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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM 8-K
CURRENT REPORT PURSUANT
TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of report (Date of earliest event reported) March 8, 2005
(March 2, 2005)
ACTIVISION, INC.
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(Exact Name of Registrant as Specified in Charter)
Delaware 0-12699 95-4803544
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(State or Other Jurisdiction (Commission (IRS Employer
of Incorporation) File Number) Identification No.)
3100 Ocean Park Blvd., Santa Monica, CA 90405
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(Address of Principal Executive Offices) (Zip Code)
(310) 255-2000
Registrant's telephone number, including area code
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N/A
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(Former Name or Former Address, if Changed Since Last Report)
Check the appropriate box below if the Form 8-K filing is intended to
simultaneously satisfy the filing obligation of the registrant under any of the
following provisions (see General Instruction A.2. below):
[ ] Written communications pursuant to Rule 425 under the Securities Act (17
CFR 230.425)
[ ] Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
240.14a-12)
[ ] Pre-commencement communications pursuant to Rule 14d-2(b) under the
Exchange Act (17 CFR 240.14d-2(b))
[ ] Pre-commencement communications pursuant to Rule 13e-4(c) under the
Exchange Act (17 CFR 240.13e-4(c))
Item 1.01. Entry into a Material Definitive Agreement.
On March 2, 2005, the Board of Directors of Activision, Inc. unanimously
approved amendments to the Company's existing Amended and Restated 2002 Employee
Stock Purchase Plan (the "Domestic Plan") and the Company's existing 2002
Employee Stock Purchase Plan for International Employees (the "International
Plan").
The amendments to the Domestic Plan provide for a decrease in the maximum
amount that participants may purchase on an annual basis, a decrease in the
length of each offering period under the plan, and an elimination of the minimum
employment period for enrollment. The amendments to the Domestic Plan are
effective as of the plan's April 1, 2005 offering period.
The amendments to the International Plan provide for changes that are
similar to the changes made to the Domestic Plan. The amendments to the
International Plan are effective as of the plan's April 1, 2005 offering period.
The Domestic Plan, as amended, and International Plan, as amended, are
filed as Exhibits 10.1 and 10.2 to this Current Report on Form 8-K.
Item 9.01 Financial Statements and Exhibits.
(c) Exhibits
10.1 Activision, Inc. Second Amended and Restated 2002 Employee Stock
Purchase Plan.
10.2 Activision, Inc. Amended and Restated 2002 Employee Stock Purchase
Plan for International Employees.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
Date: March 8, 2005
ACTIVISION, INC.
By:/s/ Ronald Doornink
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Name: Ronald Doornink
Title: President
Exhibit 10.1
ACTIVISION, INC.
SECOND AMENDED AND RESTATED
2002 EMPLOYEE STOCK PURCHASE PLAN
(EFFECTIVE AS OF APRIL 1, 2005)
TABLE OF CONTENTS
Page
SECTION 1. DEFINITIONS...... ................................................1
SECTION 2. PURPOSE OF THE PLAN...............................................3
SECTION 3. ADMINISTRATION OF THE PLAN........................................3
(a) Committee Composition ........................................3
(b) Committee Responsibilities ...................................3
SECTION 4. ENROLLMENT AND PARTICIPATION......................................4
(a) Offering Periods..............................................4
(b) Accumulation Periods..........................................4
(c) Enrollment....................................................4
(d) Duration of Participation.....................................4
(e) Applicable Offering Period and Reset Provision................4
(f) Grant of Option on Enrollment.................................5
SECTION 5. EMPLOYEE CONTRIBUTIONS............................................5
(a) Frequency of Payroll Deductions...............................5
(b) Amount of Payroll Deductions..................................5
(c) Changing Withholding Rate.....................................5
(d) Discontinuing Payroll Deductions..............................5
SECTION 6. WITHDRAWAL FROM THE PLAN..........................................6
(a) Withdrawal....................................................6
(b) Return of Payroll Deductions; Readmittance....................6
SECTION 7. CHANGE IN EMPLOYMENT STATUS.......................................6
(a) Termination of Employment.....................................6
(b) Leave of Absence...................................................6
SECTION 8. PLAN ACCOUNTS AND PURCHASE OF SHARES..............................6
(a) Plan Accounts ................................................6
(b) Purchase Price ...............................................6
(c) Number of Shares Purchased ...................................7
(d) Available Shares Insufficient ................................7
(e) Issuance of Stock ............................................7
(f) Unused Cash Balances .........................................7
(g) Stockholder Approval .........................................8
(h) Brokerage Account..................................................8
SECTION 9. LIMITATIONS ON STOCK OWNERSHIP....................................8
(a) Five Percent Limit............................................8
(b) Dollar Limit..................................................8
(c) Other Stock Purchase Plans; Effects of Preclusion.............8
SECTION 10. RIGHTS NOT TRANSFERABLE...........................................9
SECTION 11. NO RIGHTS AS AN EMPLOYEE..........................................9
SECTION 12. NO RIGHTS AS A STOCKHOLDER........................................9
SECTION 13. CONDITIONS UPON ISSUANCE OF SHARES; LIMITATION ON SALE OF SHARES..9
SECTION 14. STOCK OFFERED UNDER THE PLAN......................................9
(a) Authorized Shares .................................................9
(b) Capital Changes....................................................9
SECTION 15. NOTICE OF DISPOSITION............................................10
SECTION 16. EQUAL RIGHTS AND PRIVILEGES......................................10
SECTION 17. NOTICES..........................................................10
SECTION 18. STOCKHOLDER APPROVAL OF AMENDMENTS...............................11
SECTION 19. DESIGNATION OF BENEFICIARY.......................................11
(a) Written Designation..........................................11
(b) No Written Designation.......................................11
SECTION 20. APPLICABLE LAW. .................................................11
SECTION 21. EFFECTIVE DATE; AMENDMENT OR TERMINATION OF PLAN.................11
SECTION 22. TAX WITHHOLDING..................................................12
ACTIVISION, INC.
SECOND AMENDED AND RESTATED
2002 EMPLOYEE STOCK PURCHASE PLAN
SECTION 1. DEFINITIONS.
(a) "Accumulation Period" means a six month period during which
contributions may be made toward the purchase of Stock under the Plan, as
determined pursuant to Section 4(b).
(b) "Board" means the Board of Directors of the Company, as constituted
from time to time.
(c) "Code" means the Internal Revenue Code of 1986, as amended.
(d) "Committee" means a committee of the Board, as described in Section 3.
(e) "Company" means Activision, Inc., a Delaware corporation.
(f) "Compensation" means all W-2 compensation, including, but not limited
to base salary, wages, commissions, overtime, shift premiums and bonuses, plus
draws against commissions; provided, however, that for purposes of determining a
Participant's compensation herein, any election by such Participant to reduce
his or her regular cash remuneration under Section 125 or 401(k) of the Code
shall be treated as if the Participant did not make such election. The Committee
shall determine whether a particular item is included in Compensation.
(g) "Eligible Employee" means any employee of a Participating Company who
meets each of the following requirements:
(i) His or her customary employment is for more than five months per
calendar year and for more than 20 hours per week; and
(ii) He or she was employed by a Participating Company on the
fifteenth (15th) day of the month before the beginning of such Offering
Period.
The foregoing notwithstanding, an individual shall not be considered an Eligible
Employee if his or her participation in the Plan is prohibited by the law of any
country which has jurisdiction over him or her or if he or she is subject to a
collective bargaining agreement that does not provide for participation in the
Plan.
(h) "Exchange Act" means the Securities Exchange Act of 1934, as amended.
(i) "Fair Market Value" means the market price of Stock, determined by the
Committee as follows:
(i) If Stock was listed and traded on The Nasdaq National Market
System on the date in question, then the Fair Market Value shall be equal
to the price at which such Stock last traded on such date as reported by
The Nasdaq National Market System;
(ii) If Stock was listed and traded on a stock exchange on the date in
question, then the Fair Market Value shall be equal to the price at which
such Stock last traded on such date as reported by such stock exchange; or
(iii) Notwithstanding the foregoing provisions, if the Committee
determines that the last trading price does not adequately reflect Fair
Market Value, Fair Market Value may be determined by the Committee in good
faith on such basis as it deems appropriate. In making such determination,
the Committee shall consider the financial conditions of the Company and
its recent operating results, values of publicly-traded securities of other
comparable institutions and the lack of liquidity of the Company's shares,
and such other factors as the Committee in its sole discretion deems
relevant.
