Document:

Exhibit 10.3

 

STOCK OPTION AGREEMENT

 

	
  Stock Option

  	
  #03000705/

  	
   

  	
  For 1,000,000
  Shares

  
	
   

  	
  03000706/03000707

  	
   

  	
   

  

 

ACTIVISION,
INC.

 

THIS STOCK OPTION
AGREEMENT (THIS “OPTION AGREEMENT”) CERTIFIES that on June 15, 2005 (the “Issuance
Date”), Michael Griffith (the “Holder”) was granted an option (the “Option”) to
purchase at the option price of $17.12 per share, all or any part of 1,000,000
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 June 15, 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 June 30, 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

  
	
  June 30,
  2006

  	
   

  	
  70,000

  	
   

  	
  70,000

  
	
  June 30,
  2007

  	
   

  	
  70,000

  	
   

  	
  140,000

  
	
  June 30,
  2008

  	
   

  	
  70,000

  	
   

  	
  210,000

  
	
  June 30,
  2009

  	
   

  	
  70,000

  	
   

  	
  280,000

  
	
  June 30,
  2010

  	
   

  	
  720,000

  	
   

  	
  1,000,000

  

 

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). 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 720,000 Shares scheduled to vest on June 30,
2010, 350,000 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 116,666 Shares to vest on June 30, 2007 for
achievement of such performance objectives during the Company’s fiscal year 2007,
116,666 Shares to vest on June 30, 2008 for achievement of such
performance objectives during the Company’s fiscal year 2008, and 116,667
Shares to vest on June 30, 2009 for achievement of such performance
objectives during the Company’s fiscal year 2009. In addition, pursuant to
Paragraph 9(d) (i) of the Employment Agreement, of the 720,000 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 650,000 Shares may be subject to immediate vesting upon the death of the
Holder.

 

5.             Termination
of Employment. In the event of the termination of employment or separation
from service of the Holder for any reason (other than death or disability as
provided below), this Option, to the extent not previously exercised or
expired, shall be deemed cancelled and terminated on the day of such
termination or separation, unless the Company decides, in its sole discretion,
to extend the term of this Option, subject to the terms of the Plan, except
that if your employment is terminated by the Company other than for Cause (as
defined in the Employment Agreement), the term of this Option shall be extended
and shall be exercisable for a period of thirty (30) days following the date 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

 

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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”), 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,

 

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(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,

 

4

 

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 hi 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

 

5

 

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 tune 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.

 

[Remainder
of page intentionally blank.]

 

6

 

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

 

	
   

  	
  ACTIVISION, INC.

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ George Rose

  
	
   

  	
  Name: George Rose

  
	
   

  	
  Title: Sr. Vice President & General Counsel

  
	
   

  	
   

  
	
   

  	
  Date:

  	
  June 15, 2005

  	
   

  
	
   

  	
   

  
	
   

  	
  Attest:

  	
  /s/ Danielle Kim

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Accepted and Confirmed:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  /s/ Michael Griffith

  	
   

  	
   

  	
   

  
	
  MICHAEL GRIFFITH

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Address

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  City

  	
  State

  	
  Zip Code

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Social Security
  Number

  	
   

  	
   

  	
   

  
											

 

7Exhibit 10.4

 

ACTIVISION,
INC.

 

RESTRICTED
STOCK AWARD AGREEMENT

 

You have been awarded
restricted shares of the Company’s common stock, $0.000001 par value per share
(“Restricted Stock”), subject to the following terms and conditions:

 

	
  •

  	
  Name of Grantee:

  	
   

  	
  Michael Griffith

  
	
   

  	
   

  	
   

  	
   

  
	
  •

  	
  Total Number of Shares
  of Restricted Stock Awarded:

  	
   

  	
  116,822(1)

  
	
   

  	
   

  	
   

  	
   

  
	
  •

  	
  Date of Grant:

  	
   

  	
  June 15, 2005

  

 

