ACTIVISION BLIZZARD,INC. (NASDAQ:ATVI) Files An 8-K Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers

Section 6(a) of the Employment Agreement provides that Mr.
Kotick will be granted future equity incentive awards for each
of the 2017, 2018 and 2019 fiscal years. The target value on
the date of grant of each such award will be determined by the
Compensation Committee after taking into account the Companys
and Mr. Koticks performance, the Companys applicable peer
companies, any relevant changes in the business and market
dynamics relevant to the Company, the Companys projected
performance relative to its long-term business plan and any
other factors the Compensation Committee determines relevant,
but in no event will the value be equal to not less than the
greatest of (1) the 50th percentile of the Companys
then-applicable group of peer companies; (2) with respect to
the 2017 long-term incentive award, an amount that bears the
same general relationship as the grant value of the 2016
Performance Share Unit Award has to the Companys group of peer
companies long-term incentive grant values; or (3) with respect
to long-term incentive awards in years after 2016, the grant
date value of the annual equity awards granted to Mr. Kotick in
the immediately preceding fiscal year. The Employment Agreement
provides that the form, amount and terms and conditions of
these future equity awards will be determined by the
Compensation Committee in its discretion after consultation
with Mr. Kotick.

In addition, the Employment Agreement provides that on or about
March1, 2021, Mr.Kotick will be paid, subject to performance
and continued employment, an incentive award (the 2020
Long-Term Performance Grant) having a grant date value (2020
Long Term Performance Grant Target Value) determined by the
Compensation Committee in its discretion after consultation
with Mr.Kotick according to the valuation criteria applicable
to long-term grant values described in Section6(a)of the
Employment Agreement, and a maximum aggregate value at the date
of payment (the Maximum 2020 Long-Term Performance Grant Value)
of 500% of the 2020 Long-Term Performance Grant Target Value.
The 2020 Long-Term Performance Grant may be paid in shares of
Company common stock or cash, as determined by the Compensation
Committee. Except as noted following the table below, the share
or cash value that shall be paid to Mr.Kotick shall be zero if
the Companys annualized total shareholder return (TSR) for the
period commencing January1, 2017 and ending December31, 2020
(the 2020 Long-Term Performance Grant Measurement Period) is
less than six percent. In the event that the Companys compound
annual growth rate (CAGR) for TSR during the 2020 Long-Term
Performance Grant Measurement Period is six percent or greater,
the share value or cash value that shall be paid shall be
determined as a percentage of the 2020 Long-Term Performance
Grant Target Value in accordance with the following:

If CAGR for TSR during the 2020 Long-Term Performance Grant
Measurement Period is 25% or more, the payment as a percentage
of the 2020 Long-Term Performance Grant Target Value will be
the Maximum 2020 Long-Term Performance Grant Value.

The Employment Agreement provides for payments to Mr.Kotick to
the 2020 Long-Term Performance Grant if the Companys annualized
TSR for the 2020 Long-Term Performance Grant Measurement Period
is less than six percent but equals or exceeds the median total
shareholder return of the companies listed in the Standard
Poors 500 Index for the 2020 Long-Term Performance Grant
Measurement Period. The amounts payable in this event range
from 90% to 120% of the 2020 Long-Term Performance Grant Target
Value depending on how the Companys TSR compares to the median
total shareholder return of the companies listed in the
Standard Poors 500 Index for the 2020 Long-Term Performance
Grant Measurement Period, but shall be limited to the 2020
Long-Term Performance Grant Target Value if the Companys
annualized TSR is negative during the 2020 Long-Term
Performance Grant Measurement Period. For all purposes,
straight-line interpolation will apply to performance levels
between the levels set forth in this paragraph.

