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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

SCHEDULE 14A

Proxy Statement Pursuant to Section 14(a) of
the Securities Exchange Act of 1934 (Amendment No.          )

Filed by the Registrant ý

Filed by a Party other than the Registrant o

Check the appropriate box:

ý

 

Preliminary Proxy Statement

o

 

Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2))

o

 

Definitive Proxy Statement

o

 

Definitive Additional Materials

o

 

Soliciting Material under §240.14a-12

 

ACTIVISION BLIZZARD, INC.

(Name of Registrant as Specified In Its Charter)

 

(Name of Person(s) Filing Proxy Statement, if other than the Registrant)

Payment of Filing Fee (Check the appropriate box):

o

 

No fee required.

ý

 

Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
    (1)   Title of each class of securities to which transaction applies:
        Common stock, par value $0.000001 per share, of Activision Blizzard, Inc.
 
    (2)   Aggregate number of securities to which transaction applies:
        600,644,513
 
    (3)   Per unit price or other underlying value of transaction computed pursuant to Exchange Act Rule 0-11 (set forth the amount on which the filing fee is calculated and state how it was determined):
        In accordance with Exchange Act Rule 0-11(c), the filing fee of $1,114,219.60 was determined by multiplying 0.0001364 by the aggregate stock purchase consideration of $8,168,765,376.80. The aggregate stock purchase consideration of $8,168,765,376.80 was determined by the sum of (i) the product of 428,676,471 outstanding shares of common stock of Activision Blizzard, Inc. to be acquired in the Stock Purchase Transaction (as defined in this proxy statement) multiplied by the per share consideration of $13.60, plus (ii) the product of 171,968,042 outstanding shares of common stock of Activision Blizzard, Inc. to be acquired in the Private Sale (as defined in this proxy statement) multiplied by the per share consideration of $13.60.
 
    (4)   Proposed maximum aggregate value of transaction:
        $8,168,765,376.80
 
    (5)   Total fee paid:
        $1,114,219.60
 

o

 

Fee paid previously with preliminary materials.

o

 

Check box if any part of the fee is offset as provided by Exchange Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid previously. Identify the previous filing by registration statement number, or the Form or Schedule and the date of its filing.

 

 

(1)

 

Amount Previously Paid:
        
 
    (2)   Form, Schedule or Registration Statement No.:
        
 
    (3)   Filing Party:
        
 
    (4)   Date Filed:
        
 

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PRELIMINARY PROXY STATEMENT—SUBJECT TO COMPLETION
DATED SEPTEMBER 30, 2013

LOGO


3100 Ocean Park Boulevard
Santa Monica, California 90405

Dear Fellow Stockholders:

        I cordially invite you to join me at a special meeting of stockholders of Activision Blizzard, Inc., which we will hold at [    •    ] on [    •    ], 2013, at 9:00 a.m., Pacific Time. Stockholders of record at the close of business on [    •    ], 2013, will be entitled to vote at the special meeting or its adjournment or postponement. This proxy statement contains information about the special meeting and will serve as your guide to the matters on which you will be asked to vote.

        As previously announced, Activision Blizzard entered into a stock purchase agreement, dated as of July 25, 2013, under which it will acquire from Vivendi, S.A. approximately 429 million shares of Activision Blizzard common stock, by acquiring a Vivendi subsidiary that holds those shares, in exchange for approximately $5.83 billion in cash, or $13.60 per share. In addition, the Vivendi subsidiary has certain tax attributes that are expected to benefit Activision Blizzard in the future. The $13.60 per share price represents a discount of approximately 19.14% to the closing price of Activision Blizzard common stock on September 27, 2013, the last completed trading day prior to the date of this proxy statement, and a discount of approximately 10.41% to the closing price of Activision Blizzard common stock on July 25, 2013, the last completed trading day prior to the public announcement of the proposed transactions. In a simultaneous transaction, ASAC II LP, an investment vehicle led by Co-Chairman Brian Kelly and me, to which he and I personally have committed $100 million combined, separately will purchase from Vivendi approximately 172 million shares of Activision Blizzard common stock, in exchange for approximately $2.34 billion in cash, or $13.60 per share. Other than as a stockholder of Activision Blizzard, ASAC II LP will not share in any of the benefits resulting from the Company's assumption of the favorable tax attributes of the acquired Vivendi subsidiary.

        Upon completion of the transactions, Activision Blizzard will be an independent company with the majority of its shares owned by the public. Vivendi will no longer be the majority stockholder, but will retain a stake of approximately 83 million shares or approximately 11.9% of the then-outstanding shares of Activision Blizzard common stock, and its current designees to our board of directors will resign. Also upon completion of the transaction, ASAC II LP—the investment vehicle which, in addition to Brian Kelly and me, currently includes Davis Selected Advisors, L.P., Leonard Green & Partners, L.P., Tencent, and one of the largest global institutional investors—will own approximately 24.7% of the outstanding shares of Activision Blizzard common stock.

        Our board of directors formed a special committee consisting entirely of independent directors to evaluate whether to pursue a transaction with Vivendi and/or members of management in order to alter Vivendi's investment in Activision Blizzard, and the special committee, which was advised by its own financial and legal advisors, had full authority to negotiate the terms and conditions of the stock purchase agreement on behalf of the Company. The special committee unanimously determined the transactions contemplated by the stock purchase agreement to be advisable and in the best interests of Activision Blizzard and unanimously recommended that our board of directors approve the company's execution, delivery and performance of the stock purchase agreement and the transactions contemplated thereby.

        After consideration of, and based upon, the special committee's recommendation, our board of directors unanimously determined that it is in the best interests of Activision Blizzard to enter into the stock purchase agreement, and approved and declared advisable the execution, delivery and performance of the stock purchase agreement and the consummation of the transactions contemplated thereby.


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        At the special meeting, we will ask you to approve the stock purchase agreement and the transactions that it contemplates. We also will ask you to grant us the authority to vote your shares to adjourn the special meeting, if necessary or appropriate, to permit further solicitation of proxies if there are not sufficient votes at the time of the special meeting to approve the stock purchase agreement and the transactions that it contemplates.

        Your vote is very important to us and it is important that your shares of Activision Blizzard common stock be represented at the special meeting. The transactions contemplated by the stock purchase agreement have been enjoined by a preliminary injunction order of the Court of Chancery of the State of Delaware. Although we disagree with the Court's ruling and are appealing the decision, absent further action by the Delaware courts, the preliminary injunction prevents completion of the contemplated transactions unless the stock purchase agreement and the transactions contemplated thereby are approved by both a majority in interest of (a) the stockholders of Activision Blizzard, as of the record date, that are present in person or by proxy and entitled to vote at the special meeting and (b) the stockholders of Activision Blizzard, as of the record date, that are present in person or by proxy and entitled to vote at the special meeting, other than Vivendi and its controlled affiliates. Accordingly, whether or not you plan to attend the special meeting, I encourage you to promptly vote your shares by proxy by following the instructions beginning on page 23 of this proxy statement. If you are able to attend the special meeting and wish to vote in person, you may withdraw your proxy at that time.

        If you have any questions or need assistance voting your shares of Activision Blizzard common stock, please call [    •    ] , our proxy solicitor, toll-free at [    •    ].

        Based on the recommendation of the special committee, our board of directors unanimously recommends that you vote "FOR" the proposal to approve the stock purchase agreement and the transactions contemplated thereby and "FOR" the proposal to adjourn the special meeting if necessary or appropriate. Thank you for your continued support of Activision Blizzard. I look forward to seeing you at the special meeting.



 

Sincerely,

GRAPHIC

Robert A. Kotick
President and Chief Executive Officer

        Neither the Securities and Exchange Commission nor any state securities regulatory agency has approved or disapproved the stock purchase agreement or the transactions that it contemplates, passed upon the merits or fairness of the stock purchase agreement or the transactions that it contemplates or passed upon the adequacy or accuracy of the disclosure in this document. Any representation to the contrary is a criminal offense.

        This proxy statement is dated [    •    ], 2013 and is first being mailed to stockholders on or about [    •    ], 2013.


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LOGO

3100 Ocean Park Boulevard
Santa Monica, California 90405

NOTICE OF SPECIAL MEETING OF STOCKHOLDERS

[    •    ], 2013

9:00 a.m., Pacific Time

[    •    ]

        A special meeting of Stockholders of Activision Blizzard, Inc. ("Activision Blizzard") will be held at [    •    ] on [    •    ], 2013, at 9:00 a.m., Pacific Time.

        The purposes of the special meeting are to:

        Each of the proposals is described more fully in the proxy statement accompanying this notice. The board of directors of Activision Blizzard has fixed the close of business on [    •    ], 2013 as the record date for determining stockholders entitled to receive notice of, and to vote at, the special meeting or any adjournment or postponement thereof.

        Based on the recommendation of the special committee of the board of directors of Activision Blizzard, the board of directors of Activision Blizzard unanimously recommends that you vote "FOR" each of the above proposals.

        Your vote is very important to us and it is important that your shares of Activision Blizzard common stock be represented at the special meeting. The transactions contemplated by the stock purchase agreement have been enjoined by a preliminary injunction order of the Court of Chancery of the State of Delaware. Although we disagree with the Court's ruling and are appealing the decision, absent further action by the Delaware courts, the preliminary injunction prevents completion of the contemplated transactions unless the stock purchase agreement and the transactions contemplated thereby are approved by both a majority in interest of (a) the stockholders of Activision Blizzard, as of the record date, that are present in person or by proxy and entitled to vote at the special meeting and (b) the stockholders of Activision Blizzard, as of the record date, that are present in person or by proxy and entitled to vote at the special meeting, other than Vivendi and its controlled affiliates. Accordingly, whether or not you plan to attend the special meeting, I encourage you to promptly vote your shares by proxy by following the instructions beginning on page 23 of this proxy statement. If you are able to attend the special meeting and wish to vote in person, you may withdraw your proxy at that time.

    By Order of the Board of Directors

 

 


GRAPHIC

 

 

Jeffrey A. Brown
Corporate Secretary
[-
], 2013

In addition to delivering the proxy materials for the special meeting to be held on [    •    ], 2013 to
stockholders by mail, the proxy statement for such meeting is also available at
http://investor.activision.com/sec.cfm


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SUMMARY TERM SHEET

  1

QUESTIONS AND ANSWERS

 
11

CAUTIONARY STATEMENT CONCERNING FORWARD-LOOKING INFORMATION

 
18

RISK FACTORS

 
19

THE SPECIAL MEETING

 
22

THE STOCK PURCHASE AGREEMENT AND THE TRANSACTIONS CONTEMPLATED THEREBY

 
26

LEGAL PROCEEDINGS REGARDING THE TRANSACTIONS CONTEMPLATED BY THE STOCK PURCHASE AGREEMENT

 
64

SELECTED HISTORICAL CONSOLIDATED FINANCIAL INFORMATION

 
66

UNAUDITED PRO FORMA CONDENSED FINANCIAL INFORMATION

 
69

MARKET PRICE AND DIVIDEND DATA

 
75

SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

 
76

THE STOCK PURCHASE AGREEMENT

 
81

PROPOSAL 1:

 

APPROVAL OF THE STOCK PURCHASE AGREEMENT AND THE TRANSACTIONS CONTEMPLATED THEREBY

 
90

PROPOSAL 2:

 

ADJOURNMENT OF THE SPECIAL MEETING

 
91

FUTURE STOCKHOLDER PROPOSALS

 
92

WHERE YOU CAN FIND MORE INFORMATION

 
93

 
   
   

ANNEX A

 

Stock Purchase Agreement, dated as of July 25, 2013, by and among Activision Blizzard, Inc., Vivendi, S.A. and ASAC II LP

  A-1

ANNEX B

 

Opinion of Centerview Partners LLC

 
B-1

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SUMMARY TERM SHEET

        This Summary Term Sheet, together with the "Questions and Answers," highlights selected information from this proxy statement and does not contain all of the information that may be important to you. You should read carefully the entire proxy statement and the additional documents referred to in, or incorporated by reference into, this proxy statement for a more complete understanding of the matters being considered at the special meeting. This summary includes references to other parts of this proxy statement to direct you to a more complete description of the topics presented in this summary. In this proxy statement, "we," "us," "our," "Activision Blizzard" and the "Company" refer to Activision Blizzard, Inc., a Delaware corporation. This proxy statement is dated [    •    ], 2013 and is first being mailed to stockholders on or about [    •    ], 2013.

The Parties to the Transactions (see page 26)

    Activision Blizzard, Inc.

        Activision Blizzard, a Delaware corporation, is a leading global developer and publisher of interactive entertainment. We publish online, personal computer, video game console, handheld, mobile and tablet games. We derive the vast majority of our operating income from internally developed, wholly owned properties. We have leading franchises across several major categories of the growing video game industry, making us the largest Western independent interactive entertainment publisher.

    Vivendi, S.A.

        Vivendi, S.A., a société anonyme organized under the laws of France ("Vivendi"), is a multimedia group that creates and publishes content for which it develops broadcast networks and distribution platforms. Vivendi combines a number of companies that are leaders in content and media: the French leader in pay-TV (Canal+ Group), the world leader in music (Universal Music Group) and the world leader in independent video game publishing (Activision Blizzard). In telecommunications, Vivendi operates the French leader in alternative telecoms (SFR), the Moroccan leader in telecoms (Maroc Telecom) and the leading alternative broadband operator in Brazil (GVT). As of September 20, 2013, Vivendi beneficially owns 683,643,890 shares of Activision Blizzard common stock, representing approximately 60.8% of the issued and outstanding shares of Activision Blizzard common stock.

    ASAC II LP

        ASAC II LP is an exempted limited partnership organized under the laws of the Cayman Islands ("ASAC"). The general partner of ASAC is ASAC II LLC, a Delaware limited liability company (the "General Partner"). Our CEO Robert A. Kotick and Co-Chairman of our board of directors Brian G. Kelly are the managers of the General Partner and each of them owns, through his affiliates, 50% of the membership interests of the General Partner. ASAC was formed for the limited purpose of acquiring, holding and disposing of shares of Activision Blizzard common stock to be purchased by it pursuant to the Stock Purchase Agreement, dated as of July 25, 2013 (the "Stock Purchase Agreement"), by and among Activision Blizzard, ASAC and Vivendi. ASAC and the General Partner are referred to herein as the "ASAC Entities."

The Transactions (see pages 27, 81)

        You are being asked to vote in favor of the proposal to approve the Stock Purchase Agreement and the transactions contemplated thereby. Pursuant to the Stock Purchase Agreement, the Company will acquire from Vivendi (the "Stock Purchase Transaction") all of the outstanding shares of the capital stock of Amber Holding Subsidiary Co., a Delaware corporation and wholly owned newly formed subsidiary of Vivendi ("New VH"), which at the time of such purchase will be the direct owner of 428,676,471 shares of Activision Blizzard common stock and which is contractually prohibited from conducting any operations, in consideration of a cash payment to Vivendi of $5,830,000,005.60, or $13.60 per share for the Activision

 

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Blizzard common stock owned by New VH. In addition, New VH has certain tax attributes that are expected to benefit the Company in the future. The $13.60 per share purchase price represents a discount of approximately 19.14% to the closing price per share of Activision Blizzard common stock on September 27, 2013, the last completed trading day prior to the date of this proxy statement, and a discount of approximately 10.41% to the closing price per share of Activision Blizzard common stock on July 25, 2013, the last completed trading day prior to the public announcement of the proposed transactions. Immediately following the consummation of the Stock Purchase Transaction, ASAC, upon the terms and subject to the conditions of the Stock Purchase Agreement, will acquire from Vivendi 171,968,042 shares of Activision Blizzard common stock for an aggregate cash payment of $2,338,765,371.20, or $13.60 per share for the Activision Blizzard common stock to be acquired by ASAC (assuming no potential reduction in the shares to be acquired by ASAC pursuant to the terms of the Stock Purchase Agreement, as further described herein) (the "Private Sale"). The Stock Purchase Transaction and the Private Sale are both required by the Stock Purchase Agreement to occur on the closing date.

Effect of the Transactions (see page 27)

        After giving effect to the Stock Purchase Transaction and the Private Sale, our outstanding share count is expected to be reduced by 428,676,471 shares of Activision Blizzard common stock, and based on the approximately 1,124 million shares of Activision Blizzard common stock issued and outstanding as of September 20, 2013, (i) our outstanding share count would be approximately 695 million shares of Activision Blizzard common stock, approximately 63.4% of which would be held by the public, (ii) Vivendi would hold approximately 83 million shares of Activision Blizzard common stock (the "Remaining Shares") or approximately 11.9% of our outstanding shares of common stock, and (iii) ASAC would hold 171,968,042 shares of Activision Blizzard common stock or approximately 24.7% of our outstanding shares of common stock. The shares of Activision Blizzard common stock acquired by the Company in the Stock Purchase Transaction will be treated as treasury shares for accounting and legal purposes.

        The Company's new capital structure upon consummation of the transactions contemplated by the Stock Purchase Agreement, which will include $1.4 billion of net debt, where net debt is calculated by subtracting the debt and fees to be incurred from cash and short-term investments at June 30, 2013, and a lower total outstanding share count, is expected to be accretive to earnings per share for our stockholders. The Company no longer will qualify as a "controlled company" under the NASDAQ Stock Market rules and will be required to meet the independence standards for independent public companies following the consummation of the transactions contemplated by the Stock Purchase Agreement, subject to a phase-in period. In addition, the Company expects to assume certain favorable tax attributes of New VH upon consummation of the transactions contemplated by the Stock Purchase Agreement. Other than as a stockholder of the Company, ASAC will not share in any of the benefits resulting from the Company's assumption of the tax attributes of New VH.

        The transactions contemplated by the Stock Purchase Agreement will not (or will be deemed not to) trigger any potential "change in control" payments, as Messrs. Kotick and Kelly have waived any relevant "change in control" or similar provisions under their respective employment arrangements and certain other benefit plans and arrangements in connection with these transactions (see "—Interests of the Company's Directors and Executive Officers in the Transactions"). Upon the consummation of the Stock Purchase Transaction, the six current directors designated by Vivendi on our board of directors will resign and Vivendi will agree to a customary standstill not to, among other things, acquire additional shares of Activision Blizzard common stock or seek representation on our board of directors other than at the request of our independent directors. Similarly, upon the consummation of the simultaneous Private Sale, ASAC will agree to a customary standstill not to, among other things, acquire additional shares of Activision Blizzard common stock, run a proxy contest or call a stockholders meeting, in each case until six months after its ownership in the Company falls below 5%. ASAC will not have any contractual right to designate directors to our board of directors.

 

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Effect on Activision Blizzard if the Transactions are Not Completed (see page 14)

        If the transactions contemplated by the Stock Purchase Agreement are not completed for any reason, whether because they are not approved by our stockholders or otherwise, the Company will continue to be controlled by Vivendi, the debt issued by the Company in connection with the transactions contemplated by the Stock Purchase Agreement will be required to be redeemed, the Company's capital structure will remain as it stands today and the Company and its stockholders will not realize the potential benefits of the transactions.

Consideration (see page 81)

        Upon consummation of the Stock Purchase Transaction, the Company will pay Vivendi aggregate cash consideration in the amount of $5,830,000,005.60, or $13.60 per share, for the shares of Activision Blizzard common stock to be acquired by the Company through the acquisition of New VH. In addition, New VH has certain tax attributes that are expected to benefit the Company in the future. Upon consummation of the Private Sale, ASAC will pay Vivendi aggregate cash consideration in the amount of $2,338,765,371.20, or $13.60 per share, for the shares of Activision Blizzard common stock to be acquired by ASAC, provided that the number of shares to be acquired by ASAC may be reduced under certain circumstances as provided in the Stock Purchase Agreement. The $13.60 per share purchase price represents a discount of approximately 19.14% to the closing price per share of Activision Blizzard common stock on September 27, 2013, the last completed trading day prior to the date of this proxy statement, and a discount of approximately 10.41% to the closing price per share of Activision Blizzard common stock on July 25, 2013, the last completed trading day prior to the public announcement of the proposed transactions.

The Special Meeting (see page 22)

    Date, Time and Place

        The special meeting will be held at [    •    ], at 9:00 a.m., Pacific Time, on [    •    ], 2013 (the "special meeting").

    Purpose

        You will be asked at the special meeting to vote in favor of the proposal to approve the Stock Purchase Agreement and the transactions contemplated thereby. A special committee of our board of directors (the "special committee"), consisting entirely of independent directors, unanimously determined the transactions contemplated by the Stock Purchase Agreement to be advisable and in the best interests of the Company and unanimously recommended that our board of directors approve the Company's execution, delivery and performance of the Stock Purchase Agreement and the consummation of the transactions contemplated thereby. After consideration of, and based upon, the special committee's recommendation, our board of directors unanimously determined that it was in the best interests of the Company to enter into the Stock Purchase Agreement, and approved and declared advisable the execution, delivery and performance of the Stock Purchase Agreement and the consummation of the transactions contemplated thereby. In addition, you also will be asked to vote on a proposal to adjourn the special meeting, if necessary or appropriate, for the purpose of soliciting additional proxies to vote in favor of the proposal to approve the Stock Purchase Agreement and the transactions contemplated thereby.

    Record Date; Stock Entitled to Vote; Quorum

        Only holders of record of shares of Activision Blizzard common stock at the close of business on [    •    ], 2013 (the "record date"), are entitled to notice of and to vote at the special meeting. Each Activision Blizzard share issued and outstanding on the record date is entitled to one vote at the special meeting on each proposal presented. On the record date, [    •    ] shares of Activision Blizzard common

 

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stock were issued and outstanding and [    •    ] shares of Activision Blizzard common stock were issued and outstanding and held by holders of record other than Vivendi and its controlled affiliates.

        A quorum will be present at the special meeting if a majority of the outstanding shares of Activision Blizzard common stock entitled to vote at the special meeting are represented in person or by proxy. In the event that a quorum is present at the special meeting and there are not sufficient votes at the time of the special meeting in favor of the proposal to approve the Stock Purchase Agreement and the transactions contemplated thereby, it is expected that the special meeting would be adjourned to solicit additional proxies if the holders of a majority of the shares of Activision Blizzard common stock present, in person or by proxy, and entitled to vote at the special meeting, approve an adjournment.

    Vote Required

        The transactions contemplated by the Stock Purchase Agreement have been enjoined by a preliminary injunction order of the Court of Chancery of the State of Delaware. Although we disagree with the Court's ruling and are appealing the decision, absent further action by the Delaware courts, the preliminary injunction prevents completion of the contemplated transactions unless the Stock Purchase Agreement and the transactions contemplated thereby are approved by both a majority in interest of (a) the stockholders of Activision Blizzard, as of the record date, that are present in person or by proxy and entitled to vote at the special meeting and (b) the stockholders of Activision Blizzard, as of the record date, that are present in person or by proxy and entitled to vote at the special meeting, other than Vivendi and its controlled affiliates.

        The approval of the adjournment of the special meeting requires the presence of a quorum and the affirmative vote of a majority in interest of the stockholders of the Company, as of the record date, that are present in person or by proxy and entitled to vote at the special meeting.

        If you are present at the special meeting in person or by proxy and abstain from voting or otherwise do not vote, it will have the same effect as a vote "AGAINST" each of the proposals. If you are not present at the special meeting in person or by proxy, your shares of Activision Blizzard common stock will not be counted as voting power present for purposes of voting on the proposals, and therefore will have no effect on either of the proposals. Broker non-votes will have the same effect as not being present at the special meeting, and therefore will have no effect on either of the proposals.

        Vivendi, which beneficially owns 683,643,890 shares of Activision Blizzard common stock as of September 20, 2013, representing approximately 60.8% of the issued and outstanding shares of Activision Blizzard common stock, has informed us that it intends to be present at the special meeting and vote in favor of each of the proposals. This vote by Vivendi would be sufficient to satisfy the requirement for approval by a majority in interest of the stockholders of Activision Blizzard, as of the record date, that are present in person or by proxy and entitled to vote at the special meeting, but will not have any effect in respect of the vote of the stockholders of the Company other than Vivendi and its controlled affiliates.

Recommendation of the Special Committee and Our Board of Directors; Reasons for the Stock Purchase Agreement and Transactions Contemplated Thereby (see pages 41, 44)

    Special Committee's Recommendation

        Our board of directors formed the special committee consisting entirely of independent directors to evaluate whether to pursue a transaction with Vivendi and/or members of management in order to alter Vivendi's investment in Activision Blizzard, and the special committee, which was advised by its own financial and legal advisors, had full authority to negotiate the terms and conditions of the Stock Purchase Agreement on behalf of the Company. The special committee unanimously determined the transactions contemplated by the Stock Purchase Agreement to be advisable and in the best interests of the Company and unanimously recommended that our board of directors approve the Company's execution, delivery and

 

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performance of the Stock Purchase Agreement and the consummation of the transactions contemplated thereby.

    Board of Directors' Recommendation

        After consideration of, and based upon, the special committee's recommendation, our board of directors unanimously determined that it was in the best interests of the Company, and declared it advisable, to enter into the Stock Purchase Agreement and consummate the transactions contemplated thereby. Our board of directors recommends that Activision Blizzard stockholders vote "FOR" the proposal to approve the Stock Purchase Agreement and the transactions contemplated thereby and "FOR" the proposal to adjourn the special meeting, if necessary or appropriate, for the purpose of soliciting additional proxies to vote in favor of the proposal to approve the Stock Purchase Agreement and the transactions contemplated thereby. See "The Transactions—Reasons for the Transactions and Recommendation of the Board of Directors" beginning on page 41.

    Reasons for the Transactions

        In evaluating the Stock Purchase Agreement and the transactions contemplated thereby, the special committee was advised by independent legal and financial advisors, and considered a variety of factors pertaining to the strategic and financial rationale for the transactions, including the following: increased strategic and operational flexibility of the Company after giving effect to the transactions; the purchase price being at a discount to the then-current market price and the expected positive effect on the Company's earnings per share resulting from the transactions; the favorable tax attributes included in the transaction; the opinion of the special committee's financial advisor; the expected increase in the trading price of Activision Blizzard common stock following the transactions; the likelihood that in the absence of an agreement on the Stock Purchase Transaction the Company's controlling stockholder would pursue other alternatives that the special committee considered less favorable to the Company's unaffiliated stockholders; the ability to capture value for Company stockholders that could be lost to a third party in a sale by Vivendi, ASAC's investment and the involvement of Messrs. Kotick and Kelly; the waiver of change in control payments by Messrs. Kotick and Kelly; the opportunity to eliminate controlled company inefficiencies; the terms of the transaction agreements and the committed financing and financing condition.

        For a detailed discussion of the material factors considered by the special committee and our board of directors in reaching their conclusions and the reasons why the special committee and our board of directors unanimously determined that the Stock Purchase Agreement and transactions contemplated thereby are advisable and in the best interests of the Company, see "The Transactions—Reasons for the Transactions and Recommendation of the Special Committee and the Board of Directors" beginning on page 41.

Opinion of Centerview Partners LLC (see page 45)

        On July 24, 2013, Centerview Partners LLC, the financial advisor to the special committee ("Centerview"), delivered to the special committee its oral opinion, subsequently confirmed in a written opinion dated July 24, 2013 (and orally reaffirmed July 25, 2013), to the effect that, as of the date of such opinion, based upon and subject to the various assumptions and limitations set forth in the written opinion, the aggregate consideration to be paid by Activision Blizzard in the Stock Purchase Transaction pursuant to the Stock Purchase Agreement was fair, from a financial point of view, to Activision Blizzard.

        The full text of the written opinion of Centerview, dated July 24, 2013, which sets forth, among other things, the assumptions made, procedures followed, matters considered and limitations on the review undertaken by Centerview in connection with its opinion, is attached as Annex B to this proxy statement and is incorporated by reference herein in its entirety. Centerview provided its opinion solely for the information

 

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and assistance of the special committee (in their capacity as directors and not in any other capacity) and its opinion is limited to and addresses only the matters described therein. Centerview's opinion does not constitute a recommendation to any stockholder of Activision Blizzard or any other person as to how such stockholder or other person should vote or otherwise act with respect to the Stock Purchase Agreement or any other matter. Centerview has consented to the inclusion of a copy of its written opinion as Annex B to this proxy statement. The summary of the written opinion of Centerview set forth below is qualified in its entirety by reference to the full text of such written opinion.

        We encourage you to read carefully the written opinion of Centerview described above in its entirety for a description of the assumptions made, procedures followed, matters considered and limitations on the review undertaken by Centerview in connection with its opinion.

Interests of the Company's Directors and Executive Officers in the Transactions (see page 56)

        In considering the recommendation of our board of directors in favor of the proposals, you should be aware that there are provisions of the Stock Purchase Agreement that will result in certain benefits to our directors and executive officers.

No Appraisal Rights (see page 58)

        No appraisal or dissenters' rights are available to our stockholders under Delaware law or our Amended and Restated Certificate of Incorporation or Amended and Restated Bylaws in connection with the transactions contemplated by the Stock Purchase Agreement.

Material U.S. Federal Income Tax Consequences of the Stock Purchase Transaction (see page 58)

        The Stock Purchase Transaction is not expected to result in U.S. federal income tax consequences to our stockholders (other than Vivendi).

Financing of the Transactions Contemplated by the Stock Purchase Agreement (see page 58)

        We anticipate that the total funds needed to complete the Stock Purchase Transaction will be approximately $5.83 billion, which is expected to be funded through a combination of approximately $1.23 billion of cash on hand and $4.6 billion of net proceeds received by the Company (net of estimated $150 million of fees, expenses and upfront costs) in connection with the debt financing. The debt financing includes $2.25 billion of senior notes, the proceeds of which were funded into an escrow account on September 19, 2013 and are being held in such account, pending the closing of the transactions contemplated by the Stock Purchase Agreement, subject to the terms of the special mandatory redemption feature, which requires the Company to redeem the senior notes at 100% of the issue price of the senior notes, plus accrued and unpaid interest to, but excluding, the redemption date upon the earlier of (i) the termination of the Stock Purchase Agreement and (ii) December 18, 2013 if the transactions contemplated by the Stock Purchase Agreement have not closed by such date. The debt financing is also expected to include a $2.5 billion seven-year term loan facility to be entered into prior to or contemporaneously with the consummation of the transactions contemplated by the Stock Purchase Agreement.

Regulatory Matters (see page 63)

        Each of ASAC and the Company filed the required notification under the Hart-Scott-Rodino Antitrust Improvements Act of 1976 (the "HSR Act") on July 26, 2013 and July 30, 2013, respectively, and each party received from the Department of Justice a notice regarding the termination of the respective waiting period under the HSR Act on August 2, 2013.

 

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Legal Proceedings Regarding the Transactions Contemplated by the Stock Purchase Agreement (see page 64)

        On August 1, 2013, a purported stockholder of the Company filed a stockholder derivative action in the Superior Court of the State of California, County of Los Angeles, captioned Miller v. Kotick, et al., No. BC517086. The complaint names each member of our board of directors and Vivendi as defendants, and the Company as a nominal defendant. The complaint purports to state claims for breaches of fiduciary duties, waste of corporate assets and unjust enrichment in connection with Vivendi's sale of its stake in the Company and that Vivendi also breached its fiduciary duties. The plaintiff further alleges that a demand on our board of directors to institute action would be futile because a majority of our board of directors is not independent and a majority of the individual defendants face a substantial likelihood of liability for approving the transactions contemplated by the Stock Purchase Agreement. The complaint seeks, among other things, damages allegedly sustained by the Company, rescission of the transactions contemplated by the Stock Purchase Agreement, an order restricting our CEO and Co-Chairman from purchasing additional shares of Activision Blizzard common stock and an order directing us to take actions to improve and reform our corporate governance and internal procedures.

        On August 14, 2013, the Company received a letter from a stockholder of the Company seeking, pursuant to Section 220 of the Delaware General Corporation Law, to inspect the books and records of the Company to ascertain whether the Stock Purchase Transaction and Private Sale were in the best interests of the Company. The Company provided the stockholder with certain materials under a confidentiality agreement. On September 11, 2013, a complaint was filed under seal by the same stockholder in the Court of Chancery of the State of Delaware in an action captioned Pacchia v. Kotick et al., C.A. No. 8884-VCL. A public version of that complaint was filed on September 16, 2013. The complaint names each member of our board of directors and Vivendi as defendants, and the Company as a nominal defendant. The allegations in the complaint are substantially similar to the allegations in the above referenced matter filed on August 1, 2013. The complaint seeks, among other things, damages, injunctive relief to prevent the Private Sale from being consummated, reformation or rescission of the Private Sale if it is consummated, and disgorgement of any alleged benefits received by the defendants.

