EXHIBIT
A
RESTRICTED
STOCK AGREEMENT
PURSUANT
TO THE
TAKE-TWO
INTERACTIVE SOFTWARE, INC.
INCENTIVE
STOCK PLAN
This
Restricted Stock Agreement (this “Agreement”),
dated
June [ ], 2008, is made by and between Take-Two Interactive Software, Inc.
(the
“Company”)
and
[ ]
(the “Participant”).
WITNESSETH:
WHEREAS,
the
Company has adopted the Take-Two Interactive Software, Inc. Incentive Stock
Plan, as amended through the date hereof (the “Plan”),
which
is administered by the Compensation Committee (the “Committee”)
of the
Company’s Board of Directors (the “Board”);
WHEREAS,
pursuant
to Section 5 of the Plan, the Committee may grant to Consultants shares of
its
common stock, par value $0.01 per share (“Common
Stock”);
WHEREAS,
pursuant
to the Management Agreement between ZelnickMedia Corporation (“ZelnickMedia”)
and
the Company, dated as of March 30, 2007, as amended on July 26, 2007 and
February 14, 2008 (the “Management
Agreement”),
the
Company agreed to issue to ZelnickMedia
or one its designated affiliates,
and the
Committee has approved the grant of, the Common Stock set forth herein;
and
WHEREAS,
such
shares of Common Stock granted to the Participant hereunder are to be subject
to
certain restrictions prior to and following the vesting thereof.
NOW,
THEREFORE,
for and
in consideration of the mutual promises herein contained, and for other good
and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties agree as follows:
1. Grant
of Shares.
Subject
to the restrictions, terms and conditions of this Agreement, the Company
hereby
awards, effective as of the date hereof, to the Participant Six Hundred Thousand
(600,000) shares of duly authorized, validly issued, fully paid and
non-assessable Common Stock (the “Shares”).
Pursuant to Sections 2(a), 3(c) and 3(d) hereof, the Shares are subject to
certain transfer restrictions and possible risk of forfeiture. While such
restrictions are in effect, the Shares subject to such restrictions shall
be
referred to herein as “Restricted
Stock.”
2. Restrictions
on Transfer.
(a) Restricted
Stock.
The
Participant shall not sell, transfer, pledge, hypothecate, assign or otherwise
dispose of the Restricted Stock, except as set forth in the Plan or this
Agreement. Any attempted sale, transfer, pledge, hypothecation, assignment
or
other disposition of the Restricted Stock in violation of the Plan or this
Agreement shall be void and of no effect and the Company shall have the right
to
disregard the same on its books and records and to issue “stop transfer”
instructions to its transfer agent. Restricted Stock shall be transferable
to
any affiliate of the Participant, in whole or in part, provided that such
Shares
shall remain subject to the terms of this Agreement and each transferee agrees
in writing to take such Shares subject to and to comply with the restrictions
on
transfer contained in this Agreement.
(b) Common
Stock.
Until
October 31, 2012 or earlier if the Management Agreement is earlier terminated
in
accordance with its terms, the Participant shall not sell or otherwise dispose
(other than to an affiliate or employee of the Participant) of any shares
of
Common Stock acquired hereunder and the preceding restriction shall not be
waivable by the Company without the approval of stockholders holding a majority
of the Company’s outstanding voting securities at the time such approval is
given; provided,
however,
that
the foregoing shall not limit the right of the Participant and/or any
Permitted Transferee (as defined below)
to sell
or otherwise dispose of that number of shares of Common Stock necessary to
satisfy any taxes imposed on the Participant, its shareholders, its affiliates
and/or its members or partners, or
Permitted Transferees,
as a
result of the vesting of the shares of Restricted Stock hereunder or in
connection with the transfer of shares by the Participant to such Permitted
Transferee;
provided, further, that in
connection with any transfer of shares by the Participant to Permitted
Transferee, each such
transferee agrees in writing to take such Shares subject to and comply with
the
restrictions on transfer contained in this Agreement.
For
purposes of this Agreement, “Permitted
Transferee”
shall
mean (i) an affiliate or employee of the Participant, (ii) any transfer for
estate planning purposes to or for the benefit of any spouse, child or
grandchild of an employee of the Participant or its affiliates, or (iii)
any
trust or partnership for the benefit of any of the foregoing individuals,
including transfers by will or the laws of descent and
distribution.
(a) Retention
of Certificates.
Promptly
after the date of this Agreement, the Company shall issue stock certificates
representing the Restricted Stock unless it elects to recognize such ownership
through book entry or another similar method pursuant to Section 8 herein.
The
stock certificates shall be registered in the Participant’s name and shall bear
any legend required under the Plan or Section 4 hereof. Unless held in book
entry form, such stock certificates shall be held in custody by the Company
(or
its designated agent) until the restrictions thereon shall have lapsed. The
Participant shall deliver to the Company a duly signed stock power, endorsed
in
blank, relating to the Restricted Stock; provided,
that such stock power shall provide that it may only be used to effect a
transfer back to the Company upon the forfeiture by the Participant of the
Restricted Stock in accordance with the provisions of this Agreement.
If the
Participant receives a stock dividend or extraordinary cash dividend on the
Restricted Stock or the Restricted Stock is split or the Participant receives
any other shares, securities, moneys or property representing a dividend
on the
Restricted Stock (other than regular cash dividends and other cash equivalent
distributions on and after the date of this Agreement) or representing a
distribution or return of capital upon or in respect of the Restricted Stock
or
any part thereof, or resulting from a split-up, reclassification or other
like
changes of the Restricted Stock, or otherwise received in exchange therefor,
and
any warrants, rights or options issued to the Participant in respect of the
Restricted Stock (collectively “RS
Property”),
the
Participant will also immediately deposit with and deliver to the Company
any of
such RS Property, including any certificates representing shares duly endorsed
in blank or accompanied by stock powers duly executed in blank (provided,
that
such stock powers shall provide that they may only be used to effect a transfer
back to the Company upon the forfeiture by the Participant of such RS Property
in accordance with the provisions of this Agreement), and such RS Property
shall
be subject to the same restrictions, including that of this Section 3(a),
as the
Restricted Stock with regard to which they are issued and shall herein be
encompassed within the term “Restricted Stock.”
