Blizzard 2004 Annual Report Download - page 66

On April 29, 2003, our Board of Directors approved the Activision 2003 Incentive Plan (the “2003 Plan”).
The 2003 Plan permits the granting of “Awards” in the form of non-qualified stock options, SARs, restricted stock
awards, deferred stock awards and other common stock-based awards to directors, officers, employees, consultants and
others. The 2003 Plan requires available shares to consist in whole or in part of authorized and unissued shares or
treasury shares. The total number of shares of common stock available for distribution under the 2003 Plan is
13,500,000. There were approximately 13,353,800 shares remaining available for grant under the 2003 Plan as of
March 31, 2004.
The exercise price for Awards issued under the 1998 Plan, 1999 Plan, 2001 Plan, 2002 Plan, 2002 Executive Plan,
2002 Studio Plan and 2003 Plan (collectively, the “Plans”) is determined at the discretion of the Board of Directors
(or the Compensation Committee of the Board of Directors, which administers the Plans), and for ISOs, is not to be
less than the fair market value of our common stock at the date of grant, or in the case of non-qualified options, must
exceed or be equal to 85% of the fair market value of our common stock at the date of grant. Options typically
become exercisable in installments over a period not to exceed seven years and must be exercised within 10 years of
the date of grant. However, certain options granted to executives vest immediately. Historically, stock options have been
granted with exercise prices equal to or greater than the fair market value at the date of grant.
Other Employee Stock Options
In connection with prior employment agreements between Activision and Robert A. Kotick, Activision’s Chairman and
Chief Executive Officer, and Brian G. Kelly, Activision’s Co-Chairman, Mr. Kotick and Mr. Kelly were granted options
to purchase common stock. The Board of Directors approved the granting of these options. Relating to such grants, as
of March 31, 2004, approximately 7,816,400 shares were outstanding with a weighted average exercise price
of $2.81.
We additionally have approximately 209,500 options outstanding to employees as of March 31, 2004, with a
weighted average exercise price of $6.19. The Board of Directors approved the granting of these options. Such
options have terms similar to those options granted under the Plans.
Director Warrants
During the fiscal year ended March 31, 1997, we issued warrants to purchase 135,000 shares of our common stock,
at exercise prices ranging from $3.50 to $4.11 to two of our outside directors in connection with their election to the
Board. Such warrants vested 25% on the first anniversary of the date of grant, and 12.5% each six months thereafter
and expire within 10 years from the date of grant. Relating to such warrants, as of March 31, 2004, approximately
67,500 shares with a weighted average exercise price of $4.01 were outstanding.
Employee Stock Purchase Plans
On July 22, 2002, the Board of Directors approved the 2002 Employee Stock Purchase Plan for eligible domestic
employees. The shareholders of Activision subsequently approved the 2002 Employee Stock Purchase Plan on
September 19, 2002. Then, on February 11, 2003, the Board of Directors approved the 2002 Employee Stock
Purchase Plan for International Employees. The primary terms of the 2002 Employee Stock Purchase Plan and the
2002 Employee Stock Purchase Plan for International Employees (collectively the “2002 Purchase Plans”) are the
same. Under the 2002 Purchase Plans, up to 1,125,000 shares of our common stock may be purchased by eligible
employees during two overlapping, twelve-month offering periods that commence each April 1 and October 1 (the
“Offering Period”). At any point in time, employees may participate in only one Offering Period. The first day of each
Offering Period is referred to as the “Offering Date.” Common stock is purchased by 2002 Purchase Plans participants
at 85% of the lesser of fair market value on the Offering Date for the Offering Period that includes the common stock
purchase date or the fair market value on the common stock purchase date. Employees may purchase shares having a
value not exceeding 15% of their gross compensation during an Offering Period, limited to a maximum of 11,250
Activision, Inc. — 2004 Annual Report
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