Activision Blizzard, Inc
Total Page:16
File Type:pdf, Size:1020Kb
UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 SCHEDULE 14A Proxy Statement Pursuant to Section 14(a) of the Securities Exchange Act of 1934 (Amendment No. ) Filed by the Registrant Filed by a Party other than the Registrant Check the appropriate box: Preliminary Proxy Statement CONFIDENTIAL, FOR USE OF THE COMMISSION ONLY (AS PERMITTED BY RULE 14a-6(e)(2)) Definitive Proxy Statement Definitive Additional Materials Soliciting Material Pursuant to §240.14a-12 ACTIVISION BLIZZARD, INC. (Name of Registrant as Specified In Its Charter) (Name of Person(s) Filing Proxy Statement, if other than the Registrant) Payment of Filing Fee (Check the appropriate box): No fee required. Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11. (1) Title of each class of securities to which transaction applies: (2) Aggregate number of securities to which transaction applies: (3) Per unit price or other underlying value of transaction computed pursuant to Exchange Act Rule 0-11 (set forth the amount on which the filing fee is calculated and state how it was determined): (4) Proposed maximum aggregate value of transaction: (5) Total fee paid: 3100 Ocean Park Boulevard Santa Monica, California 90405 Dear Fellow Stockholders: I cordially invite you to join me and Activision Blizzard, Inc.’s Board of Directors at our 2013 Annual Meeting of Stockholders. This proxy statement contains information about the meeting and will serve as your guide to the matters on which you will be asked to vote. Your vote is very important to us and to our business and it is important that your shares be represented at the annual meeting. Whether or not you plan to attend the meeting, I encourage you to promptly vote your shares by proxy by following the instructions beginning on page 6 of this proxy statement. If you are able to attend the meeting and wish to vote in person, you may withdraw your proxy at that time. We think that the communication, participation and input of our stockholders are essential to Activision’s continued success. This meeting is an opportunity for you to find out more about developments at the Company and, more importantly, to express your opinions and play a part in Activision’s future, regardless of the number of shares you own. Thank you for your continued support of Activision Blizzard. I look forward to seeing you at the meeting. Sincerely, Robert A. Kotick President and Chief Executive Officer April 26, 2013 The proxy statement and our 2012 annual report to stockholders are each available at: http://www.cstproxy.com/activision/2013 Table of Contents NOTICE 3 PROXY SUMMARY 4 GENERAL 6 PROCEDURAL MATTERS 6 PROPOSAL 1 Election of Directors 10 EQUITY COMPENSATION PLAN INFORMATION 14 SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS, OFFICERS AND DIRECTORS 15 CORPORATE GOVERNANCE MATTERS 17 EXECUTIVE OFFICERS 25 PROPOSAL 2 Advisory Vote to Approve the Company’s Executive Compensation 27 EXECUTIVE COMPENSATION 28 Compensation Discussion and Analysis 28 DIRECTOR COMPENSATION 65 CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS 69 PROPOSAL 3 Ratification of Appointment of Independent Registered Public Accounting Firm 74 AUDIT-RELATED MATTERS 75 SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE 76 DIRECTOR NOMINATIONS AND OTHER STOCKHOLDER PROPOSALS 77 AVAILABILITY OF PROXY MATERIALS ON THE INTERNET 79 OTHER MATTERS 80 Appendix A Reconciliation tables A-1 3100 Ocean Park Boulevard Santa Monica, California 90405 Notice of 2013 Annual Meeting of Stockholders Thursday, June 6, 2013 9:00 a.m. 3200 Ocean Park Boulevard, Santa Monica, California 90405 The Annual Meeting of Stockholders of Activision Blizzard, Inc. (the “Company”) will be held at the Equity Office facilities at 3200 Ocean Park Boulevard, Santa Monica, California 90405 on Thursday, June 6, 2013, at 9:00 a.m., Pacific Daylight Time. The purposes of this year’s annual meeting are to: 1. elect 11 directors for a one-year term; 2. request advisory approval of our executive compensation; and 3. ratify the appointment of PricewaterhouseCoopers LLP as our independent registered public accounting firm for 2013. The Activision Blizzard, Inc. Board of Directors has fixed April 8, 2013 as the record date for determining the stockholders entitled to receive notice of, and to vote at, the annual meeting. By Order of the Board of Directors Jeffrey A. Brown Corporate Secretary April 26, 2013 Back to Contents Proxy Summary This summary highlights information contained elsewhere in this proxy statement. This summary does not contain all of the information that you should consider and you should read the entire proxy statement before voting. For more complete information regarding the Company’s 2012 performance, please review the Company’s Annual Report on Form 10-K/A for the year ended December 31, 2012. Voting Matters and Board Recommendations Our Board’s Recommendations Election of Directors (page 10) FOR each Director Nominee Advisory Vote to Approve Executive Compensation (page 27) FOR Ratify the