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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT PURSUANT
TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of report (Date of earliest event reported) May 24, 2005
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(May 24, 2005)
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ACTIVISION, INC.
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(Exact Name of Registrant as Specified in Charter)
Delaware
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(State or Other Jurisdiction of Incorporation)
0-12699 95-4803544
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(Commission File Number) (IRS Employer
Identification No.)
3100 Ocean Park Blvd., Santa Monica, CA 90405
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(Address of Principal Executive Offices) (Zip Code)
(310) 255-2000
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(Registrant's telephone number, including area code)
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(Former Name or Former Address, if Changed Since Last Report)
Check the appropriate box below if the Form 8-K filing is intended to
simultaneously satisfy the filing obligation of the registrant under any of the
following provisions (see General Instruction A.2. below):
[ ] Written communications pursuant to Rule 425 under the Securities Act (17
CFR 230.425)
[ ] Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
240.14a-12)
[ ] Pre-commencement communications pursuant to Rule 14d-2(b) under the
Exchange Act (17 CFR 240.14d-2(b))
[ ] Pre-commencement communications pursuant to Rule 13e-4(c) under the
Exchange Act (17 CFR 240.13e-4(c))
Item 1.01. Entry into a Material Definitive Agreement.
Activision, Inc. (the "Company") has several equity compensation plans in which
executives and directors may participate. Pursuant to these plans, the Company
may from time to time grant stock options. Attached as exhibits to this Form 8-K
are the forms of non-qualified stock option agreements used in connection with
option grants under the plans to directors and officers.
Item 9.01. Financial Statements and Exhibits.
(c) Exhibits.
10.1 Form of Stock Option Certificate under the 1998 Incentive Plan of
Activision, Inc.
10.2 Form of Stock Option Certificate under the 1999 Incentive Plan of
Activision, Inc.
10.3 Form of Stock Option Agreement under the 2001 Incentive Plan of
Activision, Inc.
10.4 Form of Stock Option Agreement under the 2002 Executive Incentive Plan
of Activision, Inc.
10.5 Form of Stock Option Agreement under the 2003 Incentive Plan of
Activision, Inc.
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SIGNATURES
Pursuant to the requirements of the Securities and Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
Date: May 31, 2005
ACTIVISION, INC.
By: /s/ Ronald Doornink
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Name: Ronald Doornink
Title: President
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Exhibit 10.1
STOCK OPTION CERTIFICATE
(Non-Transferable)
Stock Option #9800xxxx For x,xxx Shares
Issued Pursuant to the
1998 Incentive Plan of
ACTIVISION, INC.
THIS CERTIFIES that on ________________ (the "Issuance Date") ____________
(the "Holder") was granted an option (the "Option") to purchase at the option
price of $xx.xxx per share, all or any part of ________ fully paid and
non-assessable shares ("Shares") of the Common Stock (no par value) of
ACTIVISION, INC., a Delaware corporation (the "Company"), upon and subject to
the following terms and conditions:
(a) Terms of the Plan. The Option is granted pursuant to, and is subject to
the terms and conditions of, the 1998 Incentive Plan of the Company (the
"Plan"), the terms, conditions and definitions of which are hereby incorporated
herein as though set forth at length, and the receipt of a copy of which the
Holder hereby acknowledges by his signature below. Capitalized terms used herein
shall have the meanings set forth in the Plan, unless otherwise defined herein.
(b) Expiration. This Option shall expire on _____________, unless extended
or earlier terminated in accordance herewith.
(c) Exercise. This Option may be exercised or surrendered during the
Holder's lifetime only by the Holder or his/her guardian or legal
representative. THIS OPTION SHALL NOT BE TRANSFERABLE BY THE HOLDER OTHERWISE
THAN BY WILL OR BY THE LAWS OF DESCENT AND DISTRIBUTION, SUBJECT TO THE TERMS
AND CONDITIONS OF THE PLAN.
This Option shall vest and be exercisable as follows:
Cumulative Shares
Vesting Date Shares Vested at Vesting Date Vested at Vesting Date
------------ ----------------------------- ----------------------
This Option shall be exercised by the Holder (or by his or her executors,
administrators, guardian or legal representative) as to all or part of the
Shares, by the giving of written notice of exercise to the Company, specifying
the number of Shares to be purchased, accompanied by payment of the full
purchase price for the Shares being purchased. Full payment of such purchase
price shall be made at the time of exercise and shall be made (i) in cash or by
certified check or bank check, (ii) with the consent of the Company, by
tendering previously acquired Shares (valued at its Fair Market Value (as
defined in the Plan), as determined by the Company as of the date of tender), or
(iii) with the consent of the Company, combination of (i) and (ii). Such notice
of exercise, accompanied by such payment, shall be delivered to the Company at
its principal business office or such other office as the Company may from time
to time direct, and shall be in such form, containing such further provisions as
the Company may from time to time prescribe. In no event may this Option be
exercised for a fraction of a Share. The Company shall effect the transfer of
Shares purchased pursuant to an Option as soon as practicable, and, within a
reasonable time thereafter, such transfer shall be evidenced on the books of the
Company. No person exercising this Option shall have any of the rights of a
holder of Shares subject to this Option until certificates for such Shares shall
have been issued following the exercise of such Option. No adjustment shall be
made for cash dividends or other rights for which the record date is prior to
the date of such issuance.
(d) Termination of Employment. In the event of the termination of
employment or separation from service of the Holder for any reason (other than
death or disability as provided below), this Option, to the extent not
previously exercised or expired, shall be deemed cancelled and terminated 30
days after the day of such termination or separation.
(e) Death. In the event the Holder dies while employed by the Company or
any of its subsidiaries or affiliates, or during his term as a Director of the
Company or any of its subsidiaries or affiliates, as the case may be, this
Option, to the extent not previously expired or exercised, shall, to the extent
exercisable on the date of death, be exercisable by the estate of the Holder or
by any person who acquired this Option by bequest or inheritance, at any time
within one year after the death of the Holder, unless earlier terminated
pursuant to its terms, provided, however, that if the term of this Option would
expire by its terms within six months after the Holder's death, the term of this
Option shall be extended until six months after the Holder's death.
(f) Disability. In the event of the termination of employment of the Holder
or the separation from service of a Director who is a Holder due to total
disability, the Holder, or his or her guardian or legal representative, shall
have the unqualified right to exercise any portion of this Option which has not
been previously exercised or expired and which the Holder was eligible to
exercise as of the first date of total disability (as determined by the
Company), at any time within one year after such termination or separation,
unless earlier terminated pursuant to its terms, provided, however, that if the
term of such Option would expire by its terms within six months after such
termination or separation, the term of such Option shall be extended until six
months after such termination or separation. The term "total disability" shall,
for purposes of this Option Certificate, be defined in the same manner as such
term is defined in Section 22(e)(3) of the Internal Revenue Code of 1986, as
amended.
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(g) Change of Control. If the Holder is an active employee of the Company
or any of its subsidiaries at the time there occurs a "Change of Control" of the
Company (as defined below) and the Holder's employment is terminated by the
Company or any of its subsidiaries other than for Cause (as defined below)
within twelve (12) months following such Change of Control, or such longer
period as the Committee may determine, the portion, if any, of this Option with
respect to which the right to exercise has not yet accrued, shall immediately
vest and be exercisable in full, effective upon such termination, for a period
of 30 days thereafter, or such longer period as the Committee may determine. For
purposes of this Option, a "Change of Control" of the Company shall be deemed to
occur if:
(i) there shall have occurred a Change of Control of a nature that
would be required to be reported in response to Item 6(e) of Schedule 14A
of Regulation 14A promulgated under the Securities Exchange Act of 1934, as
amended (the "Exchange Act"), as in effect on the date hereof, whether or
not the Company is then subject to such reporting requirement, provided,
however, that there shall not be deemed to be a Change of Control of the
Company if immediately prior to the occurrence of what would otherwise be a
Change of Control of the Company (a) the Holder is the other party to the
transaction (a "Control Event") that would otherwise result in a Change of
Control of the Company or (b) the Holder is an executive officer, trustee,
director or more than 5% equity holder of the other party to the Control
Event or of any entity, directly or indirectly, controlling such other
party;
(ii) the Company merges or consolidates with, or sells all or
substantially all of its assets to, another company (each, a
"Transaction"), provided, however, that a Transaction shall not be deemed
to result in a Change of Control of the Company if (a) immediately prior
thereto the circumstances in (i)(a) or (i)(b) above exist, or (b) (1) the
shareholders of the Company, immediately before such Transaction own,
directly or indirectly, immediately following such Transaction in excess of
fifty percent (50%) of the combined voting power of the outstanding voting
securities of the corporation or other entity resulting from such
Transaction (the "Surviving Corporation") in substantially the same
proportion as their ownership of the voting securities of the Company
immediately before such Transaction and (2) the individuals who were
members of the Company's Board of Directors immediately prior to the
execution of the agreement providing for such Transaction constitute at
least a majority of the members of the board of directors or the board of
trustees, as the case may be, of the Surviving Corporation, or of a
corporation or other entity beneficially directly or indirectly owning a
majority of the outstanding voting securities of the Surviving Corporation;
or
(iii) the Company acquires assets of another company or a subsidiary
of the Company merges or consolidates with another company (each, an "Other
Transaction") and (a) the shareholders of the Company, immediately before
such Other Transaction own, directly or indirectly, immediately following
such Other Transaction 50% or less of the combined voting power of the
outstanding voting securities of the corporation or other entity resulting
from such Other Transaction (the "Other Surviving Corporation") in
substantially the same proportion as their ownership of the voting
securities of the Company immediately before such Other Transaction or (b)
the individuals who were
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members of the Company's Board of Directors immediately prior to the
execution of the agreement providing for such Other Transaction constitute
less than a majority of the members of the board of directors or the board
of trustees, as the case may be, of the Other Surviving Corporation, or of
a corporation or other entity beneficially directly or indirectly owning a
majority of the outstanding voting securities of the Other Surviving
Corporation, provided, however, that an Other Transaction shall not be
deemed to result in a Change of Control of the Company if immediately prior
thereto the circumstances in (i)(a) or (i)(b) above exist.
For purposes of this Option, "Cause" shall mean (unless a different
definition is used in the Holder's written employment agreement with the
Company, if any, in which case such different definition shall apply to the
Holder) any of the following:
(i) material breach by the Holder of his or her employment agreement,
if any, or material failure by the Holder to perform his or her duties
(other than as a result of incapacity due to physical or mental illness)
during his or her employment with the Company after written notice of such
breach or failure and the Holder failed to cure such breach or failure to
the Company's reasonable satisfaction within five (5) days after receiving
such written notice;
(ii) material breach by the Holder of his or her Employee Proprietary
Information Agreement or other similar arrangement entered into by the
Holder in connection with his or her employment by the Company; or
(iii) any act of fraud, misappropriation, misuse, embezzlement or any
other material act of dishonesty in respect of the Company or its funds,
properties, assets or other employees.
(h) Employment Violation. In consideration of the granting of this Option,
the Holder hereby agrees that the terms of this paragraph (h) shall apply to the
Option. The Holder acknowledges and agrees that each exercise of this Option and
each written notice of exercise delivered to the Company and executed by the
Holder shall serve as a reaffirmation of and continuing agreement by the Holder
to comply with the terms contained in this paragraph (h).
The Company and the Holder acknowledge and agree that if the Holder is or
shall become subject to an employment agreement with the Company and the Holder
materially breaches his or her employment agreement (it being understood that
any breach of the post-termination obligations contained therein shall be deemed
to be material) for so long as the terms of such employment agreement shall
apply to the Holder (each, an "Employment Violation"), the Company shall have
the right to require (i) the termination and cancellation of the unexercised
portion of this Option, if any, whether vested or unvested, and (ii) payment by
the Holder to the Company of the Recapture Amount (as defined below). The
Company and the Holder further agree that such termination of unexercised
Options and payment of the Recapture Amount, as the case may be, shall be in
addition to, and not in lieu of, any other right or remedy available to the
Company arising out of or in connection with any such Employment Violation
including,
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without limitation, the right to terminate the Holder's employment if not
already terminated, seek injunctive relief and additional monetary damages.
