Activision Blizzard (ATVI)

Kelly Employment Agreement

        Mr. Kelly's term of employment under his employment agreement began on December 1, 2007 and will end on December 31, 2012.

        Pursuant to the agreement, beginning on April 1, 2008 and for the duration of the term of the agreement, Mr. Kelly is entitled to an annual base salary of $450,000, with annual increases at the discretion of the Compensation Committee. For more information about Mr. Kelly's base salary, see "—Compensation Discussion and Analysis—Elements of Compensation Program for the Nine Month Period Ended December 31, 2008—Salary Analysis" above. Mr. Kelly is not entitled to an annual bonus under his employment agreement unless otherwise determined by the Compensation Committee in its sole discretion. Mr. Kelly is also entitled to participate in all benefit plans generally available to our senior executive officers and we are required to maintain a $6 million supplemental term life insurance policy for the benefit of his estate through the term of his employment.

        In addition, the Kelly employment agreement provided that all stock options granted to Mr. Kelly prior to January 1, 2007 would vest in full upon the consummation of the Combination. As a result, options to purchase 300,000 shares of Common Stock that would otherwise have vested on April 10, 2010 vested on July 9, 2008.

Kelly Employment Agreement

        The Kelly employment agreement became effective on December 1, 2007 and Mr. Kelly's term thereunder will expire on March 31, 2011. Through March 31, 2008, Mr. Kelly received an annual base salary of $876,920. Beginning on April 1, 2008 and for the duration of the term of the Kelly employment agreement, Mr. Kelly is entitled to a reduced annual base salary of $450,000, with annual increases at the discretion of the Compensation Committee. For fiscal 2008, Mr. Kelly was eligible for an annual bonus, but beginning with fiscal 2009, Mr. Kelly is not entitled to an annual bonus unless otherwise determined by the Compensation Committee in its sole discretion. For more information about performance-based bonuses, see "—Compensation Discussion and Analysis—Elements of Fiscal 2008 Compensation Program—Performance-Based Annual Bonuses" below. Mr. Kelly is also entitled to participate in benefit plans standard for the Company's senior executive officers, including life insurance plans, and the Company is required to maintain a $6 million supplemental term life insurance policy for the benefit of his estate through the term of his employment.

        In addition, the Kelly employment agreement provided that all stock options granted to Mr. Kelly prior to January 1, 2007 would vest in full upon the consummation of the Combination. As a result, options to purchase 150,000 shares of Common Stock that would otherwise have vested on April 10, 2010 vested on July 9, 2009.

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with annual increases at the discretion of the Compensation Committee.  For fiscal year 2008, Mr. Kelly will be eligible for an annual bonus under Activision’s existing Executive Bonus Plan.  Thereafter, Mr. Kelly is not entitled to an annual bonus unless otherwise determined by the Compensation Committee in its sole discretion.  Mr. Kelly will also participate in all benefit and perquisite plans, programs and arrangements generally made available to Activision’s executives.  In addition, for the duration of the term of the Kelly Employment Agreement, Activision will provide Mr. Kelly with a life insurance policy having a death benefit equal to $6,000,000.

The Kelly Employment Agreement entitles Mr. Kelly to severance benefits upon his termination of employment depending on the reason for termination.  In the event Mr. Kelly’s employment is terminated by the Company without Cause, or he resigns his employment for Good Reason (each as defined in the Kelly Employment Agreement), he will receive (i) three times the average annual base salary and bonus paid to him for the three most recent fiscal years, (ii) a pro-rata annual bonus for the year of his termination of employment, (iii) two years of medical benefit continuation, and (iv) accelerated vesting of all outstanding options granted on or prior to June 15, 2007.  If Mr. Kelly’s employment is terminated on account of his Disability (as defined in the Kelly Employment Agreement), he will receive one times his base salary and the benefits described in clauses (ii), (iii) and (iv) above.  If the Good Reason event is the Company failing to renew the Kelly Employment Agreement on similar terms and conditions at the end of the term, the severance amount in clause (i) will be reduced to “two times.”

