Exhibit 10.2

EMPLOYMENT AGREEMENT

This Employment Agreement (the “Agreement”), effective as of August 1, 2018 (the
“Effective Date”), is entered into by and between Hasbro, Inc., a Rhode Island
corporation with a principal place of business at 1011 Newport Avenue,
Pawtucket, Rhode Island 02862 (the “Company” or “Hasbro”), and John Frascotti
(the “Executive”).

WHEREAS, the Company desires to continue to employ the Executive pursuant to the
terms and conditions set forth in this Agreement;

WHEREAS, the Executive desires to continue his employment with the Company
pursuant to the terms and conditions hereof.

NOW, THEREFORE, in consideration of the continued employment of the Executive,
and for other good and valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, the Company and the Executive agree as follows:

1.         Term of Employment.  The Company hereby agrees to continue to employ
the Executive, and the Executive hereby accepts continued employment with the
Company, upon the terms set forth in this Agreement, for the period commencing
on the Effective Date and ending on March 31, 2021 (the “End Date”), unless
earlier terminated or extended pursuant to the provisions of Section 4 (such
period, the “Employment Period”). 

2.         Title; Capacity.  During the Employment Period, the Executive shall
serve as the Company’s President and Chief Operating Officer and the Company
will nominate the Executive to be elected as a member of the Company’s Board of
Directors (the “Board”).  The Executive shall continue be based at the Company’s
headquarters in Pawtucket, Rhode Island.  The Executive shall be subject to the
supervision of, and shall have such authority as is delegated to the Executive
by, the Chief Executive Officer of the Company (the “CEO”).  The Executive
hereby accepts such continued employment and agrees to undertake the duties and
responsibilities inherent in such position and such other duties and
responsibilities as the CEO shall from time to time reasonably assign to the
Executive.  The Executive agrees to devote his entire business time, attention
and energies to the business and interests of the Company during the Employment
Period.  The Executive agrees to abide by the rules, regulations, instructions,
personnel practices and policies of the Company and any changes therein which
may be adopted from time to time by the Company. 

3.         Compensation and Benefits.   

 

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3.1       Base Salary.  Beginning on the Effective Date, the Company shall pay
the Executive, in periodic installments in accordance with the Company’s
customary payroll practices, a base salary at the annualized rate of $1,100,000
(the “Base Salary”).  The Executive’s base salary shall be reviewed annually in
accordance with the Company’s compensation guidelines for senior executives, and
may be upwardly adjusted to the extent, if any, deemed appropriate by Hasbro’s
Compensation Committee and the Board; provided, however, that the Executive’s
Base Salary may be reduced if in connection with a generally applicable
reduction in the compensation of the Company’s senior executives.

3.2       Management Incentive Plan Bonus.  Beginning in the Company’s 2019
fiscal year, the Executive shall be eligible to receive an annual management
incentive plan bonus based on a target of one hundred percent (100%) of the
Executive’s earned Base Salary for the incentive year (the “Annual Bonus”).  For
each fiscal year thereafter that this Agreement is in effect, the Executive’s
target bonus shall be reviewed in accordance with the Company’s compensation
philosophy, market conditions and other factors deemed relevant by the
Compensation Committee, and upwardly adjusted to the extent, if any, deemed
appropriate by the Compensation Committee and the Board; provided, however, that
the Executive’s target bonus may be reduced if in connection with a generally
applicable reduction in the target bonuses of Hasbro’s senior executives.  The
performance criteria and targets to be used for purposes of the management
incentive plan annual bonus shall be determined and established by the CEO and
the Compensation Committee following discussion with the Executive.  Actual
bonus awards shall be determined in the discretion of the Compensation Committee
pursuant to the terms of the Company’s Senior Management Annual Performance Plan
(or the successor thereto).

3.3       Long-Term Incentive.  The Executive shall participate in the Company’s
long-term incentive program and shall, beginning in the Company’s 2019 fiscal
year, have a target annual long-term incentive award level equal to 400% of his
annualized Base Salary, with awards to be made in the form and amounts
determined by the Company’s Compensation Committee, which may include options
and/or performance share awards (“PSAs”) or other types of awards.  For each
fiscal year after 2019 that this Agreement remains in effect, the Executive’s
target long-term incentive award levels shall be reviewed in accordance with the
Company’s compensation philosophy, market conditions and other factors deemed
relevant by the Compensation Committee, and upwardly adjusted to the extent, if
any, deemed appropriate by the Compensation Committee and the Board; provided,
however, that the Executive’s target long-term incentive award level may be
reduced if in connection with a generally applicable reduction in the target
long-term incentive award levels of Hasbro’s senior executives. 

3.4       Fringe Benefits.  The Executive shall be entitled to participate in
all benefit programs that the Company establishes and makes available to its
senior officers to the extent that the Executive’s position, tenure, salary and
other qualifications make the Executive eligible to participate, including but
not limited to the Company’s group life insurance, short and long term
disability insurance, vacation, medical, dental, defined contribution and
deferred compensation programs for salaried executives, as in effect from
time-to-time.

 

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3.5       Reimbursement of Expenses.  The Company shall reimburse the Executive
for all reasonable travel, entertainment and other expenses incurred or paid by
the Executive in connection with, or related to, the performance of his duties
and responsibilities under this Agreement, in accordance with the policies and
procedures, and subject to the limitations, adopted by the Company from time to
time.  