(b) Rights
with Regard to Restricted Stock.
The
Participant will have the right to vote the Restricted Stock, to receive
and
retain any regular cash dividends and other cash equivalent distributions
(but
not any dividends that constitute RS Property) payable to holders of Common
Stock of record on and after the transfer of the Restricted Stock (although
such
dividends shall be treated, to the extent required by applicable law, as
additional compensation for tax purposes if paid on Restricted Stock and
any
dividends that constitute RS Property will be subject to the restrictions
provided herein), and to exercise all other rights, powers and privileges
of a
holder of Common Stock with respect to the Restricted Stock set forth in
the
Plan,
including the right to tender the Restricted Stock (although the consideration
received in respect thereof shall be treated as “Restricted Stock”
hereunder),
with
the exceptions that: (i) the Participant will not be entitled to delivery
of the
stock certificate or certificates representing the Restricted Stock until
the
Restriction Period shall have expired; (ii) the Company (or its designated
agent) will retain custody of the stock certificate or certificates representing
the Restricted Stock and the other RS Property during the Restriction Period;
(iii) no RS Property shall bear interest or be segregated in separate accounts
during the Restriction Period; and (iv) the Participant may not sell, assign,
transfer, pledge, hypothecate, exchange, encumber or otherwise dispose of
the RS
Property during the Restriction Period except
as
otherwise permitted under the Plan or this Agreement.
(i) The
Restricted Stock shall become vested and cease to be Restricted Stock (but
shall
remain subject to the other terms of this Agreement and the Plan) in the
amounts
set forth opposite the Vesting Dates listed in the table below; provided,
that
with respect to each tranche the Management Agreement shall not have been
terminated (other than a termination by ZelnickMedia
or its assignee
with
Good Reason (as defined in the Management Agreement) or by the Company without
Cause (as defined in the Management Agreement)) (a “Termination”)
prior
to such date;
provided, further, shares of Restricted Stock that do not vest on or prior
to
June [ ], 2011 shall be forfeited and shall revert back to the Company without
any payment to the Participant, and the Participant shall thereafter have
no
rights with respect to such shares of Restricted Stock; provided, further,
that
all shares of Restricted Stock shall immediately vest in the event the
Management Agreement is terminated by the Company without Cause or by
ZelnickMedia or its assignee for Good Reason.
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Vesting
Date
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Shares
Vested
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June
[ ], 2009
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200,000
|
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June
[ ], 2010
|
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200,000
|
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June
[ ], 2011
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200,000
|
(ii) There
shall be no proportionate or partial vesting prior to any Vesting
Date with
respect to the Shares scheduled to vest on such Vesting Date.
(iii) In
the
event of a Change in Control (as defined in the Management Agreement) prior
to
June [ ], 2011, all shares of Restricted Stock shall become vested and cease
to
be Restricted Stock immediately prior to the consummation of such Change
in
Control. Notwithstanding the foregoing, if (w)
prior
to the Effective Date (as defined in the Second Amendment to the Management
Agreement), the Company shall have received a bona fide indication of interest
in, or offer to enter into, a business combination (an “Offer”)
from a
third party, (x) such Offer shall specify, with some degree of particularity,
the material terms thereof (y) the existence of the Offer is not publicly
disclosed or confirmed by the Company or such third party prior to the Effective
Date, and (z) the transaction proposed by such Offer is consummated prior
to
November 14, 2008 and the consummation of such transaction constitutes a
Change
in Control, then the
preceding sentence shall not apply and the Committee shall consider in good
faith, taking into consideration such factors including, but not limited
to, the
contributions of ZelnickMedia and its personnel to the Company pursuant to
the
Management Agreement and otherwise, and recommend to the independent members
of
the Board, a number of shares of Restricted Stock, if any, to become vested
and
cease to be Restricted Stock in connection with such Change in Control. The
independent members of the Board shall consider such recommendation and
determine in good faith, taking into consideration such factors including,
but
not limited to, the contributions of ZelnickMedia and its personnel to the
Company pursuant to the Management Agreement and otherwise, the number of
shares
of Restricted Stock, if any, which shall become vested and cease to be
Restricted Stock in connection with such Change in Control and the remaining
shares of Restricted Stock shall be forfeited to the Company without
compensation other than the repayment of any par value paid by the Participant
for such Shares (if any).
(iv) When
any
Shares of Restricted Stock become vested, the Company shall promptly issue
and
deliver, unless the Company is using a book entry or similar method pursuant
to
Section 8 of this Agreement, to the Participant a new stock certificate
registered in the name of the Participant for such Shares without the legend
set
forth in Section 4 hereof and deliver to the Participant any related other
RS
Property, subject to applicable withholding.
(d) Forfeiture.
The
Participant shall forfeit to the Company, without compensation, other than
repayment of any par value paid by the Participant for such Shares (if any),
any
and all Restricted Stock and RS Property the
termination of the Management Agreement by the Company for Cause or by
ZelnickMedia
or its assignee without Good Reason. For the avoidance of doubt, any shares
of
Common Stock which become vested and cease to be Restricted Stock pursuant
to
the terms of Section 3(c) above shall not be subject to forfeiture pursuant
to
this Section 3(d).
(e) Taxes.
The
Participant shall be solely responsible for all applicable federal, state
and
local or foreign taxes the Participant incurs from the grant or vesting of
the
Restricted Stock.
(f) Section
83(b).
If the
Participant properly elects (as required by Section 83(b) of the Code) within
30
days after the grant of the Restricted Stock to include in gross income for
federal income tax purposes in the year of issuance the fair market value
of all
or a portion of such Shares of Restricted Stock, the Participant shall be
solely
responsible for any federal, state or local taxes the Participant incurs
in
connection with such election. The Participant acknowledges that it is the
Participant’s sole responsibility, and not the Company’s, to file timely and
properly the election under Section 83(b) of the Code and any corresponding
provisions of state tax laws if the Participant elects to utilize such
election.
