Document:

exv10w39

 

EXHIBIT 10.39

Electronic Arts

Deferred Compensation Plan

Master Plan Document

 

 

 

 

 

 

 

 

 

 

Copyright © 2003

By Clark/Bardes Consulting

All Rights Reserved

 

 

Electronic Arts

Deferred Compensation Plan

Master Plan Document

TABLE OF CONTENTS

	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	Page	 
	Purpose
	 	

	 	 	1	 
	 	 	 	 	 
	 	 	 	 
	ARTICLE 1
	 	Definitions

	 	 	1	 
	 	 	 	 	 
	 	 	 	 
	ARTICLE 2
	 	Selection/Enrollment/Eligibility

	 	 	6	 
	 	 	 	 	 
	 	 	 	 
	 	2.1	 	 	Selection by Committee

	 	 	6	 
	 	2.2	 	 	Enrollment Requirements

	 	 	6	 
	 	2.3	 	 	Eligibility; Commencement of Participation

	 	 	6	 
	 	2.4	 	 	Termination of Participation and/or Deferrals

	 	 	6	 
	 	 	 	 	 
	 	 	 	 
	ARTICLE 3
	 	Deferral Commitments/Rollover Amounts/Company

Restoration Matching Amounts/Company Contribution

Amounts/Vesting/Crediting/Taxes

	 	 	7	 
	 	 	 	 	 
	 	 	 	 
	 	3.1	 	 	Minimum Deferrals

	 	 	7	 
	 	3.2	 	 	Maximum Deferral

	 	 	7	 
	 	3.3	 	 	Election to Defer; Effect of Election Form

	 	 	8	 
	 	3.4	 	 	Withholding of Annual Deferral Amounts

	 	 	8	 
	 	3.5	 	 	Rollover Amount

	 	 	8	 
	 	3.6	 	 	Annual Company Restoration Matching Amount

	 	 	8	 
	 	3.7	 	 	Annual Company Contribution Amount

	 	 	9	 
	 	3.8	 	 	Investment of Trust Assets

	 	 	9	 
	 	3.9	 	 	Vesting

	 	 	9	 
	 	3.10	 	 	Crediting/Debiting of Account Balances

	 	 	10	 
	 	3.11	 	 	FICA and Other Taxes

	 	 	11	 
	 	3.12	 	 	Distributions

	 	 	12	 
	 	 	 	 	 
	 	 	 	 
	ARTICLE 4
	 	Short-Term Payout/Unforeseeable Financial Emergencies/Withdrawal Election

	 	 	12	 
	 	 	 	 	 
	 	 	 	 
	 	4.1	 	 	Short-Term Payout

	 	 	12	 
	 	4.2	 	 	Other Benefits Take Precedence Over Short-Term

	 	 	13	 
	 	4.3	 	 	Withdrawal Payout/Suspensions for Unforeseeable Financial Emergencies

	 	 	13	 
	 	 	 	 	 
	 	 	 	 
	ARTICLE 5
	 	Survivor Benefit

	 	 	13	 
	 	 	 	 	 
	 	 	 	 
	 	5.1	 	 	Survivor Benefit

	 	 	13	 
	 	 	 	 	 
	 	 	 	 
	ARTICLE 6
	 	Termination Benefit

	 	 	13	 
	 	 	 	 	 
	 	 	 	 
	 	6.1	 	 	Termination Benefit

	 	 	13	 
	 	6.2	 	 	Payment of Termination Benefit

	 	 	13	 

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	 	 	 	 	 	 	Page	 
	ARTICLE 7
	 	Disability Waiver and Benefit

	 	 	14	 
	 	 	 	 	 
	 	 	 	 
	 	7.1	 	 	Disability Waiver

	 	 	14	 
	 	7.2	 	 	Continued Eligibility; Disability Benefit

	 	 	14	 
	 	 	 	 	 
	 	 	 	 
	ARTICLE 8
	 	Beneficiary Designation

	 	 	15	 
	 	 	 	 	 
	 	 	 	 
	 	8.1	 	 	Beneficiary

	 	 	15	 
	 	8.2	 	 	Beneficiary Designation; Change; Spousal Consent

	 	 	15	 
	 	8.3	 	 	Acknowledgement

	 	 	15	 
	 	8.4	 	 	No Beneficiary Designation

	 	 	15	 
	 	8.5	 	 	Doubt as to Beneficiary

	 	 	16	 
	 	8.6	 	 	Discharge of Obligations

	 	 	16	 
	 	 	 	 	 
	 	 	 	 
	ARTICLE 9
	 	Leave of Absence

	 	 	16	 
	 	 	 	 	 
	 	 	 	 
	 	9.1	 	 	Paid Leave of Absence

	 	 	16	 
	 	9.2	 	 	Unpaid Leave of Absence

	 	 	16	 
	 	 	 	 	 
	 	 	 	 
	ARTICLE 10
	 	Termination/Amendment or Modification

	 	 	17	 
	 	 	 	 	 
	 	 	 	 
	 	10.1	 	 	Termination

	 	 	17	 
	 	10.2	 	 	Amendment

	 	 	17	 
	 	10.3	 	 	Plan Agreement

	 	 	18	 
	 	10.4	 	 	Effect of Payment

	 	 	18	 
	 	 	 	 	 
	 	 	 	 
	ARTICLE 11
	 	Administration

	 	 	18	 
	 	 	 	 	 
	 	 	 	 
	 	11.1	 	 	Committee Duties

	 	 	18	 
	 	11.2	 	 	Administration Upon Change In Control

	 	 	18	 
	 	11.3	 	 	Agents

	 	 	19	 
	 	11.4	 	 	Binding Effect of Decisions

	 	 	19	 
	 	11.5	 	 	Indemnity of Committee

	 	 	19	 
	 	11.6	 	 	Employer Information

	 	 	19	 
	 	 	 	 	 
	 	 	 	 
	ARTICLE 12
	 	Other Benefits and Agreements

	 	 	19	 
	 	 	 	 	 
	 	 	 	 
	 	12.1	 	 	Coordination with Other Benefits

	 	 	19	 
	 	 	 	 	 
	 	 	 	 
	ARTICLE 13
	 	Claims Procedures

	 	 	19	 
	 	 	 	 	 
	 	 	 	 
	 	13.1	 	 	Presentation of Claim

	 	 	19	 
	 	13.2	 	 	Notification of Decision

	 	 	20	 
	 	13.3	 	 	Review of a Denied Claim

	 	 	20	 
	 	13.4	 	 	Decision on Review

	 	 	20	 
	 	13.5	 	 	Mediation

	 	 	20	 
	 	13.6	 	 	Binding Arbitration

	 	 	21	 

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Deferred Compensation Plan

Master Plan Document

	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	Page	 
	ARTICLE 14
	 	Trust

	 	 	21	 
	 	 	 	 	 
	 	 	 	 
	 	14.1	 	 	Establishment of the Trust

	 	 	21	 
	 	14.2	 	 	Interrelationship of the Plan and the Trust

	 	 	21	 
	 	14.3	 	 	Distributions From the Trust

	 	 	21	 
	 	 	 	 	 
	 	 	 	 
	ARTICLE 15
	 	Miscellaneous

	 	 	21	 
	 	 	 	 	 
	 	 	 	 
	 	15.1	 	 	Status of Plan

	 	 	21	 
	 	15.2	 	 	Unsecured General Creditor

	 	 	22	 
	 	15.3	 	 	Employer’s Liability

	 	 	22	 
	 	15.4	 	 	Nonassignability

	 	 	22	 
	 	15.5	 	 	Not a Contract of Employment

	 	 	22	 
	 	15.6	 	 	Furnishing Information

	 	 	22	 
	 	15.7	 	 	Terms

	 	 	22	 
	 	15.8	 	 	Captions

	 	 	22	 
	 	15.9	 	 	Governing Law

	 	 	22	 
	 	15.10	 	 	Notice

	 	 	23	 
	 	15.11	 	 	Successors

	 	 	23	 
	 	15.12	 	 	Spouse’s Interest

	 	 	23	 
	 	15.13	 	 	Validity

	 	 	23	 
	 	15.14	 	 	Incompetent

	 	 	23	 
	 	15.15	 	 	Court Order

	 	 	23	 
	 	15.16	 	 	Distribution in the Event of Taxation

	 	 	24	 
	 	15.17	 	 	Insurance

	 	 	24	 
	 	15.18	 	 	Legal Fees To Enforce Rights After Change in Control

	 	 	24	 

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Electronic Arts

Deferred Compensation Plan

Master Plan Document

ELECTRONIC ARTS DEFERRED COMPENSATION PLAN

Amended and Restated as of April 1, 2003

Purpose

          The purpose of this Plan is to provide specified benefits to a select
group of management and highly compensated Employees and Directors who
contribute materially to the continued growth, development and future business
success of Electronic Arts, Inc., a Delaware corporation, and its subsidiaries,
if any, that sponsor this Plan. This Plan shall be unfunded for tax purposes
and for purposes of Title I of ERISA. This Plan shall amend and supersede in
its entirety the Electronic Arts Deferred Compensation Plan, adopted January
21, 1994 and amended June 1, 1995 and June 27, 1996. Any and all balances
accrued by a Participant under such predecessor plan shall be subject to the
terms and conditions of this Plan and shall be referred to as the “Rollover
Account.”

ARTICLE 1

Definitions

          For purposes of this Plan, unless otherwise clearly apparent from the
context, the following phrases or terms shall have the following indicated
meanings:

	1.1	 	“Account Balance” shall mean, with respect to a Participant, a credit on
the records of the Employer equal to the sum of (i) the Rollover Account
balance, (ii) the Deferral Account balance, (iii) the vested Company
Restoration Matching Account balance, and (iv) the vested Company
Contribution Account balance. The Account Balance, and each other
specified account balance, shall be a bookkeeping entry only and shall be
utilized solely as a device for the measurement and determination of the
amounts to be paid to a Participant, or his or her designated Beneficiary,
pursuant to this Plan.

	 
	1.2	 	“Annual Base Salary” shall mean the annual cash compensation relating to
services performed during the period beginning on October 1 of a calendar
year and ending on September 30 of the succeeding calendar year (while the
Employee is a Participant in the Plan), whether or not paid in such year
or included on the Federal Income Tax Form W-2 for such year, excluding
bonuses, commissions, overtime, fringe benefits, stock options, restricted
stock, relocation expenses, unused and unpaid excess vacation days,
incentive payments, non-monetary awards, directors fees and other fees,
automobile and other allowances paid to a Participant for employment
services rendered (whether or not such allowances are included in the
Employee’s gross income). Annual Base Salary shall be calculated before
reduction for compensation voluntarily deferred or contributed by the
Participant pursuant to all qualified or non-qualified plans of any
Employer and shall be calculated to include amounts not otherwise included
in the Participant’s gross income under Code Sections 125, 402(e)(3),
402(h), or 403(b) pursuant to plans established by any Employer; provided,
however, that all such amounts will be included in compensation only to
the extent that, had there been no such plan, the amount would have been
payable in cash to the Employee.

	 
	1.3	 	“Annual Bonus” shall mean any compensation, in addition to Annual Base
Salary, relating to services performed during any Plan Year, whether or
not paid in such year or included on the Federal Income Tax Form W-2 for
such year, payable to a Participant as an Employee under any

 

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Master Plan Document

	 	 	Employer’s annual or quarterly bonus and/or cash incentive plans,
excluding stock options and restricted stock.

	 
	1.4	 	“Annual Company Contribution Amount” shall mean, for any one Plan Year,
the amount determined in accordance with Section 3.7.

