Exhibit 10.1

 

IN THE COURT OF CHANCERY OF THE STATE OF DELAWARE

 

IN RE: ACTIVISION BLIZZARD, INC.

)

Consolidated

STOCKHOLDER LITIGATION

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C.A. No. 8885-VCL

 

 

STIPULATION OF COMPROMISE AND SETTLEMENT

This Stipulation of Compromise and Settlement (“Stipulation”) is made and
entered into as of December 19, 2014. The parties to this litigation (each a
“Party” and, collectively, the “Parties”), by and through their undersigned
attorneys, have reached an agreement for the settlement of the above-captioned
matter styled In re: Activision Blizzard, Inc. Stockholder Litigation, filed in
the Court of Chancery of the State of Delaware (the “Court”), Consolidated C.A.
No. 8885-VCL (the “Action”)1 and related matters on the terms set forth below
(the “Settlement”) and subject to Court approval pursuant to Court of Chancery
Rules 23 and 23.1. This Stipulation is intended to fully, finally, and forever
resolve, discharge, and settle all claims asserted in the Action and all claims
relating to the transactions challenged in the Action, except for any claims any
Defendant or Nominal Defendant may have against insurers, co-insurers or
reinsurers, which claims are not otherwise released pursuant to other
documentation.

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1                                          The following constituent actions
were consolidated into the Action: Pacchia v. Kotick, et al., C.A. No. 8884-VCL
(Del. Ch.); Hayes v. Activision Blizzard, Inc., et al., C.A. No. 8885-VCL (Del.
Ch.); and Benston v. Vivendi S.A., C.A. No. 9447-VCL (Del. Ch.).

 

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The Parties to this Stipulation are:

1.                                 Lead Plaintiff Anthony Pacchia (“Pacchia” or
“Plaintiff”), a stockholder of Activision Blizzard, Inc. (“Activision” or the
“Company”), who has prosecuted the Action on behalf of Activision pursuant to
Court of Chancery Rule 23.1 and on behalf of the Class (as defined below)
pursuant to Court of Chancery Rule 23;

2.                                 Nominal defendant Activision, a Delaware
corporation;

3.                                 Vivendi S.A. (“Vivendi”) and individual
defendants Philippe G.H. Capron (“Capron”), Jean-Yves Charlier (“Charlier”),
Frédéric R. Crépin (“Crépin”), Jean-Francois Dubos (“Dubos”), Lucian Grainge
(“Grainge”), and Régis Turrini (“Turrini”) (the individual defendants
collectively, the “Appointed Directors” and the Appointed Directors and Vivendi,
collectively, “Vivendi Defendants”);

4.                                 The “Special Committee Defendants” Robert J.
Corti (“Corti”), Robert J. Morgado (“Morgado”), and Richard Sarnoff (“Sarnoff”);

5.                                 The “Management Defendants” Brian G. Kelly
(“Kelly”) and Robert A. Kotick (“Kotick”); and

6.                                 ASAC II LP (“ASAC”) and ASAC II LLC (“ASAC
GP”) (collectively, the “ASAC Defendants,” and together with the Vivendi

 

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Defendants, the Special Committee Defendants and the Management Defendants, the
“Defendants”).

 

WHEREAS,

Summary of the Action

A.                             On or about July 9, 2008, Vivendi indirectly
acquired majority control of Activision as a result of a merger between
Activision and Vivendi Games.

B.                              At all relevant times through the closing of the
challenged transactions on October 11, 2013, Vivendi indirectly owned
approximately 62% of Activision’s outstanding shares of common stock.

C.                              On January 29, 2013, the Management Defendants
sent a letter to Vivendi proposing a potential transaction that would be subject
to the review, negotiation and approval of a special committee of Activision’s
Board and involve the purchase of all of Vivendi’s Activision shares at $13.15
per share by Activision, using cash on hand and $4-5 billion in new debt, and
“new equity sponsors.” The Management Defendants “would contribute a significant
amount of [their] own money to fund the equity portion of the purchase price
with the additional equity coming from new investors.”

D.                             On February 14, 2013, the Management Defendants
sent a letter to Vivendi providing more details about their proposal. The letter
proposed that,

 

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subject to review, negotiation and approval of an independent special committee
of Activision’s Board, Activision would repurchase approximately $6 billion of
Vivendi’s stake at $13.15 by using $1.3 billion in cash and $4.7 billion in new
debt, and that an investment group to be assembled by the Management Defendants
would simultaneously purchase the remaining approximately $3 billion of
Vivendi’s stake at the same price.

E.                               On February 28, 2013, the Board authorized the
formation of a Special Committee consisting of Sarnoff, Morgado, and Corti,
which promptly retained independent advisors. The Special Committee was
authorized to consider not only the proposal made at that time by the Management
Defendants but any other alternative transaction or no transaction at all.

F.                                Following the formation of the Special
Committee, the ASAC investment group was formed.

G.                             On July 25, 2013, following negotiations among
the Special Committee, Vivendi, and the Management Defendants, Vivendi, ASAC and
Activision entered into a stock purchase agreement (the “Stock Purchase 
Agreement” or “SPA”). Pursuant to the SPA, Activision agreed to purchase the
shares of a Vivendi subsidiary (“Holdco”) that held 428,676,471 shares of
Activision’s common stock for $13.60 per share. Holdco also had certain
beneficial tax attributes at the time of such purchase of Holdco by Activision.

 

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ASAC agreed to purchase from Vivendi 171,968,042 shares of Activision’s common
stock at the same price of $13.60 per share but without the additional tax
benefits (collectively, the “Transaction”).

H.                             On September 11, 2013, after making a books and
records demand and receiving confidential records of Activision, Pacchia filed a
complaint in the Delaware Court of Chancery asserting derivative claims on
behalf of Activision against the Management Defendants, the Special Committee
Defendants, and the Vivendi Defendants with respect to the Transaction.
Activision was named as a nominal defendant.

I.                                     Also on September 11, 2013, plaintiff
Douglas M. Hayes filed a complaint in the Delaware Court of Chancery asserting
derivative claims on behalf of Activision and class claims on behalf of a
putative class of Activision stockholders against Activision, the Vivendi
Defendants, the Special Committee Defendants, the ASAC Defendants, as well as
Amber Holding Subsidiary Co., Davis Selected Advisers, L.P. (“Davis”), and
Fidelity Management & Research Co. (“FMR”). Entities affiliated with Davis and
FMR had agreed to invest in ASAC as limited partners.

J.                                   On October 11, 2013, the Transaction
closed. Upon closing, the Appointed Directors resigned from the Board of
Directors of Activision, a committee of Activision’s Board consisting of Corti
and Morgado appointed Peter

 

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Nolan and Elaine Wynn as new directors of Activision, and Activision and ASAC
entered into a Stockholders Agreement (the “Stockholders Agreement”).

K.                             On November 11, 2013, the Delaware Court of
Chancery entered an order consolidating the Pacchia and Hayes actions.

L.                                On December 3, 2013, the Court named Pacchia
Lead Plaintiff and appointed Friedlander & Gorris, P.A. and Bragar Eagel &
Squire, PC as Co-Lead Counsel and Rosenthal, Monhait & Goddess, P.A. as Delaware
Liaison Counsel.

M.                          Subsequently, Plaintiff amended his complaint four
more times, with the operative complaint being a Fifth Amended Verified and
Class Action Complaint (the “Complaint”). The Complaint seeks derivative and
direct relief against the Vivendi Defendants, the Special Committee Defendants,
the Management Defendants, and the ASAC Defendants with respect to the
Transaction. The Complaint alleges that the Vivendi Defendants, Special
Committee Defendants and Management Defendants breached their fiduciary duties
by entering into the Transaction, and that the ASAC Defendants aided and abetted
those alleged breaches. Among other things, the Complaint alleges, and the
Defendants deny, that the Management Defendants usurped a corporate opportunity
in purchasing shares of stock from Vivendi at a discount to the market price and
obtained control over Activision, and that Vivendi assented to the

 

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Transaction to obtain desired liquidity. The Complaint also challenges the
initial appointment and subsequent re-nomination and reelection by some or all
of the Special Committee Defendants and Management Defendants of Nolan and Wynn
to the Activision Board as a breach of fiduciary duty and a breach of the
Stockholders Agreement by ASAC.

N.                             On June 6, 2014, the Court denied Defendants’
motions to dismiss the breach of fiduciary duty claims alleged in a prior
iteration of the Complaint. On June 6, 2014, the Court granted ASAC’s motion to
dismiss Plaintiff’s direct and derivative claims for breach of the Stockholders
Agreement, but gave Plaintiff leave to re-plead derivative claim only. At the
time the Parties entered into the settlement embodied in this Stipulation,
ASAC’s motion to dismiss Plaintiff’s re-pleaded derivative breach of contract
claim was sub judice.

O.                             On June 6, 2014, the Court denied a motion filed
by the plaintiff in Benston v. Vivendi S.A., C.A. No. 9447-VCL (Del. Ch.),
seeking permission for his counsel to participate in the leadership of the
Action.

P.                                Plaintiff propounded extensive discovery,
including subpoenas to 16 third parties. In response to Plaintiff’s discovery
requests, the Defendants and non-parties produced in excess of 800,000 pages of
documents.

Q.                             Plaintiff’s Counsel deposed 23 fact witnesses and
Plaintiff was himself deposed. The Parties engaged in expert discovery,
including the exchange

 

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of opening and rebuttal reports, the deposition of Plaintiff’s expert, and
Plaintiff’s counsel’s deposition of three of Defendants’ expert witnesses. At a
later date, after discovery was complete, Defendants determined not to identify
their fourth expert witness as a trial witness.

R.                              On October 29, 2014, the Court entered an order
providing that trial would last for up to ten days, from December 8-19, 2014.

S.                                On November 12, 2014 the Court entered an
order certifying the Class, as defined herein, pursuant to Court of Chancery
Rules 23(a), 23(b)(1), and 23(b)(2), appointing Pacchia as representative of the
Class, Friedlander & Gorris, P.A. and Bragar Eagel & Squire, PC as Co-Lead
Counsel and Rosenthal, Monhait & Goddess, P.A. as Liaison Counsel for the Class.

T.                               In early November, 2014, the parties exchanged
drafts of a Proposed Pre-Trial Order.

U.                             In connection with efforts to settle this matter,
the Parties engaged in extensive discussions, including three all-day mediation
sessions with former United States District Court Judge Layn Phillips.

V.                             The Parties believe that the Stipulation is in
the best interests of the Parties, the Class, and Activision’s current
stockholders and that the Stipulation confers substantial benefits upon
Activision and the Class and that the interests of

 

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the Parties, Activision, and the Class would best be served by settlement of the
Action on the terms and conditions set forth herein.

Plaintiff’s Claims and the Benefits of the Settlement

W.                         Plaintiff believes that the claims asserted in the
Action have merit, but also believes that the settlement set forth below
provides substantial and immediate benefits for the Class, Activision, and its
current stockholders. In addition to these substantial benefits, Plaintiff and
his counsel have considered: (i) the attendant risks of continued litigation and
the uncertainty of the outcome of the Action; (ii) the probability of success on
the merits; (iii) the inherent problems of proof associated with, and possible
defenses to, the claims asserted in the Action; (iv) the desirability of
permitting the settlement to be consummated according to its terms; (v) the
expense and length of continued proceedings necessary to prosecute the Action
against the Defendants through trial and appeals; and (vi) the conclusion of
Plaintiff and his counsel that the terms and conditions of the Stipulation are
fair, reasonable, and adequate, and that it is in the best interests of the
Class, Activision, and its current stockholders to settle the Action on the
terms set forth herein.

X.                             Based on Plaintiff’s Counsel’s thorough review
and analysis of the relevant facts, allegations, defenses, and controlling legal
principles, Plaintiff’s Counsel believe that the settlement set forth in this
Stipulation is fair, reasonable,

 

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and adequate, and confers substantial benefits upon the Class, Activision, and
its current stockholders. Based upon Plaintiff’s Counsel’s evaluation as well as
his own evaluation, Plaintiff has determined that the settlement is in the best
interests of the Class, Activision, and its current stockholders and has agreed
to settle the Action upon the terms and subject to the conditions set forth
herein.

Defendants’ Denials of Wrongdoing and Liability

Y. The Defendants deny any and all allegations of wrongdoing, liability,
violations of law or damages arising out of or related to any of the conduct,
statements, acts, or omissions alleged in the Action, and maintain that their
conduct was at all times proper, in the best interests of Activision and its
stockholders, and in compliance with applicable law. The Defendants further deny
any breach of fiduciary duties or aiding and abetting any breach of such a
fiduciary duty. The Defendants affirmatively assert that the Transaction was the
best possible transaction for Activision and its stockholders and has provided
Activision and its stockholders with substantial benefits. The Defendants also
deny that Activision or its stockholders were harmed by any conduct of the
Defendants alleged in the Action or that could have been alleged therein. Each
of the Defendants asserts that, at all relevant times, they acted in good faith
and in a manner they reasonably believed to be in the best interests of
Activision and all of its stockholders.

 

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Z.                                Defendants, however, recognize the uncertainty
and the risk inherent in any litigation, and the difficulties and substantial
burdens, expense, and length of time that may be necessary to defend this
proceeding through the conclusion of trial, post-trial motions, and appeals. In
particular, Defendants are cognizant of the burdens this litigation is imposing
on Activision and its management, and the impact that continued litigation will
have on management’s ability to continue focusing on the creation of stockholder
value. Defendants wish to eliminate the uncertainty, risk, burden, and expense
of further litigation, and to permit the operation of Activision without further
distraction and diversion of its directors and executive personnel with respect
to the Action. Defendants have therefore determined to settle the Action on the
terms and conditions set forth in this Stipulation solely to put the Released
Claims (as defined herein) to rest, finally and forever, without in any way
acknowledging any wrongdoing, fault, liability, or damages.

NOW, THEREFORE, IT IS HEREBY STIPULATED AND AGREED, BY AND AMONG THE PARTIES TO
THIS STIPULATION, subject to the approval of the Court pursuant to Court of
Chancery Rules 23 and 23.1, that the Action shall be fully and finally
compromised and settled, the Released Claims shall be released as against the
Releasees (as defined below), and the Action shall be dismissed with

 

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prejudice, upon and subject to the following terms and conditions of the
Settlement, as follows:

I.                                    DEFINITIONS

1.1.                  The “Class” means the holders of shares of Activision
common stock that were issued and outstanding as of July 25, 2013 (the
“Class Shares”), in their capacities as holders of Class Shares, together with
their heirs, assignees, transferees, and successors-in-interest, in each case in
their capacity as holders of Class Shares. For avoidance of doubt, the
Class includes anyone who acquired a Class Share after July 25, 2013. The
Defendants and their affiliates are excluded from the Class. Limited partners in
ASAC and their affiliates are included in the Class, but only to the extent they
own Class Shares outside of ASAC and ownership of those shares is not
attributable to ASAC.

