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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of report (Date of earliest event reported):
March 5, 2020
ACTIVISION BLIZZARD, INC.
(Exact Name of Registrant as Specified in Charter)
Delaware |
|
001-15839 |
|
95-4803544 |
(State or Other
Jurisdiction of
Incorporation) |
|
(Commission File
Number) |
|
(IRS Employer
Identification No.) |
3100 Ocean Park Boulevard,
Santa Monica,
CA |
|
90405 |
(Address of Principal
Executive
Offices) |
|
(Zip Code) |
Registrant’s telephone number, including area code:
(310)
255-2000
(Former Name or Former Address, if Changed Since Last Report)
Title of Each Class |
|
Trading Symbol |
|
Name of Each Exchange
on Which Registered |
Common Stock, par value $.000001 per share |
|
ATVI |
|
The Nasdaq Global Select Market |
Check the appropriate box below if the Form 8-K filing is
intended to simultaneously satisfy the filing obligation of the
registrant under any of the following provisions (see
General Instruction A.2. below):
¨ |
Written communications
pursuant to Rule 425 under the Securities Act (17 CFR
230.425) |
¨ |
Soliciting material
pursuant to Rule 14a-12 under the Exchange Act (17 CFR
240.14a-12) |
¨ |
Pre-commencement
communications pursuant to Rule 14d-2(b) under the
Exchange Act (17 CFR 240.14d-2(b)) |
¨ |
Pre-commencement
communications pursuant to Rule 13e-4(c) under the
Exchange Act (17 CFR 240.13e-4(c)) |
Indicate by check mark whether the registrant is an emerging growth
company as defined in Rule 405 of the Securities Act of 1933
(§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange
Act of 1934 (§240.12b-2 of this chapter).
Emerging
growth company ¨
If an
emerging growth company, indicate by check mark if the registrant
has elected not to use the extended transition period for complying
with any new or revised financial accounting standards provided
pursuant to Section 13(a) of the Exchange
Act. ¨
Item 5.02. Departure of Directors or Certain Officers; Election
of Directors; Appointment of Certain Officers; Compensatory
Arrangements of Certain Officers.
On March 5, 2020, the Board of Directors of Activision Blizzard,
Inc. (the “Company”) appointed Daniel Alegre as its President and
Chief Operating Officer, effective April 7, 2020. Mr. Alegre will
assume the title and duties of Collister Johnson, the Company’s
current President and Chief Operating Officer, whose employment
will continue until June 30, 2020, when the term of his employment
under his employment agreement ends.
Mr. Alegre, 51, served as President, Retail and Shopping for
Google, Inc., a multinational technology company, from August 2017
until March 2020. From 2004 to August 2017, Mr. Alegre held various
other roles at Google, including President, Global Partnerships and
Alliances, President, Japan and Asia Pacific, overseeing all
business operations in the region, and Vice President of Google’s
Latin American Sales and Asia Pacific Business Development. Prior
to joining Google, Mr. Alegre, who is originally from Mexico,
served as Vice President of Business Development for e-commerce at
Bertelsmann AG, a German multinational mass media corporation,
spearheading partnerships and acquisitions, and as Vice President
of BMG Music, a subsidiary of Bertelsmann, in Latin America. Mr.
Alegre holds a B.A. degree from Princeton University’s Woodrow
Wilson School and both an M.B.A degree and J.D. degree from Harvard
University.
There are no family relationships between Mr. Alegre and any
director or executive officer of the Company. Mr. Alegre has not
engaged in any related person transaction (as defined in Item
404(a) of Regulation S-K) with the Company.
Mr. Alegre’s term of employment under his agreement begins on April
7, 2020 and continues through March 31, 2022 (subject to the
Company’s right to extend for an additional year). The agreement
provides for: a minimum annual base salary of $1,350,000;
eligibility to receive annual discretionary bonuses targeted at
100% of base salary; eligibility to receive an additional bonus of
up to 100% of base salary for any year in which earnings per share
growth equals or exceeds 20% of the higher of the previous year’s
approved annual operating plan goal and actual results (and
eligibility to receive a portion of that additional bonus if such
earnings per share growth is at least 10%); participation in other
benefits generally available to executives; a Company-paid
supplemental life insurance policy for each of Mr. Alegre and his
wife, in each case with a face amount of $5 million; and a one-time
payment of $2.5 million as a long-term contract inducement, the
entire amount of which is subject to “clawback” if Mr. Alegre
leaves the Company’s employment in certain situations prior to the
first anniversary of his start date and half of which is subject to
“clawback” if Mr. Alegre leaves the Company’s employment in those
situations prior to the second anniversary of his start date (but
after the first anniversary of this start date).
