UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
WASHINGTON,
DC 20549
FORM
8-K
CURRENT
REPORT
Pursuant
to Section 13 or 15 (d) of the
Securities
Exchange Act of 1934
Date
of
Report (Date of earliest event reported): March
29, 2007
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TAKE-TWO
INTERACTIVE SOFTWARE, INC.
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(Exact
name of registrant as specified in its
charter)
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Delaware
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0-29230
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51-0350842
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(State
or Other
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(Commission
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(IRS
Employer
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Jurisdiction
of
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File
Number)
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Identification
No.)
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Incorporation)
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622
Broadway, New York, NY
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10012
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(Address
of Principal Executive Offices)
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(Zip
Code)
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Registrant’s
telephone number, including area code (646)
536-2842
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Not
Applicable
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(Former
Name or Former Address, if Changed Since Last
Report)
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Check
the
appropriate box below if the Form 8-K filing is intended to simultaneously
satisfy the filing obligation of the registrant under any of the following
provisions (see General Instruction A.2. below):
o Written
communications pursuant to Rule 425 under the Securities Act (17 CFR
230.425)
o Soliciting
material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
240.14a-12)
o Pre-commencement
communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR
240.14d-2(b))
o Pre-commencement
communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR
240.13e-4(c))
Item
1.01. Entry into a Material Definitive Agreement
The
Registrant entered into a Management Agreement dated March 30, 2007 (the
“Management Agreement”) with ZelnickMedia Corporation (“ZelnickMedia”), pursuant
to which ZelnickMedia will provide financial and management consulting services
to the Registrant. Pursuant to the Management Agreement, ZelnickMedia will
consult with the board of directors of the Registrant (the “Board”) and
management of the Registrant and its subsidiaries in such manner and on such
business and financial matters as may be reasonably requested from time to
time
by the Board. Strauss Zelnick is entitled during the term of the Management
Agreement to serve as chairman of the Registrant. Mr. Zelnick will also have
the
authority during such term to hire and/or terminate the chief executive officer
and the chief financial officer of the Registrant, subject to the approval
of
the Compensation Committee of the Board. During such term, ZelnickMedia will
receive a monthly management fee of $62,500, an annual bonus of up to $750,000
per annum upon the achievement by the Registrant of certain performance
thresholds, an option to purchase a number of shares of the Registrant equal
to
2.5% of the outstanding common stock of the Registrant on a fully diluted basis
(which shall vest in equal monthly installments over three years) and a number
of shares of restricted common stock of the Registrant, in each case as more
fully described in the Management Agreement. ZelnickMedia will also be entitled
to the reimbursement of expenses in connection with the Management Agreement
and
any and all transactions relating thereto, whether incurred before or after
the
execution of the Management Agreement. The Management Agreement has a term
ending October 31, 2011, unless earlier terminated by either ZelnickMedia or
the
Registrant in accordance with the terms thereof, with automatic renewal for
successive one-year periods unless either party terminates upon 90 days’ prior
written notification to the other party. The description of the Management
Agreement contained herein is qualified in its entirety by reference to the
full
text of the Management Agreement, a copy of which is filed as Exhibit
99.1
hereto
and which is incorporated herein by reference.
The
Registrant entered into a Separation Agreement and General Release dated April
4, 2007 (the “Separation Agreement”) with Paul Eibeler, the former chief
executive officer of the Registrant (as more fully described below), pursuant
to
which Mr. Eibeler will serve as a consultant to the Registrant on an as-needed
basis as determined by the Board for a period of six months from the date of
the
Separation Agreement. During the term of Mr. Eibeler’s consultancy pursuant to
the Separation Agreement, Mr. Eibeler will receive from the Registrant a monthly
consulting fee of $50,000 and certain health and other benefits. Mr. Eibeler
was
removed as president, chief executive officer and director of the Registrant
on
March 29, 2007 and, pursuant to the Separation Agreement, his employment with
the Registrant was terminated on April 4, 2007. In connection therewith, Mr.
Eibeler will receive severance payments of $2,475,000 (a multiple of his 2007
base salary and bonus calculated in accordance with the severance provisions
of
his employment agreement with the Registrant) and any vesting requirements
with
respect to options or restricted stock granted to him prior to the termination
of his employment will be deemed satisfied. The description of the Separation
Agreement contained herein is qualified in its entirety by reference to the
full
text of the Separation Agreement, a copy of which is filed as Exhibit
99.2
hereto
and which is incorporated herein by reference.
Item
2.03. Creation of a Direct Financial Obligation or an Obligation under an
Off-Balance Sheet Arrangement of a Registrant.
See
the
description of the Management Agreement above.
Item
3.01. Notice of Delisting or Failure to Satisfy a Continued Listing Rule or
Standard; Transfer of Listing.
On
April
2, 2007, the Registrant notified The NASDAQ Stock Market that the Audit
Committee of its Board was comprised of only two members (as more fully
described below), rather than three members as required by Marketplace Rule
4350(d)(2)(A). The NASDAQ Stock Market advised the Registrant that they will
wait two weeks for the Registrant to become compliant with such rule before
further notifying the Registrant with respect to the time within which the
Registrant must become compliant. The Registrant currently plans to add a third
member to its Audit Committee in a timely manner in satisfaction of such
rule.
Item
4.01. Changes in Registrant’s Certifying Accountant.
At
the
Registrant’s Annual Meeting (as defined and as more fully described below) held
March 29, 2007, the appointment of Ernst & Young LLP by the Audit Committee
of the Board as the independent registered public accounting firm of the
Registrant for its fiscal year ending October 31, 2007 was
ratified.
Item
5.01. Change in Control of Registrant.
See
below
regarding the Annual Meeting.
Item
5.02. Departure of Directors or Certain Officers; Election of Directors;
Appointment of Certain Officers; Compensatory Arrangements of Certain
Officers.
At
the
Registrant’s Annual Meeting of its stockholders held March 29, 2007 (the “Annual
Meeting”), its stockholders elected a new slate of directors to the Board.
Independent, incumbent director John F. Levy was elected and new directors
Strauss Zelnick, Benjamin Feder, Michael Dornemann, Jon J Moses and Michael
James Sheresky were nominated at the Annual Meeting by certain stockholders
of
the Registrant and elected. At a meeting of the new Board held on March 29,
2007
immediately after the Annual Meeting (the “Board Meeting”), the size of the
Board was expanded by one and the newly created vacancy was filled by Grover
C.
Brown, who had been an independent, incumbent director of the Registrant prior
to the Annual Meeting.
At
the
Board Meeting, the following independent directors were appointed to the
following committees of the Board: John F. Levy and Michael Dornemann (Audit
Committee), Michael Dornemann, Jon J Moses and Michael James Sheresky
(Compensation Committee), Jon J Moses, Michael James Sheresky and Grover C.
Brown (Corporate Governance Committee), and Grover C. Brown and John F.
Levy (Special Litigation Committee). John F. Levy was appointed Chair of
the Audit Committee, Michael Dornemann was appointed Chair of the Compensation
Committee, Jon J Moses was appointed Chair of the Corporate Governance Committee
and no chair of the Special Litigation Committee was appointed at the Board
Meeting. Also at the Board Meeting, an Executive Committee of the Board was
formed and Strauss Zelnick, Benjamin Feder and Michael Dornemann were appointed
to that committee.
At
the
Board Meeting, Strauss Zelnick was appointed chairman of the Registrant and
Benjamin Feder was appointed acting chief executive officer of the
Registrant.
Upon
the
election of the new Board at the Annual Meeting and effective March 29, 2007,
Paul Eibeler ceased to be a director of the Registrant and was removed from
his
position as president and chief executive officer of the Registrant on the
terms
set forth in the Separation Agreement.
In
connection with their election to the Board and in accordance with the
Registrant’s existing director compensation policy, on March 29, 2007 Messrs.
Dornemann, Moses and Sheresky each received a grant from the Registrant of
6,000
shares of restricted common stock of the Registrant and an option to buy 25,000
shares of common stock of the Registrant at an exercise price of $21.10, subject
to vesting. In connection with their continued service on the Board and in
accordance with the Registrant’s existing director compensation policy, on March
29, 2007 Messrs. Levy and Brown each received a grant from the Registrant of
6,000 shares of restricted common stock of the Registrant, subject to vesting.
Pursuant to a meeting of the Board held in January 2007 and in connection with
the Board’s and Compensation Committee’s review of the bonus and equity
compensation of the executive officers of the Registrant for its 2006 fiscal
year, on March 29, 2007 Mr. Eibeler and Karl H. Winters, the chief financial
officer of the Registrant, received grants from the Registrant of 25,000 and
10,000 shares respectively of restricted common stock of the Registrant, subject
to vesting.
Item
5.03. Amendments to Articles of Incorporation or Bylaws; Change in Fiscal
Year.
At
the
Board Meeting, the Board approved the adoption of the amended and restated
by-laws of the Registrant (the “By-laws”). The
By-laws reflect the addition of the office of chairman of the Registrant and
the
reduction in the maximum size of the Board from nine (pursuant to the prior
version of the by-laws of the Registrant) to six directors. At the Board
Meeting, the Board approved a further amendement to the By-laws to increase
the maximum size of the Board from six to seven directors. A copy
of the By-laws, as amended at the Board Meeting, is filed as
Exhibit
99.3
hereto
and which is incorporated herein by reference.
Item
8.01
Other Events.
Incentive
Stock Plan
At
the
Annual Meeting, the Registrant’s stockholders approved a proposal to amend the
Registrant’s Incentive Stock Plan by increasing by 2,000,000 the number of
shares of common stock of the Registrant reserved for issuance
thereunder.
Reimbursement
of Expenses
At
the
Board Meeting, the Board approved the Registrant’s reimbursement of ZelnickMedia
for all of its reasonable expenses, costs and other third party fees (including,
without limitation, reasonable fees and disbursements of counsel) incurred
or to
be incurred by ZelnickMedia, its directors, officers, employees, counsel, agents
and representatives in connection with, relating to or arising out of its work
related to the Registrant, the matters relating to the Annual Meeting or any
actions taken at the Annual Meeting by certain stockholders of the Registrant
in
connection with agreements among them and ZelnickMedia or the Board Meeting
or
any public filings made or to be made in respect of any of the
foregoing.
SEC
Formal Order
In
response to a letter request made by counsel to the Registrant dated March
15,
2007, the Registrant received from the U.S. Securities and Exchange Commission
(the “SEC”) a Formal Order of Private Investigation which allows the SEC, among
other things, to subpoena witnesses in connection with the SEC’s investigation
of the stock option practices of the Registrant and/or its directors, officers
and/or employees.
Press
Release
On
March
29, 2007, the Registrant issued a press release, a copy of which is filed as
Exhibit
99.4
hereto
and which is incorporated herein by reference.
Item
9.01. Financial Statements and Exhibits.
(d)
Exhibits
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Exhibit
99.1
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Management
Agreement between Take-Two Interactive Software, Inc. and ZelnickMedia
Corporation dated March 30, 2007.
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Exhibit
99.2
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Separation
Agreement and General Release between Take-Two Interactive Software,
Inc.
and Paul Eibeler dated April 4, 2007.
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Exhibit
99.3
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Amended
and Restated By-laws of Take-Two Interactive Software,
Inc.
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Exhibit
99.4
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Press
Release dated March 29, 2007.
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SIGNATURES
Pursuant
to the requirements of the Securities Exchange Act of 1934, the Registrant
has
duly caused this report to be signed on its behalf by the undersigned thereunto
duly authorized.
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TAKE-TWO
INTERACTIVE SOFTWARE, INC.
