As Filed with the Securities and Exchange Commission on December 7, 1999
Registration No. 333-82077
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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AMENDMENT NO. 2
TO FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
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HASBRO, INC.
(Exact name of registrant as specified in its charter)
<TABLE>
<S> <C> <C>
RHODE ISLAND 3944 05-0155090
(State or other jurisdiction of (Primary Standard Industrial (I.R.S. Employer
incorporation or organization) Classification Code Number) Identification No.)
</TABLE>
1027 NEWPORT AVENUE
PAWTUCKET, RHODE ISLAND 02861
(401) 431-8697
(Address, including zip code, and telephone number,
including area code, of registrant's principal executive offices)
PHILLIP H. WALDOKS, ESQ.
SENIOR VICE PRESIDENT -
CORPORATE LEGAL AFFAIRS AND SECRETARY
HASBRO, INC.
32 WEST 23RD STREET
NEW YORK, NEW YORK 10010
(212) 645-2400
(Name, address, including zip code, and telephone number,
including area code, of agent for service)
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Copies to:
VINCENT J. PISANO, ESQ.
SKADDEN, ARPS, SLATE,
MEAGHER & FLOM LLP
919 THIRD AVENUE
NEW YORK, NY 10022
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Approximate date of commencement of proposed sale to the
public: From time to time after the effective date of this registration
statement.
If the only securities being registered on this Form are
being offered pursuant to dividend or interest reinvestment plans, please
check the following box.|_|
If any of the securities being registered on this Form are
to be offered on a delayed or continuous basis pursuant to Rule 415 under
the Securities Act of 1933, other than securities offered only in
connection with dividend or interest reinvestment plans, check the
following box.|X|
If this Form is filed to register additional securities for
an offering pursuant to Rule 462(b) under the Securities Act, please check
the following box and list the Securities Act registration statement number
of the earlier effective registration statement for the same offering.|_|
If this Form is a post-effective amendment filed pursuant to
Rule 462 (c) under the Securities Act, check the following box and list the
Securities Act registration statement number of the earlier effective
registration statement for the same offering.|_|
If delivery of the prospectus is expected to be made
pursuant to Rule 434, please check the following box.|_|
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CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
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Proposed
Title of Each Class of Maximum Proposed Maximum Amount of
Securities to be Amount to Offering Price Aggregate Registration
Registered be Registered Per Unit(1) Offering Price(1) Fee
<S> <C> <C> <C> <C>
Debt Securities.......... $850,000,000(2) 100% $850,000,000(3) $229,300(3)
Common Stock, par value
$.50 per share (including
preference stock purchase
rights).................. --(4) -- -- --(5)
Common Stock, par value
$.50 per share (including
preference stock purchase
rights).................. 15,750,000(6) $27.40625(7) $431,648,437.50(7) $119,998.27(7)
Total................... -- -- $1,281,648,437.50 $349,298.27(8)
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(1) Estimated solely for the purpose of determining the registration
fee.
(2) If any debt securities are issued at an original issue discount,
this registration statement shall cover such greater amount of
debt securities as shall result in the initial offering prices of
all debt securities registered hereunder to aggregate
$850,000,000.
(3) Pursuant to Rule 429, this Registration Statement also relates to
an aggregate of $150,000,000 principal amount of securities
included in Registration Statement No. 333-44101 as to which a
filing fee of $44,250 previously has been paid.
(4) Also registered are such indeterminate number of shares of Common
Stock (including preference stock purchase rights) as may be
issued from time to time upon conversion of debt securities
registered hereby.
(5) Pursuant to Rule 457(i) under the Securities Act, there is no
filing fee with respect to the shares of Common Stock issuable
upon conversion of the debt securities, because no additional
consideration will be received in connection with the exercise of
the conversion privilege.
(6) Represents shares issuable upon exercise of warrants.
(7) Pursuant to Rule 457(c), these figures are based upon the average
of the high and low prices per share of Hasbro's Common Stock on
June 28, 1999, as reported on the New York Stock Exchange.
(8) $217,298.27 of the registration fee was paid on July 1, 1999 in
connection with the original filing of the Registration
Statement.
--------------------
STATEMENT PURSUANT TO RULE 429
Pursuant to Rule 429 under the Securities Act of 1933 the
prospectus included herein also relates to $150,000,000 principal amount of
debt securities previously registered under Registration Statement No.
333-44101 and not issued. In the event any such previously registered debt
securities are offered prior to the effective date of this Registration
Statement, they will not be included in the prospectus contained in this
Registration Statement.
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SUBJECT TO COMPLETION, DATED DECEMBER 7, 1999
[FLAG]
The information in this prospectus is not complete and may be changed. We
may not sell these securities until the registration statement filed with
the Securities and Exchange Commission is effective. This prospectus is not
an offer to sell these securities and it is not soliciting an offer to buy
these securities in any state where the offer or sale is not permitted.
Prospectus
HASBRO, INC.
Common Stock and Debt Securities
With this prospectus, Hasbro may:
o sell senior or subordinated debt securities to the public; and
o issue and sell up to 15,750,000 shares of its common stock upon the
exercise of warrants held by selling shareholders, which shares may
be resold by selling shareholders using this prospectus. Hasbro
will not receive any proceeds from the sale of the common stock
by the selling shareholders.
Hasbro's common stock is listed on the New York Stock Exchange
under the symbol HAS.
INVESTING IN OUR SECURITIES INVOLVES RISKS THAT ARE DESCRIBED IN
THE "RISK FACTORS" SECTION BEGINNING ON PAGE 3 OF THIS PROSPECTUS.
-------------------------
We urge you to carefully read this prospectus and, with respect to
offerings of debt securities, the accompanying prospectus supplement, which
will describe the specific terms of our senior or subordinated debt
securities, before you make your investment decision.
-------------------------
Neither the Securities and Exchange Commission nor any state
securities commission has approved or disapproved of these securities or
determined if this prospectus or any accompanying prospectus supplement is
truthful or complete. Any representation to the contrary is a criminal
offense.
-------------------------
The date of this prospectus is , 1999.
TABLE OF CONTENTS
Risk Factors...............................................................3
Where You Can Find More Information........................................6
Incorporation of Information We File with the SEC..........................7
About This Prospectus......................................................7
Note Regarding Forward-looking Statements..................................7
Hasbro.....................................................................8
Ratio of Earnings to Fixed Charges........................................10
The Selling Shareholders..................................................10
Use of Proceeds...........................................................11
Description of Securities.................................................11
Description of Debt Securities............................................11
Description of Common Stock...............................................24
Certain Anti-takeover Provisions..........................................26
Plan of Distribution......................................................31
Legal Matters.............................................................34
Experts...................................................................35
----------------------
This prospectus and any accompanying prospectus supplement contain
information you should consider when making your investment decision. You
should rely only on the information contained or incorporated by reference
in this prospectus and any accompanying prospectus supplement. We have not
authorized any other person to provide you with different information. If
anyone provides you with different or inconsistent information you should
not rely on it. We are not, and neither the selling shareholders nor any
underwriter are, making an offer to sell these securities in any
jurisdiction where the offer or sale is not permitted. You should assume
that the information appearing in this prospectus and the information we
filed with the Securities and Exchange Commission and incorporated by
reference, is accurate as of the date on the front cover of this prospectus
only. Our business, financial condition, results of operations and
prospects may have changed since that date.
RISK FACTORS
As a holder of our securities, you will be subject to risks
affecting our business and risks relating to the ownership of our
securities. You should carefully consider the following factors as well as
other information contained in this prospectus before deciding to invest in
our debt securities or common stock.
Consumer preferences are difficult to predict and the introduction
of new products is critical to the family entertainment industry.
Our business and operating results depend largely upon the appeal
of our family entertainment products, principally games and toys. A decline
in the popularity of our existing products and product lines or the failure
of new products and product lines to achieve and sustain market acceptance
could result in reduced overall revenues and margins, which could have a
material adverse effect on our business, financial condition and results of
operations. Our continued success will depend on our ability to redesign,
restyle and extend our existing family entertainment product lines and to
develop, introduce and gain customer acceptance of new family entertainment
product lines. However consumer preferences with respect to family
entertainment are continuously changing and are difficult to predict.
Individual family entertainment products typically have short life cycles.
There can be no assurances that:
o any of our current products or product lines will continue
to be popular for any significant period of time;
o any new products and product lines introduced by us will
achieve an adequate degree of market acceptance; or
o any new product's life cycle will be sufficient to permit us
to recover development, manufacturing, marketing and other
costs of the product.
Our business is seasonal and therefore our annual operating results
will depend, in large part, on our sales during the relatively brief
holiday season. Further, this seasonality is increasing as large retailers
become more efficient in their control of inventory levels through
quick response management techniques.
Sales of our family entertainment products at retail are seasonal,
with a majority of retail sales occurring during the period from September
through December in anticipation of the holiday season. This seasonality is
increasing as large retailers become more efficient in their control of
inventory levels through quick response management techniques. These
customers are timing reorders so that they are being filled by suppliers
closer to the time of purchase by consumers, which to a large extent occur
during September through December, rather than maintaining large on-hand
inventories throughout the year to meet consumer demand. While these
techniques reduce a retailer's investment in inventory, they increase
pressure on suppliers like us to fill orders promptly and shift a
significant portion of inventory risk and carrying costs to the supplier.
The limited inventory carried by retailers may also reduce or delay retail
sales. Additionally, the logistics of supplying more and more product
within shorter time periods will increase the risk that we fail to achieve
tight and compressed shipping schedules. This seasonal pattern requires
significant use of working capital mainly to manufacture inventory during
the year, prior to the holiday season, and requires accurate forecasting of
demand for products during the holiday season. Our failure to accurately
predict and respond to consumer demand could result in our underproducing
popular items and overproducing less popular items.
The continuing consolidation of our retail customer base means that
changes in the purchasing policies of our major customers could have a
significant impact on us.
If some of our major customers were to cease doing business with
us, or to significantly reduce the amount of their purchases from us, it
could have a material adverse effect on our business, financial condition
and results of operations. For the fiscal year ended December 27, 1998,
Wal-Mart Stores, Inc. accounted for approximately 18% of our consolidated
net revenues, Toys R Us, Inc. accounted for approximately 17% of our
consolidated net revenues, and our ten largest customers, including
Wal-Mart and Toys R Us, in the aggregate accounted for approximately 58% of
our consolidated net revenues.
We may not realize anticipated benefits of acquisitions or these
benefits may be delayed or reduced in their realization.
Acquisitions have been a significant part of our growth over the
years and have enabled us to further broaden and diversify our product
offerings. While we target companies having what we believe to be
attractive family entertainment product offerings, there can be no
assurance that the products of companies we acquire will continue to be
popular.
In addition, in some cases, we expect that the integration of the
product lines of the companies that we acquire into our operations will
create production, marketing and other operating synergies. We believe that
creating these synergies can create greater revenue growth and
profitability and, where applicable, cost savings, operating efficiencies
and other synergies. However, we can provide no assurances that these
synergies, efficiencies and cost savings will be realized. Even if
achieved, these benefits may be delayed or reduced in their realization.
