ELECTRONIC ARTS INC, S-8, 1995-08-14

ELECTRONIC ARTS INC
S-8, 1995-08-14
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<PAGE>

As filed with the Securities and Exchange Commission
on August 11, 1995
Registration No. 33-_________

Form S-8
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933

ELECTRONIC ARTS INC.

Delaware 94-2838567
(State of Incorporation) (I.R.S. employer identification no.)

1450 Fashion Island Boulevard
San Mateo, California 94404
(Address of principal executive offices)

1991 Stock Option Plan
Employee Stock Purchase Plan
(Full titles of the Plans)

RUTH A. KENNEDY
Vice President, General Counsel and Secretary
Electronic Arts Inc.
1450 Fashion Island Boulevard
San Mateo, California 94404
(415) 571-7171
(Name, address and telephone number of agent for service)
CALCULATION OF REGISTRATION FEE

--------------------------------------------------------------------------------
Proposed Proposed
Title of Maximum Maximum
Securities Amount Offering Aggregate Amount of
to be to be Price Per Offering Registration
Registered Registered Share Price Fee
--------------------------------------------------------------------------------
Common Stock 2,000,000 (1) $35.25 (2) $70,500,000 (2) $24,310
(0.01 par value)
--------------------------------------------------------------------------------

This Registration Statement includes exhibits. The Index to Exhibits appears
on sequentially numbered page 4.

(1) Includes 1,850,000 shares available for grant under the 1991 Stock
Option Plan, and 150,000 shares available for issuance under the Employee Stock
Purchase Plan, each as of August 3, 1995.

(2) Estimated pursuant to Rule 457(c) as of August 8, 1995, solely for the
purpose of calculating the amount of the registration fee.

<PAGE>

STATEMENT PURSUANT TO GENERAL INSTRUCTION E

Pursuant to General Instruction E, the contents of Registrant's Form S-8
Registration Statement No. 33-41955 filed on July 30, 1991, as amended by
Registrant's Form S-8 Registration Statement No. 33-41955 filed November 6,
1991, Registrant's Form S-8 Registration Statement No. 33-53302 filed October
15, 1992, Registrant's Form S-8 Registration Statement No. 33-55212 filed
December 1, 1992, Registrant's Form S-8 Registration Statement No. 33-66836
filed August 2, 1993, and Registrant's Form S-8 Registration Statement No. 33-
82166 filed July 29, 1994 are hereby incorporated by reference.

ITEM 5. EXPERTS.

The consolidated balance sheet statements of the Registrant as of March 31,
1994 and 1995 and the consolidated financial statements and schedules of the
Registrant for each of the years in the three-year period ended March 31, 1995
incorporated by reference in this Registration Statement have been incorporated
herein in reliance upon the reports of KPMG Peat Marwick LLP, independent
certified public accountants and upon the authority of said firm as experts in
accounting and auditing. To the extent that KPMG Peat Marwick LLP audits and
reports on financial statements of the Registrant issued at future dates, and
consents to the use of their report thereon, such financial statements also will
be incorporated by reference in the Registration Statement in reliance upon
their report and said authority.

The validity of the issuance of the shares of Common Stock offered hereby
will be passed upon for the Registrant by Ruth A. Kennedy, Vice President,
General Counsel and Secretary of the Registrant.

ITEM 8. EXHIBITS

4.01 Registrant's 1991 Stock Option Plan and related documents, as amended.
4.02 Registrant's Employee Stock Purchase Plan and related documents, as
amended.
5.01 Opinion of General Counsel regarding legality of the securities being
issued.
23.01 Consent of General Counsel (included in Exhibit 5.01).
23.02 Consent of KPMG Peat Marwick LLP, Independent Accountants.
24.01 Power of Attorney (see page 2).

POWER OF ATTORNEY

KNOW ALL PERSONS BY THESE PRESENTS that each individual and corporation whose
signature appears below constitutes and appoints E. Stanton McKee and David L.
Carbone and each of them, his or its true and lawful attorneys-in-fact and
agents with full power of substitution, for him or it and in his or its name,
place and stead, in any and all capacities, to sign any and all amendments
(including post-effective amendments) to this Registration Statement on
Form S-8, and to file the same with all exhibits thereto and all documents in
connection therewith, with the Securities and Exchange Commission, granting unto
said attorneys-in-fact and agents, and each of them, full power and authority to
do and perform each and every act and thing requisite and necessary to be done
in and about the premises, as fully to all intents and purposes as he or it
might or could do in person, hereby ratifying and confirming all that said
attorneys-in-fact and agents or any of them, or his or their substitute or
substitutes, may lawfully do or cause to be done by virtue hereof.

SIGNATURES

Pursuant to the requirements of the 1933 Act, the Registrant certifies that
it has reasonable grounds to believe that it meets all of the requirements for
filing on Form S-8 and has duly caused this Registration Statement

2
<PAGE>

to be signed on its behalf by the undersigned, thereunto duly authorized, in the
city of San Mateo, State of California, on this 11th day of August, 1995

ELECTRONIC ARTS INC.

By: /s/ Ruth A. Kennedy
--------------------------------------
Ruth A. Kennedy, Esq.
Vice President, General Counsel and Secretary

Pursuant to the requirements of the 1933 Act, this Registration Statement
has been signed by the following persons in the capacities and on the dates
indicated:

Name Title Date
---- ----- ----
<S> <C> <C>
CHIEF EXECUTIVE OFFICER:

/s/ Lawrence F. Probst III
--------------------------
Lawrence F. Probst III President, Chairman August 11, 1995
and Chief
Executive Officer

PRINCIPAL FINANCIAL OFFICER:

/s/ E. Stanton McKee
--------------------------
E. Stanton McKee Sr. Vice President, August 11,1995
Chief Financial and
Administrative Officer

PRINCIPAL ACCOUNTING OFFICER:

/s/ David L. Carbone
--------------------------
David L. Carbone Vice President, August 11, 1995
Controller and
Assistant Secretary

DIRECTORS:

/s/ M. Richard Asher Director August 11, 1995
--------------------------
M. Richard Asher

/s/ William J. Byron Director August 11, 1995
--------------------------
William J. Byron

/s/ Daniel H. Case III Director August 11, 1995
--------------------------
Daniel H. Case III

/s/ Gary M. Kusin Director August 11, 1995
--------------------------
Gary M. Kusin

/s/ Timothy Mott Director August 11, 1995
--------------------------
Timothy Mott
</TABLE>

<PAGE>

INDEX TO EXHIBITS

Exhibit
Number Description
------ -----------

4.01 Registrant's 1991 Stock Option Plan and
related documents, as amended

4.02 Registrant's Employee Stock Purchase Plan
and related documents, as amended

5.01 Opinion of General Counsel of Registrant regarding legality
of the securities being issued

23.01 Consent of General Counsel (included in
Exhibit 5.01)

23.02 Consent of KPMG Peat Marwick LLP, Independent Accountants

24.01 Power of Attorney (see page 2)

<PAGE>

EXHIBIT 4.01

REGISTRANT'S 1991 STOCK OPTION PLAN

<PAGE>

ELECTRONIC ARTS INC.

1991 STOCK OPTION PLAN

AS ADOPTED APRIL 25, 1991 BY THE BOARD OF DIRECTORS
AS APPROVED BY THE STOCKHOLDERS ON JULY 25, 1991
AS AMENDED ON NOVEMBER 24, 1992, AS AMENDED ON JULY 27, 1993,
AS AMENDED ON JULY 27, 1994 AND AS AMENDED AUGUST 3, 1995

1. PURPOSE. This 1991 Stock Option Plan ("PLAN") is established as a
compensatory plan to attract, retain and provide equity incentives to selected
persons to promote the financial success and progress of Electronic Arts Inc., a
Delaware corporation, (the "COMPANY"). Capitalized terms not previously defined
herein are defined in Section 16 of this Plan.

2. TYPES OF OPTIONS AND SHARES. Options granted under this Plan (The
"OPTIONS") may be either (a) incentive stock options ("ISOS") within the meaning
of Section 422A of the Internal Revenue Code of 1986, as amended (the "REVENUE
CODE"), or (b) nonqualified stock options ("NQSOS"), as designated at the time
of grant. The shares of stock that may be purchased upon exercise of Options
granted under this Plan (the "SHARES") are shares of the common stock of the
Company.

3. NUMBER OF SHARES. The aggregate number of Shares that may be issued
pursuant to options granted under this Plan is 9,900,000 Shares, subject to
adjustment as provided in this Plan. If any Option expires or is terminated
without being exercised in whole or in part, the unexercised or released Shares
from such Options shall be available for future grant and purchase under this
Plan. At all times during the term of this Plan, the Company shall reserve and
keep available such number of Shares as shall be required to satisfy the
requirements of outstanding Options under this Plan.

4. ELIGIBILITY. Options may be granted to employees, officers, directors
who are employees of the Company, consultants, independent contractors and
advisers (provided such consultants, contractors and advisers render bona fide
services not in connection with the offer and sale of securities in a capital-
raising transaction) of the Company or any Parent, Subsidiary or Affiliate of
the Company. Directors who are not employees of the Company are not eligible to
participate in this Plan. ISOs may be granted only to employees (including
officers and directors who are also employees) of the Company or a Parent or
Subsidiary of the Company. The Committee (as defined in Section 13) in its sole
discretion shall select the recipients of Options ("OPTIONEES"). An Optionee
may be granted more than one Option under this Plan. The Company may also, from
time to time, assume outstanding options granted by another company, whether in
connection with an acquisition of such other company or otherwise, by either (i)
granting an Option under this Plan in replacement of the option assumed by the
Company, or (ii) treating the assumed option as if it had been granted under
this Plan if the terms of such assumed option could be applied to an Option
granted under this Plan. Such assumption shall be permissible if the holder of
the assumed option would have been eligible to be granted an Option hereunder if
the other company had applied the rules of this Plan to such grant.

5. TERMS AND CONDITIONS OF OPTIONS. The Committee shall determine whether
each Option is to be an ISO or an NQSO, the number of Shares subject to the
Option, the exercise price of the Option, the period during which the Option may
be exercised, and all other terms and conditions of the Option, subject to the
following:

a. FORM OF OPTION GRANT. Each Option granted under this Plan shall be
evidenced by a written Stock Option Grant (the "Grant") in such form (which need
not be the same for each Optionee) as the Committee shall from time to time
approve, which Grant shall comply with and be subject to the terms and
conditions of this Plan.

b. DATE OF GRANT. The date of grant of an Option shall be the date on
which the Committee makes the determination to grant such Option unless
otherwise specified by the committee. The Grant representing the Option will be
delivered to Optionee with a copy of this Plan within a reasonable time after
the granting of the Option.

c. EXERCISE PRICE. The exercise price of an Option shall be determined
by the Committee on the date the Option is granted; provided that the exercise
price of an Option shall be not less than 100% of the Fair Market Value of the
Shares on the date the Option is granted; and PROVIDED FURTHER that the exercise
price of any Option granted to a person owning more than 10% of the total
combined voting power of all classes of stock of the Company or any Parent or
Subsidiary of the Company ("TEN PERCENT STOCKHOLDER") shall not be less than
110% of the Fair Market Value of the Shares on the date the Option is granted.

