Document:

Exhibit 10.6

 

FIRST AMENDMENT TO CONFIDENTIAL
LICENSE AGREEMENT FOR NINTENDO DS

 

THIS FIRST AMENDMENT (“First Amendment”)
amends that certain Confidential License Agreement for Nintendo DS effective October
11, 2004 between Nintendo of America Inc. (“Nintendo”) and Activision
Publishing, Inc. (“Licensee”) (“Agreement”).

 

RECITALS

 

WHEREAS, Nintendo and Licensee entered into
the Agreement;

 

WHEREAS, the Agreement currently expires on October
10, 2007 and the parties now desire to extend the Term (as such term is defined
in the Agreement) of the Agreement as set forth below.

 

AMENDMENT

 

NOW, THEREFORE, the parties agree as follows:

 

1.                                       The definition
of “Term” as set forth in Section 2.20 of the Agreement is hereby deleted in
its entirety and replaced with the following:

 

                 “‘Term’ means five (5) years from the
Effective Date.”

 

2.                                       The Term of the
Agreement is extended for an additional two (2) years.  The Term of the Agreement shall now expire on
October 10, 2009.

 

3.                                       All other terms
and conditions of the Agreement shall remain in full force and effect.  This First Amendment may be signed in
counterparts, which together shall constitute one original First Amendment.

 

                                                Signatures
provided by facsimile shall be the equivalent of originals.

 

This
First Amendment shall be effective as of July 16, 2007.

 

IN WITNESS WHEREOF, the parties have entered
into this First Amendment.

 

 

	
  NINTENDO:

  	
   

  	
  LICENSEE:

  
	
   

  	
   

  	
   

  	
   

  
	
  Nintendo of America Inc.

  	
  Activision Publishing,
  Inc.

  
	
   

  	
   

  	
   

  	
   

  
	
  By:

  	
  /s/ James R. Cannataro

  	
   

  	
  By:

  	
  /s/ Greg Deutsch

  
	
   

  	
   

  	
   

  	
   

  
	
  Name:

  	
  James R. Cannataro

  	
  Name:

  	
  Greg Deutsch

  
	
   

  	
   

  	
   

  	
   

  
	
  Its:

  	
  EVP, Administration

  	
  Its:

  	
  Vice President, Business
  and Legal AffairsExhibit 10.7

 

EMPLOYMENT AGREEMENT

 

THIS
EMPLOYMENT AGREEMENT (this “Agreement”) is entered into this 11 day of September,
2007, between Activision Publishing, Inc. (the “Employer”) and George Rose (“you”).

 

RECITAL

 

The
Employer desires to employ you, and you desire to be so employed by the
Employer, on the terms and subject to the conditions set forth in this
Agreement.

 

AGREEMENT

 

NOW,
THEREFORE, in consideration of the premises and the mutual promises set forth
in this Agreement, the Employer and you hereby agree as follows:

 

1.             Term of Employment

 

(a)           The term of your
employment under this Agreement (the “Term”)
commenced effective as of April 1, 2007 (the “Effective
Date”) and shall end on March 31, 2010 (the “Expiration Date”) or such earlier date on which your
employment is terminated under Section 10. At least six (6) months prior to the
Expiration Date, you and the Employer each agree to provide the other party
notice of intent not to continue employment following the Expiration Date.

 

(b)           Except as set forth in
Section 12(t), upon the Expiration Date (or such earlier date on which your
employment is terminated pursuant to Section 10) all obligations and rights
under this Agreement shall immediately lapse. If your employment continues
beyond the Expiration Date, you shall be an at-will employee whose employment
may be terminated by either of the parties to this Agreement at any time for
any reason.

 

2.             Compensation

 

(a)           Subject to the
provisions of this Agreement, in full consideration for all rights and services
provided by you under this Agreement, during the Term you shall receive the
compensation set forth in this Section 2.

 

(b)           Commencing on the
Effective Date, you shall receive an annual base salary (“Base
Salary”) of $475,000.00 paid in accordance with the Employer’s
payroll policies in effect from time to time. On each anniversary of the Effective Date during the Term, your Base
Salary shall be reviewed and may be increased, but not decreased, by an amount
determined by the Board of Directors (the “Board”)
of Activision, Inc., the parent company of the Employer (“Activision”)
or the Compensation Committee of the Board (the “Compensation
Committee”), in its sole and absolute discretion; provided,
however, that the annual increase shall be no less than four percent (4%) per
year.

