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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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SCHEDULE 14D-9
(AMENDMENT NO. 1)
SOLICITATION/RECOMMENDATION STATEMENT PURSUANT TO
SECTION 14(d)(4) OF THE SECURITIES EXCHANGE ACT OF 1934
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GALOOB TOYS, INC.
(Name of Subject Company)
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GALOOB TOYS, INC.
(Name of Person Filing Statement)
Common Stock, Par Value $.01 Per Share
(Title of Class of Securities)
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364091108
(CUSIP Number of Class of Securities)
William G. Catron, Esq.
Executive Vice President
and General Counsel
Galoob Toys, Inc.
500 Forbes Boulevard
South San Francisco, CA 94080
(650) 952-1678
(Name, address and telephone number of person
authorized to receive notices and communications
on behalf of the person filing Statement)
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With a copy to:
Jeffrey J. Weinberg, Esq.
Weil, Gotshal & Manges LLP
767 Fifth Avenue
New York, New York 10153-0119
(212) 310-8000
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Item 2. Tender Offer of the Bidder
This Amendment No. 1 amends and supplements the
Solicitation/Recommendation Statement on Schedule 14D-9 filed on October 2, 1998
(the "Schedule 14D-9") relating to the tender offer by New HIAC II Corp., a
Delaware corporation and a wholly-owned subsidiary of Hasbro, Inc., a Rhode
Island corporation, disclosed in the Tender Offer Statement on Schedule 14D-1,
dated October 2, 1998 (as amended and supplemented), to purchase all of the
outstanding common stock, par value $0.01 per share (the "Shares"), of Galoob
Toys, Inc., a Delaware corporation (the "Company"), at a purchase price of
$12.00 per Share, net to the seller in cash without interest, on the terms and
subject to the conditions set forth in the Offer to Purchase, dated October 2,
1998, and in the related Letter of Transmittal. Capitalized terms used in this
Amendment No. 1 and not otherwise defined herein have the meaning ascribed to
such term in the Schedule 14D-9.
Item 3. Identity and Background
(b) Material Contacts, etc. -- (b)(1) Certain Contracts, Agreements,
Arrangements or Understandings and any Actual or Potential Conflicts of
Interests Between (A) the Company or its Affiliates and (B) the Executive
Officers, Directors or Affiliates of the Company -- Stock Options
On October 20, 1998, the Company sent a letter notifying certain holders
of Options that, in connection with the termination of the Stock Option Plans,
that each outstanding Option, whether or not then vested or exercisable would,
immediately prior to the Merger, become automatically vested and exercisable and
thereafter would be cancelled. The consideration to be received for each
cancelled Option is equal to the product of (A) the excess, if any, of (i)
$12.00, over (ii) the exercise price per share of Common Stock of each cancelled
Option and (B) the number of shares of Common Stock subject to each such
cancelled Option. Any consideration paid to holders of Options pursuant to this
formula will be paid without interest and net of any withholding taxes. The text
of this letter is set forth as Exhibit P hereto and is incorporated by reference
herein.
On October 26, 1998, the Company sent a letter notifying certain holders
of Options having an exercise price greater than $12.00 per Share that, in
connection with the termination of the Stock Option Plans, such Options would,
immediately prior to the Merger, be cancelled. The text of this letter is set
forth as Exhibit Q hereto and is incorporated by reference herein.
Item 4. The Solicitation or Recommendation
(b) Background of and Reasons for the Board Recommendation
In connection with Mr. Goldman's discussions with representatives of
Lucas in late August 1998, Lucas informed Mr. Goldman that Lucas had held
discussions with both Parent and the Other Bidder and that Parent was the only
acceptable assignee of the Company's Star Wars License.
Item 9. Material to be Filed as Exhibits
Exhibit P Letter, dated October 20, 1998, from the Company to certain Option
Holders.*
Exhibit Q Letter, dated October 26, 1998, from the Company to certain Option
Holders.*
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* Annexed hereto.
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SIGNATURE
After reasonable inquiry and to the best of my knowledge and belief, I
certify that the information set forth in this statement is true, complete and
correct.
GALOOB TOYS, INC.
By: /s/ William G. Catron
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Name: William G. Catron
Title: Executive Vice President,
General Counsel,
Chief Administrative Officer and
Secretary
Dated: October 26, 1998
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EXHIBIT INDEX
Exhibit No. Description
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Exhibit P Letter, dated October 20, 1998, from the Company to certain
Option Holders.*
Exhibit Q Letter, dated October 26, 1998, from the Company to certain
Option Holders.*
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* Annexed hereto.
