TAKE TWO INTERACTIVE SOFTWARE INC
TTWO DEF 14A Report ended July 28, 2025
TAKE TWO INTERACTIVE SOFTWARE INC
10-Ks and 10-Qs
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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE
14A
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934 (Amendment No. )
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Filed by the Registrant
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Filed by a Party other than the Registrant
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Check the appropriate box:
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Preliminary Proxy Statement
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Confidential, for use of the Commission only (as permitted by Rule 14a-6(e)(2))
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Definitive Proxy Statement
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Definitive Additional Materials
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Soliciting Material Pursuant to §240.14a-12
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(Name of Registrant as Specified In Its Charter)
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
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Payment of Filing Fee (Check all boxes that apply):
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No fee required.
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Fee paid previously with preliminary materials.
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Fee computed on table in exhibit required by Item 25(b) per Exchange Act Rules 14a-6(i)(1) and 0-11.
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As we bring our exciting lineup to
market, including Grand Theft
Auto VI in Fiscal 2027, we expect
to achieve record levels of Net
Bookings that will establish a
new baseline for our business
and set us on a path of enhanced
profitability.
TAKE-TWO INTERACTIVE
SOFTWARE, INC.
110 West 44
th
Street
New York, NY 10036, USA
Tel 646.536.2842
Fax 646.536.2926
www.take2games.com
LETTER TO
OUR SHAREHOLDERS
Strauss Zelnick |
July 28, 2025
Dear Shareholders:
Fiscal
2025
was another strong year for our organization, during which we delivered Net Bookings of
$5.65 billion
. Throughout
the year, we positioned our business for sustainable, long-term growth by releasing new hit titles and experiences across our
labels; advancing the development of many key releases we plan to launch in the coming quarters; successfully acquiring
Gearbox; and continuing to implement our previously-announced cost reduction program.
We are highly confident in the path ahead for our business. Led by our top creative talent, our industry-leading portfolio of
owned intellectual property, and our increasingly efficient infrastructure, we strive to create hit entertainment experiences
delivered on every platform relevant to our audience through a variety of sound business models. As we bring our exciting
lineup to market, including Grand Theft Auto VI in Fiscal 2027, we expect to achieve record levels of Net Bookings that will
establish a new baseline for our business and set us on a path of enhanced profitability.
We invite you to attend the Annual Meeting of Shareholders of Take-Two Interactive Software, Inc. that will be held on
September 18, 2025
, at 9:00 a.m. eastern time as a virtual, audio-only meeting hosted online at
www.virtualshareholdermeeting.com/TTWO
2025
.
Details of the business to be conducted at the Annual Meeting are provided in the attached Notice of Annual Meeting of
Shareholders and Proxy Statement, which you are urged to read carefully. On or about August 1,
2025
, we expect to begin
mailing to our shareholders a Notice of Internet Availability of Proxy Materials containing instructions on how to access our
Proxy Statement and Annual Report and vote online. If you would like to receive a paper copy of our Proxy Statement and
Annual Report, please follow the instructions included in the Notice of Internet Availability of Proxy Materials.
Whether you plan to attend the meeting or not, it is important that your shares be represented and voted. After you read the
Notice of Annual Meeting of Shareholders and Proxy Statement, we urge you to cast your vote via the Internet, by completing
and returning your
proxy card
, or by telephone. If the address on the Notice of Internet Availability of Proxy Materials or the
accompanying materials is incorrect, please advise our Transfer Agent, Equiniti Trust Company LLC, in writing at 55 Challenger
Road, Floor 2, Ridgefield Park, NJ 07660.
We hope that you will attend the meeting and appreciate your continued support.
Sincerely,
Strauss Zelnick
Executive Chairman and Chief
Executive Officer
NOTICE OF ANNUAL
MEETING OF SHAREHOLDERS
SEPTEMBER 18, 2025
9:00 a.m.
local time
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REVIEW YOUR PROXY STATEMENT
AND VOTE IN ONE OF FOUR WAYS:
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INTERNET
Visit the website on your proxy card
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BY TELEPHONE
Call the telephone number on your
proxy card
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BY MAIL
Sign, date and return your proxy
card in the enclosed envelope
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Your vote is very important, regardless of
the number of shares you own.
Please read the attached Proxy Statement
carefully and complete and submit your
proxy card via the Internet or telephone
(as instructed on your proxy card) or sign
and date your paper proxy card as
promptly as possible and return it in the
enclosed envelope.
VIRTUAL, AUDIO-ONLY MEETING HOSTED ONLINE AT
www.virtualshareholdermeeting.com/TTWO
2025
ITEMS OF BUSINESS
1.
Election of 10 directors;
2.
Approval, on a non-binding advisory basis, of the compensation of the Company’s
“named executive officers” as disclosed in the attached Proxy Statement;
3.
Approval of an amendment and restatement of the Amended and Restated Take-
Two Interactive Software, Inc. 2017 Stock Incentive Plan to increase the available
shares reserved thereunder issuable to all of the Company’s eligible employees
and to extend the term of such plan;
4.
Ratification of the appointment of Ernst & Young LLP as our independent
registered public accounting firm for the
fiscal year ending March 31, 2026
; and
5.
Other business that may properly come before the Annual Meeting or any
adjournment thereof.
RECORD DATE
Only shareholders of record at the close of business on
July 23, 2025
are entitled to
notice of and to vote at the Annual Meeting or any adjournment thereof.
The Board of Directors believes that the election of the nominated directors, the
approval on an advisory basis of the compensation of the named executive officers,
the approval of an amendment and restatement of the Amended and Restated
Take-Two Interactive Software, Inc. 2017 Stock Incentive Plan, and the ratification
of the appointment of Ernst & Young LLP are in the best interests of the Company
and its shareholders and, accordingly, recommends a vote “FOR” for each of
these proposals.
To attend our Annual Meeting via the Internet,
and ask questions relevant to the
business of the meeting during the Annual Meeting
, you must log in to
www.virtualshareholdermeeting.com/TTWO
2025
and enter the 16-digit control
number on the Notice of Internet Availability of Proxy Materials or proxy card that
accompanied the proxy materials.
By Order of the Board of Directors,
Matthew K. Breitman
General Counsel Americas and Corporate Secretary
July 28, 2025
PROXY STATEMENT
Annual Meeting of Shareholders to be held on
September 18, 2025
This Proxy Statement is furnished in connection with the solicitation of proxies by the Board of Directors of Take-Two Interactive
Software, Inc. (the “Company” or “Take-Two”) for use at the Annual Meeting of Shareholders (the “Annual Meeting”) to be held
on
September 18, 2025
, at
9:00 a.m.
local time, including any adjournment or adjournments thereof, for the purposes set forth
in the accompanying Notice of Annual Meeting of Shareholders.
The Company expects to either mail or provide notice and electronic delivery of this Proxy Statement and the enclosed form of
proxy to shareholders on or about August 1,
2025
.
Proxies in the accompanying form, duly executed and returned to the
management of the Company and
not revoked, will be
voted at the Annual Meeting. A proxy may be revoked by the shareholder of record at any time prior to the voting of the proxy by
a subsequently dated proxy, by written notification to the Secretary of the Company, or by personally withdrawing the proxy at
the Annual Meeting and voting at the Annual Meeting.
The address of the principal executive offices of the Company is 110 West 44
th
Street, New York, New York 10036, and our
telephone number is (646) 536-2842.
The rules of the Securities and Exchange Commission (“SEC”) require us to notify all shareholders, including those
shareholders to whom we have mailed proxy materials, of the availability of our proxy materials through the Internet.
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Important Notice Regarding the Availability of Proxy Materials
for the Shareholder Meeting to be held on
September 18, 2025
Our Proxy Statement and
2025
Annual Report to Shareholders are available at
http://www.proxyvote.com
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4
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TAKE-TWO INTERACTIVE SOFTWARE, INC. |
2025
Proxy Statement
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TABLE OF CONTENTS
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TAKE-TWO INTERACTIVE SOFTWARE, INC. |
2025
Proxy Statement
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5
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PROXY SUMMARY
This summary highlights information contained elsewhere in this Proxy Statement and does not include all of the information
that you should consider. Please read the entire Proxy Statement carefully before voting.
2025
Annual Meeting of Shareholders
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Time and Date
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Location
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Record Date
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September 18, 2025
,
at
9:00 a.m.
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Virtual, audio-only meeting hosted online at
www.virtualshareholdermeeting.com/TTWO
2025
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July 23, 2025
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Voting Matters and Board Recommendations
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Item
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Proposal
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Board’s
Recommendation
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Page
Number
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1.
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Election of 10 director nominees
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FOR
(each nominee)
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2.
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Advisory vote to approve executive compensation
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FOR
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3.
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Approval of an Amendment and Restatement of the Amended and Restated Take-Two
Interactive Software, Inc. 2017 Stock Incentive Plan to increase the available shares
reserved thereunder issuable to all of the Company’s eligible employees and to extend
the term of such plan
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FOR
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4.
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Ratification of the appointment of Ernst & Young LLP as our independent registered public
accounting firm for the
fiscal year ending March 31, 2026
(“fiscal
2026
”)
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FOR
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Company Performance Highlights
The Company delivered strong financial results in our
fiscal year ended March 31, 2025
(“fiscal
2025
”) through continued
execution on our strategy to capitalize on the popularity of video games by developing and publishing high-quality interactive
entertainment experiences across a range of genres.
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Fiscal
2025
Financial and Operating Results
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Net Revenue
$5.63
Billion
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Net Bookings (operating metric)
$5.65
Billion
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Net Revenue by Platform
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Console, PC and Other
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$2.69
Billion
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47.8%
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of Net
Revenue
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Recurrent Consumer Spending
(virtual currency, add-on content, and in-game purchases)
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Mobile
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$4.47
Billion
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79.4%
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of Net
Revenue
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$2.94
Billion
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52.2%
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of Net
Revenue
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6
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TAKE-TWO INTERACTIVE SOFTWARE, INC. |
2025
Proxy Statement
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PROXY SUMMARY
BOARD OF DIRECTORS HIGHLIGHTS
Board of Directors Highlights
Our 10 nominees include nine independent, outside directors who as a group have extensive management experience, subject
matter expertise, and knowledge that is critical to the Company.
Board Best Practices
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Active and empowered lead independent director role
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Deliberate approach to Board refreshment, including
the addition of five new independent directors in the
past eight years, and rotation of leadership positions
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Annual election of all directors
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Annual self-evaluations by the Board of Directors and
its Committees, as well as biennial individual
interviews of each director by an outside third party
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Majority vote standard for uncontested director
elections
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9 out of 10 current director nominees are independent
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Board membership marked by leadership and a
variety of perspectives
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Outside Directorship Policy pursuant to which none of
our directors may serve on more than 3 other
public boards
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Annual performance review of the Chairman and CEO
and other members of the executive management
team by independent directors
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Board Composition
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Tenure
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Age
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Diversity
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5
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DIRECTORS
(50% OF THE BOARD)
ADDED OVER THE
LAST 8 YEARS
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90%
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INDEPENDENT
DIRECTORS
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TAKE-TWO INTERACTIVE SOFTWARE, INC. |
2025
Proxy Statement
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7
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PROXY SUMMARY
BOARD OF DIRECTORS HIGHLIGHTS
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Other
Public
Boards
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Committee Memberships
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Name
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Age
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Director
Since
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Principal
Occupation
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Independent
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Audit
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Compensation
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Corporate
Governance
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Executive
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LaVerne Srinivasan
Lead Independent
Director since
September 21, 2023
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63
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March
2017
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Vice President,
Carnegie
Corporation of
New York
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0
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Michael
Dornemann
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79
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March
2007
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Retired Chairman
and CEO,
Bertelsmann
Entertainment
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0
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William
“Bing”
Gordon
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75
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May
2022
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Partner, Kleiner
Perkins Caufield &
Byers
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1
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Roland
Hernandez
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67
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September
2019
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Founding
Principal and
CEO of
Hernandez Media
Ventures
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2
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J Moses
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66
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March
2007
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Principal, J Moses
Projects
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0
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Michael
Sheresky
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57
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March
2007
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Partner, United
Talent Agency
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0
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Ellen
Siminoff
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57
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May
2022
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Seasoned media
and technology
executive and
board member
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1
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Susan
Tolson
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63
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March
2014
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Retired Portfolio
Manager, Capital
Research and
Management
Company
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1
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Paul
Viera
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66
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May
2018
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CEO, Earnest
Partners LLC
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0
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Strauss
Zelnick
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68
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March
2007
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Chairman and
CEO, Take-Two
Interactive
Software, Inc.
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1
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Member
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Chair
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8
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TAKE-TWO INTERACTIVE SOFTWARE, INC. |
2025
Proxy Statement
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PROXY SUMMARY
SHAREHOLDER ENGAGEMENT
Shareholder Engagement
We were pleased that our Say-on-Pay vote received 86% support at our
2024
annual meeting of shareholders after our
extensive outreach and efforts to implement shareholder feedback. The Board of Directors continues to place a premium on our
extensive, year-round shareholder engagement practice, which facilitates an ongoing, two-way dialogue on topics our
shareholders find most important. Our Board members are regular participants alongside management in these critically
important conversations where we discuss a diverse range of topics, including board, governance, sustainability, and executive
compensation practices.
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Shareholder Engagement Following the
2024
Annual Meeting
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Shareholders Contacted
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Engaged with
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Director-Led Discussions
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~58.6%
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~32.9%
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~26.5%
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of our outstanding common stock
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of our outstanding common stock
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of our outstanding common stock
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All percentages represent ownership of Take-Two outstanding common stock as reported by our shareholders’ most recent
filings as of the date of this Proxy Statement.
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For more information regarding the Company’s shareholder engagement, see “Compensation Discussion and Analysis-
Shareholder Outreach.”
Sustainability
The Company continued to focus on sustainability this year. We published our third Impact Report in September 2024 which
included select disclosure against the Sustainability Accounting Standards Board (SASB) Standards. O
ur fourth Impact Report
is scheduled to be published in September 2025.
We also publish a standalone report on the Task Force on Climate-Related
Financial Disclosure recommendations, which, along with a copy of our Impact Report, is posted on the Company’s website
at
www.take2games.com
and can be accessed by clicking on “Investors.” The information on our website referenced herein is
not incorporated by reference in this Proxy Statement.
The Board of Directors provides oversight to this area through the Corporate Governance Committee, which oversees and
reviews our sustainability strategy and guides long-term climate strategy. We are continuing to develop our sustainability
strategy and commitments to help drive positive change across our industry and society. See “Proposal 1: Election of Directors
—Corporate Governance and Board Practices—Sustainability Matters” for additional details.
Corporate Governance Highlights
The Company’s sound governance practices and policies demonstrate the Board’s commitment to strong corporate
governance, effective risk management and robust independent oversight of management by the Board. The Company’s
governance highlights include:
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Extensive, year-round shareholder engagement
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Annual evaluation of the Board and its Committees
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Annual review of Board leadership structure
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Ongoing review and refreshment of Board leadership
and composition
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Lead Independent Director with clearly defined role
and responsibilities
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Board oversight of risk management and
Sustainability matters
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Shareholder right to call special meetings
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Shareholder right to act by written consent
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No supermajority voting requirements
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Strong anti-hedging, anti-pledging and insider
trading policies
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Independent Audit Committee, Compensation
Committee and Corporate Governance Committee
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Annual Succession Planning oversight
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Annual review of Director Time Commitments
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TAKE-TWO INTERACTIVE SOFTWARE, INC. |
2025
Proxy Statement
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9
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PROXY SUMMARY
EXECUTIVE COMPENSATION PROGRAM HIGHLIGHTS
Executive Compensation Program Highlights
The Company maintains strong compensation governance practices that support our pay-for-performance principles and align
management incentives with the interests of our shareholders. A substantial portion of our Company’s executive compensation
opportunity in fiscal
2025
was performance-
b
ased
.
