Electronic Arts 2016 Annual Report Download - page 77

Grants to Outside
Directors
Outside Directors are eligible to receive any Award granted under the EIP except for
ISOs, in the sole discretion of the Board of Directors. The terms and conditions,
including vesting, exercisability and settlement will be determined by the Board of
Directors. In the event of our dissolution or liquidation or a “change of control”
transaction, Options granted to our Outside Directors under the EIP will become
100% vested and exercisable in full.
In addition, our Outside Directors may elect to receive all or a portion of their cash
compensation in Shares. Directors making this election are entitled to receive Shares
having a value equal to 110% of the amount of the cash compensation foregone.
If the amendment is approved by stockholders, no Outside Director may be granted
in any fiscal year of the Company awards with a grant date value of more than
$1,200,000 in total whereby (1) shares-in-lieu of cash compensation may not have a
grant date fair value of more than $600,000; and (2) an annual equity grant Award
may not have a grant date fair value of more than $600,000.
Performance
Awards
Options, SARs, Restricted Stock Awards or Restricted Stock Units may be
performance-based Awards with vesting or exercisability conditioned on one or more
Performance Factor may be granted under the EIP individually or in tandem with
other Awards. The Awards will be subject to a specific Performance Period that may
be as short as a quarter or as long as five (5) years.
162(m) Awards The Compensation Committee will set any performance goals before the latest date
permissible and pursuant to any procedures necessary or advisable to ensure
qualification of the awards determined to be “performance-based compensation”
within the meaning of Section 162(m) of the Code.
Performance
Factors
Performance Factors are any of the following objective measures below, selected by
the Compensation Committee and specified in the award agreement and applied to
the Company as a whole or any business unit or Subsidiary, either individually,
alternatively or in any combination on a GAAP or non-GAAP basis to be measured
to the extent applicable on an absolute basis or relative to a pre-established target to
determine whether the performance goals established by the Compensation
Committee have been satisfied: (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)
diluted 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 Compensation 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
C-3
Proxy Statement