•                  This
award of Restricted Stock is being made pursuant to and as a material
inducement for the Grantee to enter into an employment agreement dated June 15,
2005 (the “Employment Agreement”) and is governed by the terms of the
Employment Agreement and the terms of the Restricted Stock Award Terms attached
hereto as Exhibit A. In addition, this award of Restricted Stock is
granted under and subject to the terms and conditions of the Company’s 2003
Incentive Plan (the “Plan”), the terms, conditions and definitions of which are
hereby incorporated herein as though set forth at length, and the receipt of a
copy of which the Grantee hereby acknowledges by his signature on the
irrevocable stock attached hereto as Exhibit B. Capitalized terms used
herein shall have the meanings set forth in the Plan, unless otherwise defined
herein.

 

•                  This award of
Restricted Stock is conditioned upon your endorsement in blank of the
irrevocable stock power attached hereto as Exhibit B. If you do not return
the attached irrevocable stock power within sixty (60) days from the Date of
Grant, this award shall be deemed forfeited. As such, promptly endorse and
return the attached irrevocable stock power to the General Counsel at the
following address:

 

Activision, Inc.

3100 Ocean Park
Boulevard

Santa Monica, CA
90405

Attn: General
Counsel

 

•                  If
you wish to elect a designated beneficiary to whom shares of common stock
otherwise due to you pursuant to the terms of this award shall be distributed
in the event of your death prior to distribution, please complete and return to
the General Counsel along with your irrevocable stock power the beneficiary
designation form attached hereto as Exhibit C.

 

	
  Dated: June 15,
  2005

  	
  ACTIVISION,
  INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ George Rose

  	
   

  
	
   

  	
   

  
	
   

  	
  Title:

  	
  Sr. Vice President

  	
   

  
	
  /s/ Michael Griffith

  	
   

  	
   

  	
  General Counsel

  
						

 

(1) Amount equal to $2,000,000 divided by the closing price of ATVI
stock as reported on closing on NASDAQ on July 1, 2005.

 

 

EXHIBIT A

 

ACTIVISION,
INC.

 

RESTRICTED
STOCK AWARD TERMS

 

Activision, Inc.,
a Delaware corporation (“Company”), has granted you (“Grantee”) an award of
restricted stock pursuant to the terms and conditions set forth in your Notice
of Restricted Stock Award (“Grant Notice”), these Restricted Stock Award Terms
(“Award Terms”) and your Employment Agreement (defined in the Grant Notice). In
addition, this award of Restricted Stock is subject to the terms and conditions
of the Company’s 2003 Incentive Plan (the “Plan”), the terms, conditions and
definitions of which are hereby incorporated herein as though set forth at
length, and the receipt of a copy of which the Grantee hereby acknowledges by
his signature on the irrevocable stock power attached to the Grant Notice as Exhibit B.
Capitalized terms used herein shall have the meanings set forth in the Plan,
unless otherwise defined herein. The text of the Plan and the Grant Notice are
incorporated herein by reference and made a part of these Award Terms.

 

1.             Definitions. For purposes of
this Award, the following terms shall have the meanings set forth below:

 

“Anniversary Date” means the annual anniversary of the Date
of Grant.

 

“Award” means this Restricted Stock Award.

 

“Board” means the Board of Directors of the Company.

 

“Code” means the
Internal Revenue Code of 1986, as amended, and regulations thereunder.

 

“Committee” means the
Compensation Committee of the Board or such other Board committee designated by
the Board in accordance with the Plan.

 

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

 

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

 

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

 

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

 

“Grant Notice” means
the Notice of Restricted Stock Award accompanying these Award Terms.

 

“Plan” means the
Activision, Inc. 2003 Incentive Plan, as amended from time to time.

 

“Restricted Shares” means
shares of Common Stock subject to the Award which are subject to the
Restrictions. This amount shall include any additional shares of Common Stock

 

A-1

 

resulting from the
investment of dividends declared on existing Restricted Shares pursuant to Section 6
hereof and additional or different securities issued as a result of any
adjustment pursuant to Section 10 hereof.