We have also adopted a number of “best practices” with respect to executive compensation, including:
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Clawback policy applicable to NEOs, including ZMC
Advisors, L.P. (“ZMC”)
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Incentive caps on annual bonuses to NEOs
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Strong anti-hedging and anti-pledging policies
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Double-trigger acceleration of vesting on a change
in control
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Meaningful stock ownership requirements (6x per
annum management fee, excluding any bonuses, for
each of CEO/Chairman and President; 3x annual
base salary for other NEOs; and 5x annual cash
retainer for directors)
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Equity incentive plan provisions that prohibit re-pricing
of stock options without shareholder approval
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Limited perquisites
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No tax gross ups in respect of any excise taxes on
parachute payments
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Annual compensation risk assessment for
employee plans
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Retention of independent compensation consultants
by the Compensation Committee
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Balanced compensation approach between short- and
long-term incentive opportunities
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10
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TAKE-TWO INTERACTIVE SOFTWARE, INC. |
2025
Proxy Statement
|
PROXY SUMMARY
AMENDMENT AND RESTATEMENT OF THE AMENDED AND RESTATED TAKE-TWO INTERACTIVE SOFTWARE, INC. 2017 STOCK INCENTIVE PLAN
Amendment and Restatement of the Amended and Restated Take-Two
Interactive Software, Inc. 2017 Stock Incentive Plan
In Proposal 3
(page
78
) we are asking our
shareholders
to approve an amendment and restatement of the Amended and
Restated 2017 Stock Incentive Plan (the “2017 Plan”) to increase the number of shares available for issuance under the 2017
Plan by 5,200,000 shares and to extend the term of the 2017 Plan to September 18, 2035 (ten years from the date of
shareholder approval).
Equity is used to attract, retain, and motivate the Company’s creative talent, which is critical to executing Take-Two’s long-term
strategy, and to align the interests of creative employees with the interests of the Company’s shareholders.
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•
Our creative employees at our Rockstar Games, 2K, and
Zynga labels, drive our business, are critical to our continued
success, and help us build shareholder value.
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•
We believe our use of equity throughout Take-Two, including
beyond the executive level, is a strategic advantage and vital
to our ownership culture, as evidenced by 90% of our full-time
employees being eligible to participate in the 2017 Plan.
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•
In fiscal
2025
, equity awards were primarily used to incentivize
and retain employees at our labels as illustrated in the pie
chart to the right.
•
As we execute on our robust pipeline, we believe it is imperative
to continue to incentivize our creative talent with equity and to
align their interests with the Company’s shareholders.
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Fiscal
2025
Share Grant Distribution
5%
Non-ZMC
NEOS and
Directors
19%
ZMC
13%
Other
63
%
Awards to
Our Labels
Plan highlights include:
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Annual limits on certain awards to
individual participants
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Non-liberal recycling of shares used to satisfy tax
withholding obligations or as payment for the exercise
price or base price for stock options and SARs
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No evergreen provision for share reserve
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No payment of dividends or dividend equivalents on
unvested awards
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Annual compensation limits for
non-
employee directors
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Minimum vesting periods for certain awards
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No repricing of underwater stock options or SARs
without shareholder approval
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No discounted stock options or SARs
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Clawback provisions
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Non-liberal definition of change in control
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No automatic grants
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Double-trigger acceleration of equity vesting in a
change of control
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TAKE-TWO INTERACTIVE SOFTWARE, INC. |
2025
Proxy Statement
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11
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PROPOSAL 1: ELECTION OF DIRECTORS
A
ll members of the Board of Directors stand for election on an annual basis, and at the Annual
Meeting 10
director nominees
will stand for election to hold office for a term expiring at the
2026
Annual Meeting of Shareholders. The Board of Directors,
upon the recommendation of the Corporate Governance Committee, has nominated the individuals named below. Each director
who is elected will serve until a successor is elected and qualified or until the director’s earlier resignation or removal.
The Corporate Governance Committee is responsible for evaluating the size and composition of the Board of Directors relative
to the evolving needs of the Company at any given time, and actively identifying qualified individuals to become new director
nominees as needed. The Corporate Governance Committee has developed criteria, including certain personal and
professional qualities, to evaluate whether the potential nominee would be a qualified director candidate for service on
Take-
Two’s Board of Directors.
Our 10 nominees include nine independent, outside directors who as a group have extensive management experience, subject
matter expertise, and knowledge that is critical to the Company. The average director tenure is approximately eleven years and
the
average age of the Board members is 66.
At the Annual Meeting, the proxies given by shareholders will be voted individually for the election of the persons named herein
as director nominees, unless a proxy card specifies that a shareholder is voting against any such nominee. If any of the
nominees listed below shall be unable to serve, it is intended that the proxy will be voted for such other nominees as may be
designated by the Board of Directors. Each of the persons named herein has indicated to the Board of Directors that he or she
will be available to serve as a director of the Company.
In an uncontested election, a director will be elected if the number of votes that are cast “FOR” his or her election by holders of
the stock present in person or represented by proxy entitled to vote on the election of directors exceeds the number of votes
cast “AGAINST” his or her election by such holders. The Company’s bylaws provide that any nominee for director who fails to
meet this standard shall promptly tender such individual’s resignation to the Corporate Governance Committee following
certification of the shareholder vote. For more information regarding this policy, see “Policy on Majority Voting for Directors.”
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THE BOARD OF DIRECTORS RECOMMENDS THAT SHAREHOLDERS VOTE
“FOR”
THE ELECTION OF THE
NOMINEES NAMED BELOW:
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12
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TAKE-TWO INTERACTIVE SOFTWARE, INC. |
2025
Proxy Statement
|
PROPOSAL 1: ELECTION OF DIRECTORS
Age:
63
Director since:
March 2017
LEAD INDEPENDENT
DIRECTOR
Committee
Membership(s):
•
Executive Committee
(Chair)
Beneficial owner of
11,026 shares
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LAVERNE SRINIVASAN
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Key qualifications and expertise provided to our board:
Ms. Srinivasan brings to the Board of Directors strong leadership skills, extensive experience leveraging
technology in the education and entertainment industries, expertise in human capital management, and deep
marketing expertise from her current and previous positions. Ms. Srinivasan became our Lead Independent
Director after our 2023 annual meeting and in that role uses the expertise she brings to the Board of Directors for
the oversight of our management agreement with ZMC as successor by assignment from ZelnickMedia
Corporation (“ZelnickMedia”).
Ms. Srinivasan is Vice President of the National Program and Program Director for Education at the
Carnegie Corporation of New York, employing creative strategies and innovative thinking to strengthen
urban education.
Since 2014, she has overseen grant making and other activities aimed at engaging parents
and communities, improving teaching and leadership for learning, advancing innovative learning environment
designs, providing K-12 pathways to college and career success, and fostering integrated approaches to
innovation and learning in the field of education. Ms. Srinivasan received a BA from Harvard College and a JD
from Harvard Law School.
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Additional Public Directorships (current):
•
None
|
||
|
Prior professional roles:
From 2012 through 2014, Ms. Srinivasan was the Co-Founder of Fiero Now, an education technology company.
Prior to Fiero Now, she worked at various educational technology, urban district change, and non-profit education
reform companies, including Time to Know, Education Champions for All and New Leaders for New Schools.
From 2003 through 2006, Ms. Srinivasan served as Deputy Chancellor for the New York City Department of
Education. In addition, from 1993 through 2003, she served in various roles at BMG Entertainment, including as
Senior Vice President and General Counsel.
|
||
|
Other board experience:
Ms. Srinivasan serves on the national advisory board of College Promise Campaign, the advisory boards of
National Education Equity Lab, EdTech Evidence Exchange, Global Science of Learning for Education Network,
Grant Makers for Educations, Educational Testing Service, and Global Cities, Inc., and was a founding member
of the Consortium for Policy Research in Education’s task force on Strategic Management of Human Capital.
|
||
Age:
79
Director since:
March 2007
INDEPENDENT
DIRECTOR
Committee
Membership(s):
•
Executive Committee
•
Compensation
Committee
Beneficial owner of
21,694 shares
|
MICHAEL DORNEMANN
|
|
|
Key qualifications and expertise provided to our board:
Mr. Dornemann’s highly relevant leadership, management, marketing and consulting experience, including his
role as Chief Executive Officer of Bertelsmann Entertainment, strongly qualifies him to contribute to all aspects of
board discussion and operations. His accomplished history of service with fashion and entertainment companies,
including as an outside director, provides a unique level of insight into both our business and our governance.
Mr. Dornemann is an entertainment and marketing executive with more than 30 years of management
consulting, corporate development, strategic advisory and media experience.
Prior to 2001,
Mr. Dornemann was an executive board member of Bertelsmann AG for 16 years and Chairman and Chief
Executive Officer of Bertelsmann Entertainment (music and television division, BMG and RTL Group). Before
that, he held positions with IBM and Boston Consulting Group. Mr. Dornemann received an MBA and PhD from
Technical University Berlin.
|
||
|
Additional Public Directorships (current):
•
None
|
||
|
Other board experience:
Mr. Dornemann has previously served on several boards, including as Chairman of Jet Set AG, a worldwide
fashion company based in Switzerland, until 2009; as a director of Columbia Music Entertainment (CME) of
Japan until 2010; and as vice-chairman and an audit and compensation committee member of Access
Worldwide Communications until 2013.
|
||
|
TAKE-TWO INTERACTIVE SOFTWARE, INC. |
2025
Proxy Statement
|
13
|
PROPOSAL 1: ELECTION OF DIRECTORS
Age:
75
Director since:
May 2022
INDEPENDENT
DIRECTOR
Committee
Membership(s):
•
None
Beneficial owner of
60,573 shares
|
WILLIAM “BING” GORDON
|
|
|
Key qualifications and expertise provided to our board:
Mr. Gordon was selected to serve on our Board of Directors due to his extensive leadership and entrepreneurial
experience as a senior executive of Electronic Arts Inc. (“EA”), a company he co-founded and through which he
gained experience with emerging technologies and consumer-focused product development and marketing
issues, as well as for his experience as a member of the board of directors and special consultant to Zynga, and
as a venture capitalist investing in and guiding technology companies.
Mr. Gordon has been a partner at Kleiner Perkins Caufield & Byers, a venture capital firm, since June
2008.
Mr. Gordon co-founded EA and held various roles, including Vice President, Marketing and later, Executive
Vice President and Chief Creative Officer from March 1998 to May 2008. Mr. Gordon received a BA from Yale
University and an MBA from Stanford Graduate School of Business.
|
||
|
Additional Public Directorships (current):
•
Duolingo, Inc.
|
||
|
Other board experience:
Mr. Gordon serves on the boards of directors of Duolingo, a language learning company; and privately held
companies including Dreamscape, a VR and learning systems company; Flipboard, a media sharing company;
N3twork, a blockchain games publisher; Playcast, a game streaming platform, Aura, a private telephony safety
company, Synthbee, a private AI agent provider, Tacta, a private physical AI company in hand robotics and Alan,
a private health insurance company. Mr. Gordon served as a member of the boards of directors of Zynga Inc.
from 2008 to May 2022, when we acquired Zynga, and Truecaller AB, a telephony company, from 2020 until
March 2024. Mr. Gordon was a special advisor to the board of directors of Amazon.com, Inc. until April 2023, and
was previously a member of its board of directors from 2003 until January 2018. He was also a founding director
at ngmoco, LLC (acquired by DeNA Co. Ltd. in 2010) and Audible, Inc. (acquired by Amazon.com, Inc. in 2008).
Mr. Gordon was awarded the Academy of Interactive Arts & Sciences’ Lifetime Achievement Award in 2011 and
held the game industry’s first ever endowed chair in game design, at the University of Southern California School
of Cinematic Arts.
|
||
Age:
67
Director since:
September 2019
INDEPENDENT
DIRECTOR
Committee
Membership(s):
•
Compensation
Committee
Beneficial owner of
9,506 shares
|
ROLAND HERNANDEZ
|
|
|
Key qualifications and expertise provided to our board:
As the former President, Chief Executive Officer and Chairman of Telemundo Group, Inc., a television and
entertainment company, and through his experience on the Boards of Fox Corporation, MGM Resorts
International, Sony Corporation, Walmart Inc. and Vail Resorts, Inc., Mr. Hernandez offers significant experience
in international business and financial matters and a broad understanding of the retail and media sectors which
is particularly relevant to the Company. In addition, with his extensive experience on the boards of large public
corporations, Mr. Hernandez brings broad corporate governance expertise, along with significant knowledge of
board operations, to our Board of Directors.
Mr. Hernandez is the Founding Principal and Chief Executive Officer of Hernandez Media Ventures, a
privately held company engaged in the acquisition and management of media assets.
He has served in
this capacity since January 2001. Before founding Hernandez Media Ventures, Mr. Hernandez served as
Chairman of Telemundo Group, Inc., a Spanish-language television and entertainment company, from 1998 to
2000 and as President and Chief Executive Officer from 1995 to 2000. Mr. Hernandez received a BA from
Harvard College and a JD from Harvard Law School.
|
||
|
Additional Public Directorships (current):
•
US Bancorp
•
Fox Corporation
|
||
|
Other board experience:
Until April 2019, Mr. Hernandez served as the Chairman of the Board of Belmond, Ltd. Until December 2019,
Mr. Hernandez served as a member of the board of directors of Vail Resorts, Inc. Until May 2021, Mr. Hernandez
served as a member of the board of directors of MGM Resorts International. Mr. Hernandez serves on the
advisory board of Harvard Law School. He previously served on the board of directors of Sony Corporation and
Walmart Inc.
|
||
|
14
|
TAKE-TWO INTERACTIVE SOFTWARE, INC. |
2025
Proxy Statement
|
PROPOSAL 1: ELECTION OF DIRECTORS
Age:
66
Director since:
March 2007
INDEPENDENT
DIRECTOR
Committee
Membership(s):
•
Corporate
Governance
Committee (Chair)
•
Compensation
Committee
Beneficial owner of
23,647 shares
|
J MOSES
|
|
|
Key qualifications and expertise provided to our board:
Mr. Moses provides insight based on vast media experience and leadership history, including his roles as CEO of
UGO Networks, President of MTV Russia and President of BMG Interactive, and his deep understanding of the
interactive entertainment industry and its global opportunities.
Mr. Moses has spent the past 40 years collaborating with leading brands, companies, and figures across
sports, news, television, film, technology, gaming, and wagering.