For purposes of this Option, the "Recapture Amount" shall mean the gross
gain realized or unrealized by the Holder upon each exercise of this Option
during the period beginning on the date which is twelve (12) months prior to the
date of the Holder's Employment Violation and ending on the date of computation
(the "Look-back Period"), which gain shall be calculated as the sum of:
(i) if the Holder has exercised any portion of this Option during the
Look-back Period and sold any of the Shares acquired on exercise
thereafter, an amount equal to the product of (x) the sales price per Share
sold less the exercise price per Share times (y) the number of Shares as to
which this Option was exercised and which were sold at such sales price;
plus
(ii) if the Holder has exercised any portion of this Option during the
Look-back Period and not sold any of the Shares acquired on exercise
thereafter, with respect to each of such Shares an amount equal to the
product of (x) the greatest of the following: (1) the Fair Market Value per
Share on the date of exercise, (2) the arithmetic average of the per Share
closing sales prices as reported on NASDAQ for the thirty (30) trading day
period ending on the trading day immediately preceding the date of the
Company's written notice of its exercise of its rights under this paragraph
(h), or (3) the arithmetic average of the per Share closing sales prices as
reported on NASDAQ for the thirty (30) trading day period ending on the
trading day immediately preceding the date of computation, minus the
exercise price per Share times (y) the number of Shares as to which this
Option was exercised and which were not sold;
provided, however, in lieu of payment by the Holder to the Company of the
Recapture Amount determined pursuant to clause (ii) above, the Holder, in his or
her discretion, may tender to the Company the Shares acquired upon exercise of
this Option during the Look-back Period and not sold and the Holder shall not be
entitled to receive any consideration from the Company in exchange therefor.
(i) Adjustments. In the event that the Company shall determine that any
dividend or other distribution (whether in the form of cash, shares of common
stock of the Company, other securities, or other property), recapitalization,
stock split, reverse stock split, reorganization, merger, consolidation,
split-up, spin-off, combination, repurchase, or exchange of shares of common
stock of the Company or other securities, the issuance of warrants or other
rights to purchase shares of common stock of the Company, or other securities,
or other similar corporate transaction or event affects the Shares, such that an
adjustment is determined by the Company to be appropriate in order to prevent
dilution or enlargement of the benefits or potential benefits intended to be
made available to the Holder, then the Company shall, in such manner as the
Company may deem equitable, adjust any or all of (i) the number and type of
shares of common stock of the Company subject to this Option, and (ii) the grant
or exercise price with respect to this Option, or, if deemed appropriate, make
provision for a cash payment to the Holder.
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(j) Delivery of Share Certificates. Within a reasonable time after the
exercise of this Option, the Company shall cause to be delivered to the person
entitled thereto a certificate for the Shares purchased pursuant to the exercise
of this Option. If this Option shall have been exercised with respect to less
than all of the Shares subject to this Option, the Company shall also cause to
be delivered to the person entitled thereto a new Option Certificate in
replacement of this Option Certificate if surrendered at the time of the
exercise of this Option, indicating the number of Shares with respect to which
this Option remains available for exercise, or the Company shall make a notation
in its books and records to reflect the partial exercise of this Option.
(k) Withholding. In the event that the Holder elects to exercise this
Option or any part thereof, and if the Company or any subsidiary or affiliate of
the Company shall be required to withhold any amounts by reasons of any federal,
state or local tax laws, rules or regulations in respect of the issuance of
Shares to the Holder pursuant to this Option, the Company or such subsidiary or
affiliate shall be entitled to deduct and withhold such amounts from any
payments to be made to the Holder. In any event, the Holder shall make available
to the Company or such subsidiary or affiliate, promptly when requested by the
Company or such subsidiary or affiliate, sufficient funds to meet the
requirements of such withholding; and the Company or such subsidiary or
affiliate shall be entitled to take and authorize such steps as it may deem
advisable in order to have such funds available to the Company or such
subsidiary or affiliate out of any funds or property due or to become due to the
Holder.
(l) Reservation of Shares. The Company hereby agrees that at all times
there shall be reserved for issuance and/or delivery upon exercise of this
Option such number of Shares as shall be required for issuance or delivery upon
exercise hereof.
(m) Rights of Holder. Nothing contained herein shall be construed to confer
upon the Holder any right to be continued in the employ of the Company and/or
any subsidiary or affiliate of the Company or derogate from any right of the
Company and/or any subsidiary or affiliate of the Company to retire, request the
resignation of, or discharge the Holder at any time, with or without cause. The
Holder shall not, by virtue hereof, be entitled to any rights of a shareholder
in the Company, either at law or in equity, and the rights of the Holder are
limited to those expressed herein and are not enforceable against the Company
except to the extent set forth herein.
(n) Exclusion from Pension Computations. By acceptance of the grant of this
Option, the Holder hereby agrees that any income realized upon the receipt or
exercise hereof, or upon the disposition of the Shares received upon its
exercise, is special incentive compensations and, to the extent permissible
under applicable law, shall not be taken into account as "wages", "salary" or
"compensation" in determining the amount of any payment under any pension,
retirement, incentive, profit sharing, bonus or deferred compensation plan of
the Company or any of its subsidiaries or affiliates.
(o) Registration; Legend. The Company may postpone the issuance and
delivery of Shares upon any exercise of this Option until (a) the admission of
such Shares to listing on any stock exchange or exchanges on which Shares of the
Company of the same class are then listed
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and (b) the completion of such registration or other qualification of such
Shares under any state or federal law, rule or regulation as the Company shall
determine to be necessary or advisable. The Holder shall make such
representations and furnish such information as may, in the opinion of counsel
for the Company, be appropriate to permit the Company, in light of the then
existence or non-existence with respect to such Shares of an effective
Registration Statement under the Securities Act of 1933, as amended, to issue
the Shares in compliance with the provisions of that or any comparable act.
The Company may cause the following or a similar legend to be set forth on
each certificate representing Shares or any other security issued or issuable
upon exercise of this Option unless counsel for the Company is of the opinion as
to any such certificate that such legend is unnecessary:
THE SECURITIES REPRESENTED BY THIS CERTIFICATE MAY NOT BE OFFERED FOR
SALE, SOLD OR OTHERWISE TRANSFERRED EXCEPT PURSUANT TO AN EFFECTIVE
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933, AS AMENDED
(THE "ACT"), OR PURSUANT TO AN EXEMPTION FROM REGISTRATION UNDER THE
ACT, THE AVAILABILITY OF WHICH IS ESTABLISHED BY AN OPINION FROM
COUNSEL TO THE COMPANY.
(p) Amendment. The Company may, with the consent of the Holder, at any time
or from time to time amend the terms and conditions of this Option, and may at
any time or from time to time amend the terms of this Option.
(q) Notices. Any notice which either party hereto may be required or
permitted to give to the other shall be in writing, and may be delivered
personally or by mail, postage prepaid, or overnight courier, addressed as
follows: if to the Company, at its office at 3100 Ocean Park Blvd., Santa
Monica, California 90405, Attn: General Counsel, or at such other address as the
Company by notice to the Holder may designate in writing from time to time; and
if to the Holder, at the address shown below his or her signature on this Option
Certificate, or at such other address as the Holder by notice to the Company may
designate in writing from time to time. Notices shall be effective upon receipt.
(r) Interpretation. A determination of the Company as to any questions
which may arise with respect to the interpretation of the provisions of this
Option and of the Plan shall be final and binding. The Company may authorize and
establish such rules, regulations and revisions thereof as it may deem
advisable.
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IN WITNESS WHEREOF, the parties have executed this Option Certificate as of
the date set forth above.
ACTIVISION, INC.
By:
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Dated:
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Attest:
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ACCEPTED:
- ---------------------------------------------
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Address
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City State Zip Code
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Social Security Number
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Exhibit 10.2
STOCK OPTION CERTIFICATE
(Non-Transferable)
Stock Option #99xxxxxx For x,xxx Shares
Issued Pursuant to the
1999 Incentive Plan of
ACTIVISION, INC.
THIS CERTIFIES that on [date] (the "Issuance Date") [name] (the "Holder")
was granted an option (the "Option") to purchase at the option price of $xx.xx
per share, all or any part of x,xxx fully paid and non-assessable shares
("Shares") of the Common Stock (no par value) of ACTIVISION, INC., a Delaware
corporation (the "Company"), upon and subject to the following terms and
conditions:
(a) Terms of the Plan. The Option is granted pursuant to, and is subject to
the terms and conditions of, the 1999 Incentive Plan of the Company (the
"Plan"), the terms, conditions and definitions of which are hereby incorporated
herein as though set forth at length, and the receipt of a copy of which the
Holder hereby acknowledges by his signature below. Capitalized terms used herein
shall have the meanings set forth in the Plan, unless otherwise defined herein.
(b) Expiration. This Option shall expire on [date + 10 years], unless
extended or earlier terminated in accordance herewith.
(c) Exercise. This Option may be exercised or surrendered during the
Holder's lifetime only by the Holder or his/her guardian or legal
representative. THIS OPTION SHALL NOT BE TRANSFERABLE BY THE HOLDER OTHERWISE
THAN BY WILL OR BY THE LAWS OF DESCENT AND DISTRIBUTION, SUBJECT TO THE TERMS
AND CONDITIONS OF THE PLAN.
This Option shall vest and be exercisable as follows:
Cumulative Shares
Vesting Date Shares Vested at Vesting Date Vested at Vesting Date
------------ ----------------------------- ----------------------
[vesting schedule]
This Option shall be exercised by the Holder (or by his or her executors,
administrators, guardian or legal representative) as to all or part of the
Shares, by the giving of written notice of exercise to the Company, specifying
the number of Shares to be purchased, accompanied by payment of the full
purchase price for the Shares being purchased. Full payment of such purchase
price shall be made at the time of exercise and shall be made (i) in cash or by
certified check or bank check, (ii) with the consent of the Company, by
tendering previously acquired Shares (valued at its Fair Market Value (as
defined in the Plan), as determined by the Company as of the date of tender), or
(iii) with the consent of the Company, combination of (i) and (ii). Such notice
of exercise, accompanied by such payment, shall be delivered to the Company at
its principal business office or such other office as the Company may from time
to time direct, and shall be in such form, containing such further provisions as
the Company may from time to time prescribe. In no event may this Option be
exercised for a fraction of a Share. The Company shall effect the transfer of
Shares purchased pursuant to an Option as soon as practicable, and, within a
reasonable time thereafter, such transfer shall be evidenced on the books of the
Company. No person exercising this Option shall have any of the rights of a
holder of Shares subject to this Option until certificates for such Shares shall
have been issued following the exercise of such Option. No adjustment shall be
made for cash dividends or other rights for which the record date is prior to
the date of such issuance.
(d) Termination of Employment. In the event of the termination of
employment or separation from service of the Holder for any reason (other than
death or disability as provided below), this Option, to the extent not
previously exercised or expired, shall be deemed cancelled and terminated 30
days after the day of such termination or separation.
(e) Death. In the event the Holder dies while employed by the Company or
any of its subsidiaries or affiliates, or during his term as a Director of the
Company or any of its subsidiaries or affiliates, as the case may be, this
Option, to the extent not previously expired or exercised, shall, to the extent
exercisable on the date of death, be exercisable by the estate of the Holder or
by any person who acquired this Option by bequest or inheritance, at any time
within one year after the death of the Holder, unless earlier terminated
pursuant to its terms, provided, however, that if the term of this Option would
expire by its terms within six months after the Holder's death, the term of this
Option shall be extended until six months after the Holder's death.
