Electronic Arts 2006 Annual Report Download - page 169

(11) STOCKHOLDERS' EQUITY
(a) Preferred Stock
As of March 31, 2006 and 2005, we had 10,000,000 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 our stockholders.
(b) Common Stock
On March 22, 2000, our stockholders authorized the issuance of a new series of common stock, designated
as Class B common stock (""Tracking Stock''). The Tracking Stock was intended to reÖect the
performance of the EA.com online games business segment. As a result of the approval of the Tracking
Stock proposal, our existing common stock was re-classiÑed as Class A common stock and was intended to
reÖect the performance of our core console and PC business segment. With the authorization of the
Class B common stock, we transferred a portion of our consolidated assets, liabilities, revenue, expenses
and cash Öows to EA.com Inc., a wholly-owned subsidiary of Electronic Arts.
In March 2003, we consolidated the operations of EA.com back into our core operations in order to
increase eÇciency, simplify our reporting structure and more directly integrate our online activities into our
core console and PC business. As a result, we eliminated dual class reporting starting in Ñscal 2004. The
majority of outstanding Class B options and warrants not directly held by us were acquired or converted to
common stock and warrants.
At our Annual Meeting of Stockholders, held on July 29, 2004, our stockholders approved an amendment
and restatement of our CertiÑcate of Incorporation to (1) consolidate our Class A and Class B common
stock into a single class of common stock by reclassifying each outstanding share of Class A common
stock as one share of common stock and converting each outstanding share of Class B common stock into
0.001 share of common stock, and (2) increase the authorized common stock from 500 million total
shares of Class A and Class B common stock combined to 1 billion shares of the newly consolidated single
class of common stock.
(c) Share Repurchase Program
On October 18, 2004, our Board of Directors authorized a program to repurchase up to an aggregate of
$750 million of our common stock. We completed the repurchase program in September 2005. We
repurchased and retired the following (in millions):
Annual Report
Number of
Shares
Repurchased Approximate
and Retired Amount
From the inception of the program through March 31, 2005 ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 0.8 $ 41
Six months ended September 30, 2005 ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 12.6 709
From the inception of the program through September 30, 2005 ÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 13.4 $750
(12) EMPLOYEE BENEFIT AND STOCK-BASED COMPENSATION PLANS
(a) Employee Stock Purchase Plan
Since September 1991, we have oÅered our employees the ability to participate in an employee stock
purchase plan. Pursuant to our current plan, the 2000 Employee Stock Purchase Plan, eligible employees
may authorize payroll deductions of up to 10 percent of their compensation to purchase shares at
85 percent of the lower of the fair market value of the common stock on the date of commencement of
the oÅering or on the last day of the six-month purchase period.
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