to the Employment Agreement, Mr.Kotick will also be granted an
incentive award (the 2021 Long-Term Performance Grant) having a
grant date value determined by the Compensation Committee in
its discretion after consultation with Mr.Kotick according to
the valuation criteria applicable to long-term grant values
described in Section6(a), but based on an assumed increase in
the long-term incentive values among companies in the Companys
general industry by applying a multiple of 1.44 to the grant
date value of Mr.Koticks 2017 long-term incentive award (the
2021 Long-Term Performance Grant Value). The maximum share
value or cash value under the 2021 Long-Term Performance Grant
will be 1.5 times the 2021 Long-Term Performance Grant Value
(the Maximum 2021 Long-Term Performance Grant Value). Except as
otherwise provided in the Employment Agreement, the 2021
Long-Term Performance Grant will be paid in fiscal year 2022.
The amount payable under the 2021 Long-Term Performance Grant
will, except as provided in the Employment Agreement, be based
on the Companys cumulative annual operating income for the
period commencing on January1, 2017 and ending with December31,
2021 (the Cumulative OI) and shall vest on March31, 2022 if,
and only if, the Compensation Committee determines that the
Cumulative Operating Income is 90% or more of the sum of the
2017 through 2021 annual operating plan operating income
objectives, with such operating income objectives for purposes
of the 2021 Long-Term Performance Grant to be the same as the
2017 through 2018 annual operating plan OI Objectives
applicable to Mr.Koticks 2016 Performance Share Unit award, and
to be determined by the Compensation Committee in its
discretion after consultation with Mr.Kotick for each of 2019,
2020 and 2021 (collectively, the Cumulative OI Objectives). If
the Cumulative OI falls at any point between 90% and 50% of the
Cumulative OI Objectives, the share or cash value that will be
received by Mr.Kotick with regard to the 2021 Long-Term
Performance Grant on the applicable vesting date shall be equal
to the 2021 Long-Term Performance Grant Value. If the
Cumulative OI is 125% of the Cumulative OI Objectives, the
share or cash value that Mr.Kotick will receive with regard to
the 2021 Long-Term Performance Grant on the applicable vesting
date will be equal to the Maximum Long-Term Performance Grant
Value. If the Cumulative OI is greater than 50% but less than
125% of the Cumulative OI Objectives, the share or cash value
that will be received with regard to the 2021 Long-Term
Performance Grant on the applicable vesting date shall be
determined based on straight line interpolation between 50% of
the 2021 Long-Term Performance Grant Value and the Maximum
Long-Term Performance Grant Value. Notwithstanding the
foregoing, the Compensation Committee in its discretion may
determine, following consultation with Mr.Kotick, that the 2021
Long-Term Performance Grant shall vest based on a five year
operating income operating plan approved by the Compensation
Committee rather than the foregoing criteria.

In addition, if the Company consummates (and the Compensation
Committee certifies that the Company has consummated), a
Transformative Transaction (as defined in the Employment
Agreement, and as determined in the discretion of the
Compensation Committee) during the term of Mr.Koticks
employment while he is the Chief Executive Officer of the
Company, Mr.Kotick will receive an award in shares or cash
equal to between one hundred percent (50%) and one hundred
fifty percent (150%) of the 2021 Long-Term Performance Grant
Value, as determined in accordance with the Employment
Agreement, and dependent upon the accretive value added to the
Companys market capitalization, as determined by the
Compensation Committee.

The Employment Agreement provides that, in the event that at
any time prior to December31, 2021 the closing trading price of
a share of the Companys common stock equals or exceeds two
times the average closing price of the Companys common stock as
determined during the period from October1, 2016 to December31,
2016, subject to certain adjustments, and remains at or above
that level for at least 90 consecutive trading days (the
Shareholder Value Creation Date), (A)any of Mr.Koticks then
outstanding equity compensation granted under Section6(a)of the
Employment Agreement will become vested with respect to 50% of
the shares subject thereto (with the number of shares subject
to performance based awards determined assuming attainment of
the maximum level of performance); (B)a payment in shares or
cash (as determined by the Compensation Committee) equal to the
grant date value (as determined by the Compensation Committee
in its discretion after consultation with Mr.Kotick) of any
annual equity grants remaining to be made to Section6(a)shall
be made 120 days after the Shareholder Value Creation Date; and
(C)the 2021 Long Term Performance Grant will be paid 120 days
after the Shareholder Value Creation Date, with the amount
payable to be no less than 1.5 times the 2021 Long Term
Performance Grant Value.

