Activision Blizzard (ATVI)

Grants Affected by Modifications after Initial Grant Date

Certain grants were modified after the initial grant date, but the Company did not account correctly for the modification in accordance with APB No. 25.  The modifications included the acceleration of vesting, the continuation of the vesting period of options of terminated employees or the extension of the post-service exercise period for vested stock options of terminated employees.  Modifications were made to 337 option grants that were not accounted for in accordance with APB No. 25. We recorded approximately $10.0 million additional pre-tax stock-based compensation expense to properly account for these modifications, or about 15% of the approximately $66.7 million in additional pre-tax stock-based compensation expense recorded by the

49

Company in the restated financial statements reported in the Company’s Amended Annual Report on Form 10-K/A for the fiscal year ended March 31, 2006.

Grants Affected by Modifications after Initial Grant Date

 Certain grants were modified after the initial grant date, but the Company did not account correctly for the modification in accordance with APB No. 25.  The modifications included the acceleration of vesting, the continuation of the vesting period of options of terminated employees or the extension of the post-service exercise period for vested stock options of terminated employees.  Modifications were made to 337 option grants that were not accounted for in accordance with APB No. 25. We recorded approximately $10.0 million additional pre-tax stock-based compensation expense to properly account for these modifications, or about 15% of the total additional pre-tax expense recorded.