Activision Blizzard (ATVI)

Performance-Based Annual Bonuses

        The employment agreement for each of the named executive officers listed below contemplates that the officer will or will have the opportunity to participate in an annual bonus plan. Consistent with fiscal 2007, the Compensation Committee established the target bonus payments for Messrs. Kotick and Kelly at 200% of base salary. For each of Messrs. Griffith, Tippl and Hodous and Ms. Kaminsky, the Compensation Committee established their target bonus payments at a level which is 10% above that required by their respective employment agreement in response to current market trends and to further motivate them to achieve the applicable performance goals. Moreover, the Compensation Committee believes that the increase is warranted due to the fact that performance goals have been established at targets the Company believes are in excess of the targets for the Company's direct competitors and are

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otherwise at stretch levels that will be challenging to satisfy. Accordingly, the Compensation Committee established target and maximum bonus levels to be paid for fiscal 2008 as follows:

        The bonus for each of Messrs. Kotick and Kelly is 50% dependent on the achievement of target earnings per share, 15% dependent on capital optimization, including the achievement of strategic acquisitions, the acquisition of new intellectual property and the location of developmental growth opportunities on favorable terms, 15% dependent on the achievement of certain corporate governance and business franchise goals, including the identification of an individual to become a new member of the Board (within the criteria established by the Nominating/Corporate Governance Committee), along with the Board's election of such individual and such individual's agreement to serve on the Board, and making advancements in Board processes, business strategies and the Company's reputation, and 20% dependent on the achievement of target operating income for the RedOctane publishing unit, the European publishing unit and a combination of specified portfolio product lines and operating margin expansion.

        For the continuing named executive officers other than Messrs. Kotick and Kelly, their bonus award opportunities are again subject to the achievement of specified corporate and individual performance goals. Again, three types of measures are utilized: corporate operating income goals; other operating income goals; and, for those executives other than Mr. Griffith, non-operating income goals. The aggregate payments pursuant to these bonus plans will be based on the weight assigned to each goal established for him and her and the extent to which the goals are satisfied or exceeded. For each of Messrs. Griffith, Tippl and Hodous and Ms. Kaminsky, if the target for each goal in his or her plan is satisfied, but not exceeded, the executive will receive his or her target bonus payment (although the Compensation Committee retains the discretion to reduce bonus award payments).

        The level of achievement with respect to the various goals may result in a bonus payment to Messrs. Griffith, Tippl or Hodous or Ms. Kaminsky that is less than or in excess of his or her target bonus opportunity. Payments of less than the target bonus payment in respect of the corporate operating income goal can be attained if at least 75% of the corporate operating income goal target is achieved, and payments of up to 150% of the target bonus payment for the corporate operating income goal can be attained by the achievement of specified levels in excess of the corporate operating income target. Payments of less than the target bonus payment in respect of any other operating income goal can be attained if at least 75% of the other operating income goal target is achieved, and payments of up to 150% of the target bonus payment for any other operating income goal can be attained by the achievement of specified levels in excess of the other operating income goal target. In addition, if the level of achievement with respect to any other operating income goal does not merit payment of the maximum bonus payment with respect to that goal but at least 75% of that other operating income goal target is achieved, the payment with respect to that goal may be increased (but not above the maximum payment of 150% of the target bonus payment for that goal) if specified corporate operating income levels are achieved. Payments in respect of non-operating income goals will only be made if the target for that goal is achieved. Payments of up to 120% of the target bonus payment for non-operating income goals can be attained by the achievement of specified levels in excess of that non-operating income goal target. In addition, assuming the non-operating income goal target is achieved, the

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payment with respect to that goal may be increased (but not above 180% of the target bonus payment for that goal) if specified corporate operating income levels are achieved.

        Mr. Griffith's bonus is dependent on the achievement of various operating income targets, including corporate operating income and operating income for the RedOctane publishing unit, the European publishing unit and a combination of specified portfolio product lines.

        Mr. Tippl's bonus is dependent on the achievement of various operating income targets, including corporate operating income and operating income for the European publishing unit, completing the filing of certain information with the SEC, execution of a comprehensive international audit plan and tax restructuring, and building and acquiring new businesses, studios and intellectual property.

        Ms. Kaminsky's bonus is dependent on the achievement of various operating income targets, including corporate operating income and operating income for the RedOctane publishing unit, delivery of portfolio product lines and platforms, the achievement of business franchise targets and improvements in the quality of games.

        Mr. Hodous's bonus is dependent on the achievement of various operating income targets, including corporate operating income and operating income for the RedOctane publishing unit, the European publishing unit and a combination of specified portfolio product lines, development of certain product lines, achievement of supply chain savings, and achievement of market share growth in strategic geographic areas.