Whenever possible, the determination of Fair Market Value by the Committee under
clauses (i) and (ii), above, shall be based on the prices reported in the Wall
Street Journal or as reported directly to the Company by Nasdaq or a stock
exchange. Such determination shall be conclusive and binding on all persons
(unless clause (iii) above is applicable).
(j) "Offering Date" means the first day of each Offering Period.
(k) "Option" means an Option described in Section 4(f).
(l) "Offering Date FMV" means the Fair Market Value of the Stock on the
Offering Date or, if such Offering Date is not a trading date, the last trading
date prior to such Offering Date.
(m) "Offering Period" means a 6 month period with respect to which the
right to purchase Stock may be granted under the Plan, as determined pursuant to
Section 4(a), provided, however, that the Committee shall have the power to
change the duration of Offering Periods without stockholder approval if such
change is announced at least fifteen (15) days prior to the scheduled beginning
of the first Offering Period to be affected.
(n) "Participant" means an Eligible Employee who elects to participate in
the Plan, as provided in Section 4(c).
(o) "Participating Company" means (i) the Company and (ii) each present or
future domestic Subsidiary designated by the Committee as a Participating
Company.
(p) "Plan" means this Activision, Inc., Second Amended and Restated 2002
Employee Stock Purchase Plan, as it may be amended from time to time.
(q) "Plan Account" means the account established for each Participant
pursuant to Section 8(a).
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(r) "Purchase Date" means the last day of an Accumulation Period provided,
however, that if the Stock is listed and traded on a stock exchange (including
The Nasdaq National Market System) during an Accumulation Period and the last
day of such Accumulation Period falls on a day which is not a trading date for
such stock exchange, then the "Purchase Date" shall be the last trading date in
such Accumulation Period.
(s) "Purchase Date FMV" means the Fair Market Value of the Stock on the
Purchase Date.
(t) "Purchase Price" means the price at which Participants may purchase
Stock under the Plan, as determined pursuant to Section 8(b).
(u) "Stock" means the common stock of the Company, $0.000001 par value.
(v) "Subsidiary" means any corporation (other than the Company) in an
unbroken chain of corporations beginning with the Company, if each of the
corporations other than the last corporation in the unbroken chain owns stock
possessing 50% or more of the total combined voting power of all classes of
stock in one of the other corporations in such chain.
(w) "Treasury Regulations" means the Treasury Regulations promulgated under
the Code.
SECTION 2. PURPOSE OF THE PLAN.
The purpose of the Plan is to provide Eligible Employees with a convenient
means to acquire an equity interest in the Company through payroll deductions,
to enhance such employees' sense of participation in the affairs of the Company
and Subsidiaries, and to provide an incentive for continued employment. The Plan
is intended to qualify as an "employee stock purchase plan" under Section 423 of
the Code (including any amendments, or replacements of such section), and the
Plan shall be so construed. Any term not expressly defined in the Plan but
defined for purposes of Section 423 of the Code shall have the same definition
therein.
SECTION 3. ADMINISTRATION OF THE PLAN.
(a) Committee Composition. The Plan shall be administered by the Committee.
The Committee shall be appointed by the Board and shall consist exclusively of
two or more directors of the Company, each of whom is a "Non-Employee Director"
as defined in Rule 16b-3(b)(3)(i) promulgated under the Exchange Act.
(b) Committee Responsibilities. The Committee shall interpret the Plan and
make all other policy decisions relating to the operation of the Plan. The
Committee may adopt such rules, guidelines and forms as it deems appropriate to
implement the Plan. Subject to the provisions of the Plan and the limitations of
Section 423 of the Code or any successor provision in the Code, all questions of
interpretation or application of the Plan shall be determined by the Committee
and its decisions shall be final and binding upon all Participants. Members of
the Committee shall receive no compensation for their services in connection
with the administration of the Plan, other than standard fees as established
from time to time by the Board for services
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rendered by Board members serving on Board committees. All expenses incurred in
connection with the administration of the Plan shall be paid by the Company.
SECTION 4. ENROLLMENT AND PARTICIPATION.
(a) Offering Periods. While the Plan is in effect, two Offering Periods
shall commence in each calendar year. The Offering Period commencing on October
1, 2004, may overlap with the Offering Period commencing on April 1, 2005. The
Offering Periods shall consist of the 6-month periods commencing on each April 1
and October 1.
(b) Accumulation Periods. While the Plan is in effect, two Accumulation
Periods shall commence in each calendar year. The Accumulation Periods shall
consist of the six month periods commencing on each April 1 and October 1.
(c) Enrollment. Any individual who, on the day preceding the first day of
an Offering Period, qualifies (or will qualify) as an Eligible Employee may
elect to become a Participant in the Plan for such Offering Period by executing
the subscription agreement prescribed for this purpose by the Committee. The
subscription agreement shall be filed with the Company at the prescribed
location not later than the 15th day of the month before such Offering Date
(unless a later time for filing a subscription agreement is set by the Committee
for all Eligible Employees with respect to a given Offering Period).
(d) Duration of Participation. Once enrolled in the Plan, a Participant
shall continue to participate in the Plan until he or she ceases to be an
Eligible Employee, withdraws from the Plan under Section 6 or reaches the end of
the Accumulation Period in which his or her employee contributions were
discontinued under Section 5(d) or 9(c). Such Participant is not required to
file any additional subscription agreements in order to continue participation
in the Plan. A Participant who discontinued employee contributions under Section
5(d) or withdrew from the Plan under Section 6 may again become a Participant,
if he or she then is an Eligible Employee, by following the procedure described
in subsection (c) above. A Participant whose employee contributions were
discontinued automatically under Section 9(c) shall automatically resume
participation at the beginning of the earliest Accumulation Period ending in the
next calendar year, if he or she then is an Eligible Employee.
(e) Applicable Offering Period. For purposes of this Plan the applicable
Offering Period shall be determined as follows:
(i) Once a Participant is enrolled in the Plan for an Offering Period,
such Offering Period shall continue to apply to him or her until the
earliest of (A) the end of such Offering Period or (B) the end of his or
her participation under subsection (d) above.
(ii) When a Participant reaches the end of an Offering Period (the
"Current Offering Period") but his or her participation is to continue,
then such Participant shall automatically be re-enrolled for the Offering
Period that commences immediately after the end of such Current Offering
Period.
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(f) Grant of Option on Enrollment. Enrollment by an Eligible Employee in
the Plan with respect to an Offering Period will constitute the grant (as of the
Offering Date for such Offering Period) by the Company to such Eligible Employee
of an option (an "Option") to purchase on each Purchase Date up to that number
of shares of Stock of the Company determined under Section 8(c).
SECTION 5. EMPLOYEE CONTRIBUTIONS.
(a) Frequency of Payroll Deductions. A Participant may purchase shares of
Stock under the Plan solely by means of payroll deductions. Payroll deductions,
as designated by the Participant pursuant to subsection (b) below, shall occur
on each payday during participation in the Plan.
(b) Amount of Payroll Deductions. An Eligible Employee shall designate on
the subscription agreement the portion of his or her Compensation that he or she
elects to have withheld for the purchase of Stock hereunder. Such portion shall
be a whole percentage of the Eligible Employee's Compensation, but not less than
2% nor more than 15%. Notwithstanding anything to the contrary in this Plan, the
total withholding under this Section 5(b) for any one Participant shall not
exceed an aggregate amount of $10,000 for the two Accumulation Periods ending in
any one calendar year. For the avoidance of doubt and by way of example, if
$6,000 is withheld for the Accumulation Period ending March 31 of a particular
calendar year, then the withholdings for the Accumulation Period ending
September 30 shall not exceed $4,000.
(c) Changing Withholding Rate. A Participant may increase or decrease the
rate of payroll deductions during an Offering Period by filing with the
Company's or Subsidiary's (whichever employs such employee) payroll department
(the "payroll department") a new authorization for payroll deductions, in which
case the new rate shall become effective for the next payroll period commencing
more than 20 days after the payroll department's receipt of the authorization
and shall continue for the remainder of the Offering Period unless changed as
described below. Such change in the rate of payroll deductions may be made at
any time during an Offering Period, but once a rate has been established a
Participant may elect only one increase and only one decrease in such rate
during each Offering Period in which such Participant is included. A Participant
may increase or decrease the rate of payroll deductions for any subsequent
Offering Period by filing with the payroll department a new authorization for
payroll deductions not later than the 10th day of the month before the beginning
of such Offering Period.