 

1

 

(c)           During the Term you
will be eligible to receive an annual discretionary bonus (the “Annual Bonus”). Your target Annual
Bonus during the Term will be seventy five percent (75%) of your Base Salary in
effect at the time bonus criteria for the year are established; provided,
however, that the actual amount of the Annual Bonus, if any, shall be
determined by the Compensation Committee in its sole and absolute discretion based
on the achievement of personal, financial and business objectives and goals. The
Annual Bonus will be paid at the same time bonuses are paid to senior
executives, but in no event later than June 15th of the year
following the fiscal year to which the Annual Bonus relates. Except as
otherwise set forth in this Agreement, you must remain continuously employed by
the Employer, Activision or their subsidiaries or affiliates (collectively, the
“Activision Group”) through the date
on which the Annual Bonus is paid to be eligible to receive such Annual Bonus.

 

(d)           Subject to the approval
of the Compensation Committee, the Employer will grant to you a non-qualified
stock option to purchase 240,000
shares of Activision’s common stock (the “Options”)
and 25,000 restricted share units which represent the conditional right to
receive shares of Activision’s common stock (the “RSUs”,
and  collectively with the Options, the “Equity Awards”).

 

(i)            The Options will vest
ratably over three years, with one-third of the Option vesting on March 31st
of each of 2008, 2009 and 2010 subject
to your remaining employed by the Activision Group through each vesting date.

 

(ii)           The RSUs will vest in full on March 31, 2010
subject to your remaining employed by the Activision Group through such vesting date; provided, however,
that vesting of 25% of the RSUs will occur if Activision meets or exceeds the 2008
Annual Operating Plan operating income objectives established by the
Compensation Committee and vesting of an additional 25% of the RSUs will occur
if Activision meets or exceeds the 2009 Annual Operating Plan operating income
objectives established by the Compensation Committee.

 

You
acknowledge that the Equity Award grants made pursuant to this Section 2(e) are
expressly conditioned upon approval by the Compensation Committee, and that the
Compensation Committee has discretion to approve or disapprove the grants
and/or to determine and make modifications to the terms of the grants. The
Equity Awards shall be subject to all terms of the Activision 2003 Incentive
Equity Plan (the “Plan”) and Activision’s
standard forms of award agreements. In the event of a conflict between this
Agreement and the terms of the Plan or award agreements, the Plan or the award
agreements, as applicable, shall govern.

 

(e)           Within thirty (30) days
following the date this Agreement is executed, the Employer shall pay you a
lump sum amount of $57,500, representing the base salary you would have
received had the Agreement been executed on April 1, 2007.

 

(f)            The Employer agrees
that it shall indemnify and hold you harmless to the fullest extent permitted
by Delaware law from and against any and all liabilities, costs and claims, and

 

2

 

all expenses actually and reasonably incurred in connection therewith,
including, without limitation, all costs and expenses actually and reasonably
incurred by you in defense of litigation arising out of your employment
hereunder.

 

3.             Title; Location

 

During the Term, you shall serve as the Chief Legal
Officer of the Employer. Your principal place of business shall be the Employer’s
headquarters in Santa Monica, California; provided, however, that
you acknowledge and agree that you may be required to travel from time to time
for business reasons.

 

4.             Duties

 

Upon commencement of the
Term you shall report directly to the Chief Executive Officer and shall have
such duties commensurate with your position as may be assigned to you by the
Chief Executive Officer from time to time. You are also required to read,
review and observe all of the Employer’s existing policies, procedures, rules
and regulations in effect from time to time during the Term. You shall
devote your full-time working time to your duties hereunder, shall faithfully
serve the Activision Group, shall in all respects conform to and comply with
the lawful directions and instructions given to you in good faith by the Board
and shall use your best efforts to promote and serve the interests of the
Activision Group. Further, you shall not, directly or indirectly, render
services to any other person or organization without the consent of Chief
Executive Officer or otherwise engage in activities that would interfere
significantly with your faithful performance of your duties hereunder; provided,
however, that you may serve on civic or charitable boards or engage in
charitable activities without remuneration if doing so is not inconsistent with
or adverse to your employment hereunder.

 

5.             Expenses

 

To the extent you incur necessary and reasonable
travel or other business expenses in the course of your employment, you shall
be reimbursed for such expenses, upon presentation of written documentation in
accordance with the Employer’s policies in effect from time to time.

