Electronic Arts 2010 Annual Report Download - page 178

restricted stock units outstanding under the VG Holding Corp. 2005 Stock Incentive Plan (the “VGH 2005
Plan”), which we assumed in connection with our acquisition of VGH.
In connection with our acquisition of VGH, we also established the 2007 Electronic Arts VGH Acquisition
Inducement Award Plan (the “VGH Inducement Plan”), which allowed us to grant restricted stock units to
service providers, who were employees of VGH or a subsidiary of VGH immediately prior to the consummation
of the acquisition and who became employees of EA following the acquisition. The restricted stock units granted
under the VGH Inducement Plan vest pursuant to either (1) time-based vesting schedules over a period of up to
four years, or (2) the achievement of pre-determined performance-based milestones, and in all cases are subject
to earlier vesting in the event we terminate a recipient’s employment without “cause” or the recipient terminates
employment for “good reason.” We do not intend to grant any further awards under the VGH Inducement Plan.
In addition, in connection with our acquisition of VGH, in exchange for outstanding stock options and restricted
stock, we granted service-based non-interest bearing notes payable solely in shares of our common stock to
certain employees of VGH, who became employees of EA following the acquisition. These notes payable vest
over a period of four years, subject to earlier vesting in the event we terminate a recipient’s employment without
“cause” or the recipient terminates employment for “good reason.”
Options granted under the Equity Plan generally expire ten years from the date of grant and are generally
exercisable as to 24 percent of the shares after 12 months, and then ratably over the following 38 months. The
material terms of options granted under the JAMDAT and VGH 2005 Plans are similar to our Equity Plan.
Stock Options
The following table summarizes our stock option activity for the fiscal year ended March 31, 2010:
Options
(in thousands)
Weighted-
Average
Exercise Price
Weighted-
Average
Remaining
Contractual
Term (in years)
Aggregate
Intrinsic Value
(in millions)
Outstanding as of March 31, 2009 ............... 34,360 $42.04
Granted .................................. 4,420 20.34
Exchange Program (granted) ................. 18 17.43
Exercised ................................ (588) 15.22
Exchange Program (cancelled) ................ (16,561) 49.11
Forfeited, cancelled or expired ................ (5,518) 40.60
Outstanding as of March 31, 2010 ............... 16,131 30.28
Vested and expected to vest .................... 15,219 $30.79 5.5 $7
Exercisable ................................. 9,165 $36.36 3.4 $2
As of March 31, 2010, the weighted-average contractual term for our stock options outstanding was 5.7 years and
the aggregate intrinsic value of our stock options outstanding was $8 million. The aggregate intrinsic value
represents the total pre-tax intrinsic value based on our closing stock price as of March 31, 2010, which would
have been received by the option holders had all option holders exercised their options as of that date. The
weighted-average grant-date fair values of stock options granted during fiscal years 2010, 2009 and 2008 were
$7.81, $10.28 and $16.85, respectively. The total intrinsic values of options exercised during fiscal years 2010,
2009 and 2008 were $3 million, $46 million and $144 million, respectively. The total estimated fair values
(determined as of the grant-date) of options vested during fiscal years 2010, 2009 and 2008 were $26 million,
$83 million and $82 million, respectively. We issue new common stock from our authorized shares upon the
exercise of stock options.
A total of 18 million shares were available for grant under our Equity Plan as of March 31, 2010.
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