to the Employment Agreement, Mr.Kotick will also be eligible to
participate in all health, welfare, pension, life insurance,
disability and similar plans, programs and arrangements
generally available to the Companys U.S.-based senior executive
group. In addition, through March15, 2022, the Company will
reimburse Mr.Kotick for the cost of maintaining the life
insurance policy in effect to Mr.Koticks prior employment
agreement. Commencing on March16, 2022 and continuing until the
tenth anniversary of the effective date of the Employment
Agreement, the Company will reimburse Mr.Kotick up to a maximum
of $80,000 per year for the cost of maintaining his
then-existing life insurance policies. The Company will pay
reasonable expenses related to Mr.Koticks use of non-commercial
transportation services for business-related travel, including
use of transportation and aviation services provided by Cove
Aviation Partners, LLC, a FAA certified charter operator
indirectly owned and managed by Mr.Kotick, as previously
approved by the Companys Audit Committee.

In the event of a termination of Mr.Koticks employment as a
result of Mr.Koticks termination for Cause or Mr.Koticks
resignation other than for Good Reason (each as defined in the
Employment Agreement), the Company will pay to Mr.Kotick (i)his
annual base salary through the date of such termination, any
earned but unpaid annual bonus due to him, and any
reimbursement due to him to Section4 of the Employment
Agreement (the Accrued Obligations) and Mr.Kotick will not be
entitled to any additional severance payments.

In the event of a termination of Mr.Koticks employment as a
result of his death or disability, the Company will pay to
Mr.Kotick or his beneficiaries (as applicable) (i) the Accrued
Obligations; (ii)an amount equal to the annual bonus earned by
Mr.Kotick for the immediately preceding fiscal year pro rated
for the number of days he worked during the fiscal year (Pro
Rata Annual Bonus); (iii)in the case of termination due to
disability, an amount equal to one times his base salary;
(iv)continuation of health/medical coverage for Mr.Kotick and
his spouse and minor children on a non-taxable basis for two
years; (v)immediate vesting of all Company equity or
equity-based awards with time-based vesting, and all
outstanding options to purchase Company stock shall remain
exercisable until the earlier of five years from the
termination date or the original expiration date of the
options; and (vi)all outstanding Company equity or equity-based
awards with performance-based vesting, the 2020 Long-Term
Performance Grant and the 2021 Long-Term Performance Grant
(together, the Performance-Based Awards) will remain
outstanding and become vested based on the actual attainment of
such awards performance targets as if Mr.Kotick were still
employed through the time of vesting.

In the event Mr.Koticks employment is terminated by the Company
without Cause or he resigns his employment for Good Reason,
other than during the 12-month period following a Change of
Control (as defined in the Employment Agreement), then
conditioned on Mr.Koticks execution of a release of any claims
against the Company, he will receive (i)the Accrued
Obligations; (ii)an amount equal to the annual bonus Mr.Kotick
earns for the fiscal year in which the termination occurs,
pro-rated for the number of days he worked during the fiscal
year (the Current Pro Rata Annual Bonus); (iii)an amount equal
to two times his base salary and target value of his 2016
annual bonus; (iv)continuation of health/medical coverage for
Mr.Kotick and his spouse and minor children on a non-taxable
basis for two years; (v)immediate vesting of all Company equity
or equity-based awards with time-based vesting, and all
outstanding options to purchase Company stock will remain
exercisable until the earlier of five years from the
termination date or the original expiration date of the
options; and (vi)all Performance-Based Awards will remain
outstanding and become vested based on the actual attainment of
such awards performance targets as if Mr.Kotick were still
employed through the time of vesting.