<PAGE>

d. EXERCISE PERIOD. Options shall be exercisable within the times or
upon the events determined by the Committee as set forth in the Grant; provided,
however, that no Option shall be exercisable after the expiration of ten (10)
years from the date the Option is granted, and provided further that no ISO
granted to a Ten Percent Stockholder shall be exercisable after the expiration
of five (5) years from the date the Option is granted.

e. LIMITATIONS ON ISOS. The aggregate Fair Market Value (determined as
of the time an Option is granted) of stock with respect to which ISOs are
exercisable for the first time by an Optionee during any calendar year (under
this Plan or under any other incentive stock option plan of the Company or any
Parent or Subsidiary of the Company) shall not exceed $100,000. If the Fair
Market Value of Shares with respect to which ISOs are exercisable for the first
time by an Optionee during any calendar year exceeds $100,000, the Options for
the first $100,000 worth of Shares to become exercisable in such year shall be
ISOs and the Options for the amount in excess of $100,000 that becomes
exercisable in that year shall be NQSOs. In the event that the Revenue Code or
the regulations promulgated thereunder are amended after the effective date of
this Plan to provide for a different limit on the Fair Market Value of Shares
permitted to be subject to ISOs, such different limit shall be incorporated
herein and shall apply to any Options granted after the effective date of such
amendment.

f. OPTIONS NON-TRANSFERABLE. Options granted under this Plan, and any
interest therein, shall not be transferable or assignable by Optionee, and may
not be made subject to execution, attachment or similar process, otherwise than
by will or by the laws of descent and distribution, and shall be exercisable
during the lifetime of Optionee only by Optionee; provided, however, that NQSOs
held by an Optionee who is not an officer or director of the Company or other
person (in each case, an "INSIDER") whose transactions in the Company's common
stock are subject to Section 16(b) of the Securities Exchange Act of 1934, as
amended (the "EXCHANGE ACT"), may be transferred to such family members, trust
and charitable institutions as the Committee, in its sole discretion, shall
approve at the time of the grant of such Option.

g. ASSUMED OPTIONS. In the event the Company assumes an option granted
by another company, the terms and conditions of such option shall remain
unchanged (except the exercise price and the number and nature of shares
issuable upon exercise, which will be adjusted appropriately pursuant to Section
425(c) of the Revenue Code). In the event the Company elects to grant a new
option rather than assuming an existing option (as specified in Section 4), such
new option may instead be granted with a similarly adjusted exercise price.

h. LIMITATION ON OPTIONS GRANTED TO INDIVIDUALS. The number of options
that may be granted to optionees from July 27, 1994 through the end of the term
of the 1991 Plan, April 25, 2001 is limited to one million shares per
individual.

6. EXERCISE OF OPTIONS.

a. NOTICE. Options may be exercised only by delivery to the Company of
a written stock option exercise agreement (the "EXERCISE AGREEMENT") in a form
approved by the Committee (which need not be the same for each Optionee),
stating the number of Shares being purchased, the restrictions imposed on the
Shares, if any, and such representations and agreements regarding Optionee's
investment intent and access to information, if any, as may be required by the
Company to comply with applicable securities laws, together with payment in full
of the exercise price for the number of Shares being purchased.

b. PAYMENT. Payment for the Shares may be made in cash (by check) or,
where approved by the Committee in its sole discretion at the time of grant and
where permitted by law: (i) by cancellation of indebtedness of the Company to
the Optionee; (ii) by surrender of shares of common stock of the Company having
a Fair Market Value equal to the applicable exercise price of the Options, that
have been owned by Optionee for more than six (6) months (and which have been
paid for within the meaning of the Securities and Exchange Commission ("SEC")
Rule 144 and, if such shares were purchased from the Company by use of a
promissory note, such note has been fully paid with respect to such shares), or
were obtained by Optionee in the open public market; (iii) by tender of a full
recourse promissory note having such terms as may be approved by the Committee
and bearing interest at a rate sufficient to avoid imputation of income under
Sections 483 and 1274 of the Revenue Code, provided that the portion of the
exercise price equal to the par value of the Shares, if any, must be paid in
cash or other legal consideration; (iv) by waiver of compensation due or accrued
to Optionee for services rendered; (v) provided that a public market for the
Company's stock exists, through a "same day sale" commitment from Optionee and a
broker-dealer that is a member of the National Association of Securities Dealers
(a "NASD DEALER") whereby Optionee irrevocably elects to exercise the option and
to sell a portion of the Shares so purchased to pay for the exercise price and
whereby the NASD Dealer irrevocably commits upon receipt of such Shares to
forward the exercise price directly to the Company; (vi) provided that a public
market for the Company's stock exists, through a "margin" commitment from
Optionee and a NASD Dealer whereby Optionee irrevocably elects to exercise the
Option and to pledge the Shares so

<PAGE>

purchased to the NASD Dealer in a margin account as security for a loan from the
NASD Dealer in the amount of the exercise price, and whereby the NASD Dealer
irrevocably commits upon receipt of such Shares to forward the exercise price
directly to the Company; or (vii) by any combination of the foregoing.

c. WITHHOLDING TAXES. Prior to issuance of the Shares upon exercise of
an Option, Optionee shall pay or make adequate provision for any federal or
state withholding obligations of the Company, if applicable.

d. LIMITATIONS ON EXERCISE. Notwithstanding the exercise periods set
forth in the Grant, exercise of an Option shall always be subject to the
following:

(i) If Optionee ceases to be employed by the Company or any Parent,
Subsidiary or Affiliate of the Company for any reason except death or
disability, Optionee may exercise such Optionee's Options to the extent (and
only to the extent) that they would have been exercisable upon the date of
termination, within three (3) months after the date of termination (or such
shorter time period as may be specified in the Grant);

(ii) If Optionee's employment with the Company or any Parent,
Subsidiary or Affiliate of the Company is terminated because of the death of
Optionee or disability of Optionee within the meaning of Section 22(e)(3) of the
Revenue Code, Optionee's Options may be exercised to the extent (and only to the
extent) that they would have been exercisable by Optionee on the date of
termination, by Optionee (or Optionee's legal representative) within twelve (12)
months after the date of termination (or such shorter time period as may be
specified in the Grant), but in any event no later than the expiration date of
the Options.

(iii) The Committee shall have discretion to determine whether
Optionee has ceased to be employed by the Company or any Parent, Subsidiary or
Affiliate of the Company and the effective date on which such employment
terminated.

(iv) In the case of an Optionee who is a director, independent
consultant, contractor or adviser, the Committee will have the discretion to
determine whether Optionee is "employed by the Company or any Parent, Subsidiary
or Affiliate of the Company" pursuant to the foregoing Sections.

(v) The Committee may specify a reasonable minimum number of Shares
that may be purchased on any exercise of an Option, provided that such minimum
number will not prevent Optionee from exercising the full number of Shares as to
which the Option is then exercisable.

(vi) An Option shall not be exercisable unless such exercise is in
compliance with the Securities Act of 1933, as amended (the "SECURITIES ACT"),
all applicable state securities laws and the requirements of any stock exchange
or national market system upon which the Shares may then be listed, as they are
in effect on the date of exercise. The Company shall be under no obligation to
register the Shares with the SEC or to effect compliance with the registration,
qualification or listing requirements of any state securities laws, stock
exchange or national market system, and the Company shall have no liability for
any inability or failure to do so.

(vii) An Option shall not be exercisable until such time as the
Plan has been approved by the stockholders in accordance with paragraph 12
below.

7. MODIFICATION, EXTENSION AND RENEWAL OF OPTIONS. The Committee shall have
the power to modify, extend or renew outstanding Options and to authorize the
grant of new Options in substitution therefor, provided that any such action may
not, without the written consent of Optionee, impair any rights under any Option
previously granted. Any outstanding ISO that is modified, extended, renewed or
otherwise altered shall be treated in accordance with Section 425(h) of the
Revenue Code. The Committee shall have the power to reduce the exercise price
of outstanding Options without the consent of Optionees by a written notice to
the Optionees affected; provided, however, that the exercise price per Share may
not be reduced below the minimum exercise price that would be permitted under
Section 5(c) of this Plan for Options granted on the date the action is taken to
reduce the exercise price.

8. PRIVILEGES OF STOCK OWNERSHIP. No Optionee shall have any of the rights
of a stockholder with respect to any Shares subject to an Option until such
Option is properly exercised. No adjustment shall be made for dividends or
distributions or other rights for which the record date is prior to such date,
except as provided in this Plan. The Company shall provide to each Optionee a
copy of the annual financial statements of the Company at such time after the
close of each fiscal year of the Company as such statements are generally
released by the Company to its common stockholders generally.

<PAGE>

9. NO OBLIGATION TO EMPLOY. Nothing in this Plan or any Option granted
under this Plan shall confer on any Optionee any right to continue in the employ
of, or other relationship with, the Company or any Parent, Subsidiary or
Affiliate of the Company or limit in any way the right of the Company or any
Parent, Subsidiary or Affiliate of the Company to terminate Optionee's
employment or other relationship at any time, with or without cause.

10. ADJUSTMENT OF OPTION SHARES. In the event that the number of
outstanding shares of common stock of the Company is changed by a stock
dividend, stock split, reverse stock split, combination, reclassification or
similar change in the capital structure of the Company without consideration, or
if a substantial portion of the assets of the Company are distributed, without
consideration in a spin-off or similar transaction, to the stockholders of the
Company, the number of Shares available under this Plan and the number of Shares
subject to outstanding Options and the exercise price per Share of such Options
shall be proportionately adjusted, subject to any required action by the Board
of Directors (the "BOARD") or stockholders of the Company and compliance with
applicable securities laws; provided, however, that a fractional share shall not
be issued upon exercise of any Option and any fractions of a Share that would
have resulted shall either be cashed out at Fair Market Value or the number of
Shares issuable under the Option shall be rounded up to the nearest whole
number, as determined by the Committee; and provided further that the exercise
price may not be decreased to below the par value, if any, for the Shares.

11. ASSUMPTION OF OPTIONS BY SUCCESSORS.

a. In the event of (i) a merger or consolidation in which the Company
is not the surviving corporation (other than a merger or consolidation with a
wholly owned subsidiary, a reincorporation, or other transaction in which there
is no substantial change in the stockholders of the corporation and the Options
granted under this Plan are assumed by the successor corporation, which
assumption shall be binding on all optionees), (ii) a dissolution or liquidation
of the Company, (iii) the sale of substantially all of the assets of the
Company, or (iv) any other transaction which qualifies as a "corporate
transaction" under Section 425(a) of the Revenue Code wherein the stockholders
of the Company give up all of their equity interest in the Company (except for
the acquisition of all or substantially all of the outstanding shares of the
Company), all outstanding Options shall, not -withstanding any contrary terms
of the Grant, accelerate and become exercisable in full prior to the
consummation of such dissolution, liquidation, merger, sale of assets or other
corporate transaction, at such times and on such conditions as the Board shall
determine, unless the successor corporation assumes the outstanding Options or
substitutes substantially equivalent options. If the Fair Market Value of
Shares with respect to which all ISOs are first exercisable in such calendar
year exceeds $100,000, the Options for the first $100,000 worth of Shares to
become exercisable in that year shall be ISOs and the Options for the amount in
excess of $100,000 shall be NQSOs.

b. Subject to the foregoing provisions of this Section 11, in the
event of the occurrence of any transaction described in Section 11(a), any
outstanding Option shall be treated as provided in the applicable agreement or
plan of merger, consolidation, dissolution, liquidation, sale of assets or other
"corporate transaction".

12. ADOPTION AND STOCKHOLDER APPROVAL. This Plan shall become effective on
the date that it is adopted by the Board of Directors of the Company. This Plan
shall be approved by the stockholders of the Company, in any manner permitted by
applicable corporate law, within twelve (12) months before or after the date
this Plan is adopted by the Board. Upon the effective date of the Plan, the
Board may grant Options pursuant to this Plan; provided that, in the event that
stockholder approval is not obtained within the time period provided herein, all
Options granted hereunder shall terminate. No Option that is issued as a result
of any increase in the number of shares authorized to be issued under this Plan
shall be exercised prior to the time such increase has been approved by the
stockholders of the Company and all such Options granted pursuant to such
increase shall similarly terminate if such Stockholder approval is not obtained.
After the Company becomes subject to Section 16(b) of the Exchange Act, the
Company will comply with the requirements of Rule 16b-3 with respect to
stockholder approval.

13. ADMINISTRATION. This Plan may be administered by the Board or a
committee appointed by the Board (the "COMMITTEE"). If at the earlier of
September 1, 1992 or the date that the Board resolves to conform to the amended
Rules promulgated by the SEC effective May 1, 1991 pursuant to Section 16 of the
Exchange Act, the Board is not comprised entirely of Disinterested Persons, the
Company will take appropriate steps to comply with the disinterested director
requirements of Section 16(b) of the Exchange Act, which may consist of the
appointment by the Board of a Committee consisting of not less than two (2)
persons (who are members of the Board), each of whom is a Disinterested Person.
As used in this Plan, references to the "Committee" shall mean either the
committee appointed by the Board to administer this Plan or the Board if no
committee has been established. The interpretation by the Committee of any of
the provisions of this Plan or any Option granted under this Plan shall be final
and binding upon the Company and all persons

<PAGE>

having an interest in any Option or any Shares purchased pursuant to an Option.
The Committee may delegate to officers of the Company the authority to grant
Options under this Plan to Optionees who are not Insiders of the Company.

