Hasbro 2009 Annual Report Download - page 78

(12) Stock Options, Other Stock Awards and Warrants
Hasbro has reserved 20,266 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 and other awards
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,
stock appreciation rights, stock awards and cash awards in addition to stock 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 or grant restricted stock units to certain key
employees. In 2009 the Company did not issue any restricted stock or restricted stock units. In 2008 and 2007
the Company granted restricted stock units of 60 and 12 shares, respectively. These shares or units are
nontransferable and subject to forfeiture for periods prescribed by the Company. These awards are valued at
the market value of the underlying common stock at the date of grant and are subsequently amortized over the
periods during which the restrictions lapse, generally 3 years. In 2009, the Company had forfeitures of 2 units
granted in 2008. There were no forfeitures in 2008 or 2007. Compensation expense, net of forfeitures,
recognized in selling, distribution and administration expense relating to the outstanding restricted stock and
restricted stock units was $768, $661, and $183 in fiscal 2009, 2008, and 2007, respectively. At December 27,
2009, the amount of total unrecognized compensation cost related to restricted stock units is $1,002 and the
weighted average period over which this will be expensed is 16 months. In 2009, the Company issued
20 shares related to restricted stock granted in 2006.
In 2009, 2008, and 2007, as part of its annual equity grant to executive officers and certain other
employees, the Compensation Committee of the Company’s Board of Directors approved the issuance of
contingent stock performance awards (the “Stock Performance Awards”). These awards provide the recipients
with the ability to earn shares of the Company’s common stock based on the Company’s achievement of stated
cumulative diluted earnings per share and cumulative net revenue targets over the three fiscal years ended
December 2011, December 2010, and December 2009 for the 2009, 2008 and 2007 awards, respectively. Each
Stock Performance Award has a target number of shares of common stock associated with such award which
may be earned by the recipient if the Company achieves the stated diluted earnings per share and revenue
targets. The ultimate amount of the award may vary, depending on actual results, from 0% to 125% of the
target number of shares. The Compensation Committee of the Company’s Board of Directors has discretionary
power to reduce the amount of the award regardless of whether the stated targets are met.
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HASBRO, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements — (Continued)
(Thousands of Dollars and Shares Except Per Share Data)