Document:

Exhibit
10.2

September 18, 2006

Brian Hodous

23 Adam & Eve Mews
 London W8 6UG
 United Kingdom

Dear Mr. Hodous:

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

1.             Term

(a)       The initial term of your
employment under this Agreement shall commence on October 1, 2006 or such other
date as the parties may mutually agree (the “Effective Date”) and expire on
September 30, 2009 (the “Expiration Date”) unless earlier terminated as
provided in Paragraph 9 below or as may be extended as provided in Paragraph
1(b) below (the “Employment Period”).

(b)       If, at any time during
the Employment Period, your Total Compensation exceeds $4,000,000, Employer
shall have the option to extend the Employment Period for up to an additional
one-year period, commencing on October 1, 2009 and expiring no later than
September 30, 2010.  For purposes of this
Agreement, “Total Compensation” shall mean the total of (i) your cumulative
Base Salary from the date of hire through the date the $4,000,000 amount has
been reached, (ii) your cumulative Annual Bonuses through such date, (iii) the
realized and unrealized gains (based upon the closing price of the common stock
of Activision, Inc. (“Activision”) as reported on The NASDAQ Stock Market on
the applicable date) from any and all vested stock options issued to you, (iv)
the market value of all vested restricted stock grants issued to you plus the
amounts you realized from the sale of any shares sold by you which were the
subject of such restricted stock grants.

(c)       In the event Employer
decides not to extend your term of employment beyond the expiration of this
agreement, Employer will provide you written notice at least 12 months prior to
the expiration of the final term.

2.             Compensation

(a)       In full consideration
for all rights and services provided by you under this Agreement, you shall
receive the compensation set forth in this Paragraph 2. Commencing on your
payroll start date, you shall receive an annual Base Salary of $375,000 for the
period until October 1, 2007 or until your initial assignment based in the
United Kingdom is complete.  Commencing
when you relocate to the United States, your Base Salary will be increased to
$450,000.

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

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

(d)       You will receive a
signing bonus of $150,000 payable on Effective Date.

(e)       In addition to your Base
Salary, you may be eligible to receive an annual discretionary bonus (the “Annual
Bonus”). Your target Annual Bonus during the term of this Agreement will be 75%
of the then applicable Base Salary, provided that the actual amount of the
Annual Bonus, if any, is within the sole and absolute discretion of the
Activision’s Board of Directors (or the Compensation Committee of the Board of
Directors) and will be based upon your achievement of certain mutually agreed
objectives and goals and/or your contribution to the success of Employer’s
financial and business objectives and goals for the fiscal year with respect to
which the Annual Bonus is calculated, such determination made by Activision’s
Board of Directors (or the Compensation Committee of the Board of Directors) in
its sole discretion. The Annual Bonus may take the form of, without limitation,
cash, shares of common stock of Activision and/or options to purchase such
shares, as determined by the Compensation Committee in its sole discretion. Employer’s
overall financial performance will also be considered in determining whether
any of the Annual Bonus is awarded and, if so, the amount. The Annual Bonus, if
granted, is generally paid to employees in May. Except as otherwise set forth
in this Agreement, you must remain continuously employed by Employer through
the date on which the Annual Bonus is paid to be eligible to receive such
Annual Bonus. Any Annual Bonus shall be subject to withholding.  For Activision’s 2007 fiscal year period
(April 1, 2006 — March 31, 2007) you will be guaranteed a minimum Annual Bonus
payment of $230,000.  This minimum
payment only applies to fiscal year 2007.

(f)        Pursuant to the
Activision 2003 Incentive Plan (“Plan”), on the Effective Date (or, if
Activision’s common stock is not traded on The NASDAQ Stock Market on the
Effective Date, the first day following the Effective Date that Activision’s
common stock is traded on The NASDAQ Stock Market), you will be granted a
non-qualified stock option (the “Option”) to purchase an aggregate of 240,000
shares of the Activision’s common stock. 
The Option to purchase 240,000 shares referred to above will vest
ratably over three years, with one-third of the amount granted vesting at the
end of each year, and with the first year commencing October 1, 

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2007.  The Option will have an exercise price per
share that will be the closing price of such common stock as reported on The
NASDAQ Stock Market on the grant date and reported in The Wall Street Journal
on the first business day following the grant date, and will be governed in all
other respects by (and you agree to enter into) Activision’s standard form of
stock option agreement for similar grants of “inducement” options.

(g)       Pursuant to the Plan,
you also will receive, on the Effective Date, a restricted stock grant of
21,000 shares of Activision’s common stock (the “Restricted Shares”).  Such grant of Restricted Shares will not vest
until the end of the third year following the Effective Date (subject to
possible earlier vesting in two equal annual installments based on the
achievement of certain performance objectives to be mutually determined by you
and Employer for the fiscal years 2008 and 2009) and will thereupon fully vest
in its entirety (on a “cliff-vesting” basis).

(h)       You may be eligible for
such additional stock option grants commensurate with your position with
Employer as the Board of Directors (or Compensation Committee of the Board of
Directors), in its sole discretion, may award to you from time to time.

(i)        In consideration for
abandoning certain benefits with your prior employer and forgoing certain other
executive opportunities and related equity participations, pursuant to the
Plan, you also will receive, on the Effective Date, a grant of 25,000
Restricted Shares, with one-half of such Restricted Shares to vest at the end
of each of the first and second years following the Effective Date.

(j)        Commencing with the
Effective Date and continuing through the duration of your initial assignment
with Activision in the United Kingdom, you will be eligible for the
international assignment related benefits as outlined in the international
assignment letter as described in Exhibit A to this Agreement.

