þ
|
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 | |
For the fiscal year ended December 31, 2006 |
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
Item 1A. | Risk Factors |
7
8
| Any of our current products or product lines will continue to be popular; | |
| Any property for which we have a significant license will achieve or sustain popularity; | |
| Any new products or product lines we introduce will be considered interesting to consumers and achieve an adequate market acceptance; | |
| Any new products life cycle will be sufficient to permit us to profitably recover development, manufacturing, marketing, royalties (including royalty advances and guarantees) and other costs of producing and selling the product; or | |
| We will be able to manufacture, source and ship new or continuing products in a timely and cost-effective basis to meet constantly changing consumer demands, a risk that is heightened by our customers compressed shipping schedules and the seasonality of our business. |
9
10
| Currency conversion risks and currency fluctuations; | |
| Limitations, including taxes, on the repatriation of earnings; | |
| Political instability, civil unrest and economic instability; | |
| Greater difficulty enforcing intellectual property rights and weaker laws protecting such rights; | |
| Complications in complying with different laws in varying jurisdictions, which laws may dictate that certain practices which are acceptable in some jurisdictions are not acceptable in others, and changes in governmental policies; | |
| Natural disasters and the greater difficulty and expense in recovering therefrom; | |
| Difficulties in moving materials and products from one country to another, including port congestion, strikes and other transportation delays and interruptions; | |
| Changes in international labor costs and other costs of doing business internationally; and | |
| The imposition of tariffs. |
11
12
13
14
Item 1B. | Unresolved Staff Comments |
15
17
Item 2.
Properties
Lease
Square
Type of
Expiration
Administrative, Sales &
Marketing, and Product Development offices
343,000
Owned
Executive Office
23,000
Owned
Administrative Office
120,000
Leased
2014
Warehouse
261,500
Owned
Office, Manufacturing &
Warehouse
1,148,000
Owned
Warehouse
500,000
Leased
2007
Warehouse
1,001,000
Leased
2010
Warehouse
147,500
Leased
2011
Office
95,400
Leased
2016
Warehouse
5,000
Leased
2007
Office & Warehouse
98,400
Leased
2015
Office
16,900
Leased
2009
Office & Showroom
18,800
Leased
2008
Office, Warehouse & Showroom
133,900
Leased
2010
Sales Office & Showroom
16,300
Leased
2010
Warehouse
88,100
Leased
2010
Warehouse
67,600
Leased
2007
Office
17,300
Leased
2007
Office
25,700
Leased
2009
Office
26,600
Leased
2009
Office
9,200
Leased
2010
Office & Showroom
51,000
Leased
2013
Office
33,500
Owned
Warehouse
301,300
Owned
Office & Warehouse
258,300
Owned
Warehouse
79,700
Leased
2007
Office
24,900
Leased
2015
16
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Lease
Square
Type of
Expiration
Offices
64,300
Leased
2008
Warehouse
11,500
Leased
2008
Warehouse
8,100
Leased
2009
Office, Manufacturing &
Warehouse
244,000
Owned
Office & Showroom
12,100
Leased
2007
Office
21,700
Leased
2013
Warehouse
221,700
Leased
2011
Office
7,200
Leased
2008
Office
2,600
Leased
2011
Office & Warehouse
35,000
Leased
2010
Office
3,200
Leased
2007
Office & Warehouse
251,900
Leased
2015
Office
9,200
Leased
2009
Office
3,700
Leased
2011
Office
11,000
Leased
2007
Warehouse
94,000
Leased
2013
Warehouse
72,000
Leased
2018
Warehouse
198,000
Owned
(1)
Property used in the North American segment.
(2)
Property used in the Corporate function.
(3)
Property used in the Global Operations segment.
(4)
Property used in the International segment.
Table of Contents
Item 3. | Legal Proceedings |
Item 4. | Submission of Matters to a Vote of Security Holders |
Period
|
||||||||||
Serving in
|
||||||||||
Current
|
||||||||||
Name
|
Age
|
Position and Office Held
|
Position
|
|||||||
Alfred J. Verrecchia(1)
|
64 | President and Chief Executive Officer | Since 2003 | |||||||
Brian Goldner(2)
|
43 | Chief Operating Officer | Since 2006 | |||||||
David D. R. Hargreaves(3)
|
54 | Executive Vice President, Finance and Global Operations and Chief Financial Officer | Since 2007 | |||||||
Frank P. Bifulco, Jr.(4)
|
57 | President, North American Sales | Since 2006 | |||||||
Simon Gardner(5)
|
46 | President, Hasbro Europe | Since 2002 | |||||||
Barry Nagler
|
50 | Senior Vice President, General Counsel and Secretary | Since 2001 | |||||||
Deborah Thomas Slater(6)
|
43 | Senior Vice President and Controller | Since 2003 | |||||||
Martin R. Trueb
|
54 | Senior Vice President and Treasurer | Since 1997 |
(1) | Prior thereto, President and Chief Operating Officer from 2001 to 2003. | |
(2) | Prior thereto, President, U.S. Toys Segment from 2003 to 2006; prior thereto, President, U.S. Toys, from 2001 to 2003. | |
(3) | Prior thereto, Senior Vice President and Chief Financial Officer from 2001 to 2007. | |
(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, Vice President and Assistant Controller from 1998 to 2003. |
18
63
79
80
81
82
83
89
90
91
92
93
Item 5.
Market
for Registrants Common Equity, Related Stockholder Matters
and Issuer Purchases of Equity Securities
Sales Prices
Cash Dividends
High
Low
Declared
$
21.90
19.52
$
.12
21.27
17.90
.12
22.75
17.00
.12
27.69
22.41
.12
$
21.50
18.11
$
.09
21.00
18.40
.09
22.35
19.83
.09
20.75
17.75
.09
(c)
Total
(d)
Number
Approximate
of Shares
Dollar Value
Purchased
of Shares
(a)
(b)
as Part of
that May yet
Total
Average
Publicly
be Purchased
Number of
Price
Announced
Under the
Shares
Paid per
Plans or
Plans or
Purchased
Share
Programs
Programs
1,055,122
$
22.9814
1,010,000
$
212,217,280
404,769
$
26.8426
395,000
$
201,615,992
210,100
$
26.8221
210,100
$
195,980,672
1,669,991
$
24.4004
1,615,100
$
195,980,672
19
Table of Contents
Item 6.
Selected
Financial Data
Fiscal Year
2006
2005
2004
2003
2002
(Thousands of dollars and shares except per share data and
ratios)
$
3,151,481
3,087,627
2,997,510
3,138,657
2,816,230
$
230,055
212,075
195,977
175,015
75,058
$
1.38
1.19
1.11
1.01
.43
$
1.29
1.09
.96
.94
.43
$
.48
.36
.24
.12
.12
$
3,096,905
3,301,143
3,240,660
3,163,376
3,142,881
$
494,917
528,389
626,822
688,204
1,059,115
9.74
8.33
6.93
4.56
2.05
167,100
178,303
176,540
173,748
172,720
181,043
197,436
196,048
190,058
185,062
(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.
20
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Item 7.
Managements
Discussion and Analysis of Financial Condition and Results of
Operations
21
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22
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2006
2005
2004
100.0
%
100.0
%
100.0
%
41.4
41.7
41.8
58.6
58.3
58.2
2.5
3.3
2.4
5.4
8.0
7.4
5.4
4.9
5.2
11.7
11.8
12.9
21.7
20.2
20.5
11.9
10.1
9.8
0.9
1.0
1.1
(0.9
)
(0.8
)
(0.3
)
1.1
(0.2
)
0.3
10.8
10.1
8.7
3.5
3.2
2.2
7.3
%
6.9
%
6.5
%
23
Table of Contents
%
%
2006
Change
2005
Change
2004
$
2,130,290
4
%
$
2,038,556
4
%
$
1,956,031
$
959,319
(3
)%
$
988,591
1
%
$
977,128
$
275,959
67
%
$
165,676
1
%
$
163,786
$
90,893
(15
)%
$
106,435
13
%
$
94,487
24
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25
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2006
2005
2004
2.5
%
3.3
%
2.4
%
5.4
8.0
7.4
5.4
4.9
5.2
11.7
11.8
12.9
21.7
20.2
20.5
26
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27
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28
Table of Contents
29
Table of Contents
30
Table of Contents
31
Table of Contents
32
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33
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Payments Due by Fiscal Year
2007
2008
2009
2010
2011
Thereafter
Total
$
135,092
359,891
494,983
22,436
22,436
14,128
14,128
14,128
192,058
279,314
28,149
25,529
21,733
10,979
10,487
22,914
119,791
91,890
12,380
13,900
41,810
4,800
164,780
249,554
249,554
$
392,029
195,437
49,761
66,917
29,415
574,863
1,308,422
34
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35
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36
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Item 7A.
Quantitative
and Qualitative Disclosures About Market Risk
37
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Item 8.
Financial
Statements and Supplementary Data
38
Table of Contents
December 31, 2006 and December 25, 2005
(Thousands of dollars except share data)
2006
2005
$
715,400
942,268
556,287
523,232
203,337
179,398
243,291
185,297
1,718,315
1,830,195
181,726
164,045
469,938
467,061
532,257
613,433
194,669
226,409
1,196,864
1,306,903
$
3,096,905
3,301,143
$
10,582
14,676
32,770
160,015
152,468
735,296
710,812
905,893
910,726
494,917
495,619
158,205
171,322
1,559,015
1,577,667
104,847
104,847
322,254
358,199
(24
)
2,020,348
1,869,007
11,186
15,348
(920,745
)
(623,901
)
1,537,890
1,723,476
$
3,096,905
3,301,143
39
Table of Contents
Fiscal Years Ended in December
(Thousands of dollars except per share data)
2006
2005
2004
$
3,151,481
3,087,627
2,997,510
1,303,885
1,286,271
1,251,657
1,847,596
1,801,356
1,745,853
78,934
102,035
70,562
169,731
247,283
223,193
171,358
150,586
157,162
368,996
366,371
387,523
682,214
624,560
614,401
1,471,233
1,490,835
1,452,841
376,363
310,521
293,012
27,521
30,537
31,698
(27,609
)
(24,157
)
(7,729
)
34,977
(6,772
)
8,955
34,889
(392
)
32,924
341,474
310,913
260,088
111,419
98,838
64,111
$
230,055
212,075
195,977
$
1.38
1.19
1.11
$
1.29
1.09
.96
$
.48
.36
.24
40
Table of Contents
Fiscal Years Ended in December
(Thousands of dollars)
2006
2005
2004
$
230,055
212,075
195,977
67,773
78,097
75,618
78,934
102,035
70,562
1,277
2,629
8,988
31,770
(2,080
)
(12,710
)
24,967
(24,032
)
34,624
22,832
74
138
(14,959
)
(10,708
)
39,341
75,590
(17,623
)
10,677
(15,838
)
(35,174
)
74,531
29,423
(20,680
)
33,211
(89,735
)
(39,169
)
(27,305
)
(15,408
)
320,647
496,624
358,506
(82,103
)
(70,584
)
(79,239
)
(79,179
)
(9,824
)
1,197
33,083
4,309
(941,120
)
941,120
(2,698
)
(3,991
)
(213
)
(83,604
)
(120,671
)
(84,967
)
(32,743
)
(93,303
)
(57,974
)
(3,726
)
(3,685
)
(6,598
)
(456,744
)
(48,030
)
86,257
45,278
25,836
14,959
(75,282
)
(58,901
)
(37,088
)
(467,279
)
(158,641
)
(75,824
)
3,368
(46
)
6,540
(226,868
)
217,266
204,255
942,268
725,002
520,747
$
715,400
942,268
725,002
$
26,228
33,265
35,781
$
84,901
32,962
40,647
41
Table of Contents
(Thousands of dollars)
Accumulated
Additional
Other
Total
Common
Paid-in
Deferred
Retained
Comprehensive
Treasury
Shareholders
Stock
Capital
Compensation
Earnings
Earnings
Stock
Equity
$
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
230,055
230,055
22,588
22,588
252,643
(26,750
)
(26,750
)
(58,498
)
159,645
101,147
(456,744
)
(456,744
)
22,553
24
255
22,832
(78,714
)
(78,714
)
$
104,847
322,254
2,020,348
11,186
(920,745
)
1,537,890
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
$
212,075
195,977
46
103
(15,124
)
(13,844
)
$
196,997
182,236
$
1.19
1.11
$
1.09
.96
$
1.10
1.03
$
1.01
.89
48
Table of Contents
2006
2005
2004
Basic
Diluted
Basic
Diluted
Basic
Diluted
$
230,055
230,055
212,075
212,075
195,977
195,977
(2,080
)
(12,710
)
4,262
4,263
4,263
$
230,055
234,317
212,075
214,258
195,977
187,530
167,100
167,100
178,303
178,303
176,540
176,540
5,339
5,629
11,574
11,574
11,574
2,369
2,220
2,305
167,100
181,043
178,303
197,436
176,540
196,048
$
1.38
1.29
1.19
1.09
1.11
.96
49
Table of Contents
(2)
Other
Comprehensive Earnings
2006
2005
2004
$
26,429
(68,530
)
50,391
(2,497
)
838
(9,862
)
(7,412
)
6,460
(3,954
)
1,991
(7,813
)
(1,661
)
4,077
2,005
16,990
$
22,588
(67,040
)
51,904
2006
2005
$
68,984
42,555
1,932
1,800
(2,116
)
3,848
(32,855
)
(57,614
)
$
11,186
15,348
50
Table of Contents
(3)
Property,
Plant and Equipment
2006
2005
$
6,623
6,836
186,519
174,183
318,835
296,607
511,977
477,626
378,979
348,646
132,998
128,980
48,728
35,065
$
181,726
164,045
(4)
Goodwill
and Intangibles
North
America
International
Total
$
294,378
172,683
$
467,061
2,877
2,877
$
294,378
175,560
$
469,938
$
294,378
175,348
$
469,726
(2,665
)
(2,665
)
$
294,378
172,683
$
467,061
51
Table of Contents
2006
2005
$
903,182
900,891
211,555
219,071
(658,218
)
(586,022
)
456,519
533,940
75,738
75,738
3,755
$
532,257
613,433
$
66,400
67,400
62,500
36,000
34,200
(5)
Financing
Arrangements
52
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53
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(6)
Accrued
Liabilities
2006
2005
$
155,630
123,860
76,695
84,765
74,781
75,515
76,653
64,583
121,254
130,007
230,283
232,082
$
735,296
710,812
54
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(7)
Long-Term
Debt
2006
2005
$
32,743
135,092
135,092
249,996
249,996
109,895
109,895
494,983
527,726
(66
)
663
494,917
528,389
32,770
$
494,917
495,619
$
135,092
359,891
$
494,983
55
Table of Contents
(8)
Income
Taxes
2006
2005
2004
$
34,049
76,642
3,786
3,203
7,147
(497
)
49,200
39,081
26,198
86,452
122,870
29,487
24,912
(20,611
)
28,019
2,135
(1,767
)
2,402
(2,080
)
(1,654
)
4,203
24,967
(24,032
)
34,624
$
111,419
98,838
64,111
56
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2006
2005
2004
35.0
%
35.0
%
35.0
%
1.2
0.8
0.5
8.3
(9.7
)
(12.2
)
(12.9
)
3.3
(0.2
)
(1.7
)
0.8
2.7
1.5
(1.4
)
0.5
1.5
1.0
32.6
%
31.8
%
24.6
%
2006
2005
2004
$
113,761
98,180
71,759
227,713
212,733
188,329
$
341,474
310,913
260,088
2006
2005
$
19,287
25,477
17,860
21,454
34,405
36,574
62,392
56,667
27,663
35,946
16,251
9,023
14,128
11,197
26,453
26,450
218,439
222,788
(27,808
)
(23,333
)
190,631
199,455
32,149
24,784
9,658
14,337
655
880
42,462
40,001
$
148,169
159,454
57
Table of Contents
(9)
Capital
Stock
58
Table of Contents
(10)
Stock
Options, Restricted Stock and Warrants
59
Table of Contents
$
306
1,436
19,942
21,684
7,399
$
14,285
2006
2005
2004
20,443
21,041
19,261
3,126
2,953
4,956
(5,490
)
(3,020
)
(1,865
)
(770
)
(531
)
(1,311
)
17,309
20,443
21,041
11,016
14,015
12,570
$
18.83
20.55
19.35
$
16.00
15.00
14.28
$
24.38
25.07
20.59
$
19.73
19.04
18.40
$
19.94
19.29
19.24
60
Table of Contents
2006
2005
2004
4.98
%
3.84
%
3.85
%
2.55
