Activision Blizzard (ATVI)

2.             Compensation

(a)           Subject to the provisions of this Agreement, in full consideration for all rights and services provided by you under this Agreement, during the Term you shall receive the compensation set forth in this Section 2.

(b)           Commencing on the Effective Date, you shall receive an annual base salary (“Base Salary”) of $475,000.00 paid in accordance with the Employer’s payroll policies in effect from time to time. On each anniversary of the Effective Date during the Term, your Base Salary shall be reviewed and may be increased, but not decreased, by an amount determined by the Board of Directors (the “Board”) of Activision, Inc., the parent company of the Employer (“Activision”) or the Compensation Committee of the Board (the “Compensation Committee”), in its sole and absolute discretion; provided, however, that the annual increase shall be no less than four percent (4%) per year.

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2.             Compensation

(a)           Subject to the provisions of this Agreement, in full consideration for all rights and services provided by you under this Agreement, during the Term you shall receive the compensation set forth in this Section 2.

(b)           Commencing on the Effective Date, you shall receive an annual base salary (“Base Salary”) of $475,000.00 paid in accordance with the Employer’s payroll policies in effect from time to time. On each anniversary of the Effective Date during the Term, your Base Salary shall be reviewed and may be increased, but not decreased, by an amount determined by the Board of Directors (the “Board”) of Activision, Inc., the parent company of the Employer (“Activision”) or the Compensation Committee of the Board (the “Compensation Committee”), in its sole and absolute discretion.

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2.             Compensation

(a)       In full consideration for all rights and services provided by you under this Agreement, you shall receive the compensation set forth in this Paragraph 2. Commencing on your payroll start date, you shall receive an annual Base Salary of $375,000 for the period until October 1, 2007 or until your initial assignment based in the United Kingdom is complete.  Commencing when you relocate to the United States, your Base Salary will be increased to $450,000.

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(b)       Base Salary payments shall be made in accordance with Employer’s then prevailing payroll policy.  The Base Salary referred to in Paragraph 2(a) shall constitute your minimum Base Salary during the applicable period.  On an annual basis, your Base Salary shall be reviewed to determine if an increase above minimum is appropriate. Your Base Salary may be increased above the minimum at any time if Activision’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 each subsequent year under this Agreement.

(c)       Employer shall not be required to actually use your services during the term of this Agreement.  You will not be permitted or authorized to act on behalf of Employer if Employer is not utilizing your services unless specifically authorized in writing to the contrary by Employer. All of your obligations to Employer under this Agreement generally, and specifically with regard to Paragraph 8, shall continue throughout the term of this Agreement and shall remain in full force and effect.  Moreover, you have an obligation to abide by the terms of the Employee Proprietary Information Agreement executed by you and Employer’s corporate governance policies.

(d)       You will receive a signing bonus of $150,000 payable on Effective Date.

(e)       In addition to your Base Salary, you may be eligible to receive an annual discretionary bonus (the “Annual Bonus”). Your target Annual Bonus during the term of this Agreement will be 75% of the then applicable Base Salary, provided that the actual amount of the Annual Bonus, if any, is within the sole and absolute discretion of the Activision’s Board of Directors (or the Compensation Committee of the Board of Directors) and will be based upon your achievement of certain mutually agreed objectives and goals and/or your contribution to the success of Employer’s financial and business objectives and goals for the fiscal year with respect to which the Annual Bonus is calculated, such determination made by Activision’s Board of Directors (or the Compensation Committee of the Board of Directors) in its sole discretion. The Annual Bonus may take the form of, without limitation, cash, shares of common stock of Activision and/or options to purchase such shares, as determined by the Compensation Committee in its sole discretion. Employer’s overall financial performance will also be considered in determining whether any of the Annual Bonus is awarded and, if so, the amount. The Annual Bonus, if granted, is generally paid to employees in May. Except as otherwise set forth in this Agreement, you must remain continuously employed by Employer through the date on which the Annual Bonus is paid to be eligible to receive such Annual Bonus. Any Annual Bonus shall be subject to withholding.  For Activision’s 2007 fiscal year period (April 1, 2006 — March 31, 2007) you will be guaranteed a minimum Annual Bonus payment of $230,000.  This minimum payment only applies to fiscal year 2007.