	 
	1.5	 	“Annual Company Restoration Matching Amount” shall mean, for any one Plan
Year, the amount determined in accordance with Section 3.6.

	 
	1.6	 	“Annual Deferral Amount” shall mean that portion of a Participant’s
Annual Base Salary, Annual Bonus and Directors Fees that a Participant
elects to have, and is deferred, in accordance with Article 3, for any one
Plan Year. In the event of a Participant’s Disability (if deferrals cease
in accordance with Section 7.1), death, or a Termination of Employment
prior to the end of a Plan Year, such year’s Annual Deferral Amount shall
be the actual amount withheld prior to such event.

	 
	1.7	 	“Annual Installment Method” shall be an annual installment payment over
the number of years (not to exceed 10) selected by the Participant in
accordance with this Plan, calculated as follows: The Account Balance of
the Participant shall be calculated as of the most recent Valuation Date.
The annual installment shall be calculated by multiplying this balance by
a fraction, the numerator of which is one, and the denominator of which is
the remaining number of annual payments due the Participant. By way of
example, if the Participant elects a 10-year Annual Installment Method,
the first payment shall be 1/10 of the Account Balance as of the most
recent Valuation Date. The following year, the payment shall be 1/9 of
the Account Balance as of the most recent Valuation Date. Each annual
installment shall be paid as soon as practicable after the amount is
calculated, but not later than thirty days after the Valuation Date.

	 
	1.8	 	“Beneficiary” shall mean one or more persons, trusts, estates or other
entities, designated in accordance with Article 8, that are entitled to
receive benefits under this Plan upon the death of a Participant.

	 
	1.9	 	“Beneficiary Designation Form” shall mean the form established from time
to time by the Committee that a Participant completes, signs and returns
to the Committee to designate one or more Beneficiaries.

	 
	1.10	 	“Board” shall mean the board of directors of the Company.

	 
	1.11	 	“Change in Control” shall mean the first to occur of any of the following
events:

	 	(a)	 	Any consolidation or merger of the Company with or into any
other corporation or corporations in which the shareholders of the
Company immediately prior to the consolidation or merger do not
retain a majority of the voting power of the surviving corporation;

	 
	 	(b)	 	Any cash tender offer, exchange offer, merger or other business
combination, sale of assets or contested election, or combination of
the foregoing, if the persons who were Directors of the Company
immediately prior to such event no longer constitute a majority of
the Company’s Board of Directors;

	 
	 	(c)	 	Any sale of all or substantially all of the assets of the
Company; or

 

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Deferred Compensation Plan

Master Plan Document

	 	(d)	 	Any liquidation or dissolution of the Company.

	1.12	 	“Claimant” shall have the meaning set forth in Section 13.1.

	 
	1.13	 	“Code” shall mean the Internal Revenue Code of 1986, as it may be amended
from time to time.

	 
	1.14	 	“Committee” shall mean the committee described in Article 11

	 
	1.15	 	“Company” shall mean Electronic Arts, Inc., a Delaware corporation, and
any successor to all or substantially all of the Company’s assets or
business.

	 
	1.16	 	“Company Contribution Account” shall mean (i) the sum of the
Participant’s Annual Company Contribution Amounts, plus (ii) amounts
credited (net of amounts debited) in accordance with all the applicable
crediting provisions of this Plan that relate to the Participant’s Company
Contribution Account, less (iii) all distributions made to the Participant
or his or her Beneficiary pursuant to this Plan that relate to the
Participant’s Company Contribution Account.

	 
	1.17	 	“Company Restoration Matching Account” shall mean (i) the sum of all of a
Participant’s Annual Company Restoration Matching Amounts, plus (ii)
amounts credited (net of amounts debited) in accordance with all the
applicable provisions of this Plan that relate to the Participant’s
Company Restoration Matching Account, less (iii) all distributions made to
the Participant or his or her Beneficiary pursuant to this Plan that
relate to the Participant’s Company Restoration Matching Account.

	 
	1.18	 	“Deduction Limitation” shall mean the following described limitation on a
benefit that may otherwise be distributable pursuant to the provisions of
this Plan. Except as otherwise provided, this limitation shall be applied
to all distributions that are “subject to the Deduction Limitation” under
this Plan. If an Employer determines in good faith prior to a Change in
Control that there is a reasonable likelihood that any compensation paid
to a Participant for a taxable year of the Employer would not be
deductible by the Employer solely by reason of the limitation under Code
Section 162(m), then to the extent deemed necessary by the Employer to
ensure that the entire amount of any distribution to the Participant
pursuant to this Plan prior to the Change in Control is deductible, the
Employer may defer all or any portion of a distribution under this Plan.
Any amounts deferred pursuant to this limitation shall continue to be
credited/debited with additional amounts in accordance with Section 3.10
below, even if such amount is being paid out in installments. The amounts
so deferred and amounts credited thereon shall be distributed to the
Participant or his or her Beneficiary (in the event of the Participant’s
death) at the earliest possible date, as determined by the Employer in
good faith, on which the deductibility of compensation paid or payable to
the Participant for the taxable year of the Employer during which the
distribution is made will not be limited by Section 162(m), or if earlier,
the effective date of a Change in Control. Notwithstanding anything to
the contrary in this Plan, the Deduction Limitation shall not apply to any
distributions made after a Change in Control.

	 
	1.19	 	“Deferral Account” shall mean (i) the sum of all of a Participant’s
Annual Deferral Amounts, plus (ii) amounts credited in accordance with all
the applicable crediting provisions of this Plan that relate to the
Participant’s Deferral Account, less (iii) all distributions made to the
Participant or his or her Beneficiary pursuant to this Plan that relate to
his or her Deferral Account.

	 
	1.20	 	“Director” shall mean any member of the board of directors of the
Employer.

	 
	1.21	 	“Director Fees” shall mean the annual fees paid by any Employer,
including retainer fees and

 

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Master Plan Document

	 	 	meeting fees, as compensation for serving on the Board.

	 
	1.22	 	“Disability” shall mean a period of disability during which a Participant
qualifies for permanent disability benefits under the Participant’s
Employer’s long-term disability plan, or, if a Participant does not
participate in such a plan, a period of disability during which the
Participant would have qualified for permanent disability benefits under
such a plan had the Participant been a participant in such a plan, as
determined in the sole and absolute discretion of the Committee. If the
Participant’s Employer does not sponsor such a plan, or discontinues to
sponsor such a plan, Disability shall be determined by the Committee in
its sole and absolute discretion.

	 
	1.23	 	“Disability Benefit” shall mean the benefit set forth in Article 7.

	 
	1.24	 	“Election Form” shall mean the form established from time to time by the
Committee that a Participant completes, signs and returns to the Committee
to make an election under the Plan.

	 
	1.25	 	“Employee” shall mean a person who is an employee of any Employer.

	 
	1.26	 	“Employer(s)” shall mean the Company and/or any of its subsidiaries (now
in existence or hereafter formed or acquired) that have been selected by
the Board to participate in the Plan and have adopted the Plan as a
sponsor.

	 
	1.27	 	“ERISA” shall mean the Employee Retirement Income Security Act of 1974,
as it may be amended from time to time.

	 
	1.28	 	“Participant” shall mean any Employee or Director (i) who is selected to
participate in the Plan, (ii) who elects to participate in the Plan, (iii)
who signs a Plan Agreement, an Election Form and a Beneficiary Designation
Form, (iv) whose signed Plan Agreement, Election Form and Beneficiary
Designation Form are accepted by the Committee, (v) who commences
participation in the Plan, and (vi) whose Plan Agreement has not
terminated. A spouse or former spouse of a Participant shall not be
treated as a Participant in the Plan or have an account balance under the
Plan, even if he or she has an interest in the Participant’s benefits
under the Plan as a result of applicable law or property settlements
resulting from legal separation or divorce.

	 
	1.29	 	“Plan” shall mean the Electronic Arts Deferred Compensation Plan, which
shall be evidenced by this instrument and by each Plan Agreement, as they
may be amended from time to time.

	 
	1.30	 	“Plan Agreement” shall mean a written agreement, as may be amended from
time to time, which is entered into by and between an Employer and a
Participant. Each Plan Agreement executed by a Participant and the
Participant’s Employer shall provide for the entire benefit to which such
Participant is entitled under the Plan; should there be more than one Plan
Agreement, the Plan Agreement bearing the latest date of acceptance by the
Employer shall supersede all previous Plan Agreements in their entirety
and shall govern such entitlement. The terms of any Plan Agreement may be
different for any Participant, and any Plan Agreement may provide
additional benefits not set forth in the Plan or limit the benefits
otherwise provided under the Plan; provided, however, that any such
additional benefits or benefit limitations must be agreed to by both the
Employer and the Participant.

	 
	1.31	 	“Plan Year” shall, for the first Plan Year, begin on April 1, 2003 and
end on March 31, 2004. For each Plan Year thereafter, Plan Year shall
mean a period beginning on April 1 of each calendar year and continuing
through March 31 of the succeeding calendar year.

 

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	1.32	 	“Predecessor Nonqualified Deferred Compensation Plan” shall mean the
Electronic Arts Deferred Compensation Plan, adopted January 21, 1994, as
amended.

	 
	1.33	 	“401(k) Plan” shall be that certain Electronic Arts, Inc. defined
contribution plan intended to satisfy the requirements of Sections 401(a),
401(k), 401(m), and 414(i) of the Code, as adopted by the Company.

	 
	1.34	 	“Rollover Amount” shall mean the amount determined in accordance with
Section 3.5.

	 
	1.35	 	“Rollover Account” shall mean (i) the sum of the Participant’s Rollover
Amount, plus (ii) amounts credited or debited in accordance with all the
applicable crediting and debiting provisions of this Plan that relate to
the Participants Rollover Account, less (iii) all distributions made to
the Participant or his or her Beneficiary pursuant to this Plan that
relate to the Participant’s Rollover Account.

	 
	1.36	 	“Short-Term Payout” shall mean the payout set forth in Section 4.1.

	 
	1.37	 	“Survivor Benefit” shall mean the benefit set forth in Article 5.

	 
	1.38	 	“Termination Benefit” shall mean the benefit set forth in Article 6.

	 
	1.39	 	“Termination of Employment” or “Terminate” shall mean the severing of
employment with all Employers, or service as a Director of all Employers,
voluntarily or involuntarily, for any reason other than Disability, death
or an authorized leave of absence. If a Participant is both an Employee
and a Director, a Termination of Employment shall occur only upon the
termination of the last position held; provided, however, that such a
Participant may elect, at least thirteen (13) months before Termination of
Employment and in accordance with the policies and procedures established
by the Committee, to be treated for purposes of this Plan as having
experienced a Termination of Employment at the time he or she ceases
employment with an Employer as an Employee.

	 
	1.40	 	“Trust” shall mean one or more trusts established pursuant to that
certain Trust Agreement, dated as of September 1, 2003 between the Company
and the trustee named therein, as amended from time to time.

	 
	1.41	 	“Unforeseeable Financial Emergency” shall mean an unanticipated emergency
that is caused by an event beyond the control of the Participant that
would result in severe financial hardship to the Participant resulting
from (i) a sudden and unexpected illness or accident of the Participant or
a dependent of the Participant, (ii) a loss of the Participant’s property
due to casualty, or (iii) such other extraordinary and unforeseeable
circumstances arising as a result of events beyond the control of the
Participant, all as determined in the sole and absolute discretion of the
Committee.

