Hasbro 2013 Annual Report Download - page 86

Download and view the complete annual report

Please find page 86 of the 2013 Hasbro annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.

Page out of 120

  • 1
  • 2
  • 3
  • 4
  • 5
  • 6
  • 7
  • 8
  • 9
  • 10
  • 11
  • 12
  • 13
  • 14
  • 15
  • 16
  • 17
  • 18
  • 19
  • 20
  • 21
  • 22
  • 23
  • 24
  • 25
  • 26
  • 27
  • 28
  • 29
  • 30
  • 31
  • 32
  • 33
  • 34
  • 35
  • 36
  • 37
  • 38
  • 39
  • 40
  • 41
  • 42
  • 43
  • 44
  • 45
  • 46
  • 47
  • 48
  • 49
  • 50
  • 51
  • 52
  • 53
  • 54
  • 55
  • 56
  • 57
  • 58
  • 59
  • 60
  • 61
  • 62
  • 63
  • 64
  • 65
  • 66
  • 67
  • 68
  • 69
  • 70
  • 71
  • 72
  • 73
  • 74
  • 75
  • 76
  • 77
  • 78
  • 79
  • 80
  • 81
  • 82
  • 83
  • 84
  • 85
  • 86
  • 87
  • 88
  • 89
  • 90
  • 91
  • 92
  • 93
  • 94
  • 95
  • 96
  • 97
  • 98
  • 99
  • 100
  • 101
  • 102
  • 103
  • 104
  • 105
  • 106
  • 107
  • 108
  • 109
  • 110
  • 111
  • 112
  • 113
  • 114
  • 115
  • 116
  • 117
  • 118
  • 119
  • 120

HASBRO, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements — (Continued)
(Thousands of Dollars and Shares Except Per Share Data)
The following is a reconciliation of the beginning and ending balances of the fair value measurements of the
Company’s financial instruments which use significant unobservable inputs (Level 3):
2013 2012
Balance at beginning of year .......................................... $7,618 3,724
Purchases ......................................................... — 5,000
Sales ............................................................. (990) —
Loss from change in fair value ......................................... (1,144) (1,106)
Balance at end of year ............................................... $5,484 7,618
(13) Stock Options, Other Stock Awards and Warrants
Hasbro has reserved 14,766 shares of its common stock for issuance upon exercise of options and 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 awards generally vest and are expensed in equal annual
amounts over three to five years. The plans provide that options be granted at exercise prices not less than the
market value of the underlying common stock 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 seven
years after date of grant. 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 and restricted stock unit grants, shares are issued out of
available treasury shares. The Company’s current plan permits the granting of awards in the form of stock, stock
appreciation rights, stock awards and cash awards in addition to stock options.
Total compensation expense related to stock options, restricted stock units, including those awards made to
non-employee members of its Board of Directors, and stock performance awards for the years ended
December 29, 2013, December 30, 2012 and December 25, 2011 was $21,272, $19,434 and $12,463,
respectively, and was recorded as follows:
2013 2012 2011
Cost of sales .............................................. $ 152 146 51
Product development ....................................... 1,767 1,854 556
Selling, distribution and administration ......................... 19,353 17,434 11,856
21,272 19,434 12,463
Income tax benefit ......................................... 7,065 6,392 4,202
14,207 13,042 8,261
Restricted Stock Units
The Company on occasion will issue restricted stock or grant restricted stock units to certain key employees.
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. During
2013, 2012 and 2011, the Company recognized compensation expense, net of forfeitures, on these awards of
$8,732, $2,328 and $1,761, respectively. At December 29, 2013, the amount of total unrecognized compensation
cost related to restricted stock units is $37,482 and the weighted average period over which this will be expensed
is 40 months.
74