Zynga 2011 Annual Report Download - page 84

Table of Contents
We have granted ZSUs to our employees that generally vest upon the satisfaction of both a service-
period condition of up to four years and
a liquidity event condition, the latter of which was satisfied following the Company’s initial public offering in December 2011. Because the
liquidity event condition was not met until our initial public offering, in prior periods, we had not recorded any expense relating to our ZSU
grants. In the fourth quarter of 2011 we recognized $510 million of stock-based compensation expense associated with ZSUs that vested in
connection with our initial public offering. Unamortized stock-based compensation relating to ZSUs amounted to $454.0 million as of
December 31, 2011. For outstanding ZSUs as of December 31, 2011 we expect to recognize approximately $293.5 million, $116.0 million,
$40.4 million and $4.1 million in 2012, 2013, 2014 and 2015, respectively, in stock-based compensation expense.
As of December 31, 2011, total unrecognized stock-based compensation expense of $15.4 million and $125.0 million related to unvested
stock options and unvested shares of Class B common stock that were Series Z convertible preferred stock prior to the initial public offering,
respectively, is expected to be recognized over a weighted-average recognition period of approximately 1.5 years.
The following table shows stock option activity for 2011 (in thousands, except weighted average exercise price and contractual term):
The aggregate intrinsic value of options exercised during the years ended December 31, 2011, 2010, and 2009 was $78.2 million, $110.6
million, and $0.01 million, respectively. The total grant date fair value of options that vested during the years ended December 31, 2011, 2010,
and 2009 was $17.5 million, $12.9 million and $1.0 million, respectively.
The following table shows a summary of ZSU activity for 2011 (in thousands, except weighted average remaining term):
For ZSUs that vested in 2011, approximately 16.0 million shares were issued net of shares withheld of approximately 8.3 million to satisfy
minimum tax withholding obligations. The aggregate intrinsic value of the net settled shares converted into Class B common stock for the twelve
months ended December 31, 2011 was $150.8 million. In 2010, we granted 41.9 million ZSUs with a weighted average fair value of $6.44.
80
Outstanding Options
Shares
Weighted
-
Average
Exercise
Price
Aggregate
Intrinsic Value of
Stock Options
Outstanding
Weighted
Average
Contractual Term
(In years)
Balance as of December 31, 2010
122,848
0.80
689,500
Stock option grants
1,080
7.22
Stock option forfeitures and cancellations
(12,885
)
2.55
Stock option exercises
(8,729
)
0.45
Balance as of December 31, 2011
102,314
$
0.69
$
892,135
7.04
As of December 31, 2011
Exercisable options
92,326
$
0.54
$
819,270
6.94
Vested and expected to vest
100,582
$
0.68
$
878,177
7.03
Shares
Weighted
Average
Fair
Value
Weighted
Average
Remaining Term
(In years)
Aggregate
Intrinsic Value of
Unvested ZSUs
Unvested as of December 31, 2010
44,179
$
6.435
Granted
66,907
$
13.13
Vested
(24,367
)
$
7.83
Forfeited and cancelled
(6,901
)
$
10.89
Unvested as of December 31, 2011
79,818
$
11.24
1.45
$
751,090