	 
	1.42	 	“Valuation Date” shall mean the last day of the Plan Year or any other
date as of which the Committee, in its sole and absolute discretion,
designates as a Valuation Date. Notwithstanding the foregoing or anything
in this Plan to the contrary, the Valuation Date may be different for
different Participants.

	 
	1.43	 	“Years of Service” shall mean the total number of years in which a
Participant has been employed by one or more Employers. For purposes of
this definition, a year of employment shall be a 365 day period (or 366
day period in case of a leap year) that, for the first year of employment,
commences on the Employee’s date of hiring and that, for any subsequent
year,

 

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	 	 	commences on an anniversary of that hiring date. The Committee shall make
a determination as to the number of Years of Service a Participant shall
be deemed to have completed, including whether any partial year of
employment shall be counted, and any such determination may, in the sole
and absolute discretion of the Committee, take into account any similar
definitions or provisions contained in the Qualified Plan.

ARTICLE 2

Selection/Enrollment/Eligibility

	2.1	 	Selection by
Committee. Eligibility for the Plan shall be limited to a
select group of management or highly compensated Employees and Directors
of the Employers, as determined by the Committee in its sole and absolute
discretion. From that group, the Committee shall select, in its sole and
absolute discretion, Employees and Directors to participate in the Plan.

	 
	2.2	 	Enrollment
Requirements. As a condition to participation, each selected
Employee or Director shall complete, execute and return to the Committee a
Plan Agreement, an Election Form and a Beneficiary Designation Form, all
within thirty (30) days after he or she is selected to participate in the
Plan. In addition, the Committee shall establish from time to time such
other enrollment requirements (including additional forms) as it
determines are necessary in its sole and absolute discretion.

	 
	2.3	 	Eligibility;
Commencement of Participation. Provided an Employee or
Director selected to participate in the Plan has met all enrollment
requirements set forth in this Plan and required by the Committee,
including returning all required forms and documents to the Committee
within the specified time period, that Employee or Director shall commence
participation in the Plan on the first day of the month following the
month in which the Employee or Director completes all enrollment
requirements. If an Employee or a Director fails to meet all such
requirements within the required period, in accordance with Section 2.2,
that Employee or Director shall not be eligible to participate in the Plan
until the first day of the Plan Year following the delivery to and
acceptance by the Committee of the required documents.

	 
	2.4	 	Termination of
Participation and/or Deferrals. If the Committee
determines in good faith that a Participant no longer qualifies as a
member of a select group of management or highly compensated employees, as
membership in such group is determined in accordance with Sections 201(2),
301(a)(3) and 401(a)(1) of ERISA, the Committee shall have the right, in
its sole and absolute discretion, to: (i) terminate any deferral election
the Participant has made for the remainder of the Plan Year in which the
Participant’s membership status changes, (ii) prevent the Participant from
making future deferral elections and/or (iii) immediately distribute the
Participant’s then Account Balance as a Termination Benefit and terminate
the Participant’s participation in the Plan.

 

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ARTICLE 3

Deferral Commitments/Rollover Amounts/Company Restoration Matching Amounts/Company

Contribution Amounts/Vesting/Crediting/Taxes

	3.1	 	Minimum Deferrals.

	 	(a)	 	Annual Base Salary, Annual Bonus and Director Fees. For each
Plan Year, a Participant may elect to defer, as his or her Annual
Deferral Amount, Annual Base Salary, Annual Bonus and/or Director
Fees in the following minimum amount:

	 	 	 	 	 	 
	 	Deferral

	 	 	Minimum Amount	 
	 	Annual Base Salary
and/or Annual Bonus
	 	 	$5,000 in aggregate	 
	 	Director Fees
	 	 	$5,000	 
	 

	 	 	 	If an election is made for less than such minimums or if no election
is made, the amount deferred shall be zero.

	 
	 	(b)	 	Short Plan Year. Notwithstanding the foregoing, if a
Participant first becomes a Participant after the first day of a Plan
Year, or in the case of the First Plan Year of this Plan, the minimum
Annual Deferral Amount shall be an amount equal to the minimum set
forth above, multiplied by a fraction, the numerator of which is the
number of complete months remaining in the Plan Year and the
denominator of which is 12.

	3.2	 	Maximum Deferral.

	 	(a)	 	Annual Base Salary, Annual Bonus and Directors Fees. For each
Plan Year, a Participant may elect to defer, as his or her Annual
Deferral Amount, Annual Base Salary, Annual Bonus and/or Director
Fees up to the following maximum percentages for each deferral
elected:

	 	 	 	 	 	 	 	 
	 	Deferral

	 	 	Maximum Amount
	 
	 	Annual Base Salary

	 	 	 	75	%	 
	 	Annual Bonus

	 	 	 	100	%	 
	 	Director Fees

	 	 	 	100	%	 
	 

	 	(b)	 	Short Plan Year. Notwithstanding the foregoing, if a
Participant first becomes a Participant after the first day of a
Plan Year, or in the case of the First Plan Year of the Plan
itself, the maximum Annual Deferral Amount with respect to Annual
Base Salary, Annual Bonus and/or Director Fees shall be limited to
the amount of compensation not yet earned by the Participant as of
the date the Participant submits a Plan Agreement and Election
Form to the Committee for acceptance.

 

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	3.3	 	Election to Defer; Effect of Election Form. 

	 	(a)	 	First Plan Year. In connection with a Participant’s
commencement of participation in the Plan, the Participant shall make
an irrevocable deferral election for the Plan Year in which the
Participant commences participation in the Plan, along with such
other elections as the Committee deems necessary or desirable under
the Plan. For these elections to be valid, the Election Form must be
completed and signed by the Participant, timely delivered to the
Committee (in accordance with Section 2.2 above) and accepted by the
Committee.

	 
	 	(b)	 	Subsequent Plan Years. For each succeeding Plan Year,
an irrevocable deferral election for that Plan Year, and such other
elections as the Committee deems necessary or desirable under the
Plan, shall be made by timely delivering to the Committee, in
accordance with the Committee’s rules and procedures, a new Election
Form. If no such Election Form is timely delivered for a Plan Year,
the Annual Deferral Amount shall be zero for that Plan Year.

	3.4	 	Withholding of Annual
Deferral Amounts. For each Plan Year, the
Annual Base Salary portion of the Annual Deferral Amount shall be withheld
from each regularly scheduled Annual Base Salary payroll in equal amounts
over each pay period, as adjusted from time to time for increases and
decreases in Annual Base Salary. The Annual Bonus and/or Director Fees
portion of the Annual Deferral Amount shall be withheld at the time the
Annual Bonus or Director Fees are or otherwise would be paid to the
Participant, whether or not this occurs during the Plan Year itself.

	3.5	 	Rollover Amount. If an Employee has an account balance in the
Predecessor Nonqualified Deferred Compensation Plan, an amount equal to
his/her account balance valued as of March 31, 2003 shall be credited to
the Participant’s Rollover Account under this Plan on April 1, 2003. The
Rollover Amount shall be subject to the terms and conditions of this Plan
and any Participant with a Rollover Amount shall have no right to demand
distribution of such amounts other than as provided for herein.

	3.6	 	Annual Company Restoration Matching Amount. A
Participant’s Annual Company Restoration Matching Amount for any Plan Year
shall be equal to an amount that is determined pursuant to the following
three steps: (i) calculate the Company matching contribution that would
have been made to the Participant’s account in the Company’s 401(k) Plan
had the Participant’s Annual Deferral Amount in this Plan been zero; (ii)
calculate the Company matching contribution that was actually made to the
Participant’s account in the Company’s 401(k) Plan; (iii) subtract item
(ii) from item (i). The amount so credited to a Participant under this
Plan shall be for that Participant the Annual Company Restoration Matching
Amount for that Plan Year and shall be credited to the Participant’s
Company Restoration Matching Account on a date or dates to be determined
by the Committee, in its sole and absolute discretion.

 

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	3.7	 	Annual Company Contribution Amount. For each Plan Year, an
Employer, in its sole and absolute discretion, may, but is not required
to, credit any amount it desires to any Participant’s Company Contribution
Account under this Plan, which amount shall be for that Participant the
Annual Company Contribution Amount for that Plan Year. The amount so
credited to a Participant may be smaller or larger than the amount
credited to any other Participant, and the amount credited to any
Participant for a Plan Year may be zero, even though one or more other
Participants receive an Annual Company Contribution Amount for that Plan
Year. The Annual Company Contribution Amount, if any, shall be credited
on a date or dates to de be determined by the Committee in its sole and
absolute discretion, and the crediting date or dates may be different for
different Participants. Notwithstanding anything in this Section or the
Plan to the contrary, if a Participant is not employed by an Employer as
of the last day of a Plan Year other than by reason of his or her death
while employed, the Annual Company Contribution Amount for that Plan Year
shall be zero.

	3.8	 	Investment of Trust Assets. The Trustee of the Trust
shall be authorized, upon written instructions received from the Committee
or investment manager appointed by the Committee, to invest and reinvest
the assets of the Trust in accordance with the applicable Trust Agreement.

	3.9	 	Vesting.

	 	(a)	 	A Participant shall at all times be 100% vested in his or her
Rollover Account and Deferral Account.

	 
	 	(b)	 	A Participant shall be vested in his or her Company
Contribution Account in accordance with the vesting schedules
established by the Committee, in its sole and absolute discretion,
for each Annual Company Contribution Amount (and amounts credited or
debited thereon) at the time such Annual Company Contribution Amount
is first credited to the Participant’s Account Balance under the
Plan. The Committee, in its sole and absolute discretion, will
determine over what period of time and in what percentage increments
a Participant shall vest in his or her Company Contribution Account.
The Committee may establish different vesting schedules for different
Participants, in its sole and absolute discretion.

	 
	 	(c)	 	A Participant shall at all times be 100% vested in his or her
Annual Company Restoration Matching Account.

	 
	 	(d)	 	Notwithstanding anything in this Section to the contrary,
except as provided in subsection (e) below, in the event of a Change
in Control, a Participant’s Company Contribution Account shall
immediately become 100% vested (without regard to whether it is
already vested in accordance with the above vesting schedules).

	 
	 	(e)	 	Notwithstanding subsection (d) above, the vesting schedule for
a Participant’s Company Contribution Account and/or Company
Restoration Matching Account shall not be accelerated to the extent
that the Committee determines that such acceleration would cause the
deduction limitations of Section 280G of the Code to become
effective. In the event that all of a Participant’s Company
Contribution Account is not vested pursuant to

 

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	 	 	 	such a determination, the Participant may request independent
verification of the Committee’s calculations with respect to the
application of Section 280G. In such case, the Committee must
provide to the Participant within thirty (30) business days of such
a request an opinion from a regionally-recognized accounting firm
selected by the Committee in its sole and absolute discretion (the
“Accounting Firm”). The opinion shall state the Accounting Firm’s
opinion that any limitation in the vested percentage hereunder is
necessary to avoid the limits of Section 280G and contain supporting
calculations. The cost of such opinion shall be paid for by the
Company.

