8-KLeadership ChangesExhibits & Filings

ELECTRONIC ARTS INC. 8-K Report, Executive Changes (Jun 22, 2007)

Filed June 22, 2007For Securities:EA

Summary

This Form 8-K filing by Electronic Arts Inc. (EA) on June 22, 2007, primarily announces significant organizational changes within the company. The key event reported is the elimination of the President, Worldwide Studios position, previously held by V. Paul Lee. In connection with this organizational shift, Mr. Lee has transitioned to a new role as Senior Advisor to the CEO. The filing details the terms of Mr. Lee's new employment agreement, outlining his responsibilities, compensation, and the duration of his tenure in the advisory role. Investors should note the specific provisions regarding severance, continued benefits, and non-compete/non-solicitation clauses, as these terms have financial implications for EA. The agreement also addresses the continued vesting of Mr. Lee's equity grants.

Key Highlights

  • 1V. Paul Lee, former President of Worldwide Studios, has been transitioned to Senior Advisor to the CEO.
  • 2EA eliminated the position of President, Worldwide Studios as part of organizational changes.
  • 3Mr. Lee's new role involves reporting to the CEO and providing strategic advice on studio operations, product development, M&A, and training.
  • 4Mr. Lee's employment agreement is set to terminate on June 30, 2009.
  • 5The agreement includes provisions for base salary, potential performance bonuses, and continued health/dental benefits.
  • 6EA may terminate the agreement without cause, with specified severance payments and benefit continuation.
  • 7The agreement outlines specific severance and benefit continuation terms if Mr. Lee resigns before or after April 4, 2008.
  • 8Mr. Lee is subject to non-competition and non-solicitation obligations within North America until April 4, 2008, with potential additional payments upon fulfillment.
  • 9Outstanding equity grants for Mr. Lee will continue to vest until June 30, 2009, or the agreement termination date.

Frequently Asked Questions

This filing is primarily to report significant organizational changes at Electronic Arts Inc. (EA), specifically the elimination of the President, Worldwide Studios position and the transition of V. Paul Lee to a new role as Senior Advisor to the CEO, along with the details of his employment agreement for this new role.

As Senior Advisor, Mr. Lee will report directly to the CEO, John Riccitiello. His duties will be at the CEO's discretion but are expected to include special projects and providing strategic advice on studio operations, product development, mergers and acquisitions, and training/knowledge sharing.

EA has entered into an employment agreement with Mr. Lee detailing his compensation, including a base salary in Canadian dollars, potential bonuses, and continued benefits. The agreement also specifies severance packages and additional payments if EA terminates the agreement or if Mr. Lee adheres to non-compete and non-solicitation clauses. Unvested equity grants will also continue to vest, representing a potential future dilution or expense.

Mr. Lee's agreement runs until June 30, 2009. If EA terminates him without cause, he is entitled to his remaining base salary through June 30, 2009, plus benefits. If he resigns, his entitlement depends on whether it's before or after April 4, 2008, with specific salary and benefit continuation terms. He may also receive additional payments for adhering to non-competition and non-solicitation obligations, and his equity grants will continue to vest.