þ
|
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 | |
For the fiscal year ended December 25, 2005 |
Rhode Island
|
05-0155090 | |
(State of Incorporation) |
(I.R.S. Employer
Identification No.) |
|
1027 Newport Avenue,
Pawtucket, Rhode Island (Address of Principal Executive Offices) |
02862
(Zip Code) |
Title of Each Class
|
Name of Each Exchange on Which
Registered
|
|
Common Stock
|
New York Stock Exchange | |
Preference Share Purchase
Rights
|
New York Stock Exchange |
Item 1. | Business |
1
2
3
4
5
6
7
Item 1A. | Risk Factors |
8
9
10
11
12
13
14
15
Item 1B. | Unresolved Staff Comments |
Item 2. | Properties |
Lease
|
||||||||||||||
Square
|
Type of
|
Expiration
|
||||||||||||
Location
|
Use
|
Feet | Possession | Dates | ||||||||||
Rhode Island
|
||||||||||||||
Pawtucket(1) (2) (3)
|
Administrative, Sales & Marketing Offices & Product Development | 343,000 | Owned | | ||||||||||
Pawtucket(3)
|
Executive Office | 23,000 | Owned | | ||||||||||
East Providence(3)
|
Administrative Office | 120,000 | Leased | 2014 | ||||||||||
Central Falls(1) (2) (3)
|
Warehouse | 261,500 | Owned | | ||||||||||
Massachusetts
|
||||||||||||||
East Longmeadow(2)
|
Office, Manufacturing & Warehouse | 1,148,000 | Owned | | ||||||||||
East Longmeadow(2)
|
Warehouse | 500,000 | Leased | 2006 | ||||||||||
California
|
||||||||||||||
Chino(1) (2)
|
Warehouse | 1,001,000 | Leased | 2010 | ||||||||||
Texas
|
||||||||||||||
Dallas(2)
|
Warehouse | 147,500 | Leased | 2011 | ||||||||||
Washington
|
||||||||||||||
Renton(2)
|
Offices | 95,400 | Leased | 2016 | ||||||||||
Tukwilla(2)
|
Warehouse | 5,000 | Leased | 2007 | ||||||||||
Australia
|
||||||||||||||
Erskine Park(5)
|
Office & Warehouse | 98,400 | Leased | 2015 | ||||||||||
Eastwood(5)
|
Office | 16,900 | Leased | 2009 | ||||||||||
Belgium
|
||||||||||||||
Brussels(5)
|
Office & Showroom | 18,800 | Leased | 2008 | ||||||||||
Canada
|
||||||||||||||
St. Laurent(2)
|
Office, Manufacturing & Warehouse | 148,400 | Leased | 2006 | ||||||||||
Montreal(5)
|
Office, Warehouse & Showroom | 133,900 | Leased | 2010 | ||||||||||
Mississauga(5)
|
Sales Office & Showroom | 16,300 | Leased | 2010 | ||||||||||
Montreal(5)
|
Warehouse | 88,100 | Leased | 2010 |
16
Lease
|
||||||||||||||
Square
|
Type of
|
Expiration
|
||||||||||||
Location
|
Use
|
Feet | Possession | Dates | ||||||||||
Chile
|
||||||||||||||
Santiago(5)
|
Warehouse | 67,600 | Leased | 2007 | ||||||||||
Santiago(5)
|
Office | 17,300 | Leased | 2007 | ||||||||||
China
|
||||||||||||||
Shenzhen(5)
|
Office | 25,700 | Leased | 2006 | ||||||||||
Shenzhen(5)
|
Office | 26,600 | Leased | 2009 | ||||||||||
Denmark
|
||||||||||||||
Glostrup(5)
|
Office | 9,200 | Leased | 2007 | ||||||||||
England
|
||||||||||||||
Uxbridge(5)
|
Office & Showroom | 51,000 | Leased | 2013 | ||||||||||
France
|
||||||||||||||
Le Bourget du Lac(5)
|
Office | 33,500 | Owned | | ||||||||||
Creutzwald(5)
|
Warehouse | 301,300 | Owned | | ||||||||||
Germany
|
||||||||||||||
Soest(5)
|
Office & Warehouse | 258,300 | Owned | | ||||||||||
Soest(5)
|
Warehouse | 79,700 | Leased | 2006 | ||||||||||
Dreieich(5)
|
Office | 24,900 | Leased | 2015 | ||||||||||
Hong Kong
|
||||||||||||||
Kowloon(4)
|
Offices | 64,300 | Leased | 2008 | ||||||||||
New Territories(4)
|
Warehouse | 11,500 | Leased | 2008 | ||||||||||
New Territories(4)
|
Warehouse | 8,100 | Leased | 2007 | ||||||||||
Ireland
|
||||||||||||||
Waterford(5)
|
Office, Manufacturing & Warehouse | 244,000 | Owned | | ||||||||||
Italy
|
||||||||||||||
Milan(5)
|
Office & Showroom | 12,100 | Leased | 2007 | ||||||||||
Mexico
|
||||||||||||||
Periferico(5)
|
Office | 16,100 | Leased | 2006 | ||||||||||
Carretera(5)
|
Warehouse | 221,700 | Leased | 2011 | ||||||||||
The Netherlands
|
||||||||||||||
Utrecht(5)
|
Office | 7,200 | Leased | 2008 | ||||||||||
New Zealand
|
||||||||||||||
Auckland(5)
|
Office & Warehouse | 35,000 | Leased | 2010 | ||||||||||
Poland
|
||||||||||||||
Warsaw(5)
|
Office | 3,200 | Leased | 2007 | ||||||||||
Spain
|
||||||||||||||
Valencia(5)
|
Office & Warehouse | 251,900 | Leased | 2015 | ||||||||||
Switzerland
|
||||||||||||||
Berikon(5)
|
Office & Warehouse | 25,000 | Leased | 2006 | ||||||||||
Delemont(5)
|
Office | 9,200 | Leased | 2009 | ||||||||||
Turkey
|
||||||||||||||
Istanbul(5)
|
Office | 11,000 | Leased | 2006 |
17
Lease
|
||||||||||||||
Square
|
Type of
|
Expiration
|
||||||||||||
Location
|
Use
|
Feet | Possession | Dates | ||||||||||
Wales
|
||||||||||||||
Newport(5)
|
Warehouse | 94,000 | Leased | 2013 | ||||||||||
Newport(5)
|
Warehouse | 72,000 | Leased | 2018 | ||||||||||
Newport(5)
|
Warehouse | 198,000 | Owned | |
(1) | Property used in the U.S. Toys segment. | |
(2) | Property used in the Games segment. | |
(3) | Property used in the Corporate area. | |
(4) | Property used in the Operations segment. | |
(5) | Property used in the International segment. |
Item 3. | Legal Proceedings |
Item 4. | Submission of Matters to a Vote of Security Holders |
18
Period
|
||||||||||
Serving in
|
||||||||||
Current
|
||||||||||
Name
|
Age
|
Position and Office
Held
|
Position
|
|||||||
Alfred J. Verrecchia(1)
|
63 | President and Chief Executive Officer | Since 2003 | |||||||
Brian Goldner(2)
|
42 | Chief Operating Officer | Since 2006 | |||||||
David D. R. Hargreaves(3)
|
53 | Senior Vice President and Chief Financial Officer | Since 2001 | |||||||
Frank P. Bifulco, Jr.(4)
|
56 | President, North American Sales | Since 2006 | |||||||
Simon Gardner(5)
|
45 | President, Hasbro Europe | Since 2002 | |||||||
Barry Nagler(6)
|
49 | Senior Vice President, General Counsel and Secretary | Since 2001 | |||||||
Deborah Thomas Slater(7)
|
42 | Senior Vice President and Controller | Since 2003 | |||||||
Martin R. Trueb
|
53 | Senior Vice President and Treasurer | Since 1997 |
(1) | Prior thereto, President and Chief Operating Officer from 2001 to 2003; prior thereto President, Chief Operating Officer and Chief Financial Officer from 2000 to 2001; prior thereto, Executive Vice President and Chief Financial Officer from 1999 to 2000. | |
(2) | Prior thereto, President, U.S. Toys Segment from 2003 to 2006; prior thereto, President, U.S. Toys, from 2001 to 2003; prior thereto, from 2000 to 2001, Senior Vice President and General Manager, U.S. Toys; during 2000, Chief Operating Officer of Tiger Electronics, Ltd., a subsidiary of the Company; prior thereto, Chief Operating Officer, Bandai America, Inc., from 1997 to 2000. | |
(3) | Prior thereto, Senior Vice President and Deputy Chief Financial Officer from 1999 through 2000. | |
(4) | Prior thereto, President, U.S. Games since joining the Company in June 2003; prior thereto, Senior Vice President and Chief Marketing Officer of The Timberland Company since 2001. | |
(5) | From 2002 to 2003 also President, Asia Pacific; prior to 2002, President, Hasbro International. | |
(6) | Prior thereto, Senior Vice President and General Counsel from 2000 to 2001; prior thereto, Senior Vice President and General Counsel, Reebok International, Ltd. from 1997 to 2000. | |
(7) | Prior thereto, Vice President and Assistant Controller from 1998 to 2003. |
19
62
69
76
77
78
79
80
84
Item 5.
Market
for Registrants Common Equity, Related Stockholder Matters
and Issuer Purchases of Equity Securities
Sales Prices
Cash Dividends
High
Low
Declared
$
21.50
18.11
$
.09
21.00
18.40
.09
22.35
19.83
.09
20.75
17.75
.09
$
22.98
19.38
$
.06
23.33
17.15
.06
19.64
16.98
.06
19.62
16.90
.06
(c)
(d)
Total
Approximate
Number
Dollar Value
of Shares
of Shares
(a)
(b)
Purchased
that May yet
Total
Average
as Part of
be Purchased
Number of
Price
Publicly
Under the
Shares
Paid per
Announced
Plans or
Purchased
Share
Programs
Programs
185,000
$
19.0025
185,000
$
314,701,879
672,300
$
18.9077
672,300
$
301,970,066
$
301,970,066
857,300
$
18.9282
857,300
$
301,970,066
20
Table of Contents
Item 6.
Selected
Financial Data
Fiscal Year
2005
2004
2003
2002
2001
(Thousands of dollars and
shares except per share data and ratios)
$
3,087,627
2,997,510
3,138,657
2,816,230
2,856,339
$
212,075
195,977
175,015
75,058
60,798
$
1.19
1.11
1.01
.43
.35
$
1.09
.96
.94
.43
.33
$
.36
.24
.12
.12
.12
$
3,301,143
3,240,660
3,163,376
3,142,881
3,368,979
$
528,389
626,822
688,204
1,059,115
1,167,953
8.33
6.93
4.56
2.05
1.76
178,303
176,540
173,748
172,720
172,131
197,436
196,048
190,058
185,062
184,592
(1)
For purposes of calculating the ratio of earnings to fixed
charges, fixed charges include interest, amortization of
deferred debt expense and one-third of rentals; earnings
available for fixed charges represent earnings before fixed
charges and income taxes.
