01—Abstract
Summary
Summary of the 8-K filed November 18, 2013. Cited figures are marked; the original filing is the authoritative source.
Take-Two Interactive Software, Inc. (TTWO) filed an 8-K on November 18, 2013, reporting a material definitive agreement.
The company, through its Board of Directors' approval, entered into an amendment to a Non-Qualified Stock Option Agreement originally established in August 2007 with ZelnickMedia Corporation. This amendment allows ZelnickMedia to exercise its outstanding stock options, which represent 2,009,075 shares of common stock at an exercise price of $14.74a per share, on a "net exercise" basis.
This method permits ZelnickMedia to satisfy the aggregate exercise price by having the company withhold shares equivalent to that value, rather than paying cash. A key benefit for Take-Two shareholders is that this net exercise approach is expected to result in less dilution to the market value of the company's outstanding shares.
02—Key points
Key Highlights
- Take-Two Interactive Software, Inc. amended a stock option agreement with ZelnickMedia Corporation.
- The amendment was approved by the Company's Board of Directors.
- The original stock option agreement was dated August 27, 2007, and covered 2,009,075 shares at an exercise price of $14.74.
- The amendment allows for 'net exercise' of the stock options.
- Net exercise means ZelnickMedia can use withheld shares to cover the exercise price, reducing immediate cash outlay.
- This 'net exercise' provision is designed to minimize dilution to the company's common stock in the market.
- The options are currently outstanding and vest over 36 months, expiring 10 years from grant.
03—Questions
Frequently Asked Questions
What is the primary purpose of this 8-K filing?
This 8-K filing reports on a material definitive agreement, specifically an amendment to a stock option agreement between Take-Two Interactive Software, Inc. and ZelnickMedia Corporation.
What is a 'net exercise' of stock options?
A 'net exercise' allows the option holder (ZelnickMedia in this case) to exercise their options by having the company withhold a number of shares that is equivalent in fair market value to the total exercise price, rather than paying the exercise price in cash. The option holder then receives the net remaining shares.
How does the 'net exercise' benefit Take-Two Interactive's shareholders?
The 'net exercise' is beneficial to shareholders because it is expected to result in less dilution to the market value of the company's outstanding common stock compared to a traditional cash exercise where new shares might be issued to cover the exercise cost.
When do these stock options expire?
The stock options were granted 10 years prior to their expiration date, meaning they would expire approximately in August 2017, based on the original grant date of August 27, 2007.
04—Continue