1.2.                  “Current Stockholders” means any Person or Persons (as
defined herein) who are record or beneficial owners of Activision common stock
as of the close of business on the date of this Stipulation.

1.3.                  “Defendants’ Counsel” means Sullivan & Cromwell LLP;
Morris, Nichols, Arsht & Tunnell LLP; Gibson, Dunn & Crutcher LLP; Richards,
Layton & Finger, P.A.; Wachtell, Lipton, Rosen & Katz; Seitz Ross Aronstam &
Moritz LLP; and Skadden, Arps, Slate, Meagher & Flom LLP.

 

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1.4.                  “Defendants’ Releasees” means Activision, Defendants,
defendants in the Miller Action, and any other current or former officer,
director, or employee of Activision or of Vivendi, and their respective past,
present, or future family members, spouses, heirs, trusts, trustees, executors,
estates, administrators, beneficiaries, distributees, foundations, agents,
employees, fiduciaries, partners, partnerships, general or limited partners or
partnerships, joint ventures, member firms, limited liability companies,
corporations, parents, subsidiaries, divisions, affiliates, associated entities,
stockholders, principals, officers, directors, managing directors, members,
managing members, managing agents, predecessors, predecessors-in-interest,
successors, successors-in-interest, assigns, financial or investment advisors,
advisors, consultants, investment bankers, entities providing any fairness
opinion, underwriters, brokers, dealers, financing sources, lenders, commercial
bankers, attorneys, personal or legal representatives, accountants, associates
and insurers, co-insurers and re-insurers except with respect to claims by any
Defendant or Nominal Defendant against such insurer, co-insurer, or re-insurer
that have not otherwise been released pursuant to other documentation.

1.5.                  “Effective Date” means the date that the Judgment, which
approves in all material respects the releases provided for in the Stipulation
and dismisses the Action with prejudice, becomes Final.

 

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1.6.                  “Escrow” means the bank account referred to below and
maintained by the Escrow Agent into which the Settlement Payment will be
deposited and wherein the Settlement Fund will be held.

1.7.                  “Escrow Agent” means the escrow agent or agents identified
in the Escrow Agreement governing the Escrow who shall be chosen by mutual
agreement of Plaintiff’s Counsel and Activision.

1.8.                  “Escrow Agreement” means the agreement governing the
Escrow.

1.9.                  “Final” means, with respect to any judgment or order, that
(i) if no appeal is filed, the expiration date of the time for filing or
noticing of any appeal of the judgment or order; or (ii) if there is an appeal
from the judgment or order, the date of (a) final dismissal of all such appeals,
or the final dismissal of any proceeding on certiorari or otherwise to review
the judgment or order, or (b) the date the judgment or order is finally affirmed
on an appeal, the expiration of the time to file a petition for a writ of
certiorari or other form of review, or the denial of a writ of certiorari or
other form of review of the judgment or order, and, if certiorari or other form
of review is granted, the date of final affirmance of the judgment or order
following review pursuant to that grant. However, any appeal or proceeding
seeking subsequent judicial review pertaining solely to an order issued with
respect to attorneys’ fees or expenses shall not in any way delay or preclude
the Judgment from becoming Final.

 

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1.10.        “Judgment” means the Order and Final Judgment entered by the Court
dismissing this Action with prejudice, substantially in the form annexed hereto
as Exhibit C.

1.11.        “Miller Action” means Todd Miller v. Kotick, et al., Case
No. BC517086 (Cal. Super.) filed in the California Superior Court in Los Angeles
County asserting derivative claims on behalf of Activision against Kotick,
Kelly, the Special Committee Defendants, the Vivendi Defendants and Does 1-25,
and naming Activision as a nominal defendant.

1.12.        “Miller’s Counsel” means Robbins Arroyo LLP.

1.13.        “Notice” means the Notice of Pendency and of Settlement of Action,
substantially in the form annexed hereto as Exhibit B.

1.14.        “Person” means a natural person, individual, corporation,
partnership, limited partnership, limited liability partnership, limited
liability company, association, joint venture, joint stock company, estate,
legal representative, trust, unincorporated association, government, or any
political subdivision or agency thereof, any business or legal entity, and any
spouse, heir, legatee, executor, administrator, predecessor, successor,
representative, or assign of any of the foregoing.

1.15.        “Plaintiff’s Counsel” means Friedlander & Gorris, P.A.; Bragar
Eagel & Squire, PC; and Rosenthal, Monhait & Goddess, P.A.

 

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1.16.  “Plaintiff’s Releasees” means Plaintiff, all other Activision
stockholders, and any current or former officer or director of any Activision
stockholder, and their respective past, present, or future family members,
spouses, heirs, trusts, trustees, executors, estates, administrators,
beneficiaries, distributees, foundations, agents, employees, fiduciaries,
partners, partnerships, general or limited partners or partnerships, joint
ventures, member firms, limited liability companies, corporations, parents,
subsidiaries, divisions, affiliates, associated entities, stockholders,
principals, officers, directors, managing directors, members, managing members,
managing agents, predecessors, predecessors-in-interest, successors,
successors-in-interest, assigns, financial or investment advisors, advisors,
consultants, investment bankers, entities providing any fairness opinion,
underwriters, brokers, dealers, financing sources, lenders, commercial bankers,
attorneys, personal or legal representatives, accountants, and associates.

1.17.  “Released Defendants’ Claims” means any and all manner of claims,
demands, rights, liabilities, losses, obligations, duties, damages, costs,
debts, expenses, interest, penalties, sanctions, fees, attorneys’ fees, actions,
potential actions, causes of action, suits, agreements, judgments, decrees,
matters, issues, and controversies of any kind, nature, or description
whatsoever, whether known or unknown, disclosed or undisclosed, accrued or
unaccrued, apparent or not apparent, foreseen or unforeseen, matured or not
matured, suspected or

 

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unsuspected, liquidated or not liquidated, fixed or contingent, including
Unknown Claims, whether based on state, local, foreign, federal, statutory,
regulatory, common, or other law or rule (including claims within the exclusive
jurisdiction of the federal courts), that arise out of or relate in any way to
the institution, prosecution, or settlement of the claims against Defendants in
the Action, except for claims relating to the enforcement of the Settlement. For
the avoidance of doubt, the Released Defendants’ Claims do not include claims
based on the conduct of the Plaintiff’s Releasees after the Effective Date and
do not include any claims that Defendants may have against any of their
insurers, co-insurers or reinsurers that are not otherwise released pursuant to
other documentation.

1.18.  “Released Plaintiff’s Claims” means any and all manner of claims,
demands, rights, liabilities, losses, obligations, duties, damages, costs,
debts, expenses, interest, penalties, sanctions, fees, attorneys’ fees, actions,
potential actions, causes of action, suits, agreements, judgments, decrees,
matters, issues and controversies of any kind, nature, or description
whatsoever, whether known or unknown, disclosed or undisclosed, accrued or
unaccrued, apparent or not apparent, foreseen or unforeseen, matured or not
matured, suspected or unsuspected, liquidated or not liquidated, fixed or
contingent, including Unknown Claims, whether based on state, local, foreign,
federal, statutory, regulatory, common, or other law or rule (including claims
within the exclusive jurisdiction of

 

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the federal courts, such as, but not limited to, federal securities claims or
other claims based upon the purchase or sale of Class Shares), that are, have
been, could have been, could now be, or in the future could, can, or might be
asserted, in the Action or in any other court, tribunal, or proceeding by
Plaintiff or any other Activision stockholder derivatively on behalf of
Activision or as a member of the Class, or by Activision directly against any of
the Defendants’ Releasees, which, now or hereafter, are based upon, arise out
of, relate in any way to, or involve, directly or indirectly, any of the
actions, transactions, occurrences, statements, representations,
misrepresentations, omissions, allegations, facts, practices, events, claims or
any other matters, things or causes whatsoever, or any series thereof, that
relate in any way to, or could arise in connection with, the Transaction (or
relate to or arise as a result of any of the events, acts or negotiations
related thereto) and the nomination, appointment or election of Activision
directors, including but not limited to those alleged, asserted, set forth,
claimed, embraced, involved, or referred to in, or related to the Fifth Amended
Class and Derivative Complaint or the Action, except for claims relating to the
enforcement of the Settlement and for any claims that Defendants may have
against any of their insurers, co-insurers or reinsurers that are not otherwise
released pursuant to other documentation. For the avoidance of doubt, the
Released Plaintiff’s Claims include all of the claims

 

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asserted in the Miller Action, but do not include claims based on conduct of
Defendants’ Releasees after the Effective Date.

1.19.  “Released Claims” means Released Plaintiff’s Claims and Released
Defendants’ Claims.

1.20.  “Releasees” means Plaintiff’s Releasees and Defendants’ Releasees.

1.21.  “Releases” means the releases set forth in Section II.B below.

1.22.  “Scheduling Order” means an order scheduling a hearing on the Stipulation
and approving the form of Notice and method of giving notice, substantially in
the form annexed hereto as Exhibit A.

1.23.  “Settlement Hearing” means the hearing (or hearings) at which the Court
will review and assess the adequacy, fairness, and reasonableness of the
Stipulation, and the appropriateness and amount of the award of attorneys’ fees,
expenses, and special award to be awarded by the Court (as set forth in Sections
IV-V, below).

1.24.  “Unknown Claims” means any Released Plaintiff’s Claims that Activision,
Plaintiff, or any other Activision stockholder does not know or suspect to exist
in his, her, or its favor at the time of the release of the Defendants’
Releasees, and any Released Defendants’ Claims that any of the Defendants or any
of the other Defendants’ Releasees does not know or suspect to exist in his,
her, or its favor at the time of the release of the Plaintiff’s Releasees,
which, if known by

 

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him, her, or it, might have affected his, her, or its decision(s) with respect
to the Settlement. With respect to any and all Released Plaintiff’s Claims and
Released Defendants’ Claims, the Parties stipulate and agree that Activision,
Plaintiff and each of the Defendants shall expressly waive, and each of the
other Activision stockholders and each of the other Defendants’ Releasees shall
be deemed to have waived, and by operation of the Judgment shall have expressly
waived, any and all provisions, rights, and benefits conferred by California
Civil Code §1542, which provides:

 

A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE CREDITOR DOES NOT KNOW OR
SUSPECT TO EXIST IN HIS OR HER FAVOR AT THE TIME OF EXECUTING THE RELEASE, WHICH
IF KNOWN BY HIM OR HER MUST HAVE MATERIALLY AFFECTED HIS OR HER SETTLEMENT WITH
THE DEBTOR.

 

and any law of any state or territory of the United States, or principle of
common law or foreign law, which is similar, comparable, or equivalent to
California Civil Code §1542. Activision, Plaintiff and each of the Defendants
acknowledge, and each of the other Activision stockholders and each of the other
Defendants’ Releasees shall be deemed by operation of law to have acknowledged,
that the foregoing waiver was separately bargained for and is a key element of
the Settlement.

 

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II.      TERMS OF SETTLEMENT

 

A.     Settlement Consideration

 

2.1.    In connection with the settlement and in consideration of the releases
set forth herein, Defendants shall cause to be paid the total sum of two hundred
seventy-five million dollars ($275,000,000) (the “Settlement Payment”) into
Escrow (the “Settlement Fund”). The balance of the Settlement Fund shall be
released from Escrow and paid to Activision in accordance with Section VII. The
Settlement Payment shall be funded as follows:

(a)    One or more payments by Vivendi totaling sixty-seven million five hundred
thousand dollars ($67,500,000) (the “Vivendi Settlement Payment”) within ten
(10) business days after entry of the Judgment, provided that Plaintiff’s
Counsel has timely provided complete wire transfer information and instructions.
The Appointed Directors shall bear no personal responsibility for any payment in
connection with this Stipulation or the Settlement. The Vivendi Defendants shall
have no responsibility for the Non-Vivendi Settlement Payment, and no Party
other than Vivendi shall have any responsibility for the Vivendi Settlement
Payment.

(b)    One or more payments on behalf of or by the Special Committee Defendants,
the ASAC Defendants and the Management Defendants, to be paid by ASAC and from
multiple insurers, totaling two hundred seven million five hundred thousand
dollars ($207,500,000) (the “Non-Vivendi Settlement

 

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Payment”). The Special Committee Defendants and the Management Defendants shall
cause any insurer payments on their behalf to be made within fifteen (15)
business days after entry of the Judgment, provided that Plaintiff’s Counsel has
timely provided complete wire transfer information and instructions. Payment of
that portion of the Non-Vivendi Settlement Payment from ASAC shall be due ten
(10) business days after entry of the Judgment, provided that Plaintiff’s
Counsel has timely provided complete wire transfer information and instructions,
and further provided that no objection to approval of the Stipulation or entry
of Judgment is filed. If an objection to approval of the Stipulation or entry of
the Judgment is filed other than an objection directed solely to an award of
attorneys’ fees and costs, then payment by ASAC shall be due within ten
(10) business days after the Effective Date. Pending the payment required by
this paragraph, ASAC shall continue to own shares of Activision stock with a
minimum market value equal to 125% of the amount of the payment ASAC is
obligated to make under this paragraph plus the amount of all outstanding
indebtedness. Because the payments are being made on their behalf as described
above, the Special Committee Defendants and the Management Defendants shall bear
no personal responsibility for any payment in connection with this Stipulation
or the Settlement. Activision shall not fund any portion of the Settlement
Payment.

 

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2.2.    On or before July 31, 2015, the number of directors of Activision will
be expanded by two, and such newly created directorships shall be filled by
persons independent (per the NASDAQ listing standards) of and unaffiliated with
all of the following: ASAC; ASAC GP; any limited partner of ASAC; any general
partner of ASAC GP; or any indirect owner of ASAC GP. Activision will make any
changes to Activision’s bylaws, certificate of incorporation or other corporate
documents necessary to facilitate this obligation. In the event either of the
directors appointed pursuant to this provision resign during the period provided
by Section 2.4, below, he or she shall be replaced by a person meeting the
requirements of this Section; however, nothing in this Stipulation shall impose
any obligation on Activision to replace any current Activision director in the
event of a resignation of such director during the period provided by
Section 2.4, below.

2.3.    Within ten (10) days of the entry of the Judgment, the parties to the
Stockholders Agreement, dated as of October 11, 2013, by and among Activision
and ASAC, will amend Section 3.07 to change the referenced “Stockholder
Percentage Interest” from “in excess of 24.9 percent” to “in excess of 19.9
percent.”

2.4.    Each of the provisions set forth in Paragraphs 2.2 and 2.3 above shall
remain in effect only so long as ASAC holds more than five percent (5%) of the
issued and outstanding stock of Activision.

 

23

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B. Releases

2.5.    Upon entry of the Judgment, and subject to Activision’s receipt of the
Settlement Payment, Activision, Plaintiff, the Class and each and every other
Activision stockholder, on behalf of themselves and any other person or entity
who could assert any of the Released Plaintiff’s Claims on their behalf, in such
capacity only, shall fully, finally, and forever release, settle, and discharge,
and shall forever be enjoined from prosecuting, the Released Plaintiff’s Claims
against Defendants and any other Defendants’ Releasees.

