8-KCorporate ChangesOther EventsExhibits & Filings

ELECTRONIC ARTS INC. 8-K Report, Bylaw Amendment (Nov 13, 2006)

Filed November 13, 2006For Securities:EA

Summary

Electronic Arts Inc. (EA) filed an 8-K on November 13, 2006, primarily to announce significant amendments to its Corporate Governance Guidelines and Bylaws, effective November 8, 2006. The most crucial change for investors is the adoption of a majority voting standard for the election of directors in uncontested elections. This means directors will now need more 'for' votes than 'against' votes to be elected, a shift from the previous plurality standard. Furthermore, the new guidelines mandate that directors must tender irrevocable resignations contingent upon failing to receive a majority vote in uncontested elections, which the Board will then consider. This move is intended to enhance accountability and shareholder responsiveness in director elections.

Key Highlights

  • 1Adoption of a majority voting standard for director elections in uncontested situations, replacing the plurality standard.
  • 2Directors in uncontested elections must now receive more 'for' votes than 'against' votes to be elected.
  • 3Mandatory tender of irrevocable resignations by directors if they fail to achieve a majority vote in an uncontested election.
  • 4The Board is required to act on these resignation offers within 90 days and publicly disclose its decision.
  • 5Expansion of advance notice provisions for stockholder nominations to include the director nominee's intent to tender a resignation.
  • 6These corporate governance changes became effective on November 8, 2006.

Frequently Asked Questions

The primary change is the adoption of a majority voting standard for director elections in uncontested scenarios. This means a nominee needs more 'for' votes than 'against' votes to be elected, moving away from the previous system where simply receiving more votes than any other single candidate (plurality) was sufficient.

If an incumbent director fails to receive a majority vote in an uncontested election, they are required to tender an irrevocable resignation. The Nominating and Governance Committee will review this resignation, and the Board of Directors must decide whether to accept it within 90 days, with the decision being publicly disclosed.

This change is designed to give shareholders greater influence over director elections. The majority voting standard and the resignation requirement upon failing to secure majority support create a clearer mechanism for shareholders to hold directors accountable for performance and shareholder alignment.

Yes, the majority voting standard applies to uncontested elections. If a contested election occurs (meaning a stockholder has properly nominated an alternative candidate), directors will continue to be elected by a plurality vote.