Hasbro 2010 Annual Report Download - page 76

(13) Stock Options, Other Stock Awards and Warrants
Hasbro has reserved 20,364 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 2010 and 2008, the Company granted restricted stock units of 138 and 60, respectively. The
2010 and 2008 grants had weighted average grant date fair values of $41.93 and $34.61. In 2009 the Company
did not issue any restricted stock or restricted stock units. 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 between three and five years. There were no forfeitures in 2010 or 2008. In
2009, the Company had forfeitures of 2 units granted in 2008. During 2010, 2009 and 2008, the Company
recognized compensation expense, net of forfeitures, on these awards of $1,209, $768 and $661, respectively.
At December 26, 2010, the amount of total unrecognized compensation cost related to restricted stock units is
$5,583 and the weighted average period over which this will be expensed is 53 months. In 2010, the Company
issued 12 shares related to restricted stock granted in 2007. At December 26, 2010, the Company has unvested
and unissued awards outstanding of 196 shares with a weighted average grant date fair value of $39.77.
In 2010, 2009 and 2008, 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 2012, December 2011, and December 2010 for the 2010, 2009 and 2008 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. Awards prior to 2010 may
vary from 0% to 125% of the target number of shares. Awards for 2010 may vary from 0% to 200% 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)