Exhibit 10.1
Electronic Arts
Discretionary Bonus
Plan
Plan Document
As Amended April
2009
Purpose of the Plan
The purposes of the Electronic Arts
Discretionary Bonus Plan (“Plan”) include:
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To provide competitive incentive
compensation to retain and attract top talent;
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To align bonus awards with the
achievement of corporate and business unit goals;
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To align team and employee
contributions more closely with bonus rewards;
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To reward and recognize
individual performance and achievements;
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To establish the terms under
which EA may provide cash bonuses to certain eligible
employees.
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Effective Date
The Plan is effective for
(i) each fiscal year beginning on or around April 1 and
ending on or around March 31 of the following year (actual
dates are determined by EA’s fiscal calendar) or
(ii) such other Performance Periods (as defined below) as
determined by EA in its sole and absolute discretion. The Plan
shall remain in effect until otherwise determined by the
Compensation Committee of EA’s Board of Directors (the
“Compensation Committee”).
Eligibility
This Plan applies solely to regular
employees of EA and its subsidiaries and affiliates (collectively
referred to in this Document as “EA” or the
“Company”) whom EA, in its sole discretion, determines
meet the eligibility requirements set forth below (“
Participant(s) ”).
To be eligible to receive a
discretionary bonus award under this Plan, a Participant must
satisfy each of the following eligibility conditions and any other
conditions provided for in a Bonus Formula Addendum (defined below)
provided to a Participant (an “ Eligible Position
”):
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Must be a Regular status employee
as such status is determined by EA in its sole
discretion
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Must be specifically identified
by EA as an eligible Participant and such eligibility must be
communicated in writing (including electronic communications) to
the individual
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Must be hired on or before
(i) January 15 of the applicable fiscal year for a bonus
payment that has been designated as having a fiscal year
Performance Period or (ii) such other date as EA may establish
for other Performance Periods
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Must receive a performance rating
of “on target” (OT) or higher to be eligible to receive
a bonus for the Performance Period to which the performance rating
applies. An individual receiving a performance rating of
“below target” (BT) or lower will not be eligible to
receive a bonus under the Plan except with written approval from
the most senior executive officer or most senior Human Resources
representative for such individual’s Business Unit (defined
below).
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Must be employed as of the actual
date of bonus payment distribution
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Except where otherwise required
by local law or as otherwise provided for in a Bonus Formula
Addendum provided to a Participant:
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the individual must not be an
overtime eligible employee
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the individual must not be
providing services to EA as, or classified as (whether or not such
classification is upheld upon review by an applicable legal
authority), a temporary employee or intern or as an independent
contractor, consultant, or agent, under a written or oral contract
or purchase order
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at any time until the date that
bonuses are paid under the Plan, the individual must not have
(i) violated any provision of EA’s Code of Conduct, any
other written EA policy and any law, rule or regulation applicable
to EA and EA employees, or (ii) entered into an employment
termination or separation agreement (not including agreements
entered into in connection with the commencement or continuation of
employment)
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Determination of Bonus Awards
Bonus
Formulas
For each Performance Period in which
EA elects to offer bonuses under this Plan, it will determine the
actual bonus formula(s) to be used in calculating Plan bonuses for
that Performance Period. The bonus formula(s) for each Performance
Period will be communicated to Plan Participants in writing
(including electronic communications) in a format similar to the
sample addendum at Attachment A (“Bonus Formula
Addendum”), which will also typically include, but not be
limited to, the following components: (i) additional
eligibility requirements, if any; (i) Performance Period(s);
(ii) Bonus Component(s); (iii) Business Unit(s);
(iv) Performance Measure(s); (v) Measurement Period(s);
and (vi) payment schedule(s).
Bonus formulas may be based on or
calculated using any defined term(s), concept(s) or measure(s) of
performance specified by EA, including, but not limited to, any of
the defined terms set forth below.
“ Annual Salary ”
shall mean the annual salary in effect at the end of the applicable
Performance Period for the Plan Participant. Except where otherwise
required by local law, annual salary shall not include variable
forms of compensation including, but not limited to, overtime,
on-call pay, lead premiums, shift differentials, bonuses, incentive
compensation, commissions, stock options, expense allowances, or
reimbursement. Payment in lieu of paid time off during active
employment or upon termination is not included in Annual Salary for
purposes of the Plan.
“ Annual Target Bonus
” shall mean a Plan Participant’s Annual Salary
multiplied by the Plan Participant’s Annual Target Bonus
Percentage.
