8-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

Current Report Pursuant to Section 13 or 15(d) of

The Securities Exchange Act of 1934

Date of Report:

March 30, 2007

MATTEL, INC.

(Exact name of registrant as specified in its charter)

Delaware	001-05647	95-1567322
(State or other jurisdiction of incorporation)	(Commission File No.)	(I.R.S. Employer Identification No.)

333 Continental Boulevard, El Segundo, California	90245-5012
(Address of principal executive offices)	(Zip Code)

Registrant’s telephone number, including area code

(310) 252-2000

N/A

(Former name or former address, if changed since last report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

¨ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

¨ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

¨ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

¨ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Section 5 – Corporate Governance and Management

Item 5.02. Compensatory Arrangements.

Performance Goals for 2007 under the 2002 Mattel Incentive Plan.

On March 26, 2007, the Compensation Committee (the “Compensation Committee”) of the Board of Directors of Mattel, Inc. (“Mattel”) established performance goals for 2007 under the 2002 Mattel Incentive Plan (the “MIP”).

Certain employees of Mattel and its subsidiaries are eligible for annual cash incentive compensation under the MIP. The performance objectives used to determine payments under the MIP may be based on one or more of a variety of different financial business criteria with respect to (1) Mattel, (2) Mattel’s worldwide operations, regional operations, country specific operations and/or subsidiaries, business units, affiliates, corporations, divisions, groups, functions or employees and/or (3) Mattel’s brands, groups of brands or specific brands. In the first quarter of each year, Mattel’s Compensation Committee establishes the performance goals that must be achieved for that year in order for annual incentive payments to be made. The performance goals for named executive officers are based on objective formulae or standards, as required to qualify for the exception from Internal Revenue Code Section 162(m) for performance-based compensation. For other employees, the Compensation Committee has the discretion to establish performance goals based on other standards, including individual performance goals, business and personal contributions and management discretion.

On March 26, 2007, the Compensation Committee established performance goals and formulae for the year 2007 under the MIP. These goals and formulae were based on the following criteria for the following named executive officers: (a) the overall corporate financial performance of Mattel and achievement of objectively measurable strategic initiatives, for each of the following officers: Robert A. Eckert, Chairman and Chief Executive Officer; Kevin M. Farr, Chief Financial Officer; and Thomas A. Debrowski, Executive Vice President, Worldwide Operations; (b) the overall corporate financial performance of Mattel, the financial performance of the Mattel Girls & Boys Brands and Fisher-Price Brands business units and achievement of objectively measurable strategic initiatives, for Neil B. Friedman, President, Mattel Brands; and (c) the overall corporate financial performance of Mattel, the financial performance of the International division and the Mattel Girls & Boys Brands and Fisher-Price Brands business units and achievement of objectively measurable strategic initiatives, for Bryan G. Stockton, Executive Vice President, International. The performance goals with respect to the overall corporate financial performance of Mattel are based upon net operating profit after taxes less a capital charge. The performance goals with regard to the financial performance of each of the Mattel Girls & Boys Brands and Fisher-Price Brands business units are based on the business unit’s U.S. operating profit less an inventory charge and the business unit’s international operating profit at planned overhead less an inventory charge. The performance goals with regard to the financial performance of the International division are based on international operating profit less a working capital charge. The performance goals, including the financial performance goals and the objectively measurable strategic initiatives, involve confidential trade secrets or confidential commercial or financial information, the disclosure of which would result in competitive harm to Mattel.

At the time they were set, all of the 2007 performance goals were substantially uncertain to be achieved. The goals were set at threshold, target and maximum levels. The threshold-level goals can be characterized as “stretch but attainable,” while the target and maximum goals represent increasingly challenging levels of performance. For 2007, the maximum amounts that named executive officers are eligible to receive under the MIP range from 90% to 200% of base salary.

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In determining the performance goals and award levels for each named executive officer for 2007 under the MIP, the Compensation Committee reviewed competitive data regarding annual incentive levels, relied upon the advice of the Compensation Committee’s independent compensation consultant and exercised its business judgment.

Non-Employee Director Compensation.

