Schedule 14a information


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NameSchedule 14a information
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and Stock Option Committee during 2001 had at any time been an officer or

employee of the Company or of any of its subsidiaries. No executive officer of

the Company served as a member of the
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compensation committee or board of directors of any other entity which had an

executive officer serving as a member of the Company's Board or Compensation and

Stock Option Committee during 2001.
SHAREHOLDER PROPOSAL

(PROPOSAL NO. 2)
INTRODUCTION
The following proposal, WHICH IS OPPOSED BY THE BOARD, would require the

affirmative vote of a majority of all shares present (in person or by proxy) and

entitled to vote at the meeting to be approved. Accordingly, an abstention or a

broker non-vote would be the equivalent of a vote against the shareholder

proposal.
The New York City Teachers' Retirement System, which represents that it is

the beneficial owner of shares of Common Stock with a market value of at least

$2,000 and has held such shares continuously for at least one year, has

submitted the following resolution and supporting statement for inclusion in

this Proxy Statement. Upon a written or oral request made to the Secretary of

the Company, the Company will provide the address of the New York City Teachers'

Retirement System to any shareholder of the Company.
REPEAL CLASSIFIED BOARD
Submitted on behalf of the New York City Teachers' Retirement System by

Alan G. Hevesi, Comptroller of the City of New York.
BE IT RESOLVED, that the stockholders of Hasbro request that the Board of

Directors take the necessary steps to declassify the Board of Directors and

establish annual elections of directors, whereby directors would be elected

annually and not by classes. This policy would take effect immediately, and be

applicable to the re-election of any incumbent director whose term, under the

current classified system, subsequently expires.
SUPPORTING STATEMENT
We believe that the ability to elect directors is the single most important

use of the shareholder franchise. Accordingly, directors should be accountable

to shareholders on an annual basis. The election of directors by classes, for

three-year terms, in our opinion, minimizes accountability and precludes the

full exercise of the rights of shareholders to approve or disapprove annually

the performance of a director or directors.
In addition, since only one-third of the Board of Directors is elected

annually, we believe that classified boards could frustrate, to the detriment of

long-term shareholder interest, the efforts of a bidder to acquire control or a

challenger to engage successfully in a proxy contest.
We urge your support for the proposal to repeal the classified board and

establish that all directors be elected annually.
* * *
RESPONSE OF THE HASBRO, INC. BOARD OF DIRECTORS
YOUR BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE AGAINST PROPOSAL NO.

2 FOR THE FOLLOWING REASONS:
Under the Company's Restated Articles of Incorporation, the Board is

divided into three classes with directors elected to staggered three-year terms.

The Board of Directors believes that a classified board offers important

advantages to shareholders, is in the best interests of the Company and its

shareholders and should not be changed.

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The Board believes that a classified board enhances continuity and

stability in the Company's management and policies since a majority of the

directors at any given time will have had prior experience and familiarity with

the business of the Company. This continuity and stability, which allows

directors to build on their past experience, develop the industry knowledge and

perspective necessary for the development of sound strategic planning and plan

for a reasonable period of time in the future, facilitates more effective

long-term corporate strategies and allows the Board to provide informed

oversight of the Company's policies. As such, the Board believes that a

classified structure is integral to increasing the Company's value to

shareholders. Moreover, such continuity helps the Company attract and retain

qualified individuals willing to commit the time and dedication necessary to

understand the Company, its operations and competitive environment.
A classified board protects shareholders against potentially coercive

takeover tactics, whereby a party attempts to acquire control of the Company on

terms that do not offer the greatest value to all shareholders. Because a

classified board prevents the immediate removal of directors, any person seeking

to acquire control of the Company is encouraged to negotiate with the

experienced directors and management of the Company. This helps ensure that the

Board has sufficient time to develop and consider appropriate strategies and

alternatives and thereby enhances its ability to negotiate the best result for

all shareholders of the Company. The Board believes that a classified board

enhances the ability to negotiate favorable terms with proponents of unfriendly

or unsolicited proposals and does not preclude takeover offers.
The Board is committed to corporate accountability and does not accept the

proposition that a classified board insulates directors from responsibility. All

directors are required to uphold their fiduciary duties to the Company and its

shareholders and the same standards of performance apply to directors regardless

of the length of their term of office. In addition, directors of the Company are

compensated, in part, with stock options and are further required to defer a

minimum of 20% of their outside directors' annual retainer into a Company

phantom stock account. Stock-based compensation aligns the interests of

directors with those of the Company and its shareholders by providing directors

with an ownership stake in the Company and its performance.
A classified board permits shareholders to annually change one-third of the

directors and thereby substantially change the Board's composition and

character. Corporate accountability depends on the selection of responsible and

experienced individuals, not on whether they serve terms of one year or three.

The Board understands that it should be responsive to shareholders and has taken

steps to assure corporate accountability through such measures as maintaining a

majority of non-employee directors, and having only non-employee directors on

the Audit Committee, the Compensation and Stock Option Committee, and the

Nominating and Governance Committee.
Finally, shareholders should be aware that adoption of this shareholder

proposal would not eliminate board classification and institute the annual

election of directors, but would constitute merely a recommendation by the

shareholders that the Board consider enacting such a change. Further action by

the Board and shareholders would be required to amend the By-Laws and Restated

Articles of Incorporation of the Company.
For the reasons outlined above, the Board has concluded that a classified

board remains in the best interests of the Company and its shareholders and thus

is opposed to the shareholder proposal.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE AGAINST PROPOSAL NO.