See Forward-Looking Information and Risk Factors That May
Affect Future Results contained in Item 1A of this
report for a discussion of risks and uncertainties that may
affect future results. Also see Managements
Discussion and Analysis of Financial Condition and Results of
Operations contained in Item 7 of this report for a
discussion of factors affecting the comparability of information
contained in this Item 6.
21
Table of Contents
Item 7.
Managements
Discussion and Analysis of Financial Condition and Results of
Operations
22
Table of Contents
2005
2004
2003
100.0
%
100.0
%
100.0
%
41.7
41.8
41.0
58.3
58.2
59.0
3.3
2.4
2.4
8.0
7.4
7.9
4.9
5.2
4.6
11.8
12.9
11.6
20.2
20.5
21.5
10.1
9.8
11.0
1.0
1.1
1.7
(1.0
)
0.0
1.5
10.1
8.7
7.8
3.2
2.2
2.2
6.9
6.5
5.6
(0.6
)
6.9
%
6.5
%
5.0
%
23
Table of Contents
%
%
2005
Change
2004
Change
2003
$
1,074,540
13
%
$
952,923
(10
)%
$
1,057,984
730,635
(8
)%
796,032
(1
)%
804,547
1,231,761
3
%
1,194,630
1
%
1,184,532
$
79,991
1013
%
$
7,185
(92
)%
$
91,996
69,477
(50
)%
137,628
(21
)%
175,295
148,135
5
%
140,784
54
%
91,273
24
Table of Contents
25
Table of Contents
26
Table of Contents
2005
2004
2003
3.3
%
2.4
%
2.4
%
8.0
7.4
7.9
4.9
5.2
4.6
11.8
12.9
11.6
20.2
20.5
21.5
27
Table of Contents
28
Table of Contents
29
Table of Contents
30
Table of Contents
31
Table of Contents
32
Table of Contents
33
Table of Contents
34
Table of Contents
Payments Due by Fiscal
Year
2006
2007
2008
2009
2010
Thereafter
Total
$
32,743
135,092
359,891
527,726
22,686
21,382
19,858
18,350
10,995
29,901
123,172
28,220
15,660
18,760
8,700
5,100
76,440
171,551
171,551
$
255,200
37,042
173,710
27,050
16,095
389,792
898,889
35
Table of Contents
36
Table of Contents
Item 7A.
Quantitative
and Qualitative Disclosures About Market Risk
37
Table of Contents
Item 8.
Financial
Statements and Supplementary Data
38
Table of Contents
Consolidated Balance Sheets
December 25, 2005 and December 26, 2004
(Thousands of dollars except share data)
2005
2004
$
942,268
725,002
523,232
578,705
179,398
194,780
185,297
219,735
1,830,195
1,718,222
164,045
206,934
467,061
469,726
613,433
637,929
226,409
207,849
1,306,903
1,315,504
$
3,301,143
3,240,660
$
14,676
17,959
32,770
324,124
152,468
167,585
710,812
638,943
910,726
1,148,611
495,619
302,698
171,322
149,627
1,577,667
1,600,936
104,847
104,847
358,199
380,745
(24
)
(98
)
1,869,007
1,721,209
15,348
82,388
(623,901
)
(649,367
)
1,723,476
1,639,724
$
3,301,143
3,240,660
39
Table of Contents
Consolidated Statements of Operations
Fiscal Years Ended in December
(Thousands of dollars except per share data)
2005
2004
2003
$
3,087,627
2,997,510
3,138,657
1,286,271
1,251,657
1,287,962
1,801,356
1,745,853
1,850,695
102,035
70,562
76,053
247,283
223,193
248,423
150,586
157,162
143,183
366,371
387,523
363,876
624,560
614,401
674,544
1,490,835
1,452,841
1,506,079
310,521
293,012
344,616
30,537
31,698
52,462
(30,929
)
1,226
48,090
(392
)
32,924
100,552
310,913
260,088
244,064
98,838
64,111
69,049
212,075
195,977
175,015
(17,351
)
$
212,075
195,977
157,664
$
1.19
1.11
1.01
$
1.09
.96
.94
$
1.19
1.11
.91
$
1.09
.96
.85
$
.36
.24
.12
40
Table of Contents
Consolidated Statements of Cash Flows
Fiscal Years Ended in December
(Thousands of dollars)
2005
2004
2003
$
212,075
195,977
157,664
17,351
78,097
75,618
88,070
102,035
70,562
76,053
1,277
20,342
8,988
(2,080
)
(12,710
)
13,630
(24,032
)
34,624
22,774
74
138
172
39,341
75,590
(13,202
)
10,677
(15,838
)
34,846
74,531
29,423
7,845
33,211
(89,735
)
16,707
(27,305
)
(15,408
)
11,903
496,624
358,506
454,155
(70,584
)
(79,239
)
(63,070
)
(79,179
)
(9,824
)
33,083
4,309
4,570
(3,991
)
(213
)
(6,379
)
(120,671
)
(84,967
)
(64,879
)
(93,303
)
(57,974
)
(389,279
)
(3,685
)
(6,598
)
309
(48,030
)
(3,378
)
45,278
25,836
39,892
(58,901
)
(37,088
)
(20,851
)
(158,641
)
(75,824
)
(373,307
)
(46
)
6,540
9,406
217,266
204,255
25,375
725,002
520,747
495,372
$
942,268
725,002
520,747
$
33,265
35,781
64,189
$
32,962
40,647
28,354
41
Table of Contents
Accumulated
Additional
Other
Total
Common
Paid-in
Deferred
Retained
Comprehensive
Treasury
Shareholders
Stock
Capital
Compensation
Earnings
Earnings
Stock
Equity
$
104,847
458,130
(613
)
1,430,950
(46,814
)
(755,134
)
1,191,366
157,664
157,664
77,298
77,298
234,962
(107,669
)
(107,669
)
48,106
60,640
108,746
(689
)
(66
)
(489
)
(1,244
)
(20,921
)
(20,921
)
104,847
397,878
(679
)
1,567,693
30,484
(694,983
)
1,405,240
195,977
195,977
51,904
51,904
247,881
(16,748
)
45,720
28,972
(385
)
581
(104
)
92
(42,461
)
(42,461
)
104,847
380,745
(98
)
1,721,209
82,388
(649,367
)
1,639,724
212,075
212,075
(67,040
)
(67,040
)
145,035
(22,546
)
73,496
50,950
(48,030
)
(48,030
)
74
74
(64,277
)
(64,277
)
$
104,847
358,199
(24
)
1,869,007
15,348
(623,901
)
1,723,476
42
Table of Contents
(1)
Summary
of Significant Accounting Policies
43
Table of Contents
44
Table of Contents
45
Table of Contents
46
Table of Contents
47
Table of Contents
2005
2004
2003
$
212,075
195,977
157,664
46
103
126
(15,124
)
(13,844
)
(12,948
)
$
196,997
182,236
144,842
$
1.19
1.11
.91
$
1.09
.96
.85
$
1.10
1.03
.83
$
1.01
.89
.78
48
Table of Contents
2005
2004
2003
Basic
Diluted
Basic
Diluted
Basic
Diluted
$
212,075
212,075
195,977
195,977
175,015
175,015
(2,080
)
(12,710
)
4,263
4,263
4,263
$
212,075
214,258
195,977
187,530
175,015
179,278
178,303
178,303
176,540
176,540
173,748
173,748
5,339
5,629
11,574
11,574
11,574
2,220
2,305
4,736
178,303
197,436
176,540
196,048
173,748
190,058
$
1.19
1.09
1.11
.96
1.01
.94
49
Table of Contents
(2)
Other
Comprehensive Earnings
2005
2004
2003
$
(68,530
)
50,391
76,126
838
(9,862
)
3,963
6,460
(3,954
)
(13,777
)
(7,813
)
(1,661
)
2,187
2,005
16,990
8,799
$
(67,040
)
51,904
77,298
2005
2004
$
42,555
111,085
1,800
962
3,848
(4,617
)
(32,855
)
(25,042
)
$
15,348
82,388
50
Table of Contents
(3)
Property,
Plant and Equipment
2005
2004
$
6,836
18,727
174,183
211,414
296,607
310,130
477,626
540,271
348,646
369,885
128,980
170,386
35,065
36,548
$
164,045
206,934
(4)
Goodwill
and Intangibles
51
Table of Contents
U.S. Toys
Games
Intl
Total
$
9,893
259,661
200,172
$
469,726
(2,665
)
(2,665
)
$
9,893
259,661
197,507
$
467,061
$
13,234
261,692
188,754
$
463,680
9,390
9,390
2,028
2,028
(3,341
)
(2,031
)
(5,372
)
$
9,893
259,661
200,172
$
469,726
(a)
In the first quarter of 2004, goodwill increased by $9,390
related to the Companys acquisition of the remaining
unowned interest in its Latin America operations.
(b)
The decrease in Toys and Games goodwill relates to the
adjustment of certain tax accruals related to a prior business
combination.