        On September 11, 2013, another stockholder of the Company filed a putative class action and stockholder derivative action in the Court of Chancery of the State of Delaware, captioned Hayes v. Activision Blizzard, Inc., et al., No. 8885-VCL. The complaint names our board of directors, Vivendi, New VH, ASAC, the General Partner of ASAC, Davis Selected Advisers, L.P. ("Davis") and Fidelity Management & Research Co. ("FMR") as defendants, and the Company as a nominal defendant. The complaint alleges that the defendants violated certain provisions of our Amended and Restated Certificate of Incorporation by failing to submit the matters contemplated by the Stock Purchase Agreement for approval by a majority of our stockholders (other than Vivendi and its controlled affiliates); that our board of directors committed breaches of their fiduciary duties in approving the Stock Purchase Agreement; that Vivendi violated fiduciary duties owed to other stockholders of the Company in entering into the Stock Purchase Agreement; that our CEO and Co-Chairman usurped a corporate opportunity from the Company; that our board of directors and Vivendi have engaged in actions to entrench our board of directors and officers in their offices; that the ASAC Entities, Davis and FMR aided and abetted breaches of fiduciary duties by the board of directors and Vivendi; and that our CEO and Co-Chairman, the ASAC Entities, Davis and FMR will be unjustly enriched through the Private Sale. The complaint seeks, among other things, a preliminary and permanent injunction of the Stock Purchase Agreement and the transactions contemplated thereby; rescission of the Private Sale; an order requiring the transfer to the Company of all or part of the shares that are the subject of the Private Sale; an order implementing measures to eliminate or mitigate the alleged entrenching effects of the Private Sale; an order requiring our CEO and Co-Chairman, the ASAC Entities, Davis and FMR to disgorge to the Company the amounts by which they have allegedly been unjustly enriched; and alleged damages sustained by the class and the Company. In addition, the stockholder sought a temporary restraining order preventing the defendants

 

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from consummating the transactions contemplated by the Stock Purchase Agreement without stockholder approval. Following a hearing on the motion for a temporary restraining order, on September 18, 2013, the Delaware Court of Chancery issued a preliminary injunction order, enjoining the consummation of the transactions contemplated by the Stock Purchase Agreement pending (a) the issuance of a final decision after a trial on the merits; (b) receipt of a favorable Activision Blizzard stockholder vote on the transactions contemplated by the Stock Purchase Agreement under Section 9.1(b) of our Amended and Restated Certificate of Incorporation or (c) modification of such preliminary injunction order by the Court of Chancery or the Delaware Supreme Court. As a result of the preliminary injunction order, the Company is seeking stockholder approval of the Stock Purchase Agreement and the transactions contemplated thereby. On September 20, 2013, the Court of Chancery certified its order granting the preliminary injunction for interlocutory appeal to the Delaware Supreme Court. The defendants moved the Delaware Supreme Court to accept and hear the appeal on an expedited basis. On September 23, 2013, the Delaware Supreme Court accepted the appeal of the Chancery Court's decision and granted the motion to hear the appeal on an expedited basis, with a hearing scheduled for October 10, 2013.

        On September 18, 2013, the Company received a letter from another purported stockholder of the Company seeking, pursuant to Section 220 of the Delaware General Corporation Law, to inspect the books and records of the Company to investigate potential wrongdoing or mismanagement in connection with the approval of the Stock Purchase Agreement.

        We believe that the defendants have meritorious defenses and intend to defend each of these lawsuits vigorously. However, these lawsuits and any other lawsuits are subject to inherent uncertainties and the actual outcome and costs will depend upon many unknown factors. The outcome of litigation is necessarily uncertain, and the Company could be forced to expend significant resources in the defense of these lawsuits and may not prevail.

        The Company also may be subject to additional claims in connection with the Stock Purchase Transaction and Private Sale. Monitoring and defending against legal actions is time consuming for our management and detracts from our ability to fully focus our internal resources on our business activities. In addition, the Company may incur substantial legal fees and costs in connection with litigation and, although coverage may be available under relevant insurance policies, coverage could be denied or prove to be insufficient. Under our Amended and Restated Certificate of Incorporation and the indemnification agreements that the Company has entered into with our officers and directors, the Company may be required in certain circumstances to indemnify and advance expenses to them in connection with their participation in proceedings arising out of their service to us. There can be no assurance that any of these payments will not be material.

        The Company is not currently able to estimate the possible cost to us from these lawsuits, as they are in the early stages and it cannot be determined how long it may take to resolve these matters or the possible amount of any damages that the Company may be required to pay. Moreover, the Company cannot be certain what the impact on our operations or financial position will be if any of the purported stockholder plaintiffs are successful in having the Stock Purchase Transaction and Private Sale rescinded or further enjoined. The Company has not established any reserves for any potential liability relating to these lawsuits. It is possible that the Company could, in the future, incur judgments or enter into settlements of claims for monetary damages. A decision adverse to the Company on these actions could result in the rescission or further enjoining of the Stock Purchase Transaction and Private Sale or the payment of substantial damages and could have a material adverse effect on our business, reputation, financial condition, results of operations, profitability, cash flows or liquidity.

 

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Conditions to the Transactions (see page 85)

        The respective obligations of each party to consummate the Stock Purchase Transaction and Private Sale, as applicable, are subject to the satisfaction or (to the extent permitted) waiver by the parties of the following conditions:

    the absence of a pending injunction enjoining the consummation of the transactions contemplated by the Stock Purchase Agreement;

    the expiration or termination of any waiting period under the HSR Act or any similar foreign antitrust, competition or similar applicable law (we have received early termination of the waiting period under the HSR Act);

    in the case of the Company's obligations to complete the Stock Purchase Transaction, Vivendi's receipt of a tax opinion with respect to Vivendi's own pre-closing internal reorganization;

    in the case of the Company's obligations to complete the Stock Purchase Transaction, our receipt of the proceeds of the Company's debt financing or alternative financing therefor as permitted under the Stock Purchase Agreement;

    in the case of ASAC's obligations to complete the Private Sale, ASAC's receipt of the proceeds of ASAC's debt financing or alternative financing therefor as permitted under the Stock Purchase Agreement;

    in the case of each of the Company, Vivendi and ASAC, the accuracy of representations and warranties and the performance of covenants by each of the other parties; and

    in the case of each of the Company, Vivendi and ASAC, receipt of duly executed copies of each ancillary agreement (see "Stock Purchase Agreement" beginning on page 81) to which any of the other parties, as applicable, is a party.

        Under the Hayes litigation described above, the transactions contemplated by the Stock Purchase Agreement have been enjoined by a preliminary injunction order of the Court of Chancery of the State of Delaware. We disagree with the Court of Chancery's ruling and are appealing the decision to the Delaware Supreme Court. Absent further action by the Delaware courts, and in the event that the Delaware Supreme Court affirms the Court of Chancery's ruling, the preliminary injunction prevents completion of the contemplated transactions unless the Stock Purchase Agreement and the transactions contemplated thereby are approved by our stockholders under our Amended and Restated Certificate of Incorporation. This preliminary proxy statement is being filed at this time in order to begin the process that would be required to consummate the transactions contemplated by the Stock Purchase Agreement in the event that we are unsuccessful in our appeal, including seeking the affirmative vote of a majority in interest of the stockholders of the Company, as of the record date, that are present in person or by proxy and entitled to vote at the special meeting, other than Vivendi and its controlled affiliates. If we present that proposal to our stockholders, our Amended and Restated Bylaws require us to also obtain the affirmative vote of a majority in interest of the stockholders of the Company, as of the record date, that are present in person or by proxy and entitled to vote at the special meeting. Vivendi has informed us that it intends to be present at the special meeting and vote in favor of the proposal to approve the Stock Purchase Agreement and the transactions contemplated thereby, and this vote by Vivendi will be sufficient to satisfy the requirement to obtain the affirmative vote of a majority in interest of the stockholders present in person or by proxy and entitled to vote at the special meeting (see "The Special Meeting—Vote Required"), However, if we receive a favorable ruling from the Delaware Supreme Court, and the affirmative vote of a majority in interest of the stockholders of Activision Blizzard, as of the record date, that are present in person or by proxy and entitled to vote at the special meeting, other than Vivendi and its controlled affiliates, is determined not to be required, the vote will not be sought and the special meeting will not be held.

 

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        The Stock Purchase Transaction and the Private Sale are both required by the Stock Purchase Agreement to occur on the closing date.

Termination of the Stock Purchase Agreement (see page 86)

        The Stock Purchase Agreement may be terminated at any time prior to the consummation of the transactions contemplated thereby:

    by mutual written consent of the Company, ASAC and Vivendi;

    by any of the parties, if the closing has not occurred by October 15, 2013; and

    by any of the parties, in the event of certain final and non-appealable legal restraints prohibiting the consummation of the Stock Purchase Transaction and the Private Sale.

        The Court of Chancery of the State of Delaware has issued a preliminary injunction order enjoining the consummation of the transactions contemplated by the Stock Purchase Agreement, pending either further action by the Delaware courts or the receipt of a favorable Activision Blizzard stockholder vote on the transactions contemplated by the Stock Purchase Agreement. We disagree with the Court of Chancery's ruling, and are appealing the ruling to the Delaware Supreme Court, which has agreed to hear the appeal on an expedited basis, with a hearing scheduled for October 10, 2013. This preliminary proxy statement is being filed at this time to begin the process that would be required to consummate the transactions contemplated by the Stock Purchase Agreement in the event that we are unsuccessful in our appeal and the parties to the Stock Purchase Agreement renegotiate the Stock Purchase Agreement. A requirement to obtain an Activision Blizzard stockholder vote would render it impossible to complete the transactions contemplated by the Stock Purchase Agreement prior to the October 15, 2013 termination date currently provided for in the Stock Purchase Agreement. Unless the ruling of the Court of Chancery is reversed, the transaction cannot and will not proceed without the agreement of each of the parties. There is no assurance that the parties will be able to renegotiate the transaction in order to reach such agreement.

        As a result, if the preliminary injunction issued by the Court of Chancery is not reversed by the Delaware Supreme Court, and because a stockholder vote could not occur prior to October 15, 2013, following October 15, 2013, unless that date is extended, any party to the Stock Purchase Agreement could freely terminate the agreement without cause and without penalty, including without payment of a termination fee. As of the time of filing of this preliminary proxy statement, the parties have not reached an agreement to extend the October 15, 2013 termination date, and it is uncertain whether any such agreement will be reached, or if so what the agreed-upon replacement date may be. This may have the effect of permitting any party to the Stock Purchase Agreement to terminate the agreement and result in the failure to consummate the Stock Purchase Transaction and the Private Sale. There is and can be no assurance that the parties to the Stock Purchase Agreement will agree to amend the agreement to extend its term or contemplate a stockholder vote, or that the other terms of the agreement would remain intact, or what any adjustments to such terms might be, in the case of any such amendment. In addition, the proceeds of approximately $2.25 billion of unsecured notes issued by Activision Blizzard to fund a portion of the cash to be paid in connection with the Stock Purchase Transaction have been funded into an escrow account, which proceeds must be used to redeem the notes at 100% of their issue price, plus accrued and unpaid interest to, but excluding, the redemption date, upon the earlier of (i) the termination of the Stock Purchase Agreement and (ii) December 18, 2013 if the transactions contemplated by the Stock Purchase Agreement have not closed by such date.

Risk Factors (see page 19)

        The transactions contemplated by the Stock Purchase Agreement involve certain risks. Prior to making any decision, stockholders should consider certain risk factors, including risks related to the transactions contemplated by the Stock Purchase Agreement and risks related to the Company's business.

 

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QUESTIONS AND ANSWERS

        The following questions and answers are intended to address briefly some commonly asked questions regarding the special meeting, the Stock Purchase Agreement and the transactions contemplated thereby. These questions and answers may not address all questions that may be important to you as an Activision Blizzard stockholder. Please refer to the "Summary Term Sheet" and the more detailed information contained elsewhere in this proxy statement, the annexes to this proxy statement and the documents referred to in this proxy statement, all of which you should read carefully.

Q:    Why am I receiving these materials?

A:
Our board of directors is furnishing this proxy statement and form of proxy card to Activision Blizzard stockholders in connection with the solicitation of proxies to be voted at the special meeting of stockholders or at any adjournments or postponements of the special meeting.

Q:    When and where is the Special Meeting?

A:
The special meeting will take place on [    •    ], 2013 at [    •    ], at 9.00 a.m., Pacific Time.

Q:    Who is entitled to vote at the Special Meeting?

A:
Only stockholders of record as of the close of business on [    •    ] , 2013 are entitled to notice of the special meeting and to vote at the special meeting or at any adjournments or postponements thereof. Each Activision Blizzard stockholder is entitled to cast one vote on each matter properly brought before the special meeting for each Activision Blizzard share that such holder owned as of the record date.

Q:    May I attend the special meeting and vote in person?

A:
Yes. All stockholders as of the record date may attend the special meeting and vote in person. Seating will be limited. Stockholders will need to present proof of ownership of Activision Blizzard common stock, such as a bank or brokerage account statement, and a form of personal identification to be admitted to the special meeting. No cameras, recording equipment, electronic devices, large bags, briefcases or packages will be permitted in the special meeting. Even if you plan to attend the special meeting in person, we encourage you to complete, sign, date and return the enclosed proxy or grant your proxy electronically over the Internet or via telephone to ensure that your shares will be represented at the special meeting. If you attend the special meeting and wish to vote in person, you may withdraw your proxy and vote in person. If your shares are held in the name of your broker, bank or other nominee, you must obtain a legal proxy, executed in your favor, from the holder of record to be able to vote at the special meeting.

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Q:    What am I being asked to vote on at the Special Meeting?

A:
You are being asked to vote in favor of:

a proposal to approve the Stock Purchase Agreement and the transactions contemplated thereby, including the Company's acquisition of all outstanding shares of the capital stock of New VH, which will hold 428,676,471 shares of Activision Blizzard common stock and certain favorable tax attributes; and

a proposal to approve the adjournment of the special meeting to a later date or dates, if necessary or appropriate, for the purpose of soliciting additional proxies to vote in favor of the proposal to approve the Stock Purchase Agreement and the transactions contemplated thereby.

Q:    What is the proposed transaction and what effects will it have on Activision Blizzard?

A:
The proposed Stock Purchase Transaction is the acquisition by Activision Blizzard of all of the outstanding capital stock of New VH, a wholly owned newly formed subsidiary of Vivendi, Activision Blizzard's majority stockholder. At the time of the acquisition, New VH, which is contractually prohibited from conducting any operations, will be the direct owner of 428,676,471 shares of Activision Blizzard common stock. Activision Blizzard will pay $5,830,000,005.60, or $13.60 per share for the shares of Activision Blizzard common stock to be acquired through the acquisition of New VH. In addition, New VH has certain tax attributes that are expected to benefit the Company in the future. Immediately following the consummation of the proposed Stock Purchase Transaction, ASAC, upon the terms and subject to the conditions of the Stock Purchase Agreement, will purchase from Vivendi 171,968,042 shares of Activision Blizzard common stock for an aggregate cash payment of $2,338,765,371.20, or $13.60 per share for the shares of Activision Blizzard common stock to be acquired by ASAC, provided that the number of shares to be acquired by ASAC may be reduced under certain circumstances as provided in the Stock Purchase Agreement. After giving effect to these transactions, based on the Activision Blizzard common stock issued and outstanding as of September 20, 2013, (i) Vivendi is expected to hold approximately 83 million shares of Activision Blizzard common stock or approximately 11.9% of the outstanding shares of Activision Blizzard common stock, and (ii) ASAC is expected to hold 171,968,042 shares or approximately 24.7% of the outstanding shares of Activision Blizzard common stock, provided that the number of shares to be acquired by ASAC may be reduced under certain circumstances as provided in the Stock Purchase Agreement. The shares of Activision Blizzard common stock purchased by the Company will be treated as treasury shares for accounting and legal purposes, leaving the majority of the remaining approximately 695 million shares of outstanding Activision Blizzard common stock in the hands of public stockholders.

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Q:    What do I need to do now?

A:
We encourage you to read carefully this proxy statement, the annexes to this proxy statement and the documents to which we refer in this proxy statement, and then complete, sign, date and return, as promptly as possible, the enclosed proxy card in the accompanying reply envelope or grant your proxy electronically over the Internet or by telephone, so that your shares can be voted at the special meeting. If you hold your shares in "street name," please refer to the voting instruction forms provided by your bank, broker or other nominee to vote your shares.

Q:    What was the role of the special committee?

A:
Because certain of our directors have actual or potential conflicts of interest in evaluating the transactions contemplated by the Stock Purchase Agreement, our board of directors appointed the special committee, which consisted entirely of independent directors, to, among other things, review and evaluate the Company's participation in the transactions contemplated by the Stock Purchase Agreement and negotiate the terms thereof.

Q:    What was the recommendation of the special committee?

A:
The special committee, after considering the various factors described under "The Transactions—Recommendation of the Special Committee and Our Board of Directors and Reasons for the Transactions," unanimously determined the transactions contemplated by the Stock Purchase Agreement to be advisable and in the best interests of the Company and unanimously recommended that our board of directors approve the Company's execution, delivery and performance of the transaction documents and the consummation of the transactions contemplated thereby.

Q:    What was the recommendation of the board of directors of Activision Blizzard?

A:
Our board of directors, after considering and based upon the recommendation of the special committee, unanimously determined that it is in the best interests of the Company, and declared it advisable, to enter into the Stock Purchase Agreement and consummate the transactions contemplated thereby.

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Q:    What happens if the transactions contemplated by the Stock Purchase Agreement are not completed?

A:
If the transactions contemplated by the Stock Purchase Agreement are not completed for any reason, whether because they are not approved by our stockholders or otherwise, the Company will continue to be controlled by Vivendi, the debt issued by the Company in connection with the transactions contemplated by the Stock Purchase Agreement will be required to be redeemed, the Company's capital structure will remain as it stands today and the Company and its stockholders will not realize the potential benefits of the transactions.

Q:    Am I entitled to appraisal or dissenters' rights in connection with the Stock Purchase Agreement and the transactions contemplated thereby?

A:
No appraisal or dissenters' rights are available to our stockholders under Delaware law or under our Amended and Restated Certificate of Incorporation or Amended and Restated Bylaws in connection with the Stock Purchase Agreement and the transactions contemplated thereby.

Q:    What is a proxy?

Q:
A proxy is your legal designation of another person, referred to as a "proxy," to vote your shares of Activision Blizzard common stock. The written document describing the matters to be considered and voted on at the special meeting is called a "proxy statement." The document used to designate a proxy to vote your shares of Activision Blizzard common stock is called a "proxy card." Our board of directors has designated [    •    ], [    •    ] and [    •    ], and each of them, with full power of substitution, as proxies for the special meeting.

Q:    What vote is required to approve the Stock Purchase Agreement and the transactions contemplated thereby?

A:
The transactions contemplated by the Stock Purchase Agreement have been enjoined by a preliminary injunction order of the Court of Chancery of the State of Delaware. Although we disagree with the Court's ruling and are appealing the decision, absent further action by the Delaware courts, the preliminary injunction prevents completion of the contemplated transactions unless the Stock Purchase Agreement and the transactions contemplated thereby are approved by both a majority in interest of (a) the stockholders of Activision Blizzard, as of the record date, that are present in person or by proxy and entitled to vote at the special meeting and (b) the stockholders of Activision Blizzard, as of the record date, that are present in person or by proxy and entitled to vote at the special meeting, other than Vivendi and its controlled affiliates.

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Q:    What vote is required to approve any proposal to adjourn the special meeting to a later date, if necessary or appropriate, for the purpose of soliciting additional proxies to vote in favor of the proposal to approve the Stock Purchase Agreement and the transactions contemplated thereby?

A:
Approval of the proposal to adjourn the special meeting, if a quorum is present, requires the affirmative vote of a majority in interest of the stockholders of the Company, as of the record date, present in person or by proxy and entitled to vote at the special meeting. In the absence of a quorum, the person presiding at the special meeting has the power to adjourn the special meeting from time to time until a quorum is present.

Q:    What is the difference between holding shares as a stockholder of record and as a beneficial owner?

A:
If your shares are registered directly in your name with our transfer agent, Continental Stock Transfer & Trust Company, you are considered, with respect to those shares, to be the "stockholder of record." In this case, this proxy statement and your proxy card have been sent directly to you by the Company.

Q:    How do I submit my proxy?

A:
Stockholders of record may submit their proxies in three ways:

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Q:    If my broker holds my shares in "street name," will my broker vote my shares for me?

A:
If you do not give instructions to the broker, bank or other nominee, the broker, bank or other nominee is generally allowed to vote your shares with respect to "discretionary" items, but is not permitted to vote your shares with respect to "non-discretionary" items, resulting in a "broker non-vote" with respect to those items (and, as such, those shares will not count as present or represented at the special meeting for those items). The approval of the Stock Purchase Agreement and the transactions contemplated thereby (proposal 1) and the adjournment of the special meeting (proposal 2) are non-discretionary items.

Q:    May I change my vote after I have mailed my signed proxy card?

A:
Any stockholder of record may revoke or change that stockholder's proxy at any time before the proxy is voted at the special meeting by (1) sending a written notice of revocation of the proxy to our Corporate Secretary at Activision Blizzard, Inc., 3100 Ocean Park Blvd., Santa Monica, California 90405, (2) properly delivering a subsequently dated proxy, or (3) voting in person at the special meeting. Please note that to be effective, your new proxy card, Internet or telephonic voting instructions or written notice of revocation must be received by the Corporate Secretary prior to the special meeting and, in the case of Internet or telephonic voting instructions, must be received before 4:00 p.m., Pacific Time, on [    •    ], 2013.

Q:    If a stockholder gives a proxy, how are the shares voted?

A:
Regardless of the method you choose to vote, the individuals named on the enclosed proxy card, or your proxies, will vote your shares in the way that you indicate. When completing the Internet or telephone process or the proxy card, you may specify whether your shares should be voted for or against or to abstain from voting on all, some or none of the specific items of business to come before the special meeting.

Q:    What should I do if I receive more than one set of voting materials?

A:
You may receive more than one set of voting materials, including multiple copies of this proxy statement and multiple proxy cards or voting instruction cards. For example, if you hold your shares in more than one brokerage account, you will receive a separate voting instruction card for each brokerage account in which you hold shares. If you are a stockholder of record and your shares are registered in more than one name, you will receive more than one proxy card. Please complete, date, sign and return (or submit your proxy via the Internet or telephone with respect to) each proxy card and voting instruction card that you receive.

Q:    Who will count the votes?

A:
The votes will be counted by an independent inspector of election appointed for the special meeting.

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Q:    Where can I find the voting results of the special meeting?

A:
The Company intends to announce preliminary voting results at the special meeting and publish final results in a Current Report on Form 8-K that will be filed with the Securities and Exchange Commission ("SEC") following the special meeting. All reports Activision Blizzard files with the SEC are publicly available when filed. See "Where Stockholders Can Find More Information" beginning on page 93 of this proxy statement.

Q:    When do you expect the transactions contemplated by the Stock Purchase Agreement to be completed?

A:
We are working toward completing the transactions contemplated by the Stock Purchase Agreement as quickly as possible and currently expect to consummate them promptly upon obtaining the requested affirmative vote of our stockholders at the special meeting. The Stock Purchase Agreement may be terminated by any party if the transactions contemplated thereby have not been completed by October 15, 2013.

Q:    Who can help answer my questions?

A:
If you have any questions concerning the Stock Purchase Agreement and the transactions contemplated thereby, the special meeting or this proxy statement, or if you would like additional copies of this proxy statement or need help voting your shares of Activision Blizzard common stock, please contact our proxy solicitor:

[    •    ]

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CAUTIONARY STATEMENT CONCERNING FORWARD-LOOKING INFORMATION

        This proxy statement, and the documents to which we refer you in this proxy statement, as well as information included in oral statements or other written statements made or to be made by us or on our behalf, contain "forward-looking statements" that do not directly or exclusively relate to historical facts. You can typically identify forward-looking statements by the use of forward-looking words, such as "may," "should," "could," "project," "believe," "anticipate," "expect," "estimate," "continue," "potential," "plan," "forecast" and other words of similar import. Stockholders are cautioned that any such forward-looking statements are not guarantees of future performance and may involve significant risks and uncertainties, and that actual results may vary materially from those in the forward-looking statements. These risks and uncertainties include, but are not limited to, the risks detailed in our filings with the SEC, including in our most recent filings on Forms 10-Q and 10-K, factors and matters described or incorporated by reference in this proxy statement, and the following factors:

        Consequently, all of the forward-looking statements we make in this proxy statement are qualified by the information contained or incorporated by reference herein, including, but not limited to (a) the information contained under this heading and (b) the information contained under the headings "Risk Factors" and information in our consolidated financial statements and notes thereto included in our most recent filings on Forms 10-K and 10-Q (see "Where You Can Find More Information" beginning on page 93). No assurance can be given that these are all of the factors that could cause actual results to vary materially from the forward-looking statements.

        Except as required by applicable law, we undertake no obligation to publicly update forward-looking statements, whether as a result of new information, future events or otherwise. Activision Blizzard stockholders are advised, however, to consult any future disclosures we make on related subjects as may be detailed in our other filings made from time to time with the SEC.

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RISK FACTORS

        In addition to the other information included in this proxy statement and found in the Annexes attached hereto, including the matters addressed under the heading "Cautionary Statement Concerning Forward-Looking Information," you should carefully consider the following risk factors before deciding whether to vote in favor of the proposal to approve the Stock Purchase Agreement and the transactions contemplated thereby. Additional risks and uncertainties not presently known to us or that are not currently believed to be material, if they occur, also may adversely affect the transactions contemplated by the Stock Purchase Agreement.

Risks Related to the Transactions Contemplated by the Stock Purchase Agreement

         There are a number of risks and uncertainties associated with the Stock Purchase Agreement and the completion of the transactions contemplated thereby. For example:

         Some of our executive officers and directors have interests in the transactions contemplated by the Stock Purchase Agreement that may be different from, or in addition to, the interests of our stockholders generally.

        As described under "Interests of the Company's Directors and Executive Officers in the Transactions," our CEO, Co-Chairman of the board of directors and the six members of our board of directors selected by Vivendi have interests in the transactions contemplated by the Stock Purchase Agreement that may be different from, or in addition to, the interests of our stockholders generally. These

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interests may present them with actual or potential conflicts of interest. Our board of directors formed a special committee early in the process in order to avoid such potential conflicts of interest, and in their deliberations, the special committee and our board of directors were aware of these interests and considered them, among other factors, when determining whether to approve the transactions contemplated by the Stock Purchase Agreement.

         We are subject to litigation initiated in connection with the Stock Purchase Agreement and the transactions contemplated thereby, which could be time consuming and divert our resources and the attention of our management.

        As described under "Legal Proceedings Regarding the Stock Purchase Transaction," the Company and the individual members of our board of directors have been named as defendants in certain lawsuits relating to the Stock Purchase Agreement and the transactions related thereto. On September 18, 2013, the Delaware Court of Chancery issued a preliminary injunction order, enjoining the consummation of the transactions contemplated by the Stock Purchase Agreement pending (a) the issuance of a final decision after a trial on the merits; (b) receipt of a favorable Activision Blizzard stockholder vote on the transactions contemplated by the Stock Purchase Agreement under Section 9.1(b) of the Amended and Restated Certificate of Incorporation of Activision Blizzard or (c) modification of such preliminary injunction order by the Court of Chancery or the Delaware Supreme Court. Although the Company believes that these suits are without merit, the defense of these suits may be expensive and may divert management's attention and resources, which could adversely affect our business. Although not a condition to the consummation of the transactions contemplated by the Stock Purchase Agreement, in light of the preliminary injunction order issued by the Delaware Court of Chancery described above, the Company is seeking stockholder approval of the Stock Purchase Agreement and the transactions contemplated thereby.

Risks Related to the Financing of the Transactions Contemplated by the Stock Purchase Agreement

         We expect to incur substantial leverage in connection with the Stock Purchase Agreement and the transactions contemplated thereby, and are currently subject to the restrictions set forth in the indenture governing our recently issued unsecured notes, which could adversely affect our cash flow or our ability to operate our business.

        If we complete the transactions contemplated by the Stock Purchase Agreement, we will incur significant debt, including secured indebtedness. As a result of the anticipated financings for such transactions, our total debt is expected to amount to approximately $4.75 billion at the closing of such transactions, of which $2.25 billion of unsecured notes were issued into an escrow account on September 19, 2013 and are subject to a special mandatory redemption feature as described below. A high degree of leverage could have important consequences, including: increasing our vulnerability to general adverse economic and industry conditions; limiting our flexibility in planning for, or reacting to, changes in our business and our industry; requiring the dedication of a substantial portion of any cash flow from operations to the payment of principal of, and interest on, our indebtedness, thereby reducing the availability of such cash flow to fund our operations, growth strategy, working capital, capital expenditures, future business opportunities and other general corporate purposes; exposing us to the risk of increased interest rates to the extent any borrowings under the Senior Credit Facilities (as defined below) are at variable rates of interest; restricting us from making strategic acquisitions or causing us to make non-strategic divestitures; limiting our ability to obtain additional financing for working capital, capital expenditures, research and development, debt service requirements, acquisitions and general corporate or other purposes; limiting our ability to adjust to changing market conditions; and placing us at a competitive disadvantage relative to our competitors who are less highly leveraged. Further, we are currently subject to the various covenants contained in the indenture governing the unsecured notes, which impose restrictions on us that may affect our ability to operate our business.

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        In addition, the indenture limits or prohibits our ability to, among other things:

These restrictions on our ability to operate our business could seriously harm our business by, among other things, limiting our ability to take advantage of financing, mergers and acquisitions and other corporate opportunities.

        Further, various risks, uncertainties and events beyond our control could affect our ability to comply with these covenants. Failure to comply with any of the covenants in our existing or future financing agreements could result in a default under those agreements and under other agreements containing cross-default provisions. Such a default would permit lenders and/or holders of notes, as applicable, to accelerate the maturity of the debt under these agreements and to foreclose upon any collateral securing the debt. Under these circumstances, we might not have sufficient funds or other resources to satisfy all of our obligations, including our obligations under the indenture. In addition, the limitations imposed by financing agreements on our ability to incur additional debt and to take other actions might significantly impair our ability to obtain other financing. We cannot assure you that we will be granted waivers or amendments to these agreements if for any reason we are unable to comply with these agreements or that we will be able to refinance our debt on terms acceptable to us, or at all.

        The realization of any of the foregoing risks may materially adversely affect our business, cash flows, financial condition, results of operations or the market price of shares of Activision Blizzard common stock. We have not previously incurred significant indebtedness, and the effects of such incurrence on our business and operations is not fully known.

        If (1) the Stock Purchase Transaction is not completed on or before December 18, 2013 (the "Redemption Deadline"), or (2) prior to the Redemption Deadline, the Stock Purchase Agreement is terminated or not otherwise consummated, then we will be required to redeem the notes at 100% of the issue price of the notes, plus accrued and unpaid interest to, but excluding, the redemption date.

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THE SPECIAL MEETING

        We are furnishing this proxy statement to you as part of the solicitation of proxies by our board of directors for use at the special meeting.

Date, Time and Place

        The special meeting will be held at [    •    ], at 9:00 a.m., Pacific Time, on [    •    ], 2013.

Purpose of the Special Meeting

        You will be asked at the special meeting to approve the Stock Purchase Agreement and the transactions contemplated thereby. You also will be asked to vote on a proposal to adjourn the special meeting, if necessary or appropriate, for the purpose of soliciting additional proxies to vote in favor of the proposal to approve the Stock Purchase Agreement and the transactions contemplated thereby. The special committee of our board of directors, consisting entirely of independent directors, unanimously determined the transactions contemplated by the Stock Purchase Agreement to be advisable and in the best interests of the Company and unanimously recommended that our board of directors approve the Company's execution, delivery and performance of the transaction documents and the consummation of the transactions contemplated thereby. After consideration of, and based upon, the special committee's recommendation, our board of directors unanimously determined that it is in the best interests of the Company, and declared it advisable, to enter into the Stock Purchase Agreement and consummate the transactions contemplated thereby.

Record Date; Stock Entitled to Vote; Quorum

        Only holders of record of shares of Activision Blizzard common stock at the close of business on [    •    ] , 2013 are entitled to notice of and to vote at the special meeting. Each share issued and outstanding on the record date is entitled to one vote at the special meeting on each proposal presented. On the record date, [    •    ] shares of Activision Blizzard common stock were issued and outstanding and [    •    ] shares of Activision Blizzard common stock, or approximately [    •    ]% of outstanding Activision Blizzard common stock, were issued and outstanding and held by holders of record other than Vivendi and its controlled affiliates.

        A quorum will be present at the special meeting if a majority of the outstanding shares of Activision Blizzard common stock entitled to vote at the special meeting are represented in person or by proxy. In the event that a quorum is present at the special meeting and there are not sufficient votes at the time of the special meeting to vote in favor of the proposal to approve the Stock Purchase Agreement and the transactions contemplated thereby, it is expected that the meeting would be adjourned to solicit additional proxies if the holders of a majority of the shares of Activision Blizzard common stock present, in person or by proxy, and entitled to vote at the special meeting approve an adjournment.

Vote Required

        The transactions contemplated by the Stock Purchase Agreement have been enjoined by a preliminary injunction order of the Court of Chancery of the State of Delaware. Although we disagree with the Court's ruling and are appealing the decision, absent further action by the Delaware courts, the preliminary injunction prevents completion of the contemplated transactions unless the Stock Purchase Agreement and the transactions contemplated thereby are approved by both a majority in interest of (a) the stockholders of Activision Blizzard, as of the record date, that are present in person or by proxy and entitled to vote at the special meeting and (b) the stockholders of Activision Blizzard, as of the record date, that are present in person or by proxy and entitled to vote at the special meeting, other than Vivendi and its controlled affiliates.

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        The approval of the adjournment of the special meeting requires the presence of a quorum and the affirmative vote of a majority in interest of the stockholders of the Company that are present in person or by proxy and entitled to vote at the special meeting.

