Electronic Arts 2012 Annual Report Download - page 29

Proxy Statement
PROPOSAL 3: APPROVAL OF THE COMPANY’S EXECUTIVE BONUS PLAN
On May 29, 2007, the Board adopted the Electronic Arts Inc. Executive Bonus Plan, which was subsequently
approved by the stockholders for a maximum term of five years from the date of the 2007 Annual Meeting. In
May 2012, the Board unanimously approved, subject to stockholder approval, the Electronic Arts Inc. Executive
Bonus Plan, as amended, (the “Executive Bonus Plan”) and directed that the Executive Bonus Plan again be
submitted to our stockholders for approval at the 2012 Annual Meeting. Stockholder approval of the Executive
Bonus Plan will allow bonuses paid pursuant to its terms to be considered “performance-based compensation”
within the meaning of Section 162(m) of the United States Internal Revenue Code of 1986, as amended
(“Code”), and therefore fully deductible by Electronic Arts for federal income tax purposes.
The Board believes that it is in the best interests of Electronic Arts and its stockholders to ensure that bonuses
paid to covered employees (as defined in Section 162(m)) who are participants are fully deductible by Electronic
Arts for federal income tax purposes. For purposes of Section 162(m), a covered employee is any employee of
ours if, as of the close of our taxable year, such employee is our principal executive officer (or an individual
acting in such a capacity) or if the total compensation of such employee for that taxable year is required to be
reported to our stockholders under applicable securities rules by reason of such employee being among the three
highest compensated officers for the taxable year (other than our principal executive officer or the principal
financial officer). Accordingly, Electronic Arts has structured the Executive Bonus Plan to satisfy the
requirements of Section 162(m) of the Code for “performance-based” compensation.
Stockholders are requested to approve the adoption of the Executive Bonus Plan. If the Executive Bonus Plan is
approved by the stockholders, compensation paid by Electronic Arts pursuant to the Executive Bonus Plan, to
covered employees will not be subject to the corporate compensation deduction limits set forth in Section 162(m)
of the Code. However, if the Executive Bonus Plan is not approved by our stockholders, it will not become
effective, and Electronic Arts will lose any tax deductions that the Executive Bonus Plan would otherwise have
provided.
Summary of the Executive Bonus Plan
The following general description is qualified in its entirety by reference to the text of the Executive Bonus Plan,
as proposed to be adopted at the 2012 Annual Meeting and filed by the Company with the SEC on or about
June 8, 2012. Unless otherwise indicated, capitalized terms used in this Proposal shall have the meanings set
forth in the text of the Executive Bonus Plan.
Purpose
The purpose of the Executive Bonus Plan is to provide eligible employees with incentive compensation based
upon the level of achievement of financial, business and other performance criteria. It is intended that bonuses
awarded under the Executive Bonus Plan to covered employees will qualify as deductible “performance-based
compensation” within the meaning of Section 162(m) of the Code.
Eligibility
Eligible participants in the Executive Bonus Plan are senior executives of Electronic Arts or of an affiliate who
are chosen solely at the discretion of the Executive Compensation and Leadership Committee (the “Committee”).
It is expected that participation in the Executive Bonus Plan will generally be limited to our Chief Executive
Officer and those executives who directly report to our Chief Executive Officer.
Administration
The Executive Bonus Plan will be administered by the Committee (or a subcommittee thereof), which is
comprised solely of two or more “outside” directors (within the meaning of Section 162(m)). The Committee has
the authority, in its discretion, to make any and all decisions regarding the administration of the Executive Bonus
Plan, including the authority to (1) construe and interpret the terms of the Executive Bonus Plan, (2) determine
the manner and time of payment of any awards, (3) prescribe forms and procedures for purposes of Executive
Bonus Plan participation and distribution of awards, and (4) adopt rules and regulations and take such actions as
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