2005
2004
$
900,891
828,186
219,071
219,071
(586,022
)
(489,238
)
533,940
558,019
75,738
75,738
3,755
4,172
$
613,433
637,929
52
Table of Contents
$
70,000
69,000
68,000
63,000
37,000
(5)
Financing
Arrangements
53
Table of Contents
(6)
Accrued
Liabilities
2005
2004
$
123,860
125,940
84,765
103,206
75,515
67,181
64,583
61,009
130,007
43,648
232,082
237,959
$
710,812
638,943
54
Table of Contents
(7)
Long-Term
Debt
2005
2004
$
71,970
32,743
32,743
135,092
135,092
249,996
250,000
109,895
109,895
22,498
527,726
622,198
663
4,624
528,389
626,822
32,770
324,124
$
495,619
302,698
55
Table of Contents
$
32,743
135,092
359,891
$
527,726
56
Table of Contents
(8)
Income
Taxes
2005
2004
2003
$
76,642
3,786
21,198
7,147
(497
)
3,229
39,081
26,198
21,848
122,870
29,487
46,275
(20,611
)
28,019
27,909
(1,767
)
2,402
2,392
(1,654
)
4,203
(7,527
)
(24,032
)
34,624
22,774
$
98,838
64,111
69,049
2005
2004
2003
35.0
%
35.0
%
35.0
%
0.8
0.5
1.5
8.3
(12.2
)
(12.9
)
(13.8
)
(0.2
)
(1.7
)
1.9
2.7
2.4
(1.4
)
1.5
1.0
1.3
31.8
%
24.6
%
28.3
%
57
Table of Contents
2005
2004
2003
$
98,180
71,759
101,135
212,733
188,329
142,929
$
310,913
260,088
244,064
2005
2004
$
25,477
15,997
21,454
15,844
36,574
46,018
56,667
56,246
35,946
29,496
11,197
11,060
35,473
43,481
222,788
218,142
(23,333
)
(24,713
)
199,455
193,429
14,337
41,963
24,784
17,935
880
1,618
40,001
61,516
$
159,454
131,913
58
Table of Contents
(9)
Capital
Stock
(10)
Stock
Options, Restricted Stock and Warrants
59
Table of Contents
2005
2004
2003
38,491
36,711
39,619
2,953
4,956
3,387
(3,020
)
(1,865
)
(3,765
)
(531
)
(1,311
)
(2,530
)
37,893
38,491
36,711
31,465
30,020
29,291
2005
2004
2003
$
20.55
19.35
12.02
$
15.00
14.28
14.56
$
25.07
20.59
19.06
$
19.53
19.18
18.95
$
19.74
19.74
20.09
60
Table of Contents
Weighted
Average
Weighted
Remaining
Average
Range of
Contractual
Exercise
Shares
Life
Price
3,200
6.3 years
$
11.50
6,752
4.8 years
$
16.33
14,374
10.7 years
$
18.71
4,773
8.0 years
$
20.56
8,794
10.7 years
$
25.71
2,405
$
11.61
5,990
$
16.16
12,597
$
18.73
1,679
$
20.57
8,794
$
25.71
(11)
Pension,
Postretirement and Postemployment Benefits
61
Table of Contents
Pension
Postretirement
2005
2004
2005
2004
$
277,820
251,185
36,082
39,506
9,383
8,632
573
605
15,526
14,630
2,003
2,285
28,698
15,257
2,342
(3,475
)
(16,514
)
(11,354
)
(2,495
)
(2,839
)
(976
)
(530
)
$
313,937
277,820
38,505
36,082
$
289,720
256,548
38,505
36,082
$
188,054
165,460
28,537
20,824
9,524
13,654
2,495
2,839
(16,514
)
(11,354
)
(2,495
)
(2,839
)
(976
)
(530
)
$
208,625
188,054
$
(105,312
)
(89,766
)
(38,505
)
(36,082
)
73,996
60,115
11,552
9,564
3,550
4,131
$
(27,766
)
(25,520
)
(26,953
)
(26,518
)
$
(81,095
)
(68,716
)
(26,953
)
(26,518
)
3,550
4,126
49,779
39,070
$
(27,766
)
(25,520
)
(26,953
)
(26,518
)
Table of Contents
2005
2004
31
%
31
%
13
12
17
15
10
13
11
12
17
16
1
1
100
%
100
%
63
Table of Contents
2005
2004
2003
$
9,384
8,632
8,263
15,526
14,630
14,026
(16,275
)
(14,489
)
(12,350
)
3,136
2,750
3,060
$
11,771
11,523
12,999
$
573
605
528
2,003
2,285
2,286
354
529
647
$
2,930
3,419
3,461
2005
2004
5.50%
5.75%
4.00%
4.00%
8.75%
8.75%
RP-2000
GAM 83
2005
2004
2003
5.75%
6.00%
6.50%
4.00%
4.00%
4.00%
8.75%
8.75%
8.75%
64
Table of Contents
Postretirement
Gross
Benefit
Subsidy
Pension
Payments
Receipts
$
16,770
$
2,560
$
17,165
2,646
263
18,512
2,771
276
19,219
2,852
285
19,434
2,895
289
115,080
14,924
1,353
2005
2004
2003
9.00
%
10.00
%
11.00
%
5.00
%
5.00
%
5.00
%
2009
2009
2009
65
Table of Contents
$
729
795
837
887
1,071
9,596
(12)
Leases
$
22,686
21,382
19,858
18,350
10,995
29,901
$
123,172
(13)
Derivative
Financial Instruments
66
Table of Contents
(14)
Commitments
and Contingencies
$
27,500
14,940
12,130
7,100
5,100
$
66,770
67
Table of Contents
(15)
Segment
Reporting
Revenue
from
Operating
Depreciation
External
Affiliate
Profit
and
Capital
Total
Customers
Revenue
(Loss)
Amortization
Additions
Assets
$
1,074,540
1,920
79,991
45,900
733
1,137,971
730,635
23,359
69,477
34,820
11,308
1,724,339
1,231,761
2,348
148,135
39,728
6,201
1,229,191
823
948,048
18,720
45,082
42,719
747,315
49,868
20,697
997
108
115,864
(975,675
)
(26,499
)
13,605
9,515
(1,653,537
)
$
3,087,627
310,521
180,132
70,584
3,301,143
68
Table of Contents
Revenue
from
Operating
Depreciation
External
Affiliate
Profit
and
Capital
Total
Customers
Revenue
(Loss)
Amortization
Additions
Assets
$
952,923
3,645
7,185
27,073
1,430
1,040,460
796,032
29,692
137,628
30,590
8,315
1,598,867
1,194,630
1,322
140,784
33,654
8,752
1,582,223
2,703
835,576
6,659
38,868
46,101
636,215
51,222
18,088
154
428
178,913
(870,235
)
(17,332
)
15,841
14,213
(1,796,018
)
$
2,997,510
293,012
146,180
79,239
3,240,660
$
1,057,984
6,732
91,996
33,486
2,282
1,037,754
804,547
29,843
175,295
34,676
7,675
1,471,286
1,184,532
112,017
91,273
52,167
4,722
1,353,546
1,929
771,341
10,438
35,694
38,622
591,674
89,665
(13,082
)
2,875
326
106,176
(919,933
)
(11,304
)
5,225
9,443
(1,397,060
)
$
3,138,657
344,616
164,123
63,070
3,163,376
(a)
The Operations segment derives substantially all of its
revenues, and thus its operating results, from intersegment
activities.
(b)
Certain intangible assets, primarily goodwill, which benefit
operating segments are reflected as Corporate assets for segment
reporting purposes. For application of SFAS 142, these
amounts have been allocated to the reporting unit which benefits
from their use. In addition, allocations of certain expenses
related to these assets to the individual operating segments are
done prior to the start of the year based on budgeted amounts.
Any difference between actual and budgeted amounts are reflected
in the Corporate segment.
(c)
Operating profit of the International segment includes a cash
charge associated with severance costs of approximately $18,400
relating to the cessation of manufacturing in the Companys
facility in Spain. In addition, the Company wrote-down certain
property, plant and equipment that will not be used in its
ongoing operations in Spain.
(d)
Other segments include a cash charge of approximately $14,040 in
2003 relating to costs incurred for leases and severance
obligations relating to the announced closure of all of the
Companys remaining retail stores.
Table of Contents
2005
2004
2003
$
869,300
662,500
962,500
1,198,800
1,276,100
1,207,100
199,500
235,100
215,500
142,600
179,700
198,100
312,600
347,000
266,500
212,000
162,800
104,000
152,827
134,310
184,957
$
3,087,627
2,997,510
3,138,657
2005
2004
2003
$
1,846,217
1,782,295
1,927,596
1,241,410
1,215,215
1,211,061
$
3,087,627
2,997,510
3,138,657
$
1,127,100
1,151,852
1,219,470
117,439
162,737
154,703
$
1,244,539
1,314,589
1,374,173
70
Table of Contents
(16)
Quarterly
Financial Data (Unaudited)
Quarter
First
Second
Third
Fourth
Full Year
$
454,944
572,388
988,052
1,072,243
3,087,627
288,969
347,622
543,277
621,488
1,801,356
(3,225
)
32,690
126,326
155,122
310,913
$
(3,713
)
29,454
92,063
94,271
212,075
$
(.02
)
.17
.51
.53
1.19
(.02
)
.13
.47
.48
1.09
$
21.50
21.00
22.35
20.75
22.35
18.11
18.40
19.83
17.75
17.75
$
.09
.09
.09
.09
.36
$
474,247
516,433
947,312
1,059,518
2,997,510
287,524
309,083
523,854
625,392
1,745,853
8,411
22,852
119,296
109,529
260,088
$
6,532
18,839
88,687
81,919
195,977
.04
.11
.50
.46
1.11
.03
.06
.43
.44
.96
$
22.98
23.33
19.64
19.62
23.33
19.38
17.15
16.98
16.90
16.90
$
.06
.06
.06
.06
.24
71
Table of Contents
Item 9.
Changes
in and Disagreements with Accountants on Accounting and
Financial Disclosure
Item 9A.
Controls
and Procedures
72
Table of Contents
73
Table of Contents
Item 9B.
Other
Information
Item 10.
Directors
and Executive Officers of the Registrant
Item 11.
Executive
Compensation
74
Table of Contents
Item 12.
Security
Ownership of Certain Beneficial Owners and Management and
Related Stockholder Matters
Item 13.
Certain
Relationships and Related Transactions
Item 14.
Principal
Accountant Fees and Services
Item 15.
Exhibits and
Financial Statement Schedules
75
Table of Contents
3
.
Articles of Incorporation and
Bylaws
(a)
Restated Articles of Incorporation
of the Company. (Incorporated by reference to Exhibit 3.1
to the Companys Quarterly Report on
Form 10-Q
for the period ended July 2, 2000, File
No. 1-6682.)
(b)
Amendment to Articles of
Incorporation, dated June 28, 2000. (Incorporated by
reference to Exhibit 3.4 to the Companys Quarterly
Report on
Form 10-Q
for the period ended July 2, 2000, File
No. 1-6682.)
(c)
Amendment to Articles of
Incorporation, dated May 19, 2003. (Incorporated by
reference to Exhibit 3.3 to the Companys Quarterly
Report on
Form 10-Q
for the period ended June 29, 2003, File
No. 1-6682.)
(d)
Amended and Restated Bylaws of the
Company, as amended. (Incorporated by reference to
Exhibit 3.4 to the Companys Quarterly Report on
Form 10-Q
for the period ended June 29, 2003, File
No. 1-6682.)
(e)
Certificate of Designations of
Series C Junior Participating Preference Stock of Hasbro,
Inc. dated June 29, 1999. (Incorporated by reference to
Exhibit 3.2 to the Companys Quarterly Report on
Form 10-Q
for the period ended July 2, 2000, File
No. 1-6682.)
(f)
Certificate of Vote(s) authorizing
a decrease of class or series of any class of shares.
(Incorporated by reference to Exhibit 3.3 to the
Companys Quarterly Report on
Form 10-Q
for the period ended July 2, 2000, File
No. 1-6682.)
4
.
Instruments defining the rights of
security holders, including indentures.
