Exhibit 10.2


 


	
  

  	
   

  	
  June 15, 2004

  
	
   

  	
   

  	
   

  
	
  Mr. Michael Griffith

  	
   

  	
   

  
	
  11061 Toddtree Lane

  	
   

  	
   

  
	
  Cincinnati, Ohio 45242

  	
   

  	
   

  



 


 


Dear Mr. Griffith:


 


This letter (“Agreement”) confirms the terms of your employment by
Activision Publishing, Inc. (“Employer”), on the terms and conditions set
forth below.


 


1.                                      Term


 


(a)                                  The
initial term of your employment under this Agreement shall commence on June 15,
2005 (the “Effective Date”) and expire on June 30, 2010 (the “Expiration
Date”) unless earlier terminated as provided in Paragraph 9 below or as may be
extended as provided in Paragraph 1(b) below (the “Employment Period”).


 


(b)                                 If,
at any time during the Employment Period, your Total Compensation exceeds $40,000,000,
Employer shall have the option to extend the Employment Period for up to an additional
three year period, commencing on July 1, 2010 and expiring no later than June 30,
2013; provided, however, that Employer’s exercise of this option shall in no
way impact your entitlement to the payment described in Paragraph 2(i) on May 15,
2010.   For purposes of this Agreement, “Total
Compensation” shall mean the total of (i) your cumulative Base Salary
through the date of determination, (ii) your cumulative Annual Bonuses
through such date, (iii) the realized and unrealized gains (based upon the
closing price of the common stock of Activision, Inc. (“Activision”) as
reported on The NASDAQ Stock Market on the applicable date) from any and all
vested stock options issued to you, (iv) the market value of all vested
restricted, stock grants issued to you plus the amounts you realized from the
sale of any shares sold by you which were the subject of such restricted stock
grants.


 


(c)                                  Employer
may exercise the option granted to it under Paragraph 1(b) by giving
written notice to you no later than April 30, 2010, which notice shall
state the exact length of the Employment Period as so extended.


 


2.                                      Salary


 


(a)                                  In
full consideration for all rights and services provided by you under this
Agreement, you shall receive the compensation set forth in this Paragraph 2.
Commencing on the Effective Date, you shall receive an annual base salary (“Base
Salary”) of $600,000 for the period of time from the Effective Date until June 30,
2006. Thereafter, on July 1 of each year of the Employment Period, beginning
on July 1, 2006, your Base Salary shall automatically increase to an
amount equal to one hundred eight (108%) percent of the Base Salary for the
prior year.


 





















 


(b)                                 Base
Salary payments shall be made in accordance with Employer’s then prevailing payroll
policy. The Base Salary referred to in Paragraph 2(a) shall constitute
your minimum Base Salary during the applicable period, and your Base Salary may
be increased above the minimum at any time if Activision’s Board of Directors
(or the Compensation Committee of such Board of Directors), in its sole and
absolute discretion, elects to do so. In the event of an increase in your Base
Salary beyond the applicable minimum Base Salary for a particular period, such
increased Base Salary shall then constitute your minimum Base Salary for each
subsequent year under this Agreement.


 


(c)                                  Employer
shall not be required to actually use your services during the term of this Agreement.
You will not be permitted or authorized to act on behalf of Employer if
Employer is not utilizing your services unless specifically authorized in
writing to the contrary by Employer. Your obligations to Employer under this
Agreement generally, and specifically with regard to Paragraph 8, shall
continue throughout the term of this Agreement. Moreover, you have an obligation
to abide by the terms of the Employee Proprietary Information Agreement
executed by you.


 


(d)                                 In
addition to your Base Salary, you may be eligible to receive an annual
discretionary bonus (the “Annual Bonus”). Your target Annual Bonus during the
term of this Agreement shall be 100% of the then applicable Base Salary,
provided that the actual amount of the Annual Bonus, if any, is within the sole
and absolute discretion of the Activision’s Board of Directors (or the Compensation
Committee of the Board of Directors) and shall be based upon your achievement
of certain mutually agreed objectives and goals and/or your contribution to the
success of Employer’s financial and business objectives and goals for the
fiscal year with respect to which the Annual Bonus is calculated, such
determination made by Activision’s Board of Directors (or the Compensation
Committee of the Board of Directors) in its sole discretion. The Annual Bonus shall
take the form of, without limitation, cash, shares of common stock of
Activision and/or options to purchase such shares, as determined by the
Compensation Committee in its sole discretion. Employer’s overall financial
performance will also be considered in determining whether any of the Annual
Bonus is awarded and, if so, the amount. The Annual Bonus, if granted, is
generally paid to employees in May. Except as otherwise set forth in this
Agreement, you must remain continuously employed by Employer through the date
on which the Annual Bonus is paid to be eligible to receive such Annual Bonus.
Any Annual Bonus shall be subject to withholding.


