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
Xxxxxxxx Xxxxx (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 serving
as
the Chief Executive Officer of the Company on an interim 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 the Chief Executive Officer 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 continue to employ the Employee as its Chief Executive
Officer 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 the Chief Executive Officer 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 Chairman of the Board of Directors of the Company (the
“Board”),
as
well as the entire 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.
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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.
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(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.
4
(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.
5
(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 00-xxxx xxxxxx xx Xxx Xxxx Xxxx, XX.
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.
000
Xxxxxxxx
Xxx
Xxxx,
Xxx Xxxx 00000
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.
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(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.
7
(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.
[End
of
text - signature page follows]
8
IN
WITNESS WHEREOF, the parties hereto have executed and delivered this Agreement
as of the date first above written.
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TAKE-TWO
INTERACTIVE SOFTWARE, INC.
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By:
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/s/ Xxxxxxx Xxxxxxxxx | |
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Name:
Xxxxxxx Xxxxxxxxx
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Title:
Director
|
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By:
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/s/ Xxxx X. Xxxxxx | |
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Name:
Xxxx X. Xxxxxx
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Title:
Executive Vice President
and
General Counsel
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/s/
Xxxxxxxx
Xxxxx
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Xxxxxxxx
Xxxxx
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