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Exhibit 10.6

ACTIVISION, INC.

2001 INCENTIVE PLAN

        ACTIVISION, INC., a corporation formed under the laws of the State of
Delaware (the "Company"), hereby establishes and adopts the following 2001
Incentive Plan (the "Plan").

RECITALS

        WHEREAS, the Company desires to encourage high levels of performance by
those individuals who are key to the success of the Company, to attract new
individuals who are highly motivated and who will contribute to the success of
the Company and to encourage such individuals to remain as directors and/or
employees of the Company and its subsidiaries by increasing their proprietary
interest in the Company's growth and success.

        WHEREAS, to attain these ends, the Company has formulated the Plan
embodied herein to authorize the granting of incentive awards through grants of
share options ("Options"), grants of share appreciation rights, grants of Share
Purchase Awards (hereafter defined), grants of Restricted Share Awards
(hereafter defined), grants of Performance-Based Awards (hereafter defined), or
any other award made under the Plan to those persons (each such person, a
"Participant") whose judgment, initiative and efforts are or have been or will
be responsible for the success of the Company.

        NOW, THEREFORE, the Company hereby constitutes, establishes and adopts
the following Plan and agrees to the following provisions:

ARTICLE 1.

PURPOSE OF THE PLAN

        1.1.    Purpose.    The purpose of the Plan is to assist the Company and
its subsidiaries in attracting and retaining selected individuals to serve as
directors, officers, consultants, advisors and other key employees of the
Company and its subsidiaries who will contribute to the Company's success and to
achieve long-term objectives which will inure to the benefit of all shareholders
of the Company through the additional incentive inherent in the ownership or
increased ownership of the Company's shares of common stock ("Shares"). Options
granted under the Plan will be either "incentive share options," intended to
qualify as such under the provisions of Section 422 of the Internal Revenue Code
of 1986, as amended from time to time (the "Code"), or "nonqualified share
options." For purposes of the Plan, the term "subsidiary" shall mean "subsidiary
corporation," as such term is defined in Section 424(f) of the Code, and
"affiliate" shall have the meaning set forth in Rule 12b-2 of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"). For purposes of the Plan,
the term "Award" shall mean a grant of an Option, a grant of a share
appreciation right, a grant of a Share Purchase Award, a grant of a Restricted
Share Award, or any other award made under the terms of the Plan.

ARTICLE 2.

SHARES SUBJECT TO AWARDS

        2.1.    Number of Shares.    Subject to the adjustment provisions of
Section 10.9 hereof, the aggregate number of Shares which may be issued under
Awards under the Plan, whether pursuant to Options, share appreciation rights,
Share Purchase Awards, Restricted Share Awards or Performance-Based Awards shall
not exceed 3,750,000. No Options to purchase fractional Shares shall be granted
or issued under the Plan. For purposes of this Section 2.1, the Shares that
shall be counted toward such limitation shall include all Shares:

(1)issued or issuable pursuant to Options that have been or may be exercised;

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(2)issued or issuable pursuant to Share Purchase Awards;

(3)issued as, or subject to issuance as a Restricted Share Award; and

(4)issued or issuable under any other Award granted under the terms of the Plan.

        2.2.    Shares Subject to Terminated Awards.    The Shares covered by
any unexercised portions of terminated Options granted under Articles 4 and 6,
Shares forfeited as provided in Section 8.2(a) and Shares subject to any Awards
which are otherwise surrendered by the Participant without receiving any payment
or other benefit with respect thereto may again be subject to new Awards under
the Plan, other than grants of Options intended to qualify as incentive share
options. In the event the purchase price of an Option is paid in whole or in
part through the delivery of Shares, the number of Shares issuable in connection
with the exercise of the Option shall not again be available for the grant of
Awards under the Plan. Shares subject to Options, or portions thereof, which
have been surrendered in connection with the exercise of share appreciation
rights shall not again be available for the grant of Awards under the Plan.

        2.3.    Character of Shares.    Shares delivered under the Plan may be
authorized and unissued Shares or Shares acquired by the Company, or both.

        2.4.    Limitations on Grants to Individual Participant.    Subject to
adjustments pursuant to the provisions of Section 10.9 hereof, the maximum
number of Shares with respect to which Options or stock appreciation rights may
be granted hereunder to any employee during any fiscal year of the Company shall
be 500,000 Shares (the "Limitation"). If an Option is cancelled, the cancelled
Option shall continue to be counted toward the Limitation for the year granted.
An Option (or a stock appreciation right) that is repriced during any fiscal
year is treated as the cancellation of the Option (or stock appreciation right)
and a grant of a new Option (or stock appreciation right) for purposes of the
Limitation for that fiscal year.

ARTICLE 3.

ELIGIBILITY AND ADMINISTRATION

        3.1.    Awards to Employees, Directors and Others.    (a) Participants
who receive (i) Options under Articles 4 and 6 hereof or share appreciation
rights under Article 5 ("Optionees"), and (ii) Share Purchase Awards under
Article 7, Restricted Share Awards under Article 8, Deferred Share Awards (as
defined herein) under Article 9, Performance-Based Awards under Article 11, or
any other Award granted under the Plan shall consist of such officers, key
employees, consultants, advisors and Directors (as defined in Section 3.2 below)
of the Company or any of its subsidiaries or affiliates as the Committee (as
defined in Section 3.2 below) shall select from time to time. The Committee's
designation of an Optionee or Participant in any year shall not require the
Committee to designate such person to receive Awards or grants in any other
year. The designation of an Optionee or Participant to receive Awards or grants
under one portion of the Plan shall not require the Committee to include such
Optionee or Participant under other portions of the Plan.

        (b)  No Option that is intended to qualify as an "incentive share
option" may be granted (x) to any individual that is not an employee of the
Company or any subsidiary thereof, or (y) to any employee who, at the time of
such grant, owns, directly or indirectly (within the meaning of Sections
422(b)(6) and 424(d) of the Code), shares possessing more than 10% of the total
combined voting power of all classes of shares of the Company or any of its
subsidiaries or affiliates, unless at the time of such grant, (i) the option
price is fixed at not less than 110% of the Fair Market Value (as defined in
Section 10.2 below) of the Shares subject to such Option, determined on the date
of the grant, and (ii) the exercise of such Option is prohibited by its terms
after the expiration of five years from the date such Option is granted.

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        3.2.    Administration.    (a) The Plan shall be administered by a
committee (the "Committee") consisting of not fewer than two Directors of the
Company (the directors of the Company being hereinafter referred to as the
"Directors"), as designated by the Directors. The Directors may remove from, add
members to, or fill vacancies in the Committee. Unless otherwise determined by
the Directors, each member of the Committee will be a "non-employee director"
within the meaning of Rule 16b-3 (or any successor rule) of the Exchange Act and
an "outside director" within the meaning of Section 162(m)(4)(C)(i) of the Code
and the regulations thereunder.

        Notwithstanding any other provision of this Plan, any Award to a member
of the Committee must be approved by the Board of Directors of the Company
(excluding Directors who are also members of the Committee) to be effective.

        (b)  The Committee is authorized, subject to the provisions of the Plan,
to establish such rules and regulations as it may deem appropriate for the
conduct of meetings and proper administration of the Plan. All actions of the
Committee shall be taken by majority vote of its members.

        (c)  Subject to the provisions of the Plan, the Committee shall have
authority, in its sole discretion, to grant Awards under the Plan, to interpret
the provisions of the Plan and, subject to the requirements of applicable law,
including Rule 16b-3 of the Exchange Act, to prescribe, amend, and rescind rules
and regulations relating to the Plan or any Award thereunder as it may deem
necessary or advisable. All decisions made by the Committee pursuant to the
provisions of the Plan shall be final, conclusive and binding on all persons,
including the Company, its shareholders, Directors and employees, and other Plan
participants.

ARTICLE 4.

OPTIONS

        4.1.    Grant of Options.    The Committee shall determine, within the
limitations of the Plan, those key officers, employees, consultants, advisors
and Directors of the Company and its subsidiaries and affiliates to whom Options
are to be granted under the Plan, the number of Shares that may be purchased
under each such Option and the option price, and shall designate such Options at
the time of the grant as either "incentive share options" or "nonqualified share
options"; provided, however, that Options granted to employees of an affiliate
(that is not also a subsidiary) or to non-employees of the Company may only be
"nonqualified share options."

        4.2.    Share Option Agreements; etc.    All Options granted pursuant to
Article 4 and Article 6 herein (a) shall be authorized by the Committee and
(b) shall be evidenced in writing by share option agreements ("Share Option
Agreements") in such form and containing such terms and conditions as the
Committee shall determine that are not inconsistent with the provisions of the
Plan, and, with respect to any Share Option Agreement granting Options that are
intended to qualify as "incentive share options," are not inconsistent with
Section 422 of the Code. Granting of an Option pursuant to the Plan shall impose
no obligation on the recipient to exercise such Option. Any individual who is
granted an Option pursuant to this Article 4 and Article 6 herein may hold more
than one Option granted pursuant to such Articles at the same time and may hold
both "incentive share options" and "nonqualified share options" at the same
time. To the extent that any Option does not qualify as an "incentive share
option" (whether because of its provisions, the time or manner of its exercise
or otherwise) such Option or the portion thereof which does not so qualify shall
constitute a separate "nonqualified share option."