At its meeting on March 26, 2007, the Compensation Committee received input from its independent compensation consultant with regard to the compensation of Mattel’s non-employee directors. The independent compensation consultant presented recommendations to the Compensation Committee with regard to adjustments to non-employee director compensation to reflect current competitive market conditions. After discussing these recommendations with the consultant, changes were approved to non-employee director compensation. Specifically, the annual retainer paid to non-employee directors for service on the Mattel Board of Directors was increased from $50,000 per year to $65,000 per year. An updated summary of non-employee director compensation is filed herewith as Exhibit 99.0, and this description of non-employee director compensation is qualified in its entirety by reference to such summary.

Amendments to Grant Agreements for Certain Non-Employee Directors

As previously reported, on May 19, 2005, Mattel made a regular Annual Grant of restricted stock units (RSUs) to each non-employee director, including Mr. Beard and Mr. Vogelstein pursuant to the Mattel, Inc. 2005 Equity Compensation Plan (the “2005 Plan”). Pursuant to a mandatory retirement provision in the Mattel Board of Directors Amended and Restated Guidelines on Corporate Governance, Messrs. Beard and Vogelstein will be required to retire from the Board on the date of the 2007 Annual Meeting of Stockholders, May 18, 2007. Mr. Beard and Mr. Vogelstein have each completed more than five years of service on the Board and are over age 55, entitling them to be treated as retirees under the 2005 Plan. The intent of the RSU grant agreements was to provide outside directors with vesting at annual intervals in connection with annual meetings of stockholders. However, because the date of the 2007 Annual Meeting is slightly before the second anniversary of the 2005 Annual Meeting, the mandatory retirement of Messrs. Vogelstein and Beard would cause an unintended and arbitrary result pursuant to the existing vesting schedules in the grant agreements. This is because the grant agreements provide for vesting for Retirees to occur on the first anniversary and second anniversary of the grant date, and thus a slight change to the Annual Meeting date from year to year can have unintended results with regard to whether RSUs vest or not. To correct these unintended and arbitrary results, and to more closely reflect the intention of vesting in annual intervals corresponding to annual meetings, Mattel is amending the 2005 RSU grant agreements for Messrs. Beard and Vogelstein to provide for vesting as follows: In the case of a severance as a result of the holder’s death, disability or retirement that occurs on or after the day immediately preceding the first annual meeting of Mattel’s stockholders that occurs after the grant date, one-half of the RSUs will vest as of the date of the severance, and in the case of a severance that occurs as a result of the holder’s death, disability or retirement that occurs on or after the day immediately preceding the second annual meeting of Mattel’s stockholders that occurs after the grant date, the RSUs will vest as of the date of severance. The form of amendment is filed herewith as Exhibit 99.1, and this description of the amendment is qualified in its entirety by reference to such form of amendment.

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Mattel has also adopted a form of amendment to grant agreements for non-qualified stock option (“NQSO”) grants to Mr. Beard and Mr. Vogelstein to permit them to transfer stock options as gifts to certain family members in connection with their mandatory retirement from the Board. The form of this amendment is filed herewith as Exhibit 99.2, and this description of the amendment is qualified in its entirety by reference to such form of amendment.

Messrs. Beard and Vogelstein recused themselves from the discussion and approval of the amendments to their grant agreements.

Consent of Neil B. Friedman to Transfer of Principal Place of Employment

Pursuant to the Executive Employment Agreement between Mattel and Neil B. Friedman, President, Mattel Brands, dated January 31, 2000 and effective as of April 1, 1999, as amended, Mr. Friedman may have “Good Reason” to terminate his employment with Mattel if Mattel transfers him outside of the greater New York, New York area without his express written consent. Mr. Friedman has given his express written consent for transfer of his principal place of employment from the greater New York, New York area to the greater Los Angeles, California area, in exchange for the following: a payment in cash sufficient to provide Mr. Friedman with $500,000 after taxes, to be paid to Mr. Friedman not later than 30 days after the close of escrow on his purchase of a residence in the Los Angeles area; and monthly payments sufficient to provide Mr. Friedman with $5,000 per month after taxes, to be paid to Mr. Friedman monthly for 36 months beginning with the month during which escrow closes on his purchase of a residence in the Los Angeles area. The monthly payments will cease if Mr. Friedman does not remain employed by Mattel with his principal place of employment in the Los Angeles area. In considering this issue, the Compensation Committee received advice from its independent compensation consultant and took into account anticipated expenses associated with Mr. Friedman’s relocation and purchase of a residence in the Los Angeles area. A copy of the letter agreement between Mattel and Mr. Friedman on this subject is filed herewith as Exhibit 99.3, and this description is qualified in its entirety by reference to such letter agreement.