	3.10	 	Crediting/Debiting of Account Balances. In accordance
with, and subject to, the rules and procedures that are established from
time to time by the Committee, in its sole and absolute discretion,
amounts shall be credited or debited to a Participant’s Account Balance in
accordance with the following rules:

	 	(a)	 	Election of Measurement Funds. A Participant, in
connection with his or her initial deferral election in accordance
with Section 3.3(a) above, shall elect, on the Election Form, one or
more Measurement Fund(s) to be used to determine the additional
amounts to be credited to his or her Account Balance for the first
business day in which the Participant commences participation in the
Plan and continuing thereafter for each subsequent day in which the
Participant participates in the Plan, unless changed in accordance
with the next sentence. Commencing with the first business day that
follows the Participant’s commencement of participation in the Plan
and continuing thereafter for each subsequent day in which the
Participant participates in the Plan, the Participant may (but is not
required to) elect, by submitting an Election Form to the Committee
that is accepted by the Committee, to add or delete one or more
Measurement Fund(s) to be used to determine the additional amounts to
be credited to his or her Account Balance, or to change the portion
of his or her Account Balance allocated to each previously or newly
elected Measurement Fund. If an election is made in accordance with
the previous sentence, it shall apply to the next business day and
continue thereafter for each subsequent day in which the Participant
participates in the Plan, unless changed in accordance with the
previous sentence.

	 
	 	(b)	 	Proportionate Allocation. In making any election
described in Section 3.10(a) above, the Participant shall specify on
the Election Form, in increments of five percentage points (5%), the
percentage of his or her Account Balance to have gains and losses
measured by a Measurement Fund.

	 
	 	(c)	 	Measurement Funds. From time to time, the Committee
in its sole and absolute discretion shall select and announce to
Participants its selection of mutual funds, insurance company
separate accounts, indexed rates or other methods (each, a
“Measurement Fund”), for the purpose of providing the basis on which
gains and losses shall be attributed to Account Balances under the
Plan. The Committee may, in its sole and absolute discretion,
discontinue, substitute or add a Measurement Fund at any time. Each
such action will take effect as of the first day of the month that
follows by thirty (30) days the day on which the Committee gives
Participants advance written notice of such change.

 

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	 	(d)	 	Crediting or Debiting Method. The performance of each
elected Measurement Fund (either positive or negative) will be
determined by the Committee, in its reasonable discretion, based on
available reports of the performance of the Measurement Funds. A
Participant’s Account Balance shall be credited or debited on a daily
basis based on the performance of each Measurement Fund selected by
the Participant, as determined by the Committee in its sole and
absolute discretion, as though (i) a Participant’s Account Balance
were invested in the Measurement Fund(s) selected by the Participant,
in the percentages applicable to such day, as of the close of
business on such day, at the closing price on such date; (ii) the
portion of the Annual Deferral Amount that was actually deferred
during any day were invested in the Measurement Fund(s) selected by
the Participant, in the percentages applicable to such day, no later
than the close of business on the first business day after the day on
which such amounts are actually deferred from the Participant’s
Annual Base Salary through reductions in his or her payroll, at the
closing price on such date; and (iii) any distribution made to a
Participant that decreases such Participant’s Account Balance ceased
being invested in the Measurement Fund(s), in the percentages
applicable to such day, no earlier than one business day prior to the
distribution, at the closing price on such date.

	 
	 	(e)	 	No Actual Investment. Notwithstanding any other
provision of this Plan that may be interpreted to the contrary, the
Measurement Funds are to be used for measurement purposes only, and a
Participant’s election of any such Measurement Fund, the allocation
to his or her Account Balance thereto, the calculation of additional
amounts and the crediting or debiting of such amounts to a
Participant’s Account Balance shall not be considered or construed in
any manner as an actual investment of his or her Account Balance in
any such Measurement Fund. In the event that the Company or the
Trustee (as that term is defined in the Trust), in its own
discretion, decides to invest funds in any or all of the Measurement
Funds, no Participant shall have any rights in or to such investments
themselves. Without limiting the foregoing, a Participant’s Account
Balance shall at all times be a bookkeeping entry only and shall not
represent any investment made on his or her behalf by the Company or
the Trust; the Participant shall at all times remain an unsecured
creditor of the Company.

	3.11	 	FICA and Other Taxes.

	 	(a)	 	Annual Deferral Amounts. For each Plan Year in which
an Annual Deferral Amount is being withheld from an Employee
Participant, the Participant’s Employer(s) shall withhold from that
portion of the Participant’s Annual Base Salary and/or Annual Bonus
that is not being deferred, in a manner determined by the
Employer(s), the Participant’s share of FICA and other employment
taxes on such Annual Deferral Amount. If necessary, the Committee
may reduce the Annual Deferral Amount in order to comply with this
Section.

	 
	 	(b)	 	Company Restoration Matching Amounts. For a
Participant’s Company Restoration Matching Amount, the Participant’s
Employer(s) shall withhold from the Participant’s

 

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	 	 	 	Annual Base Salary and/or Annual Bonus that is not deferred, in a
manner determined by the Employer(s), the Participant’s share of
FICA and other employment taxes. If necessary, the Committee may
reduce the vested portion of the Participant’s Company Restoration
Matching Account in order to comply with this Section.

	 
	 	(c)	 	Other Amounts. When an Employee Participant becomes
vested in a portion of his or her Annual Company Contribution
Amounts, the Participant’s Employer(s) shall withhold from the
Participant’s Annual Base Salary and/or Annual Bonus that is not
deferred, in a manner determined by the Employer(s) in its sole and
absolute discretion, the Participant’s share of FICA and other
employment taxes on the portion of the Annual Company Contribution
Amounts that becomes vested. If necessary, the Committee may reduce
the vested portion of the Participant’s aforementioned amounts in
order to comply with this Section.

	3.12	 	Distributions. The Participant’s Employer(s), or the
trustee of the Trust, shall withhold from any payments made to a
Participant under this Plan all federal, state and local income,
employment and other taxes required to be withheld by the Employer(s), or
the trustee of the Trust, in connection with such payments, in amounts and
in a manner to be determined in the sole and absolute discretion of the
Employer(s) and the trustee of the Trust.

ARTICLE 4

Short-Term Payout/Unforeseeable Financial Emergencies/

Withdrawal Election

	4.1	 	Short-Term Payout. In connection with each election to
defer an Annual Deferral Amount, a Participant may irrevocably elect to
receive a future “Short-Term Payout” from the Plan with respect to a
portion or all of such Annual Deferral Amount. Subject to the Deduction
Limitation, the Short-Term Payout shall be a lump sum payment in an amount
equal to the portion of the Annual Deferral Amount elected for such Short
Term Payout by the Participant plus amounts credited or debited in the
manner provided in Section 3.10 above on that amount, determined at the
time that the Short-Term Payout becomes payable (rather than the date of a
Termination of Employment). Subject to the Deduction Limitation and the
other terms and conditions of this Plan, each Short-Term Payout elected
shall be paid out during a sixty (60) day period commencing immediately
after the last day of any Plan Year designated by the Participant that is
at least three Plan Years after the end of the Plan Year in which the
Annual Deferral Amount is actually deferred. By way of example, if a
three year Short-Term Payout is elected for Annual Deferral Amounts that
are deferred in the Plan Year commencing April 1, 2003, the three year
Short-Term Payout would become payable during a sixty (60) day period
commencing April 1, 2007. In addition, subject to the terms and
conditions of this Section 4.1, Section 4.2 and all other provisions of
this Plan, any similar elections made pursuant to the terms of the
Predecessor Nonqualified Deferred Compensation Plan, shall be deemed to
remain in effect under this Plan. The distribution date selected by a
Participant in connection with such election(s) under the Predecessor
Nonqualified Deferred Compensation Plan shall remain binding on the
parties. The Committee shall, in its sole and absolute discretion,
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	 	 	any amounts deferred under the Predecessor Nonqualified Deferred
Compensation Plan shall be treated pursuant to the language of Article 4
and the Plan.

	 
	4.2	 	Other Benefits Take Precedence Over Short-Term. Should
an event occur that triggers a benefit under Article 5, 6, 7 or 8, any
Annual Deferral Amount, plus amounts credited or debited thereon, that is
subject to a Short-Term Payout election under Section 4.1 shall not be
paid in accordance with Section 4.1 but shall be paid in accordance with
the other applicable Article.

	 
	4.3	 	Withdrawal Payout/Suspensions for Unforeseeable Financial Emergencies. If the Participant experiences an Unforeseeable Financial
Emergency, the Participant may petition the Committee to (i) suspend any
deferrals required to be made by a Participant and/or (ii) receive a
partial or full payout from the Plan. The payout shall not exceed the
lesser of the Participant’s Account Balance, calculated as if such
Participant were receiving a Termination Benefit, or the amount reasonably
needed to satisfy the Unforeseeable Financial Emergency. If, subject to
the sole and absolute discretion of the Committee, the petition for a
suspension and/or payout is approved, suspension shall take effect upon
the date of approval and any payout shall be made within sixty (60) days
of the date of approval. The payment of any amount under this Section 4.3
shall not be subject to the Deduction Limitation.

ARTICLE 5

Survivor Benefit

	5.1	 	Survivor Benefit. Subject to the Deduction
Limitation, if the Participant dies before he or she experiences a
Termination of Employment or suffers a Disability prior to such date, the
Participant’s Beneficiary shall be entitled to receive the Termination
Benefit described in Section 6.2 as if Participant Terminated his or her
employment with the Company and the Election Form most recently on file
with the Company shall control the manner in which the Survivor Benefit is
paid. Should the Participant die or suffer a Disability after the
Termination of Employment, but before the Termination Benefit is paid in
full, the unpaid balance shall continue to be paid to the Beneficiary
according to the Annual Installment Method most recently selected by the
Participant.

ARTICLE 6

Termination Benefit

	6.1	 	Termination Benefit. Subject to the Deduction
Limitation, a Participant shall receive a Termination Benefit, which shall
be equal to the Participant’s Account Balance if a Participant experiences
a Termination of Employment prior to his or her death or Disability.

	6.2	 	Payment of Termination Benefit. A Participant, in
connection with his or her commencement of participation in the Plan,
shall elect on an Election Form to receive the Termination Benefit in a
lump sum or pursuant to the Annual Installment Method. The Termination
Benefit will be paid in a lump sum or Annual Installments will be begin,
in the first 60 days after the end of the calendar year in which the
Participant

 

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	 	 	terminates his or her employment. Notwithstanding the foregoing, the
Committee, in its sole and absolute discretion, may cause the Termination
Benefit to be paid or Annual Installments to begin on a date that is prior
to the one referred to in the previous sentence; provided, however, the
Termination Benefit may not be paid in a lump sum and Annual Installments
may not begin prior to the date on which a Participant experiences a
Termination of Employment. The Participant may annually change his or her
election to an allowable alternative payout period by submitting new
Election Form to the Committee, provided that any such Election Form is
submitted at least thirteen months prior the Participant’s Termination and
is accepted by the Committee, in its sole and absolute discretion. The
Election Form most recently accepted by the Committee shall govern the
payout of the Termination Benefit. If a Participant does not make any
election with respect to the payment of the Termination Benefit, then such
benefit shall be payable in a lump sum. Any payment made shall be subject
to the Deduction Limitation. Notwithstanding the foregoing or anything in
this Plan to the contrary, to the extent a Participant’s Account Balance
is less than $25,000 at the time of Termination of Employment, the
Committee shall cause the Termination Benefit to be paid in a lump sum.

ARTICLE 7

Disability Waiver and Benefit

	7.1	 	Disability Waiver.

	 	(a)	 	Waiver of Deferral. A Participant who is determined
by the Committee to be suffering from a Disability shall be (i)
excused from fulfilling that portion of the Annual Deferral Amount
commitment that would otherwise have been withheld from a
Participant’s Annual Base Salary, Annual Bonus and/or Directors Fees
for the Plan Year during which the Participant first suffers a
Disability. During the period of Disability, the Participant shall
not be allowed to make any additional deferral elections, but will
continue to be considered a Participant for all other purposes of
this Plan.

