Exhibit 10.5
REPLACEMENT BONUS
AGREEMENT
This Agreement
(the “ Agreement
”), dated as of December 1, 2007 (the “ Effective Date ”), by and between
ACTIVISION, INC., a Delaware corporation with its principal offices
at 3100 Ocean Park Boulevard, Santa Monica, CA 90405 (the “
Company ”), and
ROBERT A. KOTICK (the “ Executive ”).
RECITALS :
WHEREAS, the Company and the Executive entered
into an employment agreement dated May 22, 2000 (the “
Original Employment
Agreement ”);
WHEREAS, on
December 29, 2006, the parties amended the Original Employment
Agreement (the “ Amended
Employment Agreement ”) to remove certain provisions
that may have resulted in adverse consequences for the Executive
under Section 409A of the Internal Revenue Code of 1986, as amended
(the “ Code
”);
WHEREAS, pursuant
to the Amended Employment Agreement, the parties agreed to
negotiate in good faith to promptly develop benefits reasonably
comparable to those forgone by the Executive under the Original
Employment Agreement;
WHEREAS, the
Company, Vivendi, S.A., a Societe Anonyme organized under the laws
of France (“ Vivendi
”), Vivendi Games Acquisition Company LLC, a limited
liability company organized under the laws of the State of Delaware
(“ Vivendi LLC
”), Vivendi Games, Inc., a Delaware corporation (“
Games ”), and Sego
Merger Corporation, a Delaware corporation (“ Merger Sub ”), have proposed to
enter into a Business Combination Agreement (“ BCA ”) in order to combine the
respective businesses of Games and the Company, pursuant to which,
among other things, (i) Vivendi shall purchase (the “
Share Purchase ”)
from the Company a number of newly issued shares of common stock,
par value $0.000001 per share, of the Company (“ Company Common Stock ”) and (ii)
Merger Sub shall be merged with and into Games (the “
Merger ” and,
together with the Share Purchase, the “ Combination Transactions ”)
pursuant to which (x) each share of common stock, par value $0.01
per share, of Games shall be converted into the right to receive a
number of shares of Company Common Stock equal to the Exchange
Ratio (as defined in the BCA) and (y) Games shall become a
wholly-owned subsidiary of the Company;
WHEREAS,
concurrently with the execution of the BCA and this Agreement, the
Executive and the Company have entered into an Amended and Restated
Employment Agreement (the “ New Employment Agreement ”),
which amends and supersedes the Amended Employment Agreement;
and
WHEREAS, in
entering into the New Employment Agreement, the Executive waived
his rights under the Amended Employment Agreement in connection
with the Combination Transactions to (i) elect to receive a cash
payment in respect of all stock options held by him equal to, as to
each share of Company Common Stock subject to such stock options,
the excess of the closing price of the Company Common Stock on the
date of the Combination Transactions over the option exercise
price, (ii) accelerated vesting of all unvested stock options on
the date of the Combination Transactions and (iii) resign for any
reason during the six (6) month period following the three (3)
month anniversary of the Combination Transactions and receive a
severance payment equal to five (5) times the sum of his base
salary and most recent annual bonus, a pro-rata annual bonus for
the year of resignation and two years of health insurance
continuation; and
NOW, THEREFORE, in consideration for the
Executive’s relinquishment of certain rights as described in
the Amended Employment Agreement and the Executive’s entering
into the New Employment Agreement, the parties hereto hereby agree
as follows:
