UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 20549

 

 

FORM 8-K

 

 

CURRENT REPORT

PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934

Date of report (Date of earliest event reported): September 17, 2013

 

 

ELECTRONIC ARTS INC.

(Exact Name of Registrant as Specified in Its Charter)

 

 

Delaware

(State or Other Jurisdiction of Incorporation)

 

0-17948   94-2838567
(Commission File Number)   (IRS Employer Identification No.)

209 Redwood Shores Parkway, Redwood City, California 94065-1175

(Address of Principal Executive Offices) (Zip Code)

(650) 628-1500

(Registrant’s Telephone Number, Including Area Code)

(Former Name or Former Address, if Changed Since Last Report)

 

 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions ( see  General Instruction A.2. below):

 

¨ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

 

¨ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

 

¨ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

 

¨ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

 

 

 

Item 5.02 Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.

Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers

On September 15, 2013, the Board of Directors (the “Board”) of Electronic Arts Inc. (the “Company”) appointed Andrew Wilson, age 39, to serve as Chief Executive Officer and as a director of the Company, effective September 17, 2013. There are no arrangements or understandings between Mr. Wilson and any other persons pursuant to which he was selected as a director, and he has no direct or indirect material interest in any transaction required to be disclosed pursuant to Item 404(a) of Regulation S-K.

Mr. Wilson has served as Executive Vice President, EA SPORTS since August 2011. From March 2010 to August 2011, he served as Senior Vice President, EA SPORTS. Prior to that, Mr. Wilson held the position of Senior Vice President, Global Online from September 2009 to March 2010 and Vice President, EA SPORTS from June 2008 to September 2009. Mr. Wilson has held various positions within the Company since joining the Company in May 2000.

Compensatory Arrangements with Mr. Wilson

The Company entered into an employment offer letter dated September 15, 2013 (the “Agreement”) with Mr. Wilson. The Agreement has no specified term, and Mr. Wilson’s employment with the Company will be on an at-will basis. The material terms of the Agreement are summarized below.

 

  (a) Mr. Wilson’s annual base salary will be $800,000, and his target bonus percentage will be 150% of his annual base salary.

 

  (b) The Company has agreed to grant Mr. Wilson an option to purchase Common Stock of the Company pursuant to the Company’s 2000 Equity Incentive Plan, as follows:

 

  •   An option to purchase 1,000,000 shares, which will vest as to 24% of the shares on November 1, 2014, and will then vest in additional 2% increments on the first calendar day of each month thereafter for the following 38 months.

This option will be granted and priced at the close of market on the second trading day following the Company’s release of earnings results for the fiscal quarter ending September 30, 2013.

Mr. Wilson will participate in the compensation and benefit programs available to the Company’s executive officers.

The foregoing description of the Agreement is qualified in its entirety by reference to the full text of the Agreement, which is filed as Exhibit 10.1 to this Current Report on Form 8-K and is incorporated by reference herein. Mr. Wilson has entered into the Company’s standard New Hire/Proprietary Information Agreement, which is attached to the Agreement.

Amendment of the EA Bonus Plan Addendum for Fiscal 2014

On September 15, 2013, the Board approved an amended Bonus Formula Addendum for Fiscal Year 2014 (the “Addendum”) pursuant to the EA Bonus Plan (the “Plan”). Although EA generally expects to pay bonuses to our named executive officers pursuant to the terms of the Electronic Arts Inc. Executive Bonus Plan (the “Executive Bonus Plan”), the Board may use the criteria described below in the Addendum as a guideline to determine the final amount of the bonus awards paid to the named executive officers under the Executive Bonus Plan.

Except as modified by the Addendum, the Plan and its material features remain unchanged. A copy of the full text of the Plan was filed on November 8, 2010 as Exhibit 10.1 to EA’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2010. A copy of the full text of the Addendum, as amended effective September 17, 2013 is filed as Exhibit 10.2 hereto and is incorporated by reference herein.

The Addendum was amended to include bonus components, weightings, and performance measures applicable to the Company’s Chief Executive Officer for the period beginning on September 17, 2013 through the end of the Company’s current fiscal year (the “CEO Performance Period”).