2.
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SHAREHOLDER PROPOSAL

(PROPOSAL NO. 3)
INTRODUCTION
The following proposal, WHICH IS OPPOSED BY THE BOARD, would require the

affirmative vote of a majority of all shares present (in person or by proxy) and

entitled to vote at the meeting to be approved. Accordingly, an abstention or a

broker non-vote would be the equivalent of a vote against the shareholder

proposal.
A group of the Company's shareholders have submitted the following

resolution and supporting statement for inclusion in this Proxy Statement. Upon

a written or oral request made to the Secretary of the Company, the Company will

provide the names, addresses and shareholdings of the proponents of this

resolution to any shareholder of the Company.
HASBRO-GLOBAL HUMAN RIGHTS STANDARDS
WHEREAS, Hasbro currently has extensive overseas operations,
WHEREAS, reports of human rights abuses in the overseas subsidiaries and

suppliers of some U.S.-based corporations has led to an increased public

awareness of the problems of child labor, "sweatshop" conditions, and the denial

of labor rights in U.S. corporate overseas operations,
WHEREAS, corporate violations of human rights in these overseas operations can

lead to negative publicity, public protests, and the loss of consumer confidence

which can have a negative impact on shareholder value. The toy industry is

especially vulnerable to negative publicity of this sort,
WHEREAS, a number of corporations have implemented independent monitoring

programs with respected human rights and religious organizations to strengthen

compliance with international human rights norms in subsidiary and supplier

factories. The toy industry is increasingly under scrutiny just as the apparel

industry and footwear industry has been.
- Dozens of companies have worked diligently to improve their vendors'

compliance with their codes. For example, Mattel has created an

Independent Monitoring Council, composed of outsiders with full access to

vendors operations. This council publishes public reports that highlight

problems as well as positive leadership demonstrated by vendors. This

allows management to review the situation and take corrective action as

needed.
- Hasbro has had a Code in place since 1993, but does not report to

investors or consumers on the effectiveness of its Code nor does Hasbro

use independent outside monitors to review compliance.
WHEREAS, these standards incorporate the conventions of the United Nations'

International Labor Organization (ILO) on workplace human rights which include

the following principles:
- All workers have the right to form and join trade unions and to bargain

collectively. (ILO Conventions 87 and 98)
- Workers representatives shall not be the subject of discrimination and

shall have access to all workplaces necessary to enable them to carry out

their representation functions. (ILO Convention 135)
- There shall be no discrimination or intimidation in employment. Equality

of opportunity and treatment shall be provided regardless of race, color,

sex, religion, political opinion, age, nationality, social origin, or

other distinguishing characteristics. (ILO Convention 100 and 111)
- Employment shall be freely chosen. There shall be no use of force,

including bonded or prison labor. (ILO Conventions 29 and 105)
- There shall be no use of child labor. (ILO Convention 138)
WHEREAS, we believe independent monitoring of corporate adherence to these

standards is essential if consumer and investor confidence in our company's

commitment to human rights is to be maintained. Thus
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we believe this shareholder request is appropriate to encourage Hasbro to move

ahead more aggressively on this important issue.
RESOLVED that shareholders request that Hasbro commit itself to the

implementation of a code of corporate conduct based on the aforementioned ILO

human rights standards by its international suppliers and in its own

international production facilities and commit to a program of outside,

independent monitoring of compliance with these standards, with annual reporting

to shareholders (excluding proprietary information).
RESPONSE OF THE HASBRO, INC. BOARD OF DIRECTORS
YOUR BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE AGAINST PROPOSAL NO.

3 FOR THE FOLLOWING REASONS:
The Board of Directors and Hasbro's management have carefully reviewed the

proposal set forth above and believe that any changes to Hasbro's current Code

of Conduct and compliance procedures would neither help Hasbro better fulfill

its well-established and continuing commitment to humane global working

conditions nor add value to the shareholders of the Company. Hasbro's existing

policies and practices, which are comprehensive and progressive, already address

the concerns expressed in the above proposal and ensure compliance with business

ethics principles, as described in more detail below.
In 1993, Hasbro established its Global Business Ethics Principles ("Code of

Conduct") to ensure that products manufactured by Hasbro are not produced under

inhumane or exploitative conditions. Participation in the Hasbro program is

mandatory for all suppliers and vendors who do business with Hasbro. Among many

important areas, the Code of Conduct governs:
- child labor (no person younger than fifteen or younger than the age for

completing compulsory education in the country of manufacture (where such

age is higher than fifteen) may be employed to produce Hasbro products);
- working hours and compensation (employers must comply with all applicable

wage and hour laws or, if prevailing industry wage standards are higher,

then employers must comply with or exceed these standards);
- forced, prison, or indentured labor (any person employed to produce

Hasbro products must be voluntarily employed, except that rehabilitative

programs which provide for employment may be assessed by Hasbro on a case

by case basis);
- health and safety (employers must operate facilities in a healthy and

safe manner, including, but not limited to, providing fire prevention,

first aid, and hazardous waste disposal);
- abuse and discrimination (employers must treat employees with dignity and

respect and shall not subject employees to abuse, cruel or unusual

disciplinary practice, or discrimination);
- freedom of association (employees have the right to choose (or not) to

affiliate with legally sanctioned organizations without unlawful

interference); and
- monitoring by Hasbro (Hasbro has the right to conduct periodic on-site

inspections of working and living conditions, including unannounced

visits, audit the production records and practices of the employers and

require employers to promptly address compliance issues or face

termination by Hasbro).
As indicated above, Hasbro's Code of Conduct clearly sets forth the

standards under which vendors may manufacture Hasbro products, with auditing and

monitoring rights for Hasbro. To date, all factories located in the Far East

which manufacture products for Hasbro have been audited by Hasbro inspectors and

by independent firms hired by Hasbro. Hasbro engages two independent auditing

firms to audit manufacturers' compliance with the Code of Conduct and local law.

Since 1994, these independent monitors have conducted 624 supplier facility
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