In other cases we acquire companies with what we believe to have
strong and creative management, in which case we plan to create synergies
by operating them autonomously rather than integrating them into our
operations. There can be no assurance, however, that the key talented
individuals at these companies will continue to work for us after the
acquisition or that they will continue to develop popular and profitable
products or services.
Our sales and manufacturing operations outside the United States
subject us to risks normally associated with international operations.
Various international risks could negatively impact our
international sales and manufacturing operations, which could have a
material adverse effect on our business, financial condition and results of
operations. For the year ended December 27, 1998, our international net
revenues comprised approximately 36% of our total consolidated net
revenues. We expect our international sales to continue to account for a
significant and growing portion of our revenues. Additionally, we have
manufacturing facilities in Ireland and Spain and utilize third-party
manufacturers principally in the Far East. These sales and manufacturing
operations are subject to the risks normally associated with international
operations, including:
o currency conversion risks and currency fluctuations;
o limitations, including taxes, on the repatriation of
earnings;
o political instability, civil unrest and economic
instability;
o greater difficulty enforcing intellectual property rights
and weaker laws protecting such rights;
o complications in complying with laws in varying
jurisdictions and changes in governmental policies;
o natural disasters and the greater difficulty and expense in
recovering therefrom;
o transportation delays and interruptions; and
o the imposition of tariffs.
Our reliance on external sources of manufacturing can be shifted,
over a period of time, to alternative sources of supply, should such
changes be necessary. However, if we were prevented from obtaining products
or components for a material portion of our product line due to political,
labor or other factors beyond our control, Hasbro's operations would be
disrupted while alternative sources of products were secured. The
imposition of trade sanctions by the United States or the European Union
against a class of products imported by us from, or the loss of "most
favored nation" trading status by, the Peoples Republic of China could
significantly increase our cost of products imported into the United States
or Europe from China.
Changes in our credit rating or the credit markets could adversely
affect the price of the debt securities.
The interest rate, selling price, initial offering discount or any
premium offered for Hasbro's debt securities will be based on a number of
factors, including:
o Hasbro's rating with major credit rating agencies;
o the prevailing interest rates being paid by other companies
similar to Hasbro; and
o the overall condition of the financial markets at the time
of the initial distribution of the debt securities.
The condition of the credit markets and prevailing interets rates
have fluctuated in the past and are likely to fluctuate in the future.
Fluctuations in these factors could have an adverse effect on the price of
the debt securities.
In addition, credit rating agencies continually revise their
ratings for the companies that they follow, including Hasbro. The credit
rating agencies also evaluate the family entertainment industry as a whole
and may change their credit rating for Hasbro based on their overall view
of our industry. We cannot be sure that credit rating agencies will
maintain Hasbro's rating at any time after the issuance of any series of
the debt securities. A negative change in Hasbro's rating could have an
adverse effect on the price of the debt securities.
WHERE YOU CAN FIND MORE INFORMATION
We file reports, proxy statements and other information with
the SEC. These reports, proxy statements and other information can be read
and copied at the SEC's Public Reference Room at 450 Fifth Street, N.W.,
Washington, D.C. 20549, as well as the following regional offices: Citicorp
Center, 500 West Madison Street, Chicago, Illinois 60661; and 7 World Trade
Center, Suite 1300, New York, New York 10048. Please call the SEC at 1-800-
SEC-0330 for further information on the Public Reference Room. The SEC
maintains an Internet site at http://www.sec.gov that contains reports,
proxy and information statements and other information regarding companies
that file electronically with the SEC, including Hasbro. In addition, our
common stock is listed on the New York Stock Exchange. These reports, proxy
statements and other information can also be read at the offices of the
NYSE, 20 Broad Street, New York, New York 10005.
This prospectus is part of a registration statement filed
with the SEC by Hasbro. The full registration statement can be obtained
from the SEC as indicated above, or from Hasbro.
INCORPORATION OF INFORMATION WE FILE WITH THE SEC
The SEC allows us to "incorporate by reference" the
information we file with the SEC. This permits us to disclose important
information to you by referencing these filed documents. Any information
referenced this way is considered part of this prospectus, and any
information filed with the SEC subsequent to this prospectus will
automatically be deemed to update and supersede this information. We
incorporate by reference the following documents which we have filed with
the SEC:
o our Annual Report on Form 10-K for the fiscal year ended
December 27, 1998;
o our Quarterly Reports on Form 10-Q for the quarters ended
March 28, 1999, June 27, 1999 and September 26, 1999; and
o our Current Reports on Form 8-K dated April 15, 1999, June
16, 1999, July 15, 1999, October 14, 1999 and December 7,
1999.
We also incorporate by reference the documents listed above
and any future filings made with the SEC in accordance with Sections 13(a),
13(c), 14 or 15(d) of the Securities Exchange Act of 1934, as amended (the
"Exchange Act") until we file a post-effective amendment which indicates
the termination of the offering of the securities made by this
prospectus.
Hasbro will provide without charge upon written or oral
request, a copy of any or all of the documents which are incorporated by
reference in this prospectus, other than exhibits which are specifically
incorporated by reference into those documents. Requests for these copies
should be directed to: Hasbro, Inc., 1027 Newport Avenue, Pawtucket, Rhode
Island, 02861, Attention: Investor Relations, or by telephone to Investor
Relations at (401) 431-8697.
ABOUT THIS PROSPECTUS
This prospectus is part of a registration statement that we
filed with the SEC using a "shelf" registration process. This prospectus
provides you with a general description of the securities we may offer.
Each time we sell debt securities, we will provide a prospectus supplement
that will contain specific information about the terms of the offering. The
prospectus supplement may also add, update or change information contained
in this prospectus. You should read both this prospectus and any prospectus
supplement together with additional information described above under the
heading "Where You Can Find More Information."
NOTE REGARDING FORWARD-LOOKING STATEMENTS
This prospectus and the documents incorporated in this prospectus
by reference may contain "forward-looking statements" within the meaning of
Section 27A of the Securities Act of 1933, as amended (the "Securities
Act"), and Section 21E of the Exchange Act. These statements may be
identified by the use of forward-looking words or phrases such as
"anticipate," "believe," "expect," "intend," "may," "planned," "potential,"
and "should." These forward-looking statements reflect our current
expectations and are based upon currently available data. The Private
Securities Litigation Reform Act of 1995 provides a "safe harbor" for these
forward-looking statements. In order to comply with the terms of the safe
harbor, we note that a variety of factors could cause actual results and
experience to differ materially from the anticipated results or other
expectations expressed in the forward-looking statements. These factors
include, but are not limited to:
o our ability to manufacture, source and ship new and continuing
products in a timely manner and customers' and consumers'
acceptance of those products in a competitive product environment;
o economic conditions, currency fluctuations and government
regulation and other actions in the various markets in which we
operate throughout the world;
o the inventory policies of retailers, including the continuing trend
of concentration of our revenues in the second half and fourth
quarter of the year, together with retailers' increased reliance on
quick response inventory management techniques, which increases the
risk of us underproducing popular items, overproducing less popular
items and failing to achieve tight and compressed shipping
schedules;
o the impact of competition on revenues, margins and other aspects of
our business;
o our incurring higher than expected costs to achieve, or not
achieving, "year 2000" readiness with respect to our information
systems, or our vendors and service suppliers failing to achieve
this readiness; and
o the risk that anticipated benefits of acquisitions or our Consolidation
Program may not occur or be delayed or reduced in their realization.
These or other events or circumstances could cause our actual
performance or financial results in future periods to differ materially
from those expressed in the forward-looking statements. We undertake no
obligation to make any revisions to the forward-looking statements
contained in this prospectus or the documents incorporated by reference in
this prospectus, or to update the forward-looking statements to reflect
events or circumstances occurring after the date of this prospectus.
HASBRO
We are a worldwide leader in children's and family leisure time and
entertainment products and services, including the design, manufacture and
marketing of games and toys, from traditional to high-tech. Our offerings
include board, trading card, hand-held electronic and interactive CD-ROM
games, puzzles, preschool, boys' action and girls' toys, dolls, plush,
creative play and infant products. We also license various trademarks,
characters and other property rights for use in connection with the sale by
others of noncompeting toys and non-toy products. Both internationally and
in the U.S., our PLAYSKOOL, KENNER, TONKA, ODDZON, SUPER SOAKER, MILTON
BRADLEY, PARKER BROTHERS, TIGER, HASBRO INTERACTIVE, MICROPROSE, GALOOB and
WIZARDS OF THE COAST brands and products provide children and families with
what we believe to be the highest quality and most recognizable play
patterns in the world. References in this prospectus to "Hasbro," "we,"
"us," or "our" mean Hasbro, Inc., a Rhode Island corporation organized on
January 8, 1926, and, unless the context otherwise requires, its
subsidiaries.
On December 6, 1999, the reported last sale price of Hasbro's
common stock on the New York Stock Exchange was $21.4375 per share.
Hasbro's principal office is at 1027 Newport Avenue, Pawtucket,
Rhode Island 02861, and its telephone number is (401) 431-8697.
RATIO OF EARNINGS TO FIXED CHARGES
The table below sets forth the ratio of earnings to fixed charges
of Hasbro and its consolidated subsidiaries for each of the periods
indicated.
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NINE MONTHS
ENDED IN SEPTEMBER(1) FISCAL YEAR(2)
1999 1998 1998 1997 1996 1995 1994
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<S> <C> <C> <C> <C> <C> <C> <C>
4.28 4.47 6.70 5.66 7.51 5.82 7.58
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(1) Nine months ended September 26, 1999 and September 27, 1998.
(2) Fiscal years 1998, 1997, 1996, 1995 and 1994 ended on December 27,
1998, December 28, 1997, December 29, 1996, December 31, 1995 and
December 25, 1994, respectively.
</TABLE>
For purposes of computing the ratios of earnings to fixed charges:
o fixed charges include interest, amortization of debt expense
and one-third of rentals; and
o earnings available for fixed charges represent earnings
before fixed charges and income taxes.
THE SELLING SHAREHOLDERS
All of the shares of common stock are being issued to and sold by
the selling shareholders of Hasbro identified in the following table. The
table and the following paragraph also set forth information regarding the
beneficial ownership of our outstanding common stock as of December 6, 1999
for each of the selling shareholders. The address for each of Lucasfilm
Ltd., Lucas Licensing Ltd. and George W. Lucas, Jr. is 5858 Lucas Valley
Road, Nicasio, California 94946.
Number of Shares
Selling Shareholder Covered by this Prospectus
- ------------------- --------------------------
Lucas Licensing Ltd............................. 9,450,000
Lucasfilm Ltd................................... 6,300,000
As of the close of business on December 6, 1999, Lucas Licensing
Ltd. did not hold any shares directly but owned warrants to purchase an
aggregate of 9,450,000 shares. As of the close of business on December 6,
1999, Lucasfilm Ltd. did not hold any shares directly but owned warrants to
purchase an aggregate of 6,300,000 shares. All of the warrants held by
Lucasfilm Ltd. and Lucas Licensing Ltd. became exercisable upon the release
of the film, "Star Wars: Episode 1: The Phantom Menace" on May 19, 1999.