If Mr.Koticks employment is terminated during the 12-month
period following a Change of Control by the Company without
Cause, or by Mr.Kotick for Good Reason, he will be entitled to
(i)the Accrued Obligations; (ii)the Current Pro Rata Annual
Bonus; (iii)an amount equal to three times his base salary and
target value of his 2016 annual bonus; (iv)continuation of
health/medical coverage for Mr.Kotick and his spouse and minor
children on a non-taxable basis for two years; (v)immediate
vesting of all Company equity or equity-based awards with
time-based vesting, and all outstanding options to purchase
Company stock will remain exercisable until the earlier of five
years from the termination date or the original expiration date
of the options; and (vi)all Performance-Based Awards will
remain outstanding and become vested based on the actual
attainment of such awards performance targets as if Mr.Kotick
were still employed through the time of vesting. In addition,
all of Mr.Koticks options will remain exercisable until their
original expiration date, and Mr.Kotick will immediately vest
in and be paid the 2016 Performance Share Units, the 2020 Long
Term Performance Grant and the 2021 Long-Term Performance
Grant, based on the greater of (x)target performance and
(y)actual performance as determined by the Compensation
Committee based on the Compensation Committees assessment of
projected performance through the end of each applicable
performance period.

Mr.Kotick is subject to the Companys proprietary information
agreement. In addition, during the term of the Employment
Agreement and for a period of two years thereafter, Mr.Kotick
will be prevented from interfering with the relationship
between the Company or its subsidiaries or affiliates and their
officers and employees, from soliciting such officers and
employees, and from utilizing confidential information to
solicit customers, employees and other parties with business
relationships with the Company. In addition, Mr.Kotick shall
not, during the term of the Employment Agreement engage in any
competitive business, as defined in the agreement.

The foregoing description is not a complete description of the
Employment Agreement and is qualified in its entirety by
reference to the full text of the Employment Agreement, a copy
of which is attached hereto as Exhibit10.1 and incorporated by
reference in this Item 5.02.

2016 Long Term Performance Share Grant

As referenced above, on November22, 2016, the Company granted
Mr.Kotick an award of performance share units (the 2016
Performance Share Units) under the Companys 2014 Incentive Plan
with a target value of $22,500,000 and a maximum value of
$56,250,000. Assuming target performance, the number of shares
Mr.Kotick would receive upon the vesting of the 2016
Performance Share Units is 605,327. Assuming maximum
performance is achieved, the number of shares Mr.Kotick would
receive upon the vesting of the 2016 Performance Share Units is
1,513,317. The maximum number of shares that can be awarded to
the 2016 Performance Share Units will be funded, subject to the
Compensation Committees negative discretion, but not below
specified amounts, if, and only if, the Compensation Committee
determines that the Company has met or exceeded the cumulative
earnings per share target for the fourth quarter of the
Companys 2016 fiscal year and the Companys 2017 fiscal year, as
set forth in the applicable documents. Thereafter, the 2016
Performance Share Units will vest on March31, 2019 with the
number of shares of Company common stock determined in three
tranches based on the achievement of specified annual operating
plan OI objectives established by the Board for each of 2016,
2017 and 2018, provided, however in the event the earnings per
share target set forth above is satisfied, then at least 50% of
the of the target 2016 Performance Share Units will become
vested.

The 2016 Long-Term Performance Share Grant has been made to the
form of award agreement attached hereto as Exhibit10.2. The
foregoing description is qualified in its entirety by reference
to the full text of the form of award agreement, a copy of
which is attached hereto and incorporated by reference in this
Item 5.02.

Item 9.01. Financial Statements and Exhibits.

(d) Exhibits

10.1 Employment Agreement, dated November22, 2016, between
Robert A. Kotick and the Company

10.2 Formof Notice of Performance Share Unit Award to Robert A.
Kotick