        Vivendi, which beneficially owns 683,643,890 shares of Activision Blizzard common stock as of September 20, 2013, representing approximately 60.8% of the issued and outstanding shares of Activision Blizzard common stock, has informed us that it intends to be present at the special meeting and vote in favor of each of the proposals. This vote by Vivendi would be sufficient to satisfy the requirement for approval by a majority in interest of the stockholders of Activision Blizzard, as of the record date, that are present in person or by proxy and entitled to vote at the special meeting, but will not have any effect in respect of the vote of the stockholders of the Company other than Vivendi and its controlled affiliates.

Voting of Proxies

        All shares represented by properly executed proxies received in time for the special meeting will be voted at the special meeting in the manner specified by the holders. Properly executed proxies that do not contain voting instructions will be voted "FOR" each of the proposals.

        To submit your proxy, please complete, sign, date and return the enclosed proxy card or, to appoint a proxy over the Internet or by telephone, follow the instructions provided below. If you attend the special meeting and wish to vote in person, you may withdraw your proxy and vote in person. If your shares are held in the name of your broker, bank or other nominee, you must obtain a legal proxy, executed in your favor, from the holder of record to be able to vote at the special meeting.

        Shares of Activision Blizzard common stock represented at the special meeting but not voted, including shares for which proxies have been received but for which stockholders have abstained, will be treated as present at the special meeting for purposes of determining the presence or absence of a quorum for the transaction of all business.

        Only shares affirmatively voted in favor of the proposals, including properly executed proxies that do not contain specific voting instructions, will be counted "FOR" the proposals. If you abstain from voting but your shares are represented at the special meeting, it will have the same effect as a vote "AGAINST" each of the proposals. If you do not execute a proxy card, and you do not vote in person at the special meeting, your vote will not be counted as voting power present at the special meeting and will have no effect on either of the proposals.

        Brokers who hold shares in street name for customers have the authority to vote on "routine" proposals when they have not received instructions from beneficial owners. However, brokers are precluded from exercising their voting discretion with respect to approval of non-routine matters, such as the approval of the Stock Purchase Agreement and the transactions contemplated thereby, and, as a result, absent specific instructions from the beneficial owner of such shares, brokers are not empowered to vote those shares, referred to generally as "broker non-votes." Broker non-votes, if any, will not be counted as voting power present for purposes of voting on either of the proposals. Broker non-votes will therefore have no effect on either of the proposals at the special meeting.

        No business may be transacted at the special meeting other than the proposal to approve the Stock Purchase Agreement and the transactions contemplated thereby and the proposal to adjourn the special meeting, if necessary or appropriate, for the purpose of soliciting additional proxies to vote in favor of the proposal to approve the Stock Purchase Agreement and the transactions contemplated thereby.

Voting over the Internet or by Telephone

        You also may grant a proxy to vote your shares over the Internet or by telephone. The Internet and telephone voting procedures described below are designed to authenticate stockholders' identities, to allow stockholders to grant a proxy to vote their shares and to confirm that stockholders' instructions have been

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recorded properly. Stockholders granting a proxy to vote over the Internet should understand that there may be costs associated with electronic access, such as usage charges from Internet access providers and telephone companies that must be borne by the stockholder.

For Shares of Activision Blizzard Common Stock Registered in Your Name

        Stockholders of record may go to http://www.cstproxyvote.com to grant a proxy to vote their shares over the Internet. Have your proxy card available when you access the web site and follow the instructions to obtain your records and to create an electronic voting instruction form. Any stockholder using a touch-tone telephone may also grant a proxy to vote shares by calling [(866)894-0537] and following the recorded instructions.

For Shares of Activision Blizzard Common Stock Registered in the Name of a Broker or Bank

        Most beneficial owners whose stock is held in street name receive instructions for authorizing votes by their banks, brokers or other agents, rather than from our proxy card.

        A number of brokers and banks are participating in a program that offers the means to authorize votes over the Internet and by telephone. If your shares are held in an account with a broker or bank participating in such a program, you may authorize a proxy to vote those shares over the Internet at the Internet URL specified on the instruction form received from your broker of bank, or by telephone by calling the telephone number shown on the instruction form received from your broker or bank.

General Information for All Shares Voted over the Internet or by Telephone

        Votes submitted over the Internet or by telephone must be received by 4:00 p.m., Pacific Time, on [    •    ] , 2013. Submitting your proxy over the Internet or by telephone will not affect your right to vote in person should you decide to attend the special meeting.

Revocability of Proxies

        The grant of a proxy on the enclosed proxy card or over the Internet or by telephone does not preclude a stockholder of record from voting in person at the special meeting. You may revoke your proxy at any time before the shares reflected on your proxy card are voted at the special meeting in any one of the following ways:

        Your most current proxy card or telephone or Internet proxy is the one that is counted. Please note that to be effective, your new proxy card, Internet or telephonic voting instructions or written notice of revocation must be received by the Corporate Secretary prior to the special meeting and, in the case of Internet or telephonic voting instructions, must be received before 4:00 p.m., Pacific Time, on [    •    ], 2013.

        If you have instructed your broker to vote your shares, you must follow the directions received from your broker to change these instructions.

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Solicitation of Proxies

        This proxy solicitation is being made and paid for by Activision Blizzard. In addition, we have retained [    •    ] , to assist in the solicitation. We will pay [    •    ] approximately [    •    ] for its assistance and reimburse them for their reasonable out-of-pocket expenses. Our directors, officers and employees also may solicit proxies by personal interview, mail, e-mail, telephone or facsimile. These persons will not be paid additional remuneration for their efforts. We also will request brokers and other custodians, nominees and fiduciaries to forward proxy solicitation material to the beneficial owners of shares of Activision Blizzard common stock that the brokers and other custodians, nominees and fiduciaries hold of record. We will reimburse them for their reasonable out-of-pocket expenses incurred in forwarding such material.

Delivery of this Proxy Statement to Multiple Stockholders with the Same Address

        The SEC has adopted rules that permit companies and intermediaries (e.g., brokers) to satisfy the delivery requirements for proxy statements and annual reports with respect to two or more stockholders sharing the same address by delivering a single proxy statement addressed to those stockholders. This process, which is commonly referred to as "householding," potentially means extra convenience for stockholders and cost savings for companies.

        A number of brokers with account holders who are Activision Blizzard's stockholders will be "householding" our proxy materials, so that a single proxy statement will be delivered to multiple stockholders sharing an address unless contrary instructions have been received from the affected stockholders. Once you have received notice from your broker that they will be "householding" communications to your address, "householding" will continue until you are notified otherwise or until you revoke your consent. If, at any time, you no longer wish to participate in "householding" and would prefer to receive a separate proxy statement, please notify your broker, or direct your request to our Investor Relations department at Activision Blizzard, Inc., 3100 Ocean Park Boulevard Santa Monica, California 90405 or (310) 255-2635. Upon written or oral request, we will promptly deliver a separate proxy to one or more stockholders at a shared address to which a single copy of the proxy statement was delivered. Stockholders who currently receive multiple copies of the proxy statement at their address and would like to request "householding" of their communications should contact their broker.

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THE STOCK PURCHASE AGREEMENT AND THE TRANSACTIONS CONTEMPLATED THEREBY

        The discussion of the Stock Purchase Agreement and the transactions contemplated thereby contained in this section summarizes the material terms of the Stock Purchase Agreement and the transactions contemplated thereby. Although we believe that the description covers the material terms of the transactions contemplated by the Stock Purchase Agreement, this summary may not contain all of the information that is important to you. For a more complete understanding of the Stock Purchase Agreement and the transactions contemplated thereby, we urge you to read carefully this proxy statement and the Stock Purchase Agreement, a copy of which is attached to this proxy statement as Annex A, and the other documents referred to herein (including the annexes).

Parties to the Transactions

        Activision Blizzard, a Delaware corporation, is a leading global developer and publisher of interactive entertainment. We publish online, personal computer, video game console, handheld, mobile and tablet games. We derive the vast majority of our operating income from internally developed, wholly owned properties. We have leading franchises across several major categories of the growing video game industry, making us the largest Western independent interactive entertainment publisher.

        Vivendi, a société anonyme organized under the laws of France, is a multimedia group that creates and publishes content for which it develops broadcast networks and distribution platforms. Vivendi combines a number of companies that are leaders in content and media: the French leader in pay-TV (Canal+ Group), the world leader in music (Universal Music Group) and the world leader in independent video game publishing (Activision Blizzard). In telecommunications, Vivendi operates the French leader in alternative telecoms (SFR), the Moroccan leader in telecoms (Maroc Telecom) and the leading alternative broadband operator in Brazil (GVT). As of September 20, 2013, Vivendi beneficially owns 683,643,890 shares of Activision Blizzard common stock, representing approximately 60.8% of the issued and outstanding shares of Activision Blizzard common stock.

        ASAC is an exempted limited partnership organized under the laws of the Cayman Islands. The General Partner of ASAC is ASAC II LLC, a Delaware limited liability company. Our CEO Robert A. Kotick and Co-Chairman of our board of directors Brian G. Kelly are the managers of the General Partner and each of them owns, through his affiliates, 50% of the membership interests of the General Partner. ASAC was formed for the limited purpose of acquiring, holding and disposing of shares of Activision Blizzard common stock to be purchased by it pursuant to the Stock Purchase Agreement.

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The Transactions

        The Stock Purchase Agreement provides for the Stock Purchase Transaction, in which the Company will purchase all of the capital stock of New VH, a wholly owned newly formed subsidiary of Vivendi, which at the time of the purchase will be the direct owner of 428,676,471 shares of Activision Blizzard common stock and which is contractually prohibited from conducting any operations, in consideration of a cash payment to Vivendi of $5,830,000,005.60, or $13.60 per share for the shares of Activision Blizzard common stock to be acquired by the Company. In addition, New VH has certain tax attributes that are expected to benefit the Company in the future. Immediately following the consummation of the Stock Purchase Transaction, the Stock Purchase Agreement provides for the Private Sale to ASAC of 171,968,042 shares of Activision Blizzard common stock owned by Vivendi, for an aggregate cash payment of $2,338,765,371.20, or $13.60 per share for the shares of Activision Blizzard common stock to be acquired by ASAC, provided that the number of shares to be acquired by ASAC may be reduced under certain circumstances as provided in the Stock Purchase Agreement. The Stock Purchase Transaction and the Private Sale are both required by the Stock Purchase Agreement to occur on the closing date.

        Prior to or concurrently with the closing of the Stock Purchase Transaction and the Private Sale, pursuant to the Stock Purchase Agreement, Vivendi will cause each of its current designees to our board of directors (i.e., Philippe G. H. Capron, Jean-Yves Charlier, Frédéric R. Crépin, Jean-François Dubos, Lucian Grainge and Régis Turrini) to resign his position as a director on our board of directors and all committees of our board of directors, effective as of the closing of the Stock Purchase Transaction and Private Sale, which will result in our board of directors consisting of a majority of independent directors.

Effect of the Transactions

        After giving effect to the Stock Purchase Transaction and the Private Sale, our outstanding share count is expected to be reduced by 428,676,471 shares of Activision Blizzard common stock, and based on the approximately 1,124 million shares of Activision Blizzard common stock issued and outstanding as of September 20, 2013, (i) our outstanding share count would be approximately 695 million shares of Activision Blizzard common stock, approximately 63.4% of which would be held by the public, (ii) Vivendi would hold approximately 83 million shares of Activision Blizzard common stock (the "Remaining Shares") or approximately 11.9% of our outstanding shares of common stock, and (iii) ASAC would hold 171,968,042 shares of Activision Blizzard common stock or approximately 24.7% of our outstanding shares of common stock. The shares of Activision Blizzard common stock acquired by the Company in the Stock Purchase Transaction will be treated as treasury shares for accounting and legal purposes.

        The Company's new capital structure upon consummation of the transactions contemplated by the Stock Purchase Agreement, which will include $1.4 billion of net debt, where net debt is calculated by subtracting the debt and fees to be incurred from cash and short-term investments at June 30, 2013, and a lower total outstanding share count, is expected to be accretive to earnings per share for our stockholders. The Company no longer will qualify as a "controlled company" under the NASDAQ Stock Market rules and will be required to meet the independence standards for independent public companies following the consummation of the transactions contemplated by the Stock Purchase Agreement, subject to a phase-in period. In addition, the Company expects to assume certain favorable tax attributes of New VH upon consummation of the transactions contemplated by the Stock Purchase Agreement. Other than as a stockholder of the Company, ASAC will not share in any of the benefits resulting from the Company's assumption of the tax attributes of New VH.

        The transactions contemplated by the Stock Purchase Agreement will not (or will be deemed not to) trigger any potential "change in control" payments, as Messrs. Kotick and Kelly have waived any relevant "change in control" or similar provisions under their respective employment arrangements and certain other benefit plans and arrangements in connection with these transactions (see "—Interests of the Company's Directors and Executive Officers in the Transactions"). Upon the consummation of the Stock

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Purchase Transaction, the six current directors designated by Vivendi on our board of directors will resign and Vivendi will agree to a customary standstill not to, among other things, acquire additional shares of Activision Blizzard common stock or seek representation on our board of directors other than at the request of our independent directors. Similarly, upon the consummation of the simultaneous Private Sale, ASAC will agree to a customary standstill not to, among other things, acquire additional shares of Activision Blizzard common stock, run a proxy contest or call a stockholders meeting, in each case until six months after its ownership in the Company falls below 5%. ASAC will not have any contractual right to designate directors to our board of directors.

Background of the Transactions

        In December 2007, Activision, Inc., a predecessor of Activision Blizzard, Vivendi and certain of their respective affiliates entered into a business combination agreement (the "Business Combination Agreement") pursuant to which the two companies combined their respective gaming businesses and Vivendi acquired approximately 358.3 million shares of the Company's common stock (which constituted 54.5% of the 657.8 million outstanding shares of the Company's common stock immediately following the closing of the transactions contemplated by the Business Combination Agreement) and the right to appoint a majority of the members of the Company's board of directors. As a result of these transactions, Activision Blizzard became a controlled subsidiary of Vivendi. In connection with Vivendi's investment in the Company, the Company and Vivendi entered into an Investor Agreement governing certain aspects of the relationship between the Company and Vivendi, and the Company's certificate of incorporation and bylaws were amended and restated to, among other things, give Vivendi certain rights with respect to the governance of the Company and to provide that certain actions by Vivendi would require the approval of the Company's unaffiliated stockholders and/or unaffiliated directors.

        As a result of a two-for-one stock split and, additional issuances of stock by the Company, net of open market repurchases by the Company, the Company currently has approximately 1,124 million outstanding shares of common stock. Vivendi purchased limited amounts of additional shares in 2008 through open market purchases and reduced its ownership in the Company in November 2011, through a sale in the market of 35 million shares of the Company's common stock. Vivendi currently owns approximately 683.6 million shares, representing approximately 60.8% of the Company's outstanding shares of common stock. Pursuant to the Company's Amended and Restated Certificate of Incorporation, Vivendi nominees constitute six of the 11 members of the Company's board of directors, and the Company's current board of directors includes Philippe G.H. Capron, Chief Financial Officer of Vivendi and the Chairman of the Company's board of directors, and five other employees of Vivendi or its subsidiaries.

        In April 2012, the Supervisory Board of Vivendi embarked on a strategic review of Vivendi's assets, including a review of its ownership in the Company. In June 2012, Vivendi's CEO informed Mr. Robert A. Kotick, the Company's President and Chief Executive Officer and a member of the Company's board of directors, that Vivendi would like Company management to explore alternatives with respect to Vivendi's investment in the Company, including a potential sale of its stake in the Company or a sale of the Company as a whole. During the summer of 2012, the Company engaged in a process to identify potential investors in, or potential acquirors of, the Company and the Company and Vivendi had preliminary discussions with a number of potential strategic and financial partners. However, these discussions did not proceed beyond a preliminary stage due to a lack of interest from third parties. During the summer and fall of 2012, there were numerous press reports regarding Vivendi's strategic review process, including speculation on Vivendi's plans with respect to the Company. In addition, in the summer of 2012, there were high level executive changes at Vivendi, which resulted in changes in the Company's board of directors as Vivendi designees changed. It was the view of the Company's management that Vivendi's strategic review, its decision to consider a sale of all or part of the Company, its financial condition and management changes were creating uncertainty for the Company and adversely affecting the Company's

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stock price, relationships with third parties, employee retention and recruitment, as well as distracting the Company's management from operating the business.

        In early December 2012, Mr. Capron informed Mr. Kotick that Vivendi planned at the next meeting of the Company's board of directors to recommend that the board of directors declare a potential one-time extraordinary cash dividend, to be paid pro rata to all Company stockholders, of approximately $3 billion that could be funded by cash on hand and new debt to be incurred by the Company. Mr. Kotick shared this information with the three independent members of the Company's board of directors, Robert J. Corti, Robert J. Morgado and Richard Sarnoff, each of whom subsequently received a call from Mr. Capron to similar effect. On December 12, 2012, the three independent board members sent a letter to Vivendi outlining the considerations that they believed would need to be evaluated in connection with any payment of an extraordinary cash dividend by the Company, and suggesting that the Company's full board of directors evaluate the potential extraordinary dividend by examining a range of factors, including the impact of such an extraordinary cash dividend on the Company's finances, strategic options, operations, growth, stock price, employee retention and recruitment and existing contractual arrangements, as well as an evaluation of alternatives that might result in greater value for all stockholders. On December 18, 2012, Vivendi responded in a letter to the three independent directors suggesting that the independent directors, Company management and Vivendi management meet in mid-January 2013 to discuss this topic.

        In early January 2013, the Company's management, together with the Company's financial advisor JP Morgan, reviewed Vivendi's proposal to pay an extraordinary dividend as well as the Company's overall capital allocation strategy. By January 2013, in light of, among other things, the uncertainty regarding the Company's future resulting from Vivendi's strategic review, the relatively flat stock price performance of the Company's common stock over a period of time during which the Company experienced positive financial results and the negative impact of Vivendi's sale of 35 million shares of the Company's common stock at a discount to the market price in November 2011, the Company's management and its advisors had developed a view that the controlling position of Vivendi had a depressive effect on the Company's stock price and limited the Company's strategic options. Because of these factors, as well as Vivendi's expressed interest in the Company taking affirmative actions to return capital to stockholders, such as through an extraordinary cash dividend, the Company's management believed that it would be in the interests of the Company and its stockholders to explore whether Vivendi would be interested in selling its entire stake in the Company to the Company and other investors. Vivendi management informed the Company's management that they would consider an offer for all of its shares of the Company's common stock at an attractive price, which they indicated should include a substantial premium to the current market price, but they also were considering other options, including the extraordinary cash dividend in the near term. No offers were made at this time.

        On January 16, 2013, the Company's management team, including Mr. Kotick and Mr. Brian G. Kelly, the Co-Chairman of the Company's board of directors, Mr. Dennis Durkin, the Company's CFO, Mr. Thomas Tippl, the Company's Chief Operating Officer and Mr. Chris Walther, the Company's Chief Legal Officer, the three independent members of the Company's board of directors, and the Company's financial advisor, JP Morgan, and legal advisor, Skadden, Arps, Slate, Meagher & Flom LLP ("Skadden"), met in New York with members of Vivendi management, including Mr. Capron, and Vivendi's financial advisor, Barclays Bank PLC ("Barclays"), and legal advisor, Gibson Dunn & Crutcher LLP ("Gibson Dunn"), to discuss the Company's capital structure and potential capital allocation alternatives, including the potential extraordinary cash dividend. At this meeting, the Company's management again raised the possibility of an acquisition of Vivendi's entire stake in the Company as an option to unlock stockholder value.

        Following that meeting, communications continued between Vivendi and the Company's management team regarding a timeline for implementation of potential capital allocation alternatives, including the potential extraordinary cash dividend. During this time, Mr. Kotick and Mr. Kelly began developing a proposal for a potential acquisition of Vivendi's shares of the Company's common stock by a combination

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of the Company and other equity investors, including a significant investment by Mr. Kotick and Mr. Kelly. The independent members of the Company's board of directors were informed of this effort and supported further exploration of potentially available alternatives to the extraordinary cash dividend that Vivendi was proposing.

        On January 29, 2013, Mr. Kotick and Mr. Kelly sent a letter to Vivendi proposing a potential acquisition of Vivendi's shares of the Company's common stock by a combination of the Company and other equity investors, including Mr. Kotick and Mr. Kelly, for a purchase price of $9 billion in the aggregate, or $13.15 per share, in a transaction that would involve the Company raising a maximum of between $4 billion and $5 billion of indebtedness which together with cash on hand could finance the acquisition of shares by it and would be in lieu of the payment of an extraordinary cash dividend. The proposed $13.15 per share purchase price represented a premium of approximately 15% to the closing price of a share of the Company's common stock of $11.42 on January 29, 2013. In light of direction from Vivendi that Vivendi would be interested only in a transaction that involved a sale of Vivendi's entire stake in the Company and their view of the Company's debt capacity, Mr. Kotick and Mr. Kelly proposed that new equity investors, along with Mr. Kotick and Mr. Kelly, would purchase the shares of the Company's common stock held by Vivendi in excess of those that the Company determined to purchase. Mr. Kotick and Mr. Kelly believed that, if they personally committed to make significant equity contributions, they could attract a small group of long-term investors to form an investment entity to purchase the balance of Vivendi's stake. On February 6, 2013, Vivendi requested a more formal proposal with further information, including with regard to Mr. Kotick's and Mr. Kelly's co-investors, as well as the banks and other financing sources they would expect to involve in the proposed transaction.

        On February 14, 2013, Mr. Kotick and Mr. Kelly, on behalf of an investment entity to be led by them (which was later formed as ASAC), sent a letter to Vivendi, with a copy to the Company's full board of directors, reconfirming its willingness to explore an acquisition of all of the shares of the Company's common stock held by Vivendi for a purchase price of $9 billion in the aggregate, or $13.15 per share. The letter contemplated that the Company would repurchase approximately $6.0 billion of the shares of the Company's common stock held by Vivendi, to be financed through the issuance of approximately $4.7 billion of debt and $1.3 billion of domestic cash on hand, and that ASAC would be responsible for the purchase of the remaining $3 billion of Vivendi's stake (or approximately 33% of the Company's outstanding common stock, on a pro forma basis for the transaction). The letter attached a "highly confident" letter from a bank in respect of its ability to provide debt financing to the Company of up to an aggregate of $4.7 billion and a letter from an investment firm, which indicated an interest in making an investment in ASAC of up to $1 billion in connection with the potential transaction. The letter specified that any transaction would be subject to approval by a special committee of the independent and unaffiliated members of the Company's board of directors.

        Following the regular meeting of the Company's board of directors on February 7, 2013, the Company's earnings release included a statement that the Company was considering or may consider in 2013, substantial stock repurchases, dividends, acquisitions, licensing or other non-ordinary course transactions, and significant debt financings relating thereto.

        On February 28, 2013, at a special telephonic meeting of the Company's board of directors, the board authorized the formation of the special committee consisting of Mr. Corti, Mr. Morgado and Mr. Sarnoff in connection with the evaluation of a potential transaction between the Company, Vivendi and/or other potential investors that could affect the percentage of the Company's common stock owned by Vivendi.

        In early March 2013, the special committee engaged Centerview as its financial advisor and Wachtell, Lipton, Rosen & Katz ("Wachtell Lipton") as its legal advisor. Also in early March 2013, Vivendi emailed Mr. Kotick an illustrative potential transaction structure proposed by Vivendi, which contemplated that the Company would effect a repurchase of its shares by acquiring a wholly owned and newly formed,

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non-operating Vivendi subsidiary that would own the shares of the Company's common stock, in order to maximize the tax efficiency to Vivendi of a potential transaction.

        In the following weeks, the special committee and Vivendi, and the special committee and ASAC, and their respective advisors, spoke frequently to negotiate the proposed transaction terms. The special committee and Vivendi, and the special committee and ASAC, exchanged multiple drafts of term sheets setting forth proposed transaction terms.

        The special committee held telephonic meetings on March 12, 2013, with representatives of Wachtell Lipton and on March 18, 2013 with representatives of Wachtell Lipton and Centerview in order to discuss the special committee's evaluation of a potential transaction.

        On March 21, 2013, in response to the special committee's request for additional details with respect to ASAC's proposal regarding the purchase of the shares of the Company's common stock held by Vivendi, the special committee received a term sheet from ASAC summarizing ASAC's proposed capitalization, including the structure of its equity investments and the terms of its debt financing. Later in the day on March 21, 2013, the special committee held a telephonic meeting attended by representatives of Wachtell Lipton and Centerview, during, which, at the invitation of the special committee, Mr. Kelly and Mr. Kotick described their efforts in identifying potential investors in ASAC. The special committee informed Mr. Kelly and Mr. Kotick that the special committee would continue to oversee all aspects of a potential transaction during the negotiation process. Following the meeting, at the direction of the special committee, representatives of Centerview communicated the special committee's initial comments on the draft ASAC transaction term sheet to representatives of ASAC's financial advisor, Allen & Co. LLC ("Allen & Co.").

        On March 22, 2013, the special committee held a telephonic meeting attended by representatives of Wachtell Lipton and Centerview in order to further discuss the draft transaction term sheet received from ASAC. On March 25, 2013, the special committee communicated further comments on the draft transaction term sheet to ASAC and its legal advisor, Sullivan & Cromwell LLP ("Sullivan & Cromwell"), and Allen & Co. These comments set out certain principles that the special committee intended to use in their evaluation of potential transactions, including the goal of minimizing the price which the Company might pay to acquire its shares from Vivendi, the desire to avoid creating a new controlling stockholder of the Company and of carefully considering the identity of any new significant stockholders, the need to appropriately structure the Company's balance sheet and leverage, the goal of achieving the lowest cost funding possible, and the need to align the incentives of the Company's management team with the Company, including with respect to compensation matters and ensuring that no change of control or bonus payments for any member of the Company's management would be triggered by the transaction or used to fund the ASAC purchase.

        In late March 2013, Vivendi advised the special committee that it had hired another financial advisor, Goldman Sachs & Co. ("Goldman") to assist it in connection with any potential transaction related to a disposition of Vivendi's interest in the Company.

        On March 27, 2013, Vivendi, through Gibson Dunn, sent the special committee an updated draft of a proposed transaction structure, which contemplated that the Company would effect a repurchase of its shares by acquiring a newly formed, non-operating Vivendi subsidiary that would own only shares of the Company's common stock. The proposal did not include a contemplated purchase price or transaction size.

        On March 29, 2013, the special committee held a telephonic meeting attended by representatives of Wachtell Lipton and Centerview in order to discuss the special committee's evaluation of a potential transaction, including the potential for a secondary sale by Vivendi of a significant portion of its shares of the Company's common stock, in conjunction with or instead of a purchase by ASAC, and the benefits and detriments of the various options available to the Company. The special committee further discussed the benefits and detriments of various transaction structures, including financial, governance, tax and market

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effects, at a meeting in New York on April 3, 2013, and at telephonic meetings on April 12, 2013 and April 19, 2013, each of which was attended by representatives of Wachtell Lipton and Centerview. During this period, Centerview had several discussions with the Company's management in order to gather information relevant to evaluating the Company's leverage capacity and capital structure, including the Company's likely ratings levels, in connection with a potential transaction, and discussed such information with the special committee. At these meetings, the special committee discussed with its advisors, including Centerview, analyses of appropriate pricing for a share repurchase, the amount of debt that the Company could reasonably support, the Company's available cash, and the resulting implication for the maximum amount of shares that the Company could repurchase from Vivendi. As part of these discussions, the special committee and its advisors evaluated the implications of Vivendi either retaining the remainder of its shares in excess of what the Company acquired through its acquisition of a newly formed, non-operating Vivendi subsidiary owning Company shares (either with or without a commitment to dispose of such shares in open market sale transactions), or of selling all or a portion of those shares to ASAC in order to effect the disposition of a larger portion of Vivendi's stake in a single transaction.

        During this time the Company's management, including Mr. Kotick and Mr. Kelly, and their advisors discussed with the members of the special committee and their advisors their view that a secondary sale of approximately $3 billion of shares of the Company's common stock by Vivendi would have a potentially immediate and on-going depressive effect on the price of the Company's common stock, create a significant overhang and involve execution risk given its size. This view was, in part, formed as a result of the disruptive impact they believed Vivendi's sale of 35 million shares of the Company's common stock in November 2011 (which was a sale a fraction of the size contemplated by the $3 billion sale) had had on the Company's stock price. Mr. Kotick and Mr. Kelly informed the special committee that the Company's management had been informed by analysts and investors that the threat of another similar sale by Vivendi could put downward pressure and an overhang on the Company's stock price for an extended period of time after the sale. Moreover, Mr. Kotick and Mr. Kelly noted their belief that if such a disruptive capital markets scenario occurred it could have negative impacts on the Company's business operations, third-party relationships and the recruiting, retention and morale of employees. In addition, if a secondary sale was pursued and not completed on a timely basis, Mr. Kotick and Mr. Kelly believed it could create ongoing uncertainty that could contribute to a stagnant stock price as had been previously experienced despite positive financial results.

        On April 29, 2013, the special committee held a telephonic meeting attended by representatives of Wachtell Lipton and Centerview. The special committee discussed with its advisors, including Centerview, among other things, the Company's leverage capacity and capital structure, likely financing costs, and related issues regarding the size, price and structure of a potential transaction. The special committee directed Wachtell Lipton and Centerview to prepare a letter to Vivendi stating that the special committee was prepared to move forward with the negotiation of a purchase by the Company of a newly formed, non-operating Vivendi subsidiary owning Company shares and which possessed tax net operating loss carryforwards that the Company would succeed to for up to $5.9 billion, which was the maximum purchase size that the special committee was then prepared to recommend and which corresponded to a price of $13.15 per share of the Company's common stock (which on the preceding trading day had closed at a price per share of $14.82), subject to agreement on terms related to the remainder of Vivendi's holdings of the Company's common stock, including that all of Vivendi's special governance rights would be eliminated. The special committee agreed to condition the proposal on an agreement by Vivendi to deal with the remainder of its holdings of the Company's common stock by either (1) simultaneously selling all or a substantial majority of such retained shares in a public offering, with an agreement to eliminate Vivendi's governance rights with respect to any retained shares, (2) simultaneously selling all or a substantial majority of the remaining shares to ASAC, in a transaction in which the special committee and ASAC agreed to certain governance restrictions applicable to ASAC following closing, or (3) retaining the shares subject to certain governance restrictions, including voting requirements and a standstill. In addition, the special committee directed Wachtell Lipton and Centerview to prepare a summary of the

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special committee's position on certain governance-related items with respect to a potential investment by ASAC which could be shared with ASAC and its advisors.

        On April 30, 2013, the special committee held a telephonic meeting attended by representatives of Wachtell Lipton and Centerview in order to further discuss the proposed letter to Vivendi. Later on April 30, 2013, the special committee sent the letter to Vivendi proposing a transaction on the terms described above, a copy of which was delivered to ASAC.

        On May 2, 2013, the special committee held a telephonic meeting attended by representatives of Wachtell Lipton and Centerview. The members of the special committee discussed with their advisors certain governance-related items with respect to the potential participation by ASAC in a potential transaction, with the goal of ensuring that any transaction not create a new controlling stockholder of the Company.

        Later in the day on May 2, 2013, Vivendi sent a term sheet for a potential transaction to the special committee proposing a purchase price corresponding to $15 per share of the Company's common stock and a total transaction size of $6.5 billion consisting entirely of a purchase by the Company of a newly formed, non-operating Vivendi subsidiary owning Company shares, which would be followed by a large secondary public sale by Vivendi of the remainder of its shares. Subsequently on May 2, 2013, the special committee held a telephonic meeting attended by representatives of Wachtell Lipton and Centerview in order to discuss the terms proposed by Vivendi. Following the meeting, at the request of the special committee, Wachtell Lipton and Centerview informed Vivendi's representatives that the special committee was not prepared to discuss a price in excess of $13.15 per share at that time, and informed ASAC's advisors of the receipt of the proposal from Vivendi and requested that, if ASAC intended to submit a proposal to the special committee, assuming that the special committee reached agreement with Vivendi, that they do so as soon as possible. Also on May 2, 2013, the special committee sent a letter to ASAC stating that the special committee remained open to exploring a transaction involving ASAC, subject to negotiation of agreeable terms, and enclosing a term sheet setting forth the special committee's proposed governance framework applicable to ASAC in connection with a potential transaction consistent with the March 25, 2013 communication. The term sheet provided for a standstill period that would last for six months after ASAC and its investors collectively ceased to be a 5% stockholder of the Company, an 18-month lockup period, and a requirement that ASAC vote all of its shares of the Company's common stock either proportionately with the Company's unaffiliated stockholders or in accordance with the recommendation of the unaffiliated members of the Company's board of directors. In addition, the term sheet provided that ASAC would have the right to designate only two members of the Company's board of directors, who would generally be Mr. Kotick and Mr. Kelly until such time as they ceased to be on the board, and provided that no change of control or bonus payments for any member of the Company's management would be triggered by the transaction or used to fund the ASAC purchase.

        On May 3, 2013, ASAC sent the special committee a revised draft of the term sheet setting forth the governance terms related to a potential ASAC investment as part of the potential transaction. The ASAC term sheet eliminated restrictions on ASAC's voting rights, the lockup period and ASAC's board designation rights, and provided that the standstill period would be measured solely against ASAC's economic ownership (excluding any shares owned directly by ASAC's investors). ASAC communicated that its investors did not believe that ASACs voting rights should be curtailed, but did not require any board representation and were willing to accept a standstill applicable to ASAC.

