Document:

Exhibit
10.1

THIS
COMPOSITE PLAN REFLECTS ALL AMENDMENTS AND ADJUSTMENTS

FOR STOCK SPLITS AS OF 10/19/06

ACTIVISION,
INC.

SECOND
AMENDED AND RESTATED

2002 EMPLOYEE STOCK PURCHASE PLAN

FOR INTERNATIONAL EMPLOYEES, AS AMENDED

(EFFECTIVE AS OF OCTOBER 1, 2005 AND 

AMENDED ON OCTOBER 20, 2006)

 

TABLE
OF CONTENTS

	
  

  	
   

  	
  

  	
   

  	
   

  	
   

  	
  Page

  
	
  SECTION 1.

  	
   

  	
   

  	
   

  	
  DEFINITIONS

  	
   

  	
  1

  
	
  SECTION 2.

  	
   

  	
   

  	
   

  	
  PURPOSE OF THE PLAN

  	
   

  	
  3

  
	
  SECTION 3.

  	
   

  	
   

  	
   

  	
  ADMINISTRATION OF THE PLAN

  	
   

  	
  3

  
	
   

  	
   

  	
  (a)

  	
   

  	
  Committee
  Composition

  	
   

  	
  3

  
	
   

  	
   

  	
  (b)

  	
   

  	
  Committee
  Responsibilities

  	
   

  	
  3

  
	
  SECTION 4.

  	
   

  	
   

  	
   

  	
  ENROLLMENT AND PARTICIPATION

  	
   

  	
  4

  
	
   

  	
   

  	
  (a)

  	
   

  	
  Offering Periods

  	
   

  	
  4

  
	
   

  	
   

  	
  (b)

  	
   

  	
  Accumulation
  Periods

  	
   

  	
  4

  
	
   

  	
   

  	
  (c)

  	
   

  	
  Enrollment

  	
   

  	
  4

  
	
   

  	
   

  	
  (d)

  	
   

  	
  Duration of
  Participation

  	
   

  	
  4

  
	
   

  	
   

  	
  (e)

  	
   

  	
  Applicable
  Offering Period

  	
   

  	
  4

  
	
   

  	
   

  	
  (f)

  	
   

  	
  Grant of Option
  on Enrollment

  	
   

  	
  5

  
	
  SECTION 5.

  	
   

  	
   

  	
   

  	
  EMPLOYEE CONTRIBUTIONS

  	
   

  	
  5

  
	
   

  	
   

  	
  (a)

  	
   

  	
  Frequency of
  Payroll Deductions

  	
   

  	
  5

  
	
   

  	
   

  	
  (b)

  	
   

  	
  Amount of
  Payroll Deductions

  	
   

  	
  5

  
	
   

  	
   

  	
  (c)

  	
   

  	
  Changes to
  Payroll Deductions

  	
   

  	
  5

  
	
  SECTION 6.

  	
   

  	
   

  	
   

  	
  WITHDRAWAL FROM THE PLAN

  	
   

  	
  6

  
	
   

  	
   

  	
  (a)

  	
   

  	
  Withdrawal

  	
   

  	
  6

  
	
   

  	
   

  	
  (b)

  	
   

  	
  Return of
  Payroll Deductions; Readmittance

  	
   

  	
  6

  
	
  SECTION 7.

  	
   

  	
   

  	
   

  	
  CHANGE IN EMPLOYMENT STATUS

  	
   

  	
  6

  
	
   

  	
   

  	
  (a)

  	
   

  	
  Termination of
  Employment

  	
   

  	
  6

  
	
   

  	
   

  	
  (b)

  	
   

  	
  Leave of Absence

  	
   

  	
  6

  
	
  SECTION 8.

  	
   

  	
   

  	
   

  	
  PLAN ACCOUNTS AND PURCHASE OF SHARES

  	
   

  	
  7

  
	
   

  	
   

  	
  (a)

  	
   

  	
  Plan Accounts

  	
   

  	
  7

  
	
   

  	
   

  	
  (b)

  	
   

  	
  Purchase Price

  	
   

  	
  7

  
	
   

  	
   

  	
  (c)

  	
   

  	
  Number of Shares
  Purchased

  	
   

  	
  7

  
	
   

  	
   

  	
  (d)

  	
   

  	
  Available Shares
  Insufficient

  	
   

  	
  8

  
	
   

  	
   

  	
  (e)

  	
   

  	
  Issuance of
  Stock

  	
   

  	
  8

  
	
   

  	
   

  	
  (f)

  	
   

  	
  Unused Cash
  Balances

  	
   

  	
  8

  
	
   

  	
   

  	
  (g)

  	
   

  	
  Brokerage
  Account

  	
   

  	
  8

  
	
   

  	
   

  	
  (h)

  	
   

  	
  Stockholder
  Approval

  	
   

  	
  8

  
	
  SECTION 9.

  	
   

  	
   

  	
   

  	
  LIMITATIONS ON STOCK OWNERSHIP

  	
   

  	
  8

  
	
   

  	
   

  	
  (a)

  	
   

  	
  Dollar Limit

  	
   

  	
  8

  
	
   

  	
   

  	
  (b)

  	
   

  	
  Effects of
  Preclusion

  	
   

  	
  8

  
	
  SECTION 10.

  	
   

  	
   

  	
   

  	
  RIGHTS NOT TRANSFERABLE

  	
   

  	
  9

  
	
  SECTION 11.

  	
   

  	
   

  	
   

  	
  NO RIGHTS AS AN EMPLOYEE

  	
   

  	
  9

  
	
  SECTION 12.

  	
   

  	
   

  	
   

  	
  NO RIGHTS AS A STOCKHOLDER

  	
   

  	
  9

  
	
  SECTION 13.

  	
   

  	
   

  	
   

  	
  CONDITIONS UPON ISSUANCE OF SHARES; LIMITATION ON
  SALE OF SHARES

  	
   

  	
  9

  
	
  SECTION 14.

  	
   

  	
   

  	
   

  	
  STOCK OFFERED UNDER THE PLAN

  	
   

  	
  9

  
	
   

  	
   

  	
  (a)

  	
   

  	
  Authorized
  Shares

  	
   

  	
   

  
	
   

  	
   

  	
  (b)

  	
   

  	
  Capital Changes

  	
   

  	
   

  
	
  SECTION 15.

  	
   

  	
   

  	
   

  	
  NOTICES

  	
   

  	
  10

  

 

 

 

	
  SECTION 16.

  	
   

  	
   

  	
   

  	
  STOCKHOLDER APPROVAL OF AMENDMENTS

  	
   

  	
  10

  
	
  SECTION 17.

  	
   

  	
   

  	
   

  	
  DESIGNATION OF BENEFICIARY

  	
   

  	
  10

  
	
   

  	
   

  	
  (a)

  	
   

  	
  Written
  Designation

  	
   

  	
  10

  
	
   

  	
   

  	
  (b)

  	
   

  	
  No Written
  Designation

  	
   

  	
  11

  
	
  SECTION 18.

  	
   

  	
   

  	
   

  	
  APPLICABLE LAW

  	
   

  	
  11

  
	
  SECTION 19.

  	
   

  	
   

  	
   

  	
  EFFECTIVE DATE; AMENDMENT OR TERMINATION OF PLAN

  	
   

  	
  11

  
	
  SECTION 20.

  	
   

  	
   

  	
   

  	
  TAX WITHHOLDING

  	
   

  	
  11

  

 

 ii

 

ACTIVISION,
INC.

SECOND AMENDED AND RESTATED

2002 EMPLOYEE STOCK PURCHASE PLAN

FOR INTERNATIONAL EMPLOYEES

SECTION 1.         DEFINITIONS.

(a)           “Accumulation Period” means a six month
period during which contributions may be made toward the purchase of Stock
under the Plan, as determined pursuant to Section 4(b).

(b)           “Board” means the Board of Directors of the
Company, as constituted from time to time.

(c)           “Code” means the Internal Revenue Code of
1986, as amended.

(d)           “Committee” means a committee of the Board,
as described in Section 3.

(e)           “Company” means Activision, Inc., a
Delaware corporation.

(f)            “Compensation” means all compensation,
including, but not limited to base salary, wages, commissions, overtime, shift
premiums and bonuses, plus draws against commissions.  The Committee shall determine whether a
particular item is included in Compensation.

(g)           “Eligible Employee” means any employee of a
Participating Company who meets each of the following requirements:

(i)            His
or her customary employment is for more than five months per calendar year and
for more than 20 hours per week; and

(ii)           He
or she was employed by a Participating Company on the fifteenth (15th) day of the month before the
beginning of such Offering Period.

The foregoing
notwithstanding, an individual shall not be considered an Eligible Employee if
his or her participation in the Plan is prohibited by the law of any country
which has jurisdiction over him or her or if he or she is subject to a
collective bargaining agreement that does not provide for participation in the
Plan.

(h)           “Exchange Act” means the Securities
Exchange Act of 1934, as amended.

