EXHIBIT 10(hh)
DEFERRED RESTRICTED STOCK UNIT AGREEMENT
THIS AGREEMENT, entered into as of the Grant Date (as
defined in paragraph 1), by and between the Participant (as
defined in paragraph 1) and Hasbro, Inc. (the "Company");
WITNESSETH THAT:
WHEREAS, the Company maintains the Employee Non-
Qualified Stock Plan (the "Plan"), a copy of which is
annexed hereto as Exhibit A and the provisions of which are
incorporated herein as if set forth in full, and the
Participant has been selected by the Compensation and Stock
Option Committee of the Board of Directors of the Company
(the "Committee"), which administers the Plan, to receive
an award of deferred restricted stock units under the Plan;
NOW, THEREFORE, IT IS AGREED, by and between the Company
and the Participant, as follows:
1. Terms of Award. The following terms used in this
Agreement shall have the meanings set forth in this
paragraph 1:
A. The "Participant" is NAME.
B. The "Grant Date" is DATE.
C. The "Vesting Period" is the period beginning on the
Grant Date and ending on DATE.*
D. The number of deferred restricted stock units
("Stock Units") awarded under this Agreement shall be
Stock Units. Stock Units are fictional shares of
the Company's common stock, par value $.50 per share
("Common Stock") granted under this Agreement and subject
to the terms of this Agreement and the Plan.
E. For record-keeping purposes only, the Company shall
maintain an account (a "Stock Unit Account") for the
Participant where Stock Units shall be accumulated and
accounted for. Without limiting the provisions of Section
6 of the Plan, in the event the Company pays a stock
dividend or reclassifies or divides or combines its
outstanding Common Stock then an appropriate adjustment
* Vesting period is generally three years
shall be made in the hypothetical number of shares of.Common
Stock held in the Stock Unit Account. The Stock Unit
Account will reflect fictional fractional shares of Common
Stock to the nearest hundredth of a share.
Other terms used in this Agreement are defined pursuant to
paragraph 8 or elsewhere in this Agreement.
2. Award. The Participant is hereby granted the
number of Stock Units set forth in paragraph 1.
3. No Dividends and No Voting Rights. The Participant
shall not be entitled to any dividends or voting rights
with respect to the Stock Units or Stock Unit Account.
4. Vesting and Forfeiture of Units. If the
Participant's Date of Termination (as defined below) does
not occur during the Vesting Period, then, at the end of
the Vesting Period, the Participant shall become vested in
the Stock Units and the Stock Unit Account. The
Participant shall become vested in the Stock Units and the
Stock Unit Account, prior to the end of the Vesting Period,
as follows:
A. The Participant shall become vested in the Stock
Units and the Stock Unit Account as of the Participant's
Date of Termination prior to the expiration of the Vesting
Period, if the Participant's Date of Termination occurs by
reason of (i) the Participant's retirement at his or her
normal Retirement Date (as defined below), (ii) the
Participant's retirement at an Early Retirement Date (as
defined below), subject to the discretion of the Committee
based, among other things, upon the execution by the
Participant of a "covenant not to compete" in a form
approved by the Board or the Committee, or (iii) if the
Participant has at least one year of Credited Service (as
defined below), the Participant's death or Participant's
suffering a Permanent Physical or Mental Disability (as
defined below).
B. The Participant shall become vested in the Stock
Units and the Stock Unit Account as of the date of a Change
in Control (as defined below), if the Change in Control
occurs prior to the end of the Vesting Period, and the
Participant's Date of Termination does not occur before the
Change in Control date.
The Stock Units and the Stock Unit Account may not be sold,
assigned, transferred, pledged or otherwise encumbered.
Except as otherwise provided in this paragraph 4, if the
Participant's Date of Termination occurs prior to the end
of the Vesting Period, the Participant shall forfeit the
Stock Units and the Stock Unit Account as of the
Participant's Date of Termination.