 

6.             Other Benefits

 

(a)           During the Term you
shall be entitled to participate in all health, welfare, retirement, pension,
life insurance, disability and similar plans, programs and arrangements
generally available to senior executives of the Employer, as amended from time
to time.

 

(b)           During the Term, you
will be entitled to participate in all perquisite programs generally available
from time to time to senior executives of the Employer on the terms and
conditions then prevailing under such programs.

 

(c)           The Employer will provide
you during the Term, at the Employer’s expense, with a supplemental term life
insurance policy with a benefit amount of $2,000,000 through a carrier of the
Employer’s choice.

 

3

 

(d)           You expressly agree and
acknowledge that after the Expiration Date (or such earlier date on which your
employment is terminated pursuant to Section 10), you are entitled to no
additional benefits, except as specifically provided in this Agreement and the
benefit plans in which you participate during the Term, and subject in each
case to the terms and conditions of each such plan.

 

7.             Vacation and Paid
Holidays

 

(a)           You will be entitled to
paid vacation days in accordance with the normal vacation policies of the Employer
in effect from time to time; provided, however, 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 allowed by the Employer to its full-time employees in the
United States.

 

8.             Protection of the
Employer’s Interests

 

(a)           Duty of
Loyalty. During the Term,
you will owe a “Duty of Loyalty” to the
Employer, which includes, but is not limited to, your not competing in any
manner, whether directly or indirectly, as a principal, employee, agent, owner,
or otherwise, with the Employer, or any affiliate of the Employer; provided,
however, that nothing in this Section 8(a) will limit your right to
own up to five percent (5%) of any of the debt or equity securities of
any business organization that is then required to file reports with the
Securities and Exchange Commission pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934, as amended.

 

(b)           Policy
Compliance. You confirm that you have read, understand and will
comply with the Employer’s policies, procedures and rules in effect from time
to time, including without limitation, the Code of Business Conduct and Ethics
and the Code of Ethics for Senior Executive Officers, as amended from time to
time.

 

(c)           Property of
the 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 the Employer, (ii) result from or are
suggested by any task assigned to you or any work performed by you on behalf of
the Employer, or (iii) are based on any property owned or idea conceived
by the Employer, shall be deemed to be a work made for hire and shall be the
sole and exclusive property of the Employer. You agree to execute, acknowledge
and deliver to the Employer, at the Employer’s request, such further documents,
including copyright and patent assignments, as the Employer finds appropriate
to evidence the Employer’s rights in such property. Your agreement to assign to
the Employer any of your rights as set forth in this Section 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 the Employer were used and that was developed
entirely upon your own time, and that does not relate to the Employer’s
business, and that does not result from any work performed by you for the
Employer.

 

4

 

(d)           Covenant Not
to Shop. During the
Term, you shall not seek or negotiate for employment with any entity or person
outside of the Activision Group. Notwithstanding the foregoing, during the
final six (6) months of the Term you may seek or negotiate employment outside
of the Activision Group upon written notice to the Employer. During the search
process you shall remain strictly subject to your continuing obligations under
this Agreement, including, without limitation, your duty of loyalty, compliance
with the Employer’s policies and your confidentiality obligations.

 

(e)           Confidentiality. No confidential or proprietary
information of the Activision Group shall 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 the termination of your employment (or at any time on the
Employer’s request), you shall return to the Employer all such information that
exists, whether in electronic, written, or other form (and all copies thereof)
under your control. Without limiting the generality of the foregoing, you
acknowledge signing and delivering to the Employer the Activision Employee
Proprietary Information Agreement attached as Exhibit A hereto (the “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 (or at any time on the
Employer’s request), you will promptly deliver to the Employer or surrender to
the Employer’s representative all property of the Activision Group, including
without limitation, all documents and other materials (and all copies thereof)
relating to the Activision Group’s business, all identification and access
cards, all contact lists and third party business cards however and wherever
preserved, and any equipment provided by the Activision Group, 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 Section 8(e) shall survive the expiration or earlier
termination of this Agreement.

 

(f)            Covenant Not
to Solicit.

 

(i)            During your
employment, 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 the Activision Group,
either for your own account or for any other person, firm or company, any
person employed by the Activision Group, whether or not such person would
commit any breach of a contract by reason of his or her leaving the service of
the Activision Group; or (b) directly or indirectly solicit, induce or
entice any client, customer, contractor, licensor, agent, partner or other
business relationship of the Activision Group to terminate, discontinue,
renegotiate or otherwise cease or modify its relationship with the Employer or
its affiliates.

