Atari 2009 Annual Report Download - page 102

ANNUAL FINANCIAL REPORT – REGISTRATION DOCUMENT
102
19.2. SHARE-BASED PAYM ENT EXPENS E
The share-based payment expense recorded in the consolidated income statement for the years ended March 31, 2009
and 2008 breaks down as follows:
(€ millions)
Year ended
March 31, 2009
Year ended
March 31, 2008
Grant of free Infogrames Entertainment shares 0.2 1.4
Infogrames Entertainment SA stock option plans 3.5 1.3
Atari Inc stock option plans 0.1 (0.1)
Employer social security contributions on share grants - 0.9
Employer social security contributions on stock options 0.2 -
Incentive bonus 2.4 -
Share-based payment expense 6.4 3.5
19.3 STOCK OPTIONS GR ANTED TO EMPLOYEES
The Company grants stock options to officers and senior executives as well as other employees for their contribution to
the Group‟s performance. At the grant date, the options‟ exercise price is set close to the trading price of the Company‟s
shares. The options granted have an eight-year life and a vesting period of between zero and four years.
Atari Inc., a subsidiary in which the Company held an indirect interest of 51.39% at March 31, 2008, also has its own
stock option plan. On October 9, 2008, the Company announced that it had completed its buyout of minority interests in
Atari Inc following which Atari Inc. became a wholly-owned subsidiary of the Company. At the time of this transaction
Atari Inc.‟s stock options were cancelled in exchange for a cash payment made to the option holders.
The table below summarizes the information concerning the Company's current stock option plans:
Number of options
(in thousands)
Average exercise
price
Number of
options
(in thousands)
Average
exercise price
Number of options outstanding at the beginning of the
year
275,658
19.0 16,919 207.1
Options granted 317 13.1 262,817 12.7
Options cancelled (308) 54.7 (1,090) 56.1
Options exercised - - - -
Options forfeited (54) 806.8 (2,988) 522.3
Number of options outstanding at the end of the year 275,613 18.2 275,658 19.0
Of which, exercisable 70,322 36.1 69,534 36.4
2008-2009
2007-2008
Following the reverse stock split carried out on March 4, 2008 and the adjustments made to the stock option exercise
ratios on February 4, 2009, the exercise ratio for the Company‟s stock options now corresponds to 100.51 options for
1 share.
A €3.8 million expense was recorded in relation to these plans in the year ended March 31, 2009, including the cost of
employer social security contributions. The expense recorded in relation to these plans for the year ended
March 31, 2008 was €1.2 million.
19.4. FAIR VALUE OF OPTIONS GRANTED DURING THE YEAR
As explained in Note 2.17, the fair value of options is calculated on the grant date using the Black & Scholes option
pricing model. Subsequent changes in fair value are not recognized.
The Group used the following principal assumptions to determine the fair value of options granted by the Company in
fiscal year 2008-2009: