Exhibit 10.1
As of January 1, 2001
Xx. Xxxxxxxx Xxxxxxxx
0000 Xxx xx xx Xxx
Xxxxxxx Xxxxxxxxx, Xxxxxxxxxx 00000
Dear Xx. Xxxxxxxx:
This letter confirms the terms of your employment by Activision Publishing, Inc.
("Employer").
1. Term
The term of your employment under this agreement shall commence on January
1, 2001 and expire on March 31, 2004, unless earlier terminated as provided
below.
2. Salary
(a) In full consideration for all rights and services provided by you under
this agreement, you shall receive an annual base salary of $287,500 from the
effective date of this Agreement to March 31, 2001, an annual base salary of
$330,000 from April 1, 2001 to March 31, 2002, an annual base salary of $365,000
from April 1, 2002 to March 31, 2003 and an annual base salary of $400,000 from
April 1, 2003 to March 31, 2004.
(b) Base salary payments shall be made in accordance with Employer's then
prevailing payroll policy. Each base salary referred to in Paragraph 2(a) shall
constitute your minimum base salary during the applicable period, and your base
salary may be increased above the minimum at any time if Employer's Board of
Directors (or the Compensation Committee of such Board of Directors), in its
sole and absolute discretion, elects to do so. In the event of an increase in
your base salary beyond the applicable minimum base salary for a particular
period, such increased base salary shall then constitute your minimum base
salary for all subsequent periods under this agreement, but only to the extent
such increased base salary is in excess of the minimum base salary referred to
in Paragraph 2(a) for the corresponding period.
(c) Notwithstanding anything to the contrary set forth above but subject to
the right of termination granted to you pursuant to Paragraph 10(b), Employer
shall not be required to actually use your services, and payment of your base
salary during the applicable period of your employment under this agreement will
discharge Employer's obligations to you hereunder. Such payment, however, will
not discharge your obligations to Employer hereunder.
(d) In addition to your base salary, you shall be eligible to receive an
annual performance based bonus targeted at sixty percent (60%) of your annual
base salary, in compliance with Employer's standard bonus plan which is
established on a yearly basis by Employer's senior management and Board of
Directors (or the Compensation Committee of such Board of Directors) and is
based on a number of factors that may include, without limitation, the
achievement of corporate earning and operating margin goals.
(e) You also are being granted under Employer's existing or modified stock
option plan, options to purchase 75,000 shares of Employer's common stock. Such
options are in addition to the stock options previously issued to you by
Employer. The 75,000 options will be issued on
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January 2, 2001 at an exercise price of $13.625 and will vest as follows: 15,000
options will vest on July 1, 2001; 7,500 options will vest on January 1, 2002;
7,500 options will vest on July 1, 2002; 7,500 options will vest on January 1,
2003; 7,500 options will vest on July 1, 2003; 7,500 options will vest on
January 1, 2004; 7,500 options will vest on July 1, 2004; and 15,000 options
will vest on January 1, 2005. You also shall receive an additional 20,000 stock
options on or about April 2001 in connection with the company's standard annual
option grant program, which will vest ratably over two years, with one fourth
(1/4) of the amount granted vesting at the end of each six month period. Such
options will be governed in all other respects by Employer's stock option plan
in effect at the time of grant. You also shall be eligible to receive additional
options, under Employer's existing or modified stock option plan, if Employer's
Board of Directors (or the Compensation Committee of such Board of Directors),
in its sole and absolute discretion, determines that the grant to you of
additional options is appropriate.
3. Title
You are being employed under this agreement in the position of Executive
Vice President, World Wide Studios.
4. Duties
You shall personally and diligently perform, on a full-time and exclusive
basis, such services as Employer or any of its divisions may reasonably require,
provided that such services are consistent with your position with Employer. You
shall observe all reasonable rules and regulations adopted by Employer in
connection with the operation of its business and carry out all instructions of
Employer. You will at all times perform all of the duties and obligations
required by you under this agreement in a loyal and conscientious manner and to
the best of your ability and experience.
5. Expenses
To the extent you incur necessary and reasonable business expenses in the
course of your employment, you shall be reimbursed for such expenses, subject to
Employer's then current policies regarding reimbursement of such business
expenses.
6. Other Benefits
You shall be entitled to those benefits which are standard for persons in
similar positions with Employer, including coverage under Employer's health,
life insurance and disability plans, and eligibility to participate in
Employer's 401(k) plan. Nothing paid to you under any such plans and
arrangements (nor any bonus or stock options which Employer's Board of Directors
(or the Compensation Committee of such Board of Directors), in its sole and
absolute discretion, shall provide to you) shall be deemed in lieu, or paid on
account, of your base salary. You expressly agree and acknowledge that after
expiration or early termination of the term of your employment under this
agreement, you are entitled to no additional benefits not expressly set forth in
this agreement, except as specifically provided under the benefit plans referred
to above and those benefit plans in which you subsequently may become a
participant, and subject in each case to the terms and conditions of each such
plan. Notwithstanding anything to the contrary set forth above, you shall be
entitled to receive those benefits provided by COBRA upon the expiration or
early termination of the term of your employment under this agreement.
