ZELNICKMEDIA CORPORATION
	By:	/s/ Strauss Zelnick
		Name: Strauss Zelnick
		Title: President
	TAKE-TWO INTERACTIVE SOFTWARE, INC.
	By:	/s/ Michael Dornemann
		Name: Michael Dornemann
		Title: Director
	By:	/s/ Seth D. Krauss
		Name: Seth D. Krauss
		Title: Executive Vice President and General Counsel.

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 ”).

W I T N E S S E T H :

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.

3.   Restricted Stock .

 

(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 .

 

(c)   Vesting .

 

(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.

 

(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

New York, New York 10012

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.

 

14.   Miscellaneous .

 

(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.

 

COMPANY:
TAKE-TWO INTERACTIVE SOFTWARE, INC.
By:
Name:
Title:

PARTICIPANT:
[ZELNICKMEDIA CORPORATION]
By:
Name:
Title:
[Taxpayer Identification Number]

 

Vesting Date		Shares Eligible to Vest
June [ ], 2009			180,000
June [ ], 2010			270,000
June [ ], 2011			405,000
June [ ], 2012			45,000

	TAKE-TWO INTERACTIVE SOFTWARE, INC.
	By:	/s/ Michael Dornemann
		Name: Michael Dornemann
		Title: Director

 

 

	/s/ Benjamin Feder
	Benjamin Feder

 

EMPLOYMENT AGREEMENT

 

THIS EMPLOYMENT AGREEMENT (this “ Agreement ”) is entered into on February 14, 2008 (the “ Signing Date ”), by and between Take-Two Interactive Software, Inc., a Delaware corporation (the “ Company ”), and Karl Slatoff (the “ Employee ”).

 

WITNESSETH :

 

WHEREAS, the Company is a party to that certain Management Agreement, dated as of March 30, 2007, by and between the Company and ZelnickMedia Corporation (“ZelnickMedia”), as amended on July 26, 2007 and on February 14, 2008 (as further amended from time to time following the Signing Date, the “ Management Agreement ”);

 

WHEREAS, the Employee is currently a principal of ZelnickMedia and has been providing services to the Company on an as needed basis;

 

WHEREAS, simultaneously with the execution of this Agreement, the Company and ZelnickMedia are entering into the Second Amendment to Management Agreement (the “ Second Amendment ”), pursuant to which ZelnickMedia is agreeing to make the Employee available to serve as an Executive Vice President of the Company under the terms and conditions of this Agreement which sets forth the duties of such position and provides for an annual salary of $1.00;

 

WHEREAS, the Company desires to employ the Employee as an Executive Vice President during the Term (as defined herein) on the terms and conditions hereinafter set forth; and

 

WHEREAS, the Employee is willing to accept such employment on such terms and conditions.

 

NOW, THEREFORE, in consideration of the mutual covenants and agreements hereinafter set forth, and intending to be legally bound hereby, the Company and the Employee hereby agree as follows:

 

1.   Term . The Company hereby agrees to continue to employ the Employee, and the Employee hereby agrees to continue to serve the Company, for a period commencing on the Signing Date and, unless earlier terminated pursuant to the next sentence or Section 6 below, ending on the date of termination of the Management Agreement (such period being herein referred to as the “ Term ”).

 

2.   Employee Duties .

 

(a)   During the Term, the Employee shall serve as an Executive Vice President of the Company and have the duties and responsibilities customarily associated with such position in a company the size and nature of the Company. Employee shall report directly to the Chief Executive Officer and the Chairman of the Board of Directors of the Company (the “ Board ”).

 

 

(b)   The Employee shall devote such amount of his business time, attention, knowledge and skills as are necessary to faithfully, diligently and to the best of his ability perform his duties hereunder in furtherance of the business and activities of the Company. The principal place of performance by the Employee of his duties hereunder shall be the Company’s principal executive offices in New York, New York, although the Employee may be required from time to time to travel outside of the area where the Company’s principal executive offices are located in connection with the business of the Company. Notwithstanding the foregoing, nothing in this Agreement shall prevent the Employee from continuing in his position as a principal of ZelnickMedia and its affiliates; provided that such activities do not materially interfere with Employee’s duties and responsibilities under this Agreement or create a material conflict of interest with the business of the Company . The Employee hereby acknowledges and agrees that the Company shall have no obligation to pay or provide the Employee any amounts or benefits beyond the amounts and benefits set forth in Sections 3, 4 and 5 below, and that the compensation and benefits provided to the Employee by ZelnickMedia in connection with his duties as a principal thereof provide good and valuable consideration for the performance of his duties under this Agreement.

