Document:

Exhibit 10.27

 

ACTIVISION BLIZZARD, INC.

 

2014 INCENTIVE PLAN

 

NOTICE OF STOCK OPTION AWARD

 

You have been awarded an option to purchase Common Shares of Activision Blizzard, Inc. (the “Company”), as follows:

 

·                  Your name:  Robert A. Kotick

 

·                  Total number of Shares purchasable upon exercise of the Stock Option awarded:  [         ]

 

·                  Exercise Price:  US$[         ] per Share

 

·                  Date of Grant:  [         ]

 

·                  Expiration Date:  [         ]

 

·                  Grant ID:  [         ]

 

·                  Your Award of the Stock Option is governed by the terms and conditions set forth in:

 

·                  this Notice of Stock Option Award;

 

·                  the Stock Option Award Terms attached hereto as Exhibit A (the “Award Terms”); and

 

·                  the Company’s 2014 Incentive Plan, the receipt of a copy of which you hereby acknowledge.

 

·                  Your Award of the Stock Option has been made in connection with your Employment Agreement, and is also governed by any applicable terms and conditions set forth in such agreement.

 

·                  Schedule for Vesting:  Except as otherwise provided under the Award Terms, the Stock Option awarded to you will vest and become exercisable on [                     ], provided you remain continuously employed by the Company or one of its subsidiaries through that date.

 

·                  Please sign and return to the Company this Notice of Stock Option Award, which bears an original signature on behalf of the Company.  You are urged to do so promptly.

 

·                  Please return the signed Notice of Stock Option Award to the Company at:

 

Activision Blizzard, Inc.
 3100 Ocean Park Boulevard
 Santa Monica, CA  90405
 Attn:  Stock Plan Administration

 

·                  The Stock Option is not intended to be an “incentive stock option,” as such term is defined in Section 422 of the Code.

 

 

·                  By accepting the Award, you are deemed to be bound by the terms and conditions set forth in the 2014 Incentive Plan, this Notice of Stock Option Award and the Award Terms.

 

You should retain the enclosed duplicate copy of this Notice of Stock Option Award for your records.

 

Any capitalized term used but not otherwise defined herein shall have the meaning ascribed to such term in the Award Terms.

 

	
 
    	
 
    	
ACTIVISION   BLIZZARD, INC.
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
Brian Stolz
    
	
 
    	
 
    	
Chief People Officer
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
Date:
    	
 
    
	
 
    	
 
    	
 
    
	
ACCEPTED AND AGREED:
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
Robert A. Kotick
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
Date:
    	
 
    	
 
    	
 
    

 

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EXHIBIT A

 

ACTIVISION BLIZZARD, INC.

 

2014 INCENTIVE PLAN

 

STOCK OPTION AWARD TERMS

 

1.                                      Definitions.

 

(a)                           For purposes of these Award Terms, the following terms shall have the meanings set forth below:

 

“Award” means the award described on the Grant Notice.

 

“Cause” shall have the meaning given to such term in the Employment Agreement.

 

“Common Shares” means the shares of common stock, par value $0.000001 per share, of the Company or any security into which such Common Shares may be changed by reason of any transaction or event of the type referred to in Section 9 hereof.

 

“Company” means Activision Blizzard, Inc. and any successor thereto.

 

“Company Group” means the Company and its subsidiaries.

 

“Company-Sponsored Equity Account” means an account that is created with the Equity Account Administrator in connection with the administration of the Company’s equity plans and programs, including the Plan.

 

“Date of Grant” means the Date of Grant of the Award set forth on the Grant Notice.

 

“Employment Agreement” means that certain Employment Agreement between the Holder and the Company dated as of October 1, 2016.

 

“Employment Violation” means any material breach by the Holder of the Employment Agreement (with any breach of the post-termination obligations contained therein deemed to be material for purposes of this definition).

 

“Equity Account Administrator” means the brokerage firm utilized by the Company from time to time to create and administer accounts for participants in the Company’s equity plans and programs, including the Plan.

 

“Exercise Price” means the Exercise Price set forth on the Grant Notice.

