01—Abstract
Summary
Summary of the 8-K filed November 22, 2017. Cited figures are marked; the original filing is the authoritative source.
Take-Two Interactive Software, Inc. (TTWO) announced a new Management Agreement with ZelnickMedia Corporation, effective January 1, 2018, extending through March 31, 2024.
This agreement solidifies the continued engagement of key executives Strauss Zelnick as Executive Chairman and CEO, and Karl Slatoff as President, through ZelnickMedia's provision of financial and management consulting services. The agreement outlines a base monthly management fee of $258,333.33a, along with an annual bonus opportunity tied to company performance, with potential bonuses ranging up to $7.44 million annually.
Significant equity awards in the form of time-based and performance-based restricted units are also being granted to ZelnickMedia, totaling approximately $19.5 millionb in initial grant value, with vesting tied to continued service and specific performance metrics. The agreement also introduces restrictions on ZelnickMedia's stock sales and provisions for accelerated vesting under certain termination or change-in-control scenarios.
02—Key points
Key Highlights
- New Management Agreement with ZelnickMedia Corporation extends through March 31, 2024, effective January 1, 2018.
- Strauss Zelnick to continue as Executive Chairman and CEO, and Karl Slatoff as President, via ZelnickMedia's services.
- Annual management fee of $3,099,999.96 ($258,333.33 per month).
- Annual bonus opportunity for ZelnickMedia ranges from $0 to $7.44 million, contingent on company performance.
- Significant equity awards (restricted units) valued at approximately $19.5 million at grant date are being issued to ZelnickMedia.
- Vesting of equity awards is subject to time-based and performance-based metrics, with provisions for accelerated vesting upon certain events.
- Restrictions are placed on ZelnickMedia's ability to sell Company stock until March 31, 2024, or a Change in Control.
03—Questions
Frequently Asked Questions
What is the primary purpose of this filing?
This 8-K filing announces the entry into a material definitive agreement, specifically a new Management Agreement between Take-Two Interactive Software, Inc. and ZelnickMedia Corporation. This agreement formalizes the continued engagement of key management personnel and outlines their compensation and equity awards.
What are the key financial terms for ZelnickMedia under the new agreement?
ZelnickMedia will receive a monthly management fee of $258,333.33 (totaling $3,099,999.96 annually). Additionally, there is an annual bonus opportunity ranging from $0 to $7.44 million, dependent on Take-Two's financial performance against defined targets.
What equity is being granted to ZelnickMedia?
ZelnickMedia will receive significant equity awards in the form of time-based and performance-based restricted units. The initial grant value is approximately $8.775 million for time-based units vesting in April 2020, and a target of $10.725 million for performance-based units with vesting tied to specific performance metrics (Recurrent Consumer Spending, IP performance, and TSR) by March 31, 2020.
What happens to the management roles if Strauss Zelnick or Karl Slatoff become unavailable?
If Strauss Zelnick or Karl Slatoff are unable to serve, and ZelnickMedia cannot provide a suitable replacement within a reasonable time, Take-Two may hire an external person. The cost of this external person's compensation would be deducted from ZelnickMedia's compensation, with limits: up to 60% for replacing Mr. Zelnick and up to 40% for replacing Mr. Slatoff.
04—Continue