(d) Discontinuing Payroll Deductions. If a Participant wishes to
discontinue employee contributions entirely, he or she may do so by filing a new
subscription agreement with the Company at the prescribed location at any time.
Payroll withholding shall cease as soon as reasonably practicable after such
form has been received by the Company. (In addition, employee contributions may
be discontinued automatically pursuant to Section 9(c).) A Participant who has
discontinued employee contributions may resume such contributions effective with
the next Offering Period by filing a new subscription agreement with the Company
at the prescribed location if he or she then is an Eligible Employee.
5
SECTION 6. WITHDRAWAL FROM THE PLAN.
(a) Withdrawal. Each Participant may withdraw from an Offering Period under
the Plan by signing and delivering to the payroll department notice thereof on a
form provided for such purpose. Such withdrawal may be elected at any time at
least twenty (20) days prior to the end of an Accumulation Period.
(b) Return of Payroll Deductions; Readmittance. Upon withdrawal from the
Plan, the accumulated payroll deductions shall be returned, without interest, to
the withdrawn Participant and his or her interest in the Plan shall terminate.
In the event a Participant voluntarily elects to withdraw from the Plan, he or
she may not resume his or her participation in the Plan during the same Offering
Period, but he or she may participate in any Offering Period under the Plan
which commences on a date subsequent to such withdrawal by timely filing a new
authorization for payroll deductions in the same manner as set forth above for
initial participation in the Plan if he or she then is an Eligible Employee.
SECTION 7. CHANGE IN EMPLOYMENT STATUS.
(a) Termination of Employment. Termination of a Participant's employment
for any reason, including retirement or death or the failure of a Participant to
remain an Eligible Employee, terminates his or her participation in the Plan
immediately. In such event, the payroll deductions credited to the Participant's
Plan Account will be returned, without interest, to him or her or, in the case
of his or her death, to his or her legal representative.
(b) Leave of Absence. For purposes of the Plan, employment shall not be
deemed to terminate when the Participant goes on a military leave, a sick leave
or any other leave of absence, if such other leave was approved by the Committee
in writing. Employment, however, shall be deemed to terminate 90 days after the
Participant goes on a leave, unless a contract or statute guarantees his or her
right to return to work. Employment shall be deemed to terminate in any event
when the approved leave ends, unless the Participant immediately returns to
work.
SECTION 8. PLAN ACCOUNTS AND PURCHASE OF SHARES.
(a) Plan Accounts. The Company shall maintain an account on its books in
the name of each Participant (a "Plan Account"). All payroll deductions made for
a Participant are credited to his or her Plan Account under the Plan and are
deposited with the general funds of the Company; no interest shall accrue on the
payroll deductions. All payroll deductions received or held by the Company may
be used by the Company for any corporate purpose, and the Company shall not be
obligated to segregate such payroll deductions. A Participant may not make any
separate cash payment into his or her payroll deduction Plan Account and payment
for shares purchased under the Plan may not be made in any form other than by
payroll deduction.
(b) Purchase Price. The Purchase Price for each share of Stock purchased on
a Purchase Date shall be the lower of:
(i) 85% of the Offering Date FMV of such share on the Offering Date
for the Offering Period that includes such Purchase Date; or
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(ii) 85% of the Purchase Date FMV of such share on such Purchase Date.
(c) Number of Shares Purchased. On each Purchase Date, as long as the Plan
remains in effect, the Company shall apply the funds then in each Participant's
Plan Account to the purchase of whole shares of Stock. As of each Purchase Date,
each Participant shall be deemed to have elected to exercise his or her Option
to purchase the number of shares of Stock calculated in accordance with this
subsection (c), unless the Participant has previously elected to withdraw from
the Plan in accordance with Section 6 provided, however, that no Stock shall be
purchased on a Purchase Date on behalf of any employee whose participation in
the Plan was terminated prior to such Purchase Date. The amount then in the
Participant's Plan Account shall be divided by the Purchase Price, and the
number of shares that results shall be purchased from the Company with the funds
in the Participant's Plan Account. The foregoing notwithstanding, no Participant
shall purchase more than the Maximum Share Amount (as defined below) on any
Purchase Date nor more than the amounts of Stock set forth in Sections 9(a),
9(b) and 14(a). The Committee may determine with respect to all Participants
that any fractional share, as calculated under this subsection (c), shall be (i)
rounded down to the next lower whole share or (ii) credited as a fractional
share. Not less than twenty (20) days prior to the commencement of any Offering
Period, the Committee may, in its sole discretion, set a maximum number of
shares which may be purchased by any employee at any single Purchase Date (the
"Maximum Share Amount"). If a new Maximum Share Amount is set, then all
Participants must be notified of such Maximum Share Amount not less than twenty
(20) days prior to the commencement of the next Offering Period. Once the
Maximum Share Amount is established, it shall continue to apply with respect to
all succeeding Purchase Dates and Accumulation Periods unless revised by the
Committee as set forth above. The initial Maximum Share Amount is 5,000 shares.
(d) Available Shares Insufficient. In the event that the aggregate number
of shares that all Participants elect to purchase during an Accumulation Period
exceeds the maximum number of shares remaining available for issuance under
Section 14(a), then the Company shall make a pro rata allocation of the
remaining shares in as uniform a manner as shall be practicable and as the
Committee shall determine to be equitable.
(e) Issuance of Stock. Promptly following each Purchase Date, the number of
shares of Stock purchased by each Participant shall be deposited into an account
(a "Brokerage Account") established in the Participant's name at a stock
brokerage or other financial services firm designated by the Company. Shares may
be registered in the name of the Participant or jointly in the name of the
Participant and his or her spouse as joint tenants with right of survivorship or
as community property. During a Participant's lifetime, such Participant's
option to purchase shares hereunder is exercisable only by him or her. The
Participant will have no interest or voting right in shares covered by his or
her option until such option has been exercised.
(f) Unused Cash Balances. An amount remaining in the Participant's Plan
Account that represents the Purchase Price for any fractional share shall be
carried over in the Participant's Plan Account to the next Accumulation Period.
Any amount remaining in the Participant's Plan Account that represents the
Purchase Price for whole shares that could not be purchased by reason of
subsection (c) or (d) above, Sections 9(a), 9(b) or 14(a) shall be refunded to
the Participant in cash, without interest.
7
(g) Stockholder Approval. Any other provision of the Plan notwithstanding,
no shares of Stock shall be purchased under the Plan unless and until the
Company's stockholders have approved the adoption of the Plan.
(h) Brokerage Account. A Participant shall be free to undertake a
disposition (as such term is defined in Section 424(c) of the Code) of the
shares in his Brokerage Account at any time, whether by sale, exchange, gift, or
other transfer of legal title, but in the absence of such a disposition of the
shares, the shares must remain in the Participant's Brokerage Account until the
holding periods set forth in Section 423(a) of the Code have been satisfied.
With respect to shares for which the Section 423(a) holding periods have been
satisfied, the Participant may transfer those shares to another brokerage
account of Participant's choosing or request in writing that a stock certificate
be issued and delivered to him.
SECTION 9. LIMITATIONS ON STOCK OWNERSHIP.
(a) Five Percent Limit. Any other provision of the Plan notwithstanding, no
Participant shall be granted a right to purchase Stock under the Plan if such
Participant, immediately after his or her election to purchase such Stock, would
own stock possessing more than 5% of the total combined voting power or value of
all classes of stock of the Company or any parent or Subsidiary of the Company.
For purposes of this subsection (a), the following rules shall apply:
(i) Ownership of stock shall be determined after applying the
attribution rules of Section 424(d) of the Code and Section 1.423-2(d) of
the Treasury Regulations;
(ii) Each Participant shall be deemed to own any stock that he or she
has a right or option to purchase under this or any other plan; and
(iii) Each Participant shall be deemed to have the right to purchase a
number of shares of Stock under this Plan equal to the Maximum Share Amount
with respect to each Accumulation Period.