Upon a Change of Control (as defined in the Kelly Employment Agreement) of the Company following the consummation of the Combination Transactions, Mr. Kelly is entitled to (i) accelerated vesting of all outstanding options granted prior to January 1, 2007 and (ii) accelerated vesting of 20% of the options granted on June 15, 2007.  Mr. Kelly will also be entitled to a gross-up payment for any excise taxes imposed on him under Section 4999 of the Code.

For a period of one year following the termination of his employment, Mr. Kelly will be prevented from (i) competing with Activision, (ii) soliciting employees of Activision and (iii) utilizing confidential and proprietary information to solicit customers, employees and other Company affiliates.  Moreover, Mr. Kelly remains subject to the Company’s standard proprietary information agreement.

Replacement Bonus Agreements

The prior Employment Agreements provided for the payment of certain benefits to the Activision Management Members upon a change of control of Activision.  On December 29, 2006, the prior Employment Agreements were amended to remove certain of those benefits that may have imposed on the Activision Management Members adverse tax consequences under Section 409A of the Code.  In connection with these amendments, the parties agreed to negotiate in good faith to promptly develop benefits reasonably comparable to those forgone by the Activision Management Members under their original employment agreements.

As a result of those negotiations, on December 1, 2007, Activision entered into replacement bonus agreements (the “Replacement Bonus Agreements”) with each of the Activision Management Members.  The Replacement Bonus Agreements provide that the Activision Management Members will each receive two cash bonuses and a grant of restricted stock units (“RSUs”). The first cash bonus of $5,000,000 will be paid in a cash lump sum no later than December 31, 2007. The second cash bonus of $5,000,000 will be paid in a cash lump sum on the closing date of the Combination Transactions (or an alternative transaction that results in a Change of Control (as defined in the Management Employment Agreements) of the Company), so

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long as the closing date of the Combination Transactions (or such alternative transaction) occurs on or before June 30, 2009 and the Activision Management Members are continuously employed through the closing date.

In addition, the Activision Management Members will each receive a grant of 363,637 RSUs on the closing date of the Combination Transactions (or such alternative transaction), so long as the closing date occurs on or before June 30, 2009 and the Activision Management Members are continuously employed through the closing date.  The RSUs for Mr. Kotick will vest in three equal annual installments on December 31, 2008, December 31, 2009 and December 31, 2010.  The RSUs for Mr. Kelly will vest in full on December 31, 2010.  In the event the Activision Management Members resign or are terminated by Activision for any reason other than for Cause (as defined in the Management Employment Agreements), the vesting of all unvested RSUs will accelerate.  RSUs will be settled in shares of Company Common Stock within thirty days following the date on which they vest.

Griffith Employment Agreement Amendment

Mr. Michael Griffith currently serves as President and Chief Executive Officer of Activision Publishing, Inc., a wholly-owned subsidiary of the Company (“Activision Publishing”), pursuant to an employment agreement (the “Griffith Agreement”), effective as of June 15, 2005. On December 1, 2007, Activision entered into an amendment to the Griffith Agreement (the “Griffith Amendment”) to provide additional incentives for Mr. Griffith to remain employed by Activision Publishing following the consummation of the Combination Transactions.  The Griffith Amendment becomes effective on the Consumation Date.

The Griffith Amendment provides that, upon the Consumation Date, Mr. Griffith will receive 50,000 stock options and 50,000 RSUs.  The stock options will vest in three equal annual installments on each of the first, second and third anniversaries of the Consumation Date.  The RSUs will vest in full on June 30, 2010.

In addition, the Griffith Amendment modifies the vesting provisions of certain equity awards granted to Mr. Griffith under the Griffith Agreement to reduce the vesting term by one year.  Under the terms of the Griffith Agreement, Mr. Griffith received 1,000,000 stock options under the Company’s 2003 Incentive Plan, which were granted in three tranches.  The first tranche consisted of 350,000 stock options, which were to vest ratably over five years beginning on June 15, 2006.  The Griffith Amendment provides that these stock options will now vest in four installments as follows:  20% on June 15, 2006, 20% on June 15, 2007, 20% on June 15, 2008 and 40% on June 15, 2009.  The second tranche consisted of 350,000 stock options, which were to vest in full on June 15, 2010, subject to possible earlier vesting if Mr. Griffith attained certain performance objectives.  The Griffith Amendment provides that these stock options will now vest in full on June 15, 2009, subject to possible earlier vesting if Mr. Griffith attains certain performance objectives.  The third tranche consisted of 300,000 stock options, which were to vest in full on June 15, 2010.  The Griffith Amendment provides that the options will now vest in full on June 15, 2009.