%
1.75
%
1.29
%
24
%
29
%
40
%
5 years
5 years
5 years
(11)
Pension,
Postretirement and Postemployment Benefits
61
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62
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Pension
Postretirement
2006
2005
2006
2005
$
313,937
277,820
38,505
36,082
10,188
9,383
684
573
16,809
15,526
2,047
2,003
(8,014
)
28,698
(2,358
)
2,342
(23,291
)
(16,514
)
(2,560
)
(2,495
)
(608
)
(976
)
$
309,021
313,937
36,318
38,505
$
290,452
289,720
36,318
38,505
$
208,625
188,054
14,838
28,537
35,918
9,524
(23,291
)
(16,514
)
(608
)
(976
)
$
235,482
208,625
$
(309,021
)
(313,937
)
(36,318
)
(38,505
)
235,482
208,625
25,533
579
$
(48,006
)
(105,312
)
(35,739
)
(38,505
)
73,996
11,552
3,550
$
(48,006
)
(27,766
)
(35,739
)
(26,953
)
$
(48,006
)
(81,095
)
(35,739
)
(26,953
)
3,550
49,779
$
(48,006
)
(27,766
)
(35,739
)
(26,953
)
Table of Contents
2006
2005
30
%
31
%
14
13
20
17
9
10
11
11
16
17
1
100
%
100
%
64
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2006
2005
2004
$
10,188
9,384
8,632
16,809
15,526
14,630
(19,112
)
(16,275
)
(14,489
)
596
582
609
3,399
2,554
2,141
$
11,880
11,771
11,523
$
684
573
605
2,047
2,003
2,285
459
354
529
$
3,190
2,930
3,419
2006
2005
5.75%
5.50%
4.00%
4.00%
8.75%
8.75%
RP-2000
RP-2000
2006
2005
2004
5.50
%
5.75
%
6.00
%
4.00
%
4.00
%
4.00
%
8.75
%
8.75
%
8.75
%
65
Table of Contents
Postretirement
Gross
Benefit
Subsidy
Pension
Payments
Receipts
$
17,685
2,666
271
19,283
2,750
282
19,346
2,815
290
18,977
2,887
292
19,614
2,937
290
118,325
14,577
1,285
2006
2005
2004
10.00
%
9.00
%
10.00
%
5.00
%
5.00
%
5.00
%
2012
2011
2009
66
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$
949
1,027
1,075
1,294
1,367
11,655
(12)
Leases
$
28,149
25,529
21,733
10,979
10,487
22,914
$
119,791
(13)
Derivative
Financial Instruments
67
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(14)
Commitments
and Contingencies
$
91,890
12,380
13,900
41,810
4,800
$
164,780
68
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(15)
Segment
Reporting
69
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Revenues
from
Operating
Depreciation
External
Affiliate
Profit
and
Capital
Total
Customers
Revenue
(Loss)
Amortization
Additions
Assets
$
2,130,290
8,266
275,959
51,926
4,278
3,193,870
959,319
23
90,893
24,681
3,004
859,690
13,185
1,242,354
27,158
46,584
57,487
1,073,871
48,687
15,729
2,002
105
134,970
(1,250,643
)
(33,376
)
21,514
17,229
(2,165,496
)
$
3,151,481
376,363
146,707
82,103
3,096,905
$
2,038,556
11,042
165,676
78,562
7,394
2,658,821
988,591
124
106,435
33,048
3,866
811,577
10,612
1,171,150
22,712
53,919
49,701
866,125
49,868
19,153
997
108
115,864
(1,182,316
)
(26,499
)
13,606
9,515
(1,151,244
)
3,087,627
287,477
180,132
70,584
3,301,143
23,044
$
3,087,627
310,521
180,132
70,584
3,301,143
$
1,956,031
11,247
163,786
53,266
3,941
2,469,719
977,128
161
94,487
27,971
4,313
1,090,605
13,129
1,099,551
13,437
48,949
56,343
885,487
51,222
16,470
154
428
178,913
(1,110,959
)
(17,332
)
15,840
14,214
(1,384,064
)
2,997,510
270,848
146,180
79,239
3,240,660
22,164
$
2,997,510
293,012
146,180
79,239
3,240,660
(a)
The Global Operations segment derives substantially all of its
revenues, and thus its operating results, from intersegment
activities. Operating profit of the Global Operations segment
for the fiscal year 2006 includes a charge of approximately
$11,200, primarily related to severance costs, in connection
with the reduction of manufacturing activity at the Company
facility in Ireland.
(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
70
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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)
As noted in footnote 10, on December 26, 2005, the
first day of fiscal 2006, the Company adopted SFAS 123R
using the modified prospective method. Under this method, the
Company recorded stock option compensation in 2006 related to
unvested options as of that date as well as grants made in 2006.
The Company did not restate any of the prior years but has
adjusted the operating profit (loss) of each of its segments for
2005 and 2004 to reflect compensation for those periods based on
the Companys 2005 and 2004 pro forma disclosures under
SFAS 123. As such, the above amounts represents the removal
of the amounts included in the segment disclosures to reconcile
to the 2005 and 2004 reported consolidated operating profit for
2005 and 2004. The $23,044 of 2005 pro forma stock option
expense was allocated as follows: $15,417 to North America,
$4,309 to International, $1,774 to Global Operations and $1,544
to Other Segment. The $22,164 of 2004 pro forma stock option
expense was allocated as follows: $14,535 to North America,
$4,187 to International, $1,824 to Global Operations and $1,618
to Other Segment.
2006
2005
2004
$
1,294,110
1,246,422
1,316,031
575,841
721,770
591,574
406,663
334,729
381,424
266,844
269,826
287,035
540,298
446,822
367,734
67,725
68,058
53,712
$
3,151,481
3,087,627
2,997,510
2006
2005
2004
$
1,898,865
1,846,217
1,782,295
1,252,616
1,241,410
1,215,215
$
3,151,481
3,087,627
2,997,510
$
1,051,124
1,127,100
1,151,852
132,797
117,439
162,737
$
1,183,921
1,244,539
1,314,589
71
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72
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(16)
Quarterly
Financial Data (Unaudited)
Quarter
First
Second
Third
Fourth
Full Year
$
468,181
527,764
1,039,138
1,116,398
3,151,481
282,089
317,395
577,627
670,485
1,847,596
(5,453
)
32,502
143,876
170,549
341,474
(4,899
)
27,088
99,584
108,282
230,055
$
(.03
)
.16
.62
.68
1.38
(.03
)
.07
.58
.62
1.29
$
21.90
21.27
22.75
27.69
27.69
19.52
17.90
17.00
22.41
17.00
$
.12
.12
.12
.12
.48
$
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
73
Table of Contents
Item 9.
Changes
in and Disagreements with Accountants on Accounting and
Financial Disclosure
Item 9A.
Controls
and Procedures
74
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75
Table of Contents
Item 9B.
Other
Information
Item 10.
Directors
and Executive Officers of the Registrant
Item 11.
Executive
Compensation
76
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
77
Table of Contents
Exhibit
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.
(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 No.
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)
Revolving Credit Agreement, dated
as of June 23, 2006, by and among Hasbro, Inc., Hasbro SA,
Bank of America, N.A., Citibank, N.A., Citizens Bank of
Massachusetts, Commerzbank AG, New York and Grand Cayman
Branches, BNP Paribas, Banc of America Securities LLC and the
other banks party thereto. (Incorporated by reference to
Exhibit 10.1 to the Companys Current Report on
Form 8-K
dated June 23, 2006, File No. 1-6682.)
(e)
Rights Agreement, dated as of
June 16, 1999, between the Company and the Rights Agent.
(Incorporated by reference to Exhibit 4 to the
Companys Current Report on
Form 8-K
dated as of June 16, 1999.)
(f)
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.)
(g)
Second Amendment to Rights
Agreement, dated as of February 13, 2007, between the
Company and Computershare Trust Company N.A. as the Rights Agent.
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.)
78
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Exhibit
(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.)
(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.)
Table of Contents
Exhibit
(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.)
(r)
Amendment No. 8 to
Receivables Purchase Agreement, dated as of December 18,
2006, 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. as
Originator. (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.)
(s)
License Agreement, dated
January 6, 2006, by and between Hasbro, Inc., Marvel
Characters, Inc., and Spider-Man Merchandising L.P. (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 10.2 to the
Companys Quarterly Report on
Form 10-Q
for the period ended April 2, 2006, File No. 1-6682.)
(t)
First Amendment to License
Agreement, dated February 8, 2006, by and between Hasbro,
Inc., Marvel Characters, Inc. and Spider-Man Merchandising L.P.
(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 10.3 to the
Companys Quarterly Report on
Form 10-Q
for the period ended April 2, 2006, File No. 1-6682.)
Executive Compensation Plans and
Arrangements
(u)
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.)
(v)
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.)
(w)
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.)
(x)
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.)
(y)
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.)
(z)
Second Amendment to the 1992 Stock
Incentive Plan. (Incorporated by reference to Exhibit 10(w)
to the Companys Annual Report on
Form 10-K
for the Fiscal Year Ended December 25, 2005, File
No. 1-6682.)
(aa)
Third Amendment to the 1995 Stock
Incentive Performance Plan. (Incorporated by reference to
Exhibit 10(x) to the Companys Annual Report on
Form 10-K
for the Fiscal Year Ended December 25, 2005, File No.
1-6682.)
(bb)
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.)
Table of Contents
Exhibit
(cc)
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.)
(dd)
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.)
(ee)
Third Amendment to the 1997
Employee Non-Qualified Stock Plan. (Incorporated by reference to
Exhibit 10(bb) to the Companys Annual Report on
Form 10-K
for the Fiscal Year Ended December 25, 2005, File No.
1-6682.)
(ff)
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.)
(gg)
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.)
(hh)
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.)
(ii)
Form of Amendment, dated as of
March 10, 2000, to Form of Employment Agreement included as
Exhibit 10(hh) 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.)
(jj)
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.)
(kk)
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.)
(ll)
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.)
(mm)
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.)
(nn)
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.)
(oo)
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.)
(pp)
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.)
(qq)
Third Amendment to Hasbro, Inc.
Deferred Compensation Plan for Non-Employee Directors, dated
December 15, 2005. (Incorporated by reference to
Exhibit 10(nn) to the Companys Annual Report on
Form 10-K
for the Fiscal Year Ended December 25, 2005, File
No. 1-6682.)
(rr)
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.)
Table of Contents
Exhibit
(ss)
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.)
(tt)
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.)
(uu)
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.)
(vv)
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.)
(ww)
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.)
(xx)
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.)
(yy)
Second Amendment to Hasbro, Inc.
2003 Stock Incentive Performance Plan. (Incorporated by
reference to Exhibit 10(vv) to the Companys Annual
Report on
Form 10-K
for the Fiscal Year Ended December 25, 2005, File
No. 1-6682.)
(zz)
Third Amendment to Hasbro, Inc.
2003 Stock Incentive Performance Plan. (Incorporated by
reference to Exhibit 10.2 to the Companys Quarterly
Report on Form
10-Q
for the
period ended July 2, 2006, File No. 1-6682.)
(aaa)
Fourth Amendment to Hasbro, Inc.
2003 Stock Incentive Performance Plan. (Incorporated by
reference to Exhibit 10.2 to the Companys Quarterly
Report on Form
10-Q
for the
period ended October 1, 2006, File No. 1-6682.)
(bbb)
Form of Fair Market Value Stock
Option Agreement under the 2003 Stock Incentive Performance
Plan. (Incorporated by Reference to Exhibit 10.1 to the
Companys Quarterly Report on
Form 10-Q
for the period ended September 26, 2004, File
No. 1-6682.)
(ccc)
Form of Premium-Priced Stock
Option Agreement under the 2003 Stock Incentive Performance
Plan. (Incorporated by Reference to Exhibit 10.2 to the
Companys Quarterly Report on
Form 10-Q
for the period ended September 26, 2004, File
No. 1-6682.)
(ddd)
Form of Contingent Stock
Performance Award under the Hasbro, Inc. 2003 Stock Incentive
Performance Plan. (Incorporated by reference to Exhibit 10
to the Companys Current Report on
Form 8-K
dated as of July 27, 2006, File No. 1-6682.)
(eee)
Hasbro, Inc. Amended and Restated
Nonqualified Deferred Compensation Plan. (Incorporated by
reference to Exhibit 4.1 to the Companys Registration
Statement on
Form S-8
dated October 27, 2003, File
No. 333-110002.)
(fff)
First Amendment to Hasbro, Inc.
Amended and Restated Nonqualified Deferred Compensation Plan.
(Incorporated by Reference to Exhibit 10.1 to the
Companys Quarterly Report on
Form 10-Q
for the period ended March 28, 2004, File No. 1-6682.)
(ggg)
Post-Employment Agreement, dated
March 10, 2004, by and between the Company and Alfred J.
Verrecchia. (Incorporated by reference to Exhibit 10(rr) to
the Companys Annual Report on
Form 10-K
for the fiscal year ended December 28, 2003, File
No. 1-6682.)
(hhh)
Hasbro, Inc. 2006 Management
Incentive Plan. (Incorporated by reference to Exhibit 10.1
to the Companys Quarterly Report on
Form 10-Q
for the period ended April 2, 2006, File No. 1-6682.)
(iii)
Chairmanship Agreement between the
Company and Alan Hassenfeld dated August 30, 2005.
(Incorporated by reference to Exhibit 10.1 to the
Companys Quarterly Report on
Form 10-Q
for the period ended September 25, 2005, File
No. 1-6682.)
Table of Contents
Table of Contents
84
Table of Contents
Fiscal Years Ended in December
(Thousands of dollars)
Provision
Balance at
Charged to
Balance
Beginning of
Cost and
Other
Write-Offs
at End of
Year
Expenses(a)
Additions
and Other(b)
Year
$
29,800
(1,020
)
(1,080
)
$
27,700
$
37,000
582
(7,782
)
$
29,800
$
39,200
1,590
(3,790
)
$
37,000
(a)
Based on an assessment of accounts receivable, the Company made
an adjustment to reduce its allowance for doubtful accounts at
December 31, 2006.