 

(ii)           For a period of two (2)
years following the Expiration Date (or such earlier date on which your
employment is terminated pursuant to Section

 

5

 

10) 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, solicit the employment or
engagement of, either for your own account or for any other person, firm or
company, any person employed by the Activision Group, whether or not such
person would commit any breach of a contract by reason of his or her leaving
the service of the Employer or its affiliates.

 

(iii)          At all times following
the Expiration Date (or such earlier date on which your employment is
terminated pursuant to Section 10) for any reason whatsoever, you shall not use
the confidential, trade secret information of the Activision Group or any other
unlawful means to directly or indirectly solicit, induce or entice any client,
customer, contractor, licensor, agent, partner or other business relationship
of the Activision Group to terminate, discontinue, renegotiate or otherwise
cease or modify its relationship with the Employer or its affiliates.

 

(iv)          You expressly
acknowledge and agree that the restrictions contained in this Section 8(f) are
reasonably tailored to protect the Activision Group’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 legally
permissible for the protection of the legitimate interests of the Activision
Group, that the prohibitions shall be in effect and upheld to the fullest
extent permissible under applicable laws.

 

9.             Disability

 

(a)           If, during the Term, you become “Disabled”, you
shall receive payment of an amount equal to three (3) times the Base Salary in
effect at the time of your Disability, determined in accordance with Section
2(b); provided, however, that
this amount shall be reduced by any disability payments you receive under any
Employer-sponsored plan. The payment shall be made in a lump sum thirty (30)
days following the determination of your Disability.

 

(b)           For purposes of this
Agreement, “Disability” shall have the
meaning set forth under Section 409A (“Section 409A”) of the Internal Revenue Code of 1986, as amended
and the rules and regulations promulgated thereunder (the “Code”). The
existence of a Disability under Section
9(a) shall be determined by a physician mutually agreed upon by you and
the Employer. If you and the Employer are unable to agree on such a physician,
you and the Employer shall each appoint one physician and those two physicians
shall appoint a third physician who shall make the determination of whether you
have a Disability. You shall cooperate and make yourself available for any
medical examination requested by the Employer with respect to any determination
of your Disability within 10 days of such a request.

 

6

 

(c)           Nothing in this Section
9 shall reduce any right you
may otherwise have to receive any disability benefits under any
Employer-sponsored disability plan.

 

10.          Termination of
Employment

 

(a)           Resignation
by Employee. You promise not to resign your employment prior to the
Expiration Date unless you have Good Reason (as defined in Section 10(d)) to do so. If you do resign the
Employer may accept your resignation effective on the date set forth in your
notice or any earlier date. You acknowledge that your resignation without Good
Reason would damage the Employer in a variety of ways, such as by causing it to
incur the costs of replacing you (e.g.,
headhunter fees and training expenses) and by causing it to lose revenues or
profits (e.g., its resignation-related inability
to secure or retain customers, implement business strategies, or pursue
business opportunities); absent proof of greater damages, you agree that the
minimum damages the Employer would suffer from such a resignation shall be
presumed to equal 100% of the Base Salary you would have received during the
otherwise remaining period prior to the Expiration Date following your breach.

 

(b)           By the
Employer for Cause. At
any time during the Term, the  Employer may
terminate your employment for “Cause”,
which shall include, but not be limited to, a good-faith determination by the
Employer that you:

 

(i)            engaged in willful,
reckless or gross misconduct;

 

(ii)           materially breached
this Agreement or any other agreement between the Employer or the Activision
Group and you;

 

(iii)          committed, were
convicted of, or pled no contest to a felony or crime involving dishonesty or
moral turpitude;

 

(iv)          breached your Duty of
Loyalty;

 

(v)           violated any material
Activision Group policy; or

 

(vi)          materially failed to
follow any lawful directive of the Employer.

 

In the case of any termination for Cause pursuant to clauses (ii), (iv)
or (v), the Employer
shall give you at least thirty (30) days written notice of its intent to
terminate your employment. The notice shall specify (x) the effective date of
your termination and (y) the particular acts or circumstances that constitute
Cause for such termination. You shall be given the opportunity within fifteen
(15) days after receiving the notice to explain why Cause does not exist or to
cure any basis for Cause. Within fifteen (15) days after any such explanation
or cure, the Employer will make its final determination regarding whether Cause
exists and deliver such determination to you in writing. If the final decision
is that Cause exists and no cure has occurred, your employment with the Employer shall be terminated for Cause as of
the date of termination specified in the original notice. If the final decision
is that Cause does not exist or a cure has occurred, your employment with the
Employer shall not be terminated for
Cause at that time. If your employment terminates for any reason other than a
termination by the Employer for Cause, at a time when the Employer had Cause to
terminate you (or would have had Cause if

 

7

 

it
then knew all relevant facts), your termination shall be treated as a
termination by the Employer for Cause.