 

“Exercise Rules and Regulations” means (i) the Securities Act or any comparable federal securities law and all applicable state securities laws, (ii) the requirements of any securities exchange, securities association, market system or quotation system on which Common Shares are then traded or quoted, (iii) any restrictions on transfer imposed by the

 

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Company’s certificate of incorporation or bylaws, and (iv) any policy or procedure the Company has adopted with respect to the trading of its securities, in each case as in effect on the date of the intended transaction.

 

“Expiration Date” means the Expiration Date set forth on the Grant Notice.

 

“Grant Notice” means the Notice of Stock Option Award to which these Award Terms are attached as Exhibit A.

 

“Holder” means the recipient of the Award named on the Grant Notice.

 

“Look-back Period” means, with respect to any Employment Violation by the Holder, the period beginning on the date which is 12 months prior to the date of such Employment Violation by the Holder and ending on the date of computation of the Recapture Amount with respect to such Employment Violation.

 

“Option” means the Stock Option to purchase Common Shares awarded to the Holder on the terms and conditions described in the Grant Notice and these Award Terms.

 

“Plan” means the 2014 Incentive Plan, as amended from time to time.

 

“Recapture Amount” means, with respect to any Employment Violation by the Holder, the gross gain realized or unrealized by the Holder upon all exercises of the Stock Option during the Look-back Period with respect to such Employment Violation, which gain shall be calculated as the sum of:

 

(i)                                     if the Holder has exercised any portion of the Stock Option during such Look-back Period and sold any of the Shares acquired on exercise thereafter, an amount equal to (A) the sum of the sales price for all such Shares sold minus (B) the aggregate Exercise Price for such Shares; plus

 

(ii)                                  if the Holder has exercised any portion of the Stock Option during such Look-back Period and not sold all of the Shares acquired on exercise thereafter, an amount equal to the product of (A) the greatest of the following, minus the Exercise Price: (1) the Market Value per Share of Common Shares on the date of exercise, (2) the arithmetic average of the per share closing sales prices of Common Shares as reported on NASDAQ for the 30 trading day period ending on the trading day immediately preceding the date of the Company’s written notice of its exercise of its rights under Section 12 hereof, or (3) the arithmetic average of the per share closing sales prices of Common Shares as reported on NASDAQ for the 30 trading day period ending on the trading day immediately preceding the date of computation times (B) the number of Shares as to which the Stock Option was exercised and which were not sold.

 

“Section 409A” means Section 409A of the Code and the guidance and regulations promulgated thereunder.

 

“Securities Act” means the Securities Act of 1933, as amended.

 

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“Shares” means the Common Shares purchasable upon exercise of the Stock Option.

 

“Withholding Taxes” means any taxes, including, but not limited to, social security and Medicare taxes and federal, state and local income taxes, required under any applicable law to be withheld from amounts otherwise payable to the Holder.

 

(b)                           Any capitalized term used but not otherwise defined herein shall have the meaning ascribed to such term in the Plan.

 

2.                                      Expiration.  The Stock Option shall expire on the Expiration Date and, after such expiration, shall no longer be exercisable.

 

3.                                      Vesting and Exercise.

 

(a)                           Vesting Schedule.  Except as otherwise set forth in these Award Terms or Section 12 of the Employment Agreement (“Shareholder Value Creation Incentive”), the Stock Option shall vest, and thereupon become exercisable, in accordance with the “Schedule for Vesting” set forth on the Grant Notice.

 

(b)                           Exercisable Only by the Holder.  Except as otherwise permitted under the Plan or Section 11 hereof, the Stock Option may be exercised during the Holder’s lifetime only by the Holder or, in the event of the Holder’s legal incapacity to do so, by the Holder’s guardian or legal representative acting on behalf of the Holder in a fiduciary capacity under court supervision and/or applicable law.

 

(c)                            Procedure for Exercise.  The Stock Option may be exercised by the Holder as to all or any of the Shares as to which the Stock Option has vested (i) by following the procedures for exercise established by the Equity Account Administrator and posted on the Equity Account Administrator’s website from time to time or (ii) with the Company’s consent, by giving the Company written notice of exercise, in such form as may be prescribed by the Company from time to time, specifying the number of Shares to be purchased.