2.6.    Upon entry of the Judgment, and subject to Activision’s receipt of the
Settlement Payment, Defendants and the other Defendants’ Releasees, on behalf of
themselves and any other person or entity who could assert any of the Released
Defendants’ Claims on their behalf, in such capacity only, shall fully, finally,
and forever release, settle, and discharge, and shall forever be enjoined from
prosecuting, the Released Defendants’ Claims against Plaintiff’s Releasees.

C. Dismissal of Action

2.7.    Upon entry of the Judgment, the Action shall be dismissed in its
entirety and with prejudice. Plaintiff, Defendants, and Activision shall each
bear his, her, or its own fees, costs, and expenses, except as expressly
provided in this Stipulation, provided that nothing herein shall affect the
Activision directors’

 

24

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claims for advancement or indemnity of their legal fees, costs and expenses
incurred in connection with the Action and this Settlement.

2.8.    Within five days after the Judgment becomes Final, Miller’s Counsel
shall cause the Miller Action to be dismissed with prejudice and without fees or
costs to any Defendant or Activision on the ground that it is moot and that the
claims asserted therein have been settled, dismissed and released by virtue of
this Stipulation and the Judgment. Miller’s Counsel shall use their best efforts
to ensure that the California Superior Court enters the dismissal within five
days of the Judgment becoming final; however, any delay by the California
Superior Court in entering the dismissal order shall not affect the entitlement
of Miller’s Counsel to payment from any attorneys’ fees award pursuant to
Section 4.5 below. Miller’s Counsel represents and warrants that the Miller
Action shall remain stayed pending the entry of final judgment in this Action.

III.    PROCEDURE FOR APPROVAL

3.1.    Immediately after execution of this Stipulation, the Parties shall
jointly submit the Stipulation together with its related documents to the Court,
and shall apply to the Court for entry of the Scheduling Order, in the form
annexed hereto as Exhibit A.

3.2.    In accordance with the Scheduling Order, Activision shall mail, or cause
to be mailed, by first class U.S. mail or other mail service if mailed outside

 

25

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the U.S., postage prepaid, the Notice, substantially in the form attached hereto
as Exhibit B, to Current Stockholders and all members of the Class at their last
known address appearing in the stock transfer records maintained by or on behalf
of Activision. All Current Stockholders and all members of the Class who are
record holders of Activision common stock on behalf of beneficial owners shall
be directed to forward the Notice promptly to the beneficial owners of those
securities. Activision shall also file a copy of the Notice as an exhibit to a
Form 8K with the Securities and Exchange Commission.

3.3.    Activision shall pay any and all costs, and expenses related to
providing notice of the proposed Settlement (“Notice Costs”) regardless of
whether the Court declines to approve the Settlement or the Effective Date
otherwise fails to occur, and in no event shall Plaintiff, any other Activision
stockholder, or their attorneys be responsible for any such Notice Costs.

3.4.    The Parties and their attorneys agree to use their individual and
collective best efforts to obtain Court approval of Stipulation. The Parties and
their attorneys further agree to use their individual and collective best
efforts to effect, take, or cause to be taken all actions, and to do, or cause
to be done, all things reasonably necessary, proper, or advisable under
applicable laws, regulations, and agreements to consummate and make effective,
as promptly as practicable, the Stipulation provided for hereunder and the
dismissal of the Action.

 

26

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The Parties and their attorneys agree to cooperate fully with one another in
seeking the Court’s approval of this Stipulation and to use their best efforts
to effect the consummation of this Stipulation.

3.5.    If the Settlement embodied in this Stipulation is approved by the Court,
the Parties shall request that the Court enter the Judgment, substantially in
the form attached hereto as Exhibit C.

IV.    ATTORNEYS’ FEES AND EXPENSES

4.1.    Plaintiff’s Counsel, on behalf of themselves and Miller’s Counsel,
intend to petition the Court for an award of attorneys’ and litigation expenses,
based on the benefits provided to Activision, the Class and Activision’s
stockholders from the Settlement and the prosecution of the Action, which is no
greater than seventy-two million five hundred thousand dollars ($72,500,000)
(the “Fee and Expense Application”). Any Fee Award (as defined below) will be
paid by the Escrow Agent from the Settlement Fund. Defendants and Activision
agree that they will not object to or otherwise take any position on the Fee and
Expense Application so long as the Fee and Expense Application seeks an award no
greater than seventy-two million five hundred thousand dollars ($72,500,000).

4.2.    The Escrow Agent or its representative shall cause to be paid from the
Settlement Fund to Plaintiff’s Counsel any attorneys’ fees and expenses that are
awarded by the Court (the “Fee Award”). The Fee Award shall be paid from the

 

27

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Settlement Fund by the Escrow Agent or its representative to Plaintiff’s Counsel
within ten (10) business days after the Effective Date.

4.3.    Plaintiff’s Counsel has informed Activision and Defendants that they
intend to apply to the Court for a special award to Plaintiff for what they
characterize as his services over and above the customary responsibilities of a
derivative and class representative of up to fifty thousand dollars ($50,000) to
be payable from the fees and expenses the Court awards to Plaintiff’s Counsel in
connection with the Fee and Expense Application (the “Special Award
Application”). Defendants and Activision have not agreed to and reserve the
right to oppose the Special Award Application.

4.4.    If, after payment of the Fee Award, the Fee Award is reversed, vacated,
or reduced by final non-appealable order, or the Settlement is terminated in
accordance with the terms of this Stipulation, Plaintiff’s Counsel shall, within
ten (10) business days after receiving from Defendants’ Counsel or from a court
of appropriate jurisdiction notice of the termination of the Settlement or
notice of any reduction of the Fee Award by final non-appealable order, return
to Activision or the Escrow (if still in effect at the time) the difference
between the attorneys’ fees and expenses awarded by the Court in the Fee Award
on the one hand, and any attorneys’ fees and expenses ultimately and finally
awarded on appeal, further proceedings on remand or otherwise on the other hand.

 

28

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4.5.    The Fee Award shall be the sole aggregate compensation for Plaintiff’s
Counsel and Miller’s Counsel in connection with the Action and the Settlement.
Plaintiff’s Counsel shall allocate the attorneys’ fees awarded amongst
Plaintiff’s Counsel and Miller’s Counsel in a manner which they, in good faith,
believe reflects the contributions of such counsel to achieving the benefits of
the proposed Settlement. No payment from any attorneys’ fees award shall be made
to any counsel not affiliated with Plaintiff’s Counsel or Miller’s Counsel (and
no payment to Miller’s Counsel shall be made if the Miller Action is not
dismissed with prejudice as set forth in Section 2.8, above). Defendants’
Releasees shall have no responsibility for or liability whatsoever with respect
to the allocation or award of attorneys’ fees or expenses to Plaintiff’s Counsel
or Miller’s Counsel.

4.6.    Neither Defendants nor Activision shall be liable for or obligated to
pay any fees, expenses, costs, or disbursements, or to incur any expense on
behalf of, any person or entity (including, without limitation, Plaintiff or
Plaintiff’s Counsel), directly or indirectly, in connection with the Action or
the Settlement, except as expressly provided for in this Stipulation, provided
that nothing herein shall affect the Activision directors’ claims for
advancement or indemnity for their legal fees, costs and expenses incurred in
connection with the Action and this Settlement.

 

29

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4.7.    Neither Plaintiff nor Plaintiff’s Counsel shall be liable for or
obligated to pay any fees, expenses, costs, or disbursements to, or incur any
expenses on behalf of, any person or entity (including, without limitation,
Defendants, Activision, or their counsel), directly or indirectly, in connection
with the Delaware Action or the Settlement.

4.8.    This Stipulation, the Settlement, the Judgment, and whether the Judgment
becomes Final are not conditioned upon the approval of an award of attorneys’
fees, costs, or expenses, either at all or in any particular amount, by the
Court.

4.9.    Plaintiff’s Counsel warrants that no portion of any such award of
attorneys’ fees or expenses shall be paid to Plaintiff, except as may be
approved by the Court.

V.      STAY PENDING COURT APPROVAL

5.1.    Pending Court approval of the Stipulation, the Parties agree to stay any
and all proceedings in the Action other than those incident to the Settlement.

5.2.    Except as necessary to pursue the Settlement and determine a Fee Award,
pending final determination of whether the Stipulation should be approved, all
Parties to the Action (including Plaintiff, the Defendants, and Activision)
agree not to institute, commence, prosecute, continue, or in any way participate
in, whether directly or indirectly, representatively, individually, derivatively
on behalf

 

30

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of Activision, or in any other capacity, any action or other proceeding
asserting any Released Claims.

5.3.    Notwithstanding Paragraphs 5.1 and 5.2, nothing herein shall in any way
impair or restrict the rights of any Party to defend this Stipulation or to
otherwise respond in the event any Person objects to the Stipulation, the
proposed Judgment to be entered, and/or the Fee and Expense Application or
Special Award Application.

VI.    EFFECT OF DISAPPROVAL, CANCELLATION, OR TERMINATION

6.1.    Plaintiff, Defendants (provided they unanimously agree or if only
certain Defendants are affected by the occurrence of any event set forth in
clauses (b) through (d) below, provided that such Defendants as are affected
agree), and Activision shall each have the right to terminate the Settlement and
this Stipulation by providing written notice of their election to do so
(“Termination Notice”) to the other parties to this Stipulation within thirty
(30) calendar days of: (a) the Court’s declining to enter the Scheduling Order
in any material respect; (b) the Court’s refusal to approve this Stipulation or
any part of it that materially affects any party’s rights or obligations
hereunder; (c) the Court’s declining to enter the Judgment in any material
respect; or (d) the date upon which the Judgment is modified or reversed in any
material respect by an appellate court. Neither a modification nor a reversal on
appeal of the amount of fees, costs, and expenses

 

31

--------------------------------------------------------------------------------

 

awarded by the Court to Plaintiff’s Counsel or of the amount of special award to
Plaintiff (if a Special Award Application is made and granted by the Court)
shall be deemed a material modification of the Judgment or this Stipulation.

6.2.    In the event that the Settlement is terminated pursuant to the terms of
Paragraph 6.1 of this Stipulation or the Effective Date otherwise fails to occur
for any other reason, then (i) the Settlement and this Stipulation (other than
this Section VI and Paragraph 3.3 above) shall be canceled and terminated;
(ii) any judgment entered in the Delaware Action and any related orders entered
by the Court shall in all events be treated as vacated, nunc pro tunc; (iii) the
Releases provided under the Settlement shall be null and void; (iv) the fact of
the Settlement shall not be admissible in any proceeding before any court or
tribunal; (v) all proceedings in the Delaware Action shall revert to their
status as of November 13, 2013, and no materials created by or received from
another Party that were used in, obtained during, or related to settlement
discussions shall be admissible for any purpose in any court or tribunal, or
used, absent consent from the disclosing party, for any other purpose or in any
other capacity, except to the extent that such materials are required to be
produced during discovery in the Delaware Action or in any other litigation;
(vi) the Parties shall jointly petition the Court for a revised schedule for
trial; (vii) the Parties shall proceed in all respects as if the Settlement and
this Stipulation (other than this Section VI and Paragraph 3.3 above) had not

 

32

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been entered into by the Parties; and (viii) the Settlement Fund paid or due
with respect to such amounts, less any escrow fees or costs actually incurred
and paid or payable, shall be refunded directly to Defendants and any insurers
who made payments pursuant to Paragraph 2.1(b) in an amount proportional to
their contributions within five (5) business days after such cancellation or
termination.

6.3.    In the event Vivendi fails to make the Vivendi Settlement Payment as
required by Paragraph 2.1(a), Plaintiff shall have the right to terminate the
Settlement and this Stipulation as to the Vivendi Defendants by providing
written notice of his election to do so to the other parties to this Stipulation
and the Court within five business days of such default. In the event Activision
does not receive the Non-Vivendi Settlement Payment as required by Paragraph
2.1(b), Plaintiff shall have the right to terminate this Stipulation as to the
Defendants other than the Vivendi Defendants by providing written notice of his
election to do so to the other parties to this Stipulation and the Court within
five business days of such default. In the event this Settlement is terminated
pursuant to this paragraph as to less than all Defendants, the provisions of
Paragraph 6.2 shall be applicable, but solely as between Plaintiff and the
Defendants as to whom the Settlement has been terminated, and the parties shall
otherwise confer with the Court to modify its prior Orders and Judgment
consistent with such limited termination and to confer the releases provided
herein under Paragraphs 2.5 and 2.6 solely as to the Defendants

 

33

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as to whom the Settlement is not terminated. In addition to the foregoing,
Plaintiff shall have the right to specifically enforce the Stipulation and
compel the payment of the Vivendi Settlement Payment and the Non-Vivendi
Settlement Payment.

VII.   THE SETTLEMENT FUND

7.1.    The Settlement Fund shall be deemed to be in the custody of the Court
and will remain subject to the jurisdiction of the Court until such time as it
is distributed or returned pursuant to the terms of this Stipulation and/or
further order of the Court. The Escrow Agent shall invest any funds in a
non-interest bearing account.

7.2.    The Settlement Fund is intended to be a “qualified settlement fund”
within the meaning of Treasury Regulation § 1.468B-1, and the Parties shall so
treat it, and Plaintiff’s Counsel, as administrators of the Escrow within the
meaning of Treasury Regulation § 1.468B-2(k)(3), shall be responsible for filing
any required tax returns for the Account and paying from the Account any taxes,
including any interest or penalties thereon (the “Taxes”), owed with respect to
the Escrow. In addition, Plaintiff’s Counsel and their agents, and the Parties,
as required, shall do all things that are necessary or advisable to carry out
the provisions of this Paragraph.

7.3.    All Taxes arising with respect to the Settlement Fund and any expenses
and costs incurred in connection with the payment of Taxes pursuant to

 

34

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this Paragraph (including, without limitation, expenses of tax attorneys and/or
accountants and mailing, administration and distribution costs and expenses
relating to the filing or the failure to file all necessary or advisable tax
returns (the “Tax Expenses”)) shall be paid out of the Settlement Fund. None of
Activision, Defendants, the Released Parties or the Escrow Agent shall have any
liability or responsibility for the Taxes or the Tax Expenses. Plaintiff’s
Counsel or their agents shall timely and properly file all informational and
other tax returns necessary or advisable with respect to the Settlement Fund,
including, without limitation, the tax returns described in Treas. Reg. §
1.468B-2(k), and to the extent applicable, Treas. Reg. § 1.468B-2(l). All tax
returns shall be consistent with the terms herein and in all events shall
reflect that all Taxes shall be paid out of the Settlement Fund. Plaintiff’s
Counsel or their agents shall also timely pay any required Taxes and Tax
Expenses out of the Settlement Fund, and are authorized to withdraw, without
prior consent of the Defendants or order of the Court, from the Escrow amounts
necessary to pay Taxes and Tax Expenses. Activision and Defendants agree to
timely provide to Plaintiff’s Counsel the statement described in Treas. Reg. §
1.468B-3(e).