(k)       Within twelve months of
the Effective Date, you shall relocate your principal residence to within a
60-minute vehicle commute of Employer’s headquarters (Santa Monica,
California). At the time of relocation, Employer shall provide comprehensive
executive relocation support including payment of the following costs pursuant
to the terms of the “Relocation Summary” document and which includes: (i) all
one-time, non-recurring costs associated with buying a home; (ii) all moving
costs for household goods; and (iii) $48,000 in mortgage assistance (“Mortgage
Assistance”), payable $2,000.00 each month for 24 months. In addition, Employer
will reimburse you for the actual incremental income taxes paid by you by
reason of the inclusion in your income of the payments to you of the amounts
set forth in clauses (i) and (ii), and (iii), of the immediately preceding
sentence.

3.             Title

You are being employed under this Agreement in the position of Chief
Customer Officer of Employer.

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4.             Duties

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

5.             Expenses

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

6.             Other Benefits

You shall be entitled to those benefits which are standard for persons
in similar positions with Employer, including coverage under Employer’s health,
life insurance and disability plans, and eligibility to participate in
Activision’s Employee Stock Purchase Plan and Employer’s 401(k) plan (with
Employer matching your contributions to such 401K plan in accordance with
Employer’s matching policy).  In addition
to the foregoing benefits, Employer will provide you during the Employment
Period, at Employer’s expense, with a supplemental term life insurance policy
with a benefit amount of $2,000,000 through a carrier of Employer’s choice.
Nothing paid to you under any such plans and arrangements (nor any bonus or
stock options which Activision’s Board of Directors (or the Compensation
Committee of such Board of Directors), in its sole and absolute discretion,
shall provide to you) shall be deemed in lieu, or paid on account, of your Base
Salary. You expressly agree and acknowledge that after the expiration or early
termination of the term of your employment under this Agreement, you are
entitled to no additional benefits, except as specifically provided in this
Agreement and except as specifically provided under the benefit plans referred
to above and those benefit plans in which you subsequently may become a
participant, and subject in each case to the terms and conditions of each such
plan.  Notwithstanding anything to the
contrary set forth above, you shall be entitled to receive those benefits
provided by COBRA or CAL-COBRA upon the expiration or earlier termination of
this Agreement.

7.             Vacation and
Paid Holidays

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

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

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8.             Protection of
Employer’s Interests

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

(b)           Policy
Compliance. You confirm that you have read, understand and will
comply with the terms of Employer Corporate Governance Policies, including but
not limited to Code of Business Conduct and Ethics and Code of Ethics for
Senior Executive Officers, and any reasonable amendments thereto which you
receive.

(c)           Property of
Employer.  All rights
worldwide with respect to any and all intellectual or other property of any
nature produced, created or suggested by you during the term of your employment
or resulting from your services which (i) relate in any manner at the time of
conception or reduction to practice to the actual or demonstrably anticipated
business of Employer, (ii) result from or are suggested by any task assigned to
you or any work performed by you on behalf of Employer, or (iii) are based on
any property owned or idea conceived by Employer, shall be deemed to be a work
made for hire and shall be the sole and exclusive property of Employer.  You agree to execute, acknowledge and deliver
to Employer, at Employer’s request, such further documents, including copyright
and patent assignments, as Employer finds appropriate to evidence Employer’s
rights in such property.   Your agreement
to assign to Employer any of your rights as set forth in this Paragraph 8(c)
shall not apply to any invention that qualifies fully under the provisions of
California Labor Code Section 2870, where no equipment, supplies, facility or
trade secret information of Employer were used and that was developed entirely
upon your own time, and that does not relate to Employer’s business, or does
not result from any work performed by you for Employer.

(d)           Confidentiality.  Any confidential and/or proprietary
information of Employer or any affiliate of Employer shall not be used by you
or disclosed or made available by you to any person except as required in the
course of your employment, and upon expiration or earlier termination of the
term of your employment, you shall return to Employer all such information
which exists in written or other physical form (and all copies thereof) under
your control.  Without limiting the
generality of the foregoing, you acknowledge signing and delivering to Employer
the Activision Employee Proprietary Information Agreement as of the Effective
Date and you agree that all terms and conditions contained in such agreement,
and all of your obligations and commitments provided for in such agreement,
shall be deemed, and hereby are, incorporated into this Agreement as if set
forth in full herein.  You also
acknowledge that upon termination of your employment for any reason whatsoever,
you will promptly deliver to Employer or surrender to Employer’s representative
all Employer property, including without limitation, all documents and other
materials (and all copies thereof) relating to Employer’s business, all
identification and access cards, all contact lists and third party business
cards however and wherever preserved, and any equipment provided by Employer,
including computers, telephones, personal digital assistants, memory cards and
similar devices which you  possess or
have in your custody or under your control. The provisions of this paragraph
shall survive the expiration or earlier termination of this Agreement.

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

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

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

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

(f)            Covenant Not to Solicit. 
During the Employment Period and for a period of two years following the
expiration of the Employment Period for any reason whatsoever you shall not,
either alone or jointly, with or on behalf of others, directly or indirectly,
whether as principal, partner, agent, shareholder, director, employee,
consultant or otherwise: (a) offer employment to, or directly or indirectly
solicit the employment or engagement of, or otherwise entice away from the
employment of Employer or any affiliated entity, either for your own account or
for any other person, firm or company, any person who was employed by Employer
or any such affiliated entity during the term of your employment, whether or
not such person would commit any breach of his or her contract of employment by
reason of his or her leaving the service of Employer or any affiliated entity;
or (b) directly or indirectly solicit, induce or entice any client, customer,
contractor, licensor, agent, partner or other business relationship of Employer
to terminate, discontinue, renegotiate or otherwise cease or modify their
relationship with Employer. You expressly acknowledge and agree that the
restrictions contained in this paragraph are reasonably tailored to protect
Employer’s confidential information and trade secrets, and are reasonable in
all circumstances in scope, duration and all other respects. It is expressly
agreed by the parties that if for any reason whatsoever any one or more of such
restrictions shall (either taken by itself or themselves together) be adjudged
to go beyond what is reasonable in all circumstances for the protection of the
legitimate interests of Employer, the parties agree that the prohibitions shall
be in effect and upheld to the fullest extent permissible under applicable
laws.