(i)            “Fair Market Value” means the market price
of Stock, determined by the Committee as follows:

 

(i)            If
Stock was listed and traded on The Nasdaq National Market System on the date in
question, then the Fair Market Value shall be equal to the price at which such
Stock last traded on such date as reported by The Nasdaq National Market
System;

(ii)           If
Stock was listed and traded on a stock exchange on the date in question, then
the Fair Market Value shall be equal to the price at which such Stock last
traded on such date as reported by such stock exchange; or

(iii)          Notwithstanding
the foregoing provisions, if the Committee determines that the last trading
price does not adequately reflect Fair Market Value, Fair Market Value may be
determined by the Committee in good faith on such basis as it deems
appropriate.  In making such
determination, the Committee shall consider the financial conditions of the
Company and its recent operating results, values of publicly-traded securities
of other comparable institutions and the lack of liquidity of the Company’s
shares, and such other factors as the Committee in its sole discretion deems
relevant.

Whenever possible,
the determination of Fair Market Value by the Committee under clauses (i) and
(ii), above, shall be based on the prices reported in the Wall Street Journal or as reported
directly to the Company by Nasdaq or a stock exchange. Such determination shall
be conclusive and binding on all persons (unless clause (iii) above is
applicable).

(j)            “Offering Date” means the first day of each
Offering Period.

(k)           “Option” means an Option described in
Section 4(f).

(l)            “Offering Date FMV” means the Fair Market
Value of the Stock on the Offering Date or, if such Offering Date is not a
trading date, the last trading date prior to such Offering Date.

(m)          “Offering Period” means a 6 month period
with respect to which the right to purchase Stock may be granted under the
Plan, as determined pursuant to Section 4(a), provided, however,
that the Committee shall have the power to change the duration of Offering
Periods without stockholder approval if such change is announced at least
fifteen (15) days prior to the scheduled beginning of the first Offering Period
to be affected.

(n)           “Participant” means an Eligible Employee
who elects to participate in the Plan, as provided in Section 4(c).

(o)           “Participating Company” means each present
or future foreign Subsidiary designated by the Committee as a Participating
Company.

(p)           “Plan” means this Activision, Inc., Second
Amended and Restated 2002 Employee Stock Purchase Plan for International
Employees, as it may be amended from time to time.

 2
 

 

(q)           “Plan Account” means the account established
for each Participant pursuant to Section 8(a).

(r)            “Purchase Date” means the last day of an
Accumulation Period provided, however, that if the Stock is listed and
traded on a stock exchange (including The Nasdaq National Market System) during
an Accumulation Period and the last day of such Accumulation Period falls on a
day which is not a trading date for such stock exchange, then the “Purchase
Date” shall be the last trading date in such Accumulation Period.

(s)           “Purchase Date FMV” means the Fair Market
Value of the Stock on the Purchase Date.

(t)            “Purchase Price” means the price at which
Participants may purchase Stock under the Plan, as determined pursuant to
Section 8(b).

(u)           “Stock” means the common stock of the
Company, $0.000001 par value.

(v)           “Subsidiary” means any corporation (other
than the Company) in an unbroken chain of corporations beginning with the
Company, if each of the corporations other than the last corporation in the
unbroken chain owns stock possessing 50% or more of the total combined voting
power of all classes of stock in one of the other corporations in such chain.

SECTION 2.         PURPOSE OF THE PLAN.

The
purpose of the Plan is to provide Eligible Employees with a convenient means to
acquire an equity interest in the Company, to enhance such employees’ sense of
participation in the affairs of the Company and Subsidiaries, and to provide an
incentive for continued employment. 
Notwithstanding anything set forth herein, the Plan is NOT intended to
qualify as an “employee stock purchase plan” under Section 423 of the Code
(including any amendments or replacements of such section), and the Plan shall
be so construed.  By way of clarification
of the foregoing, the Options should be considered “nonqualified options” for
U.S. federal income tax purposes.

SECTION 3.         ADMINISTRATION OF THE PLAN.

(a)           Committee Composition. 
The Plan shall be administered by the Committee.  The Committee shall be appointed by the Board
and shall consist exclusively of two or more directors of the Company, each of
whom is a “Non-Employee Director” as defined in Rule 16b-3(b)(3)(i) promulgated
under the Exchange Act.

(b)           Committee Responsibilities. 
The Committee shall interpret the Plan and make all other policy
decisions relating to the operation of the Plan.  The Committee may adopt such rules,
guidelines and forms as it deems appropriate to implement the Plan.  Subject to the provisions of the Plan, all
questions of interpretation or application of the Plan shall be determined by
the Committee and its decisions shall be final and binding upon all
Participants.  Members of the Committee
shall receive no compensation for their services in connection with the
administration of the Plan, other than standard fees as established from time
to time by the

 3
 

 

Board for services rendered by Board members serving on Board
committees.  All expenses incurred in
connection with the administration of the Plan shall be paid by the Company.

SECTION 4.         ENROLLMENT AND PARTICIPATION.

(a)           Offering Periods. 
While the Plan is in effect, two Offering Periods shall commence in each
calendar year.  The Offering Period
commencing on October 1, 2004, may overlap with the Offering Period commencing
on April 1, 2005.  The Offering Periods
shall consist of the 6-month periods commencing on each April 1 and October 1.

(b)           Accumulation Periods. 
While the Plan is in effect, two Accumulation Periods shall commence in
each calendar year. The Accumulation Periods shall consist of the six month
periods commencing on each April 1 and October 1.

(c)           Enrollment.  Any
individual who, on the day preceding the first day of an Offering Period,
qualifies (or will qualify) as an Eligible Employee may elect to become a
Participant in the Plan for such Offering Period by executing the subscription
agreement prescribed for this purpose by the Committee.  The subscription agreement shall be filed
with the Company at the prescribed location not later than the 15th day of the
month before such Offering Date (unless a later time for filing a subscription
agreement is set by the Committee for all Eligible Employees with respect to a
given Offering Period).

(d)           Duration of Participation. 
Once enrolled in the Plan, a Participant shall continue to participate
in the Plan until he or she ceases to be an Eligible Employee, withdraws from
the Plan under Section 6 or reaches the end of the Accumulation Period in which
his or her employee contributions were discontinued under Section 5(c)(ii) or
9(b).  Such Participant is not required
to file any additional subscription agreements in order to continue
participation in the Plan.  A Participant
who discontinued employee contributions under Section 5(d) or withdrew from the
Plan under Section 6 may again become a Participant, if he or she then is an Eligible
Employee, by following the procedure described in subsection (c) above.  A Participant whose employee contributions
were discontinued automatically under Section 9(b) shall automatically resume
participation at the beginning of the earliest Accumulation Period ending in
the next calendar year, if he or she then is an Eligible Employee.

(e)           Applicable Offering Period. 
For purposes of this Plan the applicable Offering Period shall be
determined as follows:

(i)            Once
a Participant is enrolled in the Plan for an Offering Period, such Offering
Period shall continue to apply to him or her until the earliest of (A) the end
of such Offering Period or (B) the end of his or her participation under
subsection (d) above.

(ii)           When
a Participant reaches the end of an Offering Period (the “Current Offering
Period”) but his or her participation is to continue, then such Participant
shall automatically be re-enrolled for the Offering Period that commences
immediately after the end of such Current Offering Period.

 4
 

 

(f)            Grant of Option on Enrollment.  Enrollment by an Eligible Employee in the
Plan with respect to an Offering Period will constitute the grant (as of the
Offering Date for such Offering Period) by the Company to such Eligible
Employee of an option (an “Option”) to purchase on each Purchase Date up to
that number of shares of Stock of the Company determined under Section 8(c).

SECTION 5.         EMPLOYEE CONTRIBUTIONS.

(a)           Frequency of Payroll Deductions.  A Participant shall purchase shares of Stock
under the Plan by means of payroll deductions; 
provided, however, that if the laws of the applicable
jurisdiction in which a Participating Company is located do not allow payroll
deductions, then a Participant may present a certified or bank check drawn on
immediately available funds (or such other form of payment acceptable to the
Participating Company in its sole and absolute discretion) at such times and in
such manner acceptable to the Company (in its sole and absolute discretion)
(such payments, “Alternative Payments”). 
For purposes of this Section 5(a), Participants who are eligible and
desire to participate in the Alternative Payments program must file a
subscription agreement on the same terms and conditions as all other
Participants and must timely deliver the Alternative Payments on a monthly
basis (or at such times acceptable to the Company in its sole and absolute
discretion).  Failure of a Participant to
make timely Alternative Payments shall result in a deemed withdrawal from the
Plan.  Payroll deductions, as designated
by the Participant pursuant to subsection (b) below, shall occur on each payday
during participation in the Plan.

(b)           Amount of Payroll Deductions.  Unless the laws of the applicable
jurisdiction in which a Participating Company is located do not allow payroll
deductions, an Eligible Employee shall designate on the subscription agreement
the portion of his or her Compensation that he or she elects to have withheld
for the purchase of Stock hereunder. 
Such portion shall be a whole percentage of the Eligible Employee’s
Compensation, but not less than 2% nor more than 15%.  Notwithstanding anything to the contrary in
this Plan, the total withholding under this Section 5(b) for any one
Participant shall not exceed an aggregate amount of $10,000 for the two
Accumulation Periods ending in any one calendar year.  For the avoidance of doubt and by way of
example, if $6,000 is withheld for the Accumulation Period ending March 31 of a
particular calendar year, then the withholdings for the Accumulation Period
ending September 30 shall not exceed $4,000.

