Hasbro Investors

Investors

Audit Committee Charter

The primary purpose of the Audit Committee (the “Committee”) of Hasbro, Inc. (the “Company”) is to (a) appoint the independent auditor and oversee the independent auditor’s work, (b) prepare the report required to be included in the Company’s annual proxy statement by the rules of the Securities and Exchange Commission and (c) assist the Board of Directors (the “Board”) of the Company in its oversight of (i) the integrity of the Company's financial statements, (ii) the Company's compliance with legal and regulatory requirements, (iii) the independent auditor's qualifications and independence, and (iv) the performance of the Company's internal audit function and independent auditor.

In discharging its oversight role, the Committee is empowered to investigate any matter with full access to all books, records, facilities and personnel of the Company and the power to retain outside counsel, auditors or other experts for this purpose.  The Board and the Committee are in place to represent the Company’s shareholders; accordingly, the independent auditor is ultimately accountable to the Board and the Committee.

The Committee shall review and reassess the adequacy of this Charter on an annual basis.

The Committee shall be comprised of not less than three members of the Board, and the Committee’s composition will meet the requirements of the Sarbanes-Oxley Act of 2002 (the “Act”) and The NASDAQ Stock Market. 

Accordingly, all of the members of the Committee will be directors:

  • Who have no relationship to the Company that would interfere with the exercise of their independence from management and the Company;
  • Who are not an “affiliated person”, within the meaning of the Act, of the Company or any subsidiary thereof;
  • Who do not, directly or indirectly, receive any consulting, advisory or other compensatory fees from the Company or any of its affiliates other than board fees and fees related to service on the Committee or on other committees of the Board; and
  • Who are financially literate, including being able to read and understand fundamental financial statements, including a Company’s balance sheet, income statement, and cash flow statement. In addition, the Chair of the Committee will have accounting or related financial management expertise, and at least one member of the Committee will qualify as an “audit committee financial expert”, as defined by the Securities and Exchange Commission.

Committee members shall be appointed and removed by the Board, which shall designate the Committee Chair, who shall preside over meetings of the Committee.  A majority of the members of the Committee shall constitute a quorum for doing business.  All actions of the Committee shall be taken by a majority vote of the members of the Committee present at the meeting, provided a quorum is present.

The Committee shall hold regularly scheduled meetings and such special meetings as circumstances dictate.  It shall meet separately, at least quarterly, with management, the head of the Company’s Internal Audit department, and the independent auditor to discuss any matters that the Committee or any of these persons or firms believe should be discussed privately. The Committee shall report regularly to the Board.

The Committee’s job is one of oversight and it recognizes that the Company’s management is responsible for preparing the Company’s financial statements and that the independent auditors are responsible for auditing those financial statements.  Additionally, the Committee recognizes that the Company’s management, as well as the independent auditors, have more time, knowledge and more detailed information with respect to the Company than do Committee members; consequently, in carrying out its oversight responsibilities, the Committee is not providing any expert or special assurances as to the Company’s financial statements or any professional certification as to the independent auditor’s work.

While the Committee has the responsibilities set forth in this Charter, it is not the responsibility of the Committee to plan or conduct audits or to determine that the Company's financial statements are complete and accurate and are in accordance with generally accepted accounting principles.

The Committee has direct and sole responsibility for the appointment, compensation, retention, oversight and replacement, if necessary, of the independent auditor, including the resolution of disagreements between management and the independent auditor regarding financial reporting, and the independent auditor is ultimately accountable to the Board and to the Committee, acting as a committee of the Board.  Each member of the Committee shall be entitled to rely on (i) the integrity of those persons and organizations within and outside the Company that it receives information from and (ii) the accuracy of the financial and other information provided to the Committee by such persons or organizations absent actual knowledge to the contrary (which shall be promptly reported to the Board).  The Committee has the authority to retain legal, accounting or other experts that it determines to be necessary to carry out its duties.  It also has authority to determine compensation for such advisors, as well as for the independent auditor.

The following functions shall be the common recurring activities of the Committee in carrying out its oversight function.  These functions are set forth as a guide with the understanding that the Committee may diverge from this guide as appropriate, and as allowed by applicable legal and stock exchange requirements, given the circumstances.