(f)        Pursuant to the Activision 2003 Incentive Plan (“Plan”), on the Effective Date (or, if Activision’s common stock is not traded on The NASDAQ Stock Market on the Effective Date, the first day following the Effective Date that Activision’s common stock is traded on The NASDAQ Stock Market), you will be granted a non-qualified stock option (the “Option”) to purchase an aggregate of 240,000 shares of the Activision’s common stock.  The Option to purchase 240,000 shares referred to above will vest ratably over three years, with one-third of the amount granted vesting at the end of each year, and with the first year commencing October 1,

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2007.  The Option will have an exercise price per share that will be the closing price of such common stock as reported on The NASDAQ Stock Market on the grant date and reported in The Wall Street Journal on the first business day following the grant date, and will be governed in all other respects by (and you agree to enter into) Activision’s standard form of stock option agreement for similar grants of “inducement” options.

(g)       Pursuant to the Plan, you also will receive, on the Effective Date, a restricted stock grant of 21,000 shares of Activision’s common stock (the “Restricted Shares”).  Such grant of Restricted Shares will not vest until the end of the third year following the Effective Date (subject to possible earlier vesting in two equal annual installments based on the achievement of certain performance objectives to be mutually determined by you and Employer for the fiscal years 2008 and 2009) and will thereupon fully vest in its entirety (on a “cliff-vesting” basis).

(h)       You may be eligible for such additional stock option grants commensurate with your position with Employer as the Board of Directors (or Compensation Committee of the Board of Directors), in its sole discretion, may award to you from time to time.

(i)        In consideration for abandoning certain benefits with your prior employer and forgoing certain other executive opportunities and related equity participations, pursuant to the Plan, you also will receive, on the Effective Date, a grant of 25,000 Restricted Shares, with one-half of such Restricted Shares to vest at the end of each of the first and second years following the Effective Date.

(j)        Commencing with the Effective Date and continuing through the duration of your initial assignment with Activision in the United Kingdom, you will be eligible for the international assignment related benefits as outlined in the international assignment letter as described in Exhibit A to this Agreement.

(k)       Within twelve months of the Effective Date, you shall relocate your principal residence to within a 60-minute vehicle commute of Employer’s headquarters (Santa Monica, California). At the time of relocation, Employer shall provide comprehensive executive relocation support including payment of the following costs pursuant to the terms of the “Relocation Summary” document and which includes: (i) all one-time, non-recurring costs associated with buying a home; (ii) all moving costs for household goods; and (iii) $48,000 in mortgage assistance (“Mortgage Assistance”), payable $2,000.00 each month for 24 months. In addition, Employer will reimburse you for the actual incremental income taxes paid by you by reason of the inclusion in your income of the payments to you of the amounts set forth in clauses (i) and (ii), and (iii), of the immediately preceding sentence.

2.             Compensation

(a)       In full consideration for all rights and services provided by you under this Agreement, you shall receive the compensation set forth in this Paragraph 2. Commencing on the Effective Date, you shall receive an annual base salary of $468,000.  Thereafter, on June 1 of each year of the Employment Period your annual base salary shall be increased to a minimum of an amount equal to one hundred four percent (104%) of the base salary for the prior year.

(b)       Base Salary payments shall be made in accordance with Employer’s then prevailing payroll policy.  The base salary referred to in Paragraph 2(a) shall constitute your minimum base

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salary during the applicable period.  On an annual basis, your base salary shall be reviewed to determine if an increase above minimum is appropriate. Your base salary may be increased above the minimum at any time if Activision’s Board of Directors (or the Compensation Committee of such Board of Directors), in its sole and absolute discretion, elects to do so.