EXHIBIT P
[LETTERHEAD OF GALOOB TOYS, INC.]
October 20, 1998
Dear Galoob Option Holder:
In connection with the Agreement and Plan of Merger, dated as of
September 17, 1998, by and among Galoob Toys, Inc. ("Galoob"), Hasbro, Inc.
("Hasbro") and New HIAC II Corp. (the "Merger Agreement"), and Hasbro's related
offer to purchase all outstanding shares of common stock, par value $0.01 per
share, of Galoob (the "Common Stock"), Galoob has agreed to terminate its
existing 1996 Share Incentive Plan, 1995 Non-Employee Director Stock Option
Plan, 1994 Senior Management Stock Option Plan and Amended and Restated 1984
Employee Stock Option Plan (collectively, the "Option Plans"). The Option Plans
shall be terminated effective as of the effective date of the merger
contemplated by the Merger Agreement (the "Merger").
In connection with the termination of the Option Plans, each
outstanding option to purchase Common Stock (each, an "Option") held by you,
whether or not then vested or exercisable, shall, immediately prior to the
Merger, automatically become vested and exercisable and shall thereafter be
cancelled. In exchange for the cancellation of Options held by you pursuant to
which you hold the option to purchase shares of Common Stock for an amount which
is less than $12.00 per share, the Company shall pay to you, in cash, an amount
which shall be determined pursuant to the formula set forth below (such amount,
the "Cancellation Consideration"). In the event you hold an Option to purchase
shares of Common Stock for an amount equal to or greater than $12.00 per share
of Common Stock, there shall be no payment made to you in exchange for the
cancellation of such Option.
The Cancellation Consideration shall be for an amount equal to the
product of (A) the excess, if any, of (i) $12.00, over (ii) the exercise price
per share of Common Stock subject to each cancelled Option and (B) the number of
shares of Common Stock subject to each such cancelled Option. Any consideration
you may be entitled to pursuant to this formula will be paid without interest
and net of any withholding taxes.
Please return a signed copy of this letter to Kathleen R. McElwee to
the address set forth above. No payment will be made unless a signed copy of
this letter is received by Ms. McElwee by November 2, 1998. By signing this
letter, you hereby acknowledge and agree to accept cash payment in accordance
with the formula set forth above in consideration for the cancellation of your
Options.
The cancellation of the Options and the payments, if any, pursuant
to the description contained herein are contingent on the consummation of the
transactions contemplated by the Merger Agreement. If the transactions
contemplated by the Merger Agreement are not consummated, this notice shall be
deemed null and void.
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If you have any questions regarding the foregoing, please contact
Kathleen R. McElwee at (650) 952-1678 (ext. 2210).
Very truly yours,
GALOOB TOYS, INC.
William G. Catron
Executive Vice President
General Counsel and
Chief Administrative Officer
Acknowledged as of this ______ day of _________, 1998.
(sign here)
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(print name here)
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EXHIBIT Q
[Letterhead of Galoob Toys, Inc.]
October 20, 1998
Dear Galoob Option Holder:
We are sending you this letter so that you are aware of the
treatment to your outstanding options (each, an "Option") to purchase shares of
common stock (the "Common Stock"), par value $0.01 per share, of Galoob Toys,
Inc. ("Galoob"), which Options were granted to you pursuant to the terms and
conditions of the 1996 Share Incentive Plan or the Amended and Restated 1984
Employee Stock Option Plan (collectively, the "Option Plans"), in light of the
proposed acquisition by Hasbro, Inc. ("Hasbro") of Galoob.
Pursuant to the terms of the Agreement and Plan of Merger, dated as
of September 27, 1998, by and among Galoob, Hasbro and New HIAC II Corp. (the
"Merger Agreement"), Galoob has agreed to terminate the Option Plans effective
as of the consummation of the merger contemplated by the Merger Agreement (the
"Merger"). In connection with the termination of the Option Plans, each
outstanding Option held by you shall, immediately prior to the Merger,
automatically be cancelled.
Please note, however, that the cancellation of the Options is
contingent on the consummation of the Merger. If the Merger is not consummated,
this notice shall be deemed null and void.
If you have any questions regarding the foregoing, please contact
Kathleen R. McElwee at (650) 952-1678 (ext. 2210).
Sincerely,
William G. Catron
