Electronic Arts 2011 Annual Report Download - page 64

Administration
The Equity Plan is administered by our Executive Compensation and Leadership Committee. All of the members
of the Executive Compensation and Leadership Committee are “non-employee” and “independent directors”
under applicable federal securities laws and NASDAQ listing requirements, and “outside directors” as defined
under applicable federal tax laws. The Executive Compensation and Leadership Committee has the authority to
construe and interpret the Equity Plan, grant awards and make all other determinations necessary or advisable for
the administration of the Equity Plan. The members of the Executive Compensation and Leadership Committee
receive no compensation for administering the Equity Plan other than their compensation for being Board and
Committee members. The Company bears all expenses in connection with administration of the Equity Plan and
has agreed to indemnify members of the Executive Compensation and Leadership Committee in connection with
their administration of the Equity Plan. The Executive Compensation and Leadership Committee may delegate to
one or more officers of the Company the authority to grant Awards under the Equity Plan to participants who are
not executive officers of the Company.
Stock Options
Stock options granted under the Equity Plan may be either incentive stock options or nonqualified stock options.
The exercise period of stock options is determined by the Executive Compensation and Leadership Committee
but, in no event, may stock options be exercisable more than ten years from the date they are granted. The Equity
Plan provides the Executive Compensation and Leadership Committee with the ability, at its discretion, to grant
performance-based options subject to the achievement of one or more of the performance factors described under
the heading “Performance Factors” below.
Exercise Price
The Executive Compensation and Leadership Committee determines the exercise price of each option granted
under the Equity Plan. The option exercise price for each incentive and nonqualified stock option share must be
no less than 100 percent of the “fair market value” (as defined in the Equity Plan) of a share of common stock at
the time the stock option is granted. In the case of an incentive stock option granted to a stockholder that owns
more than 10 percent of the total combined voting power of all classes of stock of EA or any parent or subsidiary
of EA (a “Ten Percent Stockholder”), the exercise price for each such incentive stock option must be no less than
110 percent of the fair market value of a share of common stock at the time the incentive stock option is granted.
The exercise price of options and purchase price of shares granted under the Equity Plan may be paid as
approved by the Executive Compensation and Leadership Committee at the time of grant: (a) in cash (by check);
(b) by cancellation of indebtedness of the Company to the award holder; (c) by surrender of shares that either:
(1) have been owned by the award holder for more than six (6) months and have been paid for within the
meaning of SEC Rule 144; or (2) were obtained by the award holder in the public market; (d) by waiver of
compensation due or accrued for services rendered; (e) with respect only to purchases upon exercise of an option,
and provided that a public market for the Company’s stock exists: (1) subject to applicable laws, by a “same-day
sale” commitment from the optionee and a National Association of Securities Dealers, Inc. (“NASD”) broker; or
(2) by a “margin” commitment from the optionee and an NASD broker; (f) by withholding from the shares to be
issued upon exercise of an award that number of shares having a fair market value equal to the minimum amount
required to satisfy the exercise price or purchase price; (g) by any combination of the foregoing; or (h) such other
consideration and method of payment for issuance of shares to the extent permitted by applicable laws.
No Repricings or Exchanges of Awards Without Stockholder Approval
The Executive Compensation and Leadership Committee may, at any time or from time to time, authorize the
Company, with the consent of the affected Equity Plan participants, to issue new awards in exchange for the
surrender and cancellation of any or all outstanding awards; provided, however, that no such exchange program
may, without the approval of the Company’s stockholders, allow for the cancellation of an outstanding option or
stock appreciation right in exchange for a new option or stock appreciation right having a lower exercise price.
The Compensation Committee may also, subject to approval by the Company’s stockholders, at any time buy a
previously granted award with payment in cash, shares (including restricted stock) or other consideration, based
on such terms and conditions as the Committee and the Participant may agree.
A-2