(c)           Changes to Payroll Deductions.  The following terms apply to Participants who
make payroll deductions and do not apply to Participants that participate in
the Alternative Payments program:

(i)            Changing Withholding Rate.   
A Participant may increase or decrease the rate of payroll deductions
during an Offering Period by filing with the Company’s or Subsidiary’s
(whichever employs such employee) payroll department (the “payroll department”)
a new authorization for payroll deductions, in which case the new rate shall
become effective for the next payroll period commencing more than 20 days after
the payroll department’s receipt of the authorization and shall continue for
the remainder of the Offering Period unless changed as described below.  Such change in the rate of payroll deductions
may

 5
 

 

be made at any
time during an Offering Period, but once a rate has been established a
Participant may elect only one increase and only one decrease in such rate
during each Offering Period in which such Participant is included.  A Participant may increase or decrease the
rate of payroll deductions for any subsequent Offering Period by filing with
the payroll department a new authorization for payroll deductions not later
than the 10th day of the month before the beginning of such Offering Period.

(ii)           Discontinuing Payroll Deductions.  If a Participant wishes to discontinue
employee contributions entirely, he or she may do so by filing a new
subscription agreement with the Company at the prescribed location at any
time.  Payroll withholding shall cease as
soon as reasonably practicable after such form has been received by the
Company.  (In addition, employee
contributions may be discontinued automatically pursuant to Section 9(b).)  A Participant who has discontinued employee
contributions may resume such contributions effective with the next Offering
Period by filing a new subscription agreement with the Company at the
prescribed location if he or she then is an Eligible Employee.

SECTION 6.         WITHDRAWAL FROM THE PLAN.

(a)           Withdrawal.  Each
Participant may withdraw from an Offering Period under the Plan by signing and
delivering to the payroll department notice thereof on a form provided for such
purpose.  Such withdrawal may be elected
at any time at least twenty (20) days prior to the end of an Accumulation
Period.

(b)           Return of Payroll Deductions; Readmittance.  Upon withdrawal from the Plan, the
accumulated payroll deductions and any Alternative Payments not applied to the
purchase of Stock hereunder shall be returned, without interest, to the
withdrawn Participant and his or her interest in the Plan shall terminate.  In the event a Participant voluntarily elects
to withdraw from the Plan, he or she may not resume his or her participation in
the Plan during the same Offering Period, but he or she may participate in any
Offering Period under the Plan which commences on a date subsequent to such
withdrawal by timely filing a new subscription agreement in the same manner as
set forth above for initial participation in the Plan if he or she then is an
Eligible Employee.

SECTION 7.         CHANGE IN EMPLOYMENT STATUS.

(a)           Termination of Employment. 
Termination of a Participant’s employment for any reason, including
retirement or death or the failure of a Participant to remain an Eligible
Employee, terminates his or her participation in the Plan immediately.  In such event, the payroll deductions
credited to the Participant’s Plan Account and any Alternative Payments not
applied to the purchase of Stock hereunder will be returned, without interest,
to him or her or, in the case of his or her death, to his or her legal
representative.

(b)           Leave of Absence.  For
purposes of the Plan, employment shall not be deemed to terminate when the
Participant goes on a military leave, a sick leave or any other leave of
absence, if such other leave was approved by the Committee in writing.  Employment, however,

 6
 

 

shall be deemed to terminate 90 days after the Participant goes on a
leave, unless a contract or statute guarantees his or her right to return to
work.  Employment shall be deemed to
terminate in any event when the approved leave ends, unless the Participant
immediately returns to work.

SECTION 8.         PLAN ACCOUNTS AND PURCHASE OF SHARES.

(a)           Plan Accounts.  The
Company shall maintain an account on its books in the name of each Participant
(a “Plan Account”).  All payroll
deductions made for a Participant and all Alternative Payments are credited to
his or her Plan Account under the Plan and are deposited with the general funds
of the Company; no interest shall accrue on the payroll deductions or
Alternative Payments.  All payroll
deductions and Alternative Payments received or held by the Company may be used
by the Company for any corporate purpose, and the Company shall not be
obligated to segregate such payroll deductions or Alternative Payments.

(b)           Purchase Price.  The
Purchase Price for each share of Stock purchased on a Purchase Date shall be
the lower of:

(i)            85%
of the Offering Date FMV of such share on the Offering Date for the Offering
Period that includes such Purchase Date; or

(ii)           85%
of the Purchase Date FMV of such share on such Purchase Date.

(c)           Number of Shares Purchased. 
On each Purchase Date, as long as the Plan remains in effect, the
Company shall apply the funds then in each Participant’s Plan Account to the
purchase of whole shares of Stock.  As of
each Purchase Date, each Participant shall be deemed to have elected to
exercise his or her Option to purchase the number of shares of Stock calculated
in accordance with this subsection (c), unless the Participant has previously
elected to withdraw from the Plan in accordance with Section 6 provided,
however, that no Stock shall be purchased on a Purchase Date on behalf
of any employee whose participation in the Plan was terminated prior to such
Purchase Date.  The amount then in the
Participant’s Plan Account shall be divided by the Purchase Price, and the
number of shares that results shall be purchased from the Company with the
funds in the Participant’s Plan Account. 
The foregoing notwithstanding, no Participant shall purchase more than
the Maximum Share Amount (as defined below) on any Purchase Date nor more than
the amounts of Stock set forth in Sections 9(a) and 14(a).  The Committee may determine with respect to
all Participants that any fractional share, as calculated under this subsection
(c), shall be (i) rounded down to the next lower whole share or (ii) credited
as a fractional share.  Not less than
twenty (20) days prior to the commencement of any Offering Period, the
Committee may, in its sole discretion, set a maximum number of shares which may
be purchased by any employee at any single Purchase Date (the “Maximum Share
Amount”).  If a new Maximum Share Amount
is set, then all Participants must be notified of such Maximum Share Amount not
less than twenty (20) days prior to the commencement of the next Offering
Period.  Once the Maximum Share Amount is
established, it shall continue to apply with respect to all succeeding Purchase
Dates and Accumulation Periods unless revised by the Committee as set forth
above.  The initial Maximum Share Amount
is 5,000 shares.

 7
 

 

(d)           Available Shares Insufficient.  In the event that the aggregate number of
shares that all Participants elect to purchase during an Accumulation Period exceeds
the maximum number of shares remaining available for issuance under Section
14(a), then the Company shall make a pro rata allocation of the remaining
shares in as uniform a manner as shall be practicable and as the Committee
shall determine to be equitable.

(e)           Issuance of Stock. 
Promptly following each Purchase Date, the number of shares of Stock
purchased by each Participant shall be deposited into an account (a “Brokerage
Account”) established in the Participant’s name at a stock brokerage or other
financial services firm designated by the Company.  Shares may be registered in the name of the
Participant or jointly in the name of the Participant and his or her spouse as
joint tenants with right of survivorship or as community property.  During a Participant’s lifetime, such
Participant’s option to purchase shares hereunder is exercisable only by him or
her.  The Participant will have no
interest or voting right in shares covered by his or her option until such
option has been exercised.

(f)            Unused Cash Balances. 
An amount remaining in the Participant’s Plan Account that represents
the Purchase Price for any fractional share shall be carried over in the
Participant’s Plan Account to the next Accumulation Period.  Any amount remaining in the Participant’s
Plan Account that represents the Purchase Price for whole shares that could not
be purchased by reason of subsection (c) or (d) above, Sections 9(a) or 14(a)
shall be refunded to the Participant in cash, without interest.

(g)           Brokerage Account.  A
Participant shall be free to undertake a disposition of the shares in his
Brokerage Account at any time, whether by sale, exchange, gift, or other
transfer of legal title.  The Participant
may transfer those shares to another brokerage account of Participant’s
choosing or request in writing that a stock certificate be issued and delivered
to him.

(h)           Stockholder Approval.  Any
other provision of the Plan notwithstanding, no shares of Stock shall be
purchased under the Plan unless and until the Company’s stockholders have
approved the adoption of the Plan.

SECTION 9.         LIMITATIONS ON STOCK OWNERSHIP.

(a)           Dollar Limit.  Notwithstanding
anything to the contrary in this Plan, and for the avoidance of doubt, no
Option granted under this Plan shall permit a Participant’s right to purchase
Stock under the Plan to accrue at a rate which exceeds $25,000 of Fair Market
Value of Stock (determined at the time such Option is granted) for each
calendar year in which such Option is outstanding at any time.

(b)           Effects of Preclusion. 
If a Participant is precluded by subsection (a) above from purchasing
additional Stock under the Plan, then his or her employee contributions shall
automatically be discontinued and shall resume at the beginning of the earliest
Accumulation Period ending in the next calendar year (if he or she then is an
Eligible Employee).