 

(c)           By the
Employer Without  Cause. The
Employer may terminate your employment without Cause at any time during the
Term and such termination shall not be deemed a breach by the Employer of any
term of this Agreement or any other duty or obligation, expressed or implied,
which the Employer may owe to you pursuant to any principle or provision of
law.

 

(d)           By You for
Good Reason. At any time during the Term, you may terminate your
employment for “Good Reason”, which, for the
purposes of this Agreement, shall mean that without your written agreement or
other voluntary action on your part, the Employer:

 

(i)            reassigns your primary
place of employment to a location that is more than fifty (50) miles from your
primary place of employment as of the Effective Date and that materially and
adversely affects your commute; or

 

(ii)           materially reduces your
duties below those set forth in Section 4;

 

provided, however, that you must (x)
provide the Employer with written notice of your intent to terminate this
Agreement and your employment and a description of the event you believe
constitutes Good Reason within thirty (30) days after the initial existence of
the event and (y) the Employer shall have ninety (90) days after you
provide the notice described above to cure the default that constitutes Good
Reason (the “Cure Period”). You will have
five (5) days following the end of the Cure Period to terminate your
employment, after which Good Reason will no longer exist.

 

(e)           Death. In
the event of your death during the Term, your employment shall terminate
immediately as of the date of your death.

 

11.          Termination of
Obligations and Severance Payments

 

(a)           General. Upon
the termination of your employment pursuant to Section 10, your rights and the Employer’s obligations to you under this
Agreement shall immediately terminate except as provided in this Section 11 and Section 12(t), and you (or
your heirs or estate, as applicable) shall be entitled to receive the amounts
or benefits set forth below. The payments and benefits provided pursuant to this
Section 11 are (x) in lieu of any severance or income continuation protection
under any plan of the Activision Group that may now or hereafter exist and (y)
deemed to satisfy and be in full and final settlement of all obligations of the
Activision Group to you under this Agreement. You shall have no further right
to receive any other compensation benefits following your termination of
employment for any reason except as set forth in this Section 11.

 

For the purposes of this Agreement, the following terms
shall have the following meanings:

 

“Basic Severance”
shall mean payment of (1) any earned but unpaid Base Salary through the
date of your termination; (2) any earned but unpaid Annual Bonus for any
fiscal year that

 

8

 

ended prior to your
termination; and (3) reimbursement of approved expenses due to you pursuant to
Section 5.

 

“Bonus Severance”
shall mean payment of a pro-rated annual bonus for the fiscal year in which
your termination of employment occurs, in an amount equal to the bonus you
would have received in accordance with Section 2(f) for such year if you had
remained employed through the date such bonus would have been paid, multiplied
by a fraction, the numerator of which is the number corresponding to the month
in which the Termination Date occurs and the denominator of which is 12. For
purposes of calculating the Bonus Severance, any personal, performance goals
will be deemed attained at the greater of (i) target performance and (ii)
actual performance.

 

“Termination Date”
shall mean the effective date of your termination of employment pursuant to
Sections 10(a)-(e).

 

(b)           Death. In
the event your employment is terminated under Section 10(e):

 

(i)            Your heirs or estate
shall receive payment of the Basic Severance in a lump sum within thirty (30)
days following the date of your death.

 

(ii)           Your heirs or estate
shall receive payment of the Bonus Severance in a lump sum on June 15th
of the year following the year in which your death occurs.

 

(iii)          Your heirs or estate
shall receive payment of an amount equal to three (3) times the Base Salary (at
the rate in effect at the time of your death) in a lump sum within
thirty (30) days following the date of your death.

 

(iv)          All Equity Awards that would have vested
during the twenty-four (24) months following your death shall immediately vest. All vested RSUs shall be paid in accordance with their terms and all vested
Options shall remain exercisable until the earlier of (i) one (1) year after
the date of your death or (ii) the original expiration date of the Options
(unless that date is within six (6) months of your death, in which case the
date that is six months of your death). Any Equity Awards that do not vest in
accordance with this Section 11(b) will be cancelled
immediately.

