This excerpt taken from the ATVI DEF 14A filed Jul 29, 2005.
"Non-qualified options" that do not meet the requirements of Section 422 of the Code are available for grant under the 2003 Plan. The term of each option will be determined by the Compensation Committee and the terms of each option may be varied by the Compensation Committee so long as it conforms with the 2003 Plan. Among other restrictions applicable to options generally, the exercise price per share for non-qualified options that are performance-based awards must be at least equal to 100% of the fair market value of a share of common stock on the date of grant. The exercise price of an option can be paid for (i) in cash, or by certified or bank check or wire transfer of immediately available funds, (ii) with the consent of the Compensation Committee, by tendering (actually or constructively) previously acquired shares of common stock (valued at its fair market value, as determined by the Compensation Committee as of the date of tender) that have been owned for a period of at least six months (or such other period to avoid accounting charges against the Company's earnings), (iii) if shares of common stock are traded on a national securities exchange, the NASDAQ Stock Market or quoted on a national quotation system sponsored by the National Association of Securities Dealers, Inc. and the Compensation Committee authorizes this method of exercise, through the delivery of irrevocable instructions to a broker approved by the Compensation Committee to deliver promptly to the Company an amount equal to the purchase price, or (iv) with the consent of the Compensation Committee, by any combination of (i), (ii) and (iii) or through any other method expressly authorized by the Compensation Committee.
Options are not transferable except by will or the laws of descent and distribution and may be exercised only by the participant (or his or her guardian or legal representative) during his or her lifetime; provided, however, that non-qualified options and "related SAR's" (as defined below) may, under certain circumstances, be transferable to family members and trusts and other entities for the benefit of the participant or his family members.