Pursuant to the Griffith Agreement, Mr. Griffith also received a grant of RSUs, which were to vest in three equal annual installments on June 15, 2008, June 15, 2009 and June 15, 2010.  The Griffith Amendment provides that the RSUs will now vest in two installments, with one third (1/3) of the shares to vest on June 15, 2008, and two-thirds (2/3) of the shares to vest on June 15, 2009.

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Copies of the Management Employment Agreements, the Replacement Bonus Agreements and the Griffith Amendment are filed herewith as Exhibits 10.3, 10.4, 10.5, 10.6 and 10.7, respectively, and are incorporated herein by reference.  The foregoing descriptions of the Management Employment Agreements, the Replacement Bonus Agreements and the Griffith Amendment are qualified in their entirety by reference to the full text of the Management Employment Agreements, the Replacement Bonus Agreements and the Griffith Amendment.

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with annual increases at the discretion of the Compensation Committee.  For fiscal year 2008, Mr. Kelly will be eligible for an annual bonus under Activision’s existing Executive Bonus Plan.  Thereafter, Mr. Kelly is not entitled to an annual bonus unless otherwise determined by the Compensation Committee in its sole discretion.  Mr. Kelly will also participate in all benefit and perquisite plans, programs and arrangements generally made available to Activision’s executives.  In addition, for the duration of the term of the Kelly Employment Agreement, Activision will provide Mr. Kelly with a life insurance policy having a death benefit equal to $6,000,000.

The Kelly Employment Agreement entitles Mr. Kelly to severance benefits upon his termination of employment depending on the reason for termination.  In the event Mr. Kelly’s employment is terminated by the Company without Cause, or he resigns his employment for Good Reason (each as defined in the Kelly Employment Agreement), he will receive (i) three times the average annual base salary and bonus paid to him for the three most recent fiscal years, (ii) a pro-rata annual bonus for the year of his termination of employment, (iii) two years of medical benefit continuation, and (iv) accelerated vesting of all outstanding options granted on or prior to June 15, 2007.  If Mr. Kelly’s employment is terminated on account of his Disability (as defined in the Kelly Employment Agreement), he will receive one times his base salary and the benefits described in clauses (ii), (iii) and (iv) above.  If the Good Reason event is the Company failing to renew the Kelly Employment Agreement on similar terms and conditions at the end of the term, the severance amount in clause (i) will be reduced to “two times.”

Upon a Change of Control (as defined in the Kelly Employment Agreement) of the Company following the consummation of the Combination Transactions, Mr. Kelly is entitled to (i) accelerated vesting of all outstanding options granted prior to January 1, 2007 and (ii) accelerated vesting of 20% of the options granted on June 15, 2007.  Mr. Kelly will also be entitled to a gross-up payment for any excise taxes imposed on him under Section 4999 of the Code.

For a period of one year following the termination of his employment, Mr. Kelly will be prevented from (i) competing with Activision, (ii) soliciting employees of Activision and (iii) utilizing confidential and proprietary information to solicit customers, employees and other Company affiliates.  Moreover, Mr. Kelly remains subject to the Company’s standard proprietary information agreement.

Replacement Bonus Agreements

The prior Employment Agreements provided for the payment of certain benefits to the Activision Management Members upon a change of control of Activision.  On December 29, 2006, the prior Employment Agreements were amended to remove certain of those benefits that may have imposed on the Activision Management Members adverse tax consequences under Section 409A of the Code.  In connection with these amendments, the parties agreed to negotiate in good faith to promptly develop benefits reasonably comparable to those forgone by the Activision Management Members under their original employment agreements.