 8
 

 

SECTION 10.       RIGHTS NOT TRANSFERABLE.

Neither
payroll deductions credited to a Participant’s Plan Account nor any rights with
regard to receive shares under the Plan may be assigned, transferred, pledged
or otherwise disposed of in any way (other than by will, the laws of descent
and distribution or as provided in Section 17 hereof) by the Participant.  Any such attempt at assignment, transfer,
pledge or other disposition shall be without effect.

SECTION 11.       NO RIGHTS AS AN EMPLOYEE.

Nothing
in the Plan or in any right granted under the Plan shall confer upon the
Participant any right to continue in the employ of a Participating Company for
any period of specific duration or interfere with or otherwise restrict in any
way the rights of the Participating Companies or of the Participant, which
rights are hereby expressly reserved by each, to terminate his or her
employment at any time and for any reason, with or without cause.

SECTION 12.       NO RIGHTS AS A STOCKHOLDER.

A
Participant shall have no rights as a stockholder with respect to any shares of
Stock that he or she may have a right to purchase under the Plan until such
shares have been purchased on the applicable Purchase Date.

SECTION 13.       CONDITIONS UPON ISSUANCE OF SHARES; LIMITATION
ON SALE OF SHARES.

Shares
shall not be issued with respect to an Option unless the exercise of such
Option and the issuance and delivery of such shares pursuant thereto shall
comply with all applicable provisions of law, domestic or foreign, including,
without limitation, the Securities Act of 1933, as amended (the “Securities Act”),
the Exchange Act, the rules and regulations promulgated thereunder, and the
requirements of any stock exchange or market upon which the shares may then be
listed, and shall be further subject to the approval of counsel for the Company
with respect to such compliance.

SECTION 14.       STOCK OFFERED UNDER THE PLAN.

(a)           Authorized
Shares.  The aggregate number of
shares of Stock available for purchase under the Plan shall be 400,000, subject
to adjustment pursuant to this Section 14.

(b)           Capital
Changes.  In the event of
reorganization, recapitalization, stock split, stock dividend, combination of
shares, merger, consolidation, offerings of rights, or any other change in the
structure of the Stock of the Company, an equitable adjustment shall be made in
the number, kind, and the price of shares available for purchase under the
Plan, and in the number of shares which an employee is entitled to purchase
under the Plan, as determined by the Committee to be appropriate; provided,
however, that any fractional shares resulting from any such adjustment
shall be eliminated.

In the event of the
proposed dissolution or liquidation of the Company, the Offering Period will
terminate immediately prior to the consummation of such proposed action, unless
otherwise

 9
 

 

provided by the
Committee.  The Committee may, in the
exercise of its sole discretion in such instances, declare that the Options
under the Plan shall terminate as of a date fixed by the Committee and give
each Participant the right to exercise his or her Option as to all of the
optioned stock, including shares which would not otherwise be exercisable.  In the event of a proposed sale of all or
substantially all of the assets of the Company, or the merger of the Company
with or into another corporation, each Option under the Plan shall be assumed
or an equivalent Option shall be substituted by such successor corporation or a
parent or subsidiary of such successor corporation, unless the Committee
determines, in the exercise of its sole discretion and in lieu of such
assumption or substitution, that the Participant shall have the right to
exercise the Option as to all of the optioned stock.  If the Committee makes an Option exercisable
in lieu of assumption or substitution in the event of a merger or sale of
assets, the Committee shall notify the Participant that the Option shall be
fully exercisable for a period of twenty (20) days from the date of such
notice, and the Option will terminate upon the expiration of such period.

SECTION 15.       NOTICES.

All
notices or other communications by a Participant to the Company under or in
connection with the Plan shall be in writing and shall be deemed to have been
duly given when delivered personally or deposited in the U.S. Mail, first class
postage prepaid, addressed as follows: Activision, Inc., Stock Administration
Department, Activision, Inc., 3100 Ocean Park Boulevard, Santa Monica,
California 90405, or as such other address as the Company, by notice to
employees, may designate in writing from time to time.

SECTION 16.       STOCKHOLDER APPROVAL OF AMENDMENTS.

If
required by then applicable law, approval of the stockholders of the Company
for an amendment to the Plan shall be obtained at a duly held stockholders’
meeting by the affirmative vote of the holders of a majority of the outstanding
shares of the company represented and voting at the meeting, or if such
stockholder approval is obtained by written consent, it must be obtained by the
majority of the outstanding shares of the Company; provided, however,
that approval at a meeting or by written consent may be obtained by a lesser
degree of stockholder approval if the Committee determines, in its sole
discretion after consultation with the Company’s legal counsel, that such
lesser degree of stockholder approval will comply with all applicable laws and
will not adversely affect the qualification of the Plan under Rule 16b-3
promulgated under the Exchange Act (“Rule 16b-3”).

SECTION 17.       DESIGNATION OF BENEFICIARY.

(a)           Written Designation. 
A Participant may file a written designation of a beneficiary who is to
receive any shares and cash, if any, with respect to the Participant’s Plan
Account in the event of such Participant’s death subsequent to the end of an
Offering Period but prior to delivery to him or her of such shares and
cash.  In addition, a Participant may
file a written designation of a beneficiary who is to receive any cash from the
Participant’s Plan Account in the event of such Participant’s death prior to a
Purchase Date.  Such designation of
beneficiary may be changed by the Participant at any time by written notice to
the Company.

 10
 

 

(b)           No Written Designation. 
In the event of the death of a Participant and in the absence of a
beneficiary validly designated under the Plan who is living at the time of such
Participant’s death, the Company shall deliver such shares or cash to the
executor or administrator of the estate of the Participant, or if no such executor
or administrator has been appointed (to the knowledge of the Company), the
Company, in its sole discretion, may deliver such shares or cash to the spouse
or to any one or more dependents or relatives of the Participant, or if no
spouse, dependent or relative is known to the Company, then to such other
person as the Company may designate.

SECTION 18.       APPLICABLE LAW.

The
Plan shall be governed by the substantive laws (excluding the conflict of laws
rules) of the State of Delaware.

SECTION 19.       EFFECTIVE DATE; AMENDMENT OR TERMINATION OF
PLAN.

This Plan was adopted by the Board of
Directors on July 26, 2005, and shall be effective on October 1, 2005 (the “Effective
Date”), subject to approval by the stockholders of the Company within twelve
(12) months after the date the Plan is adopted by the Board and the Plan shall
continue until the earliest to occur of (i) termination by the Board, (ii)
issuance of all of the shares of Stock reserved for issuance under the Plan, or
(iii) October 1, 2012.  The Board may at
any time suspend or terminate the Plan, except that any such suspension or
termination cannot affect Options previously granted under the Plan.  The Board may at any time amend the Plan, provided,
however, (i) no amendment shall make any change in an Option previously
granted which would adversely affect the right of any Participant (without the
prior consent of such Participant) and (ii) no amendment shall be made without
approval of the stockholders of the Company obtained in accordance with Section
16 hereof within 12 months of the adoption of such amendment (or earlier if
required by Section 16) if such approval is required by an applicable law or
regulation, or if such amendment would constitute an amendment for which
stockholder approval is required in order to comply with Rule 16b-3 (or any
successor rule).  Notwithstanding the
foregoing, the Board may amend the Plan to remove any provision in the Plan
which relates to compliance with Rule 16b-3 (or any successor rule) without
shareholder approval.

SECTION 20.       TAX WITHHOLDING.

The
Company shall notify a Participant of any income tax withholding requirements
arising as a result of a purchase of Stock acquired pursuant to this Plan, the
disposition of such Stock or any other event occurring pursuant to this
Plan.  The Company shall have the right
to withhold from such Participant such withholding taxes as may be required by
law, or to otherwise require the Participant to pay such withholding taxes.  If the Participant shall fail to make such
tax payments as are required, the Company or its Subsidiaries shall, to the
extent permitted by law, have the right to deduct any such taxes from any
payment of any kind otherwise due to such Participant or to take such other
action as may be necessary to satisfy such withholding obligations.

 11Exhibit
10.2

THIS
COMPOSITE PLAN REFLECTS ALL AMENDMENTS AND ADJUSTMENTS

FOR STOCK SPLITS AS OF 10/19/06

ACTIVISION,
INC.

THIRD
AMENDED AND RESTATED

2002 EMPLOYEE STOCK PURCHASE PLAN, AS AMENDED

(EFFECTIVE AS OF OCTOBER 1, 2005
 AND AMENDED SEPTEMBER 14, 2006)

 

Table
of Contents

	
  

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  Page

  
	
  SECTION 1.

  	
   

  	
   

  	
   

  	
  DEFINITIONS

  	
   

  	
  1

  
	
  SECTION 2.

  	
   

  	
   

  	
   

  	
  PURPOSE OF THE PLAN

  	
   

  	
  3

  
	
  SECTION 3.

  	
   

  	
   

  	
   

  	
  ADMINISTRATION OF THE PLAN

  	
   

  	
  3

  
	
   

  	
   

  	
  (a)

  	
   

  	
  Committee
  Composition

  	
   

  	
  3

  
	
   

  	
   

  	
  (b)

  	
   

  	
  Committee
  Responsibilities

  	
   

  	
  3

  
	
  SECTION 4.

