Document:

Exhibit 10.2

 

STOCK
OPTION AGREEMENT

 

Issued
Pursuant to the

2003 Incentive Plan of

ACTIVISION,
INC.

 

	
  Stock Option #03000934

  	
  For 600,000
  Shares

  

 

 

THIS STOCK
OPTION AGREEMENT (THIS “OPTION AGREEMENT”) CERTIFIES that on October 3,
2005 (the “Issuance Date”), Thomas Tippl (the “Holder”) was granted an option
(the “Option”) to purchase at the option price of $20.28 per share, all
or any part of 600,000 fully paid and non-assessable shares (“Shares”) of
common stock, par value $.000001 per share, of ACTIVISION, INC., a Delaware
corporation (the “Company”), upon and subject to the following terms and
conditions:

 

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

 

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

 

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

 

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

 

	
  Vesting Date

  	
   

  	
  Shares Vested at Vesting Date

  	
   

  	
  Cumulative Shares

  	
   

  
	
  October 3,
  2006

  	
   

  	
  40,000

  	
   

  	
  40,000

  	
   

  
	
  October 3,
  2007

  	
   

  	
  40,000

  	
   

  	
  80,000

  	
   

  
	
  October 3,
  2008

  	
   

  	
  40,000

  	
   

  	
  120,000

  	
   

  
	
  October 3,
  2009

  	
   

  	
  40,000

  	
   

  	
  160,000

  	
   

  
	
  October 3,
  2010

  	
   

  	
  440,000

  	
   

  	
  600,000

  	
   

  

 

 

This Option
shall be exercised by the Holder (or by his executors, administrators, guardian
or legal representative) as to all or part of the Shares, by the giving of
written notice of exercise to the Company, specifying the number of Shares to
be purchased, accompanied by payment of the full purchase price for the Shares
being purchased.  Full payment of such
purchase price shall be made at the time of exercise and shall be made (i) in
cash or by certified check or bank check or wire transfer of immediately
available funds, (ii) with the consent of the Company, by tendering
previously acquired Shares (valued at their then Fair Market Value (as defined
in the Plan), as determined by the Company as of the date of tender) that have
been owned for a period of at least six months (or such other period to avoid
accounting charges against the Company’s earnings), or (iii) with the
consent of the Company, a combination of (i) and (ii).  The Holder is also eligible to utilize a “cashless”
exercise for all or part of the Option consistent with the Company’s practice
and procedures governing cashless option exercises.    Such notice of exercise, accompanied by
such payment, shall be delivered to the Company at its principal business
office or such other office as the Company may from time to time direct, and
shall be in such form, containing such further provisions as the Company may
from time to time prescribe.  In no event
may this Option be exercised for a fraction of a Share.  The Company shall effect the transfer of
Shares purchased pursuant to an Option as soon as practicable, and, within a
reasonable time thereafter, such transfer shall be evidenced on the books of
the Company.  No person exercising this
Option shall have any of the rights of a holder of Shares subject to this
Option until certificates for such Shares shall have been issued following the
exercise of such Option.  No adjustment
shall be made for cash dividends or other rights for which the record date is
prior to the date of such issuance.

 

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

 

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

 

6.                                       Death.  In the event the Holder dies while employed by the Company or any of its
subsidiaries or affiliates, this Option, to the extent not previously expired
or exercised, shall, to the extent exercisable on the date of death, be
exercisable by the estate of the Holder or by any person who acquired this
Option by bequest or inheritance, at any time within one year after the death
of the Holder, provided, however, that if the
term of such Option would expire by its terms within six months after the
Optionee’s death, the term of such Option shall be extended until six months
after the Optionee’s death.

 

 

7.                                       Disability.  In the event of the termination of employment of the Holder or the
separation from service of the Holder due to the Disability (as defined in
Paragraph 9(c) of the Employment Agreement) of the Holder, the Holder, or
his guardian or legal representative, shall have the unqualified right to
exercise any portion of this Option which has not been previously exercised or
expired and which the Holder was eligible to exercise as of the first date of
Disability, at any time within one year after such termination or separation, provided, however, that if the term of such Option would
expire by its terms within six months after such termination or separation, the
term of such Option shall be extended until six months after such termination
or separation.