(b) Dollar Limit. Notwithstanding anything to the contrary in this Plan,
and for the avoidance of doubt, no Option granted under this Plan shall permit a
Participant's right to purchase Stock under the Plan to accrue at a rate which
exceeds $25,000 of Fair Market Value of Stock (determined at the time such
Option is granted) for each calendar year in which such Option is outstanding at
any time, as determined under the provisions of Section 423(b)(8) and Treasury
Regulation Section 1.423-2(i).
(c) Other Stock Purchase Plans; Effects of Preclusion. For purposes of
subsection (b) above, employee stock purchase plans not described in Section 423
of the Code shall be disregarded. If a Participant is precluded by subsection
(b) above from purchasing additional Stock under the Plan, then his or her
employee contributions shall automatically be discontinued
8
and shall resume at the beginning of the earliest Accumulation Period ending in
the next calendar year (if he or she then is an Eligible Employee).
SECTION 10. RIGHTS NOT TRANSFERABLE.
Neither payroll deductions credited to a Participant's Plan Account nor any
rights with regard to receive shares under the Plan may be assigned,
transferred, pledged or otherwise disposed of in any way (other than by will,
the laws of descent and distribution or as provided in Section 20 hereof) by the
Participant. Any such attempt at assignment, transfer, pledge or other
disposition shall be without effect.
SECTION 11. NO RIGHTS AS AN EMPLOYEE.
Nothing in the Plan or in any right granted under the Plan shall confer
upon the Participant any right to continue in the employ of a Participating
Company for any period of specific duration or interfere with or otherwise
restrict in any way the rights of the Participating Companies or of the
Participant, which rights are hereby expressly reserved by each, to terminate
his or her employment at any time and for any reason, with or without cause.
SECTION 12. NO RIGHTS AS A STOCKHOLDER.
A Participant shall have no rights as a stockholder with respect to any
shares of Stock that he or she may have a right to purchase under the Plan until
such shares have been purchased on the applicable Purchase Date.
SECTION 13. CONDITIONS UPON ISSUANCE OF SHARES; LIMITATION ON SALE OF SHARES.
Shares shall not be issued with respect to an Option unless the exercise of
such Option and the issuance and delivery of such shares pursuant thereto shall
comply with all applicable provisions of law, domestic or foreign, including,
without limitation, the Securities Act of 1933, as amended (the "Securities
Act"), the Exchange Act, the rules and regulations promulgated thereunder, and
the requirements of any stock exchange or market upon which the shares may then
be listed, and shall be further subject to the approval of counsel for the
Company with respect to such compliance.
SECTION 14. STOCK OFFERED UNDER THE PLAN.
(a) Authorized Shares. The aggregate number of shares of Stock available
for purchase under the Plan shall be 1,500,000, subject to adjustment pursuant
to this Section 14.
(b) Capital Changes. In the event of reorganization, recapitalization,
stock split, stock dividend, combination of shares, merger, consolidation,
offerings of rights, or any other change in the structure of the Stock of the
Company, the Committee may make such adjustment, if any, as it may deem
appropriate in the number, kind, and the price of shares available for purchase
under the Plan, and in the number of shares which an employee is entitled to
purchase under the Plan; provided, however, that any fractional shares resulting
from any such adjustment shall be eliminated.
9
In the event of the proposed dissolution or liquidation of the Company, the
Offering Period will terminate immediately prior to the consummation of such
proposed action, unless otherwise provided by the Committee. The Committee may,
in the exercise of its sole discretion in such instances, declare that the
Options under the Plan shall terminate as of a date fixed by the Committee and
give each Participant the right to exercise his or her Option as to all of the
optioned stock, including shares which would not otherwise be exercisable. In
the event of a proposed sale of all or substantially all of the assets of the
Company, or the merger of the Company with or into another corporation, each
Option under the Plan shall be assumed or an equivalent Option shall be
substituted by such successor corporation or a parent or subsidiary of such
successor corporation, unless the Committee determines, in the exercise of its
sole discretion and in lieu of such assumption or substitution, that the
Participant shall have the right to exercise the Option as to all of the
optioned stock. If the Committee makes an Option exercisable in lieu of
assumption or substitution in the event of a merger or sale of assets, the
Committee shall notify the Participant that the Option shall be fully
exercisable for a period of twenty (20) days from the date of such notice, and
the Option will terminate upon the expiration of such period.
SECTION 15. NOTICE OF DISPOSITION.
Each Participant shall notify the Company in writing if the Participant
disposes of any of the shares purchased in any Offering Period pursuant to this
Plan if such disposition (a "Disqualifying Disposition") occurs within the later
of (i) two (2) years from the Offering Date, or (iii) twelve (12) months from
the Purchase Date on which such shares were purchased (the "Notice Period"). The
Company may, at any time during the Notice Period, place a legend or legends on
any certificate representing shares acquired pursuant to the Plan requesting the
Company's transfer agent to notify the Company of any transfer of the shares.
The obligation of the Participant to provide such notice shall continue
notwithstanding the placement of any such legend on certificates.
SECTION 16. EQUAL RIGHTS AND PRIVILEGES.
All Eligible Employees shall have equal rights and privileges with respect
to the Plan so that the Plan qualifies as an "employee stock purchase plan"
within the meaning of Section 423 or any successor provision of the Code and the
related regulations. Any provision of the Plan which is inconsistent with
Section 423 or any successor provision of the Code shall without further act or
amendment by the Company or the Board be reformed to comply with the
requirements of Section 423. This Section 16 shall take precedence over all
other provisions in the Plan.
SECTION 17. NOTICES.
All notices or other communications by a Participant to the Company under
or in connection with the Plan shall be in writing and shall be deemed to have
been duly given when delivered personally or deposited in the U.S. Mail, first
class postage prepaid, addressed as follows: Activision, Inc., Stock
Administration Department, Activision, Inc., 3100 Ocean Park Boulevard, Santa
Monica, California 90405, or as such other address as the Company, by notice to
employees, may designate in writing from time to time.
10
SECTION 18. STOCKHOLDER APPROVAL OF AMENDMENTS.
Any required approval of the stockholders of the Company for an amendment
to the Plan shall be obtained at a duly held stockholders' meeting by the
affirmative vote of the holders of a majority of the outstanding shares of the
company represented and voting at the meeting, or if such stockholder approval
is obtained by written consent, it must be obtained by the majority of the
outstanding shares of the Company; provided, however, that approval at a meeting
or by written consent may be obtained by a lesser degree of stockholder approval
if the Committee determines, in its sole discretion after consultation with the
Company's legal counsel, that such lesser degree of stockholder approval will
comply with all applicable laws and will not adversely affect the qualification
of the Plan under Section 423 of the Code or Rule 16b-3 promulgated under the
Exchange Act ("Rule 16b-3").
SECTION 19. DESIGNATION OF BENEFICIARY.
(a) Written Designation. A Participant may file a written designation of a
beneficiary who is to receive any shares and cash, if any, with respect to the
Participant's Plan Account in the event of such Participant's death subsequent
to the end of an Offering Period but prior to delivery to him or her of such
shares and cash. In addition, a Participant may file a written designation of a
beneficiary who is to receive any cash from the Participant's Plan Account in
the event of such Participant's death prior to a Purchase Date. Such designation
of beneficiary may be changed by the Participant at any time by written notice
to the Company.
(b) No Written Designation. In the event of the death of a Participant and
in the absence of a beneficiary validly designated under the Plan who is living
at the time of such Participant's death, the Company shall deliver such shares
or cash to the executor or administrator of the estate of the Participant, or if
no such executor or administrator has been appointed (to the knowledge of the
Company), the Company, in its sole discretion, may deliver such shares or cash
to the spouse or to any one or more dependents or relatives of the Participant,
or if no spouse, dependent or relative is known to the Company, then to such
other person as the Company may designate.
SECTION 20. APPLICABLE LAW.
The Plan shall be governed by the substantive laws (excluding the conflict
of laws rules) of the State of Delaware.
SECTION 21. EFFECTIVE DATE; AMENDMENT OR TERMINATION OF PLAN.