(Registrant)
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| By: | /s/ Seth D. Krauss | |
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Name:
Seth D. Krauss
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Title:
Executive Vice President and
General
Counsel
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MANAGEMENT
AGREEMENT
THIS
MANAGEMENT AGREEMENT (this “Agreement”),
dated
March 30, 2007, is by and between ZelnickMedia Corporation, a New York
corporation (“ZelnickMedia”),
and
Take-Two Interactive Software, Inc., a Delaware corporation (the “Company”).
WHEREAS,
the Company desires to receive financial and management consulting services
from
ZelnickMedia, and to obtain the benefit of the experience of ZelnickMedia in
business and financial management of companies engaged in businesses similar
to
the Company’s; and
WHEREAS,
ZelnickMedia desires to provide financial and management consulting services
to
the Company and the compensation arrangements set forth in this Agreement are
designed to compensate ZelnickMedia for such services.
NOW,
THEREFORE, in consideration of the foregoing and the respective agreements
hereinafter set forth, and the mutual benefits to be derived herefrom,
ZelnickMedia and the Company agree as follows:
1. Engagement.
The
Company hereby engages ZelnickMedia as its financial and management consultant,
and ZelnickMedia hereby agrees to provide financial and management consulting
services to the Company, all on the terms and subject to the conditions set
forth below.
2. Services
of ZelnickMedia.
ZelnickMedia hereby agrees during the term of this engagement to consult with
the board of directors (the “Board”)
and
management of the Company and its subsidiaries in such manner and on such
business and financial matters as may be reasonably requested from time to
time
by the Board, including but not limited to:
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(i)
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oversee
and supervise the operations of the Company and its subsidiaries
in
accordance with policies established by the Board and usual and customary
standards of efficient operation and
maintenance;
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(ii)
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assist
in the preparation of operating budgets and business
plans;
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(iii)
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advise
and assist the Company and its subsidiaries regarding their corporate
and
financial structure;
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(iv)
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advise
and assist the Company and its subsidiaries in formulating long-term
business strategies;
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(v)
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assist
the Company in recruiting senior
management;
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(vi)
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advise
and assist the Company in securing equity and/or debt financing and
negotiating and structuring the terms of such
financing;
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(vii)
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assist
the Company and its subsidiaries with controlled mergers and acquisitions
with, and of, third party entities;
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(viii)
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advise
and assist the Company in evaluating potential sale or exit opportunities,
structuring and negotiating a sale of the Company, or leveraged
recapitalization;
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(ix)
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assist
the Company in its attempts to resolve the investigations and litigations
currently pending against the Company;
and
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(x)
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respond
to Board requests concerning, and perform any other management services
incidental to, the foregoing, or any other management or advisory
services
reasonably requested by the Board from time to time and to which
ZelnickMedia agrees.
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3. Personnel;
Chairman.
ZelnickMedia shall provide and devote to the performance of this Agreement
such
employees, agents and representatives of ZelnickMedia, and for such time, as
ZelnickMedia shall deem appropriate for the furnishing of the services required
hereunder. In addition, during the term of this Agreement, Strauss Zelnick
will
be entitled to serve as the chairman of the Company so long as (x) he is alive
and not incapacitated and (y) this Agreement has not been terminated for Cause
(as defined below); provided that nothing herein shall prohibit the removal
of
Mr. Zelnick for Cause at any time. As chairman, Mr. Zelnick will interact with
the full Board, and will be delegated authority to hire and/or terminate the
employment of, from time to time, the chief executive officer and the chief
financial officer of the Company, subject to the final approval of the
Compensation Committee of the Board. The chief executive officer of the Company
will report to the chairman, as well as to the Board. At the request of
ZelnickMedia, the Company will take all actions as may be permitted under
applicable law to cause two designees of ZelnickMedia, initially Strauss Zelnick
and Benjamin Feder, to be elected to the Board.
4. Management
Fee.
On the
date hereof and on the first day of each month during the term of this Agreement
(each, a “Payment
Date”),
the
Company shall pay to ZelnickMedia a monthly management fee of $62,500 ($750,000
per annum) in immediately available funds (the “Management
Fee”).
During the first 12 months of the term of this Agreement, neither the Management
Fee nor the Annual Bonus payable in respect thereof shall be increased, except
as provided in Section 18 below; provided, however, that nothing in the
preceding clause shall require the Company to increase either of such payments
following the end of such 12-month period.
5. Annual
Bonus.
In
addition to the Management Fee, ZelnickMedia shall receive an annual bonus
of up
to $750,000 per year (the “Annual
Bonus”),
determined with respect to each fiscal year ending after the date hereof, and
payable within 15 days of the Company’s receipt of its audited financial
statements for the applicable fiscal year, as follows:
(i) In
the
event actual results in a given fiscal year during the term of this Agreement
are less than 80% of the Target (as defined below), the Annual Bonus shall
be
zero.
(ii)
In the
event actual results in a given fiscal year during the term of this Agreement
are equal to or greater than 80% of the Target but less than 100% of the Target,
the Annual Bonus shall be between zero and $375,000, pro rated on a
straight-line basis between 80% and 100% based upon the actual percentage of
Target achieved.
(iii)
In
the
event actual results in a given fiscal year during the term of this Agreement
are equal to or greater than 100% of the Target but less than 120% of the
Target, the Annual Bonus shall be between $375,000 and $750,000, pro rated
on a
straight-line basis between 80% and 100% based upon the actual percentage of
Target achieved.
(iv) In
the
event actual results in a given fiscal year during the term of this Agreement
are equal to or greater than 120% of the Target, the Annual Bonus shall be
$750,000.
The
term
“Target” shall mean budgeted EBITDA of the Company (or other measurement of
financial performance reasonably determined by the members of the Board,
excluding the designees of ZelnickMedia pursuant to Section 3 above, and agreed
with ZelnickMedia for a particular year), determined within 30 days of the
beginning of that year (and with respect to the current year, within 60 days
from the date Strauss Zelnick takes office as chairman) by mutual agreement
of
the Company and ZelnickMedia, each acting reasonably and in good faith, and
measured without giving effect to any payments under this
Agreement.
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6. Equity
Award.
No
earlier than 90 days nor later than 150 days from March 30, 2007, the Company
shall simultaneously issue to ZelnickMedia or any designated affiliate
thereof:
(i)
an
option, transferable to any affiliate of ZelnickMedia, to purchase a number
of
shares of common stock of the Company representing 2.5% of the outstanding
common stock of the Company on a fully diluted basis on the date of issuance,
such options to have a ten (10)-year term, to vest monthly in equal portions
over three (3) years (with accelerated vesting in full upon (x) a Change of
Control, (y) termination of this Agreement by the Company (except for Cause
(as
defined below), in which case the unvested portion of such options shall not
vest and shall automatically terminate), or (z) termination of this Agreement
by
ZelnickMedia (except without Good Reason (as defined below), in which case
the
unvested portion of such options shall not vest and shall automatically
terminate)), to have a strike price equal to the closing price of the common
stock on the date of issuance and to have such other customary terms as are
reasonably acceptable to ZelnickMedia; and
(ii) a
number
of shares (not less than zero) of restricted common stock, transferable to
any
affiliate of ZelnickMedia, equal to the quotient of A[B-C]/B, where A= 2.5%
of
the outstanding common stock of the Company on a fully diluted basis on the
date
of issuance, B= the closing price of the common stock on the date of issuance
of
the restricted common stock and C=$16.00 (A and C to be adjusted proportionately
for any stock split, stock combination or similar event prior to the date of
issuance), such shares to be subject to vesting upon the earliest to occur
of
(w) three (3) years from the date hereof, (x) a Change of Control, (y)
termination of this Agreement by the Company (except for Cause (as defined
below), in which case such shares shall not vest and shall automatically
terminate), or (z) termination of this Agreement by ZelnickMedia (except without
Good Reason (as defined below), in which case such shares shall not vest and
shall automatically terminate).
Until
October 31, 2011 or earlier if this Agreement is earlier terminated pursuant
to
Section 8 below, ZelnickMedia shall not sell or otherwise dispose (other than
to
an affiliate of ZelnickMedia) of any shares of common stock of the Company
acquired upon exercise of its option granted pursuant to clause (i) above or
vested pursuant to clause (ii) above and the preceding restriction shall not
be
waivable by the Company without the approval of stockholders holding a majority
of the Company’s outstanding voting securities at the time such approval is
given; provided,
however,
that
the foregoing shall not limit the right of ZelnickMedia and/or an affiliate
of
ZelnickMedia to sell or otherwise dispose of that number of shares of common
stock of the Company necessary to satisfy any taxes imposed on ZelnickMedia,
its
shareholders, such affiliate and/or its members or partners, as a result of
the
exercise of the option granted pursuant to clause (i) above or vesting of the
shares granted pursuant to clause (ii) above or in connection with the transfer
of shares by ZelnickMedia to such affiliate. For the avoidance of doubt, the
option issued pursuant to clause (i) above and the shares issued pursuant to
clause (ii) above shall be issued on the same day.
7. Expenses.
The
Company shall promptly reimburse ZelnickMedia for all reasonable travel expenses
(business class airfare in the case of domestic travel and first class airfare
in the case of any international travel, if applicable) and other reasonable
out-of-pocket fees and expenses as have been or may be incurred (before or
after
the date of this Agreement) by ZelnickMedia, its directors, officers, employees,
counsel, agents and representatives in connection with any and all transactions
relating to this Agreement, ZelnickMedia’s engagement hereunder, and the
rendering of services hereunder (including, but not limited to, attorneys’ fees,
other advisors’ fees and fees and expenses incurred in attending Company-related
meetings).
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8. Term.
This
Agreement will continue from the date hereof until October 31, 2011, unless
earlier terminated by either ZelnickMedia or the Company in accordance with
this
Section 8, with automatic renewal for successive one-year periods unless either
party gives written notice to the other at least 90 days prior to the expiration
of the initial term or any one-year period, as applicable, of such party’s
intention to terminate this Agreement at the end of such initial term or
one-year period. This Agreement may be terminated by the Company for Cause
(as
defined below) or by ZelnickMedia for Good Reason (as defined below) or upon
a
Change in Control and may be terminated upon 30 days’ written notice by the
Company without Cause or by ZelnickMedia without Good Reason. If this Agreement
is terminated by the Company or ZelnickMedia prior to October 31, 2011,
ZelnickMedia will be entitled to the following: (a) if this Agreement is
terminated by the Company for Cause or by ZelnickMedia without Good Reason,
ZelnickMedia shall be paid on the date of termination all earned but unpaid
Management Fees and all accrued but unpaid Annual Bonus, and shall retain the
vested portion of the equity described in Section 6 above; (b) if this Agreement
is terminated by the Company without Cause, by ZelnickMedia for Good Reason
or
upon a Change in Control (as defined below), ZelnickMedia shall be paid on
the
date of termination all earned but unpaid Management Fees and accrued but unpaid
Annual Bonus, all Management Fees that would have been paid through October
31,
2011, and the amount of the Annual Bonus that would have been paid for the
current year based on the year-to-date performance of the Company, and all
unvested equity described in Section 6 above shall vest. In addition, if this
Agreement is terminated in connection with a Change in Control, ZelnickMedia
shall be paid on the date of termination all Annual Bonus payments that would
have been payable through October 31, 2011, assuming 50% of the maximum Annual
Bonus would be payable in each future fiscal year. If this Agreement is
terminated on or after October 31, 2011, ZelnickMedia shall be paid on the
date
of termination all earned but unpaid Management Fees and accrued but unpaid
Annual Bonus, all Management Fees that would have been paid through the end
of
the then current term, and the amount of the Annual Bonus that would have been
paid for the current year based on the year-to-date performance of the Company.
