8-KLeadership ChangesExhibits & Filings

ELECTRONIC ARTS INC. 8-K Report, Executive Changes (Mar 24, 2009)

Filed March 24, 2009For Securities:EA

Summary

Electronic Arts Inc. (EA) filed an 8-K on March 24, 2009, reporting a key change to its executive compensation structure. The Compensation Committee of the Board of Directors approved amendments to Performance-Based Restricted Stock Unit (RSU) agreements for certain employees. The primary change involves extending the performance period for these RSUs from June 30, 2011, to June 30, 2013.

Key Highlights

  • 1Extension of performance period for Performance-Based RSUs from June 30, 2011, to June 30, 2013.
  • 2Vesting of RSUs is contingent on achieving one of three progressively higher non-GAAP net income targets.
  • 3Non-GAAP net income targets are measured on a trailing-four-quarter basis.
  • 4Unmet performance targets by June 30, 2013, will result in the cancellation of the corresponding RSU portion.
  • 5Upon vesting, each RSU will convert into one share of EA's common stock.
  • 6The amendment impacts the timing and conditions for executive equity compensation payout.

Frequently Asked Questions

The main purpose of this 8-K filing is to inform investors about amendments to Electronic Arts Inc.'s Performance-Based Restricted Stock Unit (RSU) agreements, specifically extending the performance period for these awards.

The performance period has been extended by two years, from June 30, 2011, to June 30, 2013. This means that the company and its employees now have until the new date to meet the specified non-GAAP net income targets for the RSUs to vest.

The RSUs vest in three equal tranches, with each tranche's vesting contingent upon the company achieving one of three escalating non-GAAP net income targets, calculated on a trailing-four-quarter basis. If any of these targets are not met by June 30, 2013, the corresponding portion of the RSU award will be forfeited.

For investors, this change indicates a potential delay in the vesting and subsequent issuance of EA's common stock related to these RSU awards. It also signals management's focus on achieving specific non-GAAP net income targets over a longer horizon, which could influence future share count and earnings per share depending on performance.