(f) Disability. In the event of the termination of employment of the Holder
or the separation from service of a Director who is a Holder due to total
disability, the Holder, or his or her guardian or legal representative, shall
have the unqualified right to exercise any portion of this Option which has not
been previously exercised or expired and which the Holder was eligible to
exercise as of the first date of total disability (as determined by the
Company), at any time within one year after such termination or separation,
unless earlier terminated pursuant to its terms, provided, however, that if the
term of such Option would expire by its terms within six months after such
termination or separation, the term of such Option shall be extended until six
months after such termination or separation. The term "total disability" shall,
for purposes of this Option Certificate, be defined in the same manner as such
term is defined in Section 22(e)(3) of the Internal Revenue Code of 1986, as
amended.
2
(g) Change of Control. If the Holder is an active employee of the Company
or any of its subsidiaries at the time there occurs a "Change of Control" of the
Company (as defined below) and the Holder's employment is terminated by the
Company or any of its subsidiaries other than for Cause (as defined below)
within twelve (12) months following such Change of Control, or such longer
period as the Committee may determine, the portion, if any, of this Option with
respect to which the right to exercise has not yet accrued, shall immediately
vest and be exercisable in full, effective upon such termination, for a period
of 30 days thereafter, or such longer period as the Committee may determine. For
purposes of this Option, a "Change of Control" of the Company shall be deemed to
occur if:
(i) there shall have occurred a Change of Control of a nature that
would be required to be reported in response to Item 6(e) of Schedule 14A
of Regulation 14A promulgated under the Securities Exchange Act of 1934, as
amended (the "Exchange Act"), as in effect on the date hereof, whether or
not the Company is then subject to such reporting requirement, provided,
however, that there shall not be deemed to be a Change of Control of the
Company if immediately prior to the occurrence of what would otherwise be a
Change of Control of the Company (a) the Holder is the other party to the
transaction (a "Control Event") that would otherwise result in a Change of
Control of the Company or (b) the Holder is an executive officer, trustee,
director or more than 5% equity holder of the other party to the Control
Event or of any entity, directly or indirectly, controlling such other
party;
(ii) the Company merges or consolidates with, or sells all or
substantially all of its assets to, another company (each, a
"Transaction"), provided, however, that a Transaction shall not be deemed
to result in a Change of Control of the Company if (a) immediately prior
thereto the circumstances in (i)(a) or (i)(b) above exist, or (b) (1) the
shareholders of the Company, immediately before such Transaction own,
directly or indirectly, immediately following such Transaction in excess of
fifty percent (50%) of the combined voting power of the outstanding voting
securities of the corporation or other entity resulting from such
Transaction (the "Surviving Corporation") in substantially the same
proportion as their ownership of the voting securities of the Company
immediately before such Transaction and (2) the individuals who were
members of the Company's Board of Directors immediately prior to the
execution of the agreement providing for such Transaction constitute at
least a majority of the members of the board of directors or the board of
trustees, as the case may be, of the Surviving Corporation, or of a
corporation or other entity beneficially directly or indirectly owning a
majority of the outstanding voting securities of the Surviving Corporation;
or
(iii) the Company acquires assets of another company or a subsidiary
of the Company merges or consolidates with another company (each, an "Other
Transaction") and (a) the shareholders of the Company, immediately before
such Other Transaction own, directly or indirectly, immediately following
such Other Transaction 50% or less of the combined voting power of the
outstanding voting securities of the corporation or other entity resulting
from such Other Transaction (the "Other Surviving Corporation") in
substantially the same proportion as their ownership of the voting
securities of the
3
Company immediately before such Other Transaction or (b) the individuals
who were members of the Company's Board of Directors immediately prior to
the execution of the agreement providing for such Other Transaction
constitute less than a majority of the members of the board of directors or
the board of trustees, as the case may be, of the Other Surviving
Corporation, or of a corporation or other entity beneficially directly or
indirectly owning a majority of the outstanding voting securities of the
Other Surviving Corporation, provided, however, that an Other Transaction
shall not be deemed to result in a Change of Control of the Company if
immediately prior thereto the circumstances in (i)(a) or (i)(b) above
exist.
For purposes of this Option, "Cause" shall mean (unless a different
definition is used in the Holder's written employment agreement with the
Company, if any, in which case such different definition shall apply to the
Holder) any of the following:
(i) material breach by the Holder of his or her employment agreement,
if any, or material failure by the Holder to perform his or her duties
(other than as a result of incapacity due to physical or mental illness)
during his or her employment with the Company after written notice of such
breach or failure and the Holder failed to cure such breach or failure to
the Company's reasonable satisfaction within five (5) days after receiving
such written notice;
(ii) material breach by the Holder of his or her Employee Proprietary
Information Agreement or other similar arrangement entered into by the
Holder in connection with his or her employment by the Company; or
(iii) any act of fraud, misappropriation, misuse, embezzlement or any
other material act of dishonesty in respect of the Company or its funds,
properties, assets or other employees.
(h) Employment Violation. In consideration of the granting of this Option,
the Holder hereby agrees that the terms of this paragraph (h) shall apply to the
Option. The Holder acknowledges and agrees that each exercise of this Option and
each written notice of exercise delivered to the Company and executed by the
Holder shall serve as a reaffirmation of and continuing agreement by the Holder
to comply with the terms contained in this paragraph (h).
The Company and the Holder acknowledge and agree that if the Holder is or
shall become subject to an employment agreement with the Company and the Holder
materially breaches his or her employment agreement (it being understood that
any breach of the post-termination obligations contained therein shall be deemed
to be material) for so long as the terms of such employment agreement shall
apply to the Holder (each, an "Employment Violation"), the Company shall have
the right to require (i) the termination and cancellation of the unexercised
portion of this Option, if any, whether vested or unvested, and (ii) payment by
the Holder to the Company of the Recapture Amount (as defined below). The
Company and the Holder further agree that such termination of unexercised
Options and payment of the Recapture Amount, as the case may be, shall be in
addition to, and not in lieu of, any other right or remedy available to the
Company arising out of or in connection with any such Employment Violation
including,
4
without limitation, the right to terminate the Holder's employment if not
already terminated, seek injunctive relief and additional monetary damages.
For purposes of this Option, the "Recapture Amount" shall mean the gross
gain realized or unrealized by the Holder upon each exercise of this Option
during the period beginning on the date which is twelve (12) months prior to the
date of the Holder's Employment Violation and ending on the date of computation
(the "Look-back Period"), which gain shall be calculated as the sum of:
(i) if the Holder has exercised any portion of this Option during the
Look-back Period and sold any of the Shares acquired on exercise
thereafter, an amount equal to the product of (x) the sales price per Share
sold less the exercise price per Share times (y) the number of Shares as to
which this Option was exercised and which were sold at such sales price;
plus
(ii) if the Holder has exercised any portion of this Option during the
Look-back Period and not sold any of the Shares acquired on exercise
thereafter, with respect to each of such Shares an amount equal to the
product of (x) the greatest of the following: (1) the Fair Market Value per
Share on the date of exercise, (2) the arithmetic average of the per Share
closing sales prices as reported on NASDAQ for the thirty (30) trading day
period ending on the trading day immediately preceding the date of the
Company's written notice of its exercise of its rights under this paragraph
(h), or (3) the arithmetic average of the per Share closing sales prices as
reported on NASDAQ for the thirty (30) trading day period ending on the
trading day immediately preceding the date of computation, minus the
exercise price per Share times (y) the number of Shares as to which this
Option was exercised and which were not sold;
provided, however, in lieu of payment by the Holder to the Company of the
Recapture Amount determined pursuant to clause (ii) above, the Holder, in his or
her discretion, may tender to the Company the Shares acquired upon exercise of
this Option during the Look-back Period and not sold and the Holder shall not be
entitled to receive any consideration from the Company in exchange therefor.
(i) Adjustments. In the event that the Company shall determine that any
dividend or other distribution (whether in the form of cash, shares of common
stock of the Company, other securities, or other property), recapitalization,
stock split, reverse stock split, reorganization, merger, consolidation,
split-up, spin-off, combination, repurchase, or exchange of shares of common
stock of the Company or other securities, the issuance of warrants or other
rights to purchase shares of common stock of the Company, or other securities,
or other similar corporate transaction or event affects the Shares, such that an
adjustment is determined by the Company to be appropriate in order to prevent
dilution or enlargement of the benefits or potential benefits intended to be
made available to the Holder, then the Company shall, in such manner as the
Company may deem equitable, adjust any or all of (i) the number and type of
shares of common stock of the Company subject to this Option, and (ii) the grant
or exercise price with respect to this Option, or, if deemed appropriate, make
provision for a cash payment to the Holder.
5
(j) Delivery of Share Certificates. Within a reasonable time after the
exercise of this Option, the Company shall cause to be delivered to the person
entitled thereto a certificate for the Shares purchased pursuant to the exercise
of this Option. If this Option shall have been exercised with respect to less
than all of the Shares subject to this Option, the Company shall also cause to
be delivered to the person entitled thereto a new Option Certificate in
replacement of this Option Certificate if surrendered at the time of the
exercise of this Option, indicating the number of Shares with respect to which
this Option remains available for exercise, or the Company shall make a notation
in its books and records to reflect the partial exercise of this Option.
(k) Withholding. In the event that the Holder elects to exercise this
Option or any part thereof, and if the Company or any subsidiary or affiliate of
the Company shall be required to withhold any amounts by reasons of any federal,
state or local tax laws, rules or regulations in respect of the issuance of
Shares to the Holder pursuant to this Option, the Company or such subsidiary or
affiliate shall be entitled to deduct and withhold such amounts from any
payments to be made to the Holder. In any event, the Holder shall make available
to the Company or such subsidiary or affiliate, promptly when requested by the
Company or such subsidiary or affiliate, sufficient funds to meet the
requirements of such withholding; and the Company or such subsidiary or
affiliate shall be entitled to take and authorize such steps as it may deem
advisable in order to have such funds available to the Company or such
subsidiary or affiliate out of any funds or property due or to become due to the
Holder.
(l) Reservation of Shares. The Company hereby agrees that at all times
there shall be reserved for issuance and/or delivery upon exercise of this
Option such number of Shares as shall be required for issuance or delivery upon
exercise hereof.
(m) Rights of Holder. Nothing contained herein shall be construed to confer
upon the Holder any right to be continued in the employ of the Company and/or
any subsidiary or affiliate of the Company or derogate from any right of the
Company and/or any subsidiary or affiliate of the Company to retire, request the
resignation of, or discharge the Holder at any time, with or without cause. The
Holder shall not, by virtue hereof, be entitled to any rights of a shareholder
in the Company, either at law or in equity, and the rights of the Holder are
limited to those expressed herein and are not enforceable against the Company
except to the extent set forth herein.
(n) Exclusion from Pension Computations. By acceptance of the grant of this
Option, the Holder hereby agrees that any income realized upon the receipt or
exercise hereof, or upon the disposition of the Shares received upon its
exercise, is special incentive compensations and, to the extent permissible
under applicable law, shall not be taken into account as "wages", "salary" or
"compensation" in determining the amount of any payment under any pension,
retirement, incentive, profit sharing, bonus or deferred compensation plan of
the Company or any of its subsidiaries or affiliates.
(o) Registration; Legend. The Company may postpone the issuance and
delivery of Shares upon any exercise of this Option until (a) the admission of
such Shares to listing on any stock exchange or exchanges on which Shares of the
Company of the same class are then listed
6
and (b) the completion of such registration or other qualification of such
Shares under any state or federal law, rule or regulation as the Company shall
determine to be necessary or advisable. The Holder shall make such
representations and furnish such information as may, in the opinion of counsel
for the Company, be appropriate to permit the Company, in light of the then
existence or non-existence with respect to such Shares of an effective
Registration Statement under the Securities Act of 1933, as amended, to issue
the Shares in compliance with the provisions of that or any comparable act.
