0000912057-95-006375.txt : 19950815
0000912057-95-006375.hdr.sgml : 19950815
ACCESSION NUMBER: 0000912057-95-006375
CONFORMED SUBMISSION TYPE: S-8
PUBLIC DOCUMENT COUNT: 4
FILED AS OF DATE: 19950814
EFFECTIVENESS DATE: 19950902
SROS: NASD
FILER:
COMPANY DATA:
COMPANY CONFORMED NAME: ELECTRONIC ARTS INC
CENTRAL INDEX KEY: 0000712515
STANDARD INDUSTRIAL CLASSIFICATION: SERVICES-PREPACKAGED SOFTWARE [7372]
IRS NUMBER: 942838567
STATE OF INCORPORATION: DE
FISCAL YEAR END: 0331
FILING VALUES:
FORM TYPE: S-8
SEC ACT: 1933 Act
SEC FILE NUMBER: 033-61781
FILM NUMBER: 95562146
BUSINESS ADDRESS:
STREET 1: 1450 FASHION ISLAND BLVD
CITY: SAN MATEO
STATE: CA
ZIP: 94404
BUSINESS PHONE: 4155717171
FORMER COMPANY:
FORMER CONFORMED NAME: ELECTRONIC ARTS
DATE OF NAME CHANGE: 19911211
S-8
1
S-8
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)
CELEBRITY AND ARTIST STOCK OPTION PLAN
(Full title of the Plan)
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 51,250 (1) $18.50 (2) $948,125 (2) $327
($0.01 par value)
Common Stock 948,750 (3) $35.25 (4) $33,443,438 (4) $11,532
($0.01 par value)
--------------------------------------------------------------------------------
The Index to Exhibits appears on sequentially numbered page 6.
(1) Shares subject to outstanding options granted under the
Celebrity and Artist Stock Option Plan.
(2) Calculated pursuant to Rule 457(h)(l) on the basis of the
exercise price of the outstanding options.
(3) Shares available for grant under the Celebrity
and Artist Stock Option Plan.
(4) Estimated pursuant to Rule 457(c) as of August 8, 1995, solely for
the purpose of calculating the amount of the registration fee.
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 Registrant's Annual Report on Form 10-K for Registrant's fiscal
year ended March 31, 1995, 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");
(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
referred to in (a) above.
(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 a part hereof from
the date of filing of such documents.
----------
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 this 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 Fenwick & West, Palo Alto, California,
counsel to 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
2
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 8. EXHIBITS
4.01 Registrant's Celebrity and Artist Stock Option Plan (the "PLAN").
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 By-laws (incorporated by reference to Exhibit 3.02 of
the Form 8-K).
5.01 Opinion of Fenwick & West regarding legality of the securities being
issued.
23.01 Consent of Fenwick & West (included in Exhibit 5.01).
23.02 Consent of KPMG Peat Marwick LLP, Independent Accountants.
24.01 Power of Attorney (see page 4).
----------
ITEM 9. UNDERTAKINGS
The undersigned Registrant hereby undertakes:
(1) To file, during any period in which offers or sales are 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 the 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
Exchange 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.
3
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 connection with the securities being registered herein,
the Registrant will, unless in the opinion of its counsel the 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
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.
[THE REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK]
4
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 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, Esq.
--------------------------------
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
---- ----- ----
CHIEF EXECUTIVE OFFICER:
/s/ LAWRENCE F. PROBST III President, Chairman August 11, 1995
-------------------------- of the Board of Directors
Lawrence F. Probst III and Chief Executive Officer
PRINCIPAL FINANCIAL OFFICER:
/s/ E. STANTON MCKEE, JR. Sr. Vice President, August 11, 1995
------------------------- Chief Financial and
E. Stanton McKee, Jr. Administrative Officer
PRINCIPAL ACCOUNTING OFFICER:
/s/ DAVID L. CARBONE Vice President, August 11, 1995
------------------------- Assistant Secretary
David L. Carbone
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 J. MOTT Director August 11, 1995
-------------------------
Timothy J. Mott
5
INDEX TO EXHIBITS
Exhibit
Number Description
------ -----------
4.01 Registrant's Celebrity and Artist Stock Option Stock
Plan (including form of Nonqualified Stock Option Grant)
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 By-laws (incorporated by reference to Exhibit 3.02 of
the Form 8-K)
5.01 Opinion of Fenwick & West regarding legality of the
securities being issued
23.01 Consent of Fenwick & West (included in Exhibit 5.01)
23.02 Consent of KPMG Peat Marwick LLP as Independent
Accountants
24.01 Power of Attorney (see page 4)
6
EX-4.01
2
EXHIBIT 4.01
ELECTRONIC ARTS INC.
