<PAGE> 1
As filed with the Securities and Exchange Commission
on August 3, 1998
Registration No. 333__________
Form S-8
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
ELECTRONIC ARTS INC.
Delaware 94-2838567
(State of Incorporation) (IRS employer identification no.)
1450 Fashion Island Boulevard
San Mateo, California 94404
(Address of principal executive offices)
1998 DIRECTORS' STOCK OPTION PLAN
(Full title of the Plan)
RUTH A. KENNEDY
Senior Vice President, General Counsel and Secretary
Electronic Arts Inc.
1450 Fashion Island Boulevard
San Mateo, California 94404
(650) 571-7171
(Name, address and telephone number of agent for service)
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------------------------------
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
- -------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Common Stock 135,000 (1) $49.125 (2) $6,631,875 (2) $2,010
($0.01 par value)
- -------------------------------------------------------------------------------------------------------------------------
</TABLE>
The Index to Exhibits appears on sequentially numbered page 6.
(1) Shares available for issuance under the 1998 Directors' Stock
Option Plan.
(2) Calculated solely for the purposes of determining the amount of
the Registration Fee pursuant to Rule 457(c) on the basis of the average of the
high and low trading prices of Registrant's common stock on July 27, 1998.
<PAGE> 2
ITEM 3. INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents filed by Electronic Arts Inc. (the
"REGISTRANT") with the Securities and Exchange Commission (the "COMMISSION") are
incorporated herein by reference:
(a) The Registrants Annual Report on Form 10-K for Registrant's fiscal
year ended March 31, 1998, which is Registrant's latest annual report filed
pursuant to Section 13(a) or 15(d) of the Exchange Act of 1934, as amended (the
"EXCHANGE ACT")
(c) The description of the Registrant's Common Stock contained in the
Registrant's Registration Statement on Form 8-A filed with the Commission under
Section 12 of the Exchange Act, including any amendment or report filed for the
purpose of updating such description.
All documents subsequently filed by the Registrant pursuant to Sections
13(a), 13(c), 14 and 15(d) of the Exchange Act, prior to the filing of a
post-effective amendment hereto which indicates that all securities offered
hereby have been sold or which deregisters all securities then remaining unsold,
shall be deemed to be incorporated by reference herein and to be part hereof
from the date of filing of such documents.
ITEM. 4.
Not Applicable
ITEM 5. EXPERTS.
The validity of the issuance of the shares of Common Stock offered
hereby will be passed upon for the Registrant by Ruth A. Kennedy, Senior Vice
President, General Counsel and Secretary of the Registrant.
ITEM 6. INDEMNIFICATION OF OFFICERS AND DIRECTORS.
The provisions of Section 145 of the Delaware general corporation Law
and Section 6 of the Registrant's Bylaws provide for indemnification for
expenses, judgments, fines, settlements and other amounts actually and
reasonably incurred in connection with any proceeding arising by reason of the
fact that any person is or was a director, officer or employee of the
Registrant. this indemnification may be sufficiently broad to permit
indemnification of the Registrant's officers and directors for liabilities
arising under the Securities Act of 1933, as amended. In addition, Article 7 of
the Registrant's Certificate of Incorporation provides that the Registrant's
directors shall not be personally liable to the Registrant or its stockholders
for monetary damages for breach of fiduciary duty as a director except for
liability (I) for any breach of the director's duty of loyalty to the Registrant
or its stockholders, (ii) for acts or omissions not in good faith or which
involve intentional misconduct or a knowing violation of law (iii) under Section
174 of the Delaware General Corporation Law or (iv) for any transactions for
which the director derived an improper personal benefit. Article 7 of the
Registrant's Certificate of Incorporation further provides that if any amendment
to the Delaware General Corporation Law further eliminates or limits the
liability of a director of a corporation incorporated in Delaware, the liability
of the Registrant's directors shall be eliminated to the fullest extent then
permissible under Delaware law. The Registrant has entered into indemnity
agreements with each of its current directors to give such directors additional
contractual assurances regarding the scope of indemnification and liability
limitation set forth in the Delaware General Corporation Law and the
Registrant's Certificate of Incorporation and Bylaws. The Registrant maintains
an insurance policy against claims regarding errors or omissions of any of
Registrant's directors or executive officers while acting within the scope of
their duties to the Registrant.
ITEM. 7.
Not Applicable
ITEM 8. EXHIBITS
4.01 Registrant's 1998 Directors' Stock Option Plan, (the "PLAN") and
related document
4.02 Registrant's Certificate of Incorporation (incorporated by reference to
Exhibit 3.01 of Registrant's Current Report on Form 8-K filed with the
Commission on October 16, 1991 (the "FORM 8-K")).
4.03 Registrant's Certificate of Amendment to Certificate of Incorporation
(incorporated by reference to Exhibit 4.01 to Registrant's Registration
Statement on Form S-8 filed with the Commission on December 1, 1992
(File No. 33-55212).
4.04 Registrant's Bylaws (incorporated by reference to Exhibit 3.02 of the
Form 8-K).
