Exhibit 10.4


 


Execution Copy


 


EMPLOYMENT AGREEMENT


 


THIS EMPLOYMENT AGREEMENT (this “Agreement”) is
entered into this 31st day of August 2009, between Activision
Publishing, Inc. (the “Employer”), a subsidiary of Activision Blizzard, Inc.
(“Activision Blizzard” and, together
with its subsidiaries, the “Activision Blizzard Group”),
and Christopher Walther (“you”).


 


RECITAL


 


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


 


AGREEMENT


 


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


 


1.             Term of Employment


 


(a)             The term of your employment under this Agreement (the “Term”) shall commence on or before December 1,
2009 (the “Effective Date”) and shall
end on December 31, 2012  (the “Expiration Date”) (or such earlier date on which your
employment is terminated under Section 9). 
The Employer shall have the option to extend the Term by up to one year
by notifying you in writing of its intent to do so at least six (6) months
prior to the original Expiration Date. 
The final date of any such extended Term shall thereafter be referred to
as the “Expiration Date” for purposes of this Agreement and the Term shall end
on such date (or such earlier date on which your employment is
terminated).  Except as set forth in Section 11(s),
upon the Expiration Date (or such earlier date on which your employment is
terminated) all obligations and rights under this Agreement shall immediately
lapse.


 


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


 


2.             Compensation


 


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


 


(b)             Commencing on the Effective Date, you
shall receive an annual base salary (“Base Salary”)
of $500,000, which shall be paid in accordance with the Employer’s payroll
policies.  Your Base Salary shall be
reviewed periodically and may be increased by an amount determined by the
Employer, in its sole
and absolute discretion.


 

















 


(c)             You will be eligible to receive an annual
discretionary bonus (the “Annual Bonus”).  Your target Annual Bonus for each calendar
year will be seventy five percent (75%) of your Base Salary.  In all instances, the actual amount of the
Annual Bonus, if any, shall be determined by the Employer, in its sole and absolute discretion,
and may be based on, among other things, the portion of the year falling in the
Term, your overall performance and the performance of the Employer,
Activision Blizzard and the Activision Blizzard Group. 
The Annual Bonus, if any, will be paid at the same time bonuses for that
year are generally paid to other executives, but in no event earlier than the
first day of the first month, or later than the 15th day of the third month, of the year following
the year to which the Annual Bonus relates. 
In all instances, you must remain continuously employed by the
Activision Blizzard Group through the date on which an Annual Bonus, if any, is
paid to be eligible to receive such Annual Bonus.


 


(d)           Subject to the approval of the Compensation Committee
of the Board of Directors of Activision Blizzard (the “Compensation
Committee”), Activision Blizzard will grant to you a
non-qualified stock option to purchase 300,000
shares of Activision Blizzard’s common stock (the “Option”)
and 75,000 restricted share
units which represent the conditional right to receive shares of Activision
Blizzard’s common stock (the “RSUs,” and  collectively with the Option, the “Equity Awards”).


 


(i)            One-third of the Option will vest on each of December 31,
2010, December 31, 2011 and December 30, 2012, subject to
your remaining employed by the Activision Blizzard Group through the applicable
vesting date.


 


(ii)           One-third of the RSUs will vest on each of December 31,
2010, December 31, 2011 and December 30, 2012, subject to your
remaining employed by the Activision Blizzard Group through such vesting date.


 


You acknowledge that the
grant of Equity Awards pursuant to this Section 2(d) is expressly
conditioned upon approval by the Compensation Committee, and that the
Compensation Committee has discretion to approve or disapprove the grants
and/or to determine and make modifications to the terms of the grants.  The Equity Awards shall be subject to all
terms of the equity incentive plan pursuant to which they are granted (the “Incentive  Plan”)
and Activision Blizzard’s standard forms of award agreement (as modified to the
extent necessary to reflect the provisions of Section 10).  In the event of a conflict between this
Agreement and the terms of the Incentive Plan or award agreements, the
Incentive Plan or the award agreements, as applicable, shall govern.


