Who is covered by the Change in Control Employee Severance Plan?

The Plan covers most employees of Take-Two Interactive Software, Inc. and its affiliates, including those outside the United States. However, individuals providing services under the management agreement with ZelnickMedia Corporation, such as Strauss Zelnick and Ben Feder, are explicitly excluded.

What triggers the severance benefits under the Plan?

Severance benefits are triggered if an eligible employee's employment is terminated "without Cause" or "for Good Reason" within 12 months following a "Change in Control" of the Company. The filing provides specific definitions for each of these terms.

What are the key benefits provided by the Plan?

Eligible employees will receive severance payments calculated as a multiple of their base salary and target annual bonus, paid over a specified "Continuation Period." They will also receive continued group health plan coverage (COBRA) paid by the Company during this period. Additionally, eligible employees will experience accelerated vesting of all unvested equity awards upon a qualifying termination.

Are there any restrictions on the severance payments?

Yes, all severance benefits are intended to comply with Section 409A of the Internal Revenue Code. Furthermore, benefits may be reduced to avoid excise taxes under Section 280G. Employees accepting benefits must sign a release, agree to non-solicitation and non-disparagement clauses, and cooperate with the Company in litigation.

TTWO 8-K: Leadership Changes & Regulation FD

Summary

Take-Two Interactive Software, Inc. (TTWO) filed an 8-K on March 7, 2008, primarily to disclose the adoption of a Change in Control Employee Severance Plan (the "Plan"). This plan is designed to provide severance payments and benefits to eligible employees in the event of a change in control of the company followed by a termination of employment without Cause or for Good Reason within 12 months. The Plan outlines different tiers of benefits based on employee roles, with the CEO and other key officers receiving the most substantial severance multiples and continuation periods. Notably, individuals providing services under the management agreement with ZelnickMedia Corporation, including Strauss Zelnick (Executive Chairman) and Ben Feder (CEO), are explicitly excluded from participating in this severance plan. This exclusion is a critical detail for investors to understand the potential financial impact of a change in control on different employee groups. The filing also details the definitions of "Cause" and "Change in Control" to clarify the conditions under which these benefits would be triggered.

Key Highlights

1Take-Two Interactive Software, Inc. adopted a Change in Control Employee Severance Plan effective March 3, 2008.
2The Plan provides severance payments and continued health benefits to eligible employees terminated without Cause or for Good Reason within 12 months after a Change in Control.
3Severance multiples and continuation periods vary by employee tier, with the highest benefits for the CEO and other Section 16 officers (1.5x salary/bonus for 18 months).
4Key executives Strauss Zelnick (Executive Chairman) and Ben Feder (CEO), along with other ZelnickMedia personnel, are excluded from the Plan.
5The Plan includes provisions for accelerated vesting of unvested equity awards for eligible employees upon qualifying termination.
6Definitions for "Cause," "Change in Control," and "Good Reason" are provided to clarify the conditions for benefit eligibility.
7Severance benefits are structured to comply with Section 409A of the Internal Revenue Code and may be reduced to avoid Section 280G excise taxes.

TAKE TWO INTERACTIVE SOFTWARE INC 8-K Report, Executive Changes (Mar 7, 2008)

Summary

Key Highlights

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