	 
	 	(b)	 	Return to Work. If a Participant returns to
employment, or service as a Director, with an Employer, after a
Disability ceases, the Participant may elect to defer an Annual
Deferral Amount for the Plan Year following his or her return to
employment or service and for every Plan Year thereafter while a
Participant in the Plan; provided such deferral elections are
otherwise allowed and an Election Form is delivered to and accepted
by the Committee for each such election in accordance with Section
3.3 above.

	7.2	 	Continued Eligibility; Disability Benefit. A
Participant suffering a Disability shall, for benefit purposes under this
Plan, continue to be considered to be employed, or in the service of an
Employer as a Director, and shall be eligible for the benefits provided
for in Articles 4, 5, or 6 in accordance with the provisions of those
Articles. Notwithstanding the above, the Committee, in its sole and
absolute discretion and for purposes of this Plan only, shall have the
right to deem the Participant to have experienced a Termination of
Employment at any time after such Participant is determined to be
suffering a Disability, in which case the Participant shall receive a
Disability Benefit equal to his or her Account Balance at the time of the
Committee’s determination. The Disability Benefit shall be paid in a lump
sum or pursuant to the Annual Installment Method of up to ten years,

 

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	   	 	 with the lump sum or first installment payable within sixty (60) days of
the Committee’s exercise of such right. Any payment made shall
 be subject
to the Deduction Limitation.

ARTICLE 8

Beneficiary Designation

	8.1	 	Beneficiary. Each Participant shall have the right, at
any time, to designate his or her Beneficiary(ies) (both primary as well
as contingent) to receive any benefits payable under the Plan to a
beneficiary upon the death of a Participant. The Beneficiary designated
under this Plan may be the same as or different from the Beneficiary
designation under any other plan of an Employer in which the Participant
participates.

	8.2	 	Beneficiary Designation; Change; Spousal Consent. A
Participant shall designate his or her Beneficiary by completing and
signing the Beneficiary Designation Form, and returning it to the
Committee or its designated agent. A Participant shall have the right to
change a Beneficiary by completing, signing and otherwise complying with
the terms of the Beneficiary Designation Form and the Committee’s rules
and procedures, as in effect from time to time. If the Participant names
someone other than his or her spouse as a Beneficiary, a spousal consent,
in the form designated by the Committee, must be signed by that
Participant’s spouse and returned to the Committee. Upon the acceptance
by the Committee of a new Beneficiary Designation Form, all Beneficiary
designations previously filed shall be canceled. The Committee shall be
entitled to rely on the last Beneficiary Designation Form filed by the
Participant and accepted by the Committee prior to his or her death.

	8.3	 	Acknowledgment. No designation or change in
designation of a Beneficiary shall be effective until received and
acknowledged in writing by the Committee or its designated agent.

	8.4	 	No Beneficiary Designation. If a Participant fails to
designate a Beneficiary as provided in Sections 8.1, 8.2, and 8.3 above
or, if all designated Beneficiaries predecease the Participant or die
prior to complete distribution of the Participant’s benefits, then the
Participant’s designated Beneficiary shall be deemed to be his or her
surviving spouse. If the Participant has no surviving spouse, the
benefits remaining under the Plan to be paid to a Beneficiary shall be
payable to the executor or personal representative of the Participant’s
estate.

	 
	 	 	Upon the Committee or its designated agent being provided with written
notice of the dissolution of marriage of a Participant, and
notwithstanding any of the preceding provisions of this Article 8, any
earlier designation of the Participant’s former spouse as a Beneficiary
for a portion or all of the benefits specified herein shall be treated as
though the Participant’s former spouse had predeceased the Participant.
Notwithstanding the preceding sentence, any designation of the
Participant’s former spouse as a Beneficiary shall not be treated as
though the Participant’s former spouse had predeceased the Participant if,
after the dissolution of the Participant’s marriage and prior to payment
of benefits on behalf of the Participant (1) the Participant executes and
delivers a new Beneficiary designation that complies with this Plan that
clearly names such former spouse as a Beneficiary, or (2) there is
delivered to the Plan a domestic relations order providing that the former
spouse is to be treated as the Beneficiary. In any case in which the

 

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	      	 	Participant’s former spouse is treated under the Participant’s Beneficiary
designation as having predeceased the Participant, no heirs or other
beneficiaries of the former spouse shall receive benefits from this Plan
as a Beneficiary of the Participant except as provided otherwise in the
Participant’s Beneficiary designation.

	 
	      	 	(The following example illustrates the application of the preceding
paragraph. Assume that a Participant, ‘Participant A,’ is married to
‘Spouse A’ and that Participant A files a valid and effective Beneficiary
designation under this Plan naming Spouse A as a 50% Beneficiary and each
of Participant A’s two children with Spouse A (the ‘Children’) as a 25%
Beneficiary. Assume that Participant A becomes divorced from Spouse A
after making such Beneficiary designation. Upon the Committee or its
designated agent being provided with written notice of the divorce, Spouse
A shall be deemed to have predeceased Participant A for purposes of
Participant A’s Beneficiary designation subject to the second sentence of
the preceding paragraph. If Participant A later dies without having made
a valid post-divorce Beneficiary designation under this Plan and assuming
that no Plan benefits have been paid and that there is no domestic
relations order to the contrary, Participant A’s Beneficiaries shall be
deemed to be his two Children, with each child being a 50% Beneficiary.)

	8.5	 	Doubt as to Beneficiary. If the Committee has any
doubt as to the proper Beneficiary to receive payments pursuant to this
Plan, the Committee shall have the right, exercisable in its sole and
absolute discretion, to cause the Participant’s Employer to withhold such
payments until this matter is resolved to the Committee’s satisfaction.

	8.6	 	Discharge of Obligations. The payment of benefits
under the Plan to a Beneficiary shall fully and completely discharge all
Employers and the Committee from all further obligations under this Plan
with respect to the Participant, and that Participant’s Plan Agreement
shall terminate upon such full payment of benefits.

ARTICLE 9

Leave of Absence

	9.1	 	Paid Leave of Absence. If a Participant is authorized
by the Participant’s Employer for any reason to take a paid leave of
absence from the employment of the Employer, the Participant shall
continue to be considered employed by the Employer and the Annual Deferral
Amount shall continue to be withheld during such paid leave of absence in
accordance with Section 3.3.

	9.2	 	Unpaid Leave of Absence. If a Participant is
authorized by the Participant’s Employer for any reason to take an unpaid
leave of absence from the employment of the Employer, the Participant
shall continue to be considered employed by the Employer and the
Participant shall be excused from making deferrals until the earlier of
the date the leave of absence expires or the Participant returns to a paid
employment status. Upon such expiration or return, deferrals shall resume
for the remaining portion of the Plan Year in which the expiration or
return occurs, based on the deferral election, if any, made for that Plan
Year. If no election was made for that Plan Year, no deferral shall be
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ARTICLE 10

Termination/Amendment or Modification

	10.1	 	Termination. Although each Employer anticipates that
it will continue the Plan for an indefinite period of time, there is no
guarantee that any Employer will continue the Plan or will not terminate
the Plan at any time in the future. Accordingly, each Employer reserves
the right to discontinue its sponsorship of the Plan and/or to terminate
the Plan at any time with respect to any or all of its participating
Employees and Directors, by action of its board of directors. Upon the
termination of the Plan with respect to any Employer, the Plan Agreements
of the affected Participants who are employed by that Employer, or in the
service of that Employer as Directors, shall terminate and their Account
Balances, determined as if they had experienced a Termination of
Employment on the date of Plan termination, shall be paid to the
Participants as follows: Prior to a Change in Control, if the Plan is
terminated with respect to all of its Participants, an Employer shall have
the right, in its sole and absolute discretion, and notwithstanding any
elections made by the Participant, to pay such benefits in a lump sum or
pursuant to the Annual Installment Method of up to ten (10) years, with
amounts credited and debited during the installment period as provided
herein. If the Plan is terminated with respect to less than all of its
Participants, an Employer shall be required to pay such benefits in a lump
sum. After a Change in Control, the Employer shall be required to pay
such benefits in a lump sum. The termination of the Plan shall not
adversely affect any Participant or Beneficiary who has become entitled to
the payment of any benefits under the Plan as of the date of termination;
provided however, that the Employer shall have the right to accelerate
installment payments without a premium or prepayment penalty by paying the
Account Balance in a lump sum or pursuant to the Annual Installment Method
using fewer years (provided that the present value of all payments that
will have been received by a Participant at any given point of time under
the different payment schedule shall equal or exceed the present value of
all payments that would have been received at that point in time under the
original payment schedule).

	10.2	 	Amendment. The Company may, at any time, amend or
modify the Plan in whole or in part by the action of its Board of
Directors or by action of a committee or individual(s) acting pursuant to
a valid delegation of authority of the Board of Directors, as appropriate
in its sole and absolute discretion; provided, however, that: (i) no
amendment or modification shall be effective to decrease or restrict the
value of a Participant’s Account Balance in existence at the time the
amendment or modification is made, calculated as if the Participant had
experienced a Termination of Employment as of the effective date of the
amendment or modification, and (ii) no amendment or modification shall be
effective upon or after a Change in Control without the prior written
consent of a majority of Participants. The amendment or modification of
the Plan shall not affect any Participant or Beneficiary who has become
entitled to the payment of benefits under the Plan as of the date of the
amendment or modification; provided, however, that the Employer shall have
the right to accelerate installment payments by paying the Account Balance
in a lump sum or pursuant to the Annual Installment Method using fewer
years (provided that the present value of all payments that will have been
received by a Participant at any given point of time under the different
payment schedule shall equal or exceed the present value of all payments
that would have been received at that point in time under the original
payment schedule).

 

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	10.3	 	Plan Agreement. Despite the provisions of Sections
10.1 and 10.2 above, if a Participant’s Plan Agreement contains benefits
or limitations that are not in this Plan document, the Employer may only
amend or terminate such provisions with the consent of the Participant.

	10.4	 	Effect of Payment. The full payment of the applicable
benefit under Articles 4, 5, 6, 7 or 8 of the Plan shall completely
discharge all obligations to a Participant and his or her designated
Beneficiaries under this Plan and the Participant’s Plan Agreement shall
terminate.

ARTICLE 11

Administration

	11.1	 	Committee Duties. Except as otherwise provided in this
Article 11, this plan shall be administered by a Committee, which shall
consist of those persons appointed by the Chief Executive Officer of the
Company from time to time. If the Chief Executive Officer of the Company
fails to appoint the Committee, the Committee shall be the Company until
such time as the Chief Executive Officer appoints the members of the
Committee pursuant to the previous sentence. Members of the Committee may
be Participants under this Plan. The Committee shall also have the
discretion and authority to (i) make, amend, interpret, and enforce all
appropriate rules and regulations for the administration of this Plan and
(ii) decide or resolve any and all questions including interpretations of
this Plan, as may arise in connection with the Plan. Any individual
serving on the Committee who is a Participant shall not vote or act on any
matter relating solely to himself or herself. When making a determination
or calculation, the Committee shall be entitled to rely on information
furnished by a Participant or the Company.