(g) Delivery
Delay.
The
delivery of any certificate representing the Restricted Stock or other RS
Property may be postponed by the Company for such period as may be required
for
it to comply with any applicable federal or state securities law, or any
national securities exchange listing requirements and the Company is not
obligated to issue or deliver any securities if, in the opinion of counsel
for
the Company, the issuance of such Shares shall constitute a violation by
the
Participant or the Company of any provisions of any applicable federal or
state
law or of any regulations of any governmental authority or any national
securities exchange.
4. Legend.
All
certificates representing the Restricted Stock shall have endorsed thereon
the
following legends:
(a) “The
anticipation, alienation, attachment, sale, transfer, assignment, pledge,
encumbrance or charge of the shares of stock represented hereby are subject
to
the terms and conditions (including forfeiture) of the Take-Two Interactive
Software, Inc. (the “Company”) Incentive Stock Plan (as the same may be amended
or supplemented from time to time, the “Plan”) and an agreement entered into
between the registered owner and the Company evidencing the award under the
Plan. Copies of such Plan and agreement are on file at the principal office
of
the Company.”
(b) Any
legend required to be placed thereon by applicable blue sky laws of any
state.
Notwithstanding
the foregoing, in no event shall the Company be obligated to issue a certificate
representing the Restricted Stock prior to the vesting dates set forth
above.
5. Securities
Representations.
The
Shares are being issued to the Participant and this Agreement is being made
by
the Company in reliance upon the following express representations and
warranties of the Participant.
The
Participant acknowledges, represents and warrants that:
(a) the
Participant has been advised that the Participant may be an “affiliate” within
the meaning of Rule 144 under the Securities Act of 1933, as amended (the
“Act”)
and in
this connection the Company is relying in part on the Participant’s
representations set forth in this section.
(b) If
the
Participant is deemed an affiliate within the meaning of Rule 144 of the
Act,
the Shares must be held indefinitely unless an exemption from any applicable
resale restrictions is available or the Company files an additional registration
statement (or a “re-offer prospectus”) with regard to such Shares and, other
than pursuant to the Management Agreement, the Company is under no obligation
to
register the Shares (or to file a “re-offer prospectus”).
(c) If
the
Participant is deemed an affiliate within the meaning of Rule 144 of the
Act,
the Participant understands that the exemption from registration under Rule
144
will not be available unless (i) a public trading market then exists for
the
Common Stock of the Company, (ii) adequate information concerning the Company
is
then available to the public, and (iii) other terms and conditions of Rule
144
or any exemption therefrom are complied with; and that any sale of the Shares
may be made only in limited amounts in accordance with such terms and
conditions.
6. No
Obligation to Continue Service.
This
Agreement is not an agreement of consultancy. This Agreement does not guarantee
that the Company or its affiliates will retain, or continue to retain, the
Participant during the entire, or any portion of the, term of this Agreement,
including but not limited to any period during which the Restricted Stock
is
outstanding, nor does it modify in any respect the Company or its affiliate’s
right to terminate or modify the Participant’s consultancy or
compensation.
7. Power
of Attorney.
The
Company, its successors and assigns, is hereby appointed the attorney-in-fact,
with full power of substitution, of the Participant for the purpose of carrying
out the provisions of this Agreement and taking any action and executing
any
instruments which such attorney-in-fact may deem necessary or advisable to
accomplish the purposes hereof, which appointment as attorney-in-fact is
irrevocable and coupled with an interest. The Company, as attorney-in-fact
for
the Participant, may in the name and stead of the Participant, make and execute
all conveyances, assignments and transfers of the Restricted Stock, Shares
and
property provided for herein, and the Participant hereby ratifies and confirms
all that the Company, as said attorney-in-fact, shall do by virtue hereof.
Nevertheless, the Participant shall, if so requested by the Company, execute
and
deliver to the Company all such instruments as may, in the judgment of the
Company, be advisable for the purpose.
8. Uncertificated
Shares.
Notwithstanding anything else herein, to the extent permitted under applicable
law, the Company may, issue the Restricted Stock in the form of uncertificated
shares. Such uncertificated shares of Restricted Stock shall be credited
to a
book entry account maintained by the Company (or its designee) on behalf
of the
Participant. If thereafter certificates are issued with respect to the
uncertificated shares of Restricted Stock, such issuance and delivery of
certificates shall be in accordance with the applicable terms of this
Agreement.
9. Provisions
of Plan Control.
This
Agreement is subject to all the terms, conditions and provisions of the Plan,
including, without limitation, the amendment provisions thereof, and to such
rules, regulations and interpretations relating to the Plan as may be adopted
by
the Committee and as may be in effect from time to time. The Plan is
incorporated herein by reference. Capitalized terms in this Agreement that
are
not otherwise defined shall have the same meaning as set forth in the Plan.
If
and to the extent that this Agreement conflicts or is inconsistent with the
terms, conditions and provisions of the Plan, the Plan shall control, and
this
Agreement shall be deemed to be modified accordingly. This Agreement, the
Plan
and the Management Agreement contain the entire understanding of the parties
with respect to the subject matter hereof and supersedes any prior agreements
between the Company and the Participant with respect to the subject matter
hereof.
10. Notices.
Any
notice or communication given hereunder (each a “Notice”)
shall
be in writing and shall be sent by personal delivery, by courier or by United
States mail (registered or certified mail, postage prepaid and return receipt
requested), to the appropriate party at the address set forth below:
If
to the
Company, to:
Take-Two
Interactive Software, Inc.
622
Broadway
Attention:
General Counsel
If
to the
Participant, to:
or
such
other address or to the attention of such other person as a party shall have
specified by prior Notice to the other party. Each Notice will be deemed
given
and effective upon actual receipt (or refusal of receipt).
11. Governing
Law.
