Hasbro 2008 Annual Report Download - page 74

Information with respect to stock options for the three years ended December 28, 2008 is as follows:
2008 2007 2006
Outstanding at beginning of year ............................ 14,495 17,309 20,443
Granted ............................................. 3,177 2,243 3,126
Exercised ........................................... (5,753) (4,586) (5,490)
Expired or canceled .................................... (268) (471) (770)
Outstanding at end of year................................. 11,651 14,495 17,309
Exercisable at end of year ................................. 6,345 9,731 11,016
Weighted average exercise price:
Granted ............................................. $ 27.10 32.42 18.83
Exercised ........................................... $ 21.02 18.04 16.00
Expired or canceled .................................... $ 27.49 26.60 24.38
Outstanding at end of year ............................... $ 23.76 22.01 19.73
Exercisable at end of year ............................... $ 21.01 20.48 19.94
With respect to the 11,651 outstanding options and 6,345 options exercisable at December 28, 2008, the
weighted average remaining contractual life of these options was 4.79 years and 4.03 years, respectively. The
aggregate intrinsic value of the options outstanding and exercisable at December 28, 2008 was $70,437 and
$55,343, respectively.
The Company uses the Black-Scholes valuation model in determining fair value of stock options. The
weighted average fair value of options granted in fiscal 2008, 2007 and 2006 was $4.46, $7.39 and $4.26,
respectively. The fair value of each option grant is estimated on the date of grant using the Black-Scholes
option pricing model with the following weighted average assumptions used for grants in the fiscal years
2008, 2007, and 2006:
2008 2007 2006
Risk-free interest rate .................................... 2.71% 4.79% 4.98%
Expected dividend yield .................................. 2.95% 1.97% 2.55%
Expected volatility ...................................... 22% 22% 24%
Expected option life ..................................... 5years 5 years 5 years
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 2008, 2007 and 2006 were $83,747,
$54,629 and $46,684, respectively.
At December 28, 2008, the amount of total unrecognized compensation cost related to stock options was
$15,220 and the weighted average period over which this will be expensed is 20.34 months.
In 2008, 2007 and 2006, the Company granted 36, 31 and 52 shares of common stock, respectively, to its
non-employee members of its Board of Directors. Of these shares, the receipt of 30 shares from the 2008
grant, 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 these grants,
compensation cost of $1,260 was recorded in 2008, and $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
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HASBRO, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements — (Continued)
(Thousands of Dollars and Shares Except Per Share Data)