 

3.   Compensation . During the Term, the Company shall pay the Employee a salary (the “ Salary ”) at a rate of $1.00 per annum, payable on the last day of each fiscal year of the Company. The Employee shall not be entitled to receive an annual bonus from the Company.

 

4.   Benefits .

 

(a)   During the Term, the Employee shall have the right to receive or participate in all benefits and plans which the Company may from time to time institute during such period for its executive officers and for its employees in general and for which the Employee is eligible (including the Company’s Medical Expenses Reimbursement Plan). Nothing paid to the Employee under any plan or arrangement presently in effect or made available in the future shall be deemed to be in lieu of the salary or any other obligation payable to the Employee pursuant to this Agreement.

 

(b)   During the Term, the Employee will be entitled to the number of paid holidays, personal days off, vacation days and sick leave days in each calendar year as are determined by the Company from time to time (provided that in no event shall vacation time be fewer than four weeks per year). Such vacation may be taken in the Employee’s discretion at such time or times as are not inconsistent with the reasonable business needs of the Company.

 

5.   Travel Expenses . All travel and other expenses incident to the rendering of services reasonably incurred on behalf of the Company by the Employee during the Term shall be paid by the Company. If any such expenses are paid in the first instance by the Employee, the Company shall promptly reimburse him therefor on presentation of appropriate receipts for any such expenses. All travel and lodging arrangements shall be made in accordance with Company’s regular policies and the Management Agreement.

 

 

6.   Termination . Notwithstanding the provisions of Section 1 hereof, the Employee’s employment with the Company may be earlier terminated as follows:

 

(a)   By action taken by the Board or the Chairman of the Company, the Employee may be discharged for any reason or no reason effective as of such time as the Board shall determine. Upon discharge of the Employee pursuant to this Section 6(a), the Company shall have no further obligation or duties to the Employee, except as provided in Section 8(g), and the Employee shall have no further obligations or duties to the Company, except as provided in Section 7.

 

(b)   (i) In the event of the death of the Employee or (ii) by action taken by the Board or the Chairman of the Company in the event of the Employee’s inability, by reason of physical or mental disability, to continue substantially to perform his duties hereunder for a period of 180 consecutive days, during which 180 day period Salary and any other benefits hereunder shall not be suspended or diminished. Upon any termination of the Employee’s employment under this Section 6(b), the Company shall have no further obligations or duties to the Employee, except as provided in Section 8(g).

 

7.   Confidentiality; Noncompetition; Nonsolicitation .

 

(a)   The Company and the Employee acknowledge that the services to be performed by the Employee under this Agreement are unique and extraordinary and, as a result of such employment, the Employee will be in possession of confidential information relating to the business practices of the Company. The term “confidential information” shall mean any and all information (oral and written) relating to the Company or any of its affiliates, or any of their respective activities, other than such information which can be shown by the Employee to be in the public domain (such information not being deemed to be in the public domain merely because it is embraced by more general information which is in the public domain) other than as the result of breach of the provisions of this Section 7(a), including, but not limited to, information relating to: trade secrets, personnel lists, compensation of employees, financial information, research projects, services used, pricing, customers, customer lists and prospects, product sourcing, marketing and selling and servicing. Notwithstanding the foregoing “confidential information” shall not include information relating to the general methodology and mechanics employed by Employee in the performance of his duties with the Company or that Employee can reasonably demonstrate was known to him prior to his employment with the Company. The Employee agrees that he will not, during or after his termination or expiration of employment hereunder, directly or indirectly, use, communicate, disclose or disseminate to any person, firm or corporation any confidential information regarding the clients, customers or business practices of the Company acquired by the Employee during his employment by the Company, without the prior written consent of the Company. Anything herein to the contrary notwithstanding, the provisions of this Section 7(a) shall not apply (i) when disclosure is required by law or by any court, arbitrator, mediator, administrative or legislative body (including any committee thereof), or any other governmental agency with actual or apparent jurisdiction to order the Employee to disclose or make accessible any information, (ii) with respect to any other litigation, arbitration or mediation involving this Agreement, including, but not limited to, the enforcement of this Agreement, (iii) as to information that becomes generally known to the public or within the relevant trade or industry other than due to the Employee’s violation of this Section or (iv) as to information that is or becomes available to the Employee on a non-confidential basis from a source which is entitled to disclose it to the Employee.