 

(v)           Payments and benefits
under this Section 11(b) shall be in addition to any
payments your beneficiaries or estate may be entitled to receive pursuant to
any pension or employee benefit plan or life insurance policy maintained by the
Employer.

 

(c)           Termination
by the Employer Without Cause or by you for Good Reason. In the
event the Employer terminates your employment under Section 10(c) or you terminate your
employment under Section 10(d):

 

(i)            You shall receive
payment of the Basic Severance in a lump sum within thirty (30) days following
the Termination Date.

 

9

 

(ii)           During the period commencing on the
Termination Date and ending on the six (6) month anniversary of the Termination
Date (the “Initial Severance Period”), you shall receive payment of an amount
(the “Initial
Severance”) equal to the lesser of (x) the Base Salary (at the rate in effect on
the Termination Date) that you would have received had you remained employed
through the Expiration Date, (y) the Base Salary (at the rate in effect on the Termination Date) that you would have
received had you remained employed through the Initial Severance Period and (z)
the maximum amount payable pursuant to a “separation pay plan” as set forth in
Section 409A of the Code. Payment of the Initial Severance shall commence on
the date the Release (as defined in Section 11(c)(vi) below) becomes
effective and shall be paid in equal installments through the remainder of the
Initial Severance Period in accordance with the Employer’s payroll practices in
effect at the Termination Date. The Initial
Severance is intended to constitute a “separation payment plan” for purposes of
Section 409A of the Code.

 

(iii)          During the period commencing on the first day
following the expiration of the Initial Severance Period and ending
on the Expiration Date (the “Additional Severance Period”) you shall receive payment of an amount (the
“Additional
Severance”) equal to the difference, if any between (x) the Base Salary (at the
rate in effect on the Termination Date) that you would have received had you
remained employed through the Expiration Date and (y) the Initial Severance. The
Additional Severance shall be paid in equal installments through the Additional
Severance Period in accordance with the Employer’s payroll practices in effect
at the time of Termination Date.

 

(iv)          You shall receive
payment of the Bonus Severance in a lump sum on the later of (x) June 15th
of the year following the year in which the Termination Date occurs and (y) the
first day following the end of the Initial Severance Period.

 

(v)           All Equity Awards will continue to vest
during the twenty-four (24) months following the Termination Date. The vested
RSUs shall be paid in accordance with their terms and all vested Options shall
remain exercisable until the earlier of (x) thirty (30) days after the
applicable vesting date and (y) the original expiration date of the
Options. Any Equity Awards that do not vest in accordance with this
Section 11(c) will be cancelled immediately.

 

(vi)          Payment of the Initial Severance, the Bonus
Severance, the Additional Severance and continued vesting of the Equity Awards
pursuant to this Section 11(c) are conditioned upon your execution of a
waiver and release agreement in a form prepared by the Employer (the “Release”) and the Release becoming
effective and irrevocable in its entirety. If the Release does not become effective and
irrevocable on or prior to the last date of

 

10

 

the Initial Severance Period, you shall not be
entitled to any payments or benefits pursuant to this Section 11(b) other than the Basic Severance.

 

(vii)         If you are entitled to
receive payments as a result of a Disability pursuant to Section 9, then upon a
subsequent or concurrent termination of employment, you shall only be entitled
to the payments under Sections 11(c)(i), (iv) and (v).

 

(d)           Termination
For Cause or Termination In Breach of Section 10(a). In the event
your employment and this Agreement is terminated by the Employer under Section
10(b) or you terminate your employment in breach of Section 10(a), then:

 

(i)            You shall receive
payment of the Basic Severance in a lump sum thirty (30) days following the
Termination Date; and

 

(ii)           All outstanding Equity
Awards shall cease to vest and, whether or not vested, shall no longer be
exercisable and shall be cancelled immediately.

 

(e)           Breach of
Post-termination Obligations. In the event that you breach any of
your obligations under Section 8, the Employer’s obligation, if any, to make
payments and provide benefits under Section 11 (other than payment of the Basic
Severance) shall immediately and permanently cease and you shall not be
entitled to any such payments or benefits. 

 

12.          General Provisions

 

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

 

(b)           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.

 

(c)           Assignment. The
Employer may assign this Agreement or all or any part of its rights and
obligations under this Agreement to any entity which succeeds to all or
substantially all of the Employer’s stock or assets (whether by merger,
acquisition, consolidation, reorganization or otherwise) and following such
assignment all references to the Employer shall be deemed to refer to such
assignee.

