Electronic Arts 2016 Annual Report Download - page 79

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SARs. When a SAR is granted, there are no income tax consequences for the Participant or us. When a SAR is
exercised, the Participant recognizes compensation equal to the cash and/or the fair market value of the Shares
received upon exercise. We are entitled to a deduction equal to the compensation recognized by the Participant.
Restricted Stock Awards and Restricted Stock Units. Generally, when a Restricted Stock Award or a Restricted
Stock Unit is granted, there are no income tax consequences for the Participant or us. Upon the payment to the
Participant of Shares in respect of Restricted Stock Units or the lapse of restrictions on Restricted Stock Awards,
the Participant, generally, recognizes compensation equal to the fair market value of the shares as of the date of
delivery or release. We are entitled to a deduction equal to the compensation recognized by the Participant.
Limits on Deductions. Under Section 162(m) of the Code, compensation paid to our CEO and our four most
highly paid executive officers whose compensation is required to be reported to our stockholders in a particular
year is limited to $1 million per person, except that compensation that is “qualified-performance based
compensation” will be excluded for purposes of calculating the amount of compensation subject to this
$1 million limitation.
ERISA
The EIP is not subject to any of the provisions of the Employee Retirement Income Security Act of 1974 and is
not qualified under Section 401(a) of the Code.
Proposed Amendments to the EIP
At the Annual Meeting, stockholders will be asked to approve an amendment to the EIP to increase the number
of shares authorized under the EIP by 12,900,000 shares. Stockholders will also be asked to approve the
maximum number of shares subject to Awards intended to constitute “performance-based compensation” under
Section 162(m) of the Code and maximum Award limits in any fiscal year to Outside Directors.
C-5
Proxy Statement