Document:

Exhibit 10.4

 

April 29, 2004

 

 

Mr. Michael Rowe

3100 Walnut Street

Manhattan Beach, California
90266

 

Re:          Your Employment
Agreement with Activision, Inc.

dated April 1, 2002 (the “Employment Agreement”)

 

Dear Mike:

 

This letter confirms our
agreement to amend the terms of the Employment Agreement in accordance with the
provisions set forth below.  Capitalized
terms not defined in this letter shall have the meanings ascribed to them in
the Employment Agreement.

 

The specific amendments to the
Employment Agreement are as follows:

 

1.               Paragraph
1 of the Employment Agreement is deleted in its entirety and is replaced with
the following:

 

“1.   Term

 

The term of your employment under this
agreement shall commence on April 1, 2002 and expire on March 31, 2007, unless
earlier terminated as provided below.”

 

2.               Paragraph
2(a) of the Employment Agreement is supplemented with the following sentence:

 

“Notwithstanding anything to the contrary set
forth in this agreement, commencing effective as of April 1, 2004, your base
salary shall be $350,000.

 

3.               Paragraph
2(d) of the Employment Agreement is deleted in its entirety and is replaced
with the following:

 

“In addition to your base salary, you may be eligible to receive an
annual discretionary bonus targeted at sixty percent (60%) of your annual base
salary (pro-rated for the amount of time that you actually perform services for
Employer during a particular fiscal year). 
The amount of this bonus, if any, is within the sole and absolute
discretion of the Employer’s Board of Directors (or the Compensation Committee
of the Board of Directors).  Certain of
the criteria that will be considered to evaluate your eligibility for a bonus
is your achievement of specific objectives and/or your contribution to the
success of the corporate goals and objectives. 
Employer’s overall financial performance will also be considered in
determining whether any bonus is awarded and, if so, the amount.  Discretionary bonuses, if granted, are
generally paid to employees in May.  You
must remain continuously employed by Employer through the date on which the
discretionary bonus is paid to be eligible to receive a bonus.  Employer retains the right to modify, at any
time, any

 

1

 

and all of the criteria used to determine whether Employee is eligible
for a bonus and, if so, the amount of any such bonus.”

 

Employer and you do hereby agree that the terms of that certain
Memorandum dated July 23, 2002 as specifically relating to the reduction of
your bonus level to 55% are hereby deemed no longer in effect.

 

4.               Paragraph
2(e) of the Employment Agreement is amended by adding the following provisions
to the end of the sentence currently constituting such Paragraph:

 

“Without
limiting the generality of the foregoing, in consideration for your execution
of this letter, you were also granted, under Employer’s 2002 Executive
Incentive Plan, options to purchase 135,000 shares of Employer’s common
stock.  The options were issued on April
29, 2004 at an exercise price of $13.75 per share.  The options will vest as follows:  27,000 of such options will vest on April 1,
2005; 27,000 of such options will vest on April 1, 2006; and 81,000 of such options
will vest on March 31, 2007.  The
foregoing options will be governed in all other respects by Employer’s 2002
Executive Incentive Plan.”

 

Except as specifically set
forth above, the Employment Agreement shall remain unmodified and in full force
and effect.

 

If the foregoing accurately
reflects your understanding of the provisions of your Employment Agreement that
are being amended pursuant to this letter, please so indicate by signing in the
space provided below.

 

Very truly yours,

 

/s/ Ronald
Doornink

	
  Ron Doornink

  
	
  Chief
  Executive Officer

  
	
   

  
	
   

  
	
  ACCEPTED AND
  AGREED TO:

  
	
   

  
	
   

  
	
  /s/
  Michael Rowe

  	
   

  
	
  Michael Rowe

  

 

2Exhibit 10.5

 

June 1, 2004

 

Mr. Ron Doornink

872 9th Street

Manhattan Beach, CA 90266

 

Re: Employment
Agreement Amendment

 

Dear Ron:

 

The purpose of
this letter is to confirm certain agreements we have reached with regard to
your title and responsibilities with the company.  We refer to your Employment Agreement dated
as of July 22, 2002, as amended as of February 27, 2003 and as
supplemented by letter dated July 23, 2002 (collectively, the “Employment Agreement”).  Capitalized terms used in this letter have
the meanings set forth in the Employment Agreement.  This letter supplements and amends the
Employment Agreement. To the extent any provisions of this letter conflict with
or differ from the provisions of the Employment Agreement, this letter will be
controlling.

