Exhibit 10.1

 

EMPLOYMENT AGREEMENT

 

THIS EMPLOYMENT AGREEMENT (this “Agreement”) is entered into as of the date
signed by the Employer, between Activision Blizzard, Inc. (the “Employer”) or
“Activision Blizzard” and, together with its subsidiaries, the “Activision
Blizzard Group”), and Collister “Coddy” Johnson (“you”).

 

RECITAL

 

The Employer desires to employ you, and you desire to be so employed by the
Employer, on the terms and subject to the conditions set forth in this
Agreement.

 

AGREEMENT

 

NOW, THEREFORE, in consideration of the premises and the mutual promises set
forth in this Agreement, the Employer and you hereby agree as follows:

 

1.                                      Term of Employment

 

(a)                                 The term of your employment under this
Agreement (the “Term”) shall commence on June 26, 2017 (the “Effective Date”)
and shall end on June 30, 2020 (the “Expiration Date”) (or such earlier date on
which your employment is terminated under Section 9).  The Employer shall have
the option to extend the Term by up to one year by notifying you in writing of
its intent to do so at least six (6) months prior to the original or any
extended Expiration Date.  The final date of any such extended Term shall
thereafter be referred to as the “Expiration Date” for purposes of this
Agreement and the Term shall end on such date (or such earlier date on which
your employment is terminated).  Except as set forth in Section 11(s), upon the
Expiration Date (or such earlier date on which your employment is terminated)
all obligations and rights under this Agreement shall immediately lapse.

 

(b)                                 You and the Employer each agree to provide
the other with at least six (6) months’ notice of any intent not to continue
your employment following the Expiration Date.   If your employment continues
beyond the Expiration Date, you shall be an at-will employee whose employment
may be terminated by either party to this Agreement at any time for any reason.

 

2.                                      Compensation

 

(a)                                 Subject to the provisions of this Agreement,
in full consideration for all rights and services provided by you under this
Agreement, during the Term you shall receive only the compensation set forth in
this Section 2.

 

(b)                                 Commencing on the Effective Date, you shall
receive an annual base salary (“Base Salary”) of $1,300,000, which shall be paid
in accordance with the Employer’s payroll policies.  Your Base Salary shall be
reviewed periodically and may be increased by an amount determined by the
Employer, in its sole and absolute discretion.

 

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(c)                                  (i) Annual Bonus.  You will be eligible to
receive an annual discretionary bonus (the “Annual Bonus”).  Your target Annual
Bonus for each calendar year will be one hundred percent (100%) of your Base
Salary.  If, in any year during the Term, the Employer’s non-GAAP Earnings Per
Share (as previously defined) (“EPS”) equals or exceeds 15% more than the
greater of the immediately preceding year’s (x) EPS objective approved by the
Employer’s Board of Directors (“Board”) in the annual operating plan (“AOP”) for
such preceding year; and (y) the actual EPS for such immediately preceding year,
then you will be eligible for a greater target amount for the Annual Bonus as
set forth in this Section 2(c)(i).  Specifically, if the EPS growth condition
set forth in the immediately preceding sentence is satisfied, then your target
Annual Bonus will include the following additional target Annual Bonus
opportunity, such that your maximum total target Annual Bonus opportunity will
be 200% of your Base Salary:

 

EPS Growth (%)

 

Percent of Base Salary for Additional
Target Annual Bonus Opportunity

·                  15

 

·                  10

·                  16

 

·                  20

·                  17

 

·                  30

·                  18

 

·                  40

·                  19

 

·                  50

·                  20

 

·                  60

·                  21

 

·                  70

·                  22

 

·                  80

·                  23

 

·                  90

·                  24

 

·                  100

 

If EPS growth falls between any two of the numbers set forth in the immediately
preceding chart (e.g. if EPS growth is 17.5%), then your additional target
Annual Bonus opportunity will be established via straight line interpolation
between those two numbers (e.g. in the case of 17.5% EPS growth, the additional
target Annual Bonus opportunity would be 35% of your Base Salary).

 

In all instances, the actual amount of the Annual Bonus, if any, shall be
determined by the Employer, in its sole and absolute discretion, and may be
based on, among other things, your Base Salary, the portion of the year falling
in the Term, your overall performance and the performance of the Employer and
the Activision Blizzard Group.  The Annual Bonus, if any, will be paid at the
same time bonuses for that year are generally paid to other executives, but in
no

 

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event earlier than the first day of the first month, or later than the 15th day
of the third month, of the year following the year to which the Annual Bonus
relates.  In all instances, you must remain continuously employed by the
Activision Blizzard Group through the date on which an Annual Bonus, if any, is
paid to be eligible to receive such Annual Bonus.

 

(ii)  Sign On Bonus.  The Employer will provide you with a sign on bonus
totaling $2,200,000 (less applicable taxes and withholdings). One million
($1,000,000) of this bonus will be paid in accordance with the Employer’s
payroll policies within three weeks after the Effective Date, and the remaining
$1,200,000 of this bonus will be paid in accordance with the Employer’s payroll
policies on or about January 15, 2018.  Any such bonus will not be fully earned
by you until you have completed a specified period of service pursuant to this
Agreement.  Specifically, should your employment with the Employer terminate
other than pursuant to Section 9(b), 9(c), 9(d) or 9(e) prior to the first
anniversary of the applicable payment date of the applicable portion of this
bonus, you agree to repay the Employer 100% of that portion of the bonus within
60 days of the termination of your employment.    If you remain employed by the
Activision Blizzard Group through the first anniversary of the last payment date
of any portion of this bonus, the bonus shall be fully earned as of such date
such that if your employment subsequently terminates for any reason you will not
have to repay any portion of the bonus.  The fact that you are receiving this
bonus and the terms under which you will be required to repay the bonus in no
way affect your other obligations under this Agreement.

 

(d)                           Subject to the approval of the Compensation
Committee of the Board of Directors of Activision Blizzard (the “Compensation
Committee”), Activision Blizzard will grant to you equity awards with a total
target grant value of $15,000,000 (and a total grant value of $17,250,000 if the
2017 Maximum PSU Grant Value (as defined below) were achieved) as follows:

 

(i)                                     Activision Blizzard shall grant to you
non-qualified stock options to purchase shares of Activision Blizzard’s common
stock with a total grant value of approximately $6,000,000 (the “2017
Options”).  The actual number of stock options awarded to you on the grant date
shall be determined based on the official closing price of Activision Blizzard’s
common stock on the effective date of the grant, as reported by NASDAQ (the
“Grant Date Price”), and an applicable binomial factor selected by Activision
Blizzard.  The number of stock options awarded shall be rounded to the nearest
whole number, and Activision Blizzard retains the discretion to modify the
methodology for such calculations as needed.  The 2017 Options shall be awarded
with an exercise price that is equal to the Grant Date Price.  Finally, one
hundred percent (100%) of the 2017 Options shall vest on June 29, 2020, subject
to your remaining employed by the Activision Blizzard Group through the
applicable vesting date.

 

(ii)                                  Activision Blizzard shall grant to you
performance-vesting restricted share units which represent the conditional right
to receive shares of Activision Blizzard’s common stock (the “2017 Performance
Share Units”), with a target value at the time of grant of approximately
$9,000,000 (the “2017 Target PSU Grant Value”).  The actual number of 2017
Performance Share Units awarded to you on the grant date shall be equal to the
2017 Target PSU Grant Value divided by the Grant Date Price (it being

 

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recognized that if the maximum performance objectives are met for all of the
2017 Performance Share Units, the value of the shares received upon vesting for
all of the 2017 Performance Share Units would have been $11,250,000 at the time
of grant of the 2017 Performance Share Units, representing 125% of the 2017
Target PSU Grant Value (the “2017 Maximum PSU Grant Value”).  The number of 2017
Performance Share Units awarded shall be rounded to the nearest whole number and
shall be determined by the Compensation Committee in its sole discretion, and
Activision Blizzard retains the discretion to modify the methodology for such
calculations as needed.  Subject to your remaining employed by the Activision
Blizzard Group through the applicable vesting dates, the actual number of shares
of Activision Blizzard’s common stock (“Shares”) that shall be received on each
of the applicable vesting dates is determined as follows:

