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significant strategic Company initiatives, including the transition to next-generation consoles, our own platform
development, and our continued expansion of digital revenue opportunities. The retention awards were granted to
our NEOs in July 2012, following stockholder approval of an amendment to the 2000 Equity Incentive Plan at
the Company's 2012 Annual Meeting.
Supplemental CEO Performance-Based RSU Award
In October 2012, the Board of Directors, based on a recommendation from the Committee, granted our then
CEO, Mr. Riccitiello, a supplemental performance-based RSU award with a target vesting of 300,000 shares. For
Mr. Riccitiello, the actual number of shares earned was to be determined utilizing the performance-based RSU
vesting scale based on the Company's TSR compared to the NASDAQ-100 over a single measurement period
from August 1, 2012 through March 28, 2015. The measurement period was selected taking into consideration
the grant date, the desire for a longer measurement period and performance-based compensation requirements
under Section 162(m) of the Internal Revenue Code. The Board approved the supplemental performance-based
RSU award to provide additional alignment between Mr. Riccitiello's compensation and the Company's long-
term stock price performance, and to better align his equity and total target compensation with market practices.
Mr. Riccitiello resigned from the Company effective March 29, 2013, and this award was cancelled in its entirety
upon his termination of employment.
Principle 3 -- Target Total Direct Compensation: We awarded total direct compensation to our NEOs for
fiscal 2013 consistent with market practices, each NEO's role and experience and the prevailing business
environment. Total direct compensation has three components: base salary, annual cash bonus and equity awards.
When setting the fiscal 2013 base salaries and target bonus opportunities for our NEOs, the Committee generally
targeted the 50th to 75th percentiles of the market range of comparable companies, and for our annual equity
awards, we targeted the 75th percentile. While we generally target each component at these levels, the actual
base salary, bonus, and equity compensation awarded to an NEO may be above or below these levels and is
determined based on the Company's financial performance, the financial and operating performance of each
NEO's business unit (if applicable), individual performance, market trends, and other factors unique to each
The Committee also considers the aggregate value of all three total direct compensation components, and
generally targets the 50th to 75th percentile of the market for total direct compensation. When necessary for
retention, succession planning, or recognition of outstanding performance, the Committee may approve
exceptional compensation programs for select key executives that could result in target total direct compensation
above our targeted range.
For fiscal 2013, the Committee reviewed and approved the total direct compensation of each of our NEOs (other
than for Mr. Riccitiello) in consultation with members of Company management and Compensia, the
independent compensation consulting firm retained by the Committee. Mr. Riccitiello's compensation was
approved by the Board, also in consultation with Compensia.