All
questions concerning the construction, validity and interpretation of this
Agreement will be governed by, and construed in accordance with, the domestic
laws of the State of Delaware, without giving effect to any choice of law
or
conflict of law provision or rule (whether of the State of Delaware or any
other
jurisdiction) that would cause the application of the laws of any jurisdiction
other than the State of Delaware.
12. Consent
to Jurisdiction.
In the
event of any dispute, controversy or claim between the Company or any affiliate
and the Participant in any way concerning, arising out of or relating to
the
Plan or this Agreement (a “Dispute”),
including without limitation any Dispute concerning, arising out of or relating
to the interpretation, application or enforcement of the Plan or this Agreement,
the parties hereby (a) agree and consent to the personal jurisdiction of
the
courts of the State of New York located in New York County and/or the Federal
courts of the United States of America located in the Southern District of
New
York (collectively, the “Agreed
Venue”)
for
resolution of any such Dispute, (b) agree that those courts in the Agreed
Venue,
and only those courts, shall have exclusive jurisdiction to determine any
Dispute, including any appeal, and (c) agree that any cause of action arising
out of this Agreement shall be deemed to have arisen from a transaction of
business in the State of New York. The parties also hereby irrevocably (i)
submit to the jurisdiction of any competent court in the Agreed Venue (and
of
the appropriate appellate courts therefrom), (ii) to the fullest extent
permitted by law, waive any and all defenses the parties may have on the
grounds
of lack of jurisdiction of any such court and any other objection that such
parties may now or hereafter have to the laying of the venue of any such
suit,
action or proceeding in any such court (including without limitation any
defense
that any such suit, action or proceeding brought in any such court has been
brought in an inconvenient forum), and (iii) consent to service of process
in
any such suit, action or proceeding, anywhere in the world, whether within
or
without the jurisdiction of any such court, in any manner provided by applicable
law. Without limiting the foregoing, each party agrees that service of process
on such party pursuant to a Notice as provided in Section 11 hereof shall
be
deemed effective service of process on such party. Any action for enforcement
or
recognition of any judgment obtained in connection with a Dispute may be
enforced in any competent court in the Agreed Venue or in any other court
of
competent jurisdiction.
13. Counterparts.
This
Agreement may be executed (including by facsimile transmission) with counterpart
signature pages or in separate counterparts each of which shall be an original
and all of which taken together shall constitute one and the same
agreement.
(a) This
Agreement shall inure to the benefit of and be binding upon the parties hereto
and their respective heirs, legal representatives, successors and
assigns.
(b) In
the
event of any stock split, subdivision, dividend or distribution payable in
shares of Common Stock (or other securities or rights convertible into, or
entitling the holder thereof to receive directly or indirectly shares of
Common
Stock), combination or other similar recapitalization or event occurring
after
the date hereof, each reference in this Agreement to a number of shares shall
be
amended to appropriately account for such event.
(c) The
failure of any party hereto at any time to require performance by another
party
of any provision of this Agreement shall not affect the right of such party
to
require performance of that provision, and any waiver by any party of any
breach
of any provision of this Agreement shall not be construed as a waiver of
any
continuing or succeeding breach of such provision, a waiver of the provision
itself, or a waiver of any right under this Agreement.
[End
of
text. Signature page follows.]
IN
WITNESS WHEREOF,
the
parties have executed this Agreement on the date and year first above
written.
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COMPANY:
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TAKE-TWO
INTERACTIVE SOFTWARE, INC.
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By:
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Name:
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Title:
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[ZELNICKMEDIA
CORPORATION]
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By:
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Name:
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Title:
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[Taxpayer
Identification Number]
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EXHIBIT
B
PERFORMANCE
BASED RESTRICTED STOCK AGREEMENT
PURSUANT
TO THE
TAKE-TWO
INTERACTIVE SOFTWARE, INC.
INCENTIVE
STOCK PLAN
This
Performance Based Restricted Stock Agreement (this “Agreement”),
dated
June [ ], 2008 (the “Grant
Date”),
is
made by and between Take-Two Interactive Software, Inc. (the “Company”)
and
[ ]
(the “Participant”).
WITNESSETH:
WHEREAS,
the
Company has adopted the Take-Two Interactive Software, Inc. Incentive Stock
Plan, as amended through the date hereof (the “Plan”),
which
is administered by the Compensation Committee (the “Committee”)
of the
Company’s Board of Directors;
WHEREAS,
pursuant
to Section 7 of the Plan, the Committee may grant to Consultants shares
of its
common stock, par value $0.01 per share (“Common
Stock”);
WHEREAS,
pursuant
to the Management Agreement between ZelnickMedia Corporation (“ZelnickMedia”)
and
the Company, dated as of March 30, 2007, as amended on July 26, 2007 and
February 14, 2008 (the “Management
Agreement”),
the
Company agreed to issue to ZelnickMedia or one its designated affiliates,
and
the Committee has approved the grant of, the Common Stock set forth herein;
and
WHEREAS,
such
shares of Common Stock granted to the Participant hereunder are to be subject
to
certain restrictions prior to and following the vesting thereof.
NOW,
THEREFORE,
for and
in consideration of the mutual promises herein contained, and for other
good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties agree as follows:
1. Grant
of Shares.
Subject
to the restrictions, terms and conditions of this Agreement, the Company
hereby
awards, effective as of the date hereof, to the Participant Nine Hundred
Thousand (900,000) shares of duly authorized, validly issued, fully paid
and
non-assessable Common Stock (the “Shares”).
Pursuant to Sections 2(a), 3(c) and 3(d) hereof, the Shares are subject
to
certain transfer restrictions and possible risk of forfeiture. While such
restrictions are in effect, the Shares subject to such restrictions shall
be
referred to herein as “Restricted
Stock.”
2. Restrictions
on Transfer.
(a) Restricted
Stock.