 

(d)                           Payment of Exercise Price.  To be valid, any exercise of the Stock Option must be accompanied by full payment of the aggregate Exercise Price of the Shares being purchased.  The Company shall determine the method or methods the Holder may use to make such payment, which may include any of the following:  (i) by bank check or certified check or wire transfer of immediately available funds, (ii) if securities of the Company of the same class as the Shares are then traded or quoted on a national securities exchange, the Nasdaq Stock Market, Inc. or a national quotation system sponsored by the National Association of Securities Dealers, Inc., through the delivery of irrevocable written instructions, in a form acceptable to the Company, to the Equity Account Administrator (or, with the Company’s consent, such other brokerage firm as may be requested by the person exercising the Stock Option) to sell some or all of the Shares being purchased upon such exercise and to thereafter deliver promptly to the Company from the proceeds of such sale an amount in cash equal to the aggregate Exercise Price of the Shares being purchased, (iii) by tendering previously owned shares (valued at their Market Value per Share as of the date of tender), (iv) through the withholding of Shares otherwise deliverable upon exercise, or (v) any combination of (i), (ii), (iii) or (iv) above or any other manner permitted pursuant to the Plan.

 

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(e)                            No Fractional Shares.  In no event may the Stock Option be exercised for a fraction of a Share.

 

(f)                             No Adjustment for Dividends or Other Rights.  No adjustment shall be made for cash dividends or other rights for which the record date is prior to the date as of which the issuance or transfer of Shares to the person entitled thereto has been evidenced on the books and records of the Company pursuant to clause (ii) of Section 3(g) hereof following exercise of the Stock Option.

 

(g)                            Issuance and Delivery of Shares.  As soon as practicable (and, in any event, within 30 days) after the valid exercise of the Stock Option, the Company shall (i) effect the issuance or transfer of the Shares purchased upon such exercise, (ii) cause the issuance or transfer of such Shares to be evidenced on the books and records of the Company, and (iii) cause such Shares to be delivered to a Company-Sponsored Equity Account in the name of the person entitled to such Shares (or, with the Company’s consent, such other brokerage account as may be requested by such person); provided, however, that, in the event such Shares are subject to a legend as set forth in Section 15 hereof, the Company shall instead cause a certificate evidencing such Shares and bearing such legend to be delivered to the person entitled thereto.

 

(h)                           Partial Exercise.  If the Stock Option shall have been exercised with respect to less than all of the Shares purchasable upon exercise of the Stock Option, the Company shall make a notation in its books and records to reflect the partial exercise of the Stock Option and the number of Shares that thereafter remain available for purchase upon exercise of the Stock Option.

 

4.                                      Termination of Employment.  In the event that the Holder’s employment is terminated for any reason, the terms of the Employment Agreement shall govern the impact on the Stock Option.

 

5.                                      Tax Withholding.

 

(a)                                 Regardless of any action the Company or the Employer takes with respect to any Withholding Taxes related to the Holder’s participation in the Plan and legally applicable to the Holder, the Holder acknowledges that the ultimate liability for all Withholding Taxes is and remains the Holder’s responsibility and may exceed the amount actually withheld by the Company or the Employer.  The Holder further acknowledges that the Company and/or the Employer (A) make no representations or undertakings regarding the treatment of any Withholding Taxes in connection with any aspect of the Stock Option, including, without limitation, the grant, vesting or exercise of the Stock Option, the subsequent sale of Shares acquired pursuant to such exercise and the receipt of any dividends; and (B) do not commit to and are under no obligation to structure the terms of the grant or any aspect of the Stock Option to reduce or eliminate the Holder’s liability for Withholding Taxes or achieve any particular tax result.  Further, if the Holder is subject to tax in more than one jurisdiction, the Holder acknowledges that the Company and/or the Employer (or former employer, as applicable) may be required to withhold or account for Withholding Taxes in more than one jurisdiction.  The Company shall have no obligation to deliver any Shares upon exercise of the Stock Option unless and until all Withholding Taxes contemplated by this Section 5 have been satisfied.