 


(e)                                  As
an inducement to enter into this Agreement, pursuant to the Activision 2003 Incentive
Plan (“Plan”), you will, on or before the Effective Date, be granted a
non-qualified stock option (the “Option”) to purchase an aggregate of 1,000,000
shares of the Activision’s common stock in two tranches of 350,000 shares each
and one tranche of 300,000 shares.  As to
the first tranche of 350,000 shares covered by the Option, such option will
vest ratably over the five years following the Effective Date, with 20% of the
amount vesting at the end of each year. As to the second tranche of 350,000
shares covered by the Option, such option will not vest until the end of the fifth
year following the Effective Date (subject to possible earlier vesting in three
equal annual installments if Employee shall achieve certain performance
objectives to be mutually determined by you and Employer for the fiscal years
2007, 2008 and 2009) and will thereupon fully vest in its entirety (on a “cliff-vesting”
basis). As to the third tranche of 300,000 shares covered by the Option, such
option will not vest until the end of the fifth year following the Effective
Date and


 


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will thereupon fully vest
in its entirety (on a “cliff-vesting” basis). The Option will have an exercise
price per share that will be the fair market value on the grant date and will
be governed in all other respects by (and you agree to enter into) Activision’s
standard form of stock option agreement for similar grants of “inducement”
options.


 


(f)                                    You
may be eligible for such additional stock option grants commensurate with your position
with Employer as the Board of Directors (or Compensation Committee of the Board
of Directors), in its sole discretion, may award to you from time to time in
connection with any extensions of this Agreement’s contract term.


 


(g)                                 In
consideration for abandoning certain benefits with your prior employer and
forgoing certain other executive opportunities and related equity
participations, pursuant to the Plan, you also will receive, on or before the
Effective Date, a restricted stock grant (the “Grant”) of the number of shares
of Activision’s common stock (any fractional shares resulting from this computation
shall be rounded up to the next whole number) equal to $2,000,000 divided by
the fair market value on the grant date (“Market Price”), which restricted
stock grant will vest ratably over the third, fourth and fifth years following
the Effective Date, with one third of the amount granted vesting at the end of
each of the third, fourth and fifth years following the Effective Date.


 


(h)                                 Within
three months of the Effective Date, you shall relocate your principal residence
to within a 30- to 60-minute vehicle commute of Employer’s headquarters (Santa
Monica, California). At the time of relocation, Employer shall pay for the
following costs: (i) all closing costs associated with buying and selling
a home, including real estate commissions for the sale of your existing
principal residence; (ii) all moving costs for household goods; and (iii) $300,000
mortgage assistance, payable $8,333.33 each month for 36 months. In addition,
Employer will reimburse you for the actual incremental income taxes paid by you
by reason of the inclusion in your income of the payments to you of the amounts
set forth in clauses (i) and (ii) of the immediately preceding
sentence. Prior to your relocation, Employer will reimburse you for your
reasonable commuting costs between your current residence and Los Angeles.


 


(i)                                     In
the event that on May 15, 2010 your Total Compensation plus any severance
payments that you have received, has not exceeded $20,000,000 (“Guarantee
Amount”), Employer will make a payment to you for the amount of any shortfall.
This payment is required to be made by Employer whether or not you are employed
by Employer on May 15, 2010, unless your employment has been terminated by
Employer pursuant to Paragraphs 9(a), 9(c) or 9(e) or by you other
than by reason of Paragraph 9(b), in which case no payment shall be required
under this Paragraph 2(i).


 


3.                                      Title;
Reporting


 


You are being
employed under this Agreement in the position of President and Chief Executive
Officer of Employer. You shall report to the Co-Chairmen of Activision and,
through January 2006, the Chairman of Employer.


 


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4.                                      Duties


 


You shall
personally and diligently perform, on a full-time and exclusive basis, such
services as Employer or any of its related or affiliated entities or divisions
may reasonably require. You are also required to read, review and observe all
of Employer’s existing policies, procedures, rules and regulations as well
as those adopted by Employer during the term of your employment. You will at
all times perform all of the duties and obligations required by you under this
Agreement in a loyal and conscientious manner and to the best of your ability
and experience. You will not engage in any outside business activities nor
serve on the board of directors or trustees of any entity without the prior
approval of the Co-Chairmen of Activision.


 


5.                                      Expenses


 


To the extent you
incur necessary and reasonable business expenses in the course of your
employment, you shall be reimbursed for such expenses, subject to Employer’s
then current policies regarding reimbursement of such business expenses.