 

a.              Two-ninths of the 2017 Performance Share Units (the “First
Tranche 2017 Performance Share Units”) shall vest on June 29, 2018, if, and only
if, the Compensation Committee determines that non-GAAP operating income (as
previously defined) for 2017 for Activision Blizzard (“2017 OI”) is 90% or more
of the annual operating plan operating income objective established by the Board
of Directors for Activision Blizzard for 2017 (the “2017 AOP OI Objective”).  If
the 2017 OI is less than 90% of the 2017 AOP OI Objective, then the First
Tranche 2017 Performance Share Units will not vest and shall be forfeited.  If
the 2017 OI is 90% or more of the 2017 AOP OI Objective, the number of Shares
that shall be received with regard to the First Tranche 2017 Performance Share
Units on the applicable vesting date shall be equal to the product of:  (1) the
number of First Tranche 2017 Performance Share Units; and (2) the ratio of the
2017 OI to the 2017 AOP OI Objective, up to a maximum of 125%;

 

b.              Two-ninths of the 2017 Performance Share Units (the “Second
Tranche 2017 Performance Share Units”) shall vest on June 29, 2019, if, and only
if, the Compensation Committee determines that non-GAAP operating income (as
previously defined) for 2018 for Activision Blizzard (“2018 OI”) is 90% or more
of the annual operating plan operating income objective established by the Board
of Directors for Activision Blizzard for 2018 (the “2018 AOP OI Objective”).  If
the 2018 OI is less than 90% of the 2018 AOP OI Objective, then the Second
Tranche 2017 Performance Share Units will not vest and shall be forfeited.  If
the 2018 OI is 90% or more of the 2018 AOP OI Objective, the number of Shares
that shall be received with regard to the Second Tranche 2017 Performance Share
Units on the applicable vesting date shall be equal to the product of:  (1) the
number of Second Tranche 2017 Performance Share Units; and (2) the ratio of the
2018 OI to the 2018 AOP OI Objective, up to a maximum of 125%;

 

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c.               Two-ninths of the 2017 Performance Share Units (the “Third
Tranche 2017 Performance Share Units”) shall vest on June 29, 2020, if, and only
if, the Compensation Committee determines that non-GAAP operating income (as
previously defined) for 2019 for Activision Blizzard (“2019 OI”) is 90% or more
of the annual operating plan operating income objective established by the Board
of Directors for Activision Blizzard for 2019 (the “2019 AOP OI Objective”).  If
the 2019 OI is less than 90% of the 2019 AOP OI Objective, then the Third
Tranche 2017 Performance Share Units will not vest and shall be forfeited.  If
the 2019 OI is 90% or more of the 2019 AOP OI Objective, the number of Shares
that shall be received with regard to the Third Tranche 2017 Performance Share
Units on the applicable vesting date shall be equal to the product of:  (1) the
number of Third Tranche 2017 Performance Share Units; and (2) the ratio of the
2019 OI to the 2019 AOP OI Objective, up to a maximum of 125%;

 

d.              One-ninth of the 2017 Performance Share Units (the “First
Tranche 2017 EPS Performance Share Units”) shall vest on June 29, 2018, if, and
only if, the Compensation Committee determines that the EPS for 2017 for
Activision Blizzard (“2017 EPS”) is 90% or more of the annual operating plan EPS
objective established by the Board of Directors for Activision Blizzard for 2017
(the “2017 AOP EPS Objective”).  If the 2017 EPS is less than 90% of the 2017
AOP EPS Objective, then the First Tranche 2017 EPS Performance Share Units will
not vest and shall be forfeited.  If the 2017 EPS is 90% or more of the 2017 AOP
EPS Objective, the number of Shares that shall be received with regard to the
First Tranche 2017 EPS Performance Share Units on the applicable vesting date
shall be equal to the product of:  (1) the number of First Tranche 2017 EPS
Performance Share Units; and (2) the ratio of the 2017 EPS to the 2017 AOP EPS
Objective, up to a maximum of 125%;

 

e.               one-ninth of the 2017 Performance Share Units (the “Second
Tranche 2017 EPS Performance Share Units”) shall vest on June 29, 2019, if, and
only if, the Compensation Committee determines that the EPS for 2018 for
Activision Blizzard (“2018 EPS”) is 90% or more of the annual operating plan EPS
objective established by the Board of Directors for Activision Blizzard for 2018
(the “2018 AOP EPS Objective”).  If the 2018 EPS is less than 90% of the 2018
AOP EPS Objective, then the Second Tranche 2017 EPS Performance Share Units will
not vest and shall be forfeited.  If the 2018 EPS is 90% or more of the 2018 AOP
EPS Objective, the number of Shares that shall be received with regard to the
Second Tranche 2017 EPS Performance Share Units on the applicable vesting date
shall be equal to the product of:  (1) the number of Second Tranche 2017 EPS
Performance Share

 

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Units; and (2) the ratio of the 2018 EPS to the 2018 AOP EPS Objective, up to a
maximum of 125%; and

 

f.                one-ninth of the 2017 Performance Share Units (the “Third
Tranche 2017 EPS Performance Share Units”) shall vest on June 29, 2020, if, and
only if, the Compensation Committee determines that the EPS for 2019 for
Activision Blizzard (“2019 EPS”) is 90% or more of the annual operating plan
operating income objective established by the Board of Directors for Activision
Blizzard for 2019 (the “2019 AOP EPS Objective”).  If the 2019 EPS is less than
90% of the 2019 AOP EPS Objective, then the Third Tranche 2017 EPS Performance
Share Units will not vest and shall be forfeited.  If the 2019 EPS is 90% or
more of the 2019 AOP EPS Objective, the number of Shares that shall be received
with regard to the Third Tranche 2017 EPS Performance Share Units on the
applicable vesting date shall be equal to the product of:  (1) the number of
Third Tranche 2017 EPS Performance Share Units; and (2) the ratio of the 2019
EPS to the 2019 AOP EPS Objective, up to a maximum of 125%.

 

Prior to the vesting of any portion of the 2017 Performance Share Units,
Activision Blizzard, in its sole discretion, may adjust the performance
objective for the relevant fiscal year(s) by substituting the OI and AOP OI
Objective of a different or additional business unit for that of your original
business unit or by prorating or otherwise combining the OI and AOP OI Objective
of the applicable business units, in each case for purposes of determining
whether or not the conditions of the unvested 2017 Performance Share Units have
been satisfied.

 

The Company reserves the right to modify the manner of calculating non-GAAP
earnings per share, non-GAAP earnings per share (as previously defined),
non-GAAP operating income and non-GAAP operating income (as previously defined),
so long as such calculations are applied a] in the same manner to all similarly
situated executives of Activision Blizzard; and b] to both the actual results
and the goal for the same measurement period.

 

Collectively, the 2017 Options and the 2017 Performance Share Units shall be
referred to as the “2017 Equity Awards”.  You acknowledge that the grant of 2017
Equity Awards pursuant to this Section 2(d) is expressly conditioned upon
approval by the Compensation Committee and that the Compensation Committee has
discretion to approve or disapprove the grants and/or to determine and make
modifications to the terms of the grants.  The 2017 Equity Awards shall be
subject to all terms of the equity incentive plan pursuant to which they are
granted (the “Incentive Plan”), Activision Blizzard’s standard forms of award
agreement, and, in the event that Activision Blizzard determines that you are an
Executive Officer (as defined by the Securities Exchange Act of 1934, as
amended) of Activision Blizzard, the Employer’s Executive Stock Ownership
Guidelines (including, but not limited to, all of the limitations on equity
awards described therein) which are attached as Exhibit C.  In the event of a
conflict between this Agreement and the terms of the Incentive Plan or award
agreements, the Incentive Plan or the award agreements, as applicable, shall
govern.

