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As filed with the Securities and Exchange Commission on August 14, 1998
Registration No. 333-
===========================================================================
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
__________________________________
FORM S-8
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
ACTIVISION, INC.
(Exact name of issuer as specified in its charter)
Delaware 94-2606438
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
3100 Ocean Park Boulevard
Santa Monica, California 90405
(Address of Principal Executive Offices) (Zip Code)
Activision, Inc. 1998 Incentive Plan
(Full title of the plan)
Robert A. Kotick
Chairman of the Board
Activision, Inc.
3100 Ocean Park Boulevard
Santa Monica, California 90405
(310) 255-2000
(Name, address and telephone number of agent for service)
Copies to:
Kenneth L. Henderson, Esq.
Robinson Silverman Pearce Aronsohn & Berman LLP
1290 Avenue of the Americas
New York, New York 10104
Approximate date of proposed sale to the public:
From time to time after the effective date of this Registration Statement.
CALCULATION OF REGISTRATION FEE
- --------------------------------------------------------------------------
Title of Proposed
Each Maximum Proposed
Class of Offering Maximum Amount
Securities Amount Price Aggregate of
to be to be Per Offering Registration
Registered Registered Share(1) Price(1) Fee
- --------------------------------------------------------------------------
Common Stock,
par value
$.000001
per share 3,295,000(2) $11.375 $37,480,625 $11,358
- ---------------------------------------------------------------------------
(1) Estimated solely for purposes of calculating the registration fee.
Pursuant to Rules 457(c) and (h), the Proposed Maximum Offering Price
Per Share and the Proposed Maximum Aggregate Offering Price are computed
on the basis of the average of the high and low prices for such security
on August 12, 1998, as reported on the NASDAQ National Market.
(2) Of the shares covered by this Registration Statement, 3,000,000 shares
represent the underlying stock for the stock options, restricted stock,
deferred stock, stock appreciation rights and other stock-based awards
to be granted by registrant under its 1998 Incentive Plan and 295,000
shares represent the underlying stock for non-plan options granted to
certain employees at the time of the acquisition of Head Games
Publishing.
PART I
INFORMATION REQUIRED IN THE SECTION 10(a) PROSPECTUS
Items 1 and 2. Plan Information; Registrant Information and Employee Plan
Annual Information.
The document(s) containing the information specified in the instructions
to Part I of Form S-8 will be sent or given to participants in the 1998
Incentive Plan, and to holders of the non-plan options registered hereby, as
specified by Rule 428(b)(1). In addition, the statement required to be made
pursuant to Item 2 of Part I to Form S-8 shall be contained in the Section
10(a) prospectus.
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
Item 3. Incorporation of Documents by Reference.
The following documents filed by Activision, Inc., a Delaware
corporation, (the "Company"), with the Securities and Exchange Commission
(the "Commission") are incorporated in this Registration Statement by
reference:
1. Annual Report on Form 10-K for the year ended March 31, 1998.
2. Proxy Statement dated August 7, 1998.
3. Current Report on Form 8-K filed with the Commission on July
1, 1998.
4. Description of the Company's Common Stock contained in the
Company's Registration Statement on Form S-3, Registration No.
333-46425.
All documents filed subsequent to the filing date of this
Registration Statement with the Commission by the Company pursuant to Section
13(a), 13(c), 14 or 15(d) of the Securities Exchange Act of 1934, as amended
(the "Exchange Act"), prior to the filing of a post-effective amendment which
indicates that all securities offered by this Registration Statement have
been sold or which de-registers all such securities then remaining unsold,
shall be deemed to be incorporated by reference in this Registration
Statement and to be a part hereof from the date of the filing of such
documents. Any statement contained in a document incorporated or deemed to
be incorporated herein by reference shall be deemed to be modified or
superseded for purposes of this Registration Statement to the extent that a
statement contained herein or in any subsequent filed document which also is,
or is deemed to be, incorporated by reference herein modifies or supersedes
such prior statement. Any statement so modified or superseded shall not be
deemed, except as so modified or superseded, to constitute a part of this
Registration Statement, except as indicated herein.
Item 4. Description of Securities.
Not applicable.
Item 5. Interests of Named Experts and Counsel.
Not applicable.
Item 6. Indemnification of Directors and Officers.
Section 145 of the Delaware General Corporation Law ("DGCL"),
paragraph B of Article SIXTH of the Company's Amended and Restated
Certificate of Incorporation and paragraph 5 of Article VII of the Company's
By-laws provide for the indemnification of the Company's directors and
officers in a variety of circumstances, which may include liabilities under
the Securities Act of 1933, as amended (the "Securities Act").
Paragraph B of Article SIXTH of the Amended and Restated
Certificate of Incorporation provides mandatory indemnification rights to any
officer or director of the Company who, by reason of the fact that he or she
is an officer or director of the Company, is involved in a legal proceeding
of any nature. Such indemnification rights shall include reimbursement for
expenses incurred by such officer or director in advance of the final
disposition of such proceeding in accordance with the applicable provisions
of the DGCL. Paragraph 5 of Article VII of the Company's By-laws currently
provide that the Company shall indemnify its directors and officers to the
fullest extent permitted by the DGCL.
Paragraph A of Article SIXTH of the Amended and Restated
Certificate of Incorporation contains a provision which eliminates the
personal liability of a director to the Company and its stockholders for
certain breaches of his or her fiduciary duty of care as a director. This
provision does not, however, eliminate or limit the personal liability of a
director (i) for any breach of such director's duty of loyalty to the Company
or its stockholders, (ii) for acts or omissions not in good faith or which
involve intentional misconduct or a knowing violation of law, (iii) under the
Delaware statutory provision making directors personally liable, under a
negligence standard, for unlawful dividends or unlawful stock repurchases or
redemptions, or (iv) for any transaction from which the director derived an
improper personal benefit. This provision offers persons who serve on the
Board of Directors of the Company protection against awards of monetary
damages resulting from negligent (except as indicated above) and "grossly"
negligent actions taken in the performance of their duty of care, including
grossly negligent business decisions made in connection with takeover
proposals for the Company. As a result of this provision, the ability of the
Company or a stockholder thereof to successfully prosecute an action against
a director for a breach of his duty of care has been limited. However, the
provision does not affect the availability of equitable remedies such as an
injunction or rescission based upon a director's breach of his duty of care.
The Company maintains a directors' and officers' insurance policy
which insures the officers and directors of the Company from any claim
arising out of an alleged wrongful act by such persons in their respective
capacities as officers and directors of the Company. In addition, the
Company has entered into indemnification agreements with its officers and
directors containing provisions which are in some respects broader than the
specific indemnification provisions contained in the DGCL. The
indemnification agreements require the Company, among other things, to
indemnify such officers and directors against certain liabilities that may
arise by reason of their status or service as directors or officers (other
than liabilities arising from willful misconduct of a culpable nature) and to
advance their expenses incurred as a result of any proceeding against them as
to which they could be indemnified. The Company believes that these
agreements are necessary to attract and retain qualified persons as directors
and officers.
It is currently unclear as a matter of law what impact these
provisions will have regarding securities law violations. The Commission
takes the position that indemnification of directors, officers and
controlling persons against liabilities arising under the Securities Act is
against public policy as expressed in the Securities Act and therefore is
unenforceable.
Item 7. Exemption from Registration Claimed.
Not applicable.
Item 8. Exhibits.
3.1 Amended and Restated Certificate of Incorporation of Activision,
Inc., dated October 15, 1992 (incorporated by reference to Exhibit
4.5 of Amendment No. 1 to the Company's Registration Statement on
Form S-8, Registration No. 33-48411).
3.2 Bylaws of Activision, Inc. (incorporated by reference to Exhibit
4.6 of Amendment No. 1 to the Company's Registration Statement on
Form S-8, Registration No. 33-48411).
3.3 Certificate of Amendment of Amended and Restated Certificate of
Incorporation of Activision, Inc., dated August 22, 1996
(incorporated by reference to Exhibit 3.3 of the Company's
Registration Statement on Form S-8, Registration No. 333-40727).
4.1 Activision, Inc. 1998 Incentive Plan.
4.2 Option to Purchase Common Stock of Activision, Inc. granted on June
30, 1998, to Daniel Hammett.
4.3 Option to Purchase Common Stock of Activision, Inc. granted on June
30, 1998, to Chad Koehler.
4.4 Option to Purchase Common Stock of Activision, Inc. granted on June
30, 1998, to Terry DeSanctis.
4.5 Option to Purchase Common Stock of Activision, Inc. granted on June
30, 1998, to Steven B. Foust.
5.1 Opinion of Robinson Silverman Pearce Aronsohn & Berman LLP, counsel
to the Company, as to the legality of the Common Stock being
registered.
23.1 Consent of KPMG Peat Marwick LLP
23.2 Consent of Robinson Silverman Pearce Aronsohn & Berman LLP
(included as part of Exhibit 5.1).
24.1 Power of Attorney (included on signature page).
Item 9. Undertakings.
1. The undersigned registrant hereby undertakes:
(a) To file, during any period in which offers or sales are being
made, a post-effective amendment to this Registration Statement:
(i) To include any prospectus required by Section 10(a)(3) of the
Securities Act of 1933, as amended (the "Securities Act");
(ii) To reflect in the prospectus any facts or events arising
after the effective date of this Registration Statement (or
the most recent post-effective amendment hereof) which,
individually or in the aggregate, represent a fundamental
change in the information set forth in this Registration
Statement; and
(iii) To include any material information with respect to the plan
of distribution not previously disclosed in this Registration
Statement or any material change to such information in this
Registration Statement;
provided, however, that paragraphs (1)(a)(i) and (1)(a)(ii) will not apply if
the information required to be included in a post-effective amendment by
those paragraphs is contained in periodic reports filed by the registrant
pursuant to Section 13 or Section 15(d) of the Exchange Act that are
incorporated by reference in this Registration Statement.
(b) That, for the purpose of determining any liability under the
Securities Act, each such post-effective amendment shall be deemed to be a
new registration statement relating to the securities offered therein, and
the offering of such securities at that time shall be deemed to be the
initial bona fide offering thereof.
(c) To remove from registration by means of a post-effective
amendment any of the securities being registered which remain unsold at the
termination of the offering.
2. The undersigned registrant hereby further undertakes that, for
purposes of determining any liability under the Securities Act, each filing
of the registrant's annual report pursuant to Section 13(a) or Section 15(d)
of the Exchange Act that is incorporated by reference in this Registration
Statement shall be deemed to be a new registration statement relating to the
securities offered therein, and the offering of such securities at that time
shall be deemed to be the initial bona fide offering thereof.
3. Insofar as indemnification for liabilities arising under the
Securities Act may be permitted to directors, officers and controlling
persons of the registrant pursuant to the foregoing provisions described
under Item 6 above, or otherwise, the registrant has been advised that in the
opinion of the Commission such indemnification is against public policy as
expressed in the Securities Act and is, therefore, unenforceable. In the
event that a claim for indemnification against such liabilities (other than
the payment by the registrant of expenses incurred or paid by a director,
officer or controlling person of the registrant in the successful defense of
any action, suit or proceeding) is asserted by such director, officer or
controlling person in connection with the securities being registered, the
registrant will, unless in the opinion of its counsel the matter has been
settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against
public policy as expressed in the Securities Act and will be governed by the
final adjudication of such issue.
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as
amended, the Registrant certifies that it has reasonable grounds to believe
that it meets all of the requirements for filing on Form S-8 and has duly
caused this Registration Statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of Los Angeles, State of
California, on the 12th day of August, 1998.
ACTIVISION, INC.
By:/s/ Robert A. Kotick
--------------------------------
Robert A. Kotick, Chairman and
Chief Executive Officer
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature
appears below does hereby constitute and appoint Robert A. Kotick and Brian
G. Kelly, and each or any of them, as his true and lawful attorney-in-fact
and agent, with full power of substitution and resubstitution, for him and in
his name, place and stead, in any and all capacities, to sign any and all
amendments (including, without limitation, post-effective amendments and
documents in connection therewith) to this Registration Statement, and to
file the same with the Securities and Exchange Commission, granting unto each
said attorney-in-fact and agent full power and authority to do and perform
each and every act and thing requisite and necessary to be done, as fully to
all intents and purposes as he might or could do in person, hereby ratifying
and confirming all that said attorney-in-fact and agent or either of them, or
their or his substitute or substitutes, may lawfully do or cause to be done
by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities and on the dates indicated.
