Summary
Electronic Arts Inc. (EA) filed an 8-K on May 22, 2017, reporting on the Compensation Committee's approval of performance-based restricted stock unit (PRSU) awards for senior executives. These awards are set to be granted on June 16, 2017, and are governed by the Company's 2000 Equity Incentive Plan. The key update pertains to changes in the PRSU agreement terms related to a change in control of the company, aligning them with a previously approved Change in Control Plan.
Key Highlights
- 1EA's Compensation Committee approved Performance-Based Restricted Stock Unit (PRSU) awards for senior leadership (SVP and above).
- 2These PRSUs are scheduled for grant on June 16, 2017, and are part of the fiscal year 2018 compensation.
- 3The terms of the PRSUs are largely unchanged from fiscal year 2017, except for specific provisions concerning a change in control.
- 4These change in control provisions have been updated to align with EA's Change in Control Plan approved in February 2017.
- 5In the event of a change in control before the three-year performance period ends, total shareholder return (TSR) will be certified at the time of the change to determine vesting.
- 6Vesting can be accelerated under a 'double trigger' scenario, involving termination without cause or for good reason within specific windows around a change in control.
Frequently Asked Questions
The primary purpose of this 8-K filing is to disclose the Compensation Committee's approval of new performance-based restricted stock unit (PRSU) awards for senior executives and to detail specific changes to these awards related to change-in-control events.
The PRSUs are expected to be granted on June 16, 2017, and are subject to a three-year performance period. The specific details of vesting and performance metrics are outlined in the PRSU agreement.
The change in control provisions stipulate how PRSUs will be treated if EA is acquired or undergoes a significant change in ownership. In such cases, the vesting of PRSUs may be determined by the company's Total Shareholder Return (TSR) at the time of the change and can be accelerated under certain conditions (a 'double trigger' event, like termination without cause or for good reason) linked to the change in control.
According to the filing, the terms of the form of PRSU agreement for fiscal year 2018 grants remain unchanged from the PRSUs granted in fiscal year 2017, with the exception of the specified provisions applicable in the event of a change in control.