(a)
Indenture, dated as of
July 17, 1998, by and between the Company and Citibank,
N.A. as Trustee. (Incorporated by reference to Exhibit 4.1
to the Companys Current Report on
Form 8-K
dated July 14, 1998, File
No. 1-6682.)
(b)
Indenture, dated as of
March 15, 2000, by and between the Company and the Bank of
Nova Scotia Trust Company of New York. (Incorporated by
reference to Exhibit 4(b) (i) to the Companys
Annual Report on
Form 10-K
for the Fiscal Year Ended December 26, 1999, File Number
1-6682.)
(c)
Indenture, dated as of
November 30, 2001, between the Company and The Bank of Nova
Scotia Trust Company of New York. (Incorporated by reference to
Exhibit 4.1 to the Companys Registration Statement on
Form S-3,
File
No. 333-83250,
filed February 22, 2002.)
(d)
Third Amended and Restated
Revolving Credit Agreement, dated as of November 14, 2003,
by and among the Company, the Banks party thereto, and Fleet
National Bank, as Agent for the Banks. (Incorporated by
reference to Exhibit 4(d) to the Companys Annual
Report on
Form 10-K
for the Fiscal Year Ended December 28, 2003, File
No. 1-6682.)
(e)
First Amendment to the
Companys Third Amended and Restated Revolving Credit
Agreement dated March 11, 2005. (Incorporated by reference
to Exhibit 4.5 to the Companys Quarterly Report on
Form 10-Q
for the period ended March 27, 2005, File
No. 1-6682.)
(f)
Rights Agreement, dated as of
June 16, 1999, between the Company and Fleet National Bank
(the Rights Agent). (Incorporated by reference to Exhibit 4
to the Companys Current Report on
Form 8-K
dated as of June 16, 1999.)
(g)
First Amendment to Rights
Agreement, dated as of December 4, 2000, between the
Company and the Rights Agent. (Incorporated by reference to
Exhibit 4(f) to the Companys Annual Report on
Form 10-K
for the Fiscal Year Ended December 31, 2000, File No.
1-6682.)
10
.
Material Contracts
(a)
Lease between Hasbro Canada
Corporation (formerly named Hasbro Industries (Canada)
Ltd.)(Hasbro Canada) and Central Toy Manufacturing
Co. (Central Toy), dated December 23, 1976.
(Incorporated by reference to Exhibit 10.15 to the
Companys Registration Statement on
Form S-14,
File
No. 2-92550.)
Table of Contents
(b)
Lease between Hasbro Canada and
Central Toy, together with an Addendum thereto, each dated as of
May 1, 1987. (Incorporated by reference to
Exhibit 10(f) to the Companys Annual Report on
Form 10-K
for the Fiscal Year Ended December 27, 1987, File
No. 1-6682.)
(c)
Addendum to lease, dated
March 5, 1998, between Hasbro Canada and Central Toy.
(Incorporated by reference to Exhibit 10(c) to the
Companys Annual Report on
Form 10-K
for the Fiscal Year Ended December 28, 1997, File
No. 1-6682.)
(d)
Letter agreement, dated
December 13, 2000, between Hasbro Canada and Central Toy.
(Incorporated by reference to Exhibit 10(d) to the
Companys Annual Report on
Form 10-K
for the Fiscal Year Ended December 31, 2000, File
No. 1-6682.)
(e)
Indenture and Agreement of Lease
between Hasbro Canada and Central Toy, dated November 11,
2003. (Incorporated by reference to Exhibit 10(e) to the
Companys Annual Report on
Form 10-K
for the Fiscal Year Ended December 28, 2003, File
No. 1-6682.)
(f)
Toy License Agreement between
Lucas Licensing Ltd. and the Company, dated as of
October 14, 1997. (Portions of this agreement have been
omitted pursuant to a request for confidential treatment under
Rule 24b-2
of the Securities Exchange Act of 1934, as
amended.)(Incorporated by reference to Exhibit 10(d) to the
Companys Annual Report on
Form 10-K
for the Fiscal Year Ended December 27, 1998, File
No. 1-6682.)
(g)
First Amendment to Toy License
Agreement between Lucas Licensing Ltd. and the Company, dated as
of September 25, 1998. (Portions of this agreement have
been omitted pursuant to a request for confidential treatment
under
Rule 24b-2
of the Securities Exchange Act of 1934, as
amended.)(Incorporated by reference to Exhibit 10(e) to the
Companys Annual Report on
Form 10-K
for the Fiscal Year Ended December 27, 1998, File No.
1-6682.)
(h)
Seventeenth Amendment to Toy
License Agreement between Lucas Licensing Ltd. and the Company,
dated as of January 30, 2003. (Incorporated by reference to
Exhibit 10(g) to the Companys Annual Report on
Form 10-K
for the Fiscal Year Ended December 29, 2002, File
No. 1-6682.)
(i)
Agreement of Strategic
Relationship between Lucasfilm Ltd. and the Company, dated as of
October 14, 1997. (Portions of this agreement have been
omitted pursuant to a request for confidential treatment under
Rule 24b-2
of the Securities Exchange Act of 1934, as amended.)
(Incorporated by reference to Exhibit 10(f) to the
Companys Annual Report on
Form 10-K
for the Fiscal Year Ended December 27, 1998, File
No. 1-6682.)
(j)
First Amendment to Agreement of
Strategic Relationship between Lucasfilm Ltd. and the Company,
dated as of September 25, 1998. (Incorporated by reference
to Exhibit 10(g) to the Companys Annual Report on
Form 10-K
for the Fiscal Year ended December 27, 1998, File
No. 1-6682.)
(k)
Second Amendment to Agreement of
Strategic Relationship between Lucasfilm Ltd. and the Company,
dated as of January 30, 2003. (Incorporated by reference to
Exhibit 10(j) to the Companys Annual Report on
Form 10-K
for the Fiscal Year Ended December 29, 2002, File
No. 1-6682.)
(l)
Warrant, dated October 14,
1997 between the Company and Lucas Licensing Ltd. (Incorporated
by reference to Exhibit 10(h) to the Companys Annual
Report on
Form 10-K
for the Fiscal Year ended December 27, 1998, File
No. 1-6682.)
(m)
Warrant, dated October 14,
1997 between the Company and Lucasfilm Ltd. (Incorporated by
reference to Exhibit 10(i) to the Companys Annual
Report on
Form 10-K
for the Fiscal Year ended December 27, 1998, File
No. 1-6682.)
(n)
Warrant, dated October 30,
1998 between the Company and Lucas Licensing Ltd. (Incorporated
by reference to Exhibit 10(j) to the Companys Annual
Report on
Form 10-K
for the Fiscal Year ended December 27, 1998, File
No. 1-6682.)
(o)
Warrant, dated October 30,
1998 between the Company and Lucasfilm Ltd. (Incorporated by
reference to Exhibit 10(k) to the Companys Annual
Report on
Form 10-K
for the Fiscal Year ended December 27, 1998, File
No. 1-6682.)
Table of Contents
(p)
Warrant Amendment Agreement dated
January 30, 2003 by and among the Company,
Lucasfilm Ltd., and Lucas Licensing Ltd. (Filed as
Exhibit 1 to Amendment No. 1 to Statement on
Schedule 13D filed with the SEC with respect to the
securities of Hasbro, Inc. on February 10, 2003 and
incorporated herein by reference.)
(q)
Receivables Purchase Agreement
dated as of December 10, 2003 among Hasbro Receivables
Funding, LLC, as the Seller, CAFCO LLC and Starbird Funding
Corporation, as Investors, Citibank, N.A. and BNP Paribas, as
Banks, Citicorp North America, Inc., as Program Agent, Citicorp
North America, Inc. and BNP Paribas, as Investor Agents, Hasbro,
Inc., as Collection Agent and Originator, and Wizards of the
Coast, Inc. and Oddzon, Inc., as Originators. (Portions of this
agreement have been omitted pursuant to a request for
confidential treatment under
Rule 24b-2
of the Securities Exchange Act of 1934, as amended.)
(Incorporated by reference to Exhibit 10(q) to the
Companys Annual Report on
Form 10-K
for the Fiscal Year Ended December 28, 2003, File
No. 1-6682.)
Executive Compensation Plans and
Arrangements
(r)
1992 Stock Incentive Plan.
(Incorporated by reference to Appendix A to the
Companys definitive proxy statement for its 1992 Annual
Meeting of Shareholders, File
No. 1-6682.)
(s)
Form of Stock Option Agreement
under the 1992 Stock Incentive Plan, the Stock Incentive
Performance Plan and the Employee Non-Qualified Stock Plan.
(Incorporated by reference to Exhibit 10(v) to the
Companys Annual Report on
Form 10-K
for the Fiscal Year Ended December 27, 1992, File
No. 1-6682.)
(t)
Hasbro, Inc. 1995 Stock Incentive
Performance Plan. (Incorporated by reference to Appendix A
to the Companys definitive proxy statement for its 1995
Annual Meeting of Shareholders, File
No. 1-6682.)
(u)
First Amendment to the 1992 Stock
Incentive Plan and the 1995 Stock Incentive Performance Plan.
(Incorporated by reference to Exhibit 10.1 to the
Companys Quarterly Report on
Form 10-Q
for the period ended June 27, 1999, File
No. 1-6682.)
(v)
Second Amendment to the 1995 Stock
Incentive Performance Plan. (Incorporated by reference to
Appendix A to the Companys definitive proxy statement
for its 2000 Annual Meeting of Shareholders, File
No. 1-6682.)
(w)
Second Amendment to the 1992 Stock
Incentive Plan
(x)
Third Amendment to the 1995 Stock
Incentive Performance Plan
(y)
1997 Employee Non-Qualified Stock
Plan. (Incorporated by reference to Exhibit 10(dd) to the
Companys Annual Report on
Form 10-K
for the Fiscal Year Ended December 29, 1996, File No.
1-6682.)
(z)
First Amendment to the 1997
Employee Non-Qualified Stock Plan. (Incorporated by reference to
Exhibit 10 to the Companys Quarterly Report on
Form 10-Q
for the period ended March 28, 1999, File
No. 1-6682.)
(aa)
Form of Stock Option Agreement
(For Participants in the Long Term Incentive Program) under the
1992 Stock Incentive Plan, the 1995 Stock Incentive Performance
Plan, and the 1997 Employee Non-Qualified Stock Plan.
(Incorporated by reference to Exhibit 10(w) to the
Companys Annual Report on
Form 10-K
for the Fiscal Year Ended December 27, 1992, File
No. 1-6682.)
(bb)
Third Amendment to the 1997
Employee Non-Qualified Stock Plan.
(cc)
Form of Restricted Stock
Agreement. (Incorporated by reference to Exhibit 10(gg) to
the Companys Annual Report on
Form 10-K
for the Fiscal Year Ended December 31, 2000, File
No. 1-6682.)