3.6       Clawback Policy.  The Executive understands and agrees that all
incentive compensation to which he is or becomes entitled shall be subject to
the terms of any clawback policy that may be adopted by the Board from time to
time for application to the senior executives of the Company (the “Clawback
Policy”).  For the avoidance of doubt, the Executive shall be covered by the
Clawback Policy only if and to the extent other senior executives are also
covered by such policy.

3.7       Withholding.  All compensation payable to the Executive shall be
subject to applicable taxes and withholding.

4.         Termination of Employment Period.  This Agreement and the employment
of the Executive shall terminate upon the occurrence of any of the following:

4.1       Expiration of the Employment Period;

4.2       At the election of the Company for Cause (as defined below),
immediately upon written notice by the Company to the Executive, which notice
shall identify the Cause upon which the termination is based;

4.3       At the election of the Executive for Good Reason (as defined below),
pursuant to the provisions set forth below;

4.4       Upon the death or Disability (as defined below) of the Executive;

4.5       At the election of the Company without Cause, upon not less than 15
days’ prior written notice of termination (the “Notice Period”), provided,
however, that the Company may, in its sole discretion, in lieu of all or part of
the Notice Period, pay the Executive an amount equal to the Base Salary that
would otherwise have been payable to the Executive had the Executive remained
employed for the duration of the Notice Period (in which case the Executive’s
termination will become effective on the date set forth in the Company’s written
notice of termination (the “Early Termination Date”), and the Executive will be
paid an amount equal to the Base Salary the Executive would have received had
the Executive remained employed by the Company between the Early Termination
Date and the end of the Notice Period (the “Early Termination Payment”), with
the Early Termination Payment to be made no later than the 30th day following
the end of the Notice Period); or

4.6       At the election of the Executive without Good Reason, upon not less
than 15 days’ prior written notice of termination.

5.         Effect of Termination.   

 

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5.1       Termination by the Company Without Cause or by the Executive for Good
Reason Within 24 Months Following a Change in Control.  If, within 24 months
following a Change in Control (as defined below), either the Executive’s
employment is terminated by the Company without Cause (other than due to his
Disability or death) or the Executive resigns for Good Reason, then, following
the Executive’s date of termination (the “Date of Termination”) and subject to
the conditions of Section 6 and in accordance with the timing and payment terms
set forth in Section 6:

(a)        the Company shall, on the Payment Commencement Date (as defined
below), pay to the Executive an amount equal to two times the Executive’s then
current Base Salary as severance;

(b)        the Company shall, on the Payment Commencement Date, pay to the
Executive an amount equal to two times the Executive’s target Annual Bonus;

(c)        if the Executive is eligible for and timely elects to continue
receiving group medical and/or dental insurance under the continuation coverage
rules known as COBRA, the Company will continue to pay the share of the premium
for such coverage that it pays for active and similarly-situated employees who
receive the same type of coverage (single, family, or other) until the earlier
of (x) the end of the 12th month after the Date of Termination, and (y) the date
the covered individual’s COBRA continuation coverage expires, unless, as a
result of a change in legal requirements, the Company’s provision of payments
for COBRA will violate the nondiscrimination requirements of applicable law, in
which case this benefit will not apply; and

 

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(d)       there shall be acceleration of vesting of, and lapse of restrictions
on, all unexpired, unvested stock options and time-based restricted stock units,
such that said stock options and restricted stock units become fully vested as
of the Date of Termination, except as otherwise provided in the terms of such
Awards (as defined below).  In addition, to the extent the Executive is the
holder of any stock options, restricted stock units, contingent performance
share awards and performance share awards (each, an “Award”), he shall be
entitled to the number of shares of common stock, if any, that would have been
earned (had the Executive’s employment not ended) based on achievement of the
applicable targets during the full relevant Performance Period (as defined under
the Award), pro-rated by multiplying that number of shares by a fraction, the
numerator of which is the number of days from the start of the Performance
Period to the Date of Termination, and the denominator of which is the total
number of days of the applicable Performance Period.  Any shares to be
distributed pursuant to an Award shall be provided to the Executive after the
end of the applicable Performance Period for that Award in accordance with the
Award’s terms, but in no event earlier than thirty (30) days after the
evaluation of the applicable Performance Period is completed.  The Executive may
not exercise or dispose of any portion of an Award or related shares of common
stock that vest or become exercisable under this Section 5.1(d) until such time
as the Executive Release (as defined below) becomes irrevocable (and any amounts
that were unvested or unexercisable as of the Date of Termination shall
immediately expire upon the 60th day following the Date of Termination if the
Executive Release has not then become irrevocable).  All shares to be
distributed pursuant to any of the foregoing awards shall be provided to the
Executive within thirty (30) days after the date the Executive Release executed
by the Executive has become irrevocable or such later date as provided above,
except as may be required under Section 7 hereof.  The stock options shall
remain exercisable in accordance with the relevant agreements and plans
(provided that the stock options shall remain exercisable for a period of one
year, but not longer than the expiration of the original maximum term of the
stock option).