(b)
Includes write-offs, recoveries of previous write-offs, and
translation adjustments.
85
Table of Contents
By:
Date:
February 28, 2007
Chairman of the Board
February 28, 2007
President, Chief Executive Officer
and Director (Principal Executive Officer)
February 28, 2007
Executive Vice President, Finance
and Global Operations and Chief Financial Officer (Principal
Financial and Accounting Officer)
February 28, 2007
Director
February 28, 2007
Director
February 28, 2007
Director
February 28, 2007
Director
February 28, 2007
Director
February 28, 2007
Director
February 28, 2007
Director
February 28, 2007
86
Table of Contents
Director
February 28, 2007
Director
February 28, 2007
Director
February 28, 2007
87
Table of Contents
for the Year Ended December 31, 2006
Exhibit
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.
(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 No.
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)
Revolving Credit Agreement, dated
as of June 23, 2006, by and among Hasbro, Inc., Hasbro SA,
Bank of America, N.A., Citibank, N.A., Citizens Bank of
Massachusetts, Commerzbank AG, New York and Grand Cayman
Branches, BNP Paribas, Banc of America Securities LLC and the
other banks party thereto. (Incorporated by reference to
Exhibit 10.1 to the Companys Current Report on
Form 8-K
dated June 23, 2006, File No. 1-6682.)
(e)
Rights Agreement, dated as of
June 16, 1999, between the Company and the Rights Agent.
(Incorporated by reference to Exhibit 4 to the
Companys Current Report on
Form 8-K
dated as of June 16, 1999.)
(f)
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.)
(g)
Second Amendment to Rights
Agreement, dated as of February 13, 2007, between the
Company and Computershare Trust Company N.A. as the Rights
Agent.
88
Table of Contents
Exhibit
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.)
Table of Contents
Exhibit
(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 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.)
(r)
Amendment No. 8 to
Receivables Purchase Agreement, dated as of December 18,
2006, 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. as
Originator. (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.)
(s)
License Agreement, dated
January 6, 2006, by and between Hasbro, Inc., Marvel
Characters, Inc., and Spider-Man Merchandising L.P. (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 10.2 to the
Companys Quarterly Report on
Form 10-Q
for the period ended April 2, 2006, File No. 1-6682.)
(t)
First Amendment to License
Agreement, dated February 8, 2006, by and between Hasbro,
Inc., Marvel Characters, Inc. and Spider-Man Merchandising L.P.
(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 10.3 to the
Companys Quarterly Report on
Form 10-Q
for the period ended April 2, 2006, File No. 1-6682.)
Executive Compensation Plans and
Arrangements
(u)
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.)
(v)
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.)
(w)
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.)
(x)
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.)
(y)
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.)
Table of Contents
Exhibit
(z)
Second Amendment to the 1992 Stock
Incentive Plan. (Incorporated by reference to Exhibit 10(w)
to the Companys Annual Report on
Form 10-K
for the Fiscal Year Ended December 25, 2005, File
No. 1-6682.)
(aa)
Third Amendment to the 1995 Stock
Incentive Performance Plan. (Incorporated by reference to
Exhibit 10(x) to the Companys Annual Report on
Form 10-K
for the Fiscal Year Ended December 25, 2005, File No.
1-6682.)
(bb)
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.)
(cc)
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.)
(dd)
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.)
(ee)
Third Amendment to the 1997
Employee Non-Qualified Stock Plan. (Incorporated by reference to
Exhibit 10(bb) to the Companys Annual Report on
Form 10-K
for the Fiscal Year Ended December 25, 2005, File No.
1-6682.)
(ff)
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.)
(gg)
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.)
(hh)
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.)
(ii)
Form of Amendment, dated as of
March 10, 2000, to Form of Employment Agreement included as
Exhibit 10(hh) 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.)
(jj)
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.)
(kk)
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.)
(ll)
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.)
(mm)
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.)
(nn)
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.)
(oo)
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.)
Table of Contents
Exhibit
(pp)
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.)
(qq)
Third Amendment to Hasbro, Inc.
Deferred Compensation Plan for Non-Employee Directors, dated
December 15, 2005. (Incorporated by reference to
Exhibit 10(nn) to the Companys Annual Report on
Form 10-K
for the Fiscal Year Ended December 25, 2005, File
No. 1-6682.)
(rr)
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.)
(ss)
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.)
(tt)
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.)
(uu)
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.)
(vv)
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.)
(ww)
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.)
(xx)
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.)
(yy)
Second Amendment to Hasbro, Inc.
2003 Stock Incentive Performance Plan. (Incorporated by
reference to Exhibit 10(vv) to the Companys Annual
Report on
Form 10-K
for the Fiscal Year Ended December 25, 2005, File
No. 1-6682.)
(zz)
Third Amendment to Hasbro, Inc.
2003 Stock Incentive Performance Plan. (Incorporated by
reference to Exhibit 10.2 to the Companys Quarterly
Report on Form
10-Q
for the
period ended July 2, 2006, File No. 1-6682.)
(aaa)
Fourth Amendment to Hasbro, Inc.
2003 Stock Incentive Performance Plan. (Incorporated by
reference to Exhibit 10.2 to the Companys Quarterly
Report on Form
10-Q
for the
period ended October 1, 2006, File No. 1-6682.)
(bbb)
Form of Fair Market Value Stock
Option Agreement under the 2003 Stock Incentive Performance
Plan. (Incorporated by Reference to Exhibit 10.1 to the
Companys Quarterly Report on
Form 10-Q
for the period ended September 26, 2004, File
No. 1-6682.)
(ccc)
Form of Premium-Priced Stock
Option Agreement under the 2003 Stock Incentive Performance
Plan. (Incorporated by Reference to Exhibit 10.2 to the
Companys Quarterly Report on
Form 10-Q
for the period ended September 26, 2004, File
No. 1-6682.)
(ddd)
Form of Contingent Stock
Performance Award under the Hasbro, Inc. 2003 Stock Incentive
Performance Plan. (Incorporated by reference to Exhibit 10
to the Companys Current Report on
Form 8-K
dated as of July 27, 2006, File No. 1-6682.)
(eee)
Hasbro, Inc. Amended and Restated
Nonqualified Deferred Compensation Plan. (Incorporated by
reference to Exhibit 4.1 to the Companys Registration
Statement on
Form S-8
dated October 27, 2003, File
No. 333-110002.)
(fff)
First Amendment to Hasbro, Inc.
Amended and Restated Nonqualified Deferred Compensation Plan.
(Incorporated by Reference to Exhibit 10.1 to the
Companys Quarterly Report on
Form 10-Q
for the period ended March 28, 2004, File No. 1-6682.)
Table of Contents
EXHIBIT 3(D)
AMENDED AND RESTATED BY-LAWS OF HASBRO, INC.
(as amended from time to time)
ARTICLE I
OFFICES
Section 1.1. The office of Hasbro, Inc. (the "Corporation") within the State of Rhode Island shall be located in the City of Pawtucket, County of Providence.
Section 1.2. Other Offices. The Corporation may also have offices and places of business at such other places within or without the State of Rhode Island as the Board of Directors may from time to time determine or the business of the Corporation may require.
ARTICLE II
MEETINGS OF SHAREHOLDERS
Section 2.1. Place. All meetings of shareholders of the Corporation shall be held at such place within or without the State of Rhode Island as shall be stated in the notice of the meeting.
Section 2.2. Annual Meeting. Commencing with the year 1995, a meeting of the shareholders of the Corporation shall be held annually on the second Wednesday in the month of May of each year, if not a legal holiday, and if a legal holiday, then on the next secular day following, or on such other date and at such time and place as the Board of Directors shall determine, and at such meeting, the shareholders shall transact such business as may properly be brought before the meeting.
Section 2.3. Special Meetings. Special meetings of the shareholders of the Corporation, for any purpose or purposes, unless otherwise prescribed by statute or by the Restated Articles of Incorporation (the "Articles of Incorporation"), may be called by the Chairman of the Board, any Vice Chairman, any Chief Operating Officer, President, or the Board of Directors.
Section 2.4. Notice of Meetings. Written notice of each meeting of shareholders of the Corporation stating the place, date and hour thereof, and in the case of a special meeting of shareholders, specifying the purpose or purposes thereof, and the person or persons by whom or at whose direction such meeting has been called, shall be given to each shareholder entitled to vote thereat, at his address as it appears on the records of the Corporation, not less than ten (10) nor more than sixty (60) days prior to the meeting.
Section 2.5. Quorum. At each meeting of the shareholders of the Corporation, the holders of a majority of shares of the Corporation entitled to vote thereat, present in person or by proxy, shall constitute a quorum, except as may be otherwise provided by the Articles of Incorporation or these By-Laws. If, however, a quorum shall not be present on the date specified in the original notice of meeting, the shareholders entitled to vote thereat, present in person or by proxy, shall have power to adjourn the meeting from time to time, without notice other than announcement at the meeting, until a quorum shall be present. At any such adjourned meeting, at which a quorum shall be present, the shareholders, present in person or by proxy, may transact any business which might have been transacted had a quorum been present on the date specified in the original notice of meeting.
Section 2.6. Voting. At any meeting of the shareholders of the Corporation, each shareholder having the right to vote shall be entitled to vote in person or by proxy appointed by an instrument in writing subscribed by such shareholder or otherwise appointed in accordance with the provisions of Section 2.7 of these By-Laws. Except as may be otherwise provided by the Articles of Incorporation, each holder of record of Common Stock shall be entitled to one vote for every share of such stock standing in his name on the book of the Corporation. All elections of directors by shareholders shall be determined by the vote of the holders of a majority of the stock having voting power and represented in person or by proxy at such meeting and, except as otherwise provided by statute, the Articles of Incorporation or Article XII of these By-Laws, all other matters shall be decided by the vote of the holders of a majority of the stock having voting power and represented in person or by proxy at such meeting.
Section 2.7. Proxies. Each proxy shall be either (i) executed in writing by the shareholder or his duly authorized attorney or (ii) provided through instructions transmitted by or on behalf of the shareholder by telegram, cablegram, or other means of electronic transmission, including Internet and telephonic transmissions, which in the case of this subsection (ii) are both (A) consistent with the procedures of the Corporation designed to verify that such instructions have been authorized by such shareholder and (B) comply with the applicable requirements of the Rhode Island Business Corporation Act for such proxies. No proxy shall be valid after the expiration of eleven (11) months from the date of its execution unless it shall have specified therein a longer duration. Each proxy shall be revocable at the pleasure of the person executing it or of his personal representative, except in those cases where an irrevocable proxy is permissible under applicable law.
Section 2.8. Consents. Action shall be taken by the shareholders only by unanimous written consent or at annual or special meetings of shareholders of the Corporation except that, if and with the percentage of the outstanding Preference Stock or any series thereof (the "Required Percentage") set forth in the resolution or resolutions adopted by the Board of Directors with respect to the Preference Stock, action may be taken without a meeting, without prior notice and without a vote, if consent in writing setting forth the action so taken, shall be signed by the holders of the Required Percentage of the outstanding Preference Stock or any series thereof entitled to vote thereon.
Section 2.9. Shareholder Proposals. Any new business proposed by any shareholder to be taken up at the annual meeting of shareholders shall be stated in writing and filed with the Secretary of the Corporation at least 150 days before the date of the annual meeting, and all business so stated, proposed and filed shall, if appropriate under applicable law, be considered at the annual meeting, but no other proposal shall be acted upon at the annual meeting. These provisions shall not prevent the consideration and approval or disapproval at the annual meetings of reports of officers, directors and committees, but in connection with such reports no new business shall be acted upon at such annual meeting unless stated and filed as herein provided. The business to be taken up at a special meeting of shareholders shall be confined to that set forth in the notice of special meeting.
Section 2.10. Nomination of Directors.
(a) Except as otherwise expressly provided in the Articles of Incorporation or pursuant to applicable law, only persons who are nominated in accordance with the following procedures shall be eligible for election as directors of the Corporation. Nominations of persons for election to the Board of Directors may be made at any annual meeting of shareholders (a) by or at the direction of the Board of Directors (or any duly authorized committee thereof) or (b) by any shareholder of the Corporation (i) who is a shareholder of record on the date of the giving of notice provided for in this Section 2.10 and on the record date for the determination of shareholders entitled to vote at such annual meeting and (ii) who complies with the notice-procedure set forth in this Section 2.10.
(b) In addition to any other applicable requirements, for a nomination to be made by a shareholder, such shareholder must have given timely notice thereof in proper written form to the Secretary of the Corporation (as more fully described below). To be timely, a shareholder's notice to the Secretary must be delivered to or mailed and received at the principal executive offices of the Corporation not less than sixty (60) days nor more than ninety (90) days prior to the one year anniversary date of the immediately preceding annual meeting of shareholders; provided that in the event that the annual meeting is not called for at a date that is not within the thirty (30) days before or after such anniversary date, notice by the shareholder in order to be timely must be so received not later than the close of business on the 10th day following the day on which notice of the date of the annual meeting was mailed or public disclosure of the date of the annual meeting was made, whichever first occurs.
(c) To be in proper written form, a shareholder's notice to the Secretary
must set forth (a) as to each person whom the shareholder proposes to nominate
for election or reelection as a director (i) the name, age, business address and
residence address of the person, (ii) the principal occupation or employment of
the person, (iii) the class or series or number of shares of capital stock of
the Corporation that are owned beneficially or of record by the person and (iv)
any other information relating to the person that would be required to be
disclosed in a proxy statement or other filings required to be made in
connection with solicitations of proxies for election of directors pursuant to
Section 14 of the Securities Exchange Act of 1934, as amended (the "Exchange
Act"), and the rules and regulations promulgated thereunder; and (b) as to the
shareholder giving the notice (i) the name and record address of such
shareholder, (ii) the class or series and number of shares of capital stock of
the Corporation that are owned beneficially or of record by such shareholder,
(iii) a description of all arrangements or understandings between such
shareholder and each proposed nominee and any other person or persons (including
their names) pursuant to which the nomination(s) are to be made by such
shareholder, (iv) a representation that such shareholder intends to appear in
person or by proxy at the meeting to nominate the persons named in its notice
and (v) any other information relating to such shareholder that would be
required to be disclosed in a proxy statement or other filings required to be
made in connection with solicitations of proxies for election of directors
pursuant to Section 14 of the Exchange Act and the rules and regulations
promulgated thereunder. The Corporation may require that any proposed nominee
furnish such other information as may reasonably be required by the Corporation
to determine the eligibility of such proposed nominee to serve as director of
the Corporation. Such written notice from the nominating shareholder must be
accompanied by a written consent of each proposed nominee to being named as a
nominee and to serve as a director, if elected.
(d) Except as otherwise expressly provided in the Articles of Incorporation or pursuant to applicable law, no person shall be eligible for election as a director of the Corporation unless nominated in accordance with the procedures set forth in this Section 2.10. If the Chairman of the meeting determines that a nomination was not made in accordance with the foregoing procedures, the Chairman shall declare to the meeting that the nomination was defective and such defective nomination shall be disregarded.
ARTICLE III
DIRECTORS
Section 3.1. Board of Directors. The property and business of the Corporation shall be managed by its Board of Directors, which may exercise all such powers of the Corporation and do all such lawful acts and things as are not, by statute or by the Articles of Incorporation or by these By-Laws, directed or required to be exercised or done by the shareholders. Directors need not be shareholders.