(dd)
Form of Deferred Restricted Stock
Unit Agreement. (Incorporated by reference to
Exhibit 10(hh) to the Companys Annual Report on
Form 10-K
for the Fiscal Year Ended December 31, 2000, File No.
1-6682.)
(ee)
Form of Employment Agreement
between the Company and six Company executives. (Incorporated by
reference to Exhibit 10(v) to the Companys Annual
Report on
Form 10-K
for the Fiscal Year Ended December 31, 1989, File
No. 1-6682.)
Table of Contents
(ff)
Form of Amendment, dated as of
March 10, 2000, to Form of Employment Agreement included as
Exhibit 10(ee) above. (Incorporated by reference to
Exhibit 10(ff) to the Companys Annual Report on
Form 10-K
for the Fiscal Year Ended December 26, 1999, File
No. 1-6682.)
(gg)
Hasbro, Inc. Retirement Plan for
Directors. (Incorporated by reference to Exhibit 10(x) to
the Companys Annual Report on
Form 10-K
for the Fiscal Year Ended December 30, 1990, File
No. 1-6682.)
(hh)
First Amendment to Hasbro, Inc.
Retirement Plan for Directors, dated April 15, 2003.
(Incorporated by reference to Exhibit 10.1 to the
Companys Quarterly Report on
Form 10-Q
for the period ended June 29, 2003, File
No. 1-6682.)
(ii)
Second Amendment to Hasbro, Inc.
Retirement Plan for Directors. (Incorporated by reference to
Exhibit 10.1 to the Companys Quarterly Report on
Form 10-Q
for the period ended June 27, 2004, File
No. 1-6682.)
(jj)
Form of Directors
Indemnification Agreement. (Incorporated by reference to
Appendix B to the Companys definitive proxy statement
for its 1988 Annual Meeting of Shareholders, File
No. 1-6682.)
(kk)
Hasbro, Inc. Deferred Compensation
Plan for Non-Employee Directors. (Incorporated by reference to
Exhibit 10(cc) to the Companys Annual Report on
Form 10-K
for the Fiscal Year Ended December 26, 1993, File
No. 1-6682.)
(ll)
First Amendment to Hasbro, Inc.
Deferred Compensation Plan for Non-Employee Directors, dated
April 15, 2003. (Incorporated by reference to
Exhibit 10.2 to the Companys Quarterly Report on
Form 10-Q
for the period ended June 29, 2003, File
No. 1-6682.)
(mm)
Second Amendment to Hasbro, Inc.
Deferred Compensation Plan for Non-Employee Directors, dated
July 17, 2003. (Incorporated by reference to
Exhibit 10.1 to the Companys Quarterly Report on
Form 10-Q
for the period ended September 28, 2003, File No.
1-6682.)
(nn)
Third Amendment to Hasbro, Inc.
Deferred Compensation Plan for Non-Employee Directors, dated
December 15, 2005.
(oo)
Hasbro, Inc. 1994 Stock Option
Plan for Non-Employee Directors. (Incorporated by reference to
Appendix A to the Companys definitive proxy statement
for its 1994 Annual Meeting of Shareholders, File
No. 1-6682.)
(pp)
First Amendment to the 1994 Stock
Option Plan for Non-Employee Directors. (Incorporated by
reference to Exhibit 10.2 to the Companys Quarterly
Report on
Form 10-Q
for the period ended June 27, 1999, File
No. 1-6682.)
(qq)
Form of Stock Option Agreement for
Non-Employee Directors under the Hasbro, Inc. 1994 Stock Option
Plan for Non-Employee Directors. (Incorporated by reference to
Exhibit 10(w) to the Companys Annual Report on
Form 10-K
for the Fiscal Year Ended December 25, 1994, File
No. 1-6682.)
(rr)
Hasbro, Inc. 2003 Stock Option
Plan for Non-Employee Directors. (Incorporated by reference to
Appendix B to the Companys definitive proxy statement
for its 2003 Annual Meeting of Shareholders, File
No. 1-6682.)
(ss)
Hasbro, Inc. 2004 Senior
Management Annual Performance Plan. (Incorporated by reference
to Appendix B to the Companys definitive proxy
statement for its 2004 Annual Meeting of Shareholders, File
No. 1-6682.)
(tt)
Hasbro, Inc. 2003 Stock Incentive
Performance Plan. (Incorporated by reference to Appendix D
to the Companys definitive proxy statement for its 2003
Annual Meeting of Shareholders, File
No. 1-6682.)
(uu)
First Amendment to the Hasbro,
Inc. 2003 Stock Incentive Performance Plan. (Incorporated by
reference to Appendix B to the Companys definitive
proxy statement for its 2005 Annual Meeting of Shareholders,
File
No. 1-6682.)
(vv)
Second Amendment to Hasbro, Inc.
2003 Stock Incentive Performance Plan.
Table of Contents
Table of Contents
Hasbro, Inc.:
81
Table of Contents
Provision
Balance at
Charged to
Balance
Beginning of
Costs and
Other
Write-Offs
at End of
Year
Expenses(a)
Additions
and Other(b)
Year
$
37,000
582
(7,782
)
$
29,800
$
39,200
1,590
(3,790
)
$
37,000
$
50,700
(1,137
)
(10,363
)
$
39,200
(a)
Based on an assessment of accounts receivable, the Company made
a $5.0 million adjustment to reduce its allowance for
doubtful accounts in December 2003.
(b)
Includes write-offs, recoveries of previous write-offs, and
translation adjustments.
82
Table of Contents
By: /s/ Alfred
J. Verrecchia
Date:
February 22, 2006
/s/ Alan G.
Hassenfeld
Chairman of the Board
February 22, 2006
/s/ Alfred J.
Verrecchia
President, Chief Executive Officer
and Director (Principal Executive Officer)
February 22, 2006
/s/ David D.R.
Hargreaves
Senior Vice President and
Chief Financial Officer (Principal Financial and Accounting
Officer)
February 22, 2006
/s/ Basil L.
Anderson
Director
February 22, 2006
/s/ Alan R. Batkin
Director
February 22, 2006
/s/ Frank J.
Biondi, Jr.
Director
February 22, 2006
/s/ John M.
Connors, Jr.
Director
February 22, 2006
/s/ Michael W.O.
Garrett
Director
February 22, 2006
/s/ E. Gordon Gee
Director
February 22, 2006
/s/ Jack M.
Greenberg
Director
February 22, 2006
/s/ Claudine B.
Malone
Director
February 22, 2006
83
Table of Contents
/s/ Edward M. Philip
Director
February 22, 2006
/s/ Paula Stern
Director
February 22, 2006
Table of Contents
3
.
Articles of Incorporation and
Bylaws
(a)
Restated Articles of Incorporation
of the Company. (Incorporated by reference to Exhibit 3.1
to the Companys Quarterly Report on
Form 10-Q
for the period ended July 2, 2000, File
No. 1-6682.)
(b)
Amendment to Articles of
Incorporation, dated June 28, 2000. (Incorporated by
reference to Exhibit 3.4 to the Companys Quarterly
Report on
Form 10-Q
for the period ended July 2, 2000, File
No. 1-6682.)
(c)
Amendment to Articles of
Incorporation, dated May 19, 2003. (Incorporated by
reference to Exhibit 3.3 to the Companys Quarterly
Report on
Form 10-Q
for the period ended June 29, 2003, File
No. 1-6682.)
(d)
Amended and Restated Bylaws of the
Company, as amended. (Incorporated by reference to
Exhibit 3.4 to the Companys Quarterly Report on
Form 10-Q
for the period ended June 29, 2003, File
No. 1-6682.)
(e)
Certificate of Designations of
Series C Junior Participating Preference Stock of Hasbro,
Inc. dated June 29, 1999. (Incorporated by reference to
Exhibit 3.2 to the Companys Quarterly Report on
Form 10-Q
for the period ended July 2, 2000, File
No. 1-6682.)
(f)
Certificate of Vote(s) authorizing
a decrease of class or series of any class of shares.
(Incorporated by reference to Exhibit 3.3 to the
Companys Quarterly Report on
Form 10-Q
for the period ended July 2, 2000, File
No. 1-6682.)
4
.
Instruments defining the rights of
security holders, including indentures.
(a)
Indenture, dated as of
July 17, 1998, by and between the Company and Citibank,
N.A. as Trustee. (Incorporated by reference to Exhibit 4.1
to the Companys Current Report on
Form 8-K
dated July 14, 1998, File
No. 1-6682.)
(b)
Indenture, dated as of
March 15, 2000, by and between the Company and the Bank of
Nova Scotia Trust Company of New York. (Incorporated by
reference to Exhibit 4(b) (i) to the Companys
Annual Report on
Form 10-K
for the Fiscal Year Ended December 26, 1999, File Number
1-6682.)
(c)
Indenture, dated as of
November 30, 2001, between the Company and The Bank of Nova
Scotia Trust Company of New York. (Incorporated by reference to
Exhibit 4.1 to the Companys Registration Statement on
Form S-3,
File
No. 333-83250,
filed February 22, 2002.)
(d)
Third Amended and Restated
Revolving Credit Agreement, dated as of November 14, 2003,
by and among the Company, the Banks party thereto, and Fleet
National Bank, as Agent for the Banks. (Incorporated by
reference to Exhibit 4(d) to the Companys Annual
Report on
Form 10-K
for the Fiscal Year Ended December 28, 2003, File
No. 1-6682.)
(e)
First Amendment to the
Companys Third Amended and Restated Revolving Credit
Agreement dated March 11, 2005. (Incorporated by reference
to Exhibit 4.5 to the Companys Quarterly Report on
Form 10-Q
for the period ended March 27, 2005, File
No. 1-6682.)
(f)
Rights Agreement, dated as of
June 16, 1999, between the Company and Fleet National Bank
(the Rights Agent). (Incorporated by reference to Exhibit 4
to the Companys Current Report on
Form 8-K
dated as of June 16, 1999.)
(g)
First Amendment to Rights
Agreement, dated as of December 4, 2000, between the
Company and the Rights Agent. (Incorporated by reference to
Exhibit 4(f) to the Companys Annual Report on
Form 10-K
for the Fiscal Year Ended December 31, 2000, File
No. 1-6682.)
85
Table of Contents
10
.
Material Contracts
(a)
Lease between Hasbro Canada
Corporation (formerly named Hasbro Industries (Canada)
Ltd.)(Hasbro Canada) and Central Toy Manufacturing
Co. (Central Toy), dated December 23, 1976.
(Incorporated by reference to Exhibit 10.15 to the
Companys Registration Statement on
Form S-14,
File
No. 2-92550.)
