Electronic Arts, Inc. and Subsidiaries - Page 13




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               Table 1 shows the number of video game cartridges that were            
          manufactured in Puerto Rico that EAPR sold and delivered to EA              
          during the years in issue.5                                                 
                                       Table 1                                        
                              Fiscal Year          Units                              
                              1993           2,588,306                                
                              1994            7,378,471                               
                              1995            6,485,815                               
                              1996            4,077,218                               
          D.  PPI                                                                     
               PPI was a Delaware corporation based in Santa Isabel; it was           
          an affiliate of R.E. Phelon Company, Inc., a U.S. corporation.              
          PPI was not related to EA or EAPR.  In its Santa Isabel facility,           
          PPI manufactured proprietary ignition modules and related                   
          products for use in small engines.  PPI had about 300 employees             
          in Santa Isabel in connection with this business.  PPI did not              
          own the equipment, raw materials, and components necessary to               
          manufacture video games.                                                    
          E.  EAPR-PPI Agreement                                                      
               On June 25, 1992, EAPR and PPI entered into the Agreement,             
          relating to the lease employees and certain services.  Under the            
          Agreement, EAPR was required to give to PPI (and update                     


               5It is not always obvious when the parties’ stipulations are           
          intended to refer to fiscal years and when to calendar years.  In           
          this instance, we believe the parties intended their stipulation            
          to refer to fiscal years, even though the stipulation does not              
          say so.                                                                     





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