December 30, 1999
Mr. John T. O'Neill
28 Narragansett Bay Avenue
Warwick, RI 02889
Dear John:
In connection with your retirement from employment with Hasbro,
Inc. (the "Company"), on December 31, 1999, the "Company" will
pay you the basic early retirement benefits described in Section
2 of the attached "Description of Early Retirement Benefits" if
you do not sign and return this letter postmarked by February 22,
2000.
If you timely sign and return this letter, the Company will pay
and provide you the enhanced early retirement benefits subject to
the terms and conditions outlined in Section 1 of the attached
"Description of Early Retirement Benefits". By signing and
returning this letter you will be agreeing to the terms and
conditions set forth in the numbered paragraphs below, including
the release of claims set forth in paragraph 2. You should
consult with your own attorney before signing this letter.
If after reviewing this letter with your attorney, you find the
terms and conditions are satisfactory to you, you should sign and
return this letter to Bob Carniaux, Sr. Vice President, Human
Resources in the enclosed Airborne Express return envelope
postmarked by February 22, 2000. If you sign this letter, you
may change your mind and revoke your agreement during the seven
(7) day period after you have signed it. If you do not so
revoke, this letter will become a binding agreement between you
and the Company upon the expiration of the seven (7) day
revocation period.
The following numbered paragraphs set forth the terms and
conditions which will apply if you timely sign and return this
letter and do not revoke it within the seven (7) day revocation
period:
1. Description of Early Retirement Benefits. The early
retirement benefits to be paid to you if you timely sign and
return this letter are as described in Section 1 of the attached
"Description of Early Retirement Benefits". The payment of these
benefits is subject to the terms of this letter. You acknowledge
and agree that the benefits payable to you if you timely sign and
return this letter are more than the Company would be obligated
to pay or provide to you if you did not sign and return this
letter.
2. Release. You hereby fully, forever, irrevocably and
unconditionally release, remise and discharge the Company, and
any subsidiary or affiliated organization of the Company or their
current or former officers, directors, stockholders, corporate
affiliates, attorneys, agents and employees (the "Released
Parties") from any and all claims, charges, complaints, demands,
actions, causes of action, suits, rights, debts, sums of money,
costs, accounts, reckonings, covenants, contracts, agreements,
promises, doings, omissions, damages, executions, obligations,
liabilities, and expenses (including attorneys' fees and costs),
of every kind and nature, known or unknown, which you ever had or
now have against the Released Parties, including, but not limited
to, all claims arising out of your employment, all claims arising
out of the retirement of your employment, all claims arising from
any failure to re-employ you, all claims of race, sex, national
origin, handicap, religious, sexual preference, benefit and age
discrimination, all employment discrimination claims under Title
VII of the Civil Rights Act of 1964, 42 U.S.C. Sec. 2000 et seq.,
the Age Discrimination in Employment Act, 29 U.S.C. Sec. 621 et
JOHN T. O'NEILL
December 30, 1999
Page 2
seq., the Americans with Disabilities Act of 1990, 29 U.S.C.
Sec. 12101 et seq., the Employee Retirement Income Security Act
of 1974, 29 U.S.C. Sec. 1001 et seq., and similar state or local
statutes, wrongful discharge claims, common law tort, defamation,
breach of contract and other common law claims, and any claims
under any other federal, state or local statutes or ordinances
not expressly referenced above; provided, that nothing contained
herein will be construed to release your rights, as a former
employee, officer and director of the Company and various of its
divisions and subsidiaries, to indemnification under applicable
by-laws and Company policies, or to your rights to vested
benefits under Company-sponsored employee benefits plans.
3. Covenant Not To Sue. You represent and warrant that you
have not filed any complaints, charges, or claims for relief
against the Released Parties. You further agree not to bring any
complaints, charges or claims against the Released Parties with
respect to any matters arising out of your employment with or
retirement from employment with the Company.
4. Proprietary Information. You acknowledge and reaffirm your
representations and obligations as set forth in the Invention,
Assignment and Proprietary Information Agreement which you
previously signed in connection with your employment with the
Company.
5. Legal Expenses. The Company agrees to pay reasonable and
documented legal expenses, up to a maximum of fifteen thousand
dollars ($15,000), incurred by you in connection with drafting
this Letter Agreement and related documents.
6. Nature of Agreement. You and the Company understand and
agree that this letter agreement is a early retirement and
settlement agreement and does not constitute an admission of
liability or wrongdoing on the part of you, the Company, or any
other person.