        4.3.    Option Price.    Subject to Section 3.1(b), the option exercise
price per each Share purchasable under any "incentive share option" granted
pursuant to this Article 4, any "nonqualified share option" granted pursuant to
Article 6, and Options intended to be performance-based under Section 162(m) of
the Code shall not be less than 100% of the Fair Market Value of such Share on
the date of the grant of such Option. The option exercise price per share of
each Share purchasable under any "nonqualified

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share option" that is not intended to be performance-based under Section 162(m)
of the Code and is granted pursuant to this Article 4 shall be determined by the
Committee at the time of the grant of such Option, but shall not be less than
85% of the Fair Market Value of such Share on the date of the grant of such
Option.

        4.4.    Other Provisions.    Options granted pursuant to this Article 4
shall be made in accordance with the terms and provisions of Article 10 hereof
and any other applicable terms and provisions of the Plan.

ARTICLE 5.

SHARE APPRECIATION RIGHTS

        5.1.    Grant and Exercise.    Share appreciation rights may be granted
in conjunction with all or part of any Option granted under the Plan, as
follows: (i) in the case of a nonqualified share option, such rights may be
granted either at the time of the grant of such option or at any subsequent time
during the term of the option; and (ii) in the case of an incentive share
option, such rights may be granted only at the time of the grant of such option.
A "share appreciation right" is a right to receive cash or whole Shares, as
provided in this Article 5, in lieu of the purchase of a Share under a related
Option. A share appreciation right or applicable portion thereof shall terminate
and no longer be exercisable upon the termination or exercise of the related
Option, and a share appreciation right granted with respect to less than the
full number of Shares covered by a related Option shall not be reduced until,
and then only to the extent that, the exercise or termination of the related
Option exceeds the number of Shares not covered by the share appreciation right.
A share appreciation right may be exercised by the holder thereof (the
"Holder"), in accordance with Section 5.2 of this Article 5, by giving written
notice thereof to the Company and surrendering the applicable portion of the
related Option. Upon giving such notice and surrender, the Holder shall be
entitled to receive an amount determined in the manner prescribed in Section 5.2
of this Article 5. Options which have been so surrendered, in whole or in part,
shall no longer be exercisable to the extent the related share appreciation
rights have been exercised.

        5.2.    Terms and Conditions.    Share appreciation rights shall be
subject to such terms and conditions, not inconsistent with the provisions of
the Plan, as shall be determined from time to time by the Committee, including
the following:

        (a)  Share appreciation rights shall be exercisable only at such time or
times and to the extent that the Options to which they relate shall be
exercisable in accordance with the provisions of the Plan.

        (b)  Upon the exercise of a share appreciation right, a Holder shall be
entitled to receive up to, but no more than, an amount in cash or whole Shares
as determined by the Committee in its sole discretion equal to the excess of the
then Fair Market Value of one Share over the option exercise price per Share
specified in the related Option multiplied by the number of Shares in respect of
which the share appreciation right shall have been exercised. The Holder shall
specify in his written notice of exercise, whether payment shall be made in cash
or in whole Shares. Each share appreciation right may be exercised only at the
time and so long as a related Option, if any, would be exercisable or as
otherwise permitted by applicable law.

        (c)  Upon the exercise of a share appreciation right, the Option or part
thereof to which such share appreciation right is related shall be deemed to
have been exercised for the purpose of the limitation of the number of Shares to
be issued under the Plan, as set forth in Section 2.1 of the Plan.

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        (d)  With respect to share appreciation rights granted in connection
with an Option that is intended to be an "incentive share option," the following
shall apply:

          (i)  No share appreciation right shall be transferable by a Holder
otherwise than by will or by the laws of descent and distribution, and share
appreciation rights shall be exercisable, during the Holder's lifetime, only by
the Holder.

        (ii)  Share appreciation rights granted in connection with an Option may
be exercised only when the Fair Market Value of the Shares subject to the Option
exceeds the option exercise price at which Shares can be acquired pursuant to
the Option.

ARTICLE 6.

RELOAD OPTIONS

        6.1.    Authorization of Reload Options.    Concurrently with the award
of any Option (such Option hereinafter referred to as the "Underlying Option")
to any Participant in the Plan, the Committee may grant one or more reload
options (each, a "Reload Option") to such Participant to purchase for cash or
Shares (held for at least six months or such other period to avoid accounting
charges against the Company's earnings) a number of Shares as specified below. A
Reload Option shall be exercisable for an amount of Shares equal to (i) the
number of Shares delivered by the Optionee to the Company to exercise the
Underlying Option, and (ii) to the extent authorized by the Committee, the
number of Shares used to satisfy any tax withholding requirement incident to the
exercise of the Underlying Option, subject to the availability of Shares under
the Plan at the time of such exercise. Any Reload Option may provide for the
grant, when exercised, of subsequent Reload Options to the extent and upon such
terms and conditions consistent with this Article 6, as the Committee in its
sole discretion shall specify at or after the time of grant of such Reload
Option. Except as otherwise determined by the Committee, a Reload Option will
vest and become exercisable six months after the exercise of an Underlying
Option or Reload Option by the Participant delivering to the Company Shares
owned by the Optionee for at least six months in payment of the exercise price
and/or tax withholding obligations. Notwithstanding the fact that the Underlying
Option may be an "incentive share option," a Reload Option is not intended to
qualify as an "incentive share option" under Section 422 of the Code.

        6.2.    Reload Option Amendment.    Each Share Option Agreement shall
state whether the Committee has authorized Reload Options with respect to the
Underlying Option. Upon the exercise of an Underlying Option or other Reload
Option, the Reload Option will be evidenced by an amendment to the underlying
Share Option Agreement.

        6.3.    Reload Option Price.    The option exercise price per Share
payable upon the exercise of a Reload Option shall be the Fair Market Value of a
Share on the date the corresponding Underlying Option is exercised.

        6.4.    Term and Exercise.    Except as otherwise determined by the
Committee, each Reload Option vests and is fully exercisable six months after
its grant (i.e., six months after the corresponding Underlying Option is
exercised). The term of each Reload Option shall be equal to the remaining
option term of the Underlying Option.

        6.5.    Termination of Employment.    No additional Reload Options shall
be granted to Optionees when Options and/or Reload Options are exercised
pursuant to the terms of this Plan following termination of the Optionee's
employment unless the Committee, in its sole discretion, shall determine
otherwise.

        6.6.    Applicability of Other Sections.    Except as otherwise provided
in this Article 6, the provisions of Article 9 applicable to Options shall apply
equally to Reload Options.

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ARTICLE 7.

SHARE PURCHASE AWARDS

        7.1.    Grant of Share Purchase Award.    The term "Share Purchase
Award" means the right to purchase Shares of the Company and to pay for such
Shares through a loan made by the Company to the Participant (a "Purchase Loan")
as set forth in this Article 7.

        7.2.    Terms of Purchase Loans.    (a) Purchase Loan. Each Purchase
Loan shall be evidenced by a promissory note. The term of the Purchase Loan
shall be for a period of years, as determined by the Committee, and the proceeds
of the Purchase Loan shall be used exclusively by the Participant for purchase
of Shares from the Company at a purchase price equal to the Fair Market Value on
the date of the Share Purchase Award.

        (b)    Interest on Purchase Loan.    A Purchase Loan shall be
non-interest bearing or shall bear interest at whatever rate the Committee shall
determine (but not in excess of the maximum rate permissible under applicable
law), payable in a manner and at such times as the Committee shall determine.
Those terms and provisions as the Committee shall determine shall be
incorporated into the promissory note evidencing the Purchase Loan.

        (c)    Forgiveness of Purchase Loan.    Subject to Section 7.4 hereof,
the Company may forgive the repayment of up to 100% of the principal amount of
the Purchase Loan, subject to such terms and conditions as the Committee shall
determine and set forth in the promissory note evidencing the Purchase Loan. A
Participant's Purchase Loan can be prepaid at any time, and from time to time,
without penalty.

        7.3.    Security for Loans.    (a) Stock Power and Pledge. Purchase
Loans granted to Participants shall be secured by a pledge of the Shares
acquired pursuant to the Share Purchase Award. Such pledge shall be evidenced by
a pledge agreement (the "Pledge Agreement") containing such terms and conditions
as the Committee shall determine. Purchase Loans shall be recourse or
non-recourse with respect to a Participant, as determined from time to time by
the Committee. The share certificates for the Shares purchased by a Participant
pursuant to a Share Purchase Award shall be issued in the Participant's name,
but shall be held by the Company as security for repayment of the Participant's
Purchase Loan together with a stock power executed in blank by the Participant
(the execution and delivery of which by the Participant shall be a condition to
the issuance of the Share Purchase Award). Unless otherwise determined by the
Committee, the Participant shall be entitled to exercise all rights applicable
to such Shares, including, but not limited to, the right to vote such Shares and
the right to receive dividends and other distributions made with respect to such
Shares. When the Purchase Loan and any accrued but unpaid interest thereon has
been repaid or otherwise satisfied in full, the Company shall deliver to the
Participant the share certificates for the Shares purchased by a Participant
under the Share Purchase Award.