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 Auditors
24.01 Power of Attorney (see page 3)
2
<PAGE> 3
ITEM 9. UNDERTAKINGS
The undersigned Registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being
made, a post-effective amendment to this Registration Statement:
(i) To include any prospectus required by Section
10(a)(3) of the Securities Act of 1933;
(ii) To reflect in the prospectus any facts or events
arising after the effective date of this Registration Statement (or the
most recent post-effective amendment thereof) which, individually or in
aggregate, represent a fundamental change in the information set forth
in this Registration Statement;
(iii) To include any material information with respect to
the plan of distribution not previously disclosed in this Registration
Statement or any material change to such information set forth in this
Registration Statement.
provided, however, that paragraphs (1)(i) and (1)(ii) do not apply if the
information required to be included in a post-effective amendment by those
paragraphs is contained in periodic reports filed with or furnished to the
Commission by the Registrant pursuant to Section 13 or 15(d) of the Securities
Act of 1934 that are incorporated by reference in this Registration Statement.
(2) That, for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment shall be deemed to be
a new registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof;
(3) To remove from registration by means of a post-effective amendment
any of the securities being registered which remain unsold at the termination of
the offering.
The undersigned Registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, each filing of the
Registrant's annual report pursuant to Section 13(a) or 15(d) of the Securities
Exchange Act of 1934 that is incorporated by reference in this Registration
Statement shall be deemed to be a new registration statement relating to the
securities offered herein, and the offering of such securities at that time
shall be deemed to be the initial bona fide offering thereof.
Insofar as indemnification for liabilities arising under the Securities
Act of 1933 may be permitted to directors, officers and controlling persons of
the Registrant pursuant to the provisions of Item 6 of this Registration
Statement, or otherwise, the Registrant has been advised that in the opinion of
the Securities and Exchange Commission such indemnification is against public
policy as expressed in the Act and is, therefore, unenforceable. In the event
that a claim for indemnification against such liabilities (other than by payment
by the Registrant of expenses incurred or paid by a director, officer or
controlling person of the Registrant in the successful defense of any action,
suit or proceeding ) is asserted by such director, officer or controlling person
in matter has been settled by controlling precedent, submit to a court of
appropriate jurisdiction the question whether such indemnification by it is
against public policy as expressed in the Act and will be governed by the final
adjudication of such issue.
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 of 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 to be
signed on its
3
<PAGE> 4
behalf by the undersigned, thereunto duly authorized, in the city of San Mateo,
State of California, on this 30th day of July 1998.
ELECTRONIC ARTS INC.
By: /s/ Ruth A. Kennedy
----------------------------------------------
Ruth A. Kennedy, Esq.
Sr. Vice President, General Counsel and Secretary
4
<PAGE> 5
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:
<TABLE>
<CAPTION>
Name Title Date
- ---- ----- ----
<S> <C> <C>
Chief Executive Officer:
/s/ Lawrence F. Probst III_
- -------------------------------------------
Lawrence F. Probst III Chairman, Board of July 30, 1998
Directors and
Chief Executive Officer
Principal Financial Officer:
/s/ E. Stanton McKee
- -------------------------------------------
E. Stanton McKee, Jr. Exec. Vice President, July 30, 1998
Chief Financial and
Administrative Officer
Principal Accounting Officer:
/s/ David L. Carbone
- -------------------------------------------
David L. Carbone Vice President, July 30, 1998
Assistant Secretary
Directors:
/s/ M. Richard Asher Director July 30, 1998
- -------------------------------------------
M. Richard Asher
/s/ William J. Byron Director July 30, 1998
- -------------------------------------------
William J. Byron
/s/ Daniel H. Case III Director July 30, 1998
- -------------------------------------------
Daniel H. Case III
/s/ Gary M. Kusin Director July 30, 1998
- -------------------------------------------
Gary M. Kusin
/s/ Timothy J. Mott Director July 30, 1998
- -------------------------------------------
Timothy J. Mott
</TABLE>
5
<PAGE> 6
INDEX TO EXHIBITS
<TABLE>
<CAPTION>
Exhibit
Number Description
<S> <C>
4.01 Registrant's 1998 Directors' Stock Option Plan, (the "PLAN") and
related document
4.02 Registrant's Certificate of Incorporation (incorporated by reference to
Exhibit 3.01 of Registrant's Current Report on Form 8-K filed with the
Commission on October 16, 1991 (the "FORM 8-K")).
4.03 Registrant's Certificate of Amendment to Certificate of Incorporation
(incorporated by reference to Exhibit 4.01 to Registrant's Registration
Statement on Form S-8 filed with the Commission on December 1, 1992
(File No. 33-55212).
4.04 Registrant's Bylaws (incorporated by reference to Exhibit 3.02 of the
Form 8-K).
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 Auditors
24.01 Power of Attorney (see page 3)
</TABLE>
6
<PAGE> 1
EXHIBIT 4.01
REGISTRANT'S 1998 DIRECTORS' STOCK OPTION PLAN
<PAGE> 2
EXHIBIT 4.01
ELECTRONIC ARTS INC.