 

35

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7.4.    The Settlement Fund shall be applied as follows:

(a)    To pay all costs and expenses incurred in connection with administering
the Escrow, such as escrow fees, costs and taxes;

(b)    Subject to the approval of further order(s) of the Court, to pay to
Plaintiff’s Counsel the Fee Award; and

(c)     To distribute the balance of the Settlement Fund to Activision, via wire
transfer instructions provided by Activision, within ten (10) business days
after the Effective Date.

VIII.  NO ADMISSION OF LIABILITY

8.1.    It is expressly understood and agreed that neither the Settlement nor
any act or omission in connection therewith is intended or shall be deemed or
argued to be evidence of or to constitute an admission or concession by:
(a) Defendants, Activision, or any of the other Defendants’ Releasees as to
(i) the truth of any fact alleged by Plaintiff, (ii) the validity of any claims
or other issues raised, or which might be or might have been raised, in the
Action or in any other litigation, (iii) the deficiency of any defense that has
been or could have been asserted in the Action or in any litigation, or (iv) any
wrongdoing, fault, or liability of any kind by any of them, which each of them
expressly denies; or (b) Plaintiff or any of the other Plaintiff’s Releasees
that any of their claims are without merit, that any of the Defendants or
Defendants’ Releasees had meritorious defenses, or that

 

36

--------------------------------------------------------------------------------

 

damages recoverable under the Fifth Amended Class and Derivative Complaint would
not have exceeded the Settlement Payment. The Defendants and the Released
Persons may file this Stipulation and/or Judgment in any action that has been or
may be brought against them in order to support a claim or defense based on
principles of res judicata, collateral estoppel, release, good faith settlement,
judgment bar or reduction, or any other theory of claim preclusion or issue
preclusion or similar defense or counterclaim or in connection with any
insurance litigation.

IX.    MISCELLANEOUS PROVISIONS

9.1.   This Stipulation shall be deemed to have been mutually prepared by the
Parties hereto and shall not be construed against any of them by reason of
authorship.

9.2.   The Parties agree that in the event of any breach of this Stipulation,
all of the Parties’ rights and remedies at law, equity, or otherwise, are
expressly reserved.

9.3.   This Stipulation may be executed in one or more counterparts, each of
which shall be deemed to be an original and all of which shall constitute one
and the same document. Any signature to the Stipulation by means of facsimile or
electronic scanning shall be treated in all manner and respects as an original
signature and shall be considered to have the same binding legal effect as if it
were

 

37

--------------------------------------------------------------------------------

 

the original signed version thereof and without any necessity for delivery of
the originally signed signature pages in order for this to constitute a binding
agreement.

9.4.    The headings herein are used for the purpose of convenience only and are
not meant to have legal effect.

9.5.    Each counsel or other person executing this Stipulation on behalf of any
Party warrants that he or she has the full authority to bind his or her
principal to this Stipulation.

9.6.    Plaintiff and Plaintiff’s Counsel represent and warrant that none of
Plaintiff’s claims referred to in this Stipulation or that could have been
alleged in the Action have been assigned, encumbered, or in any manner
transferred in whole or in part.

9.7.    This Stipulation shall not be modified or amended, nor shall any
provision of this Stipulation be deemed waived, unless such modification,
amendment, or waiver is in writing and executed by or on behalf of the Parties.

9.8.    Any failure by any Party to insist upon the strict performance by any
other Party of any of the provisions of this Stipulation shall not be deemed a
waiver of any of the provisions hereof, and such party, notwithstanding such
failure, shall have the right thereafter to insist upon the strict performance
of any and all of the provisions of this Stipulation to be performed by such
other Party.

 

38

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Waiver by any Party of any breach of this Stipulation by any other Party shall
not be deemed a waiver of any other prior or subsequent breach of this
Stipulation, and failure by any Party to assert any claim for breach of this
Stipulation shall not be deemed to be a waiver as to that or any other breach
and will not preclude any Party from seeking to remedy a breach and enforce the
terms of this Stipulation. Each of the Defendants’ respective obligations
hereunder are several and not joint, and the breach or default by one Defendant
shall not be imputed to, nor shall any Defendant have any liability or
responsibility for, the obligations of any other Defendant herein.

9.9.    This Stipulation shall be binding upon, and inure to the benefit of, the
successors and assigns of the Parties hereto.

9.10.  Notwithstanding the entry of the Judgment, the Court shall retain
jurisdiction with respect to the implementation, enforcement, and interpretation
of the terms of the Stipulation, and all Parties submit to the jurisdiction of
the Court for all matters relating to the administration, enforcement, and
consummation of the Settlement and the implementation, enforcement, and
interpretation of the Stipulation, including, without limitation, any matters
relating to awards of attorneys’ fees and expenses to Plaintiff’s Counsel.

9.11.  The construction and interpretation of this Stipulation shall be governed
by and construed in accordance with the laws of the State of Delaware

 

39

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and without regard to the laws that might otherwise govern under principles of
conflicts of law applicable hereto. Each Party (i) consents to personal
jurisdiction in any such action (but no other action) brought in the Court;
(ii) consents to service of process by registered mail upon such Party or such
Party’s agent; and (iii) waives any objection to venue in the Court and any
claim that Delaware or the Court is an inconvenient forum.

9.12.  Without further order of the Court, the Parties hereto may agree to
reasonable extensions of time to carry out any of the provisions of the
Stipulation.

9.13.  The following exhibits are annexed hereto and incorporated herein by
reference:

(a)     Exhibit A: Scheduling Order With Respect to Notice and Settlement
Hearing;

(b)     Exhibit B: Notice of Pendency and of Settlement of Action; and

(c)      Exhibit C: Final Order and Judgment.

IN WITNESS WHEREOF, IT IS HEREBY AGREED by the undersigned as of the date noted
above.

 

 

[SIGNATURE PAGES FOLLOW]

 

40

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FRIEDLANDER & GORRIS, P.A.

 

 

 

 

 

[g267481kk13i001.jpg]

 

 

Joel Friedlander (#3163)

 

 

Jeffrey M. Gorris (#5102)

 

 

222 Delaware Avenue, Suite 1400

 

 

Wilmington, DE 19801

 

 

(302) 573-3500

 

 

Co-Lead Counsel for Plaintiff

 

 

 

 

 

 

 

OF COUNSEL:

ROSENTHAL, MONHAIT & GODDESS, P.A.

 

Lawrence P. Eagel

[g267481kk13i002.jpg]

 

Jeffrey H. Squire

BRAGAR EAGEL & SQUIRE, PC

885 Third Avenue, Suite 3040

New York, NY 10022

(212) 308-5858

Jessica Zeldin (#3558)

 

919 N. Market Street, Suite 1401

 

Wilmington, DE 19801

 

(302) 656-4433

 

 

Delaware Liaison Counsel for

 

 

Plaintiff

 

 

 

 

 

 

 

 

 

 

 

 

 

 

ROBBINS ARROYO LLP

 

 

 

 

 

[g267481kk13i003.jpg]

 

 

Stephen J. Oddo

 

 

600 B Street, Suite 1900

 

 

San Diego, CA 92101

 

 

(619) 525-3990

 

 

Miller’s Counsel

 

 

(As to Section 2.8 Only)

 

 

41

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OF COUNSEL:

 

SEITZ ROSS ARONSTAM & MORITZ LLP

William Savitt

/s/ Garrett B. Moritz

Ryan A. McLeod

Collins J. Seitz, Jr. (#2237)

Benjamin D. Klein

Garrett B. Moritz (#5646)

WACHTELL, LIPTON, ROSEN

Eric D. Selden (#4911)

 & KATZ

100 S. West Street, Suite 400

51 West 52nd Street

Wilmington, DE 19801

New York, NY 10019

(302) 576-1600

(212) 403-1000

Attorneys for Defendants Robert J.

 

Corti, Robert J. Morgado and Richard

 

Sarnoff

 

 

 

 

OF COUNSEL:

MORRIS, NICHOLS, ARSHT & TUNNELL LLP

Robert A. Sacks

 

Diane L. McGimsey

/s/ Shannon E. German

SULLIVAN & CROMWELL LLP

R. Judson Scaggs, Jr. (#2676)

1888 Century Park East, Suite 2100

Shannon E. German (#5172)

Los Angeles, CA 90067

1201 North Market Street, 16th Floor

(310) 712-6644

Wilmington, DE 19801

 

(302) 658-9200

 

Attorneys for Defendants Brian G. Kelly, Robert A. Kotick, ASAC II LP, and ASAC
II LLC

 

 

 

42

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OF COUNSEL:

 

RICHARDS, LAYTON & FINGER, P.A.

Joel A. Feuer

/s/ Raymond J. DiCamillo

Michael M. Farhang

Raymond J. DiCamillo (#3188)

GIBSON, DUNN & CRUTCHER LLP

Susan M. Hannigan (#5342)

333 South Grand Avenue

One Rodney Square

Los Angeles, CA 90071

920 N. King Street

(213) 229-7000

Wilmington, DE 19801

 

(302) 651-7700

 

Attorneys for Defendants Vivendi,

 

S.A., Philppe G. H. Capron, Jean-Yves

 

Charlier, Frederic R. Crepin, Jean-

 

Francois Dubos, Lucian Grainge and

 

Regis Turrini

 

 

 

 

 

 

 

 

 

 

 

SKADDEN, ARPS, SLATE,
MEAGHER & FLOM LLP

 

 

 

[g267481kk13i004.jpg]

 

Edward P. Welch (#671)

 

Edward B. Micheletti (#3794)

 

Sarah Runnells Martin (#5230)

 

Lori W. Will (#5402)

 

One Rodney Square

 

Wilmington, DE 19899-0636

 

(302) 651-3000

 

Attorneys for Nominal Defendant

 

Activision Blizzard, Inc.

 

 

 

 

December 19, 2014

 

 

43

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EXHIBIT A

 

IN THE COURT OF CHANCERY OF THE STATE OF DELAWARE

 

IN RE: ACTIVISION BLIZZARD, INC.

 

)

 

Consolidated

STOCKHOLDER LITIGATION

 

)

 

C.A. No. 8885-VCL

 

 

SCHEDULING ORDER WITH RESPECT

TO NOTICE AND SETTLEMENT HEARING

 

 

WHEREAS, the parties to the above-captioned action (the “Action”) have entered
into a Stipulation of Compromise and Settlement dated December 19, 2014 (the
“Stipulation”), which sets forth the terms and conditions for the proposed
settlement and dismissal with prejudice of the Action, subject to review and
approval by this Court pursuant to Court of Chancery Rules 23 and 23.1 upon
notice to the Class (as defined in the Stipulation), including the current
stockholders of nominal defendant Activision Blizzard, Inc. (“Activision”);

NOW, upon application of the parties, after review and consideration of the
Stipulation filed with the Court and the exhibits annexed thereto,

IT IS HEREBY ORDERED this        day of                                    ,
2014 as follows:

1.       Except for terms defined herein, the Court adopts and incorporates the
definitions in the Stipulation for the purposes of this order.

2.       On November 12, 2014, the Court certified a class comprising the
holders of shares of Activision common stock that were issued and outstanding as

 

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of July 25, 2013 (the “Class Shares”), in their capacities as holders of
Class Shares, together with their heirs, assignees, transferees, and
successor-in-interest, in each case in their capacity as holders of
Class Shares. This includes all persons who acquired Class Shares after July 25,
2013. The Defendants and their affiliates are excluded from the Class. Limited
partners in ASAC and their affiliates are included in the Class, but only to the
extent they own Class Shares outside of ASAC and ownership of those shares is
not attributable to ASAC.

3.       The Court also appointed Anthony Pacchia as representative of the
Class, Friedlander & Gorris, P.A. and Bragar, Eagel & Squire PC as Co-Lead
Counsel for the Class, and Rosenthal, Monhait & Goddess, P.A. as Liaison Counsel
for the Class.

4.       A hearing (the “Settlement Hearing”) shall be held on
                                , 2015, at          .m. in the Court of
Chancery, New Castle County Courthouse, 500 North King Street, Wilmington,
Delaware 19801, to (a) determine whether the proposed Settlement, on the terms
and conditions provided for in the Stipulation, is fair, reasonable, and
adequate and in the best interests of the Class, Activision and its current
stockholders; (b) determine whether the Court should finally approve the
Stipulation and enter the Judgment as provided in the Stipulation, finally
certifying the Class, dismissing the Action with prejudice and extinguishing and
releasing the Released Claims; (c) consider Plaintiff’s

 

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Counsel’s Fee and Expense Application, including any special award to Plaintiff;
(d) hear and determine any objections to the proposed Settlement, the class
action determination, Plaintiff’s Counsel’s Fee and Expense Application, or any
application for a special award to Plaintiff (Plaintiffs’ counsel has reserved
the right to make such a request to be paid from any fees awarded to Plaintiff’s
counsel and Defendants have reserved the right to oppose); and (e) rule on such
other matters as the Court may deem appropriate.

5.      The Settlement Hearing may be adjourned by the Court from time to time
without further notice to the Class and Current Stockholders other than by
announcement at the Settlement Hearing or other adjournment thereof, or a
notation on the docket in the Action.

6.      The Court reserves the right to approve the Settlement at or after the
Settlement Hearing, with such modifications as may be consented to by the
Parties to the Stipulation, and without further notice to the Class and Current
Stockholders. Further, the Court may render its Judgment, and order the payment
of attorneys’ fees and expenses, including allowing a special award to
Plaintiff, all without further notice to the Class and Current Stockholders. The
Court retains jurisdiction over this Action to consider further applications
arising out of or connected with the proposed Settlement.

 

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7.      The Court approves, in form and content, the Notice of Pendency and of
Settlement of Action (the “Notice”) filed by the parties with the Stipulation as
Exhibit B and finds that the giving of notice substantially in the manner set
forth herein meets the requirements of Court of Chancery Rules 23 and 23.1 and
due process, is the best notice practicable under the circumstances and shall
constitute due and sufficient notice to all persons entitled thereto. No later
than sixty (60) calendar days prior to the Settlement Hearing (the “Notice
Date”), Activision shall mail, or cause to be mailed, by first class U.S. mail
or other mail service if mailed outside the U.S., postage pre-paid, the Notice,
substantially in the form annexed as Exhibit B to the Stipulation, to all
persons who are current stockholders of record or were on July 25, 2013 record
holders of common stock of Activision at their last known address appearing in
the stock transfer records maintained by or on behalf of Activision. All Current
Stockholders and all members of the Class who are record holders of Activision
common stock on behalf of beneficial owners shall be directed to forward the
Notice promptly to the beneficial owners of those securities. Additionally,
Activision shall use reasonable efforts to give notice to all beneficial owners
of common stock of Activision by providing additional copies of the Notice to
any record holder requesting the Notice for purposes of distribution to such
beneficial owners.

