Activision Blizzard (ATVI)

Robert A. Kotick and Brian G. Kelly

        On December 1, 2007, we entered into an amended and restated employment agreement with Robert A. Kotick, pursuant to which Mr. Kotick serves as our President and Chief Executive Officer. The employment agreement with Mr. Kotick is referred to in this proxy statement as the "Kotick employment agreement." Also on December 1, 2007, we entered into an amended and restated

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employment agreement with Brian G. Kelly, pursuant to which Mr. Kelly serves as the Co-Chairman of our Board. The employment agreement with Mr. Kelly is referred to in this proxy statement as the "Kelly employment agreement." We also entered into replacement bonus agreements with Messrs. Kotick and Kelly on December 1, 2007.

        Both the Kotick employment agreement and the Kelly employment agreement superseded and replaced the previous employment agreements between us and each of Messrs. Kotick and Kelly, dated May 22, 2000, which were scheduled to expire on March 31, 2008. Pursuant to their amended and restated employment agreements and the replacement bonus agreements, each of Messrs. Kotick and Kelly agreed to waive certain benefits they would have been entitled to receive under the prior employment agreements in connection with the consummation of a change of control of Activision, Inc., the definition of which would have included the Combination. The waived benefits include the right to (1) elect to receive a cash payment in respect of all stock options held by Messrs. Kotick and Kelly equal to (as to each share of our Common Stock subject to such stock options) the excess of the closing price of our Common Stock on the date of the consummation of a change of control over the option exercise price, (2) accelerated vesting on the date of the consummation of a change of control of unvested stock options granted in June 2007, (3) resign for any reason during the six-month period following the three month anniversary of the consummation of a change of control and receive severance of five times the sum of their base salary and most recent annual bonus, as well as a pro-rata annual bonus for the year of resignation and two years of health insurance continuation, and (4) enter into a four-year consulting arrangement with us in the event of a termination by us other than upon death or disability or upon a resignation not in connection with a change of control.

Kotick Employment Agreement

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

        Pursuant to the agreement, Mr. Kotick's annual base salary was $950,000 on December 1, 2007 and was and will be increased automatically on January 1 of each year for the term of the agreement, in an amount at least equal to the average percentage increase approved by the Compensation Committee for members of the executive leadership team with respect to such year, excluding any increases guaranteed by contract or due to an executive's significant promotion or modification in duties. For more information about Mr. Kotick'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. Kotick is also entitled to receive an annual bonus, with a target amount of 200% of his base salary, the actual amount of which will be determined by the Compensation Committee based on his achievement of mutually agreed objectives and his overall performance and our financial performance, and the form of which will be determined by the Compensation Committee in its sole 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. In addition, the Compensation Committee, in its sole discretion, may award Mr. Kotick a performance bonus at any time in such amount and in such form as the Compensation Committee may determine. Mr. Kotick is also entitled to participate in all benefit plans generally available to our senior executive officers and we are required to maintain an $8.55 million supplemental term life insurance policy for the benefit of his estate for a period of 10 years from the effective date of the Kotick employment agreement.

        As an inducement to enter into the Kotick employment agreement, Mr. Kotick received an option to purchase 3,700,000 shares of our Common Stock. In addition, upon the consummation of the Combination, Mr. Kotick received a grant of 2,500,000 performance shares, which will vest in 20% increments on each of the first, second, third and fourth anniversaries of the consummation of the

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Combination, with another 20% to vest on the last day of the term of Mr. Kotick's agreement, in each case subject to our attaining the compound annual total stockholder return target specified in the Kotick employment agreement for that vesting period. If we do not achieve the performance target for a vesting period, none of Mr. Kotick's performance shares mentioned above will vest for that vesting period. If, however, we later achieve a performance target for a subsequent vesting period, then all of the unvested performance shares relating to prior vesting periods will vest on such subsequent vesting date.

        The Kotick employment agreement also provided that all stock options granted to Mr. Kotick 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 our Common Stock that would otherwise have vested on April 10, 2010 vested on July 9, 2008.

