Electronic Arts 2007 Annual Report Download - page 62

shares (including restricted stock) or other consideration, based on such terms and conditions as the Committee
and the Participant may agree.
Outside Directors
Our non-employee directors are entitled to receive automatic annual grants of options to purchase shares of
our common stock under the Equity Plan. Each non-employee director who first becomes a member of the
Board of Directors is granted an option to purchase 25,000 shares of common stock. Upon re-election to our
Board of Directors following each annual meeting of our stockholders, each non-employee director is
automatically granted an additional option to purchase 10,000 shares of common stock. As proposed to be
amended, (a) each non-employee director who first becomes a member of the Board of Directors would be
granted an option to purchase 17,500 shares of common stock and 2,500 restricted stock units, and (b) upon
election (following an earlier appointment) or re-election to our Board of Directors following each annual
meeting of our stockholders, each non-employee director would automatically be granted an additional option
to purchase 8,400 shares of common stock and 1,200 restricted stock units. If a non-employee director has not
served on our Board of Directors for a full year at the time of the annual meeting of our stockholders, such
director will receive a pro-rated annual grant.
Options issued to outside directors upon their initial election to the Board are exercisable as to 2% of the
shares on the date of grant and as to an additional 2% of the shares on the first day of each calendar month
after the date of grant so long as the outside director continues as a member of the Board. The vesting
schedule for all restricted stock units and annual stock option grants made to directors upon their re-election to
the Board is subject to the discretion of the Compensation Committee.
In the event of our dissolution or liquidation or a “change in control” transaction, options granted to our non-
employee directors under the Equity Plan will become 100% vested and exercisable in full.
In addition, our non-employee directors may elect to receive all or a portion of their cash compensation in
shares of common stock. Directors making this election are entitled to receive shares having a value equal to
110% of the amount of the cash compensation foregone.
Stock Appreciation Rights
The Compensation Committee may grant stock appreciation rights (a “SAR” or “SARs”) as stand-alone
awards or in addition to, or in tandem with, other awards under the Equity Plan under such terms, conditions
and restrictions as the Compensation Committee may determine; provided, however, that no SAR will be
exercisable after the expiration of ten (10) years from the date the SAR is granted. A SAR is an award which
provides the holder with the right to receive the appreciation in value of a set number of shares of company
stock over a set period of time. A SAR is similar to an option in that the holder benefits from any increases in
stock price above the exercise price set forth in the award agreement. However, unlike an option, the holder is
not required to pay an exercise price to exercise a SAR, but simply receives the net amount of the increase in
stock price in the form of cash or stock. The exercise price for a SAR must be no less than 100% of the “fair
market value” (as defined in the Equity Plan) of a share of common stock at the time the SAR is granted. In
addition, the Compensation Committee may, at its discretion, subject SARs to the achievement of one or more
of the performance factors described under the heading “Performance Factors” below.
Restricted Stock Awards
The Compensation Committee may grant restricted stock awards either in addition to, or in tandem with, other
awards under the Equity Plan under such terms, conditions and restrictions as the Compensation Committee
may determine. A restricted stock award is an offer by Electronic Arts to award shares of common stock that
are subject to restrictions established by the Compensation Committee. These restrictions may be based upon
completion by the award holder of a specified number of years of service or by the attainment of one or more
of the performance factors described under the heading “Performance Factors” below. The purchase price, if
any, for each such award is determined by the Compensation Committee at the time of grant. In the case of an
award to a Ten Percent Stockholder, the purchase price must be 100% of fair market value. The purchase
Proxy Statement
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