        (b)    Release and Delivery of Share Certificates During the Term of the
Purchase Loan.    The Company shall release and deliver to each Participant
certificates for Shares purchased by a Participant pursuant to a Share Purchase
Award, in such amounts and on such terms and conditions as the Committee shall
determine, which shall be set forth in the Pledge Agreement.

        (c)    Release and Delivery of Share Certificates Upon Repayment of the
Purchase Loan.    The Company shall release and deliver to each Participant
certificates for the Shares purchased by the Participant under the Share
Purchase Award and then held by the Company, provided the Participant has paid
or otherwise satisfied in full the balance of the Purchase Loan and any accrued
but unpaid interest thereon. In the event the balance of the Purchase Loan is
not repaid, forgiven or otherwise satisfied within 90 days after (i) the date
repayment of the Purchase Loan is due (whether in accordance with its term, by
reason of acceleration or otherwise), or (ii) such longer time as the Committee,
in its discretion, shall provide for repayment or satisfaction, the Company
shall retain those Shares then held by the Company in accordance with the Pledge
Agreement.

        (d)    Recourse Purchase Loans.    Notwithstanding Sections 7.3(a),
(b) and (c) above, in the case of a recourse Purchase Loan, the Committee may
make a Purchase Loan on such terms as it determines, including without
limitation, not requiring a pledge of the acquired Shares.

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        7.4.    Termination of Employment.    (a) Termination of Employment by
Death, Disability or by the Company Without Cause; Change of Control. In the
event of a Participant's termination of employment or separation from service by
reason of death, "disability" or by the Company without "cause," or in the event
of a "change of control," the Committee shall have the right (but shall not be
required) to forgive the remaining unpaid amount (principal and interest) of the
Purchase Loan in whole or in part as of the date of such occurrence. "Change of
Control," "disability" and "cause" shall have the respective meanings as set
forth in the promissory note evidencing the Purchase Loan.

        (b)    Other Termination of Employment.    Subject to Section 7.4(a)
above, in the event of a Participant's termination of employment or separation
from service for any reason, the Participant shall repay to the Company the
entire balance of the Purchase Loan and any accrued but unpaid interest thereon,
which amounts shall become immediately due and payable, unless otherwise
determined by the Committee.

        7.5.    Restrictions on Transfer.    No Share Purchase Award or Shares
purchased through such an Award and pledged to the Company as collateral
security for the Participant's Purchase Loan (and accrued and unpaid interest
thereon) may be otherwise pledged, sold, assigned or transferred (other than by
will or by the laws of descent and distribution).

ARTICLE 8.

RESTRICTED SHARE AWARDS

        8.1.    Restricted Share Awards.    (a) Grant. A grant of Shares made
pursuant to this Article 8 is referred to as a "Restricted Share Award." The
Committee may grant to any Participant an amount of Shares in such manner, and
subject to such terms and conditions relating to vesting, forfeitability and
restrictions on delivery and transfer (whether based on performance standards,
periods of service or otherwise) as the Committee shall establish (such Shares,
"Restricted Shares"). The terms of any Restricted Share Award granted under this
Plan shall be set forth in a written agreement (a "Restricted Share Agreement")
which shall contain provisions determined by the Committee and not inconsistent
with this Plan. The provisions of Restricted Share Awards need not be the same
for each Participant receiving such Awards.

        (b)    Issuance of Restricted Shares.    As soon as practicable after
the date of grant of a Restricted Share Award by the Committee, the Company
shall cause to be transferred on the books of the Company, Shares registered in
the name of the Company, as nominee for the Participant, evidencing the
Restricted Shares covered by the Award; provided, however, such Shares shall be
subject to forfeiture to the Company retroactive to the date of grant, if a
Restricted Share Agreement delivered to the Participant by the Company with
respect to the Restricted Shares covered by the Award is not duly executed by
the Participant and timely returned to the Company. All Restricted Shares
covered by Awards under this Article 8 shall be subject to the restrictions,
terms and conditions contained in the Plan and the Restricted Share Agreement
entered into by and between the Company and the Participant. Until the lapse or
release of all restrictions applicable to an Award of Restricted Shares, the
share certificates representing such Restricted Shares shall be held in custody
by the Company or its designee.

        (c)    Shareholder Rights.    Beginning on the date of grant of the
Restricted Share Award and subject to execution of the Restricted Share
Agreement as provided in Sections 8.1(a) and (b), the Participant shall become a
shareholder of the Company with respect to all Shares subject to the Restricted
Share Agreement and shall have all of the rights of a shareholder, including,
but not limited to, the right to vote such Shares and the right to receive
distributions made with respect to such Shares; provided, however, that any
Shares or any other property (other than cash) distributed as a dividend or
otherwise with respect to any Restricted Shares as to which the restrictions
have not yet lapsed shall be subject to the same restrictions as such Restricted
Shares and shall be represented by book entry and held as prescribed in
Section 8.1(b).

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        (d)    Restriction on Transferability.    None of the Restricted Shares
may be assigned or transferred (other than by will or the laws of descent and
distribution), pledged or sold prior to lapse or release of the restrictions
applicable thereto.

        (e)    Delivery of Shares Upon Release of Restrictions.    Upon
expiration or earlier termination of the forfeiture period without a forfeiture
and the satisfaction of or release from any other conditions prescribed by the
Committee, the restrictions applicable to the Restricted Shares shall lapse. As
promptly as administratively feasible thereafter, subject to the requirements of
Section 12.1, the Company shall deliver to the Participant or, in case of the
Participant's death, to the Participant's beneficiary, one or more stock
certificates for the appropriate number of Shares, free of all such
restrictions, except for any restrictions that may be imposed by law.

        8.2.    Terms of Restricted Shares.    (a)    Forfeiture of Restricted
Shares.    Subject to Section 8.2(b), all Restricted Shares shall be forfeited
and returned to the Company and all rights of the Participant with respect to
such Restricted Shares shall terminate unless the Participant continues in the
service of the Company as an employee until the expiration of the forfeiture
period for such Restricted Shares and satisfies any and all other conditions set
forth in the Restricted Share Agreement. The Committee in its sole discretion,
shall determine the forfeiture period (which may, but need not, lapse in
installments) and any other terms and conditions applicable with respect to any
Restricted Share Award and the Committee has the discretion to modify the terms
and conditions of a Restricted Share award as long as the rights of the
Participant are not impaired.

        (b)    Waiver of Forfeiture Period.    Notwithstanding anything
contained in this Article 8 to the contrary, the Committee may, in its sole
discretion and subject to the limitations imposed under Section 162(m) of the
Code and the Treasury Regulations thereunder in the case of a Restricted Share
Award intended to comply with the performance-based exception under Code
Section 162(m), waive the forfeiture period and any other conditions set forth
in any Restricted Share Agreement under appropriate circumstances (including the
death, disability or retirement of the Participant or a material change in
circumstances arising after the date of an Award) and subject to such terms and
conditions (including forfeiture of a proportionate number of the Restricted
Shares) as the Committee shall deem appropriate.

ARTICLE 9.

DEFERRED SHARE AWARDS

        9.1.    Shares and Administration.    Awards of the right to receive
Shares that are not to be distributed to the Participant until after a specified
deferral period (such Award and the deferred Shares delivered thereunder
hereinafter as the context shall require, the "Deferred Shares") may be made
either alone or in addition to share Options, share appreciation rights, or
Restricted Share Awards, or Other Share-based Awards (hereafter defined) granted
under the Plan. The Committee shall determine the Directors, officers,
employees, consultants and advisors of the Company and its subsidiaries to whom
and the time or times at which Deferred Shares shall be awarded, the number of
Deferred Shares to be awarded to any Participant, the duration of the period
(the "Deferral Period") during which, and the conditions under which, receipt of
the Shares will be deferred, and the terms and conditions of the award in
addition to those contained in Section 9.2. In its sole discretion, the
Committee may provide for a minimum payment at the end of the applicable
Deferral Period based on a stated percentage of the Fair Market Value on the
date of grant of the number of Shares covered by a Deferred Share award. The
Committee may also provide for the grant of Deferred Shares upon the completion
of a specified performance period. The provisions of Deferred Share awards need
not be the same with respect to each recipient.

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        9.2.    Terms and Conditions.    Deferred Share awards made pursuant to
this Article 9 shall be subject to the following terms and conditions:

        (a)  Subject to the provisions of the Plan, the Shares to be issued
pursuant to a Deferred Share award may not be sold, assigned, transferred,
pledged or otherwise encumbered during the Deferral Period or Elective Deferral
Period (defined below), where applicable, and may be subject to a risk of
forfeiture during all or such portion of the Deferral Period as shall be
specified by the Committee. At the expiration of the Deferral Period and
Elective Deferral Period, share certificates shall be delivered to the
Participant, or the Participant's legal representative, in a number equal to the
number of shares covered by the Deferred Share award.

        (b)  Amounts equal to any dividends declared during the Deferral Period
with respect to the number of Shares covered by a Deferred Share award will be
paid to the Participant currently, or deferred and deemed to be reinvested in
additional deferred Shares or otherwise reinvested, as determined at the time of
the Award by the Committee, in its sole discretion.