 


6.                                      Other Benefits


 


You shall be
entitled to those benefits which are standard for persons in similar positions
with Employer, including coverage under Employer’s health, life insurance and
disability plans, and eligibility to participate in Activision’s Employee Stock
Purchase Plan and Employer’s 401(k) plan (with Employer matching your
contributions to such 401K plan in accordance with Employer’s matching policy).
Nothing paid to you under any such plans and arrangements (nor any bonus or
stock options which Activision’s Board of Directors (or the Compensation
Committee of such Board of Directors), in its sole and absolute discretion,
shall provide to you) shall be deemed in lieu, or paid on account, of your Base
Salary. You expressly agree and acknowledge that after the expiration or early
termination of the term of your employment under this Agreement, you are
entitled to no additional benefits, except as specifically provided in this
Agreement and except as specifically provided under the benefit plans referred
to above and those benefit plans in which you subsequently may become a
participant, and subject in each case to the terms and conditions of each such
plan. Notwithstanding anything to the contrary set forth above, you shall be
entitled to receive those benefits provided by COBRA or CAL-COBRA upon the
expiration or earlier termination of this Agreement.


 


7.                                      Vacation and
Paid Holidays


 


(a)                                  You
will be entitled to paid vacation days in accordance with the normal vacation policies
of Employer in effect from time to time, provided that in no event shall you be
entitled to less than twenty (20) paid vacation days per year.


 


(b)                                 You
shall be entitled to all paid holidays given by Employer to its full-time
employees.


 


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8.                                      Protection
of Employer’s Interests


 


(a)                                  Duty of Loyalty.  During the term of your employment, you will
owe a duty of loyalty to Employer, which includes, but is not limited to, your
not competing in any manner, whether directly or indirectly, as a principal,
employee, agent or owner, with Employer, or any affiliate of Employer, except
that the foregoing will not prevent you from holding at any time less than five
percent (5%) of the outstanding capital stock of any company whose stock is
publicly traded.


 


(b)                                 Property of Employer.  All rights worldwide with respect to any and
all intellectual or other property of any nature produced, created or suggested
by you during the term of your employment or resulting from your services which
(i) relate in any manner at the time of conception or reduction to
practice to the actual or demonstrably anticipated business of Employer, (ii) result
from or are suggested by any task assigned to you or any work performed by you
on behalf of Employer, or (iii) are based on any property owned or idea
conceived by Employer, shall be deemed to be a work made for hire and shall be
the sole and exclusive property of Employer. You agree to execute, acknowledge
and deliver to Employer, at Employer’s request, such further documents,
including copyright and patent assignments, as Employer finds appropriate to
evidence Employer’s rights in such property.


 


(c)                                  Confidentiality.  Any
confidential and/or proprietary information of Employer or any affiliate of
Employer shall not be used by you or disclosed or made available by you to any person
except as required in the course of your employment, and upon expiration or
earlier termination of the term of your employment, you shall return to
Employer all such information which exists in written or other physical form
(and all copies thereof) under your control. Without limiting the generality of
the foregoing, you acknowledge signing and delivering to Employer the
Activision Employee Proprietary Information Agreement as of the Effective Date and
you agree that all terms and conditions contained in such agreement, and all of
your obligations and commitments provided for in such agreement, shall be
deemed, and hereby are, incorporated into this Agreement as if set forth in
full herein. The provisions of this paragraph shall survive the expiration or
earlier termination of this Agreement.


 


(d)                                 Non-Competition.  During
your Employment Period, the Consulting Term and for a period of one year
following the later of (i) the expiration of the Employment Period and (ii) the
expiration of the Consulting Term, you shall not engage (including, without
limitation, as an officer, director, shareholder, owner, partner, joint
venturer, member or in a managerial capacity, or as an employee, independent
contractor, consultant, advisor or sales representative) in any Competitive
Business (as hereinafter defined) in the Territory (as hereinafter defined).
For purposes of determining whether you are permitted to be a shareholder of a
corporation engaged in a Competitive Business, the Executive’s direct or
indirect ownership (alone or together with a group) of less than 5% of the
issued and outstanding securities of a company whose securities are publicly-traded
in any U.S. or non-U.S. securities exchanges or quotation system shall be permitted.
As used herein, the term “Competitive Business” shall mean any business engaged
in publishing and distributing video games and entertainment software for
personal computers.  As used herein, the
term “Territory” shall mean:


 


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(1)                                  The
following counties in the State of California: Alameda, Alpine, Amador, Butte,
Calaveras, Colusa, Contra Costa, Del Norte, El Dorado, Fresno, Glenn, Humboldt,
Imperial, Inyo, Kern, Kings, Lake, Lassen, Los Angeles, Madera, Marin,
Mariposa, Mendocino, Merced, Modoc, Mono, Monterey, Napa, Nevada, Orange,
Placer, Plumas, Riverside, Sacramento, San Benito, San Bernardino, San Diego,
San Francisco, San Joaquin, San Luis Obispo, San Mateo, Santa Barbara, Santa
Cruz, Shasta, Sierra, Siskiyou, Solano, Sonoma, Stanislaus, Sutter, Tehama,
Trinity, Tulare, Tuolumne, Ventura, Yolo, and Yuba;


 


(2)                                  Each
and every county or other political or geographical subdivision in the balance
of the United States of America and the dependent territories of the United
States of America; and


 


(3)                                  Each
and every county or other political or subdivision in the world.