14. TERM OF PLAN. Options may be granted pursuant to this Plan from time to
time within a period of ten (10) years from the date on which this Plan is
adopted by the Board.

15. AMENDMENT OR TERMINATION OF PLAN. The Committee may at any time
terminate or amend this Plan in any respect including (but not limited to)
amendment of any form of grant, exercise agreement or instrument to be executed
pursuant to this Plan; provided, however, that the Committee shall not, without
the approval of the stockholders of the company, amend this Plan in any manner
that requires such stockholder approval pursuant to the Revenue Code or the
regulations promulgated thereunder as such provisions apply to ISO plans or
pursuant to the Exchange Act or Rule 16b-3 (or its successor) promulgated
thereunder.

16. CERTAIN DEFINITIONS. As used in this Plan, the following terms shall
have the following meanings:

a. "PARENT" means any corporation (other than the Company) in an
unbroken chain of corporations ending with the Company if, at the time of the
granting of the Option, each of such corporations other than the Company owns
stock possessing 50% or more of the total combined voting power of all classes
of stock in one of the other corporations in such chain.

b. "SUBSIDIARY" means any corporation (other than the company) in an
unbroken chain of corporations beginning with the Company if, at the time of
granting of the Option, each of the corporations other than the last corporation
in the unbroken chain owns stock possessing 50% or more of the total combined
voting power of all classes of stock in one of the other corporations in such
chain.

c. "AFFILIATE" means any corporation that directly, or indirectly
through one or more intermediaries, controls or is controlled by, or is under
common control with, another corporation, where "control" (including the terms
"controlled by" and "under common control with") means the possession, direct or
indirect, of the power to cause the direction of the management and policies of
the corporation, whether through the ownership of voting securities, by contract
or otherwise.

d. "DISINTERESTED PERSON" means a director who is not, during the
period that he is a member of the Committee and for one (1) year prior to
service as a member of the Committee, granted or awarded equity securities
pursuant to this Plan or any other plan of the Company or any Parent, Subsidiary
or Affiliate of the Company, except in accordance with the requirements set
forth in Rule 16b-3(c)(2), as promulgated by the SEC under Section 16(b) of the
Exchange act, as such Rule is amended from time to time and as interpreted by
the SEC.

e. "FAIR MARKET VALUE" shall mean the fair market value of the Shares
as determined by the Committee from time to time in good faith. In the event
the common stock of the Company is listed on a stock exchange or on the NASDAQ
National Market System, the Fair Market Value shall be the closing price of the
Corporation's common stock on the date of determination.

<PAGE>

ELECTRONIC ARTS INC.
NONQUALIFIED STOCK OPTION GRANT

Optionee:

Address:

Number of Option Shares:

Exercise Price per Share:

Date of Grant:

1. GRANT OF OPTION: Electronic Arts Inc. (the "COMPANY"), a Delaware
corporation, hereby grants to the optionee named above (the "OPTIONEE") a
nonqualified stock option (this "OPTION") to purchase the total number of shares
set forth above of Common Stock of the Company (the "OPTION SHARES") at the
exercise price per share set forth above (the "EXERCISE PRICE"), subject to all
of the terms and conditions of this Nonqualified Stock Option Grant ("GRANT")
and the Company's 1991 Stock Option Plan (as amended), (the "PLAN"), the
provisions of which are incorporated herein by this reference.

2. VESTING AND EXERCISE PERIOD OF OPTION. Subject to the terms and
conditions of the Plan and this Grant, this Option shall vest with respect to
the Option Shares as follows:

Length of Time Optionee
has been continuously Number of Option Shares
employed by the Company as to which Option
since: is Vested:
----- ----------

Less than 3 calendar months None

3 calendar months 6% of the Shares

4 calendar months 2% of the Shares for
or more each calendar month

50 calendar months or more 100% of the shares

An optionee shall be deemed to have worked a calendar month if optionee has
worked any portion of that month. The terms and conditions of this Grant
provide that this Option shall expire ten (10) years after the date of grant
(the "DATE OF GRANT") set forth above (the "EXPIRATION DATE") and must be
exercised, if at all, on or before the Expiration Date. Only vested options may
be exercised.

<PAGE>

3. RESTRICTIONS ON EXERCISE. Exercise of this Option is subject to the
following limitations:

(a) This Option may not be exercised until the Plan has been approved
by the stockholders of the Company as set forth in the Plan.

(b) This Option may not be exercised unless such exercise is in
compliance with the Securities Act of 1933, as amended, the Exchange Act of
1934, as amended, all applicable state securities laws, and the requirements of
any stock exchange or national market system on which the Company's Common Stock
may be listed, as they are in effect on the date of exercise.

(c) This Option may be exercised even if there is outstanding, within
the meaning of Section 422A(c)(7) of the Internal Revenue Code of 1954, as
amended (the "CODE"), any incentive stock option to purchase stock of the
Company or its Parent or Subsidiary (as defined in the plan) that was granted to
the Optionee before the grant of this Option.

4. TERMINATION OF OPTION.

(a) Except as provided in this Section, this Option shall terminate in
whole if Optionee ceases to be an employee of the Company and may not be
exercised to the extent terminated. If the Optionee ceases to be an employee of
the Company for any reason except by death or disability, this Option, to the
extent it is exercisable by the Optionee on the date on which the Optionee
ceases to be an employee (the "Termination Date"), may be exercised by the
Optionee within three (3) months after the Termination Date, but in no event
later than the Expiration Date set forth in Section 2 above.

(b) Except as provided in this Section, this Option shall terminate in
part, if Optionee ceases to be a full time employee of the Company but remains
an employee of the Company, and may not be exercised to the extent terminated.
If the Optionee ceases to be a full time employee of the Company for any reason
other than disability, this Option, to the extent it is exercisable by the
Optionee on the date on which the Optionee ceases to be a full time employee,
may be exercised by the Optionee within three (3) months after the Termination
Date as defined in subparagraph (a) above, but in no event later than the
Expiration Date set forth in Section 2 above.

(i) An Optionee shall be deemed to be a "full time" employee if
Optionee works not less than 40 hours per week.

(ii) Except as to the number of Option Shares for which this
Option terminates in accordance with section 4(b) above and subsection (b)(iii)
below, this Option shall continue to vest with respect to Option Shares in equal
monthly amounts from the Termination Date to the time the Optionee has been
continuously employed 50 calendar months from the date set forth in Section 2
above.

(iii) The number of Option Shares for which this Option shall
terminate in accordance with this Paragraph will be determined at a rate
proportional to the percentage of hours not worked to 40 hours/week.

(c) If the Optionee's employment with the Company is terminated
because of the death of the Optionee or disability of the Optionee within the
meaning of Section 22(e)(3) of the Code, this Option, to the extent that it is
exercisable by the Optionee on the Termination Date, may be exercised by the
Optionee (or the Optionee's legal representative) at any time prior to the
expiration of twelve months after the

<PAGE>

Termination Date, but in any event no later than the Expiration Date set forth
in Section 2 above.

(d) Nothing in the Plan or this Grant shall confer on Optionee any
right to continue in the employ of, or other relationship with, the Company or
any Parent, Subsidiary or Affiliate of the Company or limit in any way the right
of the Company or any Parent, Subsidiary or Affiliate of the Company to
terminate Optionee's employment or other relationship at any time, with or
without cause.

5. MANNER OF EXERCISE.

(a) This Option shall be exercisable by delivery to the Company of
written notice in the form attached hereto as EXHIBIT A, or in such other form
as may be approved by the Board of Directors of the Company, which shall set
forth the Optionee's election to exercise this Option, the number of Option
Shares being purchased, and such other representations and agreements as to the
Optionee's investment intent and access to information as may be required by the
Company to comply with applicable securities laws.

(b) Such notice shall be accompanied by full payment of the Exercise
Price (i) in cash; (ii) by tender of shares of Common Stock of the Company
having a fair market value equal to the Exercise Price; or (iii) a combination
of the foregoing, provided that a portion of the exercise price equal to the
par value of the Shares, if any, must be paid in cash or other legal
consideration.

(c) Prior to the issuance of the Option Shares upon exercise of this
Option, the Optionee must pay or make adequate provision for any applicable
federal or state withholding obligations of the Company.

(d) Provided that such notice and payment are in form and substance
satisfactory to counsel for the Company, the Company shall issue the Option
Shares registered in the name of the Optionee or the Optionee's legal
representative.

6. COMPLIANCE WITH LAWS AND REGULATIONS. The issuance and transfer of
Option Shares shall be subject to compliance by the Company and the Optionee
with all applicable requirements of federal and state laws and with all
applicable requirements of any stock exchange or national market system on which
the Company's Common Stock may be listed at the time of such issuance or
transfer.

7. NONTRANSFERABILITY OF OPTION. This Option may not be transferred in
any manner other than by will or by the laws of descent and distribution and may
be exercised during the lifetime of the Optionee only by the Optionee. The
terms of this Option shall be binding upon the executors, administrators,
successors and assigns of the Optionee.

8. TAX CONSEQUENCES. Set forth below is a brief summary as of the date
this form of grant was adopted of some of the federal and California tax
consequences of exercise of this Option and disposition of the Shares.
Additional information is included in the Prospectus for the Plan, as amended.
THIS SUMMARY IS NECESSARILY INCOMPLETE, AND THE TAX LAWS AND REGULATIONS ARE
SUBJECT TO CHANGE. OPTIONEE SHOULD CONSULT A TAX ADVISER BEFORE EXERCISING THIS
OPTION OR DISPOSING OF THE SHARES.

<PAGE>

Company will be required to withhold from Optionee's compensation or collect
from Optionee and pay to the applicable taxing authorities an amount equal to a
percentage of this compensation income at the time of exercise.

(b) DISPOSITION OF THE SHARES. For federal tax purposes, for shares
disposed of after 1986, long-term capital gain will generally be treated as
ordinary income subject to the maximum tax rate. If the shares acquired
pursuant to the exercise of a nonqualified stock option are held for at least
six (6) months after the date of transfer pursuant to the exercise of the
nonqualified stock option, any gain realized on disposition of the Shares will
be treated as long-term capital gain for federal (but not California) income tax
purposes for potential set-off against capital losses.

9. INTERPRETATION. Any dispute regarding the interpretation of this
agreement shall be submitted by Optionee or the Company forthwith to the
Company's Board of Directors or the committee thereof that administers the Plan,
which shall review such dispute at its next regular meeting. The resolution of
such a dispute by the Board or committee shall be final and binding on the
Company and on Optionee.

10. ENTIRE AGREEMENT. The Plan and the Notice and Agreement attached as
Exhibit A are incorporated herein by reference. This Grant, the Plan and the
Notice and Agreement constitute the entire agreement of the parties and
supersede all prior undertakings and agreements with respect to the subject
matter hereof.

ELECTRONIC ARTS INC.

By: ______________________________________

Its:_________________________________________

ACCEPTANCE

Optionee hereby acknowledges receipt of a copy of the Plan, a copy of the
Prospectus as amended, represents that Optionee has read and understands the
terms and provisions thereof, and accepts this Option subject to all the terms
and provisions of the Plan and this Grant. Optionee acknowledges that there may
be adverse tax consequences upon exercise of this Option and that Optionee
should consult a tax adviser prior to such exercise.

_________________________________
Optionee

USGRANTAN-REV.8/3/95

<PAGE>

ELECTRONIC ARTS INC.
NONQUALIFIED STOCK OPTION GRANT

Optionee:

Address:

Number of Option Shares:

Exercise Price Per Share:

Date of Grant:

1. GRANT OF OPTION: Electronic Arts Inc. (the "COMPANY"), a Delaware
corporation, hereby grants to the optionee named above (the "OPTIONEE") a
nonqualified stock option (this "OPTION") to purchase the total number of shares
set forth above of Common Stock of the Company (the "OPTION SHARES") at the
exercise price per share set forth above (the "EXERCISE PRICE"), subject to all
of the terms and conditions of this Nonqualified Stock Option Grant ("GRANT")
and the Company's 1991 Stock Option Plan, (the "PLAN"), the provisions of which
are incorporated herein by this reference.

2. VESTING PERIOD OF OPTION. Subject to the terms and conditions of the
Plan and this Grant, this Option shall vest with respect to the Option Shares as
to 2% per month for 50 months as long as Optionee has been continuously employed
by the Company since: ________________________.

