MATTEL, INC. AMENDED AND RESTATED
COMPENSATION COMMITTEE CHARTER

 

 

 

Purpose

The purpose of the Compensation Committee (the “Committee”) is to develop, evaluate, and in certain instances approve or determine the compensation plans, polices, and programs of Mattel, Inc. (the “Company”). The Committee has the authority to undertake and may exercise all of the powers of the Board of Directors (the “Board”) with respect to the specific responsibilities listed below and will have the authority to undertake such other specific responsibilities as the Board from time to time prescribes.


Statement of Philosophy

The Committee is guided by three basic principles:

 

 

 

  • The Company must offer competitive salaries and other benefits in order to attract, retain and motivate highly-qualified and experienced executives;

 

 

 

  • Cash compensation for executives in excess of base salaries should be tied to Company performance, individual performance, or both; and

 

 

 

  • The financial interest of the executives should be aligned with the financial interest of the Company’s stockholders primarily through equity programs and short and long-term incentive plans.

 

 

 

Such principles are intended to create a competitive compensation structure that will help attract and retain key management talent, assure the integrity of the Company’s compensation practices and link compensation to performance.


Membership

The Committee shall consist of not less than three members of the Board. Each member of the Committee shall be an “outside director” within the meaning of Section 162(m) of the Internal Revenue Code of 1986, as amended (the “Code”), (and shall be “independent” within the meaning of the listing standards of the New York Stock Exchange and the Company’s Corporate Governance Guidelines.)

The members and Chair of the Committee shall be appointed by the Board on the recommendation of the Governance and Social Responsibilty Committee with consideration of the desires of individual directors and input of the Board Chair. Committee members may be replaced by the Board.


Committee Organizations and Procedures

The Chair (or in his or her absence, a member designated by the Chair) shall preside at all
meetings of the Committee. The Committee shall have the authority to establish its own rules and procedures consistent with the bylaws of the Company for notice and conduct of its meetings, should the Committee, in its discretion, deem it desirable to do so. The Committee shall meet at least two times in each fiscal year, and more frequently as the Committee in its discretion deems desirable by the Committee, but at least annually to the board regarding the Committee's actions and recommendations.

The Committee shall have access to, and shall in its discretion meet with, any officer or other employee of the Company or its subsidiaries. The Committee shall meet at least once each calendar year without the Chief Executive Officer present. The Committee may utilize the services of the Company's regular corporate legal counsel with respect to legal matters or, in its discretion, retain other legal counsel if it determines that such counsel is necessary or appropriate under the circumstances.

The Committee may, in its discretion, utilize the services of a compensation consultant or other professional or expert to provide data and advice to the Committee regarding the compensation of executives of the Company and to assist the Committee in performing its other responsibilities. The retention and, where appropriate, the termination of such compensation consultant shall be at the sole discretion of the Committee without the participation of any officer or other member of management of the Company. The committee, in its sole discretion, shall approve the fees to be paid to the compensation consultant and any other terms of the engagement of the compensation consultant.

The compensation consultant shall be "independent," meaning it shall be free from any relationship with the Company or its officers or other members of management (other than providing services to the Committee, the Company, its officers or other memebers of management at the direction of the Committee) that the Committee determines, in its sole discretion, would interfere in the exercise of the independent judgement of the compensation consultant. In determining the independence of the compensation consultant, the Committee shall consider the nature and extent of any services provided (other than at the direction of the Committee) to the Company or to any executive or member of senior management of the Company.

RESPONSIBILITIES:

The Responsibilities of the Committee include:

1. The Committee shall review and approve all forms of compensation to be provided to all executives who are designated as being in the “Executive Leadership Band” and above in the Company’s compensation structure (the “Executive Leadership Officers”), including (i) annual base salary, (ii) short-term incentive opportunities, (iii) long-term incentive opportunities, (iv) grants of options, restricted stock and other equity compensation, (v) any employment agreements, severance arrangements, and change in control provisions/agreements, (vi) any loan or guarantee of any obligation (to the extent a loan or guarantee is permitted by law), (vii) any supplemental executive retirement plan and (viii) any significant special or supplemental benefits. The Committee shall receive periodic reports on the Company’s compensation programs as they affect Executive Leadership Officers and directors. With respect to Executive Leadership Officers other than the Chief Executive Officer, final approval of all such compensation shall be made by the Committee or, at the Committee’s discretion, by the full Board after receiving the Committee’s recommendation. Notwithstanding the foregoing, if any grant or award to an Executive Leadership Officer is intended to qualify for the performance-based compensation exemption from the limitations on deductibility of executive compensation imposed by Section 162(m) of the Internal Revenue Code or any successor thereto, the Committee, rather than the Board, shall approve such grant or award, but it may refer such grant or award to the Board for ratification.

