Hasbro 2008 Annual Report Download - page 72

The following is reconciliation of the beginning and ending balances of the fair value measurements of
the Company’s available-for-sale securities that use significant unobservable inputs (Level 3):
Balance at December 30, 2007 ............................................. $8,580
Loss included in other comprehensive earnings ................................. (3,989)
Balance at December 28, 2008 ............................................. $4,591
(11) Stock Options, Other Stock Awards and Warrants
Hasbro has reserved 16,147 shares of its common stock for issuance upon exercise of options and the
grant of 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 options and other awards
generally vest in equal annual amounts over three to five years. The plans provide that options be granted at
exercise prices not less than fair market value 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 ten years after date of grant. Certain of the plans permit the granting of awards in the form of stock,
stock appreciation rights, stock awards and cash awards in addition to stock options. 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 grants, shares are issued out of available treasury shares.
The Company on occasion will issue restricted stock and grant restricted stock units to certain key
employees. In 2008, 2007, and 2006 the Company issued restricted stock and restricted stock units of 60, 12
and 20 shares, respectively. These shares or units are nontransferable and subject to forfeiture for periods
prescribed by the Company. These awards are valued at the market value at the date of grant and are
subsequently amortized over the periods during which the restrictions lapse, generally 3 years. Compensation
expense recognized relating to the outstanding restricted stock and restricted stock units was $661, $183, and
$158 in fiscal 2008, 2007, and 2006, respectively. At December 28, 2008, the amount of total unrecognized
compensation cost related to restricted stock is $1,840 and the weighted average period over which this will be
expensed is 28 months.
In 2008, 2007, and 2006, as part of its annual equity grant to executive officers and certain other
employees, the Compensation Committee of the Company’s Board of Directors approved the issuance of
contingent stock performance awards (the “Stock Performance Awards”). These awards provide the recipients
with the ability to earn shares of the Company’s common stock based on the Company’s achievement of stated
cumulative diluted earnings per share and cumulative net revenue targets over the three fiscal years ended
December 2010 for the 2008 award, over the three fiscal years ended December 2009 for the 2007 award, and
over a ten quarter period beginning July 3, 2006 and ending December 2008 for the 2006 award. Each Stock
Performance Award has a target number of shares of common stock associated with such award which may be
earned by the recipient if the Company achieves the stated diluted earnings per share and revenue targets. The
ultimate amount of the award may vary, depending on actual results, from 0% to 125% of the target number
of shares. The Compensation Committee of the Company’s Board of Directors has discretionary power to
reduce the amount of the award regardless of whether the stated targets are met.
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HASBRO, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements — (Continued)
(Thousands of Dollars and Shares Except Per Share Data)