Exhibit 10.2


 


AMENDED
AND RESTATED ACTIVISION BLIZZARD, INC.


 


2008
INCENTIVE PLAN


 


NOTICE OF STOCK OPTION AWARD


 


You
have been awarded an option to purchase Common Shares of Activision Blizzard, Inc.
(the “Company”), as follows:


 


·                  Your name:  Brian
Hodous


 


·                  Total number of Shares purchasable upon
exercise of the Stock Option awarded:  200,000


 


·                  Exercise Price: 
US$ 12.46 per Share


 


·                  Date of Grant:  August 7,
2009


 


·                  Expiration Date:  August 7,
2019


 


·                  Grant ID: 
08001731


 


·                  Your Award of the Stock Option is governed by the
terms and conditions set forth in:


 


·                  this Notice of Stock Option Award;


 


·                  the Stock Option Award Terms attached
hereto as Exhibit A (the “Award Terms”); and


 


·                  the Company’s Amended and Restated 2008 Incentive Plan, the receipt of a copy
of which you hereby acknowledge.


 


·                  Your Stock Option Award has been made in
connection with your employment agreement with the Company or one of its
subsidiaries or affiliates as a material inducement to your entering into or
renewing employment with such entity pursuant to such agreement, and is also
governed by any applicable terms and conditions set forth in such agreement.


 


·                  Schedule for Vesting: 
Except as otherwise provided under the Award Terms, the Stock Option
awarded to you will vest and become exercisable as follows, provided you remain
continuously employed by the Company or one of its subsidiaries or affiliates
through each such date:


 


Schedule
for Vesting


 


	
  Date of Vesting

  	
   

  	
  No. of Shares

  Vesting at Vesting

  Date

  	
   

  	
  Cumulative No. of

  Shares Vested at

  Vesting Date

  	
   

  
	
  July 31, 2010

  	
   

  	
  75,000

  	
   

  	
  75,000

  	
   

  
	
  July 31, 2011

  	
   

  	
  75,000

  	
   

  	
  150,000

  	
   

  
	
  July 31, 2012

  	
   

  	
  50,000

  	
   

  	
  200,000

  	
   

  



 


Notwithstanding the
foregoing, the portion of the Option scheduled to vest on July 31, 2012
shall vest on July 31, 2011 following a determination by the Committee that
the 2010 annual 


 

















 


operating plan “Activision
Publishing + Blizzard Retail” operating income objectives established by the
Committee in connection with the establishment of the annual bonus goals for
Activision Publishing, Inc.’s President and Chief Executive Officer for
that year have been met or exceeded, provided you remain employed by the
Company or one of its subsidiaries or affiliates through such vesting date.


 


·                  The Stock Option is not intended to be an “incentive
stock option,” as such term is defined in Section 422 of the Code.


 


·                  Please
sign and return to the Company this Notice of Stock Option Award, which bears
an original signature on behalf of the Company. 
You are urged to do so promptly.


 


·                  Please
return the signed Notice of Stock Option Award to the Company at:


 


	
   

  	
  Activision Blizzard, Inc.

  3100 Ocean Park Boulevard

  Santa Monica, CA 90405

  Attn:  Stock Plan Administration

  



 


You
should retain the enclosed duplicate copy of this Notice of Stock Option Award
for your records.


 


Any
capitalized term used but not otherwise defined herein shall have the meaning
ascribed to such term in the Award Terms.


 


	
   

  	
   

  	
  ACTIVISION
  BLIZZARD, INC.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  /s/ Ann E.Weiser

  
	
   

  	
   

  	
  Ann E. Weiser

  
	
   

  	
   

  	
  Chief Human Resources Officer

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Date: 

  	
  October 21, 2009

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  ACCEPTED
  AND AGREED:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  /s/ Brian Hodous

  	
   

  	
   

  
	
  Brian
  Hodous

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Date:

  	
  October 19, 2009

  	
   

  	
   

  
					



 


2

















 


EXHIBIT
A


 


AMENDED AND RESTATED ACTIVISION
BLIZZARD, INC.