Oversight of Independent Auditor

  • The Committee shall annually evaluate and determine the selection of the independent auditor.
  • The Committee shall review the arrangements for and scope of the outside audit and the fees proposed for such audit, and shall have ultimate authority to pre-approve all audit engagement fees and terms, as well as all permitted non-audit engagements of the independent auditor, subject to the de minimus exception set forth in the Act.
  • The Committee shall pre-approve, either directly or through established pre-approval procedures, all auditing services (including all audit, review or attestation engagements required under the securities law) and all permitted non-audit services by the auditor, subject to the de minimus exception set forth in the Act.
  • The Committee shall receive and review formal written statements, at least annually, from the independent auditor regarding the auditor’s independence, including a delineation of all relationships between the auditor and the Company.
  • The Committee shall actively engage in dialogue with the independent auditor with respect to any such disclosed relationships or services that may impact the objectivity and independence of the independent auditor, addressing at least the matters set forth in Public Company Accounting Oversight Board Ethics and Independence Rule 3526.
  • The Committee shall receive and review a formal written report, at least annually, from the independent auditor detailing the independent auditor’s internal quality control procedures; any material issues raised by the most recent independent auditor’s internal quality control review, or peer review, or Public Company Accounting Oversight Board review, or by any inquiry or investigation by governmental or professional authorities, within the preceding five years, respecting one or more independent audits carried out by the independent auditor; and any steps taken to deal with any such issues; and all relationships between the independent auditor and the Company.
  • The Committee shall receive and review timely reports from the independent auditor which include discussion of 1) all critical accounting policies and practices to be used, 2) all alternative treatments of financial information within generally accepted accounting principles for policies and practices related to material items that have been discussed with management, ramifications of the use of such alternative disclosures and treatments, and the treatment preferred by the independent auditor, and 3) other material written communications between the independent auditor and management, such as any management representation letter or schedule of unadjusted differences.
  • The Committee shall maintain hiring policies for employees or former employees of the independent auditor.

Oversight of Audit Process and Company’s Legal Compliance

  • The Committee shall review and discuss with management and the independent auditor the interim financial statements and Management’s Discussion and Analysis of Financial Condition and Results of Operations (“MD&A”) of the Company prior to the filing of the Company’s Quarterly Report on Form 10-Q. 
  • The Committee shall also discuss the results of the quarterly review and any other matters required to be communicated to the Committee by the independent auditor in accordance with the standards of the Public Company Accounting Oversight Board.
  • The Committee shall review with management and the independent auditor the audited financial statements and MD&A to be included in the Company’s Annual Report on Form 10-K prior to the filing of such report. 
  • The Committee shall discuss the results of the annual audit and any other matters required to be communicated to the Committee by the independent auditor in accordance with the standards of the Public Company Accounting Oversight Board, and shall be responsible for recommending to the full Board the inclusion of the Company’s audited financial statements in the Form 10-K.
  • The full Board, as assisted by management, the independent auditors and the Committee, shall have the ultimate authority and responsibility to include the audited financial statements in the Company’s Annual Report on Form 10-K (or the Annual Report to Shareholders if distributed prior to the filing of Form 10-K).
  • In connection with its review of the financial statements and MD&A to be included in the Company’s quarterly reports on Form 10-Q and Annual Reports on Form 10-K, the Committee shall discuss with management and the independent auditor their qualitative judgments about the appropriateness, and not just the acceptability, of accounting principles and financial disclosure practices used or proposed to be adopted by the Company, the reasonableness of significant judgments, including a description of any transactions as to which the management obtained Statement on Auditing Standards No. 50 communications, and the clarity of disclosures in the financial statements, including the Company’s disclosures of critical accounting policies and other disclosures under “MD&A”.
  • The Committee shall review with internal auditors and the independent auditor any difficulties with audits and management’s response to such issues.
  • The Committee shall review with the Vice President–Internal Audit and management, the Internal Audit plan, scope, staffing and result of work performed, as well as the coordination of efforts with the independent auditors.
  • The Committee shall discuss with management, internal auditors and the independent auditor the Company’s system of internal controls, the Company’s critical accounting principles and any significant issues related to financial statement presentations, including any changes in the Company’s critical accounting policies and the effects of alternative GAAP methods, off-balance sheet structures and regulatory and accounting initiatives.
  • The Committee shall review and discuss with management, internal auditors and independent auditors the Company’s significant financial and other exposures, including material pending legal proceedings and other material contingent liabilities, and guidelines and policies relating to enterprise risk assessment and risk management, including the Company’s procedures for monitoring and controlling such risks.
  • The Committee shall consider and review with management, the independent auditors and the Company’s internal auditors any significant internal control deficiencies or material weaknesses communicated by the independent auditors together with management responses thereto and the remediation thereof.
  • The Committee shall review and discuss with management earnings press releases and financial information and earnings guidance provided to analysts and rating agencies.
  • The Committee shall consider and approve, if appropriate, major changes to the Company’s auditing and accounting policies, principles and practices as suggested by the independent auditors, the Company’s internal auditors or management.
  • The Committee shall meet, at least quarterly, with the Company’s management, internal auditors and independent auditors, each in separate executive sessions. 
  • In connection with and prior to giving their required certifications, the Company’s Chief Executive Officer and Chief Financial Officer must disclose to the independent auditors and the Committee all significant deficiencies and material weaknesses in the design or operation of internal controls, and any fraud that involves management or other employees who have a significant role in the Company's internal controls.
  • The Committee shall maintain procedures for the receipt, retention and treatment of complaints received by the Company regarding accounting, internal accounting controls or auditing matters, and the confidential, anonymous submissions by employees or contractors of concerns regarding questionable accounting or auditing matters.
  • The Committee shall review the performance of and pre-approve the appointment, replacement, reassignment, or dismissal of the Company’s Vice President-Internal Audit.
  • The Committee shall review management’s plan for assuring compliance with the Company’s Code of Conduct and other Company programs designed to promote regulatory compliance and ethical business conduct.
  • The Committee shall report Committee actions to the Board on a regular basis with such recommendations as the Committee may deem appropriate.
  • The Committee shall seek to ensure open communication among internal auditors, independent auditors, management and the Board.
  • The Committee shall prepare the report required by the rules of the Securities and Exchange Commission to be included in the Company’s annual proxy statement.
  • The Committee shall annually perform an evaluation of the performance of the Committee and report to the Board on the results on such evaluation.

