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Alta Fox Issues Letter to Shareholders Regarding the Need to Elect a Capital Allocation and Disclosure Expert to Hasbro's 13-Member BoardAlta Fox Capital Management, LLC (together with its affiliates, "Alta Fox" or "we"), the beneficial owner of approximately 2.6% of the outstanding shares of Hasbro, Inc. (NASDAQ: HAS) ("Hasbro" or the "Company"), today issued the below letter in connection with its campaign to refresh the Company's Board of Directors (the "Board") at the 2022 Annual Meeting of Shareholders (the "Annual Meeting"). Following ongoing engagement with fellow shareholders and the report recently released by leading independent proxy advisory firm Institutional Shareholders Services, Inc. ("ISS"), Alta Fox intends to modify its slate to pursue the election of one director candidate - capital allocation and financial disclosure expert Marcelo Fischer - and the removal of long-serving incumbent Edward M. Philip. Visit www.StrengthenHasbro.com to learn why Mr. Fischer has the right background and skills to help address issues raised by ISS and long-term shareholders of Hasbro. *** Fellow Shareholders, Alta Fox is a top 10 shareholder of Hasbro with a long-term investment horizon. Since we initiated a private dialogue with the Board in 2021, we have consistently emphasized that immediate improvements to Hasbro's capital allocation, corporate structure, financial disclosures and governance, and overall strategy can be the foundation of a turnaround and long-term value creation. Now that we are days away from the Annual Meeting, we want to reinforce the opportunity we - as Hasbro's true owners - still have at the start of Chris Cocks' tenure as a first-time Chief Executive Officer: Improve a dismissive, insular Board that has presided over sustained market share losses and share price underperformance due to failures that include abysmal capital allocation, concerning compensation practices, opaque disclosures and an unsuccessful "Brand Blueprint" strategy. Unlike Hasbro's Board, which recently initiated a defensive and reactionary expansion to 13 members, we listen and respond to shareholder feedback. It has become clear to us that many of you strongly support an incremental refresh of the Board at this year's Annual Meeting. Many of you have informed us that your ideal refreshment includes adding an experienced and independent financial mind that is completely untethered to the current Board's historical missteps and lapses. That is why we are narrowing the scope of our campaign to pursue the election of capital allocation and disclosure expert Marcelo Fischer and the removal of 19-year incumbent Edward M. Philip at the Annual Meeting. A vote on Alta Fox's GOLD proxy card will ultimately represent support for the election of just one director candidate: Mr. Fischer. Mr. Fischer has an undeniably strong record of long-term value creation, understands best-in-class disclosure practices due to his role as Chief Financial Officer of IDT Corporation and would possess an open mind upon entering the boardroom. In the context of considering the election of Mr. Fischer, we ask that you take note of the following:
The election of Mr. Fischer would not only provide Mr. Cocks and his management team another asset for thinking through disclosure, finance and investment decisions, but it would send a message to the current Board - after years of poor results - about its accountability to shareholders. It is the right time for incremental and targeted change at Hasbro, and Mr. Fischer is the right change agent. WE APPRECIATE THAT ISS ACKNOWLEDGES A "LIMITED CASE FOR CHANGE" AND THE VERACITY OF OUR CAMPAIGN Although we respect that many of you conduct your own rigorous analysis prior to making voting decisions, we believe there are notable points to consider from ISS' report. They include the following: The Alta Fox Campaign
Capital Allocation and Disclosure Issues
Performance Issues
It is clear to us that by publishing the aforementioned points and recommending shareholders withhold support for Mr. Philip, ISS' analysis is aligned with the feedback we have received from fellow shareholders supporting the election of a capital allocation and disclosure expert like Mr. Fischer. The criticisms levied by ISS are ones that Mr. Fischer is uniquely qualified to help address and remedy. Moreover, public disclosures and media reports indicate that sizable shareholders have similar concerns that can be addressed through the appointment of Mr. Fischer.3 It may be instructive to at this time to assess what Mr. Fischer can specifically bring to the Board relative to Mr. Philip. Upon conducting this assessment, we believe the choice between the two should be clear:
In closing, shareholders can reasonably disagree on what the optimal path to long-term value creation is for Hasbro. However, Alta Fox believes all stakeholders that objectively examine the capital allocation and disclosure history of the Company can agree that Mr. Fischer is the right new director at the right time. His track record of implementing disclosure best practices, exhibiting sound financial judgement and presiding over years of strong shareholder returns speaks for itself, especially when compared to what Mr. Philip offers as he nears the beginning of his third decade of Board service. We thank you in advance for your consideration and willingness to evaluate Mr. Fischer as a long-overdue replacement for Mr. Philip at this year's Annual Meeting. To contact us or to speak with Mr. Fischer, please visit www.StrengthenHasbro.com. Sincerely,
Connor Haley
### About Alta Fox Founded in 2018 by Connor Haley, Alta Fox is a Texas-based alternative asset management firm that employs a long-term focused investment strategy to pursue exceptional risk-adjusted returns for a diverse group of institutions and qualified individual clients. Alta Fox focuses on identifying often overlooked and under-the-radar opportunities across asset classes, market capitalization ranges and sectors. Learn more by visiting www.AltaFoxCapital.com.
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