Section 3.2. Number. The number of directors of the Corporation (exclusive of directors that may be elected by the holders of any one or more series of the Preference Stock voting separately as a class or classes) that shall constitute the entire Board of Directors (the "Entire Board of Directors") shall be 17, unless otherwise determined from time to time by resolution adopted by the affirmative vote of a majority of the Entire Board of Directors, except that if an Interested Person (as hereinafter defined in Article XIII of these By-Laws) exists, such majority must include the affirmative vote of at least a majority of the Continuing Directors (as hereinafter defined in Article XIII of these By-Laws).
Section 3.3. Election. Directors shall be elected at the annual meeting of shareholders, or as otherwise provided in the Articles of Incorporation or in these By-Laws.
Section 3.4. Term of Office, Classes. Except with respect to any directors elected by holders of any one or more series of Preference Stock voting separately as a class or classes, directors shall be elected in the following manner. The directors elected at the annual meeting of shareholders held in 2003 shall, along with the directors elected at the annual meeting of shareholders held in 2001, serve until the annual meeting of shareholders to be held in 2004 and until their successors shall be elected and qualified, or until their earlier death, resignation or removal. The directors elected at the annual meeting in 2002 shall hold office until the annual meeting of shareholders held in 2005 and until their successors shall be elected and qualified, or until their earlier death, resignation or removal. Beginning with the annual meeting of shareholders to be held in 2004, at each annual meeting of shareholders the directors elected at such meeting shall serve until the next annual meeting of shareholders and until their successors shall be elected and qualified, or until their earlier death, resignation or removal. No decrease in the number of directors shall have the effect of shortening the term of office of any incumbent director.
Section 3.5. Removal. Except as otherwise required by law and subject to the terms of any one or more classes or series of outstanding capital stock of the Corporation, any director may be removed; provided, however, such removal must be for cause and must be approved by at least a majority vote of the Entire Board of Directors or by at least a majority of the votes held by the holders of shares of the Corporation then entitled to be voted at an election for that director, except that if an Interested Person exists, such removal must be approved (1) by at least a majority vote of the Entire Board of Directors, including a majority of the Continuing Directors, or (2) by at least 80% of the votes held by the holders of shares of the Corporation then entitled to be voted at an election for that director, including a majority of the votes held by holders of shares of the Corporation then entitled to vote at an election for that director that are not beneficially owned or controlled, directly or indirectly, by any Interested Person. For purposes of this Section 3.5, the Entire Board of Directors will not include the director who is the subject of the removal determination, nor will such director be entitled to vote thereon. However, nothing in the preceding sentence shall be construed as preventing a director who is the subject of removal determination (but who has not yet actually been removed in accordance with this Section 3.5) from voting on any other matters brought before the Board of Directors, including, without limitation, any removal determination with respect to any other director or directors.
Section 3.6. Vacancies. Except as otherwise provided by the terms of any one or more classes or series of outstanding capital stock of the Corporation, any vacancy occurring on the Board of Directors, including any vacancy created by reason of any increase in the number of directors, shall be filled by the affirmative vote of at least a majority of the remaining directors, whether or not such remaining directors constitute a quorum, except that if an Interested Person exists, such majority of the remaining directors must include a majority of the Continuing Directors. A director elected to fill a vacancy shall serve for the unexpired term of his or her predecessor in office.
ARTICLE IV
MEETINGS OF THE BOARD
Section 4.1. Time and Place. Meetings of the Board of Directors may be held either within or without the State of Rhode Island. Regular meetings of the Board of Directors may be held without notice at such time and place as shall from time to time be determined by the Board. Each special meeting of the Board of Directors shall be held at such time and place as shall be stated in the notice of the meeting.
Section 4.2. First Meeting. The first meeting of each newly elected Board of Directors shall be held within ten (10) days following each annual meeting of the shareholders, at such time and place either within or without the State of Rhode Island, as shall be announced at the annual meeting of shareholders, and no notice of such meeting shall be necessary to the newly elected directors in order legally to constitute the meeting, provided a quorum shall be present.
Section 4.3. Special Meetings. Special meetings of the Board of Directors may be called by the Chairman of the Board, any Vice Chairman, any Chief Operating Officer, the President, or the Secretary, and at the written request of any two (2) directors, shall be called by the Secretary. Written notice of each special meeting of directors, stating the time and place thereof, shall be served upon each director, personally, by mail or by telegraph, at least two (2) days before such meeting.
Section 4.4. Quorum and Voting. At all meetings of the Board of Directors a majority of the entire Board of Directors shall be necessary and sufficient to constitute a quorum for the transaction of business and the act of a majority of the directors present at any meeting at which a quorum is present shall be the act of the Board of Directors, except as may be otherwise specifically provided by statute, by the Articles of Incorporation or by these By-Laws. If a quorum shall not be present at any meeting of the Board of Directors, the directors present thereat may adjourn the meeting from time to time, without further notice other than announcement at the meeting, until a quorum shall be present.
Section 4.5. Telephone Conference Meetings. Meetings of the directors may be held by means of a telephone or similar communications equipment, by means of which all persons participating in the meeting can hear each other at the same time and participation by such means shall constitute presence in person at a meeting.
Section 4.6 Consents. Any action allowed or required to be taken at a meeting of the Board of Directors or by any committee thereof, may be taken without a meeting if all of the directors, or all of the members of the committee, as the case may be, consent thereto in writing or by electronic transmission, before or after the action, and the writing or writings, or electronic transmission or transmissions are filed with the minutes of proceedings of the board or committee.
ARTICLE V
COMMITTEES OF DIRECTORS
Section 5.1. Designation: Powers. The Board of Directors may, by resolution or resolutions adopted by a majority of the Entire Board of Directors, designate from among its members an Executive Committee, or other Committees, each consisting of three (3) or more directors, and each of which, to the extent provided in any such resolution, shall have all the authority of the Board, except as provided by law, the Articles of Incorporation or these By-Laws. The Board of Directors may designate one or more directors as alternate members of any such Committee who may replace any absent member or members at any meeting of such Committee.
Section 5.2. Tenure and Reports. Each such Committee shall serve at the pleasure of the Board of Directors. It shall keep minutes of its meetings and report the same to the Board.
ARTICLE VI
NOTICES
Section 6.1. Delivery of Notices. Notices to directors and shareholders shall be in writing and may be delivered personally, by mail or facsimile, or by means of a form of electronic transmission consented to by the director or shareholder to whom the notice is being given. Notice by mail shall be deemed to be given at the time when the same shall be deposited in the post office or letter box, in a postage paid, sealed envelope, addressed to the director or shareholder at their address appearing on the books of the corporation. Notice given by facsimile or electronic transmission shall be deemed given when sent, addressed to the director or shareholder at their facsimile number or by means of the electronic address provided to the Corporation.
Section 6.2. Waiver of Notice. Whenever any notice is required to be given by any statute, the Articles of Incorporation or these By-Laws, a waiver thereof in writing, signed by the person or persons entitled to said notice, whether before or after the time stated therein, shall be deemed equivalent thereto. Any shareholder attending a meeting of shareholders in person or by proxy, or any director attending a meeting of the Board of Directors or any committee thereof, without protesting such lack of notice prior to the meeting or at its commencement, shall be deemed conclusively to have waived notice of such meeting. Any shareholder signing a unanimous or other written consent pursuant to Section 2.8 hereof or any director signing a unanimous written consent pursuant to Section 4.6 hereof shall be deemed conclusively to have waived notice of the action taken by such consent.
ARTICLE VII
OFFICERS
Section 7.1. Officers. The officers of the Corporation shall be a Chief Executive Officer, a President, a Treasurer, a Secretary, and such other officers as the Board of Directors shall determine. Each officer of the Corporation shall be elected annually by the directors at their annual meeting, and shall hold office at the pleasure of the Board of Directors. Any person may hold two or more such offices.
Section 7.2. Additional Officers. The Board of Directors may appoint such other officers and agents, including, without limitation, Assistant Vice Presidents, Assistant Secretaries, Assistant Treasurers and Assistant Controllers with such powers and duties as it shall deem necessary or appropriate. All such officers or agents shall hold office at the pleasure of the Board of Directors.
Section 7.3. Authorities and Duties. All officers, as between themselves and the Corporation, shall have such authority and perform such duties in the management of the Corporation as may be provided in these By-Laws, or, to the extent not so provided, as may be prescribed by the Board of Directors.
Section 7.4. Salaries. The salaries or other compensation of all officers of the Corporation shall be fixed by the Board of Directors. The salaries or other compensation of all other employees and agents of the Corporation may be fixed by the Board of Directors. However, the Board of Directors may delegate to one or more officers or employees authority to employ and to fix the salaries or other compensation of any such employees or agents.
Section 7.5. The Chairman of the Board. The Chairman of the Board shall preside at all meetings of the Board of Directors and shall have such powers and perform such duties as may from time to time be assigned to him by the Board of Directors.
Section 7.6. The Vice Chairman. In the absence of the Chairman of the Board, the Vice Chairman (and if there is more than one Vice Chairman, the Vice Chairmen in order of their seniority or as otherwise determined by the Board) shall preside at all meetings of the Board of Directors and shall have such powers and perform such duties as may from time to time be assigned to him by the Board of Directors.
Section 7.7. The Chief Operating Officers. In the absence of the Chairman of the Board and any Vice Chairman, any Chief Operating Officer (and if there is more than one Chief Operating Officer, in order of their seniority or as otherwise determined by the Board) shall preside at all meetings of the Board of Directors and shall have such powers and perform such duties as may from time to time be assigned to him by the Board of Directors.
Section 7.8. The President. In the absence of the Chairman of the Board, any Vice Chairman and the Chief Operating Officers, the President shall preside at all meetings of the Board of Directors and shall have such powers and perform such duties as may from time to time be assigned to him by the Board of Directors.
Section 7.9. The Vice Presidents. The Vice Presidents in the order of their seniority, as indicated by their titles (Executive, Senior, etc.) or as otherwise determined by the Board of Directors, shall, in the absence of the Chairman of the Board, any Vice Chairmen, the Chief Operating Officers and the President, perform the duties and exercise the powers of the Chairman of the Board, the Vice Chairmen, the Chief Operating Officers and the President, shall perform such other duties as the Board of Directors shall prescribe and shall generally assist the Chairman of the Board, the Vice Chairmen, the Chief Operating Officers and the President.
Section 7.10. The Secretary. The Secretary shall attend meetings of the Board of Directors and shareholders and record all votes and the minutes of all proceedings in a book to be kept for that purpose and shall perform like duties for the standing committees of the Board of Directors when required. He shall give, or cause to be given, notice of meetings of the shareholders and special meetings of the Board of Directors, and shall perform such other duties as may be prescribed by the Board of Directors, the Chairman of the Board, the Vice Chairmen, the Chief Operating Officers and the President, under whose collective supervision he shall be. He shall keep in safe custody the seal of the Corporation and, when authorized by the Board of Directors, affix the same to any instrument requiring it and, when so affixed, it shall be attested by his signature or by the signature of the Treasurer or an Assistant Secretary or Treasurer. He shall keep in safe custody the certificate books and stock books and such other books and papers as the Board of Directors may direct and shall perform all other duties incident to the office of Secretary.
Section 7.11. Assistant Secretaries. The Assistant Secretaries in the absence or disability of the Secretary, perform the duties and exercise the powers of the Secretary and shall perform such other duties as the Board of Directors shall prescribe.
Section 7.12. The Treasurer. The Treasurer shall have the care and custody of the corporate funds, and other valuable effects, including securities, and shall keep full and accurate accounts of receipts and disbursements in books belonging to the Corporation and shall deposit all moneys and other valuable effects in the name and to the credit of the Corporation in such depositories as may be designated by the Board of Directors. The Treasurer shall disburse the funds of the Corporation as may be ordered by the Board, taking proper vouchers for such disbursements, and shall render to the Chairman of the Board, the Vice Chairmen, the Chief Operating Officers, the President and the Board of Directors, at the regular meetings of the Board, or whenever they may require it, an account of all his transactions as Treasurer and of the financial condition of the Corporation. If required by the Board of Directors, the Treasurer shall give the Corporation a bond for such term, in such sum and with such surety or sureties as shall be satisfactory to the Board for the faithful performance of the duties of his office and for the restoration to the Corporation, in case of his death, resignation, retirement or removal from office, of all books, papers, vouchers, money and other property of whatever kind in his possession or under his control belonging to the Corporation.
Section 7.13. Assistant Treasurers. The Assistant Treasurer shall, in the absence or disability of the Treasurer, perform the duties and exercise the powers of the Treasurer and shall perform such other duties as the Board of Directors may prescribe.
Section 7.14. Execution of Instruments. Each of the Chairman of the Board, the Vice Chairman, the Chief Operating Officers, the President and the Executive Vice Presidents shall have the power to sign on behalf of the Corporation bonds, notes, deeds, mortgages, guarantees and any and all contracts, agreements and instruments of a contractual nature pertaining to matters which arise in the normal conduct and ordinary course of the business of the Corporation, except in cases in which the signing and execution thereof shall have been expressly delegated by the Board of Directors of the Corporation to some other officer or agent of the Corporation.
ARTICLE VIII
CERTIFICATES OF STOCK
Section 8.1. Form. The shares of stock of the Corporation shall be represented by certificates, provided, however, that the Board of Directors may provide by resolution or resolutions that some or all of any class or series of the Corporation's stock shall be uncertificated, and in such case, the Board of Directors shall designate any procedures applicable to such uncertificated shares. The certificates of stock of the Corporation shall be in such form as shall be determined by the Board of Directors and shall be numbered consecutively and entered in the books of the Corporation as they are issued. Each certificate shall exhibit the registered holder's name and the number and class of shares, and shall be signed by the Chairman of the Board, any Vice Chairman, any Chief Operating Officer, the President, any Executive Vice President, Senior Vice President, or Vice President and by the Treasurer or an Assistant Treasurer, or the Secretary or an Assistant Secretary, and shall bear the seal of the Corporation or an engraved or printed facsimile thereof. Where any such certificate is signed by a transfer agent or by a registrar, the signature of the Chairman of the Board, any Vice Chairman, any Chief Operating Officer, the President, Executive Vice President, Senior Vice President, Vice President, Treasurer, Assistant Treasurer, Secretary or Assistant Secretary may be a facsimile. In case any officer, transfer agent or registrar, who has signed, or whose facsimile signature or signatures have been used on, any such certificate or certificates, shall cease to be such officer, transfer agent or registrar of the Corporation, whether because of death, resignation or otherwise, before such certificate or certificates have been delivered by the Corporation, such certificate or certificates may nevertheless be issued and delivered as though the person or persons who signed such certificate or certificates or whose facsimile signature or signatures have been used thereon had not ceased to be such officer, transfer agent or registrar of the Corporation.
Section 8.2. Registered Shareholders. The Corporation shall be entitled to
(1) recognize the exclusive right of a person registered on its books as the
owner of shares as entitled to receive dividends and notices of meetings of
shareholders and to vote as such owner; and (2) hold liable for calls and
assessments a person registered on its books as the owner of shares; and the
Corporation shall not be bound to recognize any equitable or other claim to or
interest in such shares on the part of any other person, whether or not it shall
have express or other notice thereof, except as otherwise required by law.