Name Title Date
---- ----- ----
/s/ Robert A. Kotick Chairman, Chief Executive Officer August 12, 1998
- ---------------------- (Principal Executive Officer)
(Robert A. Kotick) and Director
/s/ Brian G. Kelly Chief Operating Officer, August 12, 1998
- ---------------------- President and Director
(Brian G. Kelly)
/s/ Barry J. Plaga Chief Financial Officer August 12, 1998
- ---------------------- (Principal Financial and
(Barry J. Plaga) Accounting Officer)
/s/ Harold A. Brown Director August 12, 1998
- ----------------------
(Harold A. Brown)
/s/ Barbara S. Isgur Director August 12, 1998
- ----------------------
(Barbara S. Isgur)
/s/ Steven T. Mayer Director August 12, 1998
- ----------------------
(Steven T. Mayer)
/s/ Robert J. Morgado Director August 12, 1998
- ----------------------
(Robert J. Morgado)
EXHIBIT INDEX
No. Document Page
3.1 Amended and Restated Certificate of Incorporation of
Activision, Inc., dated October 15, 1992 (incorporated by
reference to Exhibit 4.5 of Amendment No. 1 to the Company's
Registration Statement on Form S-8, Registration No. 33-
48411).
3.2 Bylaws of Activision, Inc. (incorporated by reference to
Exhibit 4.6 of Amendment No. 1 to the Company's Registration
Statement on Form S-8, Registration No. 33-48411).
3.3 Certificate of Amendment of Amended and Restated Certificate
of Incorporation of Activision, Inc., dated August 22, 1996
(incorporated by reference to Exhibit 3.3 of the Company's
Registration Statement on Form S-8, Registration No. 333-
40727).
4.1 Activision, Inc. 1998 Incentive Plan.
4.2 Option to Purchase Common Stock of Activision, Inc. granted
on June 30, 1998, to Daniel Hammett.
4.3 Option to Purchase Common Stock of Activision, Inc. granted
on June 30, 1998, to Chad Koehler.
4.4 Option to Purchase Common Stock of Activision, Inc. granted
on June 30, 1998, to Terry DeSanctis.
4.5 Option to Purchase Common Stock of Activision, Inc. granted
on June 30, 1998, to Steven B. Foust.
5.1 Opinion of Robinson Silverman Pearce Aronsohn & Berman LLP,
counsel to the Company, as to the legality of the Common
Stock being registered.
23.1 Consent of KPMG Peat Marwick LLP.
23.2 Consent of Robinson Silverman Pearce Aronsohn & Berman LLP
(included as part of Exhibit 5.1).
24.1 Power of Attorney (included on signature page).
As Adopted by the
Board of Directors
June 1, 1998
ACTIVISION, INC.
1998 INCENTIVE PLAN
ACTIVISION, INC., a corporation formed under the laws of the State
of Delaware (the "Company"), hereby establishes and adopts the following 1998
Incentive Plan (the "Plan").
RECITALS
WHEREAS, the Company desires to encourage high levels of
performance by those individuals who are key to the success of the Company,
to attract new individuals who are highly motivated and who will contribute
to the success of the Company and to encourage such individuals to remain as
directors and/or employees of the Company and its subsidiaries by increasing
their proprietary interest in the Company's growth and success.
WHEREAS, to attain these ends, the Company has formulated the Plan
embodied herein to authorize the granting of incentive awards through grants
of share options ("Options"), grants of share appreciation rights, grants of
Share Purchase Awards (hereafter defined), grants of Restricted Share Awards
(hereafter defined) and grants of Performance-Based Awards (hereafter
defined) to those individuals whose judgment, initiative and efforts are or
have been responsible for the success of the Company.
NOW, THEREFORE, the Company hereby constitutes, establishes and
adopts the following Plan and agrees to the following provisions:
ARTICLE 1.
PURPOSE OF THE PLAN
1.1 Purpose. The purpose of the Plan is to assist the Company and
its subsidiaries in attracting and retaining selected individuals to serve as
directors, officers, consultants, advisors and other key employees of the
Company and its subsidiaries who will contribute to the Company's success and
to achieve long-term objectives which will inure to the benefit of all
shareholders of the Company through the additional incentive inherent in the
ownership or increased ownership of the Company's shares of common stock
("Shares"). Options granted under the Plan will be either "incentive share
options," intended to qualify as such under the provisions of section 422 of
the Internal Revenue Code of 1986, as from time to time amended (the "Code"),
or "nonqualified share options." For purposes of the Plan, the term
"subsidiary" shall mean "subsidiary corporation," as such term is defined in
section 424(f) of the Code, and "affiliate" shall have the meaning set forth
in Rule 12b-2 of the Securities Exchange Act of 1934, as amended (the
"Exchange Act"). For purposes of the Plan, the term "Award" shall mean a
grant of an Option, a grant of a share appreciation right, a grant of a Share
Purchase Award, a grant of a Restricted Share Award, or any other award made
under the terms of the Plan.
ARTICLE 2.
SHARES SUBJECT TO AWARDS
2.1 Number of Shares. Subject to the adjustment provisions of
Section 9.10 hereof, the aggregate number of Shares which may be issued under
Awards under the Plan, whether pursuant to Options, share appreciation
rights, Share Purchase Awards , Restricted Share Awards or Performance-Based
Awards shall not exceed 3,000,000. No Options to purchase fractional Shares
shall be granted or issued under the Plan. For purposes of this Section 2.1,
the Shares that shall be counted toward such limitation shall include all
Shares:
(1) issued or issuable pursuant to Options that have been or may
be exercised;
(2) issued or issuable pursuant to Share Purchase Awards; and
(3) issued as, or subject to issuance as a Restricted Share Award.
2.2 Shares Subject to Terminated Awards. The Shares covered by
any unexercised portions of terminated Options granted under Articles 4 and
6, Shares forfeited as provided in Section 8.2(a) and Shares subject to any
Awards which are otherwise surrendered by the Participant without receiving
any payment or other benefit with respect thereto may again be subject to new
Awards under the Plan. In the event the purchase price of an Option is paid
in whole or in part through the delivery of Shares, the number of Shares
issuable in connection with the exercise of the Option shall not again be
available for the grant of Awards under the Plan. Shares subject to Options,
or portions thereof, which have been surrendered in connection with the
exercise of share appreciation rights shall not again be available for the
grant of Awards under the Plan.
2.3 Character of Shares. Shares delivered under the Plan may be
authorized and unissued Shares or Shares acquired by the Company, or both.
2.4 Limitations on Grants to Individual Participant. Subject to
adjustments pursuant to the provisions of Section 10.10 hereof, the maximum
number of Shares with respect to which Options or stock appreciation rights
may be granted hereunder to any employee during any fiscal year shall be
500,000 Shares (the "Limitation"). If an Option is cancelled, the cancelled
Option shall continue to be counted toward the Limitation for the year
granted. An Option (or a stock appreciation right) that is repriced during
any fiscal year is treated as the cancellation of the Option (or stock
appreciation right) and a grant of a new Option (or stock appreciation right)
for purposes of the Limitation for that fiscal year.
ARTICLE 3.
ELIGIBILITY AND ADMINISTRATION
3.1 Awards to Employees and Directors. (a) Participants who
receive (i) Options under Articles 4 and 6 hereof or share appreciation
rights under Article 5 ("Optionees"), and (ii) Share Purchase Awards under
Article 7 or Restricted Share Awards under Article 8 (in either case, a
"Participant"), shall consist of such officers, key employees, consultants,
representatives and other contractors and agents and Directors (hereinafter
defined) of the Company or any of its subsidiaries or affiliates as the
Committee shall select from time to time, provided, however, that an Option
that is intended to qualify as an "incentive share option" may be granted
only to an individual that is an employee of the Company or any of its
subsidiaries. The Committee's designation of an Optionee or Participant in
any year shall not require the Committee to designate such person to receive
Awards or grants in any other year. The designation of an Optionee or
Participant to receive Awards or grants under one portion of the Plan shall
not require the Committee to include such Optionee or Participant under other
portions of the Plan.
(b) No Option which is intended to qualify as an "incentive
share option" may be granted to any employee or Director who, at the time of
such grant, owns, directly or indirectly (within the meaning of sections
422(b)(6) and 424(d) of the Code), shares possessing more than 10% of the
total combined voting power of all classes of shares of the Company or any of
its subsidiaries or affiliates, unless at the time of such grant, (i) the
option price is fixed at not less than 110% of the Fair Market Value (as
defined below) of the Shares subject to such Option, determined on the date
of the grant, and (ii) the exercise of such Option is prohibited by its terms
after the expiration of five years from the date such Option is granted.
3.2 Administration. (a) The Plan shall be administered by a
committee (the "Committee") consisting of not fewer than two Directors of the
Company (the directors of the Company being hereinafter referred to as the
"Directors"), as designated by the Directors. The Directors may remove from,
add members to, or fill vacancies in the Committee. Unless otherwise
determined by the Directors, each member of the Committee will be a "non-
employee director" within the meaning of Rule 16b-3 (or any successor rule)
of the Exchange Act and an "outside director" within the meaning of Section
162(m)(4)(C)(i) of the Code and the regulations thereunder.
Notwithstanding any other provision of this Plan, any Award to
a member of the Committee must be approved by the Board of Directors of the
Company (excluding Directors who are also members of the Committee) to be
effective.
(b) The Committee is authorized, subject to the provisions of
the Plan, to establish such rules and regulations as it may deem appropriate
for the conduct of meetings and proper administration of the Plan. All
actions of the Committee shall be taken by majority vote of its members.
(c) Subject to the provisions of the Plan, the Committee
shall have authority, in its sole discretion, to grant Awards under the Plan,
to interpret the provisions of the Plan and, subject to the requirements of
applicable law, including Rule 16b-3 of the Exchange Act, to prescribe,
amend, and rescind rules and regulations relating to the Plan or any Award
thereunder as it may deem necessary or advisable. All decisions made by the
Committee pursuant to the provisions of the Plan shall be final, conclusive
and binding on all persons, including the Company, its shareholders,
Directors and employees, and other Plan participants.
ARTICLE 4.
OPTIONS
4.1 Grant of Options. Directors, Officers and Other Key
Employees. The Committee shall determine, within the limitations of the
Plan, those Directors, officers and other key employees of the Company and
its subsidiaries and affiliates to whom Options are to be granted under the
Plan, the number of Shares that may be purchased under each such Option and
the option price, and shall designate such Options at the time of the grant
as either "incentive share options" or "nonqualified share options"; pro-
vided, however, that Options granted to employees of an affiliate (that is
not also a subsidiary) or to non-employees of the Company may only be
"nonqualified share options."
4.2 Share Option Agreements; etc. All Options granted pursuant to
Article 4 and Article 6 herein (a) shall be authorized by the Committee and
(b) shall be evidenced in writing by share option agreements ("Share Option
Agreements") in such form and containing such terms and conditions as the
Committee shall determine which are not inconsistent with the provisions of
the Plan, and, with respect to any Share Option Agreement granting Options
which are intended to qualify as "incentive share options," are not
inconsistent with Section 422 of the Code. Granting of an Option pursuant to
the Plan shall impose no obligation on the recipient to exercise such option.
Any individual who is granted an Option pursuant to this Article 4 and
Article 6 herein may hold more than one Option granted pursuant to such
Articles at the same time and may hold both "incentive share options" and
"nonqualified share options" at the same time. To the extent that any Option
does not qualify as an "incentive share option" (whether because of its
provisions, the time or manner of its exercise or otherwise) such Option or
the portion thereof which does not so qualify shall constitute a separate
"nonqualified share option."
4.3 Option Price. Subject to Section 3.1(b), the option price per
each Share purchasable under any "incentive share option" granted pursuant to
this Article 4 and any "nonqualified share option" granted pursuant to
Article 6 herein shall be determined by the Committee, but in the case of an
"incentive share option" shall not be less than 100% of the Fair Market Value
(as hereinafter defined) of such Share on the date of the grant of such
Option. The option price per share of each Share purchasable under any
"nonqualified share option" granted pursuant to this Article 4 shall be
determined by the Committee at the time of the grant of such Option, but
shall not be less than 85% of the Fair Market Value of such Share on the date
of the grant of such Option.