        On May 3, 2013, Gibson Dunn and Wachtell Lipton discussed the special committee's April 30 letter to Vivendi and Vivendi's May 2, 2013 term sheet, including Vivendi's interest in structuring a two step transaction, the first step of which would be the sale of a newly formed, non-operating Vivendi subsidiary owning shares of the Company's common stock to the Company with the remainder of Vivendi's approximately 251 million Company shares to be sold in the open market in subsequent transactions as the second step. Wachtell Lipton and Gibson Dunn also discussed potential additional restrictions on Vivendi's

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governance rights that would take effect on consummation of the first step, Vivendi's concern regarding certainty of the Company's financing, and whether Vivendi was still considering a transaction involving ASAC. Gibson Dunn noted that although Vivendi would welcome an ASAC transaction, it had received no communications from ASAC or its advisers since the February 14, 2013 letter from ASAC, which did not propose a price that Vivendi would accept. In addition, Vivendi was concerned about ASAC's ability to timely obtain sufficient financing.

        On May 4, 2013, the special committee held a telephonic meeting attended by representatives of Wachtell Lipton and Centerview, at which the special committee discussed communications from ASAC's advisors that ASAC intended to submit a formal proposal to acquire $3 billion of the Company's common stock currently held by Vivendi at a price of $13.15 per share, as well as tax and governance aspects of a potential transaction. On May 5, 2013, ASAC sent a letter to the special committee confirming ASAC's proposal to acquire shares of the Company's common stock from Vivendi at a price of $13.15 per share in connection with an approximately $5.9 billion purchase by the Company of a newly formed, non-operating Vivendi subsidiary owning shares of the Company's common stock.

        On May 4, 2013, Barclays and Goldman, Vivendi's financial advisors, discussed the May 2, 2013 Vivendi term sheet with Centerview. Barclays, Goldman Sachs and Centerview (at the direction of the special committee) discussed among other issues their respective views related to the appropriate amount of debt that could be incurred by the Company in order to consummate the contemplated transaction, and the timing of any Company financing.

        On May 6, 2013, members of the special committee met with Mr. Kelly, Mr. Kotick and Mr. Capron to discuss issues related to a potential transaction. The special committee heard Mr. Kotick's and Mr. Kelly's view on various transaction issues, including governance issues. Mr. Capron noted to the special committee that Vivendi continued to consider multiple alternatives with respect to its ownership of the Company's common stock, and remained open to the idea that if no satisfactory agreement could be reached on a transaction in which the Company acquired shares of the Company's common stock from Vivendi, that the Company could issue a substantial extraordinary cash dividend pro rata to all stockholders. The special committee noted that a substantial extraordinary cash dividend would still leave Vivendi with majority ownership of the Company, and the ability to sell shares of the Company's common stock through both open market sales and private sales to third parties.

        Later in the day on May 6, 2013, the special committee held a telephonic meeting attended by representatives of Wachtell Lipton and Centerview. The members of the special committee noted the views of the Company's management and advisors that the stockholder value delivered by a potential extraordinary cash dividend would be less than a transaction in which the Company acquired its stock from Vivendi, and discussed with its advisors the significant drawbacks of the dividend, including the incurrence of debt by the Company, the governance and strategic implications of leaving Vivendi in place as a controlling stockholder, the possibility that large open market sales by Vivendi would depress the share price and other issues related to the potential transaction, including the special committee's desire that any potential transaction substantially eliminate Vivendi's governance rights with respect to the Company and avoid creating a new controlling stockholder.

        On May 7, 2013, at the request of the special committee, representatives of Centerview met with Mr. Kotick in order to discuss potential transaction structures and the Company's capital structure. Later in the day on May 7, 2013, the special committee held a telephonic meeting attended by representatives of Wachtell Lipton and Centerview. At this meeting, representatives of Centerview updated the members of the special committee on the discussion with Mr. Kotick, and the members of the special committee discussed issues related to the potential transaction with their advisors. The special committee instructed Wachtell Lipton and Centerview to continue discussions with ASAC and its advisors relating to the structure of a potential transaction, including governance-related issues. Following the meeting, Wachtell Lipton sent a revised term sheet with a proposed governance framework in connection with the potential

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transaction to Sullivan & Cromwell. The revised term sheet proposed that the lockup would be extended to ASAC's investors, an 18-month lockup period, and a requirement for ASAC to vote all of its shares of the Company's common stock in excess of 9.9% of the outstanding shares either proportionately with the Company's unaffiliated stockholders or in accordance with the recommendation of the unaffiliated members of the Company's board of directors.

        On May 9, 2013, Mr. Kotick and Mr. Kelly sent a letter to the members of the special committee stating that ASAC was prepared to purchase approximately 228 million shares of the Company's common stock from Vivendi at a price of $13.15 per share as part of a transaction involving the acquisition of approximately $6 billion worth of the Company's common stock by the Company from Vivendi at the same price. The letter enclosed a revised proposed governance term sheet which removed the standstill restrictions on ASAC's investors, reduced the lockup period to six months, and eliminated all voting restrictions applicable to ASAC's holdings of the Company's common stock.

        On May 10, 2013, the special committee held a telephonic meeting attended by representatives of Wachtell Lipton and Centerview. At this meeting, members of the special committee discussed additional feedback from Vivendi indicating that the proposed purchase price of $13.15 per share was not attractive to Vivendi. The special committee also discussed reducing Vivendi's ownership stake further through an ASAC purchase or public secondary sale and other issues relating to the potential transaction, and the benefits and detriments of such transactions. The members of the special committee instructed Wachtell Lipton and Centerview to inform ASAC's advisors that the special committee was willing to support a potential purchase by ASAC from Vivendi at a price of $13.15 per share, subject to agreement between the special committee and ASAC on governance terms to ensure ASAC would not become a new controlling stockholder.

        On May 12, 2013, Wachtell Lipton sent Gibson Dunn a revised term sheet for the potential transaction, with terms including a proposed purchase price of $13.15 per share. On May 13, 2013, Gibson Dunn sent Wachtell Lipton a further revised term sheet for the potential transaction, which addressed ancillary terms, but reserved on the issue of purchase price. In a call between Gibson Dunn and Wachtell Lipton on May 13, 2013, Gibson Dunn noted that Vivendi wanted certainty in any transaction structure that the stock purchase transaction could be consummated shortly after execution of a binding agreement. As a result, Vivendi's term sheet contemplated that the Company would have all financing required to complete the transaction in place at the time a definitive agreement was entered into between the Company and Vivendi. Gibson Dunn further noted that Vivendi had received no communication from ASAC since the February 14, 2013 ASAC letter and remained concerned that a sale of shares of the Company's common stock to ASAC would not be possible within the same time frame as a sale to the Company.

        On May 14, 2013, the special committee held a telephonic meeting attended by representatives of Wachtell Lipton and Centerview, at which the special committee instructed Wachtell Lipton and Centerview to continue to negotiate with ASAC's advisors with respect to the potential governance terms of a potential transaction. Also on May 14, 2013, ASAC sent a letter to Vivendi proposing ASAC's participation in their previously proposed transaction at a price of $13.15 per share.

        On May 15, 2013, Vivendi sent a letter replying to ASAC and stating that Vivendi remained unwilling to pursue a transaction at $13.15 per share. Subsequently on May 15, 2013, the special committee held a telephonic meeting attended by representatives of Wachtell Lipton and Centerview to discuss the ongoing discussions between Vivendi and ASAC and the ability to reach agreement on a potential transaction.

        On May 16, 2013, Vivendi sent a letter to the members of the special committee reiterating Vivendi's position that $13.15 per share was an inadequate price, particularly in light of the fact that that price represented a substantial discount to recent market price for the Company's common stock, and noting that Vivendi believed it would be able to execute a secondary public offering for the portion of the Company's common stock held by Vivendi and not sold to the Company as part of a potential transaction

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and therefore that ASAC's participation in a transaction was not necessary. Subsequently, representatives of Centerview and Goldman, had a telephonic discussion in which Goldman stated that Vivendi continued to believe that the declaration of an extraordinary cash dividend pro rata to all stockholders was a good alternative if a deal could not be reached for a potential acquisition of Company shares from Vivendi in a satisfactory timeframe.

        On May 19, 2013, the special committee held a telephonic meeting attended by representatives of Wachtell Lipton and Centerview. At this meeting, the special committee discussed the letter received from Vivendi, the drawbacks of an extraordinary cash dividend relative to the transactions under discussion and other issues related to the potential transaction. Following discussion, the special committee determined to propose a purchase price of $5.9 billion, corresponding to a price per share of $13.45 (an approximately 10% discount to the $14.94 closing price of the Company's common stock on May 17, 2013), subject to the Company acquiring a minimum of $675 million in net operating loss carryforwards from Vivendi as part of the potential transaction and subject to mutual agreement on the treatment of Vivendi's remaining shares of the Company's common stock. Following the meeting, the special committee sent a letter to this effect to Vivendi. On May 20, 2013, the special committee held a telephonic meeting attended by representatives of Wachtell Lipton and Centerview, at which it reviewed updates to the Company's strategic projects and discussed further the potential transaction.

        On May 21, 2013, Vivendi sent a letter to the members of the special committee proposing a purchase price of $14.40 per share and encouraging the special committee to consider alternative transaction structures that would include a significant secondary public sale of its shares, in order to permit Vivendi to benefit from an expected increase in the Company's stock price as a result of the purchase by the Company of a substantial number of its shares. Later in the day on May 21, 2013, the special committee held a telephonic meeting attended by representatives of Wachtell Lipton and Centerview to discuss the letter from Vivendi and other issues related to the potential transaction. Following the meeting, at the request of the special committee, Wachtell Lipton and Centerview informed Vivendi's advisors that the special committee was not prepared to proceed with a transaction at a price in excess of $13.45 per share at that time, or on terms other than those previously communicated to Vivendi.

        On May 24, 2013, Mr. Corti spoke to Mr. Capron regarding the potential transaction, including purchase price, treatment of Vivendi's retained shares of the Company's common stock, and the potential participation of ASAC in the transaction. Mr. Capron reiterated that Vivendi was prepared to pursue alternative actions with respect to its ownership in the Company if an agreement for a transaction was not reached on an acceptable timetable.

        On May 25, 2013, the special committee held a telephonic meeting attended by representatives of Wachtell Lipton and Centerview, at which the special committee discussed, among other things, Mr. Capron's position and the advisability of including ASAC in a potential transaction if possible, given the assessment of the Company's management as to the feasibility and market impact of any disposition by Vivendi of its shares of the Company through market sales. The special committee also discussed potential benefits and detriments of including ASAC in a potential transaction and structural protections to limit ASAC from becoming a controlling stockholder of the Company, and as a result determined to condition the special committee's proposal on a limitation in the amount of ASAC's participation. As part of this discussion, the special committee noted that ASAC's investors including Mr. Kotick and Mr. Kelly along with high-quality institutional investors and other parties could send positive signals to the stock market through their investment in and commitment to the Company. Following this discussion, the members of the special committee determined to inform Vivendi and ASAC that the special committee was willing to proceed with a potential transaction at a price of up to $13.60 per share and in which ASAC purchased no more than 24.9% of the Company's outstanding common stock, on a pro forma basis for the transaction, subject to the Company succeeding to a minimum of $675 million in net operating loss carryforwards of the newly formed, non-operating Vivendi subsidiary to be acquired by the Company as part of the potential transaction.

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        On May 26, 2013, the special committee held a telephonic meeting attended by representatives of Wachtell Lipton and Centerview. At this meeting, the special committee and its advisors continued to discuss the potential terms discussed at the prior meeting, and determined to contact ASAC to discuss whether they might be prepared to make a joint proposal to Vivendi in order to advance the progress of negotiations.

        On May 27, 2013, Mr. Morgado spoke with Mr. Kelly to determine whether ASAC might be supportive of making a "best and final" joint proposal to Vivendi at a price of $13.60 per share in a transaction in which ASAC would acquire up to 24.9% of the Company's outstanding common stock, on a pro forma basis for the transaction and that any tax benefits derived from the net operating loss carryforwards from such transaction would be to the benefit of the Company and would not result in any benefit to ASAC other than as a holder of the Company's common stock. Mr. Kelly requested additional time to consider this proposal. The special committee held a telephonic meeting on May 28, 2013, attended by representatives of Wachtell Lipton and Centerview, to receive an update on this discussion.

        On May 29, 2013, Mr. Corti informed Mr. Capron that the special committee was prepared to recommend a transaction in which the Company and ASAC would collectively acquire up to 600 million shares of the Company's common stock from Vivendi (through the acquisition of a newly formed, non-operating Vivendi subsidiary owning Company shares in the case of the Company and directly from Vivendi in the case of ASAC) at a price of $13.60 per share, assuming satisfactory resolution of the questions relating to the net operating loss carryforwards of the Vivendi subsidiary to be acquired and an agreement on the terms applicable to the shares retained by Vivendi. Mr. Corti further informed Mr. Capron that this represented the special committee's "best and final" offer, and that the special committee intended to propose the disbanding of the committee if an agreement could not be reached on those terms due to the belief that further discussion would not be productive. Mr. Capron informed Mr. Corti that Vivendi was unwilling to pursue a transaction involving ASAC given that ASAC had not agreed to increase its price above $13.15 per share, ASAC's inability to provide comfort on the certainty of its financing sources, Vivendi's concerns that including ASAC would delay any transaction, and the fact that such a sale would result in materially lower proceeds to Vivendi than a second step sale of Vivendi's remaining shares of the Company's common stock in the market. Mr. Corti and Mr. Capron discussed holding a meeting between the special committee, Vivendi and their respective advisors on May 30, 2013.

        Later on May 29, 2013, the special committee held two telephonic meetings attended by representatives of Wachtell Lipton and Centerview to discuss Vivendi's position. The special committee determined to meet with Mr. Capron the following day, as proposed by Vivendi. In addition, on May 29, 2013, Mr. Morgado spoke to Mr. Kotick and Mr. Kelly, and was informed that ASAC would be willing to proceed with a transaction at a price of $13.60 per share, subject to an agreement on terms related to governance and restrictions on Vivendi's sale of its remaining shares of the Company's common stock to minimize the possibility that the sale of those shares would adversely affect the price of the Company's shares.

        On May 30, 2013, the special committee held a meeting in New York attended by representatives of Wachtell Lipton and Centerview in order to prepare for the scheduled meeting with Vivendi and its representatives. Following discussion, the special committee determined to inform Vivendi that they believed it was important that ASAC participate in a potential transaction because ASAC's participation would permit a greater reduction of Vivendi's stake than the Company would be able to achieve on its own without taking on an inadvisable degree of leverage or Vivendi engaging in significant secondary public stock sales. The special committee remained prepared to recommend a transaction at a price of $13.60 per share, subject to satisfactory resolution of questions relating to the net operating loss carryforwards of the Vivendi subsidiary to be acquired.

        The members of the special committee subsequently met with Mr. Capron and other representatives of Vivendi in New York. At this meeting, Vivendi informed the special committee that it was willing to

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consider either a transaction in which all of its shares of the Company's common stock were acquired by a combination of the Company and ASAC at a blended price of $14.00 per share, a transaction in which up to approximately $6.4 billion worth of the Company's common stock was acquired at a price of $13.60 per share, or to proceed with causing an extraordinary cash dividend to be paid by the Company. Vivendi also indicated that it believed a sizable stock or stock option grant to each of Mr. Kotick and Mr. Kelly might be appropriate in connection with a transaction in which ASAC did not participate to ensure that management was strongly aligned with stockholders' interests post-transaction. The special committee indicated that it remained prepared to recommend a transaction at a price of $13.60 per share, subject to the resolution of open questions regarding the aggregate purchase price to be paid by the Company and the second step relating to an additional disposition of shares by Vivendi, either through a sale to ASAC or through a substantial public stock sale of Vivendi's holdings. The special committee and Vivendi tentatively agreed to continue discussions the next day in New York.

        Following the meeting with Vivendi, the members of the special committee discussed Vivendi's proposed terms with Mr. Kelly, who indicated that ASAC would not be supportive of a transaction at a price of $14 per share, or in a transaction that contemplated Vivendi's public offering of a significant amount of the Company's common stock, due to a belief that this would again depress the Company's stock price and counteract the substantial benefits of the recapitalization accomplished by the Company's acquisition of Vivendi's shares. Following discussion, including further discussion of the special committee's views on the desire to reduce Vivendi's holdings as much as possible and the potential paths to do so, the special committee determined to inform Vivendi that it believed the only actionable transaction before the Company was a purchase by the Company of approximately $5.6 billion worth of the Company's common stock and a purchase by ASAC of approximately 24.9% of the Company's outstanding common stock on a pro forma basis, in each case at a price of $13.60 per share and subject to satisfactory resolution of the transaction structure related to the net operating loss carryforwards. Following the special committee meeting, a letter communicating this position was drafted and shared with the members of the special committee, and subsequently with ASAC.

        On May 31, 2013, Mr. Kelly and Mr. Kotick informed the special committee that ASAC was not supportive of a transaction on the proposed terms. During the day on May 31, 2013, the special committee held two telephonic meetings attended by representatives of Wachtell Lipton and Centerview to discuss the comments received from ASAC and their advisors and the proposed response to Vivendi. Following discussion, the special committee determined to inform Vivendi that the special committee was unable to propose terms that it believed would be actionable by the Company at this time, but remained willing to continue discussions if Vivendi were able to make such a proposal following discussions directly with ASAC. The special committee sent a letter to Vivendi to this effect, and forwarded a copy of this letter to ASAC.

        On June 2, 2013, Vivendi sent a letter to the members of the special committee indicating that Vivendi continued to believe that a purchase by the Company of a substantial block of its shares of the Company's common stock would be extremely beneficial to all Company stockholders and noting that Vivendi was willing to consider reasonable alterations to the proposed terms that the special committee or management might view as necessary. The letter also noted that Vivendi was committed to completing a transaction or another value enhancing transaction for Company stockholders (including a pro rata extraordinary cash dividend to all stockholders), in the near future. Vivendi requested that the special committee either reconsider the terms proposed by Vivendi or propose revised terms for a potential transaction for the benefit of all stockholders.

        On June 5, 2013, the special committee held a telephonic meeting attended by representatives of Wachtell Lipton and Centerview in order to discuss the letter from Vivendi, but continued to believe that no actionable transaction was available to the Company, due to the need for both Vivendi and ASAC to agree on transaction terms, including price and the treatment of Vivendi's remaining shares of the

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Company's common stock, and that therefore the most appropriate course was not to respond to the letter at this time.

        On June 6, 2013, the Company's board of directors held a regularly scheduled meeting in California. At this meeting, following a discussion of the status of the transaction negotiations, the board voted to disband the special committee because no agreement among the parties had been reached.

        On June 19, 2013, in response to the special committee's May 31, 2013 letter and at the invitation of a representative of Goldman (at the instruction of Vivendi), Mr. Kelly met with Goldman in New York to discuss whether there was a basis on which to resume negotiations. Over the following weeks, Mr. Kelly exchanged drafts of a term sheet with Goldman summarizing the key terms of a potential transaction, subject to further discussion relating to the net operating loss carryforwards of the subsidiary of Vivendi to be acquired by the Company.

        On July 9, 2013, the Company received a draft term sheet from ASAC and Vivendi for a potential transaction, providing for a purchase by ASAC from Vivendi of 172 million shares of common stock at a price of $13.60 per share (an approximately 10% discount to the $14.89 closing price for the Company's common stock on July 9, 2013), and the purchase by the Company of a newly formed, non-operating subsidiary of Vivendi owning 429 million shares of the Company's common stock and possessing at least $676 million in net operating loss carryforwards at a price of $13.60 per share (structured as the purchase of 100% of the common stock of the Vivendi subsidiary with assets consisting of approximately 684 million shares of the Company's common stock and the net operating loss carryforwards for an aggregate purchase price of $5.8 billion in cash and 255 million newly issued shares of the Company's common stock). Vivendi and ASAC requested that the special committee be reconstituted to evaluate such proposed transaction terms.

        On July 9, 2013, the members of the special committee held a telephonic meeting attended by representatives of Wachtell Lipton and Centerview to discuss the revised proposal received from ASAC and Vivendi and concluded that it was a viable basis for discussions, in part due to the substantial similarity of the proposal to the terms previously proposed by the special committee to Vivendi on May 30. However, the members of the special committee continued to have concerns about the governance terms applicable to ASAC, which were not addressed in the proposal, indemnification relating to the ability of the Company to succeed to the net operating loss carryforwards, and whether the Company and/or ASAC would have the benefit of a financing condition. The members of the special committee directed Centerview and Wachtell Lipton to engage in negotiations with Vivendi and ASAC's advisors on these and other matters. The members of the special committee also discussed its formal reconstitution.

        On July 11, 2013, pursuant to a unanimous written consent, the Company's board of directors formally reconstituted the special committee.

        On July 12, 2013, Gibson Dunn sent a draft Stock Purchase Agreement to the special committee and to ASAC. Over the next two weeks, the parties and their advisors negotiated the terms of the transaction and exchanged multiple drafts of the transaction documents.

        On July 13, 2013, Wachtell Lipton sent a revised draft of the governance term sheet to Sullivan & Cromwell. The revised draft proposed that the standstill would be applicable to both ASAC and its investors, subject to certain exceptions, a 12-month lockup period, and that ASAC would be required to vote all of its shares of the Company's common stock either proportionately with the Company's unaffiliated stockholders or in accordance with the recommendation of the unaffiliated members of the Company's board of directors on certain matters in which ASAC might be perceived to have conflicting interests.

        On July 14, 2013, Gibson Dunn sent Wachtell Lipton a proposed draft of an Amended and Restated Investor Agreement between Vivendi and the Company, which would be applicable following the closing of the proposed transaction and which would generally eliminate or greatly reduce Vivendi's governance

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rights with respect to its retained shares. On July 15, 2013, ASAC sent the special committee the current drafts of ASAC's constitutive documents.

        Over the next week, the parties and their advisors circulated numerous drafts of the transaction documents and participated in active negotiations of the remaining open terms. As part of this process, the parties engaged in negotiations regarding the structure of the transaction, and the link between the structure and the indemnification of the Company by Vivendi in connection with the net operating loss carryforwards. Vivendi proposed that the Company select between two alternative structures. In the first, the Company would pay only cash consideration for the stock of a newly formed, non-operating Vivendi subsidiary owning approximately 429 million shares of the Company's common stock, and would receive indemnification from Vivendi of up to $200 million in respect of the net operating loss carryforwards of the acquired subsidiary if they were unavailable for use by the Company in certain circumstances. In the second, the Company would pay cash consideration and issue additional shares of the Company's common stock to Vivendi in exchange for all of the stock of the Vivendi subsidiary owning Vivendi's entire stake of the Company's common stock, a portion of which newly-issued shares would be purchased by ASAC, and the indemnification would be limited to $100 million.

        During this same period, the Company and its counsel, Skadden, in consultation with the special committee and its advisors, continued negotiations with multiple potential bank lenders in order to finalize the documents related to the debt to be issued by the Company to fund the transaction consideration.

        On July 18, 2013, Wachtell Lipton sent a draft of a waiver letter for Mr. Kotick and Mr. Kelly to Sullivan & Cromwell, pursuant to which Mr. Kotick and Mr. Kelly would waive any change of control benefits which would otherwise have accrued to them as a result of the proposed transaction.

        On July 19, 2013, as part of the negotiation of the transaction structure, the parties collectively decided to seek a formal ruling from NASDAQ regarding the compliance of proposed transaction structure in which the Company would both pay cash and issue additional shares of the Company's common stock to Vivendi with NASDAQ listing rules.

        On July 20, 2013, the special committee held a telephonic meeting attended by representatives of Wachtell Lipton and Centerview to discuss the transaction terms proposed by Vivendi. The special committee discussed with its advisors the status of the negotiation of the transaction documents for the potential transaction, including open items related to the net operating loss carryforwards of the Vivendi subsidiary to be acquired by the Company, inclusion of a financing condition to the Company's obligation to close and items relating to ASAC's governance rights, including voting rights limitations, the scope of the standstill obligations, and the scope and duration of the lockup restrictions. In the course of this discussion, the special committee requested an analysis of the future economic benefits that could be realized by ASAC and its principals from their investment. The special committee also noted Vivendi's proposal of a one-time extraordinary cash dividend if a transaction could not be reached, and requested that Centerview analyze the relative benefits and detriments of the proposed transaction as compared to the extraordinary one-time cash dividend. The special committee agreed to meet on July 22, 2013 to further discuss the transaction and the special dividend. Later on July 20, 2013, Wachtell Lipton sent a draft of a Stockholders Agreement between the Company and ASAC to Sullivan & Cromwell. Over the next five days, the Company and ASAC and their advisors negotiated the terms thereof and exchanged multiple drafts of the Stockholders Agreement.

        On July 22, 2013, the special committee held a meeting in New York attended by representatives of Wachtell Lipton and Centerview. In addition, members of the Company's management team, including Mr. Kotick and Mr. Kelly, and representatives of Skadden attended the meeting by telephone at the invitation of the special committee in order to discuss the terms of the proposed financing to be entered into by the Company in connection with the potential transaction, and other items related to the Company's capital structure. After Mr Kotick, Mr. Kelly and Skadden left the meeting, the members of the special committee discussed in detail with Centerview and Wachtell Lipton the benefits and risks to the

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Company of the proposed transaction, the potential benefits to ASAC and its principals as part of the proposed transaction, and the relative benefits, including as to stockholder value, of the proposed transaction as compared to an extraordinary one-time cash dividend. In addition, the special committee and its advisors noted that conditions in the financing market were currently favorable and discussed the open items relating to the transaction documents.

        On July 23, 2013, the Company received a positive ruling from NASDAQ regarding compliance of the second transaction structure with NASDAQ listing rules. Following receipt of the ruling, Mr. Morgado, on behalf of the special committee, and representatives of Vivendi negotiated regarding the transaction structure and corresponding indemnification package, and ultimately agreed to proceed with the first transaction structure, in which the Company paid only cash consideration (and did not issue any new shares to Vivendi), and Vivendi would indemnify the Company for up to $200 million in connection with the availability of the net operating loss carryforwards.

        On July 24, 2013, the special committee held a meeting in New York attended by representatives of Wachtell Lipton and Centerview. Wachtell Lipton reviewed the terms of the proposed Stock Purchase Agreement and related agreements, including the provisions related to the governance rights and restrictions applicable to each of ASAC and Vivendi following the closing and the terms of the financing to be entered into by the Company, and the few remaining open items in the transaction documents. Centerview reviewed and discussed with the special committee Centerview's financial analysis of the Company and the proposed transactions. Centerview delivered to the special committee an oral opinion, which was confirmed by delivery of a written opinion dated July 24, 2013, attached hereto as Annex B, to the effect that, as of that date and subject to the various assumptions and limitations set forth therein, the aggregate consideration to be paid by the Company in the Stock Purchase Transaction pursuant to the Stock Purchase Agreement was fair, from a financial point of view, to the Company. The special committee resolved to recommend the approval of the proposed transaction on the terms previously presented to the special committee, subject to the satisfactory resolution of the remaining open issues.

        On July 25, 2013, the special committee held a meeting in California attended telephonically by representatives of Wachtell Lipton and Centerview. Following a discussion on the resolution of the remaining open items with respect to the definitive transaction documentation and oral confirmation from Centerview that they reaffirmed their fairness opinion as of such date, subject to the various assumptions and limitations set forth in the opinion, the special committee resolved to recommend the approval of the proposed transaction to the Company's board of directors. Later in the day on July 25, 2013, the Company's board of directors unanimously approved the proposed stock purchase transaction and the related documentation, and approved and adopted and declared to be advisable the Stock Purchase Agreement and related documents and transactions. Following the board meeting, the Stock Purchase Agreement and related documents were executed by the Company, Vivendi and ASAC, and the Company and Vivendi each issued a press release announcing the entry into the transaction.

Reasons for the Transactions

        The special committee, and the Company's board of directors based upon the recommendation of the special committee, determined that the Stock Purchase Agreement and the transactions contemplated thereby are advisable and in the best interests of the Company and its stockholders. In evaluating the Stock Purchase Agreement and the transactions contemplated thereby, the special committee was advised by independent legal and financial advisors, and considered a variety of factors with respect to the transactions, including those matters discussed in "—Background of the Transaction." In view of the wide variety of factors considered in connection with the transaction, the special committee did not consider it practical, nor did they attempt, to quantify or otherwise assign relative weight to different factors considered in reaching their decisions. In addition, individual members of the special committee, in approving the transaction, may have given different weights to different factors. The special committee considered this information as a whole, and overall considered it to be favorable to, and in support of, their

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determination. In determining that the Stock Purchase Agreement and the transactions contemplated thereby are advisable and in the best interests of the Company and its stockholders, the special committee considered a number of factors pertaining to the strategic and financial rationale for the transactions, including the following:

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        The special committee also considered the potential risks of the transactions and certain other countervailing factors, including the following:

        The special committee believes that, overall, the potential benefits of the transaction to the Company and the Company's stockholders outweigh the risks. The special committee understood that there can be no assurance of future results, including results considered or expected as described in the factors listed above. It should be noted that this discussion of the reasoning of the special committee and all other information presented in this section are forward-looking in nature and, therefore, should be read in light of the factors discussed under the heading "Cautionary Statement Regarding Forward-Looking Information," beginning on page 18. Additionally, see "Projected Financial Information," beginning on page 53, for information regarding the preparation of prospective financial information.

Recommendation of the Special Committee and Our Board of Directors

        The special committee unanimously determined the transactions contemplated by the Stock Purchase Agreement to be advisable and in the best interests of the Company and unanimously recommended that our board of directors approve the Company's execution, delivery and performance of the Stock Purchase Agreement and the consummation of the transactions contemplated thereby.

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        On July 25, 2013, after consideration of, and based upon, the special committee's recommendation, our board of directors unanimously determined that it is in the best interests of the Company, and declared it advisable, to enter into the Stock Purchase Agreement and consummate the transactions contemplated thereby.

        In the course of making such determination, our board of directors considered the following factors (which factors are not intended to be exhaustive and are not in any relative order of importance):

        The foregoing discussion of the information and factors considered by our board of directors is not intended to be exhaustive but includes the material factors considered by our board of directors. In view of the variety of factors considered in connection with its evaluation of the transactions contemplated by the Stock Purchase Agreement, our board of directors did not find it practicable to, and did not, quantify or otherwise assign relative weights to the specific factors considered in reaching its determination and recommendation. In addition, individual directors may have given different weights to different factors. Our board of directors made its determination based upon the totality of the information it considered.

        After consideration of, and based upon, the unanimous recommendation of the special committee, our board of directors unanimously determined that it is in the best interests of the Company, and declared it advisable, to enter into the Stock Purchase Agreement and consummate the transactions contemplated thereby. Our board of directors recommends unanimously that the stockholders of the Company vote "FOR" the proposal to approve the Stock Purchase Agreement and the transactions contemplated thereby and "FOR" the proposal to adjourn the special meeting, if necessary or appropriate, for the purpose of soliciting additional proxies to vote in favor of the proposal to approve the Stock Purchase Agreement and the transactions contemplated thereby.

Opinion of Centerview Partners LLC

        On July 24, 2013, Centerview, the financial advisor to the special committee, delivered to the special committee its oral opinion, subsequently confirmed in a written opinion dated July 24, 2013 (and orally reaffirmed July 25, 2013), to the effect that, as of the date of such opinion, based upon and subject to the various assumptions and limitations set forth in the written opinion, the aggregate consideration to be paid by Activision Blizzard in the Stock Purchase Transaction pursuant to the Stock Purchase Agreement was fair, from a financial point of view, to Activision Blizzard.

        The full text of the written opinion of Centerview, dated July 24, 2013, which sets forth, among other things, the assumptions made, procedures followed, matters considered and limitations on the review undertaken by Centerview in connection with its opinion, is attached as Annex B to this proxy statement and is incorporated by reference herein in its entirety. Centerview provided its opinion solely for the information and assistance of the special committee (in their capacity as directors and not in any other capacity) and its opinion is limited to and addresses only the fairness, from a financial point of view, as of the date thereof, to Activision Blizzard of the aggregate consideration to be paid by Activision Blizzard in the Stock Purchase

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Transaction pursuant to the Stock Purchase Agreement. Centerview's opinion does not address any other term or aspect of the Stock Purchase Agreement or the transactions contemplated thereby and does not constitute a recommendation to any stockholder of Activision Blizzard or any other person as to how such stockholder or other person should vote or otherwise act with respect to the Stock Purchase Agreement or any other matter. Centerview has consented to the inclusion of a copy of its written opinion as Annex B to this proxy statement. The summary of the written opinion of Centerview set forth below is qualified in its entirety by reference to the full text of such written opinion.

        We encourage you to read carefully the written opinion of Centerview described above in its entirety for a description of the assumptions made, procedures followed, matters considered and limitations on the review undertaken by Centerview in connection with its opinion.

        In connection with its opinion, Centerview reviewed, among other things:

        Centerview's opinion refers to the items in the bullet points above collectively as the internal data. For purposes of this section, all of the transactions contemplated by the Stock Purchase Agreement, including the Stock Purchase Transaction and the Private Sale, are collectively referred to herein as the "Transaction."

