Exhibit 10.10

 

Confidential Materials omitted and filed separately with the Securities and
Exchange Commission. Double asterisks denote omissions.

 

King

PROFIT SHARING PLAN

 

This King Profit Sharing Plan, effective February 23, 2016, is for eligible
employees of King Digital Entertainment plc (“King”) and its subsidiaries.

 

1.        DEFINITIONS

 

“AB” shall mean Activision Blizzard, Inc., being the parent company of King.

 

“Company” shall mean, individually or collectively, King and its subsidiaries.

 

“King” shall mean King Digital Entertainment plc and references to matters being
agreed by or requiring the agreement, consent or approval of King shall mean
agreed by or the agreement, consent or approval (as the case may be) of the
Chief Executive Officer of King for the time being.

 

“King Contribution” shall mean, for each Plan Year,

 

A.        the earnings (using a methodology determined from time to time by AB
in a manner consistent with the methodology used with respect to the Blizzard
Profit Sharing Plan) before interest and taxes of the Company for that Plan Year
REDUCED BY

 

B.        the sum of the following items, to the extent not included in A.
above:

 

i.         Stock-based incentive and other compensation for employees directly
managed by the Company (other than compensation relating to this Plan),
including associated payroll taxes and social charges;

 

ii.        Restructuring charges, if applicable, related to the Company
operations, except restructuring charges that commence within 12 months of
completion of the acquisition of the Company by AB as a direct result of the
acquisition  of the Company; and

 

iii.       One-time charges (such as legal settlement expenses or gains relating
to the Company’s operations, cash payment relating to contingent earn-out of the
Company’s business acquisitions, impairment or write-downs or amortization
expenses of intangible assets resulting from acquisition of business by the
Company etc., in such a way that all revenues and income received and
receivable, and costs and expenses paid and payable relating to the Company’s
operations are captured).

 

Provided, however, that (a) any allocations of AB’s fixed costs for services
performed on behalf of the Company (including, but not limited to, Sales,
Marketing, Corporate Service Center and G&A) shall not be deducted in
determining the King Contribution, except as mutually agreed between AB and
King, (b) charges for impairment or write-downs of intangible assets, that
arises from purchase price accounting from acquisition of the Company by AB,
will not be deducted in calculating the King Contribution and (c) compensation
pursuant to this Plan shall not be deducted in calculating the King Contribution
(and in each such case, to the extent taken into account in A. above, shall be
added back).

 

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For clarity, the earnings before interest and taxes of the Company referred to
in A above shall capture all revenues and income received and receivable,
expenses and losses paid and payable for running the Company’s operations, and
be computed consistently with the non-GAAP operating income of the Company’s
operations, as determined appropriate, being disclosed in AB’s earnings release.
For example, under AB’s current definition, non-GAAP operating income excludes
from US GAAP operating income the impact from (a) stock-based compensation
expenses, (b) changes in deferral of net revenues and related cost of sales,
(c) amortization of and any impairment of intangible assets from purchase price
accounting, (d) other one-time charges that AB deems to be non-recurring and
non-operational, and the income tax adjustments associated with any of the above
items.

 

Additionally, an illustrative calculation is attached in Appendix 1 which
contains an example of the items to derive the earnings before interest and
taxes referred to in A. above from the Company’s published adjusted EBITDA.
Appendix 1 also has an example of items to derive from earnings before interest
and taxes to determine the basis for the Company’s profit sharing pool.

 

“Participant” shall mean an eligible employee of the Company designated to share
in the Profit Sharing Pool.

 

“Plan” shall mean the King Profit Sharing Plan, as amended from time to time,
approved by the Chief Executive Officer of AB.

 

“Plan Year” shall mean a fiscal year, as defined by AB pursuant to its
then-current governance practices.

 

“Profit Sharing Pool” shall mean the Profit Sharing Pool determined for each
Plan Year in accordance with Section 3.

 

2.           PURPOSE

 

The purposes of this Plan are to further the growth and success of King, to
provide Participants with cash awards in recognition of meeting business goals,
and to motivate Participants to make contributions to the profitable growth of
the Company.

 

3.          PLAN YEAR PROFIT SHARING POOL

 

For each Plan Year, King shall establish and maintain an unfunded bookkeeping
reserve for purposes of the Plan (the “Profit Sharing Pool”) with a
corresponding charge to income for the Plan Year. The Profit Sharing Pool shall
be equal to [**]% of the King Contribution (i.e. prior to profit sharing
expense),as approved by the Chief Executive Officer of AB.

 

4.         AMOUNT OF ANNUAL AWARD FROM PROFIT SHARING POOL

 

Whether an individual employee participates and the amount of a Participant’s
award payable out of the Profit Sharing Pool for any Plan Year shall be
determined by King and approved by the Chief Executive Officer of King, the
Chief Operating Officer of AB and the most senior Human Resources officer of AB,
as well as the Compensation Committee of the Board of Directors of AB (where
applicable pursuant to the then prevailing Compensation Committee procedures). 
The amount of a Participant’s award will be determined based upon actual
performance and contribution.

 

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The award, if any, to an employee for any Plan Year will be determined
independently of his or her award in any other Plan Year.

 

5.         CONDITIONS FOR PAYMENT OF AWARD

 

Except as may otherwise be provided in his or her employment or service
agreement with an effective date concurrent with or after the completion of the
Transaction Agreement between King and AB, which employment or service agreement
is acceptable to AB (“New Employment Agreement”), an employee will earn the
right to receive payment of an award for a Plan Year only if he or she remains
continuously employed by the Company until the award for the Plan Year is paid.
If an employee ceases to be an employee of the Company prior to payment of the
award for the Plan Year for any reason, except as may otherwise be provided in
his or her New Employment Agreement, the employee will not be entitled to
payment under this Plan for that Plan Year and the Company and AB will have no
further obligation under this Plan to the employee, unless the Chief Executive
Officer of King, the Chief Operating Officer of AB and the most senior Human
Resources officer of AB (or, where applicable, the Compensation Committee
pursuant to the then prevailing Compensation Committee procedures) in their sole
discretion decide otherwise.