4.4 Other Provisions. Options granted pursuant to this Article 4
shall be made in accordance with the terms and provisions of Article 10
hereof and any other applicable terms and provisions of the Plan.
ARTICLE 5.
SHARE APPRECIATION RIGHTS
5.1 Grant and Exercise. Share appreciation rights may be granted
in conjunction with all or part of any Option granted under the Plan, as
follows: (i) in the case of a nonqualified share option, such rights may be
granted either at the time of the grant of such option or at any subsequent
time during the term of the option; and (ii) in the case of an incentive
share option, such rights may be granted only at the time of the grant of
such option. A "share appreciation right" is a right to receive cash or
Shares, as provided in this Article 5, in lieu of the purchase of a Share
under a related Option. A share appreciation right or applicable portion
thereof shall terminate and no longer be exercisable upon the termination or
exercise of the related Option, and a share appreciation right granted with
respect to less than the full number of Shares covered by a related Option
shall not be reduced until, and then only to the extent that, the exercise or
termination of the related Option exceeds the number of Shares not covered by
the share appreciation right. A share appreciation right may be exercised by
the holder thereof (the "Holder"), in accordance with Section 5.2 of this
Article 5, by giving written notice thereof to the Company and surrendering
the applicable portion of the related Option. Upon giving such notice and
surrender, the Holder shall be entitled to receive an amount determined in
the manner prescribed in Section 5.2 of this Article 5. Options which have
been so surrendered, in whole or in part, shall no longer be exercisable to
the extent the related share appreciation rights have been exercised.
5.2 Terms and Conditions. Share appreciation rights shall be
subject to such terms and conditions, not inconsistent with the provisions of
the Plan, as shall be determined from time to time by the Committee,
including the following:
(a) Share appreciation rights shall be exercisable only at
such time or times and to the extent that the Options to which they
relate shall be exercisable in accordance with the provisions of the
Plan.
(b) Upon the exercise of a share appreciation right, a Holder
shall be entitled to receive up to, but no more than, an amount in cash
or whole Shares as determined by the Committee in its sole discretion
equal to the excess of the then Fair Market Value of one Share over the
option price per Share specified in the related Option multiplied by the
number of Shares in respect of which the share appreciation right shall
have been exercised. The Holder shall specify in his written notice of
exercise, whether payment shall be made in cash or in whole Shares.
Each share appreciation right may be exercised only at the time and so
long as a related Option, if any, would be exercisable or as otherwise
permitted by applicable law.
(c) Upon the exercise of a share appreciation right, the
Option or part thereof to which such share appreciation right is related
shall be deemed to have been exercised for the purpose of the limitation
of the number of Shares to be issued under the Plan, as set forth in
Section 2.1 of the Plan.
(d) With respect to share appreciation rights granted in
connection with an Option that is intended to be an "incentive share
option," the following shall apply:
(i) No share appreciation right shall be transferable by
a Holder otherwise than by will or by the laws of descent and
distribution, and share appreciation rights shall be exercisable,
during the Holder's lifetime, only by the Holder.
(ii) Share appreciation rights granted in connection
with an Option may be exercised only when the Fair Market Value of
the Shares subject to the Option exceeds the option price at which
Shares can be acquired pursuant to the Option.
ARTICLE 6.
RELOAD OPTIONS
6.1 Authorization of Reload Options. Concurrently with the award
of any Option (such Option hereinafter referred to as the "Underlying
Option") to any participant in the Plan, the Committee may grant one or more
reload options (each, a "Reload Option") to such participant to purchase for
cash or Shares a number of Shares as specified below. A Reload Option shall
be exercisable for an amount of Shares equal to (i) the number of Shares
delivered by the Optionee to the Company to exercise the Underlying Option,
and (ii) to the extent authorized by the Committee, the number of Shares used
to satisfy any tax withholding requirement incident to the exercise of the
Underlying Option, subject to the availability of Shares under the Plan at
the time of such exercise. Any Reload Option may provide for the grant, when
exercised, of subsequent Reload Options to the extent and upon such terms and
conditions consistent with this Article 6, as the Committee in its sole
discretion shall specify at or after the time of grant of such Reload Option.
The grant of a Reload Option will become effective upon the exercise of an
Underlying Option or Reload Option by the Optionee delivering to the Company
Shares owned by the Optionee in payment of the exercise price and/or tax
withholding obligations. Notwithstanding the fact that the Underlying Option
may be an "incentive share option," a Reload Option is not intended to
qualify as an "incentive share option" under Section 422 of the Code.
6.2 Reload Option Amendment. Each Share Option Agreement shall
state whether the Committee has authorized Reload Options with respect to the
Underlying Option. Upon the exercise of an Underlying Option or other Reload
Option, the Reload Option will be evidenced by an amendment to the underlying
Share Option Agreement.
6.3 Reload Option Price. The option price per Share payable upon
the exercise of a Reload Option shall be the Fair Market Value of a Share on
the date the grant of the Reload Option becomes effective.
6.4 Term and Exercise. Each Reload Option is fully exercisable
immediately from the effective date of grant. The term of each Reload Option
shall be equal to the remaining option term of the Underlying Option.
6.5 Termination of Employment. No additional Reload Options shall
be granted to Optionees when Options and/or Reload Options are exercised
pursuant to the terms of this Plan following termination of the Optionee's
employment unless the Committee, in its sole discretion, shall determine
otherwise.
6.6 Applicability of Other Sections. Except as otherwise provided
in this Article 6, the provisions of Article 9 applicable to Options shall
apply equally to Reload Options.
ARTICLE 7.
SHARE PURCHASE AWARDS
7.1 Grant of Share Purchase Award. The term "Share Purchase
Award" means the right to purchase Shares of the Company and to pay for such
Shares through a loan made by the Company to an employee (a "Purchase Loan")
as set forth in this Article 7.
7.2 Terms of Purchase Loans. (a) Purchase Loan. Each Purchase
Loan shall be evidenced by a promissory note. The term of the Purchase Loan
shall be a period of years, as determined by the Committee, and the proceeds
of the Purchase Loan shall be used exclusively by the Participant for
purchase of Shares from the Company at a purchase price equal to the Fair
Market Value on the date of the Share Purchase Award.
(b) Interest on Purchase Loan. A Purchase Loan shall be non-
interest bearing or shall bear interest at whatever rate the Committee shall
determine (but not in excess of the maximum rate permissible under applicable
law), payable in a manner and at such times as the Committee shall determine.
Those terms and provisions as the Committee shall determine shall be
incorporated into the promissory note evidencing the Purchase Loan.
(c) Forgiveness of Purchase Loan. Subject to Section 7.4
hereof, the Company may forgive the repayment of up to 100% of the principal
amount of the Purchase Loan, subject to such terms and conditions as the
Committee shall determine and set forth in the promissory note evidencing the
Purchase Loan. A Participant's Purchase Loan can be prepaid at any time,
and from time to time, without penalty.
7.3 Security for Loans. (a) Stock Power and Pledge. Purchase
Loans granted to Participants shall be secured by a pledge of the Shares
acquired pursuant to the Share Purchase Award. Such pledge shall be
evidenced by a pledge agreement (the "Pledge Agreement") containing such
terms and conditions as the Committee shall determine. Purchase Loans shall
be recourse or non-recourse with respect to a Participant, as determined from
time to time by the Committee. The share certificates for the Shares
purchased by a Participant pursuant to a Share Purchase Award shall be issued
in the Participant's name, but shall be held by the Company as security for
repayment of the Participant's Purchase Loan together with a stock power
executed in blank by the Participant (the execution and delivery of which by
the Participant shall be a condition to the issuance of the Share Purchase
Award). The Participant shall be entitled to exercise all rights applicable
to such Shares, including, but not limited to, the right to vote such Shares
and the right to receive dividends and other distributions made with respect
to such Shares. When the Purchase Loan and any accrued but unpaid interest
thereon has been repaid or otherwise satisfied in full, the Company shall
deliver to the Participant the share certificates for the Shares purchased by
a Participant under the Share Purchase Award.
(b) Release and Delivery of Share Certificates During the
Term of the Purchase Loan. The Company shall release and deliver to each
Participant certificates for Shares purchased by a Participant pursuant to a
Share Purchase Award, in such amounts and on such terms and conditions as the
Committee shall determine, which shall be set forth in the Pledge Agreement.
(c) Release and Delivery of Share Certificates Upon Repayment
of the Purchase Loan. The Company shall release and deliver to each
Participant certificates for the Shares purchased by the Participant under
the Share Purchase Award and then held by the Company, provided the
Participant has paid or otherwise satisfied in full the balance of the
Purchase Loan and any accrued but unpaid interest thereon. In the event the
balance of the Purchase Loan is not repaid, forgiven or otherwise satisfied
within 90 days after (i) the date repayment of the Purchase Loan is due
(whether in accordance with its term, by reason of acceleration or
otherwise), or (ii) such longer time as the Committee, in its discretion,
shall provide for repayment or satisfaction, the Company shall retain those
Shares then held by the Company in accordance with the Pledge Agreement.
(d) Recourse Purchase Loans. Notwithstanding Sections
7.3(a), (b) and (c) above, in the case of a recourse Purchase Loan, the
Committee may make such Purchase Loan on such terms as it determines,
including without limitation, not requiring a pledge of the acquired Shares.
7.4 Termination of Employment. (a) Termination of Employment by
Death, Disability or by the Company Without Cause; Change of Control. In the
event of a Participant's termination of employment by reason of death,
"disability" or by the Company without "cause," or in the event of a "change
of control," the Committee shall have the right (but shall not be required)
to forgive the remaining unpaid amount (principal and interest) of the
Purchase Loan in whole or in part as of the date of such occurrence. "Change
of Control," "disability" and "cause" shall have the respective meanings as
set forth in the promissory note evidencing the Purchase Loan.
(b) Other Termination of Employment. Subject to Section
7.4(a) above, in the event of a Participant's termination of employment for
any reason, the Participant shall repay to the Company the entire balance of
the Purchase Loan and any accrued but unpaid interest thereon, which amounts
shall become immediately due and payable, unless otherwise determined by the
Committee.
7.5 Restrictions on Transfer. No Share Purchase Award or Shares
purchased through such an Award and pledged to the Company as collateral
security for the Participant's Purchase Loan (and accrued and unpaid interest
thereon) may be otherwise pledged, sold, assigned or transferred (other than
by will or by the laws of descent and distribution).
ARTICLE 8.
RESTRICTED AWARDS
8.1 Restricted Share Awards. (a) Grant. A grant of Shares made
pursuant to this Article 8 is referred to as a "Restricted Share Award." The
Committee may grant to any employee an amount of Shares in such manner, and
subject to such terms and conditions relating to vesting, forfeitability and
restrictions on delivery and transfer (whether based on performance
standards, periods of service or otherwise) as the Committee shall establish
(such Shares, "Restricted Shares"). The terms of any Restricted Share Award
granted under this Plan shall be set forth in a written agreement (a
"Restricted Share Agreement") which shall contain provisions determined by
the Committee and not inconsistent with this Plan. The provisions of
Restricted Share Awards need not be the same for each Participant receiving
such Awards.
(b) Issuance of Restricted Shares. As soon as practicable
after the date of grant of a Restricted Share Award by the Committee, the
Company shall cause to be transferred on the books of the Company, Shares
registered in the name of the Company, as nominee for the Participant,
evidencing the Restricted Shares covered by the Award; provided, however,
such Shares shall be subject to forfeiture to the Company retroactive to the
date of grant, if a Restricted Share Agreement delivered to the Participant
by the Company with respect to the Restricted Shares covered by the Award is
not duly executed by the Participant and timely returned to the Company. All
Restricted Shares covered by Awards under this Article 8 shall be subject to
the restrictions, terms and conditions contained in the Plan and the
Restricted Share Agreement entered into by and between the Company and the
Participant. Until the lapse or release of all restrictions applicable to an
Award of Restricted Shares, the share certificates representing such
Restricted Shares shall be held in custody by the Company or its designee.
