Document:

Exhibit 10.3

 

Activision Blizzard, Inc.
 U.S. Corporate Annual Incentive Plan

	
 
    	
 
    	
 
    

 

I.          Introduction:  Activision Blizzard, Inc. (“Activision Blizzard” or “Company”, and together with its subsidiaries, the “Activision Blizzard Group”), is the sponsor of this U.S. Corporate Annual Incentive Plan (“CAIP” or “Plan”).  The Plan is completely discretionary, and Activision Blizzard, acting through the Governing Committee (as defined in Paragraph III.B. below) or as otherwise determined by Activision Blizzard, always retains the authority to act within its discretion in all aspects of operating this Plan (even if not explicitly stated in any specific provision below).  Although the provisions of the Plan as described below reflect the current methodology by which Activision Blizzard operates the Plan, Activision Blizzard retains the right to change, amend, or terminate the Plan at any time with or without notice, and regardless of whether or not work has been initiated or even completed with respect to goals or objectives.  Activision Blizzard retains the exclusive right to interpret the Plan in its sole discretion, and its determination will be final and binding.  Any and all exceptions to the operation of this Plan will be determined solely by the Governing Committee or the Compensation Committee of the Board of Directors of Activision Blizzard (the “Compensation Committee”), as appropriate pursuant to the then-current governance practices of the Activision Blizzard Group in effect at the time the decision is made.

 

II.         Effective Date and Location:  This Plan is effective as of Fiscal Year 20121, and shall remain effective until Activision Blizzard determines otherwise.  The Plan is applicable only in the U.S.

 

III.        Eligibility:  All U.S. employees (except as provided for in subparagraph A below) of the Activision Blizzard Group are eligible to receive an annual incentive bonus payment under the Plan for a “Plan Year”, if and only if that the individual is allocated an award by either the “Governing Committee” or the Compensation Committee.  For purposes of this Plan, a “Plan Year” will run concurrent with the fiscal year.  Since the incentive bonus rewards not only success, but also continued service and ongoing contributions to the Activision Blizzard Group, an employee is eligible to receive and may earn an incentive bonus payment only if he or she is employed with the Activision Blizzard Group on the incentive bonus payment date with respect to such bonus payment.

 

A.         Eligibility Exceptions:

 

1)         Employees who begin employment with the Activision Blizzard Group after September 30th are ineligible to participate for that Plan Year;

 

2)         Temporary employees of the Activision Blizzard Group (whether or not party to a temporary employment agreement) are ineligible to participate; and

 

3)         As a general principle, employees who participate in other Activision Blizzard Group bonus plans, such as a studio retention and incentive bonus plan or the Blizzard Entertainment Profit Sharing Plan, will not be allocated an award under this Plan.

 

B.         Governing Committee:  The Governing Committee generally will be comprised of the following individuals, or any other individuals designated by the executive management team of 

 

1 Note: Activision Blizzard’s fiscal year runs concurrent with the calendar year.

 

	
 
    	
 
    	
 
    

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Activision Blizzard from time to time:  1) the Chief Operating Officer of Activision Blizzard, 2) the Chief Financial Officer of Activision Blizzard, 3) the Chief Executive Officer of Activision Publishing (“CEO”), 4) the Chief Strategy and Talent Officer of Activision Blizzard, and 5) the Chief Legal Officer of Activision Blizzard.

 

C.        No Entitlement:  No employee shall be entitled to a payment pursuant to this Plan under any circumstances unless and until a payment actually is made.  Specifically, prior notification of the Plan itself or individual Plan eligibility, or prior participation in the Plan, does not create any entitlement to future participation.

 

IV.        Funding:

 

A.         The Plan will fund at a discretionary level determined by the Company for a Plan Year (hereinafter, the “Pool”) if the Compensation Committee determines that the Company’s actual operating income (“OI”, as defined by the Company) for that fiscal year equals or exceeds 85% of the target goal amount set forth in the Company’s annual operating plan (“AOP”).  This determination is typically made by the Compensation Committee in the first quarter of the fiscal year following the Plan Year (e.g., for a 2012 Plan Year, the determination will be made in Q1 2013).  The Company retains the option of funding the Plan even in the event that it is determined that less than 85% of the AOP OI is achieved.

 

B.         Reservation:  In the event that any funds are set aside by the Company for the payment of bonuses under this Plan, the Company reserves the right not to allocate or not to pay out any portion of those funds.  Should any funds from a Pool remain unallocated or unspent, Activision Blizzard also reserves the right to determine what Activision Blizzard may do with those funds, if anything, including without limitation, using those funds for other corporate purposes; no Participant or any beneficiary thereof will have any right or interest in or to any such assets or amounts.