The
Participant shall not sell, transfer, pledge, hypothecate, assign or otherwise
dispose of the Restricted Stock, except as set forth in the Plan or this
Agreement. Any attempted sale, transfer, pledge, hypothecation, assignment
or
other disposition of the Restricted Stock in violation of the Plan or this
Agreement shall be void and of no effect and the Company shall have the
right to
disregard the same on its books and records and to issue “stop transfer”
instructions to its transfer agent. Restricted Stock shall be transferable
to
any affiliate of the Participant, in whole or in part, provided that such
Shares
shall remain subject to the terms of this Agreement and each transferee
agrees
in writing to take such Shares subject to and to comply with the restrictions
on
transfer contained in this Agreement.
(b) Common
Stock.
Until
October 31, 2012 or earlier if the Management Agreement is earlier terminated
in
accordance with its terms, the Participant shall not sell or otherwise
dispose
(other than to an affiliate or employee of the Participant) of any shares
of
Common Stock acquired hereunder and the preceding restriction shall not
be
waivable by the Company without the approval of stockholders holding a
majority
of the Company’s outstanding voting securities at the time such approval is
given; provided,
however,
that
the foregoing shall not limit the right of the Participant and/or any
Permitted Transferee (as defined below)
to sell
or otherwise dispose of that number of shares of Common Stock necessary
to
satisfy any taxes imposed on the Participant, its shareholders, its affiliates
and/or its members or partners, or
Permitted Transferees,
as a
result of the vesting of the shares of Restricted Stock hereunder or in
connection with the transfer of shares by the Participant to such Permitted
Transferee;
provided, further, that in
connection with any transfer of shares by the Participant to Permitted
Transferee, each such
transferee agrees in writing to take such Shares subject to and comply
with the
restrictions on transfer contained in this Agreement.
For
purposes of this Agreement, “Permitted
Transferee”
shall
mean (i) an affiliate or employee of the Participant, (ii) any transfer
for
estate planning purposes to or for the benefit of any spouse, child or
grandchild of an employee of the Participant or its affiliates, or (iii)
any
trust or partnership for the benefit of any of the foregoing individuals,
including transfers by will or the laws of descent and
distribution.
(a) Retention
of Certificates.
Promptly
after the date of this Agreement, the Company shall issue stock certificates
representing the Restricted Stock unless it elects to recognize such ownership
through book entry or another similar method pursuant to Section 8 herein.
The
stock certificates shall be registered in the Participant’s name and shall bear
any legend required under the Plan or Section 4 hereof. Unless held in
book
entry form, such stock certificates shall be held in custody by the Company
(or
its designated agent) until the restrictions thereon shall have lapsed.
The
Participant shall deliver to the Company a duly signed stock power, endorsed
in
blank, relating to the Restricted Stock; provided,
that such stock power shall provide that it may only be used to effect
a
transfer back to the Company upon the forfeiture by the Participant of
the
Restricted Stock in accordance with the provisions of this Agreement.
If the
Participant receives a stock dividend or extraordinary cash dividend on
the
Restricted Stock or the Restricted Stock is split or the Participant receives
any other shares, securities, moneys or property representing a dividend
on the
Restricted Stock (other than regular cash dividends and other cash equivalent
distributions on and after the date of this Agreement) or representing
a
distribution or return of capital upon or in respect of the Restricted
Stock or
any part thereof, or resulting from a split-up, reclassification or other
like
changes of the Restricted Stock, or otherwise received in exchange therefor,
and
any warrants, rights or options issued to the Participant in respect of
the
Restricted Stock (collectively “RS
Property”),
the
Participant will also immediately deposit with and deliver to the Company
any of
such RS Property, including any certificates representing shares duly endorsed
in blank or accompanied by stock powers duly executed in blank (provided,
that
such stock powers shall provide that they may only be used to effect a
transfer
back to the Company upon the forfeiture by the Participant of such RS Property
in accordance with the provisions of this Agreement), and such RS Property
shall
be subject to the same restrictions, including that of this Section 3(a),
as the
Restricted Stock with regard to which they are issued and shall herein
be
encompassed within the term “Restricted Stock.”
(b) Rights
with Regard to Restricted Stock.
The
Participant will have the right to vote the Restricted Stock, to receive
and
retain any regular cash dividends and other cash equivalent distributions
(but
not any dividends that constitute RS Property) payable to holders of Common
Stock of record on and after the transfer of the Restricted Stock (although
such
dividends shall be treated, to the extent required by applicable law, as
additional compensation for tax purposes if paid on Restricted Stock and
any
dividends that constitute RS Property will be subject to the restrictions
provided herein), and to exercise all other rights, powers and privileges
of a
holder of Common Stock with respect to the Restricted Stock set forth in
the
Plan,
including the right to tender the Restricted Stock (although the consideration
received in respect thereof shall be treated as “Restricted Stock”
hereunder),
with
the exceptions that: (i) the Participant will not be entitled to delivery
of the
stock certificate or certificates representing the Restricted Stock until
the
Restriction Period shall have expired; (ii) the Company (or its designated
agent) will retain custody of the stock certificate or certificates representing
the Restricted Stock and the other RS Property during the Restriction Period;
(iii) no RS Property shall bear interest or be segregated in separate accounts
during the Restriction Period; and (iv) the Participant may not sell, assign,
transfer, pledge, hypothecate, exchange, encumber or otherwise dispose
of the RS
Property during the Restriction Period except
as
otherwise permitted under the Plan or this Agreement.
(i) The
Restricted Stock shall become vested and cease to be Restricted Stock (but
shall
remain subject to the other terms of this Agreement and the Plan) based
on the
achievement of the performance goal described on Annex A attached hereto;
provided,
that
the Management Agreement shall not have been terminated (other than a
termination by ZelnickMedia or its assignee with Good Reason (as defined
in the
Management Agreement) or by the Company without Cause (as defined in the
Management Agreement)) (a “Termination”)
prior
to the achievement of the performance goal described on Annex A; provided,
further,
that
any shares of Restricted Stock that do not vest on or prior to June [ ],
2012
shall be forfeited and shall revert back to the Company without any payment
to
the Participant, and the Participant shall thereafter have no rights with
respect to such shares of Restricted Stock; provided,
further,
that
all shares of Restricted Stock shall immediately vest in the event the
Management Agreement is terminated by the Company without Cause or by
ZelnickMedia or its assignee for Good Reason.
