Exhibit 10.3

 

ACTIVISION, INC.

 

RESTRICTED STOCK AWARD AGREEMENT

 

 

You have been awarded restricted shares of the Company’s common stock, $0.000001
par value per share (“Restricted Stock”), subject to the following terms and
conditions:

 

•                  Name of Grantee:

 

Thomas Tippl

 

 

 

•                  Total Number of Shares of Restricted Stock Awarded:

 

72,534(1)

 

 

 

•                  Date of Grant:

 

October 3, 2005

 

•                  This award of Restricted Stock is being made pursuant to and
as a material inducement for the Grantee to enter into an employment agreement
dated September 9, 2005 (the “Employment Agreement”) and is governed by the
terms of the Employment Agreement and the terms of the Restricted Stock Award
Terms attached hereto as Exhibit A.  In addition, this award of Restricted Stock
is granted under and subject to the terms and conditions of the Company’s 2003
Incentive Plan (the “Plan”), the terms, conditions and definitions of which are
hereby incorporated herein as though set forth at length, and the receipt of a
copy of which the Grantee hereby acknowledges by his signature on the
irrevocable stock attached hereto as Exhibit B.  Capitalized terms used herein
shall have the meanings set forth in the Plan, unless otherwise defined herein.

 

•                  This award of Restricted Stock is conditioned upon your
endorsement in blank of the irrevocable stock power attached hereto as
Exhibit B.  If you do not return the attached irrevocable stock power within
sixty (60) days from the Date of Grant, this award shall be deemed forfeited. 
As such, promptly endorse and return the attached irrevocable stock power to the
General Counsel at the following address:

 

Activision, Inc.

3100 Ocean Park Boulevard

Santa Monica, CA  90405

Attn:  General Counsel

 

•                  If you wish to elect a designated beneficiary to whom shares
of common stock otherwise due to you pursuant to the terms of this award shall
be distributed in the event of your death prior to distribution, please complete
and return to the General Counsel along with your irrevocable stock power the
beneficiary designation form attached hereto as Exhibit C.

 

Dated: October 3, 2005

ACTIVISION, INC.

 

 

Accepted and Agreed:

 

 

By:

 

 

 

Title: Sr. Vice President, General Counsel

THOMAS TIPPL

 

 

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(1)  Amount equal to $1,500,000 divided by the closing price of ATVI stock as
reported on closing on NASDAQ on October 3, 2005.

 

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EXHIBIT A

 

ACTIVISION, INC.

 

RESTRICTED STOCK AWARD TERMS

 

Activision, Inc., a Delaware corporation (“Company”), has granted you
(“Grantee”) an award of restricted stock pursuant to the terms and conditions
set forth in your Notice of Restricted Stock Award (“Grant Notice”), these
Restricted Stock Award Terms (“Award Terms”) and your Employment Agreement
(defined in the Grant Notice).  In addition, this award of Restricted Stock is
subject to the terms and conditions of the Company’s 2003 Incentive Plan (the
“Plan”), the terms, conditions and definitions of which are hereby incorporated
herein as though set forth at length, and the receipt of a copy of which the
Grantee hereby acknowledges by his signature on the irrevocable stock power
attached to the Grant Notice as Exhibit B.  Capitalized terms used herein shall
have the meanings set forth in the Plan, unless otherwise defined herein.  The
text of the Plan and the Grant Notice are incorporated herein by reference and
made a part of these Award Terms.

 

1.                                       Definitions.  For purposes of this
Award, the following terms shall have the meanings set forth below:

 

“Anniversary Date” means the annual anniversary of the Date of Grant.

 

“Award” means this Restricted Stock Award.

 

“Board” means the Board of Directors of the Company.

 

“Code” means the Internal Revenue Code of 1986, as amended, and regulations
thereunder.

 

“Committee” means the Compensation Committee of the Board or such other Board
committee designated by the Board in accordance with the Plan.

 

“Common Stock” means the Company’s common stock, $0.000001 par value per share.

 

“Company” means Activision, Inc. and any successor thereto.

 

“Date of Grant” means the Date of Grant set forth on the Grant Notice.

 

“Disability” shall have the meaning set forth in the Employment Agreement.

 

“Grant Notice” means the Notice of Restricted Stock Award accompanying these
Award Terms.

 

“Plan” means the Activision, Inc. 2003 Incentive Plan, as amended from time to
time.

 

“Restricted Shares” means shares of Common Stock subject to the Award which are
subject to the Restrictions.  This amount shall include any additional shares of
Common Stock

 

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resulting from the investment of dividends declared on existing Restricted
Shares pursuant to Section 6 hereof and additional or different securities
issued as a result of any adjustment pursuant to Section 10 hereof.

