Document:

Exhibit 10.44

September 6, 2006

Brian Hodous

Address

Address

Dear Brian:

This letter is to
confirm our mutual understanding with regard to Activision Inc.’s (“the Company”)
current plans and the compensation and benefits for your international
assignment as a Chief Customer Officer in Stockley Park, UK.

Immigration

Your international
assignment is subject to your obtaining the appropriate work/residency permits
as well as your voluntary acknowledgment that your assignment, compensation and
benefits have been explained to you.

Assignment
start date

The anticipated
effective date of this assignment is October 1, 2006, or upon receipt of the
proper work/residency permits.

Duration
of assignment

It is anticipated
that this assignment will last for one (1) year, although business conditions
and other factors may require that this period of time be reduced or
extended.  Should this assignment last
longer than currently anticipated, any applicable differentials and/or allowances
will be re-evaluated at the Company’s discretion at that time.

Terms and
conditions

During your
international assignment, your employment will remain consistent with the
Company’s employment policies and practices, which may be revised from time to
time at the Company’s discretion.

ASSIGNMENT-RELATED
BENEFITS

The following are the
specific details relative to your international assignment, which have been
determined by the Company:

Base
salary

Your annualized
base salary will be US$375,000.00 and will be delivered to you via home country
payroll.  Your next salary review will be
October 1, 2007.  Subsequent salary
reviews will be conducted in accordance with the Company’s home country
guidelines.

Variable
pay

You will have a bonus
opportunity of 75%, based on Company targets and consistent the provisions of
the Company’s annual discretionary bonus plan as previously communicated to
you.

Cost of
living allowance (COLA)

You are eligible
for a cost of living allowance.  This
amount is based on your family size with you on assignment, your annual base
salary and on consideration of the goods and services cost differential between
your home and host locations (United States vs. United Kingdom).

For the
commencement of your assignment, the COLA will be US$47,739.00 on an annualized
basis.  This allowance will be
re-evaluated twice per year and anytime throughout the year if the exchange
rate fluctuates by at least 5% over a four consecutive week period.  The Company will pay any income tax due on
this payment.

Housing
allowance

You will be
provided with a housing allowance of up to £5,675.00 per month to include
utilities.  Such allowance will be based
on your actual accommodation costs in the UK, and no cash will be paid to you
should you secure less expensive accommodation. 
This allowance will apply from date you occupy permanent housing in the
UK.  The Company will pay any income tax
due on this payment.

Home
country housing deduction

This amount is
still to be determined.

Utilities
allowance

The
Company will pay your utilities in the UK directly, including Council Tax and
telephone.  The Company will pay any
income tax due on this benefit.

Mobility
premium

You will receive a
one-time mobility premium in the amount of US$15,000.00, and the Company will
pay any applicable income tax on this payment. 
This allowance is intended as recognition of your relocation and
enhanced value to Activision as an international assignee.

Household
goods

The Company will
pay for the removal of your personal effects from the US to the UK, up to a 40’
container and a 1,000 lb. air shipment. 
Some items will be excluded from transportation (such as a wine
collection or a boat), and this will be explained to you by the Company’s
selected vendor.

Household
goods storage

You are entitled
to storage of household items you do not take with you to the UK.  Some items will be excluded from company-paid
storage (such as a wine collection, a boat, items of unusual value, etc.), and
this will be explained to you by the Company’s selected vendor.

Vacation
entitlement

During your assignment,
you will be eligible for the host country vacation entitlement.  You will take vacation based on the needs of
the business and with customary management approval.

Public
holidays

While on
assignment, UK public holidays will replace those of the US.  The current UK public holiday schedule
includes 14 holidays per year.

Home
leave

You and your
spouse will each be entitled to one return flight home for each twelve months
of your assignment, except in the year of repatriation.   For the first twelve months of your
assignment, you and your spouse will be allowed one trip home.  Class of travel will be in line with the
Company’s travel policy.

 2
 

Host
country auto benefit

While on
assignment you will be entitled to receive your choice of:

1.     Car allowance of
£540.00 monthly or

2.     Company
car lease with choice of company car, and reimbursement of fuel, maintenance
and insurance costs up to a total monthly amount of £540.00.