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9.               Termination

(a)       Employer.  At
any time during the Employment Period, Employer may terminate your employment
under this Agreement for Cause, defined as your (i) willful, reckless or gross
misconduct, (ii) material breach by you of this Agreement, (iii) conviction of
or plea of no contest to a felony or crime involving dishonesty or moral
turpitude, (iv) breach of duty of loyalty, or (v) violation of Employer’s
corporate governance policies.  In
addition, but subject to the provisions of Paragraphs 9(c)(iii) and 9(d)(ii)
below, Employer may terminate your employment under this Agreement at any time
without Cause and such termination shall not be deemed to constitute a wrongful
discharge of Employee or a wrongful termination of Employee’s employment by
Employer or a breach by Employer of any term of this Agreement and/or any other
duty or obligation, expressed or implied, which Employer may owe to Employee
pursuant to any principle or provision of law.

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

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

(i)                                                 Compensation upon Death.  In
the event this Agreement is terminated as a result of your death, your heirs,
successors or legal representatives shall receive: (i) the Base Salary through
the date of termination of this Agreement; (ii) any unpaid Annual Bonus for any
prior fiscal year; (iii) the pro rata portion of the Annual Bonus for the
fiscal year in which your termination occurs to the extent such Annual Bonus is
earned; (iv) an amount equal to three hundred (300%) of the dollar amount of
the Base Salary paid 

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or payable to you for Employer’s most recent fiscal year immediately
prior to your date of death; (v) reimbursement of approved expenses due to you
pursuant to Paragraphs 2(j), 2(k) and 5. All such payments shall be in addition
to any payments your widow, beneficiaries or estate may be entitled to receive
pursuant to any pension or employee benefit plan or life insurance policy
maintained by Employer.

(ii)                                              Compensation upon Disability.  In
the event this Agreement is terminated as a result of your Disability, you
shall receive: (i) the Base Salary through the date of your termination; (ii)
any unpaid Annual Bonus for any prior fiscal year; (iii) the pro rata portion
of the Annual Bonus for the fiscal year in which your termination occurs to the
extent such Annual Bonus is earned; (iv) reimbursement of approved expenses due
to you pursuant to Paragraphs 2(j), 2(k) and 5; (v) an amount equal to three
hundred (300%) percent of the dollar amount of the Base Salary paid or payable
to you for Employer’s most recent fiscal year immediately prior to your
Disability termination, and (vi) the long-term monthly disability payments
according to Employer’s benefit plan for Executives.

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

(iv)                                          Compensation upon Termination For Cause. In the event your employment under this
Agreement is terminated by Employer for Cause, then you shall receive: (i) the
Base Salary through the date of your termination; and (ii) reimbursement of
approved expenses due you pursuant to Paragraphs 2(j), 2(k) and 5.

(v)                                             Payment Limitations. Notwithstanding the foregoing, to the
extent any of the provisions of this Paragraph 9(c) allow for payments of Base
Salary, Annual Bonus or Mortgage Assistance subsequent to your termination,
such payments will occur and continue only for so long as you do not become
employed during the relevant non-compete period as set forth in Paragraph 8(e)
by a corporation or other entity engaged in a Competitive Business or otherwise
become engaged in directly or indirectly in a Competitive Business.

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(d)       Disposition of Stock Options and Restricted Shares
Upon Termination.  Upon termination of your employment for any
reason, the following terms shall apply to the stock options issued to you
pursuant to this Agreement under Paragraph 2(f) and the Restricted Shares issued
to you pursuant to Paragraphs  2 (g) and
(i), respectively:

(i)                                     In the event of termination of your
employment for Cause, all stock options granted to you under this Agreement,
whether or not vested, shall expire and no longer continue to vest or be exercisable
and shall be cancelled immediately on the date of termination of your
employment and all unvested Restricted Shares shall immediately be cancelled
and no longer continue to vest as of the date of termination of your
employment;

(ii)                                  In the event of termination of your
employment by Employer without Cause:

(1)                                  All stock options granted to you under this
Agreement shall continue to vest and be exercisable through the Expiration Date
in accordance with same respective vesting schedules and under same terms had
your employment not be terminated.

(2)                                  You will be allowed to vest Restricted Shares
in accordance with same respective vesting schedule through the Expiration Date
and under same terms had your employment not be terminated.

(3)                                  To the extent any of the provisions of this
Paragraph 9(d)(ii) allow vesting of Restricted Shares and vesting and exercise
of stock options subsequent to your termination, such vesting and/or exercise
will occur and/or continue only for so long as you do not become employed at
any time subsequent to your termination by a corporation or other entity
engaged in a Competitive Business. Should you become employed at any time
subsequent to your termination without cause by a corporation or other entity
engaged in a Competitive Business or otherwise become engaged directly or
indirectly in a Competitive Business, (a) all 
stock options and Restricted Shares granted to you under this Agreement
shall cease to vest immediately as of the date of  such 
employment, (b) all then unvested stock options and unvested Restricted
Shares shall be cancelled, and only vested stock options shall continue to be
exercisable until the earlier of (i) the end of the 30th day after you commence
engaging in a Competitive Business, or (ii) the expiration of such stock option
pursuant to the terms of the stock option agreement for such stock option; 

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and upon the expiration of
such period, all stock options then remaining unexercised shall be cancelled.
Notwithstanding the foregoing, in the event such employment or engagement in a
Competitive Business is in breach of Paragraph 8(d) of this Agreement, then all
stock options granted to you under this Agreement, whether or not vested, shall
expire and no longer continue to vest or be exercisable immediately on the date
you commence engaging in a Competitive Business and all unvested Restricted
Shares shall immediately be cancelled and no longer continue to vest as of the
date of your employment or engagement in a Competitive Business.