“ Annual Target Bonus
Percentage ” shall mean the percentage of a Plan
Participant’s Annual Salary that is established by EA for
purposes of determining a Plan Participant’s Annual Target
Bonus and provided in writing (including electronic communications)
to the Plan Participant.
“ Bonus Component
” shall mean a component of a Participant’s bonus
calculation that will be (i) designated by EA in its sole
discretion, (ii) assigned a weighting as a percentage (from 0%
– 100%) of a Participant’s bonus, and
(iii) evaluated independently based on the actual attainment
of any applicable Performance Measure(s). The specific Bonus
Components used and the weight of each Bonus Component as a
percentage of a Participant’s bonus award will depend upon
the Participant’s position within the Company. Typical Bonus
Components will include, but not be limited to, Company
performance, Business Unit performance, and individual Participant
performance.
“ Business Unit ”
shall mean a designated group of individuals or divisions connected
by a common business purpose, including but not limited to, all of
EA, a label (e.g., EA Games, EA Spots, EA Play), studio, title,
franchise, geographic region, business function, product line, or
any other grouping as may be determined by EA, in its sole
discretion.
“Bonus Component
Performance Factor ” shall mean the funding percentage
derived from the level of actual attainment of a Performance
Measure and any funding curves established by EA management for the
attainment of such Performance Measure.
“ Individual Achievement
Factor ” shall mean a multiplier that reflects the Plan
Participant’s contributions to EA relative to individual
performance expectations for the applicable Performance Period, as
determined by EA management in its sole and absolute discretion.
Individual performance expectations will vary to reflect each Plan
Participant’s role in the company. EA may establish a maximum
Individual Achievement Factor multiplier for any bonus under the
Plan or may determine for any particular Plan Participant that the
Individual Achievement Factor is 0, in which case, the Plan
Participant will not receive a bonus.
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“ Measurement Period
” shall mean a fiscal year or other specified period of time
during which one or more Performance Measures will be evaluated for
purposes of calculating bonuses under the Plan.
“ Performance Measure
” shall mean the target measure of financial or other
performance applicable to a Bonus Component for a Measurement
Period, as determined by EA, in its sole discretion. Performance
Measures may include any concept(s) or measure(s) of performance as
specified by EA, including but not limited to quantitative measures
(for example: net income, revenue, margin, and profit before tax or
operating profit), and qualitative measures (for example: product
reviews or performance ratings). Attainment of quantitative
Performance Measures will be assessed based on actual attainment of
the Performance Measures as compared to the targets established for
the applicable Measurement Period. Attainment of qualitative
measures will be assessed at the sole discretion of the
Company.
“ Performance Period
” shall mean the period of time during which a Plan
Participant contributes to the performance of a Business Unit, as
determined by EA management in its sole and absolute
discretion.
The Compensation Committee, in its
sole and absolute discretion, shall establish any bonus formula(s),
including each of the Bonus Components, funding curves, factors,
targets and thresholds that are to be used for calculating bonuses
under the Plan, or shall delegate to EA management the authority to
establish any such formula(s) and Bonus Components, as follows:
(i) for a fiscal year Measurement Period, on or before the
last day of the first quarter of any fiscal year in which the Plan
will be offered, and (ii) for other Measurement Periods, at
such time as EA management determines appropriate given the factors
applicable to the particular bonus.
To the extent permitted by
applicable law, rules and regulations, the Compensation Committee
may, in its sole and absolute discretion, at any time adjust upward
or downward any of the factors, percentages, targets and thresholds
set forth in any formulas established for calculating bonuses under
the Plan or may delegate the authority to make such adjustments to
EA management.
EA retains the discretion to develop
and apply, at any time, other bonus plans, subplans or formulas,
Bonus Components and Bonus Component weightings as needed to
accomplish a business purpose.
Bonus
Payments
Except as otherwise provided for in
a Bonus Formula Addendum provided to a Participant, bonus payouts
under this Plan shall be subject to the following additional
terms:
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The actual funding for each Bonus
Component payout will be determined by the funding curve that
corresponds to the actual level of attainment of each Performance
Measure.
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The percentage for each Bonus
Component Performance Factor will be capped at 200%; provided,
however, that in extraordinary and unusual circumstances, a
Participant may receive a total bonus payment of up to a maximum of
300% of such Participant’s Annual Salary, based on the
demonstration of exceptional individual performance, and subject to
CEO approval.