(ii) In
the
event of a Change in Control (as defined in the Management Agreement),
then the
Restricted Stock shall vest or be forfeited as follows:
(A)
If a
Change in Control occurs on or prior to March 31, 2009, then (x) 180,000
shares
of Restricted Stock shall become vested and cease to be Restricted Stock
immediately prior to the consummation of such Change in Control, and (y)
the
Committee shall consider in good faith, taking into consideration such
factors
including, but not limited to, the contributions of ZelnickMedia and its
personnel to the Company pursuant to the Management Agreement and otherwise,
and
recommend to the independent members of the Board a number of shares of
Restricted Stock, if any, to become vested and cease to be Restricted Stock
in
connection with such Change in Control. The independent members of the
Board
shall consider such recommendation and determine in good faith, taking
into
consideration such factors including, but not limited to, the contributions
of
ZelnickMedia and its personnel to the Company pursuant to the Management
Agreement and otherwise, the number of additional shares of Restricted
Stock, if
any, which shall become vested and cease to be Restricted Stock in connection
with such Change in Control. Any remaining shares of Restricted Stock shall
be
forfeited to the Company without compensation other than the repayment
of any
par value paid by the Participant for such Shares (if any).
(B)
Notwithstanding anything to the contrary in clause (A) of this Section
3(c)(ii),
if (w)
prior
to the Effective Date (as defined in the Second Amendment to the Management
Agreement), the Company shall have received a bona
fide
indication of interest in, or offer to enter into, a business combination
(an
“Offer”)
from a
third party, (x) such Offer shall specify, with some degree of particularity,
the material terms thereof, (y) the existence of the Offer is not publicly
disclosed or confirmed by the Company or such third party prior to the
Effective
Date, and (z)
the
transaction proposed by such Offer is consummated prior to November 14,
2008 and
the consummation of such transaction constitutes a Change in Control, then
Section 3(c)(ii)(A) shall not apply and the Committee shall consider in
good
faith, taking into consideration such factors including, but not limited
to, the
contributions of ZelnickMedia and its personnel to the Company pursuant
to the
Management Agreement and otherwise, and recommend to the independent members
of
the Board a number of shares of Restricted Stock, if any, to become vested
and
cease to be Restricted Stock in connection with such Change in Control.
The
independent members of the Board shall consider such recommendation and
determine in good faith, taking into consideration such factors including,
but
not limited to, the contributions of ZelnickMedia and its personnel to
the
Company pursuant to the Management Agreement and otherwise, the number
of shares
of Restricted Stock, if any, which shall become vested and cease to be
Restricted Stock in connection with such Change in Control and the remaining
shares of Restricted Stock shall be forfeited to the Company without
compensation other than the repayment of any par value paid by the Participant
for such Shares (if any).
(C) If
a
Change in Control occurs on or following April 1, 2009, all shares of Restricted
Stock shall become vested and cease to be Restricted Stock immediately
prior to
the consummation of such Change in Control.
(iii) When
any
Shares of Restricted Stock become vested, the Company shall promptly issue
and
deliver, unless the Company is using a book entry or similar method pursuant
to
Section 8 of this Agreement, to the Participant a new stock certificate
registered in the name of the Participant for such Shares without the legend
set
forth in Section 4 hereof and deliver to the Participant any related other
RS
Property, subject to applicable withholding.
(d) Forfeiture.
The
Participant shall forfeit to the Company, without compensation, other than
repayment of any par value paid by the Participant for such Shares (if
any), any
and all Restricted Stock and RS Property upon the termination of the Management
Agreement by the Company for Cause or by ZelnickMedia or its assignee without
Good Reason. For the avoidance of doubt, any shares of Common Stock which
become
vested and cease to be Restricted Stock pursuant to the terms of Section
3(c)
above shall not be subject to forfeiture pursuant to this Section
3(d).
(e) Taxes.
The
Participant shall be solely responsible for all applicable federal, state
and
local or foreign taxes the Participant incurs from the grant or vesting
of the
Restricted Stock.
(f) Section
83(b).
If the
Participant properly elects (as required by Section 83(b) of the Code)
within 30
days after the grant of the Restricted Stock to include in gross income
for
federal income tax purposes in the year of issuance the fair market value
of all
or a portion of such Shares of Restricted Stock, the Participant shall
be solely
responsible for any federal, state or local taxes the Participant incurs
in
connection with such election. The Participant acknowledges that it is
the
Participant’s sole responsibility, and not the Company’s, to file timely and
properly the election under Section 83(b) of the Code and any corresponding
provisions of state tax laws if the Participant elects to utilize such
election.
(g) Delivery
Delay.
The
delivery of any certificate representing the Restricted Stock or other
RS
Property may be postponed by the Company for such period as may be required
for
it to comply with any applicable federal or state securities law, or any
national securities exchange listing requirements and the Company is not
obligated to issue or deliver any securities if, in the opinion of counsel
for
the Company, the issuance of such Shares shall constitute a violation by
the
Participant or the Company of any provisions of any applicable federal
or state
law or of any regulations of any governmental authority or any national
securities exchange.
4. Legend.
All
certificates representing the Restricted Stock shall have endorsed thereon
the
following legends:
(a) “The
anticipation, alienation, attachment, sale, transfer, assignment, pledge,
encumbrance or charge of the shares of stock represented hereby are subject
to
the terms and conditions (including forfeiture) of the Take-Two Interactive
Software, Inc. (the “Company”) Incentive Stock Plan (as the same may be amended
or supplemented from time to time, the “Plan”) and an agreement entered into
between the registered owner and the Company evidencing the award under
the
Plan. Copies of such Plan and agreement are on file at the principal office
of
the Company.”
(b) Any
legend required to be placed thereon by applicable blue sky laws of any
state.
Notwithstanding
the foregoing, in no event shall the Company be obligated to issue a certificate
representing the Restricted Stock prior to the vesting dates set forth
above.
