What is the new expected closing date for the Zynga acquisition?

The parties currently anticipate that the closing of the Zynga acquisition will occur on May 23, 2022, subject to receiving the necessary stockholder approvals and satisfying other closing conditions.

How is the stock price for the Zynga acquisition exchange ratio being determined?

The exchange ratio will be determined based on the volume-weighted average sales price of Take-Two's common stock over a specific trading period, beginning April 20, 2022, and concluding on May 18, 2022.

What are the key terms of the new Management Agreement with ZelnickMedia?

The new Management Agreement, effective upon the Zynga merger closing and extending until March 31, 2029, includes a $275,000 monthly management fee, annual performance-based bonuses with a target of $6.6 million, and significant restricted stock unit grants for ZelnickMedia. Strauss Zelnick will continue as CEO and Karl Slatoff as President.

Are there any restrictions on the compensation paid to ZelnickMedia or its key personnel?

Yes, the Management Agreement stipulates that no more than 60% of the aggregate compensation paid to ZelnickMedia can go to Mr. Zelnick (as CEO) and no more than 40% to Mr. Slatoff (as President).

TTWO 8-K: Material Agreements

Summary

Take-Two Interactive Software, Inc. (TTWO) filed an 8-K on May 5, 2022, primarily to disclose an amendment to its merger agreement with Zynga Inc. and a new management agreement with ZelnickMedia Corporation. The second amendment to the merger agreement sets a potential closing date of May 23, 2022, subject to stockholder approvals and other closing conditions. This amendment also specifies a valuation mechanism for the "Parent Common Stock Price" used in calculating the exchange ratio, based on a volume-weighted average price over a defined trading period preceding the closing. Furthermore, Take-Two entered into a new Management Agreement with ZelnickMedia Corporation, which will become effective upon the closing of the Zynga acquisition. This agreement, superseding a prior one, outlines a term through March 31, 2029, and details financial consulting services provided by ZelnickMedia, including the continued roles of Strauss Zelnick as Executive Chairman and CEO, and Karl Slatoff as President. The agreement includes a fixed monthly management fee, annual bonus opportunities tied to performance, and significant restricted stock unit awards, with provisions for termination and compensation limits.

Key Highlights

1Take-Two and Zynga anticipate closing their merger on May 23, 2022, contingent on stockholder approvals and satisfaction of closing conditions.
2A specific valuation period (April 20, 2022 to May 18, 2022) will be used to determine the volume-weighted average stock price for calculating the Zynga acquisition exchange ratio.
3A new Management Agreement with ZelnickMedia Corporation is effective upon the closing of the Zynga merger, extending through March 31, 2029.
4The ZelnickMedia agreement includes a base monthly fee of $275,000 and annual bonus opportunities for ZelnickMedia, with a target bonus of $6.6 million.
5Substantial restricted stock unit grants (time-based and performance-based) are to be issued to ZelnickMedia, with vesting tied to continued service and company/stock performance.
6The agreement includes provisions for Strauss Zelnick to continue as Executive Chairman and CEO, and Karl Slatoff as President.
7Compensation for ZelnickMedia is capped, with no more than 60% going to Mr. Zelnick and 40% to Mr. Slatoff in aggregate.

TAKE TWO INTERACTIVE SOFTWARE INC 8-K Report, Material Agreement (May 5, 2022)

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