 


2008 INCENTIVE PLAN


 


STOCK OPTION AWARD TERMS


 


1.                                      Definitions.


 


(a)                                 For purposes of these Award Terms, the
following terms shall have the meanings set forth below:


 


“Award” means the award described on the Grant Notice.


 


“Cause” (i) shall have the meaning given to
such term in any employment agreement or offer letter between the Holder and
the Company or any of its subsidiaries or affiliates in effect from time to
time or (ii) if the Holder is not party to any agreement or offer letter
with the Company or any of its subsidiaries or affiliates or any such agreement
or offer letter does not contain a definition of “cause,” shall mean that the
Holder (A) engaged in misconduct or gross negligence in the performance of
his or her duties or willfully and continuously failed or refused to perform
any duties reasonably requested in the course of his or her employment; (B) engaged
in fraud, dishonesty, or any other improper conduct that causes, or in the sole
and absolute discretion of the Company has the potential to cause, harm to the
Company Group, including the business reputation or financial condition of any
member of the Company Group; (C) violated any lawful directives or
policies of the Company Group or any applicable laws, rules or
regulations; (D) materially breached his or her employment agreement,
proprietary information agreement or any other agreement with the Company
Group; (E) committed, was indicted on charges related to, convicted of, or
pled guilty or no contest to, a felony or crime involving dishonesty, moral
turpitude or which could reflect negatively upon the Company Group of otherwise
impede its operations; or (F) breached his or her fiduciary duties to the
Company Group.


 


“Common Shares” means the shares of common stock, par value $0.000001
per share, of the Company or any security into which such Common Shares may be
changed by reason of any transaction or event of the type referred to in Section 8
hereof.


 


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


 


“Company Group” means the Company or any of its subsidiaries or other
affiliates.


 


“Company-Sponsored Equity Account” means an account that is created with
the Equity Account Administrator in connection with the administration of the Company’s
equity plans and programs, including the Plan.


 


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


 

















 


“Employment Violation means any material breach by the Holder
of his or her employment agreement with the Company or one of its subsidiaries
or affiliates for so long as the terms of such employment agreement shall apply
to the Holder (with any breach of the post-termination obligations contained
therein deemed to be material for purposes of these Award Terms).


 


“Equity Account Administrator” means the brokerage firm utilized by the
Company from time to time to create and administer accounts for participants in
the Company’s equity plans and programs, including the Plan.


 


“Exercise Price” means the Exercise Price set forth on the Grant
Notice.


 


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


 


“Grant Notice” means the Notice of Stock Option Award to which these
Award Terms are attached as Exhibit A.


 


“Holder” means the recipient of the Award named on the Grant
Notice.


 


“Look-back Period” means, with respect to any Employment
Violation by the Holder, the period beginning on the date which is 12
months prior to the date of such Employment Violation by the Holder and ending
on the date of computation of the Recapture Amount with respect to such
Employment Violation.


 


“Option” means the Stock Option to purchase
Common Shares awarded to the Holder on the terms and conditions described in
the Grant Notice and these Award Terms.


 


“Plan” means the Amended and Restated Activision Blizzard, Inc.
2008 Incentive Plan, as amended
from time to time.


 


“Recapture
Amount” means, with respect to any Employment Violation by the Holder, the
gross gain realized or unrealized by the Holder upon all exercises of the Stock
Option during the Look-back Period with respect to such Employment Violation,
which gain shall be calculated as the sum of:


 


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


 


(ii)                                  if the Holder has exercised any portion
of the Stock Option during such Look-back Period and not sold any of the Shares
acquired on exercise thereafter, an amount equal to the product of (A) the
greatest of the following: (1) the Market Value per Share of Common Shares
on the date of exercise, (2) the arithmetic average of the per share
closing sales prices of Common Shares as reported on NASDAQ for the 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 Section 11
hereof, or (3) the arithmetic average of the per share closing sales
prices of Common Shares as reported on NASDAQ for the 30 trading day period
ending on the trading day immediately preceding the date of 


 


A-2

















 


computation, minus the Exercise Price, times (B) the
number of Shares as to which the Stock Option was exercised and which were not
sold.