 


(e)                                  Covenant Not to Solicit.  During the Employment Period, the Consulting
Term and for a period of two years following the later of (i) the
expiration of the Employment Period for any reason whatsoever or (ii) the
expiration of the Consulting Term, you shall not, either alone or jointly, with
or on behalf of others, directly or indirectly, whether as principal, partner,
agent, shareholder, director, employee, consultant or otherwise, offer
employment to, or directly or indirectly solicit the employment or engagement
of, or otherwise entice away from the employment of Employer or any affiliated
entity, either for your own account or for any other person, firm or company,
any person who was employed by Employer or any such affiliated entity during
the term of your employment, whether or not such person would commit any breach
of his or her contract of employment by reason of his or her leaving the
service of Employer or any affiliated entity.


 


9.                                      Termination


 


(a)                                  Employer.  At any time during the
Employment Period, Employer may terminate your employment under this Agreement
for Cause, defined as your (i) willful, reckless or gross misconduct, (ii) material
breach by you of the Agreement, which shall continue uncured for a period of 45
days after written notice to you of such material breach, or (iii) conviction
of a felony involving dishonesty or moral turpitude. In addition, but subject
to the provisions of Paragraph 9(d)(iii) below, Employer may terminate your
employment under this Agreement at any time without Cause. In the case of any
termination for Cause pursuant to clause (ii), Employer shall give written
notice of termination to you (“Notice of Cause Termination”), and shall specify
the date of such termination, which shall not be earlier than 45 days after the
date on which notice is given to you. Such notice shall specify the particular
acts or circumstances that purport to constitute Cause for such termination.
You shall be given the opportunity within 30 days after receiving such notice
to explain why Cause for such termination does not exist or to cure any such
basis for Cause. Within 15 days after any such explanation, you will be given
the final decision regarding whether Cause exists. If the final decision is
that Cause exists, your employment with Employer shall be terminated under
Paragraph 9(a)(ii) pursuant to the Notice of Cause Termination as of the
date of termination specified in the notice. If the final decision is that
Cause does not exist, your employment with Employer shall not be terminated
under Paragraph 9(a)(ii) pursuant to such Notice of Cause Termination.


 


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(b)                                 Employee.  You may
terminate your employment under this Agreement upon the continuing occurrence
of the following, which shall remain uncured for a period of 45 days following
notice to Employer of such occurrence: (i) the material diminution of your
duties and responsibilities hereunder in violation of the Agreement, provided that
neither your ceasing to have investor relations, financial reporting or similar
responsibilities, nor the addition of one or more operating units or
subsidiaries by reason of acquisitions or similar transactions that are not incorporated
into Employer, nor the addition of new management and reporting
responsibilities at Employer or Activision by reason of significant increase in
the size and scope of Employer’s core business due to acquisitions or similar
events shall be considered a diminution in your duties or responsibilities in
violation of the Agreement; (ii) a reduction in your Base Salary; (iii) the
elimination or reduction of your participation in any incentive or benefit
plan, or reduction of participation in any such plan, other than, in any such
case, as a result of the modification, reduction or elimination of such plan
with regard to all senior executives of Employer or as a result of regulatory,
tax or accounting requirements; or (iv) your relocation without your
consent to a location more than 25 miles from Los Angeles County; provided,
that you shall not have the right to terminate your employment pursuant to
clauses (i), (ii) or (iii) of this Paragraph 9(b) after such
date as your Total Compensation shall equal or exceed the Guarantee Amount so
long as, in the case of (i) above, your position remains as a senior
executive position with the equivalent of divisional leadership
responsibilities.


 


(c)                                  Death or Disability. 
In the event of your death during the term of this Agreement, this Agreement
shall terminate and Employer shall be obligated to pay only your estate or
legal representative the amounts set forth in Paragraph 9(d)(i) below.   In the event that you have or develop a
Disability, then Employer shall have the right, at its option, to terminate
your employment under this Agreement, subject to the provisions of Paragraph
9(d)(ii) below. Unless and until so terminated, during any period of
Disability during which you are unable to perform the services required of you
under this Agreement, your Base Salary shall be payable to the extent of, and
subject to, Employer’s policies and practices then in effect with regard to
sick leave and disability benefits. “Disability” shall be determined in
accordance with the definitions set forth in the Employer’s disability
insurance policies and shall be determined by a physician mutually agreed upon
by you and Employer. If you and Employer are unable to agree on such a
physician, you and Employer shall each appoint one physician and those two
physicians shall appoint a third physician who shall make such a determination.
You shall cooperate and make yourself available for any medical examination
reasonably required by Employer with respect to any determination of your
Disability.