 

8.                                       Employment Violation.    In consideration of the granting
and by acceptance of this Option, the Holder hereby agrees that the terms of
this Section 8 shall apply to the Option. 
The Holder acknowledges and agrees that each exercise of this Option and
each written notice of exercise delivered to the Company and executed by the
Holder shall serve as a reaffirmation of and continuing agreement by the Holder
to comply with the terms contained in this Section 8.

 

The Company
and the Holder acknowledge and agree that if the Holder materially breaches the
Employment Agreement (it being understood that any breach of the
post-termination obligations contained therein shall be deemed to be material)
for so long as the terms of the Employment Agreement shall apply to the Holder
(each an “Employment Violation”), subject to the cure provision outlined in
Paragraph 9(a) of the Employment Agreement, the Company shall have the
right to require (i) the termination and cancellation of the unexercised
portion of this Option, if any, whether vested or unvested, and (ii) payment
by the Holder to the Company of the Recapture Amount (as defined below).  The Company and the Holder further agree that
such termination of unexercised Options and payment of the Recapture Amount, as
the case may be, shall be in addition to, and not in lieu of, any other right
or remedy available to the Company arising out of or in connection with any
such Employment Violation including, without limitation, the right to terminate
the Holder’s employment if not already terminated, seek injunctive relief and
additional monetary damages.

 

For purposes
of this Section 8, the “Recapture Amount” shall mean the gross gain
realized or unrealized by the Holder upon each exercise of this Option during
the period beginning on the date which is twelve (12) months prior to the date
of the Holder’s Employment Violation and ending on the date of computation (the
“Look-back Period”), which gain shall be calculated as the sum of:

 

(a)                                  as to any Shares
acquired by the Holder upon exercise of any portion of this Option during the
Look-back Period and thereafter sold, an amount equal to the product of (x) the
sales price per Share sold minus the exercise price per Share times (y) the
number of Shares as to which this Option was exercised and which were sold at
such sales price; plus

 

(b)                                 as to any Shares
acquired by the Holder upon exercise and not thereafter sold, with respect to
each of such Shares an amount equal to the product of (x) the greatest of the
following: (1) the Fair Market Value per Share on the date of exercise, (2) the
arithmetic average of the per Share closing sales prices as reported on NASDAQ
for the thirty (30) trading day period ending on the trading day immediately
preceding the

 

 

date of the Company’s written notice of its exercise of its rights
under this Section 8, or (3) the arithmetic average of the per Share
closing sales prices as reported on NASDAQ for the thirty (30) trading day
period ending on the trading day immediately preceding the date of computation,
minus the exercise price per Share times (y) the number of Shares as to which
this Option was exercised and which were not sold;

 

provided,
however, in lieu of payment by the Holder to the Company of the Recapture
Amount determined pursuant to clause (b) above, the Holder, in his
discretion, may tender to the Company the Shares acquired upon exercise of this
Option during the Look-back Period and the Optionee shall not be entitled to
receive any consideration from the Company in exchange therefor.

 

9.                                       Registration; Postponement.  The Company may postpone the issuance and delivery of Shares upon any
exercise of this Option until (a) the admission of such Shares to listing
on any stock exchange or exchanges on which Shares of the Company of the same
class are then listed and (b) the completion of such registration or other
qualification of such Shares under any state or federal law, rule or
regulation as the Company shall determine to be necessary or advisable.  The Holder shall make such representations
and furnish such information as may, in the opinion of counsel for the Company,
be appropriate to permit the Company, in light of the then existence or
non-existence with respect to such Shares of an effective Registration
Statement under the Securities Act of 1933, as amended, to issue the Shares in
compliance with the provisions of that or any comparable act.  The Company shall have the right to register
the Shares underlying this Option on a Form S-8 or S-3 to facilitate their
resale by the Holder.