1998 DIRECTORS' STOCK OPTION PLAN
AS ADOPTED BY THE BOARD OF DIRECTORS ON
MAY 13, 1998 AS APPROVED BY THE
STOCKHOLDERS ON JULY 30, 1998
1. PURPOSE. This 1998 Directors' Stock Option Plan ("Plan") is
established to provide equity incentives for members of the Board of Directors
of Electronic Arts Inc., a Delaware corporation (the "Company") who are not
employees of the Company, to promote the financial success and progress of the
Company by granting such persons options ("Options") to purchase shares of the
Common Stock ("Shares") of the Company, and to provide the opportunity for such
persons to receive Shares of common stock of the Company in lieu of cash
compensation.
2. ADOPTION AND APPROVAL. This Plan shall become effective on the date
it is approved by the affirmative vote or written consent of the holders of a
majority of the outstanding shares of the Company.
3. NUMBER OF SHARES. The maximum number of Shares that may be issued
pursuant to Options granted under this Plan shall be 135,000 Shares, subject to
adjustment as provided in Section 11 below. If any Option is terminated for any
reason without being exercised in whole or in part, the Shares thereby released
from such Option shall continue to be available 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. ADMINISTRATION. This Plan shall be administered by the Board or by a
Committee of not less than three members of the Board appointed to administer
this Plan (as used herein, the term "Board" shall mean either such Committee or
the Board if no Committee has been established). The interpretation by the Board
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 having an interest
in any Option or any Shares purchased pursuant to an Option.
5. ELIGIBILITY AND AWARD FORMULA. Options may be granted only to such
directors of the Company who are not employees of the Company ("Optionees") in
accordance with the following formula:
a. Upon initial election or appointment to the Board of
Directors, each Optionee shall be granted an option to purchase 25,000 shares of
the Company's common stock on the date of election or appointment.
b. Upon re-election to the Board of Directors at the annual
meeting of stockholders of the Company, each Optionee shall be granted an option
to purchase 8,000 shares of the Company's common stock on the date of
re-election; provided, however, that any such Optionee who received such
Optionee's initial grant pursuant to (a) above since the last annual meeting of
stockholders shall receive a prorated annual grant to purchase a number of
shares determined as set forth above and multiplied by a fraction whose
numerator is the number of calendar months or portions thereof that the director
has served since the date of the initial grant and whose denominator is twelve.
The provisions of this Section 5 shall not be amended more than once every six
months, other than to comport with changes in the Internal Revenue Code of 1986,
as amended (the "Code") or the rules thereunder.
6. TERMS AND CONDITIONS OF OPTIONS. The Option shall be subject to the
following terms and conditions:
(a) Form of Option Grant. Each Option granted under this Plan
shall be evidenced by a written Stock Option Grant ("Grant") in such form as the
Board shall from time to time establish, which Grant shall incorporate the
provisions of this Plan by reference and shall comply with and be subject to the
terms and conditions of this Plan.
(b) Exercise Price. The exercise price of any Option shall be
not less than 100% of the fair market value per share of the Company's common
stock on the date the Option is granted. Fair market value shall be the closing
price on the Nasdaq National Market.
(c) Exercise Period. Options shall be exercisable as to two
percent (2%) of the Shares immediately on the date of grant and as to an
additional two percent (2%) of the Shares on the first day of each calendar
month beginning after the date of grant; provided, however, that no Option shall
be exercisable after expiration of ten (10) years from the date the Option is
granted.
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<PAGE> 3
(d) Date of Grant. The date of grant of an Option shall be the
date provided in Section 5 above. The Grant representing the Option shall be
delivered to the Optionee within a reasonable time after the granting of the
Option.
(e) Provision of Information. 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 they are released by
the Company to its stockholders.
7. EXERCISE OF OPTIONS.
(a) Notice. Options may be exercised only by delivery of a
written notice to the Company, in a form approved by the Board, stating the
number of 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, together with
payment 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 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
Optionee making an irrevocable election in writing to reduce cash compensation
in lieu of shares of common stock of the Company as described in Section 9
below; (iv) 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; or (v) by any combination of the foregoing.
(c) Withholding Taxes. Prior to issuance of the Shares upon
exercise of an Option, the 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 limitations:
(i) An Option shall not be exercisable until such
time as the Plan has been approved by the stockholders of the Company in
accordance with Section 3 above.
(ii) An Option shall not be exercisable unless such
exercise is in compliance with the Securities Act of 1933, as amended, and all
applicable state securities laws, as they are in effect on the date of exercise.
(iii) If the Optionee ceases to be a director of the
Company for any reason except death or disability, the 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, but in any event no later than the expiration
date of the Option.
(iv) If the Optionee ceases to be a director of the
Company because of death or disability, the 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, but in
any event no later than the expiration date of the Option.
8. DEFERRAL OF REGULAR CASH COMPENSATION INTO COMMON STOCK OF THE
COMPANY.
Each Optionee may elect to reduce all or part of the cash compensation
otherwise payable for services to be rendered by him as a director (including
the annual retainer and any fees payable for serving on the Board or a Committee
of the Board) and to receive in lieu thereof Shares. Any such election shall be
in writing and must be made before the services are rendered giving rise to such
compensation, and may not be revoked or changed thereafter during the Director's
term. On such election, the cash compensation otherwise payable will be
increased by 10% for purposes of determining the number of Shares to be credited
to such Optionee.