 

1.  The Employment Agreement provides that we
will mutually agree on or before October 31, 2004 what your title and
responsibilities will be commencing April 1, 2005 through March 31,
2006.  Notwithstanding anything to the
contrary contained in Paragraph 3 of the Employment Agreement, this is to
confirm that we have agreed that you will continue in your current positions as
President of Activision, Inc. (“Activision”) and as Chief Executive Officer of
Activision Publishing, Inc. (“Activision Publishing”) through December 31,
2005.  Thereafter, even though we agree
that effective as of December 31, 2005, you will no longer serve as
President of Activision and Chief Executive Officer of Activision Publishing,
the Employment Period (as defined in the Employment Agreement) shall
nevertheless continue through June 30, 2007 and you will continue to
perform your duties and responsibilities as an employee of Employer, serving at
the direction and subject to the management of Employer and Activision, performing
such executive advisory and other related services as Employer, Activision or
any of their related or affiliated entities or divisions may reasonably request
(“transitional employment services”). 
The period from January 1, 2006 to June 30, 2007 shall be
referred to as “transitional employment period” and the definition of the term
“Expiration Date” shall be amended to mean June 30, 2007.

 

2.  Paragraph 11 of the Employment Agreement is
deleted and the phrase “11. 
Intentionally omitted.” is substituted in its stead.  The last two sentences of Paragraph 3 (which
were added by amendment) and the last sentence of Paragraph 9(d)(iii) of the
Employment Agreement are deleted.

 

 

3.  You and we have agreed to the following
further modifications of the terms and conditions of the employment
arrangement, as follows:

 

(a) During the
transitional employment period, you shall be required to provide no less than
20 hours per month in services in accordance with directions received from the
management and Board of Directors of Employer, Activision or any of their
related or affiliated entities or divisions. 
You have offered, and we have agreed, that at the reasonable request of
Employer you will devote more than the 20 hours per month currently
contemplated to support the internal succession and transition plan currently
being contemplated by Employer and Activision. 
We have discussed, for example, your willingness to assist beyond the 20
hours per month if there were a major business/organizational issue, a large acquisition
or another significant event where management could use your experience and
knowledge.

 

(b) If the
internal succession and transition plan currently being contemplated by
Employer and Activision is ultimately not adopted and implemented by Employer
and Activision and as a result a new CEO/President is appointed prior to
December 31, 2005, you and Employer/Activision will work together in good
faith to develop and implement a transition plan which may provide for you to
begin the transitional employment services before January 1, 2006.  If your reduced role begins early for this
reason, you would commit to provide the 20 hours per month as set forth in the
Employment Agreement with no change in compensation for the applicable period
from what is set forth in the Employment Agreement as amended by this letter
agreement - specifically, you would receive your full time equivalent
compensation through March 31, 2006 and compensation at the reduced level
provided with regard to the transitional employment period thereafter through
the Expiration Date.

 

(c) If the
internal succession and transition plan currently being contemplated by
Employer and Activision changes and Employer/Activision does not appoint a new
CEO/President prior to December 31, 2005, you have agreed to consider in
good faith during the balance of the Employment Period (including during the
transitional employment period) assisting in transition and similar matters
that may require more than 20 hours per month depending on the circumstances at
the time, if reasonably requested by Employer. 
We would expect that this could arise in circumstances similar to those
described in paragraph (a), above.

 

3.  During the transitional employment period,
you will continue to be an employee of Employer, you will maintain an office at
Employer’s principal business location and you will be subject to Employer’s
internal rules, policies and procedures applicable to employees of Employer,
including without limitation, payroll payment schedule, withholding, employment
benefits, code of conduct and confidentiality. 
All your stock option awards will continue to vest in accordance with
their existing terms.

 

4.  In connection with the extension of your
existing positions with Employer and Activision, Employer has increased your
base salary for the current fiscal year to $550,000, has increased certain
bonus caps and has increased your target bonus potential

 

2

 

to 100% of your base salary for
fiscal 2005.  This also is to confirm
that your base salary next fiscal year - beginning April 1, 2005 - will be
fixed at 110% of current base salary.  
Your base salary during the transitional employment period shall be
$250,000 per annum.  In addition,
Employer has agreed to award you a special option grant to purchase 50,000
shares at an exercise price of $14.75. 
The option will vest and become exercisable in one-third increments,
with the first one third vesting and becoming exercisable on April 1,
2005, the second one third on April 1, 2006 and the final one third on
April 1, 2007.

 

3

 

5.  Except as modified or supplemented by this
letter, your Employment Agreement remains in full force and effect.

 

Please sign
the enclosed copies of this letter and return one of them to us to confirm your
acceptance and agreement to the foregoing.

 

	
   

  	
  ACTIVISION
  PUBLISHING, INC.

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Brian
  G. Kelly

  	
   

  
	
   

  	
   

  	
  Brian G. Kelly

  
	
   

  
	
   

  
	
  Accepted and
  Agreed:

  
	
   

  
	
  /s/
  Ronald Doornink

  	
   

  
	
  Ron Doornink

  	
   

  
					

 

4

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