With respect to the Company’s Chief Executive Officer, Mr. Wilson, 80% of his fiscal 2014 bonus for the CEO Performance Period is funded based upon the achievement of Financial Performance objectives with the key metrics being: (i) the Company’s non-GAAP net revenue; (ii) the Company’s gross profit; (iii) the Company’s operating expenses; (iv) the Company’s non-GAAP earnings per share; and (v) the Company’s operating income. The remaining 20% of Mr. Wilson’s bonus for the CEO Performance Period will be funded based on Individual Performance components and the achievement of measurable business objectives, including, but not limited to, strategic and operational objectives.

Mr. Wilson’s bonus award payout for the CEO Performance Period will be determined by the Board based upon an overall assessment of the following: (i) his target bonus amount; (ii) the funding of Financial and Individual Performance bonus components; and (iii) the Company’s total stockholder return (“TSR”) for the CEO Performance Period relative to the performance of those companies in the NASDAQ-100 Index on September 17, 2013 (the “NASDAQ-100”).

The Company’s TSR will determine a multiplier ranging from 50% to 150% based on the relative TSR percentile ranking of the Company as compared to the NASDAQ-100 for the CEO Performance Period. TSR will be calculated using the closing stock prices of the NASDAQ-100 for the last 90 days of the CEO Performance Period as compared to the average closing stock prices of the NASDAQ-100 for the first 90 days of the CEO Performance Period. To determine the Company’s relative TSR percentile ranking, the TSR of the NASDAQ-100 will be ranked from the highest to lowest according to each company’s respective TSR. The TSR multiplier will equal 100% if the Company’s TSR is at the 60 th percentile of the NASDAQ-100. If the Company’s TSR is above the 60 th percentile, the TSR multiplier will increase by 3% for each percentile above, up to a maximum of 150% at the 77 th percentile. If EA’s TSR is below the 60 th percentile, the TSR multiplier will decrease by 2% for each percentile below, to a minimum of 50% at the 35 th percentile. In addition, Mr. Wilson’s bonus payout for the CEO Performance Period is subject to an overall cap equal to 200% of his target bonus amount for the CEO Performance Period.

The foregoing description of the Addendum does not purport to be complete and is qualified in its entirety by reference to the Addendum, a copy of which is filed as Exhibit 10.2 hereto and is incorporated by reference herein.

The Company also intends to enter into its standard form indemnification agreement with Mr. Wilson, which is filed as Exhibit 10.6 to the Company’s Annual Report on Form 10-K filed on June 4, 2004 and is incorporated by reference herein.

A copy of the corporate communications announcing Mr. Wilson’s appointment as Chief Executive Officer and as a member of the Board is attached as Exhibit 99.1 to this Current Report on Form 8-K.

Item 9.01 Financial Statements and Exhibits.

 

(d) Exhibits.

 

Exhibit
Number

  

Description

10.1    Employment Offer Letter dated September 15, 2013, between Electronic Arts Inc. and Andrew Wilson*
10.2    EA Bonus Plan Addendum, as amended effective September 17, 2013*
99.1    Posts to www.ea.com/news dated September 17, 2013, relating to a change in executive officers.

 

* Management contract or compensatory plan or arrangement

SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

 

ELECTRONIC ARTS INC.

(Registrant)

By:  

/s/ Stephen G. Bené

Name:   Stephen G. Bené
Title:  

Senior Vice President,

General Counsel and Secretary

Date: September 17, 2013

EXHIBIT INDEX

 

Exhibit
Number

  

Description

10.1    Employment Offer Letter dated September 15, 2013, between Electronic Arts Inc. and Andrew Wilson*
10.2    EA Bonus Plan Addendum, as amended effective September 17, 2013*
99.1    Posts to www.ea.com/news dated September 17, 2013, relating to a change in executive officers.

 

* Management contract or compensatory plan or arrangement

Exhibit 10.1

 

LOGO

September 15, 2013

Andrew Wilson

Dear Andrew,

On behalf of the Board of Directors of Electronic Arts Inc., I am pleased to offer you the position of Chief Executive Officer commencing on September 17, 2013 at a base salary of $800,000 annualized, minus applicable deductions. As CEO you will report directly to the Board of Directors. You will be appointed to the Board of Directors effective September 17, 2013.