9
<PAGE> 4
If an Optionee so elects to defer, there shall be credited to such
Optionee a number of Shares equal to the amount of the deferral (increased by
10% as described in the preceding sentence) divided by the fair market value as
determined by the closing price on the Nasdaq National Market on the day in
which the compensation would have been paid in the absence of a deferral
election.
9. NONTRANSFERABILITY OF OPTIONS. During the lifetime of the Optionee,
an Option may be exercisable only by the Optionee. No Option may be sold,
pledged, assigned, hypothecated, transferred or disposed of in any manner other
than by will or by the laws of descent and distribution.
10. PRIVILEGES OF STOCK OWNERSHIP. No Optionee shall have any of the
rights of a shareholder with respect to any Shares subject to an Option until
the Option has been validly exercised and the Shares have been issued. No
adjustment shall be made for dividends or distributions or other rights for
which the record date is prior to the date of issuance, except as provided in
Section 11 below.
11. 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 or similar change in the capital
structure 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 or stockholders of the Company; provided, however, that no
certificate or scrip representing fractional shares shall be issued upon
exercise of any Option and any resulting fractions of a share shall be ignored.
12. NO OBLIGATION TO EMPLOY. Nothing in this Plan or in any Option
granted under this Plan shall confer on any Optionee any right to continue as a
Director.
13. COMPLIANCE WITH LAWS. The grant of Options and the issuance of
Shares upon exercise of any Options shall be subject to compliance with all
applicable requirements of law, including without limitation compliance with the
Securities Act of 1933, as amended, any required approval by the Commissioner of
Corporations of the State of Delaware, compliance with all applicable state
securities laws and compliance with the requirements of any stock exchange on
which the Shares may be listed.
14. ACCELERATION OF EXERCISABILITY ON CHANGE IN CONTROL. Upon a Change
in Control (as defined below) of the Company, all options theretofore granted
and not previously exercisable shall become fully exercisable to the same extent
and in the same manner as if they had become exercisable by passage of time in
accordance with the provisions of the Plan relating to periods of exercisability
and to termination of employment. As used in this section, a Change in Control
of the Company means (i) a dissolution or liquidation of the Company, (ii) a
merger or consolidation whereby the Company becomes a subsidiary of another
corporation or, 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), (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 424(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).
15. AMENDMENT OR TERMINATION OF PLAN. Subject to the limitations set
forth in Section 6 above, the Board may at any time terminate or amend this
Plan; provided, however, that the Board shall not, without the approval of the
stockholders of the Company, increase the total number of Shares available under
this Plan (except by operation of the provisions of Sections 3 and 11 above) or
change the class of persons eligible to receive Options. In any case, no
amendment of this Plan may adversely affect any then outstanding Options or any
unexercised portions thereof without the written consent of the Optionee.
16. EFFECTIVE PERIOD OF PLAN. Options may be granted pursuant to this
Plan from time to time from the date this Plan is approved by the stockholders
of the Company but no later than July 30, 2008.
10
<PAGE> 5
ELECTRONIC ARTS, INC.
1998 DIRECTORS NONQUALIFIED STOCK OPTION GRANT
Optionee:
Address: c/o Electronic Arts, 1450 Fashion Island Blvd., San Mateo, CA 94404
Number of Option Shares:
Exercise Price per Share: $
Date of Grant:
Expiration Date:
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 1998 Directors Stock Option Plan, (the "Plan"), the provisions
of which are incorporated herein by this reference.
2. Exercise Period of Option. Subject to the terms and conditions of
the Plan and this Grant, this Option shall become exercisable as to two percent
(2%) of the Shares immediately on the date of grant set forth above (the "Date
of Grant") and as to an additional two percent (2%) of the Shares on the first
day of each calendar month beginning after the Date of Grant.
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.
4. Termination of Option.
(a) Except as provided in this Section, this Option shall
terminate in whole if Optionee ceases to be a member (a "Board Member") of the
Board of Directors of the Company or any Parent, Subsidiary or Affiliate of the
Company and may not be exercised to the extent terminated. If the Optionee
ceases to be a Board Member 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 a Board Member (the "Termination Date"),
may be exercised by the Optionee within 90 days after the Termination Date, but
in no event later than the Expiration Date.
(b) If the Optionee ceases to be a Board Member 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 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 of Directors or the committee thereof
that administers the Plan, 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.
<PAGE> 6
(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; (iii) by tender
of a full-recourse promissory note in such form as the Board may approve at the
time the Option is granted; or (iv) by any combination of the foregoing.
(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. If Optionee
is an Insider subject, at the time of exercise of this Option, to Section 16(b)
of the Securities Exchange Act of 1934, as amended, the Optionee may provide for
payment of withholding taxes upon exercise of the Option by requesting that the
Company retain Shares with a Fair Market Value equal to the minimum amount of
taxes required to be withheld, all as set forth in Section 8(c) of the Plan. In
such case, the Company shall issue the net number of Shares to the Optionee by
deducting the Shares retained from the Shares exercised.