 

(b)                                 The Company shall determine the method or methods the Holder may use to satisfy any Withholding Taxes resulting from the exercise (in whole or in part) of the Stock

 

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Option, the issuance or transfer of any Shares upon exercise of the Stock Option or otherwise in connection with the Award at the time such Withholding Taxes become due, which may include any of the following:  (i) by delivery to the Company of a bank check or certified check or wire transfer of immediately available funds; (ii) if securities of the Company of the same class as the Shares are then traded or quoted on a national securities exchange, the Nasdaq Stock Market, Inc. or a national quotation system sponsored by the National Association of Securities Dealers, Inc., through the delivery of irrevocable written instructions, in a form acceptable to the Company, to the Equity Account Administrator (or, with the Company’s consent, such other brokerage firm as may be requested by the person exercising the Stock Option) to sell some or all of the Shares being purchased upon such exercise and to thereafter deliver promptly to the Company from the proceeds of such sale an amount in cash equal to the aggregate amount of such Withholding Taxes; (iii) through the withholding of Shares otherwise deliverable upon exercise; or (iv) by any combination of (i), (ii) or (iii) above.  Further, any entity in the Company Group shall have the right to require the Holder to satisfy any Withholding Taxes contemplated by this Section 5 by any of the aforementioned methods or by withholding from the Holder’s wages or other cash compensation.

 

(c)                                  The Company Group may withhold or account for Withholding Taxes contemplated by this Section 5 by reference to applicable withholding rates, including minimum or maximum applicable statutory rates, and if the Company Group withholds more than the amount necessary to satisfy the liability, the Holder will receive a refund of any over-withheld amount in cash and will have no entitlement to the equivalent Shares.  If the obligation for Withholding Taxes is satisfied by withholding in Shares, for tax purposes the Holder will be deemed to have been issued the full number of Shares, notwithstanding that a number of the Shares is held back solely for the purpose of paying the Withholding Taxes due as a result of any aspect of the Holder’s participation in the Plan.  No fractional Shares will be withheld or issued pursuant to the exercise of the Stock Option and the issuance of Withholding Taxes thereunder.

 

6.                                      Deemed Agreement.  By accepting the Award, the Holder is deemed to be bound by the terms and conditions set forth in the Plan, the Grant Notice and these Award Terms.

 

7.                                      Reservation of Shares.  The Company shall at all times reserve for issuance or delivery upon exercise of the Stock Option such number of Common Shares as shall be required for issuance or delivery upon exercise thereof.

 

8.                                      Committee Discretion.  Except as may otherwise be provided in the Plan, the Committee shall have sole discretion to (a) interpret any provision of the Plan, the Grant Notice and these Award Terms, (b) make any determinations necessary or advisable for the administration of the Plan and the Award, and (c) waive any conditions or rights of the Company under the Award, the Grant Notice or these Award Terms.  Without intending to limit the generality or effect of the foregoing, any decision or determination to be made by the Committee pursuant to these Award Terms, including whether to grant or withhold any consent, shall be made by the Committee in its sole and absolute discretion, subject only to the terms of the Plan.  Subject to the terms of the Plan, the Committee may amend the terms of the Award prospectively or retroactively; however, no such amendment may materially and adversely affect the rights of the Holder taken as a whole without the Holder’s consent.  Without intending to limit the generality or effect of the foregoing, the Committee may amend the terms of the Award (i) in

 

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recognition of unusual or nonrecurring events (including, without limitation, events described in Section 9 hereof) affecting any entity in the Company Group or any of the Company’s other affiliates or the financial statements of any entity in the Company Group or any of the Company’s other affiliates, (ii) in response to changes in applicable laws, regulations or accounting principles and interpretations thereof, or (iii) to prevent the Award from becoming subject to Section 409A.