	11.2	 	Administration Upon Change In Control. For purposes of this
Plan, the Committee shall be the “Administrator” at all times prior to the
occurrence of a Change in Control. Upon and after the occurrence of a
Change in Control, the “Administrator” shall be an independent third party
selected by the Trustee and approved by the individual who, immediately
prior to such event, was the Company’s Chief Executive Officer or, if not
available or willing to assume such responsibility, the Company’s highest
ranking officer (the “Ex-CEO”). The Administrator shall have the
discretionary power to determine all questions arising in connection with
the administration of the Plan and the interpretation of the Plan and
Trust including, but not limited to benefit entitlement determinations;
provided, however, upon and after the occurrence of a Change in Control,
the Administrator shall have no power to direct the investment of Plan or
Trust assets or select any investment manager or custodial firm for the
Plan or Trust. Upon and after the occurrence of a Change in Control, the
Company must: (1) pay all reasonable administrative expenses and fees of
the Administrator; (2) indemnify the Administrator against any costs,
expenses and liabilities including, without limitation, attorney’s fees
and expenses arising in connection with the performance of the
Administrator hereunder, except with respect to matters resulting from the
gross negligence or willful misconduct of the Administrator or its
employees or agents; and (3) supply full and timely information to the
Administrator or all matters relating to the Plan, the Trust, the
Participants and their Beneficiaries, the Account Balances of the
Participants, the date of circumstances of the Disability, death or
Termination of Employment of the Participants, and

 

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	      	 	such other pertinent information as the Administrator may reasonably
require. Upon and after a Change in Control, the Administrator may be
terminated (and a replacement appointed) by the Trustee only with the
approval of the Ex-CEO. Upon and after a Change in Control, the
Administrator may not be terminated by the Company.

	11.3	 	Agents. In the administration of this Plan, the
Committee may, from time to time, employ agents and delegate to them such
administrative duties as it sees fit (including acting through a duly
appointed representative) and may from time to time consult with counsel
who may be counsel to any Employer.

	11.4	 	Binding Effect of Decisions. The decision or action of
the Administrator with respect to any question arising out of or in
connection with the administration, interpretation and application of the
Plan and the rules and regulations promulgated hereunder shall be final
and conclusive and binding upon all persons having any interest in the
Plan.

	11.5	 	Indemnity of Committee. All Employers shall indemnify
and hold harmless the members of the Committee, and any Employee to whom
the duties of the Committee may be delegated, and the Administrator
against any and all claims, losses, damages, expenses or liabilities
arising from any action or failure to act with respect to this Plan,
except in the case of willful misconduct by the Committee, any of its
members, any such Employee or the Administrator.

	11.6	 	Employer Information. To enable the Committee and/or
Administrator to perform its functions, the Company and each Employer
shall supply full and timely information to the Committee and/or
Administrator, as the case may be, on all matters relating to the
compensation of its Participants, the date and circumstances of the
Disability, death or Termination of Employment of its Participants, and
such other pertinent information as the Committee or Administrator may
reasonably require.

ARTICLE 12

Other Benefits and Agreements

	12.1	 	Coordination with Other Benefits. The benefits
provided for a Participant and Participant’s Beneficiary under the Plan
are in addition to any other benefits available to such Participant under
any other plan or program for employees of the Participant’s Employer.
The Plan shall supplement and shall not supersede, modify or amend any
other such plan or program except as may otherwise be expressly provided.

ARTICLE 13

Claims Procedures

	13.1	 	Presentation of Claim. Any Participant or Beneficiary
of a deceased Participant (such Participant or Beneficiary being referred
to below as a “Claimant”) may deliver to the Committee a written claim for
a determination with respect to the amounts distributable to such Claimant
from the Plan. If such a claim relates to the contents of a notice
received by the Claimant, the claim must be made within sixty (60) days
after such notice was received by the Claimant. All other claims must be
made within 180 days of the date on which

 

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	       	 	the event that caused the claim to arise occurred. The claim must state
with particularity the determination desired by the Claimant.

	13.2	 	Notification of Decision. The Committee shall consider
a Claimant’s claim within a reasonable time, and shall notify the Claimant
in writing:

	 	(a)	 	that the Claimant’s requested determination has been made, and
that the claim has been allowed in full; or

	 
	 	(b)	 	that the Committee has reached a conclusion contrary, in whole
or in part, to the Claimant’s requested determination, and such
notice must set forth in a manner calculated to be understood by the
Claimant:

	 	(i)	 	the specific reason(s) for the denial of the claim,
or any part of it;

	 
	 	(ii)	 	specific reference(s) to pertinent provisions of
the Plan upon which such denial was based;

	 
	 	(iii)	 	a description of any additional material or
information necessary for the Claimant to perfect the claim,
and an explanation of why such material or information is
necessary; and

	 
	 	(iv)	 	an explanation of the claim review procedure set
forth in Section 13.3 below.

	13.3	 	Review of a Denied Claim. Within sixty (60) days after
receiving a notice from the Committee that a claim has been denied, in
whole or in part, a Claimant (or the Claimant’s duly authorized
representative) may file with the Committee a written request for a review
of the denial of the claim. Thereafter, but not later than thirty (30)
days after the review procedure began, the Claimant (or the Claimant’s
duly authorized representative):

	 	(a)	 	may review pertinent documents;

	 
	 	(b)	 	may submit written comments or other documents; and/or

	 
	 	(c)	 	may request a hearing, which the Committee, in its sole and
absolute discretion, may grant.

	13.4	 	Decision on Review. The Committee shall render its
decision on review promptly, and not later than sixty (60) days after the
filing of a written request for review of the denial, unless a hearing is
held or other special circumstances require additional time, in which case
the Committee’s decision must be rendered within 120 days after such date.
Such decision must be written in a manner calculated to be understood by
the Claimant, and it must contain:

	 	(a)	 	specific reasons for the decision;

	 
	 	(b)	 	specific reference(s) to the pertinent Plan provisions upon
which the decision was based; and

	 
	 	(c)	 	such other matters as the Committee deems relevant.

	13.5	 	Mediation. Should the parties be unable to resolve the
dispute pursuant to these procedures, the claim shall be referred to
non-binding mediation, conducted by

 

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	 	 	the Employment panel of Judicial Arbitration Mediation Services (“JAMS”), in accordance with JAMS’ standard mediation rules. A
mutually agreeable mediator will be selected. The parties shall share all costs of the mediation equally, including attorney fees.
Not sooner than 20 days following the mediator’s final determination, either party may request binding arbitration.

	 
	13.6	 	Binding Arbitration. Following the expiration of the 20 day period referenced in
Section 13.5, either party may initiate binding arbitration by
making a written demand for it on the other party. Such
binding arbitration shall be conducted under the applicable
rules of the American Arbitration Association using a mutually
selected arbitrator in San Mateo or San Francisco County. The
cost of the arbitration shall be borne by the non-prevailing
party or as otherwise determined by the arbitrator.

ARTICLE 14

Trust

	14.1	 	Establishment of the Trust. The Company shall
establish the Trust, and each Employer shall at least annually transfer
over to the Trust such assets as the Employer determines, in its sole and
absolute discretion, are necessary to provide, on a present value basis,
for its respective future liabilities created with respect to the Rollover
Amounts, Annual Company Contribution Amounts, Company Restoration Matching
Contribution Amounts, and Annual Deferral Amounts for such Employer’s
Participants for all periods prior to the transfer, as well as any debits
and credits to the Participants’ Account Balances for all periods prior to
the transfer, taking into consideration the value of the assets in the
trust at the time of the transfer.

	14.2	 	Interrelationship of the Plan and the Trust. The
provisions of the Plan and the Plan Agreement shall govern the rights of a
Participant to receive distributions pursuant to the Plan. The provisions
of the Trust shall govern the rights of the Employers, Participants and
the creditors of the Employers to the assets transferred to the Trust.
Each Employer shall at all times remain liable to carry out its
obligations under the Plan.

	14.3	 	Distributions From the Trust. Each Employer’s
obligations under the Plan may be satisfied with Trust assets distributed
pursuant to the terms of the Trust, and any such distribution shall reduce
the Employer’s obligations under this Plan.

ARTICLE 15

Miscellaneous

	15.1	 	Status of Plan. The Plan is intended to be a plan that is not
qualified within the meaning of Code Section 401(a) and that “is unfunded
and is maintained by an employer primarily for the purpose of providing
deferred compensation for a select group of management or highly
compensated employee” within the meaning of ERISA Sections 201(2),
301(a)(3) and 401(a)(1). The Plan shall be administered and interpreted
to the extent possible in a manner consistent with that intent.

 

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	15.2	 	Unsecured General Creditor. Participants and their
Beneficiaries, heirs, successors and assigns shall have no legal or
equitable rights, interests or claims in any property or assets of an
Employer. For purposes of the payment of benefits under this Plan, any
and all of an Employer’s assets shall be, and remain, the general,
unpledged unrestricted assets of the Employer. An Employer’s obligation
under the Plan shall be merely that of an unfunded and unsecured promise
to pay money in the future.

	15.3	 	Employer’s Liability. An Employer’s liability for the
payment of benefits shall be defined only by the Plan and the Plan
Agreement, as entered into between the Employer and a Participant. An
Employer shall have no obligation to a Participant under the Plan except
as expressly provided in the Plan and his or her Plan Agreement.

	15.4	 	Nonassignability. Neither a Participant nor any other
person shall have any right to commute, sell, assign, transfer, pledge,
anticipate, mortgage or otherwise encumber, transfer, hypothecate,
alienate or convey in advance of actual receipt, the amounts, if any,
payable hereunder, or any part thereof, which are, and all rights to which
are expressly declared to be, unassignable and non-transferable. No part
of the amounts payable shall, prior to actual payment, be subject to
seizure, attachment, garnishment or sequestration for the payment of any
debts, judgments, alimony or separate maintenance owed by a Participant or
any other person, be transferable by operation of law in the event of a
Participant’s or any other person’s bankruptcy or insolvency or be
transferable to a spouse as a result of a property settlement or
otherwise.

	15.5	 	Not a Contract of Employment. The terms and conditions
of this Plan shall not be deemed to constitute a contract of employment
between any Employer and the Participant. Such employment is hereby
acknowledged to be an “at will” employment relationship that can be
terminated at any time for any reason, or no reason, with or without
cause, and with or without notice, unless expressly provided in a written
employment agreement. Nothing in this Plan shall be deemed to give a
Participant the right to be retained in the service of any Employer,
either as an Employee or a Director, or to interfere with the right of any
Employer to discipline or discharge the Participant at any time.

	15.6	 	Furnishing Information. A Participant or his or her
Beneficiary will cooperate with the Committee by furnishing any and all
information requested by the Committee and take such other actions as may
be requested in order to facilitate the administration of the Plan and the
payments of benefits hereunder, including but not limited to taking such
physical examinations as the Committee may deem necessary.

	15.7	 	Terms. Whenever any words are used herein in the
masculine, they shall be construed as though they were in the feminine in
all cases where they would so apply; and whenever any words are used
herein in the singular or in the plural, they shall be construed as though
they were used in the plural or the singular, as the case may be, in all
cases where they would so apply.

	15.8	 	Captions. The captions of the articles, sections and
paragraphs of this Plan are for convenience only and shall not control or
affect the meaning or construction of any of its provisions.

	15.9	 	Governing Law. Subject to ERISA, the provisions of
this

 

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	         	 	Plan shall be construed and interpreted according to the internal laws of
the State of California without regard to its conflicts of laws
principles.

	15.10	 	Notice. Any notice or filing required or permitted to
be given to the Committee under this Plan shall be sufficient if in
writing and hand-delivered, or sent by registered or certified mail, to
the address below:

	 	 	 
	 	Senior Vice President, Human Resources
	 
	 	Electronic Arts, Inc.
	 