 

V.         Allocations:  Typically an employee will be recommended for an incentive bonus award (or allocation) by his or her manager or management team.  The nomination will require internal approval per the Company’s then-current governance practices.  Recommendations for a Plan Year are made in the first quarter of the following year.  For example, recommendations for award allocations for fiscal year 2012 will be made in Q1 2013.  Approved recommendations are presented to the Governing Committee for final approval, except that for purposes of any incentive bonus awards intended to qualify as a “Senior Executive Plan Bonus” within the meaning of the company’s 2008 Incentive Plan (the “2008 Plan”), approval must be sought from the Compensation Committee pursuant to the 2008 Plan or as required by the Charter of the Compensation Committee.  To determine the incentive bonus award recommendation for each relevant employee, managers generally should consider the following:

 

A.         Target Bonus:  The Company normally provides each eligible employee (or “Participant”) with a Target Bonus for each Plan Year that is expressed as a percentage of his or her “Base Salary” (as defined in Paragraph V.A.2 below) for that year.  Target Bonuses may vary from Participant to Participant depending on a Participant’s job level or any other factor the Company deems to be relevant.  Each Participant’s Target Bonus is normally set forth in a  written communication to be provided to him or her (typically in an offer letter, employment agreement, or such similar writing).  Once a Participant has been notified of his or her Target Bonus, it will normally remain the same until the Participant is notified, in writing, of any change.  For example, a Participant with a Base Salary of $100,000 may have a Target Bonus assigned of 10% of Base Salary in his or her offer letter; the Target 

 

	
 
    	
 
    	
 
    

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Bonus normally remains the same until notified of any change in writing (for example, notification of a promotion resulting in an increase in Target Bonus).

 

1)       Modification of Target Bonus.  The Company may opt to modify any Participant’s Target Bonus at any time during the Plan Year, subject to the approval process provided for under the Company’s then-current governance practices, at the Company’s discretion or as required by the Company’s then-current governance practices.  Any such modification will be communicated to the Participant promptly after it has been approved.  Unless otherwise determined by the Governing Committee or the Compensation Committee, if a Participant’s Target Bonus is modified during a fiscal year, a weighted average of the Target Bonuses normally will be used to calculate the incentive bonus payment for that year.  Awards intended to qualify as Senior Executive Plan Bonuses shall be subject to any limitations set forth in the 2008 Plan or Section 162(m) of the Code with respect to modification by the Governing Committee or the Compensation Committee.

 

2)       Base Salary:  For purposes of this Plan, the Base Salary earned by a Participant for purposes of calculating an incentive bonus payment for a specific Plan Year will be defined as follows:

 

i.                 For each Participant who was paid a salary from the Activision Blizzard Group during the Plan Year, the aggregate salary actually paid to him or her while he or she was a Participant by the Activision Blizzard Group for the relevant Plan Year;

 

ii.              For each Participant who was paid an hourly wage from the Activision Blizzard Group during the Plan Year, the aggregate hourly wages (including any overtime wages and exclusive of any special or bonus payments) actually paid to him or her while he or she was a Participant by the Activision Blizzard Group for the relevant Plan Year; and

 

iii.           For each Participant who was paid both hourly wages and a salary from the Activision Blizzard Group while he or she was a Participant during the Plan Year, the sum of the aggregate hourly wages (including any overtime wages and exclusive of any special or bonus payments) and aggregate salary actually paid to him or her while he or she was a Participant by the Activision Blizzard Group for the relevant Plan Year.

 

B.         Performance Metrics:  The following performance metrics normally will be evaluated by managers (or as otherwise provided for by the Company’s then-current governance practices) when determining the recommended level of payout for a Participant relative to his or her Target Bonus:  1) attainment of the Company’s financial objectives; 2) attainment of relevant business financial objectives; and 3) attainment of the employee’s individual performance objectives.  Other factors may also be taken into consideration, as consistent with the Company’s then-current governance practices.  For all awards intended to qualify as Senior Executive Plan Bonuses, these metrics shall be established by the Compensation Committee (or otherwise in accordance with the 2008 Plan), and shall be subject to the applicable timeframe required under Section 162(m) of the Code and the 2008 Incentive Plan, and shall be selected from the Management Objectives as set forth and defined in the 2008 Incentive Plan.  For each Participant, each metric normally will be assigned a weight expressed as a percentage so that the total weight of all of the objectives equals 100%, and normally will be set forth in a communication to be provided to each Participant annually.  The specific financial and individual 

 

	
 
    	
 
    	
 
    

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performance objectives to be utilized and the relative weighting of the various objectives may vary from Participant to Participant depending on the department or unit to which the Participant provides services, a Participant’s job level, or any other factor the Company deems to be relevant.  The Governing Committee or the Compensation Committee may modify any metrics assigned to a Participant at any time during the Plan Year, except that Awards intended to qualify as Senior Executive Plan Bonuses shall be subject to any limitations set forth in Section 162(m) of the Code or the 2008 Plan.  Any modifications will be communicated to the Participant promptly after being approved.

 

1)         Corporate Financial Objectives:  The Company’s management (with the approval of the Compensation Committee) will establish financial performance objectives for Activision Blizzard with respect to each Plan Year.  Following the close of each Plan Year, achievement of these financial objectives for that Plan Year normally will be confirmed by the Compensation Committee (usually in Q1 of the following year) or as is consistent with the Company’s then-current governance practices.  The maximum payout on any corporate financial objective for a Plan Year is 200% of target.

 

2)         Business Financial Objectives (Where Applicable):  The Company’s management (with the approval of the Compensation Committee where required by the Company’s then-current governance practices) will establish financial performance objectives and associated achievement levels for various operating and business units, regions, teams, and territories (all as defined by the Company).  Following the close of each Plan Year, achievement of these financial objectives for that Plan Year will be confirmed by the Compensation Committee (usually in Q1 of the following year) or as is consistent with the Company’s then-current governance practices.  A relevant organization must normally achieve at least 75% of its AOP financial target set by the Company in order for this metric to fund.  The maximum payout on any business financial objective for a Plan Year is (a) 200% of target, for performance measures greater than or equal to $10 million or (b) 150% of target, for performance measures less than $10 million.