 

10.                                 Adjustments.  In the event that the Company shall determine that
any dividend or other distribution (whether in the form of cash, shares of
common stock of the Company, other securities, or other property),
recapitalization, stock split, reverse stock split, reorganization, merger,
consolidation, split-up, spin-off, combination, repurchase, or exchange of
shares of common stock of the Company or other securities, the issuance of
warrants or other rights to purchase shares of common stock of the Company, or
other securities, or other similar corporate transaction or event affects the
Shares, such that an adjustment is determined by the Company to be appropriate
in order to prevent dilution or enlargement of the benefits or potential
benefits intended to be made available to the Holder, then the Company shall,
in such manner as the Company may deem equitable, adjust any or all of (i) the
number and type of shares of common stock of the Company subject to this
Option, and (ii) the grant, option or exercise price with respect to this
Option, or, if deemed appropriate, make provision for a cash payment to the
Holder.

 

11.                                 Delivery of Share Certificates.  Within a reasonable time after the exercise of
this Option, the Company shall cause to be delivered to the person entitled
thereto a certificate for the Shares purchased pursuant to the exercise of this
Option.  If this Option shall have been
exercised with respect to less than all of the Shares subject to this Option,
the Company shall also cause to be delivered to the person entitled thereto a
new Stock Option Agreement in replacement of this Option Agreement if
surrendered at the time of the exercise of this Option, indicating the number
of Shares with respect to which this Option remains available for exercise, or
the Company shall make a notation in its books and records to reflect the
partial exercise of this Option.

 

 

12.                                 Withholding.  In the event that the Holder elects to exercise
this Option or any part thereof, and if the Company or any subsidiary or
affiliate of the Company shall be required to withhold any amounts by reasons
of any federal, state or local tax laws, rules or regulations in respect
of (a) the issuance of Shares to the Holder pursuant to this Option, or (b) the
exercise or disposition (in whole or in part) of the Option, the Company or
such subsidiary or affiliate shall be entitled to deduct and withhold such
amounts from any payments to be made to the Holder.  In any event, the Holder shall make available
to the Company or such subsidiary or affiliate, promptly when requested by the
Company or such subsidiary or affiliate, sufficient funds to meet the
requirements of such withholding; and the Company or such subsidiary or
affiliate shall be entitled to take and authorize such steps as it may deem
advisable in order to have such funds available to the Company or such
subsidiary or affiliate out of any funds or property due or to become due to
the Holder.

 

13.                                 Reservation of Shares.  The Company hereby agrees that at all times there
shall be reserved for issuance and/or delivery upon exercise of this Option
such number of Shares as shall be required for issuance or delivery upon
exercise hereof.

 

14.                                 Rights of Holder.  Nothing contained herein shall be construed to
confer upon the Holder any right to be continued in the employ of the Company
and/or any subsidiary or affiliate of the Company or derogate from any right of
the Company and/or any subsidiary or affiliate of the Company to retire,
request the resignation of, or discharge the Holder at any time, with or
without cause.  The Holder shall not, by
virtue hereof, be entitled to any rights of a shareholder in the Company,
either at law or in equity, and the rights of the Holder are limited to those
expressed herein and are not enforceable against the Company except to the
extent set forth herein.

 

15.                                 Exclusion from Pension Computations. 
By acceptance of the grant
of this Option, the Holder hereby agrees that any income realized upon the
receipt or exercise hereof, or upon the disposition of the Shares received upon
its exercise, is special incentive compensations and, to the extent permissible
under applicable law, shall not be taken into account as “wages”, “salary” or “compensation”
in determining the amount of any payment under any pension, retirement,
incentive, profit sharing, bonus or deferred compensation plan of the Company
or any of its subsidiaries or affiliates.

 

16.                                 Legend.  The Company may cause the following or a similar
legend to be set forth on each certificate representing Shares or any other
security issued or issuable upon exercise of this Option unless counsel for the
Company is of the opinion as to any such certificate that such legend is
unnecessary:

 

THE SECURITIES REPRESENTED BY
THIS CERTIFICATE MAY NOT BE OFFERED FOR SALE, SOLD OR OTHERWISE
TRANSFERRED EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE
SECURITIES ACT OF 1933, AS AMENDED (THE “ACT”), OR PURSUANT TO AN EXEMPTION
FROM REGISTRATION UNDER THE ACT, THE AVAILABILITY OF WHICH IS ESTABLISHED BY AN
OPINION FROM COUNSEL TO THE COMPANY.