 

4

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8.      No later than the Notice Date, Activision shall also file a copy of the
Notice as an exhibit to a Form 8K with the Securities and Exchange Commission.

9.      Activision shall pay any and all costs and expenses related to providing
notice of the proposed Settlement (“Notice Costs”) regardless of whether
Effective Date shall occur, and in no event shall Plaintiff, any other
Activision stockholder, any other Defendant, or their attorneys be responsible
for any such Notice Costs.

10.    At least ten (10) business days prior to the Settlement Hearing,
Activision shall file an appropriate affidavit attesting to provision of the
Notice in accordance with this Order.

11.    As set forth in the Notice, any Class member that continues to own such
shares of Activision stock as of the date of the Settlement Hearing, including
any Current Stockholder, who objects to the class action determination, the
Settlement, the proposed Judgment to be entered, the Fee and Expense Application
(or any special award to Plaintiff), or who otherwise wishes to be heard
(“Objector”), may appear in person or by his, her, or its attorney at the
Settlement Hearing and present any evidence or argument that may be proper and
relevant; provided, however, that no Objector shall be heard or entitled to
contest the approval of the terms and conditions of the Settlement, or, if
approved, the Judgment to be entered thereon, the allowance of fees and expenses
to Plaintiff’s

 

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Counsel, or any special award to Plaintiff unless he, she, or it has, no later
than ten business days before the Settlement Hearing (unless the Court in its
discretion shall thereafter otherwise direct, upon application of such person
and for good cause shown), filed with the Register in Chancery, Court of
Chancery, New Castle County Courthouse, 500 North King Street, Wilmington,
Delaware 19801, the following: (a) proof of ownership of Activision stock either
(i) as of July 25, 2013 and continuously to the present (if objecting to the
derivative aspects of the settlement); or (ii) as of July 25, 2013 or as a
result of the acquisition of Class Shares thereafter (if objecting to the class
aspects of the settlement); (b) a written and signed notice of the Objector’s
intention to appear, which states the name, address and telephone number of
Objector and, if represented, his, her or its counsel; (c) a detailed statement
of the objections to any matter before the Court; and (d) a detailed statement
of all of the grounds thereon and the reasons for the Objector’s desire to
appear and to be heard, as well as all documents or writings which the Objector
desires the Court to consider. Any such filings with the Court must also be
served upon each of the following counsel (by hand, first class U.S. mail, or
express service) such that they are received no later than ten (10) calendar
days prior to the Settlement Hearing:

 

6

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Joel Friedlander, Esq.

Jeffrey M. Gorris, Esq.

FRIEDLANDER & GORRIS, P.A.
222 Delaware Avenue, Suite 1400
Wilmington, DE 19801

Co-Lead Counsel for Plaintiff

 

Jessica Zeldin, Esq.

ROSENTHAL, MONHAIT & GODDESS, P.A.

919 N. Market Street, Suite 1401

Wilmington, DE 19801

Delaware Liaison Counsel for Plaintiff

 

Collins J. Seitz, Jr., Esq.

Garrett B. Moritz, Esq.

Eric D. Selden, Esq.

SEITZ ROSS ARONSTAM & MORTIZ LLP

100 S. West Street, Suite 400

Wilmington, DE 19801

Attorneys for Defendants Robert J. Corti, Robert J. Morgado and Richard Sarnoff

 

R. Judson Scaggs, Jr., Esq.

Shannon E. German, Esq.

MORRIS, NICHOLS, ARSHT & TUNNELL LLP

1201 North Market Street, 16th Floor

Wilmington, DE 19801

Attorneys for Defendants Brian G. Kelly, Robert A. Kotick, ASAC II LP, and ASAC
II LLC

 

Raymond J. DiCamillo, Esq.

Susan M. Hannigan, Esq.

RICHARDS, LAYTON & FINGER, P.A.

One Rodney Square

920 N. King Street

Wilmington, DE 19801

Attorneys for Defendants Vivendi, S.A., Philppe G. H. Capron, Jean-Yves
Charlier, Frederic R. Crepin, Jean-Francois Dubos, Lucian Grainge and Regis
Turrini

 

7

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Edward P. Welch, Esq.

Edward B. Micheletti, Esq.

Sarah Runnells Martin, Esq.

Lori W. Will, Esq.

SKADDEN, ARPS, SLATE, MEAGHER & FLOM LLP

One Rodney Square

Wilmington, DE 19899-0636

Attorneys for Nominal Defendant Activision Blizzard, Inc.

 

12.     Any person or entity who fails to object in the manner prescribed above
shall be deemed to have waived such objection (including the right to appeal),
unless the Court in its discretion allows such objection to be heard at the
Settlement Hearing, and shall forever be barred from raising such objection in
this Action or any other action or proceeding or otherwise contesting the
Settlement, the Fee and Expense Application, any special award to Plaintiff or
other matter related to the Settlement, in the Action or any other action or
proceeding, and will otherwise be bound by the Judgment to be entered and the
releases to be given.

 

13.     At least 15 business days prior to the Settlement Hearing, Plaintiff’s
Counsel shall file with the Court a brief in support of the Settlement and
Plaintiff’s Counsel’s Fee and Expense Application (including any special award
to Plaintiff). Any objections to the Fee and Expense Application, or to any
request for a special award to Plaintiff, shall be filed and served no later
than ten business days prior to the Settlement Hearing.

 

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14.    At least five business days prior to the Settlement Hearing, the parties
may file with the Court a brief in response to any objections made by an
Objector pursuant to Paragraph 11 above, and Plaintiff may file and serve a
brief in response to any objections to the Fee and Expense Application or to any
request for a special award to Plaintiff.

 

15.    If the Settlement is approved by the Court following the Settlement
Hearing, the Court shall enter an Order and Final Judgment substantially in the
form attached to the Stipulation as Exhibit C.

 

16.    In the event that the Settlement is terminated in its entirety pursuant
tothe terms of Paragraph 6.1 of the Stipulation or the Effective Date otherwise
fails to occur for any reason, the Settlement and the Stipulation (other than
Section VI and Paragraph 3.3 thereof) shall be canceled and terminated; this
Order (other than paragraph 9 hereof) shall become null and void and be without
prejudice to the rights of Plaintiff, the Class, the other Activision
stockholders, Defendants, and the Company; and all proceedings in, and parties
to, the Action shall revert to their status as of November 13, 2014.

 

17.    All discovery and other proceedings in this Action (except as may be
necessary to carry out the terms and conditions of the proposed Settlement) are
hereby stayed and suspended until further order of the Court. Except as provided
in the Stipulation, pending final determination of whether the Stipulation
should be

 

9

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approved, all parties to the Action are hereby enjoined against instituting,
commencing, prosecuting, continuing, or in any way participating in, whether
directly, representatively, individually, derivatively on behalf of Activision,
or in any other capacity, any action or other proceeding asserting any Released
Claims, excluding any claims any Defendant or Nominal Defendant has against
insurers, re-insurers or co-insurers that are not released pursuant to other
documentation.

 

18.     The Court may, for good cause shown, extend any of the deadlines set
forth in this Order without further notice to anyone other than the parties to
the Action and any Objectors.

 

 

 

 

Vice Chancellor J. Travis Laster

 

10

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EXHIBIT B

 

IN THE COURT OF CHANCERY OF THE STATE OF DELAWARE

 

IN RE: ACTIVISION BLIZZARD, INC.

)

Consolidated

STOCKHOLDER LITIGATION

)

C.A. No. 8885-VCL

 

 

NOTICE OF PENDENCY AND SETTLEMENT OF ACTION

 

 

TO: ALL RECORD AND BENEFICIAL HOLDERS OF SHARES OF COMMON STOCK OF ACTIVISION
BLIZZARD, INC. (“ACTIVISION” OR THE “COMPANY”) THAT WERE ISSUED AND OUTSTANDING
AS OF JULY 25, 2013 (“CLASS SHARES”), INCLUDING THEIR HEIRS, ASSIGNEES,
TRANSFEREES, SUCCESSORS-IN-INTEREST, AND ALL OTHER PERSONS WHO ACQUIRED
CLASS SHARES AFTER JULY 25, 2013, BUT EXCLUDING THE DEFENDANTS AND THEIR
AFFILIATES.

 

BROKERAGE FIRMS, BANKS, AND OTHER PERSONS OR ENTITITES WHO HELD CLASS SHARES OR
WHO HELD SHARES OF RECORD WHO ARE NOT ALSO BENEFICIAL OWNERS, ARE DIRECTED TO
FORWARD THIS NOTICE PROMPTLY TO THE BENEFICIAL OWNERS OF SUCH SHARES, OR REQUEST
ACTIVISION TO DO SO (SEE SECTION AT THE END OF THIS NOTICE ENTITLED “NOTICE TO
PERSONS OR ENTITIES HOLDING RECORD OWNERSHIP ON BEHALF OF OTHERS”).

 

The purpose of this Notice is to inform you about: (i) the pendency of the
above-captioned stockholder derivative and class action (the “Action”), which
was brought by an Activision stockholder on behalf of and for the benefit of a
class of Activision stockholders and Activision in the Court of Chancery of the
State of Delaware (the “Court”); (ii) a proposed settlement of the Action (the
“Settlement”), subject to Court approval and subject to other conditions of the
Settlement being satisfied, i.e., the Effective Date occurs, as provided in a
Stipulation of Settlement (the “Stipulation”) that was filed with the Court and
is publicly available for review as indicated in paragraph 42 below; (iii) the
hearing that the Court will hold on                        , 2015 at _:__ _.m.,
to determine whether to finally certify the class, whether to approve the
Settlement and to consider Plaintiff’s Counsel’s application for an award of
attorneys’ fees and expenses and Plaintiff’s Counsel’s application for a special
award to Plaintiff; and (iv) current Class members’ and stockholders’ rights
with respect to the proposed Settlement and Plaintiff’s Counsel’s application
for attorneys’ fees and expenses and Plaintiff’s Counsel’s application for a
special award to Plaintiff.1

 

 

PLEASE READ THIS NOTICE CAREFULLY AND IN ITS ENTIRETY.
YOUR RIGHTS WILL BE AFFECTED BY THE ACTION.

 

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1 All capitalized terms not otherwise defined in this Notice shall have the
meaning provided in the Stipulation.

 

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The Stipulation was entered into as of December __, 2014, between and among:
plaintiff in the Action (“Plaintiff”); Vivendi S.A. (“Vivendi”) and individual
defendants Philippe G.H. Capron, Jean-Yves Charlier, Frédéric R. Crépin,
Jean-Francois Dubos, Lucian Grainge, and Régis Turrini (the individual
defendants collectively, the “Appointed Directors” and the Appointed Directors
and Vivendi, collectively the “Vivendi Defendants”); individual defendants
Robert J. Corti, Robert J. Morgado, and Richard Sarnoff (collectively, the
“Special Committee Defendants”); individual defendants Brian G. Kelly and Robert
A. Kotick (Messrs. Kelly and Kotick, collectively the “Management Defendants “),
ASAC II LP (“ASAC”) and ASAC II LLC (“ASAC GP”) (ASAC and ASAC GP, collectively,
the “ASAC Defendants,” and together with the Vivendi Defendants and the Special
Committee Defendants, the “Defendants”); and nominal defendant Activision
(collectively with Plaintiff, Vivendi Defendants, Special Committee Defendants,
and ASAC Defendants, the “Parties”), subject to the approval of the Court
pursuant to Delaware Chancery Rules 23 and 23.1.

 

Because this Action was brought as a class and derivative action on behalf of
and for the benefit of a class of stockholders and Activision, the benefits of
the Settlement will go to both Activision and the Class, as defined below.
Individual Class members will not receive any direct payment of funds from the
Settlement, but will obtain the benefits from the Settlement that are described
in paragraph 29 below.

 

 

WHAT IS THE PURPOSE OF THIS NOTICE?

 

1.            The purpose of this Notice is to explain the Action, the terms of
the proposed Settlement, and how the Settlement affects Activision stockholders’
and Class members’ legal rights.

 

2.            In a derivative action, one or more people and/or entities who are
current stockholders of a corporation sue on behalf of and for the benefit of
the corporation, seeking to enforce the corporation’s legal rights.

 

3.            In a class action, one or more people and/or entities who were
stockholders at the time the claim arose sue on behalf of and for the benefit of
the individual class members, seeking to enforce the Class members’ legal
rights.

 

4.            As described more fully in paragraph 40 below, Class members,
including current stockholders, have the right to object to the proposed
Settlement, the application by Plaintiff’s Counsel for an award of attorneys’
fees and expenses and Plaintiff’s Counsel’s application for a special award to
Plaintiff. They have the right to appear and be heard at the Settlement Hearing,
which will be held before The Honorable J. Travis Laster on
                          , 2015, at _:__ _.m., at the New Castle County
Courthouse, 500 N. King Street, Wilmington, Delaware 19801. At the Settlement
Hearing, the Court will (a) determine whether the proposed Settlement, on the
terms and conditions provided for in the Stipulation, is fair, reasonable, and
adequate and in the best interests of the Class, Activision and its current
stockholders; (b) determine whether the Court should finally approve the
Stipulation and enter the Judgment as provided in the

 

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Stipulation, dismissing the Action with prejudice and extinguishing and
releasing the Released Claims; (c) consider Plaintiff’s Counsel’s Fee and
Expense Application, (d) consider any application by Plaintiff’s counsel for a
special award to Plaintiff; (e) hear and determine any objections to the
proposed Settlement, the class action determination or Plaintiff’s Counsel’s Fee
and Expense Application, including a special award to Plaintiff; and (f) rule on
such other matters as the Court may deem appropriate.

 

5.       The Court has reserved the right to adjourn or continue the Settlement
Hearing including consideration of the application by Plaintiff’s Counsel for
attorneys’ fees and expenses and any application by Plaintiff’s Counsel for a
special award to Plaintiff, without further notice to you other than by
announcement at the Settlement Hearing or any adjournment thereof, or notation
on the docket in the Action. The Court has further reserved the right to approve
the Settlement, at or after the Settlement Hearing, with such modifications as
may be consented to by the Parties and without further notice of any kind.

 

WHAT IS THIS CASE ABOUT? WHAT HAS HAPPENED SO FAR?

 

THE FOLLOWING DESCRIPTION OF THE ACTION AND THE SETTLEMENT HAS BEEN PREPARED BY
COUNSEL FOR THE PARTIES. THE COURT HAS MADE NO FINDINGS WITH RESPECT TO SUCH
MATTERS, AND THIS NOTICE IS NOT AN EXPRESSION OR STATEMENT BY THE COURT OF
FINDINGS OF FACT.

 

6.            On or about July 9, 2008, Vivendi indirectly acquired majority
control of Activision as a result of a merger between Activision and Vivendi
Games.

 

7.            At all relevant times through the closing of the challenged
transactions on October 11, 2013, Vivendi indirectly owned approximately 62% of
Activision’s outstanding shares of common stock.