 

9.                                      Adjustments.  Notwithstanding anything to the contrary contained herein, pursuant to Section 13 of the Plan, the Committee will make or provide for such adjustments to the Award as are equitably required to prevent dilution or enlargement of the rights of the Holder that otherwise would result from (a) any stock dividend, extraordinary dividend, stock split, combination of shares, recapitalization or other change in the capital structure of the Company, (b) any change of control, merger, consolidation, spin-off, split-off, spin-out, split-up, reorganization, partial or complete liquidation or other distribution of assets, or issuance of rights or warrants to purchase securities, or (c) any other corporate transaction or event having an effect similar to any of the foregoing.  Moreover, in the event of any such transaction or event, the Committee, in its discretion, may provide in substitution for the Award such alternative consideration (including, without limitation, cash), if any, as it may determine to be equitable in the circumstances and may require in connection therewith the surrender of the Award.

 

10.                               Registration and Listing.  Notwithstanding anything to the contrary contained herein, the Stock Option may not be exercised, and the Stock Option and Shares purchasable upon exercise of the Stock Option may not be purchased, sold, assigned, transferred, pledged, hypothecated or otherwise disposed of or encumbered in any way, unless such transaction is in compliance with all Exercise Rules and Regulations.  The Company is under no obligation to register, qualify or list, or maintain the registration, qualification or listing of, the Stock Option or Shares with the SEC, any state securities commission or any securities exchange, securities association, market system or quotation system to effect such compliance.  The Holder shall make such representations and furnish such information as may be appropriate to permit the Company, in light of the then existence or non-existence of an effective registration statement under the Securities Act relating to the Stock Option or Shares, to issue or transfer the Stock Option or Shares in compliance with the provisions of that or any comparable federal securities law and all applicable state securities laws.  The Company shall have the right, but not the obligation, to register the issuance or resale of the Stock Option or Shares under the Securities Act or any comparable federal securities law or applicable state securities law.

 

11.                               Transferability.  Subject to the terms of the Plan and only with the Company’s consent, the Holder may transfer all or part of the Stock Option for estate planning purposes or pursuant to a domestic relations order; provided, however, that any transferee shall be bound by all of the terms and conditions of the Plan, the Grant Notice and these Award Terms and shall execute an agreement in form and substance satisfactory to the Company in connection with such transfer; and provided further that the Holder will remain bound by the terms and conditions of the Plan, the Grant Notice and these Award Terms.  Except as otherwise permitted under the Plan or this Section 11, the Stock Option shall not be transferable by the Holder other than by will or the laws of descent and distribution.

 

12.                               Employment Violation.  In the event of an Employment Violation, the Company shall have the right to require (a) the termination and cancellation of the Stock Option, whether

 

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vested or unvested, and (b) payment by the Holder to the Company of the Recapture Amount with respect to such Employment Violation; provided, however, that, in lieu of payment by the Holder to the Company of the Recapture Amount, the Holder, in his or her discretion, may tender to the Company the Shares acquired upon exercise of the Stock Option during the Look-back Period with respect to such Employment Violation (without any consideration from the Company in exchange therefor).  Any such termination of the Stock Option and payment of the Recapture Amount, as the case may be, shall be in addition to, and not in lieu of, any other right or remedy available to the Company arising out of or in connection with such Employment Violation, including, without limitation, the right to terminate the Holder’s employment if not already terminated and to seek injunctive relief and additional monetary damages.

 

13.                               Compliance with Applicable Laws and Regulations and Company Policies and Procedures.

 

(a)                                 The Holder is responsible for complying with (i) any federal, state and local taxation laws applicable to the Holder in connection with the Award and (ii) all Exercise Rules and Regulations.

 

(b)                                 The Award is subject to the terms and conditions of any policy requiring or permitting the Company to recover any gains realized by the Holder in connection with the Award, including, without limitation, the Policy on Recoupment of Performance-Based Compensation Related to Certain Financial Restatements.

 

(c)                                  The Award is subject to the terms and conditions of the Executive Stock Ownership Guidelines and the limitations contained therein on the ability of the Holder to transfer any Shares acquired upon exercise of the Stock Option.