(c)       Employer shall not be required to actually use your services during the term of this Agreement.  You will not be permitted or authorized to act on behalf of Employer if Employer is not utilizing your services unless specifically authorized in writing to the contrary by Employer. All of your obligations to Employer under this Agreement generally, and specifically with regard to Paragraph 8, shall continue throughout the term of this Agreement and shall remain in full force and effect.  Moreover, you have an obligation to abide by the terms of the Employee Proprietary Information Agreement executed by you and Employer’s corporate governance policies.

(d)       You will receive a signing bonus of $35,000 payable within two weeks of the Effective Date.

(e)       In addition to your Base Salary, you may be eligible to receive an annual discretionary bonus (the “Annual Bonus”). Your target Annual Bonus during the term of this Agreement will be 75% of the then applicable Base Salary, provided that the actual amount of the Annual Bonus, if any, is within the sole and absolute discretion of the Activision’s Board of Directors (or the Compensation Committee of the Board of Directors) and will be based upon your achievement of certain mutually agreed objectives and goals and/or your contribution to the success of Employer’s financial and business objectives and goals for the fiscal year with respect to which the Annual Bonus is calculated, such determination made by Activision’s Board of Directors (or the Compensation Committee of the Board of Directors) in its sole discretion. Employer’s overall financial performance will also be considered in determining whether any of the Annual Bonus is awarded and, if so, the amount. The Annual Bonus, if granted, is generally paid to employees in May. Except as otherwise set forth in this Agreement, you must remain continuously employed by Employer through the date on which the Annual Bonus is paid to be eligible to receive such Annual Bonus. Any Annual Bonus shall be subject to withholding.

(f)        Pursuant to the Activision 2003 Incentive Plan (“Plan”), you will be granted a non-qualified stock option (the “Option”) to purchase an aggregate of 300,000 shares of Activision’s common stock in two tranches.  As to the First Tranche of 200,000 shares covered by the Option, such tranche will vest ratably over the three years following the date on which the Option is granted to you (the “Option Grant Date”), with one-third of the amount vesting each year on the anniversary of the Option Grant Date.  As to the Second Tranche of 100,000 shares covered by the Option, such shares will not vest until the third anniversary of the Option Grant Date (subject to possible earlier vesting of 25% of the Second Tranche vesting at the end of fiscal year 2007 and another 25% vesting at the end of fiscal year 2008 if Employee shall achieve certain performance objectives to be mutually determined by you and Employer for the fiscal years 2007 and 2008).  The Option will have an exercise price per share that will be the market low on the grant date and will be governed in all other respects by Activision’s standard form of stock option agreement for similar grants.

(g)       You also will receive a restricted stock grant (the “Stock Grant”) of 35,000 shares of Activision’s common stock (the “Restricted Shares”).  Such grant of Restricted Shares will vest in

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two tranches.  As to the First Tranche of 23,333 shares covered by the Stock Grant, such tranche will vest ratably over the three years following the date on which the Stock Grant occurs (“Stock Grant Date”), with one-third of the amount vesting each year on the anniversary of the Stock Grant Date.  As to the Second Tranche of 11,667 shares covered by the Stock Grant, such shares will not vest until the end of the third anniversary of the Stock Grant Date (subject to possible earlier vesting of 25% of the shares vesting at the end of fiscal year 2007 and another 25% vesting at the end of fiscal year 2008 if Employee shall achieve certain performance objectives to be mutually determined by you and Employer for the fiscal years 2007 and 2008).

(h)       You may be eligible for such additional stock option grants commensurate with your position with Employer as the Board of Directors (or Compensation Committee of the Board of Directors), in its sole discretion, may award to you from time to time.

(i)        Employer will continue to provide mortgage assistance (“Mortgage Assistance”) in the amount of $7,500 (grossed-up in an amount sufficient to cover all tax liability you incur as a result of the Mortgage Assistance) per month from the Effective Date through the Expiration Date.