THQ 2008 Annual Report Download - page 88

exercisable over three years and expire on the fifth anniversary of the grant date. Other vesting terms are
as follows:
• PARS and PARSUs that have been granted to our officers under the 1997 Plan and the LTIP vest
with respect to 100% of the shares subject to the award on the fifth anniversary of the grant date
subject to continued employment of the grantee; provided, however, 20% of the shares subject to
each award will vest on each of the first through fourth anniversaries of the grant date if certain
performance targets for the Company are attained each fiscal year. In the fiscal year ended
March 31, 2008, it was determined that certain performance targets had been met with respect to
our fiscal year ended March 31, 2007 and as such certain of our officers vested in 20% of
outstanding awards.
• PARSUs granted to our non-employee directors under the 1997 Plan are currently fully vested.
• Deferred Stock Units (‘‘DSUs’’) granted to our non-employee directors under the LTIP vest
immediately, however, may not be paid to a director until thirteen (13) months after the date of
grant.
• RSUs granted to our employees are performance-based awards that do not carry any acceleration
conditions. Each award will vest with respect to 100% of the shares on the third anniversary of the
grant date, subject to continued employment of the grantee.
The fair value of our nonvested restricted stock and restricted stock units is determined based on the
closing trading price of our common stock on the grant date. The fair value of PARS, PARSUs, DSUs and
RSUs granted is amortized over the vesting period.
In March 2008, under the LTIP, we granted 312,375 RSUs to our employees. Total compensation expense
recognized on RSUs for fiscal year ended March 31, 2008 was $42,000.
Beginning in March 2007, we offered our non-executive employees the ability to participate in an employee
stock purchase plan (‘‘ESPP’’). Under the ESPP, up to 500,000 shares of our common stock may be
purchased by eligible employees during six-month offering periods that commence each March 1 and
September 1 (each, an ‘‘Offering Period’’). The first business day of each Offering Period is referred to as
the ‘‘Offering Date.’’ The last business day of each Offering Period is referred to as the ‘‘Purchase Date’’.
Pursuant to our ESPP, eligible employees may authorize payroll deductions of up to 15 percent of their
base salary, subject to certain limitations, to purchase shares at 85 percent of the lower of the fair market
value of our common stock on the Offering Date or Purchase Date. The fair value of the ESPP options
granted is amortized over the offering period. During the year ended March 31, 2008, employees
purchased 124,650 and 180,229 shares at a price of $24.47 and $15.90 per share, respectively, on the
Purchase Dates. No purchase of ESPP shares occurred during the year ended March 31, 2007. As of
March 31, 2008, we had 195,121 shares available for issuance under the ESPP.
Any references we make to unspecified ‘‘stock-based compensation’’ and ‘‘stock-based awards’’ are
intended to represent the collective group of all our awards and purchase opportunities: stock options,
PARS, PARSUs, DSUs, RSUs and ESPP options. Any references we make to ‘‘nonvested shares’’ and
‘‘vested shares’’ are intended to represent our PARS, PARSU, DSU and RSU awards.
Prior to April 1, 2006, we accounted for our stock-based compensation using the intrinsic value method in
accordance with APB 25 and the disclosure-only provisions of FAS 123. Effective April 1, 2006, we adopted
the fair value recognition provisions of FAS 123R using the modified prospective transition method. Under
that transition method, results for prior periods have not been restated as a result of adopting FAS 123R.
80