Electronic Arts 2007 Annual Report Download - page 34

Maximum Award. The maximum bonus payment that any participant may receive under the Executive
Bonus Plan for any performance period is 300% of their base salary for such period, but in no event will a
participant’s bonus under the Executive Bonus Plan exceed $5,000,000 during any fiscal year.
Term of Executive Bonus Plan. The Executive Bonus Plan shall first apply to fiscal 2008. The Executive
Bonus Plan shall terminate with respect to fiscal 2008 and all subsequent years unless it is approved at the
2007 Annual Meeting. Once approved by our stockholders, the Executive Bonus Plan shall continue until the
earlier of (i) the date as of which the Compensation Committee terminates the Executive Bonus Plan, (ii) the
date any stockholder approval requirement under Section 162(m) of the Code ceases to be met, or (iii) the date
that is five years after the 2007 Annual Meeting.
Amendment and Termination. The Compensation Committee may amend, modify, suspend or terminate the
Executive Bonus Plan, in whole or in part, at any time and in any respect, including the adoption of
amendments deemed necessary or desirable to correct any defect or supply omitted data or to reconcile any
inconsistency in the Executive Bonus Plan or in any award granted thereunder. However, in no event may any
such amendment, modification, suspension or termination result in an increase in the amount of compensation
payable pursuant to any award under the Executive Bonus Plan or cause compensation that is, or may become,
payable under the Executive Bonus Plan to fail to qualify as deductible “performance-based compensation”
within the meaning of Section 162(m) of the Code. To the extent required by applicable law, amendments to
the Executive Bonus Plan are subject to stockholder approval.
Federal Income Tax Consequences. Under present federal income tax law, an Executive Bonus Plan
participant will be taxed at ordinary income rates on the cash bonus in the year in which such cash is received.
If a participant elects to defer all or a portion of the bonus, the participant may be entitled to defer the
recognition of income. However, bonus deferrals are subject to applicable required withholdings, and
Electronic Arts will withhold such amounts from the amount of the bonus deferral. Generally, and subject to
the provisions of Section 162(m) of the Code, Electronic Arts will receive a federal income tax deduction
corresponding to the amount of income recognized by the 162(m) Bonus Plan participants.
Bonuses to be Paid to Certain Individuals and Groups
Awards under the Executive Bonus Plan are determined based on actual future performance. Accordingly, it is
not possible to determine the awards that would have been made had the Executive Bonus Plan been in effect
for fiscal 2007. Notwithstanding the foregoing, the maximum bonus payment that any participant may receive
under the Executive Bonus Plan for any performance period is 300% of their base salary for such period, but
in no event will a participant’s bonus under the Executive Bonus Plan exceed $5,000,000 during any fiscal
year. For fiscal 2007, we have paid discretionary bonuses or other types of compensation. See “Fiscal 2007
Summary Compensation Table” below for a description of bonuses paid to our Named Executive Officers in
fiscal 2007. Though no participants have been definitively identified as of the filing of this proxy statement,
our Compensation Committee intends to choose participants in the Executive Bonus Plan and set their bonus
amounts in the near future.
Required Vote and Board of Directors’ Recommendation
Approval of this proposal requires the affirmative vote of a majority of the voting shares present at the meeting
in person or by proxy and voting on this proposal.
The Board recommends a vote FOR approval of the Executive Bonus Plan.
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Proxy Statement