Lucasfilm Ltd. is the sole shareholder of Lucas Licensing Ltd. and as such
may be deemed to beneficially own the shares held by Lucas Licensing Ltd.
As the sole director of both Lucasfilm Ltd. and Lucas Licensing Ltd. and as
the controlling person of Lucasfilm Ltd., George W. Lucas, Jr. may be
deemed to beneficially own the shares held by both Lucasfilm Ltd. and Lucas
Licensing Ltd.
USE OF PROCEEDS
We will receive none of the proceeds of securities sold by selling
shareholders. We intend to use the net proceeds of any debt securities sold
by us for working capital, to repurchase outstanding shares of our common
stock and for acquisitions. Any specific allocation of the net proceeds of
an offering of debt securities to a specific purpose will be described in
the applicable prospectus supplement.
DESCRIPTION OF SECURITIES
This prospectus contains a summary of the debt securities and
common stock that Hasbro or selling shareholders may sell. These summaries
are not meant to be a complete description of each security. However, this
prospectus and any accompanying prospectus supplement contain the material
terms of the securities being offered.
DESCRIPTION OF DEBT SECURITIES
The debt securities will be our direct general unsecured
obligations. The debt securities will be either senior debt securities or
subordinated debt securities. Both senior debt securities and subordinated
debt securities may be issued as convertible debt securities which, unless
previously redeemed or otherwise purchased, will be convertible into shares
of Hasbro's common stock. The debt securities will be issued under one or
more separate indentures between us and a banking institution as trustee.
Senior debt securities will be issued under a senior indenture and
subordinated debt securities will be issued under a subordinated indenture.
Together the senior indenture and the subordinated indenture are called
indentures.
We have summarized all material provisions of the indentures below.
The forms of the indentures have been filed as exhibits to the registration
statement and you should read the indentures for provisions that may be
important to you. In parts of the summary below, we have included
references to section numbers of the indentures so that you can easily
locate these provisions. The Indentures are substantially identical, except
for covenants of Hasbro applicable to the senior indenture and provisions
relating to subordination. See "Provisions Applicable Solely to Senior Debt
Securities" and "Provisions Applicable Solely to Subordinated Debt
Securities."
GENERAL
Significant operations of Hasbro are currently conducted through
subsidiaries and, as a result, the cash flows of Hasbro depend in part upon
the cash flows of these subsidiaries and the availability of those cash
flows to Hasbro. In addition, the payment of dividends, distributions and
certain loans and advances to Hasbro by its subsidiaries may be subject to
statutory or contractual restrictions, depend upon the earnings of the
subsidiaries and are subject to various business considerations. Any right
of Hasbro to receive the assets of any of its subsidiaries upon their
liquidation, reorganization or recapitalization will be subordinated to the
claims of the creditors and any preferred shareholders of the respective
subsidiaries. These creditors would include trade creditors and in the
future may include lenders of additional debt for borrowed money. As a
result of this subordination, the rights of the holders of the debt
securities to participate in any distribution of assets in the situations
referred to above will be similarly subordinated. Even if Hasbro is itself
recognized as a creditor of the subsidiary, the claims of Hasbro would
still be subordinated to any security interests in the assets of the
subsidiary and any indebtedness of the subsidiary senior to that held by
Hasbro.
A prospectus supplement relating to any series of debt securities
being offered will include specific terms relating to the offering. The
terms will be established in an officer's certificate or a supplemental
indenture. The officer's certificate or supplemental indenture will be
signed at the time of issuance and will contain important information. The
officers' certificate or supplemental indenture will be filed as an exhibit
to a Current Report on Form 8-K of Hasbro. The Current Report on Form 8-K
will be publicly available. Under Section 3.01 of the indentures, the
officers' certificate or supplemental indenture will include some or all of
the following for a particular series of debt securities:
o the title of the securities;
o any limit on the amount(s) that may be issued;
o the maturity date(s) or the method by which this date or
these dates will be determined;
o the interest rate or the method of computing the interest
rate;
o the date or dates from which interest will accrue, or how
this date or these dates will be determined, and the
interest payment date or dates and any related record dates;
o any mandatory or optional sinking fund or similar provisions;
o the terms and conditions on which we may redeem the debt
securities;
o the date(s), if any, on which, and the price(s) at which
Hasbro is obligated to redeem the series of debt securities
and other related terms and provisions;
o the place(s) where payments, if any, will be made on the
debt securities and the place(s) where debt securities may
be presented for transfer and, if applicable, conversion;
o whether the debt securities are issuable as registered
securities, bearer securities or both, and the terms upon
which bearer securities may be exchanged for registered
securities;
o special provisions relating to the issuance of any bearer
securities of any series;
o the currency or currency units in which payments may be
payable;
o any changes to or additional events of default or covenants;
o the form of debt securities and coupons, if any; and
o any other terms of the debt securities.
Unless otherwise indicated in a prospectus supplement relating to
any debt securities, the covenants contained in the indentures or the debt
securities would not protect holders of the debt securities in the event of
a highly leveraged or other transaction involving Hasbro or its
subsidiaries that may adversely affect the holders of the debt securities.
Debt securities may be issued under the indentures as original
issue discount securities. An original issue discount security is a
security, including any zero-coupon security, which:
o is issued at a price lower than the amount payable upon its
stated maturity and
o provides, under Section 1.01 of the indentures, that upon
redemption or acceleration of the maturity, an amount less
than the amount payable upon the stated maturity, shall
become due and payable.
If a series of debt securities is issued as original issue discount
securities, the special Federal income tax, accounting and other
considerations applicable to original issue discount securities will be
discussed in the prospectus supplement relating to that series of debt
securities.
FORM, EXCHANGE AND TRANSFER
The debt securities will be issuable as registered securities, as
bearer securities or both. Ownership and transfer of debt securities which
are issued as bearer securities will be based upon possession or delivery
of the actual certificate; that is, the owner of a debt security issued as
a bearer security will presumptively be the "bearer" of the security. By
contrast, the ownership or transfer of debt securities issued as registered
securities will be listed in the security register described in the
indenture. The indentures will provide that debt securities may be issuable
in global form which will be deposited with, or on behalf of, a depositary,
identified in an applicable prospectus supplement. If debt securities are
issued in global form, one certificate will represent a large number of
outstanding debt securities which may be held by separate persons, rather
than each debt security being represented by a separate certificate. Under
Section 3.02 of the indentures, registered securities denominated in U.S.
dollars will be issued only in denominations of $1,000 and whole multiples
of $1,000 and bearer securities denominated in U.S. dollars will be issued
only in denominations of $5,000 and whole multiples of $5,000, unless the
prospectus supplement relating to a series of debt securities specifies
otherwise.
Debt securities may be presented for exchange, and registered
securities other than book-entry securities, may be presented for
registration of transfer with the applicable form of transfer duly
executed, at the office of any transfer agent or at the office of the
Security Registrar, as defined in the indentures, without service charge
and upon payments of any taxes and other governmental charges as described
in the indentures. Under Section 3.05 of the indentures, this registration
of transfer or exchange will be effected upon the transfer agent or the
Security Registrar, as the case may be, being satisfied with the documents
of title and identity of the person making the request. Bearer securities
will be transferable by delivery.
Under Section 3.05 of the indentures, a debt security in global
form may not be transferred except as a whole by or between the depositary
for the debt security and any of its nominees or successors. If any debt
security of a series is issuable in global form, the applicable
prospectus supplement will describe:
o any circumstances under which beneficial owners of interests
in that global debt security may exchange their interests
for definitive debt securities of that series of like tenor
and principal amount in any authorized form and
denomination,
o the manner of payment of principal and interest, if any, on
that global debt security and
o the specific terms of the depositary arrangement with
respect to that global debt security.
PAYMENT AND PAYING AGENTS
Unless otherwise indicated in an applicable prospectus supplement,
we will pay principal, any premium and interest on registered securities at
the office of the paying agents we have designated, except that we may pay
interest by check mailed to, or wire transfer to the account of, the
holder. Unless otherwise indicated in an applicable prospectus supplement,
payment of any installment of interest on registered securities will be
made to the person in whose name the registered security is registered at
the close of business on the record date for this interest payment. See
Sections 3.07 and 10.02 of the indentures for a more detailed description
of payments and payment agents.
We will pay principal, any premium and interest on bearer
securities in the currency or composite of currency in the manner
designated in the prospectus supplement, subject to any applicable laws and
regulations, at the paying agencies outside the United States we have
designated. The paying agents outside the United States initially appointed
by Hasbro for a series of debt securities will be named in the prospectus
supplement. In addition, under Section 10.02 of the indentures:
o if debt securities of a series are issuable as registered
securities, Hasbro will be required to maintain at least one
paying agent in each place of payment for the series;
o if debt securities of a series are issuable as bearer
securities, Hasbro will be required to maintain a paying
agent in a place of payment outside the United States where
debt securities of the series and any coupons appertaining
thereto may be presented and surrendered for payment; and
o if the debt securities of a series are listed on any stock
exchange located outside the United States and the stock
exchange(s) require Hasbro to maintain a paying agent in a
city located outside the United States, Hasbro will comply
with these requirements.
WAIVER, MODIFICATIONS AND AMENDMENT
Described below are provisions which apply to the waiver of
defaults under, or compliance with, the indentures.
Under Section 6.12 of the indentures, the holders of a majority of
the principal amount of the outstanding debt securities of any particular
series may waive past defaults with respect to that particular series,
except for:
o defaults on any required payments; or
o defaults relating to any covenants of the indentures which
cannot be changed without the consent of each holder of a
debt security affected by the change.
Under Section 10.07 of the senior indenture, the holders, voting as
a single class and not by individual series, of a majority in aggregate
principal amount of the outstanding senior debt securities of each series
affected under the senior indenture may waive Hasbro's compliance with some
of the restrictive provisions of the senior indenture.
Hasbro and the applicable trustee may change an indenture with the
consent of the holders of a majority in aggregate principal amount of the
debt securities outstanding under that indenture. In addition, the rights
of holders of a series of debt securities may be changed by Hasbro and the
trustee with the written consent of the holders of a majority of the
principal amount of the outstanding debt securities of each series that is
affected. However, under Section 9.02 of the indentures, the following
changes may only be made with the consent of each affected holder:
o changing the stated maturity of principal or of any
installment of principal or interest;
o reducing the principal amount or any premium;
o reducing the rate of interest;
o reducing any premium payable upon redemption;
o reducing the principal amount of an original issue discount
security due and payable upon an acceleration of maturity;
o changing the currency of payment of, or deleting any country
from places of payment on, the debt securities or changing
the obligation to maintain paying agencies;
o impairing the right to sue for any payment on a debt
security;
o making any change which adversely affects the right to
convert a debt security or, unless provided for in the
applicable indenture, decreasing the conversion rate or
increasing the conversion price;
o modifying the subordination provisions of the subordinated
indenture to adversely affect the holders of subordinated
debt securities;
o reducing the percentage of debt securities referred to
above, the holders of which are required to consent to any
waiver or amendment; or
o modifying any of the above requirements.