The Company may cause the following or a similar legend to be set forth on
each certificate representing Shares or any other security issued or issuable
upon exercise of this Option unless counsel for the Company is of the opinion as
to any such certificate that such legend is unnecessary:
THE SECURITIES REPRESENTED BY THIS CERTIFICATE MAY NOT BE OFFERED FOR
SALE, SOLD OR OTHERWISE TRANSFERRED EXCEPT PURSUANT TO AN EFFECTIVE
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933, AS AMENDED
(THE "ACT"), OR PURSUANT TO AN EXEMPTION FROM REGISTRATION UNDER THE
ACT, THE AVAILABILITY OF WHICH IS ESTABLISHED BY AN OPINION FROM
COUNSEL TO THE COMPANY.
(p) Amendment. The Company may, with the consent of the Holder, at any time
or from time to time amend the terms and conditions of this Option, and may at
any time or from time to time amend the terms of this Option.
(q) Notices. Any notice which either party hereto may be required or
permitted to give to the other shall be in writing, and may be delivered
personally or by mail, postage prepaid, or overnight courier, addressed as
follows: if to the Company, at its office at 3200 Ocean Park Blvd., Santa
Monica, California 90405, Attn: General Counsel, or at such other address as the
Company by notice to the Holder may designate in writing from time to time; and
if to the Holder, at the address shown below his or her signature on this Option
Certificate, or at such other address as the Holder by notice to the Company may
designate in writing from time to time. Notices shall be effective upon receipt.
(r) Interpretation. A determination of the Company as to any questions
which may arise with respect to the interpretation of the provisions of this
Option and of the Plan shall be final and binding. The Company may authorize and
establish such rules, regulations and revisions thereof as it may deem
advisable.
7
IN WITNESS WHEREOF, the parties have executed this Option Certificate as of
the date set forth above.
ACTIVISION, INC.
By:
------------------------------------------
Dated:
---------------------------------------
Attest:
--------------------------------------
ACCEPTED:
- ---------------------------------------------
[name]
- ---------------------------------------------
Address
- ---------------------------------------------
City State Zip Code
- ---------------------------------------------
Social Security Number
8
Exhibit 10.3
STOCK OPTION AGREEMENT
(Non-Transferable)
Stock Option #01000XXX For XXXX Shares
Issued Pursuant to the
2001 Incentive Plan of
ACTIVISION, INC.
THIS CERTIFIES that on ____________(the "Issuance Date") ___________ (the
"Holder") was granted an option (the "Option") to purchase at the option price
of $##.### per share, all or any part of #### fully paid and non-assessable
shares ("Shares") of common stock, par value $.000001 per share, of ACTIVISION,
INC., a Delaware corporation (the "Company"), upon and subject to the following
terms and conditions:
(a) Terms of the Plan. The Option is granted pursuant to, and is subject to
the terms and conditions of, the Company's 2001 Incentive Plan (the "Plan"), the
terms, conditions and definitions of which are hereby incorporated herein as
though set forth at length, and the receipt of a copy of which the Holder hereby
acknowledges by his signature below. Capitalized terms used herein shall have
the meanings set forth in the Plan, unless otherwise defined herein.
[The Company intends that this Option qualify as an "incentive" share
option within the meaning of Section 422 of the Internal Revenue Code to the
maximum extent permissible under the Internal Revenue Code. To the extent that
the Option does not qualify as an incentive share option, the Option or the
portion thereof which does not so qualify shall constitute a separate
"nonqualified" share option.]
(b) Expiration. This Option shall expire on __________, unless extended or
earlier terminated in accordance herewith.
(c) Exercise. This Option may be exercised or surrendered during the
Holder's lifetime only by the Holder or his/her guardian or legal
representative. THIS OPTION SHALL NOT BE TRANSFERABLE BY THE HOLDER OTHERWISE
THAN BY WILL OR BY THE LAWS OF DESCENT AND DISTRIBUTION, SUBJECT TO THE TERMS
AND CONDITIONS OF THE PLAN.
This Option shall vest and be exercisable as follows:
Cumulative Shares
Vesting Date Shares Vested at Vesting Date Vested at Vesting Date
- ------------ ----------------------------- ----------------------
This Option shall be exercised by the Holder (or by her executors,
administrators, guardian or legal representative) as to all or part of the
Shares, by the giving of written notice of exercise to the Company, specifying
the number of Shares to be purchased, accompanied by payment of the full
purchase price for the Shares being purchased. Full payment of such purchase
price shall be made at the time of exercise and shall be made (i) in cash or by
certified check or bank check or wire transfer of immediately available funds,
(ii) with the consent of the Company, by tendering previously acquired Shares
(valued at its Fair Market Value (as defined in the Plan), as determined by the
Company as of the date of tender), or (iii) with the consent of the Company, a
combination of (i) and (ii). Such notice of exercise, accompanied by such
payment, shall be delivered to the Company at its principal business office or
such other office as the Company may from time to time direct, and shall be in
such form, containing such further provisions as the Company may from time to
time prescribe. In no event may this Option be exercised for a fraction of a
Share. The Company shall effect the transfer of Shares purchased pursuant to an
Option as soon as practicable, and, within a reasonable time thereafter, such
transfer shall be evidenced on the books of the Company. No person exercising
this Option shall have any of the rights of a holder of Shares subject to this
Option until certificates for such Shares shall have been issued following the
exercise of such Option. No adjustment shall be made for cash dividends or other
rights for which the record date is prior to the date of such issuance.
(d) Termination of Employment. In the event of the termination of
employment or separation from service of the Holder for any reason (other than
death or disability as provided below), this Option, to the extent not
previously exercised or expired, shall be deemed cancelled and terminated on the
day of such termination or separation, unless the Company decides, in its sole
discretion, to extend the term of this Option, subject to the terms of the Plan.
(e) Death. In the event the Holder dies while employed by the Company or
any of its subsidiaries or affiliates, or during his term as a Director of the
Company or any of its subsidiaries or affiliates, as the case may be, this
Option, to the extent not previously expired or exercised, shall, to the extent
exercisable on the date of death, be exercisable by the estate of the Holder or
by any person who acquired this Option by bequest or inheritance, at any time
within one year after the death of the Holder, provided, however, that if the
term of such Option would expire by its terms within six months after the
Optionee's death, the term of such Option shall be extended until six months
after the Optionee's death, provided further, however, that in no instance may
the term of the Option, as so extended, exceed the maximum term established
pursuant to Sections 3.1(b)(ii) or 10.1 of the Plan.
(f) Disability. In the event of the termination of employment of the Holder
or the separation from service of a Director who is a Holder due to total
disability, the Holder, or her guardian or legal representative, shall have the
unqualified right to exercise any portion of this Option which has not been
previously exercised or expired and which the Holder was eligible to exercise as
of the first date of total disability (as determined by the Company), at any
time within one year after such termination or separation, provided, however,
that if the term of such Option would expire by its terms within six months
after such termination or separation, the term of such Option shall be extended
until six months after such termination or separation, provided further,
however, that in no instance may the term of the Option, as so extended, exceed
the maximum term established pursuant to Section 3.1(b)(ii) or 10.1 of the Plan.
The term "total disability" shall, for purposes of this Share Option Agreement,
be defined in the same manner as such term is defined in Section 22(e)(3) of the
Internal Revenue Code of 1986, as amended.
(g) Change of Control. If the Holder is an active employee of the Company
or any of its subsidiaries at the time there occurs a "Change of Control" of the
Company (as defined below) and the Holder's employment is terminated by the
Company or any of its subsidiaries other than for Cause (as defined below)
within twelve (12) months following such Change of Control, or such longer
period as the Committee may determine, the portion, if any, of this Option with
respect to which the right to exercise
2
has not yet accrued, shall immediately vest and be exercisable in full,
effective upon such termination, for a period of 30 days thereafter, or such
longer period as the Committee may determine. For purposes of this Option, a
"Change of Control" of the Company shall be deemed to occur if:
(i) there shall have occurred a Change of Control of a nature that
would be required to be reported in response to Item 6(e) of Schedule 14A
of Regulation 14A promulgated under the Securities Exchange Act of 1934, as
amended (the "Exchange Act"), as in effect on the date hereof, whether or
not the Company is then subject to such reporting requirement, provided,
however, that there shall not be deemed to be a Change of Control of the
Company if immediately prior to the occurrence of what would otherwise be a
Change of Control of the Company (a) the Holder is the other party to the
transaction (a "Control Event") that would otherwise result in a Change of
Control of the Company or (b) the Holder is an executive officer, trustee,
director or more than 5% equity holder of the other party to the Control
Event or of any entity, directly or indirectly, controlling such other
party;
(ii) the Company merges or consolidates with, or sells all or
substantially all of its assets to, another company (each, a
"Transaction"), provided, however, that a Transaction shall not be deemed
to result in a Change of Control of the Company if (a) immediately prior
thereto the circumstances in (i)(a) or (i)(b) above exist, or (b) (1) the
shareholders of the Company, immediately before such Transaction own,
directly or indirectly, immediately following such Transaction in excess of
fifty percent (50%) of the combined voting power of the outstanding voting
securities of the corporation or other entity resulting from such
Transaction (the "Surviving Corporation") in substantially the same
proportion as their ownership of the voting securities of the Company
immediately before such Transaction and (2) the individuals who were
members of the Company's Board of Directors immediately prior to the
execution of the agreement providing for such Transaction constitute at
least a majority of the members of the board of directors or the board of
trustees, as the case may be, of the Surviving Corporation, or of a
corporation or other entity beneficially directly or indirectly owning a
majority of the outstanding voting securities of the Surviving Corporation;
or
(iii) the Company acquires assets of another company or a subsidiary
of the Company merges or consolidates with another company (each, an "Other
Transaction") and (a) the shareholders of the Company, immediately before
such Other Transaction own, directly or indirectly, immediately following
such Other Transaction 50% or less of the combined voting power of the
outstanding voting securities of the corporation or other entity resulting
from such Other Transaction (the "Other Surviving Corporation") in
substantially the same proportion as their ownership of the voting
securities of the Company immediately before such Other Transaction or (b)
the individuals who were members of the Company's Board of Directors
immediately prior to the execution of the agreement providing for such
Other Transaction constitute less than a majority of the members of the
board of directors or the board of trustees, as the case may be, of the
Other Surviving Corporation, or of a corporation or other entity
beneficially directly or indirectly owning a majority of the outstanding
voting securities of the Other Surviving Corporation, provided, however,
that an Other Transaction shall not be deemed to result in a Change of
Control of the Company if immediately prior thereto the circumstances in
(i)(a) or (i)(b) above exist.
3
For purposes of this clause (g), "Cause" shall mean (unless a different
definition is used in the Holder's written employment agreement with the
Company, if any, in which case such different definition shall apply to the
Holder) any of the following:
(i) material breach by the Holder of his or her employment agreement,
if any, or material failure by the Holder to perform his or her duties
(other than as a result of incapacity due to physical or mental illness)
during his or her employment with the Company after written notice of such
breach or failure and the Holder failed to cure such breach or failure to
the Company's reasonable satisfaction within five (5) days after receiving
such written notice;
(ii) material breach by the Holder of his or her Employee Proprietary
Information Agreement or other similar arrangement entered into by the Holder in
connection with his or her employment by the Company; or
(iii) any act of fraud, misappropriation, misuse, embezzlement or any
other material act of dishonesty in respect of the Company or its funds,
properties, assets or other employees.
