Mattel 2008 Annual Report Download - page 89

The components of accumulated other comprehensive loss are as follows:
December 31,
2008 2007
(In thousands)
Currency translation adjustments ............................................ $(274,851) $ (82,274)
Defined benefit pension and other postretirement plans, net of tax .................. (160,713) (73,077)
Net unrealized gain (loss) on derivative instruments, net of tax .................... 4,929 (20,459)
$(430,635) $(175,810)
Note 10—Share-Based Payments
Mattel Stock Option Plans
In May 2005, Mattel’s stockholders approved the Mattel, Inc. 2005 Equity Compensation Plan
(the “2005 Plan”). Upon approval of the 2005 Plan, Mattel terminated its Amended and Restated 1996 Stock
Option Plan (the “1996 Plan”) and its 1999 Stock Option Plan (the “1999 Plan”), except with respect to grants
then outstanding under the 1996 Plan and the 1999 Plan. Restricted stock awards made under the 1996 Plan
continue to vest pursuant to the terms of their respective grant agreements. Outstanding stock option grants under
plans that have expired or have been terminated continue to be exercisable under the terms of their respective
grant agreements. All such stock options expire no later than ten years from the date of grant and generally
provide for vesting over a period of three years from the date of grant. Stock options generally were granted with
exercise prices equal to the fair market value of Mattel’s common stock on the date of grant, although there are
some outstanding stock options that were granted with an exercise price in excess of the fair market value of
Mattel’s common stock on the date of grant, as to which vesting was dependent upon Mattel’s common stock
achieving a specified fair market value during a specified time period. Options were granted to non-employee
members of Mattel’s Board of Directors under the 1996 Plan with exercise prices equal to the fair market value
of Mattel’s common stock on the date of grant; such options expire no later than ten years from the date of grant
and vest over a period of four years from the date of grant.
Under the 2005 Plan, Mattel has the ability to grant nonqualified stock options, incentive stock options,
stock appreciation rights, restricted stock, RSUs, dividend equivalent rights, and shares of common stock to
officers, employees, and other persons providing services to Mattel. Generally, options vest and become
exercisable contingent upon the grantees’ continued employment or service with Mattel. Nonqualified stock
options are granted at not less than 100% of the fair market value of Mattel’s common stock on the date of grant,
expire no later than ten years from the date of grant, and vest on a schedule determined by the Compensation
Committee of the Board of Directors, generally during a period of three years from the date of grant. In the event
of a retirement of an employee aged 55 years or greater with 5 or more years of service that occurs at least 6
months after the grant date, nonqualified stock options become fully vested. With regard to grants of stock
options in the 2007 annual grant and later, death and disability at least 6 months after the grant date also result in
accelerated vesting. With regard to grants of stock options before the 2007 annual grant, there is no accelerated
vesting for death or disability. Similar provisions exist for non-employee directors. RSUs granted under the 2005
Plan are generally accompanied by dividend equivalent rights and generally vest over a period of three years
from the date of grant. In the event of the involuntary termination of an employee aged 55 years or greater with
5 or more years of service, or the death or disability of an employee, that occurs at least 6 months after the grant
date, RSUs receive accelerated vesting as to some or all of the RSUs. The 2005 Plan also contains provisions
regarding grants of equity compensation to the non-employee members of the Board of Directors. Pursuant to
these provisions, the Compensation Committee has approved grants to non-employee members of the Board of
Directors that consist of a mix of nonqualified stock options and RSUs; such stock options and RSUs vest over a
period of three years from the date of grant (except for initial grants of stock options to directors, which are
immediately vested in full), and such stock options have exercise prices equal to the fair market value of Mattel’s
common stock on the date of grant and expire no later than ten years from the date of grant. In the event of a
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