Notwithstanding the foregoing, upon any termination for Cause pursuant to clause
(a) of the definition thereof all equity granted under Section 6 above shall
be
unvested and subject to forfeiture.
For
purposes of this Section 8, “Cause”
means
(a) the conviction of, or a plea of guilty or nolo contendere by, either Strauss
Zelnick or Benjamin Feder of any felonious criminal act (other than
traffic-related offenses or as a result of vicarious liability), (b) fraud,
or
(c) any act or omission involving malfeasance or gross negligence by
ZelnickMedia in the performance of its obligations hereunder, in the case of
each of clauses (b) through (c) above, that relates to and damages the Company
and, if capable of being cured so that the Company is not materially damaged,
is
not so cured within 15 days after receipt by ZelnickMedia of written notice
thereof. “Good
Reason”
means
(x) a condition that materially impairs the ability of ZelnickMedia or Strauss
Zelnick to perform the duties or responsibilities of ZelnickMedia or Strauss
Zelnick, as applicable, as contemplated herein, (y) the failure by the Company
to perform any of its material obligations under this Agreement (including
without limitation its obligations to cause two designees of ZelnickMedia to
be
elected to the Board, if requested by ZelnickMedia), or (z) the requirement
that
ZelnickMedia’s place of service be located outside a 10-mile radius of New York
City, NY. A “Change
in Control”
means
any transaction or occurrence (or series of related transactions or occurrences)
which results at any time in any of (i) a sale of all or substantially all
of
the consolidated assets of the Company and of its subsidiaries, or a
consolidation, reorganization, merger, or other business combination of the
Company with or into, any other person or entity if, after such transaction
the
stockholders of the Company immediately prior to such transaction beneficially
hold, directly or indirectly, less than a majority of the outstanding voting
units of the purchasing or surviving parent entity in such transaction, on
a
fully diluted basis, (ii) a change in the majority of the members of the board
of directors of the Company to Persons who were neither (x) nominated or
appointed by the current board of directors of the Company nor (y) nominated
or
appointed by directors so nominated or appointed, or (iii) an acquisition by
any
individual, general partnership, limited partnership, limited liability company,
corporation, trust, estate, real estate investment trust association or any
other entity (each, a "Person")
or
group of Persons (other than the Company or any subsidiary of the Company or
any
of their affiliates) of the outstanding securities of the Company in a
transaction or series of transactions, if immediately thereafter such acquiring
Person or group has, or would have, beneficial ownership of more than fifty
percent (50%) of the combined equity interests or voting power of the Company;
provided that mere formation of a group will not itself constitute a Change
of
Control. A Change of Control shall be deemed to occur as of the effective date
of the first event, action or transaction leading to one of the results
described above. Notwithstanding the foregoing, the actions taken at the annual
meeting of the Company to be held on or about March 23, 2007 (or any adjournment
thereof) shall not constitute a Change in Control under this Agreement.
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No
termination of this Agreement, whether pursuant to this paragraph or otherwise,
shall affect the Company’s obligations with respect to any and all reasonable
fees, costs and expenses incurred by ZelnickMedia in rendering services
hereunder and not reimbursed by the Company as of the effective date of such
termination or the Company’s indemnification and contribution
obligations.
9. Confidentiality;
Non-Solicitation.
ZelnickMedia shall not at any time during or after the term of this Agreement,
directly or indirectly, except as in good faith deemed necessary or desirable
to
perform any of its obligations hereunder, to defend its own rights or as
required by applicable law or legal process, disclose or use for its own benefit
or purposes or the benefit or purposes of any other person, firm, partnership,
joint venture, association, corporation or other business organization, entity
or enterprise other than the Company and any of its subsidiaries or affiliates,
any trade secrets, information, data, or other information, including, without
limitation, relating to customers, development programs, costs, marketing,
trading, investment, sales activities, promotion, credit and financial data,
manufacturing processes, financing methods, plans, or the business and affairs
of the Company, or of any subsidiary or affiliate of the Company; provided,
that
the foregoing shall not apply to information which is generally known to the
industry or the public other than as a result of ZelnickMedia’s breach of this
covenant or information obtained by ZelnickMedia prior to the execution of
this
Agreement or not in connection with its performance of its obligations under
this Agreement. ZelnickMedia agrees that upon termination of this Agreement,
upon the Company’s request, it shall immediately return to the Company all
memoranda, books, papers, plans, information, letters and other data, and all
copies thereof or therefrom, in any way relating to the business of the Company
and its affiliates, except that ZelnickMedia may retain such personal notes,
notebooks and diaries that do not contain confidential information of the type
described above. For a period beginning on the date hereof and ending one year
after the date of termination of this Agreement, except in the event this
Agreement is terminated upon a Change in Control, by the Company without Cause
or by ZelnickMedia for Good Reason, ZelnickMedia shall not in any capacity,
either individually or in association with others, employ or solicit for
employment (other than in any general solicitation) any person who is an
employee of the Company or its affiliates at the level of vice president or
higher immediately prior to such employment or during such
solicitation.
10. Liability.
Neither
ZelnickMedia nor any of its affiliates, directors, officers, employees, counsel,
agents or representatives shall be liable to the Company or its subsidiaries
or
affiliates for any loss, claim, liability, damage or expense arising out of
or
in connection with the performance of services contemplated by this Agreement,
other than any loss, claim, liability, damage or expense to the extent
determined by the final judgment of a court of competent jurisdiction to have
been caused from the gross negligence, fraud, bad faith or willful misfeasance
of ZelnickMedia or its affiliates.
11. Indemnification;
D&O Insurance.
To the
fullest extent permitted by applicable law, the Company shall indemnify and
hold
harmless ZelnickMedia and its affiliates, and each of their respective members,
managers, directors, officers, employees, counsel, agents, representatives,
contractors and affiliates (each such individual or entity to be referred to
hereinafter as an "Indemnified
Person"),
from
and against any loss, claim, damage or liability, joint or several, and any
action in respect thereof, whether or not involving a third party, to which
an
Indemnified Person may be subject, insofar as such loss, claim, damage,
liability or action relates to, arises out of or results from any Covered Event
(as such term is defined below) or alleged Covered Event, and will reimburse
such Indemnified Person upon request for all expenses (including, without
limitation, reasonable attorneys’ fees and disbursements) incurred by such
Indemnified Person in connection with investigating, defending or preparing
to
defend against any such loss, claim, damage, liability or action, as such
expenses are incurred or paid. The
term
"Covered
Event"
shall
mean (a) any action taken, or services performed, by an Indemnified Person,
related to or consistent with the terms of this Agreement, or (b) any action
taken, or omitted to be taken, by the Company or any of its managers, directors,
officers, employees, agents or affiliates, in connection with any matter in
which an Indemnified Person has been involved pursuant to this Agreement;
provided, that the term "Covered Event," with respect to an Indemnified Person,
shall exclude any loss, claim, damage, liability or expense to the extent
determined by the final judgment of a court of competent jurisdiction to have
been caused from the gross negligence, fraud, bad faith or willful misfeasance
of such Indemnified Person or any affiliate thereof. The Company shall cover
the
designees of ZelnickMedia under directors and officers liability insurance
both
during and, while potential liability exists, after the term of the Agreement
in
amounts reasonably requested by ZelnickMedia.
-
5 -
12. Independent
Contractor.
ZelnickMedia and the Company agree that ZelnickMedia shall perform services
hereunder as an independent contractor, retaining control and direction over
and
responsibility for its own operations and personnel. Neither ZelnickMedia nor
their directors, officers or employees shall be considered employees or agents
of the Company or its subsidiaries as a result of this Agreement nor shall
any
of them have authority to contract in the name of or bind the Company, except
as
expressly agreed to in writing by the Company, including as provided in this
Agreement.
13. Notices.
Any
notice, report or payment required or permitted to be given or made under this
Agreement by one party to the other shall be deemed to have been duly given
or
made if personally delivered or, if mailed, when mailed by registered or
certified mail, postage prepaid, to the other party at the following addresses
(or at such other address as shall be given in writing by one party to the
other):
If
to
ZelnickMedia:
ZelnickMedia
Corporation
650
5th
Avenue
New
York,
NY 10019
Telephone:
(212) 223-1383
Facsimile:
(212) 223-1384
Attention:
Benjamin Feder
If
to
the Company:
Take-Two
Interactive Software, Inc.
622
Broadway
New
York,
NY 10012
Telephone:
(646) 536-2842
Facsimile:
Attention:
14. Entire
Agreement; Modification.
This
Agreement (a) contains the complete and entire understanding and agreement
of
ZelnickMedia and the Company with respect to the subject matter hereof; and
(b)
supersedes all prior and contemporaneous understandings, conditions and
agreements, oral or written, express or implied, respecting the engagement
of
ZelnickMedia in connection with the subject matter hereof. This Agreement may
not be amended or modified except by written instrument executed by both
ZelnickMedia and the Company.
15. Waiver
of Breach.
The
waiver by either party of a breach of any provision of this Agreement by the
other party shall not operate or be construed as a waiver of any subsequent
breach of that provision or any other provision hereof.
16. Assignment.
ZelnickMedia may assign its rights or obligations under this Agreement only
with
the express written consent of the Company, such consent not to be unreasonably
withheld. The Company may not assign its rights or obligations under this
Agreement.
17. Successors.
This
Agreement and all the obligations and benefits hereunder shall inure to the
successors and permitted assigns of the parties.
18. Failure
to Pay.
If for
any reason the Company does not pay the Management Fee, Annual Bonus or any
other amount due under this Agreement when due, then such amount shall accrue
interest at a rate of 1% per month and shall continue to be payable and shall
be
paid by the Company as soon as it can be paid. The preceding sentence shall
not
limit any other remedies of ZelnickMedia in the event amounts are not paid
when
due.
-
6 -
19. Counterparts.
This
Agreement may be executed and delivered by each party hereto in separate
counterparts, each of which when so executed and delivered shall be deemed
an
original and both of which taken together shall constitute one and the same
agreement.
20. Choice
of Law.
This
Agreement and any dispute arising hereunder shall be governed by and construed
in accordance with the domestic laws of the State of Delaware, without giving
effect to any choice of law or conflict of laws provision or rule (whether
of
the State of Delaware or any other jurisdiction) that would cause the
application of the laws of any jurisdiction other than the State of Delaware.
Each party consents to the in
personam
jurisdiction of the Court of Chancery or other courts of the State of Delaware
and the United States District Court located in the State of Delaware in
connection with any claim or dispute arising under or in connection with this
Agreement.
21. Severability.
If any
provision of this Agreement is or becomes illegal, invalid or unenforceable
under any law or regulation of any jurisdiction, it shall, as to such
jurisdiction, be deemed modified to the least degree necessary to conform to
the
requirements of such law or regulation, or if for any reason it is not deemed
so
modified, it shall be illegal, invalid or unenforceable only to the extent
set
forth in the law or regulation without affecting the legality, validity or
enforceability of such provision in any other jurisdiction or the remaining
provisions of this Agreement.
22. Section
409A.
Notwithstanding anything to the contrary contained in this Agreement, in the
event that one or more payments under this Agreement are subject to Section
409A
of the Internal Revenue Code of 1986, as amended (the “Code”)
and
would cause ZelnickMedia to incur any additional tax or interest under Section
409A of the Code or any regulations or Treasury guidance promulgated thereunder,
the Company shall, at no additional cost to the Company, after consulting with
ZelnickMedia and receiving ZelnickMedia’s approval, reform and appropriately
adjust such provision; provided that the Company agrees to maintain, to the
maximum extent practicable without any such additional cost to the Company,
the
original intent and economic benefit to ZelnickMedia of the applicable provision
without violating the provisions of Section 409A of the Code.