After an eight-year tenure at ABC Sports,
Mr. Moses moved into technology as President of BMG Games where he green-lit and developed the original
Grand Theft Auto. He then launched MTV Russia as its President, overseeing the first launch of a cable network
in Russia. Mr. Moses went on to co-found and lead UGO (Unified Gamers Online), managing its growth and
eventual sale to Hearst Magazines. Currently, Mr. Moses advises various tech and media ventures and develops
scripted TV programs as President of OptIn Studios. Mr. Moses is a graduate of Princeton University and the
Harvard Graduate School of Business Administration.
|
||
|
Additional Public Directorships (current):
•
None
|
||
|
Prior executive roles:
Mr. Moses was the founder, and from 1998 to 2007, the Chief Executive Officer, of UGO Networks, Inc., an
online publisher and affiliate network delivering information and entertainment to over 20 million gamers around
the world. He managed the sale of the company to the Hearst Corporation in 2007. Mr. Moses previously served
as the President of MTV Russia where he successfully oversaw the establishment of the Moscow-based
Network in 1998. Mr. Moses served as the President of BMG Interactive from 1993 to 1996, the former video
game and new technology divisions of BMG Entertainment, where he “green-lighted” a portfolio of 11 video
games including the original Grand Theft Auto. Mr. Moses has served as the Special Assistant to Roone Arledge,
the President of ABC Sports and News; as an Executive Producer on Stolen Babies, a made for TV movie for
ABC; and as Creator for New York News, a TV series for CBS.
|
||
Age:
57
Director since:
March 2007
INDEPENDENT
DIRECTOR
Committee
Membership(s):
•
Compensation
Committee (Chair)
•
Corporate
Governance
Committee
Beneficial owner of
64,940 shares
|
MICHAEL SHERESKY
|
|
|
Key qualifications and expertise provided to our board:
Mr. Sheresky’s entertainment experience as a talent agent is an important asset to the Board of Directors,
including his particularly keen insight into negotiations with, and the development and compensation of creative
talent and of management.
Mr. Sheresky is a partner at United Talent Agency, where he has served as a motion picture talent agent
since June 2009.
Mr. Sheresky is responsible for structuring projects and deals in the areas of motion picture
and television development, production and distribution. Mr. Sheresky received a BA from Vassar College and an
MBA from Harvard Business School.
|
||
|
Additional Public Directorships (current):
•
None
|
||
|
Prior professional roles:
From 1992 through 1995, and then from 1997 through May 2009, Mr. Sheresky held a number of positions at the
William Morris Agency, a talent agency, most recently Senior Vice President in its Motion Picture Department.
During that time, he represented authors, journalists, screenwriters, directors, producers and actors in the motion
picture and television businesses.
|
||
|
TAKE-TWO INTERACTIVE SOFTWARE, INC. |
2025
Proxy Statement
|
15
|
PROPOSAL 1: ELECTION OF DIRECTORS
Age:
57
Director since:
May 2022
INDEPENDENT
DIRECTOR
Committee
Membership(s):
•
Audit Committee
•
Corporate
Governance
Committee
Beneficial owner of
14,551 shares
|
ELLEN SIMINOFF
|
|
|
Key qualifications and expertise provided to our board:
Ms. Siminoff was selected to serve on the Board of Directors due to her breadth of professional experiences in
emerging growth and technology companies, her backgrounds in marketing and advertising, her knowledge of
consumer trends and expertise in corporate and business development, her governance experience as a director
of several public companies, and her success in a variety of industries.
Ms. Siminoff is a long-tenured media and technology executive and board member.
From 2007 to 2018,
she was President and CEO of Shmoop University, an educational publishing company which has built millions
of units of content.
Ms. Siminoff served as President and CEO of Efficient Frontier, a pioneer in the field of dynamic Search Engine
Marketing (SEM) management services (sold to Adobe). Prior to Efficient Frontier, Ms. Siminoff spent six years
as a founding executive at Yahoo!. During her tenure, she led Business Development (Vice President, Business
Development and Planning), Corporate Development (Senior Vice President, Corporate Development) and ran
the Small Business and Entertainment Business units. Ms. Siminoff received a BA from Princeton University and
an MBA from Stanford University. Ms. Siminoff received a Master Liberal Arts Extension in Software Engineering
from Harvard University Extension School in 2023.
|
||
|
Additional Public Directorships (current):
•
BigCommerce
|
||
|
Other board experience:
Among other boards and advisory relationships, she currently serves on the board of BigCommerce, a leading
SAAS ecommerce platform, and the board of Verifone, a pre-eminent global payments platform. Ms. Siminoff
previously served as a member of the board of directors of Zynga Inc. from 2012 to May 2022, when we
acquired Zynga. Until April 2022, Ms. Siminoff served on the board of Discovery Education, a global leader in
standards-aligned digital curriculum resources and professional learning for K-12 classrooms, and she currently
serves on the board of Follett, a privately-held leading provider of educational technology, services, and print and
digital content. She has served as a member of the Advisory Board of Stanford University’s Graduate School of
Business and served on the President’s Advisory Council of Princeton University. Ms. Siminoff serves on the
Board of Overseers at the Hoover Institution as of September 2022. Other prior board experiences include
SolarWinds, US Auto Parts Network, Journal Communications, and Mozilla Corporation, the developers of
Firefox browsers. In 2005 she was one of eight industry professionals named “Masters of Information” by
Forbes magazine.
|
||
Age:
63
Director since:
March 2014
INDEPENDENT
DIRECTOR
Committee
Membership(s):
•
Audit Committee
(Chair)
Beneficial owner of
30,901 shares
|
SUSAN TOLSON
|
|
|
Key qualifications and expertise provided to our board:
Ms. Tolson brings to the Board of Directors significant experience in entertainment and financial/investment
matters from her previous positions, together with her existing current service as a director of both for profit and
nonprofit organizations.
Ms. Tolson is a financial executive with more than 20 years of experience in the financial services
industry. Ms. Tolson worked at Capital Research and Management Company and Capital Research
Company,
subsidiaries of The Capital Group Companies, Inc., from 1990 to 2010. She served in various
capacities, including Senior Vice President and Portfolio Manager. Before joining Capital Research, Ms. Tolson
was an Investment Officer at Aetna Investment Management Company, making private investments in media
and entertainment companies. Ms. Tolson received a BA from Smith College and an MBA from Harvard
Business School.
|
||
|
Additional Public Directorships (current):
•
OUTFRONT Media Inc.
|
||
|
Other board experience:
Ms. Tolson was a member of the board and audit committee of Worldline E-Payments Services until June 2023;
a member of the board and audit committee of Groupe Lagardère until July 2021; a member of the board and
audit committee of the American Cinematheque until May 2018; a trustee and member of the business affairs
committee of The American University of Paris until 2014; and a member of the board and audit committee of
American Media until 2014.
|
||
|
16
|
TAKE-TWO INTERACTIVE SOFTWARE, INC. |
2025
Proxy Statement
|
PROPOSAL 1: ELECTION OF DIRECTORS
Age:
66
Director since:
May 2018
INDEPENDENT
DIRECTOR
Committee
Membership(s):
•
Audit Committee
Beneficial owner of
90,665 shares
|
PAUL VIERA
|
|
|
Key qualifications and expertise provided to our board:
Mr. Viera brings to the Board of Directors proven leadership skills, vast business experience and
financial acumen.
Mr. Viera is the Founder and Chief Executive Officer of Earnest Partners, a global investment firm
responsible for overseeing over $20 billion for municipalities, states, corporations, endowments, and
universities.
Prior to founding Earnest Partners in 1998, Mr. Viera was a Vice President at Bankers Trust in both
New York and London and later joined Invesco, where he became a global partner and senior member of its
investment team. Mr. Viera received a BA from the University of Michigan and an MBA from Harvard
Business School.
|
||
|
Additional Public Directorships (current):
•
None
|
||
|
Other board experience:
Mr. Viera serves as a Trustee of the Woodruff Arts Center in Atlanta, Georgia and as a member of its investment
committee. He is also a member of the boards of directors of CBH Electronic Research Ltd., the board of
directors of DeepCare, the Board of Dean’s Advisors for Harvard Business School, the Council on Foreign
Relations, the Carter Center Board of Councilors, the National Center for Human & Civil Rights, and the
University of Michigan School of Information External Advisory Board.
|
||
Age:
68
Director since:
March 2007
CHAIRMAN AND CEO
Committee
Membership(s):
•
Executive Committee
Beneficial owner of
1,645,348 shares
|
STRAUSS ZELNICK
|
|
|
Key qualifications and expertise provided to our board:
Mr
. Zelnick provides the Company’s Board of Directors with valuable insight in organization and management
obtained from his experiences, including acting as Executive Chairman and CEO of the Company.
Mr. Zelnick has been Chairman of the Company since March 2007, Executive Chairman of the Board of
Directors since February 2008 and Chief Executive Officer of the Company since January 2011.
Mr.
Zelnick also is founder of and a partner in ZMC, a leading media focused private equity firm. Mr. Zelnick serves
as Executive Chairman of the Board of Directors and Chief Executive Officer of the Company pursuant to the
terms of the Management Agreement between the Company and ZMC. See “Certain Relationships and Related
Transactions—Management Agreement.” Mr. Zelnick received a BA from Wesleyan University, a JD from
Harvard Law School and an MBA from Harvard Business School.
|
||
|
Additional Public Directorships (current):
•
Starwood Property Trust, Inc.
|
||
|
Prior executive roles:
Mr. Zelnick served as Executive Chairman of Direct Holdings Worldwide, Inc., the parent company of Time Life
and Lillian Vernon, until the company was sold to Reader’s Digest on March 2, 2007. Prior to forming ZMC, Mr.
Zelnick was President and Chief Executive Officer of BMG Entertainment, a $4.7 billion music and entertainment
company with more than 200 record labels and operations in 54 countries. Mr. Zelnick’s appointment as
President and Chief Executive Officer of BMG Entertainment followed his tenure as President and Chief
Executive Officer of BMG’s North American business unit from 1994 through 1998. Before joining BMG
Entertainment, Mr. Zelnick was President and Chief Executive Officer of Crystal Dynamics, a leading producer
and distributor of interactive game software. Prior to that, he spent four years as President and Chief Operating
Officer of 20th Century Fox, where he managed all aspects of its worldwide motion picture and distribution
business. Previously, he spent three years at Vestron Inc. as a senior executive, and rose to become President
and Chief Operating Officer. Mr. Zelnick also served as Vice President, International Television Sales, for
Columbia Pictures.
|
||
|
Other board experience:
Mr. Zelnick serves as a member of the board of directors of the Entertainment Software Association, for which he
served as Chairman from July 2014 to July 2017. From September 2018 to December 2019, Mr. Zelnick served
on the board of ViacomCBS Inc. (formerly known as CBS Corporation), a public company, and as a member of
its compensation committee and nominating and governance committee. He also served as the non-executive
interim chairman of the CBS board from October 2018 until December 2019. Mr. Zelnick is also an associate
member of the National Academy of Recording Arts and Sciences and served on the board of directors of the
Recording Industry Association of America and the Motion Picture Association of America.
|
||
|
TAKE-TWO INTERACTIVE SOFTWARE, INC. |
2025
Proxy Statement
|
17
|
PROPOSAL 1: ELECTION OF DIRECTORS
BOARD COMPOSITION
Board Composition
Each director nominee for our Board of Directors is highly qualified and brings a variety of skills and experiences to our
boardroom. These skills are relevant to our business and enable the Board of Directors to provide strong oversight and
effectively oversee management’s execution of strategy.
|
Skill/Experience
(1)
|
|
|
|
|
|
|
|
|
|
|
|
Consumer & Marketing Insight:
Positions the Company for successful title releases and consumer retention.
|
|
|
|
|
|
|
|
|
|
|
|
Corporate Governance & Sustainability:
Ensures that the Company operates in a responsible manner as it relates
to corporate governance, environmental and community impact, and
executive compensation.
|
|
|
|
|
|
|
|
|
|
|
|
Education Experience:
Strengthens oversight of the Company’s employee development and training
programs and policies.
|
|
|
|
|
|
|
|
|
|
|
|
Entertainment & Media Expertise:
Ensures that the Board of Directors can effectively oversee strategic decisions
in our industry.
|
|
|
|
|
|
|
|
|
|
|
|
Financials & Investment Experience:
Helps the Board of Directors oversee the Company’s financial performance
and associated reporting, balance sheet strategy, and competitive positioning.
|
|
|
|
|
|
|
|
|
|
|
|
Global Business Operations:
These skills are crucial given our significant international consumer base and
employee presence.
|
|
|
|
|
|
|
|
|
|
|
|
Human Capital Management Experience:
Enables the Board of Directors to oversee our efforts to manage complex
teams, build an engaging workplace, and recruit and incentivize top talent.
|
|
|
|
|
|
|
|
|
|
|
|
Executive Leadership:
Provides valuable insight into the complexities that come with leading large,
sophisticated organizations and teams.
|
|
|
|
|
|
|
|
|
|
|
|
Regulatory & Governmental Experience:
Provides necessary insight into an increasingly complex global regulatory
landscape that impacts our content and distribution.
|
|
|
|
|
|
|
|
|
|
|
|
Risk Management Experience:
Helps the Board of Directors oversee strategic risks to the Company, including
business continuity planning, cyber, digital and physical security.
|
|
|
|
|
|
|
|
|
|
|
|
Strategy and Growth:
Helps the Board of Directors oversee strategic decisions underpinning the
Company’s long-term success, including evaluating and executing on growth
opportunities and business development through acquisitions, partnerships,
and organic initiatives.
|
|
|
|
|
|
|
|
|
|
|
|
Technology:
Staying apprised of relevant technological advancements applicable to our
business allows the Board of Directors to effectively oversee core elements of
our daily operations and competitive activities.
|
|
|
|
|
|
|
|
|
|
|
(1)
Information as of
July 28, 2025
. A “
” in the chart indicates a specific area of focus or expertise that is particularly relevant to a director’s service on our Board.
The absence of a “
” does not mean that a director does not also possess meaningful experience or skill in that area.
|
18
|
TAKE-TWO INTERACTIVE SOFTWARE, INC. |
2025
Proxy Statement
|
CORPORATE GOVERNANCE AND BOARD PRACTICES
Board Leadership Structure
The Company’s governance framework provides the Board of Directors with the flexibility to select the appropriate leadership
structure for the Company. This determination is conducted at least annually and is based on a multitude of factors, including
the current and future strategic and governance needs of the business.
For fiscal 2025, the Board of Directors decided to continue with a leadership structure comprised of a combined Chairman of
the Board and CEO, a Lead Independent Director, and Board committees led by independent directors. The Board of Directors
believes that in light of the Company’s clear strategy and the strength of its overall governance practices, at this time a
combined Chairman/CEO role more effectively unifies the Board of Directors and management around the specific initiatives
necessary to support the Company’s strategy.
Mr. Zelnick currently serves as both the Chief Executive Officer and Executive Chairman of the Company. The independent
directors of the Board of Directors have elected Ms. Srinivasan to serve as our Lead Independent Director (as described
below), a role that complements the Executive Chairman’s role and serves as the principal liaison between the independent
directors and the Executive Chairman and Company management. Ms. Srinivasan has held this position since
September 2023.