 

“Restrictions” means the restrictions set forth in Section 3 hereof which are
imposed on shares of Common Stock subject to this Agreement prior to vesting.

 

“Vested Shares” means the shares of Common Stock subject to this Agreement which
have become vested pursuant to Section 4 or 5 hereof and are, therefore, no
longer subject to the Restrictions.

 

2.                                       Grant of Restricted Stock.  Pursuant to
action of the Board and in accordance with the Employment Agreement, the Company
hereby awards to Grantee the number of shares of Common Stock as set forth on
the Grant Notice.

 

3.                                       Restrictions.  From the Date of Grant
until the date Grantee obtains a vested right to shares of Common Stock subject
to this Award pursuant to Section 4, 5 or 10 hereof, neither the shares of
Common Stock subject to this Award (including any additional shares resulting
from the reinvestment of dividends declared on the original shares awarded or an
adjustment of the original shares pursuant to Section 10 hereof) nor any right
or privilege pertaining thereto may be sold, assigned, transferred, pledged,
hypothecated or otherwise disposed or encumbered in any way, otherwise than by
transfer to a trust in accordance with Section 15 hereof, and shall not be
subject to execution, attachment or similar process (collectively, the
“Restrictions”).  Any attempt to sell, transfer, assign, pledge, hypothecate or
otherwise dispose of or encumber the Restricted Shares or any right or privilege
pertaining thereto, otherwise than by transfer to a trust pursuant to Section 16
hereof, shall be null and void and of no force and effect.  Upon the lapse of
the Restrictions with respect to any shares of Common Stock subject to this
Award, Grantee shall obtain a vested right to such shares of Common Stock.

 

4.                                      Vesting.  Except as otherwise provided
in Section 5 or 10, on each Anniversary Date beginning with the third
Anniversary Date through and including the fifth Anniversary Date that Grantee
remains in continuous employment with the Company or any of its subsidiaries or
affiliates, the Restrictions shall lapse with respect to one-third of the
original number of Restricted Shares set forth on the Grant Notice, as adjusted
to account for additional shares of Common Stock resulting from dividend
reinvestment pursuant to Section 6 hereof or any adjustment pursuant to
Section 9 hereof.  Fractional shares shall be rounded up to the nearest whole
share of Common Stock (for which purpose one-half share shall be rounded up to
the nearest whole share of Common Stock).  Upon termination of Grantee’s
employment with the Company and its subsidiaries and affiliates THE FOLLOWING
PROVISIONS WILL APPLY:

 

Restricted Shares will vest ratably over the third, fourth and fifth years
following the Effective Date, with one third of the amount granted vesting at
the end of each of the third, fourth and fifth years following the Effective
Date.  In the event of Grantee’s termination, the provisions of Paragraph 9 of
the Employment Agreement will govern vesting.

 

5.                                       Tax Withholding. Upon the lapse of the
Restrictions (or any such earlier time, if any, that an election is made under
Section 83(b) of the Code, or any successor provision thereto, to include the
value of such shares in taxable income), the Company shall be entitled to
withhold from

 

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Grantee’s compensation any required taxes, including, but not limited to,
Grantee’s social security and Medicare taxes and federal, state and local income
tax with respect to the income arising from the lapse of the Restrictions.  The
Company shall have the right to require the payment of any such taxes before
delivering the stock certificate with respect to the Vested Shares and the
related stock power held by the Company in accordance with Section 6 hereof. 
Alternatively, in lieu of such withholding, Grantee shall be entitled to cover
all or any part of the taxes arising from the lapse of the Restrictions through
a reduction of the number of Vested Shares delivered to Grantee or a delivery,
or tender, to the Company of shares of Common Stock already held by Grantee, in
each case valued in the same manner as used in computing withholding taxes under
the applicable laws.  Additionally, to the extent it is determined by a
regulatory agency or a court of competent jurisdiction that shares of Common
Stock which would otherwise be considered Restricted Shares pursuant to the
terms of the Award nevertheless result in current federal or state taxation,
(i) all Restrictions as to such shares shall immediately lapse, (ii) such shares
shall immediately become Vested Shares and (iii) Grantee shall be entitled to
cover all or any part of the taxes through a reduction of such Restricted Shares
resulting in the taxable event.

