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This excerpt taken from the HAS DEF 14A filed Apr 17, 2006. Long-Term
Incentive Strategy and Equity Awards
In fiscal 2005, and in the years prior to 2005, the Company has
employed stock options as its primary form of long-term equity
compensation for executive officers and other eligible
employees. The Company has only infrequently used restricted
stock and deferred restricted stock units as a reward and
retention mechanism. No
Table of Contents
restricted stock or deferred restricted stock unit grants were
made to the Company’s executive officers in fiscal 2005.
In fiscal 2005, non-qualified stock options were granted to all
of the Company’s executive officers pursuant to the
Company’s employee stock option plans. The grants to the
Company’s named executive officers in 2005 are reflected in
the Option Grants in Last Fiscal Year table that follows this
report. The Committee granted individual options to executive
officers in order to provide an incentive to motivate and retain
those individuals over a period of years who are important to
the Company’s future success. Stock options are designed to
align the interests of executives with those of shareholders by
providing executives with a benefit from price appreciation in
the Common Stock after the date of grant. In establishing the
number of shares covered by the option grants made to the
Company’s individual executive officers, the Committee
reviewed market data with respect to equity compensation levels
at comparable and competitive companies and determined grant
levels which it believed compensated these individuals for stock
price appreciation in a manner commensurate with their duties
and potential contributions to the performance of the Company
and its stock. Stock options granted under this program
generally vest annually over the three-year period following the
date of grant. All options granted in fiscal 2005 were granted
with an exercise price equal to the fair market value of the
Common Stock on the date of grant.
The Committee is currently in the process of determining its
equity compensation program for fiscal 2006 and as part of that
process is considering whether the Company will begin to employ
other vehicles as a more significant component of overall
long-term compensation, with a corresponding reduction in the
use of stock options. The Committee is reevaluating the
Company’s current long-term compensation strategy in light
of a number of developments, including the mandatory expensing
of stock options which is effective for the Company beginning in
fiscal 2006, and the increasing use of restricted stock and
performance awards in executive compensation.
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