Hasbro 2007 Annual Report Download - page 71

The intrinsic values, which represent the difference between the fair market value on the date of exercise
and the exercise price of the option, of the options exercised in fiscal 2007, 2006 and 2005 were $54,629,
$46,684 and $16,898, respectively.
At December 30, 2007, the amount of total unrecognized compensation cost related to stock options is
$18,221 and the weighted average period over which this will be expensed is 23.69 months.
In 2007 and 2006, the Company granted 31 and 52 shares of common stock, respectively, to its non-
employee members of its Board of Directors. Of these shares, the receipt of 19 shares from the 2007 grant and
43 shares from the 2006 grant have been deferred to the date upon which the respective director ceases to be a
member of the Company’s Board of Directors. These awards were valued at the market value at the date of
grant and vested upon grant. In connection with this grant, compensation cost of $990 was recorded in both
2007 and 2006.
In 2007 certain warrants previously issued by the Company allowing for the purchase of 1,700 shares of
the Company’s common stock, with a weighted average exercise price of approximately $16.99, were
exercised. The holder of the warrants elected to settle the warrants through a non-cash net share settlement,
resulting in the issuance of 779 shares. If the holder had not elected net share settlement, the Company would
have received cash proceeds from the exercise totaling $28,888 and would have been required to issue
1,700 shares.
In addition, during 2007 the Company exercised its call option to repurchase warrants which allowed for
the purchase of an aggregate of 15,750 shares of the Company’s common stock. See note 6 for further
discussion.
(11) Pension, Postretirement and Postemployment Benefits
Pension and Postretirement Benefits
In September 2006, the FASB issued Statement of Financial Accounting Standards No. 158, “Employer’s
Accounting for Defined Benefit Pension and Other Postretirement Plans”, (“SFAS No. 158”) which amends
Statements of Financial Accounting Standards No. 87, 88, 106 and 132R. Under SFAS No. 158, the Company
is required to recognize on its balance sheet actuarial gains and losses and prior service costs that have not yet
been included in income as an adjustment of equity through other comprehensive income with a corresponding
adjustment to prepaid pension expense or the accrued pension liability. In addition, within two years of
adoption, the measurement date for plan assets and liabilities would be required to be the Company’s fiscal
year end. The recognition provisions of SFAS No. 158 were effective for the Company in the fourth quarter of
2006. The effect of this statement in 2006 on the Company’s defined benefit pension and postretirement plans
was an increase in accrued pension liability of $36,287, a decrease in intangible assets of $3,108, an increase
in deferred tax assets of $12,645 and a decrease in accumulated other comprehensive income, net of tax, of
$26,750.
In accordance with SFAS No. 158, effective January 1, 2007, the Company elected to change the
measurement date of certain of its defined benefit pension plans and the Company’s other postretirement plan
from September 30 to the Company’s fiscal year-end date, which was December 30, 2007. As a result of this
election, the assets and liabilities of these plans were remeasured as of December 31, 2006. The remeasure-
ment of the assets and liabilities resulted in an increase in the projected benefit obligation of $536 and an
increase in the fair value of plan assets of $10,872. The impact of this accounting change was a reduction of
retained earnings of $2,143, an increase to accumulated other comprehensive earnings of $7,779, a decrease in
long-term accrued pension expense of $3,619, an increase in prepaid pension expense of $5,482, and a
decrease in long-term deferred tax assets of $3,465.
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HASBRO, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements — (Continued)
(Thousands of Dollars and Shares Except Per Share Data)