Lead Independent Director
The Lead Independent Director serves as the principal liaison between the independent directors and the Executive Chairman
and is responsible for:
|
|
Presiding at all Board of Directors meetings at which
the Chairman of the Board is not present
|
|
|
|
Convening regular and special meetings of the
independent directors
|
|
|
|
Developing the agenda for executive sessions of the
independent directors and working with the Chairman
to develop and approve the agenda for meetings of
the full Board of Directors, including scheduling to
ensure there is sufficient time for discussion
|
|
|
|
Coordinating feedback to the Chairman on behalf of
the independent directors
|
|
|
|
Coordinating with the Company’s Chief Legal Officer
to respond to shareholders who have addressed a
communication to the independent directors
|
|
|
|
Making herself available for shareholder
communication, as appropriate (other independent
directors may also participate in such communication
at times)
|
|
|
|
Handling any matters concerning an actual or
potential conflict of interest involving any other director
|
|
The Lead Independent Director regularly engages separately with one or more of the Chief Executive Officer, the President, the
Chief Financial Officer and the Chief Legal Officer to discuss the Company’s business strategy in greater detail and provide
additional guidance to management. These meetings enable the Lead Independent Director to gain a deeper understanding of
any matters being handled by management which should be brought to the attention of the entire Board of Directors or a
committee thereof, as well as an opportunity to obtain additional information on any matters which the Lead Independent
Director believes may otherwise be of interest to the other directors and to provide advice to the other directors regarding
such matters.
|
TAKE-TWO INTERACTIVE SOFTWARE, INC. |
2025
Proxy Statement
|
19
|
CORPORATE GOVERNANCE AND BOARD PRACTICES
BOARD COMMITTEES
Board Committees
The Board of Directors has three standing committees entirely comprised of independent directors: a Compensation
Committee, a Corporate Governance Committee and an Audit Committee. The Board of Directors also has a standing
Executive Committee, currently comprised of Lead Independent Director Ms. Srinivasan (Chair), and Messrs. Dornemann and
Zelnick. These four committees are governed by written charters which are posted in the Corporate Governance tab on the
Company’s website at www.take2games.com. The Company’s Code of Business Conduct and Ethics is also posted on the
Company’s website at www.take2games.com under the “Policies & Conduct” tab.
|
Name
|
Compensation
Committee
|
Corporate
Governance
Committee
|
Audit
Committee
|
Executive
Committee
|
||||
|
LaVerne Srinivasan
|
|
|||||||
|
Michael Dornemann
|
|
|
||||||
|
William “Bing” Gordon
|
||||||||
|
Roland Hernandez
|
|
|||||||
|
J Moses
|
|
|
||||||
|
Michael Sheresky
|
|
|
||||||
|
Ellen Siminoff
|
|
|
||||||
|
Susan Tolson
|
|
|||||||
|
Paul Viera
|
|
|||||||
|
Strauss Zelnick
|
|
|||||||
|
Meetings in Fiscal
2025
|
6
|
5
|
5
|
4
|
Member
Chair
Compensation Committee
members are Messrs. Sheresky (Chair), Dornemann, Hernandez and Moses, each of whom is an
independent director under Nasdaq’s Rule 5605, and a “non-employee director” as defined under the SEC rules.
The Compensation Committee, among other roles, reviews the compensation policies and procedures of the Company,
evaluates and approves executive officer compensation, and makes recommendations to the Board of Directors regarding
executive compensation.
Corporate Governance Committee
members are Messrs. Moses (Chair) and Sheresky and Ms. Siminoff. The Corporate
Governance Committee is responsible, among other things, for creating and maintaining overall corporate governance policies
for the Company, identifying, screening and recruiting director candidates for the Board of Directors and overseeing our
environmental, social and governance initiatives.
Audit Committee
members are Mses. Tolson (Chair) and Siminoff and Mr. Viera. The Audit Committee oversees the
accounting and financial reporting processes of the Company and audits of the financial statements of the Company. In
addition, the Audit Committee assists the Board of Directors in its review and oversight of the Company’s key investment
objectives, strategies and policies, as well as the Company’s operational risk relating to business continuity planning, cyber,
digital and physical security, including security controls over customer data. The Board of Directors has determined that Ms.
Tolson and Mr. Viera each qualify as an “audit committee financial expert” under federal securities laws.
Director Selection and Refreshment
The Corporate Governance Committee will consider nominees recommended by shareholders, provided that the
recommendation contains sufficient information for the committee to assess the suitability of the candidate and such nomination
complies with the Company’s bylaws. Candidates recommended by shareholders that comply with these procedures will
receive the same consideration that candidates recommended by the committee receive.
|
20
|
TAKE-TWO INTERACTIVE SOFTWARE, INC. |
2025
Proxy Statement
|
CORPORATE GOVERNANCE AND BOARD PRACTICES
DIRECTOR SELECTION AND REFRESHMENT
When selecting directors, the Board of Directors reviews and considers many factors, including experience, business
understanding, achievement, available time, skills and independence. It also will consider ethical standards, integrity and any
conflict of interest. It considers recommendations primarily from shareholders of the Company and from members of the Board
of Directors and management. The Corporate Governance Committee conducts interviews with candidates who meet the
criteria of the Board of Directors and has full discretion in considering its nominations to the Board of Directors. The Board of
Directors adopted Corporate Governance Guidelines, which include criteria to assess the suitability of candidates for the Board
of Directors. These Corporate Governance Guidelines are posted under the “Conduct” tab on the Company’s website at
“
www.take2games.com
”.
Independent Directors
The Board of Directors has determined that Messrs. Dornemann, Gordon, Hernandez, Moses, Sheresky and Viera and Mses.
Siminoff, Srinivasan and Tolson are “independent” directors, and that Mr. Zelnick is not an “independent” director, in each case
as defined under the rules of The Nasdaq Stock Market. With respect to Mr. Gordon, at the time he joined the Board of
Directors in May of 2022, the Board of Directors determined he was not an “independent” director under the rules of The
Nasdaq Stock Market as a result of a pre-existing consulting services agreement between Zynga Inc. and Mr. Gordon. Because
this consulting services agreement was terminated effective as of June 15, 2022, which is more than three years ago, the
Board of Directors has now determined that Mr. Gordon currently qualifies as an “independent” director under the rules of The
Nasdaq Stock Market effective as of June 15, 2025. During fiscal
2025
, the independent directors met in executive session
(outside the presence of management) on nine occasions.
Board Composition and Refreshment
The Board of Directors routinely reviews the composition of the Board and believes that it benefits from having a group of
directors with a wide range of viewpoints, including based on experience, backgrounds and other factors. The Board has taken
a deliberate approach to refreshment, with new directors joining in four of the prior eight years and five of our 10 director
nominees having served for eight years or less.
On an annual basis, the Corporate Governance Committee conducts a succession planning and refreshment review that covers
the Board of Directors, the Company’s executive officers and, in conjunction with the Company’s Chief Human Resources
Officer, a review of succession planning throughout the organization. Further information relating to our management
succession planning process is set forth below under “Management Development and Succession Planning” As a result of its
regular succession planning and refreshment reviews, the Board of Directors has made, and will make, the following changes
to the composition of the committees of the Board of Directors since fiscal 2024:
|
Fiscal 2024
|
Fiscal 2025
|
Fiscal 2026
|
||||||||
|
•
In September 2023,
Ms. Srinivasan succeeded
Mr. Dornemann as our
Lead Independent Director,
was appointed to serve
as the Chair of the Executive
Committee, and rotated
off the Corporate
Governance Committee.
•
Also at that time, Ms. Siminoff
joined the Corporate
Governance Committee.
|
|
•
Effective on October 1, 2024,
Mr. Dornemann rotated off
the Corporate Governance
and Audit Committees.
•
Also at that time, Mr.
Sheresky rotated off the
Executive Committee.
|
|
•
Effective after this year’s
Annual Meeting, Mr. Moses
will rotate off the
Compensation Committee
and step down as Chair of the
Corporate Governance
Committee, but remain as a
member of such committee.
•
Also at that time, Mr.
Hernandez will join the
Corporate Governance
Committee and will serve as
the new Chair of such
committee, and Mr. Sheresky
will rotate off the Corporate
Governance Committee.
|
||||||
|
TAKE-TWO INTERACTIVE SOFTWARE, INC. |
2025
Proxy Statement
|
21
|
CORPORATE GOVERNANCE AND BOARD PRACTICES
ATTENDANCE AT SHAREHOLDER MEETINGS
Board Assessment Process
The Board of Directors and its committees conduct annual self-evaluations that include both the completion of a questionnaire
as well as biennial individual interviews of each director by an outside third party. These evaluations are utilized by the Board
and each committee to improve communication, strategy, and effectiveness, and to identify possible improvements that can be
made to the performance and composition of the Board and each of its committees. The Corporate Governance Committee
assists the Board of Directors in its review and reports to the full Board regarding its findings and recommendations, which are
considered and implemented as appropriate. Furthermore, the Compensation Committee performs an annual performance
review of the Chairman/CEO and other named executive officers and reports its findings to the full Board of Directors.
Attendance at Shareholder Meetings
The Board of Directors has adopted a policy whereby director nominees are encouraged to attend the Company’s annual
meeting of shareholders. All of our then incumbent director nominees attended the last annual meeting of the Company’s
shareholders in September
2024
.
Meetings of Directors
The Board of Directors held nine meetings during fiscal
2025
. Each of the incumbent directors attended at least 75% in the
aggregate of all meetings of the Board of Directors and committees on which the individual served for the period of his or her
service in the fiscal year. Periodically, the Board of Directors convenes at an off-site strategic planning session, which includes
presentations and discussions with senior management, to review the Company’s strategic, competitive and financial
performance goals as well as to discuss the Company’s long-term strategic plan. The most recent off-site strategic planning
session took place in October 2023, and one is planned for the Fall of 2025.
Board Oversight
Board’s Role in Oversight of Strategy and Risk Management
The Board of Directors exercises direct oversight of strategic risks to the Company. The Audit Committee reviews the
Company’s policies for risk assessment and risk management relating to financial reporting and internal controls, as well as
operational risk relating to business continuity planning, cyber, digital and physical security, including security controls over
customer data, and assesses steps management has taken to control such risks and exposures. The Compensation
Committee oversees risks relating to compensation programs and policies. See “Risk Assessment of Overall Compensation
Program.” The Corporate Governance Committee oversees environmental, social and governance matters and operational risk
relating to insurance. In each case, management periodically reports to our Board of Directors or to the relevant committee,
which provides guidance on risk appetite, assessment, and mitigation. Each committee charged with risk oversight reports to
our Board of Directors on those matters.
|
COMMITTEE RISK OVERSIGHT
|
||||
|
AUDIT
|
COMPENSATION
|
CORPORATE
GOVERNANCE
|
||
|
Reviews the Company’s policies for
risk assessment and risk management
relating to financial reporting and internal
controls, as well as operational risk
relating to business continuity planning,
cyber, digital and physical security,
including security controls over
customer data, and assesses steps
management has taken to control
such risks and exposures
|
Oversees risks relating to
compensation programs and policies.
See “Risk Assessment of Overall
Compensation Program”
|
Oversees sustainability
matters and operational risk
relating to insurance
|
||
|
22
|
TAKE-TWO INTERACTIVE SOFTWARE, INC. |
2025
Proxy Statement
|
CORPORATE GOVERNANCE AND BOARD PRACTICES
SUSTAINABILITY MATTERS
Management Development and Succession Planning
The Board of Directors recognizes the importance of retaining and developing highly qualified leadership talent. To gain insight
into our pool of talent and what attracts, motivates, and retains key employees, the Board of Directors engages with members
of our management team and high-potential individuals across the business during annual 360-degree interviews, management
presentations, off-site strategic planning sessions, and periodic informal meetings and communications. By regularly interacting
with our current and future leaders, the Board of Directors
facilitates
a deeper understanding of our Company’s culture and best
positions itself to oversee and help maintain a long-term program for the effective development and succession planning of our
senior management team.
To oversee and continue to develop this long-term practice, the Board of Directors discusses management succession planning
at least once a year, and the Corporate Governance Committee works with management to maintain a succession plan for key
members of the team. Additionally, the Corporate Governance Committee monitors and reports to the Board of Directors on
certain related issues, including preparedness for an emergency situation affecting senior management, as well as the long-
term growth and development of the senior management team.
Sustainability Matters
The Company believes that focusing on corporate governance and corporate responsibility creates value for the Company, our
employees, our shareholders, our consumers and other stakeholders while also helping mitigate risks, reduce costs, protect
brand value, and identify market opportunities. The Board of Directors provides oversight for this area through the Corporate
Governance Committee, which oversees and reviews our sustainability strategy and guides long-term climate strategy. The
Company oversees Sustainability matters using the following structure:
|
CORPORATE GOVERNANCE COMMITTEE
|
|||||
|
MANAGEMENT COMMITTEE
|
|||||
|
•
Human Resources
•
Legal
•
Cybersecurity
|
•
Investor Relations
•
Workplace
|
•
Financial
•
Creative
|
|||
The Company seeks to ensure that corporate responsibility and sustainability considerations are incorporated into our
corporate strategy, disclosure, and long-term goals to maintain and advance sustainable shareholder value. We intend to
publish our fourth Impact Report incorporating the Sustainability Accounting Standards Board standards in September 2025.
The report will highlight the Company’s efforts across key environmental, social, and governance topics and will be available on
our website. We also publish a standalone report on the Task Force on Climate-Related Financial Disclosure recommendations,
which is also posted on the Company’s website. These reports and our website are not incorporated herein by reference. Areas
on which this committee continues to focus include board composition and refreshment, cybersecurity, human capital
management, sustainability and community engagement.
Cybersecurity
We continue to invest financial and operational resources to implement certain systems, processes and technologies to guard
against cyber risks and to help protect our data and systems. Our Audit Committee receives reports on at least a quarterly basis
regarding key cybersecurity, risks and related matters, including secure processing, storage, and transmission of personal and
confidential information, such as the personally identifiable information of our users. For additional information with respect to
the Company's cybersecurity risk management, strategy and governance, see Item 1C under the heading “Cybersecurity” of
Part I of the Company's Annual Report on Form 10-K for fiscal
2025
.
|
TAKE-TWO INTERACTIVE SOFTWARE, INC. |
2025
Proxy Statement
|
23
|
CORPORATE GOVERNANCE AND BOARD PRACTICES
BOARD AND GOVERNANCE POLICES
Human Capital Management
One of Take-Two’s most important assets is our people. We are constantly focused on our teams – their success, their structure
and how best to support them given their particular needs and projects.
Employee Statistics*
|
||||
|
12,928
full-time employees
|
78%
of employees are focused
on product development
|
|||
*
As of March 31,
2025
For additional information with respect to the Company's Human Capital Management see
Item 1
under the heading “Human
Capital Management” of Part I of the Company's Annual Report on Form 10-K for fiscal 2025.
Sustainability
We aim to integrate environmental responsibility into our operational and product strategies. We will seek to reduce our carbon
footprint and find opportunities for cost savings by seeking to make environmentally conscious choices in our offices worldwide.
Community & Engagement
We firmly believe that diversity of thought drives the innovation that is integral to our success. We strive to provide an inclusive
workplace in which everyone feels respected, heard, and safe. Our culture, grounded in compassion, collaboration, and a
commitment to excellence, supports an inclusive and welcoming environment for prospective employees and the
broader community.
Board and Governance Policies
Outside Directorship Policy
The Board of Directors has established a policy requiring (i) each director and executive officer to advise the Board of Directors,
through the Chief Legal Officer of the Company, of all of his or her directorships in other publicly-held companies, and (ii) that all
members of the Board of Directors may not sit on more than three outside public company boards. Directors are expected to
ensure that other existing commitments including service on other boards do not interfere with the member’s service as a
Company Director. Annually, the Corporate Governance Committee conducts a review of director commitment levels to ensure
they are aligned with our service expectations. The Corporate Governance Committee has reviewed the Company’s nominees
for the Board of Directors and has determined that all nominees have the capacity to serve effectively on the Company’s Board
of Directors.