(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
of this Option 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 in an amount equal to the excess, if any, of the fair market
value of the Shares on the date of exercise over the Exercise Price for those
Shares. Optionee represents that Optionee has consulted any tax consultant(s)
Optionee deems advisable in connection with the purchase of the Shares.
(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:
---------------------------------------
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<PAGE> 7
ACCEPTANCE
Optionee hereby acknowledges receipt of a copy of the Plan and 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
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<PAGE> 8
ELECTRONIC ARTS INC.
NON-REVOCABLE NOTICE OF ELECTION OF DEFERRAL
UNDER THE 1998 DIRECTORS' STOCK OPTION PLAN
Service Year Of Deferral: From AUGUST, 1998 THROUGH JULY, 1999
I. ________________________________, a director (the "Director") of the
Board of Directors of Electronic Arts Inc. (the "Company"), hereby
elects to receive shares of Common Stock of the Company, (the "Shares")
in lieu of cash compensation pursuant to the 1998 Directors' Stock
Option Plan (the "Plan") effective July 30, 1998. The Director
acknowledges that this election is irrevocable for the service year.
II. Designation of cash compensation to use for purchasing the Shares:
Formula: [Compensation x 110% / Common Stock FMV on date
of service]
Dollar Amount: $________________
or
Percentage of Director's yearly fees: ________________%
Source of fees (check all that apply):
Annual Retainer: ______
Committee Meetings ______
III. Certificate registration and mailing instructions:
--------------------------------------------------------------
--------------------------------------------------------------
--------------------------------------------------------------
IV. The Director hereby acknowledges that:
- The Shares will be issued under the Plan quarterly and
delivered in certificate form within a reasonable time and at
such place as the Director requests. Any amount remaining from
the Directors' compensation that is insufficient to purchase a
full Share shall be carried forward, without interest, to the
next quarterly Shares purchase.
- The Shares will be issued 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 issue.
- In connection with any registration of the Company's
securities, upon the request of the Company or the
underwriters managing any public offering of the Company's
securities, the Director will not sell or otherwise dispose of
any Shares without the prior written consent of the Company or
such underwriters, as the case may be, for a period of time
(not to exceed 180 days) from the effective date of such
registration as the Company or the underwriters may specify
for employee stockholders generally.
- The Shares will have restricted legends placed upon the
Certificate pursuant to Rule 144 and Section 16(b)(3). The
Company may issue appropriate "stop transfer" instructions to
its transfer agent to ensure compliance with the restrictions
on transfer.
- Copies of the Plan and Prospectus are available upon request
from the Stock Administration department.
- The Director understands that the Director may suffer adverse
tax consequences as a result of the Director's purchase or
disposition of the Shares. The Director represents that the
Director has consulted with any tax consultant(s) the Director
deems advisable in connection with the purchase or disposition
of the Shares and that the Director is not relying on the
Company for any tax advice.
- -------------------------------- --------------------------------
Signature of Director Ruth A. Kennedy, Secretary
Date Date
---------------------------- ----------------------------
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<PAGE> 9
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 1998 Directors' 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.
6. Delivery of Payment. Optionee (or Optionee's broker acting as agent)
herewith delivers to the Company the aggregate purchase price of the Option
Shares that Optionee has elected to purchase, in cash (by check payable to
Electronic Arts Inc.) in the amount of $_____________ , receipt of which is
acknowledged by the Company.
Submitted by: Accepted by:
OPTIONEE: ELECTRONIC ARTS INC.
-------------------------------
(Print Name)
By:
- ------------------------------- -------------------------------
(Signature)
Its: Senior Vice President,
General Counsel
Dated: Dated:
------------- -------------
15
<PAGE> 10
ELECTRONIC ARTS
1998 DIRECTORS' STOCK OPTION PLAN
JULY 30, 1998
135,000 SHARES
COMMON STOCK, $.01 PAR VALUE
Electronic Arts Inc., a Delaware corporation (the "Company"), is
offering an aggregate of 135,000 shares of its authorized but unissued Common
Stock to members of the Board of Directors of the Company who are not employees
of the Company (the "Directors") pursuant to the terms and conditions of the
Company's 1998 Directors' Stock Option Plan, as amended (the "Directors' Plan")
as described herein.
THIS DOCUMENT CONSTITUTES PART OF A PROSPECTUS COVERING
SECURITIES THAT HAVE BEEN REGISTERED UNDER THE SECURITIES ACT
OF 1933, AS AMENDED (THE "1933 ACT").
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY ANY
STATE SECURITIES COMMISSION NOR HAS ANY STATE SECURITIES
COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF THIS
DOCUMENT. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL
OFFENSE.
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<PAGE> 11
INTRODUCTION
This document relates to unexercised options to purchase shares of
Common Stock of the Company granted or to be granted to members of the Board of
Directors of the Company, who are not employees of the Company (provided such
directors render bona fide services not in connection with the offer and sale of
securities in a capital raising transaction) under the Directors' Plan. A
registration statement with respect to such shares of Common Stock (the
"Registration Statement") has been filed with the Securities and Exchange
Commission (the "SEC").
Additional information about the Directors' Plan and the administrators
can be obtained by contacting the Stock Administration Department, (650)
513-7405. The address of the corporation is 1450 Fashion Island Boulevard, San
Mateo, California 94404.