 

(d)           No Conflict
with Prior Agreements. You represent to the 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 or legal commitment on your part to any third party, nor does it or
will it violate or interfere with any rights of any third party.

 

11

 

(e)           Successors. This
Agreement shall be binding on and inure to the benefit of the Employer and its
successors and assigns. This Agreement shall also be binding on and inure to
the benefit of you and your heirs, executors, administrators and legal
representatives.

 

(f)            Waiver. No
waiver by you or the Employer at any time of any breach by the other party of,
or compliance with, any condition or provision of this Agreement to be
performed by such other party shall be deemed a waiver of similar or dissimilar
provisions or conditions at the same or at any prior or subsequent time. No
waiver of any provision of this Agreement shall be implied from any course of
dealing between or among the parties hereto or from any failure by any party
hereto to assert its rights hereunder on any occasion or series of occasions.

 

(g)           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.

 

(h)           Expiration. This
Agreement does not constitute a commitment of the Employer with regard to your
employment, express or implied, other than to the extent expressly provided for
herein. Upon the Expiration Date, or, if earlier, the termination of this
Agreement pursuant to Section 10, it is the contemplation of both parties that
your employment with the Activision Group shall cease, and that neither the
Employer nor you shall have any obligation to the other with respect to your
continued employment.

 

(i)            Taxation. The
Employer may withhold from any payments made under the Agreement all federal,
state, city or other applicable taxes as shall be required pursuant to any law,
governmental regulation or ruling.

 

(j)            Choice of
Law. Except to the extent governed by Federal 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.

 

(k)           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.

 

(l)            Arbitration.
All disputes relating to your employment (or its termination),
including disputes relating to your employment and this Agreement, shall be
resolved by final and binding arbitration in accordance with this Section. The
arbitration will be conducted by an impartial arbitrator experienced in
employment law selected from  the JAMS  panel of arbitrators in
accordance with JAMS then-current employment arbitration rules (except as
otherwise provided in this Section). You understand that the Employer and you
are waiving the right to institute a court action, except for requests for
injunctive relief pending arbitration, and understand that the Employer and you
are giving up any right to a jury trial. The Arbitrator’s award and opinion
shall be in writing and in the form typically rendered in labor and employment
arbitrations.

 

12

 

The Employer will pay any filing fee and the fees and
costs of the arbitrator, unless you initiate the claim, in which case you only
will be required to contribute an amount equal to the filing fee for a claim
initiated in a court of general jurisdiction in the State of California. The
arbitrator shall award attorneys’ fees and costs to the prevailing party,
unless prohibited by applicable law. This arbitration obligation shall not
prohibit the Employer or you from filing a claim with an administrative agency,
nor does it apply to claims for workers’ compensation or unemployment benefits,
or claims for benefits under an employee welfare or pension plan that specifies
a different dispute resolution procedure. The arbitration shall take place in
Santa Monica, California or the city in which you were last employed by the
Employer, unless the Employer and you agree otherwise.

 

(m)          Severability.
If any provision of this Agreement is held to be illegal, invalid or
unenforceable under existing or future laws effective during the Term, 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.

 

(n)           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 Sections 10 and 11 of this Agreement).

 

(o)           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 Sections 8 and 10 of this Agreement, you agree that any remedy of
law would be inadequate.  Accordingly, you agree that the Employer is
entitled to obtain injunctive relief for such breaches or threatened breaches. The
injunctive relief provided for in this Section 12(o) 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 or arbitrator’s issuance of an
injunction.

 

(p)           Subsequent
Employment. You shall receive the payments and benefits under Section
11 (other than payment of the Basic Severance) only for the time period that
you do not obtain subsequent employment and/or provide services of any kind for
compensation, whether as principal, owner, partner, agent, shareholder,
director, employee, consultant, advisor or otherwise, to any person, company,
venture or other person or business entity. If, at any time, you obtain
subsequent employment or provide services as set forth in the prior sentence,
payments and benefits under Section 11 shall cease immediately.

 

13

 

(q)           Remedies
Cumulative. The remedies in this Agreement 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.

 

(r)            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.

 

(s)           Section 409A.

 

(i)            If any amounts that
become due under this Agreement constitute “nonqualified deferred compensation”
within the meaning of Section 409A of the Code, payment of such amounts shall
not commence until you incur a “Separation from Service” (as defined
below).

