Electronic Arts 2006 Annual Report Download - page 58

Compensation Committee may determine. A restricted stock unit award is similar to a restricted stock
award (and may be awarded subject to any or all of the performance goals established by the Committee
described under the heading ""Performance Factors'' below) except the stock is not delivered to the
participant unless and until all restrictions have terminated.
Performance Factors
The Compensation Committee may grant, in its sole discretion, performance-based stock options, stock
appreciation rights, restricted stock and restricted stock unit awards with vesting and/or exercisability
conditioned on one or more of the following permissible performance factors, to be measured over a
speciÑed performance period that may be as short as a quarter or as long as Ñve years (unless tied to a
speciÑc and objective milestone or event), to the extent applicable on an absolute basis or relative to a
pre-established target: (a) net revenue; (b) earnings before interest, income taxes, depreciation and
amortization; (c) operating income; (d) operating margin; (e) net income; (f) earnings per share;
(g) total stockholder return; (h) the Company's stock price; (i) growth in stockholder value relative to a
pre-determined index; (j) return on equity; (k) return on invested capital; (l) operating cash Öow;
(m) free cash Öow; (n) economic value added; and (o) individual conÑdential business objectives. In
addition, the Committee may, in its sole discretion and in recognition of unusual or non-recurring items
such as acquisition-related activities or changes in applicable accounting rules, provide for one or more
equitable adjustments (based on objective standards) to the performance factors to preserve the
Committee's original intent regarding the performance factors at the time of the initial award grant.
Mergers, Consolidations, Change of Control
Except for automatic grants to non-employee directors, in the event of a merger, consolidation, dissolution
or liquidation of EA, the sale of substantially all of its assets or any other similar corporate transaction, the
successor corporation may assume, replace or substitute equivalent awards in exchange for those granted
under the Equity Plan or provide substantially similar consideration, shares or other property as was
provided to our stockholders (after taking into account the provisions of the awards). In the event that the
successor corporation does not assume, replace or substitute awards, such awards will accelerate and all
options will become exercisable in full prior to the consummation of the transaction at the time and upon
the conditions as the Compensation Committee determines. Any awards not exercised prior to the
consummation of the transaction will terminate.
Transferability
Incentive stock options granted under the Equity Plan are not transferable other than by means of a
distribution upon the optionee's death. NonqualiÑed stock options, stock appreciation rights, restricted
stock, and restricted stock unit awards are subject to similar restrictions on transfer unless otherwise
determined by the Compensation Committee and except that nonqualiÑed stock options may be transferred
to family members and trusts or foundations controlled by, or primarily beneÑting, family members of the
optionee.
Term of the Equity Plan
Unless terminated earlier as provided in the Equity Plan, the Equity Plan expires in 2010, ten (10) years
from the date it was adopted by the Board of Directors.
United States Federal Income Tax Information
THE FOLLOWING IS A GENERAL SUMMARY AS OF THE DATE OF THIS PROXY
STATEMENT OF THE UNITED STATES FEDERAL INCOME TAX CONSEQUENCES TO THE
COMPANY AND PARTICIPANTS UNDER THE EQUITY PLAN. THE FEDERAL TAX LAWS
MAY CHANGE AND THE FEDERAL, STATE AND LOCAL TAX CONSEQUENCES FOR ANY
PARTICIPANT WILL DEPEND UPON HIS OR HER INDIVIDUAL CIRCUMSTANCES. IN
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