 


Within three weeks of the
Effective Date, the Employer will provide you with a sign on bonus in the
amount of $350,000 (less applicable taxes). 
This bonus will not be fully earned by you until you have completed two
years of employment under this Agreement. 
Specifically, should your employment with the Employer terminate other
than pursuant to Section 9(b), 9(c), 9(d) or 9(e) prior to the
first anniversary of the Effective Date, you agree to repay the Employer 100%
of the net amount of this bonus (after taking into account any tax credit
and/or refund you are entitled to receive as a result of such repayment) within
60 days of the termination of your employment. 
Should your employment with the Employer terminate other than pursuant
to Section 9(b), 9(c), 9(d) or 9(e) at any point after the first
anniversary, but prior to the second anniversary, of the Effective Date, you
agree to repay the Employer 50% of the bonus (after taking into account any tax
credit and/or refund you are entitled to receive as a result of such repayment)
within 60 days of the termination of your employment.  If you remain employed by the Activision
Blizzard 


 


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Group through the second
anniversary of the Effective Date, the bonus shall be fully earned as of such
date such that if your employment subsequently terminates for any reason you
will not have to repay any portion of the bonus.  The fact that you are receiving this bonus
and the terms under which you will be required to repay the bonus in no way
affect your other obligations under this Agreement.


 


(e)             In connection with your relocation to the Los Angeles
area, you shall be entitled to the relocation benefits set forth in, and
determined in accordance with and otherwise subject to the terms and conditions
of, the “Relocation Summary” attached hereto as Exhibit C
hereto.  Notwithstanding anything to the
contrary in this Agreement or in the Relocation Summary, should your employment
with the Employer terminate other than pursuant to Section 9(b), 9(c), 9(d) or
9(e) prior to the first anniversary of the Effective Date, you agree to
repay the Employer 100% of any relocation expenses for which you were
reimbursed by the Employer within 60 days of the termination of your
employment.


 


3.             Title; Location


 


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


 


4.             Duties


 


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


 


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5.             Expenses


 


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


 


6.             Other Benefits


 


(a)             You shall be eligible to participate in all health,
welfare, retirement, pension, life insurance, disability, perquisite and
similar plans, programs and arrangements generally available to executives of
the Employer from time to time during the Term, subject to the then-prevailing
terms, conditions and eligibility requirements of each such plan, program, or
arrangement. In addition to the foregoing benefits, Employer will provide you
during the Term, at Employer’s expense, with a supplemental term life insurance
policy with a face amount of $2,000,000 through a carrier of Employer’s choice
(the “Target Face Amount”), subject
to your insurability.  If it is
determined that you are insurable at a higher cost than a healthy individual of
like age, the face amount of such insurance coverage will be reduced to the
maximum face amount of coverage that may be obtained for the cost of coverage
of the Target Face Amount for such healthy individual.


 


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


 


7.             Vacation and Paid Holidays


 


(a)             You will generally be entitled to paid vacation days
in accordance with the normal vacation policies of the Employer
in effect from time to time; provided, however, that you will be
entitled to at least twenty (20) paid vacation days per year.


 


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


 


8.             Protection of the  Employer’s Interests


 


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


 


(b)             Property of the Activision Blizzard Group. 
All rights worldwide with respect to any and all intellectual or other
property of any nature produced, created or suggested by you, whether on your
own time or not, alone or with others, during the term of your employment or
resulting from your services which (i) relate in any manner at the time of
conception or reduction to practice to the actual or demonstrably anticipated
business of the Activision Blizzard Group, (ii) result from or are
suggested by any task assigned to you or any work 


 


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performed by you on
behalf of the Activision Blizzard Group, (iii) were created using the time
or resources of the Activision Blizzard Group, or (iv) are based on any
property owned or idea conceived by the Activision Blizzard Group, shall be
deemed to be a work made for hire and shall be the sole and exclusive property
of the Activision Blizzard Group.  You
agree to execute, acknowledge and deliver to the Employer, at the Employer’s
request, such further documents, including copyright and patent assignments, as
the Employer finds appropriate to evidence the Activision Blizzard Group’s
rights in such property.  Your agreement
to assign to the Activision Blizzard Group any of your rights as set forth in
this Section 8(b) shall not apply to any invention that qualifies
fully under the provisions of California Labor Code Section 2870, where no
equipment, supplies, facility or trade secret information of the Activision
Blizzard Group was used, where the invention was developed entirely upon your
own time, where the invention does not relate to the Activision Blizzard Group’s
business, and where the invention does not result from any work performed by
you for the Activision Blizzard Group.


 


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


 


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


 


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


 


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designated
by the Activision Blizzard Group.  You also agree to resign from any office
held by you within the Activision Blizzard Group immediately upon termination
of your employment for any reason whatsoever (or at any time on the Employer’s
request) and you irrevocably appoint any person designated as the Activision
Blizzard Group’s representative at that time as your delegate to effect such
resignation.


 


(f)            Covenant Not to Solicit.