5. Settlement in Shares of Common Stock. Provided
that the Participant's interest in the Stock Units and the
Stock Unit Account has vested as provided in Section 4
above, the Participant's Stock Unit Account, or a portion
thereof, shall be converted into actual shares of Common
Stock on the earlier to occur of (i) the Participant's Date
of Termination and (ii) any date prior to the last day of
any fiscal year that the Company reasonably determines that
it will not be denied a deduction under Section 162(m) of
the Internal Revenue Code of 1986 (the "Code"), as amended,
for the compensation deemed to be paid to the Participant
under the Code by virtue of the delivery of such actual
shares to the Participant. If the Company would be denied
a full deduction under Section 162(m) of the Code for the
delivery of actual shares to the Participant representing
the value of the Participant's full Stock Unit Account, the
Company shall deliver such number of actual shares as is
equal in value to the deduction it can receive and the
Stock Unit Account shall continue to reflect the balance
thereof not so converted and delivered. Such shares of
Common Stock shall be registered in the name of the
Participant as of the date of conversion and the actual
stock certificate representing such actual shares shall be
delivered to the Participant within a reasonable time
thereafter. To the extent that there are fictional
fractional shares of Common Stock in a Stock Unit Account
upon settlement, such fictional fractions shares shall be
rounded to the nearest whole share.
6. Income Taxes. The Participant shall pay to the
Company promptly upon request, and in any event at the time
the Participant recognizes taxable income in respect of the
shares of Common Stock received by the Participant upon the
conversion of the Participant's Stock Unit Account, an
amount equal to the taxes the Company determines it is
required to withhold under applicable tax laws with respect
to the such shares of Common Stock. Such payment shall be
made in the form of cash, the delivery of shares of Common
Stock already owned or by withholding such number of actual
shares otherwise deliverable pursuant to this Agreement as
is equal to the withholding tax due, or in a combination of
such methods.
7. Non-Competition/Non-Solicitation.
(a) In consideration for the award of the Stock
Units to the Participant pursuant to this Agreement, the
Participant agrees that while employed by the Company and
for a period of one (1) year after termination or cessation
of such employment for any reason, the Participant will not
directly or indirectly:
(1) Engage in any business or enterprise (whether
as an owner, partner, officer, employee, director,
investor, lender, consultant, independent contractor or
otherwise, except as the holder of not more than one
percent (1%) of the combined voting power of the
outstanding stock of a publicly held company) that is
competitive with the Company's business; including but not
limited to, any business or enterprise that develops,
designs, produces, markets, sells or renders any toy or
game.
(2) Either alone or in association with others
solicit, or permit any person or organizations directly or
indirectly to solicit, any individual who at the time of
the solicitation is, or who within the six (6) month period
prior to such solicitation was, an employee of the Company
to leave the employ of the Company or terminate his/her
relationship with the Company.
(b) The geographic scope of this Section 7 shall
extend to anywhere the Company or any of its subsidiaries
or affiliates is doing business at the time of
Participant's termination or cessation of employment with
the Company.
(c) The Participant acknowledges that the
restrictions set forth in this Section 7 are necessary for
the protection of the business and goodwill of the Company
and considers the restrictions to be reasonable for such
purpose. The Participant agrees that any breach of this
Agreement is likely to cause the Company substantial and
irrevocable damage and that any breach of this Section 7
would entail the inevitable use and or disclosure of
proprietary information. Therefore, the Participant agrees
that in the event of any breach of Section 7(a)(1), the
Participant shall forfeit all rights and interest the
Participant had in the Stock Units or, if the Stock Units
have been converted to shares of Common Stock of the
Company pursuant to Paragraph 5 above, Participant shall
immediately return to the Company all such shares of Common
Stock. In the event that any of such shares of Common
Stock have been sold or transferred by the Participant,
Participant shall pay to the Company as liquidated damages
all Net Proceeds (as defined below) Participant realized on
the sale or transfer of any such shares in lieu of
returning such shares. With respect to a sale of shares,
"Net Proceeds" shall be calculated by multiplying the
number of shares of Common Stock sold times the sales
price, without regard to any subsequent market price
increase or decrease, less commission, if any. With
respect to a transfer of shares, "Net Proceeds" shall be
calculated by multiplying the number of shares of
Restricted Stock transferred times the closing price of the
shares on the day of the transfer. The Company and
Participant agree that either the return to the Company of
the shares of Common Stock or the Net Proceeds from any
sale or transfer made by Participant shall be the Company's
sole and exclusive remedy for any breach by the Participant
of Section 7(a)(1). The Participant further agrees that in
the event of any breach of Section 7(a)(2), Company, in
addition to such other remedies which may be available,
shall be entitled to specific performance and other
injunctive relief without posting a bond.