You will be eligible to participate in our discretionary bonus program. Your discretionary bonus target will be 150% of your salary. Bonus payments are calculated and paid based on the achievement of various individual and company performance objectives, as established and evaluated by the Board of Directors. You must be employed by EA at the time bonuses are paid to receive a bonus payment.

The Board of Directors has approved the grant of a non-qualified stock option to purchase a total of 1,000,000 shares of common stock of Electronic Arts, in accordance with our 2000 Equity Incentive Plan. The option will vest as follows:

 

  •   24% of the option shares will vest on November 1, 2014; and

 

  •   an additional 2% will vest on the first calendar day of each month thereafter for the following 38 months.

The option will be priced and granted at the close of market on the second trading day following our release of Q2 FY14 earnings results. You will receive more details regarding this Award from Stock Administration after the grant date.

For your information, I have enclosed several documents, including an overview of our benefits programs and EA’s Global Code of Conduct. Other EA policies and procedures are available on EA’s intranet.

In the course of your work, you will have access to proprietary materials and concepts. Our offer is contingent upon your returning a signed copy of Electronic Arts’ New Hire/ Proprietary Information Agreement, which is attached. Two copies are enclosed for signature (please keep one for your own records). Please return a signed copy by 5:00 pm California time on September 16, 2013.

This offer of employment is also contingent upon your providing Electronic Arts with proof that you have the legal right to work in the United States. In addition, Electronic Arts will conduct a background check pursuant to a written notice you will receive under separate cover, and this offer is contingent upon the results of such check being acceptable to EA.

This offer letter contains the entire understanding between you and Electronic Arts as to the terms of your employment offer and specifically supersedes all previous discussions you may have had with anyone at Electronic Arts regarding those terms.

This offer of employment is valid until 5:00 pm California time on September 16, 2013. If you have not accepted by this time, we will assume that you have declined the offer. If you accept this offer, please sign below and return both pages of the original offer letter to Gabrielle Toledano in the enclosed envelope.

Please join our team and help us be the place where GREAT people create and deliver GREAT games.

If you have any questions regarding this offer, please feel free to contact me.

Sincerely,

/s/ Larry F. Probst, III

Larry F. Probst, III

Executive Chairman

Electronic Arts

Enclosures

 

Accepted by candidate:   Date:

/s/ Andrew Wilson

  September 15, 2013

 

cc: Gabrielle Toledano, for distribution to Personnel File

ELECTRONIC ARTS INC.

NEW HIRE/PROPRIETARY INFORMATION AGREEMENT

In consideration of my employment by Electronic Arts (which together with its affiliates and subsidiaries, if any, will hereinafter collectively be called the “Company”), and the compensation paid to me by the Company from time to time, I hereby represent to and agree with the Company as follows:

1. I understand that the Company is engaged in a continuous program of research, development, production and marketing with respect to its present and future products, including fields generally related to its business. I further understand that, as an essential part of my employment by the Company, I am expected to make new contributions to and create inventions of value for the Company, although this Agreement does not constitute a contract of employment or obligate the Company to employ me for any stated period of time.

2. I represent that I have not brought and will not bring with me to the Company or use in the performance of my responsibilities at the Company any materials or documents of a former employer which are not generally available to the public, unless I have first obtained written authorization from the former employer for their possession and use, which written authorization I will deliver to the Company on or before my use of such materials or documents.

3. I understand that my employment by the Company creates a relationship of confidence and trust between me and the Company with respect to any information of a confidential or secret nature that may be learned or developed by me during the period of my employment by the Company and which (i) relates to the business of the Company or to the business of any customer or supplier of the Company, or (ii) has been created, discovered or developed by, or has otherwise become known to the Company and has commercial value in the business in which the Company is engaged (hereinafter called “Proprietary Information”). By way of illustration, but not limitation, Proprietary Information includes trade secrets, processes, formulas, computer programs, data, know-how, inventions, improvements, techniques, marketing plans, product plans, strategies, forecasts, personnel information and customer lists.