(4)                                  Nothing set forth in this Paragraph 9(d)(ii)
shall be deemed to require Employer to issue any Restricted Shares or grant to
you any stock options in addition to the Restricted Shares and stock options,
then vested or unvested, already issued to you as of the date of termination
pursuant to the terms of this Agreement

(iii)                               In the event of your termination of
employment by reason of your death or disability:

(1)                                  All stock options granted to you under this
Agreement shall continue to vest and be exercisable through the Expiration Date
in accordance with the same respective vesting schedules and under the same
terms had your employment not be terminated.

(2)                                  You will be allowed to vest Restricted Shares
in accordance with the same respective vesting schedule through the Expiration
Date and under the same terms had your employment not be terminated.

(iv)                              In the event of termination of your
employment for any reason not otherwise described in Paragraphs 9(c)(i)-(iii),
all stock options granted to you under this Agreement, whether or not vested,
shall expire immediately on the date of termination of your employment and all
such stock options shall immediately be cancelled and no longer continue to
vest or be exercisable as of the date of termination of your employment. All
Restricted Shares then remaining unvested also shall be cancelled.

10.          No Shop Clause

During the Employment Period, you shall not seek or negotiate for
employment other than with Employer, its subsidiary or affiliate, with the
exception of the final 180 days of the Employment Period, provided that you
first provide Employer with written notice of your intent to 

 

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seek
external employment and such interviews may occur strictly subject to your
continuing obligations under this Agreement, including, without limitation, your
duty of loyalty, compliance with Employer’s corporate governance policies and
confidentiality obligations.

11.          Use of Employee’s
Name

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

12.          Assignment

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

13.          No Conflict with
Prior Agreements

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

14.          Successors

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

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

15.          Minimum Ownership
Position

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

 11
 

 

16.          General Provisions

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

(b)       No
Broker.  You have given no
indication, representation or commitment of any nature to any broker, finder,
agent or other third party to the effect that any fees or commissions of any
nature are, or under any circumstances might be, payable by Employer or any
affiliate of Employer in connection with your employment under this Agreement.

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

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

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

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

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

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

 12
 

 

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

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

(k)       Right to
Negotiate.  You hereby
acknowledge that you have been given the opportunity to participate in the
negotiation of the terms of this Agreement. You acknowledge and confirm that
you have read this Agreement, fully understand its terms and contents and have
had the opportunity to ask Employer about any questions, concerns or issues you
may have on connection with this Agreement or its terms.

(l)        Services
Unique.  You recognize that
the services being performed by you under this Agreement are of a special,
unique, unusual, extraordinary and intellectual character giving them a
peculiar value, the loss of which cannot be reasonably or adequately
compensated for in damages in the event of a breach of this Agreement by you
(particularly, but without limitation, with respect to the provisions hereof
relating to the exclusivity of your services and the provisions of Paragraphs 8
and 10 of this Agreement).

(m)          Injunctive
Relief.  In the event of a
breach of or threatened breach of the provisions of this Agreement regarding
the exclusivity of your services and the provisions of Paragraphs 8 and 10 of
this Agreement you agree that any remedy of law would be inadequate. 
Accordingly you agree that Employer is entitled to obtain injunctive relief for
such breaches or threatened breaches. 
The injunctive relief provided for in this paragraph is in addition to,
and is not in limitation of, any and all other remedies at law or in equity
otherwise available to the applicable party. 
The parties agree to waive the requirement of posting a bond in
connection with a court’s issuance of an injunction.

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

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

 13
 

 

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

17.          Notices

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

	
  To Employer:

  	
   

  	
  3100 Ocean Park Boulevard

  Santa Monica, California 90405

  Attention: General Counsel

  
	
   

  	
   

  	
   

  
	
  To You:

  	
   

  	
  23 Adam & Eve Mews

  London W8 6UG

  United Kingdom

  

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

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

ACCEPTED
AND AGREED TO:

	
  Employer

  	
   

  	
  Employee

  
	
   

  	
   

  	
   

  
	
  ACTIVISION PUBLISHING, INC.

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  By:

  	
   

  	
   

  	
   

  
	
   

  	
  George Rose

  	
   

  	
  Brian Hodous

  
	
   

  	
  General Counsel

  	
   

  	
   

  

 

 14Exhibit
10.3

October 1, 2006

Robin Kaminsky

1606 1st Street
 Manhattan Beach, CA  90266

Dear Ms. Kaminsky:

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

1.             Term

a)         The initial term of
your employment under this Agreement shall commence on October 1, 2006 (the “Effective
Date”) and expire on October 31, 2008 (the “Expiration Date”) unless earlier
terminated as provided in Paragraph 9 below or as may be extended as provided
in Paragraph 1(b) below (the “Employment Period”).

(b)       If, at any time between
the Effective Date and the Expiration Date, your Total Compensation exceeds
$6,000,000, Employer shall have the option to extend your employment under this
Agreement once for an additional one-year period, commencing on November 1,
2008 and expiring on October 31, 2009. 
For purposes of this Agreement, “Total Compensation” shall mean the
total of (i) your cumulative Base Salary from the Effective Date through the
date the $6,000,000 amount has been reached, (ii) your cumulative Annual
Bonuses through such date, (iii) the realized and unrealized gains (based upon
the closing price of the common stock of Activision, Inc. (“Activision”) as
reported on The NASDAQ Stock Market on the applicable date) from any and all
vested stock options issued to you under this Agreement, and (iv) the market
value of all vested restricted stock grants issued to you under this Agreement
plus the additional amounts you realized from the sale of any shares sold by
you which were the subject of such restricted stock grants.

(c)       Notwithstanding the
foregoing, in the event Employer decides not to extend your employment beyond
the Expiration Date, Employer will provide you written notice of that decision
at least 6 months prior to the Expiration Date.

2.             Compensation

(a)       In full consideration for all rights and
services provided by you under this Agreement, you shall receive the
compensation set forth in this Paragraph 2. Commencing on the Effective Date,
you shall receive an annual base salary of $468,000.  Thereafter, on June 1 of each year of the
Employment Period your annual base salary shall be increased to a minimum of an
amount equal to one hundred four percent (104%) of the base salary for the
prior year.