 

3)         Individual Performance Objectives:  Individual performance objectives normally will be developed by each Participant and his or her immediate manager (or management team) for each Plan Year; such objectives are subject to review by the Governing Committee (or, where appropriate, the Compensation Committee), at either’s discretion or as required by the Company’s then-current governance practices.  Each Participant and his or her manager (or management team) must establish such objectives (typically two to four) with a relative weighting of each to be determined by the Participant’s management.  In the case of new hires or transfers, individual performance objectives should be developed by each Participant and his or her manager/management team within six (6) weeks following such new hire’s start date (or a deadline to be determined by Human Resources).  Following the close of each Plan Year, achievement of a Participant’s personal objectives will be determined by the Participant’s manager/management team, subject to the approval process provided for under the Company’s then-current governance practices and, at either’s discretion or as required by the Company’s then-current governance practices, review by the Governing Committee or the Compensation Committee.  For bonuses intended to qualify as Senior Executive Plan Bonuses, the achievement of a Participant’s personal objectives will be determined by the Compensation Committee.

 

	
 
    	
 
    	
 
    

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i.     Achievement levels:  Each individual objective will have four potential levels of achievement with associated multipliers:

 

	
Achievement
    	
Multiplier
    
	
 
    	
 
    
	
BT   = Below Target
    	
0%
    
	
 
    	
 
    
	
OT   = On Target
    	
100%
    
	
 
    	
 
    
	
AT   = Above Target
    	
110%
    
	
 
    	
 
    
	
SAT   = Significantly Above Target
    	
120%
    
	
 
    	
 
    

 

The Participant’s manager/management team may recommend that a Participant does not receive an incentive bonus for that Plan Year, or receives an incentive bonus which is less than his or her Target Bonus, if the Company determines that i) one or more of the objectives in a Participant’s Bonus Plan are not achieved; ii) the Participant’s performance rating (provided in conjunction with the Company’s performance review process) for a Plan Year is Below Expectations; iii) the Participant has violated any Company policy, procedure, rule, or regulation during his or her employment or any post-employment restrictions (where applicable, as discussed in Paragraph VIII.B. below); or iv) other reasons bear consideration, unless any of the above are prohibited by applicable law.  The maximum payout of any individual performance objective for a Plan Year is 120% of target.

 

C.        Formula for Calculation.  A “Weighted Multiplier” will be determined for each Participant by calculating the weighted average of achievement of each performance metric.  The performance multiplier is then multiplied by (1) the participant’s Target Bonus and (2) the Base Salary earned by the Participant to determine the recommended payout for that Plan Year.

 

D.        Sample Calculation.  In the following example (for illustration purposes only and not applicable to awards intended to qualify as Senior Executive Bonuses), the Participant earned a Base Salary of $60,000 during the Plan Year and had a Target Bonus equal to 10% of his Base Salary for that Plan Year.  The recommended incentive bonus payout would be calculated as follows:

 

	
 
    	
 
    	
 
    

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Weight
    	
Measure
    	
Target
    	
Threshold
    	
Max
    	
Actual
    	
Achieve-
   ment
    	
Weighted
   Multiplier
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
10%
    	
A|B   (Corporate Financial Obj.)
    	
$1,400m
    	
85%
    	
200%
    	
$1,190
    	
85%
    	
8.5%
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
40%
    	
Publishing   (Business Financial Obj.)
    	
$900m
    	
75%
    	
200%
    	
$990
    	
110%
    	
44.0%
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
50%
    	
Individual   Objectives:
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
Objective   1 (20%)
    	
 
    	
 
    	
 
    	
AT
    	
110%
    	
22.0%
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
Objective   2 (20%)
    	
 
    	
 
    	
 
    	
SAT
    	
120%
    	
24.0%
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
Objective   3 (10%)
    	
 
    	
 
    	
 
    	
OT
    	
100%
    	
10.0%
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
100%
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
108.5%
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    

 

Based upon the sample facts outlined above, the final recommended payout for this Sample Participant would be calculated as follows: $60,000 (Base Salary) x 10% (Target Bonus) x 108.5% (Sum of the Weighted Multipliers) = $6,510 Final Payout (less applicable taxes and withholdings).

 

VI.        Payments:

 

A.         Schedule:  Incentive bonus payments, if any, will be paid in a lump sum, less applicable taxes and withholdings, between January 1st and March 15th of the year following the applicable Plan Year, and will be paid in cash, unless otherwise determined by the Compensation Committee or otherwise in accordance with the then-current governance practices of the Activision Blizzard Group.

 

B.         Employment Required:  Since the Plan rewards not only the achievement of pre-established goals that contribute to the Company’s success, but also continued service and ongoing contributions to the Activision Blizzard Group, an employee who is allocated an incentive bonus payment must be employed with the Activision Blizzard Group on the payment date of such incentive bonus payment, unless an exception is (i) provided for under the Company’s then-current severance plan (if any), (ii) approved by the Governing Committee or the Compensation Committee, or (iii) is otherwise required by law.  For the avoidance of doubt, once the Governing Committee or Compensation Committee has approved of an incentive bonus payment to an individual, in no event will 

 

	
 
    	
 
    	
 
    

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such incentive bonus payment be made to an employee later than March 15 of the year following the applicable Plan Year.