5. Securities
Representations.
The
Shares are being issued to the Participant and this Agreement is being
made by
the Company in reliance upon the following express representations and
warranties of the Participant.
The
Participant acknowledges, represents and warrants that:
(a) the
Participant has been advised that the Participant may be an “affiliate” within
the meaning of Rule 144 under the Securities Act of 1933, as amended (the
“Act”)
and in
this connection the Company is relying in part on the Participant’s
representations set forth in this section.
(b) If
the
Participant is deemed an affiliate within the meaning of Rule 144 of the
Act,
the Shares must be held indefinitely unless an exemption from any applicable
resale restrictions is available or the Company files an additional registration
statement (or a “re-offer prospectus”) with regard to such Shares and, other
than pursuant to the Management Agreement, the Company is under no obligation
to
register the Shares (or to file a “re-offer prospectus”).
(c) If
the
Participant is deemed an affiliate within the meaning of Rule 144 of the
Act,
the Participant understands that the exemption from registration under
Rule 144
will not be available unless (i) a public trading market then exists for
the
Common Stock of the Company, (ii) adequate information concerning the Company
is
then available to the public, and (iii) other terms and conditions of Rule
144
or any exemption therefrom are complied with; and that any sale of the
Shares
may be made only in limited amounts in accordance with such terms and
conditions.
6. No
Obligation to Continue Service.
This
Agreement is not an agreement of consultancy. This Agreement does not guarantee
that the Company or its affiliates will retain, or continue to retain,
the
Participant during the entire, or any portion of the, term of this Agreement,
including but not limited to any period during which the Restricted Stock
is
outstanding, nor does it modify in any respect the Company or its affiliate’s
right to terminate or modify the Participant’s consultancy or
compensation.
7. Power
of Attorney.
The
Company, its successors and assigns, is hereby appointed the attorney-in-fact,
with full power of substitution, of the Participant for the purpose of
carrying
out the provisions of this Agreement and taking any action and executing
any
instruments which such attorney-in-fact may deem necessary or advisable
to
accomplish the purposes hereof, which appointment as attorney-in-fact is
irrevocable and coupled with an interest. The Company, as attorney-in-fact
for
the Participant, may in the name and stead of the Participant, make and
execute
all conveyances, assignments and transfers of the Restricted Stock, Shares
and
property provided for herein, and the Participant hereby ratifies and confirms
all that the Company, as said attorney-in-fact, shall do by virtue hereof.
Nevertheless, the Participant shall, if so requested by the Company, execute
and
deliver to the Company all such instruments as may, in the judgment of
the
Company, be advisable for the purpose.
8. Uncertificated
Shares.
Notwithstanding anything else herein, to the extent permitted under applicable
law, the Company may, issue the Restricted Stock in the form of uncertificated
shares. Such uncertificated shares of Restricted Stock shall be credited
to a
book entry account maintained by the Company (or its designee) on behalf
of the
Participant. If thereafter certificates are issued with respect to the
uncertificated shares of Restricted Stock, such issuance and delivery of
certificates shall be in accordance with the applicable terms of this
Agreement.
9. Provisions
of Plan Control.
This
Agreement is subject to all the terms, conditions and provisions of the
Plan,
including, without limitation, the amendment provisions thereof, and to
such
rules, regulations and interpretations relating to the Plan as may be adopted
by
the Committee and as may be in effect from time to time. The Plan is
incorporated herein by reference. Capitalized terms in this Agreement that
are
not otherwise defined shall have the same meaning as set forth in the Plan.
If
and to the extent that this Agreement conflicts or is inconsistent with
the
terms, conditions and provisions of the Plan, the Plan shall control, and
this
Agreement shall be deemed to be modified accordingly. This Agreement, the
Plan
and the Management Agreement contain the entire understanding of the parties
with respect to the subject matter hereof and supersedes any prior agreements
between the Company and the Participant with respect to the subject matter
hereof.
10. Notices.
Any
notice or communication given hereunder (each a “Notice”)
shall
be in writing and shall be sent by personal delivery, by courier or by
United
States mail (registered or certified mail, postage prepaid and return receipt
requested), to the appropriate party at the address set forth below:
If
to the
Company, to:
Take-Two
Interactive Software, Inc.
622
Broadway
Attention:
General Counsel
If
to the
Participant, to:
or
such
other address or to the attention of such other person as a party shall
have
specified by prior Notice to the other party. Each Notice will be deemed
given
and effective upon actual receipt (or refusal of receipt).
11. Governing
Law.
All
questions concerning the construction, validity and interpretation of this
Agreement will be governed by, and construed in accordance with, the domestic
laws of the State of Delaware, without giving effect to any choice of law
or
conflict of law provision or rule (whether of the State of Delaware or
any other
jurisdiction) that would cause the application of the laws of any jurisdiction
other than the State of Delaware.
12. Consent
to Jurisdiction.
In the
event of any dispute, controversy or claim between the Company or any affiliate
and the Participant in any way concerning, arising out of or relating to
the
Plan or this Agreement (a “Dispute”),
including without limitation any Dispute concerning, arising out of or
relating
to the interpretation, application or enforcement of the Plan or this Agreement,
the parties hereby (a) agree and consent to the personal jurisdiction of
the
courts of the State of New York located in New York County and/or the Federal
courts of the United States of America located in the Southern District
of New
York (collectively, the “Agreed
Venue”)
for
resolution of any such Dispute, (b) agree that those courts in the Agreed
Venue,
and only those courts, shall have exclusive jurisdiction to determine any
Dispute, including any appeal, and (c) agree that any cause of action arising
out of this Agreement shall be deemed to have arisen from a transaction
of
business in the State of New York. The parties also hereby irrevocably
(i)
submit to the jurisdiction of any competent court in the Agreed Venue (and
of
the appropriate appellate courts therefrom), (ii) to the fullest extent
permitted by law, waive any and all defenses the parties may have on the
grounds
of lack of jurisdiction of any such court and any other objection that
such
parties may now or hereafter have to the laying of the venue of any such
suit,
action or proceeding in any such court (including without limitation any
defense
that any such suit, action or proceeding brought in any such court has
been
brought in an inconvenient forum), and (iii) consent to service of process
in
any such suit, action or proceeding, anywhere in the world, whether within
or
without the jurisdiction of any such court, in any manner provided by applicable
law. Without limiting the foregoing, each party agrees that service of
process
on such party pursuant to a Notice as provided in Section 11 hereof shall
be
deemed effective service of process on such party. Any action for enforcement
or
recognition of any judgment obtained in connection with a Dispute may be
enforced in any competent court in the Agreed Venue or in any other court
of
competent jurisdiction.
