Electronic Arts 2011 Annual Report Download - page 66

non-GAAP basis, to be measured over a specified performance period that may be as short as a quarter or as long
as five years (unless tied to a specific and objective milestone or event), to the extent applicable on an absolute
basis or relative to a pre-established target: (a) profit before tax; (b) revenue (on an absolute basis or adjusted for
currency effects); (c) net revenue; (d) earnings (which may include earnings before interest and taxes, earnings
before taxes, and net earnings); (e) operating income; (f) operating margin; (g) operating profit; (h) controllable
operating profit, or net operating profit; (i) net profit; (j) gross margin; (k) operating expenses or operating
expenses as a percentage of revenue; (l) net income; (m) earnings per share; (n) total stockholder return;
(o) market share; (p) return on assets or net assets; (q) the Company’s stock price; (r) growth in stockholder value
relative to a pre-determined index; (s) return on equity; (t) return on invested capital; (u) cash flow (including
free cash flow or operating cash flows); (v) cash conversion cycle; (w) economic value added; (x) individual
confidential business objectives; (y) contract awards or backlog; (z) overhead or other expense reduction; (aa)
credit rating; (bb) strategic plan development and implementation; (cc) succession plan development and
implementation; (dd) improvement in workforce diversity; (ee) customer indicators; (ff) new product invention
or innovation; (gg) attainment of research and development milestones; (hh) improvements in productivity; or
(ii) attainment of objective operating goals and employee metrics.
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, and 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
Executive Compensation and Leadership 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. Nonqualified stock options, stock appreciation rights, restricted stock, and restricted
stock unit awards are subject to similar restrictions on transfer unless otherwise determined by the Executive
Compensation and Leadership Committee and except that nonqualified stock options may be transferred to
family members and trusts or foundations controlled by, or primarily benefiting, family members of the optionee.
Term of the Equity Plan
The Equity Plan expires in 2020 unless terminated earlier by the Board.
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 ADDITION, THE INTERNAL REVENUE
SERVICE COULD, AT ANY TIME, TAKE A POSITION CONTRARY TO THE INFORMATION
DESCRIBED IN THE FOLLOWING SUMMARY. ANY TAX EFFECTS THAT ACCRUE TO NON-U.S.
PARTICIPANTS AS A RESULT OF PARTICIPATING IN THE EQUITY PLAN ARE GOVERNED BY THE
TAX LAWS OF THE COUNTRIES IN WHICH SUCH PARTICIPANT RESIDES OR IS OTHERWISE
SUBJECT. EACH PARTICIPANT WILL BE ENCOURAGED TO SEEK THE ADVICE OF A QUALIFIED
TAX ADVISOR REGARDING THE TAX CONSEQUENCES OF PARTICIPATION IN THE EQUITY PLAN.
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