Electronic Arts 2016 Annual Report Download - page 72

Maximum Bonus The maximum Bonus that can be paid under the Executive Bonus Plan for Section
162(m) of the Code or any other purposes is five million dollars ($5,000,000).
Establishment of
Bonuses
Prior to the Predetermination Date (generally ninety days after the start of a
Performance Period), the Compensation Committee will select each Participant’s
maximum award level and establish the Performance Goal or goals that must be
achieved before an award actually will be paid to the Participant.
Performance
Goals
The Performance Goals that may be selected by the Compensation Committee include
either individually, alternatively or in any combination, 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, and measured, to the extent applicable
on an absolute basis or relative to a pre-established target, in each case as specified by
the Compensation Committee: profit before tax; revenue (on an absolute basis or
adjusted for currency effects); net revenue; earnings (which may include earnings
before interest and taxes, earnings before taxes and net earnings); operating income;
operating margin; operating profit; controllable operating profit, or net operating profit;
net profit; gross margin; operating expenses or operating expenses as a percentage of
revenue; net income; earning per share; total stockholder return; market share; return
on assets or net assets; the Company’s stock price; growth in stockholder value relative
to a pre-determined index; return on equity; return on invested capital; cash flow
(including free cash flow or operating cash flows); cash conversion cycle; economic
value added; contract awards or backlog; overhead or other expense reduction; credit
rating; strategic plan development and implementation; improvement in workforce
diversity; customer indicators; new product invention or innovation; attainment of
research and development milestones; improvements in productivity; attainment of
objective operating goals and employee metrics.
The Performance Goals may be measured either on an absolute basis or relative to a
pre-established target, to a previous period’s results, or to a designated comparison
group and may differ for each participant. For example, the Compensation
Committee may appropriately adjust any evaluation of performance under a
Performance Goal to exclude any of the following events that occurs during a
Performance Period: the effects of currency fluctuations; any or all adjustments that
are reflected in the calculation of non-GAAP earnings as presented in any Company
press release or Form 8-K filing relating to an earnings announcement; asset write-
downs; litigation or claim judgments or settlements; the effect of changes in tax law,
accounting principles or other such laws or provisions affecting reported results;
accruals for reorganization and restructuring programs; and any other extraordinary
or non-operational items. Additionally, the Compensation Committee may decide to
ignore the effect of mergers or acquisitions in their evaluation of Performance Goals.
Performance
Period
A Performance Period shall generally be a fiscal year, but may also be any such other
period of time as determined in the Compensation Committee’s sole discretion.
Certification of
Performance
Goals
As soon as practicable after the end of each Performance Period, the Compensation
Committee will certify in writing the extent to which the pre-established Performance
Goals actually were achieved and certify and approve the amount of the bonus to be
paid. The Compensation Committee reserves the discretion to reduce or eliminate
any actual award under the Executive Bonus Plan.
Payment of
Bonuses
A Participant generally has no right to a Bonus unless he or she is actively employed
on the payment date. All Bonuses will be paid as soon as practicable after the
Compensation Committee has certified that the applicable Performance Goals have
been achieved, determined the Bonus amounts, and authorized the payment of the
corresponding Bonuses, but in no event later than 2
1
⁄ 2 months after the end of the
calendar year in which the applicable Performance Period ends.
B-2