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.

Replacement Bonus Agreements

        Messrs. Kotick's and Kelly's prior employment agreements provided for the payment of certain benefits upon a change of control of Activision, Inc. On December 29, 2006, these agreements were amended to remove certain of those benefits that may have imposed adverse tax consequences on Messrs. Kotick and Kelly under Section 409A of the Internal Revenue Code. In connection with these amendments, the parties agreed to negotiate in good faith to develop benefits reasonably comparable to those forgone by Messrs. Kotick and Kelly under their prior employment agreements.

        As a result of those negotiations, on December 1, 2007, we entered into replacement bonus agreements with each of Messrs. Kotick and Kelly providing for cash bonuses and an equity incentive award to each of Messrs. Kotick and Kelly. The first cash bonus of $5,000,000 was paid in a lump sum on December 28, 2007. The second cash bonus of $5,000,000 and the grant of 727,274 restricted share units were each contingent upon the occurrence of a change of control on or prior to June 30, 2009. The bonus was paid in a lump sum, and the equity award was granted, to each upon the consummation of the Combination.

Robert A. Kotick and Brian G. Kelly

        On December 1, 2007, the Company entered into an amended and restated employment agreement with Robert A. Kotick, pursuant to which Mr. Kotick serves as President and Chief Executive Officer of the Company. The employment agreement with Mr. Kotick is referred to in this Proxy Statement as the "Kotick employment agreement." Also on December 1, 2007, the Company entered into an amended and restated employment agreement with Brian G. Kelly, pursuant to which Mr. Kelly serves as Co-Chairman of the Board. The employment agreement with Mr. Kelly is referred to in this Proxy Statement as the "Kelly employment agreement."

        Both the Kotick employment agreement and the Kelly employment agreement superseded and replaced the previous employment agreements between the Company and each of Messrs. Kotick and Kelly, dated May 22, 2000, which were scheduled to expire on March 31, 2008. Pursuant to the amended and restated employment agreements, each of Messrs. Kotick and Kelly agreed to waive certain benefits they would have been entitled to receive under the prior employment agreements. The waived benefits include the right to (a) elect to receive a cash payment in respect of all stock options held by Messrs. Kotick and Kelly equal to (as to each share of Common Stock subject to such stock options) the excess of the closing price of the Common Stock on the date of the consummation of the Combination over the option exercise price; (b) accelerated vesting on the date of the consummation of the Combination of unvested stock options granted in June 2007; (c) resign for any reason during the six-month period following the three-month anniversary of the consummation of the Combination and receive severance of five times the sum of their base salary and most recent annual bonus, as well as a pro-rata annual bonus for the year of resignation and two years of health insurance continuation; and (d) enter into a four-year consulting arrangement with the Company in the event of a termination other than upon death or disability by the Company or upon a resignation not in connection with a change of control.

Kotick Employment Agreement

        The Kotick employment agreement became effective on December 1, 2007 and Mr. Kotick's term thereunder will expire on December 31, 2012. The agreement provides for an annual base salary of $950,000 and annual base salary increases equal to the average percentage increase approved by the

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Compensation Committee for members of the executive leadership team with respect to such year, excluding any increases guaranteed by contract or due to an executive's significant promotion or modification in duties. Mr. Kotick is also eligible to receive an annual bonus, with a target amount beginning with fiscal 2009 of 200% of his base salary, based on his achievement of mutually agreed objectives and goals and/or his contribution to the success of the Company's financial and business objectives, with the actual amount of any bonus being in the sole discretion of the Board or the Compensation Committee. For fiscal 2008, the Kotick employment agreement did not specify a target bonus amount. For more information about performance-based bonuses, see "—Compensation Discussion and Analysis—Elements of Fiscal 2008 Compensation Program—Performance-Based Annual Bonuses" below. In addition, the Compensation Committee, in its sole discretion, may award Mr. Kotick a performance bonus at any time in such amount and in such form as the Compensation Committee may determine. Mr. Kotick 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 an $8.55 million supplemental term life insurance policy for the benefit of his estate for a period of ten years following the effective date of the Kotick employment agreement.