 

VII.       Appeal:  If a Participant disagrees with the incentive bonus award allocation (if any) made to him or her pursuant to this Plan, the Participant must notify his or her manager or assigned HR Generalist of such dispute within 14 days after the date that the incentive bonus award allocation is communicated to him or her.  To the extent no such notice is received by the Company within 14 days after the date such communication is made, such determination will conclusively be deemed final and binding on the Company and that Participant.  If a notice is received within such 14-day period, then the manager or HR Generalist will promptly investigate the Participant’s concerns and communicate back to the Participant a determination.  If the Participant disagrees with the determination, then he or she may appeal the determination to the Governing Committee within 7 days of receipt of the determination.  The Governing Committee (in consultation with the Compensation Committee, where appropriate) will then provide a final determination; that determination will be binding and conclusive upon the Company and the Participant.  Without limiting the generality of the foregoing, no Participant will have any right, unless provided otherwise by law, to inspect the books, records, budgets, business plans, financial data or financial statements of the Activision Blizzard Group to determine whether any financial determinations are correct with respect to any fiscal year; the foregoing procedures set forth in the prior paragraph to be the sole and exclusive methods of determining same.

 

A.         Appeal Process for Any Individual Reporting to a Member of the Governing Committee:  If a Participant reports directly to a Member of the Governing Committee, then the procedures outlined above in Paragraph VII will apply, except that the Member of the Governing Committee who is that individual’s supervisor must recuse himself from the decision-making process of the Governing Committee with respect to that appeal.

 

B.         Appeal Process for Governing Committee Members:  If a Participant is a Member of the Governing Committee, then the Participant may submit his or her appeal directly to the Chief Executive Officer of Activision Blizzard (who will consult with the Compensation Committee, where appropriate), who will function in lieu of the Governing Committee for the procedures outlined above in Paragraph VII.

 

VIII.       Miscellaneous:

 

A.         Modification or Termination of Plan:  Activision Blizzard, as the sponsor of the Plan, reserves the right to change, amend, or terminate the Plan at any time with or without notice, and regardless of whether or not work has been initiated or even completed with respect to goals or objectives.  Activision Blizzard reserves the right to suspend or terminate all payments in the event of change, amendment, or termination of the Plan.  Activision Blizzard retains the exclusive right to interpret the Plan in its sole discretion, and its determination will be final and binding.  Any prior course of dealings shall not be determinative in interpreting this Plan; no participant shall be entitled to rely on any past practices associated with administering the Plan (or any similar plans) to interpret this Plan.

 

B.         At-Will Employment:  Nothing contained in this Plan implies a contractual agreement between the Activision Blizzard Group and an employee or confers upon any such individual the right to continued employment.  For individuals not employed pursuant to an employment agreement, this Plan in no way alters the at-will employment status of his or her employment.  An employee or the Activision 

 

	
 
    	
 
    	
 
    

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Blizzard Group may terminate employment at any time, with or without cause or notice, unless an employee’s employment agreement states otherwise.

 

C.        Conflicts:  This Plan supersedes all prior oral or written communications on this same subject matter.  To the extent that this Plan conflicts with the Activision Blizzard Group’s policies, procedures, rules, or regulations, the latter shall control.  To the extent that this Plan may conflict with an employee’s employment agreement with the Activision Blizzard Group, the terms of the employment agreement shall control.

 

D.        Inapplicability of ERISA.  This Plan is intended to be a “bonus program” and “payroll practice” and, as such, is not subject to the Employee Retirement Income Security Act of 1974, as amended.

 

E.         409A and 162m Compliance:  To the extent applicable, it is intended that the Plan comply with the provisions of Sections 409A and 162m of the Internal Revenue Code, as amended.  The Plan will be administered and interpreted in a manner consistent with this intent.  Specifically, any provision that would cause the Plan 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).

 

F.         Relationship to 2008 Incentive Plan.  This Plan is intended to operate as a “sub-plan” of the Company’s shareholder-approved 2008 Plan, including for purposes of facilitating grants of Senior Executive Plan Bonuses, and shall be governed by the terms of the 2008 Plan other than in the event of any conflict between the terms of this Plan and the 2008 Plan, in which case the terms of this Plan shall control.

 

G.        Taxation:  The Activision Blizzard Group may withhold from any payments made under this Plan 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 an employee.  Likewise, the Activision Blizzard Group may withhold payments hereunder or seek reimbursement from a Participant to recover improper payments or over-payments made.

 

H.         Effect on Other Activision Blizzard Group Benefits Programs:

 

1)  No incentive bonus payment under this Plan will be considered salary or other compensation paid to an employee for purposes of computing any benefits to which he or she may be entitled under any employee benefit or retirement plan which may be maintained by the Activision Blizzard Group from time to time, except for those benefit plans which explicitly provide for otherwise.

 

2)  Participation in this Plan does not confer rights to participation in other programs which may be maintained by the Activision Blizzard Group from time to time, including but not limited to other annual or long-term incentive plans, non-qualified retirement or deferred compensation plans or other executive perquisite programs.

 

I.          Non-Exclusivity.  Neither the adoption of this Plan by the Company nor any provision of this Plan will be construed as creating any limitations on the power of the Company to adopt such additional compensation arrangements as it may deem desirable.

 

	
 
    	
 
    	
 
    

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J.         Construction:  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 Plan.  The masculine gender, wherever appearing in this Plan, will include the feminine gender and the singular will include the plural, unless the context clearly indicates to the contrary.

 

K.         Governing Law:  Except to the extent governed by federal law, this Plan shall be governed by and construed in accordance with the laws of the State of California, or, for individuals employed outside of California, the state in which an employee was last employed by the Activision Blizzard Group, without regard to conflict of law principles.