 


“Section 409A” means Section 409A of the Code and
the guidance and regulations promulgated thereunder.


 


“Shares” means the Common Shares
purchasable upon exercise of the Stock Option.


 


“Term Sheet” means the Corporate Governance Term Sheet approved
by the Delaware Court of Chancery in connection with the settlement of In re Activision, Inc. Shareholder Derivative Litigation,
C.D. Cal. Case No. CV06-4771 MRP (JTLx); In re
Activision Shareholder Derivative Litigation, L.A.S.C. Case No. SC090343.


 


“Withholding Taxes” means any taxes, including, but not limited to,
social security and Medicare taxes and federal, state and local income taxes,
required to be withheld under any applicable law.


 


(b)                                 Any capitalized term used but not
otherwise defined herein shall have the meaning ascribed to such term in the
Plan.


 


2.                                      Expiration.  The Stock
Option shall expire on the Expiration Date and, after such expiration, shall no
longer be exercisable.


 


3.                                      Vesting and Exercise.


 


(a)                                 Vesting Schedule. 
Except as otherwise set forth in these Award Terms, the Stock Option
shall vest, and thereupon become exercisable, in accordance with the “Schedule
for Vesting” set forth on the Grant Notice.


 


(b)                                 Exercisable Only by the Holder. 
Except as otherwise permitted under the Plan or Section 10 hereof,
the Stock Option may be exercised during the Holder’s lifetime only by the
Holder or, in the event of the Holder’s legal incapacity to do so, by the
Holder’s guardian or legal representative acting on behalf of the Holder in a
fiduciary capacity under state law and/or court supervision.


 


(c)                                  Procedure for Exercise. 
The Stock Option may be exercised by the Holder as to all or any of the
Shares as to which the Stock Option has vested (i) by following the
procedures for exercise established by the Equity Account Administrator and
posted on the Equity Account Administrator’s website from time to time or (ii) with
the Company’s consent, by giving the Company written notice of exercise, in
such form as may be prescribed by the Company from time to time, specifying the
number of Shares to be purchased.


 


(d)                                 Payment of Exercise Price. 
To be valid, any exercise of the Stock Option must be accompanied by
full payment of the aggregate Exercise Price of the Shares being
purchased.  The Company shall determine the
method or methods the Holder may use to make such payment, which may include
any of the following:  (i) by bank
check or certified check or wire transfer of immediately available funds, (ii) if
securities of the Company of the same class as the Shares are then traded or quoted on a national
securities exchange, the Nasdaq Stock Market, Inc. or a national quotation
system sponsored by the National Association of Securities 


 


A-3

















 


Dealers, Inc., through the delivery of irrevocable
written instructions, in a form acceptable to the Company, to the Equity
Account Administrator (or, with the Company’s consent, such other brokerage firm as may be requested by the person
exercising the Stock Option) to sell some or all of the Shares being purchased
upon such exercise and to thereafter deliver promptly to the Company from the
proceeds of such sale an amount in cash equal to the aggregate Exercise Price
of the Shares being purchased, (iii) by tendering previously owned shares
(valued at their Market Value per Share as of the date of tender), (iv) through
the withholding of Shares otherwise deliverable upon exercise, or (v) any
combination of (i), (ii), (iii) or (iv) above or any other manner
permitted pursuant to the Plan.


 


(e)                                  No Fractional Shares. 
In no event may the Stock Option be exercised for a fraction of a Share.


 


(f)                                   No Adjustment for Dividends or Other
Rights.  No adjustment shall be made for cash
dividends or other rights for which the record date is prior to the date as of
which the issuance or transfer of Shares to the person entitled thereto has
been evidenced on the books and records of the Company pursuant to clause (ii) of
Section 3(g) hereof following exercise of the Stock Option.