 

8.            On January 29, 2013, the Management Defendants sent a letter to
Vivendi proposing a potential transaction that would be subject to the review,
negotiation and approval of a special committee of Activision’s Board and
involve the purchase of all of Vivendi’s Activision shares at $13.15 per share
by Activision, using cash on hand and $4-5 billion in new debt, and “new equity
sponsors.” The Management Defendants “would contribute a significant amount of
[their] own money to fund the equity portion of the purchase price with the
additional equity coming from new investors.”

 

9.            On February 14, 2013, the Management Defendants sent a letter to
Vivendi providing more details about their proposal. The letter proposed that,
subject to review, negotiation and approval of an independent special committee
of Activision’s Board, Activision would repurchase approximately $6 billion of
Vivendi’s stake at $13.15 by using $1.3 billion in cash and $4.7 billion in new
debt, and that an investment group to be assembled by the Management Defendants
would simultaneously purchase the remaining approximately $3 billion of
Vivendi’s stake at the same price.

 

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10.          On February 28, 2013, the Board authorized the formation of a
Special Committee consisting of the Special Committee Defendants, which promptly
retained independent advisors. The Special Committee was authorized to consider
not only the proposal made at that time by the Management Defendants but any
other alternative transaction or no transaction at all.

 

11.          Following the formation of the Special Committee, the ASAC
investment group was formed.

 

12.          On July 25, 2013, following negotiations among the Special
Committee, Vivendi and the Management Defendants, Vivendi, ASAC and Activision
entered into a stock purchase agreement (the “Stock Purchase Agreement” or
“SPA”). Pursuant to the SPA, Activision agreed to purchase the shares of a
Vivendi subsidiary (“Holdco”) that held 428,676,471 shares of Activision’s
common stock for $13.60 per share. Holdco also had certain beneficial tax
attributes at the time of such purchase of Holdco by Activision. ASAC agreed to
purchase from Vivendi 171,968,042 shares of Activision’s common stock at the
same price of $13.60 per share but without the additional tax benefits
(collectively, the “Transaction”).

 

13.          On August 1, 2013, Todd Miller commenced an action styled Todd
Miller v. Kotick, et al., Case No. BC517086 (Cal. Super.) (the “Miller Action”),
filed in the California Superior Court in Los Angeles County, asserting
derivative claims on behalf of Activision against the Management Defendants, the
Special Committee Defendants, the Vivendi Defendants and Does 1-25, and naming
Activision as a nominal defendant.

 

14.          On September 11, 2013, after making a books and records demand and
receiving confidential records of Activision, Plaintiff in the Action, Anthony
Pacchia, filed a complaint in the Delaware Court of Chancery asserting
derivative claims on behalf of Activision against the Management Defendants, the
Special Committee Defendants, and the Vivendi Defendants with respect to the
Transaction. Activision was named as a nominal defendant.

 

15.          Also on September 11, 2013, plaintiff Douglas M. Hayes filed a
complaint in the Court asserting derivative claims on behalf of Activision and
class claims on behalf of a putative class of Activision stockholders against
Defendants and other parties.

 

16.          On October 11, 2013, the Transaction closed. Upon closing, the
Appointed Directors resigned from the Board of Directors of Activision, a
committee of Activision’s Board consisting of Corti and Morgado appointed Peter
Nolan and Elaine Wynn as new directors of Activision, and Activision and ASAC
entered into a Stockholders Agreement (the “Stockholders  Agreement”).

 

17.          On November 11, 2013, the Court entered an order consolidating the
Pacchia and Hayes actions.2

 

 

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2 The following constituent actions were consolidated into the Action: Pacchia
v. Kotick, et al., C.A. No. 8884-VCL (Del. Ch.); Hayes v. Activision
Blizzard, Inc., et al., C.A. No. 8885-VCL (Del. Ch.); and Benston v. Vivendi
S.A., C.A. No. 9447-VCL (Del. Ch.).

 

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18.        On December 3, 2013, the Court named Pacchia Lead Plaintiff and
appointed Friedlander & Gorris, P.A. and Bragar Eagel & Squire, PC as
Plaintiff’s Counsel and Rosenthal, Monhait & Goddess, P.A. as Delaware Liaison
Counsel (“Plaintiff’s Counsel”).

 

19.        Subsequently, Plaintiff amended his complaint four more times, with
the operative complaint being a Fifth Amended Verified and Class Action
Complaint (the “Complaint”). The Complaint seeks derivative and direct relief
against the Vivendi Defendants, the Special Committee Defendants, the Management
Defendants, and the ASAC Defendants with respect to the Transaction. The
Complaint alleges that the Vivendi Defendants, the Special Committee Defendants
and Management Defendants breached their fiduciary duties by entering into the
Transaction, and that the ASAC Defendants aided and abetted those alleged
breaches. Among other things, the Complaint alleges, and the Defendants deny,
that the Management Defendants usurped a corporate opportunity in purchasing
shares of stock from Vivendi at a discount to the market price and obtained
control over Activision, and that Vivendi assented to the Transaction to obtain
desired liquidity. The Complaint also challenges the initial appointment and
subsequent re-nomination and reelection by some or all of the Special Committee
Defendants and Management Defendants of directors Peter Nolan and Elaine Wynn to
the Activision Board as a breach of fiduciary duty and a breach of the
Stockholders Agreement by ASAC.

 

20.        On June 6, 2014, the Court denied Defendants’ motions to dismiss the
breach of fiduciary duty claims alleged in a prior iteration of the Complaint.
On June 6, 2014, the Court granted ASAC’s motion to dismiss Plaintiff’s direct
and derivative claims for breach of the Stockholders Agreement, but gave
Plaintiff leave to re-plead derivative claim only. At the time the Parties
entered into the settlement embodied in the Stipulation, ASAC’s motion to
dismiss Plaintiff’s re-pleaded derivative breach of contract claim was sub
judice.

 

21.        On June 6, 2014, the Court denied a motion filed by the plaintiff in
Benston v. Vivendi S.A., C.A. No. 9447-VCL (Del. Ch.), which sought permission
for his counsel to participate in the leadership of the Action.

 

22.        During the course of the litigation, Plaintiff propounded extensive
discovery, including subpoenas to 16 third parties. In response to Plaintiff’s
discovery requests, the Defendants and non-parties produced in excess of 800,000
pages of documents.

 

23.        Plaintiff’s Counsel deposed 23 fact witnesses and Plaintiff was,
himself, deposed.

 

24.        The Parties engaged in expert discovery, including the exchange of
opening and rebuttal reports, the deposition of Plaintiff’s expert and
Plaintiff’s counsel’s deposition of three of Defendants’ expert witnesses. At a
later date, after discovery was complete, Defendants determined not to identify
their fourth expert witness as a trial witness.

 

25.        On October 29, 2014, the Court entered an order providing that trial
would last for up to ten days, from December 8-19, 2014.

 

26.        On November 12, 2014, the Court entered an order certifying a class,
pursuant to Court of Chancery Rules 23(a), 23(b)(1), and 23(b)(2), of all
holders of shares of Activision

 

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common stock that were issued and outstanding as of July 25, 2013, in their
capacities as holders of Class Shares, together with their heirs, assignees,
transferees, and successors-in-interest, in each case in their capacity as
holders of Class Shares (the “Class”). The Class includes anyone who acquired
Class Shares after July 25, 2013. The Defendants and their affiliates are
excluded from the Class. Limited partners in ASAC and their affiliates are
included in the Class, but only to the extent they own Class Shares outside of
ASAC and ownership of those shares is not attributable to ASAC. The Court also
appointed Pacchia as representative of the Class, and Friedlander & Gorris, P.A.
and Bragar Eagel & Squire, PC as Plaintiff’s Counsel and Rosenthal, Monhait &
Goddess, P.A. as Liaison Counsel for the Class. In early November 2014, the
parties exchanged drafts of a Proposed Pre-Trial Order.

 

27.          In connection with efforts to settle this matter, the Parties
engaged in extensive discussions, including three all-day mediation sessions
with former United States District Court Judge Layn Phillips.

 

28.          On December 19, 2014, the Parties entered into a formal Stipulation
of Settlement setting forth the terms of the Settlement.

 

WHAT ARE THE TERMS OF THE SETTLEMENT?

 

 

29.          As consideration for the Settlement:

 

a.           Defendants shall cause to be paid the total sum of two hundred
seventy-five million dollars ($275,000,000) (the “Settlement Payment”) into
Escrow (the “Settlement Fund”). The balance of the Settlement Fund, minus all
costs and expenses incurred in connection with administering the Escrow and the
amount of any Fee Award (as defined in paragraph 38 below), shall be released
from Escrow and paid to Activision ten business days after the Settlement
Effective Date, which is the date the Court’s Judgment approving the Settlement
becomes final. The Settlement Payment shall be funded as follows:

 

(i)                                  One or more payments by Vivendi totaling
sixty-seven million five hundred thousand dollars ($67,500,000) (the “Vivendi
Settlement Payment”) within ten business days after entry of the Judgment,
provided that Plaintiff’s Counsel has timely provided complete wire transfer
information and instructions. The Appointed Directors bear no personal
responsibility for any payment in connection with the Stipulation or Settlement.
The Vivendi Defendants have no responsibility for the Non-Vivendi Settlement
Payment, and no Party other than Vivendi shall have any responsibility for the
Vivendi Settlement Payment.

 

(ii)                              One or more payments on behalf of or by the
Special Committee Defendants, the ASAC Defendants and the Management Defendants,
to be paid by ASAC and from multiple insurers, totaling two hundred seven
million five hundred thousand dollars ($207,500,000) (the “Non-Vivendi

 

6

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Settlement Payment”). The Special Committee Defendants and the Management
Defendants shall cause any insurer payments on their behalf to be made within 15
business days after entry of the Judgment, provided that Plaintiff’s Counsel has
timely provided complete wire transfer information and instructions. Payment of
that portion of the Non-Vivendi Settlement Payment from ASAC is due ten business
days after entry of the Judgment, provided that Plaintiff’s Counsel has timely
provided complete wire transfer information and instructions, and further
provided that no objection to approval of the Stipulation or entry of Judgment
is filed. If an objection to approval of the Stipulation or entry of the
Judgment is filed other than an objection directed solely to an award of
attorneys’ fees and costs, then payment by ASAC is due within ten business days
after the Effective Date. Pending the payment required by this paragraph, ASAC
shall continue to own shares of Activision stock with a minimum market value
equal to 125% of the amount of the payment ASAC is obligated to make under this
paragraph plus the amount of all outstanding indebtedness. Because the payments
are being made on their behalf as described above, the Special Committee
Defendants and the Management Defendants bear no personal responsibility for any
payment in connection with the Stipulation or Settlement. Activision shall not
fund any portion of the Settlement Payment.

 

b.          On or before July 31, 2015, the number of directors of Activision
will be expanded by two, and such newly created directorships shall be filled by
persons independent (per the NASDAQ listing standards) of and unaffiliated with
all of the following: ASAC; ASAC GP; any limited partner of ASAC; any general
partner of ASAC GP; or any indirect owner of ASAC GP. Activision will make any
changes to Activision’s bylaws, certificate of incorporation or other corporate
documents necessary to facilitate this obligation. In the event either of the
directors appointed pursuant to this provision resigns during the period
specified below, he or she shall be replaced by a person meeting these
requirements; however, Activision has no obligation to replace any current
Activision director in the event of a resignation of such director during the
period specified below.

 

c.           Within ten days of the entry of the Judgment, the parties to the
Stockholders Agreement, dated as of October 11, 2013, by and among Activision
and ASAC, will amend that Section 3.07 of that Agreement to change the
referenced “Stockholder Percentage Interest” from “in excess of 24.9 percent” to
“in excess of 19.9 percent.”

 

d.          If the Court approves the Settlement and all of the conditions are
met, each of the provisions set forth in Paragraphs 29(b) and 29(c) above shall
remain in effect only so long as ASAC holds more than five percent (5%) of the
issued and outstanding stock of Activision.

 

7

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WHAT ARE THE PARTIES’ REASONS FOR THE SETTLEMENT?

 

30.          Plaintiff believes that the claims asserted in the Action have
merit, but also believes that the settlement set forth below provides
substantial and immediate benefits for the Class, Activision and its current
stockholders. In addition to these substantial benefits, Plaintiff and his
counsel have considered: (i) the attendant risks of continued litigation and the
uncertainty of the outcome of the Action; (ii) the probability of success on the
merits; (iii) the inherent problems of proof associated with, and possible
defenses to, the claims asserted in the Action; (iv) the desirability of
permitting the settlement to be consummated according to its terms; (v) the
expense and length of continued proceedings necessary to prosecute the Action
against the Defendants through trial and appeals; and (vi) the conclusion of
Plaintiff and his counsel that the terms and conditions of the Stipulation are
fair, reasonable, and adequate, and that it is in the best interests of the
Class, Activision, and its current stockholders to settle the Action on the
terms set forth herein.

 

31.          Based on Plaintiff’s Counsel’s thorough review and analysis of the
relevant facts, allegations, defenses, and controlling legal principles,
Plaintiff’s Counsel believe that the settlement set forth in this Stipulation is
fair, reasonable, and adequate, and confers substantial benefits upon the Class,
Activision and its current stockholders. Based upon Plaintiff’s Counsel’s
evaluation as well as his own evaluation, Plaintiff has determined that the
settlement is in the best interests of the Class, Activision and its current
stockholders and has agreed to settle the Action upon the terms and subject to
the conditions set forth in the Stipulation and summarized herein.

 

32.          The Defendants deny any and all allegations of wrongdoing,
liability, violations of law or damages arising out of or related to any of the
conduct, statements, acts, or omissions alleged in the Action, and maintain that
their conduct was at all times proper, in the best interests of Activision and
its stockholders, and in compliance with applicable law. The Defendants further
deny any breach of fiduciary duties or aiding and abetting any breach of such a
fiduciary duty. The Defendants affirmatively assert that the Transaction was the
best possible transaction for Activision and its stockholders and has provided
Activision and its stockholders with substantial benefits. The Defendants also
deny that Activision or its stockholders were harmed by any conduct of the
Defendants alleged in the Action or that could have been alleged therein. Each
of the Defendants asserts that, at all relevant times, they acted in good faith
and in a manner they reasonably believed to be in the best interests of
Activision and all of its stockholders.

 

33.          Defendants, however, recognize the uncertainty and the risk
inherent in any litigation, and the difficulties and substantial burdens,
expense, and length of time that may be necessary to defend this proceeding
through the conclusion of trial, post-trial motions, and appeals. In particular,
Defendants are cognizant of the burdens this litigation is imposing on
Activision and its management, and the impact that continued litigation will
have on management’s ability to continue focusing on the creation of stockholder
value. Defendants wish to eliminate the uncertainty, risk, burden and expense of
further litigation, and to permit the operation of Activision without further
distraction and diversion of its directors and executive personnel with respect
to the Action. Defendants have therefore determined to settle the Action on the
terms and conditions set forth in the Stipulation solely to put the Released
Claims (as

 

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defined herein) to rest finally and forever, without in any way acknowledging
any wrongdoing, fault, liability, or damages.