(a) This Plan shall be effective on the day after the effective date of the
Company's Registration Statement filed with the Securities Exchange Commission
under the Securities Act, with respect to the shares issuable under the Plan
(the "Effective Date"), subject to approval by the stockholders of the Company
within twelve (12) months after the date the Plan is adopted by the Board and
the Plan shall continue until the earlier to occur of termination by the Board,
issuance of all of the shares of Stock reserved for issuance under the Plan, or
July 21, 2012. The Board may at any time suspend or terminate the Plan, except
that any such suspension or termination cannot affect Options previously granted
under the Plan. The Board may at any time
11
amend the Plan, provided, however, (i) no amendment shall make any change in an
Option previously granted which would adversely affect the right of any
Participant (without the prior consent of such Participant) and (ii) no
amendment shall be made without approval of the stockholders of the Company
obtained in accordance with Section 18 hereof within 12 months of the adoption
of such amendment (or earlier if required by Section 18) if such approval is
required by an applicable law or regulation, or if such amendment would:
(i) Increase the number of shares that may be issued under the Plan;
(ii) Change the designation of the employees (or class of employees)
eligible for participation in the Plan; or
(iii) Constitute an amendment for which stockholder approval is
required in order to comply with Rule 16b-3 (or any successor rule).
(b) Notwithstanding Section 21(a), with respect to those Participants whose
Offering Period began on October 1, 2004, the provisions of the Amended and
Restated Employee Stock Purchase Plan (the "Prior Plan") in effect prior to the
adoption of this Second Amended and Restated Employee Stock Purchase Plan (the
"New Plan") shall remain in effect with respect to such Offering Period only,
except that in the event of a "reset" as provided for in Section 4(e)(ii) of the
Prior Plan, which provides for a reset of the Offering Period through automatic
re-enrollment, the term of the "subsequent Offering Period" referenced in
Section 4(e)(ii) of the Prior Plan shall be for 6 months.
SECTION 22. TAX WITHHOLDING.
The Company shall notify a Participant of any income tax withholding
requirements arising as a result of a Disqualifying Disposition of shares
acquired pursuant to this Plan or any other event occurring pursuant to this
Plan. The Company shall have the right to withhold from such Participant such
withholding taxes as may be required by law, or to otherwise require the
Participant to pay such withholding taxes. If the Participant shall fail to make
such tax payments as are required, the Company or its Subsidiaries shall, to the
extent permitted by law, have the right to deduct any such taxes from any
payment of any kind otherwise due to such Participant or to take such other
action as may be necessary to satisfy such withholding obligations.
[remainder of page intentionally blank]
Exhibit 10.2
ACTIVISION, INC.
AMENDED AND RESTATED
2002 EMPLOYEE STOCK PURCHASE PLAN
FOR INTERNATIONAL EMPLOYEES
(EFFECTIVE AS OF APRIL 1, 2005)
TABLE OF CONTENTS
Page
SECTION 1. DEFINITIONS.......................................................1
SECTION 2. PURPOSE OF THE PLAN...............................................3
SECTION 3. ADMINISTRATION OF THE PLAN........................................3
(a) Committee Composition ............................................3
(b) Committee Responsibilities........................................3
SECTION 4. ENROLLMENT AND PARTICIPATION......................................4
(a) Offering Periods .................................................4
(b) Accumulation Periods .............................................4
(c) Enrollment .......................................................4
(d) Duration of Participation ........................................4
(e) Applicable Offering Period and Reset Provision ...................4
(f) Grant of Option on Enrollment ....................................4
SECTION 5. EMPLOYEE CONTRIBUTIONS. ........................................5
(a) Frequency of Payroll Deductions ..................................5
(b) Amount of Payroll Deductions .....................................5
(c) Changes to Payroll Deductions ....................................5
SECTION 6. WITHDRAWAL FROM THE PLAN. ........................................6
(a) Withdrawal .......................................................6
(b) Return of Payroll Deductions; Readmittance ......................6
SECTION 7. CHANGE IN EMPLOYMENT STATUS.......................................6
(a) Termination of Employment ........................................6
(b) Leave of Absence .................................................6
SECTION 8. PLAN ACCOUNTS AND PURCHASE OF SHARES..............................7
(a) Plan Accounts ....................................................7
(b) Purchase Price ...................................................7
(c) Number of Shares Purchased........................................7
(d) Available Shares Insufficient ....................................7
(e) Issuance of Stock ................................................8
(f) Unused Cash Balances .............................................8
(g) Brokerage Account ................................................8
SECTION 9. LIMITATIONS ON STOCK OWNERSHIP....................................8
(a) Dollar Limit .....................................................8
(b) Effects of Preclusion ............................................8
SECTION 10. RIGHTS NOT TRANSFERABLE. ........................................8
SECTION 11. NO RIGHTS AS AN EMPLOYEE. ........................................8
SECTION 12. NO RIGHTS AS A STOCKHOLDER........................................9
SECTION 13. CONDITIONS UPON ISSUANCE OF SHARES; LIMITATION ON SALE OF SHARES..9
SECTION 14. STOCK OFFERED UNDER THE PLAN......................................9
(a) Authorized Shares ................................................9
(b) Capital Changes ..................................................9
SECTION 15. NOTICES. ........................................................10
SECTION 16. STOCKHOLDER APPROVAL OF AMENDMENTS...............................10
SECTION 17. DESIGNATION OF BENEFICIARY.......................................10
(a) Written Designation .............................................10
(b) No Written Designation ..........................................10
SECTION 18. APPLICABLE LAW. ................................................11
SECTION 19. EFFECTIVE DATE; AMENDMENT OR TERMINATION OF PLAN.................11
SECTION 20. TAX WITHHOLDING. ................................................11
ACTIVISION, INC.
AMENDED AND RESTATED
2002 EMPLOYEE STOCK PURCHASE PLAN
FOR INTERNATIONAL EMPLOYEES
SECTION 1. DEFINITIONS.
(a) "Accumulation Period" means a six month period during which
contributions may be made toward the purchase of Stock under the Plan, as
determined pursuant to Section 4(b).
(b) "Board" means the Board of Directors of the Company, as constituted
from time to time.
(c) "Code" means the Internal Revenue Code of 1986, as amended.
(d) "Committee" means a committee of the Board, as described in Section
3.
(e) "Company" means Activision, Inc., a Delaware corporation.
(f) "Compensation" means all compensation, including, but not limited
to base salary, wages, commissions, overtime, shift premiums and bonuses, plus
draws against commissions. The Committee shall determine whether a particular
item is included in Compensation.
(g) "Eligible Employee" means any employee of a Participating Company
who meets each of the following requirements:
(i) His or her customary employment is for more than five months
per calendar year and for more than 20 hours per week; and
(ii) He or she was employed by a Participating Company on the
fifteenth (15th) day of the month before the beginning of such
Offering Period.
The foregoing notwithstanding, an individual shall not be considered an Eligible
Employee if his or her participation in the Plan is prohibited by the law of any
country which has jurisdiction over him or her or if he or she is subject to a
collective bargaining agreement that does not provide for participation in the
Plan.
(h) "Exchange Act" means the Securities Exchange Act of 1934, as
amended.
(i) "Fair Market Value" means the market price of Stock, determined by
the Committee as follows:
(i) If Stock was listed and traded on The Nasdaq National Market
System on the date in question, then the Fair Market Value shall be
equal to the price at which such Stock last traded on such date as
reported by The Nasdaq National Market System;
(ii) If Stock was listed and traded on a stock exchange on the
date in question, then the Fair Market Value shall be equal to the
price at which such Stock last traded on such date as reported by such
stock exchange; or
(iii) Notwithstanding the foregoing provisions, if the Committee
determines that the last trading price does not adequately reflect
Fair Market Value, Fair Market Value may be determined by the
Committee in good faith on such basis as it deems appropriate. In
making such determination, the Committee shall consider the financial
conditions of the Company and its recent operating results, values of
publicly-traded securities of other comparable institutions and the
lack of liquidity of the Company's shares, and such other factors as
the Committee in its sole discretion deems relevant.
Whenever possible, the determination of Fair Market Value by the Committee under
clauses (i) and (ii), above, shall be based on the prices reported in the Wall
Street Journal or as reported directly to the Company by Nasdaq or a stock
exchange. Such determination shall be conclusive and binding on all persons
(unless clause (iii) above is applicable).
(j) "Offering Date" means the first day of each Offering Period.
(k) "Option" means an Option described in Section 4(f).
