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"Nolan Ryan is pitching much better now that he has his curve ball straightened out."
-- Joe Garagiola

BREAKFAST WITH THE FOOL
Mattel Shareholders Willing to Give Up Their "Rights"

By Dave Marino-Nachison (TMF Braden)
June 8, 2000

Toymaker Mattel's (NYSE: MAT) annual meeting got a little hot yesterday, as new CEO Robert Eckert reportedly sat in the hot seat for an hour tackling investor questions following a year of dismal share price performance and a ton of executive upheaval. He responded politely, tried to stay upbeat, and, according to a number of reports, said he would continue to pursue employee retention, high-tech product lines, and cost cutting.

But perhaps the most interesting occurrence of the day was a shareholder vote in which 65% of voters approved a recommendation that the company remove its "poison pill" shareholder rights plan. The vote is just a recommendation and as such is non-binding, but the implication is clear: It's essentially a vote of no confidence for the company's board, which saw the rest of its recommendations go through in yesterday's shareholder vote.

"Poison pill" plans, commonly instituted by companies, essentially allow existing shareholders the right to purchase more shares if a third party should acquire more than a set percentage of the company's outstanding stock. It's a first-line takeover defense that requires a would-be purchaser to deal with a company's board of directors rather than gobble up shares on the open market or launch an unsolicited tender offer.

And sometimes shareholders are happy to have them. When they aren't, it can be taken as a sign they don't want their affairs bungled by management -- and wouldn't mind being bought out.

Eckert has been on the job for only a few weeks since coming over from Philip Morris' (NYSE: MO) Kraft Foods division. With new leadership at the helm, shareholders have some reason to expect better days to be somewhere around the corner -- or at least a game attempt -- following an ill-fated software acquisition that's wrecked the company's shares. He deserves a chance to re-energize the company following Jill Barad's February resignation.

But it's also clear they aren't holding their collective breath.

News to Go

For all the Microsoft (Nasdaq: MSFT)/Justice Department news you could want -- and more -- please visit the Fool's special feature posted last night, Judge Orders Microsoft Break-up.

Long-distance telephone giant AT&T (NYSE: T) said it would examine ways to restructure its rates after regulators got up in arms about the company's apparent intention to raise rates just after pledging to lower phone bills. The company plans to freeze its current basic rates while it studies potential options. The FCC recently cut the fees local phone companies charge long-distance carriers to collect calls, and AT&T was expected to cut its rates in return.

Personal digital assistant designer Palm Inc. (Nasdaq: PALM) said a New York federal court dismissed a patent infringement lawsuit brought against the company and parent 3Com (Nasdaq: COMS) by Xerox (NYSE: XRX). The suit, filed in 1997, alleged Palm's Graffiti handwriting recognition software used in the company's handhelds infringed upon a Xerox patent pertaining to the computerized interpretation of handwriting.

Consumer lawn, garden, and pet supply maker and merchandiser Central Garden & Pet Co. (Nasdaq: CENT) filed with the SEC to spin off its lawn and garden distribution business to shareholders. It would become a separate public company while Central would continue to operate its existing branded products businesses. The company expects the spin-off to take place in July.

Wireless voice, video, and data transmission subsystems company Remec Inc. (Nasdaq: REMC) agreed to split its stock 3-for-2 as of June 30.

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