 

 

(b)   The Employee hereby agrees that he shall not, during the period of his employment and, in the event that the Employee is terminated for Cause (as defined below) or resigns without Good Reason (as defined below), for a period of one (1) year following such employment, within any county (or adjacent county) in any State within the United States or territory outside of the United States in which the Company is engaged in business during the period of the Employee’s employment or on the date of termination of the Employee’s employment, engage, have an interest in or render any services to any business (whether as owner, manager, operator, licensor, licensee, lender, partner, stockholder, joint venturer, employee, consultant or otherwise) directly competitive with the Company's business activities; provided , however , that the foregoing prohibition shall not apply to any existing business relationship or portfolio companies of ZelnickMedia or its affiliates as of the Signing Date; provided , further , that Employee shall not be in breach of this Section 7 solely as a result of ZelnickMedia’s (or any of its affiliates’) investment in, ownership of, or provision of services to, any business that is competitive with the Company so long as the Employee does not serve as a principal officer of such business. Except as required by law or legal process, at no time during the Term or thereafter, (i) no authorized spokesperson or executive officer of the Company shall, directly or indirectly, disparage (or cause any other person to disparage) the personal, commercial, business or financial reputation of the Employee and (ii) the Employee shall not, directly or indirectly, disparage (or cause any other person to disparage) the personal, commercial, business or financial reputation of the Company or any of its executive officers.

 

(c)   The Employee hereby agrees that he shall not, during the period of his employment and, in the event that the Employee is terminated for Cause or resigns without Good Reason, for a period of one (1) year following such employment, directly entice, solicit or in any other manner persuade or attempt to persuade any officer, employee or customer, to discontinue or reduce his, her or its relationship with the Company; provided, that the foregoing shall not be violated by general advertising not targeted at officers, employees, or customers of the Company.

 

(d)   Following the termination of the Employee’s employment for any reason whatsoever and upon receipt of a written request from the Company, all documents, records, notebooks, equipment, employee lists, price lists, specifications, programs, customer and prospective customer lists and other materials which refer or relate to any aspect of the business of the Company which are in the possession of the Employee including all copies thereof, shall be promptly returned to the Company or, with the prior approval of the Company, destroyed by the Employee and the Employee shall certify in writing to the Company as to such destruction. Anything to the contrary notwithstanding, nothing in this Section 7(d) shall prevent the Employee from retaining a home computer and security system, papers and other materials of a personal nature, including personal diaries, calendars and Rolodexes, information relating to the Employee’s compensation or relating to reimbursement of expenses, information that the Employee reasonably believe may be needed for tax purposes, and copies of plans, programs and agreements relating to the Employee’s employment.

 

 

(e)   The products and proceeds of the Employee’s services hereunder that the Employee may acquire, obtain, develop or create during the Term that relate to the Company’s business, or that are otherwise made at the direction of the Company or with the use of the Company’s or its affiliates’ (other than ZelnickMedia and those of its affiliates which, other than by reason of common control by ZelnickMedia, are not affiliates of the Company ) facilities or materials, including, but not limited to, all materials, ideas, concepts, formats, suggestions, developments, packages, programs and other intellectual properties (collectively, “ Works ”), shall be considered a “ work made for hire ,” as that term is defined under the United States Copyright Act, and the Employee shall be considered an employee for hire of the Company, and all rights in and to the Works, including the copyright thereto, shall be the sole and exclusive property of the Company, as the sole author and owner thereof, and the copyright thereto may be registered by the Company in its own name. In the event that any part of the Works shall be determined not to be a work made for hire or shall be determined not to be owned by the Company, the Employee hereby irrevocably assigns and transfers to the Company, its successors and assigns, the following: (a) the entire right, title and interest in and to the copyrights, trademarks and other rights in any such Work and any rights in and to any works based upon, derived from, or incorporating any such Work (“ Derivative Work ”); (b) the exclusive right to obtain, register and renew the copyrights or copyright protection in any such Work or Derivative Work; (c) all income, royalties, damages, claims and payments now or hereafter due or payable with respect to any such Work and Derivative Work; and (d) all causes of action in law or equity, past and future, for infringements or violation of any of the rights in any such Work or Derivative Work, and any recoveries resulting therefrom. The Employee also hereby waives in writing any moral or other rights that he has under state or federal laws, or under the laws of any foreign jurisdiction, which would give him any rights to constrain or prevent the use of any Work or Derivative Work, or which would entitle him to receive additional compensation from the Company. The Employee shall execute all documents, including without limitation copyright assignments and applications and waivers of moral rights, and perform all acts that the Company may request, in order to assist the Company in perfecting its rights in and to any Work and Derivative Work anywhere in the world. The Employee hereby appoints the officers of the Company as the Employee’s attorney-in-fact to execute documents on behalf of the Employee for this limited purpose

