01—Abstract
Summary
Summary of the 8-K filed May 24, 2011. Cited figures are marked; the original filing is the authoritative source.
Take-Two Interactive Software, Inc. (TTWO) filed an 8-K on May 24, 2011, reporting on a new Management Agreement with ZelnickMedia Corporation, set to become effective upon stockholder approval at the 2011 Annual Meeting.
This agreement, if approved, will supersede the previous agreement and extends through May 31, 2015. It outlines the continued provision of management and financial consulting services, with Strauss Zelnick continuing as Executive Chairman and CEO, and Karl Slatoff as COO, along with other ZelnickMedia personnel. The agreement also details a management fee structure with a monthly fee of $208,333,a subject to a 3% annual increase, and an annual bonus opportunity tied to company performance, ranging up to $3.5 million for the fiscal year ending March 31, 2012.
Furthermore, the filing discloses the issuance of significant restricted stock awards to ZelnickMedia, including both time-based and performance-based grants, contingent on stockholder approval and company performance relative to the NASDAQ Composite Index. These awards include restrictions on sale until certain dates or market value thresholds are met, aligning ZelnickMedia's incentives with long-term shareholder value.
02—Key points
Key Highlights
- New Management Agreement with ZelnickMedia Corporation entered into, effective upon stockholder approval.
- Agreement extends through May 31, 2015, continuing Strauss Zelnick as Executive Chairman & CEO and Karl Slatoff as COO.
- Monthly management fee of $208,333 with a 3% annual increase, plus performance-based annual bonuses up to $3.5 million for FY2012.
- Significant restricted stock awards to ZelnickMedia: 1.1 million shares time-based, 1.65 million shares performance-based.
- Performance-based restricted stock vests based on TTWO's total shareholder return relative to the NASDAQ Composite Index.
- Restrictions placed on ZelnickMedia's sale of vested stock until October 31, 2012, and further conditional restrictions based on market value.
- The Board of Directors recommends stockholders approve the new Management Agreement.
03—Questions
Frequently Asked Questions
What is the primary purpose of this 8-K filing?
This 8-K filing announces the entry into a new Management Agreement between Take-Two Interactive Software, Inc. (TTWO) and ZelnickMedia Corporation. It also serves to inform investors about the financial results for the fourth fiscal quarter and full fiscal year ended March 31, 2011, as detailed in an accompanying press release.
What are the key terms of the new Management Agreement with ZelnickMedia?
The new Management Agreement, effective upon stockholder approval, extends through May 31, 2015. It ensures Strauss Zelnick continues as Executive Chairman and CEO, and Karl Slatoff as COO. The agreement includes a monthly management fee of $208,333 (with annual increases) and performance-based annual bonuses. It also involves the issuance of significant time-based and performance-based restricted stock awards to ZelnickMedia, intended to align their interests with the company's long-term performance.
When will the new Management Agreement become effective, and what happens if stockholders do not approve it?
The Management Agreement will become effective on the date of Take-Two Interactive's 2011 Annual Meeting, provided that the Company's stockholders approve it at that meeting. If the stockholders do not approve the agreement, it will be null and void, and the Company will continue to operate under the terms of the existing Management Agreement with ZelnickMedia dated March 30, 2007.
What are the implications of the restricted stock awards for ZelnickMedia?
ZelnickMedia will receive substantial time-based and performance-based restricted stock awards. These awards are subject to vesting conditions, including company performance relative to the NASDAQ Composite Index for the performance-based shares. There are also restrictions on ZelnickMedia selling these shares until specific dates or market value thresholds are met, ensuring continued alignment with shareholder interests and company stability.
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