 


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


 


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


 


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


 


(iv)          You expressly acknowledge and agree that the
restrictions contained in this Section 8(f) are reasonably tailored
to protect the Activision Blizzard Group’s confidential information and trade
secrets and to ensure that you 


 


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do not violate your Duty of Loyalty or any other
fiduciary duty to the Employer, and are reasonable in all circumstances in
scope, duration and all other respects. The provisions of this Section 8(f) shall
survive the expiration or earlier termination of this Agreement.


 


9.             Termination of Employment


 


(a)           By the Employer for Cause.


 


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


 


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


 


(iii)          If your employment terminates for any reason other
than a termination by the Employer for Cause, at a time when the Employer had
Cause to terminate you (or would have had Cause if it then knew all relevant
facts) 


 


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under clauses (i), (ii), (v), (vi) or (vii) of
the definition of Cause, your termination shall be treated as a termination by
the Employer for Cause.


 


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


 


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


 


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


 


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


 


10.          Termination of Obligations
and Severance Payments


 


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


 


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in full and final
settlement of all obligations of the Activision Blizzard Group to you under
this Agreement.  You shall have no
further right to receive any other compensation benefits following your
termination of employment for any reason except as set forth in this Section 10.


 


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


 


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


 


“Bonus Severance”
shall mean payment of:


 


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


 


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


 


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


 


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


 


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


 


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


 


(iii)          Bonus Severance.  Your heirs or
estate, as the case may be, shall receive payment of the Bonus Severance in a
lump sum no later than the 15th day 


 


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of the third month of the year following the year to
which the underlying amount relates; and


 


(iv)          Impact on Equity Awards.  All
outstanding Equity Awards shall cease to vest. 
All vested RSUs
shall be paid in accordance with their terms. 
Any vested portion of the Option shall
remain exercisable until the earlier of (i) one (1) year after the Termination Date or (ii) the original expiration date of the Option.  Any Equity Awards that are not vested as of
your Termination Date will be cancelled immediately.


 


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


 


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


 


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


 


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


 


(iv)          Impact on Equity Awards.  All
outstanding Equity Awards shall cease to vest. 
All vested RSUs
shall be paid in accordance with their terms. 
Any vested portion of the Option shall remain
exercisable until the earlier of (x) thirty (30) days after the
Termination Date and (y) the original expiration date of the Option.  Any Equity Awards that are not vested as of
your Termination Date will be cancelled immediately; and


 


10
















 


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


 


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


 


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


 


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


 


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


 


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


 


(ii)           Impact on Equity Awards.  All
outstanding Equity Awards shall cease to vest. 
All vested RSUs shall be paid in accordance
with their terms.  Any vested portion of
the Option shall remain exercisable until the earlier of (x) thirty (30)
days after the Termination Date and (y) the original expiration date of
the Option.  Any Equity Awards that are
not vested as of the Expiration Date will be cancelled immediately; and


 


(iii)          Annual Bonus.  You shall receive payment of an amount equal to the Annual Bonus that
the Employer determines, in its sole discretion, you would have received in
accordance with Section 2(c) for the fiscal year ending on the
Expiration Date had you remained employed through the date such bonus would
have been otherwise been paid.  Such
payment will be made to you in a lump sum no later than the 15th day of the
third month of the year following the year to which the underlying amount
relates.


 


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


 


(i)            Breach of Post-termination Obligations. In the event that you materially breach
any of your obligations under Section 8, the Employer’s obligation, 


 


11

















 


if any, to make payments and provide benefits under Section 10
(other than payment of the Basic Severance) shall immediately and permanently
cease and you shall not be entitled to any such payments or benefits.


 


(ii)           Subsequent Employment. Notwithstanding anything to the contrary contained
herein, if, at any time during the Salary Continuation Period, you obtain
subsequent employment and/or provide services of any kind for compensation,
whether as principal, owner, partner, agent, shareholder, director, employee,
consultant, advisor or otherwise, to any person, company, venture or other
person or business entity, you must promptly notify the Employer and payments
under Section 10(c)(ii) shall be refunded by you to the Employer (to
the extent already paid) and shall be offset (to the extent payable in the
future) by the amount of Base Compensation (as defined below) earned by, paid
to, or granted to you during or with respect to the Salary Continuation
Period.  “Base
Compensation” shall mean the amount of your base salary or, if
applicable, wages you earn (or are paid or granted) during or with respect to
any subsequent employment or services arrangement; provided, however,
such base salary or wages shall be deemed, in all cases, to equal no less than
35% of the total compensation (including, without limitation, any and all
amounts of salary, bonus and all other kinds of cash or in-kind or equity-based
compensation) you earn, are paid, or are granted during or with respect to such
subsequent employment or services arrangement and which are paid to you, vest
or otherwise accrue with respect to services performed by you, during or with
respect to the Salary Continuation Period.