        As an inducement to enter into the Kotick employment agreement, Mr. Kotick received an option to purchase 1,850,000 shares of Common Stock. In addition, upon the consummation of the Combination, Mr. Kotick received a grant of 1,250,000 performance shares, which will vest in 20% increments on each of the first, second, third and fourth anniversaries of the consummation of the Combination, with another 20% to vest on the last day of Mr. Kotick's term, in each case subject to the Company attaining the compound annual total shareholder return target specified in the employment agreement for that vesting period. If the Company does not achieve the performance target for a vesting period, none of Mr. Kotick's performance shares mentioned above will vest for that vesting period. If, however, the Company achieves a performance target for a subsequent vesting period, then all of such performance shares that would have vested on the previous vesting date will vest on the vesting date where the performance targets were achieved.

        The Kotick employment agreement also provided that all stock options granted to Mr. Kotick 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.

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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Replacement Bonus Agreements

        Messrs. Kotick's and Kelly's prior employment agreements provided for the payment of certain benefits upon a change of control of the Company. On December 29, 2006, these agreements were amended to remove certain of those benefits that may have imposed adverse tax consequences on Messrs. Kotick and Kelly under Section 409A of the Internal Revenue Code of 1986, as amended. In connection with these amendments, the parties agreed to negotiate in good faith to develop benefits reasonably comparable to those forgone by Messrs. Kotick and Kelly under their prior employment agreements.

        As a result of those negotiations, on December 1, 2007, the Company entered into replacement bonus agreements with each of Messrs. Kotick and Kelly providing for cash bonuses and an equity incentive award to each of Messrs. Kotick and Kelly. The first cash bonus of $5,000,000 was paid in a lump sum on December 28, 2007. The second cash bonus of $5,000,000 and the grant of 363,637 restricted share units were each contingent upon the occurrence of a change in control on or prior to June 30, 2009. The bonus was paid in a lump sum, and the equity award was granted, upon the consummation of the Combination.

Robert A. Kotick and Brian G. Kelly

        Under their current employment agreements, Mr. Kotick serves as Chairman and Chief Executive Officer of the Company and Mr. Kelly serves as Co-Chairman of the Company, and the Company has agreed to include each executive in the Company's nominees for election as a director at each annual meeting of Stockholders. Except with respect to the offices held by Messrs. Kotick and Kelly, their agreements are identical in all material respects. The agreements were entered into effective April 1, 2000 and amended in 2002 to extend the term through March 31, 2008 and in 2006 to avoid potential adverse tax consequences under Section 409A of the Code. The agreements provide for annual base salaries of $450,000 beginning April 1, 2000 and annual base salary increases of 10%, which occur automatically on April 1 of each year for the terms of the agreements, and contemplate the possibility of additional annual base salary increases in the discretion of the Board (which discretion the Board has delegated to the Compensation Committee). As a result of these provisions, the base salary for each of these individuals was $797,200 beginning April 1, 2006. Each of Messrs. Kotick and Kelly (1) is also entitled to an annual bonus, based on his achievement of mutually agreed financial and business objectives, and (2) may receive performance bonuses, which are paid in the sole discretion of the Board (which discretion the Board has delegated to the Compensation Committee). In 2000, in connection with entering into their employment agreements, Messrs. Kotick and Kelly each received options to purchase 1,000,000 shares of Common Stock (subsequently adjusted to 6,000,000 shares of Common Stock as a result of splits of the Common Stock), and, in connection with the 2002 amendment to each of their agreements, each of them received additional options to purchase 350,000 shares of Common Stock (subsequently adjusted to 1,400,000 shares of Common Stock as a result of splits of the Common Stock). The current agreements also provide that Messrs. Kotick and Kelly are eligible to participate in the Company's welfare benefit plans that are customarily available to the Company's senior executive officers and that the Company is required to maintain a $3 million renewable term life insurance policy through May 22, 2010 for the benefit of the estate of each of Messrs. Kotick and Kelly.