The Committee shall also perform any other activities consistent with the Articles of Incorporation and By-laws of the Company, and other governing laws, as the Board or the Committee shall deem appropriate.



Committee Members

Chair Tracy Leinbach
X
Tracy Leinbach
Retired EVP and CFO

Age: 54

 

Tracy A. Leinbach served as the Executive Vice President and Chief Financial Officer for Ryder System, Inc. (a global logistics and transportation and supply chain solutions provider) from 2003 until 2006. Prior thereto, Ms. Leinbach served as Executive Vice President, Fleet Management Solutions for Ryder since 2001. She is a director of Forward Air Corporation. Ms. Leinbach has been a director of the Company since 2008.

 

The Board has nominated Ms. Leinbach for election as a director because of her extensive business experience in corporate finance and global operations, auditing and accounting. Ms. Leinbach held a number of positions involving increasing global operating and global financial management, responsibility and oversight, as well as global supply chain management, with Ryder, spanning a career with Ryder of over 21 years. Her time with Ryder included service as controller and chief financial officer at many of Ryder’s subsidiaries and divisions. Ms. Leinbach’s career with Ryder culminated in her service as Executive Vice President and Chief Financial Officer. Prior to her career with Ryder, Ms. Leinbach worked for Price Waterhouse in public accounting and was a CPA. The Board believes Ms. Leinbach possesses particular knowledge, expertise and perspectives in corporate finance; operations, sales and logistics; and in strategic planning and risk management; expertise in issues regarding the management of a multinational corporation; and expertise regarding financial reporting and accounting issues for large public companies. The Board has determined that Ms. Leinbach qualifies as an Audit Committee Financial Expert due to her prior experience, including as the Chief Financial Officer of a public company (Ryder System, Inc.).

Committee Member Alan R. Batkin
X
Alan R. Batkin
Chairman and Chief Executive Officer

Age: 69

 

Alan R. Batkin is Chairman and Chief Executive Officer of Converse Associates, Inc. (a strategic advisory firm). From 2007 to 2012, he was the Vice Chairman of Eton Park Capital Management, L.P. (global, multi-disciplinary investment firm). Prior thereto, he was the Vice Chairman of Kissinger Associates, Inc. (strategic consulting firm) from 1990 until 2006. He is a director of Cantel Medical Corp., Pattern Energy Group, Inc. and Omnicom Group, Inc. Mr. Batkin served on the Board of Overseas Shipholding Group, Inc. from 1999 to 2012. Mr. Batkin has been a director of the Company since 1992.

 

The Board has nominated Mr. Batkin for election as a director because of his more than 40 years of business experience and financial expertise spanning his work in public accounting as a CPA, investment banking and international strategic consulting. Mr. Batkin has extensive experience advising multinational companies on global business and political issues, and he has served as a director for numerous public companies. The Board believes Mr. Batkin possesses expertise in corporate finance and asset management; expertise in strategic planning and international business operations; particular knowledge, expertise and perspective regarding financial reporting and accounting matters for multinational public companies; and expertise in corporate governance and board and committee best practices.