 


(g)                                  Issuance and Delivery of Shares. 
As soon as practicable (and, in any event, within 30 days) after the
valid exercise of the Stock Option, the Company shall (i) effect the
issuance or transfer of the Shares purchased upon such exercise, (ii) cause
the issuance or transfer of such Shares to be evidenced on the books and
records of the Company, and (iii) cause such Shares to be delivered to a
Company-Sponsored Equity Account in the name of the person entitled to such
Shares (or, with the Company’s consent, such other brokerage account as may be
requested by such person); provided, however, that, in the event
such Shares are subject to a legend as set forth in Section 14 hereof, the
Company shall instead cause a certificate evidencing such Shares and bearing
such legend to be delivered to the person entitled thereto.


 


(h)                                 Partial Exercise. 
If the Stock Option shall have been exercised with respect to less than
all of the Shares purchasable upon exercise of the Stock Option, the Company
shall make a notation in its books and records to reflect the partial exercise
of the Stock Option and the number of Shares that thereafter remain available
for purchase upon exercise of the Stock Option.


 


4.                                      Termination of Employment.


 


(a)                                 Cause.  In the event
that the Holder’s employment is terminated by the Company or any of its
subsidiaries or affiliates for Cause, as of the date of such termination of
employment the Stock Option shall (i) cease to vest, if not then fully
vested, (ii) no longer be exercisable, whether or not vested, and (iii) be
immediately cancelled.


 


(b)                                 Death. In the event that the Holder dies while employed by
the Company or any of its subsidiaries or affiliates, the Stock Option shall (i) continue
to vest until July 31, 2011 as if the Holder’s employment had continued
until that date and (ii) be exercisable in accordance with these Award
Terms until August 30, 2011, after which the Stock Option shall no longer
be exercisable and shall be immediately cancelled.  To the extent not vested as of July 31,
2011, the Stock Option shall be cancelled as of that date and shall no longer
be exercisable.


 


A-4

















 


(c)                                  Without Cause or Following Relocation of
Employment Without Consent. In the event that the Holder’s employment is
terminated by the Company or any of its subsidiaries or affiliates without
Cause or by the Holder pursuant to Section 10(c) of the Employment
Agreement, the Stock Option shall (i) continue to vest until July 31,
2011 as if the Holder’s employment had continued until that date and (ii) be
exercisable in accordance with these Award Terms until August 30, 2011,
after which the Stock Option shall no longer be exercisable and shall be
immediately cancelled; provided, however, that if the waiver and
release executed by the Holder in accordance with the Employment Agreement does
not become effective and irrevocable in its entirety in accordance with the
Employment Agreement, the Stock Option shall (i) cease to vest as of the
termination date, if not then fully vested, (ii) no longer be exercisable,
whether or not vested, and (iii) be cancelled.  In any case, to the extent not vested as of July 31,
2011, the Stock Option shall be cancelled as of that date and shall no longer
be exercisable.


 


(d)                                 Other.  Unless the
Committee determines otherwise, in the event that the Holder’s employment is
terminated for any reason not addressed by Section 4(a), 4(b) or 4(c) hereof,
the Stock Option shall (i) cease to vest as of the date of such
termination of employment and (ii) to the extent vested as of the date of
such termination of employment, be exercisable in accordance with these Award
Terms until the earlier of (A) the 30th day after the date of such
termination of employment  and (B) the
Expiration Date, after which the Stock Option shall no longer be exercisable
and shall be immediately cancelled.  To
the extent not vested as of the date of such termination of service, the Stock
Option shall be immediately cancelled and shall no longer be exercisable.


 