        Centerview also conducted discussions with members of the senior management and representatives of the Company regarding their assessment of the internal data and the strategic rationale for the Transaction. In addition, Centerview reviewed certain financial data for the Company and compared that data with publicly available financial and stock market data for certain other companies, the securities of which are publicly traded, in lines of business that Centerview deemed relevant. Centerview also compared certain of the proposed financial terms of the Stock Purchase Transaction with the financial terms, to the extent publicly available, of certain other transactions that Centerview deemed relevant and conducted such other financial studies and analyses and took into account such other information as Centerview deemed appropriate.

        Centerview assumed, without independent verification or any responsibility therefor, the accuracy and completeness of the financial, legal, regulatory, tax, accounting and other information supplied to, discussed with, or reviewed by Centerview for purposes of its opinion and, with the special committee's consent, relied upon such information as being complete and accurate. In that regard, Centerview assumed, at the special committee's direction, that the internal data was reasonably prepared on bases reflecting the best currently available estimates and judgments of the management of the Company as to

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the matters covered thereby and Centerview relied, at the special committee's direction, on the internal data (including the Management Projections referred to below) for purposes of its analysis and opinion. Centerview expressed no view or opinion as to the internal data or the assumptions on which it is based. In addition, at the special committee's direction, Centerview did not make any independent evaluation or appraisal of any of the assets or liabilities (contingent, derivative, off-balance-sheet or otherwise) of the Company or New VH, nor was Centerview furnished with any such evaluation or appraisal, and Centerview was not asked to conduct, and did not conduct, a physical inspection of the properties or assets of the Company or New VH. Centerview assumed, at the special committee's direction, (i) that New VH had no assets or liabilities other than the shares of Activision Blizzard common stock to be acquired in the Stock Purchase Transaction and the New VH NOLs, (ii) that the amount and terms of the New VH NOLs were accurately described in the Stock Purchase Agreement and internal data and that the Company will be able to fully utilize all of the New VH NOLs in the amounts and time periods contemplated in the internal data and (iii) all of the representations and warranties contained in the Stock Purchase Agreement were true and correct as of the date of Centerview's opinion. Centerview assumed, at the special committee's direction, that the final executed Stock Purchase Agreement and related agreements would not differ in any respect material to Centerview's analysis or its opinion from the draft agreements reviewed by Centerview. Centerview also assumed, at the special committee's direction, that the Transaction will be consummated on the terms set forth in the Stock Purchase Agreement, without delay or waiver, modification or amendment of any term, condition or agreement, the effect of which would be material to its analysis or opinion and that, in the course of obtaining the necessary governmental, regulatory and other approvals, consents, releases and waivers for the Transaction, no delay, limitation, restriction, condition or other change will be imposed, the effect of which would be material to Centerview's analysis or opinion or which otherwise would have an adverse effect on the Company or New VH or on the contemplated benefits expected by the Company to result from the Transaction. Centerview did not evaluate and expressed no opinion as to the solvency or fair value of the Company or New VH, or the ability of the Company or New VH to pay its obligations when they come due, or as to the impact of the Transaction on such matters, under any state, federal or other laws relating to bankruptcy, insolvency or similar matters. Centerview is not a legal, regulatory, tax or accounting advisor, and it did not express any opinion as to any legal, regulatory, tax or accounting matters.

        Centerview's opinion did not address the Company's underlying business decision to proceed with or effect the Transaction, or the relative merits of the Transaction as compared to any alternative business strategies or transactions that might be available to the Company or in which the Company might engage. Centerview's opinion was limited to and addressed only the fairness, from a financial point of view, as of the date of the opinion, to the Company of the aggregate consideration to be paid by the Company in the Stock Purchase Transaction pursuant to the Stock Purchase Agreement. Centerview's opinion did not address any other term or aspect of the Stock Purchase Agreement or the Transaction, including, without limitation, the structure or form of the Transaction or any other agreements or arrangements contemplated by the Stock Purchase Agreement or entered into in connection with or otherwise contemplated by the Transaction, including, without limitation, the fairness of the Transaction or any other term or aspect of the Transaction to, or any consideration to be received in connection therewith by, or the impact of the Transaction on, the holders of any class of securities, creditors, or other constituencies of the Company or any other party. In addition, Centerview did not opine as to the fairness (financial or otherwise) of the amount, nature or any other aspect of any compensation to be paid or payable to any of the officers, directors or employees of the Company or any party, or class of such persons in connection with the Transaction, whether relative to the aggregate consideration to be paid by the Company pursuant to the Stock Purchase Agreement or otherwise. Centerview's opinion was necessarily based on financial, economic, monetary, currency, market and other conditions and circumstances as in effect on, and the information made available to Centerview as of, the date of Centerview's written opinion, and Centerview does not have any obligation or responsibility to update, revise or reaffirm its opinion based on circumstances, developments or events occurring after the date of its written

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opinion. Centerview did not and does not express any opinion as to the price at which Activision Blizzard common stock will trade at any time, including following announcement or consummation of the Transaction.

        Centerview expressed no opinion and made no recommendation as to how the special committee or the Company's board of directors or any other person should vote or otherwise act in connection with the Transaction or any other matter.

        The issuance of Centerview's opinion was approved by the Centerview Partners LLC Fairness Opinion Committee.

        The following is a summary of the material financial and comparative analyses that Centerview deemed to be appropriate for this type of transaction and that were reviewed with the special committee in connection with rendering Centerview's opinion. The following summary, however, does not purport to be a complete description of all the financial analyses performed by Centerview in connection with rendering its opinion, nor does the order of analyses described represent relative importance or weight given to those analyses by Centerview.

        Some of the summaries of the financial analyses include information presented in tabular format. In order to fully understand the financial analyses, the tables must be read together with the text of each summary. The tables alone do not constitute a complete description of the financial analyses. Considering the data in the tables below without considering the full narrative description of the financial analyses, including the methodologies and assumptions underlying the analyses, could create a misleading or incomplete view of the financial analyses of Centerview. Except as otherwise noted, the following quantitative information, to the extent that it is based on market data, is based on market data as it existed on or before July 23, 2013 (the latest trading day prior to the date that Centerview delivered its opinion to the special committee) and is not necessarily indicative of current market conditions.

        Centerview reviewed the historical trading prices for Activision Blizzard common stock for the 52-week period ended July 19, 2013. Centerview noted that the 52-week low and the 52-week high closing prices for Activision Blizzard common stock were $10.45 and $16.11 per share, respectively.

        Centerview also reviewed stock price targets for Activision Blizzard common stock reflected in publicly available Wall Street research analyst reports. Centerview noted that the range of analyst stock price targets from all research analyst reports available to Centerview with ratings on Activision Blizzard common stock after the first quarter of 2013 was $14.50 to $22.00 per share, compared to the $13.60 implied price per share of Activision Blizzard common stock derived from the aggregate consideration to be paid by the Company in the Stock Purchase Transaction pursuant to the Stock Purchase Agreement.

        Centerview compared certain financial information for the Company to corresponding financial information for the following publicly traded companies that Centerview deemed comparable based on its experience and professional judgment to the Company:

Traditional Video Game Publishers

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Online Gaming Companies

Film Companies

Media Conglomerates

        Although none of the selected companies is directly comparable to the Company, these companies were selected, among other reasons, because they are publicly traded traditional video game publishers, online gaming companies, film companies and media conglomerates with operations and businesses that, for purposes of Centerview's analysis, may be considered similar to those of the Company.

        Using publicly available information as of July 19, 2013, Centerview calculated, for each selected company, the company's enterprise value as a multiple of the company's calendar year 2012 earnings before interest, taxes, depreciation and amortization (EBITDA) ("Enterprise Value/2012A EBITDA"). Using publicly available information as of July 19, 2013, Centerview also calculated, for each selected company, the company's market price per share as a multiple of the consensus equity research analyst estimate for the company's calendar year 2013 fully taxed cash earnings per share ("Share Price/2013E EPS").

        The following table represents the results of this analysis:

Traditional Video Game Publishers
  Mean   Median  

Enterprise Value/2012A EBITDA

    8.8x     8.8x  

Share Price/2013E EPS

    15.4x     15.1x  

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Online Gaming Companies
  Mean   Median  

Enterprise Value/2012A EBITDA

    7.9x     6.1x  

Share Price/2013E EPS

    13.0x     12.6x  

 

Film Companies
  Mean   Median  

Enterprise Value/2012A EBITDA

    23.9x     23.9x  

Share Price/2013E EPS

    27.1x     27.1x  

 

Media Conglomerates
  Mean   Median  

Enterprise Value/2012A EBITDA

    10.4x     10.6x  

Share Price/2013E EPS

    17.2x     17.2x  

        Based on this analysis and other considerations that Centerview deemed relevant in its professional judgment, Centerview applied a valuation range of 6.5x to 8.5x to the Company's calendar year 2012 EBITDA and applied a valuation range of 16.0x to 20.0x to the Company's estimated calendar year 2013 fully taxed cash earnings per share, which, in the case of the estimated calendar year 2013 fully taxed cash earnings per share, is based on the Management Projections referred to below.

        Applying the valuation ranges above resulted in the following implied per share equity value ranges for Activision Blizzard common stock:

Valuation Basis (Applied Range)
  Implied Per Share Price Range  

Enterprise Value/2012A EBITDA (6.5x - 8.5x)

  $ 13.95 - $17.04  

Share Price/2013E EPS (16.0x - 20.0x)

  $ 13.14 - $16.42  

        Centerview then compared the results of the above analysis to the $13.60 implied price per share of Activision Blizzard common stock derived from the aggregate consideration to be paid by the Company in the Stock Purchase Transaction pursuant to the Stock Purchase Agreement.

        Centerview analyzed certain information relating to selected transactions that Centerview deemed relevant to consider in relation to the Company and the Transaction. These transactions were:

Date Announced
  Target   Acquiror
02/12/13   NBC Universal   Comcast Corporation
06/15/10   British Sky Broadcasting Group   News Corp
11/13/09   Unitymedia GmbH   Liberty Global Inc.
08/31/09   Marvel Entertainment, Inc.   The Walt Disney Company
02/18/11   Citadel Broadcasting Corporation   Cumulus Media Inc.

        No company or transaction used in this analysis is identical or directly comparable to the Company or the Transaction. There were a limited number of large scale transactions in the video game sector, therefore the transactions above were selected, among other reasons, because their participants, size and other factors, for purposes of Centerview's analysis, may be considered similar to the Transaction. Financial data for the selected transactions were based on publicly available information at the time of the announcement of the relevant transactions.

        Using publicly available information, Centerview calculated, for each selected transaction, the implied enterprise value, as a multiple of the target company's last-twelve months, or LTM, EBITDA at the time of the transaction ("Enterprise Value/LTM EBITDA") and the implied equity value, as a multiple of the target company's LTM net income at the time of the transaction ("Equity Value/LTM Net Income").

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        The following table represents the results of this analysis:

Precedent Transactions
  Mean   Median  

Enterprise Value/LTM EBITDA

    10.3x     10.0x  

Equity Value/LTM Net Income

    21.8x     23.6x  

        Based on the analysis above and other considerations that Centerview deemed relevant in its professional judgment, Centerview applied a valuation range of 7.0x to 10.0x to the Company's last-twelve-months EBITDA as of the quarter ending June 30, 2013 and a valuation range of 14.0x to 18.0x to the Company's last-twelve months net income as of June 30, 2013.

        Applying the ranges above resulted in the following implied per share equity value ranges for Activision Blizzard common stock:

Valuation Basis (Applied Range)
  Implied Per Share Price Range  

Enterprise Value/LTM EBITDA (7.0x - 10.0x)

  $ 14.32 - $18.78  

Equity Value/LTM Net Income (14.0x - 18.0x)

  $ 15.88 - $20.41  

        Centerview then compared the results of the above analysis to the $13.60 implied price per share of Activision Blizzard common stock derived from the aggregate consideration to be paid by the Company in the Purchase Transaction pursuant to the Purchase Agreement.

        Centerview performed a discounted cash flow analysis of the Company based on the Management Projections referred to below under "—Projected Financial Information," Downside Case Projections (referred to below under "—Projected Financial Information") and Street Case Projections (referred to below under "—Projected Financial Information"). Centerview determined a terminal value for the Company using a terminal EBITDA multiple range of 6.5x to 8.5x, which implied perpetuity growth rates of (1.5%) to 2.4% based on the Management Projections, (1.4%) to 2.6% based on the Downside Projections and (2.6%) to 1.6% based on the Street Case Projections. The fully-taxed unlevered free cash flows from the Management Operating Plan Case, Downside Case and Street Case for the fiscal years 2013 to 2017 (the 2017 fully-taxed unlevered free cash flows were extrapolated by Centerview for purposes of this analysis at the direction of the special committee and based on Centerview's discussions with management of the Company regarding the Management Projections from 2013 to 2016) were then discounted to present values using a range of discount rates from 8.0% to 10.0%. This range of discount rates was based on Centerview's analysis of the Company's weighted average cost of capital. In performing its discounted cash flow analysis, Centerview assumed $4.5 billion of cash as of June 30, 2013.

        This analysis resulted in the following implied per share equity value ranges for the Company's common stock:

Case
  Implied Per Share Price Range  

Management Projections

  $ 14.96 - $18.16  

Downside Case Projections

  $ 14.00 - $16.89  

Street Case Projections

  $ 15.71 - $19.03  

        In addition, at the direction of the special committee, Centerview calculated the present value of the New VH NOLs (taking into account applicable limitations) based on a range of discount rates from 8.0% to 10.0%, resulting in a present value range of the New VH NOLs of $195 million to $202 million. Centerview performed its discounted cash flow analysis based on the Management Projections and Downside Case Projections and reflecting a present value range of $195 million to $202 million for the

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New VH NOLs. This analysis resulted in the following implied per share equity value ranges for Activision Blizzard common stock:

Case
  Implied Per Share Price Range  

Management Projections

  $ 15.12 - $18.33  

Downside Case Projections

  $ 14.16 - $17.06  

        Centerview then compared the results of the above analyses to the $13.60 implied price per share of Activision Blizzard common stock derived from the aggregate consideration to be paid by the Company in the Stock Purchase Transaction pursuant to the Stock Purchase Agreement.

        The preparation of a fairness opinion is a complex process and is not necessarily susceptible to partial analysis or summary description. Centerview believes that selecting portions of the analyses or of the summary set forth above, without considering the analyses as a whole, could create an incomplete view of the processes underlying Centerview's opinion. In arriving at its fairness determination, Centerview considered the results of all of its analyses and did not attribute any particular weight to any factor or analysis considered by it. Rather, Centerview made its determination as to fairness on the basis of its experience and professional judgment after considering the results of all of its analyses. In its analyses, Centerview considered industry performance, general business, economic, market and financial conditions and other matters, many of which are beyond the control of the Company. No company or other transaction used in the analyses is identical to the Company or the Transaction, and an evaluation of the results of the analyses is not entirely mathematical. The analyses involve complex considerations and judgments concerning financial and operating characteristics and other factors that could affect the public trading, acquisition or other values of the companies analyzed. The estimates contained in the analyses and the ranges of valuations resulting from any particular analysis are not necessarily indicative of actual values or predictive of future results or values, which may be significantly more or less favorable than those suggested by the analyses. In addition, analyses relating to the value of businesses or securities do not purport to be appraisals or to reflect the prices at which businesses or securities actually may be sold. Accordingly, the estimates used in, and the results derived from, the analyses are inherently subject to substantial uncertainty. Centerview prepared the above analyses for the purpose of providing its opinion to the special committee regarding whether, as of the date of Centerview's written opinion, the aggregate consideration to be paid by the Company in the Stock Purchase Transaction pursuant to the Stock Purchase Agreement was fair, from a financial point of view, to the Company. Because these analyses are inherently subject to uncertainty, being based upon numerous factors or events beyond the control of the parties or their respective advisors, none of the Company, Centerview or any other person assumes responsibility if future results are materially different from those forecasted.

        Centerview's opinion and analyses were only one of many factors taken into consideration by the special committee in its evaluation of the Transaction. Consequently, the analyses described above should not be viewed as determinative of the views of the special committee or the Company's management with respect to the aggregate consideration or as to whether the special committee would have been willing to determine that a different consideration was fair. The consideration for the Transaction was determined through arm's-length negotiations between the Company and Vivendi and was approved by the special committee. Centerview provided advice to the special committee during these negotiations. Centerview did not, however, recommend any specific amount of consideration to the Company or the special committee or that any specific amount of consideration constituted the only appropriate consideration for the Transaction.

        Centerview is a securities firm engaged directly and through affiliates and related persons in a number of investment banking, financial advisory and merchant banking activities. In the two years prior to the date of its written opinion, Centerview had not provided any investment banking services to the Company

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or its affiliates. In the two years prior to the date of its written opinion, Centerview did not provide any investment banking services to Vivendi, ASAC or their respective affiliates for which Centerview received compensation, and during such time Centerview did not have any material relationships with any such person. Centerview may provide investment banking and other services to or with respect to the Company, Vivendi, ASAC or their respective affiliates in the future, for which Centerview may receive compensation. Certain (1) of Centerview's and its affiliates' directors, officers, members and employees, or family members of these persons, (2) of Centerview's affiliates or related investment funds and (3) investment funds or other persons in which any of the foregoing may have financial interests or with which they may co-invest, may at any time acquire, hold, sell or trade, in debt, equity and other securities of, or investments in, the Company, Vivendi, ASAC or any of their respective affiliates, or any other party that may be involved in the Transaction.

        The special committee selected Centerview as its financial advisor because it is a nationally recognized investment banking firm that has substantial experience in transactions similar to the transaction. Centerview has acted as financial advisor to the special committee in connection with the Transaction. In consideration of Centerview's services, pursuant to a letter agreement dated March 8, 2013, the Company has agreed to pay Centerview a monthly retainer fee of $350,000, a discretionary fee of $2 million in the sole discretion of the special committee based on the special committee's assessment of the performance by Centerview of its services and a transaction fee of $5 million, which is contingent upon and will become payable upon the consummation of the transaction. In the event Centerview agrees to provide additional financial advisory services to the special committee that are not specified in the letter agreement, the Company will pay additional fees to Centerview in amounts as the special committee and Centerview will agree in writing. The Company has also agreed to reimburse certain of Centerview's expenses arising, and to indemnify Centerview against certain liabilities that may arise, out of its engagement.

Projected Financial Information

        The Company's senior management does not as a matter of course make public projections as to future performance or earnings beyond the current fiscal year and is especially wary of making projections for extended earnings periods due to the unpredictability of the underlying assumptions and estimates. However, financial forecasts for fiscal years 2013, 2014, 2015 and 2016 prepared by management were made available to the special committee, the board and the special committee's financial advisors in connection with their respective considerations of the proposed transaction. We have included a summary of these projections below (the "Management Projections"). The Management Projections and the other projections set forth below in this proxy statement have been included to give our stockholders access to certain nonpublic information provided to the special committee, the board and the special committee's financial advisors for purposes of considering and evaluating the proposed transaction. The inclusion of the Management Projections and the other projections set forth below should not be regarded as an indication that we or the special committee, the board, Centerview, or any other recipient of this information considered, or now considers, them to be an assurance of the achievement of future results.

        The Company advised the recipients of the Management Projections and certain of the other projections set forth below that its internal financial forecasts upon which the Management Projections and such other projections were based are subjective in many respects. The Management Projections and such other projections reflect numerous assumptions with respect to industry performance, general business, economic, market and financial conditions and other matters, many of which are difficult to predict, subject to significant economic and competitive uncertainties and beyond the Company's control. As a result, there can be no assurance that the Management Projections or such other projections will be realized or that actual results will not be significantly higher or lower than projected. The Management Projections and such other projections were prepared for internal use and to assist the financial advisors to the special committee with their due diligence investigations of the Company and not with a view toward public disclosure or toward complying with GAAP, the published guidelines of the SEC regarding

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projections or the guidelines established by the American Institute of Certified Public Accountants for preparation and presentation of prospective financial information. The Management Projections and such other projections included herein have been prepared by or at the direction of, and are the responsibility of, the Company. PricewaterhouseCoopers LLP, the Company's independent registered public accounting firm, has not examined or compiled any of the Management Projections or such other projections, and accordingly, PricewaterhouseCoopers LLP does not express an opinion or any other form of assurance with respect thereto. The PricewaterhouseCoopers LLP report incorporated by reference in this proxy statement relates to the Company's historical financial information. It does not extend to the Management Projections or such other projections and should not be read to do so.

        Projections of this type are based on estimates and assumptions that are inherently subject to factors such as industry performance, general business, economic, regulatory, market and financial conditions, as well as changes to the business, financial condition or results of operations of the Company, including the factors described under "Cautionary Statement Concerning Forward-Looking Information," which factors may cause the Management Projections or such other projections or the underlying assumptions thereof to be inaccurate. Since the Management Projections and such other projections cover multiple years, such information by its nature becomes less reliable with each successive year. Neither the Management Projections nor such other projections take into account any circumstances or events occurring after the date they were prepared.

        Readers of this proxy statement are cautioned not to place undue reliance on the specific portions of the Management Projections or such other projections set forth below. No one has made or makes any representation to any stockholder regarding the information included in the Management Projections or such other projections.

        For the foregoing reasons, as well as the bases and assumptions on which the Management Projections and such other projections were compiled, the inclusion of specific portions of the Management Projections and such other projections in this proxy statement should not be regarded as an indication that such Management Projections or such other projections will be an accurate prediction of future events, and they should not be relied on as such. Except as required by applicable securities laws, the Company does not intend to update, or otherwise revise the Management Projections or such other projections or the specific portions presented to reflect circumstances existing after the date when made or to reflect the occurrence of future events, even in the event that any or all of the assumptions are shown to be in error.

        The following is a summary of the Management Projections:


Summary of the Management Projections

 
  Fiscal Year End  
(dollars in million unless otherwise stated)
  2013E   2014E   2015E   2016E  

Adjusted Revenue(1)

  $ 4,223   $ 4,762   $ 4,673   $ 5,294  

Adjusted EBITDA(1)

    1,372     1,581     1,691     1,916  

Adjusted Net Income(1)

    946     1,091     1,171     1,328  

(1)
Non-GAAP financial metrics exclude change in deferred net revenue and related cost of sales with respect to certain online games, stock-based compensation, restructuring costs, intangible amortization, impairment of goodwill and related income tax adjustments related to all of the above items.

        In addition, at the direction of the special committee, a more conservative case (the "Downside Case Projections") was used by the special committee's financial advisor in connection with its valuation analyses of the Company and was presented to the special committee. The Downside Case Projections are based on Centerview's downward adjustments to Management Projections to account for more

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conservative estimates of future revenues and operating income to be generated by the Call of Duty and Skylanders franchises.

        The following is a summary of the Downside Case Projections:


Summary of the Projections

 
  Fiscal Year End  
(dollars in million unless otherwise stated)
  2013E   2014E   2015E   2016E  

Adjusted Revenue(1)

  $ 4,155   $ 4,726   $ 4,552   $ 5,016  

Adjusted EBITDA(1)

    1,319     1,555     1,598     1,729  

Adjusted Net Income(1)

    907     1,072     1,103     1,191  

(1)
Non-GAAP financial metrics exclude change in deferred net revenue and related cost of sales with respect to certain online games, stock-based compensation, restructuring costs, intangible amortization, impairment of goodwill and related income tax adjustments related to all of the above items.

        In addition, a set of projections derived from analyst estimates for the Company were prepared by the special committee's financial advisor (the "Street Case Projections") and used by the special committee's financial advisor in connection with its valuation analyses of the Company. The following is a summary of the Street Case Projections:

        The following is a summary of the Street Case Projections:


Summary of the Projections

 
  Fiscal Year End  
(dollars in million unless otherwise stated)
  2013E   2014E   2015E   2016E  

Adjusted Revenue(1)

  $ 4,276   $ 4,651   $ 4,757   $ 4,970  

Adjusted EBITDA(1)

    1,412     1,697     1,828     1,971  

Adjusted Net Income(1)

    970     1,185     1,308     1,385  

(1)
Non-GAAP financial metrics exclude change in deferred net revenue and related cost of sales with respect to certain online games, stock-based compensation, restructuring costs, intangible amortization, impairment of goodwill and related income tax adjustments related to all of the above items.

        The discounted cash flow analysis performed by the special committee's financial advisor with respect to the Management Projections, the Downside Case Projections and the Street Case Projections did not rely on or incorporate any reconciliation of non-GAAP metrics to comparable GAAP metrics, and was performed on an adjusted non-GAAP basis. See "—Opinion of Centerview Partners LLC."

Accounting

        The Stock Purchase Transaction will be accounted for as a share repurchase and carried as treasury shares, which reduces total shareholders' equity in the consolidated balance sheet of the Company.

Interests of Our Directors and Executive Officers in the Transactions Contemplated by the Stock Purchase Agreement

        In considering the recommendation of our board of directors with respect to the proposals, you should be aware that some of our directors and executive officers have interests in the Stock Purchase Agreement and the transactions contemplated thereby that are different from, or in addition to, the interests of our

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stockholders generally. These interests may present them with actual or potential conflicts of interest, and these interests, to the extent material, are described below. The special committee and our board of directors were aware of these interests and considered them, among other factors, when determining whether to approve the transactions contemplated by the Stock Purchase Agreement.

        Under the Stock Purchase Agreement, ASAC, an investment vehicle formed by Robert A. Kotick, our President and Chief Executive Officer and a member of our board of directors, and Brian G. Kelly, Co-Chairman of our board of directors, has agreed to purchase up to 171,968,042 shares of Activision Blizzard common stock from Vivendi for an aggregate amount of $2,338,765,371.20 or $13.60 per share for the shares of Activision Blizzard common stock to be acquired by ASAC, provided that the number of shares to be acquired by ASAC may be reduced under certain circumstances as provided in the Stock Purchase Agreement.

        The General Partner of ASAC is managed and controlled by Messrs. Kotick and Kelly, and each of them owns, through his affiliates, 50% of the membership interests of the General Partner. Each of Messrs. Kotick and Kelly has made, through his affiliates, a $5 million capital contribution to the General Partner and committed to make an additional $45 million capital contribution for a total capitalization of $100 million. The General Partner has agreed to make capital contributions to ASAC in the aggregate amount of $100 million in exchange for preferred and common interests in ASAC. Messrs. Kotick and Kelly will not, through the General Partner or otherwise, receive any management fee in respect of their service as managers of the General Partner or the General Partner's administration of the affairs of ASAC.

        ASAC will be capitalized by investments from its General Partner and each of its limited partners (the "Limited Partners") in the aggregate amount of approximately $1,723 billion and two bank loans from JPMorgan Chase Bank, N.A., London Branch and Bank of America, N.A., London Branch, in the amounts of $429 million and $214 million, respectively. ASAC has been formed for the limited purpose of acquiring, holding and disposing of the shares of Activision Blizzard common stock to be purchased by it pursuant to the Stock Purchase Agreement. Messrs. Kotick and Kelly, through its General Partner, will be entitled to exercise the rights of ASAC, as a stockholder of the Company, including voting rights and the registration rights under the stockholders agreement to be entered into by the Company, ASAC and, for the limited purposes set forth therein, Messrs. Kotick and Kelly at closing (the "ASAC Stockholders Agreement").

        Unless earlier terminated, the winding up of ASAC's affairs will commence upon the occurrence of a mandatory termination event on the fourth anniversary of the consummation of the transactions contemplated by the Stock Purchase Agreement. Upon commencement of the winding up of ASAC, ASAC will repay the two bank loans by selling its shares of Activision Blizzard common stock and, following payment of or due provision for ASAC's other liabilities, the remaining shares will be distributed to the partners, including the General Partner. The distribution priorities are structured so that each partner receives distributions yielding an internal rate of return of 7.0% and return of its capital contribution in respect of its preferred interests before the partners receive any distributions in respect of the common interests. Thereafter, Messrs. Kotick and Kelly, through the General Partner, would be entitled to disproportionate allocations in respect of the common interests at varying percentages based on the returns received by the partners and as more fully described under "ASAC Capitalization and Terms of ASAC Debt Financing."

        On March 15, 2012 and June 30, 2012, respectively, Messrs. Kotick and Kelly each entered into employment agreements with the Company. Under the terms of each of these agreements, if there is a

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change in control during the term of employment, Messrs. Kotick and Kelly are entitled to, among other things, payments of approximately $30 million to $45 million and $15 million to $22.5 million, respectively.

        Pursuant to and concurrently with the signing of the Stock Purchase Agreement, the Company and each of Messrs. Kotick and Kelly entered into certain waiver and acknowledgement letters (the "Waiver and Acknowledgement Letters"), which provide, among other things:

        As a result of these waivers, these change in control payments and benefits, including the cash bonuses of $30 million to $45 million for Mr. Kotick and $15 million to $22.5 million for Mr. Kelly, would not be payable upon consummation of the transactions contemplated by the Stock Purchase Agreement. Messrs. Kotick and Kelly received no guarantee of future employment or positions as directors on the board of directors in connection with these transactions and will not receive any transaction or other bonus as part of these transactions.

        Six of the eleven current members of our board of directors are selected by Vivendi and/or its controlled affiliates. Each of the six members of our board of directors is an executive officer of Vivendi or one of its affiliates. As of September 26, 2013, Vivendi beneficially owns 683,643,890 shares of Activision Blizzard common stock, and pursuant to the terms of the Stock Purchase Agreement, Vivendi has agreed to sell approximately 600,644,513 of its shares of Activision Blizzard stock in exchange for an aggregate consideration of approximately $8,168,765,376.80, or $13.60 per share being sold. As a result, the following current members of our board of directors selected by Vivendi and/or its controlled affiliates, each of whom has agreed, pursuant to the terms of the Stock Purchase Agreement, to resign upon consummation

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of the transactions contemplated thereby, may have an interest in the proposed transactions that differs from the interests of our stockholders generally:

Director
  Vivendi Affiliation
Philippe G.H. Capron   Chief Financial Officer of Vivendi

Jean-Yves Charlier

 

Chairman and Chief Executive Officer of SFR (a subsidiary of Vivendi)

Frédéric R. Crépin

 

Executive Vice President, General Counsel and Secretary of the Supervisory Board and of the Management Board of Vivendi

Jean-François Dubos

 

Chairman of the Management Board of Vivendi

Régis Turrini

 

Senior Executive Vice President, M&A of Vivendi

Lucian Grainge

 

Chairman and Chief Executive Officer of the Universal Music Group (a subsidiary of Vivendi)

        In the Stock Purchase Agreement, Activision Blizzard agreed that it will not, for a period of six years from the closing of the Stock Purchase Transaction, amend the Company's Amended and Restated Certificate of Incorporation or Amended and Restated Bylaws in a manner that would adversely affect the rights of any person who is a Vivendi designee on our board of directors, as a director or officer of the Company, in his or her capacity as such, to indemnification by, and/or advancement of expenses from, the Company.

No Appraisal Rights

        No appraisal or dissenters' rights are available to our stockholders under Delaware law or our Amended and Restated Certificate of Incorporation or Amended and Restated Bylaws in connection with the transactions contemplated by the Stock Purchase Agreement.

Material U.S. Federal Income Tax Consequences of the Stock Purchase Transaction

        The Stock Purchase Transaction is not expected to result in U.S. federal income tax consequences to our stockholders (other than Vivendi).

Financing of the Transactions Contemplated by the Stock Purchase Agreement

        We anticipate that the total funds needed to complete the Stock Purchase Transaction will be approximately $5.83 billion, which is expected to be funded through a combination of approximately $1.23 billion of cash on hand and $4.6 billion of net proceeds received by the Company (net of estimated $150 million of fees, expenses and upfront costs) in connection with the debt financing. The debt financing includes $2.25 billion of senior notes, the proceeds of which were funded into an escrow account on September 19, 2013 and are being held in such account, subject to the terms of the special mandatory redemption requirement as further described herein, pending the closing of the transactions contemplated by the Stock Purchase Agreement. The debt financing is also expected to include a $2.5 billion seven-year term loan facility to be entered into prior to or contemporaneously with the consummation of the transactions contemplated by the Stock Purchase Agreement.

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        On September 19, 2013, the Company issued $1,500,000,000 aggregate principal amount of 5.625% Senior Notes due 2021 (the "2021 Senior Notes") and $750,000,000 aggregate principal amount of 6.125% Senior Notes due 2023 (the "2023 Senior Notes" and, together with the 2021 Senior Notes, the "Senior Notes") under an indenture dated as of September 19, 2013 (the "Indenture") among the Company, the guarantors named therein and Wells Fargo Bank, National Association, as trustee (the "Trustee"). The Senior Notes and related guarantees were offered and sold in a private transaction that is exempt from the registration requirements of the U.S. Securities Act of 1933, as amended. The following description is only a summary of the material provisions of the Indenture and does not purport to be complete and is qualified in its entirety by reference to the provisions of the Indenture, including the definitions therein of certain terms used below.

        The Senior Notes are:

Maturity and Interest

        The 2021 Senior Notes will mature on September 15, 2021 and the 2023 Senior Notes will mature on September 15, 2023.

        The 2021 Senior Notes accrue interest at a rate of 5.625% per annum. Interest will be payable in cash semiannually, using a 360-day year comprised of twelve 30-day months, to holders of record at the close of business on the March 1 or September 1 immediately preceding the interest payment date, on March 15 and September 15 of each year, commencing March 15, 2014.