 

14.                               Section 409A.  As the Exercise Price is equal to the fair market value of a Share on the Date of Grant, payments contemplated with respect to the Award are intended to be exempt from Section 409A, and all provisions of the Plan, the Grant Notice and these Award Terms shall be construed and interpreted in a manner consistent with the requirements for avoiding taxes or penalties under Section 409A.  Notwithstanding the foregoing, (a) nothing in the Plan, the Grant Notice and these Award Terms shall guarantee that the Award is not subject to taxes or penalties under Section 409A and (b) if any provision of the Plan, the Grant Notice or these Award Terms would, in the reasonable, good faith judgment of the Company, result or likely result in the imposition on the Holder or any other person of taxes, interest or penalties under Section 409A, the Committee may, in its sole discretion, modify the terms of the Plan, the Grant Notice or these Award Terms, without the consent of the Holder, in the manner that the Committee may reasonably and in good faith determine to be necessary or advisable to avoid the imposition of such taxes, interest or penalties; provided, however, that this Section 13 does not create an obligation on the part of the Committee or the Company to make any such modification, and in no event shall the Company be liable for the payment of or gross up in connection with any taxes, interest or penalties owed by the Holder pursuant to Section 409A.

 

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15.                               Legend.  The Company may, if determined by it based on the advice of counsel to be appropriate, cause any certificate evidencing Shares to bear a legend substantially as follows:

 

“THE SECURITIES REPRESENTED HEREBY MAY NOT BE OFFERED FOR SALE, SOLD OR OTHERWISE TRANSFERRED EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE ‘ACT’), OR PURSUANT TO AN EXEMPTION FROM REGISTRATION UNDER THE ACT.”

 

16.                               No Right to Continued Employment.  Nothing contained in the Grant Notice or these Award Terms shall be construed to confer upon the Holder any right to be continued in the employ of any entity in the Company Group or derogate from any right of any entity in the Company Group to retire, request the resignation of, or discharge the Holder at any time, with or without Cause.

 

17.                               No Rights as Stockholder.  No holder of the Stock Option shall, by virtue of the Grant Notice or these Award Terms, be entitled to any right of a stockholder of the Company, either at law or in equity, and the rights of any such holder are limited to those expressed, and are not enforceable against the Company except to the extent set forth, in the Plan, the Grant Notice or these Award Terms.

 

18.                               Severability.  In the event that one or more of the provisions of these Award Terms shall be invalidated for any reason by a court of competent jurisdiction, any provision so invalidated shall be deemed to be separable from the other provisions hereof, and the remaining provisions hereof shall continue to be valid and fully enforceable.

 

19.                               Venue and Governing Law.

 

(a)                           For purposes of litigating any dispute that arises directly or indirectly from the relationship of the parties evidenced by the grant of the Stock Option or these Award Terms, the parties submit and consent to the exclusive jurisdiction of the State of California and agree that such litigation shall be conducted only in the courts of Los Angeles County, California or the federal courts of the United States for the Central District of California, and no other courts, regardless of where the grant of the Stock Option is made and/or to be performed.

 

(b)                           To the extent that federal law does not otherwise control, the validity, interpretation, performance and enforcement of the Grant Notice and these Award Terms shall be governed by the laws of the State of Delaware, without giving effect to principles of conflicts of laws thereof.

 

20.                               Successors and Assigns.  The provisions of the Grant Notice and these Award Terms shall be binding upon and inure to the benefit of the Company, its successors and assigns, and the Holder and, to the extent applicable, the Holder’s permitted assigns under Section 3(b) hereof and the Holder’s estate or beneficiaries as determined by will or the laws of descent and distribution.

 

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21.                               Notices.

 

(a)                           Any notice or other document which the Holder may be required or permitted to deliver to the Company pursuant to or in connection with the Grant Notice or these Award Terms shall be in writing, and may be delivered personally or by mail, postage prepaid, or overnight courier, addressed to the Company, at its office at 3100 Ocean Park Boulevard, Santa Monica, California 90405, Attn: Stock Plan Administration, or such other address as the Company by notice to the Holder may designate in writing from time to time.  Notices shall be effective upon delivery.