Code of Business Conduct and Ethics
The Company has adopted a written Code of Business Conduct and Ethics that applies to directors, officers and employees of
the Company, including the Company’s principal executive officer, principal financial officer, principal accounting officer and
controller and any person performing similar functions. A copy of the Code of Business Conduct and Ethics is posted on the
Company’s website at “www.take2games.com” and can be accessed by clicking on “Policies & Conduct,” “Conduct and Social
Responsibility,” then “Global Code of Business Conduct and Ethics.”
|
24
|
TAKE-TWO INTERACTIVE SOFTWARE, INC. |
2025
Proxy Statement
|
CORPORATE GOVERNANCE AND BOARD PRACTICES
BOARD AND GOVERNANCE POLICIES
Supplier Code of Conduct
The Company has also adopted a Supplier Code of Conduct that applies to vendors, suppliers, consultants and other third
parties we engage, which makes clear that we expect all of our business partners to operate fairly and ethically, comply with
domestic and international laws, and promote a work environment that values honesty, openness, integrity, and respect for
fundamental human rights, wherever in the world we do business. A copy of the Supplier Code of Conduct is posted on the
Company’s website at “www.take2games.com” and can be accessed by clicking on “Polices & Conduct,” then “Supplier Code
of Conduct.”
Policy on Majority Voting for Directors
The standard in the Company’s bylaws for uncontested director elections is a majority vote standard. In an uncontested
election, a director shall be elected if the number of votes that are cast “for” his or her election by holders of the stock present in
person or represented by proxy entitled to vote on the election of directors exceeds the number of votes cast “against” his or
her election by such holders. If a nominee who currently serves as a director is not re-elected, Delaware law provides that the
director will continue to serve on our Board as a “holdover director” (i.e., until his or her successor has been duly elected and
qualified, or until the earliest of his or her death, resignation or removal). In an uncontested election, any nominee for director
who fails to receive a greater number of votes cast “for” such individual’s election than votes cast “against” such election
promptly shall tender the individual’s resignation to the Corporate Governance Committee following certification of the
shareholder vote. The Corporate Governance Committee promptly will consider the resignation offer and recommend to the
Board of Directors the action to be taken with respect to such offered resignation. The Board of Directors will act on the
Corporate Governance Committee’s recommendation within 90 days following the date of the Annual Meeting. Thereafter, the
Board of Directors will disclose promptly its decision whether to accept the director’s resignation offer (and the reasons for
rejecting the resignation offer, if applicable) in a Current Report on Form 8-K filed with the SEC. Any director tendering a
resignation pursuant to this provision shall not participate in the Corporate Governance Committee recommendation or action of
the Board of Directors regarding whether to accept the resignation offer.
Securities Trading Policy
The Company has adopted a written Securities Trading Policy that applies to directors, officers, employees and consultants of
the Company, including the Company’s principal executive officer, principal financial officer, principal accounting officer and
controller and any person performing similar functions. A copy of the Securities Trading Policy, which includes requirements for
Rule 10b5-1 trading plans, is included as an exhibit to our Annual Report on Form 10-K for the
fiscal year ended March 31,
2024
, which is available through our Internet website at www.take2games.com or the SEC’s website at www.sec.gov.
Conflict of Interest Guidelines for Directors/Directors’ Code of Conduct
The Company has adopted a written Conflict of Interest Guidelines for Directors/Directors’ Code of Conduct that applies to
directors of the Company. A copy of the Conflict of Interest Guidelines for Directors/Directors’ Code of Conduct is posted on the
Company’s website at “www.take2games.com” and can be accessed by clicking on “Policies & Conduct,” then “Conflict of
Interest Guidelines for Directors” or “Guidelines for Directors and Board Governance,” as applicable.
|
TAKE-TWO INTERACTIVE SOFTWARE, INC. |
2025
Proxy Statement
|
25
|
CORPORATE GOVERNANCE AND BOARD PRACTICES
OTHER EXECUTIVE OFFICERS
Other Executive Officers
Each of the following executive officers, who are not also directors, will serve in such capacity until the next Annual Meeting of
Shareholders or until earlier termination or removal from office.
President
Age:
55
|
KARL SLATOFF
|
|
|
|
Key experience and qualifications:
Mr. Slatoff became President of the Company in May 2013 and served as Chief Operating Officer of the
Company from October 2010 through April 2013. Mr. Slatoff serves as President of the Company pursuant to
the terms of the 2022 Management Agreement between the Company and ZMC. See “Certain Relationships
and Related Transactions—Management Agreement.” From February 2008 to October 2010, Mr. Slatoff served
as an Executive Vice President of the Company. Mr. Slatoff also is a partner in ZMC. He previously served as a
director of Cannella Response Television, LLC and CommentSold, Inc.
|
|
|
Prior to joining ZMC in 2001, Mr. Slatoff served as Vice President, New Media for BMG Entertainment, where
he was responsible for guiding BMG’s online digital strategies, including the development of commercial digital
distribution initiatives and new business models for the sale and syndication of online content. From 1994 to
1996, he worked in strategic planning at the Walt Disney Company, where he focused on the consumer
products, studio and broadcast divisions, as well as several initiatives in the educational, publishing and new
media sectors. From 1992 to 1994, Mr. Slatoff worked in the corporate finance and mergers and acquisitions
units at Lehman Brothers where he focused on the consumer products and retail/merchandising industries.
|
||
|
|
|
|
Chief Financial Officer
Age:
57
|
LAINIE GOLDSTEIN
|
|
|
|
Key experience and qualifications:
Ms. Goldstein has been Chief Financial Officer of the Company since June 2007, and is responsible for
overseeing Finance, Investor Relations and Corporate Communications. Ms. Goldstein previously served as
the Company’s Senior Vice President of Finance from November 2003. Ms. Goldstein also serves as a director
and member of the audit committee of Phreesia, Inc.
|
|
|
Ms. Goldstein is a CPA with financial and business experience in the software, entertainment, retail and
apparel industries, with proven success in managing the finance function of publicly traded companies. Prior to
joining the Company, she held a number of positions of increasing responsibility with Nautica Enterprises, Inc.,
most recently serving as Vice President, Finance and Business Development. Earlier in her career, she held
positions in the audit and reorganization departments at Grant Thornton LLP.
|
||
|
|
|
|
Executive Vice President
and Chief Legal Officer
Age:
53
|
DANIEL EMERSON
|
|
|
|
Key experience and qualifications:
Mr. Emerson has served as Executive Vice President and General Counsel of the Company since October
2014 and, effective May 2019, Mr. Emerson was made Chief Legal Officer. Mr. Emerson joined the Company
as a Vice President in June 2005 and served in various capacities of increasing responsibility within the legal
department, including Senior Vice President, Corporate Secretary, Deputy General Counsel and General
Counsel. In addition to serving as the Chief Legal Officer of the Company, Mr. Emerson oversees
administrative management of Internal Audit on behalf of the Audit Committee and physical security.
|
|
|
Prior to joining the Company, Mr. Emerson was a partner in the New York office of the law firm Blank Rome
LLP, where he represented public and private companies across a variety of industries in mergers &
acquisitions, securities law, financings and general corporate matters.
|
|
26
|
TAKE-TWO INTERACTIVE SOFTWARE, INC. |
2025
Proxy Statement
|
PROPOSAL 2: NON-BINDING ADVISORY VOTE TO
APPROVE THE COMPENSATION OF THE COMPANY’S
NAMED EXECUTIVE OFFICERS
In accordance with the SEC’s proxy rules, we are seeking approval, on a non-binding advisory basis, of the compensation of
the Company’s “named executive officers” listed in the Summary Compensation Table (the “NEOs”) for fiscal
2025
, as disclosed
in this Proxy Statement pursuant to Item 402 of Regulation S-K, including the Compensation Discussion and Analysis, the
compensation tables, and the related narrative disclosures. This vote is not intended to address any specific item of
compensation, but rather the overall compensation of our NEOs and the philosophy, policies and practices described in this
Proxy Statement. This vote is commonly known as a
“say-on-pay”
advisory vote. Consistent with the approval by our
shareholders, on an advisory basis, of an annual advisory vote on the compensation of the named executive officers, the Board
of Directors has adopted a policy providing for annual “say-on-pay” advisory votes.
The compensation of our NEOs is described in detail in the “Compensation Discussion and Analysis” section of this Proxy
Statement beginning on page
27
, which we encourage you to read for additional details on our executive compensation
programs and compensation of our NEOs for fiscal
2025
.
Our executive compensation programs are based on three core principles that are designed to motivate our NEOs to achieve
annual financial and strategic objectives to enhance the profitability of the Company and create long-term shareholder value.
The fiscal
2025
compensation of our NEOs reflected these core principles:
|
|
A substantial portion of our NEOs’ compensation was based on the financial performance of the Company and
therefore “at risk”;
|
||
|
|
The majority of each NEO’s total compensation was provided in the form of long-term equity, two-thirds of which was
subject to performance-based vesting, including total shareholder return (“TSR”) and recurrent consumer spending
(“RCS”) performance metrics, to further align the interests of our NEOs and shareholders; and
|
||
|
|
The target total direct compensation package for each NEO was consistent with market practices for executive talent
and each NEO’s individual experience, responsibilities and performance.
|
||
We believe that our compensation programs and policies for fiscal
2025
were consistent with our core compensation principles,
provided an effective incentive for the achievement of positive results, aligned with shareholders’ interests, are supported by
strong compensation governance practices and worthy of continued shareholder support. Accordingly, we ask for our
shareholders to indicate their support for the compensation paid to our NEOs by voting “FOR” the following non-binding
resolution at the Annual Meeting:
“RESOLVED, that the Company’s shareholders approve the compensation of the named executive officers for the
fiscal year
ended March 31, 2025
, including the Compensation Discussion and Analysis, the compensation tables, and the related
narrative disclosures as included in this Proxy Statement.”
Because your vote is advisory, the result will not be binding upon the Company. Although not binding, the Board of Directors
values the opinions of our shareholders and will carefully review and consider the outcome of the vote, along with other relevant
factors, in evaluating its compensation program for our NEOs.
|
|
THE BOARD OF DIRECTORS BELIEVES THAT APPROVAL OF THE FOREGOING RESOLUTION ON THE
COMPENSATION OF THE NEOS IS IN THE BEST INTERESTS OF THE COMPANY AND UNANIMOUSLY
RECOMMENDS THAT SHAREHOLDERS VOTE “
FOR
” THE APPROVAL OF THE COMPENSATION OF THE
COMPANY’S NEOS, AS STATED IN THE ABOVE NON-BINDING RESOLUTION.
|
|
TAKE-TWO INTERACTIVE SOFTWARE, INC. |
2025
Proxy Statement
|
27
|
COMPENSATION DISCUSSION AND ANALYSIS
The Compensation Discussion and Analysis section describes the material elements of our executive compensation program
for fiscal
2025
, including the named executive officers (“NEOs”) as identified in the Summary Compensation Table and
listed below:
|
|
|
|
|
|||
|
Strauss Zelnick
Executive Chairman
and Chief Executive Officer
|
Karl Slatoff
President
|
Lainie Goldstein
Chief Financial Officer
|
Daniel Emerson
Executive Vice President and
Chief Legal Officer
|
|
Messrs. Zelnick and Slatoff serve in their executive positions pursuant to a
management agreement with ZMC, discussed below.
|
||
Executive Summary
Take-Two is a leading developer, publisher and marketer of interactive entertainment for consumers around the globe.
We develop and publish products principally through Rockstar Games, 2K and
Zynga.
|
Top Titles Include:
|
|
Top Titles Include:
|
|
Top Titles Include:
|
|||||||||||
|
•
Grand Theft Auto
•
Red Dead
Redemption
•
L.A. Noire
•
Max Payne
•
Midnight Club
|
•
NBA 2K
•
Borderlands
•
PGA TOUR 2K
•
BioShock
•
Tiny Tina’s
Wonderlands
•
Mafia
•
Sid Meier’s
Civilization
•
WWE 2K
•
XCOM
|
•
Match Factory!
•
Toon Blast
•
Twisted Tangle
•
Merge Dragons!
•
Color Block Jam
•
Words With
Friends
•
Top Eleven
•
Empires &
Puzzles
•
Zynga Poker
|
||||||||||||||
|
28
|
TAKE-TWO INTERACTIVE SOFTWARE, INC. |
2025
Proxy Statement
|
COMPENSATION DISCUSSION AND ANALYSIS
EXECUTIVE SUMMARY
Our strategy is to create hit entertainment experiences, delivered on every platform relevant to our audience through a variety
of sound business models. Our pillars - creativity, innovation, and efficiency - guide us as we strive to create the highest quality,
most captivating experiences for our consumers. We believe that our player-first approach and commitment to creativity and
innovation are distinguishing strengths, enabling us to differentiate our products in the marketplace by combining advanced
technology with compelling storylines and characters that provide unique, deeply engaging gameplay experiences. Our teams
have established a portfolio of proprietary software content for the major hardware and mobile platforms, and we aim to be at
the forefront of technological innovation. We have a diverse portfolio that spans all key platforms and numerous genres,
including action, adventure, family, casual, hyper-casual, role-playing, shooter, social casino, sports, and strategy. This enables
us to appeal to a wide array of consumers and demographic groups worldwide, ranging from game enthusiasts to casual
gamers. Most of our intellectual property is internally owned and developed, which we believe best positions us financially and
competitively. In addition, we license selectively some highly recognizable renowned brands, especially in sports entertainment.
We support our products with innovative marketing programs created by our internal global marketing teams.
Our management team and creative talent at Rockstar Games, 2K, and Zynga are essential to building and maintaining the
strongest portfolio of Intellectual Property (“IP”) in the industry. Our compensation program is designed to reflect the importance
of our creative talent, including through the use of equity awards to establish strong links between our creative teams and long-
term value creation for shareholders.
Select Fiscal
2025
Performance Highlights
The Company delivered strong financial results in fiscal
2025
and continued to execute successfully on our strategy to
capitalize on the popularity of video games by developing and publishing high-quality interactive entertainment experiences
across a range of genres.
|
Fiscal
2025
Financial and Operating Results
|
|||||||||
|
Net Revenue
$5.63
Billion
|
Net Bookings (operating metric)
$5.65
Billion
|
||||||||
|
Net Revenue by Platform
|
|||||||||
|
Console, PC and Other
|
|||||||||
|
$2.69
Billion
|
|
47.8%
|
of Net
Revenue
|
Recurrent Consumer Spending
(virtual currency, add-on content, and in-game purchases)
|
|||||
|
Mobile
|
$4.47
Billion
|
|
79.4%
|
of Net
Revenue
|
|||||
|
$2.94
Billion
|
|
52.2%
|
of Net
Revenue
|
||||||
Business Highlights
•
We released successful hit titles, engaged players with a steady cadence of in-game content, and continued to position our
organization for the long term. Highlights from the year include:
–
Grand Theft Auto V
continues to expand its audience. As of the end of fiscal
2025
, the title had sold-in over
210 million
units worldwide. At the same time,
Grand Theft Auto Online
remains one of our largest contributors to
RCS
, led by an
array of new modes, rewards, and vehicles, as well as ongoing demand for GTA+ memberships. Rockstar Games
continues to expand the possibilities for engagement with the series through ongoing development of its FiveM
creator platform.
–
Red Dead Redemption 2
continues to resonate with players worldwide and has sold-in more than
70 million
units as of the
end of fiscal 2025.