As a result of those negotiations, on December 1, 2007, Activision entered into replacement bonus agreements (the “Replacement Bonus Agreements”) with each of the Activision Management Members.  The Replacement Bonus Agreements provide that the Activision Management Members will each receive two cash bonuses and a grant of restricted stock units (“RSUs”). The first cash bonus of $5,000,000 will be paid in a cash lump sum no later than December 31, 2007. The second cash bonus of $5,000,000 will be paid in a cash lump sum on the closing date of the Combination Transactions (or an alternative transaction that results in a Change of Control (as defined in the Management Employment Agreements) of the Company), so

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long as the closing date of the Combination Transactions (or such alternative transaction) occurs on or before June 30, 2009 and the Activision Management Members are continuously employed through the closing date.

In addition, the Activision Management Members will each receive a grant of 363,637 RSUs on the closing date of the Combination Transactions (or such alternative transaction), so long as the closing date occurs on or before June 30, 2009 and the Activision Management Members are continuously employed through the closing date.  The RSUs for Mr. Kotick will vest in three equal annual installments on December 31, 2008, December 31, 2009 and December 31, 2010.  The RSUs for Mr. Kelly will vest in full on December 31, 2010.  In the event the Activision Management Members resign or are terminated by Activision for any reason other than for Cause (as defined in the Management Employment Agreements), the vesting of all unvested RSUs will accelerate.  RSUs will be settled in shares of Company Common Stock within thirty days following the date on which they vest.

Griffith Employment Agreement Amendment

Mr. Michael Griffith currently serves as President and Chief Executive Officer of Activision Publishing, Inc., a wholly-owned subsidiary of the Company (“Activision Publishing”), pursuant to an employment agreement (the “Griffith Agreement”), effective as of June 15, 2005. On December 1, 2007, Activision entered into an amendment to the Griffith Agreement (the “Griffith Amendment”) to provide additional incentives for Mr. Griffith to remain employed by Activision Publishing following the consummation of the Combination Transactions.  The Griffith Amendment becomes effective on the Consumation Date.

The Griffith Amendment provides that, upon the Consumation Date, Mr. Griffith will receive 50,000 stock options and 50,000 RSUs.  The stock options will vest in three equal annual installments on each of the first, second and third anniversaries of the Consumation Date.  The RSUs will vest in full on June 30, 2010.

In addition, the Griffith Amendment modifies the vesting provisions of certain equity awards granted to Mr. Griffith under the Griffith Agreement to reduce the vesting term by one year.  Under the terms of the Griffith Agreement, Mr. Griffith received 1,000,000 stock options under the Company’s 2003 Incentive Plan, which were granted in three tranches.  The first tranche consisted of 350,000 stock options, which were to vest ratably over five years beginning on June 15, 2006.  The Griffith Amendment provides that these stock options will now vest in four installments as follows:  20% on June 15, 2006, 20% on June 15, 2007, 20% on June 15, 2008 and 40% on June 15, 2009.  The second tranche consisted of 350,000 stock options, which were to vest in full on June 15, 2010, subject to possible earlier vesting if Mr. Griffith attained certain performance objectives.  The Griffith Amendment provides that these stock options will now vest in full on June 15, 2009, subject to possible earlier vesting if Mr. Griffith attains certain performance objectives.  The third tranche consisted of 300,000 stock options, which were to vest in full on June 15, 2010.  The Griffith Amendment provides that the options will now vest in full on June 15, 2009.

Pursuant to the Griffith Agreement, Mr. Griffith also received a grant of RSUs, which were to vest in three equal annual installments on June 15, 2008, June 15, 2009 and June 15, 2010.  The Griffith Amendment provides that the RSUs will now vest in two installments, with one third (1/3) of the shares to vest on June 15, 2008, and two-thirds (2/3) of the shares to vest on June 15, 2009.

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Copies of the Management Employment Agreements, the Replacement Bonus Agreements and the Griffith Amendment are filed herewith as Exhibits 10.3, 10.4, 10.5, 10.6 and 10.7, respectively, and are incorporated herein by reference.  The foregoing descriptions of the Management Employment Agreements, the Replacement Bonus Agreements and the Griffith Amendment are qualified in their entirety by reference to the full text of the Management Employment Agreements, the Replacement Bonus Agreements and the Griffith Amendment.