 

(f)   The parties hereto hereby acknowledge and agree that (i) the Company may be irreparably injured in the event of a breach by the Employee of any of his obligations under this Section 7, (ii) monetary damages may not be an adequate remedy for any such breach, and (iii) the Company shall be entitled to seek injunctive relief, in addition to any other remedy which it may have, in the event of any such breach.

 

(g)   It is the intent of the parties hereto that the covenants contained in this Section 7 shall be enforced to the fullest extent permissible under the laws and public policies of each jurisdiction in which enforcement is sought (the Employee hereby acknowledging that said restrictions are reasonably necessary for the protection of the Company). Accordingly, it is hereby agreed that if any of the provisions of this Section 7 shall be adjudicated to be invalid or unenforceable for any reason whatsoever, said provision shall be construed by limiting and reducing it so as to be enforceable to the extent permissible, without invalidating the remaining provisions of this Agreement or affecting the validity or enforceability of said provision in any other jurisdiction.

 

 

(h)   As used herein, “ Cause ” shall mean (i) the conviction of, or a plea of guilty or nolo contendere by, the Employee of any felonious criminal act (other than traffic-related offenses or as a result of vicarious liability), (ii) fraud, or (iii) any act or omission involving malfeasance or gross negligence by the Employee in the performance of his obligations hereunder, in the case of each of clauses (ii) through (iii) above, that relates to and damages the Company and, if capable of being cured so that the Company is not materially damaged, is not so cured within 15 days after receipt by the Employee of written notice thereof.

 

(i)   As used herein, “ Good Reason ” means (i) a condition that materially impairs the ability of the Employee to perform his duties as contemplated herein, (ii) the failure by the Company to perform any of its material obligations under this Agreement or the Management Agreement, or (iii) the requirement that the Employee’s place of service be located outside a 10-mile radius of New York City, NY.

 

8.   General . This Agreement is further governed by the following provisions:

 

(a)   Notices . All notices relating to this Agreement shall be in writing and shall be either personally delivered, sent by facsimile (receipt confirmed) or nationally recognized overnight carrier or mailed by certified mail, return receipt requested, to be delivered at such address as is indicated below, or at such other address or to the attention of such other person as the recipient has specified by prior written notice to the sending party. Notice shall be effective when so personally delivered, one business day after being sent by telecopy or five days after being mailed.

 

If to the Company :

 

Take-Two Interactive Software, Inc.

622 Broadway

New York, New York 10012

Attention: General Counsel

 

If to the Employee :

 

To the Employee’s address on the books and records of the Company.

 

(b)   Parties in Interest .

 

(i)   Employee may not delegate his duties or assign his rights hereunder.

 

(ii)   This Agreement shall inure to the benefit of, and be binding upon, the parties hereto and their respective heirs, legal representatives, successors and permitted assigns.

 

(iii)   No rights or obligations of the Company under this Agreement may be assigned or transferred by the Company except that such rights or obligations may be assigned or transferred pursuant to a merger, consolidation or similar transaction in which the Company is not the continuing entity, or a sale or liquidation of all or substantially all of the assets and business of the Company; provided , that the assignee or transferee is the successor to all or substantially all of the assets and business of the Company and such assignee or transferee assumes the liabilities, obligations and duties of the Company, as contained in this Agreement, either contractually or as a matter of law.