 

(b)                           Any notice or other document which the Company may be required or permitted to deliver to the Holder pursuant to or in connection with the Grant Notice or these Award Terms shall be in writing, and may be delivered personally or by mail, postage prepaid, or overnight courier, addressed to the Holder at the address shown on the Employment Agreement, or such other address as the Holder by notice to the Company may designate in writing from time to time.  The Company may also, in its sole discretion, deliver any such document to the Holder electronically via an e-mail to the Holder at his or her Company-provided email address or through a notice delivered to such e-mail address that such document is available on a website established and maintained on behalf of the Company or a third party designated by the Company, including, without limitation, the Equity Account Administrator.  Notices shall be effective upon delivery.

 

22.                               Conflict with Employment Agreement or Plan.  In the event of any conflict between the terms of the Employment Agreement and the terms of the Grant Notice or these Award Terms and/or the terms of the Plan, the terms of the Employment Agreement, shall control.

 

23.                               Imposition of Other Requirements.  The Company reserves the right to impose other requirements on the Holder’s participation in the Plan, on the Stock Option and on any Shares acquired under the Plan, to the extent the Company determines it is necessary or advisable in order to facilitate the administration of the Plan, and to require the Holder to sign any additional agreements or undertakings that may be necessary to accomplish the foregoing.

 

24.                               Waiver.  The Holder acknowledges that a waiver by the Company of a breach of any provision of these Award Terms shall not operate or be construed as a waiver of any other provision of these Award Terms, or of any subsequent breach by the Holder or any other holder of an equity award from the Company.

 

A-11Exhibit 10.28

 

October 3, 2018

 

Dear Mike,

 

Please find below the terms and conditions of your continued employment with Activision Blizzard, Inc. (the “Company”) (together with its subsidiaries, the “Company Group”).

 

You will continue to be an at-will employee of the Company, meaning that either the Company or you may terminate your employment with the Company with cause upon immediate notice or without cause upon ninety (90) days prior notice. The Company will determine all of its internal and external communications regarding your separation from the Company and the corresponding leadership transition, after meaningful consultation with you in a manner consistent with the Company’s customary processes for clearing and disseminating important communications. Without limiting either of our respective rights to terminate your at will employment at any time for any reason, both the Company and you have a present intention to continue your employment through the end of March, 2019. If prior to the end of March, 2019, either of us decides to terminate your employment, both of us agree to engage in a meaningful consultation prior to any final determination being made.

 

Effective October 17, 2018, you will serve as, and have the title of, Advisor, reporting to the Chief Operating Officer of the Company. You will no longer be required to fulfill the responsibilities nor have the title of Chief Executive Officer or any title other than Advisor. Consistent with your change in responsibilities, you will resign from any office or directorship you have with any member of the Company Group.

 

In your new role as Advisor, your responsibilities will include providing strategic advice and counsel to senior executives of Company Group. You will not be required to keep regular office or work hours, but will make reasonable efforts to be available to such executives, usually with advance notice.

 

In consideration of your fulfilling your responsibilities as Advisor, and subject to your being employed in good standing by the Company, your already granted equity (as set forth on Schedule1) will continue to be eligible for vesting according to the terms and conditions of the award agreements and other governing documents for such equity. If you are no longer employed by the Company, then your unvested equity will be canceled and your vested equity will be handled consistent with the terms and conditions of the applicable award agreements and other governing documents.

 

During the term of your employment through December 31, 2018, you will receive your current base salary. If your employment continues thereafter, you will receive a base salary of $2,500 per month. In each case, your base salary will be subject to taxes and withholding. Moreover, if you continue to be an employee in good standing through December 31, 2018, and are otherwise not in breach of this letter agreement, then you will receive a bonus payment with respect to your service during 2018 in an aggregate amount not less than 3.5% of the Blizzard Profit Sharing

 

 

Plan and a CAIP bonus payment in an amount calculated in the same way as similarly situated executives (subject to the applicable metrics/goals for such payment being satisfied); any such bonus amounts shall be paid not later than the date on which such bonuses are paid to other executives, whether or not you are employed by the Company on the date of such payment.