        (c)  Subject to the provisions of paragraph 9.2(d) of this Article 9,
upon termination of employment for any reason during the Deferral Period for a
given Award, the Deferred Shares in question shall be forfeited by the
Participant.

        (d)  In the event of the Participant's death or permanent disability
during the Deferral Period (or Elective Deferral Period, where applicable), or
in cases of special circumstances, the Committee may, in its sole discretion,
when it finds that a waiver would be in the best interests of the Company, waive
in whole or in part any or all of the remaining deferral limitations imposed
hereunder with respect to any or all of the Participant's Deferred Shares.

        (e)  Prior to completion of the Deferral Period, a Participant may elect
to further defer receipt of the Award for a specified period or until a
specified event (the "Elective Deferral Period"), subject in each case to the
approval of the Committee and under such terms as are determined by the
Committee, all in its sole discretion.

        (f)    Each Award shall be confirmed by a Deferred Share agreement or
other instrument executed by the Company and the Participant.

ARTICLE 10.

GENERALLY APPLICABLE PROVISIONS

        10.1.    Option Period.    Subject to Section 3.1(b), the period for
which an Option is exercisable shall be set by the Committee and shall not
exceed ten years from the date such Option is granted, provided, however, in the
case of an Option that is not intended to be an "incentive share option," the
Committee may prescribe a period in excess of ten years. After the Option is
granted, the option period may not be reduced, subject to expiration due to
termination of employment or otherwise.

        10.2.    Fair Market Value.    The "Fair Market Value" of a Share shall
be determined in good faith by the Committee in its sole discretion from time to
time. In no case shall Fair Market Value be less than the par value of a Share.
An Option shall be considered granted on the date the Committee acts to grant
the Option or such later date as the Committee shall specify.

        10.3.    Exercise of Options.    Vested Options granted under the Plan
shall be exercised by the Optionee or by a Permitted Assignee thereof (or by his
or her executors, administrators, guardian or legal representative, as provided
in Sections 10.6 and 10.7 hereof) as to all or part of the Shares covered
thereby, by the giving of written notice of exercise to the Company, specifying
the number of Shares to be purchased, accompanied by payment of the full
purchase price for the Shares being purchased. Full payment of such purchase
price shall be made at the time of exercise and shall be made (i) in cash or by
certified check or bank check or wire transfer of immediately available funds,

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(ii) with the consent of the Committee, by delivery of a promissory note in
favor of the Company upon such terms and conditions as determined by the
Committee, (iii) with the consent of Committee, by tendering previously acquired
Shares (valued at its Fair Market Value, as determined by the Committee as of
the date of tender) that have been owned for a period of at least six months (or
such other period to avoid accounting charges against the Company's earnings),
(iv) if Shares are traded on a national securities exchange, the Nasdaq Stock
Market, Inc. or quoted on a national quotation system sponsored by the National
Association of Securities Dealers, Inc. and the Committee authorizes this method
of exercise, through the delivery of irrevocable instructions to a broker
approved by the Committee to deliver promptly to the Company an amount equal to
the purchase price, or (v) with the consent of the Committee, any combination of
(i), (ii), (iii) and (iv). In connection with a tender of previously acquired
Shares pursuant to clause (iii) above, the Committee, in its sole discretion,
may permit the Optionee to constructively exchange Shares already owned by the
Optionee in lieu of actually tendering such Shares to the Company, provided that
adequate documentation concerning the ownership of the Shares to be
constructively tendered is furnished in form satisfactory to the Committee. The
notice of exercise, accompanied by such payment, shall be delivered to the
Company at its principal business office or such other office as the Committee
may from time to time direct, and shall be in such form, containing such further
provisions consistent with the provisions of the Plan, as the Committee may from
time to time prescribe. In no event may any Option granted hereunder be
exercised for a fraction of a Share. The Company shall, subject to Section 10.4
herein, effect the transfer of Shares purchased pursuant to an Option as soon as
practicable, and, within a reasonable time thereafter, such transfer shall be
evidenced on the books of the Company. No person exercising an Option shall have
any of the rights of a holder of Shares subject to an Option until certificates
for such Shares shall have been issued following the exercise of such Option. No
adjustment shall be made for cash dividends or other rights for which the record
date is prior to the date of such issuance.

        10.4.    Transferability.    No Option that is intended to qualify as an
"incentive stock option" under Section 422 of the Code shall be assignable or
transferable by the Optionee, other than by will or the laws of descent and
distribution, and such Option may be exercised during the life of the Optionee
only by the Optionee or his guardian or legal representative. "Non-qualified
share options" and any share appreciation rights granted in tandem therewith are
transferable (together and not separately) with the consent of the Committee by
the Optionee or Holder, as the case may be, to any one or more of the following
persons (each, a "Permitted Assignee"): (i) the spouse, parent, issue, spouse of
issue, or issue of spouse ("issue" shall include all descendants whether natural
or adopted) of such Optionee or Holder, as the case may be; (ii) a trust for the
benefit of one or more of those persons described in clause (i) above or for the
benefit of such Optionee or Holder, as the case may be; (iii) an entity in which
the Optionee or Holder or any Permitted Assignee thereof is a beneficial owner;
or (iv) in the case of a transfer by an Optionee who is a non-employee director,
another non-employee director of the Company; provided that such Permitted
Assignee shall be bound by and subject to all of the terms and conditions of
this Plan and the Share Option Agreement relating to the transferred Option and
shall execute an agreement satisfactory to the Company evidencing such
obligations; and provided further that such Optionee or Holder shall remain
bound by the terms and conditions of this Plan. In the case of a transfer by a
non-employee director to another non-employee director, the vesting and
exercisability shall after such transfer be determined by reference to the
service of the assignee, rather than the assignor. The Company shall cooperate
with any Permitted Assignee and the Company's transfer agent in effectuating any
transfer permitted under this Section 10.4.

        10.5.    Termination of Employment.    Unless the Committee determines
otherwise, in the event of the termination of employment of an Optionee or the
termination or separation from service of an advisor, consultant or a Director
(who is an Optionee) for any reason (other than death or disability as provided
below), any Option(s) held by such Optionee (or Permitted Assignee) under this
Plan and not previously exercised or expired shall be deemed cancelled and
terminated on the day of such termination or separation, provided, however, that
in no instance may the term of the Option, if

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extended by the Committee, exceed the maximum term established pursuant to
Section 3.1(b)(ii) or 10.1 above. Notwithstanding the foregoing, in the event of
the termination or separation from service of an Optionee for any reason other
than death or disability, under conditions satisfactory to the Company, the
Committee may, in its sole discretion, allow any "nonqualified share options"
granted to such Optionee under the Plan and not previously exercised or expired
to be exercisable for a period of time to be specified by the Committee,
provided, however, that in no instance may the term of the Option, as so
extended, exceed the maximum term established pursuant to Section 10.1 above.

        10.6.    Death.    In the event an Optionee dies while employed by the
Company or any of its subsidiaries or affiliates or during his term as a
Director, advisor or consultant of the Company or any of its subsidiaries or
affiliates, as the case may be, any Option(s) held by such Optionee (or his
Permitted Assignee) and not previously expired or exercised shall, to the extent
exercisable on the date of death, be exercisable by the estate of such Optionee
or by any person who acquired such Option by bequest or inheritance, or by the
Permitted Assignee at any time within one year after the death of the Optionee,
unless earlier terminated pursuant to its terms, provided, however, that if the
term of such Option would expire by its terms within six months after the
Optionee's death, the term of such Option shall be extended until six months
after the Optionee's death, provided further, however, that in no instance may
the term of the Option, as so extended, exceed the maximum term established
pursuant to Section 3.1(b)(ii) or 10.1 above.

        10.7.    Disability.    In the event of the termination of employment of
an Optionee or the separation from service of a Director (who is an Optionee),
advisor or consultant of the Company, due to total disability, the Optionee, or
his guardian or legal representative, or a Permitted Assignee shall have the
unqualified right to exercise any Option(s) that have not expired or been
previously exercised and that the Optionee was eligible to exercise as of the
first date of total disability (as determined by the Committee), at any time
within one year after such termination or separation, unless earlier terminated
pursuant to its terms, provided, however, that if the term of such Option would
expire by its terms within six months after such termination or separation, the
term of such Option shall be extended until six months after such termination or
separation, provided further, however, that in no instance may the term of the
Option, as so extended, exceed the maximum term established pursuant to
Section 3.1(b)(ii) or 10.1 above. The term "total disability" shall, for
purposes of this Plan, be defined in the same manner as such term is defined in
Section 22(e)(3) of the Code.

        10.8.    Amendment and Modification of the Plan.    The Committee may,
from time to time, alter, amend, suspend or terminate the Plan as it shall deem
advisable, subject to any requirement for shareholder approval imposed by
applicable law or any rule of any stock exchange or quotation system on which
Shares are listed or quoted; provided that the Committee may not amend the Plan,
without the approval of the Company's shareholders, to increase the number of
Shares that may be the subject of Options under the Plan (except for adjustments
pursuant to Section 10.9 hereof). In addition, no amendments to, or termination
of, the Plan shall in any way impair the rights of an Optionee or a Participant
(or a Permitted Assignee thereof) under any Award previously granted without
such Optionee's or Participant's consent.