 

 

17.                                 Amendment.  The Company may, with the consent of the Holder,
at any time or from time to time amend the terms and conditions of this Option,
and may at any time or from time to time amend the terms of the Plan.

 

18.                                 Notices.  Any notice which either party hereto may be
required or permitted to give to the other shall be in writing, and may be
delivered personally or by mail, postage prepaid, or overnight courier,
addressed as follows: if to the Company, at its office at 3100 Ocean Park
Boulevard, Santa Monica, California 90405, Attn: General Counsel, or at such
other address as the Company by notice to the Holder may designate in writing
from time to time; and if to the Holder, at the address shown below his
signature on this Option Agreement, or at such other address as the Holder by
notice to the Company may designate in writing from time to time.  Notices shall be effective upon receipt.

 

19.                                 Interpretation.  A determination of the Committee as to any
questions which may arise with respect to the interpretation of the provisions
of this Option and of the Plan shall be final and binding.  The Committee may authorize and establish
such rules, regulations and revisions thereof as it may deem advisable.

 

[Remainder of page intentionally blank.]

 

 

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

 

	
   

  	
  ACTIVISION, INC.

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  
	
   

  	
  Date:

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Attest:

  	
   

  	
   

  
						

 

 

	
  Accepted and Confirmed:

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  THOMAS TIPPL

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  Address

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  City

  	
  State

  	
  Zip Code

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  
	
  Social Security NumberExhibit 10.3

 

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:

  	
   

  	
  Thomas Tippl

  
	
   

  	
   

  	
   

  
	
  •                  Total Number of Shares of Restricted Stock
  Awarded:

  	
   

  	
  72,534(1)

  
	
   

  	
   

  	
   

  
	
  •                  Date of Grant:

  	
   

  	
  October 3, 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 September 9,
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: October 3, 2005

  	
  ACTIVISION, INC.

  
	
   

  	
   

  
	
  Accepted and Agreed:

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Title: Sr. Vice President, General Counsel

  
	
  THOMAS TIPPL

  	
   

  
				

 

(1)  Amount equal to
$1,500,000 divided by the closing price of ATVI stock as reported on closing on
NASDAQ on October 3, 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 THE FOLLOWING PROVISIONS WILL APPLY:

 

Restricted Shares 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.  In
the event of Grantee’s termination, the provisions of Paragraph 9 of the
Employment Agreement will govern vesting.

 

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

 

A-2

 

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 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,

 

A-3

 

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 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. The Company may not postpone
the issuance and delivery of Restricted Shares up to an amount equal to the
taxes payable as a result of the vesting of Restricted Shares.

 

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

 

A-4

 

ACT, THE AVAILABILITY OF
WHICH IS ESTABLISHED BY AN OPINION FROM COUNSEL TO THE COMPANY.

 

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

  	
   

  	
   

  	
   

  
	
  (Print
  Beneficiary’s Name)

  	
  Last

  	
  First

  	
  Middle Initial

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Print
  Beneficiary’s Address

  	
   

  	
   

  	
  Relationship

  
	
   

  	
   

  	
   

  	
   

  
	
  PRIMARY

  	
   

  	
   

  	
   

  
	
  (Print
  Beneficiary’s Name)

  	
  Last

  	
  First

  	
  Middle Initial

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Print
  Beneficiary’s Address

  	
   

  	
   

  	
  Relationship

  
						

 

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

  	
   

  	
   

  	
   

  
	
  (Print
  Beneficiary’s Name)

  	
  Last

  	
  First

  	
  Middle Initial

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Print
  Beneficiary’s Address

  	
   

  	
   

  	
  Relationship

  
	
   

  	
   

  	
   

  	
   

  
	
  SECONDARY

  	
   

  	
   

  	
   

  
	
  (Print
  Beneficiary’s Name)

  	
  Last

  	
  First

  	
  Middle Initial

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Print
  Beneficiary’s Address

  	
   

  	
   

  	
  Relationship

  

 

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.

 

	
   

  	
   

  	
   

  	
   

  
	
  Date

  	
  Grantee

  
	
   

  	
   

  
	
  ACKNOWLEDGED
  AND ACCEPTED BY THE COMPANY:

  	
   

  
	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Date

  	
  Signature of
  Company Representative

  

 

C-1

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