THQ 2007 Annual Report Download - page 83

Download and view the complete annual report

Please find page 83 of the 2007 THQ annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.

Page out of 108

  • 1
  • 2
  • 3
  • 4
  • 5
  • 6
  • 7
  • 8
  • 9
  • 10
  • 11
  • 12
  • 13
  • 14
  • 15
  • 16
  • 17
  • 18
  • 19
  • 20
  • 21
  • 22
  • 23
  • 24
  • 25
  • 26
  • 27
  • 28
  • 29
  • 30
  • 31
  • 32
  • 33
  • 34
  • 35
  • 36
  • 37
  • 38
  • 39
  • 40
  • 41
  • 42
  • 43
  • 44
  • 45
  • 46
  • 47
  • 48
  • 49
  • 50
  • 51
  • 52
  • 53
  • 54
  • 55
  • 56
  • 57
  • 58
  • 59
  • 60
  • 61
  • 62
  • 63
  • 64
  • 65
  • 66
  • 67
  • 68
  • 69
  • 70
  • 71
  • 72
  • 73
  • 74
  • 75
  • 76
  • 77
  • 78
  • 79
  • 80
  • 81
  • 82
  • 83
  • 84
  • 85
  • 86
  • 87
  • 88
  • 89
  • 90
  • 91
  • 92
  • 93
  • 94
  • 95
  • 96
  • 97
  • 98
  • 99
  • 100
  • 101
  • 102
  • 103
  • 104
  • 105
  • 106
  • 107
  • 108

75
for the impact of thecorrected options as astock option modification under FAS 123R. As a result of this
partial cash settlement of these options and the application of themodification accounting, we recognized
$0.7 million in additionalcompensation cost dueto theincrease in the fair value of these options and $0.6
million in accelerated compensation cost.
We also plan to compensateindividuals who had exercised affected options prior to December2006 for
excise taxliabilityand certain other adverse consequences under Section 409A. We incurred additional
compensation expense of $0.9 million in thethree months ended December 31, 2006 basedupon our best
estimate of this liability at that point in time. In the three months ended March 31,2007 we increasedour
estimate of this liability by $1.2 millionbased upon ourreview of the IRSComplianceResolution Program
(the “Program”),announced in February 2007 (IRS Announcement2007-18). It is our intenttoparticipate
in this Program, and we estimate our total liability under this Program will be approximately $2.1 million.
This amount is included in accruedand other current liabilities in our consolidated balance sheetat
March 31, 2007.
Asummary of the status of our nonvested shares as of March 31, 2007 and changes during the year then
ended, is as follows (in thousands, except per shareamounts):
Weighted-
Average
Grant-date
Fair Value
Shares Per Share
Nonvestedshares at April1,2006............................ 284$19.54
Granted................................................... 15526.21
Vested .................................................... (42) 25.66
Forfeited/cancelled ......................................... (58) 19.63
NonvestedsharesatMarch31,2007 .......................... 339$21.81
Theweighted-average grant-date fair value of nonvested shares granted in the fiscal year ended March 31,
2006 was $19.34. There were no grants of nonvested shares in the fiscal year ended March 31, 2005.
Theunrecognizedcompensation cost, that we expect to vest, related to our nonvested stock-basedawards
at March 31, 2007, and the weighted-averageperiod over which we expect to recognize that compensation,
is as follows (in thousands):
Unrecognized
Compensation Cost at
March 31, 2007
Weighted-
Average Period
(in years)
Stockoptions................................ $23,755 1.3
Nonvestedshares............................. 5,3303.6
ESPP .......................................7770.4
$29,862
Cash received from exercises of stock options for the fiscalyears ended March 31,2007, 2006 and 2005 was
$50.6 million, $37.8 million and $42.8 million, respectively. The actual tax benefit realized forthe tax
deductions from exercises of all stock-based awards totaled $8.9 million, $9.2 million and $6.9 million for
the fiscal years ended March31, 2007,2006 and 2005, respectively.
Thefair value of allour stock-basedawards that vested duringthe years ended March 31,2007, 2006 and
2005 was$19.9million, $14.8 million and $17.6 million, respectively.
Non-Employee Warrants. In prior years, we have granted stock warrants to third parties in connection
with the acquisition of licensing rightsforintellectual property. Thewarrants generally vest upon grantand