3. EXERCISE PERIOD OF OPTION. Subject to the terms and conditions of the
Plan and this Grant, Optionee may first exercise this Option with respect to the
vested Option Shares, as described in Paragraph 2, 12 months from ______________
Optionee may then exercise this Option with respect to Vested Option Shares at
any time until expiration or termination.

4. RESTRICTIONS ON EXERCISE. Exercise of this Option is subject to the
following limitations:

(a) This Option may not be exercised until the Plan has been approved
by the stockholders of the Company as set forth in the Plan.

<PAGE>

Subsidiary (as defined in the plan) that was granted to the Optionee before the
grant of this Option.

5. TERMINATION OF OPTION.

(i) An Optionee shall be deemed to be a "full time" employee if
Optionee works not less than 40 hours per week.

6. MANNER OF EXERCISE.

<PAGE>

purchased, and such other representations and agreements as to the Optionee's
investment intent and access to information as may be required by the Company to
comply with applicable securities laws.

7. COMPLIANCE WITH LAWS AND REGULATIONS. The issuance and transfer of
Option Shares shall be subject to compliance by the Company and the Optionee
with all applicable requirements of federal and state laws and with all
applicable requirements of any stock exchange or national market system on which
the Company's Common Stock may be listed at the time of such issuance or
transfer.

8. NONTRANSFERABILITY OF OPTION. This Option may not be transferred in
any manner other than by will or by the laws of descent and distribution and may
be exercised during the lifetime of the Optionee only by the Optionee. The
terms of this Option shall be binding upon the executors, administrators,
successors and assigns of the Optionee.

9. TAX CONSEQUENCES. Set forth below is a brief summary as of the date
this form of grant was adopted of some of the federal and California tax
consequences of exercise of this Option and disposition of the Shares.
Additional information is included in the Prospectus for the Plan, as amended.
THIS SUMMARY IS NECESSARILY INCOMPLETE, AND THE TAX LAWS AND REGULATIONS ARE
SUBJECT TO CHANGE. OPTIONEE SHOULD CONSULT A TAX ADVISER BEFORE EXERCISING THIS
OPTION OR DISPOSING OF THE SHARES.

(a) EXERCISE. Upon exercise, Optionee will recognize compensation
income (taxable at ordinary income tax rates) equal to the excess, if any, of
the fair market value of the Shares on the date of exercise over the Exercise
Price. The Company will be required to withhold from Optionee's compensation or
collect from Optionee and pay to the applicable taxing authorities an amount
equal to a percentage of this compensation income at the time of exercise.

10. INTERPRETATION. Any dispute regarding the interpretation of this
agreement shall be submitted by Optionee or the Company forthwith to the
Company's Board of Directors or the committee thereof that administers the Plan,
which shall review such

<PAGE>

dispute at its next regular meeting. The resolution of such a dispute by the
Board or committee shall be final and binding on the Company and on Optionee.

11. ENTIRE AGREEMENT. The Plan and the Notice and Agreement attached as
Exhibit A are incorporated herein by reference. This Grant, the Plan and the
Notice and Agreement constitute the entire agreement of the parties and
supersede all prior undertakings and agreements with respect to the subject
matter hereof.

ELECTRONIC ARTS INC.

By: ______________________________________

Its: ______________________________________

ACCEPTANCE

Optionee hereby acknowledges receipt of a copy of the Plan, a copy of the
Prospectus, as amended, represents that Optionee has read and understands the
terms and provisions thereof, and accepts this Option subject to all the terms
and provisions of the Plan and this Grant. Optionee acknowledges that there may
be adverse tax consequences upon exercise of this Option and that Optionee
should consult a tax adviser prior to such exercise.

_________________________________
Optionee

USGRANTNH-REV.08/03/95NH
<PAGE>

EXHIBIT A
STOCK OPTION EXERCISE NOTICE AND AGREEMENT
Electronic Arts Inc.
1450 Fashion Island Blvd.
San Mateo, CA 94404

Attention: Stock Administrator

1. EXERCISE OF OPTION. The undersigned ("OPTIONEE") hereby elects to
exercise Optionee's option to purchase _____ shares of the Common Stock (the
"OPTION SHARES") of Electronic Arts Inc. (the "COMPANY") under and pursuant to
the Company's ______ Stock Option Plan (the "PLAN") and the stock option grant
dated _______ _____________________ (the "GRANT"). The terms and conditions of
the Plan and the Grant are hereby incorporated into and made a part of this
Agreement by this reference.

2. REPRESENTATIONS OF OPTIONEE. Optionee hereby acknowledges, represents
and warrants that Optionee has received, read and understood the Plan and the
Grant and will abide by and be bound by their terms and conditions.

3. COMPLIANCE WITH SECURITIES LAWS. Optionee understands and
acknowledges that the exercise of any rights to purchase any Option Shares is
expressly conditioned upon compliance with the Securities Act of 1933, the
Exchange Act of 1934, the requirements of any stock exchange or national market
system on which the Company's stock may be listed, and all applicable state
securities laws. Optionee agrees to cooperate with the Company to ensure
compliance with such laws.

4. STOP TRANSFER NOTICES. Optionee understands and agrees that the
Company may issue appropriate "stop transfer" instructions to its transfer agent
to ensure compliance with the restrictions on transfer.

5. TAX CONSEQUENCES. OPTIONEE UNDERSTANDS THAT OPTIONEE MAY SUFFER
ADVERSE TAX CONSEQUENCES AS A RESULT OF OPTIONEE'S PURCHASE OR DISPOSITION OF
THE OPTION SHARES. OPTIONEE REPRESENTS THAT OPTIONEE HAS CONSULTED WITH ANY TAX
CONSULTANT(S) OPTIONEE DEEMS ADVISABLE IN CONNECTION WITH THE PURCHASE OR
DISPOSITION OF THE OPTION SHARES AND THAT OPTIONEE IS NOT RELYING ON THE COMPANY
FOR ANY TAX ADVICE. IN PARTICULAR, IF OPTIONEE IS AN INSIDER SUBJECT TO SECTION
16(B) OF THE EXCHANGE ACT, OPTIONEE REPRESENTS THAT OPTIONEE HAS CONSULTED WITH
OPTIONEE'S TAX ADVISERS CONCERNING THE ADVISABILITY OF FILING AN 83(B) ELECTION
WITH THE INTERNAL REVENUE SERVICE.

6. DELIVERY OF PAYMENT. Optionee herewith delivers to the Company the
aggregate purchase price of the Option Shares that Optionee has elected to
purchase and has made provision for the payment of any federal or state
withholding taxes required to be paid or withheld by the Company.

7. ENTIRE AGREEMENT. This Exercise Agreement, the Plan and the Grant
constitute the entire agreement of the parties and supersede in their entirety
all prior undertakings and agreements of the Company and Optionee with respect
to the subject matter hereof, and is governed by California law except for that
body of law pertaining to conflict of laws.

Submitted by: Accepted
OPTIONEE: __________________________ ELECTRONIC ARTS INC.
(Print Name)

____________________________________ By: ________________________________
(Signature)
Its:
Dated: ___________________________ Dated:______________________________

USEXCS-REV.8/3/95

<PAGE>

ADDENDUM TO THE 1991 STOCK OPTION PLAN
OF ELECTRONIC ARTS INC.
AS AMENDED NOVEMBER 24, 1992, JULY 27, 1993,
AS AMENDED JULY 27, 1994 AND AS AMDENDED AUGUST 3, 1995

RULES APPLICABLE TO UNITED KINGDOM EMPLOYEES

Pursuant to the authority contained in Section 16 of the 1991 Stock Option
Plan of Electronic Arts Inc. the Board (as defined below) of Electronic Arts
Inc. has amended that Plan by approving the following Rules as a scheme intended
to extend the benefits of stock options granted under the Plan to employees of
Electronic Arts Inc. residents in the United Kingdom and to United Kingdom
resident employees of companies of which Electronic Arts Inc. has control (as
defined below). These Rules are designed to qualify for approval as an approved
share option scheme under Schedule 9 (as defined below).

The Rules should be read in conjunction with the Plan and are subject to the
terms and conditions except to the extent that the terms of the Plan are
specifically disapplied or are inconsistent with the terms of these Rules.
Section 11 of the Plan shall not apply to any options issued subject to these
Rules.

The Rules set out below apply to any grant of options under the Plan:

(a) to individuals who are resident in the United Kingdom for United Kingdom
tax purposes and in respect of whom the limitations in Rule 3 below have not
been breached, and
(b) expressly stated to be subject to these Rules.

1. DEFINITIONS.

1.1 In these Rules the following words and expressions shall have the
following meanings:

"Plan" the 1991 Stock Option Plan of Electronic Arts Inc. (as
amended);

"Approval Date" the later of the date on which these Rules are adopted
by the Board under Section 13 of the Plan or the date
on which these Rules are approved by the Board of
Inland Revenue under Schedule 9;

"Associated Company" has the same meaning as in Section 416 of ICTA 1988;

"Auditors" the Auditors for the time being of the Company (acting
as experts and not as arbitrators);

"Board" the Board of Directors of the Company or such committee
pointed by the Board of Directors to administer the
Plan;

"Company" Electronic Arts Inc., a company incorporated under the
laws of Delaware, USA, having its principal place of
business at 1450 Fashion Island Blvd., San Mateo, CA
94404, USA;

"Control" Has the same meaning as in Section 840 of ICTA 1988

"Date of Grant" the date on which the Board makes the determination to
grant an Option under the Scheme;

"Eligible Employee" any director (other than a director of the Company) or
employee of any Participating Company who is required
to devote to his or her duties for all Participating
Companies not less than 25 hours (or, in the case of an
employee who is not a director of any Participating
Company, 20 hours) per week (excluding meal breaks) and
is not precluded by paragraph 8 of Schedule 9 from
participating in the Scheme;

<PAGE>

"Fair Market Value" the value of a Share on the Date of Grant determined by
the Board in good faith except that the Fair Market
Value in respect of Shares to be offered under option
to an Eligible Employee who owns more than 10% of the
total combined voting power of all classes of stock or
shares of the Company or any Associated Company shall
be equal to at least 110% of the fair market value of
those Shares at the Date of Grant;

"ICTA 1988" The Income and Corporation Taxes Act 1988.

"Market Value" on any day the market value of a Share determined in
accordance with the provisions of Part VIII of the
Taxation of Chargeable Gains Act 1992 and agreed for
the purpose of the Scheme with the United Kingdom
Inland Revenue Share Valuation Division;

"Option" a right to subscribe for Shares granted (or to be
granted) in accordance with the Rules of this Scheme;

"Participating Company" the Company and any other company of which the Company
has Control and which is for the time being nominated
by the Board to be a Participating Company;

"Relevant Emoluments" the meaning which the term bears in sub-paragraph (2)
of paragraph 28 of Schedule 9, by virtue of sub-
paragraph (4) of that paragraph;

"Rules" the Rules of the Scheme as from time to time amended;

"Schedule 9" Schedule 9 of ICTA 1988.

"Scheme" the Plan to the extent governed by these Rules as from
time to time amended;

"Share" a share of the Common Stock of the Company which
satisfies the conditions specified in paragraphs 10 to
14 inclusive of Schedule 9;

"Subscription Price" the price at which each Share subject to an Option may
be acquired on the exercise of that Option being,
subject to Rule 2, the highest of:

(i) the par value of a Share;

(ii) the Fair Market Value on the Date of Grant; and

(iii) the Market Value on the Date of Grant;

"Subsisting Option" an Option which has neither lapsed nor been exercised;

"Year of Assessment" a year beginning on any 6th April and ending on the
following 5th April.

1.2. Reference to the provision of any statute is a reference to it as
amended or as re-enacted with or without modification.

1.3. Any reference in these Rules to an amount expressed in pounds
sterling shall be treated as a reference to that amount converted into US
dollars at the mid-market spot rate of exchange in force at close of business in
London on the relevant date.

2. GRANT OF OPTIONS

2.1 At any time or times not earlier than the Approval Date nor later
than the expiration or termination of the Plan the Board may at its absolute
discretion select any number of individuals who are on the Date of Grant
Eligible Employees or who may on the date on which an Option is to be granted to
them be Eligible Employees

<PAGE>

and may grant to each such individual an Option by means of the issue of a
written option agreement duly signed by the Company's representatives in such
form, not inconsistent with these Rules, as the Board may determine.