Committee Member Michael W.O. Garrett
X
Michael W.O. Garrett
Retired Executive Vice President

Age: 71

 

Michael W.O. Garrett served in a number of positions with Nestlé S.A. (international food and beverage company), most recently as Executive Vice President of Nestlé S.A. responsible for Asia, Africa, the Middle East and Oceania until 2005. He serves as a board member of the Nestlé Company in India and non-executive director on the boards of Gottex Fund Management Holdings Ltd. and the Bobst Group in Switzerland. From 2004 to 2013 Mr. Garrett served on the Board of Prudential PLC, UK. Mr. Garrett has been a director of the Company since 2005.

 

The Board has nominated Mr. Garrett for election as a director because of his more than 40 years of experience with Nestlé S.A., which involved service in operating and executive positions of increasing responsibility, including management of large international operations and responsibility for developing and managing businesses in new and emerging markets in many global regions, including Asia Pacific, Africa and the Middle East. Mr. Garrett also has extensive experience serving on the boards of large multinational companies. The Board believes Mr. Garrett possesses particular knowledge, expertise and perspectives regarding international business operations and expansion, including operations in new and emerging markets; corporate finance and international operating and tax matters; organizational issues involving large, multinational consumer-focused companies; strategic planning expertise; and expertise in board and committee best practices.

Committee Member Lisa Gersh
X
Lisa Gersh
Chief Executive Officer

Age: 55

 

Lisa Gersh is currently CEO of Goop, a lifestyle website founded by actress Gwyneth Paltrow. Prior to joining Goop, Gersh served as President and Chief Executive Officer of Martha Stewart Living Omnimedia, Inc. (integrated media and merchandising company) until 2013. Before being named CEO, Lisa served as President and Chief Operating Officer of Martha Stewart Living Omnimedia, Inc. from 2011 to 2012. She served as President, Strategic Initiatives at NBC News, an operating subsidiary of NBC Universal from 2007 until January 2011. Ms. Gersh also served as General Managing Director of the Weather Channel companies for NBC Universal from 2007 until 2009. Prior thereto, she was a co-founder and the President and Chief Operating Officer of Oxygen Media from 1998 until 2007, when it was acquired by NBC News.

 

Ms. Gersh served as a director of Martha Stewart Living Omnimedia, Inc. from 2011 to 2013 and served on the board of directors of The Knot, Inc. (now XO Group Inc.) from 2005 until 2010. Ms. Gersh has been a director of the Company since 2010.

Committee Member Richard S. Stoddart
X
Richard S. Stoddart
Chief Executive Officer

Age: 51

 

Richard S. Stoddart is the Chief Executive Officer of Leo Burnett North America, serving in his role since 2013. Mr. Stoddart served as President of Leo Burnett North America from 2005 to 2013. Prior thereto, he was Manager of Marketing Communications of Ford Motor Company from 2001 to 2005. Mr. Stoddart has been a director of the Company since March 2014.

 

The Board appointed Mr. Stoddart in March 2014 and has nominated Mr. Stoddart for re-election as a director at the Annual Meeting because of his extensive experience in the advertising, marketing and communications industries, including in television, digital and social media and in print. As the Chief Executive Officer of one of the largest advertising agencies in North America, Mr. Stoddart is recognized for his leadership in the development and integration of shopper, digital, social and mobile capabilities as part of a company’s overall marketing and brand strategy. The Board believes Mr. Stoddart possesses particular knowledge, expertise and perspectives regarding branding and brand building, marketing strategy and marketing communications, including in traditional advertising, digital advertising and social media; expertise in media planning, launching branded content and products; and expertise in media trends and strategic planning.

Committee Member Linda Zecher
X
Linda Zecher
President and Chief Executive Officer

Age: 61

 

Linda Zecher is President and Chief Executive Officer of Houghton Mifflin Harcourt Company, serving in her role since 2011.  In this role, Ms. Zecher is leading HMH’s transformation to a digitally-focused learning and content media company.  Through a successful financial restructure and completing a series of acquisitions and mergers Ms. Zecher has been effective in strengthening the company’s competitive position in the education technology and consumer education market.

 

Prior to joining Houghton Mifflin Harcourt, Ms. Zecher served as Corporate Vice President, Worldwide Public Sector at Microsoft from 2009 to 2011.  Ms. Zecher joined Microsoft in 2003, and successfully led the U.S and Asia Pacific public sector businesses before taking over the worldwide organization in 2009.  Before joining Microsoft, Ms. Zecher was CEO at Evolve Corporation.  Prior to Evolve Corp., she was Sr. VP of Application Suites at Oracle Corporation.  She began her career as a geophysicist at Texas Instruments.

 

Currently, Ms. Zecher serves on the Board of Houghton Mifflin Harcourt Company.