(b)       Base Salary payments shall be made in
accordance with Employer’s then prevailing payroll policy.  The base salary referred to in Paragraph 2(a)
shall constitute your minimum base 

 1
 

salary during the
applicable period.  On an annual basis,
your base salary shall be reviewed to determine if an increase above minimum is
appropriate. Your base salary may be increased above the minimum at any time if
Activision’s Board of Directors (or the Compensation Committee of such Board of
Directors), in its sole and absolute discretion, elects to do so.

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

(d)       You will receive a signing bonus of $35,000
payable within two weeks of the Effective Date.

(e)       In addition to your Base
Salary, you may be eligible to receive an annual discretionary bonus (the “Annual
Bonus”). Your target Annual Bonus during the term of this Agreement will be 75%
of the then applicable Base Salary, provided that the actual amount of the
Annual Bonus, if any, is within the sole and absolute discretion of the
Activision’s Board of Directors (or the Compensation Committee of the Board of
Directors) and will be based upon your achievement of certain mutually agreed
objectives and goals and/or your contribution to the success of Employer’s
financial and business objectives and goals for the fiscal year with respect to
which the Annual Bonus is calculated, such determination made by Activision’s
Board of Directors (or the Compensation Committee of the Board of Directors) in
its sole discretion. Employer’s overall financial performance will also be
considered in determining whether any of the Annual Bonus is awarded and, if
so, the amount. The Annual Bonus, if granted, is generally paid to employees in
May. Except as otherwise set forth in this Agreement, you must remain
continuously employed by Employer through the date on which the Annual Bonus is
paid to be eligible to receive such Annual Bonus. Any Annual Bonus shall be
subject to withholding.

(f)        Pursuant to the
Activision 2003 Incentive Plan (“Plan”), you will be granted a
non-qualified stock option (the “Option”) to purchase an aggregate of 300,000
shares of Activision’s common stock in two tranches.  As to the First Tranche of 200,000 shares
covered by the Option, such tranche will vest ratably over the three years
following the date on which the Option is granted to you (the “Option Grant
Date”), with one-third of the amount vesting each year on the anniversary of
the Option Grant Date.  As to the Second
Tranche of 100,000 shares covered by the Option, such shares will not vest
until the third anniversary of the Option Grant Date (subject to possible
earlier vesting of 25% of the Second Tranche vesting at the end of fiscal year
2007 and another 25% vesting at the end of fiscal year 2008 if Employee shall
achieve certain performance objectives to be mutually determined by you and
Employer for the fiscal years 2007 and 2008). 
The Option will have an exercise price per share that will be the market low on the grant date and will
be governed in all other respects by Activision’s standard form of stock option
agreement for similar grants.

(g)       You also will receive a
restricted stock grant (the “Stock Grant”) of 35,000 shares of Activision’s
common stock (the “Restricted Shares”). 
Such grant of Restricted Shares will vest in 

 2
 

two tranches.  As to the First Tranche of 23,333 shares
covered by the Stock Grant, such tranche will vest ratably over the three years
following the date on which the Stock Grant occurs (“Stock Grant Date”), with
one-third of the amount vesting each year on the anniversary of the Stock Grant
Date.  As to the Second Tranche of 11,667
shares covered by the Stock Grant, such shares will not vest until the end of
the third anniversary of the Stock Grant Date (subject to possible earlier
vesting of 25% of the shares vesting at the end of fiscal year 2007 and another
25% vesting at the end of fiscal year 2008 if Employee shall achieve certain
performance objectives to be mutually determined by you and Employer for the
fiscal years 2007 and 2008).

(h)       You may be eligible for such additional
stock option grants commensurate with your position with Employer as the Board
of Directors (or Compensation Committee of the Board of Directors), in its sole
discretion, may award to you from time to time.

(i)        Employer will
continue to provide mortgage assistance (“Mortgage Assistance”) in the amount
of $7,500 (grossed-up in an amount sufficient to cover all tax liability you
incur as a result of the Mortgage Assistance) per month from the Effective Date
through the Expiration Date.

3.             Title

You are being
employed under this Agreement in the position of Executive Vice President,
Publishing of Employer and you will report to the Chief Executive Officer of
Employer.

4.             Duties

You
shall personally and diligently perform, on a full-time and exclusive basis,
such services as Employer or any of its related or affiliated entities or
divisions may reasonably require.  You
are also required to read, review and observe all of Employer’s existing
policies, procedures, rules and regulations as well as those adopted by
Employer during the term of your employment, which are, or have been, provided
to you.  You will at all times perform
all of the duties and obligations required by you under this Agreement in a
loyal and conscientious manner and to the best of your ability and experience.

5.             Expenses

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

6.              Other Benefits

You shall be
entitled to those benefits which are standard for persons in similar positions
with Employer, including coverage under Employer’s health, life insurance and
disability plans, and eligibility to participate in Activision’s Employee Stock
Purchase Plan and Employer’s 401(k) plan (with Employer matching your
contributions to such 401K plan in accordance with Employer’s matching
policy).  In addition to the foregoing
benefits, Employer will provide you during the Employment Period, at Employer’s
expense, with a supplemental term life insurance 

 3
 

policy with a
benefit amount of $2,000,000 through a carrier of Employer’s choice. Nothing
paid to you under any such plans and arrangements (nor any bonus or stock
options which Activision’s Board of Directors (or the Compensation Committee of
such Board of Directors), in its sole and absolute discretion, shall provide to
you) shall be deemed in lieu, or paid on account, of your Base Salary. You
expressly agree and acknowledge that after the expiration or early termination
of the term of your employment under this Agreement, you are entitled to no
additional benefits, except as specifically provided: (a) by law; (b) in this
Agreement; and/or (c) under benefit plans referred to above and those benefit
plans in which you subsequently may become a participant, and subject in each
case to the terms and conditions of each such plan.  Notwithstanding anything to the contrary set
forth above, you shall be entitled to receive those benefits provided by COBRA
or CAL-COBRA upon the expiration or earlier termination of this Agreement.  All benefits of every type referenced in
Paragraph 6 are hereinafter referred collectively as “Benefits”.

