Hasbro 2011 Annual Report Download - page 79

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HASBRO, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements — (Continued)
(Thousands of Dollars and Shares Except Per Share Data)
expected to be issued based on the Company’s actual results during the performance period. These shares are
excluded from the calculation of the weighted average grant-date fair value of Stock Performance Awards
granted during 2011, 2010 and 2009.
During 2011, 2010 and 2009, the Company recognized $(3,558), $17,144 and $15,361, respectively, of
(income) expense relating to these awards. Awards are valued at the market value of the underlying common
stock at the dates of grant and are expensed over the performance period. On a periodic basis the Company
reviews the actual and forecasted performance of the Company against the stated targets for each award. The
total expense is adjusted upward or downward based on the expected amount of shares to be issued as defined in
the agreement. If minimum targets as detailed under the award are not met, no additional compensation expense
will be recognized and any previously recognized compensation expense will be reversed. In the fourth quarter of
2011, it was determined that it is no longer probable that the minimum targets will be met for certain Stock
Performance Awards granted. As a result, all previously recognized expense totaling $16,332 related to these
awards was reversed and there is no remaining unrecognized compensation cost related to these outstanding
awards.
Total compensation expense related to stock options, restricted stock units and Stock Performance Awards
for the years ended December 25, 2011, December 26, 2010 and December 27, 2009 was $10,903, $31,952, and
$28,547, respectively, and was recorded as follows:
2011 2010 2009
Cost of sales ............................................. $ 51 349 462
Product development ...................................... 556 2,576 2,205
Selling, distribution and administration ........................ 10,296 29,027 25,880
10,903 31,952 28,547
Income tax benefit ........................................ 3,637 10,658 9,293
$ 7,266 21,294 19,254
Information with respect to stock options for the three years ended December 25, 2011 is as follows:
2011 2010 2009
Outstanding at beginning of year ............................. 11,392 13,347 11,651
Granted ............................................... 1,080 2,420 2,955
Exercised ............................................. (1,267) (4,107) (476)
Expired or forfeited ..................................... (201) (268) (783)
Outstanding at end of year .................................. 11,004 11,392 13,347
Exercisable at end of year .................................. 7,494 6,256 7,839
Weighted average exercise price:
Granted ............................................... $ 45.66 33.96 22.73
Exercised ............................................. $ 23.55 22.78 19.35
Expired or forfeited ..................................... $ 29.35 25.92 31.53
Outstanding at end of year ................................ $ 27.75 25.61 23.23
Exercisable at end of year ................................ $ 24.35 23.03 21.70
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