 

“Restrictions” means the restrictions set forth in Section 3
hereof which are imposed on shares of Common Stock subject to this Agreement
prior to vesting.

 

“Vested
Shares” means
the shares of Common Stock subject to this Agreement which have become vested
pursuant to Section 4 or 5 hereof and are, therefore, no longer subject to
the Restrictions.

 

2.             Grant of Restricted Stock.
Pursuant to action of the Board and in accordance with the Employment
Agreement, the Company hereby awards to Grantee the number of shares of Common
Stock as set forth on the Grant Notice.

 

3.             Restrictions. From the Date
of Grant until the date Grantee obtains a vested right to shares of Common
Stock subject to this Award pursuant to Section 4, 5 or 10 hereof, neither
the shares of Common Stock subject to this Award (including any additional
shares resulting from the reinvestment of dividends declared on the original
shares awarded or an adjustment of the original shares pursuant to Section 10
hereof) nor any right or privilege pertaining thereto may be sold, assigned,
transferred, pledged, hypothecated or otherwise disposed or encumbered in any
way, otherwise than by transfer to a trust in accordance with Section 15
hereof, and shall not be subject to execution, attachment or similar process
(collectively, the “Restrictions”). Any attempt to sell, transfer, assign,
pledge, hypothecate or otherwise dispose of or encumber the Restricted Shares
or any right or privilege pertaining thereto, otherwise than by transfer to a
trust pursuant to Section 16 hereof, shall be null and void and of no
force and effect. Upon the lapse of the Restrictions with respect to any shares
of Common Stock subject to this Award, Grantee shall obtain a vested right to such
shares of Common Stock.

 

4.             Vesting. Except as otherwise
provided in Section 5 or 10, on each Anniversary Date beginning with the
third Anniversary Date through and including the fifth Anniversary Date that Grantee
remains in continuous employment with the Company or any of its subsidiaries or
affiliates, the Restrictions shall lapse with respect to one-third of the
original number of Restricted Shares set forth on the Grant Notice, as adjusted
to account for additional shares of Common Stock resulting from dividend
reinvestment pursuant to Section 6 hereof or any adjustment pursuant to Section 9
hereof. Fractional shares shall be rounded up to the nearest whole share of
Common Stock (for which purpose one-half share shall be rounded up to the
nearest whole share of Common Stock). Upon termination of Grantee’s employment
with the Company and its subsidiaries and affiliates for any reason other than
death or Disability, whether by action of Grantee or the Company, any remaining
Restricted Shares which have not become vested in accordance with this Section 4
shall immediately be forfeited to the Company without payment of consideration
by the Company.

 

5.             Tax Withholding. Upon the
lapse of the Restrictions (or any such earlier time, if any, that an election
is made under Section 83(b) of the Code, or any successor provision
thereto, to include the value of such shares in taxable income), the Company
shall be entitled to withhold from Grantee’s compensation any required taxes,
including, but not limited to, Grantee’s social security and Medicare taxes and
federal, state and local income tax with respect to the income arising from the
lapse of the Restrictions. The Company shall have the right to require the
payment of any such

 

A-2

 

taxes before delivering
the stock certificate with respect to the Vested Shares and the related stock
power held by the Company in accordance with Section 6 hereof.
Alternatively, in lieu of such withholding, Grantee shall be entitled to cover
all or any part of the taxes arising from the lapse of the Restrictions through
a reduction of the number of Vested Shares delivered to Grantee or a delivery,
or tender, to the Company of shares of Common Stock already held by Grantee, in
each case valued in the same manner as used in computing withholding taxes
under the applicable laws. Additionally, to the extent it is determined by a
regulatory agency or a court of competent jurisdiction that shares of Common
Stock which would otherwise be considered Restricted Shares pursuant to the
terms of the Award nevertheless result in current federal or state taxation, (i) all
Restrictions as to such shares shall immediately lapse, (ii) such shares
shall immediately become Vested Shares and (iii) Grantee shall be entitled
to cover all or any part of the taxes through a reduction of such Restricted
Shares resulting in the taxable event.