QUESTIONS AND ANSWERS ABOUT THE OPTIONS
1. WHAT IS THE HISTORY OF THE DIRECTORS' PLAN?
The Directors' Plan was adopted by the Company's Board of Directors on
May 13, 1998 and was approved by the Company's stockholders on July 30,1998.
2. WHAT IS THE PURPOSE OF THE DIRECTORS' PLAN?
The Directors' Plan is established to provide equity incentives for
members of the Board of Directors who are not employees of the Company, to
promote the financial success and progress of the Company by granting such
persons options ("Options") to purchase shares of the Common Stock ("Shares") of
the Company, and to provide the opportunity for such persons to receive Shares
in lieu of cash compensation
3. WHO IS ELIGIBLE TO PARTICIPATE?
Members of the Board of Directors of the Company who are not employees
of the Company (provided such directors render bona fide services not in
connection with the offer and sale of securities in a capital-raising
transaction) may receive options under the Directors' Plan.
4. WHAT KIND OF OPTIONS ARE THERE?
The Company can grant only "Nonqualified Stock Options" or "NQSO's"
under the Directors' Plan. Under NQSO's, the director is required to recognize
ordinary income at the time of exercise for the difference between the exercise
price and the fair market value.
5. CAN A DIRECTOR HOLD MORE THAN ONE OPTION?
Yes.
6. IS THERE A LIMIT TO THE NUMBER OR SIZE OF OPTIONS A DIRECTOR CAN GET?
Options under the Directors' Plan are granted in accordance with the
following formula. Directors shall be granted an option for 25,000 shares upon
election to the Board of Directors. Upon re-election to the Board of Directors,
each Director shall be granted an option to purchase 8,000 shares of the
Company's common stock on the date of re-election, subject to proration if the
Director's initial grant was granted since the last annual meeting of
stockholders.
7. HOW CAN DIRECTORS RECEIVE SHARES INSTEAD OF CASH COMPENSATION?
Directors may elect to receive all or part of their annual retainer
and/or meeting fees in stock. In order to do so, the Directors must make an
irrevocable election prior to rendering services for the current year. In
exchange for forgoing cash in lieu of stock, the amount of compensation given in
stock shall be increased by 10%.
8. WHEN CAN DIRECTORS EXERCISE OPTIONS?
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<PAGE> 12
Options granted under the Directors' Plan typically become exercisable
at the rate of 2% per month beginning the month the director joins the Board.
The exercisability of the options is set forth on the first page of the option
grant or option agreement.
9. HOW LONG DO THE DIRECTORS HAVE TO EXERCISE?
All options must be exercised within ten (10) years after the option
grant date for the Directors' Plan.
10. WHAT DETERMINES THE EXERCISE PRICE?
The exercise price of any Option is determined on the date the Option
is granted. It shall be not less than 100% of the closing price of the Company's
Common Stock on the NASDAQ National Market System on the date of grant.
11. HOW DOES A DIRECTOR EXERCISE OPTIONS?
To exercise an option, a director must deliver to the Stock
Administration Department of the Company a signed copy of the Stock Option
Exercise Notice and Agreement for the Directors' Plan. Payment for the shares
may be made in cash (by check from the Director or his designated broker) or,
when authorized by the Board at the time of the grant of the option under the
Directors' Plan, shares of fully paid Common Stock of the Company, a full
recourse promissory note or certain other forms of payment. The Company will
then issue a certificate representing the shares purchased.
12. ARE THERE ANY RESTRICTIONS ON THE RESALE OF SHARES A DIRECTOR
PURCHASES?
The Directors' Plan does not impose any restrictions on the resale of
shares of Common Stock purchased. However, directors are, by definition,
affiliates of the Company, and resales are therefore required to be effected in
accordance with Rule 144. Directors are also subject to the short-swing profit
restrictions outlined in Rule 16-3 under the Securities Exchange Act of 1934. In
addition, there may be tax consequences associated with the sale or other
disposition of shares. See "Tax Information," below.
13. CAN DIRECTORS TRANSFER THEIR OPTIONS?
Generally, no. Options may not be transferred by a director except by
will or the laws of descent and distribution.
14. WHAT HAPPENS IF A DIRECTOR RESIGNS FROM THE BOARD OF THE COMPANY?
In the event that a director's relationship with the Company is
terminated for any reason other than death or disability, the director will have
the right to exercise any options, to the extent (and only to the extent) that
the options 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).
In the event that a director's relationship with the Company is
terminated because of death or disability, options granted under the Directors'
Plan may be exercised to the extent (and only to the extent) that they would
have been exercisable on the date of termination, 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.
15. IS THE OPTION AN EMPLOYMENT CONTRACT?
No. The option grant or agreement does not impose any obligation
whatsoever upon the director or the Company to continue a relationship with the
Company. Such relationship is terminable at will by the director or the Company.
16. DO DIRECTOR OPTIONS GET ADJUSTED FOR FUTURE EVENTS?
If the Company issues additional securities to raise more capital, no
adjustments will be made. However, if there is a stock split, stock dividend or
similar change in the Company's capital structure without receipt of
consideration by the Company, the number of shares subject to and the exercise
price of options issued under the Directors' Plan will be adjusted accordingly.
