Electronic Arts 2008 Annual Report Download - page 60

common stock were reserved for issuance pursuant to service-based non-interest bearing notes payable
solely in shares of our common stock, which were granted to certain former employees of VGH who
became employees of EA following the acquisition (the “Notes”). The restricted stock units granted pursu-
ant to the VGH Inducement Plan and the Notes were granted in connection with our acquisition of VGH
without stockholder approval in accordance with applicable NASDAQ listing standards. No further grants
will be made under the VGH Inducement Plan and no further Notes will be awarded to the former employ-
ees of VGH.
See also Note 12 to the Consolidated Financial Statements included in EA’s Annual Report on Form 10-K for
the period ended March 31, 2008 for additional information about these equity awards and related plans.
OTHER INFORMATION
RELATED PERSON TRANSACTIONS POLICY
Our Board of Directors has adopted a written Related Person Transactions Policy. The purpose of the policy is
to describe the procedures used to identify, review, approve or ratify and, if necessary, disclose (i) any
transaction, arrangement or relationship (or any series of similar transactions, arrangements or relationships) in
which EA (including any of its subsidiaries) was, is or will be a participant and the amount involved exceeds
$120,000, and in which any “related person” had, has or will have a direct or indirect interest, or (ii) any
transaction for which EA’s Global Code of Conduct would require approval of the Board of Directors. For
purposes of the policy, a “related person” is (a) any person who is, or at any time since the beginning of EA’s
last fiscal year was, a director or executive officer of EA or a nominee to become a director of EA, (b) any
person who is known to be the beneficial owner of more than 5% of any class of EA’s voting securities,
(c) any immediate family member or person sharing the household (other than a tenant or employee) of any of
the foregoing persons, and (d) any firm, corporation or other entity in which any of the foregoing persons is
employed or is a partner or principal or in a similar position or in which such person has a 10% or greater
beneficial ownership interest.
Once a potential related person transaction has been identified, the Audit Committee (if the transaction
involves an executive officer of EA) or the Nominating and Governance Committee (if the transaction involves
a director of EA) will review the transaction at the next scheduled meeting of such committee. In those
instances in which it is not practicable or desirable to wait until the next scheduled committee meeting, the
chairperson of the applicable committee shall consider the matter and report back to the relevant committee at
the next scheduled meeting.
In determining whether to approve or ratify a related person transaction, the Audit Committee or Nominating
and Governance Committee (or the relevant chairperson of such committee) shall consider all of the relevant
facts and circumstances available. No member of the Audit Committee or Nominating and Governance
Committee shall participate in any review, consideration or approval of any related person transaction with
respect to which such member or any of his or her immediate family members is the related person. The Audit
Committee and Nominating and Governance Committee (or the relevant chairperson) shall approve only those
related person transactions that are in, or are not inconsistent with, the best interests of EA and its
stockholders, as determined in good faith.
CERTAIN RELATIONSHIPS AND RELATED PERSON TRANSACTIONS
We enter into indemnification agreements with each of the members of our Board of Directors at the time they
join the Board to indemnify them to the extent permitted by law against any and all liabilities, costs, expenses,
amounts paid in settlement and damages incurred by the directors as a result of any lawsuit, or any judicial,
administrative or investigative proceeding in which the directors are sued or charged as a result of their service
as members of our Board of Directors.
Prior to becoming Chief Executive Officer of Electronic Arts, John Riccitiello was a Founder and Managing
Director of Elevation Partners, L.P., and also served as Chief Executive Officer of VG Holding Corp.
(“VGH”), which we acquired in January 2008. At the time of the acquisition, Mr. Riccitiello held an indirect
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