2.2 Each option agreement shall set out the terms of the Options,
including details of:

(a) the number of Shares over which that Eligible Employee has been
granted Options (being less than that number of Shares which would cause the
limit specified in Rule 3 to be exceeded); and

(b) the Subscription Price at which Shares may be acquired on the exercise
of any Option granted.

2.3 No Option may be transferred, assigned or charged and any purported
transfer, assignment or charge shall cause the Option to lapse forthwith. Each
option agreement shall carry a statement to this effect.

3. LIMITATIONS ON GRANTS

No Option shall be granted to an Eligible Employee if immediately following
such grant he or she would hold Subsisting Options over Shares with an aggregate
Subscription Price exceeding the greater of:

(a) 100,000; or

(b) four times the amount of the Eligible Employee's Relevant
Emoluments for the current or preceding Year of Assessment (whichever of those
years gives the greater amount) or, if there were no Relevant Emoluments for the
preceding Year of Assessment, four times the amount of the Relevant Emoluments
for the period of twelve months beginning with the first day during the current
Year of Assessment in respect of which there are Relevant Emoluments.

For the purpose of this Rule 3, Options shall include all Options granted under
this Scheme and all options granted under any other scheme approved under
Schedule 9 and established by the Company or any Associated Company thereof.

4. EXERCISE OF OPTIONS

4.1 An Option shall lapse on the earliest of the following events:

(a) the tenth anniversary of the Date of Grant;

(b) the first anniversary of the Option holder's death or disability
within the meaning of Section 22(e)(3) of the Internal Revenue Code of 1954 (as
amended);

(c) unless the Board otherwise decides, at the expiry of three
months following the Option holder ceasing to be a director or employee of any
Participating Company (except in the circumstances described in Rule 4.1(b) in
which case an Option shall lapse on the first anniversary of such an event;

(d) the expiration of the period within which an Option may be
exercised in accordance with Rule 5.

4.2 Notwithstanding the terms of Rule 4.1 and 7, but subject to Rule
5.3, this Rule 4.2 shall apply in relation to the exercise of an Option:

(a) if at the time of exercise of an Option (or the date of death of
an Option holder if earlier) the Option holder has been continuously employed by
any Participating Company for at least 50 full calendar months from the Vesting
Start Date (as defined below) the Option may be exercised in respect of all
Shares subject to that Option;

(b) to the extent that such continuous employment by an Option
holder has not been attained for 50 full calendar months from the Vesting Start
Date, the Option may be exercised only in respect of 2 per cent of the number of
Shares subject to the Option (rounded down to the nearest whole number of
Shares) for each full calendar month of continuous employment of the Option
holder by any Participating Company from the Vesting Start Date completed at the
time of exercise of an Option (or the date of death of an Option holder if
earlier);

<PAGE>

(c) the period of continuous employment shall be determined for the
purpose of this Rule 4.2 by the Board in accordance with such rules as the Board
may notify to the Option holders at the time of grant; in the absence of any
such notification the period of continuous employment shall be the period from
the Vesting Start Date until the date on which the Option holder's employment by
a Participating Company ceases or (if earlier) the date on which notice is given
(either by the Option holder or by the Participating Company) to determine an
Option holder's service agreement with the Participating Company; and
accordingly the provision of Sections 51 and Schedule 13 of the Employment
Protection (Consolidation) Act of 1978 as amended (which define "continuous
employment" for certain purposes) shall not apply;

(d) in this Rule 4.2, "Vesting Start Date" shall be such date not
later than the Date of Grant as may be specified in the option agreement.

5. TAKEOVERS AND LIQUIDATIONS

5.1 If any person obtains Control of the Company as a result of making:

(a) a general offer to acquire the whole of the issued share capital
of the Company which is made on a condition such that if it is satisfied the
person making the offer will have Control of the Company; or

(b) a general offer to acquire all the shares in the Company which
are of the same class as the Shares then any Subsisting Option may be exercised
(subject to Rules 4.2 and 5.4) within six months of the time when the person
making the offer has obtained Control of the Company and any condition subject
to which the offer is made has been satisfied.

5.2 If the Company is to be dissolved or liquidated or substantially all
of the assets of the Company are sold, any Subsisting Option may be exercised
(to the extent permitted by Rule 4.2) within six months of the date (or dates)
fixed by the Board prior to the effective date of such dissolution, liquidation
or sale. If the Board does not fix any such date, then this Rule 5.2 shall not
apply.

5.3 If any person obtains Control of the Company or purchases
substantially all of its assets, but does not assume all Subsisting Options or
substitute substantially equivalent options therefor, then the exerciseability
of such Subsisting Options will no longer be restricted by Rule 4.2.

5.4 If as a result of the events specified in Rule 5.1 a company has
obtained Control of the Company, the Company shall seek the agreement of that
other company (the "Acquiring Company") and if such agreement is obtained shall
exchange each Subsisting Option for a new Option which satisfies the following
conditions:

(a) the new Option is over shares in the Acquiring Company or a
company Controlling the Acquiring Company which satisfy the conditions specified
in paragraphs 10 to 14 inclusive of Schedule 9 (and the term "Shares" in this
Scheme shall thereafter be construed accordingly);

(b) the new Option is a right to acquire such number of such Shares
as has on acquisition of the new Option an aggregate Market Value equal to the
aggregate Market Value of the Shares subject to the old Option on its disposal;

(c) the new Option has a Subscription Price per Share such that the
aggregate price payable on complete exercise equals the aggregate price which
would have been payable on complete exercise of the old Option; and

(d) the new Option is otherwise identical in terms to the old
Option.

The new Option shall, for all other purposes of this Scheme, be treated as
having been acquired at the same time as the Old Option for which it is
exchanged.

5.5 For the purposes of this Rule 5 (other than Rule 5.4) a person shall
be deemed to have obtained Control of a Company if he or she and others acting
in concert with him have together obtained Control of it.

<PAGE>

5.6 The exercise of an Option pursuant to the preceding provisions of
this Rule 5 shall be subject to the provisions of Rule 7 below.

6. VARIATION OF SHARE CAPITAL

In the event of any capitalization or rights issue or any consolidation,
sub-division or reduction of capital by the Company, the number of Shares
subject to any Option and the Subscription Price for each of those Shares shall
be adjusted in such manner as the Auditors confirm to be fair and reasonable
provided that:

(a) the aggregate amount payable on the exercise of an Option in
full is not increased;

(b) the Subscription Price for a Share is not reduced below its
nominal value (if any);

(d) following the adjustment the Shares continue to satisfy the
conditions specified in paragraph 10 to 14 inclusive of Schedule 9.

7. MANNER OF EXERCISE OF OPTIONS

7.1 No Option may be exercised by an individual at any time when he or
she is precluded by Paragraph 8 of Schedule 9 from participating in the Scheme.

7.2 No Option may be exercised by an individual at any time when the
Option holder has not completed three full months of continuous employment with
any Participating Company ending on the proposed date of exercise or death of
the Option holder if earlier.

7.3 No Option may be exercised at any time when each of the shares which
may be thereby acquired is not a Share as defined in Rule 1.1.

7.4 Options shall be exercised by the Option holder, or as the case may
be, his or her personal representatives, giving notice to the Company in writing
of the number of Shares in respect of which he or she wishes to exercise Options
accompanied by the appropriate cash payment in US dollars and a completed Option
Exercise Notice and Agreement, and shall be effective on the date of its receipt
by the Company, provided always that the Board will accept cash payments only
and shall have no discretion to permit payments in money's worth.

7.5 Shares shall be allotted and issued within 30 days of the date of
exercise. Save for any rights determined by reference to a date preceding the
date of allotment, such Shares shall rank pari passu with the other shares of
the same class in issue at the date of allotment.

7.6 When an Option is exercised only in part the balance shall remain
exercisable on the same terms as originally applied to the whole Option.
However no Option may be exercised over a fraction of a Share.

8. ADMINISTRATION AND AMENDMENT

8.1 The Scheme shall be administered by the Board whose decision on all
disputes shall be final.

8.2 The Board may from time to time amend these Rules provided that:

(a) no amendment may detrimentally affect an Option holder as
regards an Option granted prior to the amendment being made;

(b) no amendment may be made which would make the terms on which
Options may be granted materially more generous or would increase the limits
specified in Rule 3 without the prior approval of the Company in general
meeting; and

<PAGE>

8.3 The cost of establishing and operating the Scheme shall be borne by
the Participating Companies in such proportions as the Board shall determine.

8.4 Any notice or other communication under or in connection with the
Scheme may be given by the Company either personally or by post, and to the
Company either personally or by post to the Board; items sent by post shall be
pre-paid and shall be deemed to have been received 7 days after posting.

9. HEADINGS

The headings herein are provided for reference and convenience only, shall
not be considered part of the Scheme, and shall not be employed in construction
of the Scheme.

10. CONTROLLING LAW

This Scheme shall be construed and enforced according to the laws of England.
<PAGE>

ELECTRONIC ARTS INC.
APPROVED UK STOCK OPTION GRANT

Optionee: _______________________________

Address: _______________________________
_______________________________
_______________________________

Number of Option Shares: ___________ Shares

Exercise Price per Share: ______________

Date of Grant: _______________

1. GRANT OF OPTION: Electronic Arts Inc. (the "COMPANY"), a Delaware
corporation, hereby grants to the optionee named above (the "OPTIONEE") a
nonqualified stock option (this "OPTION") to purchase the total number of shares
set forth above of Common Stock of the Company (the "OPTION SHARES") at the
exercise price per share set forth above (the "EXERCISE PRICE"), subject to all
of the terms and conditions of this Approved UK Stock Option Grant ("GRANT") and
the Addendum to the Company's 1991 Stock Option Plan entitled Rules Applicable
to United Kingdom Employees" as amended to date (the "RULES"), the provisions of
which are incorporated herein by this reference.

2. EXERCISE PERIOD OF OPTION. Subject to the terms and conditions of the
Rules and this Grant, this Option shall become exercisable with respect to the
Option Shares as follows:

Length of Time Optionee
has been continuously Number of Option Shares
employed by the Company as to which Option
since ______________: is exercisable:
---------------

Less than 3 calendar months None

3 calendar months 6% of the Option Shares

4 calendar months 2% of the Option Shares
or more for each calendar month

50 calendar months or more 100% of the Option Shares

<PAGE>

The terms and conditions of this Grant provide that this Option shall
expire on the earlier of (the "EXPIRATION DATE"):

(a) the tenth anniversary of the Date of Grant, as specified above;

(b) such earlier date as may be provided in Section 4 of this Grant;
or

(c) such other earlier date as may be provided for in the Rules as a
result of certain events including a takeover or sale of the Company.

3. RESTRICTIONS ON EXERCISE. Exercise of this Option is subject to the
following limitations:

(a) This Option may not be exercised unless such exercise is in
compliance with the United States Securities Act of 1933, as amended, the United
States Exchange Act of 1934, as amended, all applicable state securities laws,
and the requirements of any stock exchange or national market system on which
the Company's Common Stock may be listed, as they are in effect on the date of
exercise.

(b) This Option may be exercised even if there is outstanding, within
the meaning of Section 422A(c)(7) of the United States Internal Revenue Code of
1954, as amended (the "CODE"), any incentive stock option to purchase stock of
the Company or its Parent or Subsidiary (as defined in the plan) that was
granted to the Optionee before the grant of this Option.

4. TERMINATION OF OPTION. Except as provided in this Section, this
Option shall terminate and may not be exercised if the Optionee ceases to be an
employee or director of a Participating Company.

(a) If the Optionee ceases to be an employee or Director of a
Participating Company for any reason except death or disability, this Option, to
the extent that it is exercisable by the Optionee on the date on which the
Optionee ceases to be an employee (the "Termination Date"), may be exercised by
the Optionee within 3 months after the Termination Date, but in no event later
than the Expiration Date.

(b) If the Optionee's employment with the Company is terminated
because of the death of the Optionee or disability of the Optionee within the
meaning of Section 22(e)(3) of the Code, this Option, to the extent that it is
exercisable by the Optionee on the Termination Date, may be exercised by the
Optionee (or the Optionee's legal representative) at any time within one year
after the Termination Date, but in any event no later than the Expiration Date.

