Exhibit 10.7
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT (this “
Agreement ”) is
entered into this 11 day of September, 2007, between Activision
Publishing, Inc. (the “ Employer ”) and George Rose
(“ you
”).
RECITAL
The
Employer desires to employ you, and you desire to be so employed by
the Employer, on the terms and subject to the conditions set forth
in this Agreement.
AGREEMENT
NOW, THEREFORE, in consideration of the
premises and the mutual promises set forth in this Agreement, the
Employer and you hereby agree as follows:
1.
Term of Employment
(a)
The term of your employment under this Agreement (the “
Term ”) commenced
effective as of April 1, 2007 (the “ Effective Date ”) and shall end
on March 31, 2010 (the “ Expiration Date ”) or such
earlier date on which your employment is terminated under Section
10. At least six (6) months prior to the Expiration Date, you and
the Employer each agree to provide the other party notice of intent
not to continue employment following the Expiration Date.
(b)
Except as set forth in Section 12(t), upon the Expiration Date (or
such earlier date on which your employment is terminated pursuant
to Section 10) all obligations and rights under this Agreement
shall immediately lapse. If your employment continues beyond the
Expiration Date, you shall be an at-will employee whose employment
may be terminated by either of the parties to this Agreement at any
time for any reason.
2.
Compensation
(a)
Subject to the provisions of this Agreement, in full consideration
for all rights and services provided by you under this Agreement,
during the Term you shall receive the compensation set forth in
this Section 2.
(b)
Commencing on the Effective Date, you shall receive an annual base
salary (“ Base Salary
”) of $475,000.00 paid in accordance with the
Employer’s payroll policies in effect from time to time. On
each anniversary of the Effective Date during the Term, your Base
Salary shall be reviewed and may be increased, but not decreased,
by an amount determined by the Board of Directors (the “
Board ”) of
Activision, Inc., the parent company of the Employer (“
Activision ”) or the
Compensation Committee of the Board (the “ Compensation Committee ”), in its
sole and absolute discretion; provided, however, that the annual
increase shall be no less than four percent (4%) per year.
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(c)
During the Term you will be eligible to receive an annual
discretionary bonus (the “ Annual Bonus ”). Your target
Annual Bonus during the Term will be seventy five percent (75%) of
your Base Salary in effect at the time bonus criteria for the year
are established; provided , however , that the actual
amount of the Annual Bonus, if any, shall be determined by the
Compensation Committee in its sole and absolute discretion based on
the achievement of personal, financial and business objectives and
goals. The Annual Bonus will be paid at the same time bonuses are
paid to senior executives, but in no event later than June 15
th of the year following the fiscal year to which the
Annual Bonus relates. Except as otherwise set forth in this
Agreement, you must remain continuously employed by the Employer,
Activision or their subsidiaries or affiliates (collectively, the
“ Activision Group
”) through the date on which the Annual Bonus is paid to be
eligible to receive such Annual Bonus.
(d)
Subject to the approval of the Compensation Committee, the Employer
will grant to you a non-qualified stock option to purchase 240,000
shares of Activision’s common stock (the “ Options ”) and 25,000 restricted
share units which represent the conditional right to receive shares
of Activision’s common stock (the “ RSUs ”, and collectively with the
Options, the “ Equity
Awards ”).
(i)
The Options will vest ratably over three years, with one-third of
the Option vesting on March 31 st of each of 2008, 2009
and 2010 subject to your remaining employed by the Activision Group
through each vesting date.
(ii)
The RSUs will vest in full on March 31, 2010 subject to your
remaining employed by the Activision Group through such vesting
date; provided , however , that vesting of 25% of the
RSUs will occur if Activision meets or exceeds the 2008 Annual
Operating Plan operating income objectives established by the
Compensation Committee and vesting of an additional 25% of the RSUs
will occur if Activision meets or exceeds the 2009 Annual Operating
Plan operating income objectives established by the Compensation
Committee.
You
acknowledge that the Equity Award grants made pursuant to this
Section 2(e) are expressly conditioned upon approval by the
Compensation Committee, and that the Compensation Committee has
discretion to approve or disapprove the grants and/or to determine
and make modifications to the terms of the grants. The Equity
Awards shall be subject to all terms of the Activision 2003
Incentive Equity Plan (the “ Plan ”) and Activision’s
standard forms of award agreements. In the event of a conflict
between this Agreement and the terms of the Plan or award
agreements, the Plan or the award agreements, as applicable, shall
govern.
(e)
Within thirty (30) days following the date this Agreement is
executed, the Employer shall pay you a lump sum amount of $57,500,
representing the base salary you would have received had the
Agreement been executed on April 1, 2007.
(f)
The Employer agrees that it shall indemnify and hold you harmless
to the fullest extent permitted by Delaware law from and against
any and all liabilities, costs and claims, and
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all expenses actually
and reasonably incurred in connection therewith, including, without
limitation, all costs and expenses actually and reasonably incurred
by you in defense of litigation arising out of your employment
hereunder.