Appointment of Independent Registered Public Accounting Firm (page 74) FOR 2012 Financial and Business Highlights 2012 was another record year for the Company. Our strong financial performance is evidenced by the facts that: • We generated record GAAP(1) revenues of $4.86 billion and non-GAAP(2) revenues of $4.99 billion. • We delivered record GAAP and non-GAAP(2) net revenues from digital channels(3) accounting for 32% of our total net non-GAAP(2) revenues. • Our GAAP operating margin was a record 30% and our non-GAAP(2) operating margin was a record 34%. • We delivered record GAAP and non-GAAP(2) earnings per diluted share of $1.01 and $1.18, respectively. • We generated operating cash flow(2) of over $1.3 billion. Our strong financial performance was driven by exceptional operating performance, including: • In North America and Europe combined, including toys and accessories, Activision Publishing was the #1 console and handheld publisher for the calendar year with the #1 and #3 best-selling franchises—Call of Duty® and Skylanders.(4) • Activision Blizzard reported record digital revenues for the calendar year and was the #1 third-party interactive entertainment Western digital publisher.(5) • For the calendar year, in aggregate across all platforms in the U.S. and Europe, Activision Publishing’s Call of Duty: Black Ops II was the #1 best-selling title in dollars and Call of Duty: Modern Warfare® 3 was the #9 best-selling title in dollars.(6) • In both North America and Europe, including toys and accessories, Skylanders Giants™ was the #1 best-selling kids’ title in dollars for the fourth quarter.(4) Additionally, for the calendar year, in North America and Europe combined, including toys and accessories, Skylanders Giants was the #5 best-selling game in dollars, and Skylanders Spyro’s Adventure® was the #4 best-selling game in dollars.(4) • For the calendar year, Blizzard Entertainment had two top-10 PC games in North America and Europe. Diablo® III was the #1 best-selling PC game at retail, breaking PC-game sales records with more than 12 million copies sold worldwide through December 31, 2012, and World of Warcraft®: Mists of Pandaria® was the #3 best-selling PC game at retail.(4) (1) “GAAP” means a financial metric is presented in accordance with Generally Accepted Accounting Principles. (2) For additional information on the calculation and reconciliation of GAAP measures to non-GAAP measures, see Appendix A attached to this proxy statement. (3) Net revenues from digital online channel represent revenues from subscriptions and memberships, licensing royalties, value-added services, downloadable content, digitally distributed products and wireless devices. (4) According to The NPD Group, GfK Chart-Track and Activision Blizzard internal estimates. (5) According to Activision Blizzard internal estimates. (6) According to The NPD Group and GfK Chart-Track. ACTIVISION BLIZZARD, INC. – 2013 Proxy Statement 4 Back to Contents Director Nominees The following table sets forth the name, age and principal occupation of each of the nominees. Name of Nominee Age Principal Occupation Director Since Philippe G. H. Capron 54 Chief Financial Officer of Vivendi 2008 Jean-Yves Charlier 49 Senior Executive Vice President, Telecommunications of Vivendi 2012 Robert J. Corti 63 Chairman of the Board of Avon Products Foundation 2003 Frédéric R. Crépin 43 Executive Vice President and General Counsel of Vivendi 2008 Jean-François Dubos 67 Chairman of the Management Board of Vivendi 2012 Lucian Grainge 53 Chairman and Chief Executive Officer of Universal Music Group 2011 Brian G. Kelly 50 Co-Chairman of the Board of Activision Blizzard 1995 Robert A. Kotick 50 President and Chief Executive Officer of Activision Blizzard 1991 Robert J. Morgado 70 Chairman of Maroley Media Group 1997 Richard Sarnoff 54 Senior Advisor to Kohlberg Kravis Roberts & Co. 2005 Régis Turrini 54 Senior Executive Vice President, M&A of Vivendi 2009 Executive Compensation Highlights Our compensation philosophy is to incentivize executives to drive corporate financial performance by basing a significant portion of their compensation on achieving Company and individual goals. Our executive compensation program, designed to be consistent with that philosophy, has three primary components: (1) base salary; (2) annual cash incentives; and (3) long-term stock awards, including stock options and time- and performance-based vesting restricted share units. Further: • In order to secure long-term commitments from our executives in support of our multi-year business growth strategy, we offer our executives employment agreements which provide one-time, “upfront” long-term incentive awards with target values based upon the length of the term of the agreement. • For our executives, we generally target total compensation at the 75th percentile of our peer group. • From time-to-time, our executives may receive special bonuses for extraordinary contributions to the Company. The following table sets forth certain summarized 2012 compensation information for the named executives.