7.             Vacation and Paid Holidays

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

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

8.             Protection of
Employer’s Interests

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

(b)           Policy
Compliance. You confirm that you have read, understand and will
comply with the terms of Employer Corporate Governance Policies, including but
not limited to Code of Business Conduct and Ethics and Code of Ethics for
Senior Executive Officers, and any reasonable amendments thereto which you
receive.

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

 4
 

 

(d)           Confidentiality.  Any confidential and/or proprietary
information of Employer or any affiliate of Employer shall not be used by you
or disclosed or made available by you to any person except as required in the
course of your employment, and upon expiration or earlier termination of the
term of your employment, you shall return to Employer all such information which
exists in written or other physical form (and all copies thereof) under your
control.  Without limiting the generality
of the foregoing, you acknowledge signing and delivering to Employer the
Activision Employee Proprietary Information Agreement as of the Effective Date
and you agree that all terms and conditions contained in such agreement, and
all of your obligations and commitments provided for in such agreement, shall
be deemed, and hereby are, incorporated into this Agreement as if set forth in
full herein.  You also acknowledge that
upon termination of your employment for any reason whatsoever, you will
promptly deliver to Employer or surrender to Employer’s representative all
Employer property (which Employer acknowledges does not include contact information
that was in your possession when you joined Employer), including without
limitation, all documents and other materials (and all copies thereof) relating
to Employer’s business, all identification and access cards, all contact lists
and third party business cards however and wherever preserved, and any
equipment provided by Employer, including computers, telephones, personal
digital assistants, memory cards and similar devices which you  possess or have in your custody or under your
control. The provisions of this paragraph shall survive the expiration or
earlier termination of this Agreement.

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

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

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

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

 5
 

 

(f)            Covenant Not to Solicit. 
During the Employment Period and for a period of two years following the
expiration of the Employment Period for any reason whatsoever you shall not,
either alone or jointly, with or on behalf of others, directly or indirectly,
whether as principal, partner, agent, shareholder, director, employee,
consultant or otherwise: (a) offer employment to, or directly or indirectly
solicit the employment or engagement of, or otherwise entice away from the
employment of Employer or any affiliated entity, either for your own account or
for any other person, firm or company, any person who was employed by Employer
or any such affiliated entity during the term of your employment, whether or
not such person would commit any breach of his or her contract of employment by
reason of his or her leaving the service of Employer or any affiliated entity;
or (b) directly or indirectly solicit, induce or entice any client, customer,
contractor, licensor, agent, partner or other business relationship of Employer
to terminate, discontinue, renegotiate or otherwise cease or modify their
relationship with Employer. You expressly acknowledge and agree that the
restrictions contained in this paragraph are reasonably tailored to protect
Employer’s confidential information and trade secrets, and are reasonable in
all circumstances in scope, duration and all other respects. It is expressly
agreed by the parties that if for any reason whatsoever any one or more of such
restrictions shall (either taken by itself or themselves together) be adjudged
to go beyond what is reasonable in all circumstances for the protection of the
legitimate interests of Employer, the parties agree that the prohibitions shall
be in effect and upheld to the fullest extent permissible under applicable
laws.

9.               Termination

(a)       Employer.  At
any time during the Employment Period, Employer may terminate your employment
under this Agreement for Cause, defined as your (i) gross misconduct, (ii)
gross negligence in performance of job responsibilities, or (iii) conviction of
a felony.  In addition, but subject to
the provisions of Paragraphs 9(d)(iii) and 9(e)(ii) below, Employer may
terminate your employment under this Agreement at any time without Cause and
such termination shall not be deemed to constitute a wrongful discharge of
Employee or a wrongful termination of Employee’s employment by Employer or a
breach by Employer of any term of this Agreement and/or any other duty or
obligation, expressed or implied, which Employer may owe to Employee pursuant
to any principle or provision of law.  In
the case of any termination for Cause pursuant to clause (ii), Employer shall
give written notice of termination to you (“Notice of Cause Termination”), and
shall specify the date of such termination, which shall not be earlier than 45
days after the date on which notice is given to you.  Such notice shall specify the particular acts
or circumstances that purport to constitute Cause for such termination.  You shall be given the opportunity within 30
days after receiving such notice to explain why Cause for such termination does
not exist or to cure any such basis for Cause. 
Within 15 days after any such explanation, you will be given the final
decision, in writing, regarding whether Cause exists.  If the final decision is that Cause exists,
your employment with Employer shall be terminated under Paragraph 9(a)(ii)
pursuant to the Notice of Cause Termination as of the date of termination
specified in the notice.  If the final
decision is that Cause does not exist, your employment with Employer shall not
be terminated under Paragraph 9(a)(ii) pursuant to such Notice of Cause
Termination.

(b)       Employee.  You may terminate your employment under this
Agreement in the event of (i) Employer’s relocation to a location more than 25
miles from Los Angeles County; or, (ii) the material diminution of your job
duties.