(c) Shareholder Rights. Beginning on the date of grant of
the Restricted Share Award and subject to execution of the Restricted Share
Agreement as provided in Sections 8.1(a) and (b), the Participant shall
become a shareholder of the Company with respect to all Shares subject to the
Restricted Share Agreement and shall have all of the rights of a shareholder,
including, but not limited to, the right to vote such Shares and the right to
receive distributions made with respect to such Shares; provided, however,
that any Shares distributed as a dividend or otherwise with respect to any
Restricted Shares as to which the restrictions have not yet lapsed shall be
subject to the same restrictions as such Restricted Shares and shall be
represented by book entry and held as prescribed in Section 8.1(b).
(d) Restriction on Transferability. None of the Restricted
Shares may be assigned or transferred (other than by will or the laws of
descent and distribution), pledged or sold prior to lapse or release of the
restrictions applicable thereto.
(e) Delivery of Shares Upon Release of Restrictions. Upon
expiration or earlier termination of the forfeiture period without a
forfeiture and the satisfaction of or release from any other conditions
prescribed by the Committee, the restrictions applicable to the Restricted
Shares shall lapse. As promptly as administratively feasible thereafter,
subject to the requirements of Section 12.1, the Company shall deliver to the
Participant or, in case of the Participant's death, to the Participant's
beneficiary, one or more stock certificates for the appropriate number of
Shares, free of all such restrictions, except for any restrictions that may
be imposed by law.
8.2 Terms of Restricted Shares. (a) Forfeiture of Restricted
Shares. Subject to Section 8.2(b), all Restricted Shares shall be forfeited
and returned to the Company and all rights of the Participant with respect to
such Restricted Shares shall terminate unless the Participant continues in
the service of the Company as an employee until the expiration of the
forfeiture period for such Restricted Shares and satisfies any and all other
conditions set forth in the Restricted Share Agreement. The Committee in its
sole discretion, shall determine the forfeiture period (which may, but need
not, lapse in installments) and any other terms and conditions applicable
with respect to any Restricted Share Award.
(b) Waiver of Forfeiture Period. Notwithstanding anything
contained in this Article 8 to the contrary, the Committee may, in its sole
discretion, waive the forfeiture period and any other conditions set forth in
any Restricted Share Agreement under appropriate circumstances (including the
death, disability or retirement of the Participant or a material change in
circumstances arising after the date of an Award) and subject to such terms
and conditions (including forfeiture of a proportionate number of the
Restricted Shares) as the Committee shall deem appropriate.
ARTICLE 9.
DEFERRED SHARE AWARDS
9.1 Shares and Administration. Awards of the right to receive
Shares that are not to be distributed to the Participant until after a
specified deferral period (such Award and the deferred Shares delivered
thereunder hereinafter as the context shall require, the "Deferred Shares")
may be made either alone or in addition to share options, share appreciation
rights, or Restricted Share Awards, or Other Share-based Awards (hereafter
defined) granted under the Plan. The Committee shall determine the
Directors, officers and other key employees of the Company and its
subsidiaries to whom and the time or times at which Deferred Shares shall be
awarded, the number of Deferred Shares to be awarded to any Participant, the
duration of the period (the "Deferral Period") during which, and the
conditions under which, receipt of the Shares will be deferred, and the terms
and conditions of the award in addition to those contained in Section 9.2.
In its sole discretion, the Committee may provide for a minimum payment at
the end of the applicable Deferral Period based on a stated percentage of the
Fair Market Value on the date of grant of the number of Shares covered by a
Deferred Share award. The Committee may also provide for the grant of
Deferred Shares upon the completion of a specified performance period. The
provisions of Deferred Share awards need not be the same with respect to each
recipient.
9.2 Terms and Conditions. Deferred Share awards made pursuant to
this Article 9 shall be subject to the following terms and conditions:
(a) Subject to the provisions of the Plan, the Shares to be
issued pursuant to a Deferred Share award may not be sold,
assigned, transferred, pledged or otherwise encumbered during the
Deferral Period or Elective Deferral Period (defined below), where
applicable, and may be subject to a risk of forfeiture during all
or such portion of the Deferral Period as shall be specified by the
Committee. At the expiration of the Deferral Period and Elective
Deferral Period, share certificates shall be delivered to the
Participant, or the Participant's legal representative, in a number
equal to the number of shares covered by the Deferred Share award.
(b) Amounts equal to any dividends declared during the
Deferral Period with respect to the number of Shares covered by a
Deferred Share award will be paid to the Participant currently, or
deferred and deemed to be reinvested in additional deferred Shares
or otherwise reinvested, as determined at the time of the award by
the Committee, in its sole discretion.
(c) Subject to the provisions of paragraph 9.2(d) of this
Article 9, upon termination of employment for any reason during the
Deferral Period for a given award, the Deferred Shares in question
shall be forfeited by the Participant.
(d) In the event of the Participant's death or permanent
disability during the Deferral Period (or Elective Deferral Period,
where applicable), or in cases of special circumstances, the
Committee may, in its sole discretion, when it finds that a waiver
would be in the best interests of the Company, waive in whole or in
part any or all of the remaining deferral limitations imposed
hereunder with respect to any or all of the Participant's Deferred
Shares.
(e) Prior to completion of the Deferral Period, a Participant
may elect to further defer receipt of the award for a specified
period or until a specified event (the "Elective Deferral Period"),
subject in each case to the approval of the Committee and under
such terms as are determined by the Committee, all in its sole
discretion.
(f) Each award shall be confirmed by a Deferred Share
agreement or other instrument executed by the Company and the
Participant.
ARTICLE 10.
GENERALLY APPLICABLE PROVISIONS
10.1 Option Period. Subject to Section 3.1(b), the period for
which an Option is exercisable shall not exceed ten years from the date such
Option is granted, provided, however, in the case of an Option that is not
intended to be an "incentive share option," the Committee may prescribe a
period in excess of ten years. After the Option is granted, the option
period may not be reduced.
10.2 Fair Market Value. If the Shares are listed or admitted to
trading on a securities exchange registered under the Exchange Act or listed
as a national market security on the National Association of Securities
Dealers, Inc. Automated Quotations System ("NASDAQ"), the "Fair Market Value"
of a Share as of a specified date shall mean the closing price of a share on
the day immediately preceding the date as of which Fair Market Value is being
determined (or if there was no reported sale on such date, on the last
preceding date on which any reported sale occurred) on the principal
securities exchange or NASDAQ on which the Shares are listed or admitted to
trading. If the Shares are not listed or admitted to trading on any such
exchange but are traded in the over-the-counter market or listed or traded on
any similar system then in use, the Fair Market Value of a Share shall be the
average of the high bid and low asked prices of the Shares for the day
immediately preceding the date as of which the Fair Market Value is being
determined (or if there was no reported sale on such date, on the last
preceding date on which any reported sale occurred) reported on such system.
If the Shares are not publicly traded, Fair Market Value shall be determined
by the Committee in its sole discretion using appropriate criteria. In no
case shall Fair Market Value be less than the par value of a Share. An
Option shall be considered granted on the date the Committee acts to grant
the Option or such later date as the Committee shall specify.
10.3 Exercise of Options. Options granted under the Plan shall be
exercised by the Optionee or by a Permitted Assignee thereof (or by his
executors, administrators, guardian or legal representative, as provided in
Sections 10.6 and 10.7 hereof) as to all or part of the Shares covered
thereby, 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 within five business days following the date of
exercise and shall be made (i) in cash or by certified check or bank check,
(ii) with the consent of the Committee, by delivery of a promissory note in
favor of the Company upon such terms and conditions as determined by the
Committee, (iii) with the consent of Committee, by tendering previously
acquired Shares (valued at its Fair Market Value, as determined by the
Committee as of the date of tender), or (iv) with the consent of the
Committee, any combination of (i), (ii) and (iii). In connection with a
tender of previously acquired Shares pursuant to clause (iii) above, the
Committee, in its sole discretion, may permit the Optionee to constructively
exchange Shares already owned by the Optionee in lieu of actually tendering
such Shares to the Company, provided that adequate documentation concerning
the ownership of the Shares to be constructively tendered is furnished in
form satisfactory to the Committee. The notice of exercise, accompanied by
such payment, shall be delivered to the Company at its principal business
office or such other office as the Committee may from time to time direct,
and shall be in such form, containing such further provisions consistent with
the provisions of the Plan, as the Committee may from time to time prescribe.
In no event may any Option granted hereunder 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 an Option shall have any of the rights of a holder of Shares
subject to an 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.
10.4 Transferability. No Option that is intended to qualify as an
"incentive share option" under Section 422 of the Code shall be assignable or
transferable by the Optionee, other than by will or the laws of descent and
distribution, and such Option may be exercised during the life of the
Optionee only by the Optionee or his guardian or legal representative.
"Nonqualified share options" and any share appreciation rights granted in
tandem therewith are transferrable (together and not separately) with the
consent of the Compensation Committee of the Board of Directors by the
Optionee or Holder, as the case may be, to any one or more of the following
persons (each, a "Permitted Assignee"): (i) the spouse, parent, issue,
spouse of issue, or issue of spouse ("issue" shall include all descendants
whether natural or adopted) of such Optionee or Holder, as the case may be;
(ii) a trust for the benefit of one or more of those persons described in
clause (i) above or for the benefit of such Optionee or Holder, as the case
may be, or for the benefit of any such persons and such Optionee or Holder,
as the case may be; or (iii) an entity in which the Optionee or Holder or any
Permitted Assignee thereof is a beneficial owner; provided, however, that
such Permitted Assignee shall be bound by all of the terms and conditions of
this Plan and shall execute an agreement satisfactory to the Company
evidencing such obligation; provided further, however that any transfer by an
Optionee or Holder who is not then a Director of the Company to any Permitted
Assignee shall be subject to the prior consent of the Committee; and provided
further, however, that such Optionee or Holder shall remain bound by the
terms and conditions of this Plan. The Company shall cooperate with an
Optionee's Permitted Assignee and the Company's transfer agent in
effectuating any transfer permitted pursuant to this Section 10.4.
10.5 Termination of Employment. In the event of the termination
of employment of an Optionee or the termination or separation from service of
an advisor or consultant or a Director (who is an Optionee) for any reason
(other than death or disability as provided below), any Option(s) granted to
such Optionee under this Plan and not previously exercised or expired shall
be deemed cancelled and terminated on the day of such termination or
separation, unless the Committee decides, in its sole discretion, to extend
the term of the Option for a period not to exceed three months after the date
of such termination or separation, provided, 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 above. Notwithstanding the foregoing,
in the event of the termination or separation from service of an Optionee for
any reason other than death or disability, under conditions satisfactory to
the Company, the Committee may, in its sole discretion, allow any
"nonqualified share options" granted to such Optionee under the Plan and not
previously exercised or expired to be exercisable for a period of time to be
specified by the Committee, provided, however, that in no instance may the
term of the Option, as so extended, exceed the maximum term established
pursuant to Section 10.1 above.
10.6 Death. In the event an Optionee 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, any Option(s) granted to him (or his Permitted Assignee) and not
previously expired or exercised shall, to the extent exercisable on the date
of death, be exercisable by the estate of such Optionee or by any person who
acquired such Option by bequest or inheritance, or by the Permitted Assignee
at any time within one year after the death of the Optionee, 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 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 Section 3.1(b)(ii) or 10.1 above.
10.7 Disability. In the event of the termination of employment of
an Optionee or the separation from service of a Director (who is an Optionee)
due to total disability, the Optionee, or his guardian or legal
representative, or a Permitted Assignee shall have the unqualified right to
exercise any Option(s) which have not been previously exercised or expired
and which the Optionee was eligible to exercise as of the first date of total
disability (as determined by the Committee), 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, 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 above. The term "total disability" shall, for
purposes of this Plan, be defined in the same manner as such term is defined
in Section 22(e)(3) of the Code.
10.8 Amendment and Modification of the Plan. The Compensation Com-
mittee of the Board of Directors of the Company may, from time to time,
alter, amend, suspend or terminate the Plan as it shall deem advisable,
subject to any requirement for shareholder approval imposed by applicable law
or any rule of any stock exchange or quotation system on which Shares are
listed or quoted; provided that such Compensation Committee may not amend the
Plan, without the approval of the Company's shareholders, to increase the
number of Shares that may be the subject of Options under the Plan (except
for adjustments pursuant to Section 10.9 hereof). In addition, no amendments
to, or termination of, the Plan shall in any way impair the rights of an
Optionee or a Participant (or a Permitted Assignee thereof) under any Award
previously granted without such Optionee's or Participant's consent.