5.2       Termination by the Company Without Cause or by the Executive for Good
Reason Prior to, or More than 24 Months Following, a Change in Control.  If,
prior to a Change in Control or more than 24 months following a Change in
Control, either the Executive’s employment is terminated by the Company without
Cause (other than for Disability or death) or the Executive resigns for Good
Reason, then, following the Date of Termination and subject to the conditions of
Section 6 and in accordance with the payment terms set forth in Section 6:

(a)        the Company shall, for a period of 18 months beginning on the Payment
Commencement Date, continue to pay to the Executive, in accordance with the
Company’s customary payroll practices, his then current Base Salary as
severance;

(b)        the Executive will receive an amount equal to the annual management
incentive plan bonus that would have been otherwise payable to the Executive for
the fiscal year in which the Date of Termination occurs based on the actual
performance of the Company for such year, and assuming the Executive’s
employment had not terminated prior to the payment date for such bonus,
multiplied by a fraction, the numerator of which is the number of days elapsed
in the fiscal year of termination of employment through the Date of Termination,
and the denominator of which is 365 (the “Pro-Rata Bonus”), to be paid at the
same time as such bonuses are paid to senior executives of the Company (but in
no event earlier than the Payment Commencement Date);

 

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(c)        if the Executive is eligible for and timely elects to continue
receiving group medical and/or dental insurance under the continuation coverage
rules known as COBRA, the Company will continue to pay the share of the premium
for such coverage that it pays for active and similarly-situated employees who
receive the same type of coverage (single, family, or other) until the earlier
of (x) the end of the 18th month after the Date of Termination, and (y) the date
the covered individual’s COBRA continuation coverage expires, unless, as a
result of a change in legal requirements, the Company’s provision of payments
for COBRA will violate the nondiscrimination requirements of applicable law, in
which case this benefit will not apply; and

(d)       the Executive shall become vested in a pro-rata portion of any
unvested restricted stock units as of the Date of Termination, computed by
multiplying the full number of any unvested restricted stock units as of the
Date of Termination by a fraction, the numerator of which is the number of days
in the remaining Vesting Period (as defined in the applicable award grant) after
the most recent Annual Vesting Date (as defined in the applicable award grant)
that has been achieved, if any (i.e. the number of days elapsed since the Grant
Date (as defined in the applicable award grant) or any later Annual Vesting Date
that has occurred) which have already elapsed as of the Date of Termination,
inclusive of such date, and the denominator of which is the total number of days
in the Vesting Period remaining since either the Grant Date or any later Annual
Vesting Date that has occurred (the “Pro-Rata RSU Vesting”).   In addition, to
the extent the Executive is the holder of any performance share award, he shall
be entitled to the number of shares of common stock, if any, that would have
been earned (had the Executive’s employment not ended) based on achievement of
the applicable targets during the full relevant Performance Period (as defined
under such award), pro-rated by multiplying that number of shares by a fraction,
the numerator of which is the number of days from the start of the Performance
Period to the Date of Termination, and the denominator of which is the total
number of days of the applicable Performance Period (the “Pro-Rated PSA
Vesting”).  Any shares to subsequently be distributed shall be provided to the
Executive after the end of the applicable Performance Period in accordance with
the terms of the applicable award, but in no event earlier than thirty (30) days
after the evaluation of the applicable Performance Period is completed (the
“Pro-Rated PSA Vesting Schedule”).  The Executive may not exercise or dispose of
any portion of an award that vests under this Section 5.2(d) until such time as
the Executive Release becomes irrevocable (and any amounts that were unvested as
of the Date of Termination shall immediately expire upon the 60th day following
the Date of Termination if the Executive Release has not then become
irrevocable).  All shares to be distributed pursuant to any of the foregoing
awards shall be provided to the Executive within thirty (30) days after the date
the Executive Release executed by the Executive has become irrevocable or such
later date as provided above, except as may be required under Section 7 hereof. 
Any unvested stock options held by the Executive shall be forfeited as of the
Date of Termination, but all vested stock options held by the Executive as of
the Date of Termination shall remain exercisable for a period of one year
following the Date of Termination, but not longer than the expiration of the
original maximum term of the stock option. 

 

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 5.3      Termination by the Company for Cause, by the Executive Without Good
Reason, or Due to Expiration of the Employment Period.  If the Company
terminates the Executive’s employment for Cause, the Executive resigns without
Good Reason, or the Employment Period expires on the End Date, then the
Company’s obligations under this Agreement shall immediately cease and the
Executive shall be entitled to only the Base Salary that has accrued and to
which the Executive is entitled as of the Date of Termination.  The Executive
shall not be entitled to any other compensation or consideration that the
Executive may have received had the Employment Period not ended, and all stock
options, restricted stock units and contingent performance share awards granted
to the Executive shall be treated as provided in the relevant agreements and
plans.  Notwithstanding the foregoing, if (i) the Company does not offer in
writing to extend the Employment Period, on terms and conditions at least as
favorable as those set forth in this Agreement, for an additional period of at
least one year following the End Date, or (ii) the parties cannot otherwise
mutually agree upon the terms of an agreement pursuant to which the Executive
would remain employed with the Company following the End Date, then, following
the Date of Termination and subject to the conditions of Section 6 and in
accordance with the payment terms set forth in Section 6, for a period of 12
months beginning on the Payment Commencement Date, the Company would (a)
continue to pay to the Executive, in accordance with the Company’s customary
payroll practices, his then current Base Salary as severance, and (b) if the
Executive is eligible for and timely elects to continue receiving group medical
and/or dental insurance under the continuation coverage rules known as COBRA,
continue to pay the share of the premium for such coverage that it pays for
active and similarly-situated employees who receive the same type of coverage
(single, family, or other) unless, as a result of a change in legal
requirements, the Company’s provision of payments for COBRA will violate the
nondiscrimination requirements of applicable law, in which case this benefit
will not apply.

