Electronic Arts 2009 Annual Report Download - page 63

Proxy Statement
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 S. 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 financial interest
in VGH resulting from his interest in the entity that controlled Elevation Partners, L.P. and his interest in a limited
partner of Elevation Partners, L.P., a significant stockholder of VGH. As a result of the acquisition, Mr. Riccitiello’s
financial returns related to these interests, including returns of deemed capital contributions, were $2.4 million
through May 2008 (some of which Mr. Riccitiello could be required to return depending on the performance of the
Elevation entities). Mr. Riccitiello has not received any additional payments related to the VGH acquisition to date.
However, he could receive up to an additional $1.6 million plus any interest or other amounts earned thereon. This
amount could be reduced, however, by a variety of factors, including investment losses of Elevation, if any, as well
as certain expenses of Elevation that could offset partnership profits. Upon his separation from Elevation Partners,
L.P., Mr. Riccitiello ceased to have any further control or influence over these factors.
From the commencement of negotiations with VGH, at the direction of EA’s Board of Directors, EA’s Audit
Committee engaged directly with EA management (independently from Mr. Riccitiello) to analyze and consider
the potential benefits, risks and material terms of the acquisition. EA’s Board of Directors approved the
acquisition after reviewing with EA’s management and members of the Audit Committee the terms of the
acquisition and the potential benefits and risks thereof, as well as Mr. Riccitiello’s personal financial interest in
VGH and the acquisition. Mr. Riccitiello recused himself from the Board of Directors meeting during the
Board’s deliberation of the acquisition and he did not vote on the acquisition.
In addition, we have engaged, and expect to continue to engage, in what we consider to be arm’s-length
commercial dealings with the following companies, which are affiliated with members of our Board of Directors:
Nokia Corporation primarily related to our EA Mobile business, WorldWinner.com, a subsidiary of Liberty
Media Corporation related to our Pogo business and Google Inc. Mr. Simonson is the Chief Financial Officer of
Nokia; Mr. Maffei is the Chief Executive Officer of Liberty Media; Mr. Huber is the Senior Vice President of
Engineering at Google.
To date, these transactions have not been material to us or to the other entities involved. We do not believe that
Mr. Simonson, Mr. Maffei or Mr. Huber has a material direct or indirect interest in any of our commercial
dealings with Nokia, WorldWinner.com or Google, respectively, and therefore do not consider these dealings to
be “related person transactions” within the meaning of applicable SEC rules. Our Board of Directors considered
our dealings with Nokia, WorldWinner.com and Google in reaching its determination that Mr. Simonson,
Mr. Maffei and Mr. Huber are each an independent director.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
From April 1, 2008 (the beginning of fiscal 2009) through November 4, 2008, the Compensation Committee consisted
of Linda J. Srere, Leonard S. Coleman and Richard A. Simonson; from November 5, 2008 through March 31, 2009
(the end of fiscal 2009), the Compensation Committee consisted of Ms. Srere, Mr. Coleman and Geraldine B.
Laybourne. None of these individuals is an employee or current or former officer of EA. No EA officer serves or has
served since the beginning of fiscal 2009 as a member of the board of directors or the compensation committee of a
company at which a member of EA’s Compensation Committee is an employee or officer.
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