 

 

(c)   Entire Agreement . This Agreement supersedes any and all other agreements, either oral or in writing, between the parties hereto, with respect to the employment of the Employee by the Company, other than the Management Agreement. This Agreement together with the Management Agreement (as in effect on the Signing Date after giving effect to the Second Amendment) contain all of the covenants and agreements between the parties with respect to such employment in any manner whatsoever. Any modification or termination of this Agreement, or the Management Agreement with respect to the Employee’s employment by the Company, will be effective only if it is in writing signed by the party to be charged.

 

(d)   Governing Law . This Agreement shall be governed by and construed in accordance with the laws of the State of New York. Employee agrees to and hereby does submit to jurisdiction before any state or federal court of record in New York County.

 

(e)   Warranty . Employee hereby warrants and represents as follows:

 

(i)   That the execution of this Agreement and the discharge of Employee’s obligations hereunder will not breach or conflict with any other contract, agreement, or understanding between Employee and any other party or parties.

 

(ii)   Employee has ideas, information and know-how relating to the type of business conducted by Company, and Employee’s disclosure of such ideas, information and know-how to Company will not conflict with or violate the rights of any third party or parties.

 

(iii)   Employee will not disclose any trade secrets relating to the business conducted by any previous Company and agrees to indemnify and hold Company harmless for any liability arising out of Employee’s use of any such trade secrets.

 

(f)   Severability . In the event that any term or condition in this Agreement shall for any reason be held by a court of competent jurisdiction to be invalid, illegal or unenforceable in any respect, such invalidity, illegality or unenforceability shall not affect any other term or condition of this Agreement, but this Agreement shall be construed as if such invalid or illegal or unenforceable term or condition had never been contained herein.

 

 

(g)   Indemnification . The Employee shall be entitled to the benefits of all provisions of the Certificate of Incorporation and Bylaws of the Company, each as amended, that provide for indemnification of officers and directors of the Company. In addition, without limiting the indemnification provisions of the Certificate of Incorporation or Bylaws, to the fullest extent permitted by law, the Company shall indemnify and save and hold harmless the Employee from and against, and pay or reimburse, any and all claims, demands, liabilities, costs and expenses, including judgments, fines or amounts paid on account thereof (whether in settlement or otherwise), and reasonable expenses, including attorneys’ fees actually and reasonably incurred (including, but not limited to, investigating, preparing, pursuing or defending any action, suit, investigation, proceeding, claim or liability if the Employee is made or threatened to be made a party to or witness in any action, suit, investigation or proceeding, or if a claim or liability is asserted or threatened to be asserted against Employee (whether or not in the right of the Company), by reason of the fact that he was or is a director, officer or employee, or acted in such capacity on behalf of the Company, or the rendering of services by the Employee pursuant to this Agreement or the Employee’s prior employment agreement with the Company, whether or not the same shall proceed to judgment or be settled or otherwise brought to a conclusion (except only if and to the extent that such amounts shall be finally adjudged to have been caused by Employee’s willful misconduct or gross negligence). Upon the Employee’s request, the Company will advance any reasonable expenses or costs, subject to the Employee undertaking to repay any such advances in the event there is an unappealable final determination that Employee is not entitled to indemnification for such expenses. Employee shall be entitled to indemnification under this Section regardless of any subsequent amendment of the Certificate of Incorporation or of the Bylaws of the Company. Further, Employee shall be entitled to be covered by any directors’ and officers’ liability insurance policies which the Company maintains for the benefit of its directors and officers, subject to the limitations of such policies. This provision shall survive the expiration or termination of this Agreement.

 

(h)   Withholding . The Company may withhold from any and all amounts payable under this Agreement such federal, state and local taxes as may be required to be withheld pursuant to any applicable law or regulation.

 

(i)   Execution in Counterparts . This Agreement may be executed by the parties in one or more counterparts, each of which shall be deemed to be an original but all of which taken together shall constitute one and the same agreement, and shall become effective when one or more counterparts has been signed by each of the parties hereto and delivered to each of the other parties hereto.

 

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IN WITNESS WHEREOF, the parties hereto have executed and delivered this Agreement as of the date first above written.