5.4       Termination due to the Executive’s Death or Disability.  If the
Executive’s employment is terminated due to his death or Disability, the
Executive will receive the Pro-Rata Bonus, and Pro-Rata RSU Vesting, as well as
accelerated vesting of all unexpired, unvested stock options, such that said
stock options become fully vested as of the Date of Termination, except as
otherwise provided in the terms of such Awards, and provided that the stock
options shall remain exercisable for a period of one year following the Date of
Termination, but not longer than the expiration of the original maximum term of
the stock option.  In addition, in the event of the Executive’s Disability, the
Executive shall be entitled to Pro-Rated PSA Vesting pursuant to the Pro-Rated
PSA Vesting Schedule or, in the event of the Executive’s death, the Executive’s
estate shall be issued the number of shares of common stock that is computed by
multiplying: (i) the number of shares of common stock which would have been
issuable to the Executive pursuant to the applicable award assuming completion
of the applicable Performance Period and the Company’s achievement of the
applicable targets during the full relevant Performance Period (as defined under
such award), multiplied by (ii) a fraction, the numerator of which is the number
of days from the start of the applicable Performance Period to the Date of
Termination and the denominator of which is the total number of days in the
applicable Performance Period, with such pro-rated target award to be payable as
soon as is reasonably practicable following the Executive’s death.

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5.5       No Other Severance.  The Executive shall not be entitled to any
benefits beyond those provided for in this Section 5 by virtue of termination of
his employment or this Agreement, including pursuant to any generally applicable
Hasbro plan, policy, or agreement.

5.6       Other Effects of Termination.  Upon termination of the Executive’s
employment for any reason, the Executive shall resign effective as of such date
from any position he may then hold as a Board member or officer of Hasbro or any
subsidiary or affiliate of Hasbro.

6.         Release.  The obligation of the Company to make the payments and
provide the benefits to the Executive under Section 5.1, 5.2, or 5.3 is
conditioned upon the Executive signing and delivering to the Company a severance
and release of claims agreement in a form to be provided by the Company (which
will include, at a minimum, a release of all releasable claims and
non-disparagement and cooperation obligations) (the “Executive Release”), which
Executive Release must become irrevocable within sixty (60) days following the
Date of Termination.  Except as otherwise provided in Section 5.2(b), the
Company shall commence or make, as applicable, the payments under Section 5.1,
5.2, or 5.3 on the first payroll period following the date the Executive Release
becomes irrevocable (such date, the “Payment Commencement Date”); provided,
however, that if the 60th day following the Date of Termination falls in the
calendar year following the year of the Executive’s termination of employment,
the Payment Commencement Date shall be no earlier than the first payroll period
of such later calendar year; and provided further that the payment of any
amounts pursuant to Section 5.1, 5.2, or 5.3 shall be subject to the terms and
conditions set forth in Exhibit A.

7.         Section 280G.   

7.1       Notwithstanding any other provision of this Agreement, except as set
forth in Section 7.2, in the event that the Company undergoes a “Change in
Ownership or Control” (as defined below), the Company shall not be obligated to
provide to the Executive a portion of any “Contingent Compensation Payments” (as
defined below) that the Executive would otherwise be entitled to receive to the
extent necessary to eliminate any “excess parachute payments” (as defined in
Code Section 280G(b)(1)) for the Executive.  For purposes of this Section 7, the
Contingent Compensation Payments so eliminated shall be referred to as the
“Eliminated Payments” and the aggregate amount (determined in accordance with
Treasury Regulation Section 1.280G-1, Q/A-30 or any successor provision) of the
Contingent Compensation Payments so eliminated shall be referred to as the
“Eliminated Amount.”

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7.2       Notwithstanding the provisions of Section 7.1, no such reduction in
Contingent Compensation Payments shall be made if (i) the Eliminated Amount
(computed without regard to this sentence) exceeds (ii) 110% of the aggregate
present value (determined in accordance with Treasury Regulation Section
1.280G-1, Q/A-31 and Q/A-32 or any successor provisions) of the amount of any
additional taxes that would be incurred by the Executive if the Eliminated
Payments (determined without regard to this sentence) were paid to him or her
(including, state and federal income taxes on the Eliminated Payments, the
excise tax imposed by Section 4999 of the Code payable with respect to all of
the Contingent Compensation Payments in excess of the Executive’s “base amount”
(as defined in Section 280G(b)(3) of the Code), and any withholding taxes).  The
override of such reduction in Contingent Compensation Payments pursuant to this
Section 7.2 shall be referred to as a “Section 7.2 Override.” For purpose of
this paragraph, if any federal or state income taxes would be attributable to
the receipt of any Eliminated Payment, the amount of such taxes shall be
computed by multiplying the amount of the Eliminated Payment by the maximum
combined federal and state income tax rate provided by law.

7.3       For purposes of this Section 7 the following terms shall have the
following respective meanings:

(i)         “Change in Ownership or Control” shall mean a change in the
ownership or effective control of the Company or in the ownership of a
substantial portion of the assets of the Company determined in accordance with
Section 280G(b)(2) of the Code.

(ii)        “Contingent Compensation Payment” shall mean any payment (or
benefit) in the nature of compensation that is made or made available (under
this Agreement or otherwise) to a “disqualified individual” (as defined in
Section 280G(c) of the Code) and that is contingent (within the meaning of
Section 280G(b)(2)(A)(i) of the Code) on a Change in Ownership or Control of the
Company.