*
* * *
*
-
7 -
IN
WITNESS WHEREOF, the parties hereto have caused this Management Agreement to
be
duly executed and delivered on the date and year first above
written.
| ZELNICKMEDIA CORPORATION | ||
| |
|
|
| By: | /s/ Strauss Zelnick | |
|
Name: Strauss Zelnick |
||
| TAKE-TWO INTERACTIVE SOFTWARE, INC. | ||
| |
|
|
| By: | /s/ Seth D. Krauss | |
|
Name: Seth D. Krauss |
||
| Title: EVP and General Counsel | ||
[Management
Agreement]
SEPARATION
AGREEMENT AND GENERAL RELEASE
This
Separation Agreement and General Release is made and entered into as of April
4,
2007 (this “Agreement”),
by
and between Paul Eibeler (the “Executive”)
and
Take-Two Interactive Software, Inc., a Delaware corporation (together with
its
parents, subsidiaries, affiliates and related entities, the “Company”).
The
purpose of this Agreement is to acknowledge, and set forth the terms of, the
Executive’s termination of employment with the Company.
1. Termination
Date.
The
Executive hereby confirms that (a)
effective as of April 4, 2007 (the “Termination
Date”),
his
employment with the Company terminated, (b)
effective as of March 29, 2007, he resigned from his position as Chief Executive
Officer and President of the Company, and (c)
he will
not be eligible for any benefits or compensation after the Termination Date,
other than as specifically provided herein. In addition, effective as of the
Termination Date, the Executive hereby confirms his resignation from all other
offices, directorships, trusteeships, committee memberships and fiduciary
capacities held with, or on behalf of, the Company or it subsidiaries or any
benefit plans of the Company. The Executive acknowledges and agrees that he
will
not represent himself as being an employee, officer, director, trustee, member,
partner, agent or representative of the Company or any of its subsidiaries
for
any purpose and will not make any public statements on behalf of the Company
or
any of its subsidiaries.
2. Severance
Payments.
Subject
to the terms and conditions of this Agreement, including the Executive’s
executing (and not revoking) this Agreement, the Executive will be entitled
to
receive the following:
(a) Subject
to the provisions of Section
19,
an
amount equal to $2,475,000.00, which represents 1.5 times the total of the
Executive’s current annual base salary and target bonus for 2007, as soon as
practicable following the Effective Date (as defined in Section
22).
(b) Any
vesting or service requirements with respect to any stock options or shares
of
restricted stock granted to the Executive prior to the Termination Date will
be
deemed satisfied. Notwithstanding anything to the contrary in any agreement
with
the Company, any stock options granted to the Executive prior to the Termination
Date that remain outstanding as of the Termination Date will remain exercisable
until July 3, 2007. Executive and the Company acknowledge that as of the date
of
this Agreement, Executive’s Company stock option and restricted stock holdings
are as follows (all of which are fully vested as of the date of this Agreement):
(i) 100,000 shares of restricted stock, (ii) options to purchase 450,000 shares
of common stock of the Company at an exercise price per share of $21.28; (iii)
options to purchase 75,000 shares of common stock of the company at an
exercise price per share of $19.89.
(c) Executive’s
accrued, but unpaid base salary and accrued vacation through the Termination
Date, and unreimbursed business expenses through the Termination Date (subject
to the satisfaction of the requirements of the Company’s business expense
reimbursement policy), in each case payable in accordance with Company
policy.
3. The
Executive’s Consultancy Obligations.
(a) The
Executive agrees to serve in good faith as a consultant for the Company on
an
as-needed basis as determined by the Board of Directors of the Company or the
Acting Chief Executive Officer of the Company, and the Executive agrees to
be
reasonably available to the Company for such purpose, during the period from
the
Termination Date through the earliest of (i) October 4, 2007 or (ii) the
Executive’s death, incapacity to provide services for more than 20 consecutive
days or upon notice in the event of the Executive’s willful misconduct,
activities detrimental to the interests of the Company or breach of this
Agreement which is not cured within five (5) days of written notice thereof
(the
“Consulting
Period”).
The
Executive’s services will be of an advisory nature only, primarily focusing on
transition issues, and the Executive will have no power of decision with respect
to any matters which are the subject of consultation and will not have any
responsibility in connection with the active management of the
Company.
(b) During
the Consulting Period, subject to the provisions of Section
19, the
Executive will be entitled to the following payments and benefits:
(i) A
monthly
consulting fee of $50,000.00, payable in arrears on the first day of each month
for six consecutive months commencing on May 1, 2007.
(ii) Subject
to (A) the Executive’s timely election of continuation coverage under the
Consolidated Budget Omnibus Reconciliation Act of 1985, as amended
(“COBRA”)
and
(B) the Executive’s continued copayment of premiums at the same level and cost
to the Executive as if the Executive were an employee of the Company (excluding,
for purposes of calculating cost, an employee’s ability to pay premiums with
pre-tax dollars), to the extent permitted under applicable law and the terms
of
such plan, during the period from the Termination Date through October 4, 2007,
continued participation in the Company’s group health plan which covers the
Executive and his eligible dependents as of the Termination Date at the
Company’s expense (other than the aforementioned premiums), provided that the
Executive is eligible and remains eligible for COBRA coverage; provided,
however, that if the Executive accepts other employment (whether or not
comparable) that offers substantially similar or improved group health benefits,
the Executive will immediately notify the Company of his eligibility for such
benefits and such continuation of coverage by the Company under this
sub-paragraph (ii) will immediately cease.
(iii) A
monthly
car allowance of $799.00.
2
(c) The
Executive understands that he is responsible for the full reporting and payment
of local, state and federal taxes and statutory benefits, including Social
Security (FICA), workers compensation, disability, and unemployment insurance.
No deductions, withholding, or additional payments for such purposes will be
made by the Company. The Executive will indemnify and hold the Company harmless
with regard to any failure of him to fulfill his obligations with regard to
such
taxes or statutory benefits. The Executive further understands and agrees that
the services rendered by him pursuant to this Section
3
will be
those of an independent consultant and not of an agent or employee of the
Company and that he will not be eligible to participate in or entitled to
receive any employee benefits from the Company as a result of the services
rendered pursuant to this Section
3,
even if
subsequently determined by any court, the Internal Revenue Service or any other
governmental agency to be a common law employee of the Company.
(d) The
Executive agrees that upon the termination or expiration of the Consulting
Period, he will sign and deliver to the Company an executed General Release
for
the period of the consultancy substantially similar in form to the document
attached hereto as Exhibit
A.
4. Return
of Property.
As soon
as practicable after the date hereof, the Executive agrees to deliver to the
Company (and will not keep in his possession, recreate or deliver to anyone
else) any and all files or other property (both tangible and intellectual)
of
the Company (said property includes, but is not limited to, files, monthly
management financial booklets, projections, forecasts, balance sheets, income
statements, audited financial statements, total cost development budgets, actual
or prospective purchaser or customer lists, written proposals and studies,
plans, drawings, specifications, reports to creditors, books, accounts, reports
to directors, minutes, resolutions, certificates, bank account numbers,
passwords, rolodexes, credit cards, computers, fax machines, cellular or other
telephones, Blackberries, beepers, PDA’s, keys, card access keys to any Company
building, deeds, contracts, office equipment and supplies, records, computer
disks, any other documents or things received or acquired in connection with
the
Executive’s employment with the Company, etc.) without retaining any copies or
extracts thereof.
5. Full
Discharge.
The
Executive agrees and acknowledges that the payments and benefits provided in
Section
2
and
Section
3
and the
other entitlements hereunder: (a) are in full discharge of any and all
liabilities and obligations of the Company to the Executive, monetarily or
with
respect to employee benefits or otherwise, including any and all obligations
arising under any alleged written or oral employment agreement, policy, plan
or
procedure of the Company, including the Employment Agreement dated May 6, 2005
between the Executive and the Company (the “Employment
Agreement”)
and/or
any alleged understanding or arrangement between the Executive and the Company
or any of its officers or directors; and (b) exceed any payment, benefit, or
other thing of value to which the Executive might otherwise be entitled but
for
this Agreement under any policy, plan or procedure of the Company or any prior
agreement between the Executive and the Company, except for accrued, vested
amounts under any tax-qualified pension plan maintained by the Company, which
amounts, if any, will be paid in accordance with the terms of such plan or
plans, or benefits required to be provided under COBRA.
3
6. Future
Conduct and Obligations.
(a) The
Executive, on behalf of himself, his agents, attorneys, heirs, dependents,
executors, administrators, trustees, legal representatives and assigns, agrees
that he will not (and will cause his affiliates to not) at any time engage
in
any form of conduct, or make any statements or representations, that disparage
or otherwise impair the reputation, goodwill, or commercial interests of the
Company, its management, directors, stockholders, subsidiaries, parents, and/or
other direct or indirect affiliates.
(b) To
the
extent legally permissible and not inconsistent with Executive’s rights and
interests, the Executive will use reasonable best efforts to assist and
cooperate with the Company (and its outside counsel) in connection with the
defense or prosecution of any claim that may be made or threatened against
or by
the Company, or in connection with any ongoing or future investigation or
dispute or claim of any kind involving the Company, including any proceeding
before any arbitral, administrative, judicial, legislative, or other body or
agency, including preparing for and testifying in any proceeding to the extent
such claims, investigations or proceedings relate to services performed or
required to be performed by the Executive, pertinent knowledge possessed by
the
Executive, or any act or omission by the Executive. The Executive will perform
all acts and execute and deliver any documents that may be reasonably necessary
to carry out the provisions of this Section
6(b).
(c) The
Executive agrees to promptly inform the Company if the Executive becomes aware
of any claim that may be made or threatened against the Company.
(d) The
Executive hereby acknowledges the existence and applicability of the
restrictions set forth in Section 7 of the Employment Agreement. Such
restrictions will remain in full force and effect following the Termination
Date
as provided in the Employment Agreement.
7. General
Release.