10.9 Adjustments. In the event that the Committee shall determine
that any dividend or other distribution (whether in the form of cash, Shares,
other securities, or other property), recapitalization, stock split, reverse
stock split, reorganization, merger, consolidation, split-up, spin-off, com-
bination, repurchase, or exchange of Shares or other securities, the issuance
of warrants or other rights to purchase Shares or other securities, or other
similar corporate transaction or event affects the Shares with respect to
which Options have been or may be issued under the Plan, such that an
adjustment is determined by the Committee to be appropriate in order to
prevent dilution or enlargement of the benefits or potential benefits
intended to be made available under the Plan, then the Committee shall, in
such manner as the Committee may deem equitable, adjust any or all of (i) the
number and type of Shares that thereafter may be made the subject of Options,
(ii) the number and type of Shares subject to outstanding Options and share
appreciation rights, and (iii) the grant or exercise price with respect to
any Option, or, if deemed appropriate, make provision for a cash payment to
the holder of any outstanding Option; provided, in each case, that with
respect to "incentive stock options," no such adjustment shall be authorized
to the extent that such adjustment would cause such options to violate
Section 422(b) of the Code or any successor provision; and provided further,
that the number of Shares subject to any Option denominated in Shares shall
always be a whole number. In the event of any reorganization, merger,
consolidation, split-up, spin-off, or other business combination involving
the Company (collectively, a "Reorganization"), the Compensation Committee of
the Board of Directors or the Board of Directors may cause any Award
outstanding as of the effective date of the Reorganization to be cancelled in
consideration of a cash payment or alternate Award made to the holder of such
cancelled Award equal in value to the fair market value of such cancelled
Award. The determination of fair market value shall be made by the
Compensation Committee of the Board of Directors or the Board of Directors,
as the case may be, in their sole discretion.
10.10 Change in Control. The terms of any Award may provide in the
Share Option Agreement, Restricted Share Agreement, Purchase Loan or other
document evidencing the Award, that upon a "Change in Control" of the Company
(as that term may be defined therein), (i) Options (and share appreciation
rights) accelerate and become fully exercisable, (ii) restrictions on
Restricted Shares lapse and the shares become fully vested, (iii) Purchase
Loans are forgiven in whole or in part, and (iv) such other additional
benefits as the Committee deems appropriate shall apply. For purposes of
this Plan, a "Change in Control" shall mean an event described in the
applicable document evidencing the Award or such other event as determined in
the sole discretion of the Board of Directors of the Company. The Committee,
in its discretion, may determine that, upon the occurrence of a Change in
Control of the Company, each Option and share appreciation right outstanding
hereunder shall terminate within a specified number of days after notice to
the Participant or Holder, and such Participant or Holder shall receive, with
respect to each Share subject to such Option or share appreciation right, an
amount equal to the excess of the Fair Market Value of such Shares
immediately prior to the occurrence of such Change in Control over the
exercise price per share of such Option or share appreciation right; such
amount to be payable in cash, in one or more kinds of property (including the
property, if any, payable in the transaction) or in a combination thereof, as
the Committee, in its discretion, shall determine.
10.11 Other Provisions. (a) The Committee may require each
Participant purchasing Shares pursuant to an Award under the Plan to
represent to and agree with the Company in writing that such Participant is
acquiring the Shares without a view to distribution thereof. The
certificates for such Shares may include any legend which the Committee deems
appropriate to reflect any restrictions on transfer.
(b) All certificates for Shares delivered under the Plan pursuant
to any Award shall be subject to such share-transfer orders and other
restrictions as the Committee may deem advisable under the rules,
regulations, and other restrictions of the Securities and Exchange
Commission, any stock exchange upon which the Shares are then listed, and any
applicable Federal or state securities law, and the Committee may cause a
legend or legends to be put on any such certificates to make appropriate
reference to such restrictions.
(c) Awards granted under the Plan may, in the discretion of
the Committee, be granted either alone or in addition to, in tandem with, or
in substitution for, any other Awards granted under the Plan. If Awards are
granted in substitution for other Awards, the Committee shall require the
surrender of such other Awards in consideration for the grant of the new
Awards. Awards granted in addition to or in tandem with other Awards may be
granted either at the same time as or at a different time from the grant of
such other Awards.
(d) Nothing contained in this Plan shall prevent the Board of
Directors from adopting other or additional compensation arrangements,
subject to shareholder approval if such approval is required; and such
arrangements may be either generally applicable or applicable only in
specific cases.
(e) A Participant shall have no right as a shareholder until he or
she becomes the holder of record.
(f) The Company will provide to its shareholders, at least
annually, reports containing financial statements and management's discussion
and analysis of financial conditions and results of operations.
ARTICLE 11.
PERFORMANCE-BASED AWARDS.
11.1 General. (a) Certain Awards granted under the Plan may be
granted in a manner such that the Awards qualify as "performance-based
compensation"(as such term is used in Section 162(m) of the Code and the
regulations thereunder) and thus be exempt from the deduction limitation
imposed by Section 162(m) of the Code ("Performance-Based Awards"). Awards
shall only qualify as Performance-Based Awards if, among other things, at the
time of grant the Committee is comprised solely of two or more "outside
directors" (as such term is used in Section 162(m) of the Code and the
regulations thereunder).
(b) Performance-Based Awards may be granted to Participants
at any time and from time to time, as shall be determined by the Committee.
The Committee shall have complete discretion in determining the number,
amount and timing of awards granted to each Participant. Such Performance-
Based Awards may take the form of, without limitation, cash, Shares or any
combination thereof.
(c) The Committee shall set performance goals at its
discretion which, depending on the extent to which they are met, will
determine the number and/or value of such Performance-Based Awards that will
be paid out to the Participants, and may attach to such Performance-Based
Awards one or more restrictions. The maximum amount of Performance-Based
Awards to be awarded to any employee during any fiscal year shall be
$1,000,000.
11.2 Options and Share Appreciation Rights. Options and share
appreciation rights granted under the Plan with an exercise price at or above
the fair market value of the Shares on the date of grant should qualify as
Performance-Based Awards.
11.3 Other Awards. Either the granting or vesting of Performance-
Based Awards granted under the Plan shall be subject to the achievement of a
performance target or targets, as determined by the Committee in its sole
discretion, based on one or more of the performance measures specified in
Section 11.4 below. With respect to such Performance-Based Awards:
(1) the Committee shall establish in writing (x) the
objective performance-based goals applicable to a given
period and (y) the individual employees or class of
employees to which such performance-based goals apply no
later than 90 days after the commencement of such period
(but in no event after 25 percent of such period has
elapsed);
(2) no Performance-Based Awards shall be payable to or vest
with respect to, as the case may be, any Participant for
a given period until the Committee certifies in writing
that the objective performance goals (and any other
material terms) applicable to such period have been
satisfied; and
(3) after the establishment of a performance goal, the
Committee shall not revise such performance goal or
increase the amount of compensation payable thereunder
(as determined in accordance with Section 162(m) of the
Code) upon the attainment of such performance goal.
11.4 Performance Measures. The Committee may use the following
performance measures (either individually or in any combination) to set
performance targets with respect to Awards intended to qualify as
Performance-Based Awards: net sales; pretax income before allocation of
corporate overhead and bonus; budget; earnings per share; net income;
division, group or corporate financial goals; return on stockholders' equity;
return on assets; attainment of strategic and operational initiatives;
appreciation in and/or maintenance of the price of the Common Stock or any
other publicly-traded securities of the Company; market share; gross profits;
earnings before taxes; earnings before interest and taxes; earnings before
interest, taxes, depreciation and amortization; economic value-added models;
comparisons with various stock market indices; and/or reductions in costs.
ARTICLE 12.
MISCELLANEOUS
12.1 Tax Withholding. The Company shall notify an Optionee or
Participant (or a Permitted Assignee thereof) of any income tax withholding
requirements arising as a result of the grant of any Award, exercise of an
Option or share appreciation rights or any other event occurring pursuant to
this Plan. The Company shall have the right to withhold from such Optionee
or Participant (or a Permitted Assignee thereof) such withholding taxes as
may be required by law, or to otherwise require the Optionee or Participant
(or a Permitted Assignee thereof) to pay such withholding taxes. If the
Optionee or Participant (or a Permitted Assignee thereof) shall fail to make
such tax payments as are required, the Company or its subsidiaries or
affiliates shall, to the extent permitted by law, have the right to deduct
any such taxes from any payment of any kind otherwise due to such Optionee or
Participant or to take such other action as may be necessary to satisfy such
withholding obligations. In satisfaction of the requirement to pay
withholding taxes, the Optionee (or Permitted Assignee) make a written
election, which may be accepted or rejected in the discretion of the
Committee, to have withheld a portion of the Shares then issuable to the
Optionee (or Permitted Assignee) pursuant to the Option having an aggregate
Fair Market Value equal to the withholding taxes.
12.2 Right of Discharge Reserved. Nothing in the Plan nor the
grant of an Award hereunder shall confer upon any employee, Director or other
individual the right to continue in the employment or service of the Company
or any subsidiary or affiliate of the Company or affect any right that the
Company or any subsidiary or affiliate of the Company may have to terminate
the employment or service of (or to demote or to exclude from future Options
under the Plan) any such employee, Director or other individual at any time
for any reason. Except as specifically provided by the Committee, the
Company shall not be liable for the loss of existing or potential profit from
an Award granted in the event of termination of an employment or other
relationship even if the termination is in violation of an obligation of the
Company or any subsidiary or affiliate of the Company to the employee or
Director.
12.3 Nature of Payments. All Awards made pursuant to the Plan are
in consideration of services performed or to be performed for the Company or
any subsidiary or affiliate of the Company. Any income or gain realized
pursuant to Awards under the Plan and any share appreciation rights consti-
tutes a special incentive payment to the Optionee, Participant or Holder and
shall not be taken into account, to the extent permissible under applicable
law, as compensation for purposes of any of the employee benefit plans of the
Company or any subsidiary or affiliate of the Company except as may be
determined by the Committee or by the Directors or directors of the
applicable subsidiary or affiliate of the Company.
12.4 Unfunded Status of the Plan. The Plan is intended to
constitute an "unfunded" plan for incentive and deferred compensation. With
respect to any payments not yet made to a Participant or Optionee by the
Company, nothing contained herein shall give any such Participant or Optionee
any rights that are greater than those of a general creditor of the Company.
In its sole discretion, the Committee may authorize the creation of trusts or
other arrangements to meet the obligations created under the Plan to deliver
the Shares or payments in lieu of or with respect to Awards hereunder;
provided, however, that the existence of such trusts or other arrangements is
consistent with the unfunded status of the Plan.
12.5 Severability. If any provision of the Plan shall be held
unlawful or otherwise invalid or unenforceable in whole or in part, such
unlawfulness, invalidity or unenforceability shall not affect any other
provision of the Plan or part thereof, each of which remain in full force and
effect. If the making of any payment or the provision of any other benefit
required under the Plan shall be held unlawful or otherwise invalid or unen-
forceable, such unlawfulness, invalidity or unenforceability shall not
prevent any other payment or benefit from being made or provided under the
Plan, and if the making of any payment in full or the provision of any other
benefit required under the Plan in full would be unlawful or otherwise
invalid or unenforceable, then such unlawfulness, invalidity or unenforce-
ability shall not prevent such payment or benefit from being made or provided
in part, to the extent that it would not be unlawful, invalid or
unenforceable, and the maximum payment or benefit that would not be unlawful,
invalid or unenforceable shall be made or provided under the Plan.
12.6 Gender and Number. In order to shorten and to improve the
understandability of the Plan document by eliminating the repeated usage of
such phrases as "his or her" and any masculine terminology herein shall also
include the feminine, and the definition of any term herein in the singular
shall also include the plural except when otherwise indicated by the context.
12.7 Governing Law. The Plan and all determinations made and
actions taken thereunder, to the extent not otherwise governed by the Code or
the laws of the United States, shall be governed by the laws of the State of
Delaware and construed accordingly.