 

(ii)           Notwithstanding anything herein to the contrary, if you are a “Specified Employee,” for purposes of Section 409A of the Code, on
the date on which you incur a Separation from Service, any payment hereunder
that provides for the “deferral
of compensation” within the meaning
of Section 409A of the Code shall not be paid or commence to be paid on any
date prior to the first business day after the date that is six months
following your “Separation from
Service” (the “409A Suspension Period”); provided, however, that a
payment delayed pursuant to the preceding clause shall commence earlier in the
event of your death prior to the end of the six-month period. Within 14
calendar days after the end of the 409A Suspension Period, you shall be
paid a lump sum payment in cash equal to any payments delayed because of the
preceding sentence. Thereafter, you shall receive any remaining
benefits as if there had not been an earlier delay.

 

(iii)          For purposes of this
Agreement, “Separation from Service”
shall have the meaning set forth in Section 409A(a)(2)(i)(A) of the Code and
determined in accordance with the default rules under Section 409A of the Code.
“Specified Employee” shall have the
meaning set forth in Section 409A(a)(2)(B)(1) of the Code, as determined
in accordance with the uniform methodology and procedures adopted by the
Employer and then in effect.

 

(iv)          Anything in this
Agreement to the contrary notwithstanding, no reimbursement payable to you
pursuant to any provisions of this Agreement or pursuant to any plan or
arrangement of the Activision Group covered by this Agreement shall be paid
later than the last day of the calendar year following the calendar year in
which the related expense was incurred, except to the extent that the right to
reimbursement does not provide for a “deferral of compensation” within the
meaning of Section 409A of the Code. No amount reimbursed during any calendar
year shall affect the amounts eligible for reimbursement in any other calendar
year.

 

14

 

(v)           The
provisions of this Agreement are intended to satisfy the applicable
requirements of Section 409A of the Code with respect to amounts subject
thereto and shall be performed, interpreted and construed consistent with such
intent. If any provision of this Agreement does not satisfy such requirements
or could otherwise cause you to recognize income under Section 409A of the
Code, you and the Employer agree to negotiate in good faith an appropriate
modification to maintain, to the maximum extent practicable, the original
intent of the applicable provision without violating the requirements of
Section 409A of the Code or otherwise causing the recognition of income
thereunder.

 

(t)            Section 280G. Notwithstanding anything
herein to the contrary, in the event that you receive any payments or
distributions, whether payable, distributed or distributable pursuant to the
terms of this Agreement or otherwise, that constitute “parachute payments”
within the meaning of Section 280G of the Code, and the net after-tax amount
of the parachute payment is less than the net after-tax amount if the aggregate
payment to be made to you were three times your “base amount” (as defined in
Section 280G(b)(3) of the Code), less $1.00, then the aggregate of the
amounts constituting the parachute payment shall be reduced to an amount that
will equal three times your base amount, less $1.00. The determinations to be
made with respect to this Section 12(s) shall be made by a certified
public accounting firm designated by the Employer.

 

(u)           Survivability.
The provisions of Sections 2(f), 8, 12(l), 12(m), 12(o), 12(p) and
12(r) shall survive the termination or expiration of this Agreement.

 

(v)           Counterparts.
This Agreement may be executed in counterparts, each of which shall
be deemed an original and all of which together shall constitute one and the
same instrument.

 

(w)          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 any attorney retained by the
Employer or any member of management who has discussed any term or condition of
this Agreement with him or with you is only acting on behalf of the Employer
and not on your behalf.

 

(x)            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 and fully understand
its terms and contents.

 

13.          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 the
  Employer:

  	
  Activision Publishing, Inc.

  3100 Ocean Park Boulevard

  

 

 

15

 

	
   

  	
  Santa Monica, California 90405 

  Attention:  Chief Executive Officer

  
	
   

  	
   

  
	
  To You:

  	
  3041 Hutton Drive

  Beverly Hills, California 90210

  

 

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.

 

	
  ACCEPTED AND AGREED TO:

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Employer

  	
   

  	
  Employee

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  ACTIVISION PUBLISHING, INC.

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  By:

  	
  /s/ Michael Griffith

  	
   

  	
  /s/ George Rose

  
	
   

  	
  Michael Griffith

  	
  George Rose

  	
   

  
	
   

  	
  Chief Executive Officer and President

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Date:

  	
  September 13, 2007

  	
   

  	
  Date:

  	
  September 11, 2007

  
								

 

16

 

Exhibit A

 

 

Proprietary Information Agreement

 

[TO COME]

 

 

17

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