 

L.         Severability:  If any provision of this Plan is held to be illegal, invalid or unenforceable, such provisions shall be fully severable, the Plan shall be construed and enforced as if such illegal, invalid or unenforceable provision had never comprised a part of this Plan, and the remaining provisions of this Plan 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 Plan.  Furthermore, in lieu of such illegal, invalid or unenforceable provision, a court or arbitrator shall add automatically as part of this Plan a legal and enforceable provision as similar in terms to such illegal, invalid or unenforceable provision as may be possible.

 

M.        Assignment:  This Plan and the rights and obligations hereunder shall not be assignable or transferable by any employee, unless provided for otherwise by Activision Blizzard in writing and signed by the Chief Executive Officer of Activision Blizzard.  Activision Blizzard may assign this Plan or all or any part of its rights and obligations under this Plan at any time and following such assignment all references to Activision Blizzard shall be deemed to refer to such assignee and Activision Blizzard shall thereafter have no obligation under this Plan.

 

N.         Successors:  This Plan shall be binding on and inure to the benefit of Activision Blizzard and its successors and assigns, including successors by merger and operation of law.

 

ACTIVISION BLIZZARD, INC.

 

 

	
/s/ Thomas Tippl
    	
 
    	
November 5, 2012
    	
 
    
	
Thomas Tippl, Chief Operating   Officer
    	
Date
    

 

	
 
    	
 
    	
 
    

Page 9Exhibit 10.1

 

September 7, 2012

 

Robert A. Myhre

226 Boone Hollow Drive

Wentzville, Mo  63385

 

Dear Robert,

 

Congratulations!  We are pleased to confirm your formal offer of employment with Global Cash Access, Inc. (the “Company”).  This offer is contingent upon your successfully completing a drug screen and background investigation. In addition, as a condition of employment with the Company, you will be requested to sign a Non-Compete Agreement and an Employee Proprietary Information and Inventions Agreement.

 

Due to the nature of our business and your position with the Company, you will be required to complete applications required by various gaming regulatory, tribal, state and other international governments in which the Company and its affiliates conduct business, as well as other applications that may be required by such regulatory authorities with jurisdiction over the Company and its affiliates. Such applications are generally in addition to normal credit, reference and background investigation for employment. Such applications will require complete disclosure of personal and financial information, criminal convictions or arrests (expunged or not) and business associations.  As a condition of employment, you must be able to satisfy the licensing process and obtain appropriate gaming and other regulatory licenses.

 

The terms of this offer of employment are as follows:

 

	
·
    	
Position:
    	
Executive Vice   President and Chief Information Officer
    
	
 
    	
 
    	
 
    
	
·
    	
Reports to:
    	
David B. Lopez,   President
    
	
 
    	
 
    	
 
    
	
·
    	
Start date:
    	
October 1,   2012
    
	
 
    	
 
    	
 
    
	
·
    	
Compensation:
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
Salary:
    	
$330,000.06 in   base salary paid in bi-weekly installments of $12,692.31 in accordance with   the Company’s payroll practices. Normal withholding taxes will apply.
    
	
 
    	
 
    	
 
    
	
 
    	
Bonus:
    	
In addition to   your annual base salary, you will be eligible for a discretionary annual   bonus with a target of 50% of your salary. The bonus plan is based half on   your organization’s performance, measured against goals you agree upon with   the President and half, based upon financial goals for the Company, which   will be established in the first quarter of each fiscal year. Each of the   components could result in a bonus of 150% of the target (75% of salary),   depending upon performance. If threshold targets are not met the bonus level   could be zero. The bonus for 2012 will be prorated based on your start date.
    
	
 
    	
 
    	
 
    
	
 
    	
Equity:
    	
Management will   recommend to the Board of Directors that you be granted an option to purchase   100,000 shares of common stock of Global Cash Access Holdings, Inc. The   authority to grant options is restricted to the Board of Directors and the   grant date will be on whatever date the Board approves such grant and the   exercise price will be whatever the fair market value of the common stock is   on the date of grant. Management will also recommend to the Board of   Directors a grant of 20,000 shares of restricted stock of Global Cash Access   Holdings, Inc. Both grants are pursuant to the 2005 Stock Incentive   Plan. The authority to grant restricted shares (RSUs) is restricted to the   Board of Directors and the grant date will be on whatever date the Board   approves such grant.
    

 

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Paid   Time Off:
    	
Based on your   position, you would be eligible to accrue 26 PTO days per year, being 8 PTO   hours per pay period. Executive Vice Presidents do not account for PTO and   take time as agreed upon with the President. If you are terminated, you would   be compensated at the appropriate level for your position as outlined in the   Company’s Employee Handbook.
    
	
 
    	
 
    	
 
    
	
 
    	
Benefits:
    	
You will be   eligible to participate in the standard Company benefit plans beginning the 1st of the month following 30 days from your   hire date. Benefits include medical, dental, vision, Exec-u-Care (medical   reimbursement insurance for executives), and life insurance. Short term   disability and long term disability are provided the first of the month after   one year of service.
    