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7.4       Any payments or other benefits otherwise due to the Executive
following a Change in Ownership or Control that could reasonably be
characterized (as determined by the Company) as Contingent Compensation Payments
(the “Potential Payments”) shall not be made until the dates provided for in
this Section 7.4.  Within 30 days after each date on which the Executive first
becomes entitled to receive (whether or not then due) a Contingent Compensation
Payment relating to such Change in Ownership or Control, the Company shall
determine and notify the Executive (with reasonable detail regarding the basis
for its determinations) (i) which Potential Payments constitute Contingent
Compensation Payments, (ii) the Eliminated Amount and (iii) whether the Section
7.2 Override is applicable.  Within 30 days after delivery of such notice to the
Executive, the Executive shall deliver a response to the Company (the “Executive
Response”) stating either (A) that he agrees with the Company’s determination
pursuant to the preceding sentence, or (B) that he disagrees with such
determination, in which case he shall set forth (i) which Potential Payments
should be characterized as Contingent Compensation Payments, (ii) the Eliminated
Amount, and (iii) whether the Section 7.2 Override is applicable.  In the event
that the Executive fails to deliver an Executive Response on or before the
required date, the Company’s initial determination shall be final.  If and to
the extent that any Contingent Compensation Payments are required to be treated
as Eliminated Payments pursuant to this Section 7, then the payments shall be
reduced or eliminated, as determined by the Company, in the following order: (i)
any cash payments, (ii) any taxable benefits, (iii) any nontaxable benefits, and
(iv) any vesting of equity awards in each case in reverse order beginning with
payments or benefits that are to be paid the farthest in time from the date that
triggers the applicability of the excise tax, to the extent necessary to
maximize the Eliminated Payments.  If the Executive states in the Executive
Response that he agrees with the Company’s determination, the Company shall make
the Potential Payments to the Executive within three business days following
delivery to the Company of the Executive Response (except for any Potential
Payments which are not due to be made until after such date, which Potential
Payments shall be made on the date on which they are due).  If the Executive
states in the Executive Response that he disagrees with the Company’s
determination, then, for a period of 60 days following delivery of the Executive
Response, the Executive and the Company shall use good faith efforts to resolve
such dispute.  If such dispute is not resolved within such 60-day period, such
dispute shall be settled exclusively by arbitration in the State of Rhode
Island, in accordance with the rules of the American Arbitration Association
then in effect.  Judgment may be entered on the arbitrator’s award in any court
having jurisdiction.  The Company shall, within three business days following
delivery to the Company of the Executive Response, make to the Executive those
Potential Payments as to which there is no dispute between the Company and the
Executive regarding whether they should be made (except for any such Potential
Payments which are not due to be made until after such date, which Potential
Payments shall be made on the date on which they are due).  The balance of the
Potential Payments shall be made within three business days following the
resolution of such dispute.  Subject to the limitations contained in Sections
7.1 and 7.2 hereof, the amount of any payments to be made to the Executive
following the resolution of such dispute shall be increased by amount of the
accrued interest thereon computed at the prime rate announced from time to time
by The Wall Street Journal, compounded monthly from the date that such payments
originally were due.

7.5       The provisions of this Section 7 are intended to apply to any and all
payments or benefits available to the Executive under this Agreement or any
other agreement or plan of the Company under which the Executive receives
Contingent Compensation Payments.

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8.         Non-Competition and Non-Solicitation.    

8.1       During the Restricted Period (as defined below), the Executive shall
not, in the geographical area in which the Company or any of its affiliates does
business or has done business at the time of his employment termination, engage
in any business or enterprise that would be competitive with any business of
Hasbro in existence as of the Date of Termination (a “Competitive Business”). 
This obligation shall preclude any involvement in a Competitive Business,
whether on a direct or indirect basis, and whether as an owner, partner,
officer, director, employee, consultant, investor, lender or otherwise, except
as the passive holder of not more than 1% of the outstanding stock of a publicly
held company. 

8.2       During the Restricted Period, the Executive shall not, either alone or
in association with others, (a) solicit, recruit, induce, attempt to induce or
permit any organization directly or indirectly controlled by the Executive to
solicit, recruit, induce or attempt to induce any employee of the Company or any
of its affiliates to leave the employ of the Company or any of its affiliates,
or (b) solicit, recruit, induce, attempt to induce for employment or hire or
engage as an independent contractor, or permit any organization directly or
indirectly controlled by the Executive to solicit, recruit, induce, attempt to
induce for employment or hire or engage as an independent contractor, any person
who is employed by the Company or any of its affiliates or who was employed by
the Company or any of its affiliates at any time during the term of the
Executive’s employment with the Company, provided that this clause (b) shall not
apply to any individual whose employment  with the Company or any of its
affiliates has been terminated for a period of six (6) months or longer. 

8.3       During the Restricted Period, the Executive shall not, either alone or
in association with others, solicit, divert or take away, or attempt to solicit,
divert or take away, or permit any organization directly or indirectly
controlled by the Executive to solicit, divert or take away, or attempt to
solicit, divert or take away, the business or patronage of any of the clients,
customers or accounts, or prospective clients, customers or accounts of the
Company or any of its affiliates, which were contacted, solicited or served by
the Company or any of its affiliates at any time during the Executive’s
employment with the Company.

8.4       The Restricted Period shall mean the one year period after the
Executive’s employment with the Company (including any of its affiliates) ends
for any reason; provided, however, that if the Executive is eligible (or would
have been eligible had he timely entered into the Executive Release) to receive
severance pay pursuant to Section 5.1(a) or Section 5.2(a), the Restricted
Period shall run for a two-year post-employment period in the event of
eligibility pursuant to Section 5.1(a), and for an eighteen-month
post-employment period in the event of eligibility pursuant to Section 5.2(a).