(h) Employment Violation. In consideration of the granting and by
acceptance of this Option, the Holder hereby agrees that the terms of this
clause (h) shall apply to the Option. The Holder acknowledges and agrees that
each exercise of this Option and each written notice of exercise delivered to
the Company and executed by the Holder shall serve as a reaffirmation of and
continuing agreement by the Holder to comply with the terms contained in this
clause (h).
The Company and the Holder acknowledge and agree that if the Holder
materially breaches his or her employment agreement (it being understood that
any breach of the post-termination obligations contained therein shall be deemed
to be material) for so long as the terms of such employment agreement shall
apply to the Holder (each an "Employment Violation"), the Company shall have the
right to require (i) the termination and cancellation of the unexercised portion
of this Option, if any, whether vested or unvested, and (ii) payment by the
Holder to the Company of the Recapture Amount (as defined below). The Company
and the Holder further agree that such termination of unexercised Options and
payment of the Recapture Amount, as the case may be, shall be in addition to,
and not in lieu of, any other right or remedy available to the Company arising
out of or in connection with any such Employment Violation including, without
limitation, the right to terminate the Holder's employment if not already
terminated, seek injunctive relief and additional monetary damages.
For purposes of this clause (h), the "Recapture Amount" shall mean the
gross gain realized or unrealized by the Holder upon each exercise of this
Option during the period beginning on the date which is twelve (12) months prior
to the date of the Holder's Employment Violation and ending on the date of
computation (the "Look-back Period"), which gain shall be calculated as the sum
of:
(i) if the Holder has exercised any portion of this Option during the
Look-back Period and sold any of the Shares acquired on exercise
thereafter, an amount equal to the product of (x) the sales price per Share
sold minus the exercise price per Share times (y) the number of Shares as
to which this Option was exercised and which were sold at such sales price;
plus
(ii) if the Holder has exercised any portion of this Option during the
Look-back Period and not sold any of the Shares acquired on exercise
thereafter, with respect to each of such Shares an amount equal to the
product of (x) the greatest of the following: (1) the Fair Market Value per
Share on the date of exercise, (2) the arithmetic average of the per Share
closing sales
4
prices as reported on NASDAQ for the thirty (30) trading day period ending
on the trading day immediately preceding the date of the Company's written
notice of its exercise of its rights under this clause (h), or (3) the
arithmetic average of the per Share closing sales prices as reported on
NASDAQ for the thirty (30) trading day period ending on the trading day
immediately preceding the date of computation, minus the exercise price per
Share times (y) the number of Shares as to which this Option was exercised
and which were not sold;
provided, however, in lieu of payment by the Holder to the Company of the
Recapture Amount determined pursuant to subclause (ii) above, the Holder, in his
or her discretion, may tender to the Company the Shares acquired upon exercise
of this Option during the Look-back Period and the Optionee shall not be
entitled to receive any consideration from the Company in exchange therefor.
(i) Adjustments. In the event that the Company shall determine that any
dividend or other distribution (whether in the form of cash, shares of common
stock of the Company, other securities, or other property), recapitalization,
stock split, reverse stock split, reorganization, merger, consolidation,
split-up, spin-off, combination, repurchase, or exchange of shares of common
stock of the Company or other securities, the issuance of warrants or other
rights to purchase shares of common stock of the Company, or other securities,
or other similar corporate transaction or event affects the Shares, such that an
adjustment is determined by the Company to be appropriate in order to prevent
dilution or enlargement of the benefits or potential benefits intended to be
made available to the Holder, then the Company shall, in such manner as the
Company may deem equitable, adjust any or all of (i) the number and type of
shares of common stock of the Company subject to this Option, and (ii) the grant
or exercise price with respect to this Option, or, if deemed appropriate, make
provision for a cash payment to the Holder.
(j) Delivery of Share Certificates. Within a reasonable time after the
exercise of this Option, the Company shall cause to be delivered to the person
entitled thereto a certificate for the Shares purchased pursuant to the exercise
of this Option. If this Option shall have been exercised with respect to less
than all of the Shares subject to this Option, the Company shall also cause to
be delivered to the person entitled thereto a new Stock Option Agreement in
replacement of this Stock Option Agreement if surrendered at the time of the
exercise of this Option, indicating the number of Shares with respect to which
this Option remains available for exercise, or the Company shall make a notation
in its books and records to reflect the partial exercise of this Option.
(k) Withholding. In the event that the Holder elects to exercise this
Option or any part thereof, and if the Company or any subsidiary or affiliate of
the Company shall be required to withhold any amounts by reasons of any federal,
state or local tax laws, rules or regulations in respect of the issuance of
Shares to the Holder pursuant to this Option, the Company or such subsidiary or
affiliate shall be entitled to deduct and withhold such amounts from any
payments to be made to the Holder. In any event, the Holder shall make available
to the Company or such subsidiary or affiliate, promptly when requested by the
Company or such subsidiary or affiliate, sufficient funds to meet the
requirements of such withholding; and the Company or such subsidiary or
affiliate shall be entitled to take and authorize such steps as it may deem
advisable in order to have such funds available to the Company or such
subsidiary or affiliate out of any funds or property due or to become due to the
Holder.
(l) Reservation of Shares. The Company hereby agrees that at all times
there shall be reserved for issuance and/or delivery upon exercise of this
Option such number of Shares as shall be required for issuance or delivery upon
exercise hereof.
(m) Rights of Holder. Nothing contained herein shall be construed to confer
upon the Holder any right to be continued in the employ of the Company and/or
any subsidiary or affiliate of the Company or derogate from any right of the
Company and/or any subsidiary or affiliate of the Company to
5
retire, request the resignation of, or discharge the Holder at any time, with or
without cause. The Holder shall not, by virtue hereof, be entitled to any rights
of a shareholder in the Company, either at law or in equity, and the rights of
the Holder are limited to those expressed herein and are not enforceable against
the Company except to the extent set forth herein.
(n) Exclusion from Pension Computations. By acceptance of the grant of this
Option, the Holder hereby agrees that any income realized upon the receipt or
exercise hereof, or upon the disposition of the Shares received upon its
exercise, is special incentive compensations and, to the extent permissible
under applicable law, shall not be taken into account as "wages", "salary" or
"compensation" in determining the amount of any payment under any pension,
retirement, incentive, profit sharing, bonus or deferred compensation plan of
the Company or any of its subsidiaries or affiliates.
(o) Registration; Legend. The Company may postpone the issuance and
delivery of Shares upon any exercise of this Option until (a) the admission of
such Shares to listing on any stock exchange or exchanges on which Shares of the
Company of the same class are then listed and (b) the completion of such
registration or other qualification of such Shares under any state or federal
law, rule or regulation as the Company shall determine to be necessary or
advisable. The Holder shall make such representations and furnish such
information as may, in the opinion of counsel for the Company, be appropriate to
permit the Company, in light of the then existence or non-existence with respect
to such Shares of an effective Registration Statement under the Securities Act
of 1933, as amended, to issue the Shares in compliance with the provisions of
that or any comparable act.
The Company may cause the following or a similar legend to be set forth on
each certificate representing Shares or any other security issued or issuable
upon exercise of this Option unless counsel for the Company is of the opinion as
to any such certificate that such legend is unnecessary:
THE SECURITIES REPRESENTED BY THIS CERTIFICATE MAY NOT BE OFFERED FOR
SALE, SOLD OR OTHERWISE TRANSFERRED EXCEPT PURSUANT TO AN EFFECTIVE
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933, AS AMENDED
(THE "ACT"), OR PURSUANT TO AN EXEMPTION FROM REGISTRATION UNDER THE
ACT, THE AVAILABILITY OF WHICH IS ESTABLISHED BY AN OPINION FROM
COUNSEL TO THE COMPANY.
(p) Amendment. The Company may, with the consent of the Holder, at any time
or from time to time amend the terms and conditions of this Option, and may at
any time or from time to time amend the terms of the Plan.
(q) Notices. Any notice which either party hereto may be required or
permitted to give to the other shall be in writing, and may be delivered
personally or by mail, postage prepaid, or overnight courier, addressed as
follows: if to the Company, at its office at 3100 Ocean Park Boulevard, Santa
Monica, California 90405, Attn: General Counsel, or at such other address as the
Company by notice to the Holder may designate in writing from time to time; and
if to the Holder, at the address shown below her signature on this Stock Option
Agreement, or at such other address as the Holder by notice to the Company may
designate in writing from time to time. Notices shall be effective upon receipt.
(r) Interpretation. A determination of the Committee as to any questions
which may arise with respect to the interpretation of the provisions of this
Option and of the Plan shall be final and
6
binding. The Committee may authorize and establish such rules, regulations and
revisions thereof as it may deem advisable.
7
IN WITNESS WHEREOF, the parties have executed this Stock Option Agreement
as of the date set forth above.
ACTIVISION, INC.
By:____________________________________
Name:
Title:
Date:__________________________________
Attest:________________________________
ACCEPTED:
_______________________________
Option Holder
_______________________________
Address
_______________________________
City State Zip Code
_______________________________
Social Security Number
Exhibit 10.4
STOCK OPTION AGREEMENT
(Non-Transferable)
Stock Option #_______________ For ______ Shares
Issued Pursuant to the
2002 Executive Incentive Plan
of
ACTIVISION, INC.
THIS CERTIFIES that on _____________ (the "Issuance Date") __________ (the
"Holder") was granted an option (the "Option") to purchase at the option price
of $_______ per share, all or any part of ___________ fully paid and
non-assessable shares ("Shares") of common stock, par value $.000001 per share,
of ACTIVISION, INC., a Delaware corporation (the "Company"), upon and subject to
the following terms and conditions:
a. Terms of the Plan. The Option is granted pursuant to, and is subject to
the terms and conditions of, the Company's 2002 Executive Incentive Plan, as
amended (the "Plan"), the terms, conditions and definitions of which are hereby
incorporated herein as though set forth at length, and the receipt of a copy of
which the Holder hereby acknowledges by his signature below. Capitalized terms
used herein shall have the meanings set forth in the Plan, unless otherwise
defined herein.
[The Company intends that this Option qualify as an "incentive" share option
within the meaning of Section 422 of the Internal Revenue Code to the maximum
extent permissible under the Internal Revenue Code. To the extent that the
Option does not qualify as an incentive share option, the Option or the portion
thereof which does not so qualify shall constitute a separate "nonqualified"
share option.]
b. Expiration. This Option shall expire on [ten (10) years less one day
from date of issuance], unless extended or earlier terminated in accordance
herewith.
c. Exercise. This Option may be exercised or surrendered during the
Holder's lifetime only by the Holder or his/her guardian or legal
representative. THIS OPTION SHALL NOT BE TRANSFERABLE BY THE HOLDER OTHERWISE
THAN BY WILL OR BY THE LAWS OF DESCENT AND DISTRIBUTION, SUBJECT TO THE TERMS
AND CONDITIONS OF THE PLAN.
This Option shall vest and be exercisable as follows:
Cumulative Shares
Vesting Date Shares Vested at Vesting Date Vested at Vesting Date
- ------------ ----------------------------- ----------------------
[vesting schedule]
This Option shall be exercised by the Holder (or by her executors,
administrators, guardian or legal representative) as to all or part of the
Shares, by the giving of written notice of exercise to the Company, specifying
the number of Shares to be purchased, accompanied by payment of the full
purchase price for the Shares being purchased. Full payment of such purchase
price shall be made at the time of exercise and shall be made (i) in cash or by
certified check or bank check or wire transfer of immediately available funds,
(ii) with the consent of the Company, by tendering previously acquired Shares
(valued at its Fair Market Value (as defined in the Plan), as determined by the
Company as of the date of tender), or (iii) with the consent of the Company, a
combination of (i) and (ii). Such notice of exercise, accompanied by such
payment, shall be delivered to the Company at its principal business office or
such other office as the Company may from time to time direct, and shall be in
such form, containing such further provisions as the Company may from time to
time prescribe. In no event may this Option be exercised for a fraction of a
Share. The Company shall effect the transfer of Shares purchased pursuant to an
Option as soon as practicable, and, within a reasonable time thereafter, such
transfer shall be evidenced on the books of the Company. No person exercising
this Option shall have any of the rights of a holder of Shares subject to this
Option until certificates for such Shares shall have been issued following the
exercise of such Option. No adjustment shall be made for cash dividends or other
rights for which the record date is prior to the date of such issuance.