	
 
    	
 
    	
 
    
	
 
    	
Relocation:
    	
The Company will   reimburse you for the following relocation costs and expenses: a) reasonable   and customary closing costs incurred by you for the sale of your home in Wentzville,   Mo; provided that the Company will not reimburse you for any loss that you   incur on the sale of this home; b) reasonable and customary closing costs   incurred by you for the purchase of a home in the Las Vegas, NV area,   [exclusive of any loan or financing costs associated with such purchase]; and   c) up to 120 days of pre-approved, temporary housing or hotel stay in the Las   Vegas, NV area. The Company will also reimburse you for three, pre-approved,   round trip flights per month from Las Vegas (or other mutually agreed upon   location) to your current home, during such 120 day period. You have twenty   four (24) months from your start date to submit the foregoing closing costs for   reimbursement. In addition, the Company also will pay for costs with respect   to the transportation of House Hold Goods (HHG) from your Wentzville, Mo.   home, including packing and unpacking expenses and transportation of two   personal vehicles. You will be required to obtain two estimates for this HHG   move, pre-approval by the Company and arrange for the carrier to provide the   Company with the bill for payment to the vendor by the Company. Reimbursable   costs listed in this section of your offer letter that are not tax deductible   by you will be reimbursed to you through payroll at a grossed up amount using   the incremental tax rate based upon your base salary. You must provide   closing statements and receipts for all reimbursement items prior to payment   from the Company. If you voluntarily resign or are terminated for cause   within one year of your date of hire, you will repay all of the amounts that   you received from the Company set forth in this paragraph, including the   amounts of any tax gross ups.
    

 

Employment at the Company is employment at-will, and may be terminated at the will of either the employer or the employee, with or without cause and with or without notice at any time.  The Company reserves the right to amend, modify, or suspend its benefits and compensation plans and terms and conditions of employment at its sole discretion.

 

We at Global Cash Access, Inc. look forward to working with you.  Please indicate your acceptance of this offer of employment by signing and dating this letter and returning it to me.  If you have any questions or concerns, please let me know.

 

Sincerely,

 

	
/s/ David B. Lopez
    	
 
    
	
David B. Lopez
    	
 
    
	
President
    	
 
    

 

	
 
    	
I, Robert A. Myhre,   have read this offer of employment, understand its terms, and have accepted   it as of the date written below:
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
/s/   Robert A. Myhre
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
Date:
    	
September 11, 2012
    	
 
    	
 
    
						

 

Page 2 of 2

 

September 7, 2012

 

Dear Robert A. Myhre:

 

Reference is made to the offer of employment letter (the “Letter”), dated August 31, 2012 (the “Offer Letter”), by and between Global Cash Access, Inc. (together with all entities controlling, controlled by or under common control with Global Cash Access, Inc., the “Company”) and you (“Executive”.)  This letter amends the Letter (the “Amendment”) to the extent set forth herein.

 

Definitions

 

This Amendment  provides Executive with certain benefits in the event that the Company or Executive terminates his employment for Good Reason (as defined below).

 

For the purposes of this Agreement, termination shall be for “Cause” if (i) Executive refuses or fails to act in accordance with any lawful order or instruction of the Chief Executive Officer or Board of Directors, and such refusal or failure to act has not been cured within five (5) days of written notice from the Chief Executive Officer or Board of Directors of such disobedience; (ii) Executive fails to devote reasonable attention and time during normal business hours to the business affairs of the Company or Executive is determined by the Chief Executive Officer or Board of Directors to have been unfit (e.g., denied any license, permit or qualification required by any gaming regulator or found unsuitable by any gaming regulator) (other than as a result of an Incapacity), unavailable for service (other than as a result of an Incapacity) or grossly negligent in connection with the performance of his duties on behalf of the Company, which unfitness, unavailability or gross negligence has not been cured within five (5) days of written notice from the Chief Executive Officer or Board of Directors of the same; (iii) Executive is determined by the Chief Executive Officer or Board of Directors to have committed a material act of dishonesty or willful misconduct or to have acted in bad faith to the material detriment of the Company in connection with the performance of his duties on behalf of the Company; (iv) Executive is convicted of a felony or other crime involving dishonesty, breach of trust, moral turpitude or physical harm to any person; or (v) Executive materially breaches any agreement with the Company which material breach has not been cured within five (5) days written notice from the Chief Executive Officer or Board of Directors of the same.  For purposes of this Agreement, the term “without Cause” shall mean termination of Executive’s employment for reasons other than for “Cause.”

 

For the purposes of this Agreement, termination shall be for “Good Reason” if (i) there is a material diminution of Executive’s responsibilities with the Company, or a material change in the Executive’s reporting responsibilities or title, in each case without Executive’s consent; (ii) there is a reduction by the Company in the Executive’s annual base salary then in effect without Executive’s consent; or (iii) Executive’s principal work location is relocated outside of the Las Vegas, Nevada metropolitan area without Executive’s consent.  Executive agrees that she may be required to travel from time to time as required by the Company’s business and that such travel shall not constitute grounds for Executive to terminate his employment for Good Reason.

 

 

For the purposes of this Agreement, Executive shall be deemed to have suffered an “Incapacity” if Executive shall, due to illness or mental or physical incapacity, be unable to perform the duties and responsibilities required to be performed by his on behalf of the Company for a period of at least 180 days.

 

Termination by the Company without Cause or Termination by Executive for Good Reason

 

In the event that the Company terminates Executive’s employment without Cause or Executive terminates his employment for Good Reason, the Company shall pay Executive all base salary due and owing and all other accrued but unpaid benefits (e.g., accrued vacation) through the last day actually worked, and Executive shall be entitled to receive the following severance payments and benefits set forth below in this Section 2; provided, however, that such severance and benefits are conditioned on Executive’s execution and non-revocation of a release agreement, the form of which is attached hereto as Exhibit A, and thereafter the Company’s obligations under this Agreement shall terminate.