Mr. Alegre will initially be granted equity consisting of: (1)
stock options ($5.0 million grant value), one-third of which will
vest on March 30, 2022, if a certain level of the operating income
objective for the Company set forth in its annual operating plan
for 2020 is achieved, one-third of which will vest on March 30,
2022, if a certain level of the operating income objective for the
Company set forth in its annual operating plan for 2021 is
achieved, and one-third of which will vest on March 30, 2023, if a
certain level of the operating income objective for the Company set
forth in its annual operating plan for 2022 is achieved; (2)
performance-vesting restricted share units ($7.0 million grant
value at target, 250% of target at maximum performance), one-third
of which will vest on each of March 30, 2021, 2022 and 2023, in
each case based upon the level of achievement of the operating
income objective for the Company set forth in its annual operating
plan for the prior year; (3) performance-vesting restricted share
units ($4.0 million grant value at target, 200% of target at
maximum performance), one-third of which will vest on each of March
30, 2021, 2022 and 2023, in each case based upon the level of
achievement of the earnings per share objective for the Company set
forth in its annual operating plan for the prior year; (4)
performance-vesting restricted share units ($2.0 million grant
value at target, 150% of performance at maximum performance),
one-half of which will vest on each of March 30, 2022 and 2023, in
each case by reference to the difference between our cumulative
total shareholder return and the rate of return of the S&P
Total Return Index for a specified period; and (5)
performance-vesting restricted share units ($3.0 million grant
value at target), which will vest on January 15, 2021 subject to
the satisfaction of strategic objectives to be established by the
Company’s Chief Executive Officer. Mr. Alegre is also eligible to
receive: (1) additional annual grants of performance-vesting
restricted share units with vesting based on year-over-year
earnings per share growth compared to the higher of the previous
year’s approved annual operating plan goal and actual results of at
least 10% and target performance of 20% growth, with a target value
of $2.5 million per year; and (2) additional annual grants of
performance-vesting restricted share units with vesting based on
the level of achievement of the operating income objective set
forth in the Company’s three-year long-range strategic plans, with
a target value of $3.0 million per year.
If the agreement is terminated by
reason of Mr. Alegre’s death, his heirs or estate will be entitled
to receive, in addition to any amounts earned or accrued but
unpaid, a lump sum payment of two times his base salary, and any
vested options will generally remain exercisable for one year after
his death. If the agreement is terminated by the Company without
“cause”, by Mr. Alegre due to the relocation of his principal place
of business without his consent, or as a result of his disability,
he is entitled to receive, in addition to any amounts earned or
accrued but unpaid, salary continuation through the expiration date
of the agreement, a pro rata annual bonus with respect to the
current year and, in the case of his termination due to
disability, any vested options will generally remain exercisable
for one year after such termination. In addition, if (1) the
agreement is terminated for any of the above-referenced reasons
after the end of 2020 or 2021 (but, in either case, before March
30, 2022) or after the end of 2022 (but before March 30, 2023), and
(2) the Company’s operating income for the applicable year (i.e.,
2020, 2021 and/or 2022) is at least 90% of the objective for the
Company set forth in its annual operating plan, then Mr. Alegre (or
his heirs or estate) will receive an additional severance payment
of $1,666,667 (which amounts are cumulative to the extent the
conditions apply, so that a termination prior to March 30, 2022
could result in a payment of $3,333,334). Further, if the agreement
is terminated for any of the above-referenced reasons and such
termination occurs after the completion of a performance period for
any tranche of his initial grant of equity awards for which the
applicable performance objective has been achieved but prior to the
vesting date for such tranche, then an amount calculated in
accordance with the agreement will be paid by the Company in
consideration of the termination of the performance award prior to
its vesting.
Certain payments contemplated by the agreement that would
constitute “parachute payments” within the meaning of Section 280G
of the Internal Revenue Code are subject to reduction.
A copy of Mr. Alegre’s employment agreement is attached as an
exhibit hereto and is incorporated herein by reference. The
description of the agreement provided above does not purport to be
complete and is qualified in its entirety by reference to the full
text of such agreement.
Item 9.01. Financial Statements and Exhibits.
(d) Exhibits
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of
1934, the registrant has duly caused this report to be signed on
its behalf by the undersigned hereunto duly authorized.
Date: March 11, 2020
|
ACTIVISION
BLIZZARD, INC. |
|
|
|
By: |
/s/ Chris B.
Walther |
|
|
Chris B.
Walther |
|
|
Chief
Legal Officer |
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