        The 2023 Senior Notes accrue interest at a rate of 6.125% per annum. Interest will be payable semiannually in cash, using a 360-day year comprised of twelve 30-day months, to holders of record at the close of business on the March 1 or September 1 immediately preceding the interest payment date, on March 15 and September 15 of each year, commencing March 15, 2014.

Covenants

        The Indenture contains covenants that limit the ability of the Company and any of its restricted subsidiaries (as such term is defined in the Indenture) to, among other things:

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        The Indenture also provides for customary events of default.

Conditional Escrow of Proceeds; Special Mandatory Redemption Feature

        In connection with the issuance of the Senior Notes, the Company entered into an escrow agreement (the "Escrow Agreement") with Wells Fargo Bank, National Association, as escrow agent and as trustee under the indenture governing the Senior Notes. The proceeds of the offering were deposited, pursuant to the Escrow Agreement, into a segregated account pending completion of the transactions contemplated by the Stock Purchase Agreement, which is terminable by the parties on or after October 15, 2013 if the transactions contemplated thereby have not closed by such date. Upon satisfaction of the conditions to the release of the funds from escrow (the "Release"), including, among other things, that the conditions to the transactions contemplated by the Stock Purchase Agreement have been satisfied or waived, the escrow funds will be used, along with cash on hand at the Company and proceeds from borrowings under the Term Loan Facility (as defined below) to finance the consideration to be paid by the Company to Vivendi in connection with the transactions contemplated by the Stock Purchase Agreement. The Company will be required to redeem the Senior Notes at 100% of the issue price of the Senior Notes, plus accrued and unpaid interest to, but excluding, the redemption date upon the earlier of (i) the termination of the Stock Purchase Agreement and (ii) December 18, 2013 if the transactions contemplated by the Stock Purchase Agreement have not closed by such date.

        In connection with the Stock Purchase Transaction, we expect to enter into a credit agreement governing the senior credit facilities with Bank of America, N.A., as administrative agent, and the financial institutions party thereto (the "Senior Credit Facilities"). The Senior Credit Facilities are expected to be structured as (a) a $2,500 million seven-year term loan facility (the "Term Loan Facility") and (b) a $250 million five-year revolving credit facility that will include sub-limits for letters of credit and the issuance of swingline loans (the "Revolving Loan Facility"). In addition, the Senior Credit Facilities will permit us to add one or more incremental facilities to the Term Loan Facility and/or increase commitments under the Revolving Loan Facility in an aggregate principal amount of up to (i) $750 million plus (ii) all voluntary prepayments and voluntary commitment reductions of the Senior Credit Facilities prior to the date of any such incurrence, to the extent any commitments under the Revolving Loan Facility are permanently reduced, plus (iii) an additional amount if, after giving effect to the incurrence of such additional amount, the senior secured net leverage ratio (as set forth in the Senior Credit Facilities) is equal to or less than 2.00 to 1.00.

        Three of the Company's U.S. subsidiaries, Activision Publishing, Inc., Blizzard Entertainment, Inc. and Activision Entertainment Holdings, Inc., will guarantee the obligations of the Company under the Senior Credit Facilities. Upon the closing of the Senior Credit Facilities, the Company and the guarantors will grant a security interest in substantially all of their U.S. assets, as security for the obligations under the Senior Credit Facilities.

        The Senior Credit Facilities are subject to customary closing conditions and to the extent the Release occurs prior to October 18, 2013, the closing of the Senior Credit Facilities is expected to be concurrent

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with the Release. To the extent the Release does not occur prior to October 18, 2013 (the expiration date of the Term Loan Facility and Revolving Loan Facility commitments under the commitment letter dated July 25, 2013), the Company intends to borrow under the Term Loan Facility and place the proceeds into escrow, which escrow would have similar conditions to the Escrow Agreement entered into in connection with the issuance of the Senior Notes.

        We intend to use the proceeds from the Senior Notes and Term Loan Facility on the closing date of the Stock Purchase Transaction to fund the Stock Purchase Transaction and pay fees and expenses incurred in connection therewith. Following the closing date of the Stock Purchase Transaction, the proceeds of the Revolving Loan Facility may be used for working capital and other general corporate purposes.

        ASAC will be capitalized by equity investments from its partners and debt financing in the aggregate amount of $2.366 billion. The General Partner has agreed to make capital contributions to ASAC in an aggregate amount of $100 million and the Limited Partners have agreed to make capital contributions to ASAC in an aggregate amount of $1.623 billion. The debt financing, which will represent 27.2% of ASAC's overall capitalization, is expected to come from two loans from JPMorgan Chase Bank, N.A., London Branch and Bank of America, N.A., London Branch in the amounts of $429 million and $214 million, respectively. The debt financing represents 27.2% of ASAC's overall capitalization.

        ASAC has entered into subscription agreements, each dated July 25, 2013, with the General Partner and each of the Limited Partners, pursuant to which the General Partner and each of the Limited Partners will make capital contributions to ASAC in return for the following preferred and common interests in ASAC:

 
  Percentage Interests in ASAC  
 
  Preferred   Class A
Common
  Class B
Common
  Class C
Common
  Class D
Common
 

General Partner

    5.584 %   35.000 %   17.500 %   20.000 %   25.000 %

Limited Partners

    94.416 %   65.000 %   82.500 %   80.000 %   75.000 %

        Upon the commencement of the winding up of ASAC no later than the fourth anniversary of the consummation of the transactions contemplated by the Stock Purchase Agreement, and upon the repayment of the bank loans and the payment of due provision for any other liabilities of ASAC, the remaining shares of Activision Blizzard common stock held by ASAC will be distributed to the partners (based on the average closing price of shares of Activision Blizzard common stock over the 15 trading days immediately preceding the distribution date) in the following order of priority:

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The distribution thresholds are defined as follows:

ASAC Debt Financing

        ASAC received binding commitment letters, dated July 25, 2013, from JPMorgan Chase Bank, N.A., London Branch, and Merrill Lynch International to provide margin loans of $429 million and $214 million, respectively, and has negotiated definitive documentation in respect of such loans. The loans will be secured by shares of Activision Blizzard common stock to be purchased by ASAC pursuant to the Stock Purchase Agreement and will mature four years from the date of the closing of the purchase of such shares.

        The loans are expected to accrue interest at a fixed rate per annum to be determined on or about the closing date of the share purchase. Interest on the loans will be payable annually. Under certain circumstances related to its cash receipts, ASAC will have the option to pay such interest in kind. If the Activision Blizzard share price declines below certain levels, ASAC will be required to prepay portions of the loans to maintain certain ratios of the loan amount to the value of the shares and, if the closing price of the shares is below $5.44 on any day, ASAC will be required to prepay the loan in whole.

        Funding of the loans is conditioned on the consummation of ASAC's purchase of the shares in accordance with the Stock Purchase Agreement, and, among other things, upon: (i) the execution and delivery by ASAC and the General Partner of definitive documentation, which has been substantially finalized; (ii) ASAC's receipt of its equity financing; (iii) the pledge of the shares to the lenders; (iv) the

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assignment of ASAC's registration rights with respect to the shares to the lenders; and (v) the satisfaction of other conditions, such as the absence of certain events relating to the Company or the shares, the absence of prohibitions or restrictions on the transactions, and the accuracy of representations and warranties.

Regulatory Matters

        Each of ASAC and the Company filed the required notification under the HSR Act on July 26, 2013 and July 30, 2013, respectively, and each party received from the Department of Justice a notice regarding the termination of the respective waiting period under the HSR Act on August 2, 2013.

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LEGAL PROCEEDINGS REGARDING THE TRANSACTIONS CONTEMPLATED BY THE STOCK
PURCHASE AGREEMENT

        On August 1, 2013, a purported stockholder of the Company filed a stockholder derivative action in the Superior Court of the State of California, County of Los Angeles, captioned Miller v. Kotick, et al., No. BC517086. The complaint names each member of our board of directors and Vivendi as defendants, and the Company as a nominal defendant. The complaint purports to state claims for breaches of fiduciary duties, waste of corporate assets and unjust enrichment in connection with Vivendi's sale of its stake in the Company and that Vivendi also breached its fiduciary duties. The plaintiff further alleges that a demand on our board of directors to institute action would be futile because a majority of our board of directors is not independent and a majority of the individual defendants face a substantial likelihood of liability for approving the transactions contemplated by the Stock Purchase Agreement. The complaint seeks, among other things, damages allegedly sustained by the Company, rescission of the transactions contemplated by the Stock Purchase Agreement, an order restricting our CEO and Co-Chairman from purchasing additional shares of Activision Blizzard common stock and an order directing us to take actions to improve and reform our corporate governance and internal procedures.

        On August 14, 2013, the Company received a letter from a stockholder of the Company seeking, pursuant to Section 220 of the Delaware General Corporation Law, to inspect the books and records of the Company to ascertain whether the Stock Purchase Transaction and Private Sale were in the best interests of the Company. The Company provided the stockholder with certain materials under a confidentiality agreement. On September 11, 2013, a complaint was filed under seal by the same stockholder in the Court of Chancery of the State of Delaware in an action captioned Pacchia v. Kotick et al., C.A. No. 8884-VCL. A public version of that complaint was filed on September 16, 2013. The complaint names each member of our board of directors and Vivendi as defendants, and the Company as a nominal defendant. The allegations in the complaint are substantially similar to the allegations in the above referenced matter filed on August 1, 2013. The complaint seeks, among other things, damages, injunctive relief to prevent the Private Sale from being consummated, reformation or rescission of the Private Sale if it is consummated, and disgorgement of any alleged benefits received by the defendants.

        On September 11, 2013, another stockholder of the Company filed a putative class action and stockholder derivative action in the Court of Chancery of the State of Delaware, captioned Hayes v. Activision Blizzard, Inc., et al., No. 8885-VCL. The complaint names our board of directors, Vivendi, New VH, ASAC, the General Partner of ASAC, Davis and FMR as defendants, and the Company as a nominal defendant. The complaint alleges that the defendants violated certain provisions of our Amended and Restated Certificate of Incorporation by failing to submit the matters contemplated by the Stock Purchase Agreement for approval by a majority of our stockholders (other than Vivendi and its controlled affiliates); that our board of directors committed breaches of their fiduciary duties in approving the Stock Purchase Agreement; that Vivendi allegedly violated fiduciary duties owed to other stockholders of the Company in entering into the Stock Purchase Agreement; that our CEO and Co-Chairman usurped a corporate opportunity from the Company; that our board of directors and Vivendi have engaged in actions to entrench our board of directors and officers in their offices; that the ASAC Entities, Davis and FMR aided and abetted breaches of fiduciary duties by the board of directors and Vivendi; and that our CEO and Co-Chairman, the ASAC Entities, Davis and FMR will be unjustly enriched through the Private Sale. The complaint seeks, among other things, a preliminary and permanent injunction of the Stock Purchase Agreement and the transactions contemplated thereby; rescission of the Private Sale; an order requiring the transfer to the Company of all or part of the shares that are the subject of the Private Sale; an order implementing measures to eliminate or mitigate the alleged entrenching effects of the Private Sale; an order requiring our CEO and Co-Chairman, the ASAC Entities, Davis and FMR to disgorge to the Company the amounts by which they have allegedly been unjustly enriched; and alleged damages sustained by the class and the Company. In addition, the stockholder sought a temporary restraining order preventing the defendants from consummating the transactions contemplated by the Stock Purchase

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Agreement without stockholder approval. On September 18, 2013, the Delaware Court of Chancery issued a preliminary injunction order, enjoining the consummation of the transactions contemplated by the Stock Purchase Agreement pending (a) the issuance of a final decision after a trial on the merits; (b) receipt of a favorable Activision Blizzard stockholder vote on the transactions contemplated by the Stock Purchase Agreement under Section 9.1(b) of our Amended and Restated Certificate of Incorporation or (c) modification of such preliminary injunction order by the Delaware Court of Chancery or the Delaware Supreme Court. As a result of the preliminary injunction order, the Company is seeking stockholder approval of the Stock Purchase Agreement and the transactions contemplated thereby. On September 20, 2013, the Court of Chancery certified its order granting the preliminary injunction for interlocutory appeal to the Delaware Supreme Court. The defendants moved the Delaware Supreme Court to accept and hear the appeal on an expedited basis. On September 23, 2013, the Delaware Supreme Court accepted the appeal and granted the motion to hear the appeal on an expedited basis, with a hearing scheduled for October 10, 2013.

        On September 18, 2013, the Company received a letter from another purported stockholder of the Company seeking, pursuant to Section 220 of the Delaware General Corporation Law, to inspect the books and records of the Company to investigate potential wrongdoing or mismanagement in connection with the approval of the Stock Purchase Agreement.

        We believe that the defendants have meritorious defenses and intend to defend each of these lawsuits vigorously. However, these lawsuits and any other lawsuits are subject to inherent uncertainties and the actual outcome and costs will depend upon many unknown factors. The outcome of litigation is necessarily uncertain, and the Company could be forced to expend significant resources in the defense of these lawsuits and may not prevail.

        The Company also may be subject to additional claims in connection with the Stock Purchase Transaction and Private Sale. Monitoring and defending against legal actions is time consuming for our management and detracts from our ability to fully focus our internal resources on our business activities. In addition, the Company may incur substantial legal fees and costs in connection with litigation and, although coverage may be available under relevant insurance policies, coverage could be denied or prove to be insufficient. Under our Amended and Restated Certificate of Incorporation and the indemnification agreements that the Company has entered into with our officers and directors, the Company may be required in certain circumstances to indemnify and advance expenses to them in connection with their participation in proceedings arising out of their service to us. There can be no assurance that any of these payments will not be material.

        The Company is not currently able to estimate the possible cost to us from these lawsuits, as they are in the early stages and it cannot be determined how long it may take to resolve these matters or the possible amount of any damages that the Company may be required to pay. Moreover, the Company cannot be certain what the impact on our operations or financial position will be if any of the purported stockholder plaintiffs are successful in having the Stock Purchase Transaction and Private Sale rescinded or further enjoined. The Company has not established any reserves for any potential liability relating to these lawsuits. It is possible that the Company could, in the future, incur judgments or enter into settlements of claims for monetary damages. A decision adverse to the Company on these actions could result in the rescission or further enjoining of the Stock Purchase Transaction and Private Sale or the payment of substantial damages and could have a material adverse effect on our business, reputation, financial condition, results of operations, profitability, cash flows or liquidity.

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SELECTED HISTORICAL CONSOLIDATED FINANCIAL INFORMATION

        The following tables set forth our selected historical consolidated financial information as of the dates and for the periods indicated. The selected historical consolidated financial information as of December 31, 2012, 2011, 2010, 2009 and 2008, and for the years ended December 31, 2012, 2011, 2010, 2009 and 2008 has been derived from our audited consolidated financial statements. The selected historical consolidated financial information as of June 30, 2013 and for the six months ended June 30, 2013 and 2012 has been derived from our unaudited condensed consolidated financial statements. The unaudited condensed consolidated financial statements have been prepared on a basis consistent with the basis on which our audited consolidated financial statements have been prepared and, in the opinion of our management, reflect all adjustments, consisting only of normal and recurring adjustments, necessary for a fair presentation of such data.

        Our historical financial information may not be indicative of our future performance. Further, results for the six months ended June 30, 2013 are not necessarily indicative of the results to be expected for the full year or for any other periods.

 
  Six months ended
June 30,
  Year ended December 31,  
(dollars in millions)
  2013   2012   2012   2011   2010   2009   2008(5)  
 
  (unaudited)
   
   
   
   
   
 

Net revenues

                                           

Product sales

  $ 1,717   $ 1,672   $ 3,620   $ 3,257   $ 3,087   $ 3,080   $ 1,872  

Subscription, licensing, and other revenues

    658     575     1,236     1,498     1,360     1,199     1,154  
                               

Total net revenues

    2,375     2,247     4,856     4,755     4,447     4,279     3,026  

Costs and expenses

                                           

Cost of sales—product costs

    440     486     1,116     1,134     1,350     1,432     1,160  

Cost of sales—online subscriptions

    111     140     263     255     250     212     193  

Cost of sales—software royalties and amortization

    99     88     194     218     338     348     267  

Cost of sales—intellectual property licenses

    52     27     89     165     197     315     219  

Product development

    247     259     604     629     626     627     592  

Sales and marketing

    223     216     578     545     516     544     464  

General and administrative

    186     291     561     456     375     395     271  

Impairment of intangible assets

                    326     409      

Restructuring

                25         23     93  
                               

Total costs and expenses

    1,358     1,507     3,405     3,427     3,978     4,305     3,259  

Operating income

    1,017     740     1,451     1,328     469     (26 )   (233 )

Investment and other income (expense), net

    3     3     7     3     23     18     46  
                               

Income before income tax expense

    1,020     743     1,458     1,331     492     (8 )   (187 )

Income tax expense

    240     174     309     246     74     (121 )   (80 )
                               

Net income

  $ 780   $ 569   $ 1,149   $ 1,085   $ 418   $ 113   $ (107 )
                               

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  As of December 31,  
 
  As of
June 30,
2013
 
(dollars in millions)
  2012   2011   2010   2009   2008(5)  
 
  (unaudited)
   
   
   
   
   
 

Consolidated Balance Sheet Data

                                     

Cash and cash equivalents

  $ 4,341   $ 3,959   $ 3,165   $ 2,812   $ 2,768   $ 2,958  

Short-term investments

    205     416     360     696     477     44  

Total assets

    13,411     14,200     13,277     13,447     13,742     14,465  

Total liabilities

    1,476     2,883     2,785     3,244     2,986     2,938  

Total stockholders' equity

    11,935     11,317     10,492     10,203     10,756     11,527  
                           

 

 
  Six months ended
June 30,
  Year ended December 31,  
(dollars in millions)
  2013   2012   2012   2011   2010   2009   2008(5)  
 
  (unaudited)
   
   
   
   
   
 

Consolidated Statement of Cash Flows Data

                                           

Net cash provided by operating activities

  $ 434   $ 245   $ 1,345   $ 952   $ 1,376   $ 1,183   $ 379  

Net cash (used in) provided by investing activities

  $ 176   $ (74 ) $ (124 ) $ 266   $ (312 ) $ (443 ) $ 1,101  

Net cash (used in) provided by financing activities

  $ (176 ) $ (496 ) $ (497 ) $ (808 ) $ (1,053 ) $ (949 ) $ 1,488  
                               

 

 
  Six months ended
June 30,
  Year ended December 31,(6)  
(dollars in millions)
  2013   2012   2012   2011   2010   2009  
 
  (unaudited)
   
   
   
   
 

Non-GAAP Information

                                     

GAAP net revenues by distribution channel

                                     

Retail channels

  $ 1,522   $ 1,479   $ 3,013   $ 2,697   $ 2,629   $ 2,622  

Digital online channels(1)

    765     656     1,537     1,640     1,440     1,234  
                           

Total Activision and Blizzard

    2,287     2,135     4,550     4,337     4,069     3,856  

Distribution

    88     112     306     418     378     423  
                           

Total consolidated GAAP net revenues

    2,375     2,247     4,856     4,755     4,447     4,279  

Change in deferred net revenues(2)

                                     

Retail channels

    (1,009 )   (746 )   69     (185 )   251     457  

Digital online channels(1)

    47     140     62     (81 )   105     39  
                           

Total changes in deferred net revenues

    (962 )   (606 )   131     (266 )   356     496  
                           

Non-GAAP net revenues by distribution channel

                                     

Retail channels

    513     733     3,082     2,512     2,880     3,079  

Digital online channels(1)

    812     796     1,599     1,559     1,545     1,273  
                           

Total Activision and Blizzard

    1,325     1,529     4,681     4,071     4,425     4,352  

Distribution

    88     112     306     418     378     423  
                           

Total non-GAAP net revenues(3)(4)

  $ 1,413   $ 1,641   $ 4,987   $ 4,489   $ 4,803   $ 4,775  
                           

(1)
We define revenues from digital online channels as revenues from subscriptions and memberships, licensing royalties, value-added services, downloadable content, and digitally distributed products.

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(2)
We have determined that some of our games' online functionality represents an essential component of gameplay and as a result represents a more-than-inconsequential separate deliverable. As such, we are required to recognize the revenues of these game titles over the estimated service periods, which may range from a minimum of five months to a maximum of less than a year. In the table above, we present the amount of net revenues for each period as a result of this accounting treatment.

(3)
The analysis of revenues by distribution channel is presented both on a basis consistent with GAAP (including the impact from change in deferred revenues) and on a non-GAAP (excluding the impact from change in deferred revenues) basis. Excluding the impact from change in deferred net revenue provides a timely indication of trends in our sales and other operating results. This non-GAAP financial measure has limitations in that it does not reflect all of the items associated with our GAAP revenues. We compensate for the limitations resulting from the exclusion of the change in deferred revenues by considering the impact of that item separately and by considering our GAAP, as well as non-GAAP, revenues.

(4)
Total non-GAAP net revenues presented also represents our total operating segment net revenues.

(5)
On July 9, 2008, a business combination (the "Business Combination") by and among Activision, Inc., Sego Merger Corporation, a wholly owned subsidiary of Activision, Inc., Vivendi, VGAC LLC, a wholly owned subsidiary of Vivendi, and Vivendi Games, a wholly owned subsidiary of VGAC LLC ("Vivendi Games"), was consummated. As a result of the consummation of the Business Combination, Activision, Inc. was renamed Activision Blizzard, Inc. For accounting purposes, the Business Combination is treated as a "reverse acquisition," with Vivendi Games deemed to be the acquirer. The historical financial statements of Activision Blizzard, Inc. prior to July 9, 2008 are those of Vivendi Games. Therefore, 2012, 2011, 2010, 2009 and 2008 financial data is not comparable with prior periods.

(6)
Equivalent non-GAAP information was not measured in 2008 or in prior periods.

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UNAUDITED PRO FORMA CONDENSED FINANCIAL INFORMATION

        This unaudited pro forma condensed financial information is provided in order to present the continuing impacts from the Stock Purchase Transaction and the incurrence of $4.75 billion of debt, as well as the use of our cash and cash equivalents ("cash") in connection with the Stock Purchase Transaction, and to show how historical financial statements might have been affected had the Stock Purchase Transaction been consummated at an earlier date. The Company believes that the unaudited pro forma condensed financial information is useful because of the significant changes to the Company's capital structure expected as a result of the Stock Purchase Transaction, the incurrence of $4.75 billion of debt and use of our cash.

        The unaudited pro forma condensed statement of operations for the six months ended June 30, 2013 and the year ended December 31, 2012 gives effect to the Stock Purchase Transaction, the incurrence of $4.75 billion of debt, as well as the use of our cash in connection with the Stock Purchase Transaction as if they were consummated on January 1, 2012 and includes all adjustments, which give effect to material events that are directly attributable to the Stock Purchase Transaction, the debt and use of our cash, that are expected to have a continuing impact and are factually supportable. The unaudited pro forma condensed balance sheet as of June 30, 2013 gives effect to the Stock Purchase Transaction, the debt and use of our cash as if they had been consummated on June 30, 2013 and includes all adjustments, which give effect to material events that are directly attributable to the Stock Purchase Transaction, the debt and use of our cash, that are factually supportable. The notes to the pro forma condensed financial information describe the unaudited pro forma amounts and adjustments presented below.

        The pro forma adjustments reflect the Stock Purchase Transaction as the acquisition of treasury stock in accordance with U.S. GAAP and upon the assumptions set forth in the notes herein. The unaudited pro forma condensed balance sheet has been adjusted to reflect the impact of the incurrence of the debt, the repurchase of our common stock, and the corresponding use of our cash. This unaudited pro forma condensed financial information should be read in conjunction with the historical financial statements of Activision Blizzard incorporated by reference elsewhere in this proxy statement.

        The unaudited pro forma condensed financial information is based on financial statements prepared in accordance with U.S. GAAP. In addition, the unaudited pro forma condensed financial information is based upon available information and a number of assumptions that the Company considers to be reasonable, and have been made solely for purposes of developing such unaudited pro forma condensed financial information for illustrative purposes in compliance with the disclosure requirements S-X Article 11 of the SEC.

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Unaudited Pro Forma Condensed Statements of Operations

 
  For the six months ended June 30, 2013   For the year ended December 31, 2012  
 
  Activision
Blizzard
  Pro Forma
Adjustments
  Pro Forma
Activision
Blizzard
  Activision
Blizzard
  Pro Forma
Adjustments
  Pro Forma
Activision
Blizzard
 
 
  (in millions, except per share data)
  (in millions, except per share data)
 

Revenue:

                                     

Product sales

  $ 1,717   $   $ 1,717   $ 3,620   $   $ 3,620  

Subscription, licensing and other revenues

    658         658     1,236         1,236  
                           

Total net revenues

    2,375         2,375     4,856         4,856  

Costs and expenses:

                                     

Cost of sales

    702         702     1,662         1,662  

Product development

    247         247     604         604  

Sales and marketing

    223         223     578         578  

General and administrative

    186         186     561         561  
                           

Total costs and expenses

    1,358         1,358     3,405         3,405  

Operating income

    1,017         1,017     1,451         1,451  

Interest and other income (expenses), net

    3     (113) (a)   (110 )   7     (225) (a)   (218 )
                           

Income before income tax expense

    1,020     (113 )   907     1,458     (225 )   1,233  

Income tax expense

    240     (41) (b)   199     309     (81) (b)   228  
                           

Net income

  $ 780     (72 )   708   $ 1,149     (144 )   1,005  
                           

Earnings per common share:

                                     

Basic

  $ 0.68         $ 1.00 (c) $ 1.01         $ 1.42 (c)

Diluted

  $ 0.68         $ 0.99 (c) $ 1.01         $ 1.41 (c)

Weighted-average number of shares outstanding:

                                     

Basic

    1,116     (429) (d)   687     1,112     (429) (d)   683  

Diluted

    1,124     (429) (d)   695     1,118     (429) (d)   689  

   

See notes to unaudited pro forma condensed financial information

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Unaudited Pro Forma Condensed Balance Sheet

As of June 30, 2013

 
  Activision
Blizzard
  Pro Forma
Adjustments
  Pro Forma
Activision
Blizzard
 
 
  (in millions)
   
   
 

Assets

                   

Current assets:

                   

Cash and cash equivalents

  $ 4,341   $ (1,230) (e) $ 3,111  

Short-term investments

    205         205  

Accounts receivable, net

    117         117  

Inventories, net

    131         131  

Software development

    304         304  

Intellectual property licenses

    11         11  

Deferred income taxes, net

    335         335  

Other current assets

    185         185  
               

Total current assets

    5,629     (1,230 )   4,399  

Long-term investments

    9         9  

Software development

    35         35  

Property and equipment, net

    132         132  

Other assets

    10     60 (f)   70  

Intangible assets, net

    61         61  

Trademark and trade names

    433         433  

Goodwill

    7,102         7,102  
               

Total assets

  $ 13,411   $ (1,170 ) $ 12,241  
               

Liabilities and Shareholders' Equity

                   

Current liabilities:

                   

Accounts payable

  $ 139   $   $ 139  

Deferred revenues

    665         665  

Short-term debt

        25 (g)   25  

Accrued expenses and other liabilities

    389         389  
               

Total current liabilities

    1,193     25     1,218  

Deferred income taxes, net

    77         77  

Long-term debt, net

        4,673 (g)   4,673  

Other liabilities

    206         206  
               

Total liabilities

    1,476     4,698     6,174  

Shareholders' equity:

                   

Common stock

             

Additional paid-in capital

    9,541           9,541  

Treasury Stock

        (5,830) (d)   (5,830 )

Retained earnings

    2,456     (38) (h)   2,418  

Accumulated other comprehensive income (loss)

    (62 )       (62 )
               

Total shareholders' equity

    11,935     (5,868 )   6,067  
               

Total liabilities and shareholders' equity

  $ 13,411   $ (1,170 ) $ 12,241  
               

   

See notes to unaudited pro forma condensed financial information

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NOTES TO UNAUDITED PRO FORMA
CONDENSED FINANCIAL INFORMATION

Note 1: Basis of Pro Forma Presentation

        The unaudited pro forma condensed statements of operations for the six months ended June 30, 2013 and the year ended December 31, 2012 gives effect to the Stock Purchase Transaction, the incurrence of $4.75 billion of debt, as well as the use of our cash in connection with the Stock Purchase Transaction as if they were consummated on January 1, 2012 and includes all adjustments, which give effect to material events that are directly attributable to the Stock Purchase Transaction, the debt and use of our cash, that are expected to have a continuing impact, and are factually supportable. The unaudited pro forma condensed balance sheet as of June 30, 2013 gives effect to the Stock Purchase Transaction, the debt and use of our cash as if they had been consummated on June 30, 2013 and includes all adjustments, which give effect to material events that are directly attributable to the Stock Purchase Transaction, the debt and use of our cash, that are factually supportable. The notes to the unaudited pro forma condensed financial information describe the pro forma amounts and adjustments presented below.

        Certain non-recurring transaction expenses, such as bridge loan financing fees and legal and other professional fees estimated to range from $31 million to $38 million incurred and to be incurred, were excluded from the unaudited pro forma condensed statements of operations for the six months ended June 30, 2013 and the year ended December 31, 2012 because expensing these amounts does not have a continuing impact.

        The accounting of any derivatives embedded into our borrowings agreements were excluded from the unaudited pro forma condensed statements of operations for the six months ended June 30, 2013 and the year ended December 31, 2012, as well as the unaudited pro forma condensed balance sheet as of June 30, 2013 as the Company does not expect the accounting for these derivatives to be material for pro forma purposes.

Overview of the Accounting for the Stock Purchase Transaction

        On July 25, 2013, we entered into the Stock Purchase Agreement with Vivendi and ASAC, an exempted limited partnership established under the laws of the Cayman Islands, and acting by its General Partner. The Stock Purchase Agreement provides for us to, upon the terms and subject to the conditions thereof, acquire from Vivendi, in the Stock Purchase Transaction, all of the capital stock of New VH, a Delaware corporation and wholly owned subsidiary of Vivendi, which, at the time of purchase, will be the direct owner of approximately 429 million shares of Activision Blizzard common stock, for a cash payment of approximately $5.83 billion, or $13.60 per share for the shares of Activision Blizzard common stock being acquired by us. In addition, New VH has certain tax attributes that are expected to benefit the Company in the future. The Stock Purchase Agreement further provides for ASAC to, upon the terms and subject to the conditions thereof, purchase from Vivendi, in the Private Sale, approximately 172 million shares of Activision Blizzard common stock, in conjunction with the Stock Purchase Transaction, for an aggregate cash payment of approximately $2.34 billion, or $13.60 per share, provided that such amounts may be reduced under certain circumstances. Robert A. Kotick, our Chief Executive Officer, and Brian G. Kelly, Co-Chairman of our board of directors, are affiliates of the General Partner of ASAC, and will contribute $100 million combined to the Private Sale. The Private Sale is not reflected in this unaudited pro forma condensed financial information as it will not have an accounting implication for the Company.

        We plan to fund the Stock Purchase Transaction with a combination of approximately $1.2 billion of cash on hand and $4.6 billion of net proceeds received by the Company (net of estimated $150 million of fees, expenses and upfront costs) in connection with debt accessed through the capital markets and bank financing. We have completed the syndication of a seven-year secured term loan credit facility totaling $2.5 billion ("Term Loan B"). The Company expects to also secure a five-year revolving credit facility of $250 million. The closing of the Term Loan B and the revolving credit facility are subject to customary

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closing conditions. In addition, we have closed the private offering of $1,500 million aggregate principal amount of 5.625% senior notes due 2021 (the "2021 Notes") and $750 million aggregate principal amount of 6.125% senior notes due 2023 (the "2023 Notes" and, together with the 2021 Notes, the "Notes"). The proceeds of the Notes were funded into an escrow account on September 19, 2013 and are being held in such account, subject to the terms of the special mandatory redemption feature as described elsewhere in this proxy statement, pending the closing of the transactions contemplated by the Stock Purchase Agreement.

        After giving effect to the Stock Purchase Transaction, our common stock outstanding is expected to be reduced by approximately 429 million shares, which would accordingly increase earnings per common share. The Stock Purchase Transaction will be accounted for as a share repurchase with the consideration recorded as treasury stock in our balance sheet. We expect that following the completion of the Stock Purchase Transaction, our cash will be reduced by approximately $1.2 billion, and our new capital structure is expected to include approximately $4.75 billion of debt.

Note 2: Pro Forma Adjustments (in millions, except per share and percentage data)

(a)
Represents the following pro forma adjustments to interest and other (income) expenses, net:

 
  Six months ended
June 30, 2013
  Year Ended
December 31, 2012
 

Cash interest expense related to debt financing(1)

  $ 106   $ 212  

Amortization of debt discount, such as original issue discount and gross spread

    3     5  

Amortization of deferred financing costs

    4     8  
           

Pro forma adjustment to interest and other (income) expenses, net

  $ 113   $ 225  
           

(1)
Pro forma cash interest expense was calculated at an assumed interest rate of 3.25% for Term Loan B and 5.625% and 6.125% for the 2021 Notes and 2023 Notes, respectively. Interest expense on Term Loan B is subject to 3-months LIBOR or 0.75%, whichever is higher, plus a spread of 2.5%. For every one-eighth percentage point (0.125%) percent increase or decrease from our assumed interest rate for the Term Loan B, the estimated annual interest expense on the Term Loan B is expected to change by approximately $3 million. No assurance can be given that a similar variable rate of interest will be achieved or that estimated amount will represent the actual interest expense incurred in the future.
(b)
Represents the income tax effect of the aggregate pro forma adjustments at the statutory income tax rate of approximately 36%.