 


11.          General Provisions


 


(a)             Entire Agreement.  This Agreement and, the
Proprietary Information Agreement and  the New
Employee Letter and Certification (as defined in Section 11(d)) supersede
all prior or contemporaneous agreements and statements, whether written or oral,
concerning the terms of your employment with the Activision Blizzard Group, and
no amendment or modification of these agreements shall be binding unless it is
set forth in a writing signed by both the Employer and you.  To the extent that this Agreement conflicts
with any of the Employer’s policies, procedures, rules or regulations,
this Agreement shall supersede the other policies, procedures, rules or
regulations.


 


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


 


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


 


12

















 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


(k)             Arbitration.


 


(i)            Except as otherwise provided in this Agreement, any
dispute or controversy between the Employer and you will be settled by final
and 


 


13

















 


binding arbitration by a single arbitrator to be held
in the city in which you were last employed by the Employer, unless the
Employer and you agree otherwise, in accordance with the JAMS rules for
resolution of employment disputes then in effect, except as provided in this Section 11(k).  The arbitrator the parties select will have
the authority to grant any party all remedies otherwise available by law, but
will not have the power to grant any remedy that would not be available in a state
or federal court in the jurisdiction in which the arbitration is being
held.  Either party may seek court
intervention in a dispute for interim equitable relief in a court of competent
subject matter jurisdiction located within the city in which you were last
employed by the Employer, but the resort to interim equitable relief will be
pending and in aid of arbitration only, and in such cases the trial on the
merits of the action will occur in front of, and will be decided by, the
arbitrator, who will have the same ability to order legal or equitable remedies
as could a court of general jurisdiction. 
The arbitrator will have the authority to hear and rule on
dispositive motions (such as motions for summary adjudication or summary
judgment) and has the exclusive authority to resolve any dispute relating to
the interpretation, applicability, enforceability or formation of this
agreement to arbitrate claims, including but not limited to any claim that all
or any part of this agreement is void or voidable.    This
agreement to arbitrate applies to all claims that the Employer may have against
you or that you may have against the Employer or the Employer’s current and
former officers, directors, employees, representatives and agents, and/or all
entities affiliated with the Employer, as well as the current and former
officers, directors, employees, representatives and agents of those affiliates.
This arbitration obligation shall not prohibit the Employer or you from filing
a claim with an administrative agency, nor does it apply to claims for workers’
compensation or unemployment benefits, claims for benefits under an employee
welfare or pension plan that specifies a different dispute resolution
procedure, or claims which, by law, cannot be compelled to binding arbitration
via private agreement.


 


(ii)           Notwithstanding anything to the contrary in the rules of
JAMS, the arbitration shall provide (a) for written discovery and
depositions as provided under the Federal Rules of Civil Procedure and (b) for
a written decision by the arbitrator that includes the essential findings and
conclusions upon which the decision is based which must be issued no later than
thirty (30) days after a dispositive motion is heard or an arbitration hearing
has completed.  The Employer will pay
the fees and administrative costs charged by the arbitrator and JAMS; provided,
however, that if you initiate the arbitration, you must initiate it by paying
to JAMS an amount equal to the filing fee for the state court of general
jurisdiction in the state in which you were last employed by the Employer.


 


(iii)          Either party will have the same amount of time to file any claim
against any other party as it would have if the claim had been filed in state
or federal court in the city in which you were last employed by the
Employer.  In conducting the arbitration,
the arbitrator shall follow the Federal Rules of Evidence (including but
not limited to all applicable privileges).


 


14

















 


(iv)          The arbitrator must be experienced in employment law.  He or she will be selected by the mutual
agreement of the parties.  If the parties
cannot agree on an arbitrator, the parties will alternately strike names from a
list provided by JAMS until only one name remains.  If a JAMS arbitrator is not available to conduct an
arbitration in the city in which you last worked for the Employer, then another
similar arbitration service provider will be selected by the mutual agreement
of the parties (and all references to JAMS in this Section 11(k) will
be deemed to be references to that arbitration service provider).


 


(v)           The decision of the arbitrator will be final, conclusive and binding on
the parties to the arbitration.  The
prevailing party in the arbitration, as determined by the arbitrator, shall be
entitled to recover his/her or its reasonable attorneys’ fees, experts’ fees
and costs, including the costs or fees charged by the arbitrator and JAMS, in
addition to such other relief as may be granted, under the standards provided
by law for awarding such fees and costs applicable to the claims asserted.  Judgment may be entered on the arbitrator’s
decision in any court having jurisdiction.