(a) For
an in
consideration of the payments to be made and the promises set forth in this
Agreement, the Executive, with the intention of binding himself, his agents,
attorneys, heirs, dependents, executors, administrators, trustees, legal
representatives and assigns, does hereby (and will cause his affiliates to)
irrevocably and unconditionally release, acquit, remise and forever discharge
the Company, any and all of their employee benefit and/or pension plans or
funds, insurers, successors and assigns, each of the parties to the agreement
dated as of March 4, 2007 by and among OppenheimerFunds, Inc., D. E. Shaw &
Co., L.P., S.A.C. Capital Management, LLC, Tudor Investment Corporation and
ZelnickMedia Corporation and all of its or their past, present and/or future
stockholders, partners, members, heirs, executors, administrators, agents,
employees, officers, directors, managers, successors, insurers, assigns,
attorneys, counsel, fiduciaries and trustees, whether acting as agents for
the
Company or in their individual capacities (the “Releasees”),
of
and from any and all manner of actions, cause or causes of action, suits, debts,
sums of money, costs, interests, attorneys’ fees, liabilities, contracts,
accounts, reckonings, bonds, bills, specialties, covenants, controversies,
agreements, promises, variances, trespasses, damages, judgments, executions,
charges, claims, counterclaims and demands, whatsoever, in law or in equity
or
otherwise, that the Executive now has or may have, whether mature, direct,
derivative, subrogated, personal, assigned, both known and unknown, foreseen
or
unforeseen, contingent or actual, liquidated or unliquidated, arising from
the
beginning of the world until the date that the Executive signs this Agreement,
including, but not limited to, any claims arising in any way out of his serving
as a director of the Company, his hiring by the Company, his employment with
the
Company, or his separation from the Company. The Executive hereby expressly
waives the benefits of any statute or rule of law which, if applied to this
General Release, would otherwise exclude from its binding effect any claims
not
now known by the Executive to exist. The foregoing release of claims by the
Executive includes, but is not limited to, any and all claims for damages,
attorneys’ fees, or costs under the Age Discrimination in Employment Act
(“ADEA”),
29
U.S.C. § 621 et seq., the Americans with Disabilities Act (“ADA”),
42
U.S.C. § 12101 et seq., the Civil Rights Act of 1991, 42 U.S.C. § 1981a et seq.,
the Employee Retirement Income Security Act of 1974 (“ERISA”),
29
U.S.C. § 1001 et seq., the Fair Labor Standards Act (“FLSA”),
29
U.S.C. § 201 et seq., the Family and Medical Leave Act (“FMLA”),
Title
VII of the Civil Rights Act of 1964, 42 U.S.C. § 2000e et seq., the
Sarbanes-Oxley Act of 2002, the United States Constitution, the Constitution
of
the State of New York, or of any other state or country, the New York State
Human Rights Law, the New York Executive Law, the New York Labor Law, the New
York City Administrative Code and all other similar federal, state, or municipal
statutes or ordinances prohibiting discrimination or pertaining to employment,
and any contract, tort, or common law theories with respect to the Executive’s
serving as a director of the Company, his hiring by the Company, his employment
with the Company, or his separation from the Company.
4
(b) The
Company and the Executive acknowledge and agree that the General Release set
forth in Section
7(a)
does not
in any way affect: (i) the Executive’s rights including but not limited to those
of indemnification or contribution to which the Executive was entitled
immediately prior to the Termination Date under the Company’s By-laws, the
Company’s Certificate of Incorporation, that certain indemnification agreement
dated June 21, 2006 between the Executive and the Company or otherwise with
regard to the Executive’s service as an officer and director of the Company;
(ii) the Executive’s rights as a stockholder (other than the right to sue, which
is released); (iii) the Executive’s accrued, vested rights under any
tax-qualified pension plan maintained by the Company; and (iv) the rights of
either party to take whatever steps may be necessary to enforce the terms of
this Agreement or to obtain appropriate relief in the event of any breach of
the
terms of this Agreement.
8. No
Existing Suit.
The
Executive represents and warrants that, as of the Effective Date of this
Agreement, he has not filed or commenced any suit, claim, charge, complaint,
action, arbitration, or legal proceeding of any kind against the Company. The
Executive agrees that if he hereafter commences, joins in, or in any manner
seeks relief through any suit arising out of, based upon, or relating to any
of
the claims released hereunder, or in any manner asserts against the Releasees
any of the claims released hereunder, including through any motion to
reconsider, reopen or appeal the dismissal of the action, then he will pay
to
the Releasees against whom such claim(s) is asserted, in addition to any other
damages caused thereby, all attorneys’ fees incurred by such Releasees in
defending or otherwise responding to said suit or claim. Provided however,
that
the requirement that the Executive pay the Releasees attorneys’ fees will not be
applicable to a claim or portion of a claim that the release is not valid under
the Older Workers Benefit Protection Act, or any claim asserted under the
ADEA.
5
9. No
Participation in Third Party Civil Litigation.
The
Executive agrees and promises not to voluntarily participate, without receiving
the prior written approval of the Company, in any pending or future civil case,
arbitration, agency proceeding, or other legal proceeding brought against the
Company by a non-Governmental third party (“Third
Party Civil Litigation”)
with
respect to any issues whatsoever. The Executive also agrees that he will not
intentionally cause, encourage, or participate in any Third Party Civil
Litigation maintained or instituted against the Company. Specifically, among
other things, this Section
9
is
intended to preclude the Executive from (a) voluntarily providing any party
involved in a Third Party Civil Litigation, as defined above, against the
Company with any statement, oral or written, sworn or unsworn, to be used in
connection with that Third Party Civil Litigation, and/or (b) voluntarily
appearing for the purpose of providing deposition or trial testimony at such
party’s request without the prior written approval of the Company.
10. Certain
Forfeitures in Event of Breach or Other Liability to the
Company.
The
Executive acknowledges and agrees that, notwithstanding any other provision
of
this Agreement, if the Executive breaches any obligation under this Agreement,
which breach has a material impact on the Company, or there is a final
determination by a court of competent jurisdiction, or an agreement by the
Executive as part of a settlement, that the Executive is otherwise liable to
the
Company, the Company retains the right to recoup any and all benefits provided
for in Section
2
or
Section
3,
any
damages suffered by the Company, plus reasonable attorneys’ fees incurred in
connection with such recovery and, to the extent that such benefits have not
been fully disbursed to the Executive, the Company reserves its rights to stop
all future disbursements of such benefits.
11. Entire
Agreement.
This
Agreement sets forth the entire agreement and understanding of the parties
with
respect to the subject matter hereof and supersedes all prior promises or
agreements made by, to, or between the parties, whether oral or written with
respect to the subject matter hereof, including the Employment Agreement (other
than as specifically provided herein). This Agreement may not be amended except
by a writing signed by all the parties. There are no other promises, agreements,
or commitments made by, to, or between the parties, other than those set forth
in the written text of this Agreement.
6
12. No
Transfer by Executive.
The
Executive represents and warrants that he has not sold, assigned, transferred,
conveyed or otherwise disposed of to any third party, by operation of law or
otherwise, any action, cause of action, suit, debt, obligations, account,
contract, agreement, covenant, guarantee, controversy, judgment, damage, claim,
counterclaim, liability or demand of any nature whatsoever relating to any
matter covered by this Agreement. This Agreement is personal to the Executive
and he may not assign, pledge, delegate or otherwise transfer any of his rights,
obligations or duties under this Agreement.
13. Choice
of Law; Jurisdiction; Venue.
This
Agreement will be governed by, construed in accordance with, and enforced
pursuant to the laws of the State of New York without regard to principles
of
conflict of laws. The parties hereto waive any defense of lack of jurisdiction
or venue as not being a resident of New York County, New York, and hereby
specifically authorize any action brought by either party to this Agreement
to
be instituted and prosecuted in either the Supreme Court of the State of New
York, County of New York, or in the United States District Court for the
Southern District of New York, at the election of the party bringing such
action.
14. Counterparts.
This
Agreement may be executed (including by facsimile transmission) with counterpart
signature pages or in counterparts, each of which together constitute one and
the same instrument.
15. Notices.
Any
notice, waiver or other communication given hereunder will be delivered (except
as set forth in Section
17
in
respect of a written notice of revocation) as follows: (a) in the case of the
Company, by personal delivery, certified or registered mail (return receipt
requested), or delivery by a recognized overnight commercial courier, addressed
to Seth Krauss, Esq., Executive Vice President and General Counsel, Take-Two
Interactive Software, Inc., 622 Broadway, New York, New York, 10012, with a
courtesy copy to Arnold S. Jacobs, Esq., Proskauer Rose LLP, 1585 Broadway,
New
York, New York 10036; and (b) in the case of Paul Eibeler, by personal delivery,
certified or registered mail (return receipt requested), or delivery by a
recognized overnight commercial courier, addressed to the last address on the
records of the Company. Notices served will be deemed given and effective upon
actual receipt (or refusal of receipt).
16. Nonadmissibility;
No Company Release.
Nothing
contained in this Agreement, or the fact of its submission to the Executive,
will be admissible evidence against the Company in any judicial, administrative,
or other legal proceeding (other than an action for breach of this Agreement),
or be construed as an admission of any liability or wrongdoing on the part
of
the Company of any violation of federal, state, or local statutory law, common
law or regulation. Furthermore, nothing contained in this Agreement, is intended
to be, or will be construed as, a release by the Company of any claims against
the Executive.
7
17. Knowing
and Voluntary Waiver.
By
signing this Agreement, the Executive expressly acknowledges and agrees that:
(a) he has carefully read it and fully understands what it means; (b) he is
hereby advised in writing to discuss this Agreement with an attorney before
signing it; (c) he has been given at least 21 calendar days to consider this
Agreement; (d) he has agreed to this Agreement knowingly and voluntarily and
was
not subjected to any undue influence or duress; (e) he may revoke his acceptance
of this Agreement within seven days after he signs it by sending written notice
of revocation as set forth below; and (f) on the eighth day after he executes
this Agreement, this Agreement becomes effective and enforceable. The parties
agree that the Executive may revoke this Agreement within seven days after
the
Executive executes the Agreement. Any revocation within this period must be
submitted, in writing, to Seth Krauss, Esq., Executive Vice President and
General Counsel, Take-Two Interactive Software, Inc., 622 Broadway, New York,
New York, 10012, stating “I hereby revoke my acceptance of the Agreement.” The
revocation must be personally delivered to Mr. Krauss or mailed to him and
postmarked within seven days of the Executive’s execution of the Agreement. If
the last day of the revocation period is a Saturday, Sunday or legal holiday,
then the revocation period will be extended to the following day which is not
a
Saturday, Sunday or legal holiday. The Executive agrees that if he does not
execute this Agreement or, in the event of revocation, he will not be entitled
to receive any of the amounts or benefits under Section
2
(other
than pursuant to Section
2(c)).
18. Waiver
of Jury Trial.
EACH OF
THE PARTIES HERETO WAIVES ANY RIGHT IT MAY HAVE TO TRIAL BY JURY IN RESPECT
OF
ANY LITIGATION BASED ON, ARISING OUT OF, UNDER OR IN CONNECTION WITH THIS
AGREEMENT OR ANY COURSE OF CONDUCT, COURSE OF DEALING, VERBAL OR WRITTEN
STATEMENT OR ACTION OF ANY PARTY HERETO.
19. Tax
Matters.
(a) The
Company may withhold from any amounts payable under this Agreement or otherwise
such federal, state and local taxes as are required to be withheld (with respect
to amounts payable hereunder or under any benefit plan or arrangement available
to the Company’s employees) pursuant to any applicable law or
regulation.
(b) The
intent of the parties is that payments and benefits under this Agreement comply
with Section 409A of the Internal Revenue Code of 1986, as amended, and the
regulations and guidance promulgated thereunder (collectively “Section
409A”)
and,
accordingly, to the maximum extent permitted, this Agreement will be interpreted
to be in compliance therewith. Notwithstanding
any provision to the contrary in this Agreement, since the Executive is a
“specified employee” within the meaning of that term under Section 409A(a)(2)(B)
of the Code, then with regard to any payment or the provision of any benefit
that is required to be delayed in compliance with Section 409A(a)(2)(B) of
the
Code, such payment or benefit will not be made or provided prior to the earlier
of (A) the expiration of the six-month period measured from the date of the
Executive’s “separation from service” (as such term is defined under Section
409A) or (B) the date of the Executive’s death (the “Delay
Period”).
Upon
the expiration of the Delay Period, all payments and benefits delayed pursuant
to this Section
19
(whether
they would have otherwise been payable in a single sum or in installments in
the
absence of such delay) will be paid or reimbursed to the Executive in a lump
sum, and any remaining payments and benefits due under this Agreement will
be
paid or provided in accordance with the normal payment dates specified for
them
herein.
