Exhibit 10.5


 


AMENDMENT NO. 3 TO EMPLOYMENT
AGREEMENT


 


Thomas Tippl


 


This
Amendment No. 3 to Employment Agreement (this “Amendment No. 3”)
is entered into by and between Thomas Tippl (“You”  or  “Employee”) and Activision Blizzard, Inc. a Delaware
corporation (“Activision Blizzard” or “Employer”), and is effective as of as of the day on which
this Amendment No. 3 been executed by both parties hereto, as indicated by
reference to the dates on the signature lines hereof.


 


RECITALS:


 


Employee
and ATVI Publishing, Inc. entered into an Employment Agreement dated as of
September 9, 2005, amended that agreement as of December 15, 2008,
and further amended and assigned that agreement to Activision Blizzard as of April 15,
2009 (as amended and assigned, the “Agreement”).


 


For
consideration described below, the sufficiency and adequacy of which is hereby
acknowledged, Employee and Employer desire to amend the Agreement in certain
respects as set forth herein below.


 


AGREEMENT:


 


The
parties hereby agree to amend the terms of the Agreement as follows:


 


1.             Appointment; Title. Effective as of a date to be agreed
upon by the Employee and the Employer (which date shall be on or prior to June 1,
2010) and subject in any case to the approval by the Board of Directors of the
Employer of the Employee’s election to the office of Chief Operating Officer
(the “Promotion Effective Date”), Section 3
of the Agreement shall be amended in its entirety to provide as follows:


 


Employee is hereby being employed under
this Agreement in the position of Chief Operating Officer of Activision
Blizzard.  Until a new Chief Financial
Officer is hired, Employee shall also continue to serve as the Chief Financial
Officer of Activision Blizzard.  Employee
shall report to the President and Chief Executive Officer of Activision
Blizzard.


 


2.             Salary. 
Effective as the Promotion Effective Date, Section 2(a) of the
Agreement shall be amended in its entirety to provide as follows:


 


The Employee’s annual base salary (“Base Salary”) shall be Eight Hundred and Fifty Thousand
Dollars ($850,000), which shall be paid in accordance with the Employer’s
payroll policies. Thereafter, Base Salary shall be reviewed annually and may be
increased (but not decreased) by an amount determined by the President and
Chief Executive Officer of Activision Blizzard, in his sole absolute
discretion; provided that the percentage increase shall be no less than an
amount equal to the average percentage increase approved in the base salaries
of the members of Activision Blizzard’s executive leadership team (i.e. Section 16
officers) most recently implemented with respect to the 


 


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fiscal year in which such anniversary of
the New Effective Date (i.e. February 15) occurs excluding for these purposes
(i) increases that are required or guaranteed by contract and (ii) increases
in base salaries in connection with a promotion or other significant
modification in an executives’s duties.


 


3.             Bonus.  Effective as of the Promotion
Effective Date, Section 2(e) of the Agreement shall be amended in its
entirety to provide as follows:


 


You may be eligible to receive an annual discretionary bonus (the “Annual Bonus”).  Your
target Annual Bonus for each calendar year will be one hundred and twenty
percent 120% of your Base Salary.  In all
instances, the actual amount of the Annual Bonus, if any, shall be determined
by the Employer, in its sole and absolute discretion, and may be based on,
among other things, your base salary and target bonus prior to the Promotion
Effective Date, the portion of the year falling after the Promotion Effective
Date, your overall performance and the performance of Activision Blizzard and
its subsidiaries (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.  Except as otherwise set
forth herein, 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.


 


4.             Equity Incentive Awards.


 


(a)           Section 2(f) is hereby amended
by adding the following:


 


Subject to the approval of the Compensation
Committee of Activision  Blizzard’s Board
of Directors (the “Compensation Committee”),
the Employee will be granted a non-qualified stock option (the “Additional Option”) to purchase an aggregate of 525,000
shares of the common stock of Activision Blizzard.  One-fourth of the Additional Option will vest
in equal installments on each of February 15, 2011, February 15,
2012, February 15, 2013 and February 15, 2014, subject to your
remaining employed by Activision Blizzard through the applicable vesting
date.  Employee acknowledges that the
grant of the Additional Option is expressly conditioned upon approval by the
Compensation Committee, and that the Compensation Committee has discretion to
approve or disapprove the grant of the Additional Option and/or to determine
and make modifications to the terms of the Additional Option.  The Additional Option shall be subject to all
terms of the equity incentive plan pursuant to which it is granted and
Activision Blizzard’s standard forms of award agreement.