(d) Termination of Employment. In the event of the termination of
employment or separation from service of the Holder for any reason (other than
death or disability as provided below), this Option, to the extent not
previously exercised or expired, shall be deemed cancelled and terminated on the
day of such termination or separation, unless the Company decides, in its sole
discretion, to extend the term of this Option, subject to the terms of the Plan.
(e) Death. In the event the Holder dies while employed by the Company or
any of its subsidiaries or affiliates, or during his term as a Director of the
Company or any of its subsidiaries or affiliates, as the case may be, this
Option, to the extent not previously expired or exercised, shall, to the extent
exercisable on the date of death, be exercisable by the estate of the Holder or
by any person who acquired this Option by bequest or inheritance, at any time
within one year after the death of the Holder, provided, however, that if the
term of such Option would expire by its terms within six months after the
Optionee's death, the term of such Option shall be extended until six months
after the Optionee's death, provided further, however, that in no instance may
the term of the Option, as so extended, exceed the maximum term established
pursuant to Sections 3.1(b)(ii) or 10.1 of the Plan.
(f) Disability. In the event of the termination of employment of the Holder
or the separation from service of a Director who is a Holder due to total
disability, the Holder, or her guardian or legal representative, shall have the
unqualified right to exercise any portion of this Option which has not been
previously exercised or expired and which the Holder was eligible to exercise as
of the first date of total disability (as determined by the Company), at any
time within one year after such termination or separation, provided, however,
that if the term of such Option would expire by its terms within six months
after such termination or separation, the term of such Option shall be extended
until six months after such termination or separation, provided further,
however, that in no instance may the term of the Option, as so extended, exceed
the maximum term established pursuant to Section 3.1(b)(ii) or 10.1 of the Plan.
The term "total
2
disability" shall, for purposes of this Share Option Agreement, be defined in
the same manner as such term is defined in Section 22(e)(3) of the Internal
Revenue Code of 1986, as amended.
(g) Change of Control. If the Holder is an active employee of the Company
or any of its subsidiaries at the time there occurs a "Change of Control" of the
Company (as defined below) and the Holder's employment is terminated by the
Company or any of its subsidiaries other than for Cause (as defined below)
within twelve (12) months following such Change of Control, or such longer
period as the Committee may determine, the portion, if any, of this Option with
respect to which the right to exercise has not yet accrued, shall immediately
vest and be exercisable in full, effective upon such termination, for a period
of 30 days thereafter, or such longer period as the Committee may determine. For
purposes of this Option, a "Change of Control" of the Company shall be deemed to
occur if:
(i) there shall have occurred a Change of Control of a nature that
would be required to be reported in response to Item 6(e) of Schedule 14A
of Regulation 14A promulgated under the Securities Exchange Act of 1934, as
amended (the "Exchange Act"), as in effect on the date hereof, whether or
not the Company is then subject to such reporting requirement, provided,
however, that there shall not be deemed to be a Change of Control of the
Company if immediately prior to the occurrence of what would otherwise be a
Change of Control of the Company (a) the Holder is the other party to the
transaction (a "Control Event") that would otherwise result in a Change of
Control of the Company or (b) the Holder is an executive officer, trustee,
director or more than 5% equity holder of the other party to the Control
Event or of any entity, directly or indirectly, controlling such other
party;
(ii) the Company merges or consolidates with, or sells all or
substantially all of its assets to, another company (each, a
"Transaction"), provided, however, that a Transaction shall not be deemed
to result in a Change of Control of the Company if (a) immediately prior
thereto the circumstances in (i)(a) or (i)(b) above exist, or (b) (1) the
shareholders of the Company, immediately before such Transaction own,
directly or indirectly, immediately following such Transaction in excess of
fifty percent (50%) of the combined voting power of the outstanding voting
securities of the corporation or other entity resulting from such
Transaction (the "Surviving Corporation") in substantially the same
proportion as their ownership of the voting securities of the Company
immediately before such Transaction and (2) the individuals who were
members of the Company's Board of Directors immediately prior to the
execution of the agreement providing for such Transaction constitute at
least a majority of the members of the board of directors or the board of
trustees, as the case may be, of the Surviving Corporation, or of a
corporation or other entity beneficially directly or indirectly owning a
majority of the outstanding voting securities of the Surviving Corporation;
or
(iii) the Company acquires assets of another company or a subsidiary
of the Company merges or consolidates with another company (each, an "Other
Transaction") and (a) the shareholders of the Company, immediately
3
before such Other Transaction own, directly or indirectly, immediately
following such Other Transaction 50% or less of the combined voting power
of the outstanding voting securities of the corporation or other entity
resulting from such Other Transaction (the "Other Surviving Corporation")
in substantially the same proportion as their ownership of the voting
securities of the Company immediately before such Other Transaction or (b)
the individuals who were members of the Company's Board of Directors
immediately prior to the execution of the agreement providing for such
Other Transaction constitute less than a majority of the members of the
board of directors or the board of trustees, as the case may be, of the
Other Surviving Corporation, or of a corporation or other entity
beneficially directly or indirectly owning a majority of the outstanding
voting securities of the Other Surviving Corporation, provided, however,
that an Other Transaction shall not be deemed to result in a Change of
Control of the Company if immediately prior thereto the circumstances in
(i)(a) or (i)(b) above exist.
For purposes of this clause (g), "Cause" shall mean (unless a different
definition is used in the Holder's written employment agreement with the
Company, if any, in which case such different definition shall apply to the
Holder) any of the following:
(i) material breach by the Holder of his or her employment agreement,
if any, or material failure by the Holder to perform his or her duties
(other than as a result of incapacity due to physical or mental illness)
during his or her employment with the Company after written notice of such
breach or failure and the Holder failed to cure such breach or failure to
the Company's reasonable satisfaction within five (5) days after receiving
such written notice;
(ii) material breach by the Holder of his or her Employee Proprietary
Information Agreement or other similar arrangement entered into by the
Holder in connection with his or her employment by the Company; or
(iii) any act of fraud, misappropriation, misuse, embezzlement or any
other material act of dishonesty in respect of the Company or its funds,
properties, assets or other employees.
(h) Employment Violation. In consideration of the granting and by
acceptance of this Option, the Holder hereby agrees that the terms of this
clause (h) shall apply to the Option. The Holder acknowledges and agrees that
each exercise of this Option and each written notice of exercise delivered to
the Company and executed by the Holder shall serve as a reaffirmation of and
continuing agreement by the Holder to comply with the terms contained in this
clause (h).
The Company and the Holder acknowledge and agree that if the Holder materially
breaches his or her employment agreement (it being understood that any breach of
the post-termination obligations contained therein shall be deemed to be
material) for so long as the terms of such employment agreement shall apply to
the Holder (each an "Employment Violation"), the Company shall have the right to
require (i) the termination and cancellation of the unexercised
4
portion of this Option, if any, whether vested or unvested, and (ii) payment by
the Holder to the Company of the Recapture Amount (as defined below). The
Company and the Holder further agree that such termination of unexercised
Options and payment of the Recapture Amount, as the case may be, shall be in
addition to, and not in lieu of, any other right or remedy available to the
Company arising out of or in connection with any such Employment Violation
including, without limitation, the right to terminate the Holder's employment if
not already terminated, seek injunctive relief and additional monetary damages.
For purposes of this clause (h), the "Recapture Amount" shall mean the gross
gain realized or unrealized by the Holder upon each exercise of this Option
during the period beginning on the date which is twelve (12) months prior to the
date of the Holder's Employment Violation and ending on the date of computation
(the "Look-back Period"), which gain shall be calculated as the sum of:
(i) if the Holder has exercised any portion of this Option during the
Look-back Period and sold any of the Shares acquired on exercise
thereafter, an amount equal to the product of (x) the sales price per Share
sold minus the exercise price per Share times (y) the number of Shares as
to which this Option was exercised and which were sold at such sales price;
plus
(ii) if the Holder has exercised any portion of this Option during the
Look-back Period and not sold any of the Shares acquired on exercise
thereafter, with respect to each of such Shares an amount equal to the
product of (x) the greatest of the following: (1) the Fair Market Value per
Share on the date of exercise, (2) the arithmetic average of the per Share
closing sales prices as reported on NASDAQ for the thirty (30) trading day
period ending on the trading day immediately preceding the date of the
Company's written notice of its exercise of its rights under this clause
(h), or (3) the arithmetic average of the per Share closing sales prices as
reported on NASDAQ for the thirty (30) trading day period ending on the
trading day immediately preceding the date of computation, minus the
exercise price per Share times (y) the number of Shares as to which this
Option was exercised and which were not sold;
provided, however, in lieu of payment by the Holder to the Company of the
Recapture Amount determined pursuant to subclause (ii) above, the Holder, in his
or her discretion, may tender to the Company the Shares acquired upon exercise
of this Option during the Look-back Period and the Optionee shall not be
entitled to receive any consideration from the Company in exchange therefor.
(i) Adjustments. In the event that the Company shall determine that any
dividend or other distribution (whether in the form of cash, shares of common
stock of the Company, other securities, or other property), recapitalization,
stock split, reverse stock split, reorganization, merger, consolidation,
split-up, spin-off, combination, repurchase, or exchange of shares of common
stock of the Company or other securities, the issuance of warrants or other
rights to purchase shares of common stock of the Company, or other securities,
or other similar corporate transaction or event affects the Shares, such that an
adjustment is determined by the Company to be appropriate in order to prevent
dilution or enlargement of the benefits or potential benefits intended to be
made available to the Holder, then the Company shall, in such
5
manner as the Company may deem equitable, adjust any or all of (i) the number
and type of shares of common stock of the Company subject to this Option, and
(ii) the grant or exercise price with respect to this Option, or, if deemed
appropriate, make provision for a cash payment to the Holder.
(j) Delivery of Share Certificates. Within a reasonable time after the
exercise of this Option, the Company shall cause to be delivered to the person
entitled thereto a certificate for the Shares purchased pursuant to the exercise
of this Option. If this Option shall have been exercised with respect to less
than all of the Shares subject to this Option, the Company shall also cause to
be delivered to the person entitled thereto a new Stock Option Agreement in
replacement of this Stock Option Agreement if surrendered at the time of the
exercise of this Option, indicating the number of Shares with respect to which
this Option remains available for exercise, or the Company shall make a notation
in its books and records to reflect the partial exercise of this Option.
(k) Withholding. In the event that the Holder elects to exercise this
Option or any part thereof, and if the Company or any subsidiary or affiliate of
the Company shall be required to withhold any amounts by reasons of any federal,
state or local tax laws, rules or regulations in respect of the issuance of
Shares to the Holder pursuant to this Option, the Company or such subsidiary or
affiliate shall be entitled to deduct and withhold such amounts from any
payments to be made to the Holder. In any event, the Holder shall make available
to the Company or such subsidiary or affiliate, promptly when requested by the
Company or such subsidiary or affiliate, sufficient funds to meet the
requirements of such withholding; and the Company or such subsidiary or
affiliate shall be entitled to take and authorize such steps as it may deem
advisable in order to have such funds available to the Company or such
subsidiary or affiliate out of any funds or property due or to become due to the
Holder.
(l) Reservation of Shares. The Company hereby agrees that at all times
there shall be reserved for issuance and/or delivery upon exercise of this
Option such number of Shares as shall be required for issuance or delivery upon
exercise hereof.