 

6.             Custody, Voting and Dividends.
Restricted Shares shall be held in certificated form by the Company or its
agent for Grantee’s account, with appropriate notation of the Restrictions made
in the Company’s records and on the certificate for the Restricted Shares,
Additionally, the grant of Restricted Shares is conditioned upon Grantee’s
endorsement in blank of the irrevocable stock power attached to the Grant
Notice as Exhibit B. The irrevocable stock power must be endorsed and
returned to the General Counsel within sixty (60) days from the Date of Grant.
Failure to do so within the prescribed time period will result in an immediate
forfeiture of the Restricted Shares. At the option of the Grantee, any
dividends declared on Restricted Shares shall be reinvested in additional
shares of Common Stock (in accordance with such methods or procedures as shall
be established from time to time by the Committee), which shall vest
concurrently with the Restricted Shares, or shall be paid to the Grantee
concurrently with the payment of such dividends to all other record holders of
Common Stock. To the extent the Restricted Shares have not been forfeited, Grantee
shall be entitled to voting privileges associated with the Restricted Shares.

 

7.             Lapse of Restrictions. If,
and when, the Restrictions lapse, the Company shall distribute certificates for
such Vested Shares to the Grantee, which will not bear any restrictive legend
other than such legends as may be required pursuant to applicable securities or
blue sky laws. Additionally, the Company will deliver to Grantee no later than
thirty (30) days following the lapse of such Restrictions the related
irrevocable stock power held by the Company pursuant to Section 6 hereof.

 

8.             Committee Discretion. The
Committee shall have plenary authority to (a) interpret any provision of
these Award Terms, (b) make any determinations necessary or advisable for
the administration of the Award, and (c) waive any conditions or rights
under the Award, or amend, alter, accelerate, suspend, discontinue or terminate
the Award; provided, however, that, except as provided in Section 9
hereof, without the consent of Grantee, no such amendment, alteration, suspension,
discontinuation or termination of this Award may impair the rights of Grantee
with the Award or modify the Award in any way materially inconsistent with the
terms of Employment Agreement.

 

9.             Adjustments. Notwithstanding
anything to the contrary herein, in the event that the Committee shall
determine that any dividend or other distribution (whether in the form of cash,
shares or other property), recapitalization, stock split, reverse stock split,
reorganization, merger, consolidation, spin-off, combination, repurchase, or
share exchange, or other similar corporate transaction or event, affects the
Restricted Shares such that an adjustment is determined by the

 

A-3

 

Committee to be
appropriate in order to prevent dilution or enlargement of the rights of
Grantee under this Award, then the Committee shall, in such manner as it may
deem equitable, make any adjustments to the Award it deems appropriate. 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 subsidiary or affiliate or the financial statements of the Company or any
subsidiary or affiliate, or in response to changes in applicable laws,
regulations or accounting principles.

 

10.           Postponement; Registration.
The Company may postpone the issuance and delivery of Restricted Shares until (a) the
admission of such Restricted Shares to listing on any stock exchange or
exchanges on which Common Stock of the Company are then listed and (b) the
completion of such registration or other qualification of such Restricted
Shares under any state or federal law, rule or regulation as the Company
shall determine to be necessary or advisable. The Grantee 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 Restricted Shares of an
effective Registration Statement under the Securities Act of 1933, as amended,
to issue the Restricted Shares in compliance with the provisions of that or any
comparable act. The Company shall have the right to register the Restricted
Shares on a Form S-8 or S-3 to facilitate their resale by the Grantee.