 

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(e)                            Subject to the approval of the Compensation
Committee, beginning in 2018, you will be eligible to receive an annual equity
grant of performance-vesting restricted share units with (i) performance
objectives contingent upon cumulative operating income performance as compared
to Activision Blizzard’s three-year plan, (ii) a vesting date which will be no
later than the last day of the third month following the third full fiscal year
from grant (i.e. if granted in November 2018, the vesting will be no later than
March 30, 2022), (iii) the formula for vesting of the total number of
performance-vesting restricted shares being equal to product of: (a) the target
number of performance-vesting restricted share units and (b) the percentage of
achievement, which shall be calculated by dividing the operating income achieved
by the operating income performance objective, with a minimum ratio of 85%
(provided that achievement is equal to or greater than 85% of the performance
objective, otherwise no vesting shall occur at all) and a maximum ratio of 125%,
and (iv) a target value of $1,000,000 (with the actual amount, performance
objectives, and vesting schedule, to be determined by the Compensation
Committee, which has discretion to approve or disapprove all equity incentive
awards and to determine and/or make modification to the terms of such awards). 
Such annual awards, if and when approved by the Compensation Committee, shall be
subject to all terms of the Incentive Plan, Activision Blizzard’s standard forms
of award agreement, and, in the event that Activision Blizzard determines that
you are an Executive Officer (as defined by the Securities Exchange Act of 1934,
as amended) of Activision Blizzard, the Employer’s Executive Stock Ownership
Guidelines (including, but not limited to, all of the limitations on equity
awards described therein); in the event of a conflict between this Agreement and
the terms of the Incentive Plan or award agreements, the Incentive Plan or the
award agreements, as applicable, shall govern.  In addition, such annual awards,
if and when approved by the Compensation Committee, shall be in addition to any
previous equity incentive awards made to you.

 

(f)                                   Subject to the approval of the
Compensation Committee, beginning in 2018, you will be eligible to receive an
annual equity grant of performance-vesting restricted share units with
(i) performance objectives contingent upon year-over-year EPS growth of no less
than fifteen percent (15%), (ii) a vesting date of June 29 of the year following
the year of grant (i.e. if granted in July 2018, the vesting will be June 29,
2019), (iii) a target value of $3,000,000; and (iv) a formula for vesting as set
forth in the following sentence (in all cases, with the actual amount,
performance objectives, and vesting schedule, to be determined by the
Compensation Committee, which has discretion to approve or disapprove all equity
incentive awards and to determine and/or make modification to the terms of such
awards).  If, in any year which is the subject of a grant of performance-vesting
restricted share units pursuant to this Section 2(f), the Employer’s EPS equals
or exceeds 15% more than the greater of the immediately preceding year’s (x) EPS
objective approved by the Employer’s Board in the AOP for such preceding year;
and (y) the actual EPS for such immediately preceding year, then such
performance-vesting restricted share units granted pursuant to this
Section 2(f) will be eligible to vest.  Specifically, if the EPS growth
condition set forth in the immediately preceding sentence is satisfied, then the
applicable performance-vesting restricted share units granted pursuant to this
Section 2(f) will be eligible for vesting as follows, up to a maximum of two
hundred percent (200%):

 

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Level of Annual
EPS Growth (%)

 

Percent of Target
Earned (%)

 

Level of Annual
EPS Growth (%)

 

Percent of Target
Earned (%)

·                  15

 

·                  10

 

·                  25

 

·                  110

·                  16

 

·                  20

 

·                  26

 

·                  120

·                  17

 

·                  30

 

·                  27

 

·                  130

·                  18

 

·                  40

 

·                  28

 

·                  140

·                  19

 

·                  50

 

·                  29

 

·                  150

·                  20

 

·                  60

 

·                  30

 

·                  160

·                  21

 

·                  70

 

·                  31

 

·                  170

·                  22

 

·                  80

 

·                  32

 

·                  180

·                  23

 

·                  90

 

·                  33

 

·                  190

·                  24

 

·                  100

 

·                  34

 

·                  200

 

If EPS growth falls between any two of the numbers set forth in the immediately
preceding chart (e.g. if EPS growth is 17.5%), then your vesting opportunity
will be established via straight line interpolation between those two numbers
(e.g. in the case of 17.5% EPS growth, the vesting opportunity would be 35% of
the applicable performance-vesting restricted share units granted pursuant to
this Section 2(f)).

 

Such performance-vesting restricted share units, if and when approved by the
Compensation Committee, shall be subject to all terms of the Incentive Plan,
Activision Blizzard’s standard forms of award agreement, and, in the event that
Activision Blizzard determines that you are an Executive Officer (as defined by
the Securities Exchange Act of 1934, as amended) of Activision Blizzard, the
Employer’s Executive Stock Ownership Guidelines (including, but not limited to,
all of the limitations on equity awards described therein); in the event of a
conflict between this Agreement and the terms of the Incentive Plan or award
agreements, the Incentive Plan or the award agreements, as applicable, shall
govern.  In addition, such annual awards, if and when approved by the
Compensation Committee, shall be in addition to any previous equity incentive
awards made to you.

 

(g)                                  Subject to the approval of the Compensation
Committee, in 2020, you will be eligible to receive a one-time equity grant with
a target grant date value of $3,000,000 with the actual amount, form of grant,
performance objectives (if any), and vesting schedule, to be determined by the
Compensation Committee, which has discretion to approve or disapprove all equity
incentive awards and to determine and/or make modification to the terms of such
awards.  Such equity grant, if and when approved by the Compensation Committee,
shall be subject to all terms of the Incentive Plan, Activision Blizzard’s
standard forms of award agreement, and, in the event that Activision Blizzard
determines that you are an Executive Officer (as defined by the Securities
Exchange Act of 1934, as amended) of Activision Blizzard, the Employer’s
Executive Stock Ownership Guidelines (including, but not limited to, all of the
limitations on

 

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equity awards described therein); in the event of a conflict between this
Agreement and the terms of the Incentive Plan or award agreements, the Incentive
Plan or the award agreements, as applicable, shall govern.  In addition, such
annual awards, if and when approved by the Compensation Committee, shall be in
addition to any previous equity incentive awards made to you.

 

3.                                      Title; Location

 

You shall serve as President and Chief Operating Officer of Activision
Blizzard.  Your principal place of business initially shall be the Employer’s
headquarters in Santa Monica, California; provided, however, that you
acknowledge and agree that you may be required to travel from time to time for
business reasons.

 

4.                                      Duties

 

You shall report directly to the Chief Executive Officer (or such other
executive of the Activision Blizzard Group as may be determined from time to
time by it in its sole and absolute discretion) and shall have such duties
commensurate with your position as may be assigned to you from time to time by
the Chief Executive Officer (or, as applicable, such other executive designated
by the Employer).  You are also required to read, review and observe all of the
Activision Blizzard Group’s policies, procedures, rules and regulations in
effect from time to time during the Term that apply to employees of the
Employer, including, without limitation, the Code of Conduct, as amended from
time to time.  You shall devote your full-time working time to the performance
of your duties hereunder, shall faithfully serve the Employer, shall in all
respects conform to and comply with the lawful directions and instructions given
to you by the Chief Executive Officer (or such other executive of the Activision
Blizzard Group as may be determined from time to time by the Employer in its
sole and absolute discretion) and shall use your best efforts to promote and
serve the interests of the Activision Blizzard Group.  Further, you shall at all
times place the Employer’s interests above your own, not take any actions that
would conflict with the Employer’s interests and shall perform all your duties
for the Employer with the highest duty of care.  Further, you shall not,
directly or indirectly, render services of any kind to any other person or
organization, whether on your own behalf or on behalf of others, without the
consent of the Chief Executive Officer or otherwise engage in activities that
would interfere with your faithful and diligent performance of your duties
hereunder; provided, however, that you may serve on civic or charitable boards
or engage in charitable activities without remuneration if doing so is not
inconsistent with, or adverse to, your employment hereunder.

 

5.                                      Expenses

 

To the extent you incur necessary and reasonable travel or other business
expenses in the course of your employment, you shall be reimbursed for such
expenses, upon presentation of written documentation in accordance with the
Employer’s policies in effect from time to time.

 

6.                                      Other Benefits

 

(a)                                 You shall be eligible to participate in all
health, welfare, retirement, pension, life insurance, disability, perquisite and
similar plans, programs and arrangements generally

 

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available to executives of the Employer from time to time during the Term,
subject to the then-prevailing terms, conditions and eligibility requirements of
each such plan, program, or arrangement.  In addition to the foregoing benefits,
Employer will provide you during the Term, at Employer’s expense, with a
supplemental term life insurance policy with a face amount of $3,000,000 through
a carrier of Employer’s choice (the “Target Face Amount”), subject to your
insurability.  If it is determined that you are insurable at a higher cost than
a healthy individual of like age, the face amount of such insurance coverage
will be reduced to the maximum face amount of coverage that may be obtained for
the cost of coverage of the Target Face Amount for such healthy individual.