(m) Rights of Holder. Nothing contained herein shall be construed to confer
upon the Holder any right to be continued in the employ of the Company and/or
any subsidiary or affiliate of the Company or derogate from any right of the
Company and/or any subsidiary or affiliate of the Company to retire, request the
resignation of, or discharge the Holder at any time, with or without cause. The
Holder shall not, by virtue hereof, be entitled to any rights of a shareholder
in the Company, either at law or in equity, and the rights of the Holder are
limited to those expressed herein and are not enforceable against the Company
except to the extent set forth herein.
(n) Exclusion from Pension Computations. By acceptance of the grant of this
Option, the Holder hereby agrees that any income realized upon the receipt or
exercise hereof, or upon the disposition of the Shares received upon its
exercise, is special incentive compensations and, to the extent permissible
under applicable law, shall not be taken into account as "wages", "salary" or
"compensation" in determining the amount of any payment under any pension,
retirement, incentive, profit sharing, bonus or deferred compensation plan of
the Company or any of its subsidiaries or affiliates.
6
(o) Registration; Legend. The Company may postpone the issuance and
delivery of Shares upon any exercise of this Option until (a) the admission of
such Shares to listing on any stock exchange or exchanges on which Shares of the
Company of the same class are then listed and (b) the completion of such
registration or other qualification of such Shares under any state or federal
law, rule or regulation as the Company shall determine to be necessary or
advisable. The Holder shall make such representations and furnish such
information as may, in the opinion of counsel for the Company, be appropriate to
permit the Company, in light of the then existence or non-existence with respect
to such Shares of an effective Registration Statement under the Securities Act
of 1933, as amended, to issue the Shares in compliance with the provisions of
that or any comparable act.
The Company may cause the following or a similar legend to be set forth on each
certificate representing Shares or any other security issued or issuable upon
exercise of this Option unless counsel for the Company is of the opinion as to
any such certificate that such legend is unnecessary:
THE SECURITIES REPRESENTED BY THIS CERTIFICATE MAY NOT BE OFFERED FOR
SALE, SOLD OR OTHERWISE TRANSFERRED EXCEPT PURSUANT TO AN EFFECTIVE
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933, AS AMENDED
(THE "ACT"), OR PURSUANT TO AN EXEMPTION FROM REGISTRATION UNDER THE
ACT, THE AVAILABILITY OF WHICH IS ESTABLISHED BY AN OPINION FROM
COUNSEL TO THE COMPANY.
(p) Amendment. The Company may at any time or from time to time amend the
terms of the Plan, and may, with the consent of the Holder, at any time or from
time to time amend the terms and conditions of this Option, provided, however,
that in no instance may the exercise price of this Option be reduced after the
date of grant (except in connection with adjustments pursuant to Section 10.9 of
the Plan).
(q) Notices. Any notice which either party hereto may be required or
permitted to give to the other shall be in writing, and may be delivered
personally or by mail, postage prepaid, or overnight courier, addressed as
follows: if to the Company, at its office at 3100 Ocean Park Boulevard, Santa
Monica, California 90405, Attn: General Counsel, or at such other address as the
Company by notice to the Holder may designate in writing from time to time; and
if to the Holder, at the address shown below her signature on this Stock Option
Agreement, or at such other address as the Holder by notice to the Company may
designate in writing from time to time. Notices shall be effective upon receipt.
(r) Interpretation. A determination of the Committee as to any questions
which may arise with respect to the interpretation of the provisions of this
Option and of the Plan shall be final and binding. The Committee may authorize
and establish such rules, regulations and revisions thereof as it may deem
advisable.
7
IN WITNESS WHEREOF, the parties have executed this Stock Option Agreement
as of the date set forth above.
ACTIVISION, INC.
By:
---------------------------------
Name:
Title:
Date:
-------------------------------
Attest:
-----------------------------
ACCEPTED:
- ----------------------------------------
Option Holder
- ----------------------------------------
Address
- ----------------------------------------
City State Zip Code
- ----------------------------------------
Social Security Number
8
Exhibit 10.5
STOCK OPTION AGREEMENT
Stock Option #__________ For_________ Shares
Issued Pursuant to the
2003 Incentive Plan of
ACTIVISION, INC.
THIS STOCK OPTION AGREEMENT (THIS "AGREEMENT") CERTIFIES that on
_______________ (the "Issuance Date") __________________ (the "Holder") was
granted an option (the "Option") to purchase at the option price of $__________
per share, all or any part of ___________________ fully paid and non-assessable
shares ("Shares") of common stock, par value $.000001 per share, of ACTIVISION,
INC., a Delaware corporation (the "Company"), upon and subject to the following
terms and conditions:
1. Terms of the Plan. The Option is granted pursuant to, and is subject to
the terms and conditions of, the Company's 2003 Incentive Plan (the "Plan"), the
terms, conditions and definitions of which are hereby incorporated herein as
though set forth at length, and the receipt of a copy of which the Holder hereby
acknowledges by his signature below. Capitalized terms used herein shall have
the meanings set forth in the Plan, unless otherwise defined herein.
2. Expiration. This Option shall expire on [___________], unless extended
or earlier terminated in accordance herewith.
3. Exercise. [(a)] Except as otherwise permitted under the Plan, this
Option may be exercised or surrendered during the Holder's lifetime only by the
Holder or his/her guardian or legal representative. EXCEPT AS OTHERWISE
PERMITTED UNDER THE PLAN, THIS OPTION SHALL NOT BE TRANSFERABLE BY THE HOLDER
OTHERWISE THAN BY WILL OR BY THE LAWS OF DESCENT AND DISTRIBUTION. With the
Company's consent which may granted or withheld in its sole discretion, Options
may be transferred to certain permitted assignees, such as certain relatives of,
or entities controlled by, the Participant, as more fully set forth in Section
8.3 of the Plan.
This Option shall vest and be exercisable as follows:
- --------------------------------------------------------------------------------
Vesting Date Shares Vested at Vesting Date Cumulative Shares
- --------------------------------------------------------------------------------
[vesting schedule]
- --------------------------------------------------------------------------------
This Option shall be exercised by the Holder (or by her executors,
administrators, guardian or legal representative) as to all or part of the
Shares, by the giving of written notice of exercise to the Company, specifying
the number of Shares to be purchased, accompanied by payment of the full
purchase price for the Shares being purchased. Full payment of such purchase
price shall be made at the time of exercise and shall be made (i) in cash or by
certified check or bank check or wire transfer of immediately available funds,
(ii) with the consent of the Company, by tendering previously acquired Shares
(valued at their then Fair Market Value (as defined in the Plan), as determined
by the Company as of the date of tender) that have been owned for a period of at
least six months (or such other period to avoid accounting charges against the
Company's earnings), or (iii) with the consent of the Company, a combination of
(i) and (ii). Such notice of exercise, accompanied by such payment, shall be
delivered to the Company at its principal business office or such other office
as the Company may from time to time direct, and shall be in such form,
containing such further provisions as the Company may from time to time
prescribe. In no event may this Option be exercised for a fraction of a Share.
The Company shall effect the transfer of Shares purchased pursuant to an Option
as soon as practicable, and, within a reasonable time thereafter, such transfer
shall be evidenced on the books of the Company. No person exercising this Option
shall have any of the rights of a holder of Shares subject to this Option until
certificates for such Shares shall have been issued following the exercise of
such Option. No adjustment shall be made for cash dividends or other rights for
which the record date is prior to the date of such issuance.
[(b) Reload Option. Add provision for reload feature for those key
executives who qualify for such feature, as follows: Upon exercise of the Option
pursuant to clause (a), above, the Holder shall receive a new option (the
"Reload Option") to purchase at the option price equal to the Fair Market Value
of the Shares on the date of Option exercise, all or any part of that number of
Shares equal to (i) the number of Shares delivered to the Company by the holder,
or withheld from Shares otherwise issuable to the holder upon exercise, in
payment of the exercise price of the Option or the tax withholding obligations
attributable thereto and/or (ii) that number of Shares with a then Fair Market
Value equal to the amount of the withholding obligations paid in cash by the
holder. The Reload Option shall expire ____________________unless extended or
earlier terminated in accordance herewith. [Reload Options shall fully vest
immediately upon issuance.] All other terms and conditions (other than the
vesting schedule) of this Agreement and the Plan apply to the Reload Options.]
4. Termination of Employment. In the event of the termination of employment
or separation from service of the Holder for any reason (other than death or
disability as provided below), this Option, to the extent not previously
exercised or expired, shall be deemed cancelled and terminated on the day of
such termination or separation, unless the Company decides, in its sole
discretion, to extend the term of this Option, subject to the terms of the Plan.
5. Death. In the event the Holder dies while employed by the Company or any
of its subsidiaries or affiliates, or during his term as a Director of the
Company or any of its subsidiaries or affiliates, as the case may be, this
Option, to the extent not previously expired or exercised, shall, to the extent
exercisable on the date of death, be exercisable by the estate of the Holder or
by any person who acquired this Option by bequest or inheritance, at any time
within one year after the death of the Holder, provided, however, that if the
term of such Option would expire by its terms within six months after the
Optionee's death, the term of such Option shall be extended until six months
after the Optionee's death, provided further, however, that in no instance may
the term of the Option, as so extended, exceed the maximum term established
pursuant to Sections 4.5(b)(ii) or 4.5(c) of the Plan (if applicable).
2
6. Disability. In the event of the termination of employment of the Holder
or the separation from service of the Holder due to total disability, the
Holder, or her guardian or legal representative, shall have the unqualified
right to exercise any portion of this Option which has not been previously
exercised or expired and which the Holder was eligible to exercise as of the
first date of total disability (as determined by the Company), at any time
within one year after such termination or separation, provided, however, that if
the term of such Option would expire by its terms within six months after such
termination or separation, the term of such Option shall be extended until six
months after such termination or separation, provided further, however, that in
no instance may the term of the Option, as so extended, exceed the maximum term
established pursuant to Section 4.5(b)(ii) or 4.5(c) of the Plan (if
applicable). The term "total disability" shall, for purposes of this Share
Option Agreement, be defined in the same manner as such term is defined in
Section 22(e)(3) of the Internal Revenue Code of 1986, as amended.