 6
 

 

(c)       Death or Disability.  In the event of your death during the term of
this Agreement, this Agreement shall terminate and Employer shall be obligated
to pay only your estate or legal representative the amounts set forth in
Paragraph 9(d)(i) below and further comply with provisions of Paragraph
9(e)(iii).  In the event that you have or
develop a Disability, and such disability continues for a period of 120 or more
consecutive days or an aggregate of 120 or more days during any 12-month period
during the term of this agreement, then Employer shall have the right, at its
option, to terminate your employment under this Agreement, subject to the
provisions of Paragraphs 9(d)(ii) and 9(e)(iii) below. Unless and until so
terminated, during any period of Disability during which you are unable to
perform the essential functions of our job, even when provided such reasonable
accommodation as Employer can provide without undue hardship to Employer, your
Base Salary shall be payable to the extent of, and subject to, Employer’s
policies and practices then in effect with regard to sick leave and disability
benefits.  “Disability” shall be
determined in accordance with the definitions set forth in the Employer’s
disability insurance policies and shall be determined by a physician mutually
agreed upon by you and Employer.  If you
and Employer are unable to agree on such a physician, you and Employer shall
each appoint one physician and those two physicians shall appoint a third
physician who shall make such a determination. 
You shall cooperate and make yourself available for any medical
examination reasonably required by Employer with respect to any determination
of your Disability.

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

(i)                                                 Compensation
upon Death.  In the event this
Agreement is terminated as a result of your death, your heirs, successors or
legal representatives shall receive: (i) the Base Salary through the date of
termination of this Agreement; (ii) any unpaid Annual Bonus for any prior
fiscal year; (iii) the pro rata portion of the Annual Bonus for the fiscal year
in which your termination occurs to the extent such Annual Bonus is earned;
(iv) an amount equal to three hundred (300%) of the dollar amount of the Base
Salary paid or payable to you for Employer’s most recent fiscal year
immediately prior to your date of death; (v) continued Mortgage Assistance
payments through the Expiration Date; (vi) reimbursement of approved expenses
due to you pursuant to Paragraph 5; and (vii) continued Benefits for your
dependents, beneficiaries or estate as applicable, for 24 months following the
termination of your employment with Employer. All such payments shall be in
addition to any payments your widow, beneficiaries or estate may be entitled to
receive pursuant to any pension or employee benefit plan or life insurance
policy maintained by Employer.  For so
long as you do not become employed by a
corporation or other entity engaged in a Competitive Business or otherwise
become engaged directly or indirectly in a Competitive Business, all
payments and Benefits of every type referenced in this paragraph shall be
provided by Employer without any duty to mitigate on your part, and Employer
shall have no right to offset against such payments or Benefits any amount you
earn from any source following the ending of your employment with Employer.

 7
 

 

(ii)                                              Compensation
upon Disability.  In the event this
Agreement is terminated as a result of your Disability, you shall receive: (i)
the Base Salary through the date of your termination; (ii) any unpaid Annual
Bonus for any prior fiscal year; (iii) the pro rata portion of the Annual Bonus
for the fiscal year in which your termination occurs to the extent such Annual
Bonus is earned; (iv) reimbursement of approved expenses due to you pursuant to
Paragraph 5; (v) continued Mortgage Assistance payments through the Expiration
Date; (vi) an amount equal to three hundred (300%) percent of the dollar amount
of the Base Salary paid or payable to you for Employer’s most recent fiscal
year immediately prior to your Disability termination (vii) the long-term
monthly disability payments according to Employer’s benefit plan for
Executives; and (viii) continued Benefits for you and your dependents, for 24
months following the termination of your employment with Employer.  For so long as you do not become employed by a corporation or other entity engaged in a
Competitive Business or otherwise become engaged directly or indirectly in a
Competitive Business, all payments and Benefits of every type referenced
in this paragraph shall be provided by Employer without any duty to mitigate on
your part, and Employer shall have no right to offset against such payments or
Benefits any amount you earn from any source following the ending of your
employment with Employer.

(iii)                                           Compensation
upon Termination Without Cause.  In
the event your employment under this Agreement is terminated by Employer
without Cause, or by you pursuant to Paragraph 9(b), then you shall receive:
(i) the Base Salary through the date of your termination; (ii) any unpaid
Annual Bonus for any prior fiscal year; (iii) the pro rata portion of the
Annual Bonus for the fiscal year in which your termination occurs to the extent
such Annual Bonus is earned; (iv) continued Mortgage Assistance payments
through the Expiration Date; (v) reimbursement of approved expenses due you
pursuant to Paragraph 5; and (vi) 100% of the Base Salary payable to you from
the date of termination through the Expiration Date (or a minimum of 12 months
salary whichever amount is greater) had your employment not been terminated,
such Base Salary to be determined in accordance with the terms of Paragraph
2(a) of this Agreement and to be paid on a salary continuation basis as and
when normally paid by Employer; and (vii) continued Benefits for you and your
dependents, for 24 months following the termination of your employment with
Employer.  For so long as you do not become
employed by a corporation or other entity
engaged in a Competitive Business or otherwise become engaged directly or
indirectly in a Competitive Business, all payments and Benefits of every
type referenced in this paragraph shall be provided by Employer without any
duty to mitigate on your part, and Employer shall have no right to offset
against such payments or Benefits any amount you earn from any source following
the ending of your employment with Employer.

 8
 

 

(iv)                                          Compensation
upon Termination For Cause. In the event your employment under this
Agreement is terminated by Employer for Cause, then you shall receive: (i) the
Base Salary, Benefits and Mortgage Assistance through the date of your
termination; and (ii) reimbursement of approved expenses due you pursuant to
Paragraph 5.

(v)                                             Payment Limitations. Notwithstanding the foregoing, to the
extent any of the provisions of this Paragraph 9(d) allow for payments of Base
Salary, Annual Bonus or Mortgage Assistance subsequent to your termination,
such payments will occur and continue only for so long as you do not become
employed at any time subsequent to your termination by a corporation or other entity engaged in a Competitive Business or
otherwise become engaged directly or indirectly in a Competitive Business.  All such payments shall be provided by
Employer without any duty to mitigate on your part, and Employer shall have no
right to offset against such payments any amount you earn from any source
following the ending of your employment with Employer.