Section 9 – Financial Statements and Exhibits

Item 9.01. Financial Statements and Exhibits.

(a) Financial statements of businesses acquired: None

(b) Pro forma financial information: None

(c) Shell company transactions: None

(d) Exhibits:

Exhibit No.	Exhibit Description
99.0*	Mattel, Inc. Summary of Compensation of the Non-Employee Members of the Board of Directors

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Exhibit No.	Exhibit Description
99.1*	Form of Second Amendment to Grant Agreement for Restricted Stock Units (“RSUs”) under the Mattel, Inc. 2005 Equity Compensation Plan (the “2005 Plan”) – for Eugene P. Beard and John L. Vogelstein
99.2*	Form of Amendment to Grant Agreements for Non-Qualified Stock Options (“NQSOs”) under the Amended and Restated Mattel 1996 Stock Option Plan (the “1996 Plan”) and the 2005 Plan – for Eugene P. Beard and John L. Vogelstein
99.3*	Neil B. Friedman - Consent to Transfer of Principal Place of Employment pursuant to Executive Employment Agreement.

* Filed herewith.

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

MATTEL, INC. Registrant
By:	/s/    Robert Normile
	Robert Normile
	Senior Vice President, General Counsel and Secretary

Dated: March 30, 2007

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EX-99.0

EXHIBIT 99.0

MATTEL, INC.

SUMMARY OF COMPENSATION OF

THE NON-EMPLOYEE MEMBERS OF THE

BOARD OF DIRECTORS

REMUNERATION

Annual Cash Retainer:

Non-employee members of the Board receive a cash retainer of $65,000 per year.

• Retainer payable annually to new and continuing Directors, as of the date of the Annual Meeting of Stockholders (or, in the case of a new director who joins the Board between the date of the Annual Meeting and the end of the same calendar year, as of the date the director joins the Board).

• Pursuant to the Mattel, Inc. 2005 Equity Compensation Plan, Directors may elect in advance to receive all or a portion of the annual retainer in Mattel common stock. If no election is made, the Director will receive the entire retainer in cash.

- The number of shares will be based on the fair market value of Mattel common stock on the date of the Annual Meeting.

- If an election is made, it will be irrevocable with respect to the year for which it is made, and it will remain in force for subsequent years unless the Director makes a different election with respect to a later year.

Committee Chair Retainer:

Each non-employee Committee Chair receives a cash retainer per year:

• Audit - $20,000

• Compensation - $15,000

• Other Committees - $10,000

• Retainer payable annually, upon appointment or re-appointment as Committee Chair.

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Mattel, Inc.

Board of Directors – Compensation Summary

Board Fees:

• Non-employee members receive $2,000 per Board meeting attended¹

• Fees payable quarterly in arrears.

Committee Fees:

Each non-employee Committee member receives:

• Audit - $3,000 per meeting attended¹

• Compensation and Governance & Social Responsibility- $2,000 per meeting attended¹

• Other Committees - $1,500 per meeting attended¹

• Fees payable quarterly in arrears.

EQUITY COMPENSATION

Initial Grant:

Pursuant to the Mattel, Inc. 2005 Equity Compensation Plan (the “2005 Plan”) and resolutions adopted by the Compensation Committee, each new non-employee member of the Board, on the date he or she joins the Board, will be granted (1) an option to purchase 7,500 shares of Common Stock, with an exercise price per share equal to the fair market value on the date of grant; and (2) 2,500 restricted stock units with dividend equivalents.²

Annual Grant:

Pursuant to the 2005 Plan and resolutions adopted by the Compensation Committee, upon the date of each Annual Meeting of Stockholders, each continuing non-employee Director will be granted (1) an option to purchase 6,000 shares of Common Stock, with an exercise price per share equal to the fair market value on the date of grant; and (2) 2,000 restricted stock units with dividend equivalents.²

¹ The full amount will be paid for attendance in person or by videoconference. Attendance by telephone will be compensated at a reduced rate of $1,000 per meeting; provided, however, that if the meeting was scheduled as a telephonic meeting, the full amount will be paid for attendance by telephone.