 

(b)                                 You expressly agree and acknowledge that,
after the Expiration Date (or such earlier date on which your employment is
terminated), you shall not be entitled to any additional benefits, except as
specifically provided in this Agreement and the benefit plans in which you
participate during the Term, and subject in each case to the then-prevailing
terms and conditions of each such plan.

 

7.                                      Vacation and Paid Holidays

 

(a)                                 You will generally be entitled to paid
vacation days in accordance with the normal vacation policies of the Employer in
effect from time to time; provided, however, that you will be entitled to take
and accrue no less than twenty (20) paid vacation days per year, unless your
vacation accrual balance exceeds the Employer’s then-current maximum accrual
cap, in which case you shall cease accruing vacation leave until your accrual
balance has fallen below the cap again.

 

(b)                                 You shall be entitled to all paid holidays
allowed by the Employer to its full-time employees in the United States.

 

8.                                      Protection of the Employer’s Interests

 

(a)                                 Duty of Loyalty.  During the Term, you will
owe a “Duty of Loyalty” to the Employer, which includes, but is not limited to,
you not competing in any manner, whether directly or indirectly, as a principal,
employee, agent, owner, or otherwise, with any entity in the Activision Blizzard
Group; provided, however, that nothing in this Section 8(a) will limit your
right to own up to five percent (5%) of any of the debt or equity securities of
any business organization that is then required to file reports with the
Securities and Exchange Commission pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934, as amended.

 

(b)                                 Property of the Activision Blizzard Group. 
All rights worldwide with respect to any and all intellectual or other property
of any nature produced, created or suggested by you, whether on your own time or
not, alone or with others, during the term of your employment or resulting from
your services which (i) relate in any manner at the time of conception or
reduction to practice to the actual or demonstrably anticipated business of the
Activision Blizzard Group, (ii) result from or are suggested by any task
assigned to you or any work performed by you on behalf of the Activision
Blizzard Group, (iii) were created using the time or resources of the Activision
Blizzard Group, or (iv) are based on any property owned or idea conceived by the
Activision Blizzard Group, shall be deemed to be a work made for hire and shall
be the sole and exclusive property of the Activision Blizzard Group.  You agree
to execute, acknowledge and deliver to the Employer, at the Employer’s request,
such further documents, including copyright and patent assignments, as the
Employer finds appropriate to

 

10

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evidence the Activision Blizzard Group’s rights in such property.  Your
agreement to assign to the Activision Blizzard Group any of your rights as set
forth in this Section 8(b) shall not apply to any invention that qualifies fully
under the provisions of California Labor Code Section 2870, where no equipment,
supplies, facility or trade secret information of the Activision Blizzard Group
was used, where the invention was developed entirely upon your own time, where
the invention does not relate to the Activision Blizzard Group’s business, and
where the invention does not result from any work performed by you for the
Activision Blizzard Group.

 

(c)                                  Covenant Not to Shop.  Other than during
the final six (6) months of the Term, you shall not negotiate for employment
with any entity or person outside of the Activision Blizzard Group.  During the
search process and thereafter you shall remain strictly subject to your
continuing obligations under this Agreement, including, without limitation, your
Duty of Loyalty, compliance with the Activision Blizzard Group’s policies and
your confidentiality obligations.

 

(d)                                 Confidentiality.  You acknowledge, and the
Employer agrees, that during your employment you will have access to and become
informed of confidential and proprietary information concerning the Activision
Blizzard Group.  During your employment and at all times following the
termination of your employment, confidential or proprietary information of any
entity in the Activision Blizzard Group shall not be used by you or disclosed or
made available by you to any person except as required in the course of your
employment with the Activision Blizzard Group or as otherwise provided for in
the Employee Confidential Information Agreement attached as Exhibit A hereto
(the “Confidential Information Agreement”).  Upon the termination of your
employment (or at any time on the Employer’s request), you shall return to the
Activision Blizzard Group all such information that exists, whether in
electronic, written, or other form (and all copies or extracts thereof) under
your control and shall not retain such information in any form, including
without limitation on any devices, disks or other media.  Without limiting the
generality of the foregoing, you acknowledge signing and delivering to the
Employer the Confidential Information Agreement as of the Effective Date and you
agree that all terms and conditions contained in such agreement, and all of your
obligations and commitments provided for in such agreement, shall be deemed, and
hereby are, incorporated into this Agreement as if set forth in full herein.

 

(e)                                  Return of Property and Resignation from
Office.  You acknowledge that, upon termination of your employment for any
reason whatsoever (or at any time on the Employer’s request), you will promptly
deliver to the Activision Blizzard Group or surrender to the Activision Blizzard
Group’s representative all property of any entity in the Activision Blizzard
Group, including, without limitation, all documents and other materials (and all
copies thereof) relating to the Activision Blizzard Group’s business, all
identification and access cards, all contact lists and third party business
cards however and wherever preserved, and any equipment provided by any entity
in the Activision Blizzard Group, including, without limitation, computers,
telephones, personal digital assistants, memory cards and similar devices that
you possess or have in your custody or under your control. You will cooperate
with the Activision Blizzard Group by participating in interviews to share any
knowledge you may have regarding the Activision Blizzard Group’s intellectual or
other property with personnel designated by the Activision Blizzard Group.  You
also agree to resign from any office held by you within the Activision Blizzard
Group immediately upon termination of your employment for any reason whatsoever
(or at any time on the Employer’s request) and you irrevocably

 

11

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appoint any person designated as the Activision Blizzard Group’s representative
at that time as your delegate to effect such resignation.

 

(f)                                   Covenant Not to Solicit.

 

(i)                                     During your employment, you shall not,
at any time or for any reason, either alone or jointly, with or on behalf of
others, whether as principal, partner, agent, representative, equity holder,
director, employee, consultant or otherwise, directly or indirectly: (a) offer
employment to, or solicit the employment or engagement of, or otherwise entice
away from the employment or engagement of the Activision Blizzard Group, either
for your own account or for any other person, firm or company, any person
employed or otherwise engaged by any entity in the Activision Blizzard Group,
whether or not such person would commit any breach of a contract by reason of
his or her leaving the service of the Activision Blizzard Group; or (b) solicit,
induce or entice any client, customer, contractor, licensor, agent, supplier,
partner or other business relationship of any entity in the Activision Blizzard
Group to terminate, discontinue, renegotiate or otherwise cease or modify its
relationship with the Activision Blizzard Group.

 

(ii)                                  For a period of two (2) years following
the termination of your employment for any reason whatsoever, you shall not, at
any time or for any reason, either alone or jointly, with or on behalf of
others, whether as principal, partner, agent, representative, equity holder,
director, employee, consultant or otherwise, directly or indirectly solicit the
employment or engagement of, either for your own account or for any other
person, firm or company, any person employed or otherwise engaged by any entity
in the Activision Blizzard Group (or any person who was employed or otherwise
engaged by the Activision Blizzard Group during your final ninety (90) days of
employment), whether or not such person would commit any breach of a contract by
reason of his or her leaving the service of the Activision Blizzard Group.

 

(iii)                               During your employment and at all times
following the termination of your employment for any reason whatsoever, you
shall not, at any time or for any reason, use the confidential, trade secret
information of the Activision Blizzard Group or any other unlawful means to
directly or indirectly solicit, induce or entice any client, customer,
contractor, licensor, agent, supplier, partner or other business relationship of
any entity in the Activision Blizzard Group to terminate, discontinue,
renegotiate or otherwise cease or modify its relationship with the Activision
Blizzard Group.

 

(iv)                              You expressly acknowledge and agree that the
restrictions contained in this Section 8(f) are reasonably tailored to protect
the Activision Blizzard Group’s confidential information and trade secrets and
to ensure that you do not violate your Duty of Loyalty or any other fiduciary
duty to the Employer, and are reasonable in all circumstances in scope, duration
and

 

12

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all other respects. The provisions of this Section 8(f) shall survive the
expiration or earlier termination of this Agreement.

 

9.                                      Termination of Employment

 

(a)                                 By the Employer for Cause.