CELEBRITY AND ARTIST STOCK OPTION PLAN
AS ADOPTED JULY 22, 1994
BY THE BOARD OF DIRECTORS
1. PURPOSE. This Celebrity and Artist Stock Option Plan ("PLAN") is
established as a compensatory plan to attract, retain and provide equity
incentives to selected consultants, contractors and advisors 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. Only Nonqualified Stock Options (those
not within the definition of "incentive stock option" set forth in Section 422A
of the Internal Revenue Code of 1986, as amended (the "REVENUE CODE")) may be
granted under this Plan (the "OPTIONS"). 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 1,000,000 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 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. Employees, Directors, Officers, any
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, or other person
whose transactions in the Company's common stock are subject to Section 16(b) of
the Securities Exchange Act of 1934 (the "EXCHANGE ACT") are not eligible to
participate in this Plan. Subject to the foregoing, 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 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.
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.
e. 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.
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.
6. EXERCISE OF OPTIONS.
a. NOTICE. Options may be exercised only by delivery to the Company
of a written stock option 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 waiver of compensation due or accrued to Optionee for
services rendered; (iii) 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 (iv) 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 provide services to 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 ceases to provide services to the Company or
any Parent, Subsidiary or Affiliate of the Company 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 provide services to the Company or any Parent, Subsidiary
or Affiliate of the Company and the effective date on which provision of such
services terminated;
(iv) 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;
(v) An Option shall not be exercisable unless such exercise is
in compliance with the Securities Act of 1933, as amended, 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.
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. 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.
9. NO OBLIGATION TO RETAIN. Nothing in this Plan or any Option granted
under this Plan shall confer on any Optionee any right to continue any
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 such 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,
notwithstanding 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.
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. Upon
the effective date of the Plan, the Board may grant Options pursuant to this
Plan.
13. ADMINISTRATION. This Plan may be administered by the Board or a
committee appointed by the Board (the "COMMITTEE"). If 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 having an interest in any Option or any Shares purchased pursuant to
an Option.
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.
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
Company's common stock on the date of determination.
ELECTRONIC ARTS INC.
CELEBRITY AND ARTIST
NONQUALIFIED STOCK OPTION GRANT
Optionee:
Address:
Number of 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 "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 Celebrity and Artist Stock Option Plan, (the "PLAN"), the provisions
of which are incorporated herein by this reference. Capitalized terms used but
not otherwise defined in this Grant shall have the meanings ascribed to them in
the Plan.
2. VESTING PERIOD OF OPTION. Subject to the terms and conditions of the
Plan and this Grant, this Option shall vest at a rate of 2% of the total number
of Shares per month for 50 months from the date of grant set forth above (the
"DATE OF GRANT") as long as Optionee continues to render bona fide services to
the Company or any Parent, Subsidiary or Affiliate of the Company.
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 Shares, as described in Paragraph 2, 12 months from the Date of Grant.
Optionee may then exercise this Option with respect to vested 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 Board of Directors 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.
5. TERMINATION OF OPTION.
(a) Except as provided elsewhere in this Section, this Option shall
terminate in whole if Optionee ceases to render bona fide services to the
Company or any Parent, Subsidiary or Affiliate of the Company, for any reason
except death or disability, and Optionee may exercise this Option to the extent
(and only to the extent) that it would have been exercisable upon the date of
termination, within three (3) months after the date of termination.
(b) If Optionee ceases to render bona fide services to the Company or
any Parent, Subsidiary or Affiliate of the Company, because of the death of
Optionee or disability of Optionee within the meaning of Section 22(e)(3) of the
Revenue Code, this Option will immediately terminate and may thereafter be
exercised to the extent (and only to the extent) that it 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 this Option.