If you are not
currently eligible for a car allowance/company car in the US, you will contribute
an automobile deduction to offset the cost of your UK transportation.  The amount of the deduction will be based on
the actual cost of your monthly car payments and insurance, and will be
deducted via US payroll.

Health
and welfare benefits

You will be
maintained in the US health and benefit plans (e.g. medical, dental, vision,
life, etc.), whenever possible.  If this
is not possible, you be eligible to participate in an equivalent UK benefit
plan if offered.  We will reimburse for a
health club membership up to $4,000 USD.

Sick pay

You will continue
to remain eligible for the Company’s US sick time policy as currently in place.

Long term
disability coverage

You will continue
to remain eligible for the Company’s US LTD plan coverage as currently in place
pending insurance carrier approval.

401(k)
plan

During this
international assignment, provided you remain on US payroll, you may continue
to participate in the Company’s 401(k) plan including contributing on a pre-tax
basis and receiving the corresponding Company match contributions per the plan
document.

Social
security

You will be able
to continue to contribute to the US Social Security system (OASDI and Medicare),
in line with the totalization agreement between the US and the UK.

Cultural
training

You and your
spouse will be provided with cultural awareness training for your
assignment.  The training will be
arranged with the appropriate external organization selected by the Company.

Loss on
sale of auto

The Company will
reimburse you for the loss on sale of one auto for you and one for your spouse
(if applicable).  The reimbursement will
be equal to the difference between the average wholesale value and the actual
sales price of the vehicle(s), not to exceed the difference between the average
retail and wholesale/trade-in value(s) of the automobile(s).  Such reimbursement will be paid upon the
submission of all appropriate documentation. 
The Company will pay any income tax due on this payment.

 3
 

Destination
services

The
Company has engaged a destination services company to assist in your
relocation.  These services include but
are not limited to community orientation, home search and assistance with
securing drivers licenses.

Temporary
accommodation in the U.K.

If
necessary, you are entitled to forty-five (45) days in temporary housing upon
relocation to the UK.  The Company will
pay for your accommodations up to a maximum of £7,271.00.  Throughout the duration of your stay in
temporary accommodation, the Company will cover the cost of reasonable meals and
incidental expenses (up to a maximum of £182.00 per day total for you and your
spouse).  The Company will pay any income
tax due on this payment.

Spousal
assistance

Provided your
spouse is gainfully employed at the commencement of your assignment, the Company
will reimburse the cost of spousal assistance related to re-training,
maintaining home country qualifications, continuing education credits, career
consulting, etc.  Such reimbursement will
be made upon the submission of all receipts, up to a maximum of US$7,500.00 per
annum.  The Company will pay any income
tax due on this payment.

Repatriation
allowance

You will receive a
one-time repatriation allowance equal to one half (1/2) month’s new base
salary, not to exceed US$7,500.00.  This
allowance is intended to cover incidental costs incurred as a result of your
relocation not otherwise reimbursed by the Company.  The Company will pay any income tax due on
this payment.

Tax
equalization

The Company’s tax
equalization policy will apply during your assignment.  The policy essentially keeps you in the same
tax position as if you had remained in the US.  Hypothetical tax, which will be calculated in
a manner similar to actual US Federal and California income tax, will be withheld
from your monthly pay via US payroll.

You will pay
hypothetical tax on compensation items that you would have received had you
remained in the US.  These items include,
but are not limited to base salary, bonus, stock option income, etc.

The Company will
pay the tax on all other items of compensation mentioned in this letter.  The Company shall also be responsible for the
UK income tax liability on all items of Company compensation.

Activision, Inc.
will use the services of Deloitte to prepare your UK and applicable US income
tax returns.  The Company will pay the
cost of this service.

The Company will
also pay for the services of Deloitte to administer all aspects of your
international assignment.  Your primary
Deloitte contact is Eva Blanc, who can be reached at 408-704-2587; eblanc@deloitte.com.

Please note, if
you leave the Company on a voluntary basis and in breach of your Employment
Agreement within one year of your relocation to the UK, you will be required to
reimburse Activision, Inc. for 100% of all one-time relocation expenses
incurred by the Company.  Should you
leave on a voluntary basis and in breach of your Employment Agreement within
the second year of your relocation, you will be required to repay 50% of all
relocation expenses incurred by the Company.

