Activision Blizzard (ATVI)

Michael Morhaime

        Michael Morhaime is party to an employment agreement with us, pursuant to which he serves as the President and Chief Executive Officer of Blizzard Entertainment. The agreement became effective July 9, 2008 and Mr. Morhaime's term thereunder will expire on July 31, 2013. The agreement was most recently amended on March 31, 2009.

        Pursuant to the agreement, Mr. Morhaime's annual base salary was $475,000 on July 9, 2008. As amended, the employment agreement provides for an annual base salary of $520,000 commencing on March 31, 2009. This base salary will be increased automatically on March 1 of each year by the greatest of (1) 5%, (2) the percentage increase in the consumer price index during the immediately preceding 12 months for Irvine, California as determined by the U.S. Department of Labor, Bureau of Labor Statistics, and (3) such merit increase as is approved by our Board. For more information about Mr. Morhaime'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. Morhaime is also eligible for an annual bonus with a target amount of 75% of his base salary and a maximum amount of 150% of his base salary. Ten percent of any such bonus will be based on our financial performance and 90% of such bonus will be based on his achievement of mutually agreed objectives and his overall performance and Blizzard Entertainment's financial performance. The agreement provides that the amount of the bonus will be at least 37.5% of Mr. Morhaime's base salary at the time his annual incentive plan payment is made but will otherwise be in our discretion. For more information about performance-based bonuses, see "—Compensation Discussion and Analysis—Elements of Compensation Program for the Nine Month Period Ended December 31, 2008—2008 Achievement of Performance Goals and Payouts" above.

        Mr. Morhaime is also eligible to participate in the Blizzard Bonus Plan, under which his target annual incentive is 50% of his base salary and he is eligible to receive a payout of up to 150% of his base salary. The agreement provides that the amount of the payout will be at least 25% of Mr. Morhaime's base salary at the time the bonus is paid but will otherwise be in our Chief Executive Officer's discretion.

62

Table of Contents

        Prior to the 2009 amendment to the employment agreement, Mr. Morhaime was also eligible to participate in the Blizzard Profit Sharing Plan. The agreement provided that Mr. Morhaime would be entitled to a minimum percentage of the profit sharing pool but will otherwise be in our Chief Executive Officer's discretion. Under the amendment to his employment agreement, Mr. Morhaime will no longer participate directly in the Blizzard Profit Sharing Plan, but instead is entitled to performance-based cash compensation on an annual basis pursuant to our 2008 Plan (or any successor plan) based on a share of the earnings generated by our Blizzard Entertainment business. Mr. Morhaime will be entitled to a specified percentage of the profit sharing pool but the Compensation Committee may exercise negative discretion with respect to his actual annual percentage interest in the profit sharing pool (subject to a specified minimum percentage). For more information about the Blizzard Bonus Plan and the Blizzard Profit Sharing Plan, see "—Compensation Discussion and Analysis—Elements of Compensation Program for the Nine Month Period Ended December 31, 2008—Other Annual Incentive Plan and Bonus Programs for the Nine Month Period Ended December 31, 2008" above.

        Mr. Morhaime is also entitled to participate in all benefit plans generally available to Blizzard Entertainment's senior executive officers (provided that in any case his benefits are in the aggregate at least as favorable to him as those provided to him by Blizzard Entertainment as of October 15, 2007).

        As an inducement to enter into the employment agreement, in connection with the commencement of his employment Mr. Morhaime was granted an option to purchase 600,000 shares of our Common Stock in July 2008. In addition, the agreement provides that we will, beginning in 2009, recommend to the Compensation Committee that Mr. Morhaime receive a grant of an option to purchase 200,000 shares of our Common Stock once per year during each year of the term of his agreement to the extent awards are being made to our other senior executives during that year. No such grant was made in 2008. Mr. Morhaime was entitled to reimbursement of any legal fees he incurred in connection with the negotiation of his agreement. He also receives an annual stipend to reimburse him for his personal financial, accounting, tax and legal services and is entitled to participate in our executive auto allowance program.

Michael Morhaime

This Amendment #1 to Employment Agreement (this “Amendment #1”) is entered into as of December 15, 2008, by and between Michael Morhaime (“Employee”) and Activision Blizzard, Inc. (“Employer”).  All capitalized terms shall have the same meaning set forth in the Employment Agreement (as defined below).

Michael Morhaime:

Today I’ll talk about our performance this past quarter and then I’ll discuss our plans for the rest of the year.

The September quarter was another strong one for us due to the continued performance of World of Warcraft.  Even though the quarter was bookended by competitors in the MMO space, the World of Warcraft subscriber base continued to grow. Age of Conan launched toward the end of the June quarter, and Warhammer Online came out in mid September. To date, 68% of the players who listed Age of Conan as their reason for cancellation and 46% of players who listed Warhammer as their reason for cancellation have reactivated their subscription to World of Warcraft.

World of Warcraft also managed to grow its subscribership despite the Olympics and the summer vacation period. At the end of the quarter, World of Warcraft had 1.5 million more subscribers than during the same time last year. As a result, our Non-GAAP net revenue was up 19% and our operating income was up 11% compared to last September.

The other big news for us for the quarter was that we launched World of Warcraft in Russia and Latin America. The goal of entering these markets was to grow our World of Warcraft

8