The number of shares reserved under the Directors' Plan will also be
proportionately adjusted.
17. WHAT HAPPENS IN A MERGER OR CONSOLIDATION ?
18
<PAGE> 13
Upon a Change in Control (as defined below) of the Company, all options
theretofore granted and not previously exercisable shall become fully
exercisable to the same extent and in the same manner as if they had become
exercisable by passage of time in accordance with the provisions of the Plan
relating to periods of exercisability and to termination of employment. As used
in this section, a Change in Control of the Company means (i) a dissolution or
liquidation of the Company, (ii) a merger or consolidation whereby the Company
becomes a subsidiary of another corporation or, 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), (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 424(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)..
18. WHAT HAPPENS TO UNEXERCISED, EXPIRED OPTIONS?
If an option granted pursuant to the Directors' Plan is terminated for
any reason without being exercised in whole or in part or if it expires
according to its terms, the shares thereby released from such option will become
available again under the Directors' Plan.
19. HOW ARE THE OPTIONS ADMINISTERED?
The Directors' Plan is administered by the Compensation Committee of
the Board of Directors of the Company (referred to, along with the Board of
Directors, as the "Board" as the context requires), whose address is the same as
that of the Company's principal executive offices. The Board designates the
optionees, exercise prices, exercise periods and dates of grants. The members of
the Compensation Committee receive a yearly fee; no additional compensation is
paid for administering the Directors' Plan. The Company bears all expenses in
connection with administration of the Directors' Plan.
20. WHO IS ON THE COMPENSATION COMMITTEE?
The Compensation Committee currently consists of Mr. Richard Asher, Mr.
William J. Byron and Mr. Daniel H. Case III, each of whom are affiliates of the
Company. Other than as disclosed herein (including disclosures in material
incorporated by reference herein), members of the Compensation Committee that
administer the Directors' Plan have no material relationships with the Company,
its employees or its affiliates.
21. WHO ELECTS THE BOARD AND THE COMPENSATION COMMITTEE?
The members of the full Board are elected each year at the Company's
annual meeting of stockholders and serve until the next annual meeting or until
their successors are elected and qualified. The stockholders may remove members
of the full Board from office by following certain voting procedures set forth
in the Company's by-laws and applicable corporate law. The members of the
Compensation Committee are chosen by the full Board and serve at its discretion.
22. WHAT IF THERE IS A DISPUTE CONCERNING THE DIRECTORS' PLAN?
Subject to the provisions of the Directors' Plan, the Compensation
Committee has the authority to construe and interpret any of the provisions of
the Directors' Plan or any options granted thereunder. Such interpretations are
binding on the Company and on the director. Members of the Board can be
contacted by writing to them at the Company's principal executive offices to the
attention of the Stock Administration department.
23. HOW CAN THE DIRECTORS' PLAN CHANGE?
Subject to the terms and conditions of the Directors' Plan and
applicable law, the Board may modify, extend or renew outstanding options. The
Board may terminate or amend the Directors' Plan in any respect provided it does
not, without stockholder approval, amend the Directors' Plan in any manner that
requires such stockholder approval pursuant to the Code or the Securities
Exchange Act of 1934, as amended (the "1934 Act") (including Rule 16b-3
promulgated thereunder). Currently, this means that the Board must have
stockholder approval among other things, to increase the number of shares
available under the Directors' Plan, to change the class of persons eligible to
receive options or to make a change that materially increases the benefits
accruing to Directors' Plan participants.
19
<PAGE> 14
24. CAN I GET ADDITIONAL INFORMATION ABOUT THE DIRECTORS' PLAN AND OPTIONS
ISSUED UNDER THAT PLAN?
The full text of the Directors' Plan is attached. These questions and
answers are simply a guide to the principal provisions of the Directors' Plan
and are qualified in their entirety by the wording of those documents.
You may also contact the Company's Manager of Stock Administration with
any specific questions you may have regarding the Directors' Plan.
25. CAN DIRECTORS RECEIVE INFORMATION PROVIDED TO STOCKHOLDERS?
Yes, any optionee under the Directors' Plan can obtain material sent by
the Company to its stockholders by contacting the Stock Administration
Department at the Company's headquarters.
~~~~
26. DOES THE COMPANY PROVIDE ANY INDEMNIFICATION TO DIRECTORS?
Yes, the Company indemnifies Directors to the extent permitted by law,
the Articles of Incorporation, and the Company's Bylaws. However, the Company
has been informed by the Securities and Exchange Commission that such
indemnification is against public policy as expressed in the 1933 Act and is
therefore unenforceable.
20
<PAGE> 15
TAX INFORMATION
EACH PARTICIPANT SHOULD CONSULT A TAX ADVISOR CONCERNING FEDERAL (AND ANY STATE
AND LOCAL) INCOME TAX CONSEQUENCES OF PARTICIPATION IN THE DIRECTORS' PLAN. THE
FOLLOWING DISCUSSION DOES NOT PURPORT TO DESCRIBE STATE OR LOCAL INCOME TAX
CONSEQUENCES OR TAX CONSEQUENCES FOR PARTICIPANTS IN COUNTRIES OTHER THAN THE
UNITED STATES.
