Nonqualified Deferred Compensation Plan - Hasbro Inc.


                                 HASBRO, INC.

                    NONQUALIFIED DEFERRED COMPENSATION PLAN



                           Effective October 1, 1997



                               TABLE OF CONTENTS


                                                                  Page

Purpose                                                            

ARTICLE 1 - Definitions                                             

ARTICLE 2 - Selection, Enrollment, Eligibility                      
2.1   Selection by Committee                                        
2.2   Enrollment Requirements                                       
2.3   Eligibility; Commencement of Participation                    
2.4   Termination of Participation and/or Deferrals                 

ARTICLE 3 - Deferral Commitments/Company Matching/Crediting/Taxes   

3.1   Minimum Deferrals                                             
3.2   Maximum Deferral                                              
3.3   Election to Defer; Effect of Election Form                    
3.4   Withholding of Annual Deferral Amounts                       
3.5   Annual Company Matching Amount                               
3.6   Investment of Trust Assets                                   
3.7   Vesting                                                      
3.8   Crediting/Debiting of Account Balances                      
3.9   FICA and Other Taxes                                       
3.10  Distributions                                                
3.11  Employer Deferral                                            

ARTICLE 4 - Short-Term Payout; Unforeseeable Financial 
             Emergencies; Withdrawal Election                      

ARTICLE 5 - Retirement Benefit                                     

ARTICLE 6 - Pre-Retirement Survivor Benefit                        

ARTICLE 7 - Termination Benefit                                    

ARTICLE 8 - Disability Waiver and Benefit                          
8.1   Disability Waiver                                            
8.2   Continued Eligibility; Disability Benefit                    

ARTICLE 9 - Beneficiary Designation                                

9.1   Beneficiary                                                  
9.2   Beneficiary Designation; Change                              
9.3   Acknowledgment                                               
9.4   No Beneficiary Designation                                   
9.5   Doubt as to Beneficiary                                      
9.6   Discharge of Obligations                                     

ARTICLE 10 - Leave of Absence                                      

ARTICLE 11 - Termination, Amendment or Modification                

11.1  Termination                                                  
11.2  Amendment                                                    
11.3  Plan Agreement                                               
11.4  Effect of Payment                                            

ARTICLE 12 - Administration                                        

12.1  Committee Duties                                             
12.2  Agents                                                       
12.3  Binding Effect of Decisions                                  
12.4  Indemnity of Committee                                       
12.5  Employer Information                                         

ARTICLE 13 - Other Benefits and Agreements                         

13.1  Coordination with Other Benefits                             

ARTICLE 14 - Claims Procedures                                     

14.1 Presentation of Claim                                         
14.2  Notification of Decision                                     
14.3  Review of a Denied Claim                                     
14.4  Decision on Review                                           
14.5  Legal Action                                                 

ARTICLE 15 - Trust                                                 

15.1  Establishment of the Trust                                   
15.2  Interrelationship of the Plan and the Trust                  
15.3  Distributions From the Trust                                 

ARTICLE 16 - Miscellaneous                                         

16.1  Status of Plan                                               
16.2  Unsecured General Creditor                                   
16.3  Employer's Liability                                         
16.4  Nonassignability                                             
16.5  Not a Contract of Employment                                 
16.6  Furnishing Information                                       
16.7  Terms                                                        
16.8  Captions                                                     
16.9  Governing Law                                                
16.10 Notice                                                       
16.11 Successors                                                   
16.12 Validity                                                     
16.13 Incompetent                                                  
16.14 Distribution in the Event of Taxation                        
16.15 Insurance                                                    
16.16 Legal Fees To Enforce Rights After Change in Control         


                          HASBRO, INC.


              NONQUALIFIED DEFERRED COMPENSATION PLAN


                    Effective October 1, 1997


                            Purpose


The purpose of this Plan is to provide specified benefits to a select group 
of management and highly compensated Employees who contribute materially to 
the continued growth, development and future business success of Hasbro, 
Inc., a Rhode Island corporation, and its subsidiaries, if any, that 
sponsor this Plan. This Plan shall be unfunded for tax purposes and for 
purposes of Title I of ERISA.


                          ARTICLE 1

                         Definitions

For purposes of this Plan, unless otherwise clearly apparent from the 
context, the following phrases or terms shall have the following indicated 
meanings:

1.1    'Account Balance' shall mean, with respect to a Participant, a 
credit on the records of the Employer equal to the sum of (i) the Deferral 
Account balance and (ii) the Company Matching Account balance.  The Account 
Balance, and each other specified account balance, shall be a bookkeeping 
entry only and shall be utilized solely as a device for the measurement and 
determination of the amounts to be paid to a Participant, or his or her 
designated Beneficiary, pursuant to this Plan.

1.2    'Annual Bonus' shall mean any compensation, in addition to Base 
Annual Salary relating to services performed during any calendar year, 
whether or not paid in such calendar year or included on the Federal Income 
Tax Form W-2 for such calendar year, payable to a Participant as an 
Employee under any Employer's annual bonus and cash incentive plans, 
excluding stock options, holiday bonuses, retention bonuses, or any other 
discretionary or special bonus or awards.