Section 8.3. Lost Certificates. The Board of Directors may direct a new certificate or certificates to be issued in place of any certificate or certificates theretofore issued by the Corporation alleged to have been lost, stolen or destroyed, upon the making of an affidavit of that fact by the person claiming the certificate of stock to be lost, stolen or destroyed, and upon such other terms as the Board of Directors may prescribe; and the Board of Directors may, in its discretion and as a condition precedent to the issuance of a new certificate or certificates, require the owner of such lost, stolen or destroyed certificate or certificates, or his legal representative, to give the Corporation a bond in such sum and with such surety or sureties as it may direct as indemnity against any claim that may be made against the Corporation with respect to the certificate alleged to have been lost, stolen or destroyed.
Section 8.4. Record Date.
(a) For the purpose of determining the shareholders entitled to notice of
or to vote at any meeting of shareholders or any adjournment thereof, or to
express consent to or dissent from any proposal without a meeting, or for the
purpose of determining shareholders entitled to receive payment of any dividend
or the allotment of any rights, or for the purpose of any other action, the
Board may fix, in advance, a date as the record date for any such determination
of shareholders. Such date shall not be more than sixty (60) nor less than ten
(10) days before the date of such meeting nor more than sixty (60) days prior to
any other action.
(b) If no record date is fixed:
(1) The record date for the determination of shareholders entitled to notice of or to vote at a meeting of shareholders shall be at the close of business on the day next preceding the day on which notice is given, or, if no notice is given, the day on which the meeting is held.
(2) The record date for determining shareholders for any purpose other than that specified in subparagraph (1) shall be at the close of business on the day on which the resolution of the Board relating thereto is adopted.
(c) When a determination of shareholders of record entitled to notice of or to vote at any meeting of shareholders has been made as provided in this section, such determination shall apply to any adjournment thereof, unless the Board fixes a new record date under this section for the adjourned meeting.
Section 8.5. Fractional Shares. The Corporation may (1) issue fractions of a share, (2) arrange for the disposition of fractional interests by those entitled thereto, (3) pay in cash the fair value of fractions of a share as of the time when those entitled to receive such fractions are determined, or (4) issue scrip in registered or bearer form which shall entitle the holder to receive a certificate for a full share upon the surrender of such scrip aggregating a full share. A certificate for a fractional share shall, but scrip shall not, unless otherwise provided therein, entitle the holder to exercise voting rights, to receive dividends thereon, and to participate in any of the assets of the Corporation in the event of liquidation. The Board of Directors may cause scrip to be issued subject to the condition that it shall become void if not exchanged for certificates representing full shares before a specified date, or subject to the condition that the shares for which scrip is exchangeable may be sold by the Corporation and the proceeds thereof distributed to the holders of scrip, or subject to any other conditions which the Board of Directors may deem advisable.
ARTICLE IX
GENERAL PROVISIONS
Section 9.1. Dividends. Subject always to the provisions of the law and the Articles of Incorporation, the Board of Directors shall have full power to determine whether any, and if any, what part of any, funds legally available for the payment of dividends shall be declared in dividends and paid to shareholders; the division of the whole or any part of such funds of the Corporation shall rest wholly within the lawful discretion of the Board of Directors, and it shall not be required at any time, against such discretion, to divide or pay any part of such funds among or to the shareholders as dividends or otherwise; and the Board of Directors may fix a sum which may be set aside or reserved over and above the capital paid in of the Corporation as working capital for the Corporation or as a reserve for any proper purpose, and from time to time may increase, diminish, and vary the same in its absolute judgment and discretion.
Section 9.2. Fiscal Year. The fiscal year of the Corporation shall be determined by the Board of Directors.
Section 9.3. Seal. The corporate seal shall have inscribed thereon the name of the Corporation, the year of its organization and the words "Incorporated, Rhode Island". Said seal may be used by causing it or a facsimile thereof to be impressed, affixed or otherwise reproduced.
Section 9.4. Instruments for the Payment of Money. All checks or other instruments for the payment of money and notes of the Corporation shall be signed by such officer or officers or such other person or persons as the Board of Directors may from time to time designate.
ARTICLE X
INDEMNIFICATION
Section 10.1. Without limiting the provisions of Section 10.2, each person who at any time serves or shall have served as a director or officer of the Corporation or who, while a director or officer of the Corporation, is or was serving at the request of the Corporation as a member of any committee of the Board of Directors or as a director, officer, partner, trustee, employee or agent of another foreign or domestic corporation, partnership, joint venture, trust, other enterprise or employee benefit plan shall be indemnified to the full extent permitted by Title 7-1.1-4.1 of the Rhode Island Business Corporation Act, as the same may
be amended from time to time.
Section 10.2. Nothing contained in this ARTICLE X shall affect any rights to indemnification to which directors and officers may be entitled by agreement, vote of shareholders or disinterested directors or otherwise.
ARTICLE XI
AMENDMENTS
Section 11.1. Power to Amend. The Board of Directors is authorized to adopt, repeal, alter, amend or rescind these By-Laws by the affirmative vote of at least a majority of the Entire Board of Directors, except that if an Interested Person exists, such Board action must be taken by the affirmative vote of at least a majority of the Entire Board of Directors, including a majority of the Continuing Directors. The shareholders may adopt, repeal, alter, amend or rescind the By-Laws of the Corporation by the vote of at least 66-2/3% of the votes held by holders of shares of Voting Stock (as hereinafter defined) except that if an Interested Person exists, such shareholder action must be taken by the vote of at least 80% of the votes held by holders of shares of Voting Stock, including an Independent Majority of Shareholders (as hereinafter defined in Article XIII of these By-Laws).
ARTICLE XII
BUSINESS COMBINATIONS
Section 12.1. Subject to Section 12.2 of this Article XII, but notwithstanding any other provisions of these By-Laws or of the Articles of Incorporation or the fact that no vote for such a transaction may be required by law or that approval by some lesser percentage of shareholders may be permitted by law, neither the Corporation nor any Subsidiary shall be party to a Business Combination (as hereinafter defined in Article XIII of these By-Laws) unless all of the following conditions are met:
(1) After becoming an Interested Person and prior to consummation of such Business Combination:
(a) such Interested Person shall not have acquired any newly issued shares of capital stock, directly or indirectly, from the Corporation or a Subsidiary (except upon exercise or conversion of warrants or other rights, including preemptive rights, or convertible securities acquired by an Interested Person prior to becoming an interested Person or upon compliance with the provisions of this Article XII or as a result of a pro rata stock dividend or stock split);
(b) such Interested Person shall not have received the benefit, directly or indirectly (except proportionately as a shareholder), of any loans, advances, guarantees, pledges or other financial assistance or tax credits provided by the Corporation or a Subsidiary, or have made any major changes in the Corporation's business or equity capital structure;
(c) except as approved by a majority of the Continuing Directors, there shall have been (i) no reduction in the annual rate of dividends paid on voting Stock (except as necessary to reflect a pro rata stock dividend or stock split) and (ii) an increase in such annual rate of dividends as necessary to reflect any reclassification (including any reverse stock split), recapitalization, reorganization or any similar transaction which has the effect of reducing the number of outstanding shares of Voting Stock; and
(d) such Interested Person shall have taken steps to insure that the Board of Directors of the Corporation included at all times representation by Continuing Directors proportionate to the ratio that the number of shares of Voting Stock (as hereinafter defined in Article XIII of these By-Laws) from time to time owned by shareholders who are not Interested Persons bears to all shares of Voting Stock outstanding at the time in question (with a Continuing Director to occupy any resulting fractional position among the
directors); and
(2) The Business Combination shall have been approved by at least a majority of the Entire Board of Directors of the Corporation, including a majority of the Continuing Directors; and
(3) A shareholder's meeting shall have been called for the purpose of approving the Business Combination and a proxy statement complying with the requirements of the Exchange Act, as amended, or any successor statute or rule, whether or not the Corporation is then subject to such requirements, shall be mailed to all shareholders of the Corporation not less than thirty (30) days prior to the date of such meeting for the purpose of soliciting shareholder approval of such Business Combination and shall contain at the front thereof, in a prominent place, (a) any recommendations as to the advisability (or inadvisability) of the Business Combination which the Continuing Directors may choose to state, and (b) the opinion of a reputable national investment banking firm as to the fairness (or lack thereof) of the terms of such Business Combination, from the point of view of the remaining shareholders of the Corporation (such investment banking firm to be engaged by a majority of the Continuing Directors solely on behalf of the remaining shareholders and paid a reasonable fee for their services, which fee shall not be contingent upon the consummation of the transaction); and
(4) The Business Combination shall have been approved by at least 80% of the votes held by the holders of the outstanding Voting Stock, including an Independent Majority of Shareholders.
Section 12.2. The approval requirements of Section 12.1 shall not apply to any particular Business Combination, and such Business Combination shall require only such affirmative shareholder vote as is required by law, any other provision of the Articles of Incorporation or of these By-Laws, the terms of any outstanding classes or series of capital stock of the Corporation or any agreement with any national securities exchange, if the Business Combination is approved by a majority of the Entire Board of Directors, including the affirmative vote of at least 66-2/3% of the Continuing Directors.
Section 12.3. The Board of Directors of the Corporation, when evaluating any offer of another Person (the "Offering Person") (i) to make a tender or exchange offer for any equity security of the Corporation or (ii) to effect any Business Combination (as defined in Article XIII of these By-Laws, except that for purposes of this Section 12.3 the term "Person" shall be substituted for the term "Interested Person"), shall, in connection with the exercise of the Board's judgment in determining what is in the best interests of the Corporation as a whole, be authorized to give due consideration to such factors as the Board of Directors determines to be relevant, including, without limitation:
(a) the relationships between the consideration offered by the Offering Person and (x) the market price of the voting Stock over a period of years, (y) the current and future value of the Corporation as an independent entity and (z) political, economic and other factors bearing on securities prices and the Corporation's financial condition and future prospects;
(b) the interests of all of the Corporation's shareholders, including minority shareholders;
(c) whether the proposed transaction might violate federal, state, local or foreign laws;
(d) the competence, experience and integrity of the Offering Person and its management;
and
(e) the social, legal and economic effects upon employees, suppliers, customers, licensors, licensees and other constituents of the Corporation and its Subsidiaries and on the communities in which the Corporation and its Subsidiaries operate or are located.
In connection with any such evaluation, the Board of Directors is authorized to conduct such investigations and to engage in such legal proceedings as the Board of Directors may determine.
Section 12.4. As to any particular transaction, the Continuing Directors shall have the power and duty to determine, on the basis of information known to them:
(a) The amount of Voting Stock beneficially owned by any Person (as hereinafter defined in Article XIII of these By-Laws);
(b) Whether a Person is an Affiliate (as herein after defined in Article XIII of these By-Laws) or Associate (as hereinafter defined in Article XIII of these By-Laws) of another;
(c) Whether a Person has an agreement, arrangement or understanding with, or is acting in concert with, another;
(d) Whether the assets subject to any Business Combination constitute a Substantial Part (as hereinafter defined in Article XIII of these By-Laws);
(e) Whether a proposed transaction is proposed, directly or indirectly, by or on behalf of any Person;
(f) Whether a proposed amendment of any Article of the Articles of Incorporation would have the effect of modifying or permitting circumvention of the provisions of Article Eighth through Twelfth of the Articles of Incorporation; and
(g) Such other matters with respect to which a determination is required under Articles Eighth through Twelfth of the Articles of Incorporation.
Any such determination shall be conclusive and binding for all purposes of the Articles of Incorporation and of these By-Laws.
Section 12.5. The affirmative votes required by this Article XII is in addition to the vote of the holders of any class or series of capital stock of the Corporation otherwise required by law, the Articles of Incorporation or these By-Laws, any resolution which has been adopted by the Board of Directors providing for the issuance of a class or series of capital stock or any agreement between the Corporation and any national securities exchange.
Section 12.6. Nothing contained in this Article XII shall be construed to relieve any Interested Person from any fiduciary or other obligation imposed by law.
ARTICLE XIII
DEFINITIONS
For the purposes of these By-Laws:
(1) The term "beneficial owner" and correlative terms shall have the meaning as set forth in Rule 13d-3 of the General Rules and Regulations (the "General Rules") promulgated by the Securities and Exchange Commission (the "Commission") under the Securities Exchange Act of 1934 (the "Exchange Act"), as in effect on June 5,1985, except that the words "within sixty days" in Rule 13d-3(d) (1) (i) shall be omitted.
(2) The term "Business Combination" shall mean:
(a) any merger or consolidation of the Corporation or any Subsidiary (as hereinafter defined) (i) with an Interested Person, any Affiliate (as hereinafter defined) or Associate (as hereinafter defined) of an Interested Person or any Person (as hereinafter defined) acting in concert with an Interested Person (including, without limitation, any Person, which after such merger or consolidation, would be an Affiliate or Associate of an Interested Person), in each case irrespective of which Person is the surviving entity in such merger or consolidation, or (ii) proposed, directly or indirectly, by or on behalf of an Interested Person;
(b) any sale, lease, exchange, transfer, distribution to shareholders or other disposition, including, without limitation, a mortgage, pledge or other security device, by the Corporation or any Subsidiary (in a single transaction or a series of separate or related transactions) of all, substantially all or any Substantial Part (as hereinafter defined) of the assets or business of the Corporation or a Subsidiary (including, without limitation, any securities of a Subsidiary) (i) to or with an Interested Person, or (ii) proposed, directly or indirectly, by or on behalf of an Interested Person;
(c) the purchase, exchange, lease or other acquisition, including, without limitation, a mortgage, pledge or other security device, by the Corporation or any Subsidiary (in a single transaction or a series of separate or related transactions) of all, substantially all or any Substantial Part of the assets or business of (i) an Interested Person, or (ii) any Person, if such purchase, exchange, lease or other acquisition is proposed, directly or indirectly, by or on behalf of an Interested Person;
(d) the issuance of any securities, or of any rights, warrants or options to acquire any securities, by the Corporation or a Subsidiary to an Interested Person (except (i) as a result of a pro rata stock dividend or stock split, (ii) upon the exercise or conversion of warrants or other rights, including preemptive rights, or convertible securities acquired by an Interested Person prior to or simultaneously with becoming an Interested Person or (iii) upon conversion of publicly traded convertible securities of the Corporation) or the acquisition by the Corporation or a Subsidiary of any securities, or of any rights, warrants or options to acquire any securities, issued by an Interested Person;
(e) any plan or proposal for, or which has the effect of, the partial or complete liquidation, dissolution, spin off, split off or split up of the Corporation or any Subsidiary proposed, directly or indirectly, by or on behalf of an Interested Person;
(f) any of the following which has the effect, directly or indirectly, of increasing the proportionate amount of Voting Stock or capital stock of any Subsidiary thereof which is beneficially owned by an Interested Person: any reclassification of securities (including, without limitation, any reverse stock split) of the Corporation, any issuance of any Voting Stock or other securities of the Corporation, any recapitalization of the Corporation or any merger, consolidation or other transaction (whether or not with or into or otherwise involving an Interested Person); and
(g) any agreement, contract, understanding or other arrangement providing for any of the transactions described in this subsection (2) of this Article XIII.