Section 1.01 of the indentures requires that for purposes of
computing the required consents referred to above, and for all other
purposes under the indentures, the aggregate principal amount of any
outstanding debt securities not payable in U.S. dollars is the amount of
U.S. dollars that could be obtained for this principal amount based on the
spot rate of exchange for the applicable foreign currency or currency unit
as determined by Hasbro or by an authorized exchange rate agent.
EVENTS OF DEFAULT
Pursuant to Section 6.01 of the indentures, the following are
events of default with respect to any series of debt securities issued:
o we fail to pay the principal or any premium when due;
o we fail to deposit any sinking fund payment when due;
o we fail to pay interest when due and our failure continues
for 30 days;
o we fail to observe or perform any other covenant, other than
a covenant specifically relating to another series of debt
securities and our failure continues for 90 days after
receipt of written notice as provided in the indentures;
o events of bankruptcy, insolvency or reorganization involving
Hasbro or a Significant Subsidiary;
o acceleration of indebtedness of Hasbro or a Significant
Subsidiary aggregating more than $50 million;
o final and nonappealable judgments or orders to pay against
Hasbro or a Significant Subsidiary, in the aggregate at any
one time, of more than $50 million, rendered by a court of
competent jurisdiction, continued for 90 days during which
execution shall not be effectively stayed or bonded, without
discharge or reduction to $50 million or less; and
o any other events of default provided with respect to debt
securities of that series.
As used above, the term "Significant Subsidiary" has the meaning
ascribed to it in Regulation S-X under the Securities Act. Generally, a
Significant Subsidiary is a subsidiary, together with its subsidiaries,
that satisfies any of the following conditions:
o Hasbro and its other subsidiaries' investments in and
advances to the subsidiary exceed 10% of the total
consolidated assets of Hasbro and its subsidiaries;
o Hasbro and its other subsidiaries' proportionate share of
the total assets of the subsidiary exceeds 10% of the total
consolidated assets of Hasbro and its subsidiaries; or
o Hasbro and its other subsidiaries' equity in the income from
continuing operations before income taxes, extraordinary
items and cumulative effect of a change in accounting
principle of the subsidiary exceeds 10% of consolidated
income of Hasbro and its subsidiaries.
If an event of default occurs and is continuing, the trustee or the
holders of at least 25% in aggregate principal amount of the outstanding
debt securities of that series may declare each debt security of that
series due and payable immediately by a notice in writing to Hasbro, and to
the applicable trustee if given by holders. No notice is required in the
event of a bankruptcy, insolvency or reorganization involving Hasbro or a
Significant Subsidiary. See Section 6.02 of the indentures for a more
detailed description of default events and notice requirements.
Pursuant to Section 6.07 of the indentures, a holder of the debt
securities of any series will only have the right to institute a proceeding
under the indentures or to seek other remedies if:
o the holder has given written notice to the trustee of a
continuing event of default;
o the holders of at least 25% in aggregate principal amount of
the outstanding debt securities of that series have made
written request;
o these holders have offered reasonable indemnity to the
trustee to institute proceedings as trustee;
o the trustee has not received written directions inconsistent
with the request from the holders of a majority of the
principal amount of the outstanding debt securities of that
series; and
o the trustee does not institute a proceeding within 60 days.
Hasbro will annually file statements with the applicable trustees
regarding our compliance with the covenants in the indentures. The
applicable trustee will generally give the holders of debt securities
notice within 90 days of the occurrence of an event of default known to
the trustee.
DEFEASANCE AND COVENANT DEFEASANCE
The indentures provide, if such a provision is made applicable to
the debt securities of any series pursuant to Section 3.01 of the
applicable indenture, that, subject to certain conditions,
we may elect either:
o defeasance, whereby we are discharged from any and all
obligations with respect to the debt securities, except as
may be otherwise provided in the applicable indenture; or
o covenant defeasance, whereby we are released from our
obligations with respect to any of these senior debt
securities described below under "Restrictions on Secured
Debt," and "Restrictions on Sale and Leaseback
Transactions."
We may do so by depositing with the applicable trustee money,
and/or certain government securities which through the payment of principal
and interest in accordance with their terms will provide money in an amount
sufficient to pay the principal and any premium and interest on the debt
securities, and any mandatory sinking fund or analogous payments on their
scheduled due dates. This type of a trust may only be established if, among
other things, Hasbro has delivered to the applicable trustee an opinion of
counsel meeting the requirements set forth in Article Five of the
indentures. The prospectus supplement may further describe the provisions,
if any, permitting this type of defeasance or covenant defeasance with
respect to debt securities of a particular series.
CONSOLIDATION, MERGER, SALE OR CONVEYANCE
Under Section 8.01 of the indentures and Section 8.03 of the senior
indenture, Hasbro has the ability to merge or consolidate with, or sell,
convey, or lease all or substantially all of our property, to another
corporation, provided that:
o it is a corporation incorporated in the United States;
o the corporation assumes all of Hasbro's obligations under
the indentures and the debt securities;
o the corporation delivers to the applicable trustee a
supplemental indenture providing for preservation of any
conversion rights;
o no event of default would occur; and
o in the case of senior debt securities, prior to any
transaction or any acquisition by Hasbro of the properties
of any other person, which would result in any Principal
Property, as defined in the senior indenture, or any shares
of capital stock or indebtedness of any subsidiary owned by
Hasbro or any subsidiary becoming subject to any lien or
other security interest not permitted by the covenant
described under "Provisions Applicable Solely to Senior Debt
Securities-- Restrictions on Secured Debt," Hasbro, by
supplemental indenture, secures the payment of the principal
and any premium and interest, on the senior debt securities
then outstanding, equally and ratably with any other
indebtedness also entitled to security immediately following
the transaction.
CONVERSION
The terms, if any, on which a series of debt securities may be
convertible into or exchangeable for our common stock or cash will be
described in the prospectus supplement relating to that series of debt
securities. The terms will include provisions as to whether conversion or
exchange is mandatory or at the option of the holder or at our option.
Under Section 4.04 of the indentures, the terms will also include
provisions pursuant to which the number of shares of common stock or cash
to be received by the holders of the series of debt securities would be
subject to adjustment upon the occurrence of certain events, including:
o the issuance of shares of our common stock as a dividend or
distribution on our common stock;
o subdivisions, combinations and reclassifications of our
common stock;
o the issuance generally to holders of our common stock of
rights, options or warrants entitling them, for a period not
exceeding 45 days, to purchase shares of our common stock
for less than the then current market price; and
o apart from the above, the distribution generally to holders
of our common stock of evidences of indebtedness, equity
securities, or other assets, excluding cash dividends paid
from earned surplus or current net earnings but including
Extraordinary Cash Dividends, as defined in the indentures,
or subscription rights or options or warrants entitling
holders to subscribe for securities.
With respect to the Rights distributed under Hasbro's Rights Plan
described below under "Certain Anti-Takeover Provisions," and/or in the
event that Hasbro distributes any other rights or warrants other than those
referred to in the preceding paragraph ("Additional Rights") pro rata to
holders of our common stock, so long as any such Rights or Additional
Rights have not expired or been redeemed, the holder of any convertible
debt security surrendered for conversion will be entitled to receive a
number of Rights or Additional Rights as determined under the indentures.
The conversion price of the convertible debt securities will not be subject
to adjustment on account of any declaration, distribution or exercise of
Rights or Additional Rights. See Section 4.04 of the indentures for a more
detailed description of the distribution of Rights or Additional Rights to
holders of our convertible debt securities.
Pursuant to Section 4.03 of the indentures, we will not issue
fractional shares of our common stock upon conversion, but, in place of
fractional shares, we will pay a cash adjustment based on the then current
market price for the common stock. Upon conversion, no payments or
adjustments will be made for accrued interest on convertible debt
securities or dividends. A convertible debt security surrendered for
conversion between the record date for an interest payment and the interest
payment date, except a convertible debt security to be redeemed on a
redemption date during this period, must be accompanied by payment of an
amount equal to the interest which the registered holder is to receive with
respect to this security. The interest payable on this interest payment
date shall, notwithstanding this conversion, be payable on this interest
payment date to the registered holder on the record date. See Sections 3.07
and 4.02 of the indentures for a more detailed discussion of interest
payments and convertible debt securities.
Under Section 4.05 of the indentures, if Hasbro merges or
consolidates with or into any other person, with some exceptions, or sells
or transfers all or substantially all of its assets, the holder of
convertible debt securities, after that transaction, will have the right to
convert convertible debt securities only into the kind and amount of
securities, cash and other property which the holder would have been
entitled to receive if the holder had held the common stock issuable upon
conversion of these convertible debt securities immediately prior to that
transaction.
PROVISIONS APPLICABLE SOLELY TO SENIOR DEBT SECURITIES
General. Senior debt securities will be issued under the senior
indenture and will rank equally with all other unsecured and unsubordinated
debt of Hasbro.
Certain Definitions. For purposes of the following discussion, the
following definitions, as contained in Article One of the senior indenture,
are applicable.
"Attributable Debt" in respect of a Sale and Leaseback Transaction
means, as of any particular time, the present value of the obligation of
the lessee for rental payments during the remaining term of the lease. The
present value will be discounted at the rate of interest implicit in the
terms of the lease involved in this Sale and Leaseback Transaction, as
determined in good faith by Hasbro.
"Consolidated Net Tangible Assets" means, as determined at any
time, the aggregate amount of assets included on a consolidated balance
sheet of Hasbro and its Subsidiaries, less applicable reserves, after
deducting therefrom:
o all current liabilities of Hasbro and its Subsidiaries,
which includes current maturities of long-term indebtedness
and
o the total of the net book values of all assets of Hasbro and
its Subsidiaries properly classified as intangible assets
under U.S. generally accepted accounting principles,
in each case as of the end of the last fiscal quarter for which financial
information is available at the time of this calculation.
"Funded Debt" means all indebtedness which by its terms matures
more than 12 months after the time of the computation of this amount or
which is extendible or renewable at the option of the obligor on this
indebtedness to a time more than 12 months after the time of the
computation of this amount or which is classified, in accordance with
generally accepted accounting principles, on a corporation's balance sheet
as long-term debt.
"Principal Property" means any real property, manufacturing plant,
warehouse, office building or other physical facility or other like
depreciable physical assets of Hasbro or of any Subsidiary, whether owned
at or acquired after the date of the senior indenture, having a net book
value at the time of the determination in excess of the greater of 5% of
Consolidated Net Tangible Assets or $50 million. This definition excludes,
in each case, any of the above which in the good faith opinion of the Board
of Directors of Hasbro is not of material importance to the total business
conducted by Hasbro and its Subsidiaries as a whole. As of the date of this
Prospectus none of Hasbro's assets constitute Principal Property as defined
above.
"Sale and Leaseback Transaction" means any arrangement with any
Person providing for the leasing or use by Hasbro or any Subsidiary of any
Principal Property, whether owned at the date of the Indenture or
thereafter acquired, excluding temporary leases of a term, including any
renewal period, of not more than three years, which Principal Property has
been or is to be sold or transferred by Hasbro or a Subsidiary to a Person
with an intention of taking back a lease of this property.
