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OMB
APPROVAL
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OMB
Number:
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April
30, 2009
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Expires:
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3235-0060
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Estimated
average burden hours per response
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5.0
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UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
Washington,
D.C. 20549
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FORM
8-K
CURRENT
REPORT
Pursuant
to Section 13 OR 15(d) of The Securities Exchange Act of
1934
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Date
of Report (Date of earliest event reported):
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February
14, 2008
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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 jurisdiction
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(Commission
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(IRS
Employer
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of
incorporation)
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File
Number)
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Identification
No.)
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622
Broadway, New York, New York
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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
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(646)
536-2842
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(Former
name or former address, if changed since last
report.)
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o
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Written
communications pursuant to Rule 425 under the Securities Act (17
CFR
230.425)
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o
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Soliciting
material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
240.14a-12)
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o
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Pre-commencement
communications pursuant to Rule 14d-2(b) under the Exchange Act (17
CFR
240.14d-2(b))
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o
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Pre-commencement
communications pursuant to Rule 13e-4(c) under the Exchange Act (17
CFR
240.13e-4(c))
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·
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Commencing
on April 1, 2008, the monthly management fee payable to ZelnickMedia
under
the Management Agreement is increased from $62,500 per month to $208,333
per month.
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·
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The
maximum annual bonus that ZelnickMedia is eligible to receive under
the
Management Agreement is increased for each fiscal year of the Company
ending on or after October 31, 2008 from $750,000 per fiscal year
to
$2,500,000 per fiscal year, subject to the achievement by the Company
of
certain performance thresholds, except that the annual bonus for
the
fiscal year ending on October 31, 2008 will be pro rated to reflect
a
maximum annual bonus of $750,000 for the portion of the fiscal year
prior
to April 1, 2008.
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·
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ZelnickMedia
will continue to provide certain individuals as it deems appropriate
for
the performance of the Management Agreement. Specifically (i) Mr.
Zelnick
will serve as Executive Chairman of the Board of Directors, (ii)
Mr. Feder
will serve as the Company’s Chief Executive Officer (“CEO”),
and (iii) Karl Slatoff will serve as the Company’s Executive Vice
President. On February 14, 2008, Messrs. Feder and Slatoff each entered
into an employment agreement with the Company setting forth their
duties
with the Company and providing for an annual salary of $1, as further
described in Item 5.02 to this Report on Form 8-K. If Mr. Feder or
any
other employee of ZelnickMedia acting in an executive capacity for
the
Company is unable or unavailable to serve as CEO or in such other
capacity
(other than due to a termination by the Company without Cause or
their
resignation for Good Reason (as such terms will be defined in such
person’s employment agreement with the Company)), and ZelnickMedia is
unable to provide a qualified individual within a reasonable period
of
time to serve in such capacity who is reasonably satisfactory to
the Board
of Directors, then the Company may fill such position with a person
not
affiliated with ZelnickMedia and deduct the costs of such person’s
compensation from ZelnickMedia’s compensation under the Management
Agreement.
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·
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The
term of the Management Agreement is extended one additional year
through
October 31, 2012, unless earlier terminated in accordance with its
terms.
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·
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The
Company will make the “Additional Equity Grants” to ZelnickMedia, as
described below.
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·
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Within
six months following the Effective Date, the Company will file a
Registration Statement on Form S-3 registering for resale all of
the
shares of common stock, par value $0.01 per share (“Common
Stock”)
granted to ZelnickMedia under the Management Agreement, including
the
Additional Equity Grants.
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·
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The
Management Agreement will not be further revised during its
term.
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·
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The
Company consented to ZelnickMedia assigning all of its rights and
obligations under the Management Agreement to ZM Capital Advisors,
LLC,
(“ZM
Capital”),
except that, if ZelnickMedia elects to make such assignment it will
continue to remain liable for all of its obligations under the Management
Agreement.
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·
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In
the event of a Change of Control (as defined in the Management
Agreement) the Compensation Committee will consider in good faith
and
recommend to the independent members of the Board of Directors, the
amount
of additional compensation, if any, to be paid to ZelnickMedia in
connection with such Change in Control and the independent members
of the
Board of Directors will consider such recommendation and determine
in good
faith the amount of additional compensation, if any, to be paid to
ZelnickMedia in connection with such Change in
Control.
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·
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The
Company will include the Proposal in the proxy statement for the
2008
Annual Meeting and the Board of Directors will recommend that the
Stockholders vote for approval of the
Proposal.
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·
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Time
Based Award.
The Company will grant ZelnickMedia a restricted stock award of 600,000
shares of Common Stock that will vest in equal installments on each
of the
first, second and third anniversaries of the grant date, subject
to the
Management Agreement not being terminated prior to the applicable
vesting
date (the “Time
Based Award”).