 

Base Salary Continuation.  The Company shall continue to pay to Executive his then-current base annual salary for a period of twelve (12) months (the “Salary Continuation Period”).  Such salary continuation shall be subject to standard deductions and withholdings and shall be payable in regular periodic payments in accordance with Company payroll policy.  The Company may discontinue such salary continuation in the event that Executive breaches any of the provisions of Sections 3 or 4 or any of the terms of his existing Employee Proprietary Information and Inventions Assignment Agreement with the Company or Noncompete Agreement with the Company.

 

Target Bonus.  The Company shall also pay to Executive, subject to standard deductions and withholdings, a bonus in the amount of fifty percent (50%) of his then-current base salary, payable in equal installments concurrent with the salary continuation payments described above.

 

Group Medical Coverage.  The Company shall, following the Executive’s timely election, provide the Executive with continued coverage for the Salary Continuation Period under the Company’s group health insurance plans in effect upon termination of Executive’s employment without Cause or for Good Reason in accordance with the provisions of the Consolidated Omnibus Budget Reconciliation Act of 1985 (“COBRA”), at no cost to Executive.

 

Restrictions on Competition after Termination.

 

Reasons for Restrictions.  Executive acknowledges that the nature of the Company’s business is such that it would be extremely difficult for Executive to honor and comply with Executive’s obligation under his or his Employee Proprietary and Inventions Agreement with the Company to keep secret and confidential the Company’s trade secrets if Executive were to become employed by or substantially interested in the business of a competitor of the Company soon following the termination of Executive’s employment with the Company, and it would also

 

 

be extremely difficult to determine in any reasonably available forum the extent to which Executive was or was not complying with Executive’s obligations under such circumstances.

 

Duration of Restriction.  In consideration for the Company’s undertakings and obligations under this Agreement, Executive agrees that during the Noncompete Term (as defined below), Executive will not directly or indirectly engage in (whether as an employee, consultant, proprietor, partner, director or otherwise), or have any ownership interest in, or participate in the financing, operation, management or control of, any person, firm, corporation or business that engages in any line of business in which the Company engages at the time of such termination, in the United States, Canada, the United Kingdom or such other countries in which the Company conducts business at the time of such termination (“Restricted Territory”).  For the avoidance of doubt, the foregoing shall not prohibit Executive from engaging in, owning an interest in, or participating in any business that processes credit card, debit card or automated teller machine transactions originated from outside of gaming establishments.  For purposes of this Agreement, the “Noncompete Term” shall be the period of two (2) years after the termination of Executive’s employment hereunder.  The parties agree that ownership of no more than 1% of the outstanding voting stock of a publicly-traded corporation or other entity shall not constitute a violation of this provision.  The parties intend that the covenants contained in this section shall be construed as a series of separate covenants, one for each county, city, state and other political subdivision of the Restricted Territory.  Except for geographic coverage, each such separate covenant shall be deemed identical in terms to the covenant contained in this section.  If, in any judicial proceeding, a court shall refuse to enforce any of the separate covenants (or any part thereof) deemed included in this section, then such unenforceable covenant (or such part) shall be deemed eliminated from this Agreement for the purpose of those proceedings to the extent necessary to permit the remaining separate covenants (or portions thereof) to be enforced by such court.  It is the intent of the parties that the covenants set forth herein be enforced to the maximum degree permitted by applicable law.  To the extent that the foregoing provisions conflict with any other non-competition covenants between the Company and Executive, the foregoing provisions shall prevail.

 

Section 4.  Restrictions on Solicitation after Termination

 

For a period of two (2) years following the termination of Executive’s employment hereunder for any reason, Executive shall not, without the prior written consent of the Company, directly or indirectly, as a sole proprietor, member of a partnership, stockholder or investor, officer or director of a corporation, or as an executive, associate, consultant, independent contractor or agent of any person, partnership, corporation or other business organization or entity other than the Company solicit or endeavor to entice away from the Company any person or entity who is, or, during the then most recent three-month period, was, employed by, or had served as an agent or key consultant of the Company, provided, however, that Executive shall not be prohibited from receiving and responding to unsolicited requests for employment or career advice from Company’s employees.

 

Miscellaneous

 

This Amendment and the Letter together contain the entire agreement between the parties pertaining to the subject matter expressly set forth herein and supersedes any and all prior and/or contemporaneous oral or written negotiations, agreements, representations, and understandings

 

 

relating to such subject matter.  Each party understands that this Amendment and the Letter are made without reliance upon any inducement, statement, promise, or representation other than those contained herein and therein, respectively.  Except as expressly set forth herein, the terms and provisions of the Letter shall remain in full force and effect, including without limitation the at-will nature of Executive’s employment with the Company, which may be terminated at the will of either the Company or Executive, with or without cause and with or without prior notice at any time.

 

This Amendment and the Letter are executed voluntarily and without any duress or undue influence on the part or behalf of the parties hereto.  Each of the parties hereto acknowledge that (i) it, he or she has read this Agreement; (ii) it, he or she has been represented in the preparation, negotiation, and execution of this Agreement by legal counsel of its, his or his own choice or that it or she has voluntarily declined to seek such counsel; (iii) it, he or she understands the terms and consequences of this Amendment and the Letter and of the releases it contains; and (iv) it or she is fully aware of the legal and binding effect of this Amendment and the Letter.