Notwithstanding the foregoing, to the extent that the foregoing applies to
the
provision of any ongoing welfare benefits to the Executive that would not be
required to be delayed if the premiums therefore were paid by the Executive,
the
Executive will pay the full cost of premiums for such welfare benefits during
the Delay Period and the Company will pay the Executive an amount equal to
the
amount of such premiums paid by the Executive during the Delay Period promptly
after its conclusion.
In no
event whatsoever will the Company be liable for any additional tax, interest
or
penalties that may be imposed on the Executive by Section 409A or any damages
for failing to comply with Section 409A or this Section
19.
8
20. Third
Party Beneficiaries.
Each
Releasee will be a third party beneficiary to this Agreement, with full rights
to enforce this Agreement and the matters documented herein.
21. Interpretation.
The
parties hereto acknowledge and agree that: (a) each party hereto and its counsel
reviewed and negotiated the terms and provisions of the Agreement and have
contributed to their revision; and (b) the rule of construction to the effect
that any ambiguities are resolved against the drafting party will not be
employed in the interpretation of the Agreement. The words “include”,
“includes”, “included”, “including” and “such as” do not limit the preceding
words or terms and will be deemed to be followed by the words “without
limitation”.
22. Effective
Date.
This
Agreement will not become effective or enforceable until seven days after the
date of execution of this Agreement by the Executive (the “Effective
Date”).
[remainder
of page intentionally left blank]
9
IN
WITNESS WHEREOF,
the
parties hereto have executed and delivered this Agreement as of the day and
year
set forth at the head of this Agreement.
| TAKE-TWO INTERACTIVE SOFTWARE, INC. | ||
| |
|
|
| By: | /s/ Seth D. Krauss | |
|
Name: Seth D. Krauss |
||
| Title: EVP and General Counsel | ||
| EXECUTIVE | ||
| |
|
|
| By: | /s/ Paul Eibeler | |
|
Paul Eibeler |
||
10
Exhibit
A
Form
of General Release
For
an in
consideration of the good and valuable consideration provided for in the
Separation Agreement and General Release dated as of April [●],
2007
(the “Separation
Agreement”),
by
and between Paul Eibeler (“Mr.
Eibeler”)
and
Take-Two Interactive Software, Inc., a Delaware corporation (together with
its
parents, subsidiaries, affiliates and related entities, the “Company”),
the
receipt and sufficiency of which hereby are acknowledged, and to supplement
the
General Release in the Separation Agreement, Mr. Eibeler, with the intention
of
binding himself, his agents, attorneys, heirs, dependents, executors,
administrators, trustees, legal representatives and assigns does hereby (and
will cause his affiliates to) irrevocably and unconditionally release, acquit,
remise and forever discharge the Company, any and all of their employee benefit
and/or pension plans or funds, insurers, successors and assigns, each of the
parties to the agreement dated as of March 4, 2007 by and among
OppenheimerFunds, Inc., D. E. Shaw & Co., L.P., S.A.C. Capital Management,
LLC, Tudor Investment Corporation and ZelnickMedia Corporation and all of its
or
their past, present and/or future stockholders, partners, members, heirs,
executors, administrators, agents, employees, officers, directors, managers,
successors, insurers, assigns, attorneys, counsel, fiduciaries and trustees,
whether acting as agents for the Company or in their individual capacities
(the
“Releasees”),
of
and from any and all manner of actions, cause or causes of action, suits, debts,
sums of money, costs, interests, attorneys’ fees, liabilities, contracts,
accounts, reckonings, bonds, bills, specialties, covenants, controversies,
agreements, promises, variances, trespasses, damages, judgments, executions,
charges, claims, counterclaims and demands, whatsoever, in law or in equity
or
otherwise, that Mr. Eibeler now has or may have, whether mature, direct,
derivative, subrogated, personal, assigned, both known and unknown, foreseen
or
unforeseen, contingent or actual, liquidated or unliquidated, arising from
April
[●],
2007
until the date that Mr. Eibeler signs this Agreement, covering any claims
arising from this period with respect to Mr. Eibeler’s relationship with the
Releasees. Mr. Eibeler hereby expressly waives the benefits of any statute
or
rule of law which, if applied to this General Release, would otherwise exclude
from its binding effect any claims not now known by Mr. Eibeler to exist. The
foregoing release of claims by Mr. Eibeler includes, but is not limited to,
any
and all claims for damages, attorneys’ fees, or costs under the Age
Discrimination in Employment Act (“ADEA”),
29
U.S.C. § 621 et seq., the Americans with Disabilities Act (“ADA”),
42
U.S.C. § 12101 et seq., the Civil Rights Act of 1991, 42 U.S.C. § 1981a et seq.,
the Employee Retirement Income Security Act of 1974 (“ERISA”),
29
U.S.C. § 1001 et seq., the Fair Labor Standards Act (“FLSA”),
29
U.S.C. § 201 et seq., the Family and Medical Leave Act (“FMLA”),
Title
VII of the Civil Rights Act of 1964, 42 U.S.C. § 2000e et seq., the
Sarbanes-Oxley Act of 2002, the United States Constitution, the Constitution
of
the State of New York, or of any other state or country, the New York State
Human Rights Law, the New York Executive Law, the New York Labor Law, the New
York City Administrative Code, and all other similar federal, state, or
municipal statutes or ordinances prohibiting discrimination or pertaining to
contract, tort, or common law theories with respect to Mr. Eibeler’s
relationship with the Releasees from April [●],
2007
through the signing of this General Release.
EXECUTIVE
________________________
Paul
Eibeler
Dated:
________________, 2007
A-2
TAKE-TWO
INTERACTIVE SOFTWARE, INC.
*
* * *
*
AMENDED
AND RESTATED BY-LAWS
*
* * *
*
ARTICLE
I.
OFFICES
Section
1. The
registered office shall be in the City of Wilmington, County of New Castle,
State of Delaware.
Section
2. The
corporation may also have offices at such other places both within and without
the State of Delaware as the board of directors may from time to time determine
or the business of the corporation may require.
ARTICLE
II.
MEETINGS
OF
STOCKHOLDERS
Section
1. All
meetings of the stockholders for the election of directors shall be held in
the
City of Wilmington, State of Delaware, at such place as may be fixed from time
to time by the board of directors, or at such other place either within or
without the State of Delaware as shall be designated from time to time by the
board of directors and stated in the notice of the meeting. Meetings of
stockholders for any other purpose may be held at such time and place, within
or
without the State of Delaware, as shall be stated in the notice of the meeting
or in a duly executed waiver of notice thereof.
Section
2. Annual
meetings of stockholders, commencing with the year 1994, shall be held on the
Thursday following the second Tuesday in April if not a legal holiday, and
if a
legal holiday, then on the next secular day following, at 4:00 P.M., or at
such
other date and time as shall be designated from time to time by the board of
directors and stated in the notice of the meeting, at which they shall elect
by
a plurality vote a board of directors, and transact such other business as
may
properly be brought before the meeting.
Section
3. Written
notice of the annual meeting stating the place, date and hour of the meeting
shall be given to each stockholder entitled to vote at such meeting not less
than ten nor more than sixty days before the date of the meeting.
Section
4. The
officer who has charge of the stock ledger of the corporation shall prepare
and
make, at least ten days before every meeting of stockholders, a complete list
of
the stockholders entitled to vote at the meeting, arranged in alphabetical
order, and showing the address of each stockholder and the number of shares
registered in the name of each stockholder. Such list shall be open to the
examination of any stockholder, for any purpose germane to the meeting, during
ordinary business hours, for a period of at least ten days prior to the meeting,
either at a place within the city where the meeting is to be held, which place
shall be specified in the notice of the meeting, or, if not so specified, at
the
place where the meeting is to be held. The list shall also be produced and
kept
at the time and place of the meeting during the whole time thereof, and may
be
inspected by any stockholder who is present.
Section
5. Special
meetings of the stockholders, for any purpose or purposes, unless otherwise
prescribed by statute or by the certificate of incorporation, may be called
by
the non-executive chairman or president and shall be called by the non-executive
chairman, president or secretary at the request in writing of a majority of
the
board of directors, or at the request in writing of stockholders owning a
majority in amount of the entire capital stock of the corporation issued and
outstanding and entitled to vote. Such request shall state the purpose or
purposes of the proposed meeting.
Section
6. Written
notice of a special meeting stating the place, date and hour of the meeting
and
the purpose or purposes for which the meeting is called, shall be given not
less
than ten nor more than sixty days before the date of the meeting, to each
stockholder entitled to vote at such meeting.
Section
7. Business
transacted at any special meeting of stockholders shall be limited to the
purposes stated in the notice.
Section
8. The
holders of a majority of the stock issued and outstanding and entitled to vote
thereat, present in person or represented by proxy, shall constitute a quorum
at
all meetings of the stockholders for the transaction of business except as
otherwise provided by statute or by the certificate of incorporation. If,
however, such quorum shall not be present or represented at any meeting of
the
stockholders, the stockholders entitled to vote thereat, present in person
or
represented by proxy, shall have power to adjourn the meeting from time to
time,
without notice other than announcement at the meeting, until a quorum shall
be
present or represented. At such adjourned meeting at which a quorum shall be
present or represented any business may be transacted which might have been
transacted at the meeting as originally notified. If the adjournment is for
more
than thirty days, or if after the adjournment a new record date is fixed for
the
adjourned meeting, a notice of the adjourned meeting shall be given to each
stockholder of record entitled to vote at the meeting.
2
Section
9. When
a
quorum is present at any meeting, the vote of the holders of a majority of
the
stock having voting power present in person or represented by proxy shall decide
any question brought before such meeting, unless the question is one upon which
by express provision of the statutes or of the certificate of incorporation,
a
different vote is required in which case such express provision shall govern
and
control the decision of such question.
Section
10. Unless
otherwise provided in the certificate of incorporation each stockholder shall
at
every meeting of the stockholders be entitled to one vote in person or by proxy
for each share of the capital stock having voting power held by such
stockholder, but no proxy shall be voted on after three years from its date,
unless the proxy provides for a longer period.
Section
11. Unless
otherwise provided in the certificate of incorporation, any action required
to
be taken at any annual or special meeting of stockholders of the corporation,
or
any action which may be taken at any annual or special meeting of such
stockholders, may be taken without a meeting, without prior notice and without
a
vote, if a consent in writing, setting forth the action so taken, shall be
signed by the holders of outstanding stock having not less than the minimum
number of votes that would be necessary to authorize or take such action at
a
meeting at which all shares entitled to vote thereon were present and voted.
Prompt notice of the taking of the corporate action without a meeting by less
than unanimous written consent shall be given to those stockholders who have
not
consented in writing.
ARTICLE
III.
DIRECTORS
Section
1. The
number of directors which shall constitute the whole board shall be not less
than one nor more than seven. Within such specified limits, the number of
directors shall be determined by resolution of the board of directors or by
the
stockholders at the annual meeting or by written consent. The directors shall
be
elected at the annual meeting of the stockholders, except as provided in Section
2 of this Article III, and each director elected shall hold office until his
successor is elected and qualified. Directors need not be
stockholders.
3
Section
2. Vacancies
and newly created directorships resulting from any increase in the authorized
number of directors may be filled by a majority of the directors then in office,
though less than a quorum, or by a sole remaining director, and the directors
so
chosen shall hold office until the next annual election and until their
successors are duly elected and shall qualify, unless sooner displaced. If
there
are no directors in office, then an election of directors may be held in the
manner provided by statute. If, at the time of filling any vacancy or any newly
created directorship, the directors then in office shall constitute less than
a
majority of the whole board (as constituted immediately prior to any such
increase), the Court of Chancery may, upon application of any stockholder or
stockholders holding at least ten percent of the total number of the shares
at
the time outstanding having the right to vote for such directors, summarily
order an election to be held to fill any such vacancies or newly created
directorships, or to replace the directors chosen by the directors then in
office.