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7. Vacation and Paid Holidays
(a) You will be entitled to paid vacation days in accordance with the
normal vacation policies of Employer in effect from time to time, provided that
in no event shall you be entitled to less than twenty (20) days of paid vacation
per year.
(b) You shall be entitled to all paid holidays given by Employer to its
full-time employees.
8. Protection of Employer's Interests
During the term of your employment by Employer, you will not compete in any
manner, whether directly or indirectly, as a principal, employee, agent or
owner, with Employer, or any affiliate of Employer, except that the foregoing
will not prevent you from holding at any time less than five percent (5%) of the
outstanding capital stock of any company whose stock is publicly traded. All
rights worldwide with respect to any and all intellectual or other property of
any nature produced, created or suggested by you during the term of your
employment or resulting from your services which (i) relate in any manner at the
time of conception or reduction to practice to the actual or demonstrably
anticipated business of Employer, (ii) result from or are suggested by any task
assigned to you or any work performed by you on behalf of Employer, or (iii) are
based on any property owned or idea conceived by Employer, shall be deemed to be
a work made for hire and shall be the sole and exclusive property of Employer.
You agree to execute, acknowledge and deliver to Employer, at Employer's
request, such further documents, including copyright and patent assignments, as
Employer finds appropriate to evidence Employer's rights in such property. Any
confidential and/or proprietary information of Employer or any affiliate of
Employer shall not be used by you or disclosed or made available by you to any
person except as required in the course of your employment, and upon expiration
or earlier termination of the term of your employment, you shall return to
Employer all such information which exists in written or other physical form
(and all copies thereof) under your control. Without limiting the generality of
the foregoing, you acknowledge signing and delivering to Employer the Activision
Employee Proprietary Information Agreement and you agree that all terms and
conditions contained in such agreement, and all of your obligations and
commitments provided for in such agreement, shall be deemed, and hereby are,
incorporated into this agreement as if set forth in full herein. The provisions
of the immediately preceding four sentences of this paragraph shall survive the
expiration or earlier termination of this agreement.
9. Services Unique
You recognize that the services being performed by you under this agreement
are of a special, unique, unusual, extraordinary and intellectual character
giving them a peculiar value, the loss of which cannot be reasonably or
adequately compensated for in damages, and in the event of a breach of this
agreement by you (particularly, but without limitation, with respect to the
provisions hereof relating to the exclusivity of your services and the
provisions of paragraph 8 of this agreement), Employer shall, in addition to all
other remedies available to it, be entitled to equitable relief by way of
injunction and any other legal or equitable remedies.
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10. Termination
(a) At any time during the term of your employment, Employer may terminate
your employment under this agreement for (i) your willful, reckless or gross
misconduct, (ii) your material breach of this agreement, or (iii) for other good
cause, as such term is defined under California law.
(b) You may terminate your employment under this agreement (i) upon
Employer's material breach of the agreement, (ii) upon any relocation of the
place at which you primarily are performing your services to Employer to a
location which is outside the Los Angeles county area, (iii) if Employer elects
to not actually use your services and continues to pay your base salary pursuant
to Paragraph 2(c) above for a period of one hundred twenty (120) consecutive
days, or (iv) in the event Employer commences the production or distribution of
an entertainment software or other product which is pornographic.
(c) In the event of the termination of your employment under this agreement
pursuant to Paragraph 10(a) or 10(b), all obligations of each party to the other
under this agreement shall immediately terminate.
(d) In the event of your death during the term of this agreement, this
agreement shall terminate and Employer only shall be obligated to pay your
estate or legal representative the salary provided for above to the extent
earned by your prior to such event. In the event you are unable to perform the
services required of you under this agreement as a result of any disability, and
such disability continues for a period of 60 or more consecutive days or an
aggregate of 90 or more days during any 12-month period during the term of this
agreement, then Employer shall have the right, at its option, to terminate your
employment under this agreement. Unless and until so terminated, during any
period of disability during which you are unable to perform the services
required of you under this agreement, your base salary shall be payable to the
extent of, and subject to, Employer's policies and practices then in effect with
regard to sick leave and disability benefits.
11. Use of Employee's Name
Employer shall have the right, but not the obligation, to use your name or
likeness for any publicity or advertising purpose.