 4
 

Activision, Inc.
will pay the costs associated with your repatriation back to California, US (e.g.
airfare, household goods, temporary living, etc.), provided you either remain
employed by the Company or be involuntarily terminated by the Company at the
time of the repatriation.

In order to
acknowledge your voluntary acceptance of this assignment, please sign and date
this document and return it to me. 
Changes to this letter, your employment status, and your international
assignment are only effective if they are in writing and signed by me.  I wish you the very best with your assignment
in the UK.

Sincerely,

Sandy Digilio

Sr. Director, Global
Compensation & Benefits

cc:       Heather Rangel, Deloitte Tax LLP

            Jeff Adams, Deloitte Tax LLP

	
  

  	
   

  
	
  Brian Hodous

  
	
   

  
	
   

  
	
   

  	
   

  
	
  Date

  
			

 

 5Exhibit 10.45

ACTIVISION, INC.

AMENDED AND RESTATED 2003 INCENTIVE PLAN

NOTICE
OF SHARE OPTION AWARD

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

·                  Your name:  Brian
Hodous

·                  Total number of
Shares purchasable upon exercise of the Option awarded:  240,000

·                  Exercise
Price:  US $15.85 per Share

·                  Date of
Grant:   November 3,
2006

·                  Expiration Date:  November 3,
2016

·                  Grant ID:  03001800

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

·                  this Notice of
Share Option Award;

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

·                  the Company’s
Amended and Restated 2003 Incentive Plan, the receipt of a copy of which you
hereby acknowledge.

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

·                  Certain terms of
your Award:

·                  Schedule for Vesting:  Except as otherwise provided under the Award
Terms, the 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

  	
   

  
	
  October 1, 2007

  	
   

  	
  80,000

  	
   

  	
  80,000

  	
   

  
	
  October
  1, 2008

  	
   

  	
  80,000

  	
   

  	
  160,000

  	
   

  
	
  October 1, 2009

  	
   

  	
  80,000

  	
   

  	
  240,000

  	
   

  

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

·                  To accept your Award of the Option,
you must sign and return to the Company this Notice of Share 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 Share Option Award to the
Company at:

Activision, Inc.

3100 Ocean Park Boulevard

Santa Monica, CA  90405

Attn:  Stock Plan Administration

You should retain the
enclosed duplicate copy of this Notice of Share 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, INC.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Title:

  	
   

  	
   

  
	
   

  	
   

  	
  Date:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  ACCEPTED
  AND AGREED:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  BRIAN
  HODOUS

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Date:

  	
   

  	
   

  	
   

  	
   

  
								

 

 2

EXHIBIT
A

ACTIVISION,
INC.

AMENDED
AND RESTATED 2003 INCENTIVE PLAN

SHARE
OPTION AWARD TERMS

(OFFICER FORM)

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.

“Award Terms” means these Share
Option Award Terms.

“Cause” shall have
the meaning given to such term in the Employment Agreement.

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

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

“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.

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

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

“Disability” shall have the
meaning set forth in, or otherwise be determined in accordance with, the
Employment Agreement.

“Employment Agreement”
means the employment agreement between the Holder and the Company or one of its
subsidiaries or affiliates, as in effect from time to time.

“Employment Agreement
Expiration Date” shall have the meaning given to the term “Expiration
Date” in the Employment Agreement.

“Employment Violation”
means any material breach by the Holder of the Employment Agreement for so long
as the terms thereof 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 Share 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
option to purchase shares of Common Stock awarded to the Holder on the terms
and conditions described in the Grant Notice and these Award Terms.

“Plan” means the Activision,
Inc. Amended and Restated 2003 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 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 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 Option was exercised and which
were sold at such sales price; plus

(ii)           if
the Holder has exercised any portion of the 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 Fair Market
Value per share of Common Stock on the date of exercise, (2) the arithmetic
average of the per share closing sales prices of Common Stock 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 10 hereof, or (3) the arithmetic average of the per share closing
sales prices of Common Stock as reported on NASDAQ for the 30 trading day
period ending on the trading day immediately preceding the date of computation,
minus the Exercise Price, times (B) the number of Shares as to which the
Option was exercised and which were not sold.

