Blizzard 2008 Annual Report Download - page 93

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79
Modification of Awards through Business Combination
As a result of the reverse acquisition accounting treatment for the Business Combination,
previously issued Activision, Inc. stock options and restricted stock awards granted to employees
and directors, and Activision, Inc. warrants that were outstanding and unvested at the date of the
Business Combination, were accounted for as an exchange of awards. The fair value of the
outstanding vested and unvested awards was measured on the date of the acquisition, and for
unvested awards which require service subsequent to the date of the Business Combination, a
portion of the awards’ fair values have been allocated to future service and will be recognized over
the remaining future requisite service period.
Restricted Stock Units and Restricted Stock
We grant restricted stock units and restricted stock (collectively referred to as “restricted
stock rights”) under the 2008 Plan to employees around the world, and we have assumed as a
result of the Business Combination the restricted stock rights granted by Activision, Inc.
Restricted stock units entitle the holders thereof to receive shares of our common stock at the end
of a specified period of time or otherwise upon a specified occurrence. Restricted stock is issued
and outstanding upon grant; however, restricted stock holders are restricted from selling the shares
until they vest. Upon vesting of restricted stock rights, we may withhold shares otherwise
deliverable to satisfy tax withholding requirements. Restricted stock rights are subject to forfeiture
and transfer restrictions. Vesting for restricted stock rights is contingent upon the holders’
continued employment with us and may be subject to other conditions. If the vesting conditions
are not met, unvested restricted stock rights will be forfeited.
The following table summarizes our restricted stock rights activity for the year ended
December 31, 2008 (amounts in thousands except per share amounts):
Restricted
Stock
Rights
Weighted-
Average
Grant
Date Fair
Value
Non-vested at January 1, 2008..............................
.
—$—
Acquired from the Business Combination............
.
7,676 14.91
Granted .................................................................
.
3,247 14.67
Vested...................................................................
.
(596) 11.30
Forfeited................................................................
.
(60) 16.66
Non-vested at December 31, 2008........................
.
10,267 14.52
At December 31, 2008, approximately $64 million of total unrecognized compensation
cost related to restricted stock rights is expected to be recognized over a weighted-average period
of 2.09 years.
Non-Plan Employee Stock Options
In connection with prior employment agreements between Activision, Inc. and Robert A.
Kotick, our Chief Executive Officer, and Brian G. Kelly, our Co-Chairman, Mr. Kotick and
Mr. Kelly were previously granted options to purchase common stock of Activision, Inc. These
awards were assumed as a result of the Business Combination and accounted for as an exchange