	 	209 Redwood Shores Pkwy
	 
	 	Redwood City, CA 94065
	 
	 

	 	 	Such notice shall be deemed given as of the date of delivery or, if
delivery is made by mail, as of the date shown on the postmark on the
receipt for registration or certification.

	 
	 	 	Any notice or filing required or permitted to be given to a Participant
under this Plan shall be sufficient if in writing and hand-delivered, or
sent by mail, to the last known address of the Participant.

	 
	15.11	 	Successors. The provisions of this Plan shall bind
and inure to the benefit of the Participant’s Employer and its successors
and assigns and the Participant and the Participant’s designated
Beneficiaries.

	 
	15.12	 	Spouse’s Interest. The interest in the benefits
hereunder of a spouse of a Participant who has predeceased the Participant
shall automatically pass to the Participant and shall not be transferable
by such spouse in any manner, including but not limited to such spouse’s
will, nor shall such interest pass under the laws of in testate
succession.

	 
	15.13	 	Validity. In case any provision of this Plan shall be
illegal or invalid for any reason, said illegality or invalidity shall not
affect the remaining parts hereof, but this Plan shall be construed and
enforced as if such illegal or invalid provision had never been inserted
herein.

	 
	15.14	 	Incompetent. If the Committee determines in its
discretion that a benefit under this Plan is to be paid to a minor, a
person declared incompetent or to a person incapable of handling the
disposition of that person’s property, the Committee may direct payment of
such benefit to the guardian, legal representative or person having the
care and custody of such minor, incompetent or incapable person. The
Committee may require proof of minority, incompetence, incapacity or
guardianship, as it may deem appropriate prior to distribution of the
benefit. Any payment of a benefit shall be a payment for the account of
the Participant and the Participant’s Beneficiary, as the case may be, and
shall be a complete discharge of any liability under the Plan for such
payment amount.

	 
	15.15	 	Court Order. The Committee is authorized to make any
payments directed by court order in any action in which the Plan or the
Committee has been named as a party. In addition, if a court determines
that a spouse or former spouse of a Participant has an interest in the
Participant’s benefits under the Plan in connection with a property
settlement or otherwise, the Committee, in its sole and absolute
discretion, shall have the right, notwithstanding any election made by a
Participant, to immediately distribute the

 

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	 	 	spouse’s or former spouse’s interest in the Participant’s benefits under the Plan
to that spouse or former spouse.

	 
	15.16	 	Distribution in the Event of Taxation.

	 	(a)	 	In General. If, for any reason, all or any portion of
a Participant’s benefits under this Plan becomes taxable to the
Participant prior to receipt, a Participant may petition the
Committee before a Change in Control, or the trustee of the Trust
after a Change in Control, for a distribution of that portion of his
or her benefit that has become taxable. Upon the grant of such a
petition, which grant shall not be unreasonably withheld (and, after
a Change in Control, shall be granted), a Participant’s Employer
shall distribute to the Participant immediately available funds in an
amount equal to the taxable portion of his or her benefit (which
amount shall not exceed a Participant’s unpaid Account Balance under
the Plan). If the petition is granted, the tax liability
distribution shall be made within ninety (90) days of the date when
the Participant’s petition is granted. Such a distribution shall
affect and reduce the benefits to be paid under this Plan.

	 
	 	(b)	 	Trust. If the Trust terminates in accordance with
Section 3.6(e) of the Trust and benefits are distributed from the
Trust to a Participant in accordance with that Section, the
Participant’s benefits under this Plan shall be reduced to the extent
of such distributions.

	15.17	 	Insurance. The Employers, on their own behalf or on behalf of
the trustee of the Trust, and, in their sole and absolute discretion, may
apply for and procure insurance on the life of the Participant, in such
amounts and in such forms as the Trust may choose. The Employers or the
trustee of the Trust, as the case may be, shall be the sole owner and
beneficiary of any such insurance. The Participant shall have no interest
whatsoever in any such policy or policies, and at the request of the
Employers shall such information and execute such documents as may be
required by the insurance company or companies to whom the Employers have
applied for insurance.

	15.18	 	Legal Fees To Enforce Rights After Change in Control.
The Company and each Employer is aware that upon the occurrence of a
Change in Control, the Board or the board of directors of a Participant’s
Employer (which might then be composed of new members) or a shareholder of
the Company or the Participant’s Employer, or of any successor corporation
might then cause or attempt to cause the Company, the Participant’s
Employer or such successor to refuse to comply with its obligations under
the Plan, and might cause or attempt to cause the Company or the
Participant’s Employer to institute, or may institute, litigation seeking
to deny Participants the benefits intended under the Plan. In these
circumstances, the purpose of the Plan could be frustrated. Accordingly,
if, following a Change in Control, it should appear to any Participant
that the Company, the Participant’s Employer or any successor corporation
has failed to comply with any of its obligations under the Plan or any
agreement hereunder or, if the Company, such Employer or any other person
takes any action to declare the Plan void or unenforceable or institutes
any litigation or other legal action designed to deny, diminish or to
recover from any Participant the benefits intended to be provided, then
the Company and the Participant’s Employer irrevocably authorize such
Participant to retain counsel of his or her choice at the expense of the
Company and the Participant’s Employer (who shall be jointly and severally
liable) to represent such

 

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	 	 	Participant in connection with the initiation or defense of any litigation
or other legal action, whether by or against the Company, the
Participant’s Employer or any director, officer, shareholder or other
person affiliated with the Company, the Participant’s Employer or any
successor thereto in any jurisdiction. Notwithstanding anything in this
Section or the Plan to the contrary, the Company and/or the Participant’s
employer shall have no obligation under this Section to the extent there
is a judicial determination or final mediation decision that the
litigation or other legal action brought by the Participant is frivolous.

                    IN
WITNESS WHEREOF, the Company has signed this Plan document as of
February 20, 2004.

“Company”

Electronic Arts, Inc., a Delaware corporation

 

-25-<PAGE>
                                                                    EXHIBIT 10.1

CONTACT: CUSTOMER SERVICES -- CTSLINK
         WELLS FARGO BANK MINNESOTA, N.A.
         SECURITIES ADMINISTRATION SERVICES
         7485 NEW HORIZON WAY
         FREDERICK, MD  21703
         WWW.CTSLINK.COM
         TELEPHONE:        (301) 815-6600
         FAX:              (301) 315-6660

                                SHT SERIES 2004-1
                           RECORD DATE: JUNE 30, 2004
                        DISTRIBUTION DATE: JULY 20, 2004

                     CERTIFICATEHOLDER DISTRIBUTION SUMMARY

<TABLE>
<CAPTION>
                 Certificate Certificate   Beginning                                Current     Ending                  Cumulative
                    Class    Pass-Through  Certificate      Interest    Principal  Realized   Certificate     Total      Realized
Class    CUSIP   Description     Rate       Balance      Distribution Distribution   Loss       Balance    Distribution    Loss
------ --------- ----------- ------------ -------------- ------------ ------------ -------- -------------- ------------ ----------
<S>    <C>       <C>         <C>          <C>            <C>          <C>          <C>      <C>            <C>          <C>
 NOTE  817419AA2     SEN         1.56000% 317,044,000.00   288,510.04   630,320.08   0.00   316,413,679.92 918,830.12       0.00
  L    SHT04002L     DRAW        0.00000%           0.00         0.00         0.00   0.00             0.00       0.00       0.00
  O    SHT04002O      OC         0.00000%          81.98         0.00         0.00   0.00       630,402.06       0.00       0.00
AMBAC                FEE         0.12000%           0.00    22,193.08         0.00   0.00             0.00  22,193.08       0.00
                                          --------------   ----------   ----------   ----   -------------- ----------       ----
Totals                                    317,044,081.98   310,703.12   630,320.08   0.00   317,044,081.98 941,023.20       0.00
</TABLE>

All distributions required by the Pooling and Servicing Agreement have been
calculated by the Certificate Administrator on behalf of the Trustee.

                        PRINCIPAL DISTRIBUTION STATEMENT

<TABLE>
<CAPTION>
                         Beginning        Scheduled   Unscheduled
        Original Face   Certificate       Principal    Principal
Class      Amount         Balance       Distribution  Distribution  Accretion
------  --------------  --------------  ------------  ------------  ---------
<S>     <C>             <C>             <C>           <C>           <C>
 NOTE   317,044,000.00  317,044,000.00         0.00     630,320.08      0.00
  L               0.00            0.00         0.00           0.00      0.00
  O              81.98           81.98         0.00           0.00      0.00
AMBAC             0.00            0.00         0.00           0.00      0.00
        --------------  --------------         ----     ----------      ----
Totals  317,044,081.98  317,044,081.98         0.00     630,320.08      0.00
</TABLE>

<TABLE>
<CAPTION>
                     Total         Ending          Ending
         Realized  Principal    Certificate     Certificate    Total Principal
Class    Loss (1)  Reduction      Balance        Percentage    Distribution
-----    --------  ----------   -----------    --------------  ---------------
<S>      <C>       <C>         <C>             <C>             <C>
 NOTE        0.00  630,320.08  316,413,679.92      0.99801188    630,320.08
  L          0.00        0.00            0.00      0.00000000          0.00
  O          0.00        0.00      630,402.06  7,689.70553794          0.00
AMBAC        0.00        0.00            0.00      0.00000000          0.00
             ----  ----------  --------------  --------------    ----------
Totals       0.00  630,320.08  317,044,081.98      1.00000000    630,320.08
</TABLE>

(1)   Amount does not include excess special hazard, bankruptcy, or fraud losses
      unless otherwise disclosed. Please refer to the prospectus supplement for
      a full description.

                    PRINCIPAL DISTRIBUTION FACTORS STATEMENT

<TABLE>
<CAPTION>
                        Beginning       Scheduled   Unscheduled
       Original Face   Certificate      Principal    Principal
Class     Amount         Balance      Distribution  Distribution   Accretion
-----  --------------  -------------  ------------  ------------  ----------
<S>    <C>             <C>            <C>           <C>           <C>
 NOTE  317,044,000.00  1000.00000000    0.00000000    1.98811547  0.00000000
  L              0.00     0.00000000    0.00000000    0.00000000  0.00000000
  O             81.98  1000.00000000    0.00000000    0.00000000  0.00000000
AMBAC            0.00     0.00000000    0.00000000    0.00000000  0.00000000
</TABLE>

<TABLE>
<CAPTION>
                      Total                            Ending        Total
       Realized     Principal  Ending Certificate    Certificate   Principal
Class  Loss (3)     Reduction       Balance          Percentage   Distribution
-----  ----------  ----------  ------------------  -------------  ------------
<S>    <C>         <C>         <C>                 <C>            <C>
 NOTE  0.00000000  1.98811547       998.01188453      0.99801188   1.98811547
  L    0.00000000  0.00000000         0.00000000      0.00000000   0.00000000
  O    0.00000000  0.00000000   7689705.53793608   7689.70553794   0.00000000
AMBAC  0.00000000  0.00000000         0.00000000      0.00000000   0.00000000
</TABLE>

(3)   Amount does not include excess special hazard, bankruptcy, or fraud losses
      unless otherwise disclosed. Please refer to the prospectus supplement for
      a full description.
<PAGE>
                         INTEREST DISTRIBUTION STATEMENT

<TABLE>
<CAPTION>
                                        Beginning                Payment of
                          Current     Certificate/    Current      Unpaid     Current
        Original Face   Certificate     Notional      Accrued     Interest    Interest
Class      Amount          Rate          Balance     Interest    Shortfall   Shortfall
------  --------------  -----------  --------------  ----------  ----------  ---------
<S>     <C>             <C>          <C>             <C>         <C>         <C>
 NOTE   317,044,000.00    1.56000%   317,044,000.00  288,510.04        0.00      0.00
  L               0.00    0.00000%             0.00        0.00        0.00      0.00
  O              81.98    0.00000%            81.98        0.00        0.00      0.00
AMBAC             0.00    0.12000%   317,044,000.00   22,193.08        0.00      0.00
        --------------                               ----------        ----      ----
Totals  317,044,081.98                               310,703.12        0.00      0.00
</TABLE>

<TABLE>
<CAPTION>
                                               Remaining        Ending
        Non-Supported               Total       Unpaid      Certificate/
         Interest      Realized    Interest     Interest      Notational
Class    Shortfall     Loss (4)  Distribution  Shortfall        Balance
------  -------------  --------  ------------  ---------  --------------
<S>     <C>            <C>       <C>           <C>        <C>
 NOTE       0.00          0.00    288,510.04      0.00    316,413,679.92
  L         0.00          0.00          0.00      0.00              0.00
  O         0.00          0.00          0.00      0.00        630,402.06
AMBAC       0.00          0.00     22,193.08      0.00    316,413,679.92
            ----          ----    ----------      ----
Totals      0.00          0.00    310,703.12      0.00
</TABLE>

(4)   Amount does not include excess special hazard, bankruptcy, or fraud losses
      unless otherwise disclosed. Please refer to the prospectus supplement for
      a full description.