–
NBA 2K25
posted near-record performance during the year and has sold-in nearly 10 million units. Engagement grew
significantly, led by new features and continued innovation throughout the title. We are also pleased with the performance
of our brand extensions for the franchise, including
NBA 2K25 Arcade Edition
,
NBA 2K Online
in China, and our
NBA 2K
All-Stars
mobile title.
|
TAKE-TWO INTERACTIVE SOFTWARE, INC. |
2025
Proxy Statement
|
29
|
COMPENSATION DISCUSSION AND ANALYSIS
EXECUTIVE SUMMARY
–
2K’s release of
WWE 2K25
was met with great critical acclaim, including a score of 84 on Metacritic for Xbox Series X –
an all-time high for the series on that platform. Visual Concepts introduced new features, including The Island, a highly
immersive WWE-themed world where players can explore, compete in live events, and earn rewards. Consumer appetite
for the franchise is growing, with
RCS
up sharply over the prior iteration.
–
2K released
Sid Meier's Civilization VII
, the revolutionary new chapter in our esteemed strategy franchise. Our teams
are pursuing opportunities to expand the audience, including the recent launch of
Civilization VII
VR for Meta Quest 3
and 3S, as well as the title’s upcoming release on Switch 2, which will offer new mouse controls for a highly intuitive
gameplay experience.
–
Zynga concluded fiscal
2025
with healthy performance, led by their multi-studio approach and continued excellence in
Live Ops.
•
Peak delivered strong results.
Match Factory!
continued to scale throughout the course of the year, driven by innovative
bold beats and strategic investments in user acquisition.
•
Toon Blast
posted significant growth, led by highly engaging new features, including new single player and team based
events and social challenges.
•
Rollic launched a new hit with
Color Block Jam
, which is scaling rapidly. In just four months of operation, the title has
become profitable.
•
Our direct-to-consumer (“DTC”) business delivered record performance, as our teams continue to launch new offers,
events, and enhanced personalization, which are driving better conversion. While we have been implementing DTC in
our titles for some time, we do believe there is an even greater opportunity to expand this highly accretive channel
given recent court rulings.
Our strong financial performance in fiscal
2025
also reflects the strategic steps management has taken in the past several
years to fortify our balance sheet, grow and diversify our franchise portfolio, and enhance our margin structure for the long term.
Shareholder Engagement
We maintain a robust year-round shareholder outreach
program to facilitate ongoing, two-way dialogue on topics our
shareholders find most important. Our Board members are
regular participants in these critically important conversations,
and we discuss a diverse range of topics, including
board, governance, sustainability and executive
compensation practices.
At our 2024 annual meeting of shareholders, we were pleased
that our Say-on-Pay vote received 86% support after
extensive outreach and efforts to implement shareholder
feedback. Since the 2024 Annual Meeting, we have sought
discussions with holders of almost sixty percent of our
outstanding shares and held discussions with all investors
who expressed an interest in engaging with us, representing
nearly one-third of our outstanding shares. Members of our
Board of Directors actively participated in discussions with
shareholders holding over one-quarter of our
outstanding shares.
Shareholders continued overwhelmingly to convey positive
feedback on our compensation policies including updates we
implemented following our 2022 annual meeting. In line with
previously shared feedback, shareholders appreciated the increased rigor and disclosure of goal setting for our annual cash
incentive program, the shift to a greater percentage of performance-based equity as part of our long-term incentive program,
and the implementation of longer performance and vesting periods for equity awards, each of which was implemented in
response to prior shareholder feedback and incorporated into the 2022 Management Agreement with ZMC, which became
effective for the fiscal year ended March 31, 2023 (“fiscal 2023”).
|
30
|
TAKE-TWO INTERACTIVE SOFTWARE, INC. |
2025
Proxy Statement
|
COMPENSATION DISCUSSION AND ANALYSIS
EXECUTIVE SUMMARY
|
Shareholder Engagement Following the 2024 Annual Meeting
|
||||
|
Shareholders Contacted
|
Engaged with
|
Director-Led Discussions
|
||
|
~58.6%
|
~32.9%
|
~26.5%
|
||
|
of our outstanding common stock
|
of our outstanding common stock
|
of our outstanding common stock
|
||
|
All percentages represent ownership of Take-Two outstanding common stock as reported by our shareholders’ most
recent filings as of the date of this Proxy Statement.
|
||||
The key topics of discussion during shareholder engagements since the 2024 annual meeting of shareholders included:
•
Compensation Practices:
Shareholders appreciated the Compensation Committee’s responsiveness to the 2022 Say-on-
Pay proposal and were pleased to see the continued commitment to increased goal rigor, the longer duration of the
performance and vesting periods for our stock-based compensation, the significant shift to more “at risk” compensation
subject to measurable and rigorous performance goals, and additional disclosures regarding our compensation structure.
•
Board of Directors:
Positive discussions with shareholders occurred regarding the skill sets represented by our Board of
Directors. Many shareholders noted that they were pleased with our inclusion of an individualized skills matrix for the
members of our Board of Directors in last year’s proxy statement, stating they appreciated our responsiveness to prior
outreach discussions by including both the matrix and the definitions and description of the importance of the skills listed. We
•
Succession Planning and Board Refreshment.
Shareholders discussed our approach to succession planning and board
refreshment. Many noted they appreciated our process for succession planning throughout the organization, as well the
thoughtful way the Board of Directors has rotated its leadership and committee roles to balance new perspectives with
institutional knowledge, including the appointment of a new Lead Independent Director in 2023 and the rotation of committee
members. As noted above, after this year’s Annual Meeting we will be rotating the chair of the Corporate
Governance Committee.
•
Sustainability Topics
. Shareholders discussed our approach to sustainability topics, including our approach to Human
Capital Management, and recognized the importance of retaining and motivating key talent. Many shareholders were
pleased that we are taking appropriate steps and understood that our broad-based equity plan is a crucial instrument for
attracting, retaining, and motivating the Company’s creative talent.
Fiscal
2025
Variable Compensation Targets and Performance Achievement
Annual and long-term incentives for ZMC and our other NEOs are based on measurable financial and share price performance
metrics that reflect key measures of our success. The following table summarizes the targets and actual results for both ZMC
and NEO
performance-based cash compensation for fiscal
2025
and equity compensation linked to TSR and RCS performance
granted in fiscal
2025
.
|
Financial
Performance Metrics
|
2025
Performance
Threshold
|
2025
Performance
Target
|
2025
Performance
Maximum
|
|
|
Annual Incentive
|
Adjusted EBITDA
|
|
||
|
Performance-Based RSUs (Fiscal 2025 Grant)
|
Relative TSR
RCS
|
|
||
|
|
* Relative TSR and RCS metrics are measured over the three-year
period ending March 31, 2027.
|
|||
|
TAKE-TWO INTERACTIVE SOFTWARE, INC. |
2025
Proxy Statement
|
31
|
COMPENSATION DISCUSSION AND ANALYSIS
EXECUTIVE SUMMARY
Annual Incentive Plan Target Setting
Our Compensation Committee establishes the annual cash incentive based solely on performance against a budgeted Adjusted
EBITDA* goal set at the beginning of each fiscal year. Adjusted EBITDA is an objective measure that focuses our executives on
operating growth and profitability, which the Committee believes is key to shareholder value creation. There is no discretionary
element to this goal.
In setting an Adjusted EBITDA target, the Board of Directors works closely with management as part of an iterative process to
set the budget and determine an appropriate target that aligns with the Company’s goals and objectives for the upcoming fiscal
year. The Board of Directors is guided by a philosophy to set rigorous, yet achievable goals that contain appropriate stretch
targets to motivate outperformance. The factors considered in determining the appropriate annual Adjusted EBITDA target
include the Company’s projected annual release schedule, whether the releases are new IP or iterations of established IP, the
Company’s expected investment in future research and development, and an analysis of the risks and opportunities for the
upcoming fiscal year. Because release schedules, investment amounts, and expected risks and opportunities differ year over
year, a rigorous target that provides an appropriate incentive for the Company’s executives will vary from year to year.
In setting our fiscal
2025
Adjusted EBITDA targets, the Board of Directors specifically considered, among other factors:
•
Our expected product releases, including the expected timing of releases;
•
The impact of our cost reduction program;
•
The market conditions for our industry; and
•
Our plan to build scale through organic initiatives.
As a result of these considerations, the fiscal
2025
Adjusted EBITDA target was set at a level above the actual Adjusted
EBITDA achieved in fiscal 2024.
Annual Incentive Plan Achievement
Target Adjusted EBITDA for fiscal
2025
was
$902.3 million
and the Company achieved actual Adjusted EBITDA of
$901.0
million
, which was slightly below target. Our achievement reflected:
•
Strong catalog performance;
•
Meeting our cost reduction initiatives;
•
Overperformance of our expectations by NBA 2K;
•
Certain new titles underperforming our expectations;
•
Additional investment in certain mobile titles above what was budgeted; and
•
Certain titles on our release schedule moving to later in the fiscal year or outside of the fiscal year.
As a result, ZMC and our other NEOs received bonus payouts under the fiscal
2025
annual incentive plan that were
slightly below target level
. For further discussion of our results for fiscal
2025
, see the above section titled “Select Fiscal
2025
Performance Highlights.”
For a detailed description of the performance-based RSUs that vested, or failed to vest, in fiscal
2025
, see “Compensation
Discussion and Analysis—Detailed Discussion and Analysis—Principal Elements of Non-ZMC Related Executive
Compensation—NEO Long-Term Incentive Awards Vested in Fiscal
2025
” and “Certain Relationships and Related Transactions
—Management Agreement.”
*
Adjusted EBITDA is a non-GAAP measure, which is defined as GAAP net income (loss) excluding the change in deferred net revenue and related cost of
revenue, stock-based compensation, business reorganization, interest expense (income), depreciation and amortization, goodwill impairment, amortization and
impairment of intangible assets, bonus, income taxes, impact of the revaluation of the Turkish Lira against the U.S. Dollar, fair value adjustments related to
certain equity investments and acquisition-related costs. Refer to Annex A herein for a reconciliation of GAAP net income to the Adjusted EBITDA measure
discussed above.
|
32
|
TAKE-TWO INTERACTIVE SOFTWARE, INC. |
2025
Proxy Statement
|
COMPENSATION DISCUSSION AND ANALYSIS
EXECUTIVE SUMMARY
ZMC Management Agreement
Executive Chairman and CEO Strauss Zelnick and President Karl Slatoff serve as executives of the Company under a
management agreement (the “2022 Management Agreement”) with ZMC, a partnership of private equity investors that focuses
on the media and communications industry, of which they are partners. The 2022 Management Agreement (which runs through
March 31, 2029) includes the following enhancements from the prior 2017 Management Agreement that were implemented in
response to direct feedback from shareholders:
|
ZMC Management Agreement Enhancements
|
|||
|
Structural Element
|
2017 Management Agreement
|
2022 Management Agreement
|
|
|
Percentage of at-risk compensation at max
(across both Annual Incentive and LTI awards)
|
71%
|
|
80%
(1)
|
|
Proportion of performance-based equity
at target
|
55%
|
|
67%
|
|
Measurement and vesting period of
performance-based equity awards
|
Two years
|
|
Three years
|
|
Vesting period of time-based equity
|
Two-year cliff vesting
|
|
Three-year ratable vesting
|
|
Percentage of performance-based equity
tied to Relative TSR, RCS and IP metrics
|
75% Relative TSR
12.5% RCS
12.5% IP
|
75% Relative TSR
25% RCS
|
|
|
Relative TSR Peer Group
|
Nasdaq Composite Index
|
Nasdaq-100 Index
|
|
|
Rigorous Relative TSR Thresholds
|
40th percentile minimum
50th percentile target
75th percentile or above maximum
|
Same
|
|
|
Increased Transparency
|
60% cap on fees paid by ZMC to Mr. Zelnick
40% cap on fees paid by ZMC to Mr. Slatoff
|
Same
|
|
(1)
Percentage based on fiscal
2025
compensation.
NEO Compensation Structure and Pay-for-Performance Principles
The Compensation Committee has developed compensation programs and arrangements designed to place a substantial
portion of our executives’ compensation at risk based on Company performance. Equity awards are a key element in the
compensation of our executives, as well as creative talent throughout the organization, given the strong linkage equity awards
create between our executives and the long-term performance of our Company as well as the interests of our shareholders.
In fiscal
2025
, based on feedback received from shareholders, the Compensation Committee structured ZMC’s annual equity
grant (i) to maintain 67% weighting on performance awards, ensuring that a significant portion of such equity awards remained
“at risk” and (ii) to continue to have 25% of the vesting criteria for such performance awards subject to the RCS performance
metric. Also based on feedback from shareholders, the Compensation Committee (i) added the RCS performance metric to the
annual equity grant to our non-ZMC NEOs (comprising 25% of the performance awards), and (ii) maintained the three-year
performance period for the performance awards issuable to all our NEOs to ensure continued alignment with long-term
shareholder value.
|
TAKE-TWO INTERACTIVE SOFTWARE, INC. |
2025
Proxy Statement
|
33
|
COMPENSATION DISCUSSION AND ANALYSIS
EXECUTIVE SUMMARY
Compensation to All NEOs
We believe the short-term and long-term incentives are balanced to help incentivize optimal performance and also note that
there is no duplication in use of performance metrics between short-term and long-term programs.
In fiscal
2025
, our NEOs
were compensated through three primary components: annual management fee (for ZMC executives) or base salary (for our
non-ZMC NEOs), annual incentive and long-term incentives with the majority of such compensation being performance-based
and weighted toward long-term incentives.
The following table summarizes such compensation components for our NEOs in fiscal
2025
:
|
Compensation
Component
|
% Linked to
Performance
|
Delivery From
|
Performance Link
|
Performance
Measurement/
Vesting Period
|
|
Annual Management
Fee / Annual Base Salary
|
—
|
Cash
|
—
|
—
|
|
Annual Incentive
|
100%
|
Cash
|
Adjusted EBITDA
|
1 year
|
|
Long-Term Incentive
(Equity Grants)
|
67% at target
80% at maximum
|
Performance-
Based Awards
|
75%: Relative TSR
Performance
25%: Recurrent Consumer
Spending Performance
|
3-year measurement period
3-year cliff vest
|
|
Time-Based Awards
|
—
|
3-year ratable vesting for
ZMC executives
4-year ratable vesting for
non-ZMC NEOs
|
In fiscal 2025, the Compensation Committee decided to add RCS performance-based vesting to our non-ZMC NEO's awards
(in the same proportion included in the awards to ZMC) because it focuses executives' attention on achieving growth in RCS,
which helps reduce the volatility in our business, since our release slate can vary from year to year, better positioning the
Company to achieve our goal of sustained year over year growth. RCS performance is also a measure of the underlying
performance of our mobile business and several of our major console-based franchises (including NBA 2K and Grand Theft
Auto Online), all of which are strategic priorities for our Company.
Structural Pay and Performance Alignment for All NEOs
Our NEOs receive a mix of compensation that is appropriately weighted towards at-risk pay in the form of annual incentives and
long-term incentives. The Compensation Committee believes this creates strong alignment with the Company’s stated
compensation philosophy of providing compensation commensurate with individual and corporate performance. The majority of
incentive compensation is also delivered in the form of equity, which aligns executives’ incentives and the interests of
our shareholders.