1.3    'Annual Company Matching Amount' for any one Plan Year shall be the 
amount determined in accordance with Section 3.5.

1.4    'Annual Deferral Amount' shall mean that portion of a Participant's 
Base Annual Salary and Annual Bonus that a Participant elects to have, and 
is deferred, in accordance with Article 3, for any one Plan Year.  In the 
event of a Participant's Retirement, Disability (if deferrals cease in 
accordance with Section 8.1), death or a Termination of Employment prior to 
the end of a Plan Year, such year's Annual Deferral Amount shall be the 
actual amount withheld prior to such event.

1.5    'Base Annual Salary' shall mean the annual cash compensation 
relating to services performed during any calendar year, whether or not 
paid in such calendar year or included on the Federal Income Tax Form W-2 
for such calendar year, excluding bonuses of every type, commissions, 
overtime, fringe benefits, stock options, relocation expenses, incentive 
payments, non- monetary awards, directors fees and other fees, automobile 
and other allowances paid to a Participant for employment services rendered 
(whether or not such allowances are included in the Employee's gross 
income).  Base Annual Salary shall be calculated before reduction for 
compensation voluntarily deferred or contributed by the Participant 
pursuant to all qualified or non-qualified plans of any Employer and shall 
be calculated to include amounts not otherwise included in the 
Participant's gross income under Code Sections 125, 402(e)(3), 402(h), or 
403(b) pursuant to plans established by any Employer; provided, however, 
that all such amounts will be included in compensation only to the extent 
that, had there been no such plan, the amount would have been payable in 
cash to the Employee.

1.6    'Annual Installment Method' shall be an annual installment payment 
over the number of years selected by the Participant in accordance with 
this Plan, calculated as follows: The Account Balance of the Participant 
shall be calculated as of the close of business three business days prior 
to the last business day of the year.  The annual installment shall be 
calculated by multiplying this balance by a fraction, the numerator of 
which is one, and the denominator of which is the remaining number of 
annual payments due the Participant.  By way of example, if the Participant 
elects a 10 year Annual Installment Method, the first payment shall be 1/10 
of the Account Balance, calculated as described in this definition.  The 
following year, the payment shall be 1/9 of the Account Balance, calculated 
as described in this definition.  Each annual installment shall be paid on 
or as soon as practicable after the last business day of the applicable 
year.

1.7    'Beneficiary' shall mean one or more persons, trusts, estates or 
other entities, designated in accordance with Article 9, that are entitled 
to receive benefits under this Plan upon the death of a Participant.

1.8    'Beneficiary Designation Form' shall mean the form established from 
time to time by the Committee that a Participant completes, signs and 
returns to the Committee to designate one or more Beneficiaries.

1.9    'Board' shall mean the board of directors of the Company.

1.10   'Change in Control' shall mean the first to occur of any of the 
following events:

       (a)  The acquisition by any individual, entity or group (within the 
meaning of Section 13(d)(3) or 14(d)(2) of the Securities  Exchange Act of 
1934 (the '1934 Act') of beneficial ownership (within the meaning of Rule 
13d-3 promulgated under the 1934 Act) of 20% or more of either (i) the then 
outstanding shares of Common Stock of Hasbro, Inc. ('Hasbro') (the 
'Outstanding Common Stock') or (ii) the combined voting power of the then 
outstanding voting securities of Hasbro entitled to vote generally in the 
election of directors (the 'Outstanding voting Securities'); provided, 
however, that the following acquisitions shall not constitute a Change in 
Control:  (i) any acquisition directly from Hasbro or any of its 
subsidiaries, (ii) any acquisition by Hasbro or any of its subsidiaries, 
(iii) any acquisition by any employee benefit plan (or related trust) 
sponsored or maintained by Hasbro or any of its subsidiaries, (iv) any 
acquisition by Alan or Sylvia Hassenfeld, members of their respective 
immediate families, or heirs of Alan or Sylvia Hassenfeld or of any member 
of their respective immediate families, the Sylvia Hassenfeld Trust, the 
Merrill Hassenfeld Trust, the Alan Hassenfeld Trust, the Hassenfeld 
Foundation, any trust or foundation established by or for the primary 
benefit of any of the foregoing or controlled by one or more of any of the 
foregoing, or any affiliates or associates (as such terms are defined in 
Rule 12b-2 promulgated under the 1934 Act) of any of the foregoing or (v) 
any acquisition by any corporation with respect to which, following such 
acquisition, more than 60% of, respectively, the then outstanding shares of 
common stock of such corporation and the combined voting power of the then 
outstanding voting securities of such corporation entitled to vote 
generally in the election of directors is then beneficially owned, directly 
or indirectly, by all or substantially all of the individuals and entities 
who were the beneficial owners, respectively, of the Outstanding Common 
Stock and the Outstanding Voting Securities immediately prior to such 
acquisition in substantially the same proportions as their ownership, 
immediately prior to such acquisition, of the Outstanding Common Stock and 
Outstanding Voting Securities, as the case may be; or

