Atari 2011 Annual Report Download - page 24

ANNUAL FINANCIAL REPORT – REGISTRATION DOCUMENT
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exchange rate - to be paid in Fiscal Year 2011/2012), for his CEO of Atari Inc. functions, his Chief Operating Officer
(COO) functions and his CEO functions.
At the May 13, 2011 Board meeting, the Board of Directors approved the principle of quantitative and qualitative criteria
applicable for Mr. Jim Wilson as a CEO for the Fiscal Year 2011/2012 with quantitative criteria weighted at 60% (relating
the operating cash flow, current operating income and revenues), and qualitative criteria weighted at 40%. The
qualitative criteria are based on restructuring, publishing plan, licensing strategy, continue organization shift toward
licensing, mobile and casual, and secure co-publishing deals.
STOCK OPTIONS
On May 25, 2009, the Board of Directors attributed to Mr. Wilson 300,000 stock options (adjusted to 326,174 following
the financial transaction initiated in December 2009) with an exercise price of Euros 5.17 euro per stock (adjusted to
€4.76 following the financial transaction initiated in December 2009), subject to the achievement of performance criteria.
The Board decided that the CEO will have to maintain throughout the duration of his mandate at least 15% of the vested
stocks resulting from the exercise of these stock options.
Performance criteria applicable to the stock options are set by the Board of directors, upon the recommendation of the
Nomination and Compensation Committee. Because of the turnaround of the Company, the change in its business
model, the size of the Company and the current economic environment, 3-year criteria as well as peer group criteria are
not relevant. As a result the Board of directors reviews performance criteria each year of the vesting period upon the
recommendation of the Nomination and Compensation Committee. On December 23, 2010, the Board of Directors
approved the principle of quantitative and qualitative criteria applicable for Mr. Jim Wilson as a CEO for the remaining of
the Fiscal Year 2010/2011, and has given relative weights to these criteria for the purpose of calculating the overall
performance of senior management, as follows: quantitative criteria weighted at 60%, and qualitative criteria weighted at
40%. Select quantitative criteria will be evaluated on a sliding scale.
These criteria are applicable to Mr. Wilson, with some adjustments due to the fact that he is appointed during the Fiscal
Year. The quantitative criteria relate to online revenues, current operating income and free cash flow. The qualitative
criteria are based on: (i) substantially deliver the product publishing plan schedule, (ii) re-adjustment of the online
products schedule, (iii) develop cash management process and reporting, (iv) continue structure optimization to fully
support on-line game development, marketing and publishing, (v) develop and recommend future strategies for Cryptic
and Eden Games: deliver key Q4 products, create mission statement, product strategy and organizations at the
company’s two studios, in order for them to contribute meaningfully to the 2012 Fiscal Year in revenue and margin terms.
At the May 13, 2011 Board meeting, the Board of Directors approved the principle of quantitative and qualitative criteria
applicable for stock options for the Fiscal Year 2011/2012 with quantitative criteria weighted at 60% (relating the
operating cash flow, current operating income and revenues), and qualitative criteria weighted at 40%. The qualitative
criteria are based on restructuring, publishing plan, licensing strategy, continue organization shift toward licensing,
mobile and casual, and secure co-publishing deals.
FREE SHARES
At May 13 and 23, 2011 Board meetings, Atari’s Board of Directors granted to Mr. Wilson 500,000 free shares. The
vesting period applicable to the shares shall end two years from the initial grant date. Vesting rights of the shares
(contingent on performance and presence criteria) will apply, each year, on half of the free shares. The lock up period is
established for two (2) years after the vesting date. The Beneficiary shall be present in the Group at the final grant date
and at the vesting date of the shares. In addition, the Board decided that the CEO will have to maintain throughout the
duration of his mandate no less than 15% of the vested shares.
At the May 13, 2011 Board meeting, the Board of Directors approved the principle of quantitative and qualitative criteria
applicable for free shares for Fiscal Year 2011/2012,with quantitative criteria weighted at 60% (relating the operating
cash flow, current operating income and revenues), and qualitative criteria weighted at 40%. The qualitative criteria are
based on restructuring, publishing plan, licensing strategy, continue organization shift toward licensing, mobile and
casual, and secure co-publishing deals.
DEFERRED COMPENSATION
In the event Mr. Wilson is removed from office before the end of his appointment, the Board has also agreed a fixed
severance package equal to one year of his annual fixed gross compensation plus applicable bonus and benefits as
determined by the Board according to the performance criteria described above.
Jeff Lapin (CEO from December 10, 2009 to December 23, 2010)
Jeff Lapin was appointed Chief Executive Officer (CEO) on December 10, 2009 and left in December 23, 2010.
FIXED AND VARIABLE COMPENSATION
Jeff Lapin compensation was set by the Board of directors on December 10, 2009. It included a fixed portion and a