Mattel Inc. (MAT) will bring its executive-severance plan in line with current practices, eliminating individual contracts for executives under the chief executive.

As a result, the toy maker won't renew contracts for three top executives - Chief Financial Officer Kevin Farr, President of Mattel Brands Neil Friedman and Executive Vice President of Worldwide Operations Thomas Debrowski - after their pacts expire in 2011 and 2012, the toy maker said in a Securities and Exchange Commission filing.

However, the world's largest toymaker said it expects the three men to remain employed with the company beyond those expiration dates. All three men have worked to tie the company's toy lineup to potential blockbuster movies such as 2008's movie release of Speed Racer.

Shares of Mattel closed down 4.65%, or 76 cents, to $15.60, erasing Wednesday's minor gains of 1.9%. Shares of the company have risen 23% in the last three months.

Wedbush Morgan analysts Chris White said the company's announcement is "business as usual" and doesn't imply that the company will release the three executives following the contract expirations.

"I think that it's an archaic policy to have senior executives employed by long-term employment contracts, especially in this economy," said White. He added that the company's employment practices were outdated and Thursday's announcement is its effort to streamline its practices with its peers.

The news come as Mattel and rival toymakers are looking to rebound from the worst holiday shopping season in recent years, with mainstays seeing sales slump and international sales, previously relied upon to offset plateauing U.S. sales, sagging as well. In April, Mattel reported a wider first-quarter loss as revenue decreased worldwide.

Under the new plan, executives terminated without cause or leaving for "good reason" will get a severance package based on their recent compensation packages. Other benefits include full vesting of all stock options granted after the executive's eligibility date under the plan for up to three years and up to two years of health-insurance coverage.

Mattel has spent much of this year celebrating Barbie's 50th birthday and forever-young presence. They built her a real Malibu dream house, gave her a Facebook page and even had her tweeting on Twitter, all of which analysts said helped deliver the toy's strongest quarter in years. The company celebrated the doll's ever-evolving style at New York Fashion Week in February.

The toy industry, like the retail sector, has been hit by consumers who are clenching their wallets and pinching pennies due to high costs for food and gasoline. Analysts for the most part have remained cautious on toy companies, although chief executives of toy companies have stressed that the industry, based on their survival of the Great Depression, have continued to perform well in economic downturns.

A company representative wasn't available for comment.

-By Aja Carmichael, Dow Jones Newswires; 212-416-2187; aja.carmichael@dowjones.com;

(John Kell contributed to this report.)