 


(d)                                 Termination of Obligations. 
In the event of the termination of your employment under this Agreement
pursuant to Paragraphs 9(a), 9(b) or 9(c), all obligations of Employer to
you under this Agreement shall immediately terminate except as follows:


 


(i)                                     Compensation
upon Death. In the event of this Agreement is terminated as a result of
your death, your heirs, successors or legal representatives shall receive: (i) the
Base Salary through the date of termination of this Agreement; (ii) any
unpaid Annual Bonus for any prior fiscal year; (iii) the pro rata portion
of the Annual Bonus for the fiscal year in which your termination occurs to the
extent such Annual Bonus is earned; (iv) an amount


 


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equal to 300% of
the dollar amount of the Base Salary paid or payable to you for Employer’s most
recent fiscal year immediately prior to your date of death; (v) reimbursement
of expenses due to you pursuant to Paragraphs 2(h) and 5; (vi) immediate
vesting of a pro rata (based upon the amount of time between the Effective Date
and the date of your death) portion of the unvested portion of the second and
third tranches of the Option issued to you pursuant to Paragraph 2(e); and (vii) your
then current spouse and minor children, if any, shall receive the same level of
health/medical insurance or coverage that was provided to you immediately prior
to you death for a two year period, with the cost of such continued insurance
or coverage being borne by Employer. All such payments shall be in addition to
any payments your widow, beneficiaries or estate may be entitled to receive
pursuant to any pension or employee benefit plan or life insurance policy
maintained by Employer.


 


(ii)                                  Compensation
upon Disability. In the event this Agreement is terminated as a result of
your Disability, you shall receive: (i) the Base Salary through the date
of your termination; (ii) any unpaid Annual Bonus for any prior fiscal
year; (iii) the pro rata portion of the Annual Bonus for the fiscal year
in which your termination occurs to the extent such Annual Bonus is earned; (iv) reimbursement
of expenses due to you pursuant to Paragraphs 2(h) and 5; (v) an
amount equal to three hundred (300%) percent of the dollar amount of the Base
Salary paid or payable to you for Employer’s most recent fiscal year
immediately prior to your Disability termination, less the amount, if any, of
any payments received by you from any Employer-funded disability insurance
plan; and (vi) you and your then current spouse and minor children, if
any, shall receive the same level of health/medical insurance or coverage
provided immediately prior to such Disability termination for a two year
period, with the cost of such continued insurance or coverage being born by
Employer.


 


(iii)                               Compensation
upon Termination Without Cause. In the event your employment under this
Agreement is terminated by Employer without Cause, or by you pursuant to
Paragraph 9(b), then you shall receive: (i) the Base Salary through the
date of your termination; (ii) any unpaid Annual Bonus for any prior
fiscal year; (iii) the pro rata portion of the Annual Bonus for the fiscal
year in which your termination occurs to the extent such Annual Bonus is
earned; (iv) reimbursement of expenses due you pursuant to Paragraphs 2(h) and
5; and (v) 50% of the Base Salary payable to you from the date of
termination through the Expiration Date had your employment not been
terminated, such Base Salary to be determined in accordance with the terms of
Paragraph 2(a) of this Agreement and to be paid on a salary continuation
basis as and when normally paid by Employer; and (vi) 100% of the Annual
Bonus amount payable to you during the period following the date of termination
through the Expiration Date had your employment not been terminated, which Annual
Bonus shall be equal to the product of your Base Salary that would have been in
effect for such fiscal year and a fraction, the


 


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numerator of which
is the total of the Annual Bonus paid to you in the two fiscal years prior to
termination, and the denominator of which is the Base Salary that was paid to
you in the two fiscal years prior to termination, such Annual Bonus to be paid
as and when normally paid by Employer. Upon such termination, you will also
enter into a consulting relationship with Employer on the terms set forth in
Paragraph 10.