(b)
Lease between Hasbro Canada and
Central Toy, together with an Addendum thereto, each dated as of
May 1, 1987. (Incorporated by reference to
Exhibit 10(f) to the Companys Annual Report on
Form 10-K
for the Fiscal Year Ended December 27, 1987, File
No. 1-6682.)
(c)
Addendum to lease, dated
March 5, 1998, between Hasbro Canada and Central Toy.
(Incorporated by reference to Exhibit 10(c) to the
Companys Annual Report on
Form 10-K
for the Fiscal Year Ended December 28, 1997, File
No. 1-6682.)
(d)
Letter agreement, dated
December 13, 2000, between Hasbro Canada and Central Toy.
(Incorporated by reference to Exhibit 10(d) to the
Companys Annual Report on
Form 10-K
for the Fiscal Year Ended December 31, 2000, File
No. 1-6682.)
(e)
Indenture and Agreement of Lease
between Hasbro Canada and Central Toy, dated November 11,
2003. (Incorporated by reference to Exhibit 10(e) to the
Companys Annual Report on
Form 10-K
for the Fiscal Year Ended December 28, 2003, File
No. 1-6682.)
(f)
Toy License Agreement between
Lucas Licensing Ltd. and the Company, dated as of
October 14, 1997. (Portions of this agreement have been
omitted pursuant to a request for confidential treatment under
Rule 24b-2
of the Securities Exchange Act of 1934, as
amended.)(Incorporated by reference to Exhibit 10(d) to the
Companys Annual Report on
Form 10-K
for the Fiscal Year Ended December 27, 1998, File
No. 1-6682.)
(g)
First Amendment to Toy License
Agreement between Lucas Licensing Ltd. and the Company, dated as
of September 25, 1998. (Portions of this agreement have
been omitted pursuant to a request for confidential treatment
under
Rule 24b-2
of the Securities Exchange Act of 1934, as
amended.)(Incorporated by reference to Exhibit 10(e) to the
Companys Annual Report on
Form 10-K
for the Fiscal Year Ended December 27, 1998, File No.
1-6682.)
(h)
Seventeenth Amendment to Toy
License Agreement between Lucas Licensing Ltd. and the Company,
dated as of January 30, 2003. (Incorporated by reference to
Exhibit 10(g) to the Companys Annual Report on
Form 10-K
for the Fiscal Year Ended December 29, 2002,
File No. 1-6682.)
(i)
Agreement of Strategic
Relationship between Lucasfilm Ltd. and the Company, dated as of
October 14, 1997. (Portions of this agreement have been
omitted pursuant to a request for confidential treatment under
Rule 24b-2
of the Securities Exchange Act of 1934, as amended.)
(Incorporated by reference to Exhibit 10(f) to the
Companys Annual Report on
Form 10-K
for the Fiscal Year Ended December 27, 1998, File
No. 1-6682.)
(j)
First Amendment to Agreement of
Strategic Relationship between Lucasfilm Ltd. and the Company,
dated as of September 25, 1998. (Incorporated by reference
to Exhibit 10(g) to the Companys Annual Report on
Form 10-K
for the Fiscal Year ended December 27, 1998,
File No. 1-6682.)
(k)
Second Amendment to Agreement of
Strategic Relationship between Lucasfilm Ltd. and the Company,
dated as of January 30, 2003. (Incorporated by reference to
Exhibit 10(j) to the Companys Annual Report on
Form 10-K
for the Fiscal Year Ended December 29, 2002,
File No. 1-6682.)
(l)
Warrant, dated October 14,
1997 between the Company and Lucas Licensing Ltd. (Incorporated
by reference to Exhibit 10(h) to the Companys Annual
Report on
Form 10-K
for the Fiscal Year ended December 27, 1998, File
No. 1-6682.)
(m)
Warrant, dated October 14,
1997 between the Company and Lucasfilm Ltd. (Incorporated by
reference to Exhibit 10(i) to the Companys Annual
Report on
Form 10-K
for the Fiscal Year ended December 27, 1998, File
No. 1-6682.)
86
Table of Contents
(n)
Warrant, dated October 30,
1998 between the Company and Lucas Licensing Ltd. (Incorporated
by reference to Exhibit 10(j) to the Companys Annual
Report on
Form 10-K
for the Fiscal Year Ended December 27, 1998, File
No. 1-6682.)
(o)
Warrant, dated October 30,
1998 between the Company and Lucasfilm Ltd. (Incorporated by
reference to Exhibit 10(k) to the Companys Annual
Report on
Form 10-K
for the Fiscal Year Ended December 27, 1998, File
No. 1-6682.)
(p)
Warrant Amendment Agreement dated
January 30, 2003 by and among the Company, Lucasfilm Ltd.,
and Lucas Licensing Ltd. (Filed as Exhibit 1 to Amendment
No. 1 to Statement on Schedule 13D filed with the SEC
with respect to securities of Hasbro, Inc. on February 10,
2003 and incorporated herein by reference.)
(q)
Receivables Purchase Agreement
dated as of December 10, 2003 among Hasbro Receivables
Funding, LLC, as the Seller, CAFCO LLC and Starbird Funding
Corporation, as Investors, Citibank, N.A. and BNP Paribas, as
Banks, Citicorp North America, Inc., as Program Agent, Citicorp
North America, Inc. and BNP Paribas, as Investor Agents, Hasbro,
Inc., as Collection Agent and Originator, and Wizards of the
Coast, Inc. and Oddzon, Inc., as Originators. (Portions of this
agreement have been omitted pursuant to a request for
confidential treatment under
Rule 24b-2
of the Securities Exchange Act of 1934, as amended.)
(Incorporated by reference to Exhibit 10(q) to the
Companys Annual Report on
Form 10-K
for the Fiscal Year Ended December 28, 2003, File No.
1-6682.)
Executive Compensation Plans and
Arrangements
(r)
1992 Stock Incentive Plan.
(Incorporated by reference to Appendix A to the
Companys definitive proxy statement for its 1992 Annual
Meeting of Shareholders, File
No. 1-6682.)
(s)
Form of Stock Option Agreement
under the 1992 Stock Incentive Plan, the Stock Incentive
Performance Plan and the Employee Non-Qualified Stock Plan.
(Incorporated by reference to Exhibit 10(v) to the
Companys Annual Report on
Form 10-K
for the Fiscal Year Ended December 27, 1992, File
No. 1-6682.)
(t)
Hasbro, Inc. 1995 Stock Incentive
Performance Plan. (Incorporated by reference to Appendix A
to the Companys definitive proxy statement for its 1995
Annual Meeting of Shareholders, File
No. 1-6682.)
(u)
First Amendment to the 1992 Stock
Incentive Plan and the 1995 Stock Incentive Performance Plan.
(Incorporated by reference to Exhibit 10.1 to the
Companys Quarterly Report on
Form 10-Q
for the period ended June 27, 1999, File
No. 1-6682.)
(v)
Second Amendment to the 1995 Stock
Incentive Performance Plan. (Incorporated by reference to
Appendix A to the Companys definitive proxy statement
for its 2000 Annual Meeting of Shareholders, File
No. 1-6682.)
(w)
Second Amendment to the 1992 Stock
Incentive Plan.
(x)
Third Amendment to the 1995 Stock
Incentive Performance Plan.
(y)
1997 Employee Non-Qualified Stock
Plan. (Incorporated by reference to Exhibit 10(dd) to the
Companys Annual Report on
Form 10-K
for the Fiscal Year Ended December 29, 1996, File No.
1-6682.)
(z)
First Amendment to the 1997
Employee Non-Qualified Stock Plan. (Incorporated by reference to
Exhibit 10 to the Companys Quarterly Report on
Form 10-Q
for the period ended March 28, 1999, File
No. 1-6682.)
(aa)
Form of Stock Option Agreement
(For Participants in the Long Term Incentive Program) under the
1992 Stock Incentive Plan, the 1995 Stock Incentive Performance
Plan, and the 1997 Employee Non-Qualified Stock Plan.
(Incorporated by reference to Exhibit 10(w) to the
Companys Annual Report on
Form 10-K
for the Fiscal Year Ended December 27, 1992,
File No. 1-6682.)
(bb)
Third Amendment to the 1997
Employee Non-Qualified Stock Plan.
(cc)
Form of Restricted Stock
Agreement. (Incorporated by reference to Exhibit 10(gg) to
the Companys Annual Report on
Form 10-K
for the Fiscal Year Ended December 31, 2000,
File No. 1-6682.)
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Table of Contents
(dd)
Form of Deferred Restricted Stock
Unit Agreement. (Incorporated by reference to
Exhibit 10(hh) to the Companys Annual Report on
Form 10-K
for the Fiscal Year Ended December 31, 2000, File No.
1-6682.)
(ee)
Form of Employment Agreement
between the Company and six Company executives. (Incorporated by
reference to Exhibit 10(v) to the Companys Annual
Report on
Form 10-K
for the Fiscal Year Ended December 31, 1989, File
No. 1-6682.)
(ff)
Form of Amendment, dated as of
March 10, 2000, to Form of Employment Agreement included as
Exhibit 10(ee) above. (Incorporated by reference to
Exhibit 10(ff) to the Companys Annual Report on
Form 10-K
for the Fiscal Year Ended December 26, 1999,
File No. 1-6682.)
(gg)
Hasbro, Inc. Retirement Plan for
Directors. (Incorporated by reference to Exhibit 10(x) to
the Companys Annual Report on
Form 10-K
for the Fiscal Year Ended December 30, 1990,
File No. 1-6682.)
(hh)
First Amendment to Hasbro, Inc.
Retirement Plan for Directors, dated April 15, 2003.
(Incorporated by reference to Exhibit 10.1 to the
Companys Quarterly Report on
Form 10-Q
for the period ended June 29, 2003, File
No. 1-6682.)
(ii)
Second Amendment to Hasbro, Inc.
Retirement Plan for Directors. (Incorporated by reference to
Exhibit 10.1 to the Companys Quarterly Report on
Form 10-Q
for the period ended June 27, 2004, File
No. 1-6682.)
(jj)
Form of Directors
Indemnification Agreement. (Incorporated by reference to
Appendix B to the Companys definitive proxy statement
for its 1988 Annual Meeting of Shareholders,
File No. 1-6682.)
(kk)
Hasbro, Inc. Deferred Compensation
Plan for Non-Employee Directors. (Incorporated by reference to
Exhibit 10(cc) to the Companys Annual Report on
Form 10-K
for the Fiscal Year Ended December 26, 1993, File
No. 1-6682.)
(ll)
First Amendment to Hasbro, Inc.
Deferred Compensation Plan for Non-Employee Directors, dated
April 15, 2003. (Incorporated by reference to
Exhibit 10.2 to the Companys Quarterly Report on
Form 10-Q
for the period ended June 29, 2003, File
No. 1-6682.)