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Each Performance Measure will
have a minimum attainment percentage threshold, and a Performance
Measure payout will be 0% if the actual attainment is less than the
minimum attainment percentage for the applicable Performance
Measure.
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The Compensation Committee, in
its sole discretion, may choose to provide some level of payout for
a Performance Measure or Bonus Component when it would otherwise
equal 0%.
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The Compensation Committee, in
its sole discretion, may choose to reduce a level of payout for a
Performance Measure or Bonus Component.
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The calculation and payment of bonus
awards under this Plan will occur as soon as administratively
practicable following the completion of the applicable Performance
Period and Compensation Committee’s determination and
approval of any applicable bonus awards.
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The Compensation Committee, in its sole and
absolute discretion, shall approve the payment of any bonuses under
the Plan to senior executives of the Company, which for purposes of
this Plan shall include: (i) individuals serving as
“officers” of EA, as such term is used in section 16 of
the Securities Exchange Act of 1934, as amended; and
(ii) other key executives as may be determined by the CEO and
the Compensation Committee. The Compensation Committee may delegate
to EA management the authority to establish Performance Measures
for all other executives and non-executive employees.
Pro-Ration of
Bonuses
To the extent permitted by
applicable law, rules and regulations, EA reserves the right to
pro-rate the bonus award of any Participant who was not in an
Eligible Position for the entire applicable Performance Period, or
was not actively working full-time throughout the applicable
Performance Period. Plan bonus awards, if any, will generally be
pro-rated based on the number of full months (rounded to the
nearest full month) that a Participant is working in an Eligible
Position, however, EA reserves the right to, in its sole
discretion, pro-rate bonuses based on hours of service, days or on
any other basis. For example, the pro-ration factor for a
Participant who is eligible to participate in the Plan for the
entire applicable Performance Period will be 1.00; for a
Participant who is eligible to participate in the Plan for one-half
of the Performance Period, the pro-ration factor will be .50.
Participants in the following situations may have a pro-ration
factor less than 1.00: (a) new hires and individuals who
transfer into an Eligible Position during the applicable
Performance Period; (b) individuals who transfer between an
Eligible Position and a non-Eligible position within EA;
(c) Participants who work less than the applicable full-time
standard work week; and (d) Participants who take a leave of
absence, as described more fully below.
Participants who transfer between
Eligible Positions in different Business Units during the
applicable Performance Period will have a pro-ration factor
determined on the basis of the actual time applied to each Business
Unit.
Participants who are on sabbatical
leave or a leave of absence that is protected by statute or other
applicable law during the applicable Performance Period shall not
have their bonus award, if any, reduced by reason of such leave,
provided the Participant’s actual leave of absence does not
exceed the maximum leave of absence period protected by local law.
By way of example, legally protected leaves of absence may include
the period of leave provided by local law for medical leave,
maternity leave, or military leave.
To the extent permitted by
applicable law, rules and regulations, Participants who take unpaid
days off or leaves of absence that are not protected by statute or
other applicable law will have their bonus awards, if any,
pro-rated based on the number of full months that such Participant
is actively working in an Eligible Position.
General Guidelines, Terms and
Conditions of the Plan
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Any bonus
payment provided for under the Plan is completely discretionary,
and is not considered earned or accrued by a Participant until it
is actually paid. If employment with the Company terminates, for
any reason, prior to the date a bonus payment is made, an
individual will not be eligible to receive any bonus payment,
notwithstanding any notice periods or severance payments in lieu of
notice required under local law. In situations where an employee
has provided or been provided a notice of termination but has not
yet terminated employment as of the date bonuses are paid, bonus
eligibility will be determined in accordance with local laws and
practices.
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Eligibility to
participate in this Plan during a Performance Period (i) does
not create any right or entitlement to participate in this Plan in
the future or other bonus plans that may be established or
maintained by EA, (ii) does not constitute a guarantee or
establish an obligation for EA to maintain a similar plan, award
similar bonus benefits, or calculate bonuses according to the same
or similar formulas in the future, and (iii) does not
guarantee that any bonus will actually be paid for that Performance
Period and in some cases a Participant may not receive a bonus
under the Plan.
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Any bonus
payment awarded under this Plan is a discretionary and
extraordinary item of compensation that is outside a
Participant’s normal, regular or expected compensation, and
in no way represents any portion of a Participant’s
salar
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