Hasbro 2007 Annual Report Download - page 68

(9) Capital Stock
Preference Share Purchase Rights
Hasbro maintains a Preference Share Purchase Rights Plan (the “Rights Plan”). Under the terms of the
Rights Plan, each share of common stock is accompanied by a Preference Share Purchase Right (“Right”).
Each Right is only exercisable under certain circumstances and, until exercisable, the Rights are not
transferable apart from Hasbro’s common stock. When exercisable, each Right will entitle its holder to
purchase until June 30, 2009, in certain merger or other business combination or recapitalization transactions,
at the Right’s then current exercise price, a number of the acquiring company’s or Hasbro’s, as the case may
be, common shares having a market value at that time of twice the Right’s exercise price. Under certain
circumstances, the Company may substitute cash, other assets, equity securities or debt securities for the
common stock. At the option of the Board of Directors of Hasbro (“the Board”), the rightholder may, under
certain circumstances, receive shares of Hasbro’s stock in exchange for Rights.
Prior to the acquisition by a person or group of beneficial ownership of a certain percentage of Hasbro’s
common stock, the Rights are redeemable for $0.01 per Right. The Rights Plan contains certain exceptions
with respect to the Hassenfeld family and related entities.
Common Stock
In August 2007, the Company’s Board of Directors authorized the repurchase of up to $500,000 in
common stock after two previous authorizations dated May 2005 and July 2006 of $350,000 each were fully
utilized. Purchases of the Company’s common stock may be made from time to time, subject to market
conditions, and may be made in the open market or through privately negotiated transactions. The Company
has no obligation to repurchase shares under the authorization and the timing, actual number, and the value of
the shares which are repurchased will depend on a number of factors, including the price of the Company’s
common stock. This authorization replaces all prior authorizations. In 2007, the Company repurchased
20,795 shares at an average price of $28.20. The total cost of these repurchases, including transaction costs,
was $587,004. At December 30, 2007, $109,601 remained under this authorization.
Subsequent to December 30, 2007, the Company’s Board of Directors authorized the repurchase of up to
an additional $500,000 in common stock.
(10) Stock Options, Other Stock Awards and Warrants
Hasbro has reserved 21,997 shares of its common stock for issuance upon exercise of options and the
grant of other awards granted or to be granted under stock incentive plans for employees and for non-
employee members of the Board of Directors (collectively, the “plans”). These options generally vest in equal
annual amounts over three to five years. The plans provide that options be granted at exercise prices not less
than fair market value on the date the option is granted and options are adjusted for such changes as stock
splits and stock dividends. Generally, options are exercisable for periods of no more than ten years after date
of grant. Certain of the plans permit the granting of awards in the form of stock options, stock appreciation
rights, stock awards and cash awards in addition to options. Upon exercise in the case of stock options, grant
in the case of restricted stock or vesting in the case of performance based contingent stock grants, shares are
issued out of available treasury shares.
The Company on occasion will issue restricted stock and grant deferred restricted stock units to certain
key employees. In 2007 and 2006, the Company issued restricted stock and restricted stock units of 12 and
20 shares, respectively. No restricted stock or deferred restricted stock awards were granted in 2005. These
shares or units are nontransferable and subject to forfeiture for periods prescribed by the Company. These
awards are valued at the market value at the date of grant and are subsequently amortized over the periods
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HASBRO, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements — (Continued)
(Thousands of Dollars and Shares Except Per Share Data)