  	
   

  	
   

  	
   

  	
  ENROLLMENT AND PARTICIPATION

  	
   

  	
  4

  
	
   

  	
   

  	
  (a)

  	
   

  	
  Offering Periods

  	
   

  	
  4

  
	
   

  	
   

  	
  (b)

  	
   

  	
  Accumulation
  Periods

  	
   

  	
  4

  
	
   

  	
   

  	
  (c)

  	
   

  	
  Enrollment

  	
   

  	
  4

  
	
   

  	
   

  	
  (d)

  	
   

  	
  Duration of
  Participation

  	
   

  	
  4

  
	
   

  	
   

  	
  (e)

  	
   

  	
  Applicable Offering Period

  	
   

  	
  4

  
	
   

  	
   

  	
  (f)

  	
   

  	
  Grant of Option
  on Enrollment

  	
   

  	
  5

  
	
  SECTION 5.

  	
   

  	
   

  	
   

  	
  EMPLOYEE CONTRIBUTIONS

  	
   

  	
  5

  
	
   

  	
   

  	
  (a)

  	
   

  	
  Frequency of
  Payroll Deductions

  	
   

  	
  5

  
	
   

  	
   

  	
  (b)

  	
   

  	
  Amount of
  Payroll Deductions

  	
   

  	
  5

  
	
   

  	
   

  	
  (c)

  	
   

  	
  Changing
  Withholding Rate

  	
   

  	
  5

  
	
   

  	
   

  	
  (d)

  	
   

  	
  Discontinuing
  Payroll Deductions

  	
   

  	
  5

  
	
  SECTION 6.

  	
   

  	
   

  	
   

  	
  WITHDRAWAL FROM THE PLAN

  	
   

  	
  6

  
	
   

  	
   

  	
  (a)

  	
   

  	
  Withdrawal

  	
   

  	
  6

  
	
   

  	
   

  	
  (b)

  	
   

  	
  Return of
  Payroll Deductions; Readmittance

  	
   

  	
  6

  
	
  SECTION 7.

  	
   

  	
   

  	
   

  	
  CHANGE IN EMPLOYMENT STATUS

  	
   

  	
  6

  
	
   

  	
   

  	
  (a)

  	
   

  	
  Termination of
  Employment

  	
   

  	
  6

  
	
   

  	
   

  	
  (b)

  	
   

  	
  Leave of Absence

  	
   

  	
  6

  
	
  SECTION 8.

  	
   

  	
   

  	
   

  	
  PLAN ACCOUNTS AND PURCHASE OF SHARES

  	
   

  	
  6

  
	
   

  	
   

  	
  (a)

  	
   

  	
  Plan Accounts

  	
   

  	
  6

  
	
   

  	
   

  	
  (b)

  	
   

  	
  Purchase Price

  	
   

  	
  6

  
	
   

  	
   

  	
  (c)

  	
   

  	
  Number of Shares
  Purchased

  	
   

  	
  7

  
	
   

  	
   

  	
  (d)

  	
   

  	
  Available Shares
  Insufficient

  	
   

  	
  7

  
	
   

  	
   

  	
  (e)

  	
   

  	
  Issuance of
  Stock

  	
   

  	
  7

  
	
   

  	
   

  	
  (f)

  	
   

  	
  Unused Cash
  Balances

  	
   

  	
  7

  
	
   

  	
   

  	
  (g)

  	
   

  	
  Stockholder
  Approval

  	
   

  	
  8

  
	
   

  	
   

  	
  (h)

  	
   

  	
  Brokerage
  Account

  	
   

  	
  8

  
	
  SECTION 9.

  	
   

  	
   

  	
   

  	
  LIMITATIONS ON STOCK OWNERSHIP

  	
   

  	
  8

  
	
   

  	
   

  	
  (a)

  	
   

  	
  Five Percent Limit

  	
   

  	
  8

  
	
   

  	
   

  	
  (b)

  	
   

  	
  Dollar Limit

  	
   

  	
  8

  
	
   

  	
   

  	
  (c)

  	
   

  	
  Other Stock
  Purchase Plans; Effects of Preclusion

  	
   

  	
  8

  
	
  SECTION 10.

  	
   

  	
   

  	
   

  	
  RIGHTS NOT TRANSFERABLE

  	
   

  	
  9

  
	
  SECTION 11.

  	
   

  	
   

  	
   

  	
  NO RIGHTS AS AN EMPLOYEE

  	
   

  	
  9

  
	
  SECTION 12.

  	
   

  	
   

  	
   

  	
  NO RIGHTS AS A STOCKHOLDER

  	
   

  	
  9

  
	
  SECTION 13.

  	
   

  	
   

  	
   

  	
  CONDITIONS UPON ISSUANCE OF SHARES; LIMITATION ON
  SALE OF SHARES

  	
   

  	
  9

  
	
  SECTION 14.

  	
   

  	
   

  	
   

  	
  STOCK OFFERED UNDER THE PLAN

  	
   

  	
  9

  
	
   

  	
   

  	
  (a)

  	
   

  	
  Authorized
  Shares

  	
   

  	
  9

  

 

 

 

	
  

  	
   

  	
  (b)

  	
   

  	
  Capital Changes

  	
   

  	
  9

  
	
  SECTION 15.

  	
   

  	
   

  	
   

  	
  NOTICE OF DISPOSITION

  	
   

  	
  10

  
	
  SECTION 16.

  	
   

  	
   

  	
   

  	
  EQUAL RIGHTS AND PRIVILEGES

  	
   

  	
  10

  
	
  SECTION 17.

  	
   

  	
   

  	
   

  	
  NOTICES

  	
   

  	
  10

  
	
  SECTION 18.

  	
   

  	
   

  	
   

  	
  STOCKHOLDER APPROVAL OF AMENDMENTS

  	
   

  	
  11

  
	
  SECTION 19.

  	
   

  	
   

  	
   

  	
  DESIGNATION OF BENEFICIARY

  	
   

  	
  11

  
	
   

  	
   

  	
  (a)

  	
   

  	
  Written
  Designation

  	
   

  	
  11

  
	
  SECTION 20.

  	
   

  	
   

  	
   

  	
  APPLICABLE LAW

  	
   

  	
  11

  
	
  SECTION 21.

  	
   

  	
   

  	
   

  	
  EFFECTIVE DATE; AMENDMENT OR TERMINATION OF PLAN

  	
   

  	
  11

  
	
  SECTION 22.

  	
   

  	
   

  	
   

  	
  TAX WITHHOLDING

  	
   

  	
  12

  
								

 

 ii

 

ACTIVISION,
INC.

THIRD AMENDED AND RESTATED

2002 EMPLOYEE STOCK PURCHASE PLAN

SECTION 1.         DEFINITIONS.

(a)           “Accumulation Period” means a six month
period during which contributions may be made toward the purchase of Stock
under the Plan, as determined pursuant to Section 4(b).

(b)           “Board” means the Board of Directors of the
Company, as constituted from time to time.

(c)           “Code” means the Internal Revenue Code of
1986, as amended.

(d)           “Committee” means a committee of the Board,
as described in Section 3.

(e)           “Company” means Activision, Inc., a
Delaware corporation.

(f)            “Compensation” means all W-2 compensation,
including, but not limited to base salary, wages, commissions, overtime, shift
premiums and bonuses, plus draws against commissions; provided, however,
that for purposes of determining a Participant’s compensation herein, any
election by such Participant to reduce his or her regular cash remuneration
under Section 125 or 401(k) of the Code shall be treated as if the Participant
did not make such election.  The
Committee shall determine whether a particular item is included in
Compensation.

(g)           “Eligible Employee” means any employee of a
Participating Company who meets each of the following requirements:

(i)            His or her customary employment is
for more than five months per calendar year and for more than 20 hours per
week; and

(ii)           He or she was employed by a
Participating Company on the fifteenth (15th) day of the month before the beginning
of such Offering Period.

The foregoing
notwithstanding, an individual shall not be considered an Eligible Employee if
his or her participation in the Plan is prohibited by the law of any country
which has jurisdiction over him or her or if he or she is subject to a
collective bargaining agreement that does not provide for participation in the
Plan.

(h)           “Exchange Act” means the Securities
Exchange Act of 1934, as amended.

(i)            “Fair Market Value” means the market price
of Stock, determined by the Committee as follows:

 

(i)            If Stock was listed and traded on
The Nasdaq National Market System on the date in question, then the Fair Market
Value shall be equal to the  price at
which such Stock last traded on such date as reported by The Nasdaq National
Market System;

(ii)           If Stock was listed and traded on a
stock exchange on the date in question, then the Fair Market Value shall be
equal to the price at which such Stock last traded on such date as reported by
such stock exchange; or

(iii)          Notwithstanding the foregoing
provisions, if the Committee determines that the last trading price does not
adequately reflect Fair Market Value, Fair Market Value may be determined by
the Committee in good faith on such basis as it deems appropriate.  In making such determination, the Committee
shall consider the financial conditions of the Company and its recent operating
results, values of publicly-traded securities of other comparable institutions
and the lack of liquidity of the Company’s shares, and such other factors as
the Committee in its sole discretion deems relevant.

