Electronic Arts 2016 Annual Report Download - page 82

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Eligibility All employees of the Company or any designated subsidiary, are eligible to
participate in the ESPP except the following: (i) employees who are not employed by
the Company on the 15th day of the month before the beginning of an Offering
Period (as defined below); (ii) employees who, pursuant to Section 424(d) of the
Code, own or hold options to purchase or who, as a result of participation in the
ESPP, would own stock or hold options to purchase stock representing five percent
or more of the total combined voting power or value of all classes of stock of the
Company or any subsidiary; (iii) employees by virtue of their participation would be
participating in more than one Offering Period; and unless otherwise required by
applicable law; (iv) employees who are customarily employed for less than 20 hours
per week; and/or (v) employees who are customarily employed for less than five
months in a calendar year. Approximately 8,500 individuals are eligible to participate
in the ESPP.
Non-employee directors are not eligible to participate in the ESPP.
Share Limits If the amendment is approved by the stockholders, the maximum number of shares
available to be granted under the ESPP will be 28,300,000.
Adjustment Subject to any necessary stockholder approval, the number of shares issuable under
the ESPP is subject to proportional adjustment to reflect stock splits, stock dividends
and other similar events.
Offering and
Purchase Periods
The Offering Periods of the ESPP (the “Offering Period”) are generally twelve (12)
months in duration commencing on February 16th and August 16th of each year and
ending on February 15th and August 15th of the following year. The first day of each
Offering Period is referred to as the “Offering Date.” Each Offering Period shall
consist of two (2) six-month purchase periods (individually, a “Purchase Period”),
during which payroll deductions of the participant are accumulated under the ESPP.
Each such six-month Purchase Period shall commence on February 16th or August
16th of an Offering Period and shall generally end on August 15th or February 15th
(each a “Purchase Date”).
The Compensation Committee shall have the power to change the duration of
Offering Periods or Purchase Periods without stockholder approval if such change is
announced at least fifteen (15) days prior to the scheduled beginning of the first
Offering Period or Purchase Period, as the case may be, to be affected.
Participation Employees may participate in the ESPP by entering into a subscription agreement
and electing a percentage of payroll deductions to be withheld with each payroll
period, which may not be less than two (2) percent nor more than ten (10) percent of
the employee’s salary as defined in the ESPP. The employee may increase or lower
the rate of payroll deductions for any subsequent Offering Period but may only lower
the rate of payroll deductions once during the current Purchase Period.
Limitations on
Shares to be
Purchased
In any given Purchase Period, no employee may purchase more than (a) twice the
number of shares that could have been purchased with the payroll deductions if the
purchase price were determined by using 85 percent of the fair market value of a
Company share on the Offering Date or (b) the maximum number of shares set by the
Board of Directors. In addition, no employee may purchase shares at a rate that, when
aggregated with all other rights to purchase stock under all other employee stock
purchase plans of the Company, or any parent or subsidiary of the Company, exceeds
$25,000 in fair market value (determined on the Offering Date) for each year.
Purchase Price The purchase price of shares that may be acquired in any Purchase Period under the
ESPP is 85 percent of the lesser of (a) the fair market value of the shares on the
Offering Date or (b) the fair market value of the shares on the Purchase Date. The
fair market value of the common stock on a given date is the closing price of the
common stock on the immediately preceding business day as quoted on the
NASDAQ Global Select Market.
D-2