Electronic Arts 2012 Annual Report Download - page 185

Annual Report
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.” All remaining awards either vested or were cancelled during fiscal 2012. 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.” All notes payable vested during fiscal 2012.
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 VGH 2005 Plan are similar to our Equity Plan.
At our Annual Meeting of Stockholders, held on July 28, 2011, our stockholders approved an amendment to our
2000 Equity Incentive Plan (the “Equity Plan”) to increase the number of shares authorized for issuance under
the Equity Plan by 10 million shares. A total of 14.7 million options or 10.3 million restricted stock units were
available for grant under our Equity Plan as of March 31, 2012.
Stock Options
The following table summarizes our stock option activity for the fiscal year ended March 31, 2012:
Options
(in thousands)
Weighted-
Average
Exercise Prices
Weighted-
Average
Remaining
Contractual
Term (in years)
Aggregate
Intrinsic Value
(in millions)
Outstanding as of March 31, 2011 .............. 12,899 $31.39
Granted ................................. 470 20.54
Exercised ................................ (1,295) 19.18
Forfeited, cancelled or expired ............... (2,300) 24.22
Outstanding as of March 31, 2012 .............. 9,774 34.17
Vested and expected to vest ................... 9,690 $34.31 4.7 $1
Exercisable ................................ 8,490 $35.37 4.3 $1
As of March 31, 2012, the weighted-average contractual term for our stock options outstanding was 4.7 years and
the aggregate intrinsic value of our stock options outstanding was $1 million. The aggregate intrinsic value
represents the total pre-tax intrinsic value based on our closing stock price as of March 31, 2012, which would have
been received by the option holders had all the option holders exercised their options as of that date. The weighted-
average grant date fair values of stock options granted during fiscal years 2012, 2011 and 2010 were $7.27, $6.03
and $7.81, respectively. The total intrinsic values of stock options exercised during fiscal years 2012, 2011 and 2010
were $4 million, $1 million and $3 million, respectively. The total estimated fair values (determined as of the grant
date) of stock options vested during fiscal years 2012, 2011 and 2010 were $15 million, $24 million and $26
million, respectively. We issue new common stock from our authorized shares upon the exercise of stock options.
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