Exhibit 10.2


 


STOCK
OPTION AGREEMENT


 


Issued
Pursuant to the

2003 Incentive Plan of


ACTIVISION,
INC.


 


	
  Stock Option #03000934

  	
  For 600,000
  Shares

  



 


 


THIS STOCK
OPTION AGREEMENT (THIS “OPTION AGREEMENT”) CERTIFIES that on October 3,
2005 (the “Issuance Date”), Thomas Tippl (the “Holder”) was granted an option
(the “Option”) to purchase at the option price of $20.28 per share, all
or any part of 600,000 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:


 


1.                                             General Terms of the Option.  The Option is granted as a material inducement to the Holder’s entering
into employment with the Company pursuant to an employment agreement dated September 9,
2005 (the “Employment Agreement”).  In
addition, this Option has been granted pursuant to and is subject to the terms
and conditions of the Company’s 2003 Incentive Plan (the “Plan”), and the terms
and conditions of the Plan shall be deemed to be incorporated herein by
reference and made a part of this Option. 
Holder hereby acknowledges by his signature below that he has received a
copy of the Plan.  Capitalized terms used
herein shall have the meanings set forth in the Plan, unless otherwise defined
herein.


 


2.                                       Expiration.  This Option shall expire on October 3, 2015, unless extended or
earlier terminated in accordance herewith.


 


3.                                       Exercise.  Except as
otherwise permitted under the Plan, this Option may be exercised or surrendered
during the Holder’s lifetime only by the Holder or his/her guardian or legal
representative.  EXCEPT AS OTHERWISE
PERMITTED UNDER THE PLAN, THIS OPTION SHALL NOT BE TRANSFERABLE BY THE HOLDER
OTHERWISE THAN BY WILL OR BY THE LAWS OF DESCENT AND DISTRIBUTION.  With the Company’s consent which may granted
or withheld in its sole discretion, Options may be transferred to certain
permitted assignees, such as certain relatives of, or entities controlled by,
the Participant, as more fully set forth in Section 8.3 of the Plan.


 


This Option
shall vest and be exercisable as follows (except as otherwise provided in this
Option Agreement or the Employment Agreement:


 


	
  Vesting Date

  	
   

  	
  Shares Vested at Vesting Date

  	
   

  	
  Cumulative Shares

  	
   

  
	
  October 3,
  2006

  	
   

  	
  40,000

  	
   

  	
  40,000

  	
   

  
	
  October 3,
  2007

  	
   

  	
  40,000

  	
   

  	
  80,000

  	
   

  
	
  October 3,
  2008

  	
   

  	
  40,000

  	
   

  	
  120,000

  	
   

  
	
  October 3,
  2009

  	
   

  	
  40,000

  	
   

  	
  160,000

  	
   

  
	
  October 3,
  2010

  	
   

  	
  440,000

  	
   

  	
  600,000

  	
   

  



 





















 


This Option
shall be exercised by the Holder (or by his 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 their then Fair Market Value (as defined
in the Plan), as determined by the Company 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), or (iii) with the
consent of the Company, a combination of (i) and (ii).  The Holder is also eligible to utilize a “cashless”
exercise for all or part of the Option consistent with the Company’s practice
and procedures governing cashless option exercises.    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 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.


 


4.                                       Tranches Subject to Acceleration.  Pursuant
to Paragraph 2(e) of the Employment Agreement, of the 440,000 Shares
scheduled to vest on October 3, 2010, 200,000 Shares may be subject to
accelerated vesting if Holder shall achieve certain performance objectives to
be mutually determined by Holder and the Company at the rate of 66,666 Shares
to vest on May 3, 2007 for achievement of such performance objectives
during the Company’s fiscal year 2007, 
66,666 Shares to vest on May 3, 2008 for achievement of such
performance objectives during the Company’s fiscal year 2008, and 66,667 Shares
to vest on May 3, 2009 for achievement of such performance objectives
during the Company’s fiscal year 2009. In addition, pursuant to Paragraph
9(f)(iii)(1) of the Employment Agreement, of the 440,000 Shares scheduled
to vest on June 30, 2010, a pro rata (based upon the amount of time
between the Issuance Date and the date of the death of the Holder) portion of
400,000 Shares may be subject to immediate vesting upon the death of the
Holder.


 


5.                                       Termination of Employment. Please refer to
Employment Agreement Paragraph 9 for treatment of stock options in the case of
termination.


 


6.                                       Death.  In the event the Holder dies while employed by the Company or any of its
subsidiaries or affiliates, 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.


 





















 


7.                                       Disability.  In the event of the termination of employment of the Holder or the
separation from service of the Holder due to the Disability (as defined in
Paragraph 9(c) of the Employment Agreement) of the Holder, the Holder, or
his 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
Disability, 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.


 


8.                                       Employment Violation.    In consideration of the granting
and by acceptance of this Option, the Holder hereby agrees that the terms of
this Section 8 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 Section 8.


 


The Company
and the Holder acknowledge and agree that if the Holder materially breaches the
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 the Employment Agreement shall apply to the Holder
(each an “Employment Violation”), subject to the cure provision outlined in
Paragraph 9(a) of the Employment Agreement, 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 Section 8, 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:


 


(a)                                  as to any Shares
acquired by the Holder upon exercise of any portion of this Option during the
Look-back Period and thereafter sold, 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


 


(b)                                 as to any Shares
acquired by the Holder upon exercise and not thereafter sold, 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 Section 8, 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 clause (b) above, the Holder, in his
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.


 


9.                                       Registration; Postponement.  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 shall have the right to register
the Shares underlying this Option on a Form S-8 or S-3 to facilitate their
resale by the Holder.


 


10.                                 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, option or exercise price with respect to this
Option, or, if deemed appropriate, make provision for a cash payment to the
Holder.


 


11.                                 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 Option Agreement if
surrendered at the time of the exercise of this Option, indicating the number
of Shares 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.


 





















 


12.                                 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 (a) the issuance of Shares to the Holder pursuant to this Option, or (b) the
exercise or disposition (in whole or in part) of the 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.


 


13.                                 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.


 


14.                                 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.


 


15.                                 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.


 


16.                                 Legend.  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.


 





















 


17.                                 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.


 


18.                                 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 his
signature on this 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.


 


19.                                 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 Option Agreement as of the date first
set forth above.


 


	
   

  	
  ACTIVISION, INC.

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  
	
   

  	
  Date:

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Attest:

  	
   

  	
   

  
						



 


 


	
  Accepted and Confirmed:

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  THOMAS TIPPL

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
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  Social Security Number