Whenever possible,
the determination of Fair Market Value by the Committee under clauses (i) and
(ii), above, shall be based on the prices reported in the Wall Street Journal or as reported
directly to the Company by Nasdaq or a stock exchange. Such determination shall
be conclusive and binding on all persons (unless clause (iii) above is
applicable).

(j)            “Offering Date” means the first day of each
Offering Period.

(k)           “Option” means an Option described in
Section 4(f).

(l)            “Offering Date FMV” means the Fair Market
Value of the Stock on the Offering Date or, if such Offering Date is not a
trading date, the last trading date prior to such Offering Date.

(m)          “Offering Period” means a 6 month period
with respect to which the right to purchase Stock may be granted under the
Plan, as determined pursuant to Section 4(a), provided, however,
that the Committee shall have the power to change the duration of Offering
Periods without stockholder approval if such change is announced at least
fifteen (15) days prior to the scheduled beginning of the first Offering Period
to be affected.

(n)           “Participant” means an Eligible Employee
who elects to participate in the Plan, as provided in Section 4(c).

(o)           “Participating Company” means (i) the
Company and (ii) each present or future domestic Subsidiary designated by the
Committee as a Participating Company.

(p)           “Plan” means this Activision, Inc., Third
Amended and Restated 2002 Employee Stock Purchase Plan, as it may be amended
from time to time.

(q)           “Plan Account” means the account
established for each Participant pursuant to Section 8(a).

 2
 

 

(r)            “Purchase Date” means the last day of an
Accumulation Period provided, however, that if the Stock is listed and
traded on a stock exchange (including The Nasdaq National Market System) during
an Accumulation Period and the last day of such Accumulation Period falls on a
day which is not a trading date for such stock exchange, then the “Purchase
Date” shall be the last trading date in such Accumulation Period.

(s)           “Purchase Date FMV” means the Fair Market
Value of the Stock on the Purchase Date.

(t)            “Purchase Price” means the price at which
Participants may purchase Stock under the Plan, as determined pursuant to
Section 8(b).

(u)           “Stock” means the common stock of the
Company, $0.000001 par value.

(v)           “Subsidiary” means any corporation (other
than the Company) in an unbroken chain of corporations beginning with the
Company, if each of the corporations other than the last corporation in the
unbroken chain owns stock possessing 50% or more of the total combined voting
power of all classes of stock in one of the other corporations in such chain.

(w)          “Treasury Regulations” means the Treasury
Regulations promulgated under the Code.

SECTION 2.         PURPOSE OF THE PLAN.

The
purpose of the Plan is to provide Eligible Employees with a convenient means to
acquire an equity interest in the Company through payroll deductions, to
enhance such employees’ sense of participation in the affairs of the Company
and Subsidiaries, and to provide an incentive for continued employment.  The Plan is intended to qualify as an “employee
stock purchase plan” under Section 423 of the Code (including any amendments,
or replacements of such section), and the Plan shall be so construed.  Any term not expressly defined in the Plan
but defined for purposes of Section 423 of the Code shall have the same
definition therein.

SECTION 3.         ADMINISTRATION OF THE PLAN.

(a)           Committee Composition. 
The Plan shall be administered by the Committee.  The Committee shall be appointed by the Board
and shall consist exclusively of two or more directors of the Company, each of
whom is a “Non-Employee Director” as defined in Rule 16b-3(b)(3)(i) promulgated
under the Exchange Act.

(b)           Committee Responsibilities. 
The Committee shall interpret the Plan and make all other policy
decisions relating to the operation of the Plan.  The Committee may adopt such rules,
guidelines and forms as it deems appropriate to implement the Plan.  Subject to the provisions of the Plan and the
limitations of Section 423 of the Code or any successor provision in the Code,
all questions of interpretation or application of the Plan shall be determined
by the Committee and its decisions shall be final and binding upon all
Participants.  Members of the Committee shall
receive no compensation for their services in connection with the
administration of the Plan, other than standard fees as established from time
to time by the Board for services

 3
 

 

rendered by Board members serving on Board committees.  All expenses incurred in connection with the
administration of the Plan shall be paid by the Company.

SECTION 4.         ENROLLMENT AND PARTICIPATION.

(a)           Offering Periods. 
While the Plan is in effect, two Offering Periods shall commence in each
calendar year.  The Offering Period
commencing on October 1, 2004, may overlap with the Offering Period commencing
on April 1, 2005.  The Offering Periods
shall consist of the 6-month periods commencing on each April 1 and October 1.

(b)           Accumulation Periods. 
While the Plan is in effect, two Accumulation Periods shall commence in
each calendar year. The Accumulation Periods shall consist of the six month
periods commencing on each April 1 and October 1.

(c)           Enrollment.  Any
individual who, on the day preceding the first day of an Offering Period,
qualifies (or will qualify) as an Eligible Employee may elect to become a
Participant in the Plan for such Offering Period by executing the subscription
agreement prescribed for this purpose by the Committee.  The subscription agreement shall be filed
with the Company at the prescribed location not later than the 15th day of the
month before such Offering Date (unless a later time for filing a subscription
agreement is set by the Committee for all Eligible Employees with respect to a
given Offering Period).

(d)           Duration of Participation. 
Once enrolled in the Plan, a Participant shall continue to participate
in the Plan until he or she ceases to be an Eligible Employee, withdraws from
the Plan under Section 6 or reaches the end of the Accumulation Period in which
his or her employee contributions were discontinued under Section 5(d) or
9(c).  Such Participant is not required
to file any additional subscription agreements in order to continue
participation in the Plan.  A Participant
who discontinued employee contributions under Section 5(d) or withdrew from the
Plan under Section 6 may again become a Participant, if he or she then is an
Eligible Employee, by following the procedure described in subsection (c)
above.  A Participant whose employee contributions
were discontinued automatically under Section 9(c) shall automatically resume
participation at the beginning of the earliest Accumulation Period ending in
the next calendar year, if he or she then is an Eligible Employee.

(e)           Applicable Offering Period. 
For purposes of this Plan the applicable Offering Period shall be
determined as follows:

(i)            Once a Participant is enrolled in
the Plan for an Offering Period, such Offering Period shall continue to apply
to him or her until the earliest of (A) the end of such Offering Period or (B)
the end of his or her participation under subsection (d) above.

(ii)           When a Participant reaches the end of
an Offering Period (the “Current Offering Period”) but his or her participation
is to continue, then such Participant shall automatically be re-enrolled for
the Offering Period that commences immediately after the end of such Current
Offering Period.

 4
 

 

(f)            Grant of Option on Enrollment.  Enrollment by an Eligible Employee in the
Plan with respect to an Offering Period will constitute the grant (as of the Offering
Date for such Offering Period) by the Company to such Eligible Employee of an
option (an “Option”) to purchase on each Purchase Date up to that number of
shares of Stock of the Company determined under Section 8(c).

SECTION 5.         EMPLOYEE CONTRIBUTIONS.

(a)           Frequency of Payroll Deductions.  A Participant may purchase shares of Stock
under the Plan solely by means of payroll deductions.  Payroll deductions, as designated by the
Participant pursuant to subsection (b) below, shall occur on each payday during
participation in the Plan.

(b)           Amount of Payroll Deductions.  An Eligible Employee shall designate on the
subscription agreement the portion of his or her Compensation that he or she
elects to have withheld for the purchase of Stock hereunder.  Such portion shall be a whole percentage of
the Eligible Employee’s Compensation, but not less than 2% nor more than
15%.  Notwithstanding anything to the
contrary in this Plan, the total withholding under this Section 5(b) for any
one Participant shall not exceed an aggregate amount of $10,000 for the two
Accumulation Periods ending in any one calendar year.  For the avoidance of doubt and by way of
example, if $6,000 is withheld for the Accumulation Period ending March 31 of a
particular calendar year, then the withholdings for the Accumulation Period
ending September 30 shall not exceed $4,000.

(c)           Changing Withholding Rate. 
A Participant may increase or decrease the rate of payroll deductions
during an Offering Period by filing with the Company’s or Subsidiary’s
(whichever employs such employee) payroll department (the “payroll department”)
a new authorization for payroll deductions, in which case the new rate shall
become effective for the next payroll period commencing more than 20 days after
the payroll department’s receipt of the authorization and shall continue for
the remainder of the Offering Period unless changed as described below.  Such change in the rate of payroll deductions
may be made at any time during an Offering Period, but once a rate has been established
a Participant may elect only one increase and only one decrease in such rate
during each Offering Period in which such Participant is included.  A Participant may increase or decrease the
rate of payroll deductions for any subsequent Offering Period by filing with
the payroll department a new authorization for payroll deductions not later
than the 10th day of the month before the beginning of such Offering Period.