        10.9.    Adjustments.    In the event that the Committee shall determine
that any dividend or other distribution (whether in the form of cash, Shares,
other securities, or other property), recapitalization, stock split, reverse
stock split, reorganization, merger, consolidation, split-up, spin-off,
combination, repurchase, or exchange of Shares or other securities, the issuance
of warrants or other rights to purchase Shares or other securities, or other
similar corporate transaction or event affects the Shares with respect to which
Awards have been or may be issued under the Plan, such that an adjustment is
determined in good faith by the Committee to be appropriate in order to prevent
dilution or enlargement of the benefits or potential benefits intended to be
made available under the Plan, then the Committee shall, in such manner as the
Committee may deem equitable, adjust any or all of (i) the number and type of
Shares that thereafter may be made the subject of Awards, (ii) the number and

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type of Shares subject to outstanding Awards and share appreciation rights, and
(iii) the grant or exercise price with respect to any Award, or, if deemed
appropriate, make provision for a cash payment to the holder of any outstanding
Award; provided, in each case, that with respect to "incentive stock options,"
no such adjustment shall be authorized to the extent that such adjustment would
cause such options to violate Section 422(b) of the Code or any successor
provision; and provided further, that the number of Shares subject to any Award
denominated in Shares shall always be a whole number. In the event of any
reorganization, merger, consolidation, split-up, spin-off, or other business
combination involving the Company (collectively, a "Reorganization"), the
Committee or the Board of Directors of the Company may cause any Award
outstanding as of the effective date of the Reorganization to be cancelled in
consideration of a cash payment or alternate Award (whether from the Company or
another entity that is a party to the Reorganization) or a combination thereof
made to the holder of such cancelled Award substantially equivalent in value to
the fair market value of such cancelled Award. The determination of fair market
value shall be made by the Committee or the Board of Directors, as the case may
be, in their sole discretion.

        10.10.    Change of Control.    The terms of any Award may provide in
the Share Option Agreement, Restricted Share Agreement, Purchase Loan or other
document evidencing the Award, that upon a "Change of Control" of the Company
(as that term may be defined therein), (i) Options (and share appreciation
rights) immediately vest and become fully exercisable, (ii) restrictions on
Restricted Shares lapse and the shares become fully vested, (iii) Purchase Loans
are forgiven in whole or in part, and (iv) such other additional benefits as the
Committee deems appropriate shall apply, subject in each case to any terms and
conditions contained in the applicable document evidencing such Award. For
purposes of this Plan, a "Change of Control" shall mean an event described in
the applicable document evidencing the Award or such other event as determined
in the sole discretion of the Board of Directors of the Company. The Committee,
in its discretion, may determine that, upon the occurrence of a Change of
Control of the Company, each Option and share appreciation right outstanding
hereunder shall terminate within a specified number of days after notice to the
Participant or Holder, and such Participant or Holder shall receive, with
respect to each Share subject to such Option or share appreciation right, an
amount equal to the excess of the Fair Market Value of such Share immediately
prior to the occurrence of such Change of Control over the exercise price per
share of such Option or share appreciation right; such amount to be payable in
cash, in one or more kinds of property (including the property, if any, payable
in the transaction) or in a combination thereof, as the Committee, in its
discretion, shall determine.

        10.11.    Employment Violation.    Each Share Option Agreement
evidencing an Option granted hereunder shall include and be subject to the
following terms:

        (a)  The terms of this Section 10.11 shall apply to the Option if the
Optionee is or shall become subject to an employment agreement with the Company.

        (b)  If the Optionee materially breaches his or her employment agreement
(it being understood that any breach of the post-termination obligations
contained therein shall be deemed to be material) for so long as the terms of
such employment agreement shall apply to the Optionee (each an "Employment
Violation"), the Company shall have the right to require (i) the termination and
cancellation of the unexercised portion of the Option, if any, whether vested or
unvested, and (ii) payment by the Optionee to the Company of the Recapture
Amount (as defined below). Such termination of unexercised Options and payment
of the Recapture Amount, as the case may be, shall be in addition to, and not in
lieu of, any other right or remedy available to the Company arising out of or in
connection with any such Employment Violation including, without limitation, the
right to terminate Optionee's employment if not already terminated, seek
injunctive relief and additional monetary damages.

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        (c)  "Recapture Amount" shall mean the gross gain realized or unrealized
by the Optionee upon each exercise of his Option during the period beginning on
the date which is twelve (12) months prior to the date of the Optionee's
Employment Violation and ending on the date of computation (the "Look-back
Period"), which gain shall be calculated as the sum of:

          (i)  if the Optionee has exercised any portion of his Option during
the Look-back Period and sold any of the Shares acquired on exercise thereafter,
an amount equal to the product of (x) the sales price per Share sold minus the
exercise price per Share times (y) the number of Shares as to which the Option
was exercised and which were sold at such sales price; plus

        (ii)  if the Optionee has exercised any portion of his Option during the
Look-back Period and not sold any of the Shares acquired on exercise thereafter,
with respect to each of such Shares an amount equal to the product of (x) the
greatest of the following: (1) the Fair Market Value per Share on the date of
exercise, (2) the arithmetic average of the per Share closing sales prices as
reported on NASDAQ for the thirty (30) trading day period ending on the trading
day immediately preceding the date of the Company's written notice of its
exercise of its rights under this clause (h), or (3) the arithmetic average of
the per Share closing sales prices as reported on NASDAQ for the thirty
(30) trading day period ending on the trading day immediately preceding the date
of computation, minus the exercise price per Share times (y) the number of
Shares as to which this Option was exercised and which were not sold;

provided, however, in lieu of payment by the Optionee to the Company of the
Recapture Amount determined pursuant to subclause (ii) above, the Optionee, in
his or her discretion, may tender to the Company the Shares acquired upon
exercise of this Option during the Look-back Period and the Optionee shall not
be entitled to receive any consideration from the Company in exchange therefor.

        With respect to any other Awards granted hereunder, the terms of any
Restricted Share Agreement, share appreciation right, Share Purchase Award or
any other document evidencing an Award under the Plan, may include comparable
provisions to those set forth in this Section 10.11.

        10.12.    Other Provisions.    (a)    The Committee may require each
Participant purchasing Shares pursuant to an Award under the Plan to represent
to and agree with the Company in writing that such Participant is acquiring the
Shares without a view to distribution thereof. The certificates for such Shares
may include any legend which the Committee deems appropriate to reflect any
restrictions on transfer.

        (b)  All certificates for Shares delivered under the Plan pursuant to
any Award shall be subject to such share-transfer orders and other restrictions
as the Committee may deem advisable under the rules, regulations, and other
restrictions of the Securities and Exchange Commission, any stock exchange upon
which the Shares are then listed, and any applicable Federal or state securities
law, and the Committee may cause a legend or legends to be put on any such
certificates to make appropriate reference to such restrictions.

        (c)  Awards granted under the Plan may, in the discretion of the
Committee, be granted either alone or in addition to, in tandem with, or in
substitution for, any other Awards granted under the Plan. If Awards are granted
in substitution for other Awards, the Committee shall require the surrender of
such other Awards in consideration for the grant of the new Awards. Awards
granted in addition to or in tandem with other Awards may be granted either at
the same time as or at a different time from the grant of such other Awards.

        (d)  Nothing contained in this Plan shall prevent the Board of Directors
from adopting other or additional compensation arrangements, subject to
shareholder approval if such approval is required; and such arrangements may be
either generally applicable or applicable only in specific cases.

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        (e)  A Participant shall have no right as a shareholder until he or she
becomes the holder of record.

        (f)    The Company will provide to its shareholders, at least annually,
reports containing financial statements and management's discussion and analysis
of financial conditions and results of operations.

        10.13.    Terms of Option Grant.    Notwithstanding anything in
Section 10.4, 10.5, 10.6, 10.7, 10.10 and 10.11 to the contrary, the Committee
may grant an Option under such terms and conditions as may be provided in the
Share Option Agreement given to the Optionee and the Committee has the
discretion to modify the terms and conditions of an Option after grant as long
as the rights of the Optionee are not impaired unless the Optionee otherwise
consents, provided, however, that in no instance may the term of the Option, as
so granted, exceed the maximum term established pursuant to Section 10.1 above.

ARTICLE 11.

PERFORMANCE-BASED AWARDS.

        11.1.    General.    (a) Certain Awards granted under the Plan may be
granted in a manner such that the Awards qualify as "performance-based
compensation"(as such term is used in Section 162(m) of the Code and the
regulations thereunder) and thus be exempt from the deduction limitation imposed
by Section 162(m) of the Code ("Performance-Based Awards"). Awards shall only
qualify as Performance-Based Awards if, among other things, at the time of grant
the Committee is comprised solely of two or more "outside directors" (as such
term is used in Section 162(m) of the Code and the regulations thereunder).

        (b)  Performance-Based Awards may be granted to Participants at any time
and from time to time, as shall be determined by the Committee. The Committee
shall have complete discretion in determining the number, amount and timing of
awards granted to each Participant. Such Performance-Based Awards may take the
form of, without limitation, cash, Shares or any combination thereof.