5.                                      Tax Withholding. 
The Company shall have the right to require the Holder to satisfy any
Withholding Taxes resulting from the exercise (in whole or in part) of the
Stock Option, the issuance or transfer of any Shares upon exercise of the Stock
Option or otherwise in connection with the Award at the time such Withholding
Taxes become due.  The Company shall
determine the method or methods the Holder may use to satisfy any Withholding
Taxes contemplated by this Section 5, which may include any of the
following:  (a) by delivery to the
Company of a bank check or certified check or wire transfer of immediately
available funds; (b) if securities of the Company of the same class as the
Shares are then traded or quoted on a national securities exchange, the Nasdaq
Stock Market, Inc. or a national quotation system sponsored by the
National Association of Securities Dealers, Inc., through the delivery of
irrevocable written instructions, in a form acceptable to the Company, to the
Equity Account Administrator (or, with the Company’s consent, such other
brokerage firm as may be requested by the person exercising the Stock Option)
to sell some or all of the Shares being purchased upon such exercise and to
thereafter deliver promptly to the Company from the proceeds of such sale an
amount in cash equal to the aggregate amount of such Withholding Taxes; (c) by
tendering previously owned shares (valued at their Market Value per Share as of
the date of tender); (d) through the withholding of Shares otherwise
deliverable upon exercise; or (e) by any combination of (a), (b), (c) or
(d) above.  Notwithstanding anything
to the contrary contained herein, (i) the Company or any of its
subsidiaries or affiliates shall have the right to withhold from the Holder’s
compensation any Withholding Taxes contemplated by this Section 5 and (ii) the
Company shall have no obligation to deliver any Shares upon exercise of the
Stock Option unless and until all Withholding Taxes contemplated by this Section 5
have been satisfied.


 


A-5

















 


6.                                      Reservation of Shares. 
The Company shall at all times reserve for issuance or delivery upon
exercise of the Stock Option such number of Common Shares as shall be required
for issuance or delivery upon exercise thereof.


 


7.                                      Committee Discretion. 
Except as may otherwise be provided in the Plan, the Committee shall
have sole discretion to (a) interpret any provision of the Plan, the Grant
Notice and these Award Terms, (b) make any determinations necessary or
advisable for the administration of the Plan and the Award, and (c) waive
any conditions or rights of the Company under the Award, the Grant Notice or
these Award Terms.  Without intending to
limit the generality or effect of the foregoing, any decision or determination
to be made by the Committee pursuant to these Award Terms, including whether to
grant or withhold any consent, shall be made by the Committee in its sole and
absolute discretion, subject only to the terms of the Plan.  Subject to the terms of the Plan, the
Committee may amend the terms of the Award prospectively or retroactively;
however, no such amendment may materially and adversely affect the rights of
the Holder taken as a whole without the Holder’s consent.  Without intending to limit the generality or
effect of the foregoing, the Committee may amend the terms of the Award (i) in
recognition of unusual or nonrecurring events (including, without limitation,
events described in Section 8 hereof) affecting the Company or any of its
subsidiaries or affiliates or the financial statements of the Company or any of
its subsidiaries or affiliates, (ii) in response to changes in applicable
laws, regulations or accounting principles and interpretations thereof, or (iii) to
prevent the Award from becoming subject to Section 409A.


 


8.                                      Adjustments. 
Notwithstanding anything to the contrary contained herein, pursuant to Section 12
of the Plan, the Committee will make or provide for such adjustments to the
Award as are equitably required to prevent dilution or enlargement of the
rights of the Holder that would otherwise result from (a) any stock
dividend, extraordinary dividend, stock split, combination of shares,
recapitalization or other change in the capital structure of the Company, (b) any
change of control, merger, consolidation, spin-off, split-off, spin-out,
split-up, reorganization, partial or complete liquidation or other distribution
of assets, or issuance of rights or warrants to purchase securities, or (c) any
other corporate transaction or event having an effect similar to any of the
foregoing.  Moreover, in the event of any
such transaction or event, the Committee, in its discretion, may provide in
substitution for the Award such alternative consideration (including, without
limitation, cash or other equity awards), if any, as it may determine to be
equitable in the circumstances and may require in connection therewith the
surrender of the Award.