(l) "Offering Date FMV" means the Fair Market Value of the Stock on the
Offering Date or, if such Offering Date is not a trading date, the last trading
date prior to such Offering Date.
(m) "Offering Period" means a 6 month period with respect to which the
right to purchase Stock may be granted under the Plan, as determined pursuant to
Section 4(a), provided, however, that the Committee shall have the power to
change the duration of Offering Periods without stockholder approval if such
change is announced at least fifteen (15) days prior to the scheduled beginning
of the first Offering Period to be affected.
(n) "Participant" means an Eligible Employee who elects to participate
in the Plan, as provided in Section 4(c).
(o) "Participating Company" means each present or future foreign
Subsidiary designated by the Committee as a Participating Company.
(p) "Plan" means this Activision, Inc., Amended and Restated 2002
Employee Stock Purchase Plan for International Employees, as it may be amended
from time to time.
(q) "Plan Account" means the account established for each Participant
pursuant to Section 8(a).
2
(r) "Purchase Date" means the last day of an Accumulation Period
provided, however, that if the Stock is listed and traded on a stock exchange
(including The Nasdaq National Market System) during an Accumulation Period and
the last day of such Accumulation Period falls on a day which is not a trading
date for such stock exchange, then the "Purchase Date" shall be the last trading
date in such Accumulation Period.
(s) "Purchase Date FMV" means the Fair Market Value of the Stock on the
Purchase Date.
(t) "Purchase Price" means the price at which Participants may purchase
Stock under the Plan, as determined pursuant to Section 8(b).
(u) "Stock" means the common stock of the Company, $0.000001 par value.
(v) "Subsidiary" means any corporation (other than the Company) in an
unbroken chain of corporations beginning with the Company, if each of the
corporations other than the last corporation in the unbroken chain owns stock
possessing 50% or more of the total combined voting power of all classes of
stock in one of the other corporations in such chain.
SECTION 2. PURPOSE OF THE PLAN.
The purpose of the Plan is to provide Eligible Employees with a
convenient means to acquire an equity interest in the Company, to enhance such
employees' sense of participation in the affairs of the Company and
Subsidiaries, and to provide an incentive for continued employment.
Notwithstanding anything set forth herein, the Plan is NOT intended to qualify
as an "employee stock purchase plan" under Section 423 of the Code (including
any amendments or replacements of such section), and the Plan shall be so
construed. By way of clarification of the foregoing, the Options should be
considered "nonqualified options" for U.S. federal income tax purposes.
SECTION 3. ADMINISTRATION OF THE PLAN.
(a) Committee Composition. The Plan shall be administered by the
Committee. The Committee shall be appointed by the Board and shall consist
exclusively of two or more directors of the Company, each of whom is a
"Non-Employee Director" as defined in Rule 16b-3(b)(3)(i) promulgated under the
Exchange Act.
(b) Committee Responsibilities. The Committee shall interpret the Plan
and make all other policy decisions relating to the operation of the Plan. The
Committee may adopt such rules, guidelines and forms as it deems appropriate to
implement the Plan. Subject to the provisions of the Plan, all questions of
interpretation or application of the Plan shall be determined by the Committee
and its decisions shall be final and binding upon all Participants. Members of
the Committee shall receive no compensation for their services in connection
with the administration of the Plan, other than standard fees as established
from time to time by the Board for services rendered by Board members serving on
Board committees. All expenses incurred in connection with the administration of
the Plan shall be paid by the Company.
3
SECTION 4. ENROLLMENT AND PARTICIPATION.
(a) Offering Periods. While the Plan is in effect, two Offering Periods
shall commence in each calendar year. The Offering Period commencing on October
1, 2004, may overlap with the Offering Period commencing on April 1, 2005. The
Offering Periods shall consist of the 6-month periods commencing on each April 1
and October 1.
(b) Accumulation Periods. While the Plan is in effect, two Accumulation
Periods shall commence in each calendar year. The Accumulation Periods shall
consist of the six month periods commencing on each April 1 and October 1.
(c) Enrollment. Any individual who, on the day preceding the first day
of an Offering Period, qualifies (or will qualify) as an Eligible Employee may
elect to become a Participant in the Plan for such Offering Period by executing
the subscription agreement prescribed for this purpose by the Committee. The
subscription agreement shall be filed with the Company at the prescribed
location not later than the 15th day of the month before such Offering Date
(unless a later time for filing a subscription agreement is set by the Committee
for all Eligible Employees with respect to a given Offering Period).
(d) Duration of Participation. Once enrolled in the Plan, a Participant
shall continue to participate in the Plan until he or she ceases to be an
Eligible Employee, withdraws from the Plan under Section 6 or reaches the end of
the Accumulation Period in which his or her employee contributions were
discontinued under Section 5(c)(ii) or 9(b). Such Participant is not required to
file any additional subscription agreements in order to continue participation
in the Plan. A Participant who discontinued employee contributions under Section
5(d) or withdrew from the Plan under Section 6 may again become a Participant,
if he or she then is an Eligible Employee, by following the procedure described
in subsection (c) above. A Participant whose employee contributions were
discontinued automatically under Section 9(b) shall automatically resume
participation at the beginning of the earliest Accumulation Period ending in the
next calendar year, if he or she then is an Eligible Employee.
(e) Applicable Offering Period. For purposes of this Plan the
applicable Offering Period shall be determined as follows:
(i) Once a Participant is enrolled in the Plan for an Offering
Period, such Offering Period shall continue to apply to him or her
until the earliest of (A) the end of such Offering Period or (B) the
end of his or her participation under subsection (d) above.
(ii) When a Participant reaches the end of an Offering Period
(the "Current Offering Period") but his or her participation is to
continue, then such Participant shall automatically be re-enrolled for
the Offering Period that commences immediately after the end of such
Current Offering Period.
(f) Grant of Option on Enrollment. Enrollment by an Eligible Employee
in the Plan with respect to an Offering Period will constitute the grant (as of
the Offering Date for such Offering Period) by the Company to such Eligible
Employee of an option (an "Option") to
4
purchase on each Purchase Date up to that number of shares of Stock of the
Company determined under Section 8(c).
SECTION 5. EMPLOYEE CONTRIBUTIONS.
(a) Frequency of Payroll Deductions. A Participant shall purchase
shares of Stock under the Plan by means of payroll deductions; provided,
however, that if the laws of the applicable jurisdiction in which a
Participating Company is located do not allow payroll deductions, then a
Participant may present a certified or bank check drawn on immediately available
funds (or such other form of payment acceptable to the Participating Company in
its sole and absolute discretion) at such times and in such manner acceptable to
the Company (in its sole and absolute discretion) (such payments, "Alternative
Payments"). For purposes of this Section 5(a), Participants who are eligible and
desire to participate in the Alternative Payments program must file a
subscription agreement on the same terms and conditions as all other
Participants and must timely deliver the Alternative Payments on a monthly basis
(or at such times acceptable to the Company in its sole and absolute
discretion). Failure of a Participant to make timely Alternative Payments shall
result in a deemed withdrawal from the Plan. Payroll deductions, as designated
by the Participant pursuant to subsection (b) below, shall occur on each payday
during participation in the Plan.
(b) Amount of Payroll Deductions. Unless the laws of the applicable
jurisdiction in which a Participating Company is located do not allow payroll
deductions, an Eligible Employee shall designate on the subscription agreement
the portion of his or her Compensation that he or she elects to have withheld
for the purchase of Stock hereunder. Such portion shall be a whole percentage of
the Eligible Employee's Compensation, but not less than 2% nor more than 15%.
Notwithstanding anything to the contrary in this Plan, the total withholding
under this Section 5(b) for any one Participant shall not exceed an aggregate
amount of $10,000 for the two Accumulation Periods ending in any one calendar
year. For the avoidance of doubt and by way of example, if $6,000 is withheld
for the Accumulation Period ending March 31 of a particular calendar year, then
the withholdings for the Accumulation Period ending September 30 shall not
exceed $4,000.