² If Mattel identifies a problem with granting restricted stock units (for example, if issues arise with regard to Section 409A of the Internal Revenue Code as a result of regulations interpreting Section 409A), then restricted stock may be granted instead of restricted stock units with dividend equivalents.

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Mattel, Inc.

Board of Directors – Compensation Summary

The summary description above of grants under the 2005 Plan is subject in its entirety to the provisions of the 2005 Plan and forms of grant agreements adopted pursuant to the 2005 Plan.

STOCK OWNERSHIP

The Board has, as part of its Guidelines on Corporate Governance, adopted policies regarding (i) non-employee Director stock ownership and (ii) non-employee Director retention of shares obtained in exercises of stock options. These policies are set forth in the Mattel, Inc. Board of Directors Amended and Restated Guidelines on Corporate Governance.

DEFERRED COMPENSATION

Non-employee Directors may elect in advance to defer all or part of the cash Directors’ fees under the Mattel, Inc. Deferred Compensation Plan for Non-Employee Directors, which provides for the deferred amounts to be deemed invested either in an interest-bearing account or a stock equivalent account. Elections to defer compensation during a given calendar year may be made during the last open trading window of the preceding calendar year; provided that a new Director may make such an election within 30 days after joining the Board for compensation earned after the election is made. If an election is made, it will remain in force for subsequent years unless the Director later makes a different election. A participating non-employee Director may elect to take the distribution of such deferred amounts in a lump sum or installments over a period of years after the individual ceases to be a Director of Mattel. If a deferral election is made without any specific election between interest-bearing or stock equivalent accounts, such deferral will be invested in an interest-bearing account.

Mattel anticipates that during the years 2005, 2006 and 2007 Mattel will take steps to ensure that deferred compensation for directors complies with Section 409A of the Internal Revenue Code, as enacted by the American Jobs Creation Act of 2004, and IRS regulations and guidance pursuant to Section 409A. These steps may include amending the Mattel, Inc. Deferred Compensation Plan for Non-Employee Directors or adopting a successor plan for deferrals that are subject to Section 409A.

LIABILITY INSURANCE

Directors are provided with liability insurance under a directors, officers and corporate liability insurance policy.

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Mattel, Inc.

Board of Directors – Compensation Summary

EXPENSE REIMBURSEMENT AND TRAVEL

Mattel will pay all appropriate expenses for Directors’ travel on Board business. In most cases, and based on the Director’s preference, Mattel will handle any travel arrangements, book airline and hotel reservations and cover billings. Directors are permitted to use aircraft leased by Mattel for purposes of travel on Board business. If the Director prefers, Mattel will reimburse appropriate travel expenses for travel on Board business, including ground transportation (such as taxis and airport limousines), first class air travel, the reasonable cost of charter flights, and, if the Director uses a non-Mattel private aircraft to travel on Mattel Board business, the amount reimbursable under applicable Federal Aviation Regulations, which generally would include variable trip-specific costs or direct operating costs of the travel on Mattel Board business, but not fixed costs such as management fees, capital costs or depreciation.

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EX-99.1

Exhibit 99.1

Form of

Second Amendment to Grant Agreement for

Restricted Stock Units

under the Mattel, Inc. 2005 Equity Compensation Plan

[for Eugene P. Beard and John L. Vogelstein]

This Second Amendment to Grant Agreement for Restricted Stock Units under the Mattel, Inc. 2005 Equity Compensation Plan (this “Amendment”) is made as of March 27, 2007 between Mattel, Inc. (“Mattel”) and the undersigned Holder.

WHEREAS, on May 19, 2005, Mattel made a grant of restricted stock units to the undersigned Holder, pursuant to a Grant Agreement for Restricted Stock Units under the Mattel, Inc. 2005 Equity Compensation Plan (the “Grant Agreement”); and

WHEREAS, as of May 10, 2006, the Grant Agreement was amended; and

WHEREAS, the Mattel Board of Directors Amended and Restated Guidelines on Corporate Governance contains a mandatory retirement provision providing that, upon attaining the age of 72, a director shall not stand for re-election to the Board at subsequent meetings of the stockholders; and

