al., Case No. CV-06-5375 MRP(JLTx) (“Hamian”); Abdelnur v. Kotick, et al., Case No. CV-07-3575 MRP(JTLx) (“Abdelnur”); and Scarborough v. Kotick, et al., Case No. CV-07-4602 MRP(JTLx) (“Scarborough”).  The Pfeiffer and Hamian complaints were consolidated by Order dated January 25, 2007, as In re Activision, Inc. Shareholder Derivative Litigation, Case No. CV-06-4771 MRP(JTLx) (the “Federal Derivative Action”), Pfeiffer and Hamian were appointed Lead Plaintiff, and Co-Lead Counsel was appointed.  Abdelnur was consolidated into the Federal Derivative Action by order dated July 13, 2007, and Scarborough was consolidated into the action by Order dated September 13, 2007.

Both the Federal Derivative Action and the State Derivative Action allege claims on behalf of Activision against the Individual Settling Defendants, certain current and former Activision officers and directors, arising from or relating to the granting of stock options at Activision, including from 1996 through at least 2003.

On or about July 25, 2006, Activision’s Board of Directors (the “Board”) approved the appointment of a subcommittee of the Board’s audit committee (the “Special Subcommittee”) to conduct a review of Activision’s practices and policies relating to the granting of stock options.  The Special Subcommittee’s review encompassed 4,849 grants between fiscal years 1992 and 2006, covering 204,230,604 shares, or about 86% of the 237,756,486 options granted in the period reviewed.  The Special Subcommittee concluded that a substantial number of options granted during the period reviewed required measurement date corrections pursuant to the applicable accounting rules, and that Activision would be required to record additional non-cash, stock-based compensation expense arising from measurement date corrections.

Beginning in August 2007, the parties to the Federal Derivative Action commenced settlement discussions, which continued from time-to-time over the following months.  Beginning in November 2007, the parties to both Actions conducted confidential mediation sessions before the Honorable Edward A. Infante (Ret.).  Attending the mediation sessions were counsel for the Federal and State

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Plaintiffs, all Defendants in the Actions except for Barry J. Plaga, Activision, certain of Activision’s directors and officers (“D&O”) insurance carriers, and Activision’s former outside corporate counsel, Bryan Cave LLP.  In the course of confidential settlement discussions, and pursuant to the mediation supervised by Judge Infante, counsel for Activision has discussed with the Federal and State Plaintiffs’ counsel the Special Subcommittee’s investigation and the Special Subcommittee’s findings and conclusions pursuant thereto.  Counsel for Activision also provided to the Federal and State Plaintiffs’ counsel for review various documents relevant to the parties’ disputes, in the course of confidential settlement discussions, and pursuant to the mediation supervised by Judge Infante.

All parties to the Actions and non-party Bryan Cave have reached a non-binding agreement-in-principle for the resolution of the claims asserted therein and any and all claims which could have been asserted therein, as set forth in an Amended Memorandum of Understanding, previously executed by certain of the parties on or about January 17, 2008 and additional non-binding agreements-in-principle with respect to Individual Settling Defendants Chardavoyne and Goldberg.

The Individual Settling Defendants have denied and continue to deny each and all of the claims and contentions alleged by the Plaintiffs in the Actions.  The Individual Settling Defendants expressly have denied and continue to deny all charges of wrongdoing or liability against them arising out of any of the conduct, statements, acts or omissions alleged, or that could have been alleged, in the Actions.  The Individual Settling Defendants also have denied and continue to deny, inter alia, the allegations that the Plaintiffs, Activision or its stockholders have suffered damage, or that the Plaintiffs, Activision or its stockholders were harmed by the conduct alleged in the Actions.  The Individual Settling Defendants have further asserted that at all

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relevant times, they acted in good faith, and in a manner they reasonably believed to be in the best interests of Activision and its stockholders.

Nonetheless, the Individual Settling Defendants and Activision have concluded that further conduct of the Actions would be protracted, expensive, and distractive to Activision and its management.  The Individual Settling Defendants and Activision have also taken into account the uncertainty and risks inherent in any litigation, especially in complex cases like the Actions.  The Individual Settling Defendants and Activision have, therefore, determined that it is desirable that the Actions, and all of the Settling Parties’ disputes related thereto, be fully and finally settled in the manner and upon the terms and conditions set forth in this Stipulation (hereinafter, the “Settlement”).  The Individual Settling Defendants are entering into this Stipulation solely because the proposed Settlement would eliminate the burden and expense of further litigation.