(d)           Discontinuing Payroll Deductions.  If a Participant wishes to discontinue employee
contributions entirely, he or she may do so by filing a new subscription
agreement with the Company at the prescribed location at any time.  Payroll withholding shall cease as soon as
reasonably practicable after such form has been received by the Company.  (In addition, employee contributions may be
discontinued automatically pursuant to Section 9(c).)  A Participant who has discontinued employee
contributions may resume such contributions effective with the next Offering
Period by filing a new subscription agreement with the Company at the
prescribed location if he or she then is an Eligible Employee.

 5
 

 

SECTION 6.         WITHDRAWAL FROM THE PLAN.

(a)           Withdrawal.  Each
Participant may withdraw from an Offering Period under the Plan by signing and
delivering to the payroll department notice thereof on a form provided for such
purpose.  Such withdrawal may be elected
at any time at least twenty (20) days prior to the end of an Accumulation
Period.

(b)           Return of Payroll Deductions; Readmittance.  Upon withdrawal from the Plan, the
accumulated payroll deductions shall be returned, without interest, to the
withdrawn Participant and his or her interest in the Plan shall terminate.  In the event a Participant voluntarily elects
to withdraw from the Plan, he or she may not resume his or her participation in
the Plan during the same Offering Period, but he or she may participate in any
Offering Period under the Plan which commences on a date subsequent to such
withdrawal by timely filing a new authorization for payroll deductions in the
same manner as set forth above for initial participation in the Plan if he or
she then is an Eligible Employee.

SECTION 7.         CHANGE IN EMPLOYMENT STATUS.

(a)           Termination of Employment. 
Termination of a Participant’s employment for any reason, including
retirement or death or the failure of a Participant to remain an Eligible
Employee, terminates his or her participation in the Plan immediately.  In such event, the payroll deductions
credited to the Participant’s Plan Account will be returned, without interest,
to him or her or, in the case of his or her death, to his or her legal
representative.

(b)           Leave of Absence.  For
purposes of the Plan, employment shall not be deemed to terminate when the
Participant goes on a military leave, a sick leave or any other leave of
absence, if such other leave was approved by the Committee in writing.  Employment, however, shall be deemed to
terminate 90 days after the Participant goes on a leave, unless a contract or statute
guarantees his or her right to return to work. 
Employment shall be deemed to terminate in any event when the approved
leave ends, unless the Participant immediately returns to work.

SECTION 8.         PLAN ACCOUNTS AND PURCHASE OF SHARES.

(a)           Plan Accounts.  The
Company shall maintain an account on its books in the name of each Participant
(a “Plan Account”).  All payroll
deductions made for a Participant are credited to his or her Plan Account under
the Plan and are deposited with the general funds of the Company; no interest
shall accrue on the payroll deductions. 
All payroll deductions received or held by the Company may be used by
the Company for any corporate purpose, and the Company shall not be obligated
to segregate such payroll deductions.  A
Participant may not make any separate cash payment into his or her payroll
deduction Plan Account and payment for shares purchased under the Plan may not
be made in any form other than by payroll deduction.

(b)           Purchase Price.  The
Purchase Price for each share of Stock purchased on a Purchase Date shall be
the lower of:

(i)            85% of the Offering Date FMV of such
share on the Offering Date for the Offering Period that includes such Purchase
Date; or

 6
 

 

(ii)           85% of the Purchase Date FMV of such
share on such Purchase Date.

(c)           Number of Shares Purchased. 
On each Purchase Date, as long as the Plan remains in effect, the
Company shall apply the funds then in each Participant’s Plan Account to the
purchase of whole shares of Stock.  As of
each Purchase Date, each Participant shall be deemed to have elected to
exercise his or her Option to purchase the number of shares of Stock calculated
in accordance with this subsection (c), unless the Participant has previously
elected to withdraw from the Plan in accordance with Section 6 provided,
however, that no Stock shall be purchased on a Purchase Date on behalf
of any employee whose participation in the Plan was terminated prior to such
Purchase Date.  The amount then in the
Participant’s Plan Account shall be divided by the Purchase Price, and the
number of shares that results shall be purchased from the Company with the
funds in the Participant’s Plan Account. 
The foregoing notwithstanding, no Participant shall purchase more than
the Maximum Share Amount (as defined below) on any Purchase Date nor more than
the amounts of Stock set forth in Sections 9(a), 9(b) and 14(a).  The Committee may determine with respect to
all Participants that any fractional share, as calculated under this subsection
(c), shall be (i) rounded down to the next lower whole share or (ii) credited
as a fractional share.  Not less than
twenty (20) days prior to the commencement of any Offering Period, the
Committee may, in its sole discretion, set a maximum number of shares which may
be purchased by any employee at any single Purchase Date (the “Maximum Share
Amount”).  If a new Maximum Share Amount
is set, then all Participants must be notified of such Maximum Share Amount not
less than twenty (20) days prior to the commencement of the next Offering
Period.  Once the Maximum Share Amount is
established, it shall continue to apply with respect to all succeeding Purchase
Dates and Accumulation Periods unless revised by the Committee as set forth
above.  The initial Maximum Share Amount
is 5,000 shares.

(d)           Available Shares Insufficient.  In the event that the aggregate number of
shares that all Participants elect to purchase during an Accumulation Period
exceeds the maximum number of shares remaining available for issuance under
Section 14(a), then the Company shall make a pro rata allocation of the
remaining shares in as uniform a manner as shall be practicable and as the
Committee shall determine to be equitable.

(e)           Issuance of Stock. 
Promptly following each Purchase Date, the number of shares of Stock
purchased by each Participant shall be deposited into an account (a “Brokerage
Account”) established in the Participant’s name at a stock brokerage or other
financial services firm designated by the Company.  Shares may be registered in the name of the
Participant or jointly in the name of the Participant and his or her spouse as
joint tenants with right of survivorship or as community property.  During a Participant’s lifetime, such
Participant’s option to purchase shares hereunder is exercisable only by him or
her.  The Participant will have no interest
or voting right in shares covered by his or her option until such option has
been exercised.

(f)            Unused Cash Balances. 
An amount remaining in the Participant’s Plan Account that represents
the Purchase Price for any fractional share shall be carried over in the
Participant’s Plan Account to the next Accumulation Period.  Any amount remaining in the Participant’s
Plan Account that represents the Purchase Price for whole shares that could not
be

 7
 

 

purchased by reason of subsection (c) or (d) above, Sections 9(a), 9(b)
or 14(a) shall be refunded to the Participant in cash, without interest.

(g)           Stockholder Approval. 
Any other provision of the Plan notwithstanding, no shares of Stock
shall be purchased under the Plan unless and until the Company’s stockholders
have approved the adoption of the Plan.

(h)           Brokerage Account.  A
Participant shall be free to undertake a disposition (as such term is defined
in Section 424(c) of the Code) of the shares in his Brokerage Account at any
time, whether by sale, exchange, gift, or other transfer of legal title, but in
the absence of such a disposition of the shares, the shares must remain in the
Participant’s Brokerage Account until the holding periods set forth in Section
423(a) of the Code have been satisfied. 
With respect to shares for which the Section 423(a) holding periods have
been satisfied, the Participant may transfer those shares to another brokerage
account of Participant’s choosing or request in writing that a stock
certificate be issued and delivered to him.

SECTION 9.         LIMITATIONS ON STOCK OWNERSHIP.

(a)           Five Percent Limit. 
Any other provision of the Plan notwithstanding, no Participant shall be
granted a right to purchase Stock under the Plan if such Participant,
immediately after his or her election to purchase such Stock, would own stock
possessing more than 5% of the total combined voting power or value of all
classes of stock of the Company or any parent or Subsidiary of the Company. For
purposes of this subsection (a), the following rules shall apply:

(i)            Ownership of stock shall be
determined after applying the attribution rules of Section 424(d) of the Code
and Section 1.423-2(d) of the Treasury Regulations;

(ii)           Each Participant shall be deemed to
own any stock that he or she has a right or option to purchase under this or
any other plan; and

(iii)          Each Participant shall be deemed to
have the right to purchase a number of shares of Stock under this Plan equal to
the Maximum Share Amount  with respect to
each Accumulation Period.

(b)           Dollar Limit.  Notwithstanding
anything to the contrary in this Plan, and for the avoidance of doubt, no
Option granted under this Plan shall permit a Participant’s right to purchase
Stock under the Plan to accrue at a rate which exceeds $25,000 of Fair Market
Value of Stock (determined at the time such Option is granted) for each
calendar year in which such Option is outstanding at any time, as determined
under the provisions of Section 423(b)(8) and Treasury Regulation Section
1.423-2(i).

(c)           Other Stock Purchase Plans; Effects of Preclusion.  For purposes of subsection (b) above,
employee stock purchase plans not described in Section 423 of the Code shall be
disregarded.  If a Participant is
precluded by subsection (b) above from purchasing additional Stock under the
Plan, then his or her employee contributions shall automatically be
discontinued

 8
 

 

and shall resume at the beginning of the earliest Accumulation Period
ending in the next calendar year (if he or she then is an Eligible Employee).

SECTION 10.       RIGHTS NOT TRANSFERABLE.