 

(i)                                     At any time during the Term, the
Employer may terminate your employment for “Cause,” which shall mean a
reasonable and good-faith determination by the Employer that you (i) engaged in
gross negligence in the performance of your duties or willfully and continuously
failed or refused to perform any duties reasonably requested in the course of
your employment; (ii) engaged in fraud, dishonesty, or any other serious
misconduct that causes or has the potential to cause, harm to any entity in the
Activision Blizzard Group, including its business or reputation;
(iii) materially violated any lawful directives or policies of the Activision
Blizzard Group or any laws, rules or regulations applicable to your employment
with the Activision Blizzard Group; (iv) materially breached this Agreement;
(v) materially breached any proprietary information or confidentiality agreement
with any entity in the Activision Blizzard Group; (vi) were convicted of, or
pled guilty or no contest to, a felony or crime involving dishonesty or moral
turpitude; or (vii) materially breached your fiduciary duties to the Activision
Blizzard Group.

 

(ii)                                  In the case of any termination for Cause
that is curable without any residual damage (financial or otherwise) to the
Employer or any entity in the Activision Blizzard Group, the Employer shall give
you at least thirty (30) days written notice of its intent to terminate your
employment; provided, that in no event shall any termination pursuant to clause
(vi) of the definition of Cause be deemed curable.  The notice shall specify
(x) the effective date of your termination and (y) the particular acts or
circumstances that constitute Cause for such termination.  You shall be given
the opportunity within fifteen (15) days after receiving the notice to explain
why Cause does not exist or to cure any basis for Cause (other than a
termination pursuant to clause (vi) of the definition thereof).  Within fifteen
(15) days after any such explanation or cure, the Employer will make its final
determination regarding whether Cause exists and deliver such determination to
you in writing.  If the final decision is that Cause exists and no cure has
occurred, your employment with the Employer shall be terminated for Cause as of
the date of termination specified in the original notice.  If the final decision
is that Cause does not exist or a cure has occurred, your employment with the
Employer shall not be terminated for Cause at that time.

 

(iii)                               If your employment terminates for any reason
other than a termination by the Employer for Cause, at a time when the Employer
had Cause to terminate you (or would have had Cause if it then knew all relevant
facts) under clauses (i), (ii), (v), (vi) or (vii) of the definition of Cause,
your termination shall be treated as a termination by the Employer for Cause.

 

13

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(b)                                 By the Employer Without Cause.  The Employer
may terminate your employment without Cause at any time during the Term and such
termination shall not be deemed a breach by the Employer of any term of this
Agreement or any other duty or obligation, expressed or implied, which the
Employer may owe to you pursuant to any principle or provision of law.

 

(c)                                  By You If Your Principal Place of Business
Is Relocated Without Your Consent.  At any time during the Term, you may
terminate your employment if, without your written agreement or other voluntary
action on your part, the Employer reassigns your principal place of business to
a location that is more than fifty (50) miles from your principal place of
business as of the Effective Date and that materially and adversely affects your
commute; provided, however, that you must (i) provide the Employer with written
notice of your intent to terminate your employment under this Section 9(c) and a
description of the event you believe gives you the right to do so within thirty
(30) days after the initial existence of the event and (ii) the Employer shall
have ninety (90) days after you provide the notice described above to cure any
such default (the “Cure Period”).  You will have five (5) days following the end
of the Cure Period to terminate your employment, after which your ability to
terminate your employment under this Section 9(c) will no longer exist.

 

(d)                                 Death.  In the event of your death during
the Term, your employment shall terminate immediately as of the date of your
death.

 

(e)                                  Disability.  In the event that you are or
become “disabled,” the Employer shall, to the extent permitted by applicable
law, have the right to terminate your employment.  For purposes of this
Agreement, “disabled” shall mean that either (i) you are receiving benefits
under any long-term disability plan of the Employer then in effect, or (ii) if
there is no such long-term disability plan of the Employer then in effect, you
have a long-term and continuous physical or mental impairment that renders you
unable to perform the duties required of you under this Agreement, even with the
Employer providing you a reasonable accommodation, as determined by a physician
mutually acceptable to you and the Employer.  You shall cooperate and make
yourself available for any medical examination requested by the Employer with
respect to any determination of whether you are disabled within ten (10) days of
such a request.  Without limiting the generality of the foregoing, to the extent
provided by the Employer’s policies and practices then in effect, you shall not
receive any Base Salary during any period in which you are disabled; provided,
however, that nothing in this Section 9(e) shall impact any right you may have
to any payments under the Employer’s short-term and long-term disability plans,
if any.

 

10.                               Termination of Obligations and Severance
Payments

 

(a)                                 General.  Upon the termination of your
employment pursuant to Section 9, your rights and the Employer’s obligations to
you under this Agreement shall immediately terminate except as provided in this
Section 10 and Section 11(s), and you (or your heirs or estate, as applicable)
shall be entitled to receive any amounts or benefits set forth below (subject in
all cases to Sections 10(f), 11(q) and 11(r)).  The payments and benefits
provided pursuant to this Section 10 are (x) in lieu of any severance or income
continuation protection under any plan of the Activision Blizzard Group that may
now or hereafter exist and (y) deemed to satisfy and be in full and final
settlement of all obligations of the Activision Blizzard Group to you under this

 

14

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Agreement.  You shall have no further right to receive any other compensation
benefits following your termination of employment for any reason except as set
forth in this Section 10.

 

For the purposes of this Agreement, the following terms shall have the following
meanings:

 

“Basic Severance” shall mean payment of (1) any Base Salary earned but unpaid as
of the Termination Date; (2) any business expenses incurred but not reimbursed
under Section 5 as of the Termination Date; and (3) payment in lieu of any
vacation accrued under Section 7 but unused as of the Termination Date.

 

“Bonus Severance” shall mean payment of:

 

(i)                                     an amount equal to the Annual Bonus that
the Employer determines, in its sole discretion, you would have received in
accordance with Section 2(c)(i) for any year that ended prior to the Termination
Date had you remained employed through the date such bonus would have been
otherwise been paid (in the event that your Termination Date occurs before such
bonus would have been paid); and

 

(ii)                                  an amount equal to the Annual Bonus that
the Employer determines, in its sole discretion, you would have received in
accordance with Section 2(c)(i) for the year in which your Termination Date
occurs had you had remained employed through the date such bonus would have been
paid, multiplied by a fraction, the numerator of which is the number
corresponding to the calendar month in which the Termination Date occurs and the
denominator of which is 12, where, for purposes of calculating the amount of
such bonus, any goals will be measured by actual performance.

 

“Termination Date” shall mean the effective date of your termination of
employment pursuant to Sections 9(a)-(e).

 

(b)                                 Death.  In the event your employment is
terminated under Section 9(d):

 

(i)                                     Basic Severance.  Your heirs or estate,
as the case may be, shall receive payment of the Basic Severance in a lump sum
within thirty (30) days following the Termination Date unless a different
payment date is prescribed by an applicable compensation, incentive or benefit
plan, in which case payment shall be made in accordance with such plan;

 

(ii)                                  Lump Sum Payment of Two Times Base
Salary.  Your heirs or estate, as the case may be, shall receive payment of an
amount equal to two (2) times the Base Salary (at the rate in effect as of the
Termination Date) in a lump sum within thirty (30) days following the
Termination Date; provided, however, that this amount shall be reduced by any
payments to which you become entitled upon death under any Employer-sponsored
plan other than the $3,000,000 life insurance policy;

 

15

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(iii)                               Bonus Severance.  Your heirs or estate, as
the case may be, shall receive payment of the Bonus Severance in a lump sum no
later than the 15th day of the third month of the year following the year to
which the underlying amount relates; and

 

(iv)                              Impact on Equity Awards.  All outstanding
equity awards shall cease to vest.  All vested performance share units shall be
paid in accordance with their terms.  Any vested portion of stock options shall
remain exercisable until the earlier of (x) one (1) year after the Termination
Date or (y) the original expiration date of stock options.  Any equity awards
that are not vested as of your Termination Date will be cancelled immediately.

 

(v)                                 Additional Severance and PSU Termination
Consideration.  The Additional Severance and PSU Termination Consideration
provisions set forth in Sections 10(c)(iv) and 10(c)(v)b. shall apply, subject
to Section 10(c)(vi).