The following chart illustrates the fiscal
2025
compensation mix, based on maximum compensation opportunities for ZMC and
for
our other
N
EOs
.
|
34
|
TAKE-TWO INTERACTIVE SOFTWARE, INC. |
2025
Proxy Statement
|
COMPENSATION DISCUSSION AND ANALYSIS
EXECUTIVE SUMMARY
Highlights of Compensation Governance Practices
Take-Two maintains strong compensation governance practices that support our pay-for-performance principles and align
management incentives with the interests of our shareholders. We have adopted a number of “best practices” with respect to
executive compensation, including:
|
|
Clawback policy applicable to NEOs, including ZMC
|
|
|
|
Incentive caps on annual bonuses to NEOs
|
|
|
|
Strong anti-hedging and anti-pledging policies
|
|
|
|
Double-trigger acceleration of vesting on a change
in control
|
|
|
|
Meaningful stock ownership requirements (6x per
annum management fee, excluding any bonuses, for
each of CEO/Chairman and President; 3x annual
base salary for other NEOs; and 5x annual cash
retainer for directors)
|
|
|
Equity incentive plan provisions that prohibit re-pricing
of stock options without shareholder approval
|
|
|
|
Limited perquisites
|
|
|
|
No tax gross ups in respect of any excise taxes on
parachute payments
|
|
|
|
Annual compensation risk assessment for
employee plans
|
|
|
|
Retention of independent compensation consultants
by the Compensation Committee
|
|
|
|
Balanced compensation approach between short-and
long-term incentive opportunities
|
|
Detailed Discussion and Analysis
The main body of this Compensation Discussion and Analysis provides details on the principles and objectives of our executive
compensation program and the Compensation Committee’s key fiscal
2025
compensation-related decisions. This section is
organized into the following categories:
I.
Objectives and Philosophy of Executive Compensation
II.
Competitive Market Positioning
III.
Compensation to Executive Chairman and CEO and President
IV.
Other NEO Compensation
V.
Principal Elements of Non-ZMC Related Executive Compensation
VI.
Operation of the Compensation Committee
VII.
Compensation Governance Practices
|
TAKE-TWO INTERACTIVE SOFTWARE, INC. |
2025
Proxy Statement
|
35
|
COMPENSATION DISCUSSION AND ANALYSIS
DETAILED DISCUSSION AND ANALYSIS
I. Objectives and Philosophy of Executive Compensation
Our executive compensation program is designed to drive Take-Two’s mission of producing strong, sustainable financial results
for its shareholders by striving to create the highest quality, most captivating experiences for our consumers. To achieve this, it
is critical that we have the resources available to attract and retain executives who are committed to creativity, efficiency
and innovation.
Accordingly, the Compensation Committee has established a market competitive compensation plan for our NEOs that is
designed to:
|
|
Enhance the profitability of the Company and drive
shareholder value creation;
|
|
|
|
Link a substantial portion of compensation to the
Company’s long-term financial and stock price
performance, thereby creating long-term
shareholder value;
|
|
|
|
Attract, motivate, and retain highly
qualified individuals;
|
|
|
|
Reward each NEO’s contribution to the Company’s
profitability and growth; individual initiative, leadership
and achievements; and management of risks; and
|
|
|
|
Motivate NEOs to build a career at the Company and
to contribute to our future success.
|
|
Our compensation program’s design, and in particular the use of equity awards as a key incentive element, establishes strong
links between our creative teams and long-term value creation for shareholders. Our compensation program reflects the
importance of creative talent to our business and enables us to retain and incentivize these groups. As a result of the
importance we place on equity incentives, Take-Two may, in some years, have higher equity usage for share plans than some
of our peers; however, for the past two fiscal years we have been below the 50th percentile of our peer group. The Board of
Directors periodically authorizes share repurchases when it believes such actions are in the best interest of the shareholders;
these repurchases directly reduce the number of the Company’s outstanding shares.
II. Competitive Market Positioning
The Compensation Committee determines pay levels for our NEOs based on a number of factors, including the individual’s role
and responsibilities within the Company, the individual’s experience and expertise, historical compensation actually realized by
the individual, pay levels in the marketplace for similar positions, and performance of the individual and the Company as a
whole. In determining pay levels, the Compensation Committee considers all forms of compensation and benefits, including the
mix thereof.
After consideration of data collected on external competitive levels of compensation and internal relationships within the
executive group, the Compensation Committee makes decisions regarding each individual NEO’s target total compensation
opportunity based on the need to attract, motivate and retain an experienced and effective management team.
Fiscal
2025
Peer Group
Each year, the Compensation Committee works with its independent compensation consultant, Frederic W. Cook & Co., Inc.
(“FW Cook”) to review and approve a peer group that is used to provide relevant market context for the Committee’s decisions.
In doing so, the Compensation Committee seeks to approve a peer group that is representative of the sector in which we
operate and includes companies with similar revenue and market capitalization as Take-Two.
|
36
|
TAKE-TWO INTERACTIVE SOFTWARE, INC. |
2025
Proxy Statement
|
COMPENSATION DISCUSSION AND ANALYSIS
DETAILED DISCUSSION AND ANALYSIS
For fiscal
2025
, the Compensation Committee approved the following group of 16 companies which reflected the removal of
Activision Blizzard Inc. (following its take-private acquisition), and the addition of DraftKings Inc., a digital sports entertainment
and gaming company that is similar in size to Take-Two.
|
Videogame
|
Internet & Technology
|
Entertainment & Leisure
|
|
|
•
Electronic Arts Inc.
|
•
Booking Holdings Inc.
|
•
Peloton Interactive, Inc.
|
•
DraftKings Inc. *
|
|
•
Playtika Ltd.
|
•
eBay Inc.
|
•
Roku, Inc.
|
•
Fox Corporation
|
|
•
Roblox Corporation
|
•
Expedia Group, Inc.
|
•
Sirius XM Holdings Inc.
|
•
Hasbro, Inc.
|
|
•
Match Group, Inc.
|
•
Mattel, Inc.
|
||
|
•
Paramount Global
|
|||
|
•
Warner Music Group Corp.
|
|||
*
Added to peer group for fiscal
2025
While the Compensation Committee believes that the peer group consists of a collection of companies for which executive
compensation information is publicly available that are most comparable to the Company, the Compensation Committee
understands that Take-Two has a limited number of direct competitors in the
videogame
industry and that many of the
Company’s competitors are either privately held and/or incorporated in foreign jurisdictions which do not require public
disclosure of executive compensation. This dynamic creates added challenges when constructing a statistically reliable set of
peers and requires that the Company both include the few direct competitors it has in the group and to expand its pool of
potential peer companies to a broader collection of internet and technology, media and entertainment, and leisure companies
that we compete with to attract and retain talent. While imperfect, the Compensation Committee believes the peer group
selected is representative of the sector in which the Company operates, and includes a balanced set of companies with similar
revenue (generally 1/3x-3x) and market capitalization (generally 1/4x-4x) as Take-Two.
For fiscal
2026
, as part of its annual review process, the Compensation Committee worked with FW Cook to review the peer
group in April 2025 and determined to remove Peloton Interactive, Inc., due to its declining revenues and market capitalization
(small size), and add Live Nation Entertainment Inc., TKO Group Holdings Inc. and Warner Bros. Discovery, Inc. These three
additions were identified as size-appropriate peers with industry relevance (as leading media and entertainment
content producers and distributors) that better balance the group, overall, on key size measures, including revenue and
market capitalization.
Target Determinations
The Compensation Committee annually reviews total NEO compensation as compared to competitive market data. For
purposes of calculating annual target compensation for any fiscal year, the Compensation Committee includes base salary,
target cash bonus, target long-term incentive compensation and any special awards.
III. Compensation to Executive Chairman and CEO and President
Take-Two has a long-standing management relationship with ZMC, under which ZMC provides executive management and
other services to Take-Two. This relationship was first established in 2007 and has been maintained, with several amendments
and restatements, since that time. Our Executive Chairman and CEO, Strauss Zelnick, and our President, Karl Slatoff, serve in
their current roles pursuant to the 2022 Management Agreement with ZMC. Mr. Zelnick has been our Executive Chairman since
2008 and our CEO since 2011. Mr. Slatoff has been our President since May 2013 and previously served in other executive
roles at the Company. The Board of Directors believes the Company’s management structure and relationship with ZMC has
been critical to building the Company’s franchises, improving profitability, strengthening the balance sheet, and providing
disciplined management. Many shareholders have told us that we should make continuing the relationship with ZMC a
top priority.
Since first engaging ZMC in 2007, the Company has been transformed from single franchise dependency into a diverse,
financially strong, global interactive entertainment enterprise. The Company now has 16 franchises with individual titles that
have sold-in to retail more than 5 million units each, and 15 of the top 200 U.S. grossing mobile games. The Company has also
expanded geographically, in digital distribution and with new business models, and grown strategically, including by executing
upon the transformative acquisition of Zynga during fiscal 2023.
|
TAKE-TWO INTERACTIVE SOFTWARE, INC. |
2025
Proxy Statement
|
37
|
COMPENSATION DISCUSSION AND ANALYSIS
DETAILED DISCUSSION AND ANALYSIS
On May 3, 2022, the Company entered into the 2022 Management Agreement that became effective on May 23, 2022, which
superseded the 2017 Management Agreement from and after the effective date of the 2022 Management Agreement. Fees and
incentives paid to ZMC during fiscal
2025
are detailed below under “Fiscal
2025
Fees and Incentives to ZMC.” Based on
shareholder feedback, the Compensation Committee implemented the following enhancements to the 2022 Management
Agreement designed to significantly increase the proportion of compensation that is “at risk” based on performance and further
link the compensation paid to our CEO and President with long-term shareholder value creation:
|
•
Increased portion of overall compensation that is performance-based.
The percentage of compensation that is
performance based, consisting of the annual incentive and performance-based RSUs, has increased to 80% at
maximum achievement for fiscal
2025
.
•
Increased portion of performance-based shares.
The proportion of performance-based shares has meaningfully
increased from 55% to 67% of the total equity grant.
•
Lengthened the performance measurement and vesting periods of performance-based equity.
The RCS and
relative TSR performance measurement and vesting periods have each been lengthened from two years to
three years.
•
Lengthened the vesting period for time-based equity.
The vesting schedule for the time-based awards have been
lengthened from two-year cliff vesting to ratable vesting over three years.
•
Recurrent Consumer Spending (RCS) metric, which is generated from ongoing consumer engagement and
includes revenue from virtual currency, add-on content, and in-game purchases, continues to focus
executives’ attention on achieving key strategic goals.
Growth in RCS helps reduce the volatility in our business,
since our release slate can vary from year to year, better positioning the Company to achieve our goal of sustained
year over year growth. RCS performance is also a measure of the underlying performance of our mobile business and
several of our major console-based franchises (including
NBA 2K
and
Grand Theft Auto Online
), all of which are
strategic priorities for our Company. Given the strategic importance of revenue from RCS, a larger portion (25% versus
12.5% under the prior Management Agreement) of the performance shares vest based on growth in RCS during
the measurement period. The remaining 75% of the performance shares continue to vest based on relative
TSR performance.
•
Relative TSR metric updated to the Nasdaq-100 Index.
The comparator group used for purposes of the relative TSR
performance-based RSUs has moved from the Nasdaq Composite Index to the Nasdaq-100 Index.
•
Rigorous relative TSR thresholds.
We maintained a minimum threshold of 40
th
percentile relative performance
before any of the TSR shares began to vest. We also maintained a target threshold of 50
th
percentile relative
performance and a maximum threshold of 75
th
percentile relative performance. The relative TSR performance payout
schedule reflects the Board of Directors’ continued commitment to a strong pay for performance approach with
rigorous multi-year goal setting that in most cases exceeds minimum performance thresholds in place among our
compensation peers.
•
Increased disclosure.
Enhanced disclosure to provide greater transparency, including individual fee caps paid by
ZMC to Messrs. Zelnick and Slatoff for their services to Take-Two.
•
No TSR “catch-up” provision.
Performance-based equity grants are based solely on relative TSR and RCS
performance and do not include any TSR “catch-up” opportunity.
•
No automatic annual fee increases.
There is no automatic increase in the annual fee during the term of the
Management Agreement.
•
Continued annual grant structure.
Agreements prior to the 2017 Management Agreement included an up-front equity
grant at the commencement of the agreement. The 2022 Management Agreement, like the 2017 Management
Agreement, has an annual equity grant structure, including an initial grant that was made on June 1, 2022 in respect of
our fiscal 2023, June 1, 2023 in respect of our fiscal 2024, June 3, 2024 in respect of our fiscal 2025, and June 2, 2025
in respect of our fiscal 2026, and the choice, in its discretion, for the Compensation Committee to grant additional
annual equity awards in respect of subsequent fiscal years.
|
||
The target compensation opportunity for ZMC under the Management Agreement takes into consideration the Company’s need
for a senior leadership team that can provide financial and technological acumen as well as management of creative talent. This
is a unique combination of skills that creates a limited pool of candidates and has resulted in the Board of Directors’ decision to
provide a competitive compensation opportunity for ZMC. However, this compensation opportunity is contingent on achieving
superior performance.
|
38
|
TAKE-TWO INTERACTIVE SOFTWARE, INC. |
2025
Proxy Statement
|
COMPENSATION DISCUSSION AND ANALYSIS
DETAILED DISCUSSION AND ANALYSIS
Services Provided by ZMC
The provisions of the Management Agreement establish the payments and benefits to which ZMC is entitled as consideration
for providing certain valuable and unique services. These services include:
•
Executive management and leadership delivered through the services of Executive Chairman and CEO Strauss Zelnick and
President Karl Slatoff.
•
Resources of other ZMC partners that may provide services and advice to the Company on an as-needed basis.
•
First access to certain deal opportunities as they are identified by ZMC.
•
Elevated market positioning due to the industry relationships of ZMC.
The Board of Directors and Compensation Committee believe that the services provided by ZMC, inclusive of the services of
Mr. Zelnick and Mr. Slatoff, are a competitive advantage to Take-Two. The Board of Directors and the Compensation Committee
regularly evaluate the relationship with ZMC to ensure that it is still the appropriate management structure for the Company. To
facilitate this review:
•
At least annually, the Compensation Committee interviews a broad spectrum of Company management to seek feedback on
the performance of Mr. Zelnick and Mr. Slatoff, as well as the other NEOs, and the relationship with ZMC, generally.
•
Feedback from these 360-degree interviews with Company management is discussed in executive sessions of the
independent members of the Board of Directors.
•
The Lead Independent Director regularly engages with members of the senior management team to discuss the business
strategy of the Company in greater detail and provide additional guidance to such members of management.
Fiscal
2025
Fees and Incentives to ZMC
During fiscal
2025
, in accordance with the 2022 Management Agreement, ZMC received an annual management fee, had the
opportunity to receive an annual performance-based incentive, the payment of which is linked solely to an objective company
performance measure, and received a long-term incentive equity grant in a combination of performance-based vesting RSUs
and time-based vesting RSUs.
Compensation to ZMC in fiscal
2025
under the 2022 Management Agreement is summarized below:
|
Annual
Management Fee
|
Annual Incentive
Compensation
|
Performance-
Based RSUs
|
Time-Based
RSUs
|
Total Compensation
|
||||||||
|
$3,300,000
|
(1)
|
$
6,567,000
|
(2)
|
$
30,603,590
|
(3)
|
$
15,073,410
|
(4)
|
$55,544,000
|
(1)
Fixed annual fee per the 2022 Management Agreement.