7. Change of Control. If the Holder is an active employee of the Company or
any of its subsidiaries at the time there occurs a "Change of Control" of the
Company (as defined below) and the Holder's employment is terminated by the
Company or any of its subsidiaries other than for Cause (as defined below)
within twelve (12) months following such Change of Control, or such longer
period as the Committee may determine, the portion, if any, of this Option with
respect to which the right to exercise has not yet accrued, shall immediately
vest and be exercisable in full, effective upon such termination, for a period
of 30 days thereafter, or such longer period as the Committee may determine. For
purposes of this Option, a "Change of Control" of the Company shall be deemed to
occur if:
(a) there shall have occurred a Change of Control of a nature that
would be required to be reported in response to Item 6(e) of Schedule 14A
of Regulation 14A promulgated under the Securities Exchange Act of 1934, as
amended (the "Exchange Act"), as in effect on the date hereof, whether or
not the Company is then subject to such reporting requirement, provided,
however, that there shall not be deemed to be a Change of Control of the
Company if immediately prior to the occurrence of what would otherwise be a
Change of Control of the Company (i) the Holder is the other party to the
transaction (a "Control Event") that would otherwise result in a Change of
Control of the Company or (ii) the Holder is an executive officer, trustee,
director or more than 5% equity holder of the other party to the Control
Event or of any entity, directly or indirectly, controlling such other
party;
(b) the Company merges or consolidates with, or sells all or
substantially all of its assets to, another company (each, a
"Transaction"), provided, however, that a Transaction shall not be deemed
to result in a Change of Control of the Company if (i) immediately prior
thereto the circumstances in (a)(i) or (a)(ii) above exist, or (ii) (1) the
shareholders of the Company, immediately before such Transaction own,
directly or indirectly, immediately following such Transaction in excess of
fifty percent (50%) of the combined voting power of the outstanding voting
securities of the corporation or other entity resulting from such
Transaction (the "Surviving Corporation") in substantially the same
proportion as their ownership of the voting securities of the Company
immediately before such Transaction and (2) the individuals who were
members of the Company's Board of Directors immediately prior to the
execution of the agreement providing for such Transaction constitute at
least a majority of the members of the board of directors or
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the board of trustees, as the case may be, of the Surviving Corporation, or
of a corporation or other entity beneficially directly or indirectly owning
a majority of the outstanding voting securities of the Surviving
Corporation; or
(c) the Company acquires assets of another company or a subsidiary of
the Company merges or consolidates with another company (each, an "Other
Transaction") and (i) the shareholders of the Company, immediately before
such Other Transaction own, directly or indirectly, immediately following
such Other Transaction 50% or less of the combined voting power of the
outstanding voting securities of the corporation or other entity resulting
from such Other Transaction (the "Other Surviving Corporation") in
substantially the same proportion as their ownership of the voting
securities of the Company immediately before such Other Transaction or (ii)
the individuals who were members of the Company's Board of Directors
immediately prior to the execution of the agreement providing for such
Other Transaction constitute less than a majority of the members of the
board of directors or the board of trustees, as the case may be, of the
Other Surviving Corporation, or of a corporation or other entity
beneficially directly or indirectly owning a majority of the outstanding
voting securities of the Other Surviving Corporation, provided, however,
that an Other Transaction shall not be deemed to result in a Change of
Control of the Company if immediately prior thereto the circumstances in
(a)(i) or (a)(ii) above exist.
For purposes of this Section 7, "Cause" shall mean (unless a different
definition is used in the Holder's written employment agreement with the
Company, if any, in which case such different definition shall apply to the
Holder) any of the following:
(x) material breach by the Holder of his or her employment agreement,
if any, or material failure by the Holder to perform his or her duties
(other than as a result of incapacity due to physical or mental illness)
during his or her employment with the Company after written notice of such
breach or failure and the Holder failed to cure such breach or failure to
the Company's reasonable satisfaction within five (5) days after receiving
such written notice;
(y) material breach by the Holder of his or her Employee Proprietary
Information Agreement or other similar arrangement entered into by the
Holder in connection with his or her employment by the Company; or
(z) any act of fraud, misappropriation, misuse, embezzlement or any
other material act of dishonesty in respect of the Company or its funds,
properties, assets or other employees.
8. Employment Violation. In consideration of the granting and by acceptance
of this Option, the Holder hereby agrees that the terms of this Section 8 shall
apply to the Option. The Holder acknowledges and agrees that each exercise of
this Option and each written notice of exercise delivered to the Company and
executed by the Holder shall serve as a reaffirmation of and continuing
agreement by the Holder to comply with the terms contained in this Section 8.
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The Company and the Holder acknowledge and agree that if the Holder
materially breaches his or her employment agreement (it being understood that
any breach of the post-termination obligations contained therein shall be deemed
to be material) for so long as the terms of such employment agreement shall
apply to the Holder (each an "Employment Violation"), the Company shall have the
right to require (i) the termination and cancellation of the unexercised portion
of this Option, if any, whether vested or unvested, and (ii) payment by the
Holder to the Company of the Recapture Amount (as defined below). The Company
and the Holder further agree that such termination of unexercised Options and
payment of the Recapture Amount, as the case may be, shall be in addition to,
and not in lieu of, any other right or remedy available to the Company arising
out of or in connection with any such Employment Violation including, without
limitation, the right to terminate the Holder's employment if not already
terminated, seek injunctive relief and additional monetary damages.
For purposes of this Section 8, the "Recapture Amount" shall mean the gross
gain realized or unrealized by the Holder upon each exercise of this Option
during the period beginning on the date which is twelve (12) months prior to the
date of the Holder's Employment Violation and ending on the date of computation
(the "Look-back Period"), which gain shall be calculated as the sum of:
(a) if the Holder has exercised any portion of this Option during the
Look-back Period and sold any of the Shares acquired on exercise
thereafter, an amount equal to the product of (x) the sales price per Share
sold minus the exercise price per Share times (y) the number of Shares as
to which this Option was exercised and which were sold at such sales price;
plus
(b) if the Holder has exercised any portion of this Option during the
Look-back Period and not sold any of the Shares acquired on exercise
thereafter, with respect to each of such Shares an amount equal to the
product of (x) the greatest of the following: (1) the Fair Market Value per
Share on the date of exercise, (2) the arithmetic average of the per Share
closing sales prices as reported on NASDAQ for the thirty (30) trading day
period ending on the trading day immediately preceding the date of the
Company's written notice of its exercise of its rights under this Section
8, or (3) the arithmetic average of the per Share closing sales prices as
reported on NASDAQ for the thirty (30) trading day period ending on the
trading day immediately preceding the date of computation, minus the
exercise price per Share times (y) the number of Shares as to which this
Option was exercised and which were not sold;
provided, however, in lieu of payment by the Holder to the Company of the
Recapture Amount determined pursuant to clause (b) above, the Holder, in his or
her discretion, may tender to the Company the Shares acquired upon exercise of
this Option during the Look-back Period and the Optionee shall not be entitled
to receive any consideration from the Company in exchange therefor.
9. Adjustments. In the event that the Company shall determine that any
dividend or other distribution (whether in the form of cash, shares of common
stock of the Company, other securities, or other property), recapitalization,
stock split, reverse stock split, reorganization, merger, consolidation,
split-up, spin-off, combination, repurchase, or exchange of shares of
5
common stock of the Company or other securities, the issuance of warrants or
other rights to purchase shares of common stock of the Company, or other
securities, or other similar corporate transaction or event affects the Shares,
such that an adjustment is determined by the Company to be appropriate in order
to prevent dilution or enlargement of the benefits or potential benefits
intended to be made available to the Holder, then the Company shall, in such
manner as the Company may deem equitable, adjust any or all of (i) the number
and type of shares of common stock of the Company subject to this Option, and
(ii) the grant or exercise price with respect to this Option, or, if deemed
appropriate, make provision for a cash payment to the Holder.
10. Delivery of Share Certificates. Within a reasonable time after the
exercise of this Option, the Company shall cause to be delivered to the person
entitled thereto a certificate for the Shares purchased pursuant to the exercise
of this Option. If this Option shall have been exercised with respect to less
than all of the Shares subject to this Option, the Company shall also cause to
be delivered to the person entitled thereto a new Stock Option Agreement in
replacement of this Stock Option Agreement if surrendered at the time of the
exercise of this Option, indicating the number of Shares with respect to which
this Option remains available for exercise, or the Company shall make a notation
in its books and records to reflect the partial exercise of this Option.
11. Withholding. In the event that the Holder elects to exercise this
Option or any part thereof, and if the Company or any subsidiary or affiliate of
the Company shall be required to withhold any amounts by reasons of any federal,
state or local tax laws, rules or regulations in respect of (a) the issuance of
Shares to the Holder pursuant to this Option, or (b) the exercise or disposition
(in whole or in part) of the Option, the Company or such subsidiary or affiliate
shall be entitled to deduct and withhold such amounts from any payments to be
made to the Holder. In any event, the Holder shall make available to the Company
or such subsidiary or affiliate, promptly when requested by the Company or such
subsidiary or affiliate, sufficient funds to meet the requirements of such
withholding; and the Company or such subsidiary or affiliate shall be entitled
to take and authorize such steps as it may deem advisable in order to have such
funds available to the Company or such subsidiary or affiliate out of any funds
or property due or to become due to the Holder.
12. Reservation of Shares. The Company hereby agrees that at all times
there shall be reserved for issuance and/or delivery upon exercise of this
Option such number of Shares as shall be required for issuance or delivery upon
exercise hereof.
13. Rights of Holder. Nothing contained herein shall be construed to confer
upon the Holder any right to be continued in the employ of the Company and/or
any subsidiary or affiliate of the Company or derogate from any right of the
Company and/or any subsidiary or affiliate of the Company to retire, request the
resignation of, or discharge the Holder at any time, with or without cause. The
Holder shall not, by virtue hereof, be entitled to any rights of a shareholder
in the Company, either at law or in equity, and the rights of the Holder are
limited to those expressed herein and are not enforceable against the Company
except to the extent set forth herein.
14. Exclusion from Pension Computations. By acceptance of the grant of this
Option, the Holder hereby agrees that any income realized upon the receipt or
exercise hereof, or upon the
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disposition of the Shares received upon its exercise, is special incentive
compensations and, to the extent permissible under applicable law, shall not be
taken into account as "wages", "salary" or "compensation" in determining the
amount of any payment under any pension, retirement, incentive, profit sharing,
bonus or deferred compensation plan of the Company or any of its subsidiaries or
affiliates.
15. Registration; Legend. The Company may postpone the issuance and
delivery of Shares upon any exercise of this Option until (a) the admission of
such Shares to listing on any stock exchange or exchanges on which Shares of the
Company of the same class are then listed and (b) the completion of such
registration or other qualification of such Shares under any state or federal
law, rule or regulation as the Company shall determine to be necessary or
advisable. The Holder shall make such representations and furnish such
information as may, in the opinion of counsel for the Company, be appropriate to
permit the Company, in light of the then existence or non-existence with respect
to such Shares of an effective Registration Statement under the Securities Act
of 1933, as amended, to issue the Shares in compliance with the provisions of
that or any comparable act.
The Company may cause the following or a similar legend to be set forth on
each certificate representing Shares or any other security issued or issuable
upon exercise of this Option unless counsel for the Company is of the opinion as
to any such certificate that such legend is unnecessary:
THE SECURITIES REPRESENTED BY THIS CERTIFICATE MAY NOT BE OFFERED FOR
SALE, SOLD OR OTHERWISE TRANSFERRED EXCEPT PURSUANT TO AN EFFECTIVE
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933, AS AMENDED
(THE "ACT"), OR PURSUANT TO AN EXEMPTION FROM REGISTRATION UNDER THE
ACT, THE AVAILABILITY OF WHICH IS ESTABLISHED BY AN OPINION FROM
COUNSEL TO THE COMPANY.
16. Amendment. The Company may, with the consent of the Holder, at any time
or from time to time amend the terms and conditions of this Option, and may at
any time or from time to time amend the terms of the Plan.
17. Notices. Any notice which either party hereto may be required or
permitted to give to the other shall be in writing, and may be delivered
personally or by mail, postage prepaid, or overnight courier, addressed as
follows: if to the Company, at its office at 3100 Ocean Park Boulevard, Santa
Monica, California 90405, Attn: General Counsel, or at such other address as the
Company by notice to the Holder may designate in writing from time to time; and
if to the Holder, at the address shown below her signature on this Stock Option
Agreement, or at such other address as the Holder by notice to the Company may
designate in writing from time to time. Notices shall be effective upon receipt.
18. Interpretation. A determination of the Committee as to any questions
which may arise with respect to the interpretation of the provisions of this
Option and of the Plan shall be final and binding. The Committee may authorize
and establish such rules, regulations and revisions thereof as it may deem
advisable.
[Remainder of page intentionally blank.]
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IN WITNESS WHEREOF, the parties have executed this Stock Option Agreement
as of the date first set forth above.
ACTIVISION, INC.
By:
---------------------------------
Name:
Title:
Date:
-------------------------------
Attest:
-----------------------------
ACCEPTED:
- ----------------------------------------
Option Holder
- ----------------------------------------
Address
- ----------------------------------------
City State Zip Code
- ----------------------------------------
Social Security Number
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