(c) Changes to Payroll Deductions. The following terms apply to
Participants who make payroll deductions and do not apply to Participants that
participate in the Alternative Payments program:
(i) Changing Withholding Rate. A Participant may increase or
decrease the rate of payroll deductions during an Offering Period by
filing with the Company's or Subsidiary's (whichever employs such
employee) payroll department (the "payroll department") a new
authorization for payroll deductions, in which case the new rate shall
become effective for the next payroll period commencing more than 20
days after the payroll department's receipt of the authorization and
shall continue for the remainder of the Offering Period unless changed
as described below. Such change in the rate of payroll deductions may
be made at any time during an Offering Period, but once a rate has
been established a Participant may elect only one increase and only
one decrease in such rate during each Offering Period in which such
Participant is included. A
5
Participant may increase or decrease the rate of payroll deductions
for any subsequent Offering Period by filing with the payroll
department a new authorization for payroll deductions not later than
the 10th day of the month before the beginning of such Offering
Period.
(ii) Discontinuing Payroll Deductions. If a Participant wishes to
discontinue employee contributions entirely, he or she may do so by
filing a new subscription agreement with the Company at the prescribed
location at any time. Payroll withholding shall cease as soon as
reasonably practicable after such form has been received by the
Company. (In addition, employee contributions may be discontinued
automatically pursuant to Section 9(b).) A Participant who has
discontinued employee contributions may resume such contributions
effective with the next Offering Period by filing a new subscription
agreement with the Company at the prescribed location if he or she
then is an Eligible Employee.
SECTION 6. WITHDRAWAL FROM THE PLAN.
(a) Withdrawal. Each Participant may withdraw from an Offering Period
under the Plan by signing and delivering to the payroll department notice
thereof on a form provided for such purpose. Such withdrawal may be elected at
any time at least twenty (20) days prior to the end of an Accumulation Period.
(b) Return of Payroll Deductions; Readmittance. Upon withdrawal from
the Plan, the accumulated payroll deductions and any Alternative Payments not
applied to the purchase of Stock hereunder shall be returned, without interest,
to the withdrawn Participant and his or her interest in the Plan shall
terminate. In the event a Participant voluntarily elects to withdraw from the
Plan, he or she may not resume his or her participation in the Plan during the
same Offering Period, but he or she may participate in any Offering Period under
the Plan which commences on a date subsequent to such withdrawal by timely
filing a new subscription agreement in the same manner as set forth above for
initial participation in the Plan if he or she then is an Eligible Employee.
SECTION 7. CHANGE IN EMPLOYMENT STATUS.
(a) Termination of Employment. Termination of a Participant's
employment for any reason, including retirement or death or the failure of a
Participant to remain an Eligible Employee, terminates his or her participation
in the Plan immediately. In such event, the payroll deductions credited to the
Participant's Plan Account and any Alternative Payments not applied to the
purchase of Stock hereunder will be returned, without interest, to him or her
or, in the case of his or her death, to his or her legal representative.
(b) Leave of Absence. For purposes of the Plan, employment shall not be
deemed to terminate when the Participant goes on a military leave, a sick leave
or any other leave of absence, if such other leave was approved by the Committee
in writing. Employment, however, shall be deemed to terminate 90 days after the
Participant goes on a leave, unless a contract or statute guarantees his or her
right to return to work. Employment shall be deemed to terminate in any event
when the approved leave ends, unless the Participant immediately returns to
work.
6
SECTION 8. PLAN ACCOUNTS AND PURCHASE OF SHARES.
(a) Plan Accounts. The Company shall maintain an account on its books
in the name of each Participant (a "Plan Account"). All payroll deductions made
for a Participant and all Alternative Payments are credited to his or her Plan
Account under the Plan and are deposited with the general funds of the Company;
no interest shall accrue on the payroll deductions or Alternative Payments. All
payroll deductions and Alternative Payments received or held by the Company may
be used by the Company for any corporate purpose, and the Company shall not be
obligated to segregate such payroll deductions or Alternative Payments.
(b) Purchase Price. The Purchase Price for each share of Stock
purchased on a Purchase Date shall be the lower of:
(i) 85% of the Offering Date FMV of such share on the Offering
Date for the Offering Period that includes such Purchase Date; or
(ii) 85% of the Purchase Date FMV of such share on such Purchase
Date.
(c) Number of Shares Purchased. On each Purchase Date, as long as the
Plan remains in effect, the Company shall apply the funds then in each
Participant's Plan Account to the purchase of whole shares of Stock. As of each
Purchase Date, each Participant shall be deemed to have elected to exercise his
or her Option to purchase the number of shares of Stock calculated in accordance
with this subsection (c), unless the Participant has previously elected to
withdraw from the Plan in accordance with Section 6 provided, however, that no
Stock shall be purchased on a Purchase Date on behalf of any employee whose
participation in the Plan was terminated prior to such Purchase Date. The amount
then in the Participant's Plan Account shall be divided by the Purchase Price,
and the number of shares that results shall be purchased from the Company with
the funds in the Participant's Plan Account. The foregoing notwithstanding, no
Participant shall purchase more than the Maximum Share Amount (as defined below)
on any Purchase Date nor more than the amounts of Stock set forth in Sections
9(a) and 14(a). The Committee may determine with respect to all Participants
that any fractional share, as calculated under this subsection (c), shall be (i)
rounded down to the next lower whole share or (ii) credited as a fractional
share. Not less than twenty (20) days prior to the commencement of any Offering
Period, the Committee may, in its sole discretion, set a maximum number of
shares which may be purchased by any employee at any single Purchase Date (the
"Maximum Share Amount"). If a new Maximum Share Amount is set, then all
Participants must be notified of such Maximum Share Amount not less than twenty
(20) days prior to the commencement of the next Offering Period. Once the
Maximum Share Amount is established, it shall continue to apply with respect to
all succeeding Purchase Dates and Accumulation Periods unless revised by the
Committee as set forth above. The initial Maximum Share Amount is 5,000 shares.
(d) Available Shares Insufficient. In the event that the aggregate
number of shares that all Participants elect to purchase during an Accumulation
Period exceeds the maximum number of shares remaining available for issuance
under Section 14(a), then the Company shall make a pro rata allocation of the
remaining shares in as uniform a manner as shall be practicable and as the
Committee shall determine to be equitable.
7
(e) Issuance of Stock. Promptly following each Purchase Date, the
number of shares of Stock purchased by each Participant shall be deposited into
an account (a "Brokerage Account") established in the Participant's name at a
stock brokerage or other financial services firm designated by the Company.
Shares may be registered in the name of the Participant or jointly in the name
of the Participant and his or her spouse as joint tenants with right of
survivorship or as community property. During a Participant's lifetime, such
Participant's option to purchase shares hereunder is exercisable only by him or
her. The Participant will have no interest or voting right in shares covered by
his or her option until such option has been exercised.
(f) Unused Cash Balances. An amount remaining in the Participant's Plan
Account that represents the Purchase Price for any fractional share shall be
carried over in the Participant's Plan Account to the next Accumulation Period.
Any amount remaining in the Participant's Plan Account that represents the
Purchase Price for whole shares that could not be purchased by reason of
subsection (c) or (d) above, Sections 9(a) or 14(a) shall be refunded to the
Participant in cash, without interest.
(g) Brokerage Account. A Participant shall be free to undertake a
disposition of the shares in his Brokerage Account at any time, whether by sale,
exchange, gift, or other transfer of legal title. The Participant may transfer
those shares to another brokerage account of Participant's choosing or request
in writing that a stock certificate be issued and delivered to him.
SECTION 9. LIMITATIONS ON STOCK OWNERSHIP.
(a) Dollar Limit. Notwithstanding anything to the contrary in this
Plan, and for the avoidance of doubt, no Option granted under this Plan shall
permit a Participant's right to purchase Stock under the Plan to accrue at a
rate which exceeds $25,000 of Fair Market Value of Stock (determined at the time
such Option is granted) for each calendar year in which such Option is
outstanding at any time.
(b) Effects of Preclusion. If a Participant is precluded by subsection
(a) above from purchasing additional Stock under the Plan, then his or her
employee contributions shall automatically be discontinued and shall resume at
the beginning of the earliest Accumulation Period ending in the next calendar
year (if he or she then is an Eligible Employee).
SECTION 10. RIGHTS NOT TRANSFERABLE.
Neither payroll deductions credited to a Participant's Plan Account nor
any rights with regard to receive shares under the Plan may be assigned,
transferred, pledged or otherwise disposed of in any way (other than by will,
the laws of descent and distribution or as provided in Section 17 hereof) by the
Participant. Any such attempt at assignment, transfer, pledge or other
disposition shall be without effect.