4. All Proprietary Information shall be the sole property of the Company and its assigns. I hereby assign to the Company any rights I may have or acquire in all Proprietary Information. At all times, both during the entire period of my employment and after its termination, I will keep in confidence and trust all Proprietary Information, and I will not use or disclose any Proprietary Information or anything relating to it without the prior written consent of the Company, except as may be necessary in the ordinary course of performing my duties as an employee of the Company. In addition, I understand that I am only to access, use and disclose Proprietary Information that is necessary for me to have in the course of performing my duties, and that I am not to disclose Proprietary Information to other employees or contractors at EA unless it is necessary for those employees or contractors to have such Proprietary Information in the course of their duties. In the event of the termination of my employment by me or by the Company for any reason, I will promptly deliver to the Company all materials, documents and data of any nature containing or pertaining to any Proprietary Information and I will not take with me any such materials, documents or data or any reproduction thereof.

5. I will promptly disclose in confidence to the Company, or any persons designated by it, all Inventions that are made or conceived or first reduced to practice by me on or after the date specified in Section 16 below and during the entire period of my employment with the Company (or thereafter if Invention uses Proprietary Information of the Company). For the purposes of this Agreement, “Inventions” means all inventions, improvements, original works or authorship, formulas, processes, ideas, innovations, concepts, proposed trademarks, computer programs, techniques, know-how and data, whether or not patentable or copyrightable, made or conceived or first reduced to practice or learned by me, whether or not in the course of my employment.

6. I agree that all Inventions that are made or conceived or first reduced to practice by me on or after the date specified in Section 16 below and during the entire period of my employment with the Company (or thereafter if any such Invention uses Proprietary Information of the Company) shall be the sole and exclusive property of the Company and its assigns, and the Company and its

assigns shall have the right to use and/or to apply for patents, copyrights or other statutory or common law protections for such Inventions in any and all countries. I further agree to assist the Company in every proper way (but at the Company’s expense) to obtain and from time to time enforce patents, copyrights and other statutory or common law protections for such Inventions in any and all countries. To that end, I will execute all documents for use in applying for and obtaining such patents, copyrights and other statutory or common law protections therefore and enforcing same, as the Company may desire, together with any assignments thereof to the Company or to persons designated by the Company. My obligations under this Paragraph 6 shall continue beyond the termination of my employment with the Company, but the Company shall compensate me at a reasonable rate after such termination for time actually spent by me at the Company’s request on such assistance.

7. I have been notified and I understand that the provisions of Paragraph 6 above do not apply to an Invention for which all of the following are true (and, as applicable to all California employees, which qualifies fully under the provisions of Section 2870 of the California Labor Code):

(a) The Invention was developed entirely on my own time;

(b) I developed the Invention away from the Company’s facilities, and entirely without using the Company’s equipment, supplies, or trade secret information;

(c) The Invention does not relate to the business or any anticipated research or development of the Company; and

(d) The Invention does not result from, and is not the extension of, any work done by me for the Company.

8. I have identified on Exhibit A attached hereto a complete list of all Inventions which have been made or conceived or first reduced to practice by me alone or jointly with others prior to my employment by the Company and to which the provisions of Sections 5 and 6 above therefore do not apply. I agree, however, that if and when I use or disclose any Invention listed in Exhibit A (or any portion thereof) in the course of my employment, I shall have simultaneously granted to the Company a perpetual, non-cancelable, royalty-free right and license to use, modify, reproduce, practice, market, distribute and sell the portion of such Invention that I have disclosed. If there is no such list on Exhibit A, I represent that I have made no such Inventions at the time of signing this Agreement.

9. I agree that during the entire period of my employment by the Company I will not, without the Company’s prior written consent, engage in any employment or activity other than for the Company in any business in which the Company is now or may hereafter become engaged.

10. I represent that my performance of all the terms of this Agreement and as an employee of the Company does not and will not breach any agreement to keep in confidence proprietary information acquired by me in confidence prior to my employment with the Company. I agree not to enter into any agreement either written or oral in conflict herewith. I hereby authorize the Company to make known the terms of this Agreement and the fact of my responsibility hereunder to any person or entity, including without limitation customers of the Company and my future employers.

11. I understand that my breach of this Agreement may cause the Company irreparable harm which may not be adequately compensated by money damages. Accordingly, in the event of a breach or threatened breach by me of this Agreement, the Company shall be entitled to injunctive or other preliminary or equitable relief, without the requirement of posting a bond, in addition to such other remedies as may be available to the Company for such breach or threatened breach, including the recovery of damages.