8. Definitions. For purposes of this Agreement, the
terms used in this Agreement shall be subject to the
following:
A. Change in Control. The term "Change in Control"
shall have the meaning ascribed to it in the Plan.
B. Credited Service. The term "Credited Service"
shall mean the period of the employee's employment
considered in determining whether the employee is eligible
to receive benefits under the Company's Pension Plan (or
any successor plan) upon termination of employment.
C. Date of Termination. The Participant's "Date of
Termination" shall be the first day occurring on or after
the Grant Date on which the Participant is not employed by
the Company or any entity directly or indirectly controlled
by the Company (a "Subsidiary"), regardless of the reason
for the termination of employment; provided that a
termination of employment shall not be deemed to occur by
reason of a transfer of the Participant between the Company
and a Subsidiary or between two Subsidiaries; and further
provided that the Participant's employment shall not be
considered terminated while the Participant is on a leave
of absence from the Company or a Subsidiary approved by the
Participant's employer. If, as a result of a sale or other
transaction, the Participant's employer ceases to be a
Subsidiary (and the Participant's employer is or becomes an
entity that is separate from the Company), the occurrence
of such transaction shall be treated as the Participant's
Date of Termination caused by the Participant being
discharged by the employer.
D. Early Retirement Date. The term "Early Retirement
Date" shall mean the day on which a Participant who has
attained age fifty-five (55), but has not reached age
sixty-five (65), with ten (10) or more years of Credited
Service, retires. A Participant is eligible for early
retirement on the first day of the calendar month
coincident with or immediately following the attainment of
age fifty-five (55) and the completion of ten (10) years of
Credited Service, and "early retirement" shall mean
retirement by an eligible Participant at the Early
Retirement Date.
E. Normal Retirement Date. The term "Normal
Retirement Date" shall mean the day on which a Participant
who has attained age sixty-five (65), with five (5) years
of Credited Service, retires. A Participant is eligible
for normal retirement on the first day of the calendar
month coincident with or immediately following the
Participant's attainment of age sixty-five (65) and
completion of five (5) years of Credited Service, and
"normal retirement" shall mean the retirement by an
eligible Participant at the Normal Retirement Date.
F. Permanent Physical or Mental Disability. The term
"Permanent Physical or Mental Disability" shall mean the
Participant's inability to perform his or her job or any
position which the Participant can perform with his or her
background and training by reason of any medically
determinable physical or mental impairment which can be
expected to result in death or to be of long, continued and
indefinite duration.
G. Plan Definitions. Except where the context clearly
implies or indicates the contrary, a word, term, or phrase
used in the Plan is similarly used in this Agreement.
9. Heirs and Successors. This Agreement shall be
binding upon, and inure to the benefit of, the Company and
its successors and assigns, and upon any person acquiring,
whether by merger, consolidation, purchase of assets or
otherwise, all or substantially all of the Company's assets
and business and the Participant and the successors and
permitted assigns of the Participant, including but not
limited to, the estate of the Participant and the executor,
administrator or trustee of such estate, the guardian or
legal representative of the Participant.
10. Administration. The authority to manage and
control the operation and administration of this Agreement
shall be vested in the Committee, and the Committee shall
have all powers with respect to this Agreement as it has
with respect to the Plan. Any interpretation of the
Agreement by the Committee and any decision made by it with
respect to the Agreement is final and binding.
11. Plan Governs. Notwithstanding anything in this
Agreement to the contrary, the terms of this Agreement
shall be subject to the terms of the Plan.
12. Amendment. This Agreement may be amended by
written Agreement of the Participant and the Company,
without the consent of any other person.
13. Entire Agreement. This Agreement and the Plan
contain the entire agreement and understanding of the
parties hereto with respect of the subject matter contained
herein and therein and supersede all prior communications,
representations and negotiations in respect thereof.
14. Severability. The invalidity or unenforceability
of any provision of this Agreement shall not affect the
validity or enforceabilty of any other provision of this
Agreement, and each other provision of this Agreement shall
be severable and enforceable to the extent permitted by law
and any court determining the unenforceability of any
provisions shall have the power to reduce the scope or
duration of such provision to render such provision
enforceable.
IN WITNESS WHEREOF, the Participant has executed this
Agreement, and the Company has caused these presents to be
executed in its name and on its behalf, all as of the Grant
Date.
Participant
- ------------------------
Signature
- ------------------------
Print Name
HASBRO, INC.
By: ----------------------