 


9.                                      Registration and Listing. 
Notwithstanding anything to the contrary contained herein, the Stock
Option may not be exercised, and the Stock Option and Shares purchasable upon
exercise of the Stock Option may not be purchased, sold, assigned, transferred,
pledged, hypothecated or otherwise disposed of or encumbered in any way, unless
such transaction is in compliance with (a) the Securities Act of 1933, as
amended, or any comparable federal securities law, and all applicable state
securities laws, (b) the requirements of any securities exchange,
securities association, market system or quotation system on which securities
of the Company of the same class as the Shares are then traded or quoted, (c) any
restrictions on transfer imposed by the Company’s certificate of incorporation
or bylaws, and (d) any policy or procedure the Company has adopted with
respect to the trading of its securities, in each case as in effect on the date
of the intended transaction.  The Company
is under no obligation to register, qualify or list, or maintain the
registration, qualification or listing of, the Stock Option or Shares with the
SEC, any state securities commission or any securities exchange, securities
association, market system 


 


A-6

















 


or quotation system to effect such compliance.  The Holder shall make such representations
and furnish such information as may be appropriate to permit the Company, in
light of the then existence or non-existence of an effective registration
statement under the Securities Act of 1933, as amended, relating to the Stock
Option or Shares, to issue or transfer the Stock Option or Shares in compliance
with the provisions of that or any comparable federal securities law and all
applicable state securities laws.  The
Company shall have the right, but not the obligation, to register the issuance
or resale of the Stock Option or Shares under the Securities Act of 1933, as
amended, or any comparable federal securities law or applicable state
securities law.


 


10.                               Transferability. 
Except as otherwise permitted under the Plan or this Section 10,
the Stock Option shall not be transferable by the Holder other than by will or
the laws of descent and distribution. 
Subject to the terms of the Plan, with the Company’s consent, the Holder
may transfer all or part of the Stock Option for estate planning purposes or
pursuant to a domestic relations order; provided, however, that
any transferee shall be bound by all of the terms and conditions of the Plan,
the Grant Notice and these Award Terms and shall execute an agreement in form
and substance satisfactory to the Company in connection with such transfer; and
provided  further that the Holder will remain bound by the terms
and conditions of the Plan, the Grant Notice and these Award Terms.


 


11.                               Employment Violation. 
The terms of this Section 11 shall apply to the Stock Option if the
Holder is or becomes subject to an employment agreement with the Company or any
of its subsidiaries or affiliates.  In
the event of an Employment Violation, the Company shall have the right to
require (i) the termination and cancellation of the Stock Option, whether
vested or unvested, and (ii) payment by the Holder to the Company of the Recapture
Amount with respect to such Employment Violation; provided, however,
that, in lieu of payment by the Holder to the Company of the Recapture Amount,
the Holder, in his or her discretion, may tender to the Company the Shares
acquired upon exercise of the Stock Option during the Look-back Period with
respect to such Employment Violation and the Holder shall not be entitled to
receive any consideration from the Company in exchange therefor.  Any such termination of the Stock Option 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 such Employment Violation, including, without
limitation, the right to terminate the Holder’s employment if not already
terminated and to seek injunctive relief and additional monetary damages.


 


12.                               Compliance with Applicable Laws and
Regulations and Company Policies and Procedures.


 


(a)                                 The Holder is responsible for complying
with (a) any federal, state and local taxation laws applicable to the
Holder in connection with the Award, (b) any federal and state securities
laws applicable to the Holder in connection with the Award, (c) the
requirements of any securities exchange, securities association, market system
or quotation system on which securities of the Company of the same class as the
Shares are then traded or quoted, (d) any restrictions on transfer imposed
by the Company’s certificate of incorporation or bylaws, and (e) any
policy or procedure the Company maintains or may adopt with respect to the
trading of its securities.


 


(b)                                 The Award is subject to the terms and
conditions of the Term Sheet, and any Company policies or procedures adopted in
connection with the Company’s implementation 


 


A-7

















 


of the Term Sheet, including, without limitation, any
policy requiring or permitting the Company to recover any gains realized by the
Holder in connection with the Award.


