Hasbro 2015 Annual Report Download - page 93

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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):
2015 2014
Balance at beginning of year ........................................ $(19,553) 5,484
Purchases ....................................................... 7,600 —
Sales ........................................................... (7,924) —
Issuance of option agreement ........................................ — (25,590)
Net gains from change in fair value ................................... 2,809 553
Balance at end of year ............................................. $(17,068) (19,553)
(13) Stock Options, Other Stock Awards and Warrants
Hasbro has reserved 11,217 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 and share awards are
adjusted for such changes as stock splits and stock dividends. 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 27, 2015, December 28, 2014 and December 29, 2013 was $53,880, $36,152 and $21,272,
respectively, and was recorded as follows:
2015 2014 2013
Cost of sales .............................................. $ 366 395 152
Product development ....................................... 3,527 3,874 1,767
Selling, distribution and administration ......................... 49,987 31,883 19,353
53,880 36,152 21,272
Income tax benefit ......................................... 13,489 11,745 7,065
$40,391 24,407 14,207
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