 2
 

“Shares” means the shares of Common Stock or other securities purchasable upon exercise
of the Option.

“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.  Except as otherwise set forth in these Award
Terms, the Option shall expire and no longer be exercisable on the Expiration
Date.

3.             Vesting and
Exercise.

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

(b)           Exercisable Only by
Holder; Transferability.  Except as
otherwise permitted under the Plan, the Option may be exercised during the
Holder’s lifetime only by the Holder. 
With the Committee’s consent, all or part of the Option may be
transferred in accordance with Section 7.3 of the Plan.  EXCEPT AS OTHERWISE PERMITTED UNDER THE PLAN
AND THESE AWARD TERMS, THE OPTION SHALL NOT BE TRANSFERABLE BY THE HOLDER OTHER
THAN BY WILL OR THE LAWS OF DESCENT AND DISTRIBUTION.

(c)           Procedure for
Exercise.  The Option may be
exercised by the Holder as to all or any of the Shares as to which it 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 Option must be accompanied by full payment of the aggregate Exercise Price
of the Shares being purchased.  Such
payment shall be made (i) in cash or by certified check or bank 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 Dealers, Inc. and
with the Company’s consent, through the delivery of irrevocable written
instructions, in 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 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, or (iii) with the
Company’s consent, any combination of (i) or (ii) above.

 3
 

(e)           No Fractional Shares.  In no event may the 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 Option.

(g)           Issuance and
Delivery of Shares.  As soon as
practicable (and, in any event, within 30 days) after the valid exercise of the
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 11 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 Option shall have been exercised with
respect to less than all of the Shares purchasable upon exercise of the Option,
the Company shall make a notation in its books and records to reflect the partial
exercise of the Option and the number of Shares that thereafter remain
available for purchase upon exercise of the 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
prior to the vesting in full of the Option, as of the date of such termination
of employment the Option shall (i) cease to vest, (ii) no longer be
exercisable, whether or not vested, and (iii) be immediately cancelled.

(b)           Without Cause.  In the event that the Holder’s employment is
terminated by the Company or any of its subsidiaries or affiliates without
Cause prior to the vesting in full of the Option, the Option shall (i) continue
to vest in accordance with the “Schedule for Vesting” set forth on the Grant
Notice as if the Holder’s employment had continued thereafter until the
Employment Agreement Expiration Date and (ii) to the extent vested on the
Employment Expiration Date, be exercisable in accordance with these Award Terms
until the earlier of (A) the 30th day after the Employment Agreement Expiration
Date and (B) the Expiration Date, after which the Option shall no longer
be exercisable and shall be cancelled.

(c)           Death or Disability.  In the event that the Holder dies while
employed by the Company or any of its subsidiaries or affiliates or the Holder’s
employment with the Company or any of its subsidiaries or affiliates is
terminated due to the Holder’s Disability, in each case prior to the vesting in
full of the Option, the Option shall (i) continue to vest in accordance with
the “Schedule for Vesting” set forth on the Grant Notice as if the Holder’s
employment had continued thereafter until the Employment Agreement Expiration
Date (ii) to the extent vested on the Employment Agreement Expiration Date, be
exercisable in accordance

 4
 

with these Award Terms
until the earlier of (A) the 30th day after the Employment Agreement Expiration
Date and (B) the Expiration Date, after which the Option shall no longer be
exercisable and shall be cancelled.

(d)           Other.  Unless the Committee decides 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 prior to the vesting in full of
the Option, the 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 Option shall no longer
be exercisable and shall be cancelled.

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 Option, the issuance or transfer of any Shares upon
exercise of the Option or otherwise in connection with the Award at the time
such Withholding Taxes become due.  The
Holder shall be entitled to satisfy any Withholding Taxes contemplated by this
Section 5 (a) by delivery to the Company of  a certified check or bank 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. and with the
Company’s consent, through the delivery of irrevocable written instructions, in
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 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; or (c) with the Company’s consent, by any combination
of (a) and (b) 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
Option unless and until all Withholding Taxes contemplated by this
Section 5 have been satisfied.