 


(vi)          You understand that your and the Employer’s
agreement to arbitrate all disputes means that both you and the Employer are
waiving your right to file a court action, except for requests for injunctive
relief pending arbitration.  You also
understand that both you and the Employer are giving up any right to a jury
trial.


 


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


 


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


 


(n)             Injunctive Relief.  In the event
of a breach of or threatened breach of the provisions of this Agreement
regarding the exclusivity of your services and the provisions of Section 8,
you agree that any remedy at law would be inadequate.  Accordingly, you
agree that the Employer is entitled to obtain injunctive relief for such
breaches or threatened breaches in 


 


15

















 


any court of competent
jurisdiction.  The injunctive relief
provided for in Section 11(k)(i) and this Section 11(n) is
in addition to, and is not in limitation of, any and all other remedies at law
or in equity otherwise available to the applicable party.  The parties agree to waive the requirement of
posting a bond in connection with a court or arbitrator’s issuance of an
injunction.


 


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


 


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


 


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


 


(r)              Section 280G and Section 162(m).  Notwithstanding anything herein to the contrary, in
the event that you receive any payments or distributions, whether payable,
distributed or distributable pursuant to the terms of this Agreement or
otherwise, that constitute “parachute payments” within the meaning of Section 280G
of the Code, and the net after-tax amount of the parachute payment is less than
the net after-tax amount if the aggregate payment to be made to you were three
times your “base amount” (as defined in Section 280G(b)(3) of the
Code), less $1.00, then the aggregate of the amounts constituting the parachute
payment shall be 


 


16

















 


reduced to an amount that
will equal three times your base amount, less $1.00.  To the extent the aggregate of the amounts
constituting the parachute payments are required to be so reduced, the amounts
provided under Section 10 of this Agreement shall be reduced (if
necessary, to zero) with amounts that are payable first reduced first; provided,
however, that, in all events the payments provided under Section 10
of this Agreement which are not subject to Section 409A shall be reduced
first.  Similarly, you agree that no
payments or distributions, whether payable, distributed or distributable
pursuant to the terms of this Agreement or otherwise, shall be made to you if
the Employer reasonably anticipates that Section 162(m) of the Code
would prevent the Employer from receiving a deduction for such payment.  If, however, any payment is not made pursuant
to the previous sentence, the Employer shall make such payment as soon as
practicable in the first calendar year that it reasonably determines that it
can do so and still receive a deduction for such payment.  The determinations to be made with respect to
this Section 12(r) shall be made by a certified public accounting
firm designated by the Employer.


 


(s)             Survivability.  The provisions of Sections 8,
10, 11(b), 11(c), 11(e), 11(f), 11(h), 11(i), 11(k), 11(l), 11(m), 11(n),
11(o), 11(q), 11(r), this 11(s) and Section 12 (as well as the
Proprietary Information Agreement and the New Employee Letter and
Certification) shall survive the termination or expiration of this Agreement


 


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


 


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


 


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


 


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


 


12.          Indemnification


 


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


 


17

















 


13.          Notices


 


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


 




	
  To the Employer:

  	
   

  	
  Activision Publishing, Inc.

  
	
   

  	
   

  	
  3100 Ocean Park Boulevard

  
	
   

  	
   

  	
  Santa Monica, California 90405

  
	
   

  	
   

  	
  Attention: Chief Corporate Officer

  
	
   

  	
   

  	
   

  
	
  To You:

  	
   

  	
  Christopher Walther

  
	
   

  	
   

  	
  c/o Ben B. Stockton, Jr.

  
	
   

  	
   

  	
  4545 Sienna Court

  
	
   

  	
   

  	
  Evansville, IN 47711

  






 


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


 


	
  ACCEPTED AND AGREED TO:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Employer

  	
   

  	
   

  	
  Employee

  
	
   

  	
   

  	
   

  
	
  ACTIVISION PUBLISHING,
  INC

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  By:

  	
  /s/ Thomas Tippl

  	
   

  	
   

  	
  /s/ Christopher Walther

  
	
   

  	
  Thomas Tippl

  	
   

  	
   

  	
  Christopher Walther

  
	
   

  	
  Chief Corporate Officer

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Date:

  	
  September 1,
  2009

  	
   

  	
  Date:

  	
  August 31,
  2009

  
						



 


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