2. The Committee shall annually review and approve corporate goals and objectives relevant to Chief Executive Officer compensation, evaluate the Chief Executive Officer’s performance in light of those goals and objectives, meet with the Chief Executive Officer to discuss the Committee’s evaluation and establish the Chief Executive Officer’s compensation levels based on this evaluation. In determining the incentive components of Chief Executive Officer compensation, the Committee should consider the Company’s performance and relative shareholder return, the value of similar incentive awards to Chief Executive Officers at comparable companies, the awards given to the Chief Executive Officer in past years and other factors. With respect to the Chief Executive Officer, final approval of all forms of compensation shall be made by the Committee, or at the discretion of the Board, by the Committee in conjunction with other independent directors of the Board. Notwithstanding the foregoing, if any grant or award to the Chief Executive Officer is intended to qualify for the performance-based compensation exemption from the limitations on deductibility of executive compensation imposed by Section 162(m) of the Internal Revenue Code or any successor thereto, the Committee, rather than the Board, shall approve such grant or award, but it may refer such grant or award to the Board for ratification.

3. The form and amount of director compensation will be periodically reviewed by, and shall be determined by, the Committee, with the advice of the Chief Executive Officer, and with full discussion by the Board. The Committee will consider that directors’ independence may be jeopardized if director compensation and perquisites exceed customary levels, if the Company makes substantial charitable contributions to organizations with which a director is affiliated (other than as a result of such director’s affiliation with the Company, i.e., the Mattel Children’s Foundation) or if the Company enters into consulting contracts with (or provides other indirect forms of compensation to) a director or an organization with which a director is affiliated.

4. The Committee shall determine the Company’s policy with respect to the application of Code Section 162(m), and whether and to what extent compensation shall be designed to be “qualified performance-based compensation” (within the meaning of Code Section 162(m)(C).

5. The Committee shall act as administrator of the short-term and long-term incentive plans of the Company that may be adopted by the Board from time to time. The Committee shall have the authority to exercise all powers granted to the administrator under such plans, including, but not limited to, making grants or awards, amending the terms of such grants or awards where determined by the Committee to be appropriate, determining what performance objectives are appropriate with respect to each plan, whether such objectives have been satisfied and whether any adjustments to those objectives should be made due to external circumstances or other unusual or nonrecurring items (in each case pursuant to the terms and limitations of such plans). The Committee shall have the authority, in its discretion and pursuant to the terms of such plans, to delegate all responsibility for the administration of such plans to officers of the Company, except that the Committee shall not delegate responsibility for grants or awards to any “covered employee” within the meaning of Code Section 162(m).

6. The Committee shall act as administrator of the stock option or equity participation plans of the Company that may be adopted by the Board from time to time. The Committee shall have the authority to exercise all powers granted to the administrator under such plans, including, but not limited to, granting stock options, restricted stock or other equity compensation to individuals eligible for such grants (including grants to individuals subject to Section 16 of the Exchange Act in compliance with Rule 16b-3 promulgated thereunder) and amending such grants where determined by the Committee to be appropriate (in each case pursuant to the terms and limitations of such plans). (Notwithstanding the foregoing, the Committee shall ensure that no stock option plan for executive officers or directors will be adopted without a shareholder vote, and no stock option plan will be modified to reduce stock option exercise prices or increase the maximum number of shares granted without a shareholder vote.) The Committee shall also account for the number of options granted and available under the respective plans and make recommendations to the Board with respect to any changes in the number of shares reserved for issuance thereunder. The Committee may authorize the repurchase of shares of the Company’s stock from terminated employees pursuant to applicable law. The Committee shall have the authority, in its discretion and pursuant to the terms of such plans, and to the extent permitted by applicable law, to delegate all responsibility for the administration of such plans to officers of the Company, except that the Committee shall not delegate responsibility for any grants of stock options, restricted stock or other equity compensation to individuals subject to Section 16 of the Exchange Act (or likely to be subject to Section 16 of the Exchange Act when such options are exercised) or any grants to any “covered employee” under Code Section 162(m).

7. The Committee shall provide the Report of the Committee for inclusion in the Company’s annual Proxy Statement required by Item 402(k) of Regulation S-K of the Securities and Exchange Commission.

8. The Committee may form and delegate authority to subcommittees when appropriate.

9. The Committee shall review and reassess the adequacy of this Charter periodically and recommend any proposed changes to the Board for approval. The Committee shall annually review its own performance.

10. The Committee shall make regular reports to the Board.