Electronic Arts 2011 Annual Report Download - page 26

PROPOSAL 2. AMENDMENT TO THE 2000 EQUITY INCENTIVE PLAN
The 2000 Equity Incentive Plan, which was approved by the stockholders on March 22, 2000, continues EA’s
program of providing equity incentives to eligible employees, officers and directors. We offer these incentives in
order to assist in recruiting, retaining and motivating qualified employees, officers and directors. Since the Equity
Plan’s adoption, 104,685,000 shares of common stock have been reserved for issuance. For more information
regarding the Equity Plan, please read the full text of the Equity Plan, as proposed to be amended, or the
summary of its material terms, as proposed to be amended, included as Appendix A of this proxy statement.
We are proposing an amendment to the 2000 Equity Incentive Plan that would:
• Increase the number of shares authorized under the Equity Plan by 10,000,000 shares to a total of
114,685,000 shares.
We believe that alignment of the interests of our stockholders and our employees, officers and directors is best
advanced through the issuance of equity incentives as a portion of their total compensation. In this way, we
reinforce the link between our stockholders and our employees’, officers’ and directors’ focus on personal
responsibility, creativity and stockholder returns. Equity incentives such as stock options and restricted stock
units also play an important role in our recruitment and retention strategies, as the competition for creative and
technical talent and leadership in our industry is intense.
While equity is a strategic tool for recruitment and retention, we also carefully manage stock option and
restricted stock unit issuances and strive to keep the dilutive impact of the equity incentives we offer within a
reasonable range. Historically, we have made a significant portion of our equity grants in a given fiscal year in
connection with our annual reviews and merit increases.
During fiscal 2011, we granted stock options to purchase a total of approximately 174,047 shares and
restricted stock units to acquire a total of 8,210,716 shares. Together these stock option and restricted stock
unit grants represented approximately 2.5 percent of our total shares outstanding as of March 31, 2011. As of
March 31, 2011, the Company had 12,899,437 outstanding stock options under all plans with a weighted
average exercise price of $31.39 and a weighted average remaining contractual life of 5.26 years. Also as of
that same date, there were 15,963,628 granted but unvested shares of restricted stock and/or restricted stock
units, and the number of shares remaining available for future grant under all plans was 16,857,464 shares
available for issuance as stock options or 11,788,436 shares available for issuance as restricted stock and/or
restricted stock units. Going forward, we intend to continue to responsibly manage issuances of equity
incentive awards under the Equity Plan.
The Equity Plan contains several features designed to protect stockholders’ interests. For example, the Equity
Plan does not allow any options to be granted at less than 100 percent of fair market value, and the exercise
price of outstanding options issued under the Equity Plan may not be reduced without stockholder approval.
The Equity Plan does not contain an “evergreen” provision whereby the number of authorized shares is
automatically increased on a regular basis. In addition, the Equity Plan prohibits us from loaning, or
guaranteeing the loan of, funds to participants under the Equity Plan.
Plan Benefits
The amount and timing of awards granted under the Equity Plan are determined in the sole discretion of the
administrator and therefore cannot be determined in advance. The future awards that would be received under the
Equity Plan by directors, executive officers and other employees are discretionary and are therefore not
determinable at this time.
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 for or against the proposal.
The Board recommends a vote FOR the amendment to the 2000 Equity Incentive Plan.
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