Activision 2010 Annual Report Download - page 75

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On January 18, 2011, the court granted the Company’s motion to amend its cross complaint against West and
Zampella to add allegations with respect to them and to add Electronic Arts, Inc. as a party. On January 26, 2011, Electronic
Arts, Inc. filed a demurrer with respect to the claims asserted against it in the amended cross complaint. On January 31, 2011,
the case was transferred to the complex division, staying the case pending a status hearing with the new judge. A status
conference is scheduled for March 16, 2011.
The Company has accrued and will continue to accrue appropriate amounts related to bonuses and other monies
allegedly owed in connection with this matter. The Company does not expect this lawsuit to have a material impact on the
Company.
In addition, we are party to other routine claims and suits brought by us and against us in the ordinary course of
business, including disputes arising over the ownership of intellectual property rights, contractual claims, employment laws,
regulations and relationships, and collection matters. In the opinion of management, after consultation with legal counsel, the
outcome of such routine claims and lawsuits will not have a material adverse effect on our business, financial condition,
results of operations, or liquidity.
19. Stock-Based Compensation
Activision Blizzard Equity Incentive Plans
The Activision Blizzard Inc. 2008 Incentive Plan was adopted by our Board on July 28, 2008, approved by our
stockholders and amended and restated by our Board on September 24, 2008, further amended and restated by our Board
with stockholder approval on June 3, 2009, further amended and restated by the Compensation Committee of our Board with
stockholder approval on December 17, 2009, and further amended and restated by our Board and the Compensation
Committee of our Board with shareholder approval on June 3, 2010 (as so amended and restated, the “2008 Plan”). The 2008
Plan authorizes the Compensation Committee of our Board of Directors to provide stock-based compensation in the form of
stock options, share appreciation rights, restricted stock, restricted stock units, performance shares, performance units and
other performance- or value-based awards structured by the Compensation Committee within parameters set forth in the 2008
Plan, including custom awards that are denominated or payable in, valued in whole or in part by reference to, or otherwise
based on or related to, shares of our common stock, or factors that may influence the value of our common stock or that are
valued based on our performance or the performance of any of our subsidiaries or business units or other factors designated
by the Compensation Committee, as well as incentive bonuses, for the purpose of providing incentives and rewards for
performance to the directors, officers, and employees of, and consultants to, Activision Blizzard and its subsidiaries.
While the Compensation Committee has broad discretion to create equity incentives, our stock-based compensation
program for the most part currently utilizes a combination of options and restricted stock units. Options have time-based
vesting schedules, generally vesting annually over a period of three to five years, and all options expire ten years from the
grant date. Restricted stock units either have time-based vesting schedules, generally vesting in their entirety on an
anniversary of the date of grant, or vesting annually over a period of three to five years, or vest only if certain performance
measures are met. In addition, under the terms of the 2008 Plan, the exercise price for the options must be equal to or greater
than the closing price per share of our common stock on the date the award is granted, as reported on NASDAQ.
Upon the effective date of the 2008 Plan, we ceased to make awards under the following equity incentive plans
(collectively, the “Prior Plans”), although such plans will remain in effect and continue to govern outstanding awards:
(i) Activision, Inc. 1998 Incentive Plan, as amended; (ii) Activision, Inc. 1999 Incentive Plan, as amended;
(iii) Activision, Inc. 2001 Incentive Plan, as amended; (iv) Activision, Inc. 2002 Incentive Plan, as amended;
(v) Activision, Inc. 2002 Executive Incentive Plan, as amended; (vi) Activision, Inc. 2002 Studio Employee Retention
Incentive Plan, as amended; (vii) Activision, Inc. 2003 Incentive Plan, as amended; and (viii) Activision, Inc. 2007 Incentive
Plan.
Pursuant to the 2008 Plan as adopted, 30 million shares of our common stock were made available for issuance. The
2008 plan was amended with stockholder approval on December 17, 2009 to increase the number of shares of our common
stock available for issuance thereunder by 14 million and was further amended with stockholder approval on June 3, 2010 to
increase the number of shares of our common stock available for issuance thereunder by 56 million. The number of shares of
our common stock reserved for issuance under the 2008 Plan may be further increased from time to time by: (i) the number
of shares relating to awards outstanding under any Prior Plan that: (a) expire, or are forfeited, terminated or cancelled,
without the issuance of shares; (b) are settled in cash in lieu of shares; or (c) are exchanged, prior to the issuance of shares of
our common stock, for awards not involving our common stock; and (ii) if the exercise price of any option outstanding under