Hasbro 2012 Annual Report Download - page 82

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HASBRO, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements — (Continued)
(Thousands of Dollars and Shares Except Per Share Data)
Stock Performance Awards granted during 2011 and 2010 include 23 and 80 shares related to the 2009 and
2008 awards, respectively, reflecting an increase in the ultimate amount of the awards issued or expected 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 during 2011 and
2010. Shares cancelled in 2012 represent the cancellation of the Stock Performance Awards granted during 2010
based on the minimum targets for these awards not being met.
During 2012, 2011 and 2010, the Company recognized $3,628, $(3,558) and $17,144, respectively, of
(income) 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
2011, 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 $16,332 related to these
awards was reversed. At December 30, 2012, the amount of total unrecognized compensation cost related to
these awards is approximately $8,043 and the weight average period over which this will be expensed is 24
months.
Total compensation expense related to stock options, restricted stock units and Stock Performance Awards
for the years ended December 30, 2012, December 25, 2011 and December 26, 2010 was $17,875, $10,903 and
$31,952, respectively, and was recorded as follows:
2012 2011 2010
Cost of sales ............................................. $ 146 51 349
Product development ...................................... 1,854 556 2,576
Selling, distribution and administration ........................ 15,874 10,296 29,027
17,874 10,903 31,952
Income tax benefit ........................................ 5,827 3,637 10,658
$12,047 7,266 21,294
Information with respect to stock options for the three years ended December 30, 2012 is as follows:
2012 2011 2010
Outstanding at beginning of year ............................. 11,004 11,392 13,347
Granted ............................................... 1,730 1,080 2,420
Exercised ............................................. (3,126) (1,267) (4,107)
Expired or forfeited ..................................... (325) (201) (268)
Outstanding at end of year .................................. 9,283 11,004 11,392
Exercisable at end of year .................................. 6,094 7,494 6,256
Weighted average exercise price:
Granted ............................................... $ 36.14 45.66 33.96
Exercised ............................................. $ 21.23 23.55 22.78
Expired or forfeited ..................................... $ 35.19 29.35 25.92
Outstanding at end of year ................................ $ 31.25 27.75 25.61
Exercisable at end of year ................................ $ 27.84 24.35 23.03
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