Neither
payroll deductions credited to a Participant’s Plan Account nor any rights with
regard to receive shares under the Plan may be assigned, transferred, pledged
or otherwise disposed of in any way (other than by will, the laws of descent
and distribution or as provided in Section 20 hereof) by the Participant.  Any such attempt at assignment, transfer,
pledge or other disposition shall be without effect.

SECTION 11.       NO RIGHTS AS AN EMPLOYEE.

Nothing
in the Plan or in any right granted under the Plan shall confer upon the
Participant any right to continue in the employ of a Participating Company for
any period of specific duration or interfere with or otherwise restrict in any
way the rights of the Participating Companies or of the Participant, which
rights are hereby expressly reserved by each, to terminate his or her
employment at any time and for any reason, with or without cause.

SECTION 12.       NO RIGHTS AS A STOCKHOLDER.

A
Participant shall have no rights as a stockholder with respect to any shares of
Stock that he or she may have a right to purchase under the Plan until such
shares have been purchased on the applicable Purchase Date.

SECTION 13.       CONDITIONS UPON ISSUANCE OF SHARES; LIMITATION ON SALE OF
SHARES.

Shares
shall not be issued with respect to an Option unless the exercise of such
Option and the issuance and delivery of such shares pursuant thereto shall
comply with all applicable provisions of law, domestic or foreign, including,
without limitation, the Securities Act of 1933, as amended (the “Securities Act”),
the Exchange Act, the rules and regulations promulgated thereunder, and the
requirements of any stock exchange or market upon which the shares may then be
listed, and shall be further subject to the approval of counsel for the Company
with respect to such compliance.

SECTION 14.       STOCK OFFERED UNDER THE PLAN.

(a)           Authorized Shares.  The aggregate number of shares of Stock
available for purchase under the Plan shall be 3,600,000, subject to adjustment
pursuant to this Section 14.

(b)           Capital Changes.  In the event of reorganization,
recapitalization, stock split, stock dividend, combination of shares, merger,
consolidation, offerings of rights, or any other change in the structure of the
Stock of the Company, an equitable adjustment shall be made in the number,
kind, and the price of shares available for purchase under the Plan, and in the
number of shares which an employee is entitled to purchase under the Plan, as
determined by the Committee to be appropriate; provided, however,
that any fractional shares resulting from any such adjustment shall be
eliminated.

 9
 

 

In
the event of the proposed dissolution or liquidation of the Company, the
Offering Period will terminate immediately prior to the consummation of such
proposed action, unless otherwise provided by the Committee.  The Committee may, in the exercise of its
sole discretion in such instances, declare that the Options under the Plan
shall terminate as of a date fixed by the Committee and give each Participant
the right to exercise his or her Option as to all of the optioned stock,
including shares which would not otherwise be exercisable.  In the event of a proposed sale of all or
substantially all of the assets of the Company, or the merger of the Company
with or into another corporation, each Option under the Plan shall be assumed
or an equivalent Option shall be substituted by such successor corporation or a
parent or subsidiary of such successor corporation, unless the Committee
determines, in the exercise of its sole discretion and in lieu of such
assumption or substitution, that the Participant shall have the right to
exercise the Option as to all of the optioned stock.  If the Committee makes an Option exercisable
in lieu of assumption or substitution in the event of a merger or sale of
assets, the Committee shall notify the Participant that the Option shall be
fully exercisable for a period of twenty (20) days from the date of such
notice, and the Option will terminate upon the expiration of such period.

SECTION 15.       NOTICE OF DISPOSITION.

Each
Participant shall notify the Company in writing if the Participant disposes of
any of the shares purchased in any Offering Period pursuant to this Plan if
such disposition (a “Disqualifying Disposition”) occurs within the later of (i)
two (2) years from the Offering Date, or (iii) twelve (12) months from the
Purchase Date on which such shares were purchased (the “Notice Period”).  The Company may, at any time during the
Notice Period, place a legend or legends on any certificate representing shares
acquired pursuant to the Plan requesting the Company’s transfer agent to notify
the Company of any transfer of the shares. 
The obligation of the Participant to provide such notice shall continue
notwithstanding the placement of any such legend on certificates.

SECTION 16.       EQUAL RIGHTS AND PRIVILEGES.

All
Eligible Employees shall have equal rights and privileges with respect to the
Plan so that the Plan qualifies as an “employee stock purchase plan” within the
meaning of Section 423 or any successor provision of the Code and the related
regulations.  Any provision of the Plan
which is inconsistent with Section 423 or any successor provision of the Code
shall without further act or amendment by the Company or the Board be reformed
to comply with the requirements of Section 423. 
This Section 16 shall take precedence over all other provisions in the
Plan.

SECTION 17.       NOTICES.

All
notices or other communications by a Participant to the Company under or in
connection with the Plan shall be in writing and shall be deemed to have been
duly given when delivered personally or deposited in the U.S. Mail, first class
postage prepaid, addressed as follows: Activision, Inc., Stock Administration
Department, Activision, Inc., 3100 Ocean Park Boulevard, Santa Monica,
California 90405, or as such other address as the Company, by notice to
employees, may designate in writing from time to time.

 10
 

 

SECTION 18.       STOCKHOLDER APPROVAL OF AMENDMENTS.

Any
required approval of the stockholders of the Company for an amendment to the
Plan shall be obtained at a duly held stockholders’ meeting by the affirmative
vote of the holders of a majority of the outstanding shares of the company
represented and voting at the meeting, or if such stockholder approval is
obtained by written consent, it must be obtained by the majority of the
outstanding shares of the Company; provided, however, that
approval at a meeting or by written consent may be obtained by a lesser degree
of stockholder approval if the Committee determines, in its sole discretion
after consultation with the Company’s legal counsel, that such lesser degree of
stockholder approval will comply with all applicable laws and will not
adversely affect the qualification of the Plan under Section 423 of the Code or
Rule 16b-3 promulgated under the Exchange Act (“Rule 16b-3”).

SECTION 19.       DESIGNATION OF BENEFICIARY.

(a)           Written Designation. 
A Participant may file a written designation of a beneficiary who is to
receive any shares and cash, if any, with respect to the Participant’s Plan Account
in the event of such Participant’s death subsequent to the end of an Offering
Period but prior to delivery to him or her of such shares and cash.  In addition, a Participant may file a written
designation of a beneficiary who is to receive any cash from the Participant’s
Plan Account in the event of such Participant’s death prior to a Purchase
Date.  Such designation of beneficiary
may be changed by the Participant at any time by written notice to the Company.

(b)           No Written Designation. 
In the event of the death of a Participant and in the absence of a
beneficiary validly designated under the Plan who is living at the time of such
Participant’s death, the Company shall deliver such shares or cash to the
executor or administrator of the estate of the Participant, or if no such
executor or administrator has been appointed (to the knowledge of the Company),
the Company, in its sole discretion, may deliver such shares or cash to the
spouse or to any one or more dependents or relatives of the Participant, or if
no spouse, dependent or relative is known to the Company, then to such other
person as the Company may designate.

SECTION 20.       APPLICABLE LAW.

The
Plan shall be governed by the substantive laws (excluding the conflict of laws
rules) of the State of Delaware.

SECTION 21.       EFFECTIVE DATE; AMENDMENT OR TERMINATION OF PLAN.

This Plan was adopted on July 26, 2005, and shall be effective on
October 1, 2005, (the “Effective Date”), subject to approval by the
stockholders of the Company within twelve (12) months after the date the Plan
is adopted by the Board and the Plan shall continue until the earliest to occur
of (i) termination by the Board, (ii) issuance of all of the shares of Stock
reserved for issuance under the Plan, or (iii) July 21, 2012.  The Board may at any time suspend or
terminate the Plan, except that any such suspension or termination cannot
affect Options previously granted under the Plan.  The Board may at any time amend the Plan,
provided, however, (i) no amendment shall make any change in an Option
previously granted which would

 11
 

 

adversely affect the right of any Participant (without the prior
consent of such Participant) and (ii) no amendment shall be made without
approval of the stockholders of the Company obtained in accordance with Section
18 hereof within 12 months of the adoption of such amendment (or earlier if
required by Section 18) if such approval is required by an applicable law or
regulation, or if such amendment would:

(i)            Increase the number of shares that
may be issued under the Plan;

(ii)           Change the designation of the
employees (or class of employees) eligible for participation in the Plan; or

(iii)          Constitute an amendment for which
stockholder approval is required in order to comply with Rule 16b-3 (or any
successor rule).

SECTION 22.       TAX WITHHOLDING.

The
Company shall notify a Participant of any income tax withholding requirements
arising as a result of a Disqualifying Disposition of shares acquired pursuant
to this Plan or any other event occurring pursuant to this Plan.  The Company shall have the right to withhold
from such Participant such withholding taxes as may be required by law, or to
otherwise require the Participant to pay such withholding taxes.  If the Participant shall fail to make such
tax payments as are required, the Company or its Subsidiaries shall, to the
extent permitted by law, have the right to deduct any such taxes from any
payment of any kind otherwise due to such Participant or to take such other
action as may be necessary to satisfy such withholding obligations.

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