7. Amendment. This letter agreement shall be binding upon the
parties and may not be modified in any manner, except by an
instrument in writing of concurrent or subsequent date signed by
a duly authorized representative of the parties hereto. This
agreement is binding upon and shall inure to the benefit of the
parties and their respective agents, assigns, heirs, executors,
successors and administrators. 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 or waiver of any right on any other occasion.
8. Validity. Should any provision of this letter agreement
be declared or be determined by any court of competent
jurisdiction to be illegal or invalid, the validity of the
remaining parts, terms, or provisions shall not be affected
thereby and said illegal and invalid part, term or provision
shall be deemed not to be a part of this agreement.
JOHN T. O'NEILL
December 30, 1999
Page 3
9. Confidentiality. You understand and agree that the terms
and contents of this letter agreement, and the contents of the
negotiations and discussions resulting in this agreement, shall
be maintained as confidential by you and your agents and
representatives, and any dispute resolved by this agreement shall
also remain confidential, and none of the above shall be
disclosed except to the extent required by federal or state law
or as otherwise agreed to in writing by an officer of the
Company; provided, that you shall not be under any restraint with
respect to disclosure of your continuing obligations to the
Company under Section 4 and 13 hereof.
10. Entire Agreement and Applicable Law. This letter
agreement contains and constitutes the entire understanding and
agreement between the parties hereto with respect to your early
retirement benefits and settlement of claims against the Company
and cancels all previous oral and written negotiations,
agreements, commitments, and writings in connection therewith.
This agreement shall be governed by the laws of the State of
Rhode Island to the extent not preempted by federal law.
11. Acknowledgments. You acknowledge that you have been given
at least twenty-one (21) days to consider this letter agreement
and that the Company advised you to consult with any attorney of
your own choosing prior to signing this letter. You may revoke
this agreement for a period of seven (7) days after signing this
letter, and the agreement shall not be effective or enforceable
until the expiration of this seven (7) day revocation period.
Additionally, you will receive another seven (7) day revocation
period if the Company's Compensation and Stock Option Committee
fails to approve the items described in Section 1(j) of the
attached Description of Early Retirement Benefits, said seven (7)
days to run from receipt by you of written notice of the
Compensation and Stock Option Committee's decision.
12. Voluntary Assent. You affirm that no other promises or
agreements of any kind have been made to or with you by any
person or entity whatsoever to cause you to sign this letter
agreement, and that you fully understand the meaning and intent
of this agreement. You state and represent that you have had an
opportunity to fully discuss and review the terms of this
agreement with an attorney. You further state and represent that
you have carefully read this letter, understand the contents
herein, freely and voluntarily assent to all of the terms and
conditions hereof, and sign your name of your own free act.
13. Covenant Not to Compete.
(a). You agree that you will not, without written consent of
the Company, at any time during which Early Retirement Benefits
are payable under this letter agreement and for a period of two
years from the date Early Retirement Benefits cease under this
letter agreement, directly or indirectly, own, manage, operate,
join, control or participate in the ownership, management,
operation or control of, render services or advice to, or be
connected with, as partner, stockholder, director, officer,
agent, employee, consultant or otherwise, any business, firm or
corporation which competes with the Company in any country or
line of business in which the Company is engaged.
(b). You agree that during the period in which Early
Retirement Benefits are paid and thereafter for a period of two
years, you will not interfere with any relationship, contractual
or otherwise, between the Company and any other party, including;
without limitation, any customer, supplier, distributor, lessor
or lessee, licenser or licensee, commercial or investment banker.
(c). You understand, acknowledge and agree that the
provisions of this Section 12 shall survive the termination of
this letter agreement.
JOHN T. O'NEILL
December 30, 1999
Page 4
If you have any questions about the matters covered in this
letter, please call Bob Carniaux, Sr. Vice President, Human
Resources at (401) 727-5654.
Very truly yours,
/s/ Alan G. Hassenfeld
Alan G. Hassenfeld
Chairman & CEO
Hasbro, Inc.
JOHN T. O'NEILL
December 30, 1999
Page 5
I hereby agree to the terms and conditions set forth above and in
the attached Description of Early Retirement Benefits. I intend
that this letter will become a binding agreement between me and
the Company if I do not revoke my acceptance within seven (7)
days.
/s/ John T. O'Neill
Signature ---------------------
(Employee's Name)
February 18, 2000
Date: --------------------
To be returned in enclosed envelope by February 22, 2000.
HASBRO, INC.