Neither this Stipulation nor any document or exhibit referred to herein, including, but not limited to, the Corporate Governance policies attached as Exhibit A, nor any action taken to carry out this Stipulation is, may be construed as, or may be used as an admission by or against the Settling Parties, or any of them, of any fault, wrongdoing or liability whatsoever.  Entering into or carrying out this Stipulation (or the exhibits thereto) and any negotiations or proceedings related thereto shall not in any event be construed as, or be deemed to be evidence of, an admission or concession with regard to the claims alleged in the Actions or contrary to the denials or defenses of the Settling Parties, and it is the Settling Parties’ intention that the Settlement shall not be offered or admitted into evidence, or used, in any action or proceeding in any court, administrative agency or other tribunal for any purpose whatsoever other than to enforce the provisions of this Stipulation (and the exhibits hereto) or the provisions of any related agreement or release; except that this Stipulation may be filed in the Actions or related litigation as evidence of the Settlement, or by the Settling Parties or Released Persons in any subsequent action

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against or by them in support a defense of res judicata, collateral estoppel, release, or other theory of claim or issue preclusion or similar defense.

Bryan Cave has denied and continues to deny any wrongdoing or liability in connection with or arising out of any of the allegations that were or that could have been alleged in the Actions or otherwise asserted in connection with the Settling Parties’ dispute.  Bryan Cave believes the proposed settlement will resolve complex legal issues in a way that permits Activision to put the questions raised by the Actions to rest and move forward with its business.  Although Bryan Cave does not believe that any potential claims against it would have merit, Bryan Cave is entering into this Stipulation and is foregoing payment for its efforts in support of the Special Subcommittee’s investigation in order to help accomplish this result and to resolve the Settling Parties’ dispute.

Activision, the Individual Settling Defendants and Bryan Cave have determined, in light of the foregoing considerations and others, that it is desirable and beneficial that the Actions and all of the Settling Parties’ disputes relating thereto be settled in a manner and upon the terms and conditions set forth in this Stipulation.

al., Case No. CV-06-5375 MRP(JLTx) (“Hamian”);
Abdelnur v. Kotick, et al., Case No. CV-07-3575
MRP(JTLx) (“Abdelnur”); and Scarborough v. Kotick, et
al., Case No. CV-07-4602 MRP(JTLx) (“Scarborough”).  The Pfeiffer and Hamian complaints were consolidated by Order dated January 25,
2007, as In re Activision, Inc. Shareholder Derivative
Litigation, Case No. CV-06-4771 MRP(JTLx) (the “Federal
Derivative Action”), Pfeiffer and Hamian were appointed Lead Plaintiff, and
Co-Lead Counsel was appointed.  Abdelnur was consolidated into the Federal Derivative Action
by order dated July 13, 2007, and Scarborough was
consolidated into the action by Order dated September 13, 2007.

Both the Federal
Derivative Action and the State Derivative Action allege claims on behalf of
Activision against the Individual Settling Defendants, certain current and
former Activision officers and directors, arising from or relating to the
granting of stock options at Activision, including from 1996 through at least
2003.

On or about July 25,
2006, Activision’s Board of Directors (the “Board”) approved the appointment of
a subcommittee of the Board’s audit committee (the “Special Subcommittee”) to
conduct a review of Activision’s practices and policies relating to the
granting of stock options.  The Special
Subcommittee’s review encompassed 4,849 grants between fiscal years 1992 and
2006, covering 204,230,604 shares, or about 86% of the 237,756,486 options
granted in the period reviewed.  The
Special Subcommittee concluded that a substantial number of options granted
during the period reviewed required measurement date corrections pursuant to
the applicable accounting rules, and that Activision would be required to
record additional non-cash, stock-based compensation expense arising from
measurement date corrections.

Beginning in August 2007,
the parties to the Federal Derivative Action commenced settlement discussions,
which continued from time-to-time over the following months.  Beginning in November 2007, the parties
to both Actions conducted confidential mediation sessions before the Honorable
Edward A. Infante (Ret.).  Attending the
mediation sessions were counsel for the Federal and State

-2-

Plaintiffs, all
Defendants in the Actions except for Barry J. Plaga, Activision, certain of
Activision’s directors and officers (“D&O”) insurance carriers, and
Activision’s former outside corporate counsel, Bryan Cave LLP.  In the course of confidential settlement
discussions, and pursuant to the mediation supervised by Judge Infante, counsel
for Activision has discussed with the Federal and State Plaintiffs’ counsel the
Special Subcommittee’s investigation and the Special Subcommittee’s findings
and conclusions pursuant thereto. 
Counsel for Activision also provided to the Federal and State Plaintiffs’
counsel for review various documents relevant to the parties’ disputes, in the
course of confidential settlement discussions, and pursuant to the mediation
supervised by Judge Infante.