 

(c)                                  Termination by the Employer Without Cause,
by You if Your Principal Place of Business Is Relocated Without Your Consent or
by the Employer if You Become Disabled. In the event the Employer terminates
your employment under Section 9(b), you terminate your employment under
Section 9(c) or the Employer terminates your employment under Section 9(e):

 

(i)                                     Basic Severance.  You or your legal
representative, as the case may be, shall receive payment of the Basic Severance
in a lump sum within thirty (30) days following the Termination Date unless a
different payment date is prescribed by an applicable compensation, incentive or
benefit plan, in which case payment shall be made in accordance with such plan;

 

(ii)                                  Salary Continuation.  Subject to
Section 10(f)(ii), you or your legal representative, as the case may be, shall
receive the payment of an amount equal to the Base Salary (at the rate in effect
on the Termination Date) that you would have received had you remained employed
through the Expiration Date (the “Salary Continuation Period”), which amount
shall be paid in equal installments commencing on the first payroll date
following the 60th day following the Termination Date in accordance with the
Employer’s payroll practices in effect on the Termination Date, provided that
the first such payment shall include any installments relating to the 60 day
period following the Termination Date; provided, however, that, to the extent
doing so will not result in the imposition of additional taxes under
Section 409A (“Section 409A”) of the Internal Revenue Code of 1986, as amended
and the rules and regulations promulgated thereunder (the “Code”), this amount
shall be reduced by any payments which you have received or to which you become
entitled under any Employer-sponsored long-term disability plan;

 

(iii)                               Bonus Severance.  You or your legal
representative, as the case may be, shall receive payment of the Bonus Severance
in a lump sum no later than

 

16

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the 15th day of the third month of the year following the year to which the
underlying amount relates;

 

(iv)                              Additional Severance.

 

a.                                      You or your legal representative, as the
case may be, shall receive payment of $2,000,000, if and only if, (i) your
employment is terminated pursuant to Section 9(b), 9(c), 9(d) or 9(e), (ii) your
Termination Date is after December 31, 2017, and (iii) the Compensation
Committee determines, in its sole discretion, that Activision Blizzard’s [i]
2017 OI is $1 or greater and [ii] 2017 OI is 90% or greater than the 2017 AOP OI
Objective;

 

b.                                      You or your legal representative, as the
case may be, shall receive payment of $2,000,000, if an only if, (i) your
employment is terminated pursuant to Section 9(b), 9(c), 9(d) or 9(e), (ii) your
Termination Date is after December 31, 2018, and (iii) the Compensation
Committee determines, in its sole discretion, that Activision Blizzard’s [i]
2018 OI is $1 or greater and [ii] 2018 OI is 90% or greater than the 2018 AOP OI
Objective; and

 

c.                                       You or your legal representative, as
the case may be, shall receive payment of $2,000,000, if an only if, (i) your
employment is terminated pursuant to Section 9(b),9(c), 9(d) or 9(e), (ii) your
Termination Date is after December 31, 2019, and (iii) the Compensation
Committee determines, in its sole discretion, that Activision Blizzard’s [i]
2019 OI is $1 or greater and [ii] 2019 OI is 90% or greater than the 2019 AOP OI
Objective.

 

The amounts set forth in Sections 10(c)(iv)a. through 10(c)(iv)c. are intended
to be cumulative to the extent the applicable conditions are satisfied;
provided, however, no payment pursuant to Section 10(c)(iv)a., 10(c)(iv)b., or
10(c)(iv)c. shall be due to you if your Termination Date is on or after June 29,
2020.  All amounts owed pursuant to this Section 10(c)(iv) will be paid within
30 days after the date the Compensation Committee determines that the applicable
OI conditions have been achieved (if any), provided that this is no sooner than
the 60th day following the Termination Date, and will be subject to applicable
taxes and withholdings.

 

(v)                                 Impact on Equity Awards.

 

a.                                      All outstanding equity awards shall
cease to vest.  All vested performance share units shall be paid in accordance
with their terms.  Any vested portion of stock options shall remain exercisable
until the earlier of (x) ninety (90) days after the Termination Date (or, in the
event of termination by the Employer if you become disabled, then one (1) year)
and (y) the original expiration date of stock options.  Any equity awards that
are not vested as of your Termination Date will be cancelled immediately; and

 

17

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b.                                      In the event the Employer terminates
your employment under Section 9(b), 9(d) or 9(e) or you terminate your
employment under Section 9(c), all unvested equity awards, including the 2017
Performance Share Units, will cease to vest and be cancelled immediately. 
Notwithstanding the foregoing, in the event that (i) your Termination Date
occurs after the completion of one or more performance periods (i.e. fiscal
years 2017, 2018 and/or 2019), (ii) your employment is terminated pursuant to
Section 9(b),  9(c), 9(d) or 9(e)); (iii) the Compensation Committee determines
that the applicable performance objective(s) (i.e. 2017 AOP OI Objective, 2018
AOP OI Objective, 2019 AOP OI Objective, 2017 AOP EPS Objective, 2018 AOP EPS
Objective and/or 2019 AOP EPS Objective) have been achieved for a performance
period completed prior to your Termination Date, and (iv) the applicable tranche
(i.e. the First Tranche 2017 Performance Share Units, the Second Tranche 2017
Performance Share Units, the Third Tranche 2017 Performance Share Units, the
First Tranche 2017 EPS Performance Share Units, the Second Tranche 2017 EPS
Performance Share Units and/or the Third Tranche 2017 EPS Performance Share
Units,) has not vested as of the Termination Date, then an amount to be
calculated as provided for below in Paragraph 10(c)(iv)b.[i] shall be paid to
you, (the “PSU Termination Consideration”).  This amount shall be paid within 30
days after the date the Compensation Committee determines that the applicable
performance objective(s) (i.e. 2017 AOP OI Objective, 2018 AOP OI Objective,
2019 AOP OI Objective, 2017 AOP EPS Objective, 2018 AOP EPS Objective and/or
2019 AOP EPS Objective) have been achieved (if any), provided that this is no
sooner than the 60th day following the Termination Date, and will be subject to
applicable taxes and withholdings.

 

[i] The formula for determining the PSU Termination Consideration for each
applicable tranche of cancelled 2017 Performance Share Units, if any, (i.e. the
First Tranche 2017 Performance Share Units, the Second Tranche 2017 Performance
Share Units, the Third Tranche 2017 Performance Share Units, the First Tranche
2017 EPS Performance Share Units, the Second Tranche 2017 EPS Performance Share
Units and/or the Third Tranche 2017 EPS Performance Share Units) is as follows:
multiply the Grant Date Price by the product of the number of performance share
units for the applicable tranche by the ratio, as determined by the Compensation
Committee, in its discretion, of the non-GAAP operating income (as previously
defined) or the EPS  for the applicable fiscal year to the AOP OI Objective or
AOP EPS Objective, respectively, for the applicable fiscal year (e.g. the
performance objective for the applicable fiscal year), up to a maximum of 125%.

 

For clarity, the following examples are provided as illustration, but not by way
of limitation:

 

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(x) in the event that your employment terminates on January 1, 2018, pursuant to
Section 9(b), 9(c), 9(d) or 9(e), the Compensation Committee determines that 86%
of the 2017 AOP OI Objective is achieved, 95% of the 2017 AOP EPS Objective is
achieved, the number of performance share units granted for the First Tranche
2017 Performance Share Units is 40,000, the number of performance share units
granted for the First Tranche 2017 EPS Performance Share Units is 20,000 and the
Grant Date Price is $50, then $950,000 (less applicable taxes and withholdings)
will be paid using the following calculation: $50 x [20,000 x .95] = $950,000. 
You will receive no payment with respect to the cancelled First, Second or Third
Tranche 2017 Performance Share Units or the cancelled Second or Third Tranche
2017 EPS Performance Share Units because the applicable performance period has
not been completed and/or the applicable objectives have not been achieved.

 

(y) in the event that your employment terminates on January 1, 2019, pursuant to
Section 9(b), 9(c), 9(d) or 9(e), the Compensation Committee determines that
135% of the 2018 AOP OI Objective is achieved and140% of the 2017 AOP EPS
Objective is achieved, the Grant Date Price is $50,the number of performance
share units granted for the Second Tranche 2017 Performance Share Units is
40,000, and the number of performance share units granted for the Second Tranche
2017 EPS Performance Share Units is 20,000, then $3,750,000 (less applicable
taxes and withholdings) will be paid using the following calculation: $50 x
[40,000 x 1.25] + $50 x [20,000 x 1.25] = $3,750,000.  You will receive no
payment with respect to the First Tranche 2017 Performance Share Units because
such units will have already vested, if eligible.  You will receive no payment
with respect to the cancelled Third Tranche 2017 Performance Share Units or the
cancelled Third Tranche 2017 EPS Performance Share Units because the applicable
performance period has not been completed nor the objectives achieved.

