Management Incentive Plan
2005
Hasbro, Inc.
Management Incentive Plan
1.0
Background
1.1
The Management Incentive Plan
Establishes standard criteria to determine plan eligibility, and overall company, business unit and individual performance objectives.
Establishes target awards based on worldwide band level.
Plan pay out is based on a combination of company, individual, and/or business unit performance.
Provides a rounded assessment of Hasbro's financial success - using a combination of sales, core brand growth, operating margin and returns for company and business unit performance, as well as an individual component.
1.2
Purpose
Hasbro, Inc., herein referred to as “the Company”, has established this plan for the purpose of providing incentive compensation in the form of a cash supplement to the base salaries of those officers, managers, and key employees who contribute significantly to the growth and success of the Company’s business; to attract and retain, in the employ of the Company, individuals of outstanding ability; and to align the interests of those who hold positions of major responsibility in the Company with the interest of the Company’s shareholders.
1.2.1
General Guideline
Amounts awarded under the plan are discretionary at all times.
1.3
Scope
The Plan is applicable to all subsidiaries and divisions of the Company, including the Corporate group on a worldwide basis.
1.3.1
Eligibility
Officers, managers, and key employees, as determined by Management, whose duties and responsibilities contribute significantly to the growth and success of the Company’s business are eligible to participate in the Plan. Eligibility will be determined in accordance with the corporation’s method of job evaluation. Worldwide employees in positions classified in broad bands 30 and above will be eligible to participate.
Eligibility to participate in the Plan does not guarantee the receipt of an award under the Plan. In addition, the incentive awards for executives considered part of the Senior Management Team are subject to the discretion and approval of the Stock Option and Compensation Committee of the Board of Directors of Hasbro, Inc.
1.3.2
Approval of Incentive Awards
The incentive awards for those employees participating in this plan must be approved by the Chief Executive Officer & President (hereinafter, the "CEO") of the Company and the Stock Option and Compensation Committee of the Board of Directors.
2.0
Incentive Award Levels
2.1
Target Incentive Award
Target awards are expressed as a percentage of earned salary for the plan year. For purposes of this Plan, earned salary means all base compensation for the participant for the year in question, which base compensation shall include all base compensation amounts deferred into the Company’s retirement savings plan, the Company’s Non-Qualified Deferred Compensation Plan, and/or any similar successor plans for the fiscal year and excludes any bonus or other benefits, other than base compensation, for the plan year. By design, these are the award levels that plan participants can expect to earn when they and their applicable business units perform as expected; (i.e., achieve their goals and objectives.)
2.2
Maximum Incentive Award
Under this incentive plan the maximum award is 200% of target of the overall award and/or any component of the award. Any awards that are in excess of one times salary must be reviewed and approved by the Division’s senior management and the CEO.
2.3
The following table outlines the various incentive award levels defined above. All percentages refer to percentages of base salary earned for the incentive award period.
WW Band
Target
90
75%
80
55%
70
50%
60
45%
50
40%
40*
40%
30
25%
*Includes broad band 45 in European markets.
3.0
Measures of Performance
3.1
Company