12. I understand and agree that my employment with the Company is at will, which means that either I or the Company may terminate the employment relationship at any time, with or without cause or notice. In addition, the Company reserves the right to eliminate or change any term or condition of employment at any time with or without cause or notice. I further agree that only the Board of Directors of the Company has the authority to make any agreement contrary to the terms of this provision, and any modification of the at-will nature of my employment must be in writing and executed by me and a duly authorized representative of the Board of Directors.

13. While employed by the Company and for one year thereafter, I agree not to recruit, solicit or induce, or attempt to induce, any employee or employees of the Company to terminate their employment with, or otherwise cease their relationship with, the Company.

14. This Agreement shall be binding upon me, my heirs, executors, assigns and administrators and shall inure to the benefit of the Company, its successors and assigns. If any provision of this Agreement is held by a court of competent jurisdiction to be void or unenforceable for any reason, the remaining provisions of this Agreement shall continue with full force and effect.

15. This Agreement constitutes the entire agreement between the parties as to the subjects herein and supersedes all prior negotiations, understandings, correspondence and agreements with respect to the same subject matter between the parties.

16. This Agreement shall be effective as of the first day of my employment by the Company as CEO, namely, September 17, 2013.

17. There are 0 Inventions identified on Exhibit A attached hereto.

Accepted by

ELECTRONIC ARTS INC.

 

BY:  

 /s/ Larry F. Probst, III

    BY:  

 /s/ Andrew Wilson

        Employee’s Signature
NAME:   Larry F. Probst, III     NAME:   Andrew Wilson
DATE:   September 15, 2013     DATE:   September 15, 2013

EXHIBIT A

INVENTIONS

 

                                                                                                                                                                                                                                                                       

                                                                                                                                                                                                                                                                       

                                                                                                                                                                                                                                                                       

                                                                                                                                                                                                                                                                       

                                                                                                                                                                                                                                                                       

                                                                                                                                                                                                                                                                       

                                                                                                                                                                                                                                                                       

 

Employee Initial:  

 /s/ AW

    Supervisor Initial:  

 /s/ LP

Attach a separate sheet if necessary

Exhibit 10.2

EA Bonus Plan

Addendum

FY14 Bonus Formula, as amended

Effective September 17, 2013

Subject to all other terms and conditions of the EA Bonus Plan (“Plan”)*, those Plan Participants who have been specifically identified by Electronic Arts Inc. (the “Company”) as eligible to receive a discretionary bonus pursuant to the terms of this Addendum shall have such bonus determined as follows:

 

1. Additional Eligibility Criteria, If Any :

n/a (see Plan eligibility criteria)

 

2. Fiscal Year 2014 Bonus Pool

Funding for a Company-wide bonus pool (“Bonus Pool”) for Fiscal Year 2014 will be approved, on a discretionary basis, by the Compensation Committee of the Company’s Board of Directors (the “Committee”).

 

3. Bonus Awards for Eligible Participants Other Than The Chief Executive Officer (“CEO”)

 

Bonus
Component(s)

   Weight  

Performance

Measure(s)

  

Measurement
Period(s)

Company Performance    20%   Non-GAAP Earnings Per Share and Non-GAAP Net Revenue    Fiscal Year 2014
Business Unit Performance    80%   The achievement of measurable business objectives, including, but not limited to, business unit financial and operational performance metrics, profit and revenue targets    Fiscal Year 2014

The Company Performance component is funded based on the Company’s performance against Non-GAAP Earnings Per Share and Non-GAAP Revenue targets for the Measurement Period.

The Business Unit Performance component is funded at the discretion of the Committee.

 

  a. Allocation of Bonus Pool Funding To Business Units :

Following the completion of the Measurement Period, Company management will allocate, at its discretion, a percentage of the Bonus Pool funding to each business unit. Such allocation will be based upon the achievement of measurable business unit objectives or such other factors as Company management deems relevant to the business unit’s performance.

Subject to local laws, rules and regulations, Company management may also allocate, at its discretion, a percentage of any approved Bonus Pool funding to business units for the payment of bonus awards to selected Participants at any time prior to the end of the Measurement Period (“Mid-Year Bonus Awards”).