6. MANNER OF EXERCISE.
(a) This Option shall be exercisable by delivery to the Company of a
written stock option exercise agreement in the form attached hereto as EXHIBIT A
or in such other form as may be approved by the Committee, which shall set forth
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.
(b) Such notice shall be accompanied by full payment of the Exercise
Price for the Shares in cash (by check in U.S. dollars) or where permitted by
law: (i) by cancellation of indebtedness of the Company to the Optionee; (ii)
by waiver of compensation due or accrued to Optionee for services rendered;
(iii) 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 (iv) by any combination of the foregoing.
(c) Prior to the issuance of the Shares upon exercise of this Option,
Optionee shall pay or make adequate provision for any federal or state
withholding obligations of the Company, if applicable.
7. COMPLIANCE WITH LAWS AND REGULATIONS. The issuance and transfer of
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 of
this Option of some of the federal and California tax consequences of exercise
of this Option and disposition of the Shares. 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.
2
(b) DISPOSITION OF THE SHARES. For federal tax purposes, short-term
capital gain on the disposition of purchased shares will generally be treated as
ordinary income subject to the maximum tax rate. If the Shares acquired
pursuant to the exercise of this Option are held for at least one (1) year after
the date of purchase pursuant to the exercise of this 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.
10. INTERPRETATION. Any dispute regarding the interpretation of this
agreement shall be submitted by Optionee or the Company forthwith to the
Committee, which shall review such dispute at its next regular meeting. The
resolution of such a dispute by the Committee shall be final and binding on the
Company and on Optionee.
11. ENTIRE AGREEMENT. The Plan and the Stock Option Exercise Notice and
Agreement attached as Exhibit A are incorporated herein by reference. This
Grant, the Plan and the Exercise 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 and 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
3
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
"SHARES") of Electronic Arts Inc. (the "COMPANY") under and pursuant to the
Company's Celebrity and Artist 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 understands 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 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 and requirements.
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 SHARES. OPTIONEE REPRESENTS THAT OPTIONEE HAS CONSULTED WITH ANY TAX
CONSULTANT(S) OPTIONEE DEEMS ADVISABLE IN CONNECTION WITH THE PURCHASE OR
DISPOSITION OF THE 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 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.
Submitted by: Accepted by:
OPTIONEE:___________________________ ELECTRONIC ARTS INC.
(Print Name)
____________________________________ By:________________________________
(Signature)
Its:_______________________________
Dated:_____________________________ Dated:_____________________________
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EX-5.01
3
EXHIBIT 5.01
EXHIBIT 5.01
(INCLUDES EXHIBIT 23.01)
Opinion of Fenwick & West regarding legality of the securities being issued
23.01 Consent of Fenwick & West (included in Exhibit 5.01)
[Fenwick & West]
August 3, 1995
Electronic Arts Inc.
1450 Fashion Island Boulevard
San Mateo, CA 94404
Gentlemen/Ladies:
At your request, we have examined the Registration Statement on Form S-8
(the "REGISTRATION STATEMENT") to be filed by you with the Securities and
Exchange Commission on or about August 7, 1995 in connection with the
registration under the Securities Act of 1993, as amended, of an aggregate of
1,000,000 shares of your Common Stock, $.01 par value (the "STOCK"), all of
which may be sold by you pursuant to options granted or to be granted by you
to certain of your (or your parents', affiliates' or subsidiaries')
consultants, independent contractors and advisors pursuant to your Celebrity
and Artist Stock Option Plan (the "PLAN")
As your counsel, we have examined the proceedings taken by you in connection
with the adoption of the Plan.
It is our opinion that the 1,000,000 shares of the Stock that may be issued
and sold by you pursuant to the Plan, when issued and sold in the manner
referred to in the Prospectus associated with the Registration Statement and
the Plan, will be legally issued, fully paid and nonassessable.
We consent to the use of this opinion as an exhibit to the Registration
Statement and further consent to all references to us, if any, in the
Registration Statement and any amendments thereto.
Very truly yours,
/s/ Fenwick & West
FENWICK & WEST
EX-23.02
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EXHIBIT 23.02
EXHIBIT 23.02
CONSENT OF INDEPENDENT ACCOUNTANTS
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