 

6.                                       Custody, Voting and Dividends. 
Restricted Shares shall be held in certificated form by the Company or its agent
for Grantee’s account, with appropriate notation of the Restrictions made in the
Company’s records and on the certificate for the Restricted Shares. 
Additionally, the grant of Restricted Shares is conditioned upon Grantee’s
endorsement in blank of the irrevocable stock power attached to the Grant Notice
as Exhibit B.  The irrevocable stock power must be endorsed and returned to the
General Counsel within sixty (60) days from the Date of Grant.  Failure to do so
within the prescribed time period will result in an immediate forfeiture of the
Restricted Shares.  At the option of the Grantee, any dividends declared on
Restricted Shares shall be reinvested in additional shares of Common Stock (in
accordance with such methods or procedures as shall be established from time to
time by the Committee), which shall vest concurrently with the Restricted
Shares, or shall be paid to the Grantee concurrently with the payment of such
dividends to all other record holders of Common Stock.  To the extent the
Restricted Shares have not been forfeited, Grantee shall be entitled to voting
privileges associated with the Restricted Shares.

 

7.                                       Lapse of Restrictions.  If, and when,
the Restrictions lapse, the Company shall distribute certificates for such
Vested Shares to the Grantee, which will not bear any restrictive legend other
than such legends as may be required pursuant to applicable securities or blue
sky laws.  Additionally, the Company will deliver to Grantee no later than
thirty (30) days following the lapse of such Restrictions the related
irrevocable stock power held by the Company pursuant to Section 6 hereof.

 

8.                                       Committee Discretion.  The Committee
shall have plenary authority to (a) interpret any provision of these Award
Terms, (b) make any determinations necessary or advisable for the administration
of the Award, and (c) waive any conditions or rights under the Award, or amend,
alter, accelerate, suspend, discontinue or terminate the Award; provided,
however, that, except as provided in Section 9 hereof, without the consent of
Grantee, no such amendment, alteration, suspension, discontinuation or
termination of this Award may impair the rights of Grantee with the Award or
modify the Award in any way materially inconsistent with the terms of Employment
Agreement.

 

9.                                       Adjustments.  Notwithstanding anything
to the contrary herein, in the event that the Committee shall determine that any
dividend or other distribution (whether in the form of cash,

 

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shares or other property), recapitalization, stock split, reverse stock split,
reorganization, merger, consolidation, spin-off, combination, repurchase, or
share exchange, or other similar corporate transaction or event, affects the
Restricted Shares such that an adjustment is determined by the Committee to be
appropriate in order to prevent dilution or enlargement of the rights of Grantee
under this Award, then the Committee shall, in such manner as it may deem
equitable, make any adjustments to the Award it deems appropriate.  In addition,
the Committee is authorized to make such adjustments as it deems appropriate in
the terms and conditions of, and the criteria included in, the Award in
recognition of unusual or nonrecurring events (including, without limitation,
events described in the preceding sentence) affecting the Company or any
subsidiary or affiliate or the financial statements of the Company or any
subsidiary or affiliate, or in response to changes in applicable laws,
regulations or accounting principles.

 

10.                                 Postponement; Registration.  The Company may
postpone the issuance and delivery of Restricted Shares until (a) the admission
of such Restricted Shares to listing on any stock exchange or exchanges on which
Common Stock of the Company are then listed and (b) the completion of such
registration or other qualification of such Restricted Shares under any state or
federal law, rule or regulation as the Company shall determine to be necessary
or advisable.  The Grantee shall make such representations and furnish such
information as may, in the opinion of counsel for the Company, be appropriate to
permit the Company, in light of the then existence or non-existence with respect
to such Restricted Shares of an effective Registration Statement under the
Securities Act of 1933, as amended, to issue the Restricted Shares in compliance
with the provisions of that or any comparable act.  The Company shall have the
right to register the Restricted Shares on a Form S-8 or S-3 to facilitate their
resale by the Grantee. The Company may not postpone the issuance and delivery of
Restricted Shares up to an amount equal to the taxes payable as a result of the
vesting of Restricted Shares.

 

11.                                 Beneficiary Designations.  Grantee shall
file with the Executive Vice President of Human Resources on the form attached
to the Grant Notice as Exhibit C, or such other form as may be prescribed by the
Company, a designation of a primary beneficiary(ies) and a contingent
beneficiary(ies) to whom shares of Common Stock otherwise due to Grantee
pursuant to the terms hereof shall be distributed in the event of the death of
Grantee prior to distribution.  Grantee shall have the right to change the
beneficiary from time to time; provided, however, that any change shall not
become effective until received in writing by the secretary of the Company or
its designee.  If any designated beneficiary survives Grantee but dies before
receiving all of Grantee’s benefits hereunder to which he or she is entitled,
any remaining benefits due Grantee to which the deceased beneficiary is entitled
shall be distributed to the deceased beneficiary’s estate.  If there is no
effective beneficiary designation on file at the time of Grantee’s death, or if
the designated primary beneficiary(ies) and contingent beneficiary(ies)
predecease Grantee, the payment of benefits shall be made to Grantee’s estate.