 

  b. Individual Bonus Award Payouts :

Annual Bonus Award payouts: in most circumstances, Annual Bonus Award payouts will be determined based upon an assessment of:

 

  (1) the Participant’s target bonus amount;

 

  (2) the percentage of the Bonus Pool allocated to a Participant’s business unit; and

  (3) the Participant’s Individual Achievement Factor, as determined by the Participant’s manager.

The Individual Achievement Factor is a multiplier (generally ranging from zero to 200%) which takes into account the Participant’s contributions to the Company for the fiscal year relative to individual performance expectations.

Mid-Year Bonus Award payouts : Subject to local laws, rules and regulations, some Participants may receive a Mid-Year Bonus Award payout. Mid-Year Bonus Awards may be either: (1) in addition to; or (2) in place of, all or part of a Participant’s Annual Bonus Award. The actual earning and payout of a Mid-Year Bonus Award is discretionary and may be based on factors such as the achievement of short-term performance goals, outstanding individual accomplishments or such other terms and conditions as may be determined at the discretion of Management and/or the Committee.

Where applicable, the Committee will approve individual Participant bonus award payouts.

 

4. Bonus Award for the CEO

 

Bonus
Component(s)

   Weight  

Performance

Measure(s)

  

Measurement Period

Financial

Performance

   80%   Non-GAAP Net Revenue, Gross Profit, Operating Expenses, Non-GAAP Earnings Per Share, and Operating Income    Q3 and Q4 of Fiscal Year 2014
Individual Performance    20%   The achievement of measurable business objectives, including strategic and operational performance metrics    September 17, 2013 through Q4 of Fiscal Year 2014

The Financial Performance component is funded based on the Company’s performance against Non-GAAP Net Revenue, Gross Profit, Operating Expenses, Non-GAAP Earnings Per Share, and Operating Income targets for the Measurement Period.

The Individual Performance component is funded at the discretion of the Company’s Board of Directors.

Bonus Award payout: A Bonus Award payout for the CEO will be determined based upon an overall assessment of the following:

 

  (1) the CEO’s target bonus amount;

 

  (2) the funding of the Financial Performance and Individual Performance components;

 

  (3) the Company’s relative total stockholder return (“TSR”) for the period from September 17, 2013 through the end of Fiscal Year 2014 (the “Measurement Period”) as compared to those companies in the NASDAQ-100 Index on September 17, 2013 (the “NASDAQ-100”).

The Company’s relative TSR will determine an overall bonus multiplier to be applied to the CEO’s bonus, ranging from 50% to 150%, with the multiplier percentage to be determined as follows:

 

  •   TSR for the Measurement Period for each company in the NASDAQ-100 will be calculated as the percentage change in the average closing stock price of the company for the last 90 days of the Measurement Period as compared to the average closing stock price of the company for the first 90 days of the Measurement Period.

 

  •   To determine the Company’s relative TSR percentile ranking, the TSR for the Measurement Period of each company in the NASDAQ-100 will be ranked from the highest (100th percentile) to lowest (1st percentile) according to each company’s respective TSR as determined above.

 

2

  •   The TSR multiplier will be determined based on the relative TSR percentile ranking of the Company within the rankings of the companies in the NASDAQ-100, as follows:

 

    

Company’s TSR
Percentile Ranking

  

TSR Multiplier for CEO Bonus

MAXIMUM    77th percentile or greater    150%
   61st to 76th percentile    100% plus 3% for each percentile over 60th
TARGET    60th percentile    100%
   36th to 59th percentile    100% minus 2% for each percentile under 60th
MINIMUM    35th percentile or less    50%

The Company’s Board of Directors will approve the CEO Bonus Award after assessing the factors set forth above, and has discretion to increase or decrease the final bonus payout based on any such other factors it deems applicable, provided that the final bonus payout shall not exceed 200% of the CEO’s target bonus amount for the Measurement Period.

 

5. Payment Schedule:

 

  1. Annual Bonus Awards will be paid as soon as administratively practicable following the completion of the Measurement Period and the Committee’s approval of the Bonus Pool.

 

  2. Mid-Year Bonus Awards: Mid-year Bonus Awards will be paid in accordance with the specific terms and conditions applicable to such awards.