3.
Title; Location
During the Term, you shall serve as the Chief
Legal Officer of the Employer. Your principal place of business
shall be the Employer’s headquarters in Santa Monica,
California; provided , however , that you acknowledge
and agree that you may be required to travel from time to time for
business reasons.
4.
Duties
Upon commencement of the Term you shall report
directly to the Chief Executive Officer and shall have such duties
commensurate with your position as may be assigned to you by the
Chief Executive Officer from time to time. You are also required to
read, review and observe all of the Employer’s existing
policies, procedures, rules and regulations in effect from time to
time during the Term. You shall devote your full-time
working time to your duties hereunder, shall faithfully serve the
Activision Group, shall in all respects conform to and comply with
the lawful directions and instructions given to you in good faith
by the Board and shall use your best efforts to promote and serve
the interests of the Activision Group. Further, you shall not,
directly or indirectly, render services to any other person or
organization without the consent of Chief Executive Officer or
otherwise engage in activities that would interfere significantly
with your faithful performance of your duties hereunder;
provided , however , that you may serve on civic or
charitable boards or engage in charitable activities without
remuneration if doing so is not inconsistent with or adverse to
your employment hereunder.
5.
Expenses
To
the extent you incur necessary and reasonable travel or other
business expenses in the course of your employment, you shall be
reimbursed for such expenses, upon presentation of written
documentation in accordance with the Employer’s policies in
effect from time to time.
6.
Other Benefits
(a)
During the Term you shall be entitled to participate in all health,
welfare, retirement, pension, life insurance, disability and
similar plans, programs and arrangements generally available to
senior executives of the Employer, as amended from time to
time.
(b)
During the Term, you will be entitled to participate in all
perquisite programs generally available from time to time to senior
executives of the Employer on the terms and conditions then
prevailing under such programs.
(c)
The Employer will provide you during the Term, at the
Employer’s expense, with a supplemental term life insurance
policy with a benefit amount of $2,000,000 through a carrier of the
Employer’s choice.
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(d)
You expressly agree and acknowledge that after the Expiration Date
(or such earlier date on which your employment is terminated
pursuant to Section 10), you are entitled to no additional
benefits, except as specifically provided in this Agreement and the
benefit plans in which you participate during the Term, and subject
in each case to the terms and conditions of each such plan.
7.
Vacation and Paid Holidays
(a)
You will be entitled to paid vacation days in accordance with the
normal vacation policies of the Employer in effect
from time to time; provided , however , that in no
event shall you be entitled to less than twenty (20) paid vacation
days per year.
(b)
You shall be entitled to all paid holidays allowed by the Employer
to its full-time employees in the United States.
8.
Protection of the Employer’s Interests
(a)
Duty of Loyalty. During the Term, you will owe a “
Duty of Loyalty ” to
the Employer, which includes, but is not limited to, your not
competing in any manner, whether directly or indirectly, as a
principal, employee, agent, owner, or otherwise, with the Employer,
or any affiliate of the Employer; provided , however
, that nothing in this Section 8(a) will limit your right to
own up to five percent (5%) of any of the debt or equity securities
of any business organization that is then required to file reports
with the Securities and Exchange Commission pursuant to
Section 13 or 15(d) of the Securities Exchange Act of 1934, as
amended.
(b)
Policy Compliance. You confirm that you have read,
understand and will comply with the Employer’s policies,
procedures and rules in effect from time to time, including without
limitation, the Code of Business Conduct and Ethics and the Code of
Ethics for Senior Executive Officers, as amended from time to
time.
(c)
Property of the Employer
. All rights worldwide with respect to any and all intellectual
or other property of any nature produced, created or suggested by
you during the term of your employment or resulting from your
services which (i) relate in any manner at the time of
conception or reduction to practice to the actual or demonstrably
anticipated business of the Employer, (ii) result from or are
suggested by any task assigned to you or any work performed by you
on behalf of the Employer, or (iii) are based on any property
owned or idea conceived by the Employer, shall be deemed to be a
work made for hire and shall be the sole and exclusive property of
the Employer. You agree to execute, acknowledge and deliver to the
Employer, at the Employer’s request, such further documents,
including copyright and patent assignments, as the Employer finds
appropriate to evidence the Employer’s rights in such
property. Your agreement to assign to the Employer any of your
rights as set forth in this Section 8(c) shall not apply to
any invention that qualifies fully under the provisions of
California Labor Code Section 2870, where no equipment, supplies,
facility or trade secret information of the Employer were used and
that was developed entirely upon your own time, and that does not
relate to the Employer’s business, and that does not result
from any work performed by you for the Employer.
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(d)
Covenant Not to Shop
. During the Term, you shall not seek or negotiate for
employment with any entity or person outside of the Activision
Group. Notwithstanding the foregoing, during the final six (6)
months of the Term you may seek or negotiate employment outside of
the Activision Group upon written notice to the Employer. During
the search process you shall remain strictly subject to your
continuing obligations under this Agreement, including, without
limitation, your duty of loyalty, compliance with the
Employer’s policies and your confidentiality obligations.