Section
3. The
business of the corporation shall be managed by or under the direction of its
board of directors which may exercise all such powers of the corporation and
do
all such lawful acts and things as are not by statute or by the certificate
of
incorporation or by these by-laws directed or required to be exercised or done
by the stockholders.
MEETINGS
OF THE BOARD OF DIRECTORS
Section
4. The
board
of directors of the corporation may hold meetings, both regular and special,
either within or without the State of Delaware.
Section
5. The
first
meeting of each newly elected board of directors shall be held at such time
and
place as shall be fixed by the vote of the stockholders at the annual meeting
or
by written consent and no notice of such meeting shall be necessary to the
newly
elected directors in order legally to constitute the meeting, provided a quorum
shall be present. In the event of the failure of the stockholders to fix the
time or place of such first meeting of the newly elected board of directors,
or
in the event such meeting is not held at the time and place so fixed by the
stockholders, the meeting may be held at such time and place as shall be
specified in a notice given as hereinafter provided for special meetings of
the
board of directors, or as shall be specified in a written waiver signed by
all
of the directors.
4
Section
6. Regular
meetings of the board of directors may be held without notice at such time
and
at such place as shall from time to time be determined by the
board.
Section
7. Special
meetings of the board may be called by the non-executive chairman or president
on reasonable notice to each director, either personally or by mail or by
facsimile or by electronic transmission; special meetings shall be called by
the
non-executive chairman, president or secretary in like manner and on like notice
on the written request of only one director.
Section
8. At
all
meetings of the board a majority of the directors shall constitute a quorum
for
the transaction of business and the act of a majority of the directors present
at any meeting at which there is a quorum shall be the act of the board of
directors, except as may be otherwise specifically provided by statute or by
the
certificate of incorporation. If a quorum shall not be present at any meeting
of
the board of directors the directors present thereat may adjourn the meeting
from time to time, without notice other than announcement at the meeting, until
a quorum shall be present.
Section
9. Unless
otherwise restricted by the certificate of incorporation or these by-laws,
any
action required or permitted to be taken at any meeting of the board of
directors or of any committee thereof may be taken without a meeting, if all
members of the board or committee, as the case may be, consent thereto in
writing, and the writing or writings are filed with the minutes of proceedings
of the board or committee.
Section
10. Unless
otherwise restricted by the certificate of incorporation or these by-laws,
members of the board of directors, or any committee designated by the board
of
directors, may participate in a meeting of the board of directors, or any
committee, by means of conference telephone or similar communications equipment
by means of which all persons participating in the meeting can hear each other,
and such participation in a meeting shall constitute presence in person at
the
meeting.
COMMITTEES
OF DIRECTORS
Section
11. The
board
of directors may, by resolution passed by a majority of the whole board,
designate one or more committees, each committee to consist of one or more
of
the directors of the corporation. The board may designate one or more directors
as alternate members of any committee, who may replace any absent or
disqualified member at any meeting of the committee.
5
Any
such
committee, to the extent provided in the resolution of the board of directors,
shall have and may exercise all the powers and authority of the board of
directors in the management of the business and affairs of the corporation,
and
may authorize the seal of the corporation to be affixed to all papers which
may
require it; but no such committee shall have the power or authority in reference
to amending the certificate of incorporation, (except that a committee may,
to
the extent authorized in the resolution or resolutions providing for the
issuance of shares of stock adopted by the board of directors as provided in
Section 151(a) fix any of the preferences or rights of such shares relating
to
dividends, redemption, dissolution, any distribution of assets of the
corporation or the conversion into, or the exchange of such shares for, shares
of any other class or classes or any other series of the same or any other
class
or classes of stock of the corporation) adopting an agreement of merger or
consolidation, recommending to the stockholders the sale, lease or exchange
of
all or substantially all of the corporation’s property and assets, recommending
to the stockholders a dissolution of the corporation or a revocation of a
dissolution, or amending the by-laws of the corporation; and, unless the
resolution or the certificate of incorporation expressly so provide, no such
committee shall have the power or authority to declare a dividend or to
authorize the issuance of stock or to adopt a certificate of ownership and
merger. Such committee or committees shall have such name or names as may be
determined from time to time by resolution adopted by the board of
directors.
Section
12. Each
committee shall keep regular minutes of its meetings and report the same to
the
board of directors when required.
COMPENSATION
OF DIRECTORS
Section
13. Unless
otherwise restricted by the certificate of incorporation or these by-laws,
the
board of directors shall have the authority to fix the compensation of
directors. The directors may be paid their expenses, if any, of attendance
at
each meeting of the board of directors and may be paid a fixed sum for
attendance at each meeting of the board of directors or a stated salary as
director. No such payment shall preclude any director from serving the
corporation in any other capacity and receiving compensation therefor. Members
of special or standing committees may be allowed like compensation for attending
committee meetings.
6
REMOVAL
OF DIRECTORS
Section
14. Unless
otherwise restricted by the certificate of incorporation or by law, any director
or the entire board of directors may be removed, with or without cause, by
the
holders of a majority of shares entitled to vote at an election of
directors.
ARTICLE
IV.
NOTICES
Section
1. Whenever,
under the provisions of the statutes or of the certificate of incorporation
or
of these by-laws, notice is required to be given to any director or stockholder,
it shall not be construed to mean personal notice, but such notice may be given
in writing, by mail, addressed to such director or stockholder, at his address
as it appears on the records of the corporation, with postage thereon prepaid,
and such notice shall be deemed to be given at the time when the same shall
be
deposited in the United States mail. Notice to directors may also be given
by
telegram or by any other manner permissible under the Delaware General
Corporation Law.
Section
2. Whenever
any notice is required to be given under the provisions of the statutes or
of
the certificate of incorporation or of these by-laws, a waiver thereof in
writing, signed by the person or persons entitled to said notice, whether before
or after the time stated therein, shall be deemed equivalent
thereto.
ARTICLE
V.
OFFICERS
Section
1. The
officers of the corporation shall be a president, a vice-president, a secretary
and a treasurer. The secretary and treasurer shall be chosen by the board of
directors. The president shall be appointed and may be removed at any time,
with
or without cause, by the non-executive chairman. The holders of a majority
of
the outstanding shares of the corporation or the board of directors may elect
a
non-executive chairman, who need not be a director and, unless otherwise
determined by the board of directors, shall not be an officer of the corporation
and who shall preside at all meetings of the stockholders and the board of
directors. Any number of offices may be held by the same person, unless the
certificate of incorporation or these by-laws otherwise provide.
7
Section
2. The
board
of directors at its first meeting after each annual meeting of stockholders
shall choose one or more vice-presidents, a secretary and a
treasurer.
Section
3. The
board
of directors may appoint such other officers and agents as it shall deem
necessary who shall hold their offices for such terms and shall exercise such
powers and perform such duties as shall be determined from time to time by
the
board.
Section
4. The
salaries of all officers and agents of the corporation shall be fixed by the
board of directors.
Section
5. The
officers of the corporation shall hold office until their successors are chosen
and qualify. Any officer elected or appointed by the board of directors may
be
removed at any time by the affirmative vote of a majority of the board of
directors. Any vacancy occurring in any office of the corporation shall be
filled by the board of directors.
THE
PRESIDENT
Section
6. The
president shall be the chief executive officer of the corporation, shall have
general and active management of the business of the corporation and shall
see
that all orders and resolutions of the board of directors are carried into
effect.
Section
7. He
shall
execute bonds, mortgages and other contracts requiring a seal, under the seal
of
the corporation, except where required or permitted by law to be otherwise
signed and executed and except where the signing and execution thereof shall
be
expressly delegated by the board of directors to some other officer or agent
of
the corporation.
THE
VICE-PRESIDENTS
Section
8. In
the
absence of the president or in the event of his inability or refusal to act,
the
vice-president (or in the event there be more than one vice-president, the
vice-presidents in the order designated by the directors, or in the absence
of
any designation, then in the order of their election) shall perform the duties
of the president, and when so acting, shall have all the powers of and be
subject to all the restrictions upon the president. The vice-presidents shall
perform such other duties and have such other powers as the board of directors
may from time to time prescribe.
8
THE
SECRETARY AND ASSISTANT SECRETARY
Section
9. The
secretary shall attend all meetings of the board of directors and all meetings
of the stockholders and record all the proceedings of the meetings of the
corporation and of the board of directors in a book to be kept for that purpose
and shall perform like duties for the standing committees when required. He
shall give, or cause to be given, notice of all meetings of the stockholders
and
special meetings of the board of directors, and shall perform such other duties
as may be prescribed by the board of directors or president, under whose
supervision he shall be. He shall have custody of the corporate seal of the
corporation and he, or an assistant secretary, shall have authority to affix
the
same to any instrument requiring it and when so affixed, it may be attested
by
his signature or by the signature of such assistant secretary. The board of
directors may give general authority to any other officer to affix the seal
of
the corporation and to attest the affixing by his signature.
Section
10. The
assistant secretary, or if there be more than one, the assistant secretaries
in
the order determined by the board of directors (or if there be no such
determination, then in the order of their election) shall, in the absence of
the
secretary or in the event of his inability or refusal to act, perform the duties
and exercise the powers of the secretary and shall perform such other duties
and
have such other powers as the board of directors may from time to time
prescribe.
THE
TREASURER AND ASSISTANT TREASURERS
Section
11. The
treasurer shall have the custody of the corporate funds and securities and
shall
keep full and accurate accounts of receipts and disbursements in books belonging
to the corporation and shall deposit all moneys and other valuable effects
in
the name and to the credit of the corporation in such depositories as may be
designated by the board of directors.
Section
12. He
shall
disburse the funds of the corporation as may be ordered by the board of
directors, taking proper vouchers for such disbursements, and shall render
to
the president and the board of directors, at its regular meetings, or when
the
board of directors so requires, an account of all his transactions as treasurer
and of the financial condition of the corporation.
9
Section
13. If
required by the board of directors, he shall give the corporation a bond (which
shall be renewed every six years) in such sum and with such surety or sureties
as shall be satisfactory to the board of directors for the faithful performance
of the duties of his office and for the restoration to the corporation, in
case
of his death, resignation, retirement or removal from office, of all books,
papers, vouchers, money and other property of whatever kind in his possession
or
under his control belonging to the corporation.
Section
14. The
assistant treasurer, or if there shall be more than one, the assistant
treasurers in the order determined by the board of directors (or if there be
no
such determination, then in the order of their election) shall, in the absence
of the treasurer or in the event of his inability or refusal to act, perform
the
duties and exercise the powers of the treasurer and shall perform such other
duties and have such other powers as the board of directors may from time to
time prescribe.
ARTICLE
VI.
CERTIFICATES
FOR SHARES
Section
1. The
shares of the corporation shall be represented by a certificate or shall be
uncertificated. Certificates shall be signed by, or in the name of the
corporation by, the chairman or vice-chairman of the board of directors, or
the
president or a vice-president, and by the treasurer or an assistant treasurer,
or the secretary or an assistant secretary of the corporation.
Within
a
reasonable time after the issuance or transfer of uncertificated stock, the
corporation shall send to the registered owner thereof a written notice
containing the information required to be set forth or stated on certificates
pursuant to Sections 151, 156, 202(a) or 218 (a) or a statement that the
corporation will furnish without charge to each stockholder who so requests
the
powers, designations, preferences and relative participating, optional or other
special rights of each class of stock or series thereof and the qualifications,
limitations or restrictions of such preferences and/or rights.