(mm)
Second Amendment to Hasbro, Inc.
Deferred Compensation Plan for Non-Employee Directors, dated
July 17, 2003. (Incorporated by reference to
Exhibit 10.1 to the Companys Quarterly Report on
Form 10-Q
for the period ended September 28, 2003, File No.
1-6682.)
(nn)
Third Amendment to Hasbro, Inc.
Deferred Compensation Plan for Non-Employee Directors, dated
December 15, 2005.
(oo)
Hasbro, Inc. 1994 Stock Option
Plan for Non-Employee Directors. (Incorporated by reference to
Appendix A to the Companys definitive proxy statement
for its 1994 Annual Meeting of Shareholders, File
No. 1-6682.)
(pp)
First Amendment to the 1994 Stock
Option Plan for Non-Employee Directors. (Incorporated by
reference to Exhibit 10.2 to the Companys Quarterly
Report on
Form 10-Q
for the period ended June 27, 1999, File
No. 1-6682.)
(qq)
Form of Stock Option Agreement for
Non-Employee Directors under the Hasbro, Inc. 1994 Stock Option
Plan for Non-Employee Directors. (Incorporated by reference to
Exhibit 10(w) to the Companys Annual Report on
Form 10-K
for the Fiscal Year Ended December 25, 1994, File
No. 1-6682.)
(rr)
Hasbro, Inc. 2003 Stock Option
Plan for Non-Employee Directors. (Incorporated by reference to
Appendix B to the Companys definitive proxy statement
for its 2003 Annual Meeting of Shareholders, File
No. 1-6682.)
(ss)
Hasbro, Inc. 2004 Senior
Management Annual Performance Plan. (Incorporated by reference
to Appendix B to the Companys definitive proxy
statement for its 2004 Annual Meeting of Shareholders, File
No. 1-6682.)
(tt)
Hasbro, Inc. 2003 Stock Incentive
Performance Plan. (Incorporated by reference to Appendix D
to the Companys definitive proxy statement for its 2003
Annual Meeting of Shareholders, File
No. 1-6682.)
88
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89
EXHIBIT 10(w)
SECOND AMENDMENT TO
HASBRO, INC. 1992 STOCK INCENTIVE PLAN
The Hasbro, Inc. 1992 Stock Incentive Plan (the "1992 Plan"), as amended, is hereby further amended in the manner set forth below by this second amendment (the "Second Amendment"). The effective date for this Second Amendment is December 23, 2005.
1. Section 16(b)(1) of the 1992 Plan is hereby deleted and replaced in its entirety with the following:
"(1) Upon the occurrence of an event constituting a Change in Control, all awards outstanding on such date shall become 100% vested and the then value of such awards, less all applicable withholding taxes, shall be paid to the participant in cash (or, in the case of Stock Options, SARs, Stock Awards and any other awards providing for equity in the Company, either in cash or in shares of Common Stock, or in any combination thereof, as may be determined by the Committee in its sole and absolute discretion) as soon as may be practicable. Upon such payment, such awards shall be cancelled."
2. A new Section 16(b)(4) is hereby added to the 1992 Plan as follows:
"(4) In the event that the Committee determines pursuant to
Section 16(b)(1) above to pay participants the value of an equity award
in shares of Common Stock, the number of shares of Common Stock to be
paid to each participant will be determined by taking the cash value
which would have been paid if the Committee had elected to pay in cash,
computed in accordance with Section 16(b)(2) above, and dividing such
value by the Payout Fair Market Value of the Common Stock. No fractional
shares of Common Stock will be issued. The value of any fractional share
amount will be paid to the participant in cash. For purposes of this Plan
the term "Payout Fair Market Value" shall mean the average of the Fair
Market Values of the Stock for the ten trading days immediately preceding
the date on which the Change in Control shall have occurred."
EXHIBIT 10(x)
THIRD AMENDMENT TO
HASBRO, INC. 1995 STOCK INCENTIVE PERFORMANCE PLAN
The Hasbro, Inc. 1995 Stock Incentive Performance Plan (the "1995 Plan"), as amended, is hereby further amended in the manner set forth below by this third amendment (the "Third Amendment"). The effective date for this Third Amendment is December 23, 2005.
1. Section 16(b)(1) of the 1995 Plan is hereby deleted and replaced in its entirety with the following:
"(1) Upon the occurrence of an event constituting a Change in Control, all awards outstanding on such date shall become 100% vested and the then value of such awards, less all applicable withholding taxes, shall be paid to the participant in cash (or, in the case of Stock Options, SARs, Stock Awards and any other awards providing for equity in the Company, either in cash or in shares of Common Stock, or in any combination thereof, as may be determined by the Committee in its sole and absolute discretion) as soon as may be practicable. Upon such payment, such awards shall be cancelled."
2. A new Section 16(b)(4) is hereby added to the 1995 Plan as follows:
"(4) In the event that the Committee determines pursuant to
Section 16(b)(1) above to pay participants the value of an equity award
in shares of Common Stock, the number of shares of Common Stock to be
paid to each participant will be determined by taking the cash value
which would have been paid if the Committee had elected to pay in cash,
computed in accordance with Section 16(b)(2) above, and dividing such
value by the Payout Fair Market Value of the Common Stock. No fractional
shares of Common Stock will be issued. The value of any fractional share
amount will be paid to the participant in cash. For purposes of this Plan
the term "Payout Fair Market Value" shall mean the average of the Fair
Market Values of the Stock for the ten trading days immediately preceding
the date on which the Change in Control shall have occurred."
EXHIBIT 10(bb)
THIRD AMENDMENT TO
HASBRO, INC. 1997 EMPLOYEE NON-QUALIFIED STOCK PLAN
The Hasbro, Inc. 1997 Employee Non-Qualified Stock Plan (the "1997 Plan"), as amended, is hereby further amended in the manner set forth below by this third amendment (the "Third Amendment"). The effective date for this Third Amendment is December 23, 2005.
1. Section 16(b)(1) and (2) of the 1997 Plan are hereby deleted and replaced in their entirety with the following:
"(1) Upon the occurrence of an event constituting a Change in Control, all awards outstanding on such date shall become 100% vested and the then value of such awards, less all applicable withholding taxes, shall be paid to the participant in cash (or, in the case of stock options, SARs, stock awards and any other awards providing for equity in the Company, either in cash or in shares of Common Stock, or in any combination thereof, as may be determined by the Committee in its sole and absolute discretion) as soon as may be practicable. Upon such payment, such awards shall be cancelled.
(2) The amount of cash to be paid with respect to stock awards, stock options and SARs shall be determined by multiplying the number of such awards by (i) in the case of stock awards, the CIC Price, provided, however, that in the case of stock awards where the performance period, if any, has been completed on or prior to the occurrence of a Change in Control, or when the stock awards will vest solely as a result of continuous service with the Company, the number of stock awards to be multiplied shall be the number of shares issued pursuant to the award as determined in accordance with the award agreement and in the case of stock awards where the performance period, if any, has not been completed upon the occurrence of a Change in Control, the number of stock awards to be multiplied shall be the higher of the target number of such awards as determined by the Committee at the time of grant and the number of shares issuable based on actual performance to date, in each case prorated based on the number of fiscal years then completed during the performance period, (ii) in the case of stock options, the difference between the exercise price per share and the CIC Price, if the CIC price is higher, and (iii) in the case of SARs, the difference between the exercise or designated price per share and the CIC Price, if the CIC price is higher. In the case of cash awards the amount of cash to be paid shall be determined, (i) where the performance period, if any, has been completed on or prior to the occurrence of a Change in Control, the value of such award as determined in accordance with the award agreement and (ii) where the performance period, if any, has not been completed upon the occurrence of Change in Control, the higher of the target value of such awards as determined by the Committee at the time of grant and the value of such awards based on actual performance to date, in each case prorated based on the number of fiscal years then completed during the performance period. In addition, all accrued dividends and dividend equivalents or interest accrued on deferred settlements shall be paid.
(3) In the event that the Committee determines pursuant to Section 16(b)(1) above to pay participants the value of an equity award in shares of Common Stock, the number of shares of Common Stock to be paid to each participant will be determined by taking the cash value which would have been paid if the Committee had elected to pay in cash, computed in accordance with Section 16(b)(2) above, and dividing such value by the Payout Fair Market Value of the Common Stock. No fractional shares of Common Stock will be issued. The value of any fractional share amount will be paid to the participant in cash. For purposes of this Plan the term "Payout Fair Market Value" shall mean the average of the Fair Market Values of the Stock for the ten trading days immediately preceding the date on which the Change in Control shall have occurred.
(4) Instead of the treatment afforded by Section 16(b)(1) above, in the event of a merger or consolidation in which the Company is not the surviving corporation, as well as a merger of consolidation which would constitute a Change in Control under Section 16(a)(C) above (whether or not the Company is the surviving corporation), the agreement of merger or consolidation may provide (i) that the stock awards, stock options, SARs or cash awards are unaffected by the merger or consolidation, (ii) for substituted stock awards, stock options, SARs or cash awards by the surviving corporation for those stock awards, SARs or cash awards granted hereunder or (iii) for the assumption of such awards, options or SARs by the surviving corporation, in which case the Committee in its sole discretion, may provide for such substitution or assumption with such adjustments to the awards, options and SARs granted hereunder as the Committee shall in its sole discretion determine."
EXHIBIT 10(nn)
THIRD AMENDMENT TO
HASBRO, INC. DEFERRED COMPENSATION PLAN FOR
NON-EMPLOYEE DIRECTORS
The Hasbro, Inc. Deferred Compensation Plan for Non-Employee Directors (the "Deferred Plan") is hereby amended, effective as of December 15, 2005 (except where a different effective date is explicitly set forth), as is set forth below.
1. The second sentence of Section 1.2 of the Deferred Plan is deleted in its entirety effective December 31, 2005. For 2006 and subsequent years there will be no mandatory deferral into the Stock Unit Account and any other references to a mandatory deferral into the Stock Unit Account are deleted.
2. Effective December 31, 2005, Exhibit 1 to the Deferred Plan is hereby amended to remove any reference to a minimum mandatory deferral amount into the Stock Unit Account.
3. Section 1.4 of the Deferred Plan is hereby deleted and replaced in its entirety with the following:
"1.4 If any individual initially becomes a Director during the calendar year, he or she may elect to defer Director's fees for subsequent services in that calendar year at any time before the start of such Director's term."
4. The second paragraph of Section 3.5 of the Deferred Plan is hereby deleted in its entirety.
IN WITNESS WHEREOF, this Third Amendment to the Deferred Plan has been executed by a duly authorized officer of the Company as of this 15th day of December, 2005.
HASBRO, INC.
