Mattel 2012 Annual Report Download - page 92

For 2012, currency translation adjustments resulted in a net gain of $27.6 million, with gains from the
strengthening of the Euro, Mexican peso, and British pound sterling against the US dollar, partially offset by the
weakening of the Brazilian real against the US dollar. For 2011, currency translation adjustments resulted in a net
loss of $77.1 million, with losses from the weakening of the Euro, Mexican peso, Brazilian real, and British
pound sterling against the US dollar. For 2010, currency translation adjustments resulted in a net gain of $0.9
million, with gains from the strengthening of the Mexican peso, Brazilian real, and Chilean peso against the US
dollar, partially offset by the weakening of the Euro and British pound sterling against the US dollar.
Note 7—Share-Based Payments
Mattel Stock Option Plans
In May 2010, Mattel’s stockholders approved the Mattel, Inc. 2010 Equity and Long-Term Compensation
Plan (the “2010 Plan”). Upon approval of the 2010 Plan, Mattel terminated its 2005 Equity Compensation Plan
(the “2005 Plan”), except with respect to grants then outstanding under the 2005 Plan. Outstanding restricted
stock unit (“RSU”) awards made under the 2005 Plan continue to vest pursuant to the terms of their respective
grant agreements. Outstanding stock option grants under the 2005 Plan that have not expired or have not been
terminated continue to be exercisable under the terms of their respective grant agreements. The terms of the 2010
Plan are substantially similar to the 2005 Plan.
Under the 2010 Plan, Mattel has the ability to grant nonqualified stock options, incentive stock options,
stock appreciation rights, restricted stock, RSUs, dividend equivalent rights, performance awards, 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, or the
death or disability of an employee, that occurs in each case at least 6 months after the grant date, nonqualified
stock options become fully vested. Similar provisions exist for non-employee directors. Time-vesting RSUs
granted under the 2010 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 become fully vested. The 2010 Plan also contains provisions regarding grants
of equity compensation to the non-employee members of the Board of Directors. The 2010 Plan expires on
March 25, 2020, except as to any grants then outstanding.
The number of shares of common stock available for grant under the 2010 Plan is subject to an aggregate
limit of the sum of (i) 48 million shares, (ii) the number of shares that remained available for issuance under the
2005 Plan on May 12, 2010, and (iii) any shares subject to awards outstanding under the 2005 Plan that on or
after May 12, 2010 are forfeited or otherwise terminate or expire without the issuance of shares to the holder of
the award. The 2010 Plan is further subject to detailed share-counting rules. As a result of such share-counting
rules, full-value grants such as grants of restricted stock or RSUs count against shares remaining available for
grant at a higher rate than grants of stock options and stock appreciation rights. Each stock option or stock
appreciation right grant is treated as using one available share for each share actually subject to such grant,
whereas each restricted stock or RSU grant is treated as using three available shares for each share actually
subject to such full-value grant. At December 31, 2012, there were approximately 30 million shares of common
stock available for grant remaining under the 2010 Plan.
As of December 31, 2012, total unrecognized compensation cost related to unvested share-based payments
totaled $76.5 million and is expected to be recognized over a weighted-average period of 2.0 years.
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