WHEREAS, pursuant to this mandatory retirement provision, the Holder’s Retirement from the Board will occur on the date of Mattel’s 2007 Annual Meeting of Stockholders, currently scheduled for May 18, 2007; and

WHEREAS, the intent of the Grant Agreement was to provide for vesting of Units to occur at annual intervals in connection with annual meetings of stockholders; and

WHEREAS, it has come to Mattel’s attention that because the date of the 2007 Annual Meeting is slightly before the second anniversary of the 2005 Annual Meeting, the mandatory Retirement of the Holder from the Board will cause an unintended and arbitrary result pursuant to Section 4 of the Grant Agreement (Consequences of Severance); and

WHEREAS, Mattel and the Holder wish to amend Section 4 of the Grant Agreement to more closely reflect the intention of vesting in annual intervals corresponding to annual meetings;

NOW, THEREFORE, for good and valuable consideration, Mattel and the undersigned Holder each agree as follows:

1. Capitalized terms used and not defined in this Amendment shall have the meanings assigned to them in the Grant Agreement.

2. Section 4 of the Grant Agreement is hereby replaced, in its entirety, with the following:

4. Consequences of Severance. The consequences of the Holder’s Severance before the third anniversary of the Grant Date shall be as follows:

i. In the case of a Severance as a result of the Holder’s death, Disability, or Retirement that occurs on or after the day immediately preceding the first annual meeting of Mattel’s stockholders that occurs after the Grant Date, one-half of the Units shall vest and the remainder shall be forfeited as of the date of the Severance;

ii. In the case of a Severance as a result of the Holder’s death, Disability, or Retirement that occurs on or after the day immediately preceding the second annual meeting of Mattel’s stockholders that occurs after the Grant Date, the Units that have not yet vested shall vest as of the date of the Severance; and

iii. In all other cases, the units that have not yet vested shall be forfeited as of the date of the Severance.

* * * * * * * * * *

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IN WITNESS WHEREOF, Mattel and the undersigned Holder have executed this Amendment, which shall be effective as of the date first set forth above.

MATTEL, INC.
By:
Name:	Alan Kaye
Title:	Senior Vice President, Human Resources

THE HOLDER:

Signature:

Name:

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EX-99.2

Exhibit 99.2

Form of

Amendment to Grant Agreements for

Non-Qualified Stock Options

under the Amended and Restated Mattel 1996 Stock Option Plan and

the Mattel, Inc. 2005 Equity Compensation Plan

[for Eugene P. Beard and John L. Vogelstein]

This Amendment (this “Amendment”) to Grant Agreements for Non-Qualified Stock Options under the Amended and Restated Mattel 1996 Stock Option Plan, as amended (the “1996 Plan”), and the Mattel, Inc. 2005 Equity Compensation Plan (the “2005 Plan”) is made as of March 27, 2007 between Mattel, Inc. (“Mattel”) and the undersigned Option Holder.

WHEREAS, Mattel made grants of non-qualified stock options to the undersigned Option Holder, pursuant to Grant Agreements under the 1996 Plan and the 2005 Plan, as listed on Exhibit A (such options, the “Options,” and such Grant Agreements, the “Grant Agreements”); and

WHEREAS, the Mattel Board of Directors Amended and Restated Guidelines on Corporate Governance contains a mandatory retirement provision providing that, upon attaining the age of 72, a director shall not stand for re-election to the Board at subsequent meetings of the stockholders; and

WHEREAS, pursuant to this mandatory retirement provision, the Option Holder’s retirement from the Board will occur on the date of Mattel’s 2007 Annual Meeting of Stockholders, currently scheduled for May 18, 2007; and

WHEREAS, the Option Holder would like to assign the Options as gifts to certain of his family members, it being understood that, upon the Option Holder’s retirement, the Options will be outstanding, vested and exercisable as set forth in Exhibit A, and will have the expiration dates set forth in Exhibit A; and

WHEREAS, Mattel and the Option Holder wish to amend the Grant Agreements to permit such assignment of the Options;

NOW, THEREFORE, for good and valuable consideration, Mattel and the undersigned Option Holder each agree as follows:

1. Capitalized terms used and not defined in this Amendment shall have the meanings assigned to them in the 1996 Plan and the Grant Agreements thereunder and the 2005 Plan and the Grant Agreements thereunder, with regard to the Options granted under the 1996 Plan and the 2005 Plan, respectively.