SECTION 11. NO RIGHTS AS AN EMPLOYEE.
Nothing in the Plan or in any right granted under the Plan shall confer
upon the Participant any right to continue in the employ of a Participating
Company for any period of
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specific duration or interfere with or otherwise restrict in any way the rights
of the Participating Companies or of the Participant, which rights are hereby
expressly reserved by each, to terminate his or her employment at any time and
for any reason, with or without cause.
SECTION 12. NO RIGHTS AS A STOCKHOLDER.
A Participant shall have no rights as a stockholder with respect to any
shares of Stock that he or she may have a right to purchase under the Plan until
such shares have been purchased on the applicable Purchase Date.
SECTION 13. CONDITIONS UPON ISSUANCE OF SHARES; LIMITATION ON SALE OF SHARES.
Shares shall not be issued with respect to an Option unless the
exercise of such Option and the issuance and delivery of such shares pursuant
thereto shall comply with all applicable provisions of law, domestic or foreign,
including, without limitation, the Securities Act of 1933, as amended (the
"Securities Act"), the Exchange Act, the rules and regulations promulgated
thereunder, and the requirements of any stock exchange or market upon which the
shares may then be listed, and shall be further subject to the approval of
counsel for the Company with respect to such compliance.
SECTION 14. STOCK OFFERED UNDER THE PLAN.
(a) Authorized Shares. Subject to any adjustments pursuant to Section
14(b), the aggregate number of shares of Stock available for purchase under the
Plan shall be, on any date, (i) 1,500,000 less (ii) the cumulative number of
shares purchased under the Company's 2002 Employee Stock Purchase Plan for
domestic employees (the "Domestic Plan"), through such date (including any
shares of Stock purchased or to be purchased under the Domestic Plan at any time
on such date), less (iii) the cumulative number of shares purchased under this
Plan prior to such date.
(b) Capital Changes. In the event of reorganization, recapitalization,
stock split, stock dividend, combination of shares, merger, consolidation,
offerings of rights, or any other change in the structure of the Stock of the
Company, the Committee may make such adjustment, if any, as it may deem
appropriate in the number, kind, and the price of shares available for purchase
under the Plan, and in the number of shares which an employee is entitled to
purchase under the Plan; provided, however, that any fractional shares resulting
from any such adjustment shall be eliminated.
In the event of the proposed dissolution or liquidation of the Company,
the Offering Period will terminate immediately prior to the consummation of such
proposed action, unless otherwise provided by the Committee. The Committee may,
in the exercise of its sole discretion in such instances, declare that the
Options under the Plan shall terminate as of a date fixed by the Committee and
give each Participant the right to exercise his or her Option as to all of the
optioned stock, including shares which would not otherwise be exercisable. In
the event of a proposed sale of all or substantially all of the assets of the
Company, or the merger of the Company with or into another corporation, each
Option under the Plan shall be assumed or an equivalent Option shall be
substituted by
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such successor corporation or a parent or subsidiary of such successor
corporation, unless the Committee determines, in the exercise of its sole
discretion and in lieu of such assumption or substitution, that the Participant
shall have the right to exercise the Option as to all of the optioned stock. If
the Committee makes an Option exercisable in lieu of assumption or substitution
in the event of a merger or sale of assets, the Committee shall notify the
Participant that the Option shall be fully exercisable for a period of twenty
(20) days from the date of such notice, and the Option will terminate upon the
expiration of such period.
SECTION 15. NOTICES.
All notices or other communications by a Participant to the Company
under or in connection with the Plan shall be in writing and shall be deemed to
have been duly given when delivered personally or deposited in the U.S. Mail,
first class postage prepaid, addressed as follows: Activision, Inc., Stock
Administration Department, Activision, Inc., 3100 Ocean Park Boulevard, Santa
Monica, California 90405, or as such other address as the Company, by notice to
employees, may designate in writing from time to time.
SECTION 16. STOCKHOLDER APPROVAL OF AMENDMENTS.
If required by then applicable law, approval of the stockholders of the
Company for an amendment to the Plan shall be obtained at a duly held
stockholders' meeting by the affirmative vote of the holders of a majority of
the outstanding shares of the company represented and voting at the meeting, or
if such stockholder approval is obtained by written consent, it must be obtained
by the majority of the outstanding shares of the Company; provided, however,
that approval at a meeting or by written consent may be obtained by a lesser
degree of stockholder approval if the Committee determines, in its sole
discretion after consultation with the Company's legal counsel, that such lesser
degree of stockholder approval will comply with all applicable laws and will not
adversely affect the qualification of the Plan under Rule 16b-3 promulgated
under the Exchange Act ("Rule 16b-3").
SECTION 17. DESIGNATION OF BENEFICIARY.
(a) Written Designation. A Participant may file a written designation
of a beneficiary who is to receive any shares and cash, if any, with respect to
the Participant's Plan Account in the event of such Participant's death
subsequent to the end of an Offering Period but prior to delivery to him or her
of such shares and cash. In addition, a Participant may file a written
designation of a beneficiary who is to receive any cash from the Participant's
Plan Account in the event of such Participant's death prior to a Purchase Date.
Such designation of beneficiary may be changed by the Participant at any time by
written notice to the Company.
(b) No Written Designation. In the event of the death of a Participant
and in the absence of a beneficiary validly designated under the Plan who is
living at the time of such Participant's death, the Company shall deliver such
shares or cash to the executor or administrator of the estate of the
Participant, or if no such executor or administrator has been appointed (to the
knowledge of the Company), the Company, in its sole discretion, may deliver such
shares or cash to the spouse or to any one or more dependents or relatives of
the Participant,
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or if no spouse, dependent or relative is known to the Company, then to such
other person as the Company may designate.
SECTION 18. APPLICABLE LAW.
The Plan shall be governed by the substantive laws (excluding the
conflict of laws rules) of the State of Delaware.
SECTION 19. EFFECTIVE DATE; AMENDMENT OR TERMINATION OF PLAN.
(a) This Plan shall be effective on the date the Plan is adopted by the
Board (the "Effective Date"), and the Plan shall continue until the earlier to
occur of (i) termination by the Board, issuance of all of the shares of Stock
reserved for issuance under the Plan, or (ii) October 1, 2012. The Board may at
any time suspend or terminate the Plan, except that any such suspension or
termination cannot affect Options previously granted under the Plan. The Board
may at any time amend the Plan, provided, however, (i) no amendment shall make
any change in an Option previously granted which would adversely affect the
right of any Participant (without the prior consent of such Participant) and
(ii) no amendment shall be made without approval of the stockholders of the
Company obtained in accordance with Section 16 hereof within 12 months of the
adoption of such amendment (or earlier if required by Section 16) if such
approval is required by an applicable law or regulation, or if such amendment
would constitute an amendment for which stockholder approval is required in
order to comply with Rule 16b-3 (or any successor rule). Notwithstanding the
foregoing, the Board may amend the Plan to remove any provision in the Plan
which relates to compliance with Rule 16b-3 (or any successor rule) without
shareholder approval.
(b) Notwithstanding Section 19(a), with respect to those Participants
whose Offering Period began on October 1, 2004, the provisions of the Amended
and Restated Employee Stock Purchase Plan (the "Prior Plan") in effect prior to
the adoption of this Second Amended and Restated Employee Stock Purchase Plan
(the "New Plan") shall remain in effect with respect to such Offering Period
only, except that in the event of a "reset" as provided for in Section 4(e)(ii)
of the Prior Plan, which provides for a reset of the Offering Period through
automatic re-enrollment, the term of the "subsequent Offering Period" referenced
in Section 4(e)(ii) of the Prior Plan shall be for 6 months.
SECTION 20. TAX WITHHOLDING.
The Company shall notify a Participant of any income tax withholding
requirements arising as a result of a purchase of Stock acquired pursuant to
this Plan, the disposition of such Stock or any other event occurring pursuant
to this Plan. The Company shall have the right to withhold from such Participant
such withholding taxes as may be required by law, or to otherwise require the
Participant to pay such withholding taxes. If the Participant shall fail to make
such tax payments as are required, the Company or its Subsidiaries shall, to the
extent permitted by law, have the right to deduct any such taxes from any
payment of any kind otherwise due to such Participant or to take such other
action as may be necessary to satisfy such withholding obligations.
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