DESCRIPTION OF EARLY RETIREMENT BENEFITS
Name of Employee: JOHN T. O'NEILL
Date of Offer: December 30, 1999
Retirement Date: December 31, 1999
If you timely sign and return the attached letter and it becomes
a binding contract between you and the Company, the Company will
pay you the enhanced early retirement subject to the terms and
conditions outlined in Section 1 below, the terms and conditions
contained in the attached letter and description.
If you do not timely sign and return the attached letter, the
Company will pay you the basic early retirement benefits
described in Section 2 below, subject to the terms and conditions
contained in this description and the Company's Early Retirement
Benefits Plan for Salaried Employees.
Section 1. Enhanced Early Retirement Benefits. If you timely
sign and return the attached letter and it becomes a binding
contract between you and the Company, you will be entitled to an
enhanced program of early retirement benefits consisting of the
following. These enhanced early retirement payments are offered
in consideration of your agreement to retire early:
(a) early retirement payment in the amount of $960,000 paid in
five installments as follows: first payment by February 28, 2000
in the amount of $135,000, three quarterly payments in the amount
of $200,000 paid on March 31, 2000, June 30, 2000, September 30,
2000, and a final payment on January 3, 2001 in the amount of
$225,000.
(b) early retirement pay at the base rate of $20,280.78 bi-
weekly for 43 pay periods beginning January 21, 2000 and ending
on August 31, 2001, (the period between December 31, 1999 and
August 31, 2001 being sometimes hereinafter referred to as the
"early retirement period"). In addition, since your first week
of early retirement will be during the middle of a bi-weekly pay
period, your first week of early retirement pay (January 3, 2000
- January 7, 2000) will be for $10,140.39 and will be combined
with your last week of employment pay in the amount of $10,140.39
for a total of $20,280.78 which will be paid on January 7, 2000.
(c) an enhanced deferred compensation program where you will
defer 40% of your early retirement pay in the amount of $8,112.31
bi-weekly on a pre-tax basis for 43 pay periods and one pay
period of 40% of your first week's retirement pay in the amount
of $4,056.16, which will be made on January 7, 2000 and
thereafter in bi-weekly deferrals (the "Deferrals"). The
Deferrals will constitute a separate deferred compensation
program ("Program") for you in consideration of your early
retirement, the terms of which shall be consistent with the terms
of the Hasbro, Inc., Nonqualified Deferred Compensation plan (the
"DCP"), in which you will continue to participate including,
without limitation, the beneficiary designation and trust
provisions, except to the extent inconsistent with the following
terms: For purposes of your Program, the Deferrals will be deemed
allocated to the same funds and in the same percentages as your
election under the DCP and your distributions will be made in ten
annual installments in a manner consistent with the DCP, but not
commencing until the month next following the termination of your
early retirement payments described above;
(d) an award equal to your target incentive (i.e. $290,015)
payable as a management bonus for 1999 when bonuses are paid by
the Company in Q1 of 2000;
JOHN T. O'NEILL
December 30, 1999
DESCRIPTION OF EARLY RETIREMENT BENEFITS (CONTINUED)
- 2 -
(e) continuance of your current level of basic, supplemental
and dependent life insurance with the Company and you sharing the
cost for this coverage on the same basis as the cost is shared
between the Company and similarly situated active employees
during the early retirement period. Long-term disability benefit
ends on December 31, 1999;
(f) continuance of your current medical and dental coverage
during the early retirement period, with the Company and you
sharing the cost for this coverage on the same basis as the cost
is shared between the Company and similarly situated active
employees during the same period, and with your and your
dependents respective rights to continued coverage (or conversion
to an individual policy) at your own expense where available
beginning when the extended coverage under this item ends and
continuing for the maximum period permitted by the law known as
COBRA notwithstanding the continuation of medical and dental
coverage during the early retirement period;
(g) continuance of your leased Company executive automobile
through the end of the current lease (i.e. January 2002);
(h) continuance of use of your personal computer during the
early retirement period provided that you will be responsible for
all operating and maintenance costs;
(i) continuance of reimbursement for reasonable expenses for
personal executive income tax filing preparation and advising
services for tax years 1999 and 2000;
(j) the vesting of all previously granted unvested stock
options will be accelerated to December 31, 1999. You will be
granted an extended exercise period expiring 36 months after the
end of the early retirement period for all your outstanding
premium priced stock options. You will be granted an extended
exercise period of 12 months after the end of the early
retirement period for: (A) all regular stock options granted in
and after 1997, and (B) 22,500 regular stock options granted on
December 21, 1993. All other regular stock options held by you
will be canceled. All of the terms in this section 1 (j) are
subject to the approval of the Compensation and Stock Option
Committee of the Board of Directors of Hasbro, Inc.