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8.5       The geographic scope of this Section 8 shall extend to anywhere the
Company or any of its subsidiaries or affiliates is doing business at the time
of termination or expiration of this Agreement.  If any restriction set forth in
this Section 8 is found by any court of competent jurisdiction to be
unenforceable because it extends for too long a period of time or over too great
a range of activities or in too broad a geographic area, it shall be interpreted
to extend only over the maximum period of time, range of activities or
geographic area as to which it may be enforceable.  Each of the parties intends
that this non-competition provision shall be deemed to be a series of separate
covenants, one for each country and one for each and every county or other
political subdivision of each and every state or other political subdivision of
each country where this provision is intended to be effective.

8.6       The Executive acknowledges that the restrictions contained in this
Section 8 are necessary for the protection of the business and goodwill of the
Company and are considered by the Executive to be reasonable for such purpose. 
The Executive agrees that any breach of this Section 8 will cause the Company
substantial and irrevocable damage, and therefore, in the event of any such
breach, in addition to such other remedies which may be available, the Company
shall have the right to obtain and receive specific performance and injunctive
relief without posting a bond or other security.

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8.7       If it is determined by a court of law that the Executive violated any
of the provisions of Section 8.1, 8.2, or 8.3, he shall continue to be bound by
the restrictions set forth therein until a period equal to the Restricted Period
has expired without any violation of such provisions.  The Executive further
agrees that in the event he violates any of the provisions of Section 8.1, 8.2,
or 8.3 (and such violation is not cured (if capable of being cured) within
thirty (30) days after the Executive receives written notice from the Company
setting forth in reasonable detail the manner in which the Company believes the
Executive has violated any such provision), then the Company shall have no
obligation to pay or provide any of the benefits described in Section 5.1, 5.2,
or 5.3, as applicable (and, to the extent the Company previously paid or
provided any such benefits, the Executive shall be required to immediately repay
to the Company the value of any such pay and benefits).  In addition, in the
event of any violation that is not cured as provided in the preceding sentence,
the Executive agrees to forfeit and pay to Hasbro the total Net Proceeds
obtained with respect to any unvested stock options, restricted stock units,
performance share awards, contingent stock performance awards or other equity
accelerated or provided pursuant to Section 5.1 or 5.2, as applicable.  For
purposes of this Agreement, “Net Proceeds” shall be computed for each stock
option grant accelerated pursuant to Section 5.1 or 5.2, as applicable, by
multiplying the number of accelerated options times the difference between the
closing price of Hasbro’s common stock on the last day of Executive’s employment
and the exercise price for the grant being accelerated. “Net Proceeds” for each
share of restricted stock unit accelerated pursuant to Section 5.1 or 5.2, as
applicable, shall be computed by multiplying the number of shares or units
accelerated by the closing price of Hasbro’s common stock on the last day of
Executive’s employment.  “Net Proceeds” for each share of stock or performance
share award provided pursuant to an unvested contingent stock performance or
performance share award shall be computed by multiplying the number of shares or
units provided pursuant to the Award by the closing price of Hasbro’s common
stock on the day such shares are provided to Executive.  Net Proceeds will be
computed without regard to any subsequent increase or decrease, if any, in the
market price or actual proceeds from any sale of Hasbro’s common stock.  The
foregoing amounts will be owed regardless of whether or not the accelerated
options have been actually exercised or the underlying shares of common stock
have been actually sold.

9.         Absence of Restrictions.  The Executive represents and warrants that
he is not bound by any employment contracts, restrictive covenants or other
restrictions that are in any way inconsistent with any of the terms of this
Agreement.

10.       Definitions.  For purposes of this Agreement, the following terms
shall have the following meanings:

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10.1     “Cause” shall, prior to or more than two years following a Change in
Control, be deemed to exist upon (a) the Executive’s refusal to perform (i) the
Executive’s assigned duties for the Company; or (ii) the Executive’s obligations
under this Agreement; (b) conduct of the Executive involving fraud, gross
negligence or willful misconduct or other action which damages the reputation of
the Company; (c) the Executive’s indictment for or conviction of, or the entry
of a pleading of guilty or nolo contendere by the Executive to, any crime
involving moral turpitude or any felony; (d) the Executive’s fraud, embezzlement
or other intentional misappropriation from the Company; or (e) the Executive’s
material breach of any material policies, rules or regulations of employment
which may be adopted or amended from time to time by the Company; provided,
however, that the Company may not terminate the Executive’s employment for Cause
unless (x) the Company gives written notice of its intent to terminate the
Executive’s employment (including the reasons therefor) and (y) with respect to
any alleged violation of clause (a) or (e) above, the Executive fails to cure
such refusal or material breach (if the breach is subject to cure) within thirty
(30) days of the Executive’s receipt of such written notice (which, if so cured
within such 30-day period, shall no longer be a grounds for termination of the
Executive’s employment for “Cause”).  The Company’s financial performance or the
financial performance of operating units for which the Executive is responsible
shall not in and of itself constitute a basis for the Company to terminate the
Executive for Cause or (except to the extent that financial performance triggers
the Clawback Policy in a manner that affects any post-employment payments or
benefits) refuse to provide any severance benefits under this Agreement;

10.2     “Cause” shall, within two years following a Change in Control, be
deemed to exist upon (a) repeated violations by the Executive of the Executive’s
obligations under this Agreement (other than as a result of Disability) which
are demonstrably willful and deliberate on the Executive’s part, which are
committed in bad faith or without reasonable belief that such violations are in
the best interests of the Company and which are not remedied in a reasonable
period of time after receipt of written notice from the Company specifying such
violations; or (b) the conviction of the Executive of a felony involving moral
turpitude. 