 

11.           Beneficiary Designations.
Grantee shall file with the Executive Vice President of Human Resources on the
form attached to the Grant Notice as Exhibit C,
or such other form as may be prescribed by the Company, a designation of a
primary beneficiary(ies) and a contingent beneficiary(ies) to whom shares of
Common Stock otherwise due to Grantee pursuant to the terms hereof shall be
distributed in the event of the death of Grantee prior to distribution. Grantee
shall have the right to change the beneficiary from time to time; provided,
however, that any change shall not become effective until received in writing
by the secretary of the Company or its designee. If any designated beneficiary
survives Grantee but dies before receiving all of Grantee’s benefits hereunder
to which he or she is entitled, any remaining benefits due Grantee to which the
deceased beneficiary is entitled shall be distributed to the deceased
beneficiary’s estate. If there is no effective beneficiary designation on file
at the time of Grantee’s death, or if the designated primary beneficiary(ies)
and contingent beneficiary(ies) predecease Grantee, the payment of benefits
shall be made to Grantee’s estate.

 

12.           Legend. The Company may cause
the following or a similar legend to be set forth on each certificate
representing Restricted Shares or any other security issued 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.

 

A-4

 

13.           No Right to Continued Employment.
Nothing in these Award Terms shall be deemed to create any limitation or
restriction on such rights as the Company otherwise would have to terminate the
employment of Grantee at any time for any reason.

 

14.           Governing Law. To the extent
federal law does not otherwise control, the validity, interpretation,
performance and enforcement of this Award shall be governed by the laws of the
State of California, without giving effect to principles of conflicts of laws
thereof.

 

15.           Successors and Assigns. The
provisions of this Award shall be binding upon and inure to the benefit of the
Company, its successors and assigns, and Grantee and, to the extent applicable,
Grantee’s legal representative. Grantee may transfer Restricted Shares to the
trustee of a trust only to the extent approved in advance by the Committee (or
its designee), in its sole discretion, and the Restricted Shares are held by
such trustee subject to all the terms and conditions set forth in this Award.
Furthermore, as a condition to transfer, the Committee (or its designee) shall
have the authority to require the trustee to execute any documentation deemed
appropriate by the Committee (or its designee) to ensure the Restricted Shares
will continue to be subject to the terms and conditions set forth in this Award.

 

A-5

 

EXHIBIT B

 

IRREVOCABLE
STOCK POWER

 

FOR VALUE
RECEIVED, and pursuant to the Restricted Stock Award dated as of                    (the
“Award”), the undersigned does hereby sell, assign, transfer and convey to

 

Activision, Inc.(the
“Company”)                    
shares of Activision, Inc. common stock, $0.000001 par value, represented
by Certificate(s) No.                    
, and hereby irrevocably constitutes and appoints                     
to transfer said stock on the books of the

Company, with full power
of substitution in the premises.

 

 

	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  First Name

  	
   

  	
  Middle Name

  	
   

  	
  Last Name

  	
   

  	
  Date

  

 

Instructions: Please do not fill in any blanks
other than the signature line. The purpose of this irrevocable stock power is
to enable the Company to exercise full ownership and control over the
restricted stock subject to the Award in the event of forfeiture.

 

B-1

 

EXHIBIT C

 

ACTIVISION, INC.

Restricted Stock Award dated as of                       ,
20         

 

Designation
of Beneficiary

 

I,
                                                            
(“Grantee”), hereby designate

 

PRIMARY
                                                            

 

	
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  PRIMARY

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
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as my primary
beneficiary(ies) for purposes of the above-referenced award (“Award”). In the
event of my death prior to the distribution of all shares of Common Stock
otherwise due to me pursuant to the Award, such primary beneficiary(ies) shall
receive the remaining amount in equal shares. If none of the above-named
primary beneficiary(ies) survive me, the remaining amount of shares of Common
Stock shall be distributed in equal shares to those then living of the
following person(s):

 

SECONDARY

 

	
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  SECONDARY

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
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It is understood that
this Designation of Beneficiary is made pursuant to the Award and is subject to
the conditions stated therein. It is further understood that all prior
designations of beneficiary under the Award are hereby revoked and that this
Designation of Beneficiary may only be revoked in writing, signed by Grantee
and filed with the Company prior to Grantee’s death.

 

	
   

  	
   

  	
   

  	
   

  
	
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  ACKNOWLEDGED AND ACCEPTED BY
  THE COMPANY:

  	
   

  
	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Date

  	
  Signature of Company
  Representative

  

 

C-1

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