(e)       Disposition of Stock Options and Restricted Shares
Upon Termination.  Upon termination of your employment for any
reason, the following terms shall apply to the stock options issued to you
pursuant to this Agreement under Paragraph 2(f) and Restricted Shares issued to
you pursuant to Paragraph 2(g), respectively:

(i)                                     In the event of termination of your
employment for Cause, all unvested stock options and unvested Restricted Shares
granted to you under this Agreement, shall expire immediately on the date of
termination of your employment and all such unvested stock options and unvested
Restricted Shares shall immediately be cancelled and no longer continue to vest
or be exercisable as of the date of termination of your employment;

(iii)                               In the event of termination of your
employment by Employer Without Cause or by you pursuant to Paragraph 9(b):

(1)                                  All stock options granted to you under this
Agreement shall continue to vest and be exercisable for a period of 24 months
in accordance with same respective vesting schedules and under same terms had your
employment not been terminated.

(2)                                  You will be allowed to continue to vest
Restricted Shares for a period of 24 months in accordance with same respective
vesting schedule under the same terms had your employment not been terminated.

(3)                                  Your
new hire option grant (grant #01000230) shall
vest immediately the number of options that would have vested over the course
of the next 24 months had your 

 9
 

employment not been
terminated, and will be exercisable on the same terms as would have applied had
your employment not been terminated.

(4)                                  To the extent any of the provisions of this
Paragraph 9(e)(ii) allow vesting of Restricted Shares and vesting and exercise
of stock options subsequent to your termination, such vesting and/or will occur
and/or continue only for so long as you do not become employed at any
time subsequent to your termination by a
corporation or other entity engaged in a Competitive Business. Should you become
employed at any time subsequent to your termination without cause by a corporation or other entity engaged in a
Competitive Business or otherwise become engaged directly or indirectly in a
Competitive Business, (a) all  stock
options and Restricted Shares granted to you under this Agreement shall cease
to vest immediately as of the date of 
such  employment, (b) all then
unvested stock options and Restricted Shares shall be cancelled, and only
vested stock options shall continue to be exercisable until the earlier of (i)
the end of the 30th day after you commence engaging in a Competitive Business,
or (ii) the expiration of such stock option pursuant to the terms of the stock
option agreement for such stock option; and upon the expiration of such period,
all stock options then remaining unexercised shall be cancelled.
Notwithstanding the foregoing, in the event such employment or engagement in a
Competitive Business is in breach of Paragraph 8(d) of this Agreement, then all
unvested Restricted Shares and unvested stock options granted to you under this
Agreement shall expire immediately on the date you commence engaging in a
Competitive Business and all such unvested Restricted Shares and unvested stock
options shall immediately be cancelled and no longer continue to vest or be
exercisable as of the date of your employment or engagement in a Competing
Business.

(iii)                               In the event of your termination of
employment by reason of your death or disability:

(1)                                  All stock options granted to you under this
Agreement shall continue to vest and be exercisable for a period of 24 months
in accordance with same respective vesting schedules and under same terms had
your employment not been terminated.

(2)                                  Your
new hire option grant (grant #01000230) shall
vest immediately the number of options that would have vested over the course
of the next 24 months had your employment not been terminated, and will be
exercisable on the same terms as would have applied had your employment not
been terminated.

 10
 

 

(3)                                  You will be allowed to continue to vest
Restricted Shares for a period of 24 months in accordance with same respective
vesting schedule under the same terms had your employment not been terminated.

10.          Use of Employee’s Name

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

11.          Assignment

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

12.          No Conflict with Prior Agreements

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

13.          Successors

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

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

14.          Minimum Ownership Position

At all times
during the term on or after the first anniversary of the Effective date, you
shall make a good-faith effort to own a number of shares of Activision’s common
stock that have an “aggregate market value” which is at least equal to one
times your annual Base Salary as set forth in Paragraph 2(a). All Activision
restricted stock grants to you shall be included for these purposes in the
foregoing calculation.  Employer shall in
good faith monitor such ownership position. 
You also agree to comply with any additional reasonable stock ownership
guidelines that may be adopted by the Board of Directors and apply to Employer’s
senior executives.

 11
 

 

15.          General Provisions

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

(b)       No Broker.  You have given no indication,
representation or commitment of any nature to any broker, finder, agent or
other third party to the effect that any fees or commissions of any nature are,
or under any circumstances might be, payable by Employer or any affiliate of
Employer in connection with your employment under this Agreement.

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

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

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

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

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

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

 12
 

 

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

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

(k)       Right to
Negotiate.  You hereby
acknowledge that you have been given the opportunity to participate in the
negotiation of the terms of this Agreement. You acknowledge and confirm that
you have read this Agreement, fully understand its terms and contents and have
had the opportunity to ask Employer about any questions, concerns or issues you
may have on connection with this Agreement or its terms.

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

(m)          Injunctive
Relief.  In the event of a
breach of or threatened breach of the provisions of this Agreement regarding
the exclusivity of your services and the provisions of Paragraph 8 of this
Agreement you agree that any remedy of law would be inadequate. 
Accordingly you agree that Employer is entitled to obtain injunctive relief for
such breaches or threatened breaches. 
The injunctive relief provided for in this paragraph is in addition to,
and is not in limitation of, any and all other remedies at law or in equity
otherwise available to the applicable party. 
The parties agree to waive the requirement of posting a bond in
connection with a court’s issuance of an injunction.

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

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

 13
 

 

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

17.          Notices

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

	
  

  	
   

  	
  To Employer:

  	
   

  	
  3100 Ocean Park Boulevard

  Santa Monica,
  California 90405

  Attention:  Senior Vice President,

  Business Affairs and General Counsel

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  To You:

  	
   

  	
  1606 1st Street

  Manhattan Beach, CA  90266

  

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

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

ACCEPTED
AND AGREED TO:

	
  Employer

  	
   

  	
  Employee

  
	
   

  	
   

  	
   

  
	
  ACTIVISION PUBLISHING, INC.

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  By:

  	
   

  	
   

  	
   

  
	
   

  	
  George Rose

  	
   

  	
  Robin Kaminsky

  
	
   

  	
  General Counsel

  	
   

  	
   

  

 

 14

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