 

12.                                 Legend.  The Company may cause the following
or a similar legend to be set forth on each certificate representing Restricted
Shares or any other security issued unless counsel for the Company is of the
opinion as to any such certificate that such legend is unnecessary:

 

THE SECURITIES REPRESENTED BY THIS CERTIFICATE MAY NOT BE OFFERED FOR SALE, SOLD
OR OTHERWISE TRANSFERRED EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT
UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “ACT”), OR PURSUANT TO AN
EXEMPTION FROM REGISTRATION UNDER THE

 

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ACT, THE AVAILABILITY OF WHICH IS ESTABLISHED BY AN OPINION FROM COUNSEL TO THE
COMPANY.

 

13.                                 No Right to Continued Employment.  Nothing
in these Award Terms shall be deemed to create any limitation or restriction on
such rights as the Company otherwise would have to terminate the employment of
Grantee at any time for any reason.

 

14.                                 Governing Law.  To the extent federal law
does not otherwise control, the validity, interpretation, performance and
enforcement of this Award shall be governed by the laws of the State of
California, without giving effect to principles of conflicts of laws thereof.

 

15.                                 Successors and Assigns.  The provisions of
this Award shall be binding upon and inure to the benefit of the Company, its
successors and assigns, and Grantee and, to the extent applicable, Grantee’s
legal representative.  Grantee may transfer Restricted Shares to the trustee of
a trust only to the extent approved in advance by the Committee (or its
designee), in its sole discretion, and the Restricted Shares are held by such
trustee subject to all the terms and conditions set forth in this Award. 
Furthermore, as a condition to transfer, the Committee (or its designee) shall
have the authority to require the trustee to execute any documentation deemed
appropriate by the Committee (or its designee) to ensure the Restricted Shares
will continue to be subject to the terms and conditions set forth in this Award.

 

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EXHIBIT B

 

IRREVOCABLE STOCK POWER

 

FOR VALUE RECEIVED, and pursuant to the Restricted Stock Award dated as of
                                   (the “Award”), the undersigned does hereby
sell, assign, transfer and convey to

 

Activision, Inc. (the “Company”)                                  shares of
Activision, Inc. common stock, $0.000001 par value, represented by
Certificate(s) No.                            , and hereby irrevocably
constitutes and appoints                                            to transfer
said stock on the books of the Company, with full power of substitution in the
premises.

 

 

 

 

 

 

First Name

Middle Name

Last Name

 

Date

 

Instructions: Please do not fill in any blanks other than the signature line. 
The purpose of this irrevocable stock power is to enable the Company to exercise
full ownership and control over the restricted stock subject to the Award in the
event of forfeiture.

 

B-1

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EXHIBIT C

 

ACTIVISION, INC.

 

Restricted Stock Award dated as of                      , 20       

 

Designation of Beneficiary

 

I,

 

(“Grantee”), hereby designate

 

 

 

 

PRIMARY

 

 

 

(Print Beneficiary’s Name)

Last

First

Middle Initial

 

 

 

 

 

 

 

 

Print Beneficiary’s Address

 

 

Relationship

 

 

 

 

PRIMARY

 

 

 

(Print Beneficiary’s Name)

Last

First

Middle Initial

 

 

 

 

 

 

 

 

Print Beneficiary’s Address

 

 

Relationship

 

as my primary beneficiary(ies) for purposes of the above-referenced award
(“Award”). In the event of my death prior to the distribution of all shares of
Common Stock otherwise due to me pursuant to the Award, such primary
beneficiary(ies) shall receive the remaining amount in equal shares.  If none of
the above-named primary beneficiary(ies) survive me, the remaining amount of
shares of Common Stock shall be distributed in equal shares to those then living
of the following person(s):

 

SECONDARY

 

 

 

(Print Beneficiary’s Name)

Last

First

Middle Initial

 

 

 

 

 

 

 

 

Print Beneficiary’s Address

 

 

Relationship

 

 

 

 

SECONDARY

 

 

 

(Print Beneficiary’s Name)

Last

First

Middle Initial

 

 

 

 

 

 

 

 

Print Beneficiary’s Address

 

 

Relationship

 

It is understood that this Designation of Beneficiary is made pursuant to the
Award and is subject to the conditions stated therein.  It is further understood
that all prior designations of beneficiary under the Award are hereby revoked
and that this Designation of Beneficiary may only be revoked in writing, signed
by Grantee and filed with the Company prior to Grantee’s death.

 

 

 

 

 

Date

Grantee

 

 

ACKNOWLEDGED AND ACCEPTED BY THE COMPANY:

 

 

 

 

 

 

 

Date

Signature of Company Representative

 

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