 

6.         ALLOCATIONS AND PAYMENTS OF AWARD

 

King shall make and pay awards, if any, one time per Plan Year, within the first
90 days following the end of the applicable Plan Year (the “Primary Award”),
unless and to the extent that the next sentence applies.  For any Plan Year, the
Chief Executive Officer of King may elect to defer payment of the portion of the
Profit Sharing Pool (the “Deferred Amount”).  Subject to the following sentence,
the Chief Executive Officer of King retains full discretion to determine to whom
such Deferred Amounts shall be allocated and when such Deferred Amounts shall be
paid.

 

The calculation of the Primary Award and the Deferred Amount, if any, as well as
the amount of the payment to each Participant are subject to the approval of the
Chief Operating Officer of AB and the most senior Human Resources Officer of AB.

 

7.         PLAN INTERPRETATION, TERMINATION, OR MODIFICATION

 

Except for the Chief Executive Officer of King, the most senior Human Resources
Officer of AB, the Chief Executive Officer of AB, the Chief Operating Officer of
AB and, the Compensation Committee (where applicable, pursuant to the then
prevailing Compensation Committee procedures), in each case acting within his or
its authority as specifically set forth in the provisions of the Plan, no
employee has the authority to bind the Company with respect to any aspect of the
Plan. Any and all decisions with respect to the operation of the Plan will be
determined solely by the Chief Executive Officer of King, the Chief Operating
Officer of AB, the most senior Human Resources Officer of AB, the Chief
Executive Officer of AB, and the Compensation Committee (where applicable
pursuant to the then prevailing Compensation Committee procedures), as outlined
in the provisions of the Plan, and, as appropriate, pursuant to the applicable
governance practices of the Company and AB in effect at the time the decision is
made.  Any course of dealings will not be applicable to the interpretation or
implementation of the Plan and no employee will be entitled to rely on any past,
current or future practices. Although the provisions of this Plan reflect the
current methodology by which the Company and AB anticipate operating the Plan,
the Plan is completely discretionary and AB retains the right to change,
interpret and/or terminate the Plan in its sole discretion, with or without
notice, and regardless of whether or not work has been initiated or completed,
and the AB’s determination on these matters will be final and binding.

 

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8.        GENERAL

 

A.                             Right to Withhold Taxes. The Company shall have
the right to withhold such amounts from any payment under this Plan as it
determines (acting reasonably) necessary to fulfill any federal, state, or local
wage or compensation withholding requirements.

 

B.                              Non-Transferability of Rights. A Participant may
not assign or transfer his/her rights and interests under the Plan in whole or
in part either directly or by operation of law or otherwise (except in an event
of the Participant’s death), including, but not limited to, by way of execution,
levy, garnishment, attachment, pledge, bankruptcy or in any other manner, and no
such rights or interests of any Participant under the Plan shall be subject to
any obligation or liability of such Participant other than any obligations or
liabilities owed by the Participant to the Company or AB.

 

C.                              No Right to Continued Employment. Neither the
Plan, nor any compensation payable under the Plan, shall confer upon any
Participant any right to continuance of employment by the Company or AB nor
shall they interfere in any way with the right of the Company or AB to terminate
any Participant’s employment at any time. In the event of termination, the
Participant’s right to payment under this Plan will be determined pursuant to
Section 5 above.

 

 

D.                            No Claim Against Assets.  Nothing in this Plan
shall be construed as giving any Participant or his or her legal representative,
or designated beneficiary, any claim against any specific assets of the Company
or AB or as imposing any trustee relationship upon the Company or AB in respect
of the Participant.  The Company shall not be required to segregate any assets
in order to provide for the satisfaction of the obligations hereunder.  If and
to the extent that the Participant or his or her legal representative or
designated beneficiary acquires a right to receive any payment pursuant to this
Plan, such right shall be no greater than the right of an unsecured general
creditor of the Company or AB.

 

E.                               Payment to Designated Beneficiary.  In the
event of a Participant’s death or total disability, payment of the Participant’s
incentive compensation shall be made to a beneficiary (or beneficiaries)
designated by the Participant in the form and a manner prescribed by the
Company, or to the Participant’s legal representative.  If a Participant does
not have a properly designated beneficiary, payment shall be made to the
Participant’s estate.

 

F.                               No Other Agreements or Understandings.  Except
as expressly provided herein, this Plan represents the sole agreement among the
Company, AB and the Participants concerning its subject matter and it supersedes
all prior agreements, arrangements, understandings, warranties, representations,
and statements among the Company, AB and the Participants concerning its subject
matter.

 

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G.                             Headings.  Section headings are used in this Plan
for convenience of reference only and shall not affect the meaning of any
provision of the Plan.

 

H.                             Governing Law.  The Plan and all actions taken
pursuant thereto shall be governed by, and construed in accordance with, the
laws of England applied without regard to conflict of law principles.

 

 

Executed this 2nd day of November, 2015.

 

ACTIVISION BLIZZARD, INC.

 

 

/s/ Robert A. Kotick

 

 

Robert A. Kotick, Chief Executive Officer

 

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Agreed and Acknowledged on this 2nd day of November, 2015.

 

KING DIGITAL ENTERTAINMENT PLC

 

/s/ RZ

 

 

Riccardo Zacconi, Chief Executive Officer

 

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APPENDIX [X] – Illustrative example

 

[**]

 

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