 

WHAT WILL HAPPEN IF THE SETTLEMENT IS APPROVED? WHAT CLAIMS WILL
THE SETTLEMENT RELEASE?

 

34.       If the Settlement is approved, the Court will enter a judgment (the
“Judgment”). Upon entry of the Judgment, and subject to Activision’s receipt of
the Settlement Payment, the Action will be dismissed in its entirety and with
prejudice and the following releases will occur:

 

Release of Claims by Plaintiff, the Class and Activision: Activision, Plaintiff,
the Class and each and every other Activision stockholder, on behalf of
themselves and any other person or entity who could assert any of the Released
Plaintiff’s Claims on their behalf, in such capacity only, shall fully, finally,
and forever release, settle, and discharge, and shall forever be enjoined from
prosecuting, the Released Plaintiff’s Claims against Defendants and any other
Defendants’ Releasees.

 

“Released Plaintiff’s Claims” means all any and all manner of claims, demands,
rights, liabilities, losses, obligations, duties, damages, costs, debts,
expenses, interest, penalties, sanctions, fees, attorneys’ fees, actions,
potential actions, causes of action, suits, agreements, judgments, decrees,
matters, issues and controversies of any kind, nature, or description
whatsoever, whether known or unknown, disclosed or undisclosed, accrued or
unaccrued, apparent or not apparent, foreseen or unforeseen, matured or not
matured, suspected or unsuspected, liquidated or not liquidated, fixed or
contingent, including Unknown Claims, whether based on state, local, foreign,
federal, statutory, regulatory, common, or other law or rule (including claims
within the exclusive jurisdiction of the federal courts, such as, but not
limited to, federal securities claims or other claims based upon the purchase or
sale of Class Shares), that are, have been, could have been, could now be, or in
the future could, can, or might be asserted, in the Action or in any other
court, tribunal, or proceeding by Plaintiff or any other Activision stockholder
derivatively on behalf of Activision or as a member of the Class, or by
Activision directly against any of the Defendants’ Releasees, which, now or
hereafter, are based upon, arise out of, relate in any way to, or involve,
directly or indirectly, any of the actions, transactions, occurrences,
statements, representations, misrepresentations, omissions, allegations, facts,
practices, events, claims or any other matters, things or causes whatsoever, or
any series thereof, that relate in any way to, or could arise in connection
with, the Transaction (or relate to or arise as a result of any of the events,
acts or negotiations related thereto) and the nomination, appointment or
election of Activision directors, including but not limited to those alleged,
asserted, set forth, claimed, embraced, involved, or referred to in, or related
to the Fifth Amended Class and Derivative Complaint or the Action, except for
claims relating to the enforcement of the Settlement and for any claims that
Defendants may have against any of their insurers, co-insurers or reinsurers
that are not otherwise released pursuant to other documentation. For the
avoidance of doubt, the Released Plaintiff’s Claims include all of the claims
asserted in the Miller Action, but do not include claims based on conduct of
Defendants’ Releasees after the Effective Date.

 

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“Defendants’ Releasees” means Activision, Defendants, defendants in the Miller
Action, and any other current or former officer, director or employee of
Activision or of Vivendi, and their respective past, present, or future family
members, spouses, heirs, trusts, trustees, executors, estates, administrators,
beneficiaries, distributees, foundations, agents, employees, fiduciaries,
partners, partnerships, general or limited partners or partnerships, joint
ventures, member firms, limited liability companies, corporations, parents,
subsidiaries, divisions, affiliates, associated entities, stockholders,
principals, officers, directors, managing directors, members, managing members,
managing agents, predecessors, predecessors-in-interest, successors,
successors-in-interest, assigns, financial or investment advisors, advisors,
consultants, investment bankers, entities providing any fairness opinion,
underwriters, brokers, dealers, financing sources lenders, commercial bankers,
attorneys, personal or legal representatives, accountants, associates and
insurers, co-insurers and reinsurers, except with respect to claims by any
Defendant or Nominal Defendant against such insurer, co-insurer, or re-insurer
that have not otherwise been released pursuant to other documentation.

 

Release of Claims by Defendants: Defendants and the other Defendants’ Releasees,
on behalf of themselves and any other person or entity who could assert any of
the Released Defendants’ Claims on their behalf, in such capacity only, shall
fully, finally, and forever release, settle, and discharge, and shall forever be
enjoined from prosecuting, the Released Defendants’ Claims against Plaintiff’s
Releasees.

 

“Released Defendants’ Claims” means any and all manner of claims, demands,
rights, liabilities, losses, obligations, duties, damages, costs, debts,
expenses, interest, penalties, sanctions, fees, attorneys’ fees, actions,
potential actions, causes of action, suits, agreements, judgments, decrees,
matters, issues, and controversies of any kind, nature, or description
whatsoever, whether known or unknown, disclosed or undisclosed, accrued or
unaccrued, apparent or not apparent, foreseen or unforeseen, matured or not
matured, suspected or unsuspected, liquidated or not liquidated, fixed or
contingent, including Unknown Claims, whether based on state, local, foreign,
federal, statutory, regulatory, common, or other law or rule (including claims
within the exclusive jurisdiction of the federal courts), that arise out of or
relate in any way to the institution, prosecution, or settlement of the claims
against Defendants in the Action, except for claims relating to the enforcement
of the Settlement. For the avoidance of doubt, the Released Defendants’ Claims
do not include claims based on the conduct of the Plaintiff’s Releasees after
the Effective Date and do not include any claims that Defendants may have
against any of their insurers, co-insurers or reinsurers that are not otherwise
released pursuant to other documentation.

 

“Plaintiff’s Releasees” means Plaintiff, all other Activision stockholders, and
any current or former officer or director of any Activision stockholder, and
their respective past, present, or future family members, spouses, heirs,
trusts, trustees, executors, estates, administrators, beneficiaries,
distributees, foundations, agents, employees, fiduciaries, partners,
partnerships, general or limited partners or partnerships, joint ventures,
member firms, limited liability companies, corporations, parents, subsidiaries,
divisions, affiliates, associated entities, stockholders, principals, officers,
directors, managing directors,

 

10

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members, managing members, managing agents, predecessors,
predecessors-in-interest, successors, successors-in-interest, assigns, financial
or investment advisors, advisors, consultants, investment bankers, entities
providing any fairness opinion, underwriters, brokers, dealers, financing
sources, lenders, commercial bankers, attorneys, personal or legal
representatives, accountants, and associates.

 

“Unknown Claims” means any Released Plaintiff’s Claims that Activision,
Plaintiff, or any other Activision stockholder does not know or suspect to exist
in his, her, or its favor at the time of the release of the Defendants’
Releasees, and any Released Defendants’ Claims that any of the Defendants or any
of the other Defendants’ Releasees does not know or suspect to exist in his,
her, or its favor at the time of the release of the Plaintiff’s Releasees,
which, if known by him, her or it, might have affected his, her, or its
decision(s) with respect to the Settlement. With respect to any and all Released
Plaintiff’s Claims and Released Defendants’ Claims, the Parties stipulate and
agree that Activision, Plaintiff and each of the Defendants shall expressly
waive, and each of the other Activision stockholders and each of the other
Defendants’ Releasees shall be deemed to have waived, and by operation of the
Judgment shall have expressly waived, any and all provisions, rights, and
benefits conferred by California Civil Code §1542, which provides:

 

A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE CREDITOR DOES NOT KNOW OR
SUSPECT TO EXIST IN HIS OR HER FAVOR AT THE TIME OF EXECUTING THE RELEASE, WHICH
IF KNOWN BY HIM OR HER MUST HAVE MATERIALLY AFFECTED HIS OR HER SETTLEMENT WITH
THE DEBTOR.

 

and any law of any state or territory of the United States, or principle of
common law or foreign law, which is similar, comparable, or equivalent to
California Civil Code §1542. Activision, Plaintiff and each of the Defendants
acknowledge, and each of the other Activision stockholders and each of the other
Defendants’ Releasees shall be deemed by operation of law to have acknowledged,
that the foregoing waiver was separately bargained for and is a key element of
the Settlement.

 

35.       In the event Vivendi fails to make the Vivendi Settlement Payment as
required, Plaintiff shall have the right to terminate the Settlement and the
Stipulation as to the Vivendi Defendants by providing written notice of his
election to do so to the other parties to the Stipulation and the Court within
five business days of such default. In the event Activision does not receive the
Non-Vivendi Settlement Payment as required, Plaintiff shall have the right to
terminate the Stipulation as to the Defendants other than the Vivendi Defendants
by providing written notice of his election to do so to the other parties to the
Stipulation and the Court within five business days of such default. In the
event this Settlement is terminated as to less than all Defendants, the parties
shall otherwise confer with the Court to modify its prior Orders and Judgment
consistent with such limited termination and to confer the releases provided
solely as to the Defendants as to whom the Settlement is not terminated. In
addition to the foregoing,

 

11

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Plaintiff shall have the right to specifically enforce the Stipulation and
compel the payment of the Vivendi Settlement Payment and the Non-Vivendi
Settlement Payment.

 

36.          If the Settlement is approved and the Effective Date occurs, since
Activision will have released the Released Plaintiff’s Claims described above
against any of the other Defendants’ Releasees, no Activision stockholder or
Class member will be able to bring another action asserting those claims against
those persons on behalf of Activision or individually excluding any claims any
Defendant or Nominal Defendant has against insurers, re-insurers or co-insurers
that are not released pursuant to other documentation.

 

37.          Pending final determination of whether the Settlement should be
approved, all proceedings in the Action, other than such proceedings as may be
necessary to carry out the terms and conditions of the Settlement and determine
a fee award, have been stayed and suspended. Pending final determination of
whether the Settlement should be approved, Plaintiff, all Activision
stockholders, all Class members, Defendants, and Activision are enjoined from
filing, commencing, or prosecuting any Released Claims against the Releasees in
the Action or in any other lawsuit in any jurisdiction excluding any claims any
Defendant or Nominal Defendant has against insurers, re-insurers or co-insurers
that are not released pursuant to other documentation.

 

HOW WILL THE ATTORNEYS GET PAID?

 

38.          Plaintiff’s Counsel have not received any payment for their
services in pursuing the claims asserted in the Action, nor have Plaintiff’s
Counsel been reimbursed for their out-of-pocket expenses. Plaintiff’s Counsel
invested their own resources for pursuing the Action on a contingency basis,
meaning they would only recover their expenses and be compensated for their time
if they created benefits through the Action. In light of the risks undertaken in
pursuing the Action on a contingency basis and the benefits created for
Activision and the Class through the Settlement and the prosecution of the
Action, Plaintiff’s Counsel, on behalf of themselves and counsel for Plaintiff
Miller, intend to petition the Court for an award of attorneys’ and litigation
expenses to be paid from the Settlement Payment, and from no other source, which
is no greater than $72,500,000 (the “Fee Application”). Defendants and
Activision have agreed not to object to such a Fee Application. Additionally,
Plaintiff’s Counsel will seek a special award to plaintiff Anthony Pacchia in an
amount of up to $50,000 (the “Special Award Application”) to be payable from the
fees and expenses awarded by the Court to Plaintiff’s Counsel in connection with
the Fee and Expense Application. Defendants have not agreed to and reserve the
right to oppose the Special Award Application. The Court will determine the
amount of any fee and expense award to Plaintiffs’ Counsel (the “Fee Award”) and
any special award to Mr. Pacchia.

 

WHEN AND WHERE WILL THE SETTLEMENT HEARING BE HELD? DO I HAVE THE
RIGHT TO APPEAR AT THE SETTLEMENT HEARING?

 

39.          The Court will consider the Settlement and all matters related to
the Settlement at the Settlement Hearing. The Settlement Hearing will be held
before The Honorable J. Travis Laster on                         , 2015, at _:__
_.m., in the Court of Chancery, New Castle County Courthouse, 500 North King
Street, Wilmington, Delaware 19801.

 

12

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40.      Any Class member or Current Stockholder who objects to the Settlement,
the application for attorneys’ fees and expenses by Plaintiff’s Counsel, or any
application for a special award to Plaintiff, or who otherwise wishes to be
heard, may appear in person or through his, her, or its attorney at the
Settlement Hearing and present any evidence or argument that may be proper and
relevant; provided, however, that no such person shall be heard or entitled to
contest the approval of the terms and conditions of the Settlement, or, if
approved, the Judgment to be entered thereon, or the allowance of fees and
expenses to Plaintiff’s Counsel (including any special award to Plaintiff)
unless, no later than ten business days before the Settlement Hearing, such
person files with the Register in Chancery, Court of Chancery, 500 North King
Street, Wilmington, Delaware, 19801, the following: (a) proof of ownership of
Activision stock either (i) as of July 25, 2013 and continuously to the present
(if objecting to the derivative aspects of the settlement); or (ii) as of
July 25, 2013 or based upon the acquisition of Class Shares thereafter (if
objecting to the class aspects of the settlement); (b) a written and signed
notice of the Objector’s intention to appear, which states the name, address and
telephone number of Objector and, if represented, his, her or its counsel; (c) a
detailed statement of the objections to any matter before the Court; and (d) a
detailed statement of all of the grounds thereon and the reasons for the
Objector’s desire to appear and to be heard, as well as all documents or
writings which the Objector desires the Court to consider. Any such filings with
the Court must also be served upon each of the following counsel (by hand, first
class U.S. mail, or express service) such that they are received no later than
ten calendar days prior to the Settlement Hearing:

 

Joel Friedlander, Esq.
Jeffrey M. Gorris, Esq.

FRIEDLANDER & GORRIS, P.A.

222 Delaware Avenue, Suite 1400

Wilmington, DE 19801

Co-Lead Counsel for Plaintiff

 

Jessica Zeldin, Esq.

ROSENTHAL, MONHAIT & GODDESS, P.A.

919 N. Market Street, Suite 1401

Wilmington, DE 19801

Delaware Liaison Counsel for Plaintiff

 

Collins J. Seitz, Jr., Esq.

Garrett B. Moritz, Esq.

Eric D. Selden, Esq.

SEITZ ROSS ARONSTAM & MORTIZ LLP

100 S. West Street, Suite 400

Wilmington, DE 19801

Attorneys for Defendants Robert J. Corti, Robert J. Morgado and Richard Sarnoff

 

13

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R. Judson Scaggs, Jr., Esq.

Shannon E. German, Esq.

MORRIS, NICHOLS, ARSHT & TUNNELL LLP

1201 North Market Street, 16th Floor

Wilmington, DE 19801

Attorneys for Defendants Brian G. Kelly, Robert A. Kotick, ASAC II LP, and ASAC
II LLC

 

Raymond J. DiCamillo, Esq.

Susan M. Hannigan, Esq.