 

This Amendment and the Letter shall be construed under and governed by the laws of the State of Nevada without regard to any conflict of laws or choice of law provisions that would result in the application of the laws of any jurisdiction other than the internal laws of the State of Nevada.  This Amendment and the Letter shall be deemed to have been entered into in Las Vegas, Nevada.  If any legal or equitable action is necessary to enforce the terms of this Amendment and the Letter, such action shall be brought exclusively in the state or federal courts located within Clark County in the State of Nevada.

 

No supplement, modification, or amendment of this Amendment and the Letter shall be binding unless executed in writing by all of the parties hereto.  No waiver of any of the provisions of this Amendment and the Letter shall be binding unless in the form of a writing signed by the party against whom enforcement of the waiver is sought, and no such waiver shall operate as a waiver of any other provisions hereof (whether or not similar), nor shall such waiver constitute a continuing waiver.  Except as specifically provided herein, no failure to exercise or any delay in exercising any right or remedy hereunder shall constitute a waiver thereof.

 

If any provision (or portion thereof) of this Amendment and the Letter shall be held by a court of competent jurisdiction to be invalid, void, or otherwise unenforceable, the remaining provisions shall remain enforceable to the fullest extent permitted by law.  Furthermore, to the fullest extent possible, the provisions of Amendment and the Letter (including, without limitation, each portion of Amendment and the Letter containing any provision held to be invalid, void, or otherwise unenforceable, that is not itself invalid, void, or unenforceable) shall be construed so as to give effect to the intent manifested by the provision held invalid, void, or unenforceable.

 

Amendment and the Letter shall be binding upon and inure to the benefit of and be enforceable by the parties hereto and their respective successors, assigns, heirs, and personal and legal representatives.

 

 

Amendment and the Letter may be executed in counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument.  Facsimile counterparts shall be deemed to be originals.

 

Please indicate your acceptance of and agreement to the terms and conditions of this Amendment by signing where indicated below.

 

 

	
Very truly yours,
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
GLOBAL CASH   ACCESS, INC.
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
By:
    	
/s/ David B. Lopez
    	
 
    
	
David   B. Lopez, President
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
Agreed and accepted   this 11th day of September, 2012.
    	
 
    
	
 
    	
 
    
	
/s/ Robert A.   Myhre
    	
 
    
	
Robert   A. Myhre
    	
 
    
			

 

 

EXHIBIT A

RELEASE AND WAIVER OF CLAIMS

 

In exchange for the severance payments and other benefits to which I would not otherwise be entitled, I hereby furnish Global Cash Access Holdings, Inc., Global Cash Access, Inc. and each of their respective subsidiaries and affiliates (collectively, the “Company”) with the following release and waiver.

 

I hereby release, and forever discharge the Company, its officers, directors, agents, employees, stockholders, attorneys, successors, assigns and affiliates, of and from any and all claims, liabilities, demands, causes of action, costs, expenses, attorneys fees, damages, indemnities and obligations of every kid and nature, in law, equity, or otherwise, known and unknown, suspected and unsuspected, disclosed and undisclosed, arising at any time prior to and including the date I sign this Release with respect to any claims relating to my employment and the termination of my employment, including but not limited to:  any and all such claims and demands directly or indirectly arising out of or in any way connected with my employment with the Company or the termination of that employment; claims or demands related to salary, bonuses, commissions, stock, stock options, or any other ownership interests in the Company, vacation pay, fringe benefits, expense reimbursements, sabbatical benefits, severance benefits, or any other form of compensation; claims pursuant to any federal, state or local law or cause of action including, but not limited to, the federal Civil Rights Act of 1964, as amended; the federal Age Discrimination Act of 1990; the Delaware Fair Employment Practices Act, as amended; tort law; contract law; wrongful discharge; discrimination; harassment; fraud; emotional distress; and breach of the implied covenant of good faith and fair dealing, provided, however, that this Release shall not apply to claims or causes of action for defamation, libel, or invasion of privacy.

 

In granting the releases herein, I acknowledge that I understand that I am waiving any and all rights and benefits conferred by the provisions of Section 1542 of the Civil Code of the State of California and any similar provision of law of any other state or territory of the United States or other jurisdiction to the following effect:  “A general release does not extend to claims which the creditor does not know or suspect to exist in his favor at the time of executing the release, which if known by him must have materially affected his settlement with the debtor.”  I hereby expressly waive and relinquish all rights and benefits under that section and any law or legal principle of similar effect in any jurisdiction with respect to the release of unknown and unsuspected claims granted in this Agreement.

 

I acknowledge that, among other rights, I am waiving and releasing any rights I may have under ADEA, that this waiver and release is knowing and voluntary, and that the consideration given for this waiver and release is in addition to anything of value to which I was already entitled.  I further acknowledge that I have been advised, as required by the Older Workers Benefit Protection Act, that:  (a) the waiver and release granted herein does not relate to claims which may arise after this agreement is executed; (b) I have the right to consult with an attorney prior to executing this agreement (although I may choose voluntarily not to do so); (c) I have twenty-one (21) days from the date I receive this agreement, in which to consider this agreement (although I may choose voluntarily to execute this agreement earlier); (d) I have seven (7) days following the execution of this agreement to revoke my consent to the agreement; and (e) this agreement shall not be effective until the seven (7) day revocation period has expired.

 

 

	
Date:
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
Signature

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