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things,certifiesthecaseasaclassaction,enjoinstheBusinessCombination,requiresthedefendantsto
discloseallmaterialinformation,declaresthattheBusinessCombinationisinbreachofthedirectors’
fiduciarydutiesandthereforeunlawfulandunenforceable,awardstheplaintiffandtheputativeclass
damagesforallprofitsandspecialbenefitsobtainedbythedefendantinconnectionwiththeBusiness
Combinationandtenderoffer,andawardstheplaintiffitscostandexpense,includingattorney’sfees.
Aftervariousinitialmotionswerefiledandruledupon,onMay8,2008,theplaintifffiledan
amendedcomplaintthat,amongotherthings,addedallegationsrelatingtoarevisedpreliminaryproxy
statementfiledbytheCompanyonApril30,2008.Additionalmotionswerethenfiled,includingamotion
forpreliminaryinjunctionfiledbytheplaintiffandamotiontodismissfiledbyVivendiandits
subsidiaries.OnJune14,2008,theplaintifffiledamotionforleavetofileasecondamendedcomplaint.
OnJune30,2008,thecourtgrantedVivendianditssubsidiaries’motiontodismiss,pursuanttoa
stipulationwiththeplaintiff,andonJuly1,2008,deniedtheplaintiff’smotionforpreliminaryinjunction.
OnDecember23,2008,theplaintifffiledanamendedmotionforleavetofileasecondamended
complaint.ThecourtgrantedthemotiononJanuary14,2009andthesecondamendedcomplaintwas
deemedfiledonthesamedate.Thesecondamendedcomplaintassertsclaimssimilartotheonesmadein
theoriginalcomplaint,challengingActivision’sBoardofDirectors’actionsinconnectionwiththe
negotiationandapprovaloftheBusinessCombination,aswellasdisclosuresmadetoourstockholdersand
certainamendmentsmadetoourcertificateofincorporationinconnectiontherewith.Inaddition,the
secondamendedcomplaintassertsthatActivision’sBoardofDirectorsbreacheditsfiduciarydutiesin
approvingandrecommendingthoseamendmentstothecertificateofincorporation.Amongotherthings,
theplaintiffseekscertificationoftheactionasaclassaction,adeclarationthatamendmentsmadetothe
certificateofincorporationareinvalidandunenforceable,adeclarationthatourdirectorsbreachedtheir
fiduciaryduties,rescissionoftheBusinessCombinationandrelatedtransactions,anddamages,interest,
feesandcosts.OnJuly24,2009,thecourtgrantedtheCompany’smotiontodismissthecomplaintfor
failuretostateaclaim.
OnAugust21,2009,theplaintifffiledanoticeofappealofthecourt’sdismissal.Appellate
briefinghasbeencompletedandahearingontheappealoccurredbeforeapaneloftheDelawareSupreme
CourtonJanuary13,2010.Thecourthasnowscheduledanadditionalhearingbeforetheentirecourton
March31,2010.Noamountshavebeenrecordedinthestatementsofoperationsforthismatteraslosses
arenotprobable.
InNovember2009,theCompanyreleasedCallofDuty:ModernWarfare2,agamedevelopedby
oneoftheCompany’swhollyownedstudios,InfinityWard.Asnotedabove,ModernWarfare2wasthe
bestsellingconsoletitleintheU.S.andEuropein2009.Consistentwithpastpractice,theCompany
intendstoreleaseaCallofDutygamein2010developedbyanotherwhollyownedstudio.TheCompany
isconcludinganinternalhumanresourcesinquiryintobreachesofcontractandinsubordinationbytwo
senioremployeesatInfinityWard.Thismatterisexpectedtoinvolvethedepartureofkeypersonneland
litigation.Atpresent,theCompanydoesnotexpectthismattertohaveamaterialimpactontheCompany.
Inaddition,wearepartytootherroutineclaimsandsuitsbroughtbyusandagainstusinthe
ordinarycourseofbusiness,includingdisputesarisingovertheownershipofintellectualpropertyrights,
contractualclaims,employmentlaws,regulationsandrelationships,andcollectionmatters.Intheopinion
ofmanagement,afterconsultationwithlegalcounsel,theoutcomeofsuchroutineclaimsandlawsuitswill
nothaveamaterialadverseeffectonourbusiness,financialcondition,resultsofoperations,orliquidity.
19.StockBasedCompensation
EquityIncentivePlans
TheActivisionBlizzardInc.2008IncentivePlanwasadoptedbyourBoardonJuly28,2008,
approvedbyourstockholdersandamendedandrestatedbyourBoardonSeptember24,2008,further
amendedandrestatedbyourBoardwithstockholderapprovalonJune3,2009andfurtheramendedand
restatedbytheCompensationCommitteeofourBoardwithstockholderapprovalonDecember17,2009
(assoamendedandrestated,the“2008Plan”).The2008PlanauthorizestheCompensationCommitteeof