Hasbro 2015 Annual Report Download - page 97

HASBRO, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements — (Continued)
(Thousands of Dollars and Shares Except Per Share Data)
With respect to the 3,445 outstanding options and 2,208 options exercisable at December 27, 2015, the
weighted average remaining contractual life of these options was 3.76 years and 2.84 years, respectively. The
aggregate intrinsic value of the options outstanding and exercisable at December 27, 2015 was $73,115 and
$57,988, respectively. Substantially all unvested outstanding options are expected to vest.
The Company uses the Black-Scholes valuation model in determining the fair value of stock options. The
expected life of the options used in this calculation is the period of time the options are expected to be
outstanding and has been determined based on historical exercise experience. The weighted average fair value of
options granted in fiscal 2015, 2014 and 2013 was $9.29, $8.40 and $6.94, respectively. The fair value of each
option grant is estimated on the date of grant using the Black-Scholes option pricing model with the following
weighted average assumptions used for grants in the fiscal years 2015, 2014 and 2013:
2015 2014 2013
Risk-free interest rate ....................................... 1.34% 1.42% 0.62%
Expected dividend yield ..................................... 2.98% 3.30% 3.39%
Expected volatility ......................................... 23% 26% 26%
Expected option life ........................................ 5years 5 years 5 years
The intrinsic values, which represent the difference between the fair market value on the date of exercise
and the exercise price of the option, of the options exercised in fiscal 2015, 2014 and 2013 were $41,906,
$44,890 and $89,534, respectively.
At December 27, 2015, the amount of total unrecognized compensation cost related to stock options was
$6,220 and the weighted average period over which this will be expensed is 20 months.
Non-Employee Awards
In 2015, 2014 and 2013, the Company granted 20, 34 and 33 shares of common stock, respectively, to its
non-employee members of its Board of Directors. Of these shares, the receipt of 16 shares from the 2015 grant,
26 shares from the 2014 grant and 28 shares from the 2013 grant has been deferred to the date upon which the
respective director ceases to be a member of the Company’s Board of Directors. These awards were valued at the
market value of the underlying common stock at the date of grant and vested upon grant. In connection with
these grants, compensation cost of $1,449 was recorded in selling, distribution and administration expense in the
year ended December 27, 2015, $1,834 in the year ended December 28, 2014 and $1,560 in the year ended
December 29, 2013.
(14) Pension, Postretirement and Postemployment Benefits
Pension and Postretirement Benefits
The Company recognizes an asset or liability for each of its defined benefit pension plans equal to the
difference between the projected benefit obligation of the plan and the fair value of the plan’s assets. Actuarial
gains and losses and prior service costs that have not yet been included in income are recognized in the
consolidated balance sheets in AOCE. Reclassifications to earnings from AOCE related to pension and
postretirement plans are recorded to selling, distribution and administration expense.
Expenses related to the Company’s defined benefit pension and defined contribution plans for 2015, 2014
and 2013 were approximately $36,000, $34,300 and $35,900, respectively. Of these amounts, $26,600, $28,100
and $23,000, respectively, related to defined contribution plans in the United States and certain international
subsidiaries. The remainder of the expense relates to defined benefit pension plans discussed below.
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