5. MANNER OF EXERCISE.

(a) This Option shall be exercisable by delivery to the Company of
written notice in the form attached hereto as EXHIBIT A, or in such other form
as may be approved by the Board, which shall set forth the Optionee's election
to exercise this Option, the number of Option Shares being purchased, and such
other representations and agreements as to the Optionee's investment intent and
access to information as may be required by the Company to comply with
applicable securities laws.

(b) Such notice shall be accompanied by full payment of the Exercise
Price in cash in U.S. dollars.

(c) Prior to the issuance of the Option Shares upon exercise of this
Option, the Optionee must pay or make adequate provision for any applicable
national or regional withholding obligations of the Company.
<PAGE>

6. COMPLIANCE WITH LAWS AND REGULATIONS. The issuance and transfer of
Option Shares shall be subject to compliance by the Company and the Optionee
with all applicable requirements of United States federal and state laws and
with all applicable requirements of any stock exchange or national market system
on which the Company's Common Stock may be listed at the time of such issuance
or transfer.

8. TAX CONSEQUENCES. Set forth below is a brief summary of the current
Inland Revenue tax consequences with regard to the exercise of this Option and
the subsequent sale of the Option Shares. THIS IS A SUMMARY FOR OPTIONEE'S
INFORMATION ONLY AND OPTIONEE IS ADVISED TO SEEK INDIVIDUAL TAX ADVICE.

(a) The Addendum to the Plan under which this Option has been granted
has been approved by the UK Board of Inland Revenue under paragraph 1,
Schedule 9.

(b) Unless and until approval is withdrawn, there will be no charge
to UK income tax on the exercise of an Option in accordance with the Plan at a
time when:

(i) at least 3 but not more than 10 years have passed from the
Date of Grant of the Option; and

(ii) at least 3 years have elapsed since the latest previous
exercise by the Optionee of any option (granted under a scheme which is approved
under the ICTA 1988) which enjoyed relief from income tax.

(c) On a subsequent sale of the Option Shares, the Optionee will be
liable to pay capital gains tax on the resultant gains.

(d) The Company intends to maintain in force the UK Inland Revenue
approval for the Plan. However, if it is unable or unwilling to do so, it shall
be under no liability to the Optionee as a result of any increased tax liability
incurred by him or her whether on exercise of the Option, sale of the Option
Shares or otherwise.

9. INTERPRETATION. Any dispute regarding the interpretation of this
Grant shall be submitted by Optionee or the Company forthwith to the Board,
which shall review such dispute at its next regular meeting. The resolution of
such a dispute by the Board shall be final and binding on the Company and on
Optionee.

10. ENTIRE AGREEMENT. The Rules and the Notice and Agreement attached as
Exhibit A are incorporated herein by reference. This Grant, the Rules and the
Notice and Agreement constitute the entire agreement of the parties and
supersede all prior undertakings and agreements with respect to the subject
matter hereof.
<PAGE>

ELECTRONIC ARTS INC.

By: _____________________________
Its:___________________________________

ACCEPTANCE

Optionee hereby acknowledges receipt of a copy of the Rules, represents
that Optionee has read and understands the terms and provisions thereof, and
accepts this Option subject to all the terms and provisions of the Rules and
this Grant. Optionee acknowledges that there may be adverse tax consequences
upon exercise of this Option and that Optionee should consult a tax adviser
prior to such exercise.

_________________________________
Optionee

UKOPTIONGNT-REV8/3/95
<PAGE>

ELECTRONIC ARTS INC.
APPROVED UK STOCK OPTION GRANT

Optionee: _______________________________

Address: _______________________________

_______________________________________
Number of Option Shares: ___________ Shares

Exercise Price per Share: ______________

Date of Grant: _______________

1. GRANT OF OPTION: Electronic Arts Inc. (the "COMPANY"), a Delaware
corporation, hereby grants to the optionee named above (the "OPTIONEE") a
nonqualified stock option (this "OPTION") to purchase the total number of shares
set forth above of Common Stock of the Company (the "OPTION SHARES") at the
exercise price per share set forth above (the "EXERCISE PRICE"), subject to all
of the terms and conditions of this Approved UK Stock Option Grant ("GRANT") and
the Addendum to the Company's 1991 Stock Option Plan entitled Rules Applicable
to United Kingdom Employees" as amended to date (the "RULES"), the provisions of
which are incorporated herein by this reference.

3. EXERCISE PERIOD OF OPTION. Subject to the terms and conditions of the
Plan and this Grant, Optionee may first exercise this Option with respect to the
vested Option Shares, as described in Paragraph 2, 12 months from _____________.
Optionee may then exercise this Option with respect to Vested Option Shares
at any time until expiration or termination.

The terms and conditions of this Grant provide that this Option shall
expire on the earlier of (the "EXPIRATION DATE"):

(a) the tenth anniversary of the Date of Grant, as specified above;

(b) such earlier date as may be provided in Section 4 of this Grant;
or

(c) such other earlier date as may be provided for in the Rules as a
result of certain events including a takeover or sale of the Company.

4. RESTRICTIONS ON EXERCISE. Exercise of this Option is subject to the
following limitations:
(a) This Option may not be exercised unless such exercise is in
compliance with the United States Securities Act of 1933, as amended, the United
States Exchange Act of 1934, as amended, all applicable state securities laws,
and the requirements of any stock exchange or national market system on which
the Company's Common Stock may be listed, as they are in effect on the date of
exercise.

<PAGE>

5. TERMINATION OF OPTION. Except as provided in this Section, this
Option shall terminate and may not be exercised if the Optionee ceases to be an
employee or director of a Participating Company.

6. MANNER OF EXERCISE.

(b) Such notice shall be accompanied by full payment of the Exercise
Price in cash in U.S. dollars.

7. COMPLIANCE WITH LAWS AND REGULATIONS. The issuance and transfer of
Option Shares shall be subject to compliance by the Company and the Optionee
with all applicable requirements of United States federal and state laws and
with all applicable requirements of any stock exchange or national market system
on which the Company's Common Stock may be listed at the time of such issuance
or transfer.

9. TAX CONSEQUENCES. Set forth below is a brief summary of the current
Inland Revenue tax consequences with regard to the exercise of this Option and
the subsequent sale of the Option Shares. THIS IS A SUMMARY FOR OPTIONEE'S
INFORMATION ONLY AND OPTIONEE IS ADVISED TO SEEK INDIVIDUAL TAX ADVICE.

(a) The Addendum to the Plan under which this Option has been granted
has been approved by the UK Board of Inland Revenue under paragraph 1, Schedule
9.

(b) Unless and until approval is withdrawn, there will be no charge
to UK income tax on the exercise of an Option in accordance with the Plan at a
time when:

(i) at least 3 but not more than 10 years have passed from the
Date of Grant of the Option; and

(c) On a subsequent sale of the Option Shares, the Optionee will be
liable to pay capital gains tax on the resultant gains.

10. INTERPRETATION. Any dispute regarding the interpretation of this
Grant shall be submitted by Optionee or the Company forthwith to the Board,
which shall review such dispute at its next regular meeting. The resolution of
such a dispute by the Board shall be final and binding on the Company and on
Optionee.

11. ENTIRE AGREEMENT. The Rules and the Notice and Agreement attached as
Exhibit A are incorporated herein by reference. This Grant, the Rules and the
Notice and Agreement constitute the entire agreement of the parties and
supersede all prior undertakings and agreements with respect to the subject
matter hereof.

ELECTRONIC ARTS INC.

By: _____________________________
Its: ____________________________________________

ACCEPTANCE

_________________________________
Optionee
UKOPTIONGNT-REV8/3/95
<PAGE>

UK STOCK OPTION EXERCISE NOTICE AND AGREEMENT

Electronic Arts Inc.
1450 Fashion Island Blvd.
San Mateo, California USA 94404

Attention: Stock Administrator

1. EXERCISE OF OPTION. The undersigned ("OPTIONEE") hereby elects to
exercise Optionee's option to purchase shares of the Common Stock
(the "OPTION SHARES") of Electronic Arts Inc. (the "COMPANY") under and pursuant
to the Addendum to the Company's Stock Option Plan titled "Rules
Applicable to United Kingdom Employees," as amended to date (the "Rules") and
the stock option grant dated (the "GRANT"). The
terms and conditions of the Rules and the Grant are hereby incorporated into and
made a part of this Agreement by this reference.

2. REPRESENTATIONS OF OPTIONEE. Optionee hereby acknowledges, represents
and warrants that Optionee has received, read and understood the Rules and the
Grant and will abide by and be bound by their terms and conditions. Optionee
represents that Optionee is purchasing the Option Shares for Optionee's own
account for investment and not with a view to, or for sale in connection with, a
distribution of any of such Option Shares.

3. COMPLIANCE WITH SECURITIES LAWS. Optionee understands and
acknowledges that the exercise of any rights to purchase any Option Shares is
expressly conditioned upon compliance with the United States Securities Act of
1933, the United States Exchange Act of 1934, the requirements of any stock
exchange or national market system on which the Company's stock may be listed,
and all applicable state securities laws. Optionee agrees to cooperate with the
Company to ensure compliance with such laws.

5. TAX CONSEQUENCES. Optionee understands that Optionee may suffer
adverse tax consequences as a result of Optionee's purchase or disposition of
the Option Shares. Optionee represents that Optionee has consulted with any tax
consultant(s) Optionee deems advisable in connection with the purchase or
disposition of the Option Shares and that Optionee is not relying on the Company
for any tax advice.

6. DELIVERY OF PAYMENT. Optionee herewith delivers to the Company the
aggregate purchase price of the Option Shares that Optionee has elected to
purchase and has made provision for the payment of any national or regional
withholding taxes required to be paid or withheld by the Company.

7. ENTIRE AGREEMENT. This Exercise Agreement, the Rules and the Grant
constitute the entire agreement of the parties and supersede in their entirety
all prior undertakings and agreements of the Company and Optionee with respect
to the subject matter hereof, and is governed by the laws of England.

Submitted by: Accepted by:

OPTIONEE: __________________________ ELECTRONIC ARTS INC.
(Print Name)

___________________________________ By:________________________________
(Signature)
Its:
Dated: _____________________________ Dated:_____________________________

UKEXCS-REV.8/3/95

<PAGE>

EXHIBIT 4.02

REGISTRANT'S EMPLOYEE STOCK PURCHASE PLAN

<PAGE>

ELECTRONIC ARTS INC.

EMPLOYEE STOCK PURCHASE PLAN

AS APPROVED BY THE STOCKHOLDERS ON JULY 25, 1991,
AS AMENDED ON JULY 14, 1992, JULY 27, 1993, JULY 27, 1994
AND AUGUST 3, 1995

1. ESTABLISHMENT OF PLAN. Electronic Arts Inc., (the "COMPANY") proposes
to grant options for purchase of the Company's common Stock to eligible
employees of the Company and Subsidiaries (as hereinafter defined) pursuant to
this Employee Stock Purchase Plan (the "PLAN"). For purposes of this Plan,
"parent corporation" and "Subsidiary" (collectively, "Subsidiaries") shall have
the same meanings as "parent corporation" and "subsidiary corporation" in
Sections 425(e) and 425(f), respectively, of the Internal Revenue Code of 1986,
as amended (the "Code"). The Company intends that the Plan shall qualify as an
"employee stock purchase plan" under Section 423 of the Code (including any
amendments or replacements of such section), and the Plan shall be so construed.
Any term not expressly defined in the Plan but defined for purposes of Section
423 of the Code shall have the same definition herein. A total of 1,050,000
shares of Common Stock are reserved for issuance under the Plan. Such number
shall be subject to adjustments effected in accordance with Section 14 of the
Plan.

2. PURPOSES. The purpose of the Plan is to provide employees of the
Company and Subsidiaries designated by the Board of Directors as eligible to
participate in the Plan with a convenient means to acquire an equity interest in
the Company through payroll deductions, to enhance such employees' sense of
participation in the affairs of the Company and Subsidiaries, and to provide an
incentive for continued employment.