       (b)  Individuals who, as the effective date of the Plan constitute 
the Board (the 'Incumbent Board') cease for any reason to constitute at 
least a majority of the Board; provided, however, that any individual 
becoming a director subsequent to the effective date of the Plan whose 
election, or nomination for election by the Company's shareholders, was 
approved by a vote of at least a majority of the directors then comprising 
the Incumbent Board shall be considered as though such individual were a 
member of the Incumbent Board, but excluding, for this purpose, any such 
individual whose initial assumption of office occurs as a result of either 
an actual or threatened election contest (as such terms are used in Rule 
14a-11 of Regulation 14A promulgated under the 1934 Act) or other actual or 
threatened solicitation of proxies or consents; or

       (c)  Approval by the shareholders of Hasbro of a reorganization, 
merger or consolidation, in each case, with respect to which all or 
substantially all of the individuals and entities who were the beneficial 
owners, respectively of the Outstanding Common Stock and Outstanding Voting 
Securities immediately prior to such reorganization, merger or 
consolidation do not, following such reorganization, merger or 
consolidation, beneficially own, directly or indirectly, more than 60% of, 
respectively, the then outstanding shares of common stock and the combined 
voting power of the then outstanding voting securities entitled to vote 
generally in the election of directors, as the case may be, of the 
corporation resulting from such reorganization, merger or consolidation in 
substantially the same proportions as their ownership, immediately prior to 
such reorganization, merger or consolidation, of the outstanding Common 
Stock and Outstanding Voting Securities, as the case may be; or

       (d)  Approval by the shareholders of Hasbro of (i) a complete 
liquidation or dissolution of Hasbro or (ii) the sale or other disposition 
of all or substantially all of the assets of Hasbro, other than to a 
corporation, with respect to which following such sale or other 
disposition, more than 60% of, respectively, the then outstanding shares of 
common stock of such corporation and the combined voting power of the then 
outstanding voting securities of such corporation entitled to vote 
generally in the election of directors is then beneficially owned, directly 
or indirectly, by all or substantially all of the individuals and entities 
who were the beneficial owners, respectively, of the Outstanding Common 
Stock and Outstanding Voting Securities immediately prior to such sale or 
other disposition in substantially the same proportion as their ownership, 
immediately prior to such sale or other disposition, of the Outstanding 
Common Stock and Outstanding Voting Securities, as the case may be.

1.11   'Claimant' shall have the meaning set forth in Section 14.1.

1.12   'Code' shall mean the Internal Revenue Code of 1986, as it may be 
amended from time to time.

1.13   'Committee' shall mean the committee described in Article 12.

1.14   'Company' shall mean Hasbro, Inc., a Rhode Island corporation, and 
any successor to all or substantially all of the Company's assets or 
business.

1.15   'Company Matching Account' shall mean (i) the sum of all of a 
Participant's Annual Company Matching Amounts,  plus (ii) amounts credited 
in accordance with all the applicable crediting provisions of this Plan 
that relate to the Participant's Company Matching Account, less (iii) all 
distributions made to the Participant or his or her Beneficiary pursuant to 
this Plan that relate to the Participant's Company Matching Account.

1.16   'Deduction Limitation' shall mean the following described limitation 
on a benefit that may otherwise be distributable pursuant to the provisions 
of this Plan.  Except as otherwise provided, this limitation shall be 
applied to all distributions that are 'subject to the Deduction Limitation' 
under this Plan.  If an Employer determines in good faith prior to a Change 
in Control that there is a reasonable likelihood that any compensation paid 
to a Participant for a taxable year of the Employer would not be deductible 
by the Employer solely by reason of the limitation under Code Section 
162(m), then to the extent deemed necessary by the Employer to ensure that 
the entire amount of any distribution to the Participant pursuant to this 
Plan prior to the Change in Control is deductible, the Employer may defer 
all or any portion of a distribution under this Plan.  Any amounts deferred 
pursuant to this limitation shall continue to be credited/debited with 
additional amounts in accordance with Section 3.8 below.  The amounts so 
deferred and amounts credited thereon shall be distributed to the 
Participant or his or her Beneficiary (in the event of the Participant's 
death) at the earliest possible date, as determined by the Employer in good 
faith, on which the deductibility of compensation paid or payable to the 
Participant for the taxable year of the Employer during which the 
distribution is made will not be limited by Section 162(m), or if earlier, 
the effective date of a Change in Control.  Notwithstanding anything to the 
contrary in this Plan, the Deduction Limitation shall not apply to any 
distributions made after a Change in Control.  


1.17   'Deferral Account' shall mean (i) the sum of all of a Participant's 
Annual Deferral Amounts, plus (ii) amounts credited in accordance with all 
the applicable crediting provisions of this Plan that relate to the 
Participant's Deferral Account, less (iii) all distributions made to the 
Participant or his or her Beneficiary pursuant to this Plan that relate to 
his or her Deferral Account.