(c)
Pro forma earnings per share was calculated pursuant to the two-class method which requires the allocation of net income between common shareholders and participating security holders. We had, on a weighted average basis, participating securities of approximately 25 million for the six months ended June 30, 2013 and 24 million for the year ended December 31, 2012. On a pro forma basis, net income attributable to common shareholders used to calculate earnings per share was $687 million for the six months ended June 30, 2013 and $973 million for the year ended December 31, 2012.

(d)
Represents the pro forma adjustments to the weighted average number of shares outstanding for the six months ended June 30, 2013 and the year ended December 31, 2012 attributed to the repurchase of approximately 429 million shares of Activision Blizzard common stock. The repurchase of shares of Activision Blizzard common stock in total of approximately $5,830 million or at $13.60 per share is reflected as treasury stock in the unaudited pro forma condensed balance sheet.

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(e)
Represents the pro forma adjustments to cash and cash equivalents of approximately $1,230 million of cash that we plan to use to fund, in part, the Stock Purchase Transaction. The remainder of the aggregate $5,830 million to be paid by the Company as part of the Stock Purchase Transaction will be funded with the approximately $4,600 million of net proceeds received by the Company (net of estimated $150 million of fees, expenses, issuance discount, and upfront costs) in connection with the issuance of the $2,250 million of the Notes and the $2,500 million Term Loan B.

(f)
Represents the fees paid capitalized as deferred financing costs in connection with the debt.

(g)
Represents the following pro forma adjustments for short-term and long-term debt related to the debt financing of $4,750 million:

Term Loan B

  $ 2,500  

2021 Notes

    1,500  

2023 Notes

    750  
       

Total debt

    4,750  

Original issue discount and gross spread cost

    (52 )
       

Total carrying value of debt

    4,698  

Less: short-term debt

    (25 )
       

Total long-term debt

  $ 4,673  
       
(h)
Represents one-time expenses of the Stock Purchase Transaction and non-capitalizable debt-related costs such as bridge loan financing fees and legal and other professional fees.

Note 3: Tax Attributes Assumed

        Pursuant to the Stock Purchase Agreement, in addition to the acquisition of our common stock through the acquisition of New VH, Vivendi's wholly owned newly formed subsidiary, the New VH entity has certain tax attributes that are expected to benefit the Company in the future. These generally consist of New VH's net operating loss ("NOL") carryforwards of approximately $676 million (having a potential future tax benefit of approximately $245 million). Under the same Stock Purchase Agreement, the Company obtains indemnification from Vivendi against losses attributable to the potential nonexistence of such NOLs or the disallowance of claimed utilization of such NOL carryforwards of up to $200 million (unrealized tax benefit) in the aggregate, limited to taxable years ending on or prior to December 31, 2016. The accounting of the NOL carryforwards and indemnification were excluded from the unaudited pro forma condensed statements of operations for the six months ended June 30, 2013 and the year ended December 31, 2012 because of uncertainty in assumptions around the tax attributes and indemnification, and as such, the accounting impact cannot be reliably determined.

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MARKET PRICE AND DIVIDEND DATA

        Activision Blizzard common stock is traded on NASDAQ under the ticker symbol "ATVI." The following table sets forth, for the period indicated, the range of high and low sale prices of shares of Activision Blizzard common stock, as reported by NASDAQ with respect to the period from January 1, 2011 through June 30, 2013.

 
  Activision Blizzard
Shares
 
 
  High   Low  

Fiscal Year ending December 31, 2013

             

Second Quarter

  $ 16.11   $ 13.27  

First Quarter

  $ 15.08   $ 10.75  

Fiscal Year ended December 31, 2012

             

Fourth Quarter

  $ 11.74   $ 10.45  

Third Quarter

  $ 12.57   $ 11.00  

Second Quarter

  $ 13.00   $ 11.32  

First Quarter

  $ 12.95   $ 11.54  

Fiscal Year ended December 31, 2011

             

Fourth Quarter

  $ 14.40   $ 11.60  

Third Quarter

  $ 12.30   $ 10.40  

Second Quarter

  $ 12.06   $ 10.85  

First Quarter

  $ 12.64   $ 10.40  

        The high and low sales prices per Activision Blizzard share as reported by NASDAQ on September 27, 2013, the latest practicable trading day before the filing of this proxy statement were $17.04 and $16.76. There were 1,723 stockholders of record of shares of Activision Blizzard common stock as of September 20, 2013.

        On February 7, 2013, our board of directors declared a cash dividend of $0.19 per common share payable on May 15, 2013 to stockholders of record at the close of business on March 20, 2013. On February 9, 2012, our board of directors declared a cash dividend of $0.18 per common share payable on May 16, 2012 to stockholders of record at the close of business on March 21, 2012.

        Pursuant to the terms of the Indenture, the Company is limited in its ability to pay dividends or make other distributions on, or repurchase or redeem, shares of Activision Blizzard common stock or make other restricted payments. The Indenture does not prohibit the Company from making aggregate payments up to $150 million on shares of Activision Blizzard common stock in any calendar year, with such amount increasing 7.5% each calendar year after September 19, 2013, so long as no default under the Indenture shall have occurred and be continuing or would occur as a consequence of making such payments.

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SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

        The following table sets forth information, as of September 20, 2013, with respect to the beneficial ownership of shares of Activision Blizzard common stock by (1) our named executive officers, (2) our directors, (3) all current executive officers and directors as a group, and (4) each stockholder (including any "group" as that term is used in Section 13(d)(3) of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), that we know to be the beneficial owner of more than 5% of shares of Activision Blizzard common stock. Unless otherwise noted, the persons named in the table have sole voting and investment power with respect to all shares shown as beneficially owned by such stockholder.

 
  Shares of Activision Blizzard Beneficially Owned  
Beneficial Owner
  Shares Owned   Right to
Acquire(1)
  Total Shares
Owned plus
Right
to Acquire
  Percent of
Outstanding
Shares(2)
 

Philippe G.H. Capron

                 

Jean-Yves Charlier

                 

Robert J. Corti

    87,000 (3)   187,084 (4)   274,084     *  

Frédéric R. Crépin

                 

Jean-François Dubos

                 

Dennis Durkin

    47,147         47,147     *  

Lucian Grainge

                 

Brian Hodous

    146,166     200,000 (5)   346,166     *  

Brian G. Kelly

    2,563,543 (6)   312,549 (7)   2,876,092     *  

Robert A. Kotick

    2,044,703 (8)   4,031,698 (9)   6,076,401     *  

Robert J. Morgado

    260,998     251,530 (10)   512,528     *  

Michael Morhaime

    109,491     1,382,224 (11)   1,491,715     *  

Humam Sakhnini

    55,280     314,000 (5)   369,280     *  

Richard Sarnoff

    85,000     267,084 (12)   352,084     *  

Thomas Tippl(13)

    86,250 (14)   1,353,750 (5)   1,440,000     *  

Régis Turrini

                 
                   

All current directors and executive officers as a group (18 persons)

    5,501,408 (15)   8,519,919 (16)   14,021,327     1.24 %
                   

VGAC(17)

    683,643,890         683,643,890     60.85 %
                   

*
Less than 1%.

(1)
Consists of shares of Activision Blizzard common stock that may be acquired upon (a) the exercise of stock options to purchase shares of Activision Blizzard common stock that are exercisable on or within 60 days of September 20, 2013 (i.e., November 19, 2013) and (b) the vesting of restricted share units reflecting the right to receive shares of shares of Activision Blizzard common stock that vest, or the settlement of vested restricted share units that settle, within 60 days of September 20, 2013 (i.e., November 19, 2013).

(2)
The percent of outstanding shares was calculated by dividing the number of shares of Activision Blizzard common stock beneficially owned by each beneficial owner or group of beneficial owners as of September 20, 2013 (including the number of shares that each beneficial owner or group of beneficial owners had the right to acquire within 60 days of that date) by the sum of (a) 1,123,540,541, the total number of shares of Activision Blizzard common stock outstanding on that date (including 86,250 restricted shares of Activision Blizzard common stock, all of which were issued and outstanding but subject to forfeiture on that date) and (b) the number of shares that may be acquired by such beneficial owner or group of beneficial owners within 60 days of that date.

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(3)
Consists of shares held jointly by Mr. Corti and his wife, Joann Corti, who share voting and investment power with respect to such shares.

(4)
Consists of (a) options to purchase 184,334 shares of Activision Blizzard common stock and (b) 2,750 restricted share units, each representing the conditional right to receive one Activision Blizzard share.

(5)
Consists of options to purchase shares of Activision Blizzard common stock.

(6)
Consists of (a) 350,754 shares held by Mr. Kelly, (b) 472,865 shares held by an irrevocable trust for the benefit of Mr. Kelly's minor children, (c) 203,149 shares held by grantor retained annuity trust of which Mr. Kelly is the annuitant beneficiary and his wife, Joelle Kelly, is the trustee, (d) 666,884 shares held by the Brian & Joelle Kelly Family Foundation, a charitable foundation of which Mr. Kelly is a trustee, as to which Mr. Kelly disclaims beneficial ownership, (e) 860,291 shares held by the 45121I Trust, a trust for the benefit of Mr. Kotick's minor children of which Mr. Kelly is trustee, as to which Mr. Kelly disclaims beneficial ownership, and (f) 9,600 shares held in UTMA accounts for the benefit of Mr. Kotick's minor children of which Mr. Kelly is the custodian, as to which Mr. Kelly disclaims beneficial ownership.

(7)
Consists of (a) 262,998 options to purchase shares of Activision Blizzard common stock held by Mr. Kelly, (b) 14,181 options to purchase shares of Activision Blizzard common stock held in the 45121I Trust, a trust for the benefit of Mr. Kotick's minor children of which Mr. Kelly is trustee, as to which Mr. Kelly disclaims beneficial ownership, and (c) 35,370 restricted share units, each representing the conditional right to receive one Activision Blizzard share.

(8)
Consists of (a) 963,305 shares of Activision Blizzard common stock held in the 10122B Trust, of which Mr. Kotick is the trustee and the sole beneficiary, (b) 1,076,598 shares of Activision Blizzard common stock held in the 1011 Foundation, Inc. a charitable foundation of which Mr. Kotick is the President, as to which Mr. Kotick disclaims beneficial ownership and (c) 4,800 shares of Activision Blizzard common stock held in a UTMA account for the benefit of Mr. Kotick's minor relative of which Mr. Kotick is the custodian, as to which Mr. Kotick disclaims beneficial ownership.

(9)
Consists of (a) 3,962,998 options to purchase shares of Activision Blizzard common stock held in the 10122B Trust, of which Mr. Kotick is the trustee and the sole beneficiary, and (b) 68,700 restricted share units, each representing the conditional right to receive one Activision Blizzard share.

(10)
Consists of (a) options to purchase 248,780 shares of Activision Blizzard common stock and (b) 2,750 restricted Activision Blizzard share units, each representing the conditional right to receive one Activision Blizzard share.

(11)
Consists of (a) 1,300,001 options to purchase shares of Activision Blizzard common stock held by Mr. Morhaime, (b) 70,000 restricted share units, each representing the conditional right to receive shares of Activision Blizzard common stock, (c) 9,723 options to purchase shares of Activision Blizzard common stock held by Mr. Morhaime's wife, Amy Morhaime, who is employed by Blizzard Entertainment, and (d) 2,500 restricted share units, each representing the conditional right to receive shares of Activision Blizzard common stock, held by Amy Morhaime.

(12)
Consists of (a) options to purchase 264,334 shares of Activision Blizzard common stock and (b) 2,750 restricted share units, each representing the conditional right to receive shares of Activision Blizzard common stock.

(13)
Consists of equity held by the Thomas and Laura Tippl Family Trust. Mr. Tippl and his wife, Laura Tippl, are co-trustees of such trust and share voting and investment power with respect thereto.

(14)
Includes 86,250 restricted shares of Activision Blizzard common stock (56,250 of which have vesting tied to performance).

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(15)
Includes shares of Activision Blizzard common stock held indirectly by such individuals as described in certain footnotes above.

(16)
Includes (a) options to purchase 8,215,099 shares of Activision Blizzard common stock and (b) 304,820 restricted share units, each representing the conditional right to receive one Activision Blizzard share.

(17)
VGAC is a wholly owned subsidiary of Vivendi. The address for both VGAC and Vivendi is 42, avenue de Friedland, 75380 Paris Cedex 08, France.

        The following table sets forth information, as of September 20, 2013, with respect to the beneficial ownership of shares of Vivendi by (1) each of our named executive officers, (2) each of our directors, and (3) all current executive officers and directors of Activision Blizzard, as a group. Unless otherwise noted, the persons named in the table have sole voting and investment power with respect to all shares shown as beneficially owned by such stockholder.

 
  Shares of Vivendi Beneficially Owned  
Beneficial Owner
  Shares Owned   Right to
Acquire(1)
  Total Shares
Owned plus
Right
to Acquire
  Percent of
Outstanding
Shares(2)
 

Philippe G.H. Capron

    100,370 (3)   842,744 (4)   943,114     *  

Jean-Yves Charlier

    87,256 (5)   75,358 (6)   162,614     *  

Robert J. Corti

                 

Frédéric R. Crépin

    56,652 (7)   294,293 (8)   350,945     *  

Jean-François Dubos

    122,921 (9)   1,659,359 (10)   1,782,280     *  

Dennis Durkin

                 

Lucian Grainge

    5,929     345,254 (11)   351,183     *  

Brian Hodous

                 

Brian G. Kelly

                 

Robert A. Kotick

                 

Robert J. Morgado

                 

Michael Morhaime

                *  

Humam Sakhnini

                 

Richard Sarnoff

                 

Thomas Tippl

                 

Régis Turrini

    50,428 (12)   705,201 (13)   755,629     *  
                   

All current directors and executive officers as a group (16 persons)

    423,556     3,922,209 (14)   4,345,765     *  
                   

*
Less than 1%.

(1)
Consists of (A) shares of Vivendi common stock that may be acquired upon (x) the exercise of stock options to purchase shares of Vivendi common stock that are exercisable on or within 60 days of September 20, 2013 (i.e., November 19, 2013) or (y) the vesting and settlement of restricted share units reflecting the right to receive shares of Vivendi common stock that vest within 60 days of September 20, 2013 (i.e., November 19, 2013), and (B) shares held in the Vivendi Group Savings Plan, which are restricted and may not be withdrawn from the plan except in limited circumstances as determined under French law. For purposes of this table, the number of shares (rounded to the nearest whole share) attributable to the Vivendi Group Savings Plan is equal to (i) the person's outstanding balance under the plan as of September 15, 2013, divided by (ii) €17.27 per share, which was the closing price of Vivendi's common stock as reported on the NYSE Euronext market on September 13, 2013.

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(2)
The percent of outstanding shares was calculated by dividing the number of shares of Activision Blizzard common stock beneficially owned by each beneficial owner or group of beneficial owners as of September 20, 2013 (including the number of shares that each beneficial owner or group of beneficial owners had the right to acquire within 60 days of that date) by the sum of (a) 1,338,876,716, the total number of voting shares of record of Vivendi that were issued and outstanding on that date and (b) the number of shares that may be acquired by such beneficial owner or group of beneficial owners within 60 days of that date.

(3)
Includes (a) 14,336 shares that are owned but may not be sold or otherwise transferred until April 17, 2014 and (b) 28,937 shares that are owned but may not be sold or otherwise transferred until April 16, 2015.

(4)
Consists of (a) options to purchase 699,780 shares of Vivendi common stock, (b) 28,996 shares underlying performance-based restricted share units that may vest on April 18, 2014 (and will then be owned but may not be sold or otherwise transferred until April 19, 2016), (c) 50 shares underlying performance-based restricted share units that may vest on July 18, 2014 (and will then be owned but may not be sold or otherwise transferred until July 19, 2016), (d) 63,831 shares underlying performance-based restricted share units that may vest on February 23, 2015 (and will then be owned but may not be sold or otherwise transferred until February 24, 2017), and (e) 50,087 shares held in the Vivendi Group Savings Plan.

(5)
Includes 79,765 shares that are owned but may not be sold or otherwise transferred until September 28, 2016.

(6)
Consists of (a) 22,166 shares underlying performance-based restricted share units that may vest on September 29, 2014 (and will then be owned but may not be sold or otherwise transferred until September 30, 2016) and (b) 53,192 shares underlying performance-based restricted share units that may vest on February 22, 2015 (and will then be owned but may not be sold or otherwise transferred until February 23, 2017).

(7)
Includes (a) 2,868 shares that are owned but may not be sold or otherwise transferred until April 17, 2014, (b) 9,188 shares that are owned but may not be sold or otherwise transferred until April 16, 2015, and (c) 35,000 shares that are owned but currently may not be sold or otherwise transferred.

(8)
Consists of (a) options to purchase 230,545 shares of Vivendi common stock, (b) 7,021 shares underlying performance-based restricted share units that may vest on April 18, 2014 (and will then be owned but may not be sold or otherwise transferred until April 19, 2016), (c) 50 shares underlying performance-based restricted share units that may vest on July 18, 2014 (and will then be owned but may not be sold or otherwise transferred until July 19, 2016), (d) 2,959 shares underlying performance-based restricted share units that may vest on September 29, 2014 (and will then be owned but may not be sold or otherwise transferred until September 30, 2016, (e) 42,554 shares underlying performance-based restricted share units that may vest on February 22, 2015 (and will then be owned but may not be sold or otherwise transferred until February 23, 2017), and (f) 11,164 shares held in the Vivendi Group Savings Plan.

(9)
Includes (a) 28,937 shares that are owned but may not be sold or otherwise transferred until April 15, 2013, and (b) 73,433 shares that are owned but currently may not be sold or otherwise transferred.

(10)
Consists of (a) options to purchase 1,418,698 shares of Vivendi common stock, (b) 30,522 shares underlying performance-based restricted share units that may vest on April 18, 2014 (and will then be owned but may not be sold or otherwise transferred until April 19, 2016), (c) 63,847 shares underlying performance-based restricted share units that may vest on September 29, 2014 (and will then be owned but may not be sold or otherwise transferred until September 30, 2016), (d) 106,384 shares underlying performance-based restricted share units that may vest on February 23, 2015 (and will then

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    be owned but may not be sold or otherwise transferred until February 24, 2017), and (e) 39,908 shares held in the Vivendi Group Savings Plan.

(11)
Consists of (a) options to purchase 179,689 shares of Vivendi common stock, (b) 8,149 shares underlying performance-based restricted share units that may vest on April 16, 2014 (and will then be owned but may not be sold or otherwise transferred until April 17, 2016), (c) 25,836 shares underlying performance-based restricted share units that may vest on April 14, 2015 (and will then be owned but may not be sold or otherwise transferred until April 15, 2017), (d) 77,514 shares underlying performance-based restricted share units that may vest on April 22, 2015 (and will then be owned but may not be sold or otherwise transferred until April 23, 2017), (e) 27,470 shares underlying performance-based restricted share units that may vest on April 18, 2016 (and will then be owned but may not be sold or otherwise transferred until April 19, 2018), and (f) 26,596 shares underlying performance-based restricted share units that may vest on February 23, 2017 (and will then be owned but may not be sold or otherwise transferred until February 24, 2019).

(12)
Includes (a) 7,168 shares that are owned but may not be sold or otherwise transferred until April 17, 2014 and (b) 14,779 shares that are owned but may not be sold or otherwise transferred until April 16, 2015.

(13)
Consists of (a) options to purchase 624,224 shares of Vivendi common stock, (b) 15,262 shares underlying performance-based restricted share units that may vest on April 18, 2014 (and will then be owned but may not be sold or otherwise transferred until April 19, 2016), (c) 50 shares underlying performance-based restricted share units that may vest on July 18, 2014 (and will then be owned but may not be sold or otherwise transferred until July 19, 2016), (d) 37,235 shares underlying performance-based restricted share units that may vest on February 22, 2015 (and will then be owned but may not be sold or otherwise transferred until February 23, 2017) and (e) 28,430 shares held in the Vivendi Group Savings Plan.

(14)
Includes (a) options to purchase 3,152,936 shares of Vivendi common stock, (b) 639,684 shares underlying performance-based restricted share units, and (c) 129,589 shares held in the Vivendi Group Savings Plan.

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THE STOCK PURCHASE AGREEMENT

        The summary of the material terms of the Stock Purchase Agreement below and elsewhere in this proxy statement is qualified in its entirety by reference to the Stock Purchase Agreement, a copy of which is attached to this proxy statement as Annex A and which we incorporate by reference into this proxy statement. This summary does not purport to be complete and may not contain all of the information about the Stock Purchase Agreement that is important to you. We encourage you to read carefully the Stock Purchase Agreement in its entirety.

        The Stock Purchase Agreement has been included to provide you with information regarding its terms. It is not intended to provide any other factual information about the Company, Vivendi or ASAC. Such information can be found elsewhere in this proxy statement and in the other public filings the Company makes with the SEC, which are available without charge at www.sec.gov. The representations, warranties and covenants contained in the Stock Purchase Agreement were made only for purposes of that agreement and as of specific dates, were solely for the benefit of the parties to the Stock Purchase Agreement, and may be subject to limitations agreed upon by the contracting parties, including being qualified by confidential disclosures made for the purposes of allocating contractual risk between the parties to the Stock Purchase Agreement instead of establishing these matters as facts, and may be subject to standards of materiality applicable to the contracting parties that differ from those applicable to investors. Accordingly, you should not rely on the representations and warranties as characterizations of the actual state of affairs of the Company without considering the entirety of public disclosure about the Company as set forth in the Company's SEC filings. Moreover, information concerning the subject matter of the representations and warranties may change after the date of the Stock Purchase Agreement, which subsequent information may or may not be fully reflected in this proxy statement or in other public disclosures by the Company.

The Transactions

        The Stock Purchase Agreement provides for the Stock Purchase Transaction, in which the Company will purchase all of the capital stock of New VH, a wholly owned newly formed subsidiary of Vivendi, which at the time of the purchase will be the direct owner of 428,676,471 shares of Activision Blizzard common stock and which is contractually prohibited from conducting any operations, in consideration of a cash payment to Vivendi of $5,830,000,005.60, or $13.60 per share for the shares of Activision Blizzard common stock to be acquired by the Company. In addition, New VH has certain tax attributes that are expected to benefit the Company in the future. Immediately following the consummation of the Stock Purchase Transaction, the Stock Purchase Agreement provides for the Private Sale to ASAC of 171,968,042 shares of Activision Blizzard common stock owned by Vivendi, for an aggregate cash payment of $2,338,765,371.20, or $13.60 per share for the shares of Activision Blizzard common stock to be acquired by ASAC, provided that the number of shares to be acquired by ASAC may be reduced under certain circumstances as provided in the Stock Purchase Agreement. The Stock Purchase Transaction and the Private Sale are both required by the Stock Purchase Agreement to occur on the closing date.

Possible Reduction in Shares to be Acquired by ASAC

        In the event one (and only one) of the investor groups of ASAC (other than the investor group affiliated with FMR) fails to fund its equity commitment to ASAC at the scheduled closing of the Private Sale, the number of shares to be acquired by ASAC will be reduced to take into account the reduced funds available to ASAC to complete the Private Sale.

Consideration

        In the Stock Purchase Transaction, the Company will pay Vivendi, in consideration for all of the capital stock of New VH to be acquired by the Company, an aggregate cash payment of $5,830,000,005.60, or $13.60 per share for the shares of Activision Blizzard common stock to be acquired by the Company

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through the acquisition of New VH. In addition, New VH has certain tax attributes that are expected to benefit the Company in the future.

        In the Private Sale, ASAC will pay Vivendi, in consideration for the 171,968,042 shares of Activision Blizzard common stock to be acquired by ASAC, an aggregate cash payment of $2,338,765,371.20, or $13.60 per share for the shares of Activision Blizzard common stock to be acquired by ASAC, provided that the number of shares to be acquired by ASAC may be reduced under certain circumstances as described under "—Possible Reduction in Shares to be Acquired by ASAC."

        The $13.60 per share purchase price represents a discount of approximately 20.05% to the closing price per share of Activision Blizzard common stock on September 26, 2013, the last completed trading day prior to the date of this proxy statement, and a discount of approximately 10.41% to the closing price per share of Activision Blizzard common stock on July 25, 2013, the last completed trading day prior to the public announcement of the proposed transactions.

Resignation of Vivendi Designees

        The Stock Purchase Agreement provides that, prior to or concurrently with the closing of the Stock Purchase Transaction and the Private Sale, Vivendi will cause each of its current designees to the Company's board of directors (i.e., Philippe G. H. Capron, Jean-Yves Charlier, Frédéric R. Crépin, Jean-François Dubos, Lucian Grainge and Régis Turrini) to resign his position as a director on the Company's board of directors and all committees of the Company's board of directors, effective as of the closing of the Stock Purchase Transaction and Private Sale.

Representations and Warranties

        The Stock Purchase Agreement contains representations and warranties of the Company, Vivendi and ASAC.

        Some of the representations and warranties in the Stock Purchase Agreement made by the Company are qualified by "materiality" or "Company Material Adverse Effect." For purposes of the Stock Purchase Agreement, "Company Material Adverse Effect" means a fact, effect, change, event or circumstance which is materially adverse to the ability of the Company to perform its obligations under the Stock Purchase Agreement or to consummate the transactions contemplated thereby.

        In the Stock Purchase Agreement, the Company has made representations and warranties to Vivendi and ASAC (with some representations and warranties made solely to Vivendi) that are subject, in some cases, to specified exceptions and qualifications contained in the Stock Purchase Agreement. These representations and warranties relate to, among other things:

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        In the Stock Purchase Agreement, Vivendi has made representations and warranties to the Company and ASAC (with some representations and warranties made solely to the Company or ASAC) that are subject, in some cases, to specified exceptions and qualifications contained in the Stock Purchase Agreement. These representations and warranties relate to, among other things:

        In the Stock Purchase Agreement, ASAC has made representations and warranties to the Company and Vivendi (with some representations and warranties made solely to Vivendi) that are subject, in some cases, to specified exceptions and qualifications contained in the Stock Purchase Agreement. These representations and warranties relate to, among other things:

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Agreement to Use Reasonable Best Efforts

        Each of the Company, Vivendi and ASAC have agreed to use their reasonable best efforts to take, or cause to be taken, all appropriate action to do, or cause to be done, all things necessary, proper or advisable under applicable law or otherwise to consummate the transactions contemplated by the Stock Purchase Agreement as promptly as practicable, including to

        Each of the Company and ASAC must use its reasonable best efforts to arrange and obtain the proceeds of its respective financing on the terms and conditions described in its respective financing commitments, subject to certain limitations.

Director and Officer Indemnification

        The Stock Purchase Agreement provides that the Company may not amend its Amended and Restated Certificate of Incorporation or Amended and Restated Bylaws between the date of closing of the Transactions and the sixth year anniversary of such date in a manner that would adversely affect the rights of any person who is a Vivendi designated director or officer of the Company, in his or her capacity as such, to indemnification by, and/or advancement of expenses from, the Company.

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Registration Obligations

        The Company has agreed to file registration statements under certain circumstances for the sale of up to all of the Remaining Shares. The Stock Purchase Agreement contemplates that Vivendi may commence, after the consummation of the Stock Purchase Transaction and Private Sale, one or more registered public offerings (the "Market Offerings") for the sale of up to all of the Remaining Shares and provides that the Company shall file a shelf registration statement for each such Market Offerings, in accordance with the terms and subject to the conditions set forth in the Stock Purchase Agreement and the Amended and Restated Investor Agreement (as defined below). The Company has agreed to use its reasonable best efforts to file and have declared effective the first shelf registration statement no later than three days prior to the end of the first 180 days of the fifteen month lockup period in which Vivendi is restricted from selling the Remaining Shares (subject to sales permitted during the permitted sales period) (as described in "—Sale Restrictions") and the second shelf registration statement no later than three days prior to the end of that fifteen month period.

Sale Restrictions

        Vivendi and ASAC have agreed to certain restrictions on their respective ability to sell shares of Activision Blizzard common stock following the consummation of the transactions contemplated by the Stock Purchase Agreement.

        Vivendi has agreed that neither it nor any of its controlled affiliates will transfer the Remaining Shares for fifteen months following the closing of the Stock Purchase Transaction and Private Sale, with the exception of a 90-day period of time after the first 180 days in which Vivendi will be able to sell up to the lesser of (a) 50% of the Remaining Shares and (b) 9% of the issued and outstanding shares of Activision Blizzard common stock as of the date of such sale.

        ASAC has agreed that it will not transfer its approximately 24.7% ownership interest in the shares of Activision Blizzard common stock immediately following the closing of the Private Sale until the earlier of (a) the end of the eighteen-month period following the closing of the Stock Purchase Transaction and Private Sale, and (b) the date on which Seller Entities in the Stock Purchase Agreement no longer own 20% or more of the Remaining Shares (subject to certain exceptions to sell shares to pay off debt incurred by ASAC in connection with the Private Sale as set forth in the Stock Purchase Agreement).

Conditions to the Transactions

        The respective obligations of each party to consummate the Stock Purchase Transaction and Private Sale, as applicable, are subject to the satisfaction or (to the extent permitted) waiver by the parties of the following conditions:

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        Under the Hayes litigation described above, the transactions contemplated by the Stock Purchase Agreement have been enjoined by a preliminary injunction order of the Court of Chancery of the State of Delaware. We disagree with the Court of Chancery's ruling and are appealing the decision to the Delaware Supreme Court. Absent further action by the Delaware courts, and in the event that the Delaware Supreme Court affirms the Court of Chancery's ruling, the preliminary injunction prevents completion of the contemplated transactions unless the Stock Purchase Agreement and the transactions contemplated thereby are approved by our stockholders under our Amended and Restated Certificate of Incorporation. This preliminary proxy statement is being filed at this time in order to begin the process that would be required to consummate the transactions contemplated by the Stock Purchase Agreement in the event that we are unsuccessful in our appeal, including seeking the affirmative vote of a majority in interest of the stockholders of the Company, as of the record date, other than Vivendi and its controlled affiliates, that are present in person or by proxy and entitled to vote at the special meeting. If we present that proposal to our stockholders, our Amended and Restated Bylaws require us to also obtain the affirmative vote of a majority in interest of the stockholders of the Company, as of the record date, that are present in person or by proxy and entitled to vote at the special meeting. Vivendi has informed us that it intends to be present at the special meeting and vote in favor of the proposal to approve the Stock Purchase Agreement and the transactions contemplated thereby, and this vote by Vivendi will be sufficient to satisfy the requirement to obtain the affirmative vote of a majority in interest of the stockholders present in person or by proxy and entitled to vote at the special meeting (see "The Special Meeting—Vote Required"). However, if we receive a favorable ruling from the Delaware Supreme Court, and the affirmative vote of a majority in interest of the stockholders of Activision Blizzard, as of the record date, that are present in person or by proxy and entitled to vote at the special meeting, other than Vivendi and its controlled affiliates, is determined not to be required, the vote will not be sought and the special meeting will not be held.

        The Stock Purchase Transaction and the Private Sale are both required by the Stock Purchase Agreement to occur on the closing date.

Termination of the Stock Purchase Agreement

        The Stock Purchase Agreement may be terminated at any time prior to the closing:

        The Court of Chancery of the State of Delaware has issued a preliminary injunction order enjoining the consummation of the transactions contemplated by the Stock Purchase Agreement, pending either further action by the Delaware courts or the receipt of a favorable Activision Blizzard stockholder vote on the transactions contemplated by the Stock Purchase Agreement. We disagree with the Court of Chancery's ruling, and are appealing the ruling to the Delaware Supreme Court, which has agreed to hear the appeal on an expedited basis, with a hearing scheduled for October 10, 2013. This preliminary proxy statement is being filed at this time to begin the process that would be required to consummate the transactions contemplated by the Stock Purchase Agreement in the event that we are unsuccessful in our appeal and the parties to the Stock Purchase Agreement renegotiate the Stock Purchase Agreement. A requirement to obtain an Activision Blizzard stockholder vote would render it impossible to complete the transactions contemplated by the Stock Purchase Agreement prior to the October 15, 2013 termination

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date currently provided for in the Stock Purchase Agreement. Unless the ruling of the Court of Chancery is reversed, the transaction cannot and will not proceed without the agreement of each of the parties. There is no assurance that the parties will be able to renegotiate the transaction in order to reach such agreement.

