Electronic Arts 2016 Annual Report Download - page 76

future grants if the Shares (a) cease to be subject to an Option for reasons other than
exercise; (b) subject to a forfeited Award; (c) subject to an Award that otherwise
terminates or settled without the issuance of shares. Shares subject to (a) net
settlement of Options or SARs that are withheld and never issued; (b) Shares used to
pay exercise price or taxes on Award; or (c) Shares repurchased by the Company
with the proceeds of an Option exercise will not go back into the share pool.
Maximum Shares No person is eligible to receive Awards, including Options, SARs, Restricted Stock
Awards or Restricted Stock Units that constitute “performance-based compensation”
under Section 162(m) of the Code, covering more than 2,000,000 Shares in any fiscal
year or 4,000,000 Shares if the employee is a new hire.
Adjustment The number of Shares issuable under the EIP, and under outstanding Options and
other Awards, is subject to proportional adjustment to reflect stock splits, stock
dividends and other similar events.
Award Types:
Options Options granted under the EIP may be either ISOs or nonqualified Options. The
exercise period of Options is determined by the Compensation Committee but, in no
event, may Options be exercisable more than ten years from the date they are granted.
The Compensation Committee determines the exercise price of each Option granted
under the EIP. The exercise price for each ISO and nonqualified stock Option must be
no less than 100% of the fair market value of a share at the time the Option is granted.
Restricted Stock A Restricted Stock Award is an offer by the Company to award Shares that are
subject to time-based or performance-based restrictions established by the
Compensation Committee. The purchase price, if any, for a Restricted Stock Award
is determined by the Compensation Committee at the time of grant.
RSUs Restricted Stock Units are unfunded, unsecured rights to receive Company shares of
common stock upon the satisfaction of certain time-based or performance-based
vesting criteria. Restricted Stock Units are generally granted for no consideration,
however the purchase price, if any for the Restricted Stock Units will be determined
by the Compensation Committee at the time of grant. Each Restricted Stock Unit
represents one share of common stock. Participants have no rights to the shares
underlying the Restricted Stock Units unless and until the restrictions on the
Restricted Stock Units have lapsed and the Shares have been released.
SARs The Compensation Committee may determine the terms and conditions of a SAR,
however no SAR will be exercisable after the expiration of ten (10) years from the
date the SAR is granted and the exercise price for a SAR must be no less than 100%
of the fair market value of a Share at the time the SAR is granted.
Payment for Share
Purchases
Where expressly approved by the Compensation Committee and where permitted by
law, payment methods for Shares underlying Awards granted under the EIP (where
applicable) will be set forth in the award agreement in accordance with the EIP.
No Repricings or
Exchange of
Awards
Without Stockholder
Approval
The Compensation Committee may, at any time or from time to time, authorize the
Company, with the consent of the affected EIP participants, to issue new Awards in
exchange for the surrender and cancellation of any or all outstanding Awards;
provided, however, that no such exchange program may, without the approval of the
Company’s stockholders, allow for the cancellation of an outstanding Option or SAR
in exchange for a new Option or SAR having a lower exercise price. The
Compensation Committee may also, subject to approval by the Company’s
stockholders, at any time buy a previously granted Award with payment in cash,
shares (including Restricted Stock Awards) or other consideration, based on such
terms and conditions as the Compensation Committee and the participant may agree.
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