2. Section 8 (“Assignability”) of each of the Grant Agreements for the Options granted under the 1996 Plan, as listed in Exhibit A hereto, is hereby amended by replacing such Section 8 in its entirety with the following:

Assignability. Except as may be effected by designation of a beneficiary or beneficiaries in such manner as may be determined by the Committee, or as may be effected by will or other testamentary distribution or by the laws of descent and distribution, any attempt to assign or otherwise transfer this Option shall be of no effect; provided, that references to employment or other provision of services shall continue to refer to the employment of, or provision of services by, the original Option Holder named above; and provided, further, that the Option Holder may assign this Option as a gift to a “family member” as such term is defined in the Securities and Exchange Commission’s Form S-8,¹ and after such assignment this Option shall be exercisable by such assignee on the terms and conditions set forth herein. In the case of any assignment permitted by the preceding sentence, no further assignment or transfer of this Option is permitted. Any further assignment or transfer in violation of this Section 8 shall be null and void.

3. Section 7 (“Assignability”) of each of the Grant Agreements for the Options granted under the 2005 Plan, as listed in Exhibit A hereto, is hereby amended by replacing such Section 7 in its entirety with the following:

Assignability. This Option shall not be transferable by the Holder, other than upon the death of the Holder, in accordance with such beneficiary designation procedures or other procedures as the Company may prescribe from time to time; and this Option shall be exercisable, subject to the terms of the Plan and this Grant Agreement, only by the Holder, the guardian or legal representative of the Holder as provided in Section 9(c) of the Plan, or any person to whom this Option is permissibly transferred pursuant to this Section 7 and Section 15(a) of the Plan, it being understood that the term “Holder” includes such guardian, legal representative and other transferee; provided, that references to employment or other provision of services to the Company (such as the terms “Disability, “Retirement” and “Severance”) shall continue to refer to the employment of, or provision of services by, the original Holder named above; and provided, further, that the Holder may assign this Option as a gift to a “family member” as such term is defined in the Securities and Exchange Commission’s Form S-8,¹ and after such assignment this Option shall be exercisable by such assignee on the terms and conditions set forth herein. In the case of any assignment permitted by the previous sentence, no further assignment or transfer of this Option is permitted. Any further assignment or transfer in violation of this Section 7 shall be null and void.

¹ The current definition of “family member” pursuant to Form S-8 is attached hereto as Exhibit B.

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IN WITNESS WHEREOF, Mattel and the undersigned Holder have executed this Amendment, which shall be effective as of March 27, 2007.

MATTEL, INC.
By:
Name:	Alan Kaye
Title:	Senior Vice President, Human Resources

THE HOLDER:

Signature:

Name:

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EX-99.3

Exhibit 99.3

March 27, 2007

Mr. Neil B. Friedman

President, Mattel Brands

Mattel, Inc.

333 Continental Blvd.

El Segundo, CA 90245-5012

Re: Consent to Transfer of Principal Place of Employment Pursuant to Executive Employment Agreement

Dear Neil:

Pursuant to Section 4(c) of your Executive Employment Agreement with Mattel, Inc. (“Mattel”) dated January 31, 2000 and effective as of April 1, 1999, as amended, you hereby consent to Mattel transferring your principal place of employment from the greater New York, New York area to the greater Los Angeles, California area, in exchange for Mattel’s agreement to provide you with the following:

(a) a payment in cash sufficient to provide you with $500,000 after taxes, to be paid to you not later than 30 days after the close of escrow on your purchase of a residence in the Los Angeles, California area; and

(b) payments sufficient to provide you with $5,000 per month after taxes, to be paid to you monthly for 36 months beginning with the month during which escrow closes on your purchase of a residence in the Los Angeles, California area, provided that such monthly payments shall cease if you do not remain employed by Mattel with your principal place of employment in the Los Angeles, California area.

* * * * * * * * * * *

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If you accept this letter agreement, I would appreciate it if you would sign, date and return a copy to me.

Sincerely,
MATTEL, INC.
By:	/s/ Alan Kaye
Name:	Alan Kaye
Title:	Senior Vice President, Human Resources

Agreed to and accepted by:

/s/ Neil B. Friedman

Neil B. Friedman

Date: 3/28/07

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