"Secured Debt" means indebtedness, other than indebtedness among
Hasbro and its Subsidiaries, for money borrowed by Hasbro or a Subsidiary
which is secured by:
o a mortgage or other lien on any Principal Property, or
o a pledge, lien or other security interest on any shares of
stock or evidences of indebtedness of a Subsidiary.
If any amount of indebtedness among Hasbro and its Subsidiaries is
transferred in any manner to any Person other than Hasbro or a Subsidiary,
this amount shall be deemed to be Secured Debt issued on the date of
transfer.
"Subsidiary" means any corporation of which Hasbro, or Hasbro and
one or more Subsidiaries, or any one or more Subsidiaries, directly or
indirectly own a majority of the outstanding voting securities having
voting power, under ordinary circumstances, to elect the directors of the
corporation.
Restrictions on Secured Debt. Under Section 10.09 of the senior
indenture, if Hasbro and its Subsidiaries incur, assume or guarantee any
Secured Debt, Hasbro must secure the senior debt securities equally and
ratably with or, at the option of Hasbro, prior to that Secured Debt. The
foregoing restrictions are not applicable to:
o any security interest on any property acquired by Hasbro or
a Subsidiary and created within 180 days after the
acquisition to secure or provide for the payment of all or
any part of the purchase price of the property;
o any security interest on any property improved or
constructed by Hasbro or a Subsidiary and created within 180
days after the completion and commencement of commercial
operation of the property to secure or provide for the
payment of all or any part of the construction price of the
property;
o any security interest existing on property at the time of
acquisition by Hasbro or a Subsidiary;
o any security interest existing on the property or on the
outstanding shares or indebtedness of a corporation at the
time it becomes a Subsidiary, but not created in
anticipation of the transaction in which the corporation
becomes a Subsidiary;
o any security interest on the property, shares or
indebtedness of a corporation existing at the time the
corporation is merged or consolidated with Hasbro or a
Subsidiary or at the time of a sale, lease or other
disposition of all or substantially all of the properties of
a corporation or firm to Hasbro or a Subsidiary, but not
created in anticipation of any the transaction;
o any security interest in favor of governmental bodies to
secure payments of any amounts owed under contract or
statute; or
o any extensions, renewals or replacements of any of the
security interests referred to above.
Notwithstanding the above restriction, Section 10.09 of the senior
indenture permits Hasbro and any one or more Subsidiaries to create, incur,
assume or guarantee Secured Debt, including, for purposes of this
paragraph, pursuant to a transaction to which the covenant described in the
last item under "Consolidation, Merger, Sale or Conveyance" applies,
without equally and ratably securing the senior debt securities to the
extent that the sum of:
o the amount of all Secured Debt then outstanding, other than
Secured Debt referred to in the bullet points in the
immediately preceding paragraph and Secured Debt deemed
outstanding under the last item of "Consolidation, Merger,
Sale or Conveyance" in connection with which Hasbro secures
obligations on the senior debt securities then outstanding
in accordance with the provisions of that item, plus
o the amount of Attributable Debt in respect of Sale and
Leaseback Transactions, other than Sale and Leaseback
Transactions described in the bullet points in the
immediately succeeding paragraph,
does not at the time exceed the greater of 10% of Consolidated Net Tangible
Assets or $100 million.
Restrictions on Sale and Leaseback Transactions. Under Section
10.10 of the senior indenture, Sale and Leaseback Transactions by Hasbro or
any Subsidiary of any Principal Property are prohibited unless at the
effective time of the Sale and Leaseback Transaction:
o Hasbro or the Subsidiary would be entitled, without equally
and ratably securing the senior debt securities, to incur
Secured Debt secured by a mortgage or security interest on
the Principal Property to be leased pursuant to
"Restrictions on Secured Debt" above, or
o Hasbro or the Subsidiary would be entitled, without equally
and ratably securing the senior debt securities, to incur
Secured Debt in an amount at least equal to the Attributable
Debt, or
o Hasbro shall apply an amount equal to the Attributable Debt,
within 180 days after the effective date of the Sale and
Leaseback Transaction, to the prepayment or retirement of
senior debt securities or other indebtedness for borrowed
money which was recorded as Funded Debt of Hasbro and its
Subsidiaries, including the prepayment or retirement of any
mortgage, lien or other security interest in the Principal
Property existing prior to the Sale and Leaseback
Transaction. The aggregate principal amount of the senior
debt securities or other indebtedness required to be so
retired will be reduced by the aggregate principal amount of
o any senior debt securities delivered within 180 days
after the effective date of any the Sale and
Leaseback Transaction to the Trustee for retirement
and
o this other indebtedness retired by Hasbro or a
Subsidiary within 180 days after the effective date
of the Sale and Leaseback Transaction.
PROVISIONS APPLICABLE SOLELY TO SUBORDINATED DEBT SECURITIES
Subordination. The subordinated debt securities will be subordinate
in right of payment to the extent set forth in the subordinated indenture
to all existing and future Senior Indebtedness, as defined below, of
Hasbro. In the event of any distribution of our assets in any dissolution,
winding down, liquidation or reorganization of Hasbro, payment in full must
be made on the Senior Indebtedness before any payment is made on the
subordinated debt securities. Upon the happening and during the continuance
of a default in payment of any principal, sinking fund installments or
interest due on any Senior Indebtedness, Hasbro may not make payments of
any kind on the subordinated debt securities until the default shall have
been remedied. Hasbro will also not be able to make any payments on the
subordinated debt securities if a default described in the preceding
sentence would result. These subordination provisions will not prevent the
occurrence of any event of default. See Sections 13.02 and 13.03 of the
subordinated indenture for a more detailed description of the subordination
of the subordinated debt securities to any Senior Indebtedness.
"Senior Indebtedness" means the principal of and premium, if any,
and interest, whether accruing before or after filing of any petition in
bankruptcy or any similar proceeding by or against Hasbro, on any
Indebtedness of Hasbro, whether outstanding on the date of issuance of the
applicable series of subordinated debt securities or thereafter incurred,
assumed or guaranteed; excluding, however:
o the subordinated debt securities, and
o any Indebtedness of Hasbro which, by its terms or the terms
of the instrument creating or evidencing it, is subordinate
or equal in right of payment to the subordinated debt
securities.
"Indebtedness", as used in the preceding paragraph means
(1) any liability of any Person
o for borrowed money,
o evidenced by a note, debenture or similar instrument,
including an obligation with or without recourse,
issued in connection with the acquisition of any
business, real property or other assets, other than
inventory or similar property acquired in the
ordinary course of business, or
o for the payment of money relating to a Capital Lease
Obligation, as defined in the Subordinated Indenture;
(2) any liability of others described in clause (1) which the
Person has guaranteed or which is otherwise its legal
liability; or
(3) any amendment, renewal, extension or refunding of any of
this type of liability.
The Indentures do not limit the amount of additional Indebtedness,
including Senior Indebtedness or Indebtedness ranking equally with the
subordinated debt securities, which Hasbro or any Subsidiary can create,
incur, assume or guarantee. As a result of these subordination provisions
and the requirement, as stated in Section 13.02 of the subordinated
indenture, that certain payments be paid over to holders of Senior
Indebtedness, in the event of insolvency, holders of the subordinated debt
securities may recover less ratably than general creditors of Hasbro.
DESCRIPTION OF COMMON STOCK
GENERAL
Hasbro's authorized capital stock consists of 300,000,000 shares of
common stock, and 5,000,000 shares of preference stock. No shares of
preference stock were issued or outstanding as of December 6, 1999.
However, 60,000 shares of preference stock (the "Junior Participating
Preference Stock") have been authorized and reserved for issuance in
connection with the preference stock purchase rights (the "Rights")
described in "Certain Anti-Takeover Provisions -- Shareholders Rights Plan"
and "--Junior Participating Preference Stock."
VOTING RIGHTS
Each holder of common stock is entitled to one vote for each share
held on all matters to be voted upon by shareholders.
DIVIDEND RIGHTS
The holders of common stock, subject to the rights of holders of
any outstanding preference stock, are entitled to receive dividends as
determined by the board of directors.
LIQUIDATION RIGHTS AND OTHER PROVISIONS
Subject to the prior rights of creditors and the holders of any
outstanding preference stock, the holders of the common stock are entitled
to share ratably in our remaining assets in the event of a liquidation,
dissolution or winding up of Hasbro.
The common stock is fully paid and is not liable to any calls or
assessments and is not convertible into any other securities. There are no
redemption or sinking fund provisions applicable to the common stock, and,
in accordance with the Rhode Island Business Corporation Act and the
Articles of Incorporation, there are no preemptive rights.
BankBoston, N.A., acting directly and through EquiServe L.P., acts
as transfer agent and registrar for the common stock.
DIRECTORS' LIABILITY
Our Articles of Incorporation provide that, to the fullest extent
permitted by the Rhode Island Business Corporation Act, a member of the
board of directors will not be personally liable to Hasbro or its
shareholders for monetary damages for breaches of his or her legal duties
to Hasbro or our shareholders as a director, except for liability:
o for any breach of the director's duty of loyalty to Hasbro
or our shareholders;
o for acts or omissions not in good faith or which involve
intentional misconduct or a knowing violation of law;
o for unlawfully declaring dividend payments or purchasing
stock; or
o for any transaction from which the director derived an
improper personal benefit, other than as permitted under
Section 7-1.1-37 of the Rhode Island Business Corporation
Act.
In addition, we have entered into an indemnification agreement
with each of our directors, whereby we have agreed to indemnify each
director for amounts that the director is legally obligated to pay,
including judgments, settlements of fines, including certain related
expenses to be advanced by us, due to any actual or alleged breach of duty,
neglect, error, misstatement, misleading statement or other act or omission
by a director in his or her capacity as a director. This indemnification
agreement excludes claims:
o covered by our directors and officers liability insurance
policy;
o for which the director is otherwise indemnified or
reimbursed;
o relating to certain judgments or adjudications under which
the director is liable for breaches of duty of loyalty, acts
or omissions not in good faith or involving intentional
misconduct or involving knowing violations of law, actions or
certain transactions from which the director derives an
improper personal benefit;
o relating to the director's liability for accounting for
profits under Section 16 of the Exchange Act;
o in respect of remuneration, if found unlawful; and
o as to which a final and non-appealable judgment has
determined that payment to the director thereunder is
unlawful.
In addition, our By-Laws include certain provisions which provide
that our directors and officers generally shall be indemnified against
specific liabilities to the fullest extent permitted or required by the Rhode
Island Business Corporation Act.
CERTAIN ANTI-TAKEOVER PROVISIONS
The provisions of the Articles of Incorporation summarized in the
succeeding paragraphs could have an anti-takeover effect. These provisions
are intended to enhance the likelihood of continuity and stability in the
composition of our Board of Directors and in their policies. They may,
however, delay, defer or prevent a tender offer or takeover attempt that a
shareholder might consider to be in his or her best interest, including
those attempts that might result in a premium over the market price for the
shares held by shareholders.