(k) during the early retirement period, your right to
reimbursement for income tax service expenses, executive
automobile, personal computer, continuance of basic, supplemental
and dependent life insurance coverage partially at Company
expense, continuance of medical and dental coverage partially at
Company expense each shall end to the extent that you are
provided with similar coverage(s) or benefit(s) through such new
employment.
Section 2. Basic Benefits. If you do not timely sign and
return the attached letter, you will be entitled to a
program of early retirement benefits consisting of:
(a) early retirement pay at your base rate of pay (as in
effect immediately before termination and exclusive of any
bonuses, commissions, overtime pay, or other extra forms of
compensation) for three (3) weeks;
(b) a lump sum payment to be made at the end of the period of
early retirement pay for your unused vacation that has been
granted for use in the current year;
JOHN T. O'NEILL
December 30, 1999
DESCRIPTION OF EARLY RETIREMENT BENEFITS (CONTINUED)
- 3 -
(c) continuance of your current level of basic, supplemental
and dependent life insurance with the company and you sharing the
cost for this coverage on the same basis as the cost is shared
between the company and similarly situated active employees
during the period of early retirement pay;
(d) continuance of your current medical and dental coverage
during the period of early retirement pay, with the Company and
you sharing the cost for this coverage on the same basis as the
cost is shared between the Company and similarly situated active
employees during the same period, and with your and your
dependents rights to continued coverage (or conversion to an
individual policy) at your own expense where available beginning
when the extended coverage under this item ends and continuing
for the maximum period permitted by the law known as COBRA
notwithstanding the continuation of medical and dental coverage
during the salary continuation period.
(e) If you begin new employment during the period of early
retirement pay, your right to early retirement pay and
continuance of basic, supplemental and dependent life insurance
coverage and of medical and dental coverage partially at Company
expense shall end when the new employment begins and you shall be
obligated to repay to the Company any early retirement pay paid
to you and any premiums paid by the Company for basic life
insurance coverage and the Company's share of the cost for
medical and dental coverage paid after you begin the new
employment.
Section 3. Other Provisions.
(a) You will be entitled to any benefits payable after or on
account of retirement from employment under any employee pension
or welfare benefit plans, stock option plans, or other plans or
programs or policies of the Company in accordance with their
terms and conditions, unless otherwise stated above in Section 1.
You also will receive a profit sharing payment for fiscal year
1999 on the same basis as other similarly-situated senior
executives. Further, for the purpose of computing your pension
benefit, you will be credited with 1.30435 years of Credited
Service for each 1.0 year of Credited Service actually earned
under the Pension Plan. The benefits attributed to the additional
service credit shall be payable by the Company and not from the
Hasbro, Inc. Pension Plan or the Hasbro, Inc. Supplemental
Benefit Retirement Plan, but shall be included and secured under
any trust established with respect to the Hasbro, Inc.,
Supplemental Benefit Retirement Plan, on the same terms and
subject to the same conditions as benefits under the Hasbro, Inc.
Supplemental Benefits Retirement Plan;
(b) The Company may withhold from any payment described
herein:
(1) any federal, state, or local income or payroll taxes
required by law to be withheld with respect to such payment;
(2) such sum as the Company may reasonably estimate is
necessary to cover any taxes for which the Company may be liable
and which may be assessed with regard to such payment; and
JOHN T. O'NEILL
December 30, 1999
DESCRIPTION OF EARLY RETIREMENT BENEFITS (CONTINUED)
- 4 -
(3) such other amounts as appropriately may be withheld
under the Company's payroll policies and procedures from time to
time in effect.
(c) The early retirement benefits described herein are the
maximum benefits that the Company will pay. To the extent that
the Company owes you any amounts in the nature of early
retirement benefits under any other program, policy or plan of
the Company, or to the extent that any federal, state or local
law, including, without limitation, so-called "plant closing"
laws, requires the Company to give advance notice or make a
payment of any kind to you because of your involuntary
termination due to a layoff, reduction in force, plant or
facility closing, sale of business, or similar event, the
benefits provided hereunder or under the other arrangement shall
either be reduced or eliminated to avoid any duplication of
payment;
(d) In the event of your death during the early retirement
period, the early retirement pay shall cease at death.