        (c)  The Committee shall set performance goals at its discretion which,
depending on the extent to which they are met, will determine the number and/or
value of such Performance-Based Awards that will be paid out to the
Participants, and may attach to such Performance-Based Awards one or more
restrictions. The maximum amount of Performance-Based Awards to be awarded to
any employee during any fiscal year shall be $1,000,000.

        11.2.    Options and Share Appreciation Rights.    Options and share
appreciation rights granted under the Plan with an exercise price at or above
the Fair Market Value of the Shares on the date of grant should qualify as
Performance-Based Awards.

        11.3.    Other Awards.    Either the granting or vesting of
Performance-Based Awards granted under the Plan shall be subject to the
achievement of a performance target or targets, as determined by the Committee
in its sole discretion, based on one or more of the performance measures
specified in Section 11.4 below. With respect to such Performance-Based Awards:

(1)the Committee shall establish in writing (x) the objective performance-based
goals applicable to a given period and (y) the individual employees or class of
employees to which such performance-based goals apply no later than 90 days
after the commencement of such period (but in no event after 25 percent of such
period has elapsed);

(2)no Performance-Based Awards shall be payable to or vest with respect to, as
the case may be, any Participant for a given period until the Committee
certifies in writing that the objective

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performance goals (and any other material terms) applicable to such period have
been satisfied; and

(3)after the establishment of a performance goal, the Committee shall not revise
such performance goal or increase the amount of compensation payable thereunder
(as determined in accordance with Section 162(m) of the Code) upon the
attainment of such performance goal.

        11.4.    Performance Measures.    The Committee may use the following
performance measures (either individually or in any combination) to set
performance targets with respect to Awards intended to qualify as
Performance-Based Awards: net sales; pretax income before allocation of
corporate overhead and bonus; budget; earnings per share; net income; division,
group or corporate financial goals; return on stockholders' equity; return on
assets; attainment of strategic and operational initiatives; appreciation in
and/or maintenance of the price of the common stock or any other publicly-traded
securities of the Company; market share; gross profits; earnings before taxes;
earnings before interest and taxes; earnings before interest, taxes,
depreciation and amortization; economic value-added models; comparisons with
various stock market indices; and/or reductions in costs.

ARTICLE 12.

MISCELLANEOUS

        12.1.    Tax Withholding.    The Company shall have the right to make
all payments or distributions pursuant to the Plan to an Optionee or Participant
(or a Permitted Assignee thereof) net of any applicable Federal, State and local
taxes required to be paid as a result of the grant of any Award, exercise of an
Option or share appreciation rights or any other event occurring pursuant to
this Plan. The Company or any subsidiary or affiliate thereof shall have the
right to withhold from wages or other amounts otherwise payable to such Optionee
or Participant (or a Permitted Assignee thereof) such withholding taxes as may
be required by law, or to otherwise require the Optionee or Participant (or a
Permitted Assignee thereof) to pay such withholding taxes. If the Optionee or
Participant (or a Permitted Assignee thereof) shall fail to make such tax
payments as are required, the Company or its subsidiaries or affiliates shall,
to the extent permitted by law, have the right to deduct any such taxes from any
payment of any kind otherwise due to such Optionee or Participant or to take
such other action as may be necessary to satisfy such withholding obligations.
In satisfaction of the requirement to pay withholding taxes, the Optionee or
Participant (or Permitted Assignee) may make a written election, which may be
accepted or rejected in the discretion of the Committee, to have withheld a
portion of the Shares then issuable to the Optionee (or Permitted Assignee)
pursuant to the Plan having an aggregate Fair Market Value equal to the
withholding taxes.

        12.2.    Right of Discharge Reserved.    Nothing in the Plan nor the
grant of an Award hereunder shall confer upon any employee, Director or other
individual the right to continue in the employment or service of the Company or
any subsidiary or affiliate of the Company or affect any right that the Company
or any subsidiary or affiliate of the Company may have to terminate the
employment or service of (or to demote or to exclude from future Options under
the Plan) any such employee, Director or other individual at any time for any
reason. Except as specifically provided by the Committee, the Company shall not
be liable for the loss of existing or potential profit with respect to an Award
in the event of termination of an employment or other relationship even if the
termination is in violation of an obligation of the Company or any subsidiary or
affiliate of the Company to the employee, Director, advisor or consultant.

        12.3.    Nature of Payments.    All Awards made pursuant to the Plan are
in consideration of services performed or to be performed for the Company or any
subsidiary or affiliate of the Company. Any income or gain realized pursuant to
Awards under the Plan and any share appreciation rights constitutes a special
incentive payment to the Optionee, Participant or Holder and shall not be taken

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into account, to the extent permissible under applicable law, as compensation
for purposes of any of the employee benefit plans of the Company or any
subsidiary or affiliate of the Company except as may be determined by the
Committee or by the Directors or directors of the applicable subsidiary or
affiliate of the Company.

        12.4.    Unfunded Status of the Plan.    The Plan is intended to
constitute an "unfunded" plan for incentive and deferred compensation. With
respect to any payments not yet made to a Participant or Optionee by the
Company, nothing contained herein shall give any such Participant or Optionee
any rights that are greater than those of a general creditor of the Company. In
its sole discretion, the Committee may authorize the creation of trusts or other
arrangements to meet the obligations created under the Plan to deliver the
Shares or payments in lieu of or with respect to Awards hereunder; provided,
however, that the existence of such trusts or other arrangements is consistent
with the unfunded status of the Plan.

        12.5.    Severability.    If any provision of the Plan shall be held
unlawful or otherwise invalid or unenforceable in whole or in part, such
unlawfulness, invalidity or unenforceability shall not affect any other
provision of the Plan or part thereof, each of which remain in full force and
effect. If the making of any payment or the provision of any other benefit
required under the Plan shall be held unlawful or otherwise invalid or
unenforceable, such unlawfulness, invalidity or unenforceability shall not
prevent any other payment or benefit from being made or provided under the Plan,
and if the making of any payment in full or the provision of any other benefit
required under the Plan in full would be unlawful or otherwise invalid or
unenforceable, then such unlawfulness, invalidity or unenforceability shall not
prevent such payment or benefit from being made or provided in part, to the
extent that it would not be unlawful, invalid or unenforceable, and the maximum
payment or benefit that would not be unlawful, invalid or unenforceable shall be
made or provided under the Plan.

        12.6.    Gender and Number.    In order to shorten and to improve the
understandability of the Plan document by eliminating the repeated usage of such
phrases as "his or her" and any masculine terminology herein shall also include
the feminine, and the definition of any term herein in the singular shall also
include the plural except when otherwise indicated by the context.

        12.7.    Governing Law.    The Plan and all determinations made and
actions taken thereunder, to the extent not otherwise governed by the Code or
the laws of the United States, shall be governed by the laws of the State of
Delaware and construed accordingly.

        12.8.    Effective Date of Plan; Termination of Plan.    The Plan shall
be effective on the date of the approval of the Plan by the Board of Directors.
Notwithstanding the foregoing, no Option intended to qualify as an incentive
share option shall be granted hereunder until the Plan shall be approved by the
holders of a majority of the shares entitled to vote thereon, provided such
approval is obtained within 12 months after the date of adoption of the Plan by
the Board of Directors. Awards may be granted under the Plan at any time and
from time to time prior to July 10, 2011, on which date the Plan will expire
except as to Awards and related share appreciation rights then outstanding under
the Plan. Such outstanding Awards and share appreciation rights shall remain in
effect until they have been exercised or terminated, or have expired.

        12.9.    Captions.    The captions in this Plan are for convenience of
reference only, and are not intended to narrow, limit or affect the substance or
interpretation of the provisions contained herein.

        12.10.    Dissolution or Liquidation.    In the event of the proposed
dissolution or liquidation of the Company, the Committee shall notify each
Optionee and Participant as soon as practicable prior to the effective date of
such proposed transaction. The Committee in its sole discretion may permit an
Optionee to exercise an Option until ten days prior to such transaction with
respect to all vested and exercisable Shares covered thereby and with respect to
such number of unvested Shares as the Committee shall determine. In addition,
the Committee may provide that any forfeiture provision or

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Company repurchase option applicable to any Restricted Share Award shall lapse
as to such number of Shares as the Committee shall determine, contingent upon
the occurrence of the proposed dissolution or liquidation at the time and in the
manner contemplated. To the extent an Option has not been previously exercised,
the Option shall terminate automatically immediately prior to the consummation
of the proposed action. To the extent a forfeiture provision applicable to a
Restricted Share Award has not been waived by the Committee, the related
Restricted Share Award shall be forfeited automatically immediately prior to the
consummation of the proposed action.

        12.11.    Successors and Assigns.    This Plan shall be binding upon and
inure to the benefit of the respective successors and permitted assigns of the
Company, Optionees and Participants.

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STOCK OPTION AGREEMENT
(Non-Transferable)

Stock Option #                           For            Shares

Issued Pursuant to the
2001 Incentive Plan of

ACTIVISION, INC.