All parties to the
Actions and non-party Bryan Cave have reached a non-binding
agreement-in-principle for the resolution of the claims asserted therein and
any and all claims which could have been asserted therein, as set forth in an
Amended Memorandum of Understanding, previously executed by certain of the
parties on or about January 17, 2008 and additional non-binding
agreements-in-principle with respect to Individual Settling Defendants
Chardavoyne and Goldberg.

The Individual
Settling Defendants have denied and continue to deny each and all of the claims
and contentions alleged by the Plaintiffs in the Actions.  The Individual Settling Defendants expressly
have denied and continue to deny all charges of wrongdoing or liability against
them arising out of any of the conduct, statements, acts or omissions alleged,
or that could have been alleged, in the Actions.  The Individual Settling Defendants also have
denied and continue to deny, inter alia,
the allegations that the Plaintiffs, Activision or its stockholders have
suffered damage, or that the Plaintiffs, Activision or its stockholders were
harmed by the conduct alleged in the Actions. 
The Individual Settling Defendants have further asserted that at all

-3-

relevant times,
they acted in good faith, and in a manner they reasonably believed to be in the
best interests of Activision and its stockholders.

Nonetheless, the
Individual Settling Defendants and Activision have concluded that further
conduct of the Actions would be protracted, expensive, and distractive to
Activision and its management.  The
Individual Settling Defendants and Activision have also taken into account the
uncertainty and risks inherent in any litigation, especially in complex cases
like the Actions.  The Individual
Settling Defendants and Activision have, therefore, determined that it is
desirable that the Actions, and all of the Settling Parties’ disputes related
thereto, be fully and finally settled in the manner and upon the terms and
conditions set forth in this Stipulation (hereinafter, the “Settlement”).  The Individual Settling Defendants are
entering into this Stipulation solely because the proposed Settlement would
eliminate the burden and expense of further litigation.

Neither this Stipulation
nor any document or exhibit referred to herein, including, but not limited to,
the Corporate Governance policies attached as Exhibit A, nor any action
taken to carry out this Stipulation is, may be construed as, or may be used as
an admission by or against the Settling Parties, or any of them, of any fault,
wrongdoing or liability whatsoever. 
Entering into or carrying out this Stipulation (or the exhibits thereto)
and any negotiations or proceedings related thereto shall not in any event be
construed as, or be deemed to be evidence of, an admission or concession with
regard to the claims alleged in the Actions or contrary to the denials or
defenses of the Settling Parties, and it is the Settling Parties’ intention
that the Settlement shall not be offered or admitted into evidence, or used, in
any action or proceeding in any court, administrative agency or other tribunal
for any purpose whatsoever other than to enforce the provisions of this Stipulation
(and the exhibits hereto) or the provisions of any related agreement or
release; except that this Stipulation may be filed in the Actions or related
litigation as evidence of the Settlement, or by the Settling Parties or
Released Persons in any subsequent action

-4-

against or by them
in support a defense of res judicata,
collateral estoppel, release, or other theory of claim or issue preclusion or
similar defense.

Bryan Cave has denied and
continues to deny any wrongdoing or liability in connection with or arising out
of any of the allegations that were or that could have been alleged in the
Actions or otherwise asserted in connection with the Settling Parties’
dispute.  Bryan Cave believes the proposed
settlement will resolve complex legal issues in a way that permits Activision
to put the questions raised by the Actions to rest and move forward with its
business.  Although Bryan Cave does not
believe that any potential claims against it would have merit, Bryan Cave is
entering into this Stipulation and is foregoing payment for its efforts in
support of the Special Subcommittee’s investigation in order to help accomplish
this result and to resolve the Settling Parties’ dispute.

Activision, the Individual
Settling Defendants and Bryan Cave have determined, in light of the foregoing
considerations and others, that it is desirable and beneficial that the Actions
and all of the Settling Parties’ disputes relating thereto be settled in a
manner and upon the terms and conditions set forth in this Stipulation.