Hasbro 2015 Annual Report Download - page 95

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HASBRO, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements — (Continued)
(Thousands of Dollars and Shares Except Per Share Data)
Shares granted in 2015 include 90 shares related to the 2013 award, reflecting an increase in the ultimate
amount of shares 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 in 2015. Shares cancelled in 2014 and 2013 represent the cancellation of the Stock Performance Awards
granted during 2012 and 2011, respectively, based on failure to meet the targets set forth by the agreement.
During 2015, 2014 and 2013, the Company recognized $27,960, $11,315 and $815, respectively, of 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 2013, it was
determined that it was no longer probable that the minimum targets would be met for certain Stock Performance
Awards grants and, as a result, all previously recognized expense totaling $7,046 related to these awards was
reversed. At December 27, 2015, the amount of total unrecognized compensation cost related to these awards is
approximately $20,410 and the weighted average period over which this will be expensed is 19 months.
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
2015, 2014 and 2013, the Company recognized compensation expense, net of forfeitures, on these awards of
$19,052, $15,643 and $8,732, respectively. At December 27, 2015, the amount of total unrecognized
compensation cost related to restricted stock units is $28,566 and the weighted average period over which this
will be expensed is 22 months.
In October 2012, as part of an Amended and Restated Employment Agreement, the Company’s Chief
Executive Officer was awarded 587 shares to be granted in two tranches across 2013 and 2014. As of May 2013,
both tranches met the accounting definition for grant date and, as such, are being expensed from 2013 through
2017. Expenses related to 2014 and 2013 are included in the aforementioned recognized and unrecognized
compensation costs related to restricted stock units. 468 shares of this award are considered granted in 2013
while the remaining 119 shares were granted in February 2014. These awards provide the recipient with the
ability to earn shares of the Company’s common stock based on the Company’s achievement of four stated stock
price hurdles and continued employment through December 31, 2017. At the completion of the service period,
the recipient will receive one quarter of the award for each stock price hurdle achieved after April 24, 2013. The
four stock price hurdles are $45, $52, $56 and $60 which must be met for a period of at least thirty days using the
average closing price over such period. In August 2014, the Amended and Restated Employment Agreement was
further amended to include additional requirements. Specifically, if the third and fourth stock price hurdles are
achieved, the number of shares ultimately issued will be dependent on the average stock price for the thirty day
period immediately prior to December 31, 2017. This amendment did not result in any incremental fair value to
the award which is used to record compensation expense for the award.
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