Electronic Arts 2006 Annual Report Download - page 45

EMPLOYMENT AND CHANGE OF CONTROL AGREEMENTS
EA currently has no employment contracts with any Named Executive OÇcer, other than Dr. Florin, or
severance arrangements with respect to their resignation or termination of employment, except that
outstanding awards under the 2000 Equity Incentive Plan, including those held by executive oÇcers, may
immediately vest in connection with certain changes in control or ownership of the Company, unless the
successor company assumes or replaces those awards.
In February 2001, prior to becoming an executive oÇcer of EA, Dr. Florin entered into an agreement with
us setting forth the terms and conditions of his employment (""Florin Employment Agreement''). The
Florin Employment Agreement contains standard terms and conditions generally applicable at that time to
all full-time employees in the UK. In addition, the Florin Employment Agreement provided for:
(i) Dr. Florin's salary at the time (which has been superseded by subsequent salary increases not reÖected
in the agreement); (ii) use of a company car and a fuel allowance (in accordance with company policy,
this beneÑt is generally available to all senior employees and members of management resident in the
UK); (iii) a notice of termination of employment period of six months plus one week for each year of
employment with EA, up to a maximum of twelve additional weeks; and (iv) a six-month non-solicitation
period following the termination of Dr. Florin's employment during which he is prohibited from enticing
away from us any member of our senior management or our sales and development staÅ.
On September 2, 2005, Dr. Florin was promoted to Executive Vice President and General Manager,
International Publishing and accepted a letter setting forth the new terms and conditions of his
employment in connection with this promotion (""Florin Promotion Letter''). Pursuant to the terms of the
Florin Promotion Letter, Dr. Florin's annual gross salary was increased to 314,650 British pounds. His
discretionary bonus target was increased to 60% of his annual gross salary. In addition, Dr. Florin received
Proxy Statement
a stock option grant to purchase 75,000 shares of EA common stock, which option will vest in its entirety
on the fourth anniversary of the date of grant and has an exercise price equal to the closing market price
of EA common stock on the NASDAQ market on the date of grant.
In addition, on September 6, 2005, Dr. Florin accepted an international relocation oÅer letter (""Florin
Relocation Letter'') setting forth the terms and conditions of his relocation to Geneva, Switzerland, where
EA is establishing a headquarters oÇce for its international publishing business. The headquarters
commenced limited operations in early 2006 and is expected to become fully operational later in the year.
At the time Dr. Florin relocates to Geneva, EA intends to enter into an employment agreement with him
that will supersede the Florin Employment Agreement. Pursuant to the terms of the Florin Relocation
Letter, Dr. Florin's salary will be increased to 718,817 Swiss francs (""CHF'') upon his relocation to
Geneva, while his discretionary bonus target will remain at 60% of his annual gross salary. In addition,
Dr. Florin will be eligible to receive an annual housing allowance for a period of up to 5 years of:
(i) CHF 300,000 during year one; (ii) CHF 192,177 during years two and three; (iii) CHF 102,177 in
year four; and (iv) CHF 42,177 in year Ñve. EA will bear the cost of any Swiss social security and income
taxes incurred by Dr. Florin arising from the annual housing allowance. The foregoing amounts reÖect the
deduction of an annual housing contribution of 15% of Dr. Florin's gross annual salary at the beginning of
year one, or CHF 107,823, that Dr. Florin is required to make to EA beginning in year two and continuing
each year during which he receives an annual housing allowance. In the event that Dr. Florin elects to
purchase a primary residence in Switzerland at the beginning of year one, he will receive 70% of the net
housing allowances he would have received during years one through Ñve. In the event Dr. Florin elects to
purchase a home by the end of year one, he will receive 70% of the net housing allowances he would have
received during years two through Ñve. EA will bear the cost of any Swiss social security and income taxes
incurred by Dr. Florin arising from funds provided to him for the purpose of purchasing a primary
residence in Switzerland. Dr. Florin will also be eligible to receive other transfer-related assistance, as well
an annual car allowance of CHF 25,000 and other beneÑts generally available to EA employees relocating
to Switzerland. In the event Dr. Florin voluntarily terminates his employment with EA in Switzerland for
any reason during the Ñrst 12 months following his relocation, Dr. Florin will be required to either repay or
have deducted from his Ñnal salary payment amounts previously paid by EA for transferring Dr. Florin and
his belongings to Switzerland. In the event that EA terminates Dr. Florin's employment for any reason,
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