 


(e)                                  Performance Termination.  At any time during the Employment Period,
Employer may terminate your employment under this Agreement by reason of your
failure to perform the functions of your position at the level appropriate for
Employer, provided that you shall have been given written notice of such
performance deficiencies and shall have failed to cure such performance
deficiencies within 12 months following such notice. In the event your
employment under this Agreement is terminated by Employer pursuant to this
Paragraph 9(e), then you shall receive: (i) Base Salary through date of
termination; (ii) any unpaid Annual Bonus for any prior fiscal year, (iii) the
pro rata portion of the Annual Bonus for the fiscal year in which your
termination occurs to the extent such Annual Bonus is earned; (iv) reimbursement
of expenses due you pursuant to Paragraphs 2(h) and 5; and (v) 50% of
the Base Salary payable to you from the date of termination through the
Expiration Date had your employment not been terminated, such Base Salary to be
determined in accordance with the terms of Paragraph 2(a) of this
Agreement and to be paid on a salary continuation basis as and when normally
paid by Employer; and (vi) 100% of the Annual Bonus amount payable to you
during the period following the date of termination through the Expiration Date
had your employment not been terminated, which Annual Bonus shall be equal to
the product of your Base Salary that would have been in effect for such fiscal
year and a fraction, the numerator of which is the total of the Annual Bonus
paid to you in the two fiscal years prior to termination, and the denominator
of which is the Base Salary that was paid to you in the two fiscal years prior
to termination, such Annual Bonus to be paid as and when normally paid by
Employer; provided that the total of severance payments following a termination
pursuant to this Paragraph 9(e)

shall not be more than the Pro-Rata Guarantee Amount. The Pro Rata Guarantee
Amount shall be (i) $4,000,000 if your employment is terminated before the
second anniversary of the effective Date, (ii) $8,000,000 if your
employment is terminated after the second anniversary of the Effective date and
before the third anniversary of the Effective Date, (iii) $12,000,000 if
your employment is terminated after the third anniversary of the Effective Date
and before the fourth anniversary of the Effective Date, (iv) $16,000,000
if your employment is terminated after the fourth anniversary of the Effective
Date and before the fifth anniversary of the Effective Date, and (v) $20,000,000
if your employment is terminated after the fifth anniversary of the Effective
Date.


 


10.                               Consulting
Agreement.


 


In the event
Employer elects to terminate your employment under this Agreement without
cause, or you terminate your employment pursuant to Paragraph 9(b), you agree
that upon the effective date of such termination, you and Employer shall then
enter into a consulting agreement (the “Consulting Agreement”) pursuant to
which Employer will retain your services as a consultant of Employer for a
period of equal to the remaining Employment Period (as such Employment Period
may have been extended pursuant to Paragraph 1(b)), following such termination
and for a period of additional two years (the “Consulting Term”). The
Consulting Agreement shall provide for, among other things:


 


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(a) payment of consulting
fees to you in the following amounts: (i) until the Expiration Date, the amount
equal to 50% of the Base Salary that would have been payable to you had your employment
not been terminated, such Base Salary to be determined in accordance with the
terms of Paragraph 2(a) of this Agreement, and (ii) following the
Expiration Date, $250,000 per annum. Payment of consulting fees shall be made
in accordance with Employer’s standard payroll practices and will be subject to
Withholding;


 


(b) that you shall
continue to receive those benefits described in Paragraph 6 above;


 


(c) that you shall not be
restricted from engaging (including, without limitation, as an officer, director,
shareholder, owner, partner, joint venturer, member or in a managerial
capacity, or as an employee, independent contractor, consultant, advisor or
sales representative) in such activities as you deem appropriate to engage in
during the Consulting Term, provided that such activities or activities of any
entity to which you are providing services shall not be directly competitive
with the activities of Employer or any of its affiliates (regardless of whether
Employer engaged in such activities prior to the commencement of the Consulting
Agreement or may commence engaging in such activities at any time during the Consulting
Term);


 


(d) that you will
continue to abide by all of Employer’s internal rules, policies and procedures.
Without limiting the generality of the foregoing, you will remain subject to
the provisions of Paragraph 8 of this Agreement, including without limitation,
your agreement not to engage in solicitations of any employees of Employer and
its affiliates for a period of (2) years following the termination of the
Consulting Agreement;


 


(e) that you shall also
remain subject to the provisions of the Employee Proprietary Information Agreement
previously executed by you; and


 


(f) such other terms and
provisions as Employer deems appropriate


 


In the event Employer and
you fail to execute the Consulting Agreement, then provisions of this Paragraph
10 shall govern the relationship between you and Employer until the expiration
of the Consulting Term.


 


11.                               Use of Employee’s
Name


 


Employer shall
have the right, but not the obligation, to use your name or likeness for any
publicity or advertising purpose.


 


12.                               Assignment


 


Employer may
assign this Agreement or all or any part of its rights under this Agreement to
any entity which succeeds to all or substantially all of Employer’s assets
(whether by merger, acquisition, consolidation, reorganization or otherwise) or
which Employer may own substantially, and this Agreement shall inure to the
benefit of such assignee.