However, the Time Based Award will immediately vest in full if the
Management Agreement is terminated by ZelnickMedia
for
Good Reason (as defined in the Management Agreement) or by the Company
without Cause (as defined in the Management
Agreement). Further,
in the event of a Change in Control all unvested shares of restricted
stock under the Time Based Award will vest in full immediately prior
to
the consummation of such Change in Control. However, the preceding
sentence will not apply, and the unvested shares of restricted stock
will
not vest, if (w) prior to the Effective Date, the Company received
a bona
fide indication of interest in, or offer to enter into, a business
combination (an “Offer”)
from a third party, (x) the Offer specifies, with some degree of
particularity, the material terms thereof, (y) the existence of the
Offer
is not publicly disclosed or confirmed by the Company or such third
party
prior to the Effective Date, and (z) the transaction proposed by
such
Offer is consummated prior to November 14, 2008 and the consummation
of
such transaction constitutes a Change in Control (such transaction,
an
“Excluded
Transaction”).
In the event of an Excluded Transaction, the Compensation Committee
will
consider in good faith, and recommend to the independent members
of the
Board of Directors, a number of shares of restricted stock subject
to the
Time Based Award, if any, to become vested in connection with such
Change
in Control. The independent members of the Board of Directors will
consider such recommendation and determine in good faith the number
of
shares of restricted stock under the Time Based Award, if any, that
will
become vested in connection with such Change in Control and the remaining
shares of restricted stock will be forfeited to the Company. ZelnickMedia
will forfeit to the Company any and all restricted stock that has
not
previously vested under the Time Based Award if the Management Agreement
is terminated by the Company for Cause or by ZelnickMedia
without Good Reason.
Generally, ZelnickMedia may not sell or otherwise dispose of any
Common
Stock that it acquires pursuant to the Time Based Award until the
earlier
of October 31, 2012 or the termination of the Management
Agreement.
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·
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Performance
Based Award.
The Company will grant ZelnickMedia a restricted stock award of 900,000
shares of Common Stock that may vest on or after each of the Vesting
Dates
listed in the table below in the amounts set forth opposite the applicable
Vesting Date, and subject to, with respect to each tranche, (i) the
achievement of an increase in the price of the Common Stock which
would
place the stockholder return on the Common Stock in the 75th
percentile of the stockholder returns of all of the companies in
the
NASDAQ Industrial Index, and (ii) the Management Agreement not being
terminated prior to the achievement of the applicable performance
goal for
such Vesting Date (the “Performance
Based Award”).
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Vesting
Date
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Shares
Eligible to Vest
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First
anniversary of grant date
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180,000
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Second
anniversary of grant date
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270,000
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Third
anniversary of grant date
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405,000
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Fourth
anniversary of grant date
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45,000
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(A)
such Change in Control occurs on or prior to March 31, 2009, then
180,000
unvested shares of restricted stock under the Performance Based Award
will
vest in full immediately prior to the consummation of such Change
in
Control and the Compensation Committee will consider in good faith,
and
recommend to the independent members of the Board of Directors, a
number
of shares of restricted stock subject to the Performance Based Award,
if
any, to become vested in connection with such Change in Control.
The
independent members of the Board of Directors will consider such
recommendation and determine in good faith, the number of shares
of
restricted stock under the Performance Based Award, if any, that
will
become vested in connection with such Change in Control and the remaining
shares of restricted stock will be forfeited to the Company. However,
the
foregoing will not apply if the Change in Control is an Excluded
Transaction. If such Change in Control is an Excluded Transaction
then the
Compensation Committee will consider in good faith, and recommend
to the
independent members of the Board of Directors, a number of shares
of
restricted stock subject to the Performance Based Award, if any,
to become
vested in connection with such Change in Control. The independent
members
of the Board of Directors will consider such recommendation and determine
in good faith, the number of shares of restricted stock under the
Performance Based Award, if any, that will become vested in connection
with such Change in Control and the remaining shares of restricted
stock
will be forfeited to the Company;
or
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| (c) |
Exhibits:
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3.1
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Amendment
to the Amended and Restated By-laws of the Company dated February 14,
2008.
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10.1
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Second
Amendment, dated February 14, 2008, to the Management Agreement dated
March 30, 2007 between Take-Two Interactive Software, Inc. and
ZelnickMedia Corporation.
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10.2
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Employment
Agreement, dated February 14, 2008, by and between Take-Two Interactive
Software, Inc. and Benjamin Feder.
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10.3
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Employment
Agreement, dated February 14, 2008, by and between Take-Two Interactive
Software, Inc. and Karl Slatoff.
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99.1
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Press
Release entitled “Take-Two Interactive Software, Inc. Announces Executive
Appointments” dated February 15,
2008.
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TAKE-TWO
INTERACTIVE SOFTWARE, INC.
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(Company)
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By:
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/s/Daniel
P. Emerson
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Daniel
P. Emerson
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Vice
President and Associate General
Counsel
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| Exhibit |
Description
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| 3.1 |
Amendment
to the Amended and Restated By-laws of the Company dated February 14,
2008.
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| 10.1 |
Second
Amendment, dated February 14, 2008, to the Management Agreement dated
March 30, 2007 between Take-Two Interactive Software, Inc. and
ZelnickMedia Corporation.
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| 10.2 |
Employment
Agreement, dated February 14, 2008, by and between Take-Two Interactive
Software, Inc. and Benjamin Feder.
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| 10.3 |
Employment
Agreement, dated February 14, 2008, by and between Take-Two Interactive
Software, Inc. and Karl Slatoff.
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| 99.1 |
Press
Release entitled “Take-Two Interactive Software, Inc. Announces Executive
Appointments ” dated February 15,
2008.
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