(3) The term "Continuing Director" shall mean (i) a director serving
continuously as a director of the Corporation from and including June 5, 1985;
(ii,) a person who was a member of the Board of Directors of the Corporation
immediately prior to the time that any then existing Interested Person became an
Interested Person, (in) a person not affiliated with any Interested Person and
designated (before or simultaneously with initially becoming a director) as a
Continuing Director by at least a majority of the then Continuing Directors and
(iv) a director deemed to be a Continuing Director in accordance with the last
sentence of this subsection (3) of this Article XIII. All references to action
by a specified percentage of the Continuing Directors shall mean a vote of such
specified percentage of the total number of Continuing Directors of the
Corporation at a meeting at which at least such specified percentage of the
total number of Continuing Directors shall have been in attendance. Whenever a
condition requires the act of a specified percentage of Continuing Directors,
such condition shall not be capable of fulfillment unless there is at least one
Continuing Director. If all of the capital stock of the Corporation is
beneficially owned by one Person continuously for at least three consecutive
years during which period at least three annual meetings of shareholders shall
have taken place, at which meetings all of the Continuing Directors as defined
in clauses (i) -(iii) above shall not have been reelected, all directors elected
from and after such third consecutive year shall be deemed Continuing Directors.
(4) The term "Independent Majority of Shareholders" shall mean the majority of the votes held by holders of shares of the outstanding Voting Stock that are not beneficially owned or controlled, directly or indirectly, by any Interested Person.
(5) The term "Interested Person" shall mean (i) any Person, which, together with its "Affiliates"
and "Associates" (as defined in Rule 12b-2 of the General Rules promulgated by
the Commission under the Exchange Act, as in effect on June 5, 1985) and any
Person acting in concert therewith, is the beneficial owner, directly or
indirectly, often percent (10%) or more of the votes held by the holders of
shares of Voting Stock, (ii) any Affiliate or Associate of an Interested Person,
including, without limitation, a Person acting in concert therewith, (iii) 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, often percent
(10%) or more of the votes held by the holders of shares of Voting Stock, or
(iv) 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 shall have
occurred in the course of a transaction or series of transactions not involving
a public offering within the meaning of the Securities Act of 1933, as amended.
For purposes of determining the percentage of votes held by a Person, any Voting
Stock not outstanding which is subject to any option, warrant, convertible
security, preemptive or other right held by such Person (whether or not such
option, warrant, convertible security, preemptive or other right is currently
exercisable) shall be deemed to be outstanding for the purpose of computing the
percentage of votes held by such Person.
Notwithstanding anything contained in the immediately preceding paragraph, the term "Interested Person" shall not include (A) a Subsidiary of the Corporation or (B) a Continuing Director who beneficially owned, on June 5, 1985, ten percent (10%) or more of the votes held by the holders of shares of Voting Stock and any Affiliate or Associate of one or more of such Continuing Directors. For purposes of Articles III and XI of these By-Laws, the term "Interested Person" shall not include any Person which shall have deposited all of its Voting Stock in a voting trust (only and for so long as the voting trust shall be continuing and all of such Person's Voting Stock shall remain deposited in the Voting Trust) pursuant to an agreement with the Corporation providing the Corporation with the power to appoint a majority of the voting trustees of the voting trust who, in turn, shall have the power to vote all of the snares of Voting Stock in the voting trust, in their discretion, for the election of directors of the Corporation and the amendment of the Articles of Incorporation and/or these By-Laws. The agreement by the Corporation with any Person described in the immediately preceding sentence to use its best efforts to elect one designee of such Person as a director and to cause the voting trustees appointed by the Corporation to vote for such designee shall not cause such Person to be deemed an Interested Person for purposes of Articles III and XI of these By-Laws.
A Person who is an Interested Person as of (x) the time any definitive agreement, or amendment thereto, relating to a Business Combination is entered into, (y) the record date for the determination of shareholders entitled to notice of and to vote on a Business Combination, or (z) immediately prior to the consummation of a Business Combination shall be deemed an Interested Person for purposes of this definition.
(6) The term "Person" shall mean any individual, corporation, partnership or other person, group or entity (other than the Corporation, any Subsidiary or a trustee holding stock for the benefit of employees of the Corporation or its Subsidiaries, or anyone of them, pursuant to one or more employee benefit plans or arrangements). When two or more Persons act as a partnership, limited partnership, syndicate, association or other group for the purpose of acquiring, holding or disposing of securities, such partnership, syndicate, association or group will be deemed a "Person".
(7) The term "Subsidiary" shall mean any corporation or other entity fifty percent (50%) or more of the equity of which is beneficially owned by the Corporation; provided, however, that for purposes of the definition of Interested Person set forth in subsection (5) of this Article XIII and the definition of Person set forth in subsection (6) of this Article XIII, the term "Subsidiary" shall mean only a corporation of which a majority of each class of equity security is beneficially owned by the Corporation.
(8) The term "Substantial Part", as used in reference to the assets or business of any Person means assets or business having a value of more than ten percent (10%) of the total consolidated assets of the Corporation and its Subsidiaries as of the end of the Corporation's most recent fiscal year ending prior to the time the determination is made.
(9) For the purposes of determining the number of "votes held by holders" of shares, including Voting Stock, of the Corporation, each share shall have the number of votes granted to it pursuant to Article Fifth of the Articles of Incorporation of the Corporation.
(10) The term "Voting Stock" shall mean stock or other securities of the Corporation entitled to vote generally in the election of directors.
EXHIBIT 4(G)
SECOND AMENDMENT TO RIGHTS AGREEMENT
This is the Second Amendment (the "Second Amendment") to the Rights Agreement, dated June 16, 1999, between Hasbro, Inc., a Rhode Island corporation (the "Company") and BankBoston, N.A, as the original Rights Agent. The Rights Agreement was amended by a First Amendment dated December 4, 2000. Fleet National Bank ("Fleet") became the Rights Agent under the Rights Agreement when it succeeded to the business of BankBoston, N.A. Subsequently, EquiServe L.P. and EquiServe Trust Company, N.A. succeeded to the business of Fleet. Following this, Computershare Trust Company, N.A. succeeded to the business of EquiServe Trust Company, N.A. and is now the current Rights Agent. Terms used in this Second Amendment and not otherwise defined shall have the meanings set forth in the Rights Agreement, as amended.
The Company and the Rights Agent have entered into this Second Amendment effective as of February 13, 2007 in accordance with the provisions of Section 27 of the Rights Agreement. The Company and the Rights Agent each hereby represent, respectively, that they have taken all steps necessary for them to adopt this amendment in compliance with the Rights Agreement.
1. Effective as of the date of this Second Amendment the definition of "Acquiring Person", as it appears in Section 1(a) of the Rights Agreement, be and hereby is replaced in its entirety with the following:
"(a) "Acquiring Person" shall mean any Person who or which, together with all Affiliates and Associates of such Person, shall be the Beneficial Owner of twenty percent (20%) or more of the shares of Common Stock then outstanding, but shall not include (i) the Company, (ii) any Subsidiary of the Company, (iii) any employee benefit plan of the Company, or of any Subsidiary of the Company, or any Person or entity organized, appointed or established by the Company for or pursuant to the terms of any such plan, (iv) Alan or Sylvia Hassenfeld or members of their respective immediate families (the "Hassenfeld Family"), heirs or legatees of the Hassenfeld Family, the Sylvia Hassenfeld Trust, the Merrill Hassenfeld Trust, the Stephen Hassenfeld Trust, the Alan Hassenfeld Trust, the Hassenfeld Foundation, transferees by will, laws of descent or distribution or
by operation of law of any of the foregoing (including any such transferees), any trust or foundation to which any of the foregoing has transferred or may transfer securities of the Company, any trust established for primary benefit of any of the foregoing, or any Affiliates or Associates of any of the foregoing (collectively, the "Hassenfeld Group"), or (v) any Person who becomes the Beneficial Owner of twenty percent (20%) or more of the shares of Common Stock then outstanding as the result of a reduction in the number of shares of Common Stock outstanding due to the repurchase of shares of Common Stock by the Company unless and until such Person, after becoming aware that such Person has become the Beneficial Owner of twenty percent (20%) or more of the then outstanding shares of Common Stock, acquires beneficial ownership of additional shares of Common Stock representing one percent (1%) or more of the shares of Common Stock then outstanding."
2. This Second Amendment shall be governed by and construed in accordance with the laws of the State of Rhode Island and for all purposes shall be governed and construed in accordance with the laws of such State applicable to contracts to be made and performed entirely within such State.
3. This Second Amendment to Rights Agreement may be executed in counterparts and such counterparts shall together constitute one and the same agreement.
4. In all respects not inconsistent with the terms and provisions of this Second Amendment, the Rights Agreement as previously amended is hereby ratified, adopted, approved and confirmed. In executing and delivering this Second Amendment, the Rights Agent shall be entitled to all the privileges and immunities afforded to the Rights Agent under the terms and conditions of the Rights Agreement.
[The remainder of this page intentionally left blank.]
IN WITNESS WHEREOF, the parties have caused this Second Amendment to be duly executed as of February 13, 2007.
HASBRO, INC.
By: /s/ Alfred J. Verrecchia -------------------------------- Name: Alfred J. Verrecchia Title: President and Chief Executive Officer |
COMPUTERSHARE TRUST COMPANY, N.A.
By: /s/ Dennis Moccia -------------------------------- Name: Dennis Moccia Title: Managing Director |
EXHIBIT 10(R)
"____________" DENOTES MATERIAL THAT HAS BEEN OMITTED FROM THE PUBLICLY FILED VERSION OF THIS DOCUMENT PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT UNDER RULE 24B-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED
AMENDMENT NO. 8 TO RECEIVABLES PURCHASE AGREEMENT
This AMENDMENT NO. 8 TO RECEIVABLES PURCHASE AGREEMENT, dated as of December 18, 2006 (this "Amendment Agreement"), is made by and among Hasbro Receivables Funding, LLC (the "Seller"), CAFCO, LLC ("CAFCO"), Starbird Funding Corporation ("Starbird"), Citibank, N.A. ("Citibank"), BNP Paribas acting through its New York Branch ("BNP Paribas"), as a Bank and an Investor Agent (each as defined in the Agreement) (as defined below), Citicorp North America, Inc., as program agent (the "Program Agent") for the Investors (as defined in the Agreement) and the Banks and as an Investor Agent, Hasbro, Inc., as collection agent and undertaking party under the Parent Undertaking (as defined in the Agreement defined below) (the "Collection Agent and the Parent"), and Hasbro, Inc., and Wizards of the Coast, Inc., as originators (the "Originators").
Preliminary Statements. (1) The Seller, CAFCO, Starbird, Citibank, BNP Paribas, the Program Agent, the Collection Agent, the Investor Agents and the Originators are parties to a Receivables Purchase Agreement, dated as of December 10, 2003, as amended as of August 27, 2004, as of November 18, 2004, as of December 3, 2004, as of December 7, 2005, as of January 23, 2006, as of May 17, 2006 and as of December 6, 2006 (as amended, the "Agreement"; capitalized terms used herein and not otherwise defined herein shall have the meanings attributed to them in the Agreement).
(2) The Seller, CAFCO, Starbird, Citibank, BNP Paribas, the Program Agent, the Collection Agent and the Originators wish to amend the Agreement, to, among other things, increase the Purchase Limit.
NOW, THEREFORE, the parties agree as follows:
SECTION 1. Amendments to Agreement. Effective as of the date hereof in accordance with Section 2 of this Amendment Agreement:
(a) Section 1.01 of the Agreement is amended as follows:
(i) (A) The definition of "Applicable Margin" is restated in its entirety to read as follows:
"'Applicable Margin' means, at any time, the percentage determined pursuant to Annex F corresponding to the more favorable to the Seller of the Parent's Debt/Earnings Ratio
for the most recent fiscal quarter and the Parent's Debt Rating at such time."
(B) The definition of "Bank Commitment" is restated in its entirety as follows:
"'Bank Commitment' of any Bank means, (a) with respect to Citibank, $150,000,000 from and including the first day of the October Fiscal Month of each year and ending on the last day of the January Fiscal Month of the next year, and at all other times, $125,000,000 or such amount as reduced or increased by any transfer under any Assignment and Acceptance entered into among Citibank, another Bank, the Investor Agent for Citibank and the Program Agent, (b) with respect to BNP Paribas, $150,000,000 from and including the first day of the October Fiscal Month of each year and ending on the last day of the January Fiscal Month of the next year, and at all other times, $125,000,000 or such amount as reduced or increased by any transfer under any Assignment and Acceptance entered into among BNP Paribas, another Bank, the Investor Agent for BNP Paribas and the Program Agent or (c) with respect to a Bank (other than Citibank or BNP Paribas) that has entered into an Assignment and Acceptance, the amount set forth therein as such Bank's Bank Commitment, in each case as such amount may be reduced or increased by an Assignment and Acceptance entered into among such Bank, an Eligible Assignee, the Investor Agent for such Bank and the Program Agent, and as may be further reduced (or terminated) pursuant to the next sentence. Any reduction (or termination) of the Purchase Limit pursuant to the terms of this Agreement shall reduce ratably (or terminate) each Bank's Bank Commitment; provided that if the Investors and Banks in any Group (the 'Departing Group') shall determine not to extend the Commitment Termination Date or shall approve an extension of the Commitment Termination Date based on a reduced Investor Purchase Limit for their Group, then, if the Investors and the Banks in the other Groups shall nonetheless determine to extend the Commitment Termination Date, effective from such Commitment Termination Date, the Bank Commitment of each Bank in the Departing Group shall be reduced (ratably, or as otherwise mutually agreed by such Banks) or terminated."
(C) The definition of "Commitment Termination Date" is amended by deleting the date "December 18, 2006" in line
one thereof and replacing it with the date "December 5, 2007".
(D) The definition of "Concentration Limit" is restated in its entirety to read as follows:
(E) The definition of "Debt Rating" is restated in its entirety to read as follows:
"'Debt Rating' for any Person means the rating determined by one or more of S&P, Moody's or Fitch, as the case may be, of such Person's long-term public senior unsecured non-credit enhanced debt."
(F) The definition of "Dilution Horizon Factor" is restated in its entirety to read as follows:
"'Dilution Horizon Factor' means (i) as of any date which does not occur during the Ratings and Leverage Period, a ratio computed by dividing (A) the aggregate original Outstanding Balance of all Originator Receivables created by the Originators during the number of Fiscal Months determined pursuant to the definition of Liquidation Period by (B) the Outstanding Balance of Originator Receivables (other than Defaulted Receivables), less Collections on hand but not yet applied to reduce the Outstanding Balance of Originator Receivables, in each case as at the last day of the most recently ended Fiscal Month and (ii) as of any date which occurs during the Ratings and Leverage Period, a ratio computed by dividing (A) the aggregate original Outstanding Balance of all Originator Receivables created by the Originators during the three most recently ended Fiscal Months by (B) the Outstanding Balance of Originator Receivables (other than Defaulted Receivables), less Collections on hand but not yet applied to reduce the Outstanding Balance of Originator Receivables, in each case as of the last day of the most recently ended Fiscal Month."
(G) The definition of "Dilution Percentage" is restated in its entirety to read as follows:
"'Dilution Percentage' means, as of any date, the product of (a) the sum of (i) the product of (x) 2.0 (or for so long as the Ratings and Leverage Period shall have occurred and shall be continuing, 1.5), multiplied by (y) the average of the Dilution Ratios for each of the twelve most recently ended Fiscal Months, plus (ii) the Dilution Volatility Ratio as at the last day of the most recently ended Fiscal Month, multiplied by (b) the Dilution Horizon Factor as of such date."