 

* Including, but not limited to: (1) the Plan Participant must be actually employed by EA or one of its subsidiaries or affiliates on the date that each payment is made pursuant to the Plan in order to earn the right to receive each such payment, (2) except where otherwise required by local law, at any time until the date that bonuses are paid under the Plan, the individual must not have (i) violated any provision of EA’s Code of Conduct, any other written EA policy and any law, rule or regulation applicable to EA and EA employees, or (ii) entered into an employment termination or separation agreement (not including agreements entered into in connection with the commencement or continuation of employment), and (3) eligibility to receive a bonus calculated pursuant to this Addendum does not guarantee the payment of any bonus for a specific Performance Period, nor does it guarantee employment for any specific period of time. Capitalized terms in this Addendum shall have the meanings set forth in the Plan, except where such terms are separately defined in this Addendum.

 

3

Exhibit 99.1

FROM LARRY PROBST

On behalf of EA’s Board of Directors, I am very pleased to announce that we have chosen Andrew Wilson to serve as the next Chief Executive Officer of Electronic Arts.

The rigorous search conducted by our Board included several talented executives from both outside the company and from within EA. Andrew’s appointment is a clear demonstration of the deep bench of management talent at EA, and reflects our fundamental belief that EA is on track to become the global leader in interactive games and services.

Andrew joined EA in 2000 and has held several strategic positions in our studio organization, providing leadership on product and brand development for both packaged goods and digital services. He has extensive experience with our Asia Online Publishing Group and our studio in Seoul, Korea. Earlier in his career at EA, Andrew distinguished himself as the Executive Producer of our FIFA franchise. Most recently he has served as the Executive Vice President overseeing EA SPORTS and our online portal for digital games and services, Origin. In his leadership role of the EA SPORTS Label he has shown an exceptional ability to identify and develop talented people and teams.

I am convinced that Andrew was an inspired choice by our Board, and one I expect the team at EA will enthusiastically support. Andrew is the first studio executive to serve as our CEO, a testament to his blend of creative skills and business acumen. He is a compelling and charismatic communicator who cares deeply about organizational development, teams, and the individual careers of people who work for EA. Most of all, he has a powerful sense of respect for and commitment to our consumers.

To support Andrew in his transition to CEO, I will continue to serve as EA’s Executive Chairman for an indefinite period.

Please join me in congratulating Andrew on becoming the Chief Executive Officer of Electronic Arts.

FROM ANDREW WILSON

Let me start by saying I am deeply honored and humbled to become EA’s CEO. I have a profound respect and passion for this organization, as well as for our global community of fans, and I’m incredibly motivated to serve our people, our gamers and our shareholders at such an exciting time in our industry.

From my start at EA in Australia back in 2000, through stops in Asia, Europe and now North America, I’ve worked with people in this company who have consistently amazed and inspired me. It’s my passion for our people and the great products we all impact that gives me such excitement for our future. I hope you all feel the same level of energy and optimism that I do as we embark on this journey together.

I envision EA as the World’s Greatest Games Company. This is not about what we are aiming for or what we will become. Rather, it is about an unfaltering commitment to what we will be every day. This is an attitude that must drive our culture as one team.

I also believe EA’s strategy is sound. Our focus on our talent, our brands and our platform together with our investment in next-generation consoles, mobile and PC free-to-play, as part of our ongoing transition to digital, is right. But we have plenty of work ahead to ensure our collective success.

In the short term, our mission is crystal clear: We are 100 percent focused on delivering our FY14 business plan. We have made strong progress in the first half of the fiscal year, establishing financial discipline and continuing to create a slate of fantastic games for current and next-generation consoles, mobile and PC. But now we’ve got to finish the job – execute in Q3 and Q4 and deliver on the promises we made to our fans and our shareholders.

Looking ahead, my focus will be on three things:

 

1. Continued transformation for our digital future;

 

2. Delivering amazing games and services across platforms; and

 

3. Instilling a culture of execution that will drive profitable growth.

In the days and weeks ahead, I will provide a greater level of operational detail behind the plan that will make these goals a reality.

I could not be more proud to lead you as CEO of EA. Thank you in advance for your support.