                     INTEREST DISTRIBUTION FACTORS STATEMENT

<TABLE>
<CAPTION>
                                       Beginning               Payment of
                          Current   Certificate/     Current     Unpaid      Current
Class   Original Face  Certificate     Notional      Accrued    Interest     Interest
 (5)        Amount          Rate        Balance      Interest   Shortfall   Shortfall
-----  --------------  -----------  -------------  ----------  ----------  ----------
<S>    <C>             <C>          <C>            <C>         <C>         <C>
NOTE   317,044,000.00     1.56000%  1000.00000000  0.91000000  0.00000000  0.00000000
  L              0.00     0.00000%     0.00000000  0.00000000  0.00000000  0.00000000
  O             81.98     0.00000%  1000.00000000  0.00000000  0.00000000  0.00000000
AMBAC            0.00     0.12000%  1000.00000000  0.07000000  0.00000000  0.00000000
</TABLE>

<TABLE>
<CAPTION>
                                                 Remaining       Ending
       Non-Supported                Total          Unpaid      Certificate/
Class     Interest     Realized      Interest     Interest       Notational
 (5)    Shortfall      Loss (6)   Distribution   Shortfall       Balance
-----  -------------  ----------  ------------  ----------  ----------------
<S>    <C>            <C>         <C>           <C>         <C>
NOTE    0.00000000    0.00000000   0.91000000   0.00000000      998.01188453
  L     0.00000000    0.00000000   0.00000000   0.00000000        0.00000000
  O     0.00000000    0.00000000   0.00000000   0.00000000  7689705.53793608
AMBAC   0.00000000    0.00000000   0.07000000   0.00000000      998.01188453
</TABLE>

(5)   Per $1 denomination

(6)   Amount does not include excess special hazard, bankruptcy, or fraud losses
      unless otherwise disclosed. Please refer to the prospectus supplement for
      a full description.

                       CERTIFICATEHOLDER ACCOUNT STATEMENT

                               CERTIFICATE ACCOUNT

<TABLE>
<S>                                                             <C>
Beginning Balance                                                       0.00

Deposits
  Payments of Interest and Principal                            1,078,996.54
  Liquidations, Insurance Proceeds, Reserve Funds                       0.00
  Proceeds from Repurchased Loans                                       0.00
  Other Amounts (Servicer Advances)                                     0.00
  Realized Losses (Gains, Subsequent Expenses & Recoveries)             0.00
  Prepayment Penalties                                                  0.00
                                                                ------------
Total Deposits                                                  1,078,996.54

Withdrawals
  Reimbursement for Servicer Advances                                   0.00
  Payment of Service Fee                                          137,973.34
  Payment of Interest and Principal                               941,023.20
                                                                ------------
Total Withdrawals (Pool Distribution Amount)                    1,078,996.54

Ending Balance                                                          0.00
                                                                ============
</TABLE>
<PAGE>
                   PREPAYMENT/CURTAILMENT INTEREST SHORTFALL

<TABLE>
<S>                                                             <C>
Total Prepayment/Curtailment Interest Shortfall                          0.00
Servicing Fee Support                                                    0.00
                                                                -------------
Non-Supported Prepayment Curtailment Interest Shortfall                  0.00
                                                                =============
</TABLE>

                                 SERVICING FEES

<TABLE>
<S>                                                             <C>
Gross Servicing Fee                                                134,010.29
Master Servicing Fee                                                 3,963.05
Supported Prepayment/Curtailment Interest Shortfall                      0.00
                                                                -------------
Net Servicing Fee                                                  137,973.34
                                                                =============
</TABLE>

                                 OTHER ACCOUNTS

<TABLE>
<CAPTION>
                      Beginning          Current          Current       Ending
  Account Type         Balance         Withdrawals       Deposits       Balance
------------------    ---------        -----------       --------       -------
<S>                   <C>              <C>               <C>            <C>
Financial Guaranty      0.00              0.00             0.00          0.00
</TABLE>
<PAGE>
             LOAN STATUS STRATIFICATION/CREDIT ENHANCEMENT STATEMENT

<TABLE>
<CAPTION>
           DELINQUENT                         BANKRUPTCY                       FORECLOSURE
---------------------------------  -------------------------------  -------------------------------
             No. of    Principal                No. of   Principal               No. of   Principal
              Loans     Balance                 Loans     Balance                Loans     Balance
<S>        <C>         <C>         <C>        <C>        <C>        <C>        <C>        <C>
0-29 Days       0            0.00  0-29 Days      0           0.00  0-29 Days      0          0.00
30 Days         1      216,079.63  30 Days        0           0.00  30 Days        0          0.00
60 Days         0            0.00  60 Days        0           0.00  60 Days        0          0.00
90 Days         0            0.00  90 Days        0           0.00  90 Days        0          0.00
120 Days        0            0.00  120 Days       0           0.00  120 Days       0          0.00
150 Days        0            0.00  150 Days       0           0.00  150 Days       0          0.00
180+ Days       0            0.00  180+ Days      0           0.00  180+ Days      0          0.00
              ---      ----------               ---      ---------               ---      --------
                1      216,079.63                 0           0.00                 0          0.00

             No. of    Principal                No. of   Principal               No. of   Principal
              Loans     Balance                 Loans     Balance                Loans     Balance

0-29 Days   0.000000%  0.000000%   0-29 Days  0.000000%  0.000000%  0-29 Days  0.000000%  0.000000%
30 Days     0.018471%  0.068154%   30 Days    0.000000%  0.000000%  30 Days    0.000000%  0.000000%
60 Days     0.000000%  0.000000%   60 Days    0.000000%  0.000000%  60 Days    0.000000%  0.000000%
90 Days     0.000000%  0.000000%   90 Days    0.000000%  0.000000%  90 Days    0.000000%  0.000000%
120 Days    0.000000%  0.000000%   120 Days   0.000000%  0.000000%  120 Days   0.000000%  0.000000%
150 Days    0.000000%  0.000000%   150 Days   0.000000%  0.000000%  150 Days   0.000000%  0.000000%
180+ Days   0.000000%  0.000000%   180+ Days  0.000000%  0.000000%  180+ Days  0.000000%  0.000000%
            --------   --------               --------   --------              --------   --------
            0.018471%  0.068154%              0.000000%  0.000000%             0.000000%  0.000000%
</TABLE>

<TABLE>
<CAPTION>
             REO                              TOTAL
-------------------------------  --------------------------------
            No. of    Principal               No. of   Principal
             Loans     Balance                Loans     Balance
<S>        <C>        <C>        <C>        <C>        <C>
0-29 Days      0          0.00   0-29 Days      0            0.00
30 Days        0          0.00   30 Days        1      216,079.63
60 Days        0          0.00   60 Days        0            0.00
90 Days        0          0.00   90 Days        0            0.00
120 Days       0          0.00   120 Days       0            0.00
150 Days       0          0.00   150 Days       0            0.00
180+ Days      0          0.00   180+ Days      0            0.00
             ---      --------                ---      ----------
               0          0.00                  1      216,079.63

            No. of    Principal               No. of   Principal
             Loans     Balance                Loans     Balance

0-29 Days  0.000000%  0.000000%  0-29 Days  0.000000%  0.000000%
30 Days    0.000000%  0.000000%  30 Days    0.018471%  0.068154%
60 Days    0.000000%  0.000000%  60 Days    0.000000%  0.000000%
90 Days    0.000000%  0.000000%  90 Days    0.000000%  0.000000%
120 Days   0.000000%  0.000000%  120 Days   0.000000%  0.000000%
150 Days   0.000000%  0.000000%  150 Days   0.000000%  0.000000%
180+ Days  0.000000%  0.000000%  180+ Days  0.000000%  0.000000%
           --------   --------              --------   --------
           0.000000%  0.000000%             0.018471%  0.068154%
</TABLE>

<TABLE>
<S>                                             <C>
Current Period Class A Insufficient Funds:      0.00
Principal Balance of Contaminated Properties    0.00
Periodic Advance                                0.00
</TABLE>

<TABLE>
<S>        <C>      <C>            <C>          <C>           <C>         <C>
Class L    81.98    0.00002586%    630,402.06   0.19883735%   0.000000%   0.000000%
Class O     0.00    0.00000000%          0.00   0.00000000%   0.198837%   0.000000%
</TABLE>

Please refer to the prospectus supplement for a full description of loss
exposure
<PAGE>
                              COLLATERAL STATEMENT

<TABLE>
<CAPTION>
Collateral Description                                              Mixed Arm
----------------------                                          ----------------
<S>                                                             <C>
Weighted Average Gross Coupon                                         4.083962%
Weighted Average Net Coupon                                           3.576738%
Weighted Average Pass-Through Rate                                    3.561738%
Weighted Average Maturity (Stepdown Calculation)                            125

Beginning Scheduled Collateral Loan Count                                 5,414
Number of Loans Paid in Full                                                  0
Ending Scheduled Collateral Loan Count                                    5,414

Beginning Scheduled Collateral Balance                           317,044,081.98
Ending Scheduled Collateral Balance                              317,044,081.98
Ending Actual Collateral Balance at 30-June-2004                 317,044,081.98

Monthly P&I Constant                                                       0.00
Special Servicing Fee                                                      0.00
Prepayment Penalties                                                       0.00
Realized Loss Amount                                                       0.00
Cumulative Realized Loss                                                   0.00
</TABLE>

MISCELLANEOUS REPORTING

<TABLE>
<S>                                                             <C>
Additional Balance Contributed Amount                                      0.00
Additional Balance                                                 7,646,273.37
Cumulative Loss Percent                                                0.00000%
Managed Amortization Period                                                 YES
Overcollateralization Amount                                              81.98
Six Month Rolling Delinquency                                          0.00000%
Specified Overcollateralization Amount                             3,963,051.02
3 Largest Loan Balance                                             5,474,951.84
Draw Amount                                                        7,646,273.37
Rapid Amortization Event                                                     NO
Excess Cashflow                                                      630,320.08
</TABLE>

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00069-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00069-of-00352.parquet"}]]