12.8 Effective Date of Plan; Termination of Plan. The Plan shall
be effective on the date of the approval of the Plan by the Board of
Directors. Notwithstanding the foregoing, no Option intended to qualify as
an incentive share option shall be granted hereunder until the Plan shall be
approved by the holders of a majority of the shares entitled to vote thereon,
provided such approval is obtained within 12 months after the date of
adoption of the Plan by the Board of Directors. Awards may be granted under
the Plan at any time and from time to time prior to May 31, 2008, on which
date the Plan will expire except as to Awards and related share appreciation
rights then outstanding under the Plan. Such outstanding Awards and share
appreciation rights shall remain in effect until they have been exercised or
terminated, or have expired.
12.9 Captions. The captions in this Plan are for convenience of
reference only, and are not intended to narrow, limit or affect the substance
or interpretation of the provisions contained herein.
STOCK OPTION CERTIFICATE
For ______ 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 $_______ 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.
[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 _______, ____, 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 [commencing on the
Issuance Date] [as follows: ______________________].
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 [within five business days following the date
of] [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 delivery of a
promissory note in favor of the Company upon such terms and conditions as
determined by the Company, (iii) 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 (iv) with the consent of the Company, any combination of (i), (ii) and
(iii). 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 for a period not to exceed
three months after the date 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 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 eli-
gible 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.
[(g) Change in Control. In the event of the occurrence of a change
in control (as defined below) of the Company, this Option and all rights
granted hereunder shall immediately vest and be exercisable in accordance
with its terms with respect to those Shares not already vested and
exercisable pursuant to the terms of this Option. For purposes of this
Option, a "change in control of the Company" shall be deemed to occur if:
(i) there shall have occurred a change in 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 in control" of the
Company if immediately prior to the occurrence of what would
otherwise be a "change in control" of the Company (a) the Executive
is the other party to the transaction (a "Control Event") that
would otherwise result in a "change in control" of the Company or
(b) the Executive 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 in 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 in control" of the Company if immediately prior
thereto the circumstances in (i)(a) or (i)(b) above exist.]
(h) 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.
(i) 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 this
Option Certificate shall be endorsed to give effect to the partial exercise
of this Option.
(j) 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.
(k) 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.
(l) 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.
(m) 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.
(n) 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.
(o) 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.
(p) 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 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.
(q) 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.
IN WITNESS WHEREOF, the parties have executed this Option
Certificate as of the date set forth above.
ACTIVISION, INC.
Dated: ____________________
By:________________________
Attest:____________________ Name:
Title:
ACCEPTED:
______________________________
Option Holder
______________________________
Address
______________________________
City State Zip Code
______________________________
Social Security Number
OPTION TO PURCHASE COMMON STOCK OF
ACTIVISION, INC.
THIS CERTIFIES that on June 30, 1998, Daniel Hammett, (the
"Optionholder") was granted an option (the "Option") to purchase from
ACTIVISION, INC., a Delaware corporation (the "Company"), up to 250,000
shares of fully paid and non-assessable shares (the "Shares") of the Common
Stock (par value $.000001 per share) of the Company at a purchase price per
share of $10.00 (the "Purchase Price") at any time or from time to time prior
to expiration (as provided in Section 14 hereof), such price and number of
shares subject to the following terms and conditions:
1. Definitions. As used in this Option, the following terms,
unless the context otherwise requires, have the following meanings:
(a) "Company" includes any corporation which shall succeed to or
assume the obligations of the Company under this Option.
(b) "Common Stock" when used with the reference to stock of the
Company, means all shares, now or hereafter authorized, of the class of the
Common Stock of the Company presently authorized and shares of any other
class into which those shares may hereafter be changed.
2. Exercise. This Option may be exercised or surrendered during
the Optionholder's lifetime only by the Optionholder. THIS OPTION SHALL NOT
BE TRANSFERABLE BY THE OPTIONHOLDER OTHERWISE THAN BY WILL OR BY THE LAWS OF
DESCENT AND DISTRIBUTION.
This Option shall vest and be exercisable as follows:
(a) This Option shall be exercisable immediately.
(b) To exercise this Option, the Optionholder shall surrender this
Option, with the form of notice of exercise attached hereto as Exhibit 1 duly
executed, to the Company at its principal office, accompanied by payment in
the amount obtained by multiplying the Purchase Price by the number of Shares
designated in such notice.
(c) Payment of Purchase Price. The Optionholder shall pay the
Purchase Price in cash, in immediately available funds.
3. Delivery of Stock Certificates. As soon as practical after
full or partial exercise of this Option, the Company at its expense will use
to be issued in the name of, and delivered to, the Optionholder, a
certificate or certificates for the number of fully paid and nonassessable
Shares to which the Optionholder shall be entitled upon such exercise,
together with any other securities and property to which the Optionholder is
entitled upon such exercise, under the terms of this Option. No fractional
shares will be issued upon exercise of rights to purchase under this Option.
If upon any exercise of this Option a fraction of share results, the Company
will pay the cash value of that fractional share, calculated on the basis of
the fair market value (as determined by the Board of Directors of the
Company) as of the date of exercise.
4. Antidilution Provisions.
(a) Stock Splits and Combinations. If the Company shall at any
time subdivide or combine its outstanding Shares, this Option shall, after
such subdivision or combination, evidence the right to purchase the number of
Shares that would have been issuable as a result of such change with respect
to the Shares which were purchasable under this Option immediately before
such subdivision or combination becomes effective.
(b) Reclassification Exchange or Substitution. If the Shares
issuable upon exercise of this Option shall be changed into the same or
different number of shares of any other class or classes of shares, whether
by capital reorganization, reclassification, exchange or otherwise (other
than a subdivision or combination of shares as provided for above), the
holder of this Option shall on its exercise be entitled to purchase, in lieu
of the Shares which the Optionholder would have become entitled to purchase
but for such change, a number of shares of such other class or classes of
stock equivalent to the number of Shares that would have been subject to
purchase by the Optionholder on exercise of this Option immediately before
such change.
(c) Reorganization, Merger, Consolidation or Sale of Assets. In
the event of a proposed dissolution or liquidation of the Company, or in the
event of a proposed sale of all or substantially all of the shares or assets
of the Company, or the merger of the Company with or into another corporation
and the Company is not the surviving corporation, the Company shall give the
Optionholder not less than ten (10) days prior notice thereof and this Option
will terminate upon the effectiveness of such action, unless otherwise
provided by the applicable sale or merger agreement.
(d) Notice of Adjustments. The Company shall give notice of each
adjustment or readjustment of the Purchase Price or the number of Shares or
other securities issuable upon exercise of this Option to the Optionholder at
the Optionholder's address as shown on the Company's books.
(e) No Change. The form of this Option need not be changed
because of any adjustment in the Purchase Price or in the number of Shares
purchasable upon its exercise. A Option issued after any adjustment upon any
partial exercise or in replacement may continue to express the same Purchase
Price and the same number of Shares (appropriately reduced in the case of
partial exercise) and such Purchase Price and number of shares shall be
considered to have been so changed as of the close of business on the date of
adjustment.
5. Replacement. On receipt of evidence reasonably satisfactory
to the Company of the loss, theft, destruction or mutilation of this Option
and, in the case of loss, theft or destruction, on delivery of any indemnity
agreement or bond reasonably satisfactory in form and amount to the Company,
or in the case of mutilation, surrender and cancellation of this Option, the
Company at its expense will execute and deliver, in lieu of this Option, a
new Option of like tenor.
6. Withholding. In the event that the Optionholder elects to
exercise this Option or any part thereof, and if the Company shall be
required to withhold any amounts by reason of any federal, state or local tax
laws, rules or regulations in respect of the issuance of Shares to the
Optionholder pursuant to the Option, the Company shall be entitled to deduct
and withhold such amounts from any payments to be made to the Optionholder.
In any event, the Optionholder shall make available to the Company promptly
when requested by the Company sufficient funds to meet the requirements of
such withholding; and the Company shall be entitled to take and authorize
such steps as it may deem advisable in order to have such funds available to
the Company out of any funds or property due or to become due to the
Optionholder.
7. Reservation of Shares. The Company hereby agrees that at all
times there shall be reserved for issuance and/or delivery upon exercise of
the Option such number of Shares as shall be required for issuance or
delivery upon exercise hereof.
8. No Rights as Optionholder. Nothing contained herein shall be
construed to confer upon the Optionholder any right to be continued in the
employ of the Company or as a director of the Company or derogate from any
right of the Company to retire, request the resignation of, or discharge the
Optionholder at any time, with or without cause. The Optionholder 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 Optionholder are limited to
those expressed herein and are not enforceable against the Company except to
the extent set forth herein.
9. Registration; Legend. The Company may postpone the issuance
and delivery of Shares upon any exercise of the 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 Optionholder 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 legend to be set forth on each
certificate representing Shares or any other security issued or issuable upon
exercise of the 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 HAVE NOT
BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED (THE "ACT"), AND MAY NOT BE OFFERED FOR SALE,
SOLD OR OTHERWISE TRANSFERRED EXCEPT PURSUANT TO AN
EFFECTIVE REGISTRATION STATEMENT UNDER 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.
10. Amendment: The Board of Directors of the Company may, with
the consent of the Optionholder, at any time or from time to time amend the
terms of this Option.
11. 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, or at such other address as the Company by
notice to the Optionholder may designate in writing from time to time; and if
to the Optionholder, at the address shown below his signature on this Option
Certificate, or at such other address as the Optionholder by notice to the
Company may designate in writing from time to time. Notices shall be
effective upon receipt.
12. Governing Law. This Option shall be governed by and construed
and enforced in accordance with the laws of the State of Delaware.
13. Interpretation: A determination of the Board as to any
questions which may arise with respect to the interpretation of the
provisions of this Option shall be final and binding.
14. Expiration. The right to exercise this Option shall expire at
the close of business on June 30, 2008; provided, however, that if the
Optionholder shall cease to be an employee of the Company or its subsidiaries
for any reason prior thereto, the Optionholder may, but only within 30 days
(or such other period of time as the Board of Directors of the Company may
determine) after the date the Optionholder ceases to be an employee, exercise
this Option to the extent that the Optionholder was entitled to exercise it
at the date of such termination of service as an employee.
IN WITNESS WHEREOF, the parties have executed this Option
Certificate as of the date set forth above.
ACTIVISION, INC.
By:________________________
Name:
Title:
ACCEPTED:
______________________________
Optionholder
______________________________
Address
______________________________
City State Zip Code
Social Security Number: __________________
OPTION TO PURCHASE COMMON STOCK OF
ACTIVISION, INC.
THIS CERTIFIES that on June 30, 1998, Chad Koehler, (the
"Optionholder") was granted an option (the "Option") to purchase from
ACTIVISION, INC., a Delaware corporation (the "Company"), up to 20,000 shares
of fully paid and non-assessable shares (the "Shares") of the Common Stock
(par value $.000001 per share) of the Company at a purchase price per share
of $10.00 (the "Purchase Price") at any time or from time to time prior to
expiration (as provided in Section 14 hereof), such price and number of
shares subject to the following terms and conditions:
1. Definitions. As used in this Option, the following terms,
unless the context otherwise requires, have the following meanings:
(a) "Company" includes any corporation which shall succeed to or
assume the obligations of the Company under this Option.
(b) "Common Stock" when used with the reference to stock of the
Company, means all shares, now or hereafter authorized, of the class of the
Common Stock of the Company presently authorized and shares of any other
class into which those shares may hereafter be changed.
2. Exercise. This Option may be exercised or surrendered during
the Optionholder's lifetime only by the Optionholder. THIS OPTION SHALL NOT
BE TRANSFERABLE BY THE OPTIONHOLDER OTHERWISE THAN BY WILL OR BY THE LAWS OF
DESCENT AND DISTRIBUTION.
This Option shall vest and be exercisable as follows:
(a) This Option shall be exercisable as to 4,000 Shares on and
after June 30, 1999; as to an additional 4,000 Shares on and after June 30,
2000; and as to an additional 4,000 on each anniversary thereof until the
Options shall be exercisable in full.
(b) To exercise this Option, the Optionholder shall surrender this
Option, with the form of notice of exercise attached hereto as Exhibit 1 duly
executed, to the Company at its principal office, accompanied by payment in
the amount obtained by multiplying the Purchase Price by the number of Shares
designated in such notice.