By: /s/ Barry Nagler ------------------------------------------------ Name: Barry Nagler Title: Senior Vice President and General Counsel |
EXHIBIT 10(vv)
SECOND AMENDMENT TO
HASBRO, INC. 2003 STOCK INCENTIVE PERFORMANCE PLAN
The Hasbro, Inc. 2003 Stock Incentive Performance Plan (the "2003 Plan"), as amended, is hereby further amended in the manner set forth below by this second amendment (the "Second Amendment"). The effective date for this Second Amendment is December 23, 2005.
1. Section 8(a)(1) of the 2003 Plan is hereby deleted and replaced in its entirety with the following:
"(1) Upon the occurrence of an event constituting a Change in Control, all Awards outstanding on such date shall become 100% vested and the then value of such Awards, less all applicable withholding taxes, shall be paid to the Participant in cash (or, in the case of Stock Options, SARs, Restricted Stock, Unrestricted Stock, Deferred Stock and any other Awards providing for equity in the Company, either in cash or in shares of Stock, or in any combination thereof, as may be determined by the Administrator in its sole and absolute discretion) as soon as may be practicable. Upon such payment, such Awards shall be cancelled."
2. A new Section 8(a)(3) is hereby added to the 2003 Plan as follows:
"(3) In the event that the Administrator determines pursuant to
Section 8(a)(1) above to pay Participants the value of an equity Award in
shares of Stock, the number of shares of Stock to be paid to each
Participant will be determined by taking the cash value which would have
been paid if the Administrator had elected to pay in cash, computed in
accordance with Section 8(a)(2) above, and dividing such value by the
Payout Fair Market Value of the Stock. No fractional shares of Stock will
be issued. The value of any fractional share amount will be paid to the
Participant in cash."
3. A definition entitled "Payout Fair Market Value" is hereby added to the 2003 Plan as follows:
"Payout Fair Market Value": The average of the Fair Market Values of the Stock for the ten trading days immediately preceding the date on which the Change in Control shall have occurred."
EXHIBIT 11
HASBRO, INC. AND SUBSIDIARIES
Computation of Earnings Per Share
(Thousands of Dollars and Shares Except Per Share Data)
2005 2004 2003 ---------------------- --------------------- --------------------- Basic Diluted Basic Diluted Basic Diluted --------- --------- --------- --------- --------- --------- Net earnings before cumulative effect of accounting change $ 212,075 212,075 195,977 195,977 175,015 175,015 Effect of dilutive securities: Change in fair value of liabilities potentially settleable in common stock -- (2,080) -- (12,710) -- -- Interest expense on contingent convertible debentures due 2021 -- 4,263 -- 4,263 -- 4,263 --------- --------- --------- --------- --------- --------- Adjusted net earnings $ 212,075 214,258 195,977 187,530 175,015 179,278 ========= ========= ========= ========= ========= ========= Weighted average number of shares outstanding: Outstanding at beginning of year 177,315 177,315 175,479 175,479 172,805 172,805 Exercise of stock options and warrants: Actual exercise of options 1,713 1,713 1,061 1,061 943 943 Treasury share repurchase (725) (725) -- -- -- -- Assumed exercise of options and warrants -- 2,220 -- 2,305 -- 4,736 Liabilities potentially settleable in common stock -- 5,339 -- 5,629 -- -- Contingent convertible debentures due 2021 -- 11,574 -- 11,574 -- 11,574 --------- --------- --------- --------- --------- --------- Total 178,303 197,436 176,540 196,048 173,748 190,058 ========= ========= ========= ========= ========= ========= Per common share: Net earnings before cumulative effect of accounting change $ 1.19 1.09 1.11 .96 1.01 .94 ========= ========= ========= ========= ========= ========= |
EXHIBIT 12
HASBRO, INC. AND SUBSIDIARIES
Computation of Ratio of Earnings to Fixed Charges Fiscal Years Ended in December
(Thousands of Dollars)
2005 2004 2003 2002 2001 -------- -------- -------- -------- -------- Earnings available for fixed charges: Net earnings (loss) $212,075 195,977 157,664 (170,674) 59,732 Add: Cumulative effect of accounting change -- -- 17,351 245,732 1,066 Fixed charges 42,394 43,890 68,467 99,209 126,323 Taxes on income 98,838 64,111 69,049 29,030 35,401 -------- -------- -------- -------- -------- Total $353,307 303,978 312,531 203,297 222,522 ======== ======== ======== ======== ======== Fixed charges: Interest on long-term debt $ 26,602 27,813 44,461 69,480 86,244 Other interest charges 2,423 3,205 6,413 8,019 17,444 Amortization of debt expense 1,512 680 1,588 1,843 3,031 Rental expense representative of interest factor 11,857 12,192 16,005 19,867 19,604 -------- -------- -------- -------- -------- Total $ 42,394 43,890 68,467 99,209 126,323 ======== ======== ======== ======== ======== Ratio of earnings to fixed charges 8.33 6.93 4.56 2.05 1.76 ======== ======== ======== ======== ======== |
EXHIBIT 21
HASBRO, INC. AND SUBSIDIARIES
Subsidiaries of the Registrant (a)
Name Under Which Subsidiary State or Other Jurisdiction of Does Business Incorporation or Organization --------------------------- ------------------------------ Hasbro Receivables Funding, LLC. Delaware Hasbro International, Inc. Delaware Hasbro France S.A.S. France Hasbro Deutschland GmbH Germany Hasbro Italy S.r.l. Italy Hasbro Latin America Inc. Delaware Hasbro Chile LTDA Chile Hasbro International Holdings, B.V. The Netherlands Hasbro Ireland Limited Ireland Hasbro S.A. Switzerland Hasbro Holdings S.A. Switzerland Hasbro Canada Corporation / Corporation Hasbro Canada Nova Scotia Hasbro Asia-Pacific Marketing Ltd. Hong Kong Hasbro de Mexico S.R.L. de C.V. Mexico Hasbro (Schweiz) AG Switzerland Hasbro U.K. Limited United Kingdom Group Grosvenor Plc. United Kingdom MB International B.V. The Netherlands Hasbro B.V. The Netherlands Hasbro Hellas Industrial & Commercial Company S.A. Greece Hasbro Toys & Games Holdings, S.L. Spain Hasbro Iberia SL Spain S.A. Hasbro N.V. Belgium Hasbro InterToy Eqitim Araclari Sanayi Ve Ticaret A.S. Turkey Hasbro Far East LTD Hong Kong Hasbro Australia Pty Ltd Australia Hasbro Australia Limited Australia Hasbro Managerial Services, Inc. Rhode Island Wizards of the Coast, Inc. Washington |
(a) Inactive subsidiaries and subsidiaries with minimal operations have been omitted. Such subsidiaries, if taken as a whole, would not constitute a significant subsidiary.
EXHIBIT 23
Consent of Independent Registered Public Accounting Firm
The Board of Directors
Hasbro, Inc.:
We consent to the incorporation by reference in the Registration Statements Nos. 2-78018, 2-93483, 33-57344, 33-59583, 333-38159, 333-10404, 333-10412, 333-34282, 333-110000, 333-110001, 333-110002 and 333-129618 on Form S-8 and Nos. 33-41548, 333-44101, 333-82077, 333-83250 and 333-103561 on Form S-3 of Hasbro, Inc. of our reports dated February 21, 2006, with respect to the consolidated balance sheets of Hasbro, Inc. and subsidiaries as of December 25, 2005 and December 26, 2004, and the related consolidated statements of operations, shareholders' equity, and cash flows for each of the fiscal years in the three-year period ended December 25, 2005 and the related consolidated financial statement schedule, management's assessment of the effectiveness of internal control over financial reporting as of December 25, 2005 and the effectiveness of internal control over financial reporting as of December 25, 2005, which reports appear in the December 25, 2005 annual report on Form 10-K of Hasbro, Inc. Our report refers to a change in the method used to compute diluted earnings per share, and a change in the method used to account for certain financial instruments with characteristics of liabilities and equity.
/s/ KPMG LLP Providence, Rhode Island February 21, 2006 |
Exhibit 31.1
CERTIFICATION
I, Alfred J. Verrecchia, certify that:
1. I have reviewed this annual report on Form 10-K of Hasbro, Inc.;
2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
4. The registrant's other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
c) Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
d) Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and
5. The registrant's other certifying officers and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):
a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and
b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.
Date: February 22, 2006 /s/ Alfred J. Verrecchia -------------------------------- Alfred J. Verrecchia President and Chief Executive Officer |
Exhibit 31.2
CERTIFICATION
I, David D.R. Hargreaves, certify that:
1. I have reviewed this annual report on Form 10-K of Hasbro, Inc.;
2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
4. The registrant's other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
c) Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
d) Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and
5. The registrant's other certifying officers and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):
a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and
b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.
Date: February 22, 2006 /s/ David D.R. Hargreaves ------------------------------- David D.R. Hargreaves Senior Vice President and Chief Financial Officer |
EXHIBIT 32.1
CERTIFICATION PURSUANT TO
SECTION 1350, CHAPTER 63 OF TITLE 18, UNITED STATES CODE,
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
Pursuant to Section 1350, Chapter 63 of Title 18, United States Code, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, the undersigned, as Chief Executive Officer of Hasbro, Inc., a Rhode Island corporation (the "Company"), does hereby certify that to the best of the undersigned's knowledge:
1) the Company's Annual Report on Form 10-K for the year ended December 25, 2005, as filed with the Securities and Exchange Commission (the "10-K Report"), fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
2) the information contained in the Company's 10-K Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
/s/ Alfred J. Verrecchia -------------------------------------- Alfred J. Verrecchia President and Chief Executive Officer of Hasbro, Inc. Dated: February 22, 2006 |
A signed original of this written statement required by Section 906 has been provided to Hasbro, Inc. and will be retained by Hasbro, Inc. and furnished to the Securities and Exchange Commission or its staff upon request.
EXHIBIT 32.2
CERTIFICATION PURSUANT TO
SECTION 1350, CHAPTER 63 OF TITLE 18, UNITED STATES CODE,
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
Pursuant to Section 1350, Chapter 63 of Title 18, United States Code, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, the undersigned, as Chief Financial Officer of Hasbro, Inc., a Rhode Island corporation (the "Company"), does hereby certify that to the best of the undersigned's knowledge:
1) the Company's Annual Report on Form 10-K for the year ended December 25, 2005, as filed with the Securities and Exchange Commission (the "10-K Report"), fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
2) the information contained in the Company's 10-K Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
/s/ David D.R. Hargreaves ---------------------------------------- David D.R. Hargreaves Senior Vice President and Chief Financial Officer of Hasbro, Inc. Dated: February 22, 2006 |
A signed original of this written statement required by Section 906 has been provided to Hasbro, Inc. and will be retained by Hasbro, Inc. and furnished to the Securities and Exchange Commission or its staff upon request.