3. ADMINISTRATION. This Plan may be administered by the Board or a
committee appointed by the Board (the "COMMITTEE"). Until the earlier of
September 1, 1992 or the date that the Board resolves to conform to the amended
Rules promulgated by the SEC effective May 1, 1991 pursuant to Section 16 of the
Exchange Act, the Plan shall be administered by the Board or a committee
appointed by the Board consisting of not less than three (3) persons (who are
members of the Board), each of whom is a disinterested director. As used in
this Plan, references to the "Committee" shall mean either the committee
appointed by the Board to administer this Plan or the Board if no committee has
been established. Subject to the provisions of the Plan and the limitations of
Section 423 of the Code or any successor provision in the Code, all questions of
interpretation or application of the Plan shall be determined by the Committee
and its decisions shall be final and binding upon all participants. Members of
the Committee shall receive no compensation for their services in connection
with the administration of the Plan, other than standard fees as established
from time to time by the Board of Directors of the Company for services rendered
by Board members serving on Board committees. All expenses incurred in
connection with the administration of the Plan shall be paid by the Company.

4. ELIGIBILITY. Any employee of the Company or the Subsidiaries is
eligible to participate in an Offering Period (as hereinafter defined) under the
Plan except the following:

(a) employees who are not employed by the Company or Subsidiaries on
the fifteenth (15th) day of the month before the beginning of such Offering
Period;

(b) employees who are customarily employed for less than 20 hours per
week;

(d) employees who, together with any other person whose stock would be
attributed to such employee pursuant to Section 425(d) of the Code, own
stock or hold options to purchase stock or who, as a result of being granted
an option under the Plan with respect to such Offering Period, would own
stock or hold options to purchase stock possessing five (5) percent or more
of the total combined voting power or value of all classes of stock of the
Company or any of its Subsidiaries; and

(e) employees who would, by virtue of their participation in such
Offering Period, be participating simultaneously in more than one Offering
Period under the Plan.

<PAGE>

5. OFFERING DATES. The Offering Periods of the Plan (the "Offering
Period") shall be of twelve (12) months duration commencing on the first
business day of March and September of each year and ending on the last business
day of February and August, respectively, hereafter. The first Offering Period
shall commence on September 2, 1991. The first day of each Offering Period is
referred to as the "Offering Date". Each Offering Period shall consist of two
(2) six-month purchase periods (individually, a "Purchase Period"), during which
payroll deductions of the participant are accumulated under this Plan. Each
such six-month Purchase Period shall commence on the first business day of
March and September of an Offering Period and shall end on the last business day
of the following August and February, respectively. The last business day of
each Purchase Period is hereinafter referred to as the Purchase Date. The Board
of Directors of the Company shall have the power to change the duration of
Offering Periods or Purchase Periods without stockholder approval if such change
is announced at least fifteen (15) days prior to the scheduled beginning of the
first Offering Period or Purchase Period, as the case may be, to be affected.

6. PARTICIPATION IN THE PLAN. Eligible employees may become participants
in an Offering Period under the Plan on the first Offering Date after satisfying
the eligibility requirements by delivering to the Company's or Subsidiary's
(whichever employs such employee) payroll department (the "payroll department")
not later than the 15th day of the month before such Offering Date unless a
later time for filing the subscription agreement is set by the Board for all
eligible Employees with respect to a given Offering Period a subscription
agreement authorizing payroll deductions. An eligible employee who does not
deliver a subscription agreement to the payroll department by such date after
becoming eligible to participate in such Offering Period under the Plan shall
not participate in that Offering Period or any subsequent Offering Period unless
such employee enrolls in the Plan by filing the subscription agreement with the
payroll department not later than the 15th day of the month preceding a
subsequent Offering Date. Once an employee becomes a participant in an Offering
Period, such employee will automatically participate in the Offering Period
commencing immediately following the last day of the prior Offering Period
unless the employee withdraws from the Plan or terminates further participation
in the Offering Period as set forth in Section 11 below. Such participant is
not required to file any additional subscription agreements in order to continue
participation in the Plan. Any participant whose option expires and who has not
withdrawn from the Plan pursuant to Section 11 below will automatically be re-
enrolled in the Plan and granted a new option on the Offering Date of the next
Offering Period. A participant in the Plan may participate in only one Offering
Period at any time.

7. GRANT OF OPTION ON ENROLLMENT. Enrollment by an eligible employee in
the Plan with respect to an Offering Period will constitute the grant (as of the
Offering Date) by the Company to such employee of an option to purchase on each
Purchase Date up to that number of shares of Common Stock of the Company
determined by dividing the amount accumulated in such employee's payroll
deduction account during such Purchase Period by the lower of (i) eighty-five
percent (85%) of the fair market value of a share of the Company's Common Stock
on the Offering Date (the "Entry Price") or (ii) eighty-five percent (85%) of
the fair market value of a share of the company's Common Stock on the Purchase
Date, provided, however, that the number of shares of the Company's Common Stock
subject to any option granted pursuant to this Plan shall not exceed the lesser
of (a) the maximum number of shares set by the Board pursuant to Section 10(c)
below with respect to all Purchase Periods within the applicable Offering Period
or Purchase Period, or (b) 200% of the number of shares determined by using 85%
of the fair market value of a share of the Company's Common Stock on the
Offering Date as the denominator. Fair market value of a share of the Company's
Common Stock shall be determined as provided in Section 8 hereof.

8. PURCHASE PRICE. The purchase price per share at which a share of Common
Stock will be sold in any Offering Period shall be eighty-five percent (85%) of
the lesser of:

(a) the fair market value on the Offering Date or

(b) the fair market value on the Purchase Date.

For purposes of the Plan, the term "fair market value" on a given date shall
mean the closing bid from the previous day's trading of a share of the Company's
Common Stock as reported on the NASDAQ National Market System.

<PAGE>

9. PAYMENT OF PURCHASE PRICE; CHANGES IN PAYROLL DEDUCTIONS; ISSUANCE OF
SHARES.

(a) The purchase price of the shares is accumulated by regular payroll
deductions made during each Purchase Period. The deductions are made as a
percentage of the employee's compensation in one percent (1%) increments not
less than two percent (2%) nor greater than ten percent (10%). Compensation
shall mean all W-2 compensation, including, but not limited to base salary,
wages, commissions, overtime, shift premiums and bonuses, plus draws against
commissions; provided, however, that for purposes of determining a
participant's compensation, any election by such participant to reduce his
or her regular cash remuneration under Sections 125 or 401(k) of the Code
shall be treated as if the participant did not make such election. Payroll
deductions shall commence with the first pay period following the Offering
Date and shall continue to the end of the Offering Period unless sooner
altered or terminated as provided in the Plan.

(b) A participant may lower (but not increase) the rate of payroll
deductions during a Purchase Period by filing with the payroll department a
new authorization for payroll deductions, in which case the new rate shall
become effective for the next payroll period commencing more than 15 days
after the payroll department's receipt of the authorization and shall
continue for the remainder of the Offering Period unless changed as
described below. Such change in the rate of payroll deductions may be made
at any time during an Offering Period, but not more than one change may be
made effective during any Purchase Period. A participant may increase or
lower the rate of payroll deductions for any subsequent Purchase Period by
filing with the payroll department a new authorization for payroll
deductions not later than the 15th day of the month before the beginning of
such Purchase Period.

(c) All payroll deductions made for a participant are credited to his
or her account under the Plan and are deposited with the general funds of
the Company; no interest accrues on the payroll deductions. All payroll
deductions received or held by the Company may be used by the Company for
any corporate purpose, and the Company shall not be obligated to segregate
such payroll deductions.

(d) On each Purchase Date, as long as the Plan remains in effect and
provided that the participant has not submitted a signed and completed
withdrawal form before that date which notifies the Company that the
participant wishes to withdraw from that Offering Period under the Plan and
have all payroll deductions accumulated in the account maintained on behalf
of the participant as of that date returned to the participant, the Company
shall apply the funds then in the participant's account to the purchase of
whole shares of Common Stock reserved under the option granted to such
participant with respect to the Offering Period to the extent that such
option is exercisable on the Purchase Date. The purchase price per share
shall be as specified in Section 8 of the Plan. Any cash remaining in a
participant's account after such purchase of shares shall be refunded to
such participant in cash; provided, however, that any amount remaining in
participant's account on a Purchase Date which is less than the amount
necessary to purchase a full share of Common Stock of the Company shall be
carried forward, without interest, into the next Purchase Period or Offering
Period, as the case may be. In the event that the Plan has been
oversubscribed, all funds not used to purchase shares on the Purchase Date
shall be returned to the participant. No Common Stock shall be purchased on
a Purchase Date on behalf of any employee whose participation in the Plan
has terminated prior to such Purchase Date.

(e) As promptly as practicable after the Purchase Date, the Company
shall arrange the delivery to each participant, as appropriate, of a
certificate representing the shares purchased upon exercise of his option;
provided that the Board may deliver certificates to a broker or brokers that
hold such certificates in street name for the benefit of each such
participant.

(f) During a participant's lifetime, such participant's option to
purchase hares hereunder is exercisable only by him or her. The
participant will have no interest or voting right in shares covered by his
or her option until such option has been exercised. Shares to be delivered
to a participant under the Plan will be registered in the name of the
participant or in the name of the participant and his or her spouse.

<PAGE>

10. LIMITATIONS ON SHARES TO BE PURCHASED.

(a) No employee shall be entitled to purchase stock under the Plan at a
rate which, when aggregated with his or her rights to purchase stock under
all other employee stock purchase plans of the Company or any Subsidiary,
exceeds $25,000 in fair market value, determined as of the Offering Date (or
such other limit as may be imposed by the Code) for each calendar year in
which the employee participates in the Plan.

(b) No more than 200% of the number of shares determined by using 85%
of the fair market value of a share of the Company's Common Stock on the
Offering Date as the denominator may be purchased by a participant on any
single Purchase Date.

(c) No employee shall be entitled to purchase more than the Maximum
Share Amount (as defined below) on any single Purchase Date. Not less than
thirty days prior to the commencement of any Purchase Period, the Board may,
in its sole discretion, set a maximum number of shares which may be
purchased by any employee at any single Purchase Date (hereinafter the
"Maximum Share Amount"). In no event shall the Maximum Share Amount exceed
the amounts permitted under Section 10(b) above. If a new Maximum Share
Amount is set, then all participants must be notified of such Maximum Share
Amount not less than fifteen (15) days prior to the commencement of the next
Purchase Period. Once the Maximum Share Amount is set, it shall continue to
apply with respect to all succeeding Purchase Dates and Purchase Periods
unless revised by the Board as set forth above.

(d) If the number of shares to be purchased on a Purchase Date by all
employees participating in the Plan exceeds the number of shares then
available for issuance under the Plan, the Company shall make a pro rata
allocation of the remaining shares in as uniform a manner as shall be
practicable and as the Board shall determine to be equitable. In such
event, the Company shall give written notice of such reduction of the number
of shares to be purchased under a participant's option to each employee
affected thereby.

(e) Any payroll deductions accumulated in a participant's account which
are not used to purchase stock due to the limitations in this Section 10
shall be returned to the participant as soon as practicable after the end of
the Offering Period.

11. WITHDRAWAL.

(a) Each participant may withdraw from an Offering Period under the
Plan by signing and delivering to the payroll department notice on a form
provided for such purpose. Such withdrawal may be elected at any time at
least fifteen (15) days prior to the end of an Offering Period.

(b) Upon withdrawal from the Plan, the accumulated payroll deductions
shall be returned to the withdrawn employee and his or her interest in the
Plan shall terminate. In the event an employee voluntarily elects to
withdraw from the Plan, he or she may not resume his or her participation in
the Plan during the same Offering Period, but he or she may participate in
any Offering Period under the Plan which commences on a date subsequent to
such withdrawal by filing a new authorization for payroll deductions in the
same manner as set forth above for initial participation in the Plan.
However, if the participant is an "insider" for purposes of Rule 16(b), he
or she shall not be eligible to participate in any Offering Period under the
Plan which commences less than six (6) months from the date of withdrawal
from the Plan.

(c) A participant may participate in the current Purchase Period under
an Offering Period (the "Current Offering Period") and enroll in the
Offering Period commencing after such Purchase Period (the "New Offering
Period") by (i) withdrawing from participating in the Current Offering
Period effective as of the last day of a Purchase Period within that
Offering Period and (ii) enrolling in the New Offering Period. Such
withdrawal and enrollment shall be effected by filing with the payroll
department at least fifteen (15) days prior to the end of a Purchase Period
such form or forms as are provided for such purposes.