(c) Payment of Purchase Price. The Optionholder shall pay the
Purchase Price in cash, in immediately available funds.
3. Delivery of Stock Certificates. As soon as practical after
full or partial exercise of this Option, the Company at its expense will use
to be issued in the name of, and delivered to, the Optionholder, a
certificate or certificates for the number of fully paid and nonassessable
Shares to which the Optionholder shall be entitled upon such exercise,
together with any other securities and property to which the Optionholder is
entitled upon such exercise, under the terms of this Option. No fractional
shares will be issued upon exercise of rights to purchase under this Option.
If upon any exercise of this Option a fraction of share results, the Company
will pay the cash value of that fractional share, calculated on the basis of
the fair market value (as determined by the Board of Directors of the
Company) as of the date of exercise.
4. Antidilution Provisions.
(a) Stock Splits and Combinations. If the Company shall at any
time subdivide or combine its outstanding Shares, this Option shall, after
such subdivision or combination, evidence the right to purchase the number of
Shares that would have been issuable as a result of such change with respect
to the Shares which were purchasable under this Option immediately before
such subdivision or combination becomes effective.
(b) Reclassification Exchange or Substitution. If the Shares
issuable upon exercise of this Option shall be changed into the same or
different number of shares of any other class or classes of shares, whether
by capital reorganization, reclassification, exchange or otherwise (other
than a subdivision or combination of shares as provided for above), the
holder of this Option shall on its exercise be entitled to purchase, in lieu
of the Shares which the Optionholder would have become entitled to purchase
but for such change, a number of shares of such other class or classes of
stock equivalent to the number of Shares that would have been subject to
purchase by the Optionholder on exercise of this Option immediately before
such change.
(c) Reorganization, Merger, Consolidation or Sale of Assets. In
the event of a proposed dissolution or liquidation of the Company, or in the
event of a proposed sale of all or substantially all of the shares or assets
of the Company, or the merger of the Company with or into another corporation
and the Company is not the surviving corporation, the Company shall give the
Optionholder not less than ten (10) days prior notice thereof and this Option
will terminate upon the effectiveness of such action, unless otherwise
provided by the applicable sale or merger agreement.
(d) Notice of Adjustments. The Company shall give notice of each
adjustment or readjustment of the Purchase Price or the number of Shares or
other securities issuable upon exercise of this Option to the Optionholder at
the Optionholder's address as shown on the Company's books.
(e) No Change. The form of this Option need not be changed
because of any adjustment in the Purchase Price or in the number of Shares
purchasable upon its exercise. A Option issued after any adjustment upon any
partial exercise or in replacement may continue to express the same Purchase
Price and the same number of Shares (appropriately reduced in the case of
partial exercise) and such Purchase Price and number of shares shall be
considered to have been so changed as of the close of business on the date of
adjustment.
5. Replacement. On receipt of evidence reasonably satisfactory
to the Company of the loss, theft, destruction or mutilation of this Option
and, in the case of loss, theft or destruction, on delivery of any indemnity
agreement or bond reasonably satisfactory in form and amount to the Company,
or in the case of mutilation, surrender and cancellation of this Option, the
Company at its expense will execute and deliver, in lieu of this Option, a
new Option of like tenor.
6. Withholding. In the event that the Optionholder elects to
exercise this Option or any part thereof, and if the Company shall be
required to withhold any amounts by reason of any federal, state or local tax
laws, rules or regulations in respect of the issuance of Shares to the
Optionholder pursuant to the Option, the Company shall be entitled to deduct
and withhold such amounts from any payments to be made to the Optionholder.
In any event, the Optionholder shall make available to the Company promptly
when requested by the Company sufficient funds to meet the requirements of
such withholding; and the Company shall be entitled to take and authorize
such steps as it may deem advisable in order to have such funds available to
the Company out of any funds or property due or to become due to the
Optionholder.
7. Reservation of Shares. The Company hereby agrees that at all
times there shall be reserved for issuance and/or delivery upon exercise of
the Option such number of Shares as shall be required for issuance or
delivery upon exercise hereof.
8. No Rights as Optionholder. Nothing contained herein shall be
construed to confer upon the Optionholder any right to be continued in the
employ of the Company or as a director of the Company or derogate from any
right of the Company to retire, request the resignation of, or discharge the
Optionholder at any time, with or without cause. The Optionholder 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 Optionholder are limited to
those expressed herein and are not enforceable against the Company except to
the extent set forth herein.
9. Registration; Legend. The Company may postpone the issuance
and delivery of Shares upon any exercise of the 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 Optionholder 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 legend to be set forth on each
certificate representing Shares or any other security issued or issuable upon
exercise of the 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 HAVE NOT
BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED (THE "ACT"), AND MAY NOT BE OFFERED FOR SALE,
SOLD OR OTHERWISE TRANSFERRED EXCEPT PURSUANT TO AN
EFFECTIVE REGISTRATION STATEMENT UNDER 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.
10. Amendment: The Board of Directors of the Company may, with
the consent of the Optionholder, at any time or from time to time amend the
terms of this Option.
11. 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, or at such other address as the Company by
notice to the Optionholder may designate in writing from time to time; and if
to the Optionholder, at the address shown below his signature on this Option
Certificate, or at such other address as the Optionholder by notice to the
Company may designate in writing from time to time. Notices shall be
effective upon receipt.
12. Governing Law. This Option shall be governed by and construed
and enforced in accordance with the laws of the State of Delaware.
13. Interpretation: A determination of the Board as to any
questions which may arise with respect to the interpretation of the
provisions of this Option shall be final and binding.
14. Expiration. The right to exercise this Option shall expire at
the close of business on June 30, 2008; provided, however, that if the
Optionholder shall cease to be an employee of the Company or its subsidiaries
for any reason prior thereto, the Optionholder may, but only within 30 days
(or such other period of time as the Board of Directors of the Company may
determine) after the date the Optionholder ceases to be an employee (the
"Employment Termination Date"), exercise this Option to the extent that the
Optionholder was entitled to exercise it at the Employment Termination Date.
Any Options that have not vested and have not yet become exercisable as of
the Employment Termination Date under Section 2(a) shall terminate and shall
not be exercisable.
IN WITNESS WHEREOF, the parties have executed this Option
Certificate as of the date set forth above.
ACTIVISION, INC.
By:________________________
Name:
Title:
ACCEPTED:
______________________________
Optionholder
______________________________
Address
______________________________
City State Zip Code
Social Security Number: __________________
OPTION TO PURCHASE COMMON STOCK OF
ACTIVISION, INC.
THIS CERTIFIES that on June 30, 1998, Terry DeSanctis, (the
"Optionholder") was granted an option (the "Option") to purchase from
ACTIVISION, INC., a Delaware corporation (the "Company"), up to 10,000 shares
of fully paid and non-assessable shares (the "Shares") of the Common Stock
(par value $.000001 per share) of the Company at a purchase price per share
of $10.00 (the "Purchase Price") at any time or from time to time prior to
expiration (as provided in Section 14 hereof), such price and number of
shares subject to the following terms and conditions:
1. Definitions. As used in this Option, the following terms,
unless the context otherwise requires, have the following meanings:
(a) "Company" includes any corporation which shall succeed to or
assume the obligations of the Company under this Option.
(b) "Common Stock" when used with the reference to stock of the
Company, means all shares, now or hereafter authorized, of the class of the
Common Stock of the Company presently authorized and shares of any other
class into which those shares may hereafter be changed.
2. Exercise. This Option may be exercised or surrendered during
the Optionholder's lifetime only by the Optionholder. THIS OPTION SHALL NOT
BE TRANSFERABLE BY THE OPTIONHOLDER OTHERWISE THAN BY WILL OR BY THE LAWS OF
DESCENT AND DISTRIBUTION.
This Option shall vest and be exercisable as follows:
(a) This Option shall be exercisable as to 2,000 Shares on and
after June 30, 1999; as to an additional 2,000 Shares on and after June 30,
2000; and as to an additional 2,000 on each anniversary thereof until the
Options shall be exercisable in full.
(b) To exercise this Option, the Optionholder shall surrender this
Option, with the form of notice of exercise attached hereto as Exhibit 1 duly
executed, to the Company at its principal office, accompanied by payment in
the amount obtained by multiplying the Purchase Price by the number of Shares
designated in such notice.
(c) Payment of Purchase Price. The Optionholder shall pay the
Purchase Price in cash, in immediately available funds.
3. Delivery of Stock Certificates. As soon as practical after
full or partial exercise of this Option, the Company at its expense will use
to be issued in the name of, and delivered to, the Optionholder, a
certificate or certificates for the number of fully paid and nonassessable
Shares to which the Optionholder shall be entitled upon such exercise,
together with any other securities and property to which the Optionholder is
entitled upon such exercise, under the terms of this Option. No fractional
shares will be issued upon exercise of rights to purchase under this Option.
If upon any exercise of this Option a fraction of share results, the Company
will pay the cash value of that fractional share, calculated on the basis of
the fair market value (as determined by the Board of Directors of the
Company) as of the date of exercise.
4. Antidilution Provisions.
(a) Stock Splits and Combinations. If the Company shall at any
time subdivide or combine its outstanding Shares, this Option shall, after
such subdivision or combination, evidence the right to purchase the number of
Shares that would have been issuable as a result of such change with respect
to the Shares which were purchasable under this Option immediately before
such subdivision or combination becomes effective.
(b) Reclassification Exchange or Substitution. If the Shares
issuable upon exercise of this Option shall be changed into the same or
different number of shares of any other class or classes of shares, whether
by capital reorganization, reclassification, exchange or otherwise (other
than a subdivision or combination of shares as provided for above), the
holder of this Option shall on its exercise be entitled to purchase, in lieu
of the Shares which the Optionholder would have become entitled to purchase
but for such change, a number of shares of such other class or classes of
stock equivalent to the number of Shares that would have been subject to
purchase by the Optionholder on exercise of this Option immediately before
such change.
(c) Reorganization, Merger, Consolidation or Sale of Assets. In
the event of a proposed dissolution or liquidation of the Company, or in the
event of a proposed sale of all or substantially all of the shares or assets
of the Company, or the merger of the Company with or into another corporation
and the Company is not the surviving corporation, the Company shall give the
Optionholder not less than ten (10) days prior notice thereof and this Option
will terminate upon the effectiveness of such action, unless otherwise
provided by the applicable sale or merger agreement.
(d) Notice of Adjustments. The Company shall give notice of each
adjustment or readjustment of the Purchase Price or the number of Shares or
other securities issuable upon exercise of this Option to the Optionholder at
the Optionholder's address as shown on the Company's books.
(e) No Change. The form of this Option need not be changed
because of any adjustment in the Purchase Price or in the number of Shares
purchasable upon its exercise. A Option issued after any adjustment upon any
partial exercise or in replacement may continue to express the same Purchase
Price and the same number of Shares (appropriately reduced in the case of
partial exercise) and such Purchase Price and number of shares shall be
considered to have been so changed as of the close of business on the date of
adjustment.
5. Replacement. On receipt of evidence reasonably satisfactory
to the Company of the loss, theft, destruction or mutilation of this Option
and, in the case of loss, theft or destruction, on delivery of any indemnity
agreement or bond reasonably satisfactory in form and amount to the Company,
or in the case of mutilation, surrender and cancellation of this Option, the
Company at its expense will execute and deliver, in lieu of this Option, a
new Option of like tenor.
6. Withholding. In the event that the Optionholder elects to
exercise this Option or any part thereof, and if the Company shall be
required to withhold any amounts by reason of any federal, state or local tax
laws, rules or regulations in respect of the issuance of Shares to the
Optionholder pursuant to the Option, the Company shall be entitled to deduct
and withhold such amounts from any payments to be made to the Optionholder.
In any event, the Optionholder shall make available to the Company promptly
when requested by the Company sufficient funds to meet the requirements of
such withholding; and the Company shall be entitled to take and authorize
such steps as it may deem advisable in order to have such funds available to
the Company out of any funds or property due or to become due to the
Optionholder.
7. Reservation of Shares. The Company hereby agrees that at all
times there shall be reserved for issuance and/or delivery upon exercise of
the Option such number of Shares as shall be required for issuance or
delivery upon exercise hereof.