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                        10.3     “Change in Control” means the occurrence of any
one of the following events: (i) sale of all or substantially all (at least 85%)
of the consolidated assets of the Company to one or more individuals, entities,
or groups (other than an “Excluded Owner” as defined below); (ii) acquisition or
attainment of ownership by a person, entity, or group (other than an Excluded
Owner) of more than 50% of the undiluted total voting power of the Company’s
then-outstanding securities eligible to vote to elect members of the Board
(“Company Voting Securities”); (iii) completion of a merger or consolidation of
the Company with or into any other entity (other than an Excluded Owner) unless
the holders of the Company’s Voting Securities outstanding immediately before
such completion, together with any trustee or other fiduciary holding securities
under a Hasbro benefit plan, hold securities that represent immediately after
such merger or consolidation more than 50% of the combined voting power of the
then outstanding voting securities of either Hasbro or the other surviving
entity or its ultimate parent; or (iv) individuals who constitute the Board on
the date hereof (“Incumbent Directors”) cease for any reason during a 12 month
period to constitute at least a majority of the Board; provided, that any
individual who becomes a member of the Board subsequent to the date hereof,
whose election or nomination for election was approved by a vote of at least a
majority of the Incumbent Directors, shall be treated as an Incumbent Director
unless he assumed office as a result of an actual or threatened election contest
with respect to the election or removal of directors.  For purposes of this
Agreement, an “Excluded Owner” consists of Hasbro, any entity owned, directly or
indirectly, at least 50% by Hasbro, any entity that, directly or indirectly,
owns at least 50% of Hasbro, any Hasbro benefit plan, and any underwriter
temporarily holding securities for an offering of such securities. 
Notwithstanding the foregoing, where required to avoid extra taxation under
Section 409A, a Change in Control must also satisfy the requirements of Treas.
Reg. Section 1.409A-3(a)(5).

10.4     “Disability” means the Executive’s inability, due to a physical or
mental disability, for a period of 180 consecutive days, to perform the services
contemplated under this Agreement, with reasonable accommodation.  A
determination of Disability shall be made by a physician selected by the Company
and reasonably satisfactory to the Executive.

10.5     “Good Reason” means, prior, to or more than two years following, a
Change in Control, termination by the Executive of his employment, upon thirty
(30) days’ written notice, for any of the following reasons: (a) a material
reduction in the Executive’s base salary or Annual Bonus opportunity or target
annual long-term incentive opportunity (under Section 3.3), without his consent,
unless such reduction is due to a generally applicable reduction in the
compensation of the Company’s senior executives, (b) the Executive no longer
serves as President and Chief Operating Officer of the Company and that change
in status constitutes a material reduction in the Executive’s duties,
authorities, and responsibilities, (c) the Executive is demoted by being
required to report to someone other than the CEO (other than a requirement to
report directly to the Board), or (d) a material breach by the Company of a
material provision of this Agreement.

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10.6     “Good Reason” means, within two years following a Change in Control,
termination by the Executive of his employment, upon thirty (30) days’ written
notice, for any of the following reasons: (a) any action by the Company that
results in a material diminution in the Executive’s position, authority, duties
or responsibilities; (b) the Executive is demoted by being required to report to
someone other than the CEO (other than a requirement to report directly to the
Board); (c) any failure by the Company to comply with any of the provisions of
Section 3.1, 3.2, or 3.3 of this Agreement; (d) the Company’s requiring the
Executive to be based at any office or location other than the location where
the Executive was employed immediately preceding the Change in Control or any
office or location greater than 35 miles from such location; (e) any purported
termination by the Company of the Executive’s employment otherwise than as
expressly permitted by this Agreement; or (f) any failure by the Company to
comply with and satisfy Section 11.6 of this Agreement, provided that such
successor has received at least five days’ prior written notice from Hasbro or
the Executive of the requirements of Section 11.6 of the Agreement. 

10.7     Notwithstanding the provisions of Section 10.5 and 10.6, the Executive
may not terminate his employment for “Good Reason” unless (a) he gives written
notice of his intent to terminate his employment under this provision (including
the reasons therefor) within thirty (30) days of the event giving rise to the
right to terminate, and (b) the Company fails to cure the material reduction or
material breach of a material provision, or restore the Executive’s title within
thirty (30) days of its receipt of the Executive’s written notice, which, if so
cured within such 30-day period, shall no longer be a grounds by the Executive
for terminating his employment with “Good Reason.”

11.       Miscellaneous. 

11.1     Entire Agreement; Modification.  This Agreement constitutes the entire
understanding and agreement between the parties hereto with regard to the
subject matter hereof and supersedes all prior understandings and agreements,
whether written or oral.  The Executive is not relying on any representations
other than those set forth in this Agreement.

11.2     Notices.  Any notice delivered under this Agreement shall be deemed
duly delivered 3 business days after it is sent by registered or certified mail,
return receipt requested, postage prepaid, or one business day after it is sent
for next-business day delivery via a reputable nationwide overnight courier
service, to the Company at its principal headquarters and to the Executive at
the address most recently shown on the personnel records of the Company.  Either
party may change the address to which notices are to be delivered by giving
notice of such change to the other party in the manner set forth in this Section
11.2.

11.3     Pronouns.  Whenever the context may require, any pronouns used in this
Agreement shall include the corresponding masculine, feminine or neuter forms,
and the singular forms of nouns and pronouns shall include the plural, and vice
versa.