6.             Reservation of
Shares.  The Company shall at all
times reserve for issuance or delivery upon exercise of the Option such number
of shares of Common Stock or other securities 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, or amend, alter,
accelerate, suspend, discontinue or terminate the Award, the Grant Notice or
these Award Terms; provided, however, that, except as provided in
Section 8 or 9  hereof, without the
consent of the Holder, no such amendment, alteration, suspension,
discontinuation or termination of the Award, the Grant Notice or these Award
Terms may materially and adversely affect the rights or obligations of the
Holder in respect of the Award, taken as a whole.  Without intending to limit the generality or

 5
 

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.  By accepting and agreeing to the Award, the
Holder consents to any such amendment, alteration, suspension, discontinuation
or termination of the Award, the Grant Notice or these Award Terms that
(i) is effected in accordance with Section 8 or 9  hereof or (ii) does not materially
and adversely affect the rights or obligations of the Holder in respect of the
Award, taken as a whole.

8.             Adjustments.  Notwithstanding anything to the contrary
contained herein, to prevent the dilution or enlargement of benefits or
potential benefits intended to be made available under the Plan, in the event
of any corporate transaction or event such as a stock dividend, extraordinary
dividend or other similar distribution (whether in the form of cash, shares of
Common Stock, 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 or
other securities, the issuance of warrants or other rights to purchase shares
of Common Stock or other securities, or other similar corporate transaction or
event affecting shares of Common Stock, then the Award shall be adjusted in
accordance with Section 7.6 of the Plan. 
In addition, the Committee is authorized to make such adjustments as it
deems appropriate in the terms and conditions of, and the criteria included in,
the Award in recognition of unusual or nonrecurring events (including, without
limitation, events described in the preceding sentence) affecting the Company
or any of its subsidiaries or affiliates or the financial statements of the
Company or any of its subsidiaries or affiliates, or in response to changes in
applicable laws, regulations or accounting principles.  It is intended that the Award will not be
subject to any adverse consequences under Section 409A of the Code; however,
the Committee is authorized to make such adjustments as it deems appropriate to
the terms and conditions of the Award in order to prevent the Award from
becoming subject to any adverse consequences under Section 409A of the Code.

9.             Registration and
Listing.  Notwithstanding anything to
the contrary contained herein, the Option may not be exercised, and the Option
and Shares purchasable upon exercise of the 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 Option or Shares with the SEC, any state securities commission
or any securities exchange, securities association, market system 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 Option or Shares, to issue or transfer the 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

 6
 

of the Option or
Shares under the Securities Act of 1933, as amended, or any comparable federal
securities law or applicable state securities law.

10.           Employment Violation.

(a)           In the event of an
Employment Violation, the Company shall have the right to require (i) the
termination and cancellation of the 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 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 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.

(b)           Without limiting the
generality of Section 10(a) hereof and Section 8.8 of the Plan and
notwithstanding anything to contrary contained herein, to the extent the Option
would otherwise continue to vest or be exercisable following the termination of
the Holder’s employment, (i) if the Holder engages in a Competitive Business in
breach of the Employment Agreement, as of the date on which such engagement
commences this Option shall (x) cease to vest, (y) no longer be exercisable,
whether or not vested, and (z) be immediately cancelled, and (ii) if the Holder
otherwise becomes employed by a corporation or other entity engaged in a
Competitive Business or otherwise engages directly or indirectly in a
Competitive Business, as of the date on which such employment or other
engagement commences, this Option shall (I) cease to vest and (II) to the
extent the vested, be exercisable in accordance with this Option Agreement
until the earlier of (A) the 30th day thereafter and (B) the Expiration Date.

11.           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.”

12.           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.

 7
 

13.           No Rights as
Stockholder.  No holder of the 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.

14.           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.

15.           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 California, without giving effect to principles of conflicts of laws
thereof.

16.           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.

17.           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 the Employment Agreement 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.

18.           Conflict with
Employment Agreement or Plan.  In the
event of any conflict between the terms of the Employment Agreement 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 the Employment Agreement, the Grant Notice or these Award Terms and
the terms of the Plan, the terms of the Plan shall control.

 8

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