(e)
Confidentiality . No
confidential or proprietary information of the Activision Group
shall be used by you or disclosed or made available by you to any
person except as required in the course of your employment, and
upon the termination of your employment (or at any time on the
Employer’s request), you shall return to the Employer all
such information that exists, whether in electronic, written, or
other form (and all copies thereof) under your control. Without
limiting the generality of the foregoing, you acknowledge signing
and delivering to the Employer the Activision Employee Proprietary
Information Agreement attached as Exhibit A hereto (the
“ Proprietary Information
Agreement ”) as of the Effective Date and you agree
that all terms and conditions contained in such agreement, and all
of your obligations and commitments provided for in such agreement,
shall be deemed, and hereby are, incorporated into this Agreement
as if set forth in full herein. You also acknowledge that upon
termination of your employment for any reason whatsoever (or at any
time on the Employer’s request), you will promptly deliver to
the Employer or surrender to the Employer’s representative
all property of the Activision Group, including without limitation,
all documents and other materials (and all copies thereof) relating
to the Activision Group’s business, all identification and
access cards, all contact lists and third party business cards
however and wherever preserved, and any equipment provided by the
Activision Group, including computers, telephones, personal digital
assistants, memory cards and similar devices which you possess or
have in your custody or under your control. The provisions of this
Section 8(e) shall survive the expiration or earlier termination of
this Agreement.
(f)
Covenant Not to Solicit.
(i)
During your employment, you shall not, either alone or jointly,
with or on behalf of others, directly or indirectly, whether as
principal, partner, agent, shareholder, director, employee,
consultant or otherwise: (a) offer employment to, or directly
or indirectly solicit the employment or engagement of, or otherwise
entice away from the employment of the Activision Group, either for
your own account or for any other person, firm or company, any
person employed by the Activision Group, whether or not such person
would commit any breach of a contract by reason of his or her
leaving the service of the Activision Group; or (b) directly
or indirectly solicit, induce or entice any client, customer,
contractor, licensor, agent, partner or other business relationship
of the Activision Group to terminate, discontinue, renegotiate or
otherwise cease or modify its relationship with the Employer or its
affiliates.
(ii)
For a period of two (2) years following the Expiration Date (or
such earlier date on which your employment is terminated pursuant
to Section
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10)
for any reason whatsoever, you shall not, either alone or jointly,
with or on behalf of others, directly or indirectly, whether as
principal, partner, agent, shareholder, director, employee,
consultant or otherwise, solicit the employment or engagement of,
either for your own account or for any other person, firm or
company, any person employed by the Activision Group, whether or
not such person would commit any breach of a contract by reason of
his or her leaving the service of the Employer or its
affiliates.
(iii)
At all times following the Expiration Date (or such earlier date on
which your employment is terminated pursuant to Section 10) for any
reason whatsoever, you shall not use the confidential, trade secret
information of the Activision Group or any other unlawful means to
directly or indirectly solicit, induce or entice any client,
customer, contractor, licensor, agent, partner or other business
relationship of the Activision Group to terminate, discontinue,
renegotiate or otherwise cease or modify its relationship with the
Employer or its affiliates.
(iv)
You expressly acknowledge and agree that the restrictions contained
in this Section 8(f) are reasonably tailored to protect the
Activision Group’s confidential information and trade
secrets, and are reasonable in all circumstances in scope, duration
and all other respects. It is expressly agreed by the parties that
if for any reason whatsoever any one or more of such restrictions
shall (either taken by itself or themselves together) be adjudged
to go beyond what is legally permissible for the protection of the
legitimate interests of the Activision Group, that the prohibitions
shall be in effect and upheld to the fullest extent permissible
under applicable laws.
9.
Disability
(a)
If, during the Term, you become “Disabled”, you shall
receive payment of an amount equal to three (3) times the Base
Salary in effect at the time of your Disability, determined in
accordance with Section 2(b) ; provided ,
however , that this amount shall be reduced by any
disability payments you receive under any Employer-sponsored plan.
The payment shall be made in a lump sum thirty (30) days following
the determination of your Disability.
(b)
For purposes of this Agreement, “ Disability ” shall have the
meaning set forth under Section 409A (“ Section 409A ”) of the Internal
Revenue Code of 1986, as amended and the rules and regulations
promulgated thereunder (the “ Code ”). The existence of a
Disability under Section 9(a) shall be determined by a physician
mutually agreed upon by you and the Employer. If you and the
Employer are unable to agree on such a physician, you and the
Employer shall each appoint one physician and those two physicians
shall appoint a third physician who shall make the determination of
whether you have a Disability. You shall cooperate and make
yourself available for any medical examination requested by the
Employer with respect to any determination of your Disability
within 10 days of such a request.
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(c)
Nothing in this Section 9 shall reduce any right you may otherwise
have to receive any disability benefits under any
Employer-sponsored disability plan.
10.
Termination of Employment
(a)
Resignation by Employee. You p
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