Our Board of Directors is divided into three classes that are
elected for staggered three-year terms. Directors can be removed from
office only for cause and, with certain exceptions, only with the approval
of a majority vote of the entire Board of Directors or by the affirmative
vote of holders of a majority of the then outstanding shares of capital
stock of Hasbro entitled to vote for these directors. Vacancies on the
Board of Directors may be filled only by the remaining directors and not by
the shareholders.
Under the Articles of Incorporation, the Board of Directors by
resolution may establish one or more series of preference stock having the
number of shares, designation, relative voting rights, dividend rates,
liquidation and other rights, preferences and limitations as may be fixed
by the Board of Directors without any further shareholder approval. These
rights, preferences, privileges and limitations as may be established could
have the effect of impeding or discouraging the acquisition of control of
Hasbro.
The Articles of Incorporation also provide that any action required
or permitted to be taken by our shareholders may be effected only at an
annual or special meeting of shareholders, or by the unanimous written
consent of shareholders.
In order to approve a number of extraordinary corporate
transactions, such as a merger, consolidation or sale of all or
substantially all assets, with an Interested Person, as defined below, our
Articles of Incorporation require:
o an 80% vote of all outstanding Company shares entitled to
vote, including a majority vote of all disinterested
shareholders;
o the approval of a majority of the entire Board of Directors,
including the affirmative vote of a majority of the
"Continuing Directors", as defined in the Articles of
Incorporation; and
o the satisfaction of procedural requirements which are
intended to assure that shareholders are treated fairly
under the circumstances.
"Interested Person", as used in the preceding paragraph means:
o any person together with its "Affiliates" and "Associates",
as defined in the Exchange Act, and any person acting in
concert therewith who is the beneficial owner, directly or
indirectly, of ten percent or more of the votes held by the
holders of the securities generally entitled to vote for
directors (the "Voting Stock"),
o any Affiliate or Associate of an Interested Person,
including without limitation, a Person acting in concert
therewith,
o any person that at any time within the two year period
immediately prior to the date in question was the beneficial
owner, directly or indirectly, of ten percent or more of the
votes held by the holders of shares of Voting Stock, or
o an assignee of, or successor to, any shares of Voting Stock
which were at any time within the two year period prior to
the date in question beneficially owned by any Interested
Person, if such assignment or succession occurred in a
transaction or series of transactions not involving a public
offering as defined by the Securities Act.
This definition of an Interested Person is subject to certain
exceptions as contained within our Articles of Incorporation.
The 80% vote will not be required and, in accordance with the Rhode
Island Business Corporation Act, only a majority vote of shareholders will
generally be required if this type of a transaction is approved by a
majority of the entire Board of Directors, including the affirmative
vote of at least two-thirds of the Continuing Directors.
SHAREHOLDERS RIGHTS PLAN
On June 16, 1999, we entered into a rights agreement with
BankBoston, N.A., as Rights Agent. This agreement replaced a previous
rights agreement, dated June 4, 1989, which expired on June 30, 1999. As
with most shareholder rights agreements, the terms of our rights agreement
are complex and not easily summarized, particularly as they relate to the
acquisition of our common stock and to exercisability of the Rights. This
summary may not contain all of the information that is important to you.
Accordingly, you should carefully read our rights agreement, which is
incorporated by reference into this prospectus in its entirety. Capitalized
terms used in this summary and not otherwise defined shall have the
meanings given to them in the rights agreement.
The Rights attach to all certificates representing shares of common
stock outstanding at the close of business on June 30, 1999 and will attach
to any shares of common stock issued by Hasbro, including upon the exercise
of any warrants and options or upon conversion of any convertible debt
securities, after this date and prior to the Distribution Date, as defined
below. The Rights will become exercisable and will separate from the common
stock and be represented by separate certificates on the Distribution Date;
the date which is approximately 10 days after anyone acquires or commences
a tender offer to acquire 15% of more of our outstanding common stock (an
"Acquiring Person"). The Rights will not be exercisable until such date, if
any, and will expire on June 30, 2009, unless this date is extended or
unless the Rights are earlier exchanged or redeemed by Hasbro. Upon the
Distribution Date, the Rights will initially be exercisable, at a price of
$140, for one ten-thousandth of a share of Hasbro's Junior Participating
Preference Stock, although the terms of the exercise are subject to
adjustment under the rights agreement. Under the rights agreement, the
following are not Acquiring Persons:
o Hasbro;
o any of our subsidiaries;
o employee benefit plans of Hasbro or any of our subsidiaries;
o individuals and entities connected with the Hassenfeld
family, as described in the rights agreement;
o any person who becomes the owner of 15% or more of the
common stock by virtue of a repurchase of common stock by
Hasbro, unless after becoming aware of this fact, such
person acquires an additional 1%; and
o any person who reports the ownership of 15% or more of the
common stock in a filing under the Exchange Act, who does
not state any intention to control the management of Hasbro
and who, upon request, certifies to Hasbro that the 15%
threshold was crossed inadvertently and with no knowledge of
the terms of the Rights.
Upon any person becoming an Acquiring Person, subject to the
exception noted below in this paragraph, each Right will entitle the holder
to purchase a number of shares of common stock of Hasbro having a then
current market value of twice the exercise price of the Right. For example,
at the initial exercise price of $140, upon exercise, each Right would
entitle its holder to receive $280 worth of common stock or other
consideration, as described below. A holder of a Right will not be entitled
to purchase shares if any person becomes an Acquiring Person in a tender
offer or exchange offer for all outstanding shares that has been determined
by the Board of Directors, after receiving advice from one or more
investment banking firms, to be at a price which is fair to and otherwise
in the best interests of the shareholders.
In addition, each Right will entitle the holder to purchase a
number of shares of common stock of the acquiring company having a current
market value of twice the exercise price of the Right, if, after the date
upon which someone has become an Acquiring Person:
o Hasbro is party to a merger or another business combination
transaction in which Hasbro is not the surviving
corporation;
o Hasbro is the surviving corporation in a merger or other
business combination, but all or part of its common stock is
changed into or exchanged for stock or other securities of
another person, cash or any other property; or
o Hasbro sells 50% or more of its consolidated assets, cash
flow or earning power.
If any of the above events occurs, the acquiring company shall assume all
of our obligations under the rights agreement.
From and after the occurrence of the event which triggers the
exercise of the Rights, any Rights that are or were acquired or
beneficially owned by any Acquiring Person, any Associate or any Affiliate
shall be void and any holder of these Rights shall thereafter have no right
to exercise these Rights.
At any time prior to the earlier of ten business days following the
date upon which someone has become an Acquiring Person and the expiration
date of the Rights, our Board of Directors may redeem all, but not less
than all, of the outstanding Rights at a price of $.01 per Right, subject
to adjustment, payable in cash, shares of common stock or other
consideration. Immediately upon any redemption of the Rights, the right to
exercise the Rights will terminate, and the only right of the holders of
Rights will be to receive the redemption price. The exercisability of the
Rights triggered by someone becoming an Acquiring Person, as described
above, will not occur until after the expiration of this redemption right.
If, however, a majority of our Board of Directors was elected by
shareholder action by written consent or is not comprised of members who
were nominated by the predecessor Board of Directors, the Rights shall not
be redeemed if this type of a redemption is likely to have the effect of
allowing anyone to become an Acquiring Person or to otherwise trigger the
exercisability of the Rights, as described above, for a period of 180 days
following the election.
At any time after a person becomes an Acquiring Person and prior to
the acquisition by a person or group of 50% or more of our outstanding
common stock, our Board of Directors may exchange the Rights, other than
those Rights owned by the person or group which have become void. This
exchange may be in whole or in part, at a ratio of one share of common
stock per Right, subject to adjustment.
In the event that, after the Rights become exercisable for shares
of our common stock, there is an insufficient number of shares of our
common stock available to permit the full exercise of Rights, our Board of
Directors has the ability to substitute an equivalent value in:
o cash;
o a reduction in the exercise price of the Right;
o shares of preference stock with an equivalent value to our
common stock;
o debt securities;
o other assets; or
o any combination of the foregoing.
Prior to the Distribution Date, the rights agreement may be amended
by our Board of Directors without the consent of the holders of the Rights.
After the Distribution Date, the rights agreement may only be amended by
our Board of Directors, without the consent of the holders of
the Rights, as follows:
o to cure any ambiguity;
o to correct any provisions which are defective or
inconsistent;
o to shorten or lengthen any time period, though any
lengthening must be for the purpose of protecting the
interests of the holders of the Rights; or
o to make changes which do not adversely affect the interests
of the holders of the Rights.
The rights agreement may not be amended, however, at any time when the
Rights are not redeemable.
Until a holder of a Right exercises the Right, the holder will have
no rights as a shareholder of Hasbro, including, without limitation, the
right to vote or to receive dividends.
While the distribution of the Rights will not be taxable to
shareholders or to Hasbro, shareholders may, depending on the
circumstances, recognize taxable income in the event that the Rights become
exercisable for our common stock, or other consideration, or in the event
the Rights are redeemed by Hasbro.
The Rights may have certain anti-takeover effects. The Rights will
cause substantial dilution to a person or group that attempts to acquire
Hasbro in a manner which causes the Rights to become exercisable. We do not
believe, however, that the Rights would affect any prospective offeror
willing to make an offer at a price that is fair and otherwise in the best
interests of the shareholders, since the Board of Directors would be
required by its fiduciary duties under applicable law to consider the
offer. If the offer were fair and otherwise in the best interests of the
shareholders, the Board could, at its option, exercise its right to redeem
the Rights as described above. In considering the merits of a proposed
offer and pursuant to Rhode Island law and our Articles of Incorporation,
however, our directors are authorized to take into account the interests of
Hasbro in addition to the interests of the shareholders. In considering the
interests of Hasbro, our directors may evaluate the effect of the proposed
offer on Hasbro's employees, suppliers, creditors and customers. Our
directors may also consider the effect of the proposed offer on the
communities in which Hasbro operates as well as the long and short term
interests of Hasbro, including the possibility that these interests may be
best served by the continued independence of Hasbro. If in considering any
of these factors, the Board of Directors determines the proposed offer is
not in the best interests of Hasbro, the Board may reject the offer and has
no obligation to facilitate or refrain from impeding the proposed offer.
Because of the redemption right, the Rights should also not interfere with
any merger or business combination approved by our Board of Directors.
JUNIOR PARTICIPATING PREFERENCE STOCK
In connection with the rights agreement, 60,000 shares of Junior
Participating Preference Stock have been reserved and authorized for
issuance by the Board of Directors. No shares of Junior Participating
Preference Stock were outstanding as of December 6, 1999. The following
statements with respect to the Junior Participating Preference Stock are
subject to, and are qualified in their entirety by reference to, the
detailed provisions of the Articles of Incorporation, including the
Certificate of Designation relating to the Junior Participating Preference
Stock (the "Certificate of Designation"), which is incorporated herein by
reference.