        THIS CERTIFIES that on                        (the "Issuance Date")
                        (the "Holder") was granted an option (the "Option") to
purchase at the option price of $            per share, all or any part
of                        fully paid and non-assessable shares ("Shares") of
common stock, par value $.000001 per share, of ACTIVISION, INC., a Delaware
corporation (the "Company"), upon and subject to the following terms and
conditions:

        a.    Terms of the Plan.    The Option is granted pursuant to, and is
subject to the terms and conditions of, the Company's 2001 Incentive Plan, as
amended (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 Holder hereby acknowledges by his signature below. Capitalized terms
used herein shall have the meanings set forth in the Plan, unless otherwise
defined herein.

        [The Company intends that this Option qualify as an "incentive" share
option within the meaning of Section 422 of the Internal Revenue Code to the
maximum extent permissible under the Internal Revenue Code. To the extent that
the Option does not qualify as an incentive share option, the Option or the
portion thereof which does not so qualify shall constitute a separate
"nonqualified" share option.]

        b.    Expiration.    This Option shall expire on [ten (10) years less
one day from date of issuance], unless extended or earlier terminated in
accordance herewith.

        c.    Exercise.    This Option may be exercised or surrendered during
the Holder's lifetime only by the Holder or his/her guardian or legal
representative. THIS OPTION SHALL NOT BE TRANSFERABLE BY THE HOLDER OTHERWISE
THAN BY WILL OR BY THE LAWS OF DESCENT AND DISTRIBUTION, SUBJECT TO THE TERMS
AND CONDITIONS OF THE PLAN.

        This Option shall vest and be exercisable as follows:

Vesting Date

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  Shares Vested at Vesting Date

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  Cumulative Shares
Vested at Vesting Date

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[vesting schedule]

        This Option shall be exercised by the Holder (or by her executors,
administrators, guardian or legal representative) as to all or part of the
Shares, by the giving of written notice of exercise to the Company, specifying
the number of Shares to be purchased, accompanied by payment of the full
purchase price for the Shares being purchased. Full payment of such purchase
price shall be made at the time of exercise and shall be made (i) in cash or by
certified check or bank check or wire transfer of immediately available funds,
(ii) with the consent of the Company, by tendering previously acquired Shares
(valued at its Fair Market Value (as defined in the Plan), as determined by the
Company as of the date of tender), or (iii) with the consent of the Company, a
combination of (i) and (ii). Such notice of exercise, accompanied by such
payment, shall be delivered to the Company at its principal business office or
such other office as the Company may from time to time direct, and shall be in
such form, containing such further provisions as the Company may from time to
time prescribe. In no event may this Option be exercised for a fraction of a
Share. The Company shall effect the transfer of Shares purchased pursuant to an
Option as soon as practicable, and, within a reasonable time thereafter, such
transfer shall be evidenced on the books of the Company. No person exercising
this Option shall have any of the rights of a holder of Shares subject to this
Option until certificates for such Shares shall

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have been issued following the exercise of such Option. No adjustment shall be
made for cash dividends or other rights for which the record date is prior to
the date of such issuance.

        (d)    Termination of Employment.    In the event of the termination of
employment or separation from service of the Holder for any reason (other than
death or disability as provided below), this Option, to the extent not
previously exercised or expired, shall be deemed cancelled and terminated on the
day of such termination or separation, unless the Company decides, in its sole
discretion, to extend the term of this Option, subject to the terms of the Plan.

        (e)    Death.    In the event the Holder dies while employed by the
Company or any of its subsidiaries or affiliates, or during his term as a
Director of the Company or any of its subsidiaries or affiliates, as the case
may be, this Option, to the extent not previously expired or exercised, shall,
to the extent exercisable on the date of death, be exercisable by the estate of
the Holder or by any person who acquired this Option by bequest or inheritance,
at any time within one year after the death of the Holder, provided, however,
that if the term of such Option would expire by its terms within six months
after the Optionee's death, the term of such Option shall be extended until six
months after the Optionee's death, provided further, however, that in no
instance may the term of the Option, as so extended, exceed the maximum term
established pursuant to Sections 3.1(b)(ii) or 10.1 of the Plan.

        (f)    Disability.    In the event of the termination of employment of
the Holder or the separation from service of a Director who is a Holder due to
total disability, the Holder, or her guardian or legal representative, shall
have the unqualified right to exercise any portion of this Option which has not
been previously exercised or expired and which the Holder was eligible to
exercise as of the first date of total disability (as determined by the
Company), at any time within one year after such termination or separation,
provided, however, that if the term of such Option would expire by its terms
within six months after such termination or separation, the term of such Option
shall be extended until six months after such termination or separation,
provided further, however, that in no instance may the term of the Option, as so
extended, exceed the maximum term established pursuant to Section 3.1(b)(ii) or
10.1 of the Plan. The term "total disability" shall, for purposes of this Share
Option Agreement, be defined in the same manner as such term is defined in
Section 22(e)(3) of the Internal Revenue Code of 1986, as amended.

        (g)    Change of Control.    If the Holder is an active employee of the
Company or any of its subsidiaries at the time there occurs a "Change of
Control" of the Company (as defined below) and the Holder's employment is
terminated by the Company or any of its subsidiaries other than for Cause (as
defined below) within twelve (12) months following such Change of Control, or
such longer period as the Committee may determine, the portion, if any, of this
Option with respect to which the right to exercise has not yet accrued, shall
immediately vest and be exercisable in full, effective upon such termination,
for a period of 30 days thereafter, or such longer period as the Committee may
determine. For purposes of this Option, a "Change of Control" of the Company
shall be deemed to occur if:

          (i)  there shall have occurred a Change of Control of a nature that
would be required to be reported in response to Item 6(e) of Schedule 14A of
Regulation 14A promulgated under the Securities Exchange Act of 1934, as amended
(the "Exchange Act"), as in effect on the date hereof, whether or not the
Company is then subject to such reporting requirement, provided, however, that
there shall not be deemed to be a Change of Control of the Company if
immediately prior to the occurrence of what would otherwise be a Change of
Control of the Company (a) the Holder is the other party to the transaction (a
"Control Event") that would otherwise result in a Change of Control of the
Company or (b) the Holder is an executive officer, trustee, director or more
than 5% equity holder of the other party to the Control Event or of any entity,
directly or indirectly, controlling such other party;

        (ii)  the Company merges or consolidates with, or sells all or
substantially all of its assets to, another company (each, a "Transaction"),
provided, however, that a Transaction shall not be

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deemed to result in a Change of Control of the Company if (a) immediately prior
thereto the circumstances in (i)(a) or (i)(b) above exist, or (b) (1) the
shareholders of the Company, immediately before such Transaction own, directly
or indirectly, immediately following such Transaction in excess of fifty percent
(50%) of the combined voting power of the outstanding voting securities of the
corporation or other entity resulting from such Transaction (the "Surviving
Corporation") in substantially the same proportion as their ownership of the
voting securities of the Company immediately before such Transaction and (2) the
individuals who were members of the Company's Board of Directors immediately
prior to the execution of the agreement providing for such Transaction
constitute at least a majority of the members of the board of directors or the
board of trustees, as the case may be, of the Surviving Corporation, or of a
corporation or other entity beneficially directly or indirectly owning a
majority of the outstanding voting securities of the Surviving Corporation; or

        (iii)  the Company acquires assets of another company or a subsidiary of
the Company merges or consolidates with another company (each, an "Other
Transaction") and (a) the shareholders of the Company, immediately before such
Other Transaction own, directly or indirectly, immediately following such Other
Transaction 50% or less of the combined voting power of the outstanding voting
securities of the corporation or other entity resulting from such Other
Transaction (the "Other Surviving Corporation") in substantially the same
proportion as their ownership of the voting securities of the Company
immediately before such Other Transaction or (b) the individuals who were
members of the Company's Board of Directors immediately prior to the execution
of the agreement providing for such Other Transaction constitute less than a
majority of the members of the board of directors or the board of trustees, as
the case may be, of the Other Surviving Corporation, or of a corporation or
other entity beneficially directly or indirectly owning a majority of the
outstanding voting securities of the Other Surviving Corporation, provided,
however, that an Other Transaction shall not be deemed to result in a Change of
Control of the Company if immediately prior thereto the circumstances in (i)(a)
or (i)(b) above exist.

        For purposes of this clause (g), "Cause" shall mean (unless a different
definition is used in the Holder's written employment agreement with the
Company, if any, in which case such different definition shall apply to the
Holder) any of the following:

          (i)  material breach by the Holder of his or her employment agreement,
if any, or material failure by the Holder to perform his or her duties (other
than as a result of incapacity due to physical or mental illness) during his or
her employment with the Company after written notice of such breach or failure
and the Holder failed to cure such breach or failure to the Company's reasonable
satisfaction within five (5) days after receiving such written notice;

        (ii)  material breach by the Holder of his or her Employee Proprietary
Information Agreement or other similar arrangement entered into by the Holder in
connection with his or her employment by the Company; or

        (iii)  any act of fraud, misappropriation, misuse, embezzlement or any
other material act of dishonesty in respect of the Company or its funds,
properties, assets or other employees.

        (h)    Employment Violation.    In consideration of the granting and by
acceptance of this Option, the Holder hereby agrees that the terms of this
clause (h) shall apply to the Option. The Holder acknowledges and agrees that
each exercise of this Option and each written notice of exercise delivered to
the Company and executed by the Holder shall serve as a reaffirmation of and
continuing agreement by the Holder to comply with the terms contained in this
clause (h).

