16. Non-transferability of Grants.
(a) No Option or Free-Standing Stock Appreciation Right shall be transferable by a Participant other
than (i) upon the death of the Participant, or (ii) in the case of a Non-Qualified Stock Option or Free-
Standing Stock Appreciation Right, as otherwise expressly permitted by the Committee; provided,
however, that in no event may an Option or Free-Standing Stock Appreciation Right be transferable for
consideration absent stockholder approval. A Tandem Stock Appreciation Right shall be transferable
only with the related Option as permitted by the preceding sentence. Any Option or Stock Appreciation
Right shall be exercisable, subject to the terms of the Plan, only by the applicable Participant, the
guardian or legal representative of such Participant as provided in Section 9(c), or any person to whom
such Option or Stock Appreciation Right is permissibly transferred pursuant to this Section 16(a), it
being understood that the term “Participant” 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 Participant.
(b) No other Grant shall be transferable except as specifically provided in the Grant; provided,
however, that in no event may a Grant be transferable for consideration absent stockholder approval.
(c) The Company may establish such procedures for making beneficiary designations or such other
rules and procedures as may be appropriate under applicable laws and regulations for the treatment of
Grants upon the death of a Participant.
17. Adjustments.
(a) In the event of (i) a stock dividend, declaration of an extraordinary cash dividend, stock split,
reverse stock split, share combination, or recapitalization or similar event affecting the capital structure
of Mattel (each, a “Share Change”), or (ii) a merger, consolidation, acquisition of property or shares,
separation, spinoff, reorganization, stock rights offering, liquidation, Disaffiliation, or similar event
affecting Mattel or any of its Subsidiaries or Affiliates (each, a “Corporate Transaction”), the
Committee or the Board shall make such substitutions or adjustments as it deems appropriate and
equitable to (A) the aggregate number and kind of shares of Common Stock or other securities
reserved for Grants under the Plan, (B) the limitations set forth in Sections 5(a) and 5(e), (C) the
number and kind of shares or other securities subject to outstanding Grants, (D) the exercise price of
outstanding Options and Stock Appreciation Rights.
(b) In the case of Corporate Transactions, the adjustments pursuant to Section 17(a) may include,
without limitation, (1) the cancellation of outstanding Grants in exchange for payments of cash,
property or a combination thereof having an aggregate value equal to the value of such Grants, as
determined by the Committee or the Board in its sole discretion (it being understood that in the case of
a Corporate Transaction with respect to which stockholders of Common Stock receive consideration
other than publicly traded equity securities of the ultimate surviving entity, any such determination by
the Committee that the value of an Option or Stock Appreciation Right shall for this purpose be
deemed to equal the excess, if any, of the value of the consideration being paid for each share pursuant
to such Corporate Transaction over the exercise price of such Option or Stock Appreciation Right shall
conclusively be deemed valid); (2) the substitution of other property (including, without limitation,
cash or other securities of Mattel and securities of entities other than Mattel) for the shares subject to
outstanding Grants; and (3) in connection with any Disaffiliation, arranging for the assumption of
Grants, or replacement of Grants with new awards based on other property or other securities
(including, without limitation, other securities of Mattel and securities of entities other than Mattel), by
the affected Subsidiary or Affiliate by the entity that controls the affected Subsidiary, Affiliate or
division following such Disaffiliation (as well as any corresponding adjustments to Grants that remain
based upon Company securities).
(c) Notwithstanding the foregoing: (i) any adjustments made pursuant to Section 17(a) to Grants that
are considered “deferred compensation” within the meaning of Code Section 409A shall be made in