 

(vi)                              Severance Conditioned Upon Release.  Payments
and benefits described in Sections 10(c)(ii)-10(c)(v) are conditioned upon your
or your legal representative’s execution of a waiver and release in a form
prepared by the Employer and that release becoming effective and irrevocable in
its entirety within 60 days of the Termination Date.  Unless otherwise provided
by the Employer, if the release referenced above does not become effective and
irrevocable on or prior to the 60th day following the Termination Date, you
shall not be entitled to any payments under this Section 10(c) other than the
Basic Severance.

 

(d)                                 Termination by the Employer For Cause.  In
the event your employment is terminated by the Employer under Section 9(a),
then:

 

(i)                                     Basic Severance.  You shall receive
payment of the Basic Severance in a lump sum within thirty (30) days following
the Termination Date unless a different payment date is prescribed by an
applicable compensation,

 

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incentive or benefit plan, in which case payment shall be made in accordance
with such plan; and

 

(ii)                                  Impact on Equity Awards.  All outstanding
equity awards shall cease to vest and, whether or not vested, shall no longer be
exercisable and shall be cancelled immediately.

 

(e)                                  Termination on the Expiration Date.   In
the event your employment terminates on the Expiration Date, then:

 

(i)                                     Basic Severance.  You shall receive
payment of the Basic Severance in a lump sum within thirty (30) days following
the Termination Date unless a different payment date is prescribed by an
applicable compensation, incentive or benefit plan, in which case payment shall
be made in accordance with such plan;

 

(ii)                                  Bonus Severance.  You shall receive
payment of the Bonus Severance in a lump sum no later than the 15th day of the
third month of the year following the year to which the underlying amount
relates; and

 

(iii)                               Impact on Equity Awards.  All outstanding
equity awards shall cease to vest.  All vested performance share units shall be
paid in accordance with their terms.  Any vested portion of stock options shall
remain exercisable until the earlier of (x) ninety (90) days after the
Termination Date and (y) the original expiration date of stock options.  Any
equity awards that are not vested as of the Expiration Date will be cancelled
immediately.

 

(f)                                   Breach of Post-termination Obligations or
Subsequent Employment.

 

(i)                                     Breach of Post-termination Obligations.
In the event that you materially breach any of your obligations under Section 8,
the Employer’s obligation, if any, to make payments and provide benefits under
Section 10 (other than payment of the Basic Severance) shall immediately and
permanently cease and you shall not be entitled to any such payments or
benefits.

 

(ii)                                  Subsequent Employment. Notwithstanding
anything to the contrary contained herein, if, at any time during the Salary
Continuation Period, you obtain subsequent employment and/or provide services of
any kind for compensation, whether as principal, owner, partner, agent,
shareholder, director, employee, consultant, advisor or otherwise, to any
person, company, venture or other person or business entity, you must promptly
notify the Employer and payments under Section 10(c)(ii) shall be refunded by
you to the Employer (to the extent already paid) and shall be offset (to the
extent payable in the future) by the amount of Base Compensation (as defined
below) earned by, paid to, or granted to you during or with respect to the
Salary Continuation Period.  “Base Compensation” shall mean the amount of your
base salary or, if applicable, wages you earn (or are paid or granted) during or
with respect to any subsequent employment or services arrangement; provided,
however, such base salary or wages shall be deemed, in all cases, to equal

 

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no less than 35% of the total compensation (including, without limitation, any
and all amounts of salary, bonus and all other kinds of cash or in-kind or
equity-based compensation) you earn, are paid, or are granted during or with
respect to such subsequent employment or services arrangement and which are paid
to you, vest or otherwise accrue with respect to services performed by you,
during or with respect to the Salary Continuation Period.

 

11.                               General Provisions

 

(a)                                 Entire Agreement.  This Agreement, together
with the Confidential Information Agreement, the Activision Blizzard Group
Dispute Resolution Agreement (the “Dispute Resolution Agreement”, as referenced
in Section 11(k) below), the New Employee Letter and Certification (as defined
in Section 11(d)), and the Employer’s Executive Stock Ownership Guidelines,
supersede all prior or contemporaneous agreements and statements, whether
written or oral, concerning the terms of your employment with the Activision
Blizzard Group, and no amendment or modification of these agreements shall be
binding unless it is set forth in a writing signed by both the Employer and
you.  To the extent that this Agreement conflicts with any of the Employer’s
policies, procedures, rules or regulations, this Agreement shall supersede the
other policies, procedures, rules or regulations. Without limiting the
generality of the foregoing, you acknowledge that this Agreement supersedes any
prior written agreement with the Activision Blizzard Group concerning your prior
employment with the Activision Blizzard Group.

 

(b)                                 Use of Employee’s Name and Likeness.  You
hereby irrevocably grant the Activision Blizzard Group the right, but not the
obligation, to use your name or likeness in any product made by the Activision
Blizzard Group or for any publicity or advertising purpose in any medium now
known or hereafter existing.

 

(c)                                  Assignment.  This Agreement and the rights
and obligations hereunder shall not be assignable or transferable by you without
the prior written consent of the Employer.  The Employer may assign this
Agreement or all or any part of its rights and obligations under this Agreement
at any time to any member of the Activision Blizzard Group or to a successor to
all or substantially all of the business or assets of the Employer and following
such assignment all references to the Employer shall be deemed to refer to such
assignee and the Employer shall thereafter have no obligation under this
Agreement.

 

(d)                                 No Conflict with Prior Agreements.  You
represent to the Employer that neither your commencement of employment under
this Agreement nor the performance of your duties under this Agreement conflicts
or will conflict with any contractual or legal commitment on your part to any
third party, nor does it or will it violate or interfere with any rights of any
third party.  If you have acquired any confidential or proprietary information
in the course of your prior employment or otherwise in connection with your
provision of services to any entity outside the Activision Blizzard Group,
during the Term you will fully comply with any duties to such entity
then-applicable to you not to disclose or otherwise use such information. 
Without limiting the generality of the foregoing, you acknowledge signing and
delivering to the Employer the New Employee Letter and Certification attached as
Exhibit D hereto (the “New Employee Letter and Certification”) as of the
Effective Date and you agree that all terms and conditions contained in such
agreement, and all of your obligations and commitments provided

 

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for in such agreement, shall be deemed, and hereby are, incorporated into this
Agreement as if set forth in full herein.

 

(e)                                  Successors.  This Agreement shall be
binding on and inure to the benefit of the Employer and its successors and
assigns, including successors by merger and operation of law.  This Agreement
shall also be binding on and inure to the benefit of you and your heirs,
executors, administrators and legal representatives.

 

(f)                                   Waiver.  No waiver by you or the Employer
at any time of any breach by the other party of, or compliance with, any
condition or provision of this Agreement to be performed by such other party
shall be deemed a waiver of similar or dissimilar provisions or conditions at
the same or at any prior or subsequent time.  No waiver of any provision of this
Agreement shall be implied from any course of dealing between or among the
parties hereto or from any failure by any party hereto to assert its rights
hereunder on any occasion or series of occasions.

 

(g)                                  Expiration.  This Agreement does not
constitute a commitment of the Employer with regard to your employment, express
or implied, other than to the extent expressly provided for herein.  Upon the
Expiration Date, or, if earlier, the termination of this Agreement pursuant to
Section 9, neither the Employer nor you shall have any obligation to the other
with respect to your continued employment.

 

(h)                                 Taxation.  The Employer may withhold from
any payments made under the Agreement all federal, state, city or other
applicable taxes or amounts as shall be required or permitted pursuant to any
law, governmental regulation or ruling or agreement with you.

 

(i)                                     Immigration.  In accordance with the
Immigration Reform and Control Act of 1986, employment under this Agreement is
conditioned upon satisfactory proof of your identity and legal ability to work
in the United States.

 

(j)                                    Choice of Law.  Except to the extent
governed by federal law, this Agreement shall be governed by and construed in
accordance with the laws of the State of California or whatever other state in
which you were last employed by the Employer, without regard to conflict of law
principles.

 

(k)                                 Arbitration.  Except as otherwise provided
in this Agreement, both parties agree that any dispute or controversy between
them will be settled by final and binding arbitration pursuant to the terms of
the Dispute Resolution Agreement (attached hereto as Exhibit B).