The Directors' Plan is not qualified under Section 401(a) of the Code.
TAX TREATMENT OF THE OPTIONEE
Tax Consequences. Set forth below is a brief summary as of the date the
form of grant was adopted of some of the federal and California tax consequences
of exercise of the 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 THE OPTION OR DISPOSING
OF THE SHARES.
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.
Disposition of the Shares. For federal tax purposes, if the Shares are
held for more than twelve (12) months but not more than eighteen (18) months
after the date of transfer of the Shares pursuant to the exercise of a
nonqualified stock option, any gain realized on the disposition of the Shares
will be treated as mid-term capital gain. If the Shares are held for more than
eighteen (18) months any such gain will be treated as long-term capital gain.
The maximum mid-term capital gain rate is twenty-eight percent (28%) and the
maximum long-term capital gain rate is twenty percent (20%).
Exercises Within Six Months of a Section 16(b) Purchase. If an optionee
exercises an option more than six months from the date of grant but within six
months from the date of a prior purchase that does not constitute an exempt
purchase under Section 16(b) of the 1934 Act.
TAX TREATMENT OF THE COMPANY
The Company will be entitled to a deduction in connection with the
exercise of an NQSO by a domestic director to the extent that the optionee
recognizes ordinary income.
ERISA
The Company believes that the Directors' Plan is not subject to any of
the provisions of the Employee Retirement Income Security Act of 1974.
AVAILABILITY OF ADDITIONAL INFORMATION
The Company filed the Registration Statement with the SEC with respect
to the shares issuable pursuant to the exercise of options granted under the
Directors' Plan. The Registration Statement incorporates by reference the
following documents:
(a) The Registrant's latest annual report filed pursuant to
Section 13 or 15(d) of the Exchange Act or the latest
prospectus filed pursuant to Rule 424(b) under the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), or the
latest prospectus filed pursuant to Rule 424(b) under the
Securities Act of 1933 (the "1933 Act"), that contains audited
financial statements for the Registrant's latest fiscal year
for which such statements have been filed.
(b) All other reports filed pursuant to Section 13(a) or 15(d) of
the Exchange Act since the end of the fiscal year covered by
the annual report or the prospectus referred to in (a) above.
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<PAGE> 16
(c) The description of the Registrant's Common Stock contained in
the Registrant's Registration Statement filed with the
Commission under Section 12 of the Exchange Act, including any
amendment or report filed for the purpose of updating such
description .
All documents subsequently filed by the Registrant pursuant to Sections
13(a), 13(c), 14 and 15(d) of the Exchange Act, prior to the filing of a
post-effective amendment which indicates that all securities offered hereby have
been sold or which deregisters all securities then remaining unsold, shall be
deemed to be incorporated by reference herein and to be a part hereof from the
date of filing of such documents.
The Company will provide, upon written or oral request and without
charge: (1) a copy of any document incorporated by reference in the Registration
Statement (not including exhibits to such document unless such exhibits are
specifically incorporated by reference into such document); (2) a copy of the
Company's most recent Annual Report to Shareholders (or such alternative
document as Rule 428(b)(2) under the 1933 Act permits); (3) a copy of all
reports, proxy statements and other communications distributed by the Company to
its stockholders generally; and (4) a copy of all documents that constitute a
part of the prospectus required to be delivered to each Plan participant. Please
direct all requests to the Manager of Stock Administration.
22
<PAGE> 1
EXHIBIT 5.01
(INCLUDES EXHIBIT 23.01)
July 30, 1998
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 Senior 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 4, 1998 in connection with the registration
under the Securities Act of 1933, as amended, of 135,000 shares of Common Stock
that may be sold by EA to eligible non-employee Directors of EA pursuant to EA's
1998 Directors' Stock Option Plan (the "Directors' Plan").
As General Counsel for EA, I have examined the proceedings taken by EA in
connection with the Directors' Plan and the shares being registered hereby.
It is my opinion that the 135,000 shares of Common Stock that may be issued and
sold by EA pursuant to the Directors' Plan, when issued and sold in the manner
referred to in the Prospectus associated with the Registration Statement and the
Directors' 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
Senior Vice President,
General Counsel and Secretary
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<PAGE> 1
EXHIBIT 23.2
CONSENT OF INDEPENDENT AUDITORS
The Board of Directors
Electronic Arts Inc.:
We consent to incorporation by reference in the registration statement dated
August 3, 1998, on Form S-8 of Electronic Arts Inc. of our report dated May 1,
1998, relating to the consolidated balance sheets of Electronic Arts Inc. and
subsidiaries as of March 31, 1998 and 1997, and the related consolidated
statements of income, stockholders' equity, and cash flows for each of the years
in the three-year period ended March 31, 1998, and the related schedule, which
reports appear in the March 31, 1998, annual report on Form 10-K of Electronic
Arts Inc.
/s/ KPMG Peat Marwick LLP
KPMG Peat Marwick LLP
Mountain View, California
August 3, 1998
24