 


13.                               Section 409A. 
As the Exercise Price is equal to the fair market value of a Share on
the Date of Grant, payments contemplated with respect to the Award are intended
to be exempt from Section 409A, and all provisions of the Plan, the Grant
Notice and these Award Terms shall be construed and interpreted in a manner
consistent with the requirements for avoiding taxes or penalties under Section 409A.  Notwithstanding the foregoing, (i) nothing
in the Plan, the Grant Notice and these Award Terms shall guarantee that the
Award is not subject to taxes or penalties under Section 409A and (ii) if
any provision of the Plan, the Grant Notice or these Award Terms would, in the
reasonable, good faith judgment of the Company, result or likely result in the
imposition on the Holder or any other person of taxes, interest or penalties
under Section 409A, the Committee may, in its sole discretion, modify the
terms of the Plan, the Grant Notice or these Award Terms, without the consent
of the Holder, in the manner that the Committee may reasonably and in good
faith determine to be necessary or advisable to avoid the imposition of such
taxes, interest or penalties; provided, however, that this Section 13
does not create an obligation on the part of the Committee or the Company to
make any such modification.


 


14.                               Legend.  The Company
may, if determined by it based on the advice of counsel to be appropriate,
cause any certificate evidencing Shares to bear a legend substantially as
follows:


 


“THE SECURITIES REPRESENTED HEREBY 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.”


 


15.                               No Right to Continued Employment. 
Nothing contained in the Grant Notice or these Award Terms shall be
construed to confer upon the Holder any right to be continued in the employ of
the Company or any of its subsidiaries or affiliates or derogate from any right
of the Company or any of its subsidiaries or affiliates to retire, request the
resignation of, or discharge the Holder at any time, with or without Cause.


 


16.                               No Rights as Stockholder. 
No holder of the Stock Option shall, by virtue of the Grant Notice or
these Award Terms, be entitled to any right of a stockholder of the Company,
either at law or in equity, and the rights of any such holder are limited to
those expressed, and are not enforceable against the Company except to the
extent set forth, in the Plan, the Grant Notice and these Award Terms.


 


17.                               Severability. 
In the event that one or more of the provisions of these Award Terms
shall be invalidated for any reason by a court of competent jurisdiction, any
provision so invalidated shall be deemed to be separable from the other
provisions hereof, and the remaining provisions hereof shall continue to be
valid and fully enforceable.


 


18.                               Governing Law. 
To the extent that federal law does not otherwise control, the validity,
interpretation, performance and enforcement of the Grant Notice and these Award
Terms shall be governed by the laws of the State of Delaware, without giving
effect to principles of conflicts of laws thereof.


 


A-8

















 


19.                               Successors and Assigns. 
The provisions of the Grant Notice and these Award Terms shall be
binding upon and inure to the benefit of the Company, its successors and
assigns, and the Holder and, to the extent applicable, the Holder’s permitted
assigns under Section 3(b) hereof and the Holder’s estate or
beneficiary(ies) as determined by will or the laws of descent and distribution.


 


20.                               Notices.  Any notice or
other document which the Holder or the Company may be required or permitted to
deliver to the other pursuant to or in connection with the Grant Notice or these
Award Terms shall be in writing, and may be delivered personally or by mail,
postage prepaid, or overnight courier, addressed as follows: (a) if to the
Company, at its office at 3100 Ocean Park Boulevard, Santa Monica, California
90405, Attn: Stock Plan Administration, or such other address as the Company by
notice to the Holder may designate in writing from time to time; and (b) if
to the Holder, at the address shown in any employment agreement or offer letter
between the Holder and the Company or any of its subsidiaries or affiliates in
effect from time to time or 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.


 


21.                               Conflict with Employment Agreement or
Plan.  In the event of any conflict between the
terms of any employment agreement or offer letter between the Holder and the
Company or any of its subsidiaries or affiliates in effect from time to time
and the terms of the Grant Notice or these Award Terms, the terms of the Grant
Notice or these Award Terms, as the case may be, shall control.  In the event of any conflict between the
terms of any employment agreement or offer letter between the Holder and the
Company or any of its subsidiaries or affiliates in effect from time to time,
the Grant Notice or these Award Terms and the terms of the Plan, the terms of
the Plan shall control.


 


22.                               Deemed Agreement. 
By accepting the Award, the Holder is deemed to be bound by the terms
and conditions set forth in the Plan, the Grant Notice and these Award Terms.


 


A-9