12. Assignment
Employer may assign this agreement or all or any part of its rights under
this agreement to any entity which succeeds to all or substantially all of
Employer's assets (whether by merger, acquisition, consolidation, reorganization
or otherwise) or which Employer may own substantially, and this agreement shall
inure to the benefit of such assignee.
13. No Conflict with Prior Agreements
You represent to Employer that neither your commencement of employment
under this agreement nor the performance of your duties under this agreement
conflicts or will conflict with any contractual commitment on your part to any
third party, nor does it or will it violate or interfere with any rights of any
third party.
14. Post-Termination Obligations
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After the expiration or earlier termination of your employment under this
agreement for any reason whatsoever, you shall not, either alone or jointly,
with or on behalf of others, directly or indirectly, whether as principal,
partner, agent, shareholder, director, employee, consultant or otherwise, at any
time during a period of one (1) year following such expiration or termination,
offer employment to, or solicit the employment or engagement of, or otherwise
entice away from the employment of Employer or any affiliated entity, either for
your own account or for any other person firm or company, any person who was
employed by Employer or any such affiliated entity during the term of your
employment, whether or not such person would commit any breach of his or her
contract of employment by reason of his or her leaving the service of Employer
or any affiliated entity.
15. Entire Agreement; Amendments; Waiver, Etc.
(a) This agreement supersedes all prior or contemporaneous agreements and
statements, whether written or oral, concerning the terms of your employment
with Employer, and no amendment or modification of this agreement shall be
binding against Employer unless set forth in a writing signed by Employer and
delivered to you. Without limiting the generality of the foregoing, you
acknowledge that this agreement supersedes your prior written agreement with
Employer dated April 1, 2000, and such agreement is hereby declared terminated
and of no further force and effect.
(b) You have given no indication, representation or commitment of any
nature to any broker, finder, agent or other third party to the effect that any
fees or commissions of any nature are, or under any circumstances might be,
payable by Employer or any affiliate of Employer in connection with your
employment under this agreement.
(c) No waiver by either party of any breach by the other party of any
provision or condition of this agreement shall be deemed a waiver of any similar
or dissimilar provision or condition at the same or any prior or subsequent
time.
(d) Nothing contained in this agreement shall be construed so as to require
the commission of any act contrary to law and wherever there is any conflict
between any provision of this agreement and any present or future statute, law,
ordinance or regulation, the latter shall prevail, but in such event the
provision of this agreement affected shall be curtailed and limited only to the
extent necessary to bring it within legal requirements.
(e) This agreement does not constitute a commitment of Employer with regard
to your employment, express or implied, other than to the extent expressly
provided for herein. Upon termination of this agreement, it is the contemplation
of both parties that your employment with Employer shall cease, and that neither
Employer nor you shall have any obligation to the other with respect to
continued employment. In the event that your employment continues for a period
of time following the stated expiration date of this contract, unless and until
agreed to in a new subscribed written document, such employment or any
continuation thereof is "at will," and may be terminated without obligation at
any time by either party giving notice to the other.
(f) This agreement shall be governed by and construed in accordance with
the laws of the State of California without regard to conflict of law
principles.
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(g) In accordance with the Immigration Reform and Control Act of 1986,
employment under this agreement is conditioned upon satisfactory proof of your
identity and legal ability to work in the United States.
(h) To the extent permitted by law, you will keep the terms of this
agreement confidential, and you will not disclose any information concerning
this agreement to anyone other than your immediate family and professional
representatives (provided they also agree to keep the terms of this agreement
confidential).
16. Notices
All notices which either party is required or may desire to give the other
shall be in writing and given either personally or by depositing the same in the
United States mail addressed to the party to be given notice as follows:
To Employer: 0000 Xxxxx Xxxx Xxxxxxxxx
Xxxxx Xxxxxx, Xxxxxxxxxx 00000
Attention: Senior Vice President
and General Counsel
To Employee: 0000 Xxx xx xx Xxx
Xxxxxxx Xxxxxxxxx, Xxxxxxxxxx 00000
Either party may by written notice designate a different address for giving
of notices. The date of mailing of any such notices shall be deemed to be the
date on which such notice is given.
17. Headings
The headings set forth herein are included solely for the purpose of
identification and shall not be used for the purpose of construing the meaning
of the provisions of this agreement.
If the foregoing accurately reflects our mutual agreement, please sign
where indicated.
ACCEPTED AND AGREED TO:
Employer Employee
By: /s/ Xxx Xxxxxxxx By: /s/ Xxxxxxxx Xxxxxxxx
----------------------------- ----------------------------
Xxx Xxxxxxxx Xxxxxxxx Xxxxxxxx
President and Chief
Operating Officer
Date: May 24, 2001 Date: May 24, 2001
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