        The Company and the Holder acknowledge and agree that if the Holder
materially breaches his or her employment agreement (it being understood that
any breach of the post-termination obligations contained therein shall be deemed
to be material) for so long as the terms of such employment

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agreement shall apply to the Holder (each an "Employment Violation"), the
Company shall have the right to require (i) the termination and cancellation of
the unexercised portion of this Option, if any, whether vested or unvested, and
(ii) payment by the Holder to the Company of the Recapture Amount (as defined
below). The Company and the Holder further agree that such termination of
unexercised Options and payment of the Recapture Amount, as the case may be,
shall be in addition to, and not in lieu of, any other right or remedy available
to the Company arising out of or in connection with any such Employment
Violation including, without limitation, the right to terminate the Holder's
employment if not already terminated, seek injunctive relief and additional
monetary damages.

        For purposes of this clause (h), the "Recapture Amount" shall mean the
gross gain realized or unrealized by the Holder upon each exercise of this
Option during the period beginning on the date which is twelve (12) months prior
to the date of the Holder's Employment Violation and ending on the date of
computation (the "Look-back Period"), which gain shall be calculated as the sum
of:

          (i)  if the Holder has exercised any portion of this Option during the
Look-back Period and sold any of the Shares acquired on exercise thereafter, an
amount equal to the product of (x) the sales price per Share sold minus the
exercise price per Share times (y) the number of Shares as to which this Option
was exercised and which were sold at such sales price; plus

        (ii)  if the Holder has exercised any portion of this Option during the
Look-back Period and not sold any of the Shares acquired on exercise thereafter,
with respect to each of such Shares an amount equal to the product of (x) the
greatest of the following: (1) the Fair Market Value per Share on the date of
exercise, (2) the arithmetic average of the per Share closing sales prices as
reported on NASDAQ for the thirty (30) trading day period ending on the trading
day immediately preceding the date of the Company's written notice of its
exercise of its rights under this clause (h), or (3) the arithmetic average of
the per Share closing sales prices as reported on NASDAQ for the thirty
(30) trading day period ending on the trading day immediately preceding the date
of computation, minus the exercise price per Share times (y) the number of
Shares as to which this Option was exercised and which were not sold;

provided, however, in lieu of payment by the Holder to the Company of the
Recapture Amount determined pursuant to subclause (ii) above, the Holder, in his
or her discretion, may tender to the Company the Shares acquired upon exercise
of this Option during the Look-back Period and the Optionee shall not be
entitled to receive any consideration from the Company in exchange therefor.

        (i)    Adjustments.    In the event that the Company shall determine
that any dividend or other distribution (whether in the form of cash, shares of
common stock of the Company, other securities, or other property),
recapitalization, stock split, reverse stock split, reorganization, merger,
consolidation, split-up, spin-off, combination, repurchase, or exchange of
shares of common stock of the Company or other securities, the issuance of
warrants or other rights to purchase shares of common stock of the Company, or
other securities, or other similar corporate transaction or event affects the
Shares, such that an adjustment is determined by the Company to be appropriate
in order to prevent dilution or enlargement of the benefits or potential
benefits intended to be made available to the Holder, then the Company shall, in
such manner as the Company may deem equitable, adjust any or all of (i) the
number and type of shares of common stock of the Company subject to this Option,
and (ii) the grant or exercise price with respect to this Option, or, if deemed
appropriate, make provision for a cash payment to the Holder.

        (j)    Delivery of Share Certificates.    Within a reasonable time after
the exercise of this Option, the Company shall cause to be delivered to the
person entitled thereto a certificate for the Shares purchased pursuant to the
exercise of this Option. If this Option shall have been exercised with respect
to less than all of the Shares subject to this Option, the Company shall also
cause to be delivered to the person entitled thereto a new Stock Option
Agreement in replacement of this Stock Option Agreement if surrendered at the
time of the exercise of this Option, indicating the number of Shares

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with respect to which this Option remains available for exercise, or the Company
shall make a notation in its books and records to reflect the partial exercise
of this Option.

        (k)    Withholding.    In the event that the Holder elects to exercise
this Option or any part thereof, and if the Company or any subsidiary or
affiliate of the Company shall be required to withhold any amounts by reasons of
any federal, state or local tax laws, rules or regulations in respect of the
issuance of Shares to the Holder pursuant to this Option, the Company or such
subsidiary or affiliate shall be entitled to deduct and withhold such amounts
from any payments to be made to the Holder. In any event, the Holder shall make
available to the Company or such subsidiary or affiliate, promptly when
requested by the Company or such subsidiary or affiliate, sufficient funds to
meet the requirements of such withholding; and the Company or such subsidiary or
affiliate shall be entitled to take and authorize such steps as it may deem
advisable in order to have such funds available to the Company or such
subsidiary or affiliate out of any funds or property due or to become due to the
Holder.

        (l)    Reservation of Shares.    The Company hereby agrees that at all
times there shall be reserved for issuance and/or delivery upon exercise of this
Option such number of Shares as shall be required for issuance or delivery upon
exercise hereof.

        (m)    Rights of Holder.    Nothing contained herein shall be construed
to confer upon the Holder any right to be continued in the employ of the Company
and/or any subsidiary or affiliate of the Company or derogate from any right of
the Company and/or any subsidiary or affiliate of the Company to retire, request
the resignation of, or discharge the Holder at any time, with or without cause.
The Holder shall not, by virtue hereof, be entitled to any rights of a
shareholder in the Company, either at law or in equity, and the rights of the
Holder are limited to those expressed herein and are not enforceable against the
Company except to the extent set forth herein.

        (n)    Exclusion from Pension Computations.    By acceptance of the
grant of this Option, the Holder hereby agrees that any income realized upon the
receipt or exercise hereof, or upon the disposition of the Shares received upon
its exercise, is special incentive compensations and, to the extent permissible
under applicable law, shall not be taken into account as "wages", "salary" or
"compensation" in determining the amount of any payment under any pension,
retirement, incentive, profit sharing, bonus or deferred compensation plan of
the Company or any of its subsidiaries or affiliates.

        (o)    Registration; Legend.    The Company may postpone the issuance
and delivery of Shares upon any exercise of this Option until (a) the admission
of such Shares to listing on any stock exchange or exchanges on which Shares of
the Company of the same class are then listed and (b) the completion of such
registration or other qualification of such Shares under any state or federal
law, rule or regulation as the Company shall determine to be necessary or
advisable. The Holder 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 Shares of an effective Registration Statement under the Securities Act
of 1933, as amended, to issue the Shares in compliance with the provisions of
that or any comparable act.

        The Company may cause the following or a similar legend to be set forth
on each certificate representing Shares or any other security issued or issuable
upon exercise of this Option 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 ACT, THE AVAILABILITY OF WHICH IS
ESTABLISHED BY AN OPINION FROM COUNSEL TO THE COMPANY.

5

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        (p)    Amendment.    The Company may, with the consent of the Holder, at
any time or from time to time amend the terms and conditions of this Option, and
may at any time or from time to time amend the terms of the Plan.

        (q)    Notices.    Any notice which either party hereto may be required
or permitted to give to the other shall be in writing, and may be delivered
personally or by mail, postage prepaid, or overnight courier, addressed as
follows: if to the Company, at its office at 3100 Ocean Park Boulevard, Santa
Monica, California 90405, Attn: General Counsel, or at such other address as the
Company by notice to the Holder may designate in writing from time to time; and
if to the Holder, at the address shown below her signature on this Stock Option
Agreement, or at such other address as the Holder by notice to the Company may
designate in writing from time to time. Notices shall be effective upon receipt.

        (r)    Interpretation.    A determination of the Committee as to any
questions which may arise with respect to the interpretation of the provisions
of this Option and of the Plan shall be final and binding. The Committee may
authorize and establish such rules, regulations and revisions thereof as it may
deem advisable.

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        IN WITNESS WHEREOF, the parties have executed this Stock Option
Agreement as of the date set forth above.

    ACTIVISION, INC.
 
 
By:
 
         

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Name:
Title:
 
 
Date:
 
         

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Attest:
 
         

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ACCEPTED:    
    

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Option Holder
 
 
    

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Address
 
 
    

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  City   State   Zip Code    
    

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Social Security Number

 
 

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QuickLinks

Exhibit 10.6

ACTIVISION, INC. 2001 INCENTIVE PLAN
RECITALS
ARTICLE 1. PURPOSE OF THE PLAN
ARTICLE 2. SHARES SUBJECT TO AWARDS
ARTICLE 3. ELIGIBILITY AND ADMINISTRATION
ARTICLE 4. OPTIONS
ARTICLE 5. SHARE APPRECIATION RIGHTS
ARTICLE 6. RELOAD OPTIONS
ARTICLE 7. SHARE PURCHASE AWARDS
ARTICLE 8. RESTRICTED SHARE AWARDS
ARTICLE 9. DEFERRED SHARE AWARDS
ARTICLE 10. GENERALLY APPLICABLE PROVISIONS
ARTICLE 11. PERFORMANCE-BASED AWARDS.
ARTICLE 12. MISCELLANEOUS
STOCK OPTION AGREEMENT (Non-Transferable)