Blizzard 2002 Annual Report Download - page 24

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“Offering Period”). Employees may purchase shares having a value not exceeding 10% of their gross
compensation during an Offering Period. Employees purchased approximately 44,900 and 51,900 shares at
a price of $13.64 and $6.31 per share during the Purchase Plan’s offering period ended September 30, 2001
and 2000, respectively, and approximately 48,000 and 65,900 shares at a price of $14.23 and $7.86 per
share during the Purchase Plan’s offering period ended March 31, 2002 and 2001, respectively.
Activity of Employee and Director Options and Warrants. Activity of all employee and director options and
warrants during the last three fiscal years was as follows (amounts in thousands, except weighted average
exercise price amounts):
2002 2001 2000
Wtd. Avg. Wtd. Avg. Wtd. Avg.
Shares Ex. Price Shares Ex. Price Shares Ex. Price
Outstanding at beginning of year 17,916 $ 6.45 15,498 $7.38 14,924 $7.03
Granted 4,109 16.30 10,151 4.61 5,651 7.68
Exercised (8,681) 6.74 (5,250) 6.04 (3,497) 6.10
Forfeited (481) 7.35 (2,483) 6.49 (1,580) 7.94
Outstanding at end of year 12,863 $ 9.37 17,916 $6.45 15,498 $7.38
Exercisable at end of year 6,334 $ 8.25 9,816 $6.66 7,073 $6.83
For the year ended March 31, 2002, 4,108,900 options with a weighted average exercise price of $16.30
were granted at an exercise price equal to the fair market value on the date of grant.
For the year ended March 31, 2001, 6,513,000 options with a weighted average exercise price of $4.79
were granted at an exercise price equal to the fair market value on the date of grant and 3,637,500 options
with a weighted average exercise price of $4.29 were granted at an exercise price greater than fair market
value on the date of grant .
For the year ended March 31, 2000, 3,751,500 options with a weighted average exercise price of $8.59
were granted at an exercise price equal to the fair market value on the date of grant and 1,057,500 options
with a weighted average exercise price of $7.14 were granted at an exercise price greater than fair market
value on the date of grant . Additionally, in conjunction with the acquisition of Expert, 841,500 options with
a weighted average exercise price of $4.32 were granted at an exercise price less than market value on the
date of grant. Options granted to Exper t were outside any of the Plans.
The following tables summarize information about all employee and director stock options and warrants
outstanding as of March 31, 2002 (share amounts in thousands):
Outstanding Options Exercisable Options
Remaining
Wtd. Avg.
Contractual
Life Wtd. Avg. Wtd. Avg.
Shares (in years) Exercise Price Shares Exercise Price
Range of exercise prices:
$ 3.17 to $ 4.08 1,812 8.06 $ 4.04 328 $ 3.99
$ 4.09 to $ 6.83 1,692 7.07 5.73 887 6.40
$ 6.88 to $ 7.00 3,074 7.05 6.99 2,915 7.00
$ 7.04 to $ 8.91 1,380 6.65 7.65 608 7.37
$ 8.92 to $11.29 1,331 6.23 9.70 630 10.14
$11.50 to $13.92 1,612 8.90 13.73 499 13.89
$14.12 to $16.67 1,394 8.26 15.99 467 15.12
$16.81 to $28.60 565 9.68 24.74 — —
$28.61 to $28.61 1 9.97 28.61 — —
$31.29 to $31.29 2 9.95 31.29 — —
12,863 7.55 $ 9.37 6,334 $ 8.25
On August 23, 2001, the shareholders of Activision approved the Activision 2001 Incentive Plan, as
amended (the “2001 Plan”). The 2001 Plan permits the granting of “Awards” in the form of non-qualified
stock options, ISOs, SARs, restricted stock awards, deferred stock awards and other common stock-based
awards to directors, officers, employees, consultants and others. The total number of shares of common
stock available for distribution under the 2001 Plan is 2,250,000. The 2001 Plan requires available shares to
consist in whole or in part of authorized and unissued shares or treasury shares. There were approximately
694,000 shares remaining available for grant under the 2001 Plan as of March 31, 2002.
On April 4, 2002, the Board of Directors approved the Activision 2002 Incentive Plan (the “2002 Plan”).
The 2002 Plan permits the granting of “Awards” in the form of non-qualified stock options, ISOs, SARs,
restricted stock awards, deferred share awards and other common stock-based awards to officers (other
than executive officers), employees, consultants, advisors and others. The total number of shares of com-
mon stock available for distribution under the 2002 Plan is 2,350,000. The 2002 Plan requires available
shares to consist in whole or in part of authorized and unissued shares or treasury shares.
The exercise price for Awards issued under the 1991 Plan, 1998 Plan, 1999 Plan, 2001 Plan and 2002 Plan
(collectively, the “Plans”) is determined at the discretion of the Board of Directors (or the Compensation
Committee of the Board of Directors, which administers the Plans), and for ISOs, is not to be less than the
fair market value of our common stock at the date of grant, or in the case of non-qualified options, must
exceed or be equal to 85% of the fair market value at the date of grant. Options typically become exercis-
able in installments over a period not to exceed five years and must be exercised within 10 years of the
date of grant. However, certain options granted to executives vest immediately. Historically, stock options
have been granted with exercise prices equal to or greater than the fair market value at the date of grant.
In connection with prior employment agreements between Activision and Robert A. Kotick, Activision’s
Chairman and Chief Executive Officer, and Brian G. Kelly, Activision’s Co-Chairman, Mr. Kotick and Mr. Kelly
were granted options to purchase common stock. The Board of Directors approved the granting of these
options. Relating to such grants, as of March 31, 2002, 4,142,300 and 3,267,300 shares with weighted
average exercise prices of $6.31 and $6.90 were outstanding and exercisable, respectively.
We additionally have approximately 390,000 options outstanding to employees as of March 31, 2002, with
a weighted average exercise price of $13.92. The Board of Directors approved the granting of these
options. Such options have terms similar to those options granted under the Plans.
We also issued stock options in conjunction with acquisition transactions. For the year ended March 31,
2002, 12,000 options with a weighted average exercise price of $6.67 were outstanding relating to options
issued in conjunction with acquisitions completed in fiscal 1999 and 1998. The Board of Directors approved
the granting of these options. None of these shares were exercisable as of March 31, 2002.
Director Warrants. The Director Warrant Plan, which expired on December 19, 1996, provided for the auto-
matic granting of warrants (“Director Warrants”) to purchase 25,000 shares of common stock to each
director of Activision who was not an officer or employee of Activision or any of its subsidiaries. Director
Warrants granted under the Director Warrant Plan vest 25% on the first anniversary of the date of grant,
and 12.5% each six months thereafter. The expiration of the Plan had no effect on the outstanding Director
Warrants. As of March 31, 2002, there were no shares of common stock available for distribution nor were
there any warrants outstanding under the Director Warrant Plan.
During the fiscal year ended March 31, 1997, we issued warrants to purchase 60,000 shares of our common
stock, at exercise prices ranging from $7.87 to $9.25 to two of our outside directors in connection with
their election to the Board. Such warrants have vesting terms identical to the Directors Warrants and
expire within 10 years. Relating to such warrants, as of March 31, 2002, 30,000 shares with a weighted
average exercise price of $9.02 were outstanding and exercisable.
Employee Stock Purchase Plan. We have an employee stock purchase plan for all eligible employees (the
“Purchase Plan”). Under the Purchase Plan, shares of our common stock may be purchased at six-month
intervals at 85% of the lower of the fair market value on the first or last day of each six-month period (the