Shares of Junior Participating Preference Stock purchasable upon
exercise of the Rights will not be redeemable. Each share of Junior
Participating Preference Stock will be entitled to a minimum preferential
quarterly dividend payment of $10 per share but will be entitled to an
aggregate dividend of 10,000 times the dividend declared per share of
common stock. In the event of liquidation, the holders of the Junior
Participating Preference Stock will be entitled to a minimum preferential
liquidation payment of $10,000 per share, plus accrued and unpaid
dividends, and will also be entitled to preferential treatment on the
distribution of any remaining assets. Each share of Junior Participating
Preference Stock will have 10,000 votes, voting together with the common
stock. In the event of any merger, consolidation or other transaction in
which shares of common stock are exchanged, each share of Junior
Participating Preference Stock will be entitled to receive 10,000 times the
amount received per share of common stock. These rights are subject to
proportionate adjustment in the event of certain stock splits,
recombinations and other events.
PLAN OF DISTRIBUTION
DEBT SECURITIES
We may sell debt securities directly or to or through one or more
underwriters, agents or dealers who will be named in the prospectus
supplement or an underwriting syndicate, represented by one or more
managing underwriters, that would be named in the prospectus supplement
relating to an issue of offered debt securities.
The distribution of the debt securities may be effected from time
to time in one or more transactions at a fixed price or prices, which may
be changed, or at market prices prevailing at the time of sale, at prices
related to the prevailing market prices or at negotiated prices.
In connection with underwritten offerings of the debt securities
and in accordance with applicable law and industry practice, underwriters
may over-allot or effect transactions that stabilize, maintain or otherwise
affect the market price of the debt securities at levels above those which
might otherwise prevail in the open market. Such transactions include the
entering of stabilizing bids, effecting syndicate covering transactions or
imposing penalty bids.
o A stabilizing bid means the placing of any bid, or the
effecting of any purchase, for the purpose of pegging,
fixing or maintaining the price of a security.
o A syndicate covering transaction means the placing of any
bid on behalf of the underwriting syndicate or the effecting
of any purchase to reduce a short position created in
connection with the offering.
o A penalty bid means an arrangement that permits the managing
underwriter to reclaim a selling concession from a syndicate
member in connection with the offering when debt securities
originally sold by the syndicate member are purchased in
syndicate covering transactions.
These transactions may be effected in the over-the-counter market
or otherwise. Underwriters are not required to engage in any of these
activities. Any of these activities, if commenced, may be discontinued at
any time.
In connection with the sale of debt securities to underwriters,
underwriters may receive compensation in the form of discounts, concessions
or commissions from Hasbro or from purchasers of debt securities for whom
they may act as agents. Underwriters and dealers that participate in the
distribution of debt securities may be deemed to be underwriters, and any
discounts or commissions received by them and any profit on the resale of
debt securities by them may be deemed to be underwriting discounts and
commissions under the Securities Act. Any such underwriter will be
identified, and any such compensation will be described, in the prospectus
supplement.
Debt securities may be sold directly by Hasbro or through agents
designated by Hasbro from time to time. Any agent involved in the offer or
sale of the debt securities in respect of which this prospectus is
delivered will be named, and any commissions payable by Hasbro to such
agent will be set forth, in the prospectus supplement. Unless otherwise
indicated in the prospectus supplement, any such agent will be acting on a
best efforts basis for the period of its appointment.
Under agreements which may be entered into by Hasbro, underwriters,
agents and dealers who participate in the distribution of debt securities
may be entitled to indemnification by Hasbro against certain liabilities,
including liabilities under the Securities Act, or to contribution with
respect to payments which these underwriters, dealers, or agents may be
required to make in respect thereof. These underwriters, dealers or agents
may engage in transactions with, or perform services for, Hasbro in the
ordinary course of business.
The debt securities are a new issue of securities with no
established trading market. In the event that debt securities of a series
offered hereunder are not listed on a national securities exchange, certain
broker-dealers may make a market in the debt securities, but will not be
obligated to do so and may discontinue any market making at any time
without notice. No assurance can be given that any broker-dealer will make
a market in the debt securities of any series or as to the liquidity of the
trading market for the debt securities. Any of this type of market making
activity may be discontinued at any time.
STOCK SALES BY SELLING SHAREHOLDERS
The selling shareholders or their respective successors, including
permitted assignees, pledgees, donees, transferees or other successors in
interest, may sell all of their shares from time to time in transactions on
the securities markets and exchanges, including the NYSE, in the over the
counter market, in privately negotiated transactions, or through writing
options or warrants on their shares or otherwise. They may sell shares at
fixed prices that may change, at market prices prevailing at the time of
sale, at prices relating to prevailing market prices or at negotiated
prices. Under certain circumstances, the selling shareholders may sell
their shares pursuant to Rule 144 or another exemption from registration
under the Securities Act in lieu of selling their shares pursuant to this
prospectus. The selling shareholders may sell shares in any manner
permitted by law, including through underwriters, licensed brokers, dealers
or agents, and directly to one or more purchasers.
Sales of shares of common stock may involve:
o sales to underwriters, who will acquire shares of common
stock for their own account and resell them in one or more
transactions at fixed prices or at varying prices determined
at that time of sale;
o block transactions in which the broker or dealer so engaged
may sell shares as agent or principal;
o purchases by a broker or dealer as principal who resells the
shares for its account;
o an exchange distribution in accordance with the rules of any
such exchange;
o ordinary brokerage transactions and transactions in which a
broker solicits purchasers; and
o privately negotiated sales, which may include sales directly
to institutions.
The selling shareholders have advised us that, as of the date of
this prospectus, they have not entered into any agreements, understandings
or arrangements for the sale of the shares with any underwriters or
broker-dealers and that no underwriter or coordinating broker-dealer is now
acting in connection with the proposed sale of shares. At the time a
particular offering of shares is made and to the extent required, the
aggregate number of shares being offered, the name or names of the selling
shareholders and the terms of the offering, including the names of the
underwriters, broker-dealers or agents, any discounts, concessions or
commissions and other terms constituting compensation from the selling
shareholders, and any discounts, concessions or commissions allowed or
re-allowed or paid to broker-dealers, will be set forth in an accompanying
prospectus supplement.
Broker-dealers may receive compensation in the form of discounts,
concessions or commissions from the selling shareholders and/or the
purchasers. The selling shareholders and any broker-dealers, agents or
underwriters that participate with the selling shareholders in the
distribution of shares offered by this prospectus may be deemed to be
"underwriters" within the meaning of the Securities Act. Accordingly, the
selling shareholders will be subject to the prospectus delivery
requirements of the Securities Act. Any commissions paid or any discounts
or concessions allowed to these persons, and any profits received on the
resale of the shares offered by this prospectus and purchased by these
persons, may be deemed to be underwriting commissions or discounts under
the Securities Act.
Under the rules and regulations under the Exchange Act, any person
engaged in a distribution of the shares offered pursuant to this prospectus
may be limited in its ability to engage in market activities with respect
to those shares. Each selling shareholder will be subject to the provisions
of the Exchange Act and the rules and regulations under the Exchange Act,
including Regulation M. Those rules and regulations may limit the timing of
purchases and sales of any shares offered by the selling shareholders
pursuant to this prospectus, which may affect the marketability of the
shares offered by this prospectus.
We will pay all expenses, other than selling commissions, selling
fees and stock transfer taxes, of the registration and sale of shares. We
also have agreed to indemnify the selling shareholders against certain
liabilities, including liabilities under the Securities Act.
We may suspend the use of this prospectus by the selling
shareholders under certain circumstances.
We will not receive any proceeds from sales of shares by selling
shareholders. We cannot guarantee that the selling shareholders will sell
any or all of their shares.
LEGAL MATTERS
The validity of the securities offered by this prospectus will be
passed upon for Hasbro by Phillip H. Waldoks, Senior Vice President --
Corporate Legal Affairs and Secretary of Hasbro. Mr. Waldoks will rely as
to matters of Rhode Island law on the opinion of David Dubosky, Vice
President/Managing Attorney, of Hasbro. Mr. Waldoks owns 3,600 shares of
Common Stock and has options to purchase 139,905 shares of Common Stock
granted under Hasbro's employee stock option plans. Mr. Dubosky has options
to purchase 14,950 shares of Common Stock granted under Hasbro's employee
stock option plans. Certain legal matters with respect to the debt
securities offered by this prospectus will be passed upon for any
underwriters, dealers or agents by Skadden, Arps, Slate, Meagher & Flom
LLP, New York, New York.
EXPERTS
The consolidated financial statements incorporated by reference and
schedule included in the Annual Report on Form 10-K of Hasbro for the
fiscal year ended December 27, 1998 incorporated by reference herein and
elsewhere in the Registration Statement, have been incorporated by
reference herein and in the registration statement in reliance upon the
reports of KPMG LLP, independent certified public accountants, incorporated
by reference herein, and upon the authority of said firm as experts in
accounting and auditing.
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION
The estimated expenses in connection with the issuance and
distribution of the securities being registered, other than underwriting
discounts and commissions, will be paid by the Registrant and are:
Filing Fee for Registration Statement..........................$349,298.27
Rating Agency Fees..............................................200,000
Legal Fees and Expenses.........................................105,000
Accounting Fees and Expenses....................................100,000
Printing and Engraving Fees......................................75,000
Trustees' Fees...................................................12,000
Miscellaneous................................................... 8,701.73
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Total..................................................$850,000.00
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ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS
The Registrant is incorporated in Rhode Island. Under
Section 7-1.1- 4.1 of the Rhode Island Business Corporation Act, a Rhode
Island corporation has the power, under specified circumstances, to
indemnify its officers, directors, employees and agents against judgments,
penalties, fines, settlements and reasonable expenses, including attorneys'
fees, actually incurred by them in connection with any proceeding to which
these persons were made parties by reason of the fact that these persons
are or were directors, officers, employees or agents, if:
o these persons shall have acted in good faith,
o they reasonably believed that their actions were in the best
interests of the corporation, if the proceeding involves
conduct in an official capacity with the corporation, or not
opposed to the best interests of the corporation, if the
proceeding involves conduct other than in an official
capacity with the corporation, and
o in criminal proceedings, they had no reasonable cause to
believe that their conduct was unlawful.
The foregoing statement is subject to the detailed provisions of
7-1.1-4.1 of the Rhode Island Business Corporation Act.
Article X of the By-Laws of the Registrant provides that the
Registrant shall indemnify its directors and officers to the full extent
permitted by Section 7-1.1-4.1 of the Rhode Island Business Corporation
Act.
Section 7-1.1-48 of the Rhode Island Business Corporation
Act provides that articles of incorporation may contain a provision
eliminating or limiting the personal liability of a director to the
corporation or its shareholders for monetary damages for breach of
fiduciary duty as a director provided that the provision shall not
eliminate or limit the liability of a director:
o for any breach of the director's duty of loyalty to the
corporation or its shareholders,
o for acts or omissions not in good faith or which involve
intentional misconduct or a knowing violation of law,
o under Section 7-1.1-43 of the Rhode Island Business
Corporation Act, which relates to liability for unauthorized
acquisitions or redemptions of, or dividends or distribution
on, capital stock, or
o for any transaction from which the director derived an
improper personal benefit, unless said transaction is
permitted by Section 7-1.1- 37.1 of the Rhode Island
Business Corporation Act, which relates to director
conflicts of interest.