(H) The definition of "Dilution Ratio" is restated in its entirety to read as follows:
"'Dilution Ratio' means (i) as of any date which does not occur during the Ratings and Leverage Period, the ratio (expressed as a percentage) computed for the most recently ended Fiscal Month by dividing (A) the aggregate amount of Diluted Receivables arising during such Fiscal Month by (B) the aggregate Outstanding Balance (in each case, at the time of creation) of all Originator Receivables created during the sixth Fiscal Month immediately preceding such Fiscal Month and (ii) as of any date which occurs during the Ratings and Leverage Period, the ratio (expressed as a percentage) computed for the most recently ended Fiscal Month by dividing (A) the aggregate amount of Diluted Receivables less an amount equal to the amount of Planned Diluted Receivables arising during such Fiscal Month by (B) the aggregate Outstanding Balance (in each case at the time of creation) of all Originator Receivables created during the third Fiscal Month immediately preceding such Fiscal Month."
(I) The definition of "Dilution Reserve" is restated in its entirety to read as follows:
"'Dilution Reserve' means, for any Receivable Interest on any date, an amount equal to the greater of:
(a) DP x (C + YFR)
where:
DP = the Dilution Percentage on such date.
C = the Capital of such Receivable Interest on such date.
YFR = the Yield and Fee Reserve for such Receivable Interest on such date.
or (b) PD x 2.0
where:
PD = the Projected Dilution for the most recent Fiscal Month.
provided, that for so long as the Ratings and Leverage Period shall have occurred and shall be continuing, then the Dilution Reserve shall be as set forth only in clause (a) above."
(J) The definition of "Facility Termination Date" is amended by deleting the date "December 18, 2006" in line one thereof and replacing it with the date "December 1, 2011".
(K) The definition of "Investor Purchase Limit" is restated in its entirety as follows:
"'Investor Purchase Limit' means (a) with respect to the Group consisting of CAFCO and its Related Banks, $150,000,000 from and including the first day of the October Fiscal Month of each year and ending on the last day of the January Fiscal Month of the next year, and at all other times, $125,000,000, and (b) with respect to the Group consisting of Starbird and its Related Banks, $150,000,000 from and including the first day of the October Fiscal Month of each year and ending on the last day of the January Fiscal Month of the next year, and at all other times, $125,000,000. Any reduction (or termination) of the Purchase Limit pursuant to the terms of this Agreement shall reduce ratably (or terminate) each Group's Investor Purchase Limit; provided, that if any Departing Group shall determine not to extend the Commitment Termination Date or shall approve an extension of the Commitment Termination Date based on a reduced Investor Purchase Limit for their Group, then, if the Investors and Banks in the other Groups shall nonetheless determine to extend the Commitment Termination Date, effective from such Commitment Termination Date, the Investor Purchase Limit of the Departing Group shall be so reduced or terminated.
(L) The definition of "Net Receivables Pool Balance" is restated in its entirety to read as follows:
"'Net Receivables Pool Balance' means at any time the Outstanding Balance of Eligible Receivables then in the Receivables Pool reduced by the sum of (without duplication) (i) the aggregate amount by which the Outstanding Balance of Eligible Receivables of each Obligor then in the Receivables Pool exceeds the product of (A) the Concentration Limit for such Obligor multiplied by (B) the aggregate outstanding Capital of all Receivable Interests (provided, that if such Concentration Limit is calculated as a dollar amount, then such dollar amount shall be used in lieu of the product of clauses (A) and (B)), (ii) the aggregate amount of Collections on hand at such time but not yet applied to reduce the Outstanding Balance
(M) The definition of "Purchase Limit" is amended in its entirety to read as follows:
"'Purchase Limit' means $300,000,000 from and including the first day of the October Fiscal Month of each year and ending on the last day of the January Fiscal Month of the next year, and at all other times, $250,000,000, as such amount may be reduced pursuant to the immediately succeeding sentence or Section 2.01(b). In the event that the Facility Termination Date shall occur solely under clause (d) of such defined term, then on such Facility Termination Date the Purchase Limit shall be reduced by the aggregate Bank Commitments of the Banks in the Group for which such Facility Termination Date has occurred (as such Bank Commitments were in effect immediately prior to such Facility Termination Date). References to the unused portions of the Purchase Limit
shall mean, at any time, the Purchase Limit, as then reduced pursuant to Section 2.01(b), minus the then outstanding Capital of Receivable Interests under this Agreement."
(N) The definition of "Subsidiary" is amended in its entirety to read as follows:
"'Subsidiary' of a Person means a corporation, partnership, joint venture, limited liability company or other business entity of which a majority of the shares of Capital Stock having ordinary voting power for the election of directors or other governing body (other than Capital Stock having such power only by reason of the happening of a contingency) are at the time beneficially owned directly or indirectly through one or more Subsidiaries by such Person. Unless otherwise specified, all references herein to a 'Subsidiary' or to 'Subsidiaries' shall refer to a Subsidiary or Subsidiaries of the Parent."
(O) The definition of "Weekly Reporting Period" is amended in its entirety to read as follows:
"'Weekly Reporting Period' means the period beginning on the first day of the December Fiscal Month of each year and ending on the last day of the February Fiscal Month of the next year; provided, that Weekly Reporting Period shall mean the period beginning on the first day of the January Fiscal Month of each year and ending on the last day of the February Fiscal Month of each year for so long as the Ratings and Leverage Period shall have occurred and shall then be continuing."
(ii) The following new definitions are hereby added in their proper alphabetical order:
(A) "'Attributable Indebtedness' means, at any time, the amount of obligations outstanding at such time under the legal documents entered into as part of a Permitted Receivables Securitization Facility on any date of determination that would be characterized as principal if such Permitted Receivables Securitization Facility were structured as a secured lending transaction rather than as a purchase, less (i) any escrowed or pledged cash proceeds which effectively secure, or are required to be maintained as reserves by the applicable Receivables Subsidiary for, the Indebtedness of the Parent and its Subsidiaries in
respect of, or the obligations of the Parent and its Subsidiaries under, such Permitted Receivables Securitization Facility, (ii) reasonable attorneys' fees, accountants' fees, brokerage consultant and other customary fees, underwriting commissions and other reasonable fees and expenses actually incurred in connection with such Permitted Receivables Securitization Facility and (iii) any taxes paid or reasonably estimated to be payable as a result thereof."
(B) "'Capital Stock' means any and all shares, interests, participations or other equivalents (however designated) of capital stock of a corporation, any and all equivalent ownership interests in a Person (other than a corporation) and any and all warrants, rights or options to purchase any of the foregoing."
(C) "'Capitalized Leases' means leases under which the Parent or any of its Subsidiaries is the lessee or obligor, the discounted future rental payment obligations under which are required to be capitalized on the balance sheet of the lessee or obligor in accordance with GAAP."
(D) "'Consolidated EBITDA' means, with respect to any particular fiscal period, the amount equal to (a) Consolidated Operating Profit (or Loss) for such period, plus (b) in each case without duplication, and to the extent deducted in calculating Consolidated Operating Profit (or Loss) for such period, (i) depreciation and amortization of the Parent and its Subsidiaries, (ii) other non-cash charges of the Parent and its Subsidiaries, and (iii) extraordinary losses of the Parent and its Subsidiaries, and minus (c) to the extent included in Consolidated Operating Profit (or Loss) for such period, extraordinary gains of the Parent and its Subsidiaries for such period, all determined in accordance with GAAP."
(E) "'Consolidated Operating Profit (or Loss)' means the consolidated operating profit (or loss) of the Parent and its Subsidiaries identified as such on the Parent's income statement for any period, determined in accordance with GAAP."
(F) "'Consolidated Total Funded Debt' means, as of any date
of determination, with respect to the Parent and its
Subsidiaries, the amount equal to, without duplication,
(a) the aggregate amount of Indebtedness of the Parent
and
its Subsidiaries, on a consolidated basis, relating to
(i) the borrowing of money or the obtaining of credit,
(ii) the deferred purchase price of assets (other than
trade payables incurred in the ordinary course of
business), (iii) any Synthetic Lease Obligation or any
Capitalized Leases, (iv) the face amount of all letters
of credit outstanding, (v) any Recourse Obligations,
plus (b) the aggregate amount of Indebtedness of the
type referred to in clause (a) of another Person (other
than the Parent or a Subsidiary thereof) guaranteed by
the Parent or any of its Subsidiaries plus (c) the
Attributable Indebtedness. In determining under clause
(a) of this definition the Indebtedness of the Parent
and its Subsidiaries under or in respect of any
Permitted Receivables Securitization Facility or under
clause (c) of this definition the Attributable
Indebtedness in respect of any Permitted Receivables
Securitization Facility, such Indebtedness or amount
shall be reduced by any escrowed or pledged cash
proceeds which effectively secure such Indebtedness or
the obligations of the Parent or any such Subsidiary
under such Permitted Receivables Securitization
Facility."
(G) "'Credit Agreement' means the Revolving Credit Agreement dated as of June 23, 2006 among Hasbro, Inc., and Hasbro SA as Borrowers, Bank of America, N.A., as Administrative Agent, Swing Line Lender and L/C Issuer, and the other lenders party thereto, Citibank, N.A. and Citizen Bank of Massachusetts, as Co-Syndication Agents, Commerzbank AG, New York and Grand Cayman Branches, and BNP Paribas as Co-Documentation Agents and Banc of America Securities LLC, as Sole Lead Arranger and Sole Book Manager as the same may be amended, modified or restated from time to time."
(H) "'Debt/Earnings Ratio' means, for any fiscal quarter of the Parent, the ratio of Consolidated Total Funded Debt at the end of such fiscal quarter to Consolidated EBITDA for the fiscal period consisting of such fiscal quarter and the three preceding fiscal quarters."
(I) "'Designated Borrower' means Hasbro SA, a corporation organized under the laws of Switzerland and a wholly-owned Subsidiary of the Parent."
(J) "'GAAP' means generally accepted accounting principles in the United States consistent with the opinions and pronouncements of the Accounting Principles Board and
the American Institute of Certified Public Accountants and statements and pronouncements of the Financial Accounting Standards Board or such other principles as may be approved by a significant segment of the accounting profession in the United States, that are applicable to the circumstances as of the date of determination, consistently applied."
(K) "'Indebtedness' as applied to any Person, means, without duplication:
(a) every obligation of such Person to repay money borrowed,
(b) every obligation of such Person for principal evidenced by bonds, debentures, notes or other similar instruments, including obligations incurred in connection with the acquisition of property, assets or businesses,
(c) every reimbursement obligation of such Person with respect to letters of credit, bankers' acceptances or similar facilities issued for the account of such Person,
(d) every obligation of such Person issued or
assumed as the deferred purchase price of property or
services (including securities repurchase agreements
but excluding (i) trade accounts payable or accrued
liabilities arising in the ordinary course of business,
(ii) earnout obligations in respect of assets or
businesses acquired prior to the Closing Date (as
defined in the Credit Agreement) and (iii) obligations
to repurchase any Lucas Warrant (as defined in the
Credit Agreement) under the Warrant Amendment Agreement
(as defined in the Credit Agreement),
(e) every obligation of such Person under any Capitalized Lease,
(f) every obligation of such Person under any Synthetic Lease Obligation,
(g) Indebtedness of any other entity (including any partnership in which such Person is a general partner) to the extent that such Person is liable therefor as a result of such Person's ownership interest in or other relationship with such entity, except to the extent that the terms of such
Indebtedness provide that such Person is not liable therefor and such terms are enforceable under applicable law,
(h) every obligation, contingent or otherwise, of such Person guaranteeing, or having the economic effect of guaranteeing or otherwise acting as surety for, any obligation of a type described in any of clauses (a) through (h) (the 'primary obligation') of another Person (the 'primary obligor'), in any manner, whether directly or indirectly, and including, without limitation, any such obligation of such Person (i) to purchase or pay (or advance or supply funds for the purchase of) any security for the payment of such primary obligation, (ii) to purchase property, securities or services for the purpose of assuring the payment of such primary obligation, or (iii) to maintain working capital, equity capital or other financial statement condition or liquidity of the primary obligor so as to enable the primary obligor to pay such primary obligation.
The 'amount' or 'principal amount' of any Indebtedness at any time of determination represented by (w) any Indebtedness, issued at a price that is less than the principal amount at maturity thereof, shall be the amount of the liability in respect thereof determined in accordance with GAAP, (x) any Capitalized Lease shall be the discounted aggregate rental obligations under such Capitalized Lease required to be capitalized on the balance sheet of the lessee in accordance with GAAP and (y) any Synthetic Lease shall be the stipulated loss value, termination value or other equivalent amount."
(L) "'Permitted Receivables Securitization Facility' means any transaction or series of related transactions providing for the financing of any Receivables (as defined in the Credit Agreement); provided that any such transaction shall be consummated on terms that include terms substantially as described on Schedule 1.03 to the Credit Agreement or as the Required Lenders (as defined in the Credit Agreement) may otherwise consent, such consent not to be unreasonably withheld."
(M) "'Planned Diluted Receivable' means that portion (and only that portion) of any Originator Receivable which is either reduced or cancelled as a result of the application of a credit to such Receivable issued with respect to a Planned Dilution."
(P) "'Ratings and Leverage Period' means any period of time during which the Parent's Debt Rating is at least BBB- by S&P or Baa1 by Moody's or BBB- by Fitch (provided, that at no time during such period shall the Parent's Debt Rating be below BB+ by S&P or Ba1 by Moody's or BB+ by Fitch) and the Debt/Earnings Ratio for the most recent fiscal quarter is less than or equal to 2:75 to 1:0.
(Q) "'Receivables Subsidiary" means any special purpose, bankruptcy-remote corporation, limited liability company, trust or other entity established and majority owned by the Parent that purchases, receives contributions of, or receives financing secured by, Receivables (as defined in the Credit
Agreement) generated by the Parent or any of its Subsidiaries."
(R) "'Recourse Obligations' of a Person means all sales with recourse by such Person of (i) accounts or general intangibles for money due or to become due, (ii) chattel paper, instruments or documents creating or evidencing a right to payment of money or (iii) other receivables (collectively 'receivables'), whether pursuant to a purchase facility or otherwise, other than in connection with the disposition of the business operations of such Person relating thereto or a disposition of defaulted receivables for collection and not as a financing arrangement, and together with any obligation of such Person to pay any discount, interest, fees, indemnities, penalties, recourse, expenses or other amounts in connection therewith. The outstanding amount of any Recourse Obligation shall be the portion of the principal investment of the purchaser thereof (other than the Parent or a Significant Subsidiary) as to which recourse to such Person exists, in any event excluding amounts representative of yield and interest earned on such investment."
(S) "'Significant Subsidiary' means (a) the Designated Borrower, (b) any other Subsidiary of the Parent (other than any Receivables Subsidiary), which, either alone or together with the Subsidiaries of such Subsidiary, meets either of the following conditions:
(i) the investments of the Parent and its Subsidiaries in, or their proportionate share (based on their equity interests) of the book value of the total assets (after intercompany eliminations) of, the Subsidiary in question exceed 10% of the book value of the total assets of the Parent and its Subsidiaries on a consolidated basis, or
(ii) the equity of the Parent and its Subsidiaries in the revenues of the Subsidiary in question exceeds 10% of the revenues from continuing operations of the Parent and its Subsidiaries on a consolidated basis for the Parent's most recent fiscal year; or
(c) Any other Subsidiary of the Parent designated as a 'Significant Subsidiary' by the Parent in a written notice to the Administrative Agent (as defined in the Credit Agreement) with a copy to the Program Agent."