 


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13.                               No Conflict with
Prior Agreements


 


You represent to
Employer that neither your commencement of employment under this Agreement nor
the performance of your duties under this Agreement conflicts or will conflict
with any contractual commitment on your part to any third party, nor does it or
will it violate or interfere with any rights of any third party.


 


14.                               Successors


 


(a)                                  This
Agreement is personal to you and without the prior written consent of Employer shall
not be assignable by you otherwise than by will or the laws of descent and
distribution. This Agreement shall inure to the benefit of and be enforceable
by your legal representatives.


 


(b)                                 This
Agreement shall inure to the benefit of and be binding upon Employer and its successors
and assigns, including any successor by reason of merger, sale of all or
substantially all of the assets of Employer or by operation of law.


 


15.                               Minimum Ownership Position


 


At all times
during the term on or after the second anniversary of the Effective date, you
shall own a number of shares of Activision’s common stock that have an “aggregate
market value” which is at least equal to the greater of (a) 1.50 times
your annual Base Salary set forth in Paragraph 2(a) or (b) ten
percent (10%) of the total amount realized by you from all option exercises
within two years of the Effective Date, determined for each option so exercised
to be an amount equal to the Market Price (as defined in Paragraph 2(g)) of
Activision’s shares on the applicable exercise date over the exercise price per
share of such options. For purposes of this Agreement, “aggregate market value”
shall be the product of the Market Price and the total number of Activision’s
shares owned by you as of the applicable date. All Activision restricted stock
grants to you shall be included for these purposes in the foregoing
calculation. Employer shall in good faith monitor such ownership position. You
also agree to comply with any additional stock ownership guidelines that may be
adopted by the Board of Directors and apply to Employer’s senior executives.


 


16.                               General Provisions


 


(a)                                  Entire Agreement. 
This Agreement, together with the Employee Proprietary Information
Agreement, and stock option agreement, supersede all prior or contemporaneous
agreements and statements, whether written or oral, concerning the terms of
your employment with Employer, and no amendment or modification of these agreements
shall be binding unless it is set forth in a writing signed by both Employer
and you. To the extent that this Agreement conflicts with any of Employer’s
policies, procedures, rules or regulations, this Agreement shall supersede
the other policies, procedures, rules or regulations.


 


(b)                                 No Broker.  You
have given no indication, representation or commitment of any nature to any
broker, finder, agent or other third party to the effect that any fees or
commissions of


 


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any nature are, or under
any circumstances might be, payable by Employer or any affiliate of Employer in
connection with your employment under this Agreement.


 


(c)                                  Waiver.  No
waiver by either party of any breach by the other party of any provision or
condition of this Agreement shall be deemed a waiver of any similar or
dissimilar provision or condition at the same or any prior or subsequent time.


 


(d)                                 Prevailing Law. 
Nothing contained in this Agreement shall be construed so as
to require the commission of any act contrary to law and wherever there is any
conflict between any provision of this Agreement and any present or future
statute, law, ordinance or regulation, the latter shall prevail, but in such
event the provision of this Agreement affected shall be curtailed and limited
only to the extent necessary to bring it within legal requirements.


 


(e)                                  Expiration.  This
Agreement does not constitute a commitment of Employer with regard to your
employment, express or implied, other than to the extent expressly provided for
herein. Upon expiration of the term of this Agreement, it is the contemplation
of both parties that your employment with Employer shall cease, and that
neither Employer nor you shall have any obligation to the other with respect to
your continued employment. In the event that your employment continues for a
period of time following the term unless and until agreed to in a new subscribed
written document, such continuation of your employment shall be “at will,” and
may be terminated without obligation at any time by either party giving notice
to the other.


 


(f)                                    Choice of Law.  This
Agreement shall be governed by and construed in accordance with the laws of the
State of California without regard to conflict of law principles.


 


(g)                                 Immigration.  In
accordance with the Immigration Reform and Control Act of 1986, employment
under this Agreement is conditioned upon satisfactory proof of your identity
and legal ability to work in the United States.


 


(h)                                 Venue and Jurisdiction.  The parties agree that all actions
or proceedings initiated by either party hereto arising directly or indirectly
out of this Agreement shall be litigated in federal or state court in Los
Angeles, California. The parties hereto expressly submit and consent in advance
to such jurisdiction and agree that service of summons and complaint or other
process or papers may be made by registered or certified mail addressed to the
relevant party at the address set forth below. The parties hereto waive any
claim that a federal or state court in Los Angeles, California, is an
inconvenient or an improper forum.


 


(i)                                     Severability.  If
any provision of this Agreement is held to be illegal, invalid or unenforceable
under existing or future laws effective during the term of this Agreement, such
provisions shall be fully severable, the Agreement shall be construed and
enforced as if such illegal, invalid or unenforceable provision had never
comprised a part of this Agreement, and the remaining provisions of this
Agreement shall remain in full force and effect and shall not be affected by
the illegal, invalid or unenforceable provision or by its severance from this
Agreement. Furthermore, in lieu of such illegal, invalid or unenforceable
provision, there shall be added automatically as part of this Agreement a
provision as similar in terms to such illegal, invalid or unenforceable
provision as may be possible and be legal and enforceable.