Article Thirteenth of the Registrant's Articles of
Incorporation contains such a provision.
Section 7-1.1-4.1(j) of the Rhode Island Business
Corporation Act empowers a Rhode Island corporation to purchase and
maintain insurance on behalf of its current and prior directors, officers,
employees and agents against any liability incurred or asserted against
them as a result of their official capacities, whether or not the
corporation would have the power to indemnify such person against the
insured liability under the provisions of such Section. The Registrant has
a directors and officers liability insurance policy.
The Registrant has entered into an indemnification agreement
with each of its directors, whereby the Registrant has agreed to indemnify
each such director for amounts which the director is legally obligated to
pay, including judgments, settlements of fines, including certain related
expenses to be advanced by the Registrant, due to any actual or alleged
breach of duty, neglect, error, misstatement, misleading statement or other
act or omission by a director in his capacity as a director. This
indemnification excludes claims:
o covered by the Registrant's directors and officers liability
insurance policy,
o for which the director is otherwise indemnified or
reimbursed,
o relating to certain judgments or adjudications under which
the director is liable for breaches of duty of loyalty, acts
or omissions not in good faith or involving intentional
misconduct or involving knowing violations of law, actions
or certain transactions from which the director derives an
improper personal benefit,
o relating to the director's liability for accounting for
profits under Section 16 of the Securities Exchange Act of
1934, as amended,
o in respect of remuneration, if found unlawful, and
o as to which a final and non-appealable judgement has
determined that payment to the director thereunder is
unlawful.
In addition, any underwriting agreement entered into in
connection with our sale of debt securities will provide for
indemnification of directors and officers of the Registrant under certain
circumstances.
ITEM 16. LIST OF EXHIBITS
The following Exhibits are filed as part of this Registration
Statement:
1.1 Form of underwriting agreement (incorporated by
reference to Exhibit 1.1 to Hasbro's Registration
Statement on Form S- 3, dated June 24, 1998,
Registration No. 333-44101).
3.1 Restated Articles of Incorporation of Hasbro
(incorporated by reference to Exhibits 3.1, 3.2 and
3.3 to Hasbro's Quarterly Report on Form 10-Q for
the Fiscal Quarter ended on June 27, 1999, File No.
1-6682).
3.2 Amended and Restated Bylaws of Hasbro (incorporated
by reference to Exhibit (3) to Hasbro's Current
Report on Form 8-K, dated February 16, 1996, File
No. 1-6682).
4.1 Form of the indenture between Hasbro and a banking
institution, as trustee, relating to senior debt
securities.**
4.2 Form of the indenture between Hasbro and a banking
institution, as trustee, relating to subordinated
debt securities (incorporated by reference to
Exhibit 4.2 to Hasbro's Registration Statement on
Form S-3, dated June 24, 1998, Registration No.
333-44101).
4.3 Rights Agreement, dated June 16, 1999, between
Hasbro and BankBoston, N.A. (incorporated by
reference to Exhibit 4 to Hasbro's Current Report
on Form 8-K dated June 16, 1999).
4.4 Warrant, dated October 14, 1997, between Hasbro and
Lucas Licensing Ltd. (incorporated by reference to
Exhibit 10(h) to Hasbro's Annual Report on Form
10-K for the Fiscal Year ended on December 27,
1998, File No. 1-6682).
4.5 Warrant, dated October 14, 1997, between Hasbro and
Lucasfilm Ltd. (incorporated by reference to
Exhibit 10(i) to Hasbro's Annual Report on Form
10-K for the Fiscal Year ended on December 27,
1998, File No. 1-6682).
4.6 Warrant, dated October 30, 1998, between Hasbro and
Lucas Licensing Ltd. (incorporated by reference to
Exhibit 10(j) to Hasbro's Annual Report on Form
10-K for the Fiscal Year ended on December 27,
1998, File No. 1-6682).
4.7 Warrant, dated October 30, 1998, between Hasbro and
Lucasfilm Ltd. (incorporated by reference to
Exhibit 10(k) to Hasbro's Annual Report on Form
10-K for the Fiscal Year ended on December 27,
1998, File No. 1-6682).
5.1 Opinion of Phillip H. Waldoks, Senior Vice
President - Corporate Legal Affairs and Secretary
of Hasbro.*
12.1 Calculation of Ratio of Earnings to Fixed Charges
(incorporated by reference to Exhibit 12 to
Hasbro's Quarterly Report on Form 10-Q for the
Fiscal Quarter ended on September 26, 1999, File
No. 1-6682).
23.1 Consent of KPMG LLP.
23.2 Consent of Phillip H. Waldoks, Senior Vice
President - Corporate Legal Affairs and Secretary
of Hasbro (included as part of Exhibit 5.1).
24.1 Powers of Attorney **
25.1 Form T-1 Statement of Eligibility under the Trust
Indenture Act of 1939 of the trustee*
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* To be filed and incorporated by reference herein in connection with
the offering of securities.
** Previously filed.
ITEM 17. UNDERTAKINGS
The undersigned Registrant hereby undertakes:
1. To file, during any period in which offers or sales are
being made of the securities registered hereby, a post-effective amendment
to this Registration Statement:
(i) to include any prospectus required by Section
10(a)(3) of the Securities Act:
(ii) to reflect in the prospectus any facts or
events arising after the effective date of this Registration Statement, or
the most recent post-effective amendment thereof, which, individually or in
the aggregate, represent a fundamental change in the information set forth
in this Registration Statement. Notwithstanding the foregoing, any increase
or decrease in volume of securities offered, if the total dollar value of
securities offered would not exceed that which was registered, and any
deviation from the lower or higher end of the estimated maximum offering
range may be reflected in the form of prospectus filed with the Commission
pursuant to Rule 424(b) if, in the aggregate, the changes in volume and
price represent no more than 20 percent change in the maximum aggregate
offering price set forth in the "Calculation of Registration Fee" table in
the effective registration statement; and
(iii) to include any material information with
respect to the plan of distribution not previously disclosed in this
Registration Statement or any material change to such information in this
Registration Statement;
2. That, for the purpose of determining any liability under
the Securities Act, each such post-effective amendment shall be deemed to
be a new registration statement relating to the securities offered herein,
and the offering of such securities at that time shall be deemed to be the
initial bona fide offering thereof.
3. To remove from registration by means of a post-effective
amendment any of the securities being registered hereby which remain unsold
at the termination of the offering.
4. That, for purposes of determining any liability under the
Securities Act, each filing of the Registrant's annual report pursuant to
Section 13(a) or Section 15(d) of the Exchange Act (and, where applicable,
each filing of an employee benefit plan's annual report pursuant to Section
15(d) of the Exchange Act) that is incorporated by reference in this
Registration Statement shall be deemed to be a new registration statement
relating to the securities offered herein, and the offering of such
securities at that time shall be deemed to be the initial bona fide
offering thereof.
5. To file an application for the purpose of determining the
eligibility of the trustee to act under subsection (a) of Section 310 of
the Trust Indenture Act of 1939, as amended (the "Trust Indenture Act") in
accordance with the rules and regulations prescribed by the Securities and
Exchange Commission under Section 305(b)(2) of the Trust Indenture Act.
Insofar as indemnification for liabilities arising under the
Securities Act may be permitted to directors, officers and controlling
persons of the Registrant pursuant to the foregoing provisions, or
otherwise, the Registrant has been advised that in the opinion of the
Securities and Exchange Commission such indemnification is against public
policy as expressed in the Securities Act and is therefore unenforceable.
In the event that a claim for indemnification against such liabilities,
other than the payment by the Registrant of expenses incurred or paid by a
director, officer or controlling person of the Registrant in the successful
defense of any action, suit or proceeding, is asserted against the
Registrant by such director, officer or controlling person in connection
with the securities being registered, the Registrant will, unless in the
opinion of its counsel the matter has been settled by controlling
precedent, submit to a court of appropriate jurisdiction the question
whether such indemnification by it is against public policy as expressed in
the Securities Act and will be governed by the final adjudication of such
issue.
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933,
the Registrant certifies that it has reasonable grounds to believe that it
meets all of the requirements for filing on Form S-3 and has duly caused
this Registration Statement to be signed on its behalf by the undersigned,
thereunto duly authorized, in the City of New York, State of New York, on
the 7th day of December, 1999.
HASBRO, INC.
By *
----------------------------
Alan G. Hassenfeld
Chairman of the Board
and Chief Executive Officer
Pursuant to the requirements of the Securities Act of 1933,
this Registration Statement has been signed by the following persons in the
capacities and on the dates indicated.
Signature Title Date
--------- ----- -----
* Chairman of the Board and December 7, 1999
- --------------------------- Chief Executive Officer and
ALAN G. HASSENFELD Director (Principal Executive
Officer)
* Executive Vice President-- December 7, 1999
- --------------------------- Global Operations, Chief
ALFRED J. VERRECCHIA Financial Officer and
Director (Principal Financial
and Accounting Officer)
* Director December 7, 1999
- ----------------------------
ALAN R. BATKIN
* Director December 7, 1999
- -----------------------------
HERBERT M. BAUM
* Director December 7, 1999
- -----------------------------
E. GORDON GEE
* Director December 7, 1999
- -----------------------------
HAROLD P. GORDON
* Director December 7, 1999
- -----------------------------
ALEX GRASS
* Director December 7, 1999
- -----------------------------
SYLVIA K. HASSENFELD
* Director December 7, 1999
- -----------------------------
MARIE-JOSEE KRAVIS
- ----------------------------- Director
MORRIS W. OFFIT
* Director December 7, 1999
- ----------------------------
NORMA T. PACE
* Director December 7, 1999
- -----------------------------
E. JOHN ROSENWALD, JR.
- ----------------------------- Director
CARL SPIELVOGEL
* Director December 7, 1999
- -----------------------------
PRESTON ROBERT TISCH
* Director December 7, 1999
- -----------------------------
PAUL WOLFOWITZ
* Phillip H. Waldoks, pursuant to Powers of Attorney (executed by
each of the officers and directors indicated above and filed as
part of the registrant's Registration Statement, filed on July 1,
1999, Reg. No. 333-82077), by signing his name hereto does hereby
sign and execute this Amendment No. 2 to Form S-3 Registration
Statement Under the Securities Act of 1933 on behalf of each such
officer and director.
/s/ Phillip H. Waldoks
----------------------------
Phillip H. Waldoks
Exhibit 23.1
CONSENT OF INDEPENDENT AUDITORS
The Board of Directors
Hasbro, Inc.:
We consent to use of our reports included or incorporated by reference in
the Hasbro, Inc. Annual Report on Form 10-K for the fiscal year ended
December 27, 1998, which is incorporated by reference herein, and to the
reference to our firm under the heading "Experts" in the prospectus.
/s/ KPMG LLP
Providence, Rhode Island
December 6, 1999