8. No Rights as Optionholder. Nothing contained herein shall be
construed to confer upon the Optionholder any right to be continued in the
employ of the Company or as a director of the Company or derogate from any
right of the Company to retire, request the resignation of, or discharge the
Optionholder at any time, with or without cause. The Optionholder 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 Optionholder are limited to
those expressed herein and are not enforceable against the Company except to
the extent set forth herein.
9. Registration; Legend. The Company may postpone the issuance
and delivery of Shares upon any exercise of the 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 Optionholder 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 legend to be set forth on each
certificate representing Shares or any other security issued or issuable upon
exercise of the 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 HAVE NOT
BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED (THE "ACT"), AND MAY NOT BE OFFERED FOR SALE,
SOLD OR OTHERWISE TRANSFERRED EXCEPT PURSUANT TO AN
EFFECTIVE REGISTRATION STATEMENT UNDER 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.
10. Amendment: The Board of Directors of the Company may, with
the consent of the Optionholder, at any time or from time to time amend the
terms of this Option.
11. 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, or at such other address as the Company by
notice to the Optionholder may designate in writing from time to time; and if
to the Optionholder, at the address shown below his signature on this Option
Certificate, or at such other address as the Optionholder by notice to the
Company may designate in writing from time to time. Notices shall be
effective upon receipt.
12. Governing Law. This Option shall be governed by and construed
and enforced in accordance with the laws of the State of Delaware.
13. Interpretation: A determination of the Board as to any
questions which may arise with respect to the interpretation of the
provisions of this Option shall be final and binding.
14. Expiration. The right to exercise this Option shall expire at
the close of business on June 30, 2008; provided, however, that if the
Optionholder shall cease to be an employee of the Company or its subsidiaries
for any reason prior thereto, the Optionholder may, but only within 30 days
(or such other period of time as the Board of Directors of the Company may
determine) after the date the Optionholder ceases to be an employee (the
"Employment Termination Date"), exercise this Option to the extent that the
Optionholder was entitled to exercise it at the Employment Termination Date.
Any Options that have not vested and have not yet become exercisable as of
the Employment Termination Date under Section 2(a) shall terminate and shall
not be exercisable.
IN WITNESS WHEREOF, the parties have executed this Option
Certificate as of the date set forth above.
ACTIVISION, INC.
By:________________________
Name:
Title:
ACCEPTED:
______________________________
Optionholder
______________________________
Address
______________________________
City State Zip Code
Social Security Number: __________________
OPTION TO PURCHASE COMMON STOCK OF
ACTIVISION, INC.
THIS CERTIFIES that on June 30, 1998, Steven B. Foust, (the
"Optionholder") was granted an option (the "Option") to purchase from
ACTIVISION, INC., a Delaware corporation (the "Company"), up to 15,000 shares
of fully paid and non-assessable shares (the "Shares") of the Common Stock
(par value $.000001 per share) of the Company at a purchase price per share
of $10.00 (the "Purchase Price") at any time or from time to time prior to
expiration (as provided in Section 14 hereof), such price and number of
shares subject to the following terms and conditions:
1. Definitions. As used in this Option, the following terms,
unless the context otherwise requires, have the following meanings:
(a) "Company" includes any corporation which shall succeed to or
assume the obligations of the Company under this Option.
(b) "Common Stock" when used with the reference to stock of the
Company, means all shares, now or hereafter authorized, of the class of the
Common Stock of the Company presently authorized and shares of any other
class into which those shares may hereafter be changed.
2. Exercise. This Option may be exercised or surrendered during
the Optionholder's lifetime only by the Optionholder. THIS OPTION SHALL NOT
BE TRANSFERABLE BY THE OPTIONHOLDER OTHERWISE THAN BY WILL OR BY THE LAWS OF
DESCENT AND DISTRIBUTION.
This Option shall vest and be exercisable as follows:
(a) This Option shall be exercisable immediately.
(b) To exercise this Option, the Optionholder shall surrender this
Option, with the form of notice of exercise attached hereto as Exhibit 1 duly
executed, to the Company at its principal office, accompanied by payment in
the amount obtained by multiplying the Purchase Price by the number of Shares
designated in such notice.
(c) Payment of Purchase Price. The Optionholder shall pay the
Purchase Price in cash, in immediately available funds.
3. Delivery of Stock Certificates. As soon as practical after
full or partial exercise of this Option, the Company at its expense will use
to be issued in the name of, and delivered to, the Optionholder, a
certificate or certificates for the number of fully paid and nonassessable
Shares to which the Optionholder shall be entitled upon such exercise,
together with any other securities and property to which the Optionholder is
entitled upon such exercise, under the terms of this Option. No fractional
shares will be issued upon exercise of rights to purchase under this Option.
If upon any exercise of this Option a fraction of share results, the Company
will pay the cash value of that fractional share, calculated on the basis of
the fair market value (as determined by the Board of Directors of the
Company) as of the date of exercise.
4. Antidilution Provisions.
(a) Stock Splits and Combinations. If the Company shall at any
time subdivide or combine its outstanding Shares, this Option shall, after
such subdivision or combination, evidence the right to purchase the number of
Shares that would have been issuable as a result of such change with respect
to the Shares which were purchasable under this Option immediately before
such subdivision or combination becomes effective.
(b) Reclassification Exchange or Substitution. If the Shares
issuable upon exercise of this Option shall be changed into the same or
different number of shares of any other class or classes of shares, whether
by capital reorganization, reclassification, exchange or otherwise (other
than a subdivision or combination of shares as provided for above), the
holder of this Option shall on its exercise be entitled to purchase, in lieu
of the Shares which the Optionholder would have become entitled to purchase
but for such change, a number of shares of such other class or classes of
stock equivalent to the number of Shares that would have been subject to
purchase by the Optionholder on exercise of this Option immediately before
such change.
(c) Reorganization, Merger, Consolidation or Sale of Assets. In
the event of a proposed dissolution or liquidation of the Company, or in the
event of a proposed sale of all or substantially all of the shares or assets
of the Company, or the merger of the Company with or into another corporation
and the Company is not the surviving corporation, the Company shall give the
Optionholder not less than ten (10) days prior notice thereof and this Option
will terminate upon the effectiveness of such action, unless otherwise
provided by the applicable sale or merger agreement.
(d) Notice of Adjustments. The Company shall give notice of each
adjustment or readjustment of the Purchase Price or the number of Shares or
other securities issuable upon exercise of this Option to the Optionholder at
the Optionholder's address as shown on the Company's books.
(e) No Change. The form of this Option need not be changed
because of any adjustment in the Purchase Price or in the number of Shares
purchasable upon its exercise. A Option issued after any adjustment upon any
partial exercise or in replacement may continue to express the same Purchase
Price and the same number of Shares (appropriately reduced in the case of
partial exercise) and such Purchase Price and number of shares shall be
considered to have been so changed as of the close of business on the date of
adjustment.
5. Replacement. On receipt of evidence reasonably satisfactory
to the Company of the loss, theft, destruction or mutilation of this Option
and, in the case of loss, theft or destruction, on delivery of any indemnity
agreement or bond reasonably satisfactory in form and amount to the Company,
or in the case of mutilation, surrender and cancellation of this Option, the
Company at its expense will execute and deliver, in lieu of this Option, a
new Option of like tenor.
6. Withholding. In the event that the Optionholder elects to
exercise this Option or any part thereof, and if the Company shall be
required to withhold any amounts by reason of any federal, state or local tax
laws, rules or regulations in respect of the issuance of Shares to the
Optionholder pursuant to the Option, the Company shall be entitled to deduct
and withhold such amounts from any payments to be made to the Optionholder.
In any event, the Optionholder shall make available to the Company promptly
when requested by the Company sufficient funds to meet the requirements of
such withholding; and the Company shall be entitled to take and authorize
such steps as it may deem advisable in order to have such funds available to
the Company out of any funds or property due or to become due to the
Optionholder.
7. Reservation of Shares. The Company hereby agrees that at all
times there shall be reserved for issuance and/or delivery upon exercise of
the Option such number of Shares as shall be required for issuance or
delivery upon exercise hereof.
8. No Rights as Optionholder. Nothing contained herein shall be
construed to confer upon the Optionholder any right to be continued in the
employ of the Company or as a director of the Company or derogate from any
right of the Company to retire, request the resignation of, or discharge the
Optionholder at any time, with or without cause. The Optionholder 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 Optionholder are limited to
those expressed herein and are not enforceable against the Company except to
the extent set forth herein.
9. Registration; Legend. The Company may postpone the issuance
and delivery of Shares upon any exercise of the 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 Optionholder 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 legend to be set forth on each
certificate representing Shares or any other security issued or issuable upon
exercise of the 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 HAVE NOT
BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED (THE "ACT"), AND MAY NOT BE OFFERED FOR SALE,
SOLD OR OTHERWISE TRANSFERRED EXCEPT PURSUANT TO AN
EFFECTIVE REGISTRATION STATEMENT UNDER 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.
10. Amendment: The Board of Directors of the Company may, with
the consent of the Optionholder, at any time or from time to time amend the
terms of this Option.
11. 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, or at such other address as the Company by
notice to the Optionholder may designate in writing from time to time; and if
to the Optionholder, at the address shown below his signature on this Option
Certificate, or at such other address as the Optionholder by notice to the
Company may designate in writing from time to time. Notices shall be
effective upon receipt.
12. Governing Law. This Option shall be governed by and construed
and enforced in accordance with the laws of the State of Delaware.
13. Interpretation: A determination of the Board as to any
questions which may arise with respect to the interpretation of the
provisions of this Option shall be final and binding.
14. Expiration. The right to exercise this Option shall expire at
the close of business on June 30, 2008.
IN WITNESS WHEREOF, the parties have executed this Option
Certificate as of the date set forth above.
ACTIVISION, INC.
By:________________________
Name:
Title:
ACCEPTED:
______________________________
Optionholder
______________________________
Address
______________________________
City State Zip Code
Social Security Number: __________________
ROBINSON SILVERMAN PEARCE ARONSOHN & BERMAN LLP
1290 AVENUE OF THE AMERICAS
NEW YORK, NEW YORK 10104
(212) 541-2000
August 13, 1998
Activision, Inc.
3100 Ocean Park Boulevard
Santa Monica, California 90405
Ladies and Gentlemen:
We refer to the Registration Statement on Form S-8 (the
"Registration Statement") to be filed by Activision, Inc., a Delaware
corporation (the "Company"), on or about the date hereof with the Securities
and Exchange Commission (the "Commission") in connection with the
registration under the Securities Act of 1933, as amended (the "Securities
Act"), of 3,000,000 shares of the Company's common stock, $.000001 par value
per share (the "Common Stock"), reserved for issuance pursuant to the terms
of the Company's 1998 Incentive Plan (the "Plan").
We are familiar with the Amended and Restated Certificate of
Incorporation, as amended, and the By-laws of the Company and have examined
copies of the Plan, the resolutions adopted by the Company's Board of
Directors, and originals or copies, certified or otherwise identified to our
satisfaction, of such other documents, evidence of corporate action,
certificates and other instruments, and have made such other investigations
of law and fact, as we have deemed necessary or appropriate for the purposes
of this opinion.
Based upon the foregoing, it is our opinion that the 3,000,000
shares of Common Stock reserved for issuance pursuant to the terms of the
Plan have been duly authorized and, when issued in accordance with the terms
of the Plan and in accordance with Awards that have been or may be granted
under and in conformity with the Plan ("Awards") and upon payment of the
purchase price therefor, if any, provided for any Common Stock issued
pursuant to such Awards, will be validly issued, fully paid and non-
assessable by the Company.
We hereby consent to the use of this opinion in the Registration
Statement. In giving this consent, we do not thereby admit that we come
within the category of persons whose consent is required under Section 7 of
the Securities Act or the Rules and Regulations of the Commission thereunder.
Very truly yours,
/s/ Robinson Silverman Pearce
Aronsohn & Berman LLP
CONSENT OF INDEPENDENT ACCOUNTANTS
The Board of Directors
Activision, Inc.:
We consent to the use of our report incorporated herein by reference.
KPMG PEAT MARWICK LLP
Los Angeles, California
August 13, 1998