<PAGE>

12. TERMINATION OF EMPLOYMENT. Termination of a participant's employment
for any reason, including retirement or death or the failure of a participant to
remain an eligible employee, terminates his or her participation in the Plan
immediately. In such event, the payroll deductions credited to the
participant's account will be returned to him or her or, in the case of his or
her death, to his or her legal representative. For this purpose, an employee
will not be deemed to have terminated employment or failed to remain in the
continuous employ of the Company in the case of sick leave, military leave, or
any other leave of absence approved by the Board of Directors of the Company;
provided that such leave is for a period of not more than ninety (90) days or re
employment upon the expiration of such leave is guaranteed by contract or
statute.

13. RETURN OF PAYROLL DEDUCTIONS. In the event an employee's interest in
the Plan is terminated by withdrawal, termination of employment or otherwise, or
in the event the Plan is terminated by the Board, the Company shall promptly
deliver to the employee all payroll deductions credited to his account. No
interest shall accrue on the payroll deductions of a participant in the Plan.

14. CAPITAL CHANGES. Subject to any required action by the stockholders of
the Company, the number of shares of Common Stock covered by each option under
the Plan which has not yet been exercised and the number of shares of Common
Stock which have been authorized for issuance under the Plan but have not yet
been placed under option (collectively, the "Reserves"), as well as the price
per share of Common Stock covered by each option under the Plan which has not
yet been exercised, shall be proportionately adjusted for any increase or
decrease in the number of issued shares of Common Stock resulting from a stock
split or the payment of a stock dividend (but only on the Common Stock) or any
other increase or decrease in the number of shares of Common Stock effected
without receipt of consideration by the Company; provided, however, that
conversion of any convertible securities of the Company shall not be deemed to
have been "effected without receipt of consideration". Such adjustment shall be
made by the Board, whose determination in that respect shall be final, binding
and conclusive. Except as expressly provided herein, no issue by the Company of
shares of stock of any class, or securities convertible into shares of stock of
any class, shall affect, and no adjustment by reason thereof shall be made with
respect to, the number or price of shares of Common Stock subject to an option.

In the event of the proposed dissolution or liquidation of the Company, the
Offering Period will terminate immediately prior to the consummation of such
proposed action, unless otherwise provided by the Board. The Board may, in the
exercise of its sole discretion in such instances, declare that the options
under the Plan shall terminate as of a date fixed by the Board and give each
participant the right to exercise his or her option as to all of the optioned
stock, including shares which would not otherwise be exercisable. In the event
of a proposed sale of all or substantially all of the assets of the Company, or
the merger of the Company with or into another corporation, each option under
the Plan shall be assumed or an equivalent option shall be substituted by such
successor corporation or a parent or subsidiary of such successor corporation,
unless the Board determines, in the exercise of its sole discretion and in lieu
of such assumption or substitution, that the participant shall have the right to
exercise the option as to all of the optioned stock. If the Board makes an
option exercisable in lieu of assumption or substitution in the event of a
merger or sale of assets, the Board shall notify the participant that the option
shall be fully exercisable for a period of twenty (20) days from the date of
such notice, and the option will terminate upon the expiration of such period.

The Board may, if it so determines in the exercise of its sole discretion,
also make provision for adjusting the Reserves, as well as the price per share
of Common Stock covered by each outstanding option, in the event that the
Company effects one or more reorganizations, recapitalizations, rights offerings
or other increases or reductions of shares of its outstanding common Stock, and
in the event of the Company being consolidated with or merged into any other
corporation.

15. NONASSIGNABILITY. Neither payroll deductions credited to a
participant's account nor any rights with regard to the exercise of an option or
to receive shares under the Plan may be assigned, transferred, pledged or
otherwise disposed of in any way (other than by will, the laws of descent and
distribution or as provided in Section 22 hereof) by the participant. Any such
attempt at assignment, transfer, pledge or other disposition shall be without
effect.

<PAGE>

16. REPORTS. Individual accounts will be maintained for each participant
in the Plan. Each participant shall receive promptly after the end of each
Purchase Period a report of his account setting forth the total payroll
deductions accumulated, the number of shares purchased, the per share price
thereof and the remaining cash balance, if any, carried forward to the next
Purchase Period or Offering Period, as the case may be.

17. NOTICE OF DISPOSITION. Each participant shall notify the Company if
the participant disposes of any of the shares purchased in any Offering Period
pursuant to this Plan if such disposition occurs within two (2) years from the
Offering Date or within twelve (12) months from the Purchase Date on which such
shares were purchased (the "Notice Period"). Unless such participant is
disposing of any of such shares during the Notice Period, such participant shall
keep the certificates representing such shares in his or her name (and not in
the name of a nominee) during the Notice Period. The Company may, at any time
during the Notice Period, place a legend or legends on any certificate
representing shares acquired pursuant to the Plan requesting the Company's
transfer agent to notify the Company of any transfer of the shares. The
obligation of the participant to provide such notice shall continue
notwithstanding the placement of any such legend on certificates.

18. NO RIGHTS TO CONTINUED EMPLOYMENT. Neither this Plan nor the grant of
any option hereunder shall confer any right on any employee to remain in the
employ of the Company or any Subsidiary or restrict the right of the Company or
any Subsidiary to terminate such employee's employment.

19. EQUAL RIGHTS AND PRIVILEGES. All eligible employees shall have equal
rights and privileges with respect to the Plan so that the Plan qualifies as an
"employee stock purchase plan" within the meaning of Section 423 or any
successor provision of the Code and the related regulations. Any provision of
the Plan which is inconsistent with Section 423 or any successor provision of
the Code shall without further act or amendment by the Company or the Board be
reformed to comply with the requirements of Section 423. This Section 19 shall
take precedence over all other provisions in the Plan.

20. NOTICES. All notices or other communications by a participant to the
Company under or in connection with the Plan shall be deemed to have been duly
given when received in the form specified by the Company at the location, or by
the person, designated by the Company for the receipt thereof.

21. STOCKHOLDER APPROVAL OF AMENDMENTS. Any required approval of the
stockholders of the Company for an amendment shall be solicited at or prior to
the first annual meeting of stockholders held subsequent to the grant of an
option under the Plan as then amended to an officer or director of the Company.
If such stockholder approval is obtained at a duly held stockholders' meeting,
it must be obtained by the affirmative vote of the holders of a majority of the
outstanding shares of the company represented and voting at the meeting, or if
such stockholder approval is obtained by written consent, it must be obtained by
the majority of the outstanding shares of the Company; provided, however, that
approval at a meeting or by written consent may be obtained by a lesser degree
of stockholder approval if the Board determines, in its discretion after
consultation with the Company's legal counsel, that such lesser degree of
stockholder approval will comply with all applicable laws and will not adversely
affect the qualification of the Plan under Section 423 of the Code or Rule 16b-3
promulgated under the Exchange Act ("Rule 16b-3").

22. DESIGNATION OF BENEFICIARY

(a) A participant may file a written designation of a beneficiary who
is to receive any shares and cash, if any, from the participant's account
under the Plan in the event of such participant's death subsequent to the
end of a Purchase Period but prior to delivery to him of such shares and
cash. In addition, a participant may file a written designation of a
beneficiary who is to receive any cash from the participant's account under
the Plan in the event of such participant's death prior to a Purchase Date.

<PAGE>

(b) Such designation of beneficiary may be changed by the participant
at any time by written notice. In the event of the death of a participant
and in the absence of a beneficiary validly designated under the Plan who is
living at the time of such participant's death, the Company shall deliver
such shares or cash to the executor or administrator of the estate of the
participant, or if no such executor or administrator has been appointed (to
the knowledge of the Company), the Company, in its discretion, may deliver
such shares or cash to the spouse or to any one or more dependents or
relatives of the participant, or if no spouse, dependent or relative is
known to the Company, then to such other person as the Company may
designate.

23. CONDITIONS UPON ISSUANCE OF SHARES; LIMITATION ON SALE OF SHARES.
Shares shall not be issued with respect to an option unless the exercise of such
option and the issuance and delivery of such shares pursuant thereto shall
comply with all applicable provisions of law, domestic or foreign, including,
without limitation, the Securities Act of 1933, as amended, the Exchange Act,
the rules and regulations promulgated thereunder, and the requirements of any
stock exchange upon which the shares may then be listed, and shall be further
subject to the approval of counsel for the Company with respect to such
compliance.

24. APPLICABLE LAW. The Plan shall be governed by the substantive laws
(excluding the conflict of laws rules) of the State of Delaware.

25. AMENDMENT OR TERMINATION OF THE PLAN. This Plan shall be effective on
the day after the effective date of the Company's Registration Statement filed
with the Securities Exchange Commission under the Securities Act of 1933, as
amended, with respect to the shares issuable under the Plan (the "Effective
Date"), subject to approval by the stockholders of the Company within twelve
(12) months after the date the Plan is adopted by the Board of Directors of the
company and the Plan shall continue until the earlier to occur of termination by
the Board, issuance of all of the shares of Common Stock reserved for issuance
under the Plan, or ten (10) years from the adoption of the Plan by the Board.
The Board of Directors of the Company may at any time amend or terminate the
Plan, except that any such termination cannot affect options previously granted
under the Plan, nor may any amendment make any change in an option previously
granted which would adversely affect the right of any participant, nor may any
amendment be made without approval of the stockholders of the Company obtained
in accordance with Section 21 hereof within 12 months of the adoption of such
amendment (or earlier if required by Section 21) if such amendment would:

(a) Increase the number of shares that may be issued under the Plan;

(b) Change the designation of the employees (or class of employees)
eligible for participation in the Plan or;

(c) Constitute an amendment for which stockholder approval is required
in order to comply with Rule 16b-3 (or any successor rule) of the Exchange
Act.

<PAGE>

EXHIBIT 5.01
(INCLUDES EXHIBIT 23.01)

Opinion of General Counsel regarding legality of the securities being issued

23.01 Consent of General Counsel (included in Exhibit 5.01)

<PAGE>

[ELECTRONIC ARTS LETTERHEAD]

August 10, 1995

Securities and Exchange Commission
Division of Corporation Finance
450 5th Street, N.W.
Washington, D.C. 20549

Re: ELECTRONIC ARTS INC. ("EA")
REGISTRATION STATEMENT ON FORM S-8

Ladies/Gentlemen:

I am an attorney licensed to practice law in the states of California and
New York, and I am Vice President, General Counsel and Secretary of EA. I have
examined EA's Registration Statement on Form S-8 (the "REGISTRATION STATEMENT")
to be filed by EA on or about August 11, 1995 in connection with the
registration under the Securities Act of 1933, as amended, of an additional
1,850,000 shares of Common Stock of Electronic Arts Inc., $0.01 par value per
share ("Common Stock"), that may be sold by EA upon the exercise of options
granted or to be granted by EA to officers, employees, independent contractors,
consultants and advisors pursuant to EA's 1991 Stock Option Plan (the "1991
PLAN") and an additional 150,000 shares of Common Stock that may be sold by EA
to eligible employees of EA and its subsidiaries pursuant to EA's Employee Stock
Purchase Plan (the "PURCHASE PLAN").

As General Counsel for EA, I have examined the proceedings taken by EA in
connection with the amendment of the 1991 Plan and the Purchase Plan to add the
shares being registered hereby.

It is my opinion that the additional 1,850,000 shares of Common Stock that may
be issued and sold by EA pursuant to the 1991 Plan and the additional 150,000
shares of Common Stock that may be issued and sold by EA pursuant to the
Purchase Plan, when issued and sold in the manner referred to in the applicable
Prospectus associated with the Registration Statement and the 1991 Plan or the
Purchase Plan, as applicable, will be legally issued, fully paid and
nonassessable.

I consent to the use of this opinion as an exhibit to the Registration Statement
and further consent to all references to this opinion, if any, in the
Registration Statement and amendments thereto.

Very truly yours,
ELECTRONIC ARTS INC.

/s/ Ruth A. Kennedy

Ruth A. Kennedy
Vice President, General Counsel and Secretary

<PAGE>

EXHIBIT 23.02

CONSENT OF KPMG PEAT MARWICK, LLP AS INDEPENDENT ACCOUNTANTS

<PAGE>

CONSENT OF INDEPENDENT AUDITORS

The Board of Directors
Electronic Arts, Inc.:

We consent to the use of our reports incorporated herein by reference and to the
reference to our firm under the heading "Experts" in the registration statement.

KPMG Peat Marwick LLP

Palo Alto, California
August 10, 1995