(T) "'Synthetic Lease Obligation' means the monetary obligation of a Person under (a) a so-called synthetic, off-balance sheet or tax retention lease, or (b) an agreement for the use or possession of property creating obligations that do not appear on the balance sheet of such Person but which, upon the insolvency or bankruptcy of such Person, would be characterized as the indebtedness of such Person (without regard to accounting treatment)".
(b) Section 1.02 of the Agreement is amended by deleting the term "generally accepted accounting principles" and replacing it with the term "GAAP".
(c) Section 4.01(e) of the Agreement is amended by deleting the date "December 10, 2003" in line five thereof and replacing it with the date "December 25, 2005".
(d) Section 4.02(e) of the Agreement is amended by deleting the date "September 28, 2003" in line seven thereof and replacing it with the date "December 25, 2005".
(e) Clause (x) of Section 5.01(k) of the Agreement is amended in its entirety to read as follows:
"(x) at the time of the delivery of the financial statements provided for in clauses (i) and (ii) of this paragraph, (A) a certificate of the chief financial officer or the treasurer of the Seller to the effect that, to the best of such officer's knowledge, no Event of Termination has occurred and is continuing or, if any Event of Termination has occurred and is continuing, specifying the nature and extent thereof and (B) a copy of the Compliance Certificate (as defined in the Credit Agreement) corresponding to such fiscal period and setting forth the calculation of the Debt/Earnings Ratio for the most recent fiscal quarter in reasonable detail;"
(f) Section 6.02(g)(iv) of the Agreement is amended by deleting the proviso clause contained therein and replacing it in its entirety as follows:
", provided, however, that so long as the Ratings and Leverage Period shall have occurred and shall be continuing, such Daily Report need not be submitted during a Weekly Reporting Period."
(g) Section 7.01(h)(iv) is restated in its entirety to read as follows:
"(iv)(A) if such last day of such Fiscal Month does not occur during the Ratings and Leverage Period, the average of such Dilution Ratios for such Fiscal Month and the two immediately preceding Fiscal Months shall exceed
(h) Section 7.01 of the Agreement is further amended by adding the word "or" at the end of subsection (o) thereof and adding a new subsection (p) as follows:
"(p) The aggregate outstanding Capital of all Receivable Interests at any time shall exceed the Purchase Limit then in effect for more than five Business Days after the delivery of the most recent Seller Report which indicates such an excess;"
(i) Annex A-1 (Monthly Report) is deleted in its entirety and replaced with Exhibit I to this Amendment Agreement.
(j) Annex F (Applicable Margin) is deleted in its entirety and replaced with Exhibit II to this Amendment Agreement.
(k) Schedule III (Fiscal Months) is deleted in its entirety and replaced with Exhibit III to this Amendment Agreement.
SECTION 3. Consent. Pursuant to Section 5.01(m) of the Agreement, each of the Program Agent and each Investor Agent hereby consents to an amendment to the Originator Purchase Agreement amending Section 4.01(f) thereof.
SECTION 4. Representations and Warranties. Each of the Seller and the Collection Agent represents and warrants that each of the representations and warranties contained in Section 4.01 and Section 4.02, respectively, of the Agreement (after giving effect to this Amendment Agreement) are correct in all material respects on and as of the date of this Amendment Agreement as though made on and as of such date.
SECTION 5. Confirmation of Agreement. Each reference in the Agreement to "this Agreement" or "the Agreement" shall mean the Agreement as amended by this Amendment Agreement, and as hereafter amended or restated. Except as herein expressly amended, the Agreement is ratified and confirmed in all respects and shall remain in full force and effect in accordance with its terms.
SECTION 6. Confirmation and Amendment of Parent Undertaking. (a) The Parent, as the undertaking party under the Parent Undertaking, hereby consents to the terms of this Amendment Agreement and hereby confirms and agrees that, notwithstanding the effectiveness of this Amendment Agreement, the Parent Undertaking is, and shall continue to be, in full force and effect and shall apply to the Agreement as amended by this Amendment Agreement and the Parent Undertaking is hereby ratified and confirmed.
(b) The Parent and the Program Agent (as assignee of the Seller) agree to amend Section 5(e) of the Parent Undertaking by deleting the date "June 29, 2003" in line seven thereof and replacing it with the date "December 25, 2005".
SECTION 7. Costs and Expenses. The Seller agrees to pay on demand all reasonable costs and expenses in connection with the preparation, execution and delivery of this Amendment Agreement and any other documents to be delivered hereunder, including, without limitation, the reasonable fees and out-of-pocket expenses of counsel for the Program Agent, the Investor Agents, the Investors and the Banks with respect thereto.
SECTION 8. GOVERNING LAW. THIS AMENDMENT AGREEMENT SHALL, IN ACCORDANCE WITH SECTION 5-1401 OF THE GENERAL OBLIGATIONS LAW OF THE STATE OF NEW YORK, BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK WITHOUT REGARD TO ANY CONFLICT OF LAWS PRINCIPLES THEREOF THAT WOULD CALL FOR THE APPLICATION OF THE LAWS OF ANY OTHER JURISDICTION.
SECTION 9. Execution in Counterparts. This Amendment Agreement may be executed in any number of counterparts and by different parties hereto in separate counterparts, each of which when so executed shall be deemed to be an original and all of which when taken together shall constitute one and the same agreement. Delivery of an executed counterpart of a signature page to this Amendment Agreement by facsimile shall be effective as delivery of a manually executed counterpart of this Amendment Agreement.
[Remainder of this page intentionally left blank]
IN WITNESS WHEREOF, the parties have caused this Amendment Agreement to be executed by their respective officers thereunto duly authorized, as of the date first above written.
HASBRO RECEIVABLES FUNDING, LLC,
as the Seller
By: /s/ Martin R. Trueb ------------------------------------ Name: Martin R. Trueb Title: Senior Vice-President, Treasurer |
CAFCO, LLC, as an Investor
By: Citicorp North America,
Inc., as Attorney-in-Fact
By: /s/ Patricia Schaupp ------------------------------------ Name: Patricia Schaupp Title: --------------------------------- |
STARBIRD FUNDING CORPORATION,
as an Investor
By: /s/ Franklin P. Collazo ------------------------------------ Name: Franklin P. Collazo Title: Secretary |
CITICORP NORTH AMERICA, INC.,
as Program Agent and as an
Investor Agent
By: /s/ Patricia Schaupp ------------------------------------ Name: Patricia Schaupp Title: --------------------------------- |
CITIBANK, N.A., as a Bank
By: /s/ Patricia Schaupp ------------------------------------ Name: Patricia Schaupp Title: --------------------------------- |
BNP PARIBAS, NEW YORK BRANCH
as a Bank and as an Investor Agent
By: /s/ Sean Reddington ------------------------------------ Name: Sean Reddington Title: Managing Director By: /s/ Michael Gonik ------------------------------------ Name: Michael Gonik Title: Director |
HASBRO, INC., as an Originator and as Collection Agent
By: /s/ Martin R. Trueb ------------------------------------ Name: Martin R. Trueb Title: Senior Vice-President, Treasurer |
WIZARDS OF THE COAST, INC., as an
Originator
By: /s/ Martin R. Trueb ------------------------------------ Name: Martin R. Trueb Title: Senior Vice-President, Treasurer |
EXHIBIT-I TO
AMENDMENT NO. 8 TO RECEIVABLES
PURCHASE AGREEMENT
[Exhibit omitted pursuant to a request for confidential treatment]
EXHIBIT-II TO
AMENDMENT NO. 8 TO RECEIVABLES
PURCHASE AGREEMENT
[Exhibit omitted pursuant to a request for confidential treatment]
EXHIBIT-III TO
AMENDMENT NO. 8 TO RECEIVABLES
PURCHASE AGREEMENT
(Fiscal Months)
SCHEDULE III
FISCAL MONTHS
HASBRO, INC.
FISCAL YEARS PLANNING CALENDAR
2005-2020
2005 2006 2007 2008 2009 2010 2011 -------- -------- -------- -------- -------- -------- -------- JAN Beginning Date 12/27/04 12/26/05 1/1/07 12/31/07 12/29/08 12/28/09 12/27/10 Ending Date 1/23/05 1/29/06 1/28/07 1/27/08 1/25/09 1/24/10 1/23/11 Weeks in Mo 4 5 4 4 4 4 4 FEB Beginning Date 1/24/05 1/30/06 1/29/07 1/28/08 1/26/09 1/25/10 1/24/11 Ending Date 2/27/05 3/5/06 3/4/07 3/2/08 3/1/09 2/28/10 2/27/11 Weeks in Mo 5 5 5 5 5 5 5 MAR Beginning Date 2/28/05 3/6/06 3/5/07 3/3/08 3/2/09 3/1/10 2/28/11 Ending Date 3/27/05 4/2/06 4/1/07 3/30/08 3/29/09 3/28/10 3/27/11 Weeks in Mo 4 4 4 4 4 4 4 APR Beginning Date 3/28/05 4/3/06 4/2/07 3/31/08 3/30/09 3/29/10 3/28/11 Ending Date 4/24/05 4/30/06 4/29/07 4/27/08 4/26/09 4/25/10 4/24/11 Weeks in Mo 4 4 4 4 4 4 4 MAY Beginning Date 4/25/05 5/1/06 4/30/07 4/28/08 4/27/09 4/26/10 4/25/11 Ending Date 5/29/05 6/4/06 6/3/07 6/1/08 5/31/09 5/30/10 5/29/11 Weeks in Mo 5 5 5 5 5 5 5 JUN Beginning Date 5/30/05 6/5/06 6/4/07 6/2/08 6/1/09 5/31/10 5/30/11 Ending Date 6/26/05 7/2/06 7/1/07 6/29/08 6/28/09 6/27/10 6/26/11 Weeks in Mo 4 4 4 4 4 4 4 JUL Beginning Date 6/27/05 7/3/06 7/2/07 6/30/08 6/29/09 6/28/10 6/27/11 Ending Date 7/24/05 7/30/06 7/29/07 7/27/08 7/26/09 7/25/10 7/24/11 Weeks in Mo 4 4 4 4 4 4 4 AUG Beginning Date 7/25/05 7/31/06 7/30/07 7/28/08 7/27/09 7/26/10 7/25/11 Ending Date 8/28/05 9/3/06 9/2/07 8/31/08 8/30/09 8/29/10 8/28/11 Weeks in Mo 5 5 5 5 5 5 5 SEP Beginning Date 8/29/05 9/4/06 9/3/07 9/1/08 8/31/09 8/30/10 8/29/11 Ending Date 9/25/05 10/1/06 9/30/07 9/28/08 9/27/09 9/26/10 9/25/11 Weeks in Mo 4 4 4 4 4 4 4 OCT Beginning Date 9/26/05 10/2/06 10/1/07 9/29/08 9/28/09 9/27/10 9/26/11 Ending Date 10/23/05 10/29/06 10/28/07 10/26/08 10/25/09 10/24/10 10/23/11 Weeks in Mo 4 4 4 4 4 4 4 NOV Beginning Date 10/24/05 10/30/06 10/29/07 10/27/08 10/26/09 10/25/10 10/24/11 Ending Date 11/27/05 12/3/06 12/2/07 11/30/08 11/29/09 11/28/10 11/27/11 Weeks in Mo 5 5 5 5 5 5 5 DEC Beginning Date 11/28/05 12/4/06 12/3/07 12/1/08 11/30/09 11/29/10 11/28/11 Ending Date 12/25/05 12/31/06 12/30/07 12/28/08 12/27/09 12/26/10 12/25/11 Weeks in Mo 4 4 4 4 4 4 4 WEEKS IN YR 52 53 52 52 52 52 52 |
EXHIBIT 12
HASBRO, INC. AND SUBSIDIARIES
Computation of Ratio of Earnings to Fixed Charges Fiscal Years Ended in December
(Thousands of Dollars)
2006 2005 2004 2003 2002 -------- ------- ------- ------- -------- Earnings available for fixed charges: Net earnings (loss) $230,055 212,075 195,977 157,664 (170,674) Add: Cumulative effect of accounting change -- -- -- 17,351 245,732 Fixed charges 39,055 42,394 43,890 68,467 99,209 Taxes on income 111,419 98,838 64,111 69,049 29,030 -------- ------- ------- ------- -------- Total $380,529 353,307 303,978 312,531 203,297 ======== ======= ======= ======= ======== Fixed charges: Interest on long-term debt $ 23,157 26,602 27,813 44,461 69,480 Other interest charges 2,884 2,423 3,205 6,413 8,019 Amortization of debt expense 1,480 1,512 680 1,588 1,843 Rental expense representative of interest factor 11,534 11,857 12,192 16,005 19,867 -------- ------- ------- ------- -------- Total $ 39,055 42,394 43,890 68,467 99,209 ======== ======= ======= ======= ======== Ratio of earnings to fixed charges 9.74 8.33 6.93 4.56 2.05 ======== ======= ======= ======= ======== |
.
.
.
EXHIBIT 21
HASBRO, INC. AND SUBSIDIARIES
Subsidiaries of the Registrant (a)
State or Other Jurisdiction of Name Under Which Subsidiary 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 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 Sobral Ltd. Bermuda 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 27, 2007, with respect to the consolidated balance sheets of Hasbro, Inc. and subsidiaries as of December 31, 2006 and December 25, 2005, 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 31, 2006 and the related consolidated financial statement schedule, management's assessment of the effectiveness of internal control over financial reporting as of December 31, 2006 and the effectiveness of internal control over financial reporting as of December 31, 2006, which reports appear in the December 31, 2006 annual report on Form 10-K of Hasbro, Inc. Our report refers to a change in the accounting for pensions and other postretirement benefits other than pensions and a change in the accounting for share-based payments.
/s/ KPMG LLP Providence, Rhode Island February 27, 2007 |
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 registrants 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 registrants 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 registrants internal control over financial reporting that occurred during the registrants most recent fiscal quarter (the registrants fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrants internal control over financial reporting; and |
5. | The registrants other certifying officers and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrants auditors and the audit committee of the registrants 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 registrants 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 registrants internal control over financial reporting. |
/s/ Alfred J. Verrecchia | ||||
Alfred J. Verrecchia | ||||
President and Chief Executive Officer | ||||
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 registrants 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 registrants 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 registrants internal control over financial reporting that occurred during the registrants most recent fiscal quarter (the registrants fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrants internal control over financial reporting; and |
5. | The registrants other certifying officers and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrants auditors and the audit committee of the registrants 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 registrants 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 registrants internal control over financial reporting. |
/s/ David D.R. Hargreaves | ||||
David D.R. Hargreaves | ||||
Executive Vice President, Finance and Global Operations and Chief Financial Officer | ||||
1) | the Companys Annual Report on Form 10-K for the year ended December 31, 2006, 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 Companys 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. | ||||
1) | the Companys Annual Report on Form 10-K for the year ended December 31, 2006, 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 Companys 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 | ||||
Executive Vice President, Finance and Global Operations and Chief Financial Officer of Hasbro, Inc. | ||||