11.4     Amendment.  This Agreement may be amended or modified only by a written
instrument executed by both the Company and the Executive and approved by the
Board.

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11.5     Governing Law.  This Agreement shall be governed by and construed in
accordance with the laws of the State of Rhode Island (without reference to the
conflicts of laws provisions thereof).  Any action, suit or other legal
proceeding arising under or relating to any provision of this Agreement shall be
commenced only in a court of the State of Rhode Island (or, if appropriate, a
federal court located within Rhode Island), and the Company and the Executive
each consents to the jurisdiction of such a court.  The Company and the
Executive each hereby irrevocably waives any right to a trial by jury in any
action, suit or other legal proceeding arising under or relating to any
provision of this Agreement.

11.6     Successors and Assigns.  This Agreement shall be binding upon and inure
to the benefit of both parties and their respective successors and assigns,
including any corporation with which or into which Hasbro may be merged or which
may succeed to its assets or business; provided, however, that the Executive’s
obligations are personal and shall not be assigned by the Executive.  The
Company will require any successor (whether direct or indirect, by purchase,
merger, consolidation or otherwise) to all or substantially all of the business
and/or assets of Hasbro to assume expressly and agree to perform this Agreement
in the same manner and to the same extent that Hasbro would be required to
perform it if no such succession had taken place.  As used in this Agreement,
“Hasbro” or “the Company” shall mean Hasbro as hereinbefore defined and any
successor to its business and/or assets as aforesaid which assumes and agrees to
perform this Agreement by operation of law, or otherwise.

11.7     Waivers.  No delay or omission by the Company in exercising any right
under this Agreement shall operate as a waiver of that or any other right.  A
waiver or consent given by the Company on any one occasion shall be effective
only in that instance and shall not be construed as a bar to or waiver of any
right on any other occasion.

11.8     Captions.  The captions of the sections of this Agreement are for
convenience of reference only and in no way define, limit or affect the scope or
substance of any section of this Agreement.

11.9     Severability.  In case any provision of this Agreement shall be
invalid, illegal or otherwise unenforceable, the validity, legality and
enforceability of the remaining provisions shall in no way be affected or
impaired thereby.

11.10   Executive’s Acknowledgments.  The Executive acknowledges that he: (i)
has read this Agreement; (ii) has been represented in the preparation,
negotiation, and execution of this Agreement by legal counsel of the Executive’s
own choice or has voluntarily declined to seek such counsel; (iii) understands
the terms and consequences of this Agreement; and (iv) is fully aware of the
legal and binding effect of this Agreement.

[Remainder of page is intentionally left blank] 

 

 

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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the
dates set forth below.

HASBRO, INC.

By:            /s/ Brian Goldner                              
               Date:            8/1/18                                     

Name:  Brian Goldner

Title:  Chairman and Chief Executive Officer

EXECUTIVE:

                   /s/ John Frascotti                            
               Date:            8/1/18                                   
John Frascotti

 

 

 

 

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Exhibit A

Section 409A

The intent of the parties is that payments and benefits under this Agreement
comply with, or be exempt from, Internal Revenue Code Section 409A and the
regulations and guidance promulgated thereunder (collectively “Code Section
409A”) and this Agreement shall be interpreted consistently therewith.  With
regard to any provision herein that provides for reimbursement of costs and
expenses or in-kind benefits, except as permitted by Code Section 409A, (i) the
right to reimbursement or in-kind benefits shall not be subject to liquidation
or exchange for another benefit, (ii) the amount of expenses eligible for
reimbursement, or in-kind benefits, provided during any taxable year shall not
affect the expenses eligible for reimbursement, or in-kind benefits to be
provided, in any other taxable year, provided that this clause (ii) shall not be
violated with regard to expenses reimbursed under any arrangement covered by
Section 105(a) of the Code solely because such expenses are subject to a limit
related to the period the arrangement is in effect, and (iii) such payments
shall be made on or before the last day of your taxable year following the
taxable year in which the expense occurred, provided that any tax gross-ups may
be reimbursed by the end of the calendar year following the calendar year in
which such taxes are remitted to the taxing authorities. For purposes of Code
Section 409A, each payment hereunder shall be treated as a separate payment and
Executive’s right to receive any installment payments pursuant to this Agreement
shall be treated as a right to receive a series of separate and distinct
payments. In no event may Executive, directly or indirectly, designate the
calendar year of any payment to be made under this Agreement that is considered
nonqualified deferred compensation. Termination of employment as used herein
shall mean separation from service within the meaning of Code Section 409A.
Notwithstanding anything in this Agreement to the contrary, to the extent
required by Section 409A of the Code, if Executive is considered a “specified
employee” for purposes of Section 409A of the Code and if payment of any amounts
under this Agreement is required to be delayed for a period of six months after
separation from service pursuant to Section 409A of the Code, payments of such
amounts shall be delayed as required by Section 409A of the Code, and the
accumulated amounts shall be paid in a lump sum payment within ten days after
the end of the six-month period.  If Executive dies during the postponement
period prior to the payment of benefits, the amounts withheld on account of
Section 409A of the Code shall be paid to the personal representative of the
Executive’s estate within 60 days after the date of Executive’s death. The
Company is not making any representation or warranty to Executive with respect
to the treatment of this Agreement under Code Section 409A and shall have no
liability to Executive or any other person with respect to payments or benefits
under this Agreement should any payments or benefits under this Agreement be
determined to constitute nonqualified deferred compensation subject to Code
Section 409A but not satisfying the conditions of such section.

 

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