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This excerpt taken from the HAS DEF 14A filed Apr 8, 2008. CERTAIN
RELATIONSHIPS AND RELATED PARTY TRANSACTIONS
The Company has a policy that any transaction which would
require disclosure under Item 404(a) of
Regulation S-K
of the rules and regulations of the United States Securities and
Exchange Commission, with respect to a director or nominee for
election as a director, must be reviewed and approved or
ratified by the Company’s full Board, excluding any
director interested in such transaction. All other related party
transactions which would require disclosure under
Item 404(a), including, without limitation, those involving
executive officers of the Company, must be reviewed and approved
or ratified by either the Company’s full Board or a
committee of the Board which has been delegated with such duty.
Any such related party transactions will only be approved or
ratified if the Board, or the applicable committee of the Board,
determines that such transaction will not impair the involved
person’s service to, and exercise of judgment on behalf of,
the Company, or otherwise create a conflict of interest which
would be detrimental to the Company. This policy is contained in
Section 20, entitled “Code of Conduct; Conflicts of
Interest and Related Party Transactions” of the
Company’s Corporate Governance Principles. Although the
Company adopted this policy in 2007, all of the transactions
disclosed below, even those entered into before this policy was
adopted, have been reviewed and approved or ratified by the
Company’s Board.
The Company’s wholly-owned subsidiary, Hasbro Canada
Corporation (“Hasbro Canada”), leases an office and
warehouse facility from Central Toy Manufacturing Inc.
(“CTM”), a real estate corporation which is 25% owned
by the estate of Merrill Hassenfeld, a former Chief Executive
Officer and director of the Company. Sylvia K. Hassenfeld, a
former director of the Company and mother of the Company’s
Chairman, Alan G. Hassenfeld, is executrix and a beneficiary of
the estate of Merrill Hassenfeld. During 2003 a new lease was
signed for a six-year term ending on January 31, 2010, with
one three-year renewal option that Hasbro Canada can exercise at
the end of the term. The new lease also provided Hasbro Canada
with a right to terminate the lease on January 31, 2007, or
at any time thereafter, upon six months’ written notice.
The rent provided for in this six-year lease is $525,000
Canadian per year (approximately $535,000 U.S. at exchange
rates in effect at the end of 2007). In accordance with this new
lease, total rent paid by Hasbro Canada to CTM for the lease of
the office and warehouse facility in 2007 was approximately
$535,000 U.S. at exchange rates in effect at the end of
2007. In management’s opinion, this lease is on terms at
least as favorable as would otherwise presently be obtainable
from unrelated parties.
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Lucas Licensing Ltd. (“Licensing”) and Lucasfilm Ltd.
(“Film” and together with “Licensing”,
“Lucas”) formerly owned exercisable warrants to
purchase an aggregate of 15,750,000 shares of Common Stock.
These warrants were issued to Lucas in connection with
arms-length negotiations between Lucas and the Company pursuant
to which the Company obtained certain licensed rights related to
the STAR WARS properties. In January 2003, the Company amended
its license with Licensing for the manufacture and distribution
of STAR WARS toys and games. Under the amended agreement the
term was extended by ten years and is expected to run through
2018. In addition, the minimum guaranteed royalties due to
Licensing were reduced by $85 million. In a separate
agreement, the warrants previously granted to Lucas were also
amended. Under this warrant amendment, the terms of each of the
warrants issued to Lucas were extended by ten years. The warrant
amendment agreement also provided the Company with an option
through October 2016 to purchase all of these warrants from
Lucas for a price to be paid at the Company’s election of
either $200 million in cash or $220 million in Common
Stock, such stock being valued at the time of the exercise of
the option. The Company exercised this right in May of 2007 and
repurchased all of the warrants for Common Stock held by Lucas
for $200 million in cash. Lucas no longer holds any
warrants for Common Stock. In fiscal 2007, the Company paid an
aggregate of approximately $6.1 million in royalties to
Licensing pursuant to license agreements entered into at arms
length in the ordinary course of business.
In December 2005 the Company entered into a three-year
arrangement with Vurv Technologies, Inc. (formerly Recruitmax
Software, Inc.) (“Vurv”) pursuit to which Vurv
supplies the Company with applicant tracking and recruitment
software and services. Under this agreement the Company expects
to pay Vurv approximately $292,000 over the course of the
three-year term. In fiscal 2007 the Company paid Vurv $57,143 of
the total estimated fee of $292,000 (the Company had previously
paid an aggregate of $144,345 in fiscal 2005 and fiscal 2006).
Jim Philip, who is a shareholder of Vurv, is the brother of
Edward M. Philip, one of the Company’s directors.
Alfred J. Verrecchia, the Company’s President and Chief
Executive Officer, is Chairman of Lifespan, a hospital holding
company. Three of Lifespan’s member hospitals are the
Hasbro Children’s Hospital, the Bradley Hospital and the
Miriam Hospital. In fiscal 2007, the Company provided
approximately $830,000 in aggregate of money and in-kind
donations to the Hasbro Children’s Hospital, the Bradley
Hospital and the Miriam Hospital. Michael Verrecchia, son of
Alfred J. Verrecchia, is employed by the Company as a Director
of Marketing. For fiscal 2007, Michael Verrecchia was paid an
aggregate salary and bonus of $177,324.