 


(b)           Section 2(j) is hereby amended
by adding the following:


 


The Employee will receive a restricted
stock grant of 225,000 shares of Activision Blizzard’s common stock (the “New Performance Shares”). 
The New Performance Shares will vest in equal installments on each of February 15,
2011, February 15, 2012, February 15, 2013 and February 15,
2014, if (and only if) non-GAAP earnings per share of Activision Blizzard for
the fiscal year ended immediately prior to such vesting date, as reported as
such in the press release issued by Activision Blizzard for that period, is
greater than or equal to the non-GAAP earnings per share annual operating plan
objectives established by the


 


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Board of Directors and approved by the
Compensation Committee for that fiscal year (provided that, if Activision
Blizzard fails to meet an objective for a fiscal year, but “over-delivers” on
any subsequent fiscal year(s) by an amount which is equal to or greater
than the amount by which Activision Blizzard failed to achieve that or any
other prior year’s objective, such that the cumulative non-GAAP earnings per
share for all fiscal years prior to and including the fiscal year immediately
prior to such vesting date, in each case as reported in the press release
issued by Activision Blizzard for the period, has met or exceeded the
cumulative non-GAAP earnings per share annual operating plan objectives, all
shares that previously failed to vest will vest on that subsequent vesting date
(along with the shares otherwise vesting on that date)), and subject to your
remaining employed by Activision Blizzard through such vesting date.  Employee acknowledges that the grant of the
New Performance Shares is expressly conditioned upon approval by the
Compensation Committee, and that the Compensation Committee has discretion to
approve or disapprove the grant of the New Performance Shares and/or to
determine and make modifications to the terms of the New Performance
Shares.  The New Performance Shares shall
be subject to all terms of the equity incentive plan pursuant to which they are
granted and Activision Blizzard’s standard forms of award agreement.  Employee also acknowledges that the
Compensation Committee must determine whether the performance criteria solely
as stated above have been satisfied and Employer agrees to use its reasonable
best efforts for the Compensation Committee to consider whether or not the
performance criteria solely as stated above have been satisfied prior to February 15
of the applicable period.


 


(c)           A new Section 2(k) is hereby
added:


 


Subject to the approval of the
Compensation Committee, the Employee will be granted 350,000 restricted share
units which represent the conditional right to receive shares of Activision
Blizzard’s common stock (the “RSUs”).  One-fourth of the RSUs will vest in equal
installments on each of February 15, 2011, February 15, 2012, February 15,
2013 and February 15, 2014, subject to your remaining employed by
Activision Blizzard through the applicable vesting date.  Employee acknowledges that the grant of the
RSUs is expressly conditioned upon approval by the Compensation Committee, and
that the Compensation Committee has discretion to approve or disapprove the
grant of the RSUs and/or to determine and make modifications to the terms of
the RSUs.  The RSUs shall be subject to
all terms of the equity incentive plan pursuant to which they are granted and
Activision Blizzard’s standard forms of award agreement.


 


(d)           A new Section 2(l) is hereby
added:


 


The Employee will be eligible for annual
equity grants to the extent that similarly situated Section 16 officers
are determined by the Compensation Committee to be eligible for such grants.


 


5.             Removal of Minimum Ownership
Position Requirements:  Section 15 of the Agreement is hereby
deleted in its entirety.


 


6.             Use of Defined Terms: 
The parties agree that, with respect to the Agreement as amended by this
Amendment No. 3, except with respect to Section 2 of the Agreement and
including


 


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Exhibit A
to the Agreement, all references to “Restricted Shares” shall be deemed to
include the “RSUs” (in addition to the “Restricted Shares” and the “New
Restricted Shares”) (and, for purposes of determining the “Market Price”, the
determination shall be based upon the value of the shares underlying the
restricted stock units and, where the context requires, references to the sale
of RSUs shall be deemed to be references to the sales of the shares underlying
the restricted stock units.


 


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Except
as specifically set forth in this Amendment No. 3, the Agreement shall
remain unmodified and in full force and effect. 
If any term or provision of the Agreement is contradictory to, or
inconsistent with, any term or provision of this Amendment No. 3, then the
terms and provisions of this Amendment No. 3 shall in all events control.


 


 


AGREED AND ACCEPTED:


 


	
  Employee:

  	
   

  	
   

  	
  Employer:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Activision
  Blizzard, Inc.

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  /s/ Thomas Tippl

  	
   

  	
   

  	
  /s/
  Chris B. Walther

  
	
  Thomas Tippl

  	
   

  	
   

  	
  Chris
  B. Walther

  
	
  Date: 

  	
  March 23,
  2010

  	
   

  	
  Date: 

  	
  March 23,
  2010

  
					



 


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