Section
2. Any
of or
all the signatures on a certificate may be facsimile. In case any officer,
transfer agent or registrar who has signed or whose facsimile signature has
been
placed upon a certificate shall have ceased to be such officer, transfer agent
or registrar before such certificate is issued, it may be issued by the
corporation with the same effect as if he were such officer, transfer agent
or
registrar at the date of issue.
10
LOST
CERTIFICATES
Section
3. The
board
of directors may direct a new certificate or certificates or uncertificated
shares to be issued in place of any certificate or certificates theretofore
issued by the corporation alleged to have been lost, stolen or destroyed, upon
the making of an affidavit of that fact by the person claiming the certificate
of stock to be lost, stolen or destroyed. When authorizing such issue of a
new
certificate or certificates or uncertificated shares, the board of directors
may, in its discretion and as a condition precedent to the issuance thereof,
require the owner of such lost, stolen or destroyed certificate or certificates,
or his legal representative, to advertise the same in such manner as it shall
require and/or to give the corporation a bond in such sum as it may direct
as
indemnity against any claim that may be made against the corporation with
respect to the certificate alleged to have been lost, stolen or
destroyed.
TRANSFER
OF STOCK
Section
4. Upon
surrender to the corporation or the transfer agent of the corporation of a
certificate for shares duly endorsed or accompanied by proper evidence of
succession, assignation or authority to transfer, it shall be the duty of the
corporation to issue a new certificate to the person entitled thereto, cancel
the old certificate and record the transaction upon its books. Upon receipt
of
proper transfer instructions from the registered owner of uncertificated shares
such uncertificated shares shall be cancelled and issuance of new equivalent
uncertificated shares or certificated shares shall be made to the person
entitled thereto and the transaction shall be recorded upon the books of the
corporation.
FIXING
RECORD DATE
Section
5. In
order
that the corporation may determine the stockholders entitled to notice of or
to
vote at any meeting of stockholders or any adjournment thereof, or to express
consent to corporate action in writing without a meeting, or entitled to receive
payment of any dividend or other distribution or allotment of any rights, or
entitled to exercise any rights in respect of any change, conversion or exchange
of stock or for the purpose of any other lawful action, the board of directors
may fix, in advance, a record date, which shall not be more than sixty nor
less
than ten days before the date of such meeting, nor more than sixty days prior
to
any other action. A determination of stockholders of record entitled to notice
of or to vote at a meeting of stockholders shall apply to any adjournment of
the
meeting: provided, however, that the board of directors may fix a new record
date for the adjourned meeting.
11
REGISTERED
STOCKHOLDERS
Section
6. The
corporation shall be entitled to recognize the exclusive right of a person
registered on its books as the owner of shares to receive dividends and to
vote
as such owner, and to hold liable for calls and assessments a person registered
on its books as the owner of shares, and shall not be bound to recognize any
equitable or other claim to or interest in such share or shares on the part
of
any other person, whether or not it shall have express or other notice thereof,
except as otherwise provided by the laws of Delaware.
ARTICLE
VII.
GENERAL
PROVISIONS DIVIDENDS
Section
1. Dividends
upon the capital stock of the corporation, subject to the provisions of the
certificate of incorporation, if any, may be declared by the board of directors
at any regular or special meeting, pursuant to law. Dividends may be paid in
cash, in property, or in shares of the capital stock, subject to the provisions
of the certificate of incorporation.
Section
2. Before
payment of any dividend, there may be set aside out of any funds of the
corporation available for dividends such sum or sums as the directors from
time
to time, in their absolute discretion, think proper as a reserve or reserves
to
meet contingencies, or for equalizing dividends, or for repairing or maintaining
any property of the corporation, or for such other purpose as the directors
shall think conducive to the interest of the corporation, and the directors
may
modify or abolish any such reserve in the manner in which it was
created.
ANNUAL
STATEMENT
Section
3. The
board
of directors shall present at each annual meeting, and at any special meeting
of
the stockholders when called for by vote of the stockholders, a full and clear
statement of the business and condition of the corporation.
12
CHECKS
Section
4. All
checks or demands for money and notes of the corporation shall be signed by
such
officer or officers or such other person or persons as the board of directors
may from time to time designate.
FISCAL
YEAR
Section
5. The
fiscal year of the corporation shall be fixed by resolution of the board of
directors.
SEAL
Section
6. The
corporate seal shall have inscribed thereon the name of the corporation, the
year of its organization and the words “Corporate Seal, Delaware”. The seal may
be used by causing it or a facsimile thereof to be impressed or affixed or
reproduced or otherwise.
INDEMNIFICATION
Section
7. The
corporation shall indemnify its officers and directors and any employees and
agents to the extent permitted by the General Corporation Law of
Delaware.
ARTICLE
VIII.
AMENDMENTS
Section
1. These
by-laws may be altered, amended or repealed or new by-laws may be adopted by
the
stockholders or by the board of directors, when such power is conferred upon
the
board of directors by the certificate of incorporation at any regular meeting
of
the stockholders or of the board of directors or at any special meeting of
the
stockholders or of the board of directors if notice of such alteration,
amendment, repeal or adoption of new by-laws be contained in the notice of
such
special meeting. If the power to adopt, amend or repeal by-laws is conferred
upon the board of directors by the certificate of incorporation it shall not
divest or limit the power of the stockholders to adopt, amend or repeal
by-laws.
13
Take-Two
Interactive Software, Inc. Announces Results of Annual
Meeting
Newly
Appointed Board Names Strauss Zelnick Chairman; Ben Feder to Serve as Acting
Chief Executive Officer
New
York, NY - March 29, 2007 - Take-Two Interactive Software, Inc.
(NASDAQ: TTWO) announced that, at the Annual Meeting of Take-Two stockholders
held today, stockholders elected a new slate of directors to the Take-Two Board.
The Take-Two Board of Directors now consists of Strauss Zelnick, Ben Feder,
Jon
J. Moses, Michael Dornemann, Michael James Sheresky and John Levy, who is an
incumbent, independent director of Take-Two. Grover C. Brown, an incumbent,
independent director, was also elected as a director at a meeting of the new
Board of Directors held following the stockholders meeting.
At
the
direction of the new Take-Two Board, Strauss Zelnick, founding partner of
ZelnickMedia became the new chairman of Take-Two. Since the formation of
ZelnickMedia, Mr. Zelnick and his partners have led the successful execution
of
several operational turnarounds, including Columbia Music Entertainment of
Japan
and Time-Life. Prior to founding ZelnickMedia in 2001, Mr. Zelnick held a number
of high-level media industry positions including president and chief executive
officer of BMG Entertainment, president and chief executive officer of Crystal
Dynamics, a producer and distributor of interactive entertainment software,
and
president and chief operating officer of 20th Century Fox.
In
addition to Mr. Zelnick, the following individuals joined the Take-Two Board:
|
·
|
Ben
Feder, a partner of ZelnickMedia since 2001. Mr. Feder served previously
as a senior executive at News Corp. He currently serves on the Board
of
Directors of Columbia Music Entertainment, traded on the Tokyo Stock
Exchange. Mr. Feder has been named acting CEO, reporting to Mr. Zelnick.
The Board is working with Paul Eibeler, former CEO and President
of
Take-Two, to ensure an orderly and effective transition.
|
|
·
|
Jon
J. Moses, CEO of UGO Networks, an online network of game sites. Mr.
Moses
previously served as the president of BMG Interactive.
|
|
·
|
Michael
Dornemann, an entertainment and marketing executive with more than
30
years of corporate development, strategic advisory, advertising and
media
experience. Previously, Mr. Dornemann was an executive board member
of
Bertelsmann AG for 16 years and CEO of BMG Entertainment. As CEO,
Mr.
Dornemann was responsible for the oversight of BMG's music, television
and
games operations in 56 countries.
|
|
·
|
Michael
James Sheresky, a senior vice president in the Motion Picture Department
at the William Morris Agency. Sheresky focuses on representing major
clients and developing business opportunities across the broad spectrum
of
the entertainment industry.
|
|
·
|
John
Levy and Grover C. Brown, incumbent, independent directors of Take-Two.
|
Strauss
Zelnick, founding partner of ZelnickMedia, commented, "Take-Two has exceptional
brands and creative resources, and we are thrilled to be able to work with
the
many talented people within the company. The new Board plans to put in place
strategies designed to revitalize Take-Two, focus on supporting and enhancing
its creative output, improve its margins and ensure that the 2007 release
pipeline meets expectations. We are here to maximize the value of Take-Two
for
shareholders, for game consumers, and for the Company's employees."
The
Company also announced that the Board of Directors ratified the management
contract with ZelnickMedia, as described in previously issued Schedule 13D
filings.
Additional
Proposals
The
proposal to amend Take-Two's Incentive Stock Plan to increase the number of
shares of common stock reserved for issuance under the plan by 2,000,000 shares
was approved.
The
proposal to ratify the appointment of Ernst & Young LLP as the Company's
independent registered public accounting firm to audit the Company's financial
statements for its fiscal year ending October 31, 2007, was
approved.
A
shareholder proposal requesting that the Board of Directors' Compensation
Committee include social responsibility, as well as corporate governance and
financial criteria, in setting executive compensation was defeated.
About
Take-Two Interactive Software
Headquartered
in New York City, Take-Two Interactive Software, Inc. is a global developer,
marketer, distributor and publisher of interactive entertainment software games
for the PC, PlayStation® game console, PlayStation®2 and PLAYSTATION®3 computer
entertainment systems, PSP® (PlayStation®Portable) system, Xbox® and Xbox 360™
video game and entertainment systems from Microsoft, Wii™, Nintendo GameCube™,
Nintendo DS™ and Game Boy® Advance. The Company publishes and develops products
through its wholly owned labels Rockstar Games, 2K and 2K Sports, and Global
Star Software; and distributes software, hardware and accessories in North
America through its Jack of All Games subsidiary. Take-Two's common stock is
publicly traded on NASDAQ under the symbol TTWO. For more corporate and product
information please visit our website at www.take2games.com.
All
trademarks and copyrights contained herein are the property of their respective
holders.
Safe
Harbor Statement under the Private Securities Litigation Reform Act of 1995:
This press release contains forward-looking statements made in reliance upon
the
safe harbor provisions of Section 27A of the Securities Act of 1933, as amended,
and Section 21E of the Securities Exchange Act of 1934, as amended. The
statements contained herein which are not historical facts are considered
forward-looking statements under federal securities laws. Such forward-looking
statements are based on the beliefs of our management as well as assumptions
made by and information currently available to them. The Company has no
obligation to update such forward-looking statements. Actual results may vary
significantly from these forward-looking statements based on a variety of
factors. These risks and uncertainties include the matters relating to the
Special Committee's investigation of the Company's stock option grants and
the
restatement of our consolidated financial statements as well as the risks and
uncertainties stated in this release. The investigation and conclusions of
the
Special Committee may result in claims and proceedings relating to such matters,
including previously disclosed stockholder and derivative litigation and actions
by the Securities and Exchange Commission and/or other governmental agencies
and
negative tax or other implications for the Company resulting from any accounting
adjustments or other factors. In addition, there can be no assurance that the
actions taken or to be taken by the Company as described herein will ensure
the
continued listing of the Company's common stock on NASDAQ. Other important
factors are described in the Company's Annual Report on Form 10-K for the fiscal
year ended October 31, 2006 in the section entitled "Risk Factors".