Electronic Arts 1999 Annual Report Download - page 36

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NOTE 5: LITIGATION
The Company is subject to pending claims and litigation. Management, after review and consultation with counsel,
considers that any liability from the disposition of such lawsuits would not have a material adverse effect upon
the consolidated financial condition of the Company.
NOTE 6: PREFERRED STOCK
At March 31, 1999 and 1998, the Company had 1,000,000 shares of Preferred Stock authorized but unissued. The rights,
preferences, and restrictions of the Preferred Stock may be designated by the Board of Directors without further action by
the Company’s stockholders.
NOTE 7: TREASURY STOCK
In February 1999, the Board of Directors approved a plan to purchase up to two million shares of the Company’s common
stock. For the year ended March 31, 1999, the Company repurchased 222,500 shares for approximately $9,001,000 under
this program. Of these, 99,937 shares were reissued under the Company’s Stock Plans as of March 31, 1999.
When treasury shares are reissued, any excess of the average acquisition cost of the shares over the proceeds from
reissuance is charged to retained earnings.
NOTE 8: STOCK PLANS
(a) Employee Stock Purchase Plan
The Company has an Employee Stock Purchase Plan program whereby eligible employees may authorize payroll deduc-
tions of up to 10% of their compensation to purchase shares at 85% of the lower of the fair market value of the Common
Stock on the date of commencement of the offering or on the last day of the six-month purchase period. The program
commenced in September 1991. In fiscal 1999, 241,514 shares were purchased by the Company and distributed to
employees at prices ranging from $26.19 to $36.60. In fiscal 1998, 199,680 shares were purchased by the Company and
distributed to employees at prices ranging from $26.14 to $26.19. In fiscal 1997, 184,596 shares were purchased by the
Company and distributed to employees at prices ranging from $21.25 to $25.18 per share. The weighted average fair
value of the fiscal 1999, fiscal 1998 and fiscal 1997 awards was $18.27, $9.43, and $10.41, respectively. Under the Employee
Stock Purchase Plan 30,928 shares were distributed from reissued treasury stock in fiscal 1999. No shares were distributed
from reissued treasury stock in fiscal 1998 or fiscal 1997. At March 1999, the Company had 237,444 shares of its Common
Stock reserved for future issuance under the Plan.
Prior to the Maxis merger in July 1997, Maxis employees were eligible to participate in an employee stock purchase plan.
In fiscal 1998 and 1997, Maxis purchased 7,684, and 18,220 shares, respectively, under this plan which were distributed to
participating employees. Shares were purchased at prices ranging from $27.70 to $27.99 in fiscal 1998, and $28.56 to $46.08
in fiscal 1997.