13. Counterparts.
This
Agreement may be executed (including by facsimile transmission) with counterpart
signature pages or in separate counterparts each of which shall be an original
and all of which taken together shall constitute one and the same
agreement.
(a) This
Agreement shall inure to the benefit of and be binding upon the parties
hereto
and their respective heirs, legal representatives, successors and
assigns.
(b) In
the
event of any stock split, subdivision, dividend or distribution payable
in
shares of Common Stock (or other securities or rights convertible into,
or
entitling the holder thereof to receive directly or indirectly shares of
Common
Stock), combination or other similar recapitalization or event occurring
after
the date hereof, each reference in this Agreement to a number of shares
or a
price per share shall be amended to appropriately account for such
event.
(c) The
failure of any party hereto at any time to require performance by another
party
of any provision of this Agreement shall not affect the right of such party
to
require performance of that provision, and any waiver by any party of any
breach
of any provision of this Agreement shall not be construed as a waiver of
any
continuing or succeeding breach of such provision, a waiver of the provision
itself, or a waiver of any right under this Agreement.
[End
of
text. Signature page follows.]
IN
WITNESS WHEREOF,
the
parties have executed this Agreement on the date and year first above
written.
|
COMPANY:
|
| |
|
TAKE-TWO
INTERACTIVE SOFTWARE, INC.
|
| |
|
|
By:
|
|
|
Name:
|
|
Title:
|
|
PARTICIPANT:
|
| |
[ZELNICKMEDIA
CORPORATION]
|
| |
|
|
By:
|
|
|
Name:
|
|
Title:
|
|
[Taxpayer
Identification Number]
|
Annex
A
Vesting
A.
Vesting.
The
Restricted Stock shall become vested and cease to be Restricted Stock (but
shall
remain subject to the other terms of this Agreement and the Plan) in the
amounts
set forth opposite the Vesting Dates listed in the table below; provided,
that
with respect to each tranche, the Committee has determined that the applicable
Measurement Price (as defined below) with respect to the Common Stock on
the
trading date immediately preceding the applicable Vesting Date (each a
“Measurement
Date”)
achieves a Percentile Rank (as defined below) of 75% or higher with respect
to
Total Shareholder Return (as defined below) relative to the Peer Group
(as
defined below) for the period from the Grant Date though the applicable
Measurement Date:
|
Vesting
Date
|
|
Shares Eligible to Vest
|
|
| |
|
|
|
|
June
[ ], 2009
|
|
|
180,000
|
|
|
June
[ ], 2010
|
|
|
270,000
|
|
|
June
[ ], 2011
|
|
|
405,000
|
|
|
June
[ ], 2012
|
|
|
45,000
|
|
There
shall be no proportionate or partial vesting prior to any Vesting Date
with
respect to the Shares scheduled to vest on such Vesting Date or
the
achievement of any Percentile Rank with respect to Total Shareholder Return
prior to the applicable Measurement Date.
B.
Catch-Up;
Forfeiture.
In
the
event that the Company does not achieve
a
Percentile Rank of 75% or higher with respect to Total Shareholder Return
relative to the Peer Group as of a Measurement Date, the
Shares of Restricted Stock that otherwise would have vested on the applicable
Vesting Date shall nevertheless vest as of any succeeding Vesting Date
if the
Company achieves
a
Percentile Rank of 75% or higher with respect to Total Shareholder Return
relative to the Peer Group as of the Measurement Date applicable to such
succeeding Vesting Date.
Any
Shares of Restricted Stock that have not vested as
of
final
Vesting
Date
shall
automatically be forfeited and shall revert back to
the
Company without compensation to the Participant, other than the repayment
of any
par value paid by the Participant for such Shares (if any).
C.
Definitions.
“Base
Price”
means
the average closing price of the Common Stock or the common stock of a
Peer
Group company, as applicable, for each trading day during the 90 day period
ending on the day immediately prior to the Grant Date.
“Measurement
Price”
means
with respect to a Vesting Date, the average closing price of the Common
Stock or
the common stock of a Peer Group company, as applicable, for each of the
10
trading days ending on (and including) the applicable Measurement
Date.
The
“Peer
Group”
shall
consist of the companies that comprise The NASDAQ Industrial Index on the
applicable Measurement Date.
The
“Percentile
Rank”
of
a
given company’s Total Shareholder Return is defined as the percentage of the
Peer Group companies’ returns falling at or below the company’s Total
Shareholder Return. The formula for calculating the Percentile Rank is
as
follows:
Percentile
Rank = (N-R+1)/N * 100
Where:
|
|
total
number of companies in the Peer Group
|
| |
|
|
R
=
|
the
numeric rank of the Company’s Total Shareholder Return relative to the
Peer Group, where the highest Total Shareholder Return in the Peer Group
is ranked number 1
|
The
Percentile Rank shall be rounded to the nearest whole percentage, with
(.5)
rounded up.
To
illustrate, if the Company’s Total Shareholder Return is the 25th
highest
in a Peer Group comprised of 100 companies, its Percentile Rank would be
76. The
calculation is: (100 - 25 + 1)/100 x 100 =76.
“Total
Shareholder Return”
means
the percentage change in the value of the Common Stock or the common stock
of a
Peer Group company, as applicable, from the Base Price to the Measurement
Price
on the applicable Measurement Date.