 

As an employee, you will continue to have a duty of loyalty and fiduciary duties to the Company Group. You will continue to be bound and abide by the Company’s Code of Conduct and the policies of the Company Group, including, without limitation, those related to conflicts of interest. Accordingly, without the Company’s prior written consent, which may be exercised in its sole discretion, while you are employed by the Company, you may not be employed by or in any way provide services to any third parties or engage in any competitive or for-profit activities of any kind for your own benefit or for the benefit of any third party, other than customary investments of less than five percent (5%) of the outstanding equity of any publicly traded company.

 

During your employment, you will 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 Company 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 Company Group, whether or not such person would commit any breach of a contract by reason of his or her leaving the service of the Company Group; or (b) solicit, induce or entice any client, customer, contractor, licensor, agent, supplier, partner or other business relationship of any entity in the Company Group to terminate, discontinue, renegotiate or otherwise cease or modify its relationship with the Company Group.

 

For the period following the termination of your employment for any reason whatsoever, through June 30, 2019, you will 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 fulltime employee of any entity in the Company Group, whether or not such person would commit any breach of a contract by reason of his or her leaving the service of the Company Group, provided that this provision shall not be interpreted to prevent the hiring, on behalf of your own account or any other person, firm or company, any of such persons so long as you have not violated the terms and conditions of this letter agreement.

 

During your employment and at all times following the termination of your employment for any reason whatsoever, you will not, at any time or for any reason, use the confidential, trade secret information of the Company 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 Company Group to terminate, discontinue, renegotiate or otherwise cease or modify its relationship with the Company Group.

 

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You expressly acknowledge and agree that the restrictions contained in this letter are reasonably tailored to protect the Company Group’s confidential information and trade secrets and to ensure that you do not violate your duty of loyalty or any other fiduciary duty to the Company Group, and are reasonable in all circumstances in scope, duration and all other respects.

 

During your employment and through December 31, 2019, you agree not to criticize, denigrate or otherwise disparage the Company, all current and former parents, subsidiaries, related companies, partnerships, joint ventures, or other affiliates, and, with respect to each of them, their predecessors and successors; and, with respect to each such entity, all employees (past and present), all of its past, present, and future officers, directors, and owners, (together, all of the foregoing shall be referenced as the “Non-Disparaged Parties”), or any of the Non-Disparaged Party’s products, processes, experiments, policies, practices, standards of business conduct, or areas or techniques of research. However, nothing in this subsection shall prohibit you from (a) complying with any lawful subpoena or court order or taking any other actions affirmatively authorized by law or making a truthful representation in connection with a report or complaint to an administrative agency; (b) engaging in private discussions with family and friends or (c) responding truthfully and proportionately to any critical, denigrating or disparaging statements about you by any officer or authorized spokesperson of any entity within the Company Group.

 

Nothing in this letter agreement will alter or amend any obligations either the Company or you may have to the other pursuant to your now expired 2007 employment agreement, as amended (the “Expired Employment Agreement”), specifically including, without limitation, the Company’s obligations to you in Section 14 and your obligations to the Company in Section 5(b) which remain in full force and effect. For the avoidance of doubt, the non-solicit and non-disparagement provisions hereof supersede any such provisions in the Expired Employment Agreement.

 

Any legal action by the Company for violation of your non-solicit or non-disparagement provisions in this letter agreement must be initiated by the Company within one year after the expiration of such applicable provision (i.e. prior to July 1, 2020, in the case of the non-solicit provision and prior to January 1, 2021, in the case of the non-disparagement provision).

 

The Company confirms that this letter agreement has been duly authorized by all necessary corporate action on the part of the Company. Each of the Company and you confirm that this letter agreement is legally valid, binding and enforceable. This letter agreement and the terms and conditions of your at-will employment will be governed by and construed in accordance with the laws of the State of California.

 

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Sincerely,
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
ACTIVISION   BLIZZARD, INC.
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
/s/ Chris Walther
    
	
 
    	
 
    	
By: Chris Walther
    
	
 
    	
 
    	
Chief Legal Officer
    
	
 
    	
 
    	
 
    
	
Acknowledged and Agreed
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
/s/ Mike Morhaime
    	
 
    	
 
    
	
Mike Morhaime
    	
 
    	
 
    

 

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