RICHARDS, LAYTON & FINGER, P.A.

One Rodney Square

920 N. King Street

Wilmington, DE 19801

Attorneys for Defendants Vivendi, S.A., Philppe G. H. Capron, Jean-Yves
Charlier, Frederic R. Crepin, Jean-Francois Dubos, Lucian Grainge and Regis
Turrini

 

Edward P. Welch, Esq.

Edward B. Micheletti, Esq.

Sarah Runnells Martin, Esq.

Lori W. Will, Esq.

SKADDEN, ARPS, SLATE, MEAGHER & FLOM LLP

One Rodney Square

Wilmington, DE 19899-0636

Attorneys for Nominal Defendant Activision Blizzard, Inc.

 

 

41.        Unless the Court otherwise directs, any person who fails to object in
the manner prescribed above shall be deemed to have waived his, her, or its
right to object and shall be forever barred from raising any objection to the
Settlement or Plaintiff’s Counsel’s application for an award of attorneys’ and
expenses, or any other matter related to the Settlement, in the Action or in any
other action or proceeding.

 

 CAN I SEE THE COURT FILE? WHOM SHOULD I CONTACT IF I HAVE QUESTIONS?

 

42.        This Notice does not purport to be a comprehensive description of the
Action, the allegations related thereto, the terms of the Settlement, or the
Settlement Hearing. For a more detailed statement of the matters involved in the
Action, you may inspect the pleadings, the Stipulation, the Orders entered by
the Court, and other papers filed in the Action at the Office of the Register in
Chancery in the Court of Chancery of the State of Delaware, New Castle County
Courthouse, 500 N. King Street, Wilmington, Delaware 19801, during regular
business hours of each business day. You may also view a copy of the Stipulation
at http://www.                .com. If you have questions regarding the
Settlement, you may write or call Plaintiff’s Counsel: Lawrence P. Eagel,
Esquire, Bragar Eagel & Squire, PC, 885 Third

 

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Avenue, Suite 3040, New York, NY 10022, (212) 308-5858, and Joel Friedlander,
Friedlander & Gorris, P.A., 222 Delaware Avenue, Suite 1400, Wilmington, DE
19801, (302) 573-3500.

 

DO NOT CALL OR WRITE THE COURT OR THE OFFICE OF THE REGISTER IN CHANCERY
REGARDING THIS NOTICE

 

 NOTICE TO PERSONS OR ENTITIES HOLDING RECORD OWNERSHIP ON BEHALF OF OTHERS

 

43.       Brokerage firms, banks, and other persons or entities who hold shares
of Activision common stock as record owners, but not as beneficial owners, are
directed to either (a) promptly request from Activision sufficient copies of
this Notice to forward to all such beneficial owners and after receipt of the
requested copies promptly forward such Notices to all such beneficial owners; or
(b) promptly provide a list of the names and addresses of all such beneficial
owners to                         , Corporate Secretary,
Activision,                           after which Activision will promptly send
copies of the Notice to such beneficial owners. Copies of this Notice may be
obtained by calling Activision toll-free at                 .

 

 

BY ORDER OF THE COURT

 

 

Dated:                     , 2014

 

 

Register in Chancery

 

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EXHIBIT C

 

IN THE COURT OF CHANCERY OF THE STATE OF DELAWARE

 

IN RE: ACTIVISION BLIZZARD, INC.

)

Consolidated

STOCKHOLDER LITIGATION

)

C.A. No. 8885-VCL

 

 

ORDER AND FINAL JUDGMENT

 

A hearing having been held before this Court on                               ,
2015 pursuant to this Court’s Scheduling Order with Respect to Notice and
Settlement Hearing, dated                            , 2014 (the “Scheduling
Order”), and upon a Stipulation of Compromise and Settlement, dated December 19,
2014 (the “Stipulation”) outlining a Settlement of the above-captioned action
(the “Action”), which is incorporated herein by reference, the parties having
appeared by their attorneys of record, the Court having heard and considered the
submissions and evidence presented in support of the proposed Settlement, the
application for an award of attorneys’ fees, expenses, and the application for a
special award to Plaintiff, the opportunity to be heard having been given to all
other persons requesting to be heard in accordance with the Scheduling Order,
and the Court having determined that Notice was adequate and sufficient, and the
entire matter of the proposed Settlement having been heard and considered by the
Court,

 

IT IS ORDERED, ADJUDGED AND DECREED, this                day of
                         , 2015 that:

 

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1.      Unless otherwise defined herein, all capitalized terms shall have the
same meanings as set forth in the Stipulation and the Scheduling Order.

 

2.      The Court has jurisdiction over the subject matter of the Action, and
all matters relating to the Settlement of the Action, as well as personal
jurisdiction over all of the Parties and each of the Current Stockholders and
Class members, and it is further determined that Plaintiff, Defendants,
Activision, the Class and all Current Stockholders, as well as their
transferees, heirs, executors, successors, and assigns, are bound by this Order
and Final Judgment (the “Judgment”).

 

3.      The Notice has been given to all Activision stockholders as of July 25,
2013 and all current stockholders of the Company pursuant to and in the manner
directed by the Scheduling Order, proof of mailing, and other dissemination of
the Notice was filed with the Court and full opportunity to be heard has been
offered to all parties, members of the Class, Current Stockholders of the
Company, and persons in interest. The Court finds that the form and means of the
Notice was the best notice practicable under the circumstances and was given in
full compliance with the requirements of Court of Chancery Rules 23 and 23.1 and
due process of law, and that all members of the Class and stockholders of
Activision are bound by this Judgment.

 

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4.       With regard to the class action, pursuant to Court of Chancery
Rules 23(a), 23(b)(1), and 23(b)(2):

 

a.       The Court finds that (i) the Class, as defined below, is so numerous
that joinder of all members is impracticable; (ii) there are questions of law
and fact common to the Class; (iii) the claims of the Plaintiff are typical of
the claims of the Class; and (iv) the Plaintiff has fairly and adequately
protected the interests of the Class;

 

b.       The Court finds that Plaintiff and Plaintiff’s Counsel have adequately
represented the interests of the Class;

 

c.       The Court finds that the requirements of Court of Chancery
Rules 23(b) (1) and (2) have been satisfied; and

 

d.       The Action is hereby finally certified as a class action on behalf of a
class comprising the holders of shares of Activision common stock that were
issued and outstanding as of July 25, 2013 (the “Class Shares”), in their
capacities as holders of Class Shares, together with their heirs, assignees,
transferees, and successor-in-interest, in each case in their capacity as
holders of Class Shares (the “Class”). The Class includes all persons who
acquired Class Shares after July 25, 2013. The Defendants and their affiliates
are excluded from the Class. Limited partners in ASAC and their affiliates are
included in the Class, but only to the

 

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extent they own Class Shares outside of ASAC and ownership of those shares is
not attributable to ASAC.

 

5.       With respect to the derivative claims, the Court finds that Plaintiff
in the Action has held stock in the Company since the time of the conduct
complained of in the Action, otherwise has standing to prosecute the Action, and
is an adequate representative of all stockholders of Activision.

 

6.       The Court finally appoints Anthony Pacchia as representative of the
Class and Activision, with respect to the derivative claims, and finally
appoints Friedlander & Gorris, P.A. and Bragar, Eagel & Squire, PC as Co-Lead
Counsel for the Class and on behalf of Activision with respect to the derivative
claims, and Rosenthal, Monhait & Goddess, P.A. as Liaison Counsel for the
Class and on behalf of Activision with respect to the derivative claims.

 

7.       Based on the record in the Action, each of the provisions of Chancery
Court Rules 23 and 23.1 has been satisfied and the Action has been properly
maintained according to the provisions of Chancery Court Rules 23 and 23.1.

 

8.       The Court finds that the Settlement is fair, reasonable, adequate, and
in the best interests of the Class, Activision and its stockholders.

 

9.       Pursuant to Court of Chancery Rules 23 and 23.1, this Court approves
the Settlement in all respects, and the parties are directed to consummate the

 

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settlement in accordance with the terms of the Stipulation. The Register in
Chancery is directed to enter and docket this Judgment.

 

10.     The Action is hereby dismissed with prejudice as to all Defendants and
as to Activision, and against Plaintiff, the Class and all Current Stockholders.
As between Plaintiff and Defendants, the parties are to bear their own costs,
except as otherwise provided in paragraphs 17 and 18 below or as otherwise
provided in the Stipulation and the Scheduling Order.

 

11.     Upon entry of this Judgment and subject to Activision’s receipt of the
Settlement Payment, Activision, Plaintiff, the Class and each and every other
Activision stockholder, on behalf of themselves and any other person or entity
who could assert any of the Released Plaintiff’s Claims on their behalf, in such
capacity only, shall fully, finally, and forever release, settle, and discharge,
and shall forever be enjoined from prosecuting, the Released Plaintiff’s Claims
against Defendants and any other Defendants’ Releasees, except for any claims
any Defendant or Nominal Defendant may have against any insurer, co-insurer or
re-insurer that are not released pursuant to other documentation.

 

12.     Upon entry of this Judgment and subject to Activision’s receipt of the
Settlement Payment, Defendants and the other Defendants’ Releasees, on behalf of
themselves and any other person or entity who could assert any of the Released

 

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Defendants’ claims on their behalf, in such capacity only, shall fully, finally,
and forever release, settle, and discharge, and shall forever be enjoined from
prosecuting, the Released Defendants’ Claims against Plaintiff’s Releasees,
except for any claims any Defendant or Nominal Defendant may have against any
insurer, co-insurer or re-insurer that are not released pursuant to other
documentation.

 

13.     The Parties are hereby authorized, without further approval from the
Court, to agree to adopt such amendments, modifications, and expansions of the
Stipulation that are consistent with this Judgment and the Stipulation and that
do not limit the rights of Plaintiff, Defendants, Activision, the Class or the
Company’s stockholders under the Stipulation. Without further order of the
Court, the Parties may agree to reasonable extensions of time to carry out any
of the provisions of the Stipulation.

 

14.     Neither this Judgment, nor the Settlement nor any act or omission in
connection therewith shall be deemed or argued to be evidence of or to
constitute an admission or concession by: (a) Defendants, Activision, or any of
the other Defendants’ Releasees as to (i) the truth of any fact alleged by
Plaintiff, (ii) the validity of any claims or other issues raised, or which
might be or might have been raised, in the Action or in any other litigation,
(iii) the deficiency of any defense that has been or could have been asserted in
the Action or in any litigation, or (iv)

 

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any wrongdoing, fault, or liability of any kind by any of them, which each of
them expressly denies; or (b) Plaintiff or any of the other Plaintiff’s
Releasees that any of their claims are without merit, that any of the Defendants
or Defendants’ Releasees had meritorious defenses, or that damages recoverable
under the Fifth Amended Class and Derivative Complaint would not have exceeded
the Settlement Payment.

 

15.     In the event that the Settlement is terminated in its entirety pursuant
to Paragraph 6.1 of the Stipulation or the Effective Date otherwise fails to
occur for any other reason, then (i) the Settlement and the Stipulation (other
than Section VI and Paragraph 3.3 thereof) shall be canceled and terminated;
(ii) this Judgment and any related orders entered by the Court shall in all
events be treated as vacated, nunc pro tunc; (iii) the Releases provided under
this Judgment shall be null and void; (iv) the fact of the Settlement shall not
be admissible in any proceeding before any court or tribunal; (v) all
proceedings in, and parties to, the Action shall revert to their status as of
November 13, 2014, and no materials created by or received from another Party
that were used in, obtained during, or related to settlement discussions shall
be admissible for any purpose in any court or tribunal, or used, absent consent
from the disclosing party, for any other purpose or in any other capacity,
except to the extent that such materials are required to be produced

 

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during discovery in the Action or in any other litigation; (vi) the Court shall
set a revised schedule for trial; (vii) the Parties shall proceed in all
respects as if the Settlement and the Stipulation (other than Section VI and
Paragraph 3.3) had not been entered into by the Parties; and (viii) the
Settlement Fund paid or due with respect to such amounts, less any escrow fees
or costs actually incurred and paid or payable, shall be refunded directly to
Defendants and any insurers who made payments pursuant to paragraph 2.1(b) of
the Stipulation in any amount proportional to their contributions within five
(5) business days after such cancellation or termination.

 

16.     In the event Vivendi fails to make the Vivendi Settlement Payment as
required by Paragraph 2.1(a) of the Stipulation, Plaintiff shall have the right
to terminate the Settlement and the Stipulation as to the Vivendi Defendants by
providing written notice of his election to do so to the other parties to this
Stipulation and the Court within five business days of such default. In the
event Activision does not receive the Non-Vivendi Settlement Payment as required
by Paragraph 2.1(b) of the Stipulation, Plaintiff shall have the right to
terminate the Stipulation as to the Defendants other than the Vivendi Defendants
by providing written notice of his election to do so to the other parties to
this Stipulation and the Court within five business days of such default. In the
event this Settlement is

 

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terminated pursuant to this paragraph as to less than all Defendants, the
provisions of Paragraph 6.2 of the Stipulation shall be applicable, but solely
as between Plaintiff and the Defendants as to whom the Settlement has been
terminated, and the parties shall otherwise confer with the Court to modify its
prior Orders and Judgment consistent with such limited termination and to confer
the releases provided herein solely as to the Defendants as to whom the
Settlement is not terminated. In addition to the foregoing, Plaintiff shall have
the right to specifically enforce the Stipulation and compel the payment of the
Vivendi Settlement Payment and the Non-Vivendi Settlement Payment.

 

17.     Plaintiff’s Counsel are awarded attorneys’ fees and expenses in the sum
of $                                             to be payable from the
Settlement Fund, which the Court finds to be fair and reasonable, to be paid in
accordance with the terms of the Stipulation. Plaintiff’s Counsel shall allocate
the attorneys’ fees awarded amongst Plaintiff’s Counsel and Miller’s Counsel in
a manner which they, in good faith, believe reflects the contributions of such
counsel to achieving the benefits of the proposed Settlement.

 

18.     [Plaintiff Anthony Pacchia is awarded a special award of
$                           to be payable from the fees and expenses awarded by
the Court in paragraph 17 above, which the Court finds to be fair and
reasonable, and which

 

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is to be paid in accordance with the terms of the Stipulation.] OR [Plaintiff’s
application for a special award to Plaintiff Anthony Pacchia is denied.]

 

19.    No proceedings or Court order with respect to the Fee Award shall in any
way disturb or affect this Judgment (including precluding the Judgment from
being Final or otherwise being entitled to preclusive effect), and any such
proceedings or Court order shall be considered separate from this Judgment.
Nothing herein dismisses or releases any claim by or against any party to the
Stipulation arising out of a breach of the Stipulation or violation of this
Judgment.

 

20.    Without affecting the finality of this Judgment in any way, this Court
reserves jurisdiction over all matters relating to the administration,
enforcement and consummation of the Settlement and this Judgment.

 

 

 

 

 

Vice Chancellor J. Travis Laster

 

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