 

(l)                                     Severability.  It is expressly agreed by
the parties that each of the provisions included in Section 8(f) is separate,
distinct, and severable from the other and remaining provisions of Section 8(f),
and that the invalidity or unenforceability of any Section 8(f) provision shall
not affect the validity or enforceability of any other provision or provisions
of this Agreement.  If any provision of this Agreement is held to be illegal,
invalid or unenforceable under, or would require the commission of any act
contrary to, existing or future laws effective during the Term, such provisions
shall be fully severable, the Agreement shall be construed and enforced as if
such illegal, invalid or unenforceable provision had never comprised a part of
this Agreement, and the remaining provisions of this Agreement shall remain in
full force and effect and shall not be affected by the illegal, invalid or
unenforceable provision or by its severance from this Agreement.  Furthermore,
in lieu of such illegal, invalid

 

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or unenforceable provision, there shall be added automatically as part of this
Agreement a legal and enforceable provision as similar in terms to such illegal,
invalid or unenforceable provision as may be possible.

 

(m)                             Services Unique.  You recognize that the
services being performed by you under this Agreement are of a special, unique,
unusual, extraordinary and intellectual character giving them a peculiar value,
the loss of which cannot be reasonably or adequately compensated for in damages
in the event of a breach of this Agreement by you.

 

(n)                                 Injunctive Relief.  In the event of a breach
of or threatened breach of the provisions of this Agreement regarding the
exclusivity of your services and the provisions of Section 8, you agree that any
remedy at law would be inadequate.  Accordingly, you agree that the Employer is
entitled to obtain injunctive relief for such breaches or threatened breaches in
any court of competent jurisdiction.  The injunctive relief provided for in
Exhibit B and this Section 11(n) is in addition to, and is not in limitation of,
any and all other remedies at law or in equity otherwise available to the
applicable party.  The parties agree to waive the requirement of posting a bond
in connection with a court or arbitrator’s issuance of an injunction.

 

(o)                                 Remedies Cumulative.  The remedies in this
Agreement are not exclusive, and the parties shall have the right to pursue any
other legal or equitable remedies to enforce the terms of this Agreement.

 

(p)                                 Headings.  The headings set forth herein are
included solely for the purpose of identification and shall not be used for the
purpose of construing the meaning of the provisions of this Agreement.

 

(q)                                 Section 409A.  To the extent applicable, it
is intended that the Agreement comply with the provisions of Section 409A.  The
Agreement will be administered and interpreted in a manner consistent with this
intent, and any provision that would cause the Agreement to fail to satisfy
Section 409A will have no force and effect until amended to comply therewith
(which amendment may be retroactive to the extent permitted by Section 409A). 
Notwithstanding anything contained herein to the contrary, to the extent any
payment under this Agreement is subject to Section 409A, you shall not be
considered to have terminated employment with the Employer for purposes of the
Agreement and no payments shall be due to you under the Agreement which are
payable upon your termination of employment unless you would be considered to
have incurred a “separation from service” from the Employer within the meaning
of Section 409A.  To the extent required in order to avoid accelerated taxation
and/or tax penalties under Section 409A, amounts that would otherwise be payable
and benefits that would otherwise be provided pursuant to the Agreement during
the six-month period immediately following your termination of employment shall
instead be paid on the first business day after the date that is six months
following your termination of employment (or upon your death, if earlier).  In
addition, for purposes of the Agreement, each amount to be paid or benefit to be
provided to you pursuant to the Employment Agreement shall be construed as a
separate identified payment for purposes of Section 409A.  With respect to
expenses eligible for reimbursement under the terms of the Agreement, (i) the
amount of such expenses eligible for reimbursement in any taxable year shall not
affect the expenses eligible for reimbursement in another taxable year and
(ii) any reimbursements of such expenses shall be made no later than the end of
the calendar year following the calendar year in which the related expenses were
incurred, except, in each case, to the extent that the right to reimbursement
does not provide for

 

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a “deferral of compensation” within the meaning of Section 409A; provided,
however that with respect to any reimbursements for any taxes to which you
become entitled under the terms of the Agreement, the payment of such
reimbursements shall be made by the Employer no later than the end of the
calendar year following the calendar year in which you remit the related taxes.

 

(r)                                    Section 280G and Section 162(m). 
Notwithstanding anything herein to the contrary, in the event that you receive
any payments or distributions, whether payable, distributed or distributable
pursuant to the terms of this Agreement or otherwise, that constitute “parachute
payments” within the meaning of Section 280G of the Code, and the net after-tax
amount of the parachute payment is less than the net after-tax amount if the
aggregate payment to be made to you were three times your “base amount” (as
defined in Section 280G(b)(3) of the Code), less $1.00, then the aggregate of
the amounts constituting the parachute payment shall be reduced to an amount
that will equal three times your base amount, less $1.00.  To the extent the
aggregate of the amounts constituting the parachute payments are required to be
so reduced, the amounts provided under Section 10 of this Agreement shall be
reduced (if necessary, to zero) with amounts that are payable first reduced
first; provided, however, that, in all events the payments provided under
Section 10 of this Agreement which are not subject to Section 409A shall be
reduced first.  Similarly, you agree that no payments or distributions, whether
payable, distributed or distributable pursuant to the terms of this Agreement or
otherwise, shall be made to you if the Employer reasonably anticipates that
Section 162(m) of the Code would prevent the Employer from receiving a deduction
for such payment.  If, however, any payment is not made pursuant to the previous
sentence, the Employer shall make such payment as soon as practicable in the
first calendar year that it reasonably determines that it can do so and still
receive a deduction for such payment.  The determinations to be made with
respect to this Section 11(r) shall be made by a certified public accounting
firm designated by the Employer.

 

(s)                                   Survivability.  The provisions of Sections
8, 10, 11 and 12, as well as Exhibits A through Ex. C, the shall survive the
termination or expiration of this Agreement

 

(t)                                    Counterparts.  This Agreement may be
executed in counterparts, each of which shall be deemed an original and both of
which together shall constitute one and the same instrument.

 

(u)                                 Legal Counsel.  You acknowledge that you
have been given the opportunity to consult with legal counsel or any other
advisor of your own choosing regarding this Agreement.  You understand and agree
that any attorney retained by the Employer, the Activision Blizzard Group or any
member of management who has discussed any term or condition of this Agreement
with you or your advisor is only acting on behalf of the Employer and not on
your behalf.

 

(v)                                 Right to Negotiate.  You hereby acknowledge
that you have been given the opportunity to participate in the negotiation of
the terms of this Agreement.  You acknowledge and confirm that you have read
this Agreement and fully understand its terms and contents.

 

(w)                               No Broker.  You have given no indication,
representation or commitment of any nature to any broker, finder, agent or other
third party to the effect that any fees or commissions of any nature are, or
under any circumstances might be, payable by the Activision Blizzard Group in
connection with your employment under this Agreement.

 

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12.                               Indemnification

 

The Employer agrees that it shall indemnify and hold you harmless to the fullest
extent permitted by Delaware law from and against any and all third-party
liabilities, costs and claims, and all expenses actually and reasonably incurred
by you in connection therewith by reason of the fact that you are or were
employed by the Activision Blizzard Group, including, without limitation, all
costs and expenses actually and reasonably incurred by you in defense of
litigation arising out of your employment hereunder.

 

13.                               Notices

 

All notices which either party is required or may desire to give the other shall
be in writing and given either personally or by depositing the same in the
United States mail addressed to the party to be given notice as follows:

 

To the Employer:

 

Activision Blizzard, Inc.
3100 Ocean Park Boulevard
Santa Monica, California 90405
Attention:  Chief Legal Officer

 

 

 

To You:

 

Collister “Coddy” Johnson

(to be sent to last known home address on file with Human Resources)

 

Either party may by written notice designate a different address for giving of
notices.  The date of mailing of any such notices shall be deemed to be the date
on which such notice is given.

 

ACCEPTED AND AGREED TO:

 

 

 

 

 

 

Employer

 

Employee

 

 

 

 

ACTIVISION BLIZZARD, INC.

 

 

 

 

 

 

 

 

 

 

By:

/s/ Brian Stolz

 

/s/ Collister Johnson

 

Brian Stolz

 

Collister Johnson

 

Chief People Officer

 

 

 

 

 

 

Date:

5/10/17

 

Date:

5/10/17

 

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