        As a result, if the preliminary injunction issued by the Court of Chancery is not reversed by the Delaware Supreme Court, and because a stockholder vote could not occur prior to October 15, 2013, following October 15, 2013, unless that date is extended, any party to the Stock Purchase Agreement could freely terminate the agreement without cause and without penalty, including without payment of a termination fee. As of the time of filing of this preliminary proxy statement, the parties have not reached an agreement to extend the October 15, 2013 termination date, and it is uncertain whether any such agreement will be reached, or if so what the agreed-upon replacement date may be. This may have the effect of permitting any party to the Stock Purchase Agreement to terminate the agreement and result in the failure to consummate the Stock Purchase Transaction and the Private Sale. There is and can be no assurance that the parties to the Stock Purchase Agreement will agree to amend the agreement to extend its term or contemplate a stockholder vote, or that the other terms of the agreement would remain intact, or what any adjustments to such terms might be, in the case of any such amendment. In addition, the proceeds of approximately $2.25 billion of unsecured notes issued by Activision Blizzard to fund a portion of the cash to be paid in connection with the Stock Purchase Transaction have been funded into an escrow account, which proceeds must be used to redeem the notes at 100% of their issue price, plus accrued and unpaid interest to, but excluding, the redemption date, upon the earlier of (i) the termination of the Stock Purchase Agreement and (ii) December 18, 2013 if the transactions contemplated by the Stock Purchase Agreement have not closed by such date.

Indemnification

        Subject to certain limitations in the Stock Purchase Agreement, the Stock Purchase Agreement provides that:

Specific Performance

        Each of the parties is entitled to specific performance to enforce performance of any covenant or obligation under the Stock Purchase Agreement or injunctive relief to prevent any breach thereof.

Fees and Expenses

        Except as otherwise provided in the Stock Purchase Agreement or as provided in the ancillary agreements, all fees and expenses incurred in connection with the Stock Purchase Agreement and the transactions contemplated thereby will be paid by the party incurring such fees or expenses. ASAC will be

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solely responsible for all fees and expenses payable with respect to the Stock Purchase Agreement pursuant to the HSR Act.

Governing Law

        Delaware law is the governing law for the Stock Purchase Agreement.

Ancillary Agreements

        The Stock Purchase Agreement contemplates the ancillary agreements described below (the "ancillary agreements"), which are to be entered into in connection with the consummation of the transactions contemplated by the Stock Purchase Agreement.

        Pursuant to the Stock Purchase Agreement, the Company, Vivendi, VGAC and Vivendi Games, Inc. ("Vivendi Games") are required to enter into, at the closing of the Stock Purchase Transaction and Private Sale, an amended and restated Investor Agreement (the "Amended and Restated Investor Agreement") to amend and restate in its entirety the existing investor agreement, dated as of July 9, 2008 between Vivendi, VGAC, Vivendi Games and the Company.

        The form of Amended and Restated Investor Agreement provides, among other things, that until the six-month anniversary of the first time at which Vivendi and its "controlled affiliates" (as defined in the Amended and Restated Investor Agreement) no longer beneficially own 5% of the issued and outstanding shares of Activision Blizzard common stock, they shall vote, and cause to be voted, all shares of their Activision Blizzard common stock that represent shares of Activision Blizzard common stock in excess of 9.9% of the issued and outstanding shares of Activision Blizzard common stock (i) in a manner proportionally consistent with the vote of the shares of Activision Blizzard common stock not owned by them or (ii) in accordance with the recommendation, if any, of a majority of the independent directors then serving on our board of directors. Shares of Activision Blizzard common stock owned by Vivendi and its controlled affiliates that represent up to 9.9% of the issued and outstanding shares of Activision Blizzard common stock may be voted by Vivendi and its controlled affiliates in their sole discretion. The form of Amended and Restated Investor Agreement also provides that Vivendi agrees to vote in favor of amendments to our Amended and Restated Certificate of Incorporation or Amended and Restated Bylaws proposed by us in certain circumstances.

        The form of Amended and Restated Investor Agreement further provides for a standstill on each of Vivendi and VGAC, on behalf of themselves and their controlled affiliates, for a period commencing on the date of the closing of the transactions contemplated by the Stock Purchase Agreement and ending six months after the first date on which Vivendi and its controlled affiliates, in the aggregate, beneficially own less than 5% of the issued and outstanding shares of Activision Blizzard common stock, during which time Vivendi, VGAC and their controlled affiliates may not, among other things, directly or indirectly: (a) acquire, offer or propose to acquire, or agree or seek to acquire, or solicit the acquisition of, by purchase or otherwise, any shares of Activision Blizzard common stock (or beneficial ownership thereof) or rights or options to acquire any shares of Activision Blizzard common stock (or beneficial ownership thereof) or commence any tender or exchange offer for any shares of Activision Blizzard common stock (or beneficial ownership thereof), subject to certain exceptions; or (b) call a meeting of our stockholders or initiate any stockholder proposal for action by our stockholders or engage in the "solicitation" of "proxies" (as such terms are used in the proxy rules of the SEC) or consents to vote any of our voting securities.

        The form of Amended and Restated Investor Agreement also grants to Vivendi, its controlled affiliates and each "holder" (as defined in the Amended and Restated Investor Agreement) certain registration rights.

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        Pursuant to the Stock Purchase Agreement, the Company, ASAC and, for the limited purposes set forth in the ASAC Stockholders Agreement, Messrs. Kotick and Kelly are required to enter into, at the closing of the Stock Purchase Transaction and Private Sale, the ASAC Stockholders Agreement. The form of the ASAC Stockholders Agreement, provides for, among other things, certain registration rights for ASAC and also imposes certain restrictions on the transfer of ASAC's (and its controlled affiliates') shares of Activision Blizzard common stock and its acquisition of additional shares of Activision Blizzard common stock, subject to the terms and conditions set forth therein.

        The form of the ASAC Stockholders Agreement provides that prior to the end of the twelve month period following the closing of the Stock Purchase Transaction and Private Sale, and thereafter during any regularly scheduled black-out period of the Company or any other trading black-out declared by us pursuant to our insider trading policies, ASAC and its controlled affiliates are prohibited from transferring or announcing any intention to transfer their shares of Activision Blizzard common stock without the prior written consent of the majority of the members of our board of directors not affiliated with ASAC, subject to certain exceptions set forth in the ASAC Stockholders Agreement (including to sell shares to pay off debt incurred by ASAC in connection with the Private Sale).

        The form of the ASAC Stockholders Agreement also provides for a standstill that will prohibit ASAC and its controlled affiliates from, among other things, acquiring additional shares of Activision Blizzard common stock, calling a meeting of our stockholders, initiating any stockholder proposal for action by our stockholders or engaging in the "solicitation" of "proxies" (as such terms are used in the proxy rules of the SEC) or consents to vote any of our voting securities, in each case from the closing of the Stock Purchase Transaction and Private Sale until six months after the time at which the percentage of shares of Activision Blizzard common stock held by ASAC and any member of a group with ASAC and Messrs. Kotick and Kelly, divided by the total number of shares of Activision Blizzard common stock issued and outstanding falls below 5% of the issued and outstanding shares of Activision Blizzard common stock (subject to certain exceptions set forth in the ASAC Stockholders Agreement).

        Certain of the rights and restrictions described above are applicable to the investors of ASAC, subject to the exceptions set forth in the ASAC Stockholders Agreement.

        The form of the ASAC Stockholders Agreement also provides that at any time at which the percentage of shares of Activision Blizzard common stock held by ASAC, any member of a group with ASAC and Messrs. Kotick and Kelly divided by the total number of shares of Activision Blizzard common stock issued and outstanding exceeds 24.7%, Messrs. Kotick and Kelly will vote any shares in excess of 24.7% (other than shares of Activision Blizzard common stock held by ASAC) in a manner proportionally consistent with the vote of the share of Activision Blizzard common stock not owned by ASAC, Mr. Kotick or Mr. Kelly or in accordance with the recommendation, if any, of a majority of the directors of Activision Blizzard unaffiliated with ASAC, Mr. Kotick or Mr. Kelly.

        Pursuant to the Stock Purchase Agreement, we, Vivendi and Coöperative Activision Blizzard International U.A. ("Coop") plan to enter into, at the closing of the Stock Purchase Transaction and Private Sale, a termination agreement (the "Termination Agreement") to modify and terminate a certain cash management services agreement, dated as of June 19, 2008 (the "Cash Management Services Agreement"), by and among Vivendi, Activision Blizzard and Activision Blizzard Treasury SAS, a société anonyme organized under the laws of France formerly known as Vivendi Games Treasury SAS ("ABT"), and a certain license agreement, dated as of July 1, 2008 (the "License Agreement"), by and among Vivendi, Activision Blizzard and ABT, both of which were assigned by ABT to Coop pursuant to that Assignment, Assumption and Amendment, dated as of June 9, 2011, by and among Vivendi, Activision Blizzard, Coop and ABT. The form of the Termination Agreement provides that the Cash Management Services Agreement and the License Agreement shall be terminated within 30 days of the closing of the transactions contemplated by the Stock Purchase Agreement.

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PROPOSAL 1: APPROVAL OF THE STOCK PURCHASE AGREEMENT AND THE TRANSACTIONS
CONTEMPLATED THEREBY

The Stock Purchase Agreement Approval Proposal ("Proposal 1")

        We are asking you to vote in favor of the proposal to approve the Stock Purchase Agreement and the transactions contemplated thereby.

Vote Required and Board of Directors' Recommendation

        The approval of Proposal 1 requires the presence of a quorum and the affirmative vote of a majority in interest of both (i) the stockholders of the Company, as of the record date, that are present in person or by proxy and entitled to vote at the special meeting and (ii) the stockholders of the Company, as of the record date, that are present in person or by proxy and entitled to vote at the special meeting, other than Vivendi and its controlled affiliates.

        If you are present at the special meeting in person or by proxy and abstain from voting or otherwise do not vote, it will have the same effect as a vote "AGAINST" Proposal 1. If you are not present at the special meeting in person or by proxy, your shares of Activision Blizzard common stock will not be counted as voting power present for purposes of voting on Proposal 1, and therefore will have no effect on Proposal 1. Broker non-votes will have the same effect as not being present at the special meeting, and therefore will have no effect on Proposal 1.

        The special committee unanimously determined the transactions contemplated by the Stock Purchase Agreement to be advisable and in the best interests of the Company and unanimously recommended that our board of directors approve the Company's execution, delivery and performance of the Stock Purchase Agreement and the consummation of the transactions contemplated thereby. After consideration of, and based upon, the special committee's recommendation, our board of directors unanimously determined that it is in the best interests of the Company, and declared it advisable, to enter into the Stock Purchase Agreement and consummate the transactions contemplated thereby.

        Our board of directors unanimously recommends that Activision Blizzard stockholders vote "FOR" Proposal 1.

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PROPOSAL 2: ADJOURNMENT OF THE SPECIAL MEETING

The Adjournment Proposal ("Proposal 2")

        We are asking you to approve a proposal to adjourn the special meeting to a later date or dates, if necessary or appropriate, for the purpose of soliciting additional proxies to vote in favor of the proposal to approve the Stock Purchase Agreement and the transactions contemplated thereby. If our stockholders approve Proposal 2, we could adjourn the special meeting and use the additional time to solicit additional proxies, including the solicitation of proxies from stockholders that previously returned properly executed proxies voting against Proposal 1. Among other things, Proposal 2 could mean that, even if we had received proxies representing a sufficient number of votes against Proposal 1 such that Proposal 1 would be defeated, we could adjourn the special meeting without a vote on Proposal 1 and seek to convince the holders of those shares to change their votes to votes in favor of Proposal 1. Additionally, in the absence of a quorum, the person presiding at the special meeting has the power to adjourn the special meeting from time to time until a quorum is present.

Vote Required and Board of Directors' Recommendation

        The approval of Proposal 2 requires the presence of a quorum and the affirmative vote of a majority in interest of the stockholders of the Company that are present in person or by proxy and entitled to vote at the special meeting.

        If you are present at the special meeting in person or by proxy and abstain from voting or otherwise do not vote, it will have the same effect as a vote "AGAINST" Proposal 2. If you are not present at the special meeting in person or by proxy, your shares of Activision Blizzard common stock will not be counted as voting power present for purposes of voting on Proposal 2, and therefore will have no effect on Proposal 2. Broker non-votes will have the same effect as not being present at the special meeting, and therefore will have no effect on Proposal 2.

        Our board of directors unanimously recommends that Activision Blizzard stockholders vote "FOR" Proposal 2.

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FUTURE STOCKHOLDER PROPOSALS

        Stockholders may present proposals for inclusion in our proxy statement for, and consideration at, our 2014 annual meeting by submitting their proposals to us in writing, in a timely manner. For such notice to be considered timely, our Corporate Secretary must receive it on or before December 27, 2013 (unless the date of the 2014 annual meeting is advanced by more than 30 days or delayed by more than 30 days from the anniversary date of the 2013 annual meeting, in which case the proposal must be received a reasonable time before we begin to print and mail our proxy materials for the 2014 annual meeting). For such proposal to be included in our proxy statement, it must otherwise be in compliance with Rule 14a-8 under the Exchange Act (e.g., it must be a proper subject for action by stockholders under the Delaware General Corporation Law).

        Stockholders who wish to present proposals before our 2014 annual meeting, but do not intend for those proposals to be included in the proxy statement for that meeting, may utilize the procedure in our Amended and Restated Bylaws. Under our Amended and Restated Bylaws, such proposals may be made by stockholders who are entitled to vote at the meeting by providing notice to us, in writing, in a timely manner and which contains the information required by our Amended and Restated Bylaws. For such notice to be considered timely, our Corporate Secretary must receive it no earlier than February 10, 2014 and no later than March 12, 2014 (unless the date of the 2014 annual meeting is advanced by more than 30 days or delayed by more than 30 days from the anniversary date of the 2013 annual meeting, in which case the notice must be submitted by the later of the 90th day before the 2014 annual meeting or the 10th day following the day on which public announcement of the date of the meeting is first made). For the business to be considered, the notice must contain all of the information required by our Amended and Restated Bylaws (e.g., the information that would be required to be included in our proxy statement for the meeting if such business had been proposed for consideration by our board of directors) and it must pertain to business which is a proper matter for stockholder action under the Delaware General Corporation Law.

        Any such proposal should be sent to our Corporate Secretary at Activision Blizzard, Inc., 3100 Ocean Park Boulevard, Santa Monica California 90405.

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WHERE YOU CAN FIND MORE INFORMATION

        The SEC allows us to "incorporate by reference" information into this proxy statement, which means that we can disclose important information to you by referring you to other documents filed separately with the SEC. The information incorporated by reference is deemed to be part of this proxy statement, except for any information superseded by information in this proxy statement or incorporated by reference subsequent to the date of this proxy statement. This proxy statement incorporates by reference the documents set forth below that we have previously filed with the SEC. These documents contain important information about us and our financial condition and are incorporated by reference into this proxy statement.

        The following Activision Blizzard filings with the SEC are incorporated by reference:

        Information furnished under Items 2.02 or 7.01 (or corresponding information furnished under Item 9.01 or included as an exhibit) in any past or future current report on Form 8-K that we file with the SEC, unless otherwise specified in such report, is not incorporated by reference in this proxy statement, nor are any other documents or information that is deemed to have been "furnished" and not "filed" with the SEC.

        We also incorporate by reference into this proxy statement additional documents that we may file with the SEC between the date of this proxy statement and the earlier of the date of the special meeting or the termination of the Stock Purchase Agreement. These documents include periodic reports, such as Annual Reports on Form 10-K and Quarterly Reports on Form 10-Q, as well as Current Reports on Form 8-K and proxy soliciting materials. The information provided on our website is not part of this proxy statement, and therefore is not incorporated by reference herein.

        You may read and copy any reports, statements or other information that we file with the SEC at its public reference room at the following location: Station Place, 100 F Street, N.E., Room 1580, Washington, D.C. 20549. You may also obtain copies of those documents at prescribed rates by writing to the Public Reference Section of the SEC at that address. Please call the SEC at (800) SEC-0330 for further information on the public reference room. These SEC filings are also available to the public from commercial document retrieval services and at www.sec.gov. In addition, stockholders may obtain free copies of the documents filed with the SEC by Activision Blizzard through the Investor Relations section of our website, and the "SEC Filings" tab therein.

        You may obtain any of the documents we file with the SEC, without charge, by requesting them in writing or by telephone from us at the following address:

Activision Blizzard, Inc.
Attn: Investor Relations
3100 Ocean Park Boulevard,
Santa Monica California 90405
(310) 255-2000

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        If you would like to request documents from us, please do so by [    •    ], 2013, to receive them before the special meeting. If you request any documents from us, we will mail them to you by first class mail, or another equally prompt method, within one business day after we receive your request. Please note that all of our documents that we file with the SEC are also promptly available through the Investor Relations section of our website, www.activisionblizzard.com, and the "SEC Filings" tab therein. The information included on our website is not incorporated by reference into this proxy statement.

        If you have any questions about this proxy statement, the special meeting or the Stock Purchase Transaction or need assistance with voting procedures, you should contact:

[    •    ]

Stockholders, call toll-free: [    •    ]

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Annex A

STOCK PURCHASE AGREEMENT

by and among

ACTIVISION BLIZZARD, INC.,

ASAC II LP,

and

VIVENDI, S.A.

Dated as of July 25, 2013

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TABLE OF CONTENTS

 
   
  Page  
ARTICLE I DEFINITIONS     A-4  

Section 1.1

 

Certain Defined Terms

   
A-4
 

Section 1.2

  Table of Definitions     A-8  

ARTICLE II RESTRUCTURING TRANSACTIONS

 

 

A-9

 

Section 2.1

 

Restructuring Transactions

   
A-9
 

Section 2.2

  Modifications to the Restructuring Transactions     A-10  

ARTICLE III PURCHASE AND SALE

 

 

A-10

 

Section 3.1

 

Purchase and Sale of the New VH Shares

   
A-10
 

Section 3.2

  Purchase and Sale of the Private Sale Shares     A-10  

Section 3.3

  Closing     A-10  

Section 3.4

  Withholding     A-11  

Section 3.5

  Resignation of Vivendi Designees     A-12  

ARTICLE IV REPRESENTATIONS AND WARRANTIES OF THE SELLER

 

 

A-12

 

Section 4.1

 

Organization

   
A-12
 

Section 4.2

  Authority     A-13  

Section 4.3

  No Conflict; Required Filings and Consents     A-13  

Section 4.4

  Capitalization of New VH     A-14  

Section 4.5

  Title to New VH Shares     A-14  

Section 4.6

  Title to Private Sale Shares     A-14  

Section 4.7

  Taxes     A-14  

Section 4.8

  Interim Operations of New VH     A-15  

Section 4.9

  Brokers     A-15  

Section 4.10

  No Other Representations or Warranties     A-15  

ARTICLE V REPRESENTATIONS AND WARRANTIES OF THE COMPANY

 

 

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Section 5.1

 

Organization

   
A-15
 

Section 5.2

  Authority     A-16  

Section 5.3

  No Conflict; Required Filings and Consents     A-16  

Section 5.4

  Financing     A-16  

Section 5.5

  Fairness Opinion     A-17  

Section 5.6

  Brokers     A-17  

Section 5.7

  No Other Representations or Warranties     A-17  

ARTICLE VI REPRESENTATIONS AND WARRANTIES OF ASAC

 

 

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Section 6.1

 

Organization

   
A-18
 

Section 6.2

  Authority     A-18  

Section 6.3

  No Conflict; Required Filings and Consents     A-18  

Section 6.4

  Financing     A-19  

Section 6.5

  Brokers     A-20  

Section 6.6

  No Other Representations or Warranties     A-20  

Section 6.7

  Investment Intent     A-20  

Section 6.8

  ASAC's Investigation and Reliance     A-20  

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ARTICLE VII COVENANTS

 

 

A-20

 

Section 7.1

 

Consents and Filings; Further Assurances

   
A-20
 

Section 7.2

  Tax Matters     A-21  

Section 7.3

  Public Announcements     A-24  

Section 7.4

  Market Offerings and Sale Restrictions     A-24  

Section 7.5

  Financing     A-26  

Section 7.6

  Section 16 Matters     A-29  

Section 7.7

  Continuation of New VH     A-29  

Section 7.8

  No Changes to Indemnification Provisions     A-29  

Section 7.9

  Waiver     A-29  

ARTICLE VIII CONDITIONS TO CLOSING

 

 

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Section 8.1

 

General Conditions

   
A-29
 

Section 8.2

  Conditions to Obligations of the Seller     A-30  

Section 8.3

  Conditions to Obligations of the Company     A-30  

Section 8.4

  Conditions to Obligations of ASAC     A-31  

ARTICLE IX TERMINATION

 

 

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Section 9.1

 

Termination

   
A-31
 

Section 9.2

  Effect of Termination     A-31  

ARTICLE X INDEMNIFICATION

 

 

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Section 10.1

 

Survival of Representations and Warranties

   
A-32
 

Section 10.2

  Indemnification by the Seller     A-32  

Section 10.3

  Indemnification by the Company and ASAC     A-32  

Section 10.4

  Procedures     A-33  

Section 10.5

  Limits on Indemnification     A-34  

Section 10.6

  Assignment of Claims     A-35  

Section 10.7

  Exclusivity     A-35  

ARTICLE XI GENERAL PROVISIONS

 

 

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Section 11.1

 

Fees and Expenses

   
A-36
 

Section 11.2

  Amendment and Modification     A-36  

Section 11.3

  Waiver     A-36  

Section 11.4

  Notices     A-36  

Section 11.5

  Interpretation     A-37  

Section 11.6

  Entire Agreement     A-38  

Section 11.7

  No Third-Party Beneficiaries     A-38  

Section 11.8

  Governing Law     A-38  

Section 11.9

  Submission to Jurisdiction     A-38  

Section 11.10

  Assignment; Successors     A-38  

Section 11.11

  Enforcement     A-38  

Section 11.12

  Currency     A-39  

Section 11.13

  Severability     A-39  

Section 11.14

  Waiver of Jury Trial     A-39  

Section 11.15

  Counterparts     A-39  

Section 11.16

  Facsimile or Electronic Signature     A-39  

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STOCK PURCHASE AGREEMENT

        STOCK PURCHASE AGREEMENT, dated as of July 25, 2013 (this "Agreement"), by and among Activision Blizzard, Inc., a Delaware corporation (the "Company"), ASAC II LP, an exempted limited partnership established under the laws of the Cayman Islands and acting by ASAC II LLC, its general partner ("ASAC"), and Vivendi, S.A., a société anonyme organized under the laws of France (the "Seller" and, together with ASAC and the Company, the "Parties" and each a "Party").


RECITALS

        WHEREAS, the Seller and the Company desire to enter into a transaction (the "Purchase Transaction") pursuant to which the Company will acquire all of the capital stock of Amber Holding Subsidiary Co., a Delaware corporation and wholly-owned subsidiary of the Seller ("New VH"), which at the time of the Purchase Transaction will be the direct owner of 428,676,471 shares (the "Transferred Company Shares") of the Company's common stock, par value, $0.000001 per share ("Company Common Stock");

        WHEREAS, the Seller and ASAC desire to enter into a transaction (the "Private Sale") pursuant to which ASAC will purchase from the Seller up to 171,968,042 shares of Company Common Stock (the "Maximum Private Sale Shares");

        WHEREAS, the Parties contemplate that, subject to the terms and conditions of this Agreement and the Amended and Restated Investor Agreement (as defined below), after the consummation of the Purchase Transaction and the Private Sale, the Seller may commence one or more registered public offerings (the "Market Offerings") for the sale of up to all of the shares of Company Common Stock that will be owned by the Seller and its subsidiaries after giving effect to the Purchase Transaction and the Private Sale (the "Remaining Shares");

        WHEREAS, in order to facilitate the Purchase Transaction, the Private Sale and the Market Offerings, prior to the transfer of the New VH Shares (as defined below) to the Company, the Seller and its subsidiaries shall consummate the restructuring transactions described in Article II below (the "Restructuring Transactions");

        WHEREAS, the Board of Directors of the Company (the "Board"), upon the unanimous recommendation of a special committee of the Board comprised solely of independent and disinterested directors (the "Special Committee"), has approved this Agreement, the Purchase Transaction, the Private Sale and the other transactions contemplated hereby (collectively, the "Transactions"); and

        WHEREAS, concurrently with the execution and delivery of this Agreement, Robert A. Kotick ("Kotick") and Brian G. Kelly ("Kelly") are each executing a waiver and acknowledgement letter in the forms attached hereto as Exhibit A and Exhibit B, respectively.


AGREEMENT

        In consideration of the foregoing and the mutual covenants and agreements herein contained, and intending to be legally bound hereby, the Parties agree as follows:


ARTICLE I
DEFINITIONS

        Section 1.1    Certain Defined Terms.     For purposes of this Agreement:

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        Section 1.2
    Table of Definitions.     The following terms have the meanings set forth in the Sections referenced below:

Definition
  Location
Aggregate Private Sale Price   3.2
Aggregate Purchase Price   3.1
Agreement   Preamble
ASAC   Preamble
ASAC Debt Financing   6.4(a)
ASAC Debt Financing Commitments   6.4(a)
ASAC Equity Commitments   6.4(a)
ASAC Financing   6.4(a)
ASAC Financing Commitments   6.4(a)
ASAC Financing Sources   6.4(a)
ASAC Indemnified Parties   10.2(b)
Bankruptcy and Equity Exception   4.2
Board   Recitals
Bylaws   3.3(b)(i)
Centerview   5.5
Charter   Section 3.5
CHL Shares   2.1(b)
Closing   3.3(a)
Closing Date   3.3(a)
Company   Preamble
Company Common Stock   Recitals
Company Debt Financing   5.1(a)
Company Debt Financing Commitment   5.1(a)
Company Debt Financing Sources   5.4(a)
Company Indemnified Parties   10.2(a)
DGCL   2.1(h)
Direct Claim   10.4(d)
Disclosure Schedules   Article IV
DOJ   7.1
Financing Source Related Parties   6.4(a)
Financing Sources   6.4(a)
First Lockup Period   7.4(a)
First Market Offering Registration Statement   7.4(b)
FTC   7.1
HSR Act   4.3(a)
Indemnified Party   10.4(a)
Indemnifying Party   10.4(a)
Kelly   Recitals
Kotick   Recitals
Losses   10.2(a)
Market Offerings   Recitals
Maximum Private Sale Shares   Recitals
New VH   Recitals
New VH Common Stock   4.4
New VH NOLs   4.7(b)
New VH Note   2.1(i)
Parties   Preamble
Party   Preamble
Permitted Sale Period   7.4(a)
Potential Contributor   10.6
Private Sale   Recitals

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Definition
  Location
Prohibited Transactions   7.4(a)
Purchase Transaction   Recitals
Remaining Shares   Recitals
Restructuring Transactions   Recitals
Scheduled Closing Date   3.3(c)
Second Lockup Period   7.4(a)
Second Market Offering Registration Statement   7.4(b)
Securities Act   6.7
Seller   Preamble
Seller Entities   4.1
Seller Indemnified Parties   10.3(a)
Special Committee   Recitals
Tax Representations   10.1
Termination Date   9.1(b)
Third Party Claim   10.4(a)
Transactions   Recitals
Transferred Company Shares   Recitals
VHI Debt   2.1(j)
WKSI   7.4(b)


ARTICLE II
RESTRUCTURING TRANSACTIONS

        Section 2.1    Restructuring Transactions.     Upon the terms and subject to the conditions of this Agreement (other than those conditions that can only be satisfied on the Closing Date), on or prior to the Closing Date (but in any event prior to the Closing), the following actions shall be taken in the order set forth below:

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        Section 2.2    Modifications to the Restructuring Transactions.     The Seller shall be permitted to take such ancillary actions as may be necessary or advisable to effectuate the purpose of the Restructuring Transactions without the consent of the other Parties. Notwithstanding the foregoing, without the prior written consent of the Company (which consent shall not be unreasonably withheld, conditioned or delayed), the Seller shall not make any modifications to the Restructuring Transactions that would adversely affect the assets or liabilities of New VH as of or following the Closing or otherwise be economically adverse to the Company (after giving effect to the Transactions), in each case in a more than de minimis respect.


ARTICLE III
PURCHASE AND SALE

        Section 3.1    Purchase and Sale of the New VH Shares.     Upon the terms and subject to the conditions of this Agreement, at the Closing, the Seller shall sell, assign, transfer, convey and deliver the New VH Shares to the Company, free and clear of all Encumbrances, and the Company shall purchase the New VH Shares from the Seller. In consideration for the New VH Shares, the Company shall pay the Seller $5,830,000,005.60 in cash (the "Aggregate Purchase Price").


        Section 3.2
    Purchase and Sale of the Private Sale Shares.     Upon the terms and subject to the conditions of this Agreement, at the Closing, immediately following the consummation of the Purchase Transaction, the Seller shall sell, assign, transfer, convey and deliver the Private Sale Shares to ASAC, free and clear of all Encumbrances, and ASAC shall purchase the Private Sale Shares from the Seller. In consideration for the Private Sale Shares, ASAC shall pay the Seller, in cash, $13.60 per share of Company Common Stock for an aggregate cash payment of $2,338,765,371.20 or, in the event of a Permitted ASAC Equity Commitment Failure, an amount equal to the product of (a) the number of Adjusted Private Sale Shares multiplied by (b) $13.60 (the "Aggregate Private Sale Price").


        Section 3.3
    Closing.     

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        Section 3.4
    Withholding.     The Company and ASAC shall be entitled to deduct and withhold from the Aggregate Purchase Price and Aggregate Private Sale Price, respectively, and any other consideration otherwise payable to the Seller pursuant to this Agreement such amounts as may be required to be deducted and withheld with respect to the making of such payment under applicable Tax Law. Any amounts so deducted and withheld shall be treated for all purposes of this Agreement as having been paid to the Seller. Prior to the Closing, the Company shall provide to ASAC a certification that complies with the requirements of Treasury Regulation Sections 1.897-2(h) and 1.1445-2(c)(3) to the effect that the

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Private Sale Shares are not U.S. real property interests within the meaning of Section 897 of the Code (a "FIRPTA Certificate"). The Parties acknowledge that under applicable Law as of the date hereof, neither the Company nor ASAC is aware of any obligation to withhold any Taxes from the foregoing payments. If either Party becomes aware of a change in applicable Law that would require any withholding Tax with respect to the foregoing payments, such Party shall promptly inform the other Party of such change, and the Parties shall cooperate in good faith and use reasonable best efforts to minimize such withholding Tax to the extent permitted by applicable Law (which efforts, for the avoidance of doubt, will not require either Party to agree to any substantive changes to the transactions contemplated by this Agreement or the Ancillary Agreements).


        Section 3.5
    Resignation of Vivendi Designees.     Prior to or concurrently with the Closing, the Seller, on behalf of itself and its Controlled Affiliates, will cause (a) each of the Vivendi Designees to resign his or her position as a director of the Company on the Board and all committees of the Board, effective as of the Closing; (b) the Vivendi Nominating Committee (as defined in the Bylaws and for so long as such committee may exist) to be composed solely of Independent Directors, or such other members of the Board who may be designated by the Independent Directors prior to Closing, and such individuals to be designated as Vivendi Designees; (c) the two Vivendi Designees on the Executive Nominating Committee (as defined in the Bylaws and for so long as such committee may exist) to be Independent Directors, or such other members of the Board who may be designated by the Independent Directors prior to Closing; (d) following the resignations referred to in clause (a), each of the Independent Directors or such other members of the Board who may be designated by the Independent Directors prior to Closing to be designated as a Vivendi Designee and (e) unless otherwise requested by the Independent Directors, the Board to resolve to reduce the size of the Board to five members as of the Closing. Following the Closing until the occurrence of a Termination Event (as defined in the Bylaws), the Seller and its Controlled Affiliates hereby covenant and agree not to (i) designate any new Vivendi Designees (except as specified in the foregoing sentence), (ii) fill any vacancies on the Board or on the Vivendi Nominating Committee (except (A) by voting as a holder of Company Common Stock to the extent permitted by Section 3.1 of the Amended and Restated Investor Agreement with respect to nominees not proposed by the Seller or any of its Controlled Affiliates to fill vacancies on the Board, (B) as reasonably requested by the Independent Directors, or (C) as specified in the foregoing sentence), (iii) exercise any rights under the certificate of incorporation of the Company (the "Charter") or the Bylaws that are capable of being exercised only by the Seller and/or its Controlled Affiliates, including any exercise that would otherwise be permitted because a Triggering Event or Termination Event has not yet occurred due to insufficient passage of time or (iv) remove any of the Vivendi Designees who were designated as such in accordance with this sentence (who are, for the avoidance of doubt, Independent Directors).


ARTICLE IV
REPRESENTATIONS AND WARRANTIES
OF THE SELLER

        Except as set forth in the Disclosure Schedules attached hereto (collectively, the "Disclosure Schedules"), the Seller hereby makes the representations and warranties set forth in this Article IV (other than the representations and warranties set forth in Section 4.6, which are made solely to ASAC) to the Company and hereby makes the representations and warranties set forth in this Article IV (other than the representations and warranties set forth in Sections 4.4, 4.5, 4.7 and 4.8, which are made solely to the Company) to ASAC.


        Section 4.1
    Organization.     Each of the Seller, New VH, VHI, VGAC Co. and VGAC LLC (collectively, the "Seller Entities") (i) is duly organized and is validly existing and in good standing under the Laws of the jurisdiction of its incorporation or organization, (ii) has all necessary power and authority to own, lease and operate its properties and assets and to carry on its business as currently conducted and (iii) is duly qualified to do business as a foreign entity and is in good standing in each jurisdiction where the

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character of the property owned, leased or operated by it or the nature of its activities makes such qualification necessary, except where the failure to be so qualified has not had, and would not, individually or in the aggregate, reasonably be expected to have a Seller Material Adverse Effect. The Seller has made available to the Company complete and correct copies of New VH's certificate of incorporation and bylaws and all the amendments thereto, as