Square Enix 2011 Annual Report Download - page 59

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(2) Scale of and changes in stock options
With respect to stock options outstanding at this fiscal year-end, the number of stock options and the status of their exercise to shares of common
stock are indicated below:
1) Number of stock options
2005
stock options
2005
stock options
2007
stock options
2007
stock options
2008
stock options
2009
stock options
2009
stock options
2010
stock options
2010
stock options
2010
stock options
Before vesting (shares)
March 31, 2010 — — — 426,700 — — 140,000 — — —
Granted ———————77,000 140,000 20,000
Forfeited — — — 17,000——————
Vested — — — 210,300———77,000 — —
Unvested balance — — — 199,400 — — 140,000 — 140,000 20,000
After vesting (shares)
March 31, 2010 792,000 1,000 450,000 210,300 19,800 57,000 — — — —
Vested — — — 210,300 — — — 77,000 — —
Exercised — — — — — — — — — —
Forfeited 792,000 1,000 200,000 33,000——— ———
Balance unexercised — — 250,000 387,600 19,800 57,000 — 77,000 — —
2) Price information Yen
2005
stock options
2005
stock options
2007
stock options
2007
stock options
2008
stock options
2009
stock options
2009
stock options
2010
stock options
2010
stock options
2010
stock options
Exercise price ¥3,365 ¥3,360 ¥3,706 ¥3,706 ¥1 ¥1 ¥2,293 ¥1 ¥1,895 ¥1,779
Average share price at
exercise ——————————
Fair market value on
grant date — — 526
A. 526
B. 594
C. 715
3,171 2,107 385 1,464 364 250
4. Method of estimating the fair value of stock options
The fair value of the 2010 Stock Options granted during the fiscal year under review was estimated using following method.
(1) Method of valuation used: Black-Scholes option pricing model
(2) Main assumptions used and method of valuation
2010 Stock Options 2010 Stock Options 2010 Stock Options
Expected share price volatility (Note 1) 32.8% 36.1% 36.3%
Expected life (Note 2) 10 years 3.44 years 3.45 years
Expected dividend (Note 3) Dividend yield 1.96% Dividend yield 1.96% Dividend yield 2.34%
Risk-free interest rate (Note 4) 0.97% 0.14% 0.32%
Notes: 1. Calculated based on historical share price data prior to the grant date over a period equivalent to the expected life.
2. Owing to insufficient accumulated data, an appropriate estimate is problematic. Consequently, the midpoint of the available exercise period has been used as the
estimated life.
3. For the 2010 Stock Options, this was calculated based on the actual dividend applicable to the fiscal year ended March 31, 2010.
4. Yield of government bonds corresponding to the expected life of the options.
5. Method of estimating the number of vested stock options
In principle, owing to the difficulty of appropriately estimating the forfeited number of stock options for future periods, estimation of the vested
number is based on actual forfeitures in prior periods.
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