 


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(j)                                     Legal Counsel.  You acknowledges that you
have been given the opportunity to consult with legal counsel of your own
choosing regarding this Agreement. You understand and agree that Employer’s
General Counsel, or any other attorney or member of management who has discussed
any term or condition of this Agreement with him, is only acting on behalf of
the Employer and not on your behalf.


 


(k)                                  Right to Negotiate.  You hereby acknowledge
that you have been given the opportunity to participate in the negotiation of
the terms of this Agreement.


 


(l)                                     Services Unique.  You recognize that the
services being performed by you under this Agreement are of a special, unique,
unusual, extraordinary and intellectual character giving them a peculiar value,
the loss of which cannot be reasonably or adequately compensated for in damages
in the event of a breach of this Agreement by you (particularly, but without
limitation, with respect to the provisions hereof relating to the exclusivity
of your services and the provisions of Paragraph 8 of this Agreement).


 


(m)                               Injunctive Relief.  In the event of a breach
or threatened breach of this Agreement, you hereby agree that any remedy at law
for any breach or threatened breach of this Agreement will be inadequate and,
accordingly, each party hereby stipulates that the other is entitled to obtain
injunctive relief for any such breaches or threatened breaches. The injunctive
relief provided for in this paragraph is in addition to, and is not in
limitation of, any and all other remedies at law or in equity otherwise
available to the applicable party. The parties agree to waive the requirement
of posting a bond in connection with a court’s issuance of an injunction.


 


(n)                                 Remedies Cumulative.  The remedies in this
paragraph are not exclusive, and the parties shall have the right to pursue any
other legal or equitable remedies to enforce the terms of this Agreement.


 


(o)                                 Attorneys’ Fees And Costs.  If
either party brings an action to enforce, interpret or apply the terms of this
Agreement or declare its rights under this Agreement, the prevailing party in
such action, including all appeals, shall receive all of its or your attorneys’
fees, experts’ fees, and all of its or your costs, in addition to such other
relief as may be granted.


 


(p)                                 Amendment.  This Agreement may not be
amended or modified otherwise than by a written agreement executed by the
parties hereto or their respective successors and legal representatives. The
parties shall cooperate in good faith in making any amendments to this
Agreement that may be necessary to avoid imposition of any penalty tax imposed
under Section 409A of the Internal Revenue Code of 1986, as amended (the “Code”),
or the regulations thereunder.


 


(q)                                 Deferred Compensation.  Notwithstanding anything to the contrary in this
Agreement, in the event that it is determined that any payment to be made under
this Agreement is considered “nonqualified deferred compensation” subject to Section 409A
of the Code or the regulations thereunder, payment under this Agreement shall
be delayed for six months following the termination of employment of Employee.
Any such deferred amount shall be included in Total Compensation or otherwise
included in computing amounts paid with regard to the Guarantee Amount
notwithstanding any such deferral.


 


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(p)                                 Headings.  The
headings set forth herein are included solely for the purpose of identification
and shall not be used for the purpose of construing the meaning of the
provisions of this Agreement.


 


17.                               Notices


 


All notices which
either party is required or may desire to give the other shall be in writing
and given either personally or by depositing the same in the United States mail
addressed to the party to be given notice as follows:


 


	
  To Employer:

  	
  3100 Ocean Park
  Boulevard

  
	
   

  	
  Santa Monica,
  California 90405

  
	
   

  	
  Attention: Senior Vice
  President,

  
	
   

  	
  Business Affairs and
  General Counsel

  
	
   

  	
   

  
	
  To You:

  	
  Michael Griffith

  
	
   

  	
  11061 Toddtree Lane

  
	
   

  	
  Cincinnati, Ohio 45242

  



 


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Either party may
by written notice designate a different address for giving of notices. The date
of mailing of any such notices shall be deemed to be the date on which such
notice is given.


 


If the foregoing
accurately reflects our mutual agreement, please sign where indicated.


 


ACCEPTED
AND AGREED TO:


 


	
  Employer

  	
  Employee

  	
   

  
	
   

  	
   

  	
   

  
	
  ACTIVISION PUBLISHING,
  INC.

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  By:

  	
  /s/ George Rose

  	
   

  	
  /s/ Michael Griffith

  	
   

  
	
  Its:

  	
  Sr. Vice President &

  	
   

  	
  Michael Griffith

  	
   

  
	
   

  	
  General Counsel

  	
   

  	
   

  	
   

  



 


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