(2)
Adjusted EBITDA achieved in fiscal
2025
was approximately
99.9%
of the budgeted target. As a result, ZMC earned slightly below the target annual incentive
for fiscal
2025
. The table below describes the payout schedule for the annual incentive opportunity, with proration on a straight-line basis between the
amounts listed:
|
Percentage of Adjusted
EBITDA Target Obtained
|
Amount of
Annual Bonus
|
||
|
80% or less
|
$
0
|
||
|
90%
|
$
3,300,000
|
||
|
100%
|
$
6,600,000
|
||
|
110%
|
$
8,014,286
|
||
|
120%
|
$
9,428,572
|
||
|
130%
|
$
10,685,714
|
||
|
140%
|
$
11,942,858
|
||
|
150%
|
$
13,200,000
|
||
|
Above 150%
|
$
13,200,000
|
||
(3)
Represents the planning value of the grant made on June 1, 2024. Amount reported assumes that target TSR and Recurrent Consumer Spending performance
achievement is met, resulting in the vesting of 207,090 RSUs. If the maximum performance achievement is met, 414,180 RSUs would vest. Relative TSR
performance-based vesting is a function of the Company’s TSR during the performance period, which commenced on June 1, 2024 and ends on March 31,
2027 (which is the end of the third fiscal year during such period), as compared to the TSR generated by the companies that comprise the Nasdaq 100 Index
on the first day of the performance period. We use the Nasdaq 100 Index for this purpose, rather than a narrow peer group, given the small size of our public
company compensation peer group and the stock price volatility of those peers. The table below describes the vesting schedule for the performance-based
equity based on achievement of relative TSR over such performance period, with proration on a straight-line basis between the amounts listed:
|
TAKE-TWO INTERACTIVE SOFTWARE, INC. |
2025
Proxy Statement
|
39
|
COMPENSATION DISCUSSION AND ANALYSIS
DETAILED DISCUSSION AND ANALYSIS
|
TSR Percentile Rank
|
TSR Vesting Percentage
|
|
Less than 40
th
Percentile
|
0% of target shares
|
|
40
th
Percentile
|
50% of target shares
|
|
50
th
Percentile
|
100% of target shares
|
|
75
th
Percentile
|
200% of target shares
|
Recurrent Consumer Spending performance-based vesting is determined by comparing the following two measurements and using the measurement that
results in the greatest number of RSUs vesting: (i) the percentage change between the Recurrent Consumer Spending for the base fiscal year (which is the
fiscal year prior to the fiscal year in which the grant was made) and the three-year average Recurrent Consumer Spending for the three fiscal years following
the base fiscal year (“
Absolute Recurrent Consumer Spending Growth
”) and (ii) the three-year average Recurrent Consumer Spending for the three fiscal
years following the base fiscal year as a percentage of the three-year average total net bookings for the same period (“
Relative Recurrent Consumer
Spending
”). Recurrent Consumer Spending is defined as the consolidated net bookings generated by the Company that are supplemental to the sale of any
full game release from the sale of virtual currency, add-on content, in-game purchases and similar items, calculated on a basis consistent with how the
Company calculates recurrent consumer spending for its management reporting. The table below describes the vesting schedule for the Recurrent Consumer
Spending performance-based shares (with the measurement that results in the greatest number of RSUs vesting being determinative):
|
Absolute Recurrent Consumer Spending Growth
(during the relevant measurement period)
|
Absolute Recurrent Consumer
Spending Vesting Percentage
|
|
Less than 3%
|
0% of target shares
|
|
3%
|
50% of target shares
|
|
6%
|
100% of target shares
|
|
9% or greater
|
200% of target shares
|
|
Relative Recurrent Consumer Spending
(as a percentage of three-year average total net bookings)
|
Relative Recurrent Consumer
Spending Vesting Percentage
|
|
Less than 45%
|
0% of target shares
|
|
45%
|
50% of target shares
|
|
50%
|
100% of target shares
|
|
55% or greater
|
200% of target shares
|
(4)
Represents the planning value of the grant made on June 1, 2024. Awards will vest 1/3
rd
on each of June 1, 2026 and June 1, 2027 (with 1/3
rd
having previously
vested on May 30, 2025), for the grant made on June 1, 2024, in each case provided that the Management Agreement has not been terminated prior to
such date.
For a detailed description of the fees and incentives to ZMC under the Management Agreement, including the RSUs awarded
in fiscal
2025
and 2026 and the awards vested in fiscal
2025
, see “Certain Relationships and Related Transactions—
Management Agreement.”
Compensation of Mr. Zelnick and Mr. Slatoff
Under the Management Agreement, Mr. Zelnick may not receive more than 60% of the aggregate compensation paid to ZMC
and Mr. Slatoff may not receive more than 40% of the aggregate compensation paid to ZMC. These individual caps continue to
provide greater transparency with respect to the maximum compensation payable to Messrs. Zelnick and Slatoff. Beyond this
provision, the allocation of any revenues of ZMC among its principals is not set forth in the Management Agreement or
determined by means of any process in which the Company participates. In connection with their provision of services to the
Company pursuant to the Management Agreement, and subject to the limitations above, the actual amount of compensation
received by Messrs. Zelnick and Slatoff is determined in the sole discretion of ZMC.
Mr. Zelnick and Mr. Slatoff each continue to receive $1 annually in compensation from the Company, to provide them the
opportunity to receive certain health and other plan benefits, the value of which is described in the Summary Compensation
Table below. Mr. Slatoff receives his $1 of annual compensation pursuant to an employment agreement entered into with the
Company in February 2008, the terms of which are described under “Executive Compensation—Narrative Disclosure
Regarding Equity Plans and Employment Agreements—Employment Agreements—Karl Slatoff” below.
|
40
|
TAKE-TWO INTERACTIVE SOFTWARE, INC. |
2025
Proxy Statement
|
COMPENSATION DISCUSSION AND ANALYSIS
DETAILED DISCUSSION AND ANALYSIS
For illustrative purposes only, assuming that ZMC allocated the maximum 60% of the payments under the 2022
Management Agreement to Mr. Zelnick and the maximum 40% of the payments under the 2022 Management
Agreement to Mr. Slatoff, the compensation to Messrs. Zelnick and Slatoff would be as follows:
|
|
Minimum
|
Target
|
Maximum
|
|||||||||
|
|
•
≤80% Adjusted EBITDA
Goal
•
<40
th
Percentile Relative
TSR
•
Min Recurrent Consumer
Spending Goal
|
•
100% Adjusted EBITDA
Goal
•
50
th
Percentile Relative
TSR
•
Target Recurrent
Consumer Spending Goal
|
•
≥150% Adjusted EBITDA
Goal
•
≥75
th
Percentile Relative
TSR
•
Max Recurrent Consumer
Spending Goal
|
|||||||||
|
Annual Management Fee
|
|
$
3,300,000
|
|
$
3,300,000
|
|
$
3,300,000
|
||||||
|
Annual Incentive
Metric: Adjusted EBITDA
|
|
$
0
|
|
$
6,600,000
|
|
$
13,200,000
|
||||||
|
Time-Based RSUs
(1)
|
|
$
15,073,410
|
|
$
15,073,410
|
|
$
15,073,410
|
||||||
|
Performance-Based RSUs
Metrics: TSR and
Recurrent Consumer
Spending Performance
(1)
|
|
$
0
|
|
$
30,603,590
|
|
$
61,207,180
|
||||||
|
Total Compensation
Opportunity
|
|
$
18,373,410
|
|
$
55,577,000
|
|
$
92,780,590
|
||||||
|
Maximum Opportunity at
Each Performance Level
|
|
|
|
|||||||||
(1)
For purposes of this illustrative table, includes the planning values for the performance-based and time-based RSUs granted to ZMC in June 2024.
The targets set by the Board of Directors have been sufficiently challenging as illustrated by the varied payouts to ZMC under
the Annual Incentive Plan and Performance Equity Awards over the last several years:
|
Annual Incentive Plan Achievement
|
||
|
Fiscal Year
|
Adjusted EBITDA
Achievement (% of target)
|
Annual Incentive Plan Payout
|
|
2025
|
99.9%
|
Slightly less than target cash bonus
|
|
2024
|
88.6%
|
Less than target cash bonus
|
|
2023
|
79.2%
|
No cash bonus
|
|
2022
|
139.8%
|
Less than maximum cash bonus
|
|
Performance Equity Vesting Achievement
|
||
|
Vest Date
|
Shares Forfeited (#)
|
Shares Forfeited (% of maximum
performance opportunity)
|
|
May 30, 2025
|
0
|
0%
|
|
May 31, 2024
|
67,920
|
45%
|
|
April 12, 2024
|
18,876
|
14%
|
|
April 13, 2023
|
40,985
|
33%
|
|
April 13, 2022
|
55,126
|
29%
|
|
TAKE-TWO INTERACTIVE SOFTWARE, INC. |
2025
Proxy Statement
|
41
|
COMPENSATION DISCUSSION AND ANALYSIS
DETAILED DISCUSSION AND ANALYSIS
Additionally, the compensation received by ZMC and the other NEOs is strongly aligned with the Company’s TSR performance
during the same period as evidenced by our ranking in the top quartile (above 75
th
percentile) of all companies in the Nasdaq
Composite Index for the two-year measurement period that ended on March 31, 2021 and the top half (above 50
th
percentile) of
the two-year measurement periods that ended on each of March 31, 2022, March 31, 2023 and March 31, 2024. Additionally,
we ranked between the 25
th
and 50
th
percentile of all companies in the Nasdaq 100 Index for the two-year measurement period
that ended on March 31, 2024 and in the top quartile (above 75th percentile) for the three-year measurement period that ended
on March 31, 2025.
IV. Other NEO Compensation
Other NEOs for fiscal
2025
were Ms. Goldstein, our Chief Financial Officer, and Mr. Emerson, our Executive Vice President and
Chief Legal Officer. Pay opportunities for specific individuals vary based on a number of factors, such as scope of duties,
tenure, institutional knowledge and/or difficulty in recruiting a new executive. Actual total compensation and the mix of such
compensation in a given year will vary above or below the target compensation levels based primarily on the attainment of
operational goals and the creation of shareholder value. The Compensation Committee believes that each of the compensation
packages to Ms. Goldstein and Mr. Emerson are within the competitive range of practices when compared to the objective
comparative data.
Compensation Overview
In May 2018 and January 2015, the Company entered into amended
employment agreements with Ms. Goldstein and
Mr. Emerson, respectively, which provide for a base salary, target cash bonus, and target long-term incentive compensation
opportunities. The details of those employment agreements are discussed below under “Executive Compensation—Narrative
Disclosure Regarding Equity Plans and Employment Agreements—Employment Agreements.”
Ms. Goldstein’s and Mr. Emerson’s fiscal
2025
target compensation was comprised of:
|
Base Salary
|
Target Annual Cash
Bonus Opportunity
(based on Adjusted EBITDA)
|
Target Equity Incentive
Opportunity (66.7% subject to
performance vesting)
|
|||||||
|
Ms. Goldstein
|
$
1,000,000
|
$
1,500,000
|
(150% of base salary)
|
$
6,120,000
|
|||||
|
Mr. Emerson
|
$
850,000
|
$
1,062,500
|
(125% of base salary)
|
$
4,200,000
|
|||||
As a result of the Company’s Adjusted EBITDA performance for fiscal
2025
, Ms. Goldstein and Mr. Emerson each received
slightly
below the t
arget cash bonus for such period in the following amounts: Ms. Goldstein,
$1,495,500
; Mr. Emerson,
$1,059,313
. For a discussion of the Company’s Adjusted EBITDA goals and performance, see “Compensation Discussion and
Analysis—Executive Summary—Fiscal
2025
Variable Compensation Targets and Performance Achievement.”
V. Principal Elements of Non-ZMC Related Executive Compensation
Pay Elements—Overview
Executive compensation for our NEOs consists of the following elements:
|
Direct Compensation Elements
|
Indirect Compensation Elements
|
|
Base Salary
|
Other Compensation/Employee Benefits
|
|
Annual Cash Incentive
|
Severance and Change in Control Protection
|
|
Long-Term Equity Incentives
|
Base Salary
Base salary is intended to provide fixed pay that considers an NEO’s role and responsibilities, experience, expertise,
marketplace comparables and individual performance, and although established by the NEOs’ employment agreements, is
subject to annual review by the Compensation Committee, including for discretionary year-to-year increases.
|
42
|
TAKE-TWO INTERACTIVE SOFTWARE, INC. |
2025
Proxy Statement
|
COMPENSATION DISCUSSION AND ANALYSIS
DETAILED DISCUSSION AND ANALYSIS
Ms. Goldstein’s base salary was set at $1,000,000 in fiscal 2023 based on Ms. Goldstein’s strong individual performance and
value to the organization as a key senior leader and peer benchmarking. Ms. Goldstein’s base salary remained the same for
fiscal 2024 and fiscal
2025
and will remain the same for fiscal 2026.
Mr. Emerson’s base salary was set at $850,000 in fiscal 2023 based on Mr. Emerson’s strong individual performance and value
to the organization as a key senior leader and peer benchmarking. Mr. Emerson’s base salary remained the same for fiscal
2024 and fiscal
2025
and will remain the same for fiscal 2026.
Annual Cash Incentive
The Compensation Committee has the authority to award annual performance-based cash bonuses to the NEOs pursuant to
their employment agreements with the Company. The Compensation Committee believes that an annual performance-based
bonus opportunity provides the incentives necessary to retain our NEOs and reward them for their attainment of the Company’s
business goals.
Annual bonus awards for Ms. Goldstein and Mr. Emerson are 100% performance-based and solely dependent on achievement
of budgeted Adjusted EBITDA targets for the applicable fiscal year, which are predetermined at the beginning of the applicable
fiscal year. The Compensation Committee believes that using budgeted Adjusted EBITDA as the core performance metric in the
annual bonus design represents an appropriate measure of the Company’s performance and an appropriate way to align NEOs’
short-term incentives with our shareholders’ interests. For a description of the Board’s target-setting process as well as
disclosure regarding how we fared against that target please see the above sections titled “Annual Incentive Plan Target
Bonus amounts for Ms. Goldstein and Mr. Emerson in fiscal
2025
were a function of Adjusted EBITDA relative to target, as set
forth in the following table:
|
Adjusted EBITDA Achievement
|
Annual Bonus for Ms. Goldstein and Mr. Emerson
|
|
Less than 80% of the budget
|
No bonus earned
|
|
80% - 100% of the budget
|
36%-100% of target
|
|
100% - 120% of the budget
|
100%-140% of target
|
|
120% - 150% of the budget
|
140%-200% of target
|
|
Greater than 150% of the budget
|
Capped at 200% of target
|
Budgeted Adjusted EBITDA for fiscal 2025 was
$902.3 million
and the Company achieved actual Adjusted EBITDA of
$901.0
million
(approximately
99.9%
of the budgeted Adjusted EBITDA), which resulted in the following annual cash bonus payouts:
|
|
Annual
Salary
|
Threshold
Bonus
|
Target
Bonus
|
Maximum
Bonus
|
|
|
Ms. Goldstein
|
$
1,000,000
|
|
|||
|
Mr. Emerson
|
$
850,000
|
|
|||
|
TAKE-TWO INTERACTIVE SOFTWARE, INC. |
2025
Proxy Statement
|
43
|
COMPENSATION DISCUSSION AND ANALYSIS
DETAILED DISCUSSION AND ANALYSIS
Long-Term Equity Incentives
Equity is an essential tool to attract and retain highly skilled employees, including key creative and technical talent, and it aligns
the interests of creative employees with our shareholders. Our creative employees at our labels drive our business, are critical
to our continued success, and help us build shareholder value. We also believe that equity-based awards are an important
factor in aligning the long-term financial interests of the NEOs and certain other employees of the Company with its
shareholders. The Compensation Committee continually evaluates the use of equity-based awards and intends to continue to
use such awards in the future