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This excerpt taken from the HAS DEF 14A filed Apr 16, 2007. CERTAIN
RELATIONSHIPS AND RELATED PARTY TRANSACTIONS
The Company has a policy that any transaction which would
require disclosure under Item 404(a) of
Regulation S-K
of the rules and regulations of the United States Securities and
Exchange Commission, with respect to a director or nominee for
election as a director, must be reviewed and approved or
ratified by the Company’s full Board, excluding any
director interested in such transaction. All other related party
transactions which would require disclosure under
Item 404(a), including, without limitation, those involving
executive officers of the Company, must be reviewed and approved
or ratified by either the Company’s full Board or a
committee of the Board which has been delegated with such duty.
Any such related party transactions will only be approved or
ratified if the Board, or the applicable committee of the Board,
determines that such transaction will not impair the involved
person’s service to, and exercise of judgment on behalf of,
the Company, or otherwise create a conflict of interest which
would be detrimental to the Company. This policy is contained in
Section 20, entitled “Code of Conduct; Conflicts of
Interest” of the Company’s Corporate Governance
Principles. Although the Company adopted this policy in 2007,
all of the transactions disclosed below, even those entered into
before this policy was adopted, have been reviewed and approved
or ratified by the Company’s Board.
The Company’s wholly-owned subsidiary, Hasbro Canada
Corporation (“Hasbro Canada”), leases an office and
warehouse facility from Central Toy Manufacturing Inc.
(“CTM”), a real estate corporation which is 25% owned
by the estate of Merrill Hassenfeld, a former Chief Executive
Officer and director of the Company. Sylvia K. Hassenfeld, a
former director of the Company and mother of the Company’s
Chairman, Alan G. Hassenfeld, is executrix and a beneficiary of
the estate of Merrill Hassenfeld. During 2000, the CTM lease was
renewed for a three-year term ending on January 31, 2004 at
rentals of approximately $579,000, $589,000 and $599,000
Canadian for the three years, respectively. During 2003 a new
lease was signed for a six-year term ending on January 31,
2010, with one three-year renewal option that Hasbro Canada can
exercise at the end of the term. The new lease also provided
Hasbro Canada with a right to terminate the lease on
January 31, 2007, or at any time thereafter, upon six
months’ written notice. The rent provided for in this
six-year lease is $525,000 Canadian per year (approximately
$450,250 U.S. at exchange rates in effect at the end of
2006). In accordance with this new lease, total rent paid by
Hasbro Canada to CTM for the lease of the office and warehouse
facility in 2006 was approximately $450,250 U.S. at
exchange rates in effect at the end of 2006. In
management’s opinion, this lease is on terms at least as
favorable as would otherwise presently be obtainable from
unrelated parties.
Lucas Licensing Ltd. (“Licensing”) and Lucasfilm Ltd.
(“Film” and together with “Licensing”,
“Lucas”) own in the aggregate exercisable warrants to
purchase 15,750,000 shares of Common Stock which were
obtained in arms-length negotiations with the Company in
connection with the Company’s obtaining certain rights
related to the STAR WARS properties. The Common Stock subject to
such warrants would, if all warrants were fully exercised,
constitute approximately 8.9% of the Company’s outstanding
shares as of March 1, 2007. Accordingly, under SEC
Rule 13d-3,
George W. Lucas, Jr., as owner, director and an officer of
Film and Licensing, may be deemed to own approximately 8.9% of
the Company’s outstanding shares. See “Voting
Securities and Principal Holders Thereof.” In fiscal 2006,
the Company paid an aggregate of approximately $2.4 million
in royalties to Licensing pursuant to license agreements entered
into at arms length in the ordinary course of business.
In January 2003, the Company amended its license with Licensing
for the manufacture and distribution of STAR WARS toys and
games. Under the amended agreement the term was extended by ten
years and is expected to run through 2018. In addition, the
minimum guaranteed royalties due to Licensing were reduced by
$85 million. In a separate agreement, the warrants
previously granted to Lucas were also amended. Under this
warrant amendment, the terms of each of the warrants issued to
Lucas were extended by ten years. The warrant amendment
agreement provides the Company with an option through October
2016 to purchase all of these warrants from Lucas for a price to
be paid at the Company’s election of either
$200 million in cash or $220 million in Common Stock,
such stock being valued at the time of the exercise of the
option. Also, the warrant amendment agreement provides Lucas
with an option through January 2008 to sell all of these
warrants to the Company for a price to be paid at the
Company’s election of either $100 million in cash or
$110 million in Common Stock, such stock being valued at
the time of the exercise of the option.
In December 2005 the Company entered into a three-year
arrangement with Vurv Technologies, Inc. (formerly Recruitmax
Software, Inc.) (“Vurv”) pursuit to which Vurv
supplies the Company with applicant tracking and
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recruitment software and services. Under this agreement the
Company expects to pay Vurv approximately $292,000 over the
course of the three-year term. In fiscal 2006 the Company paid
Vurv $5,742 of the total estimated fee of $292,000 (the Company
had previously paid $137,600 in fiscal 2005). Jim Philip, who is
a member of the board of directors and a shareholder of Vurv, is
the brother of Edward M. Philip, one of the Company’s
directors.
Alfred J. Verrecchia, the Company’s President and Chief
Executive Officer, is Chairman of Lifespan, a hospital holding
company. Two of Lifespan’s member hospitals are the Hasbro
Children’s Hospital and the Miriam Hospital. In fiscal
2006, the Company provided approximately $700,000 in aggregate
of money and in-kind donations to the Hasbro Children’s
Hospital and the Miriam Hospital.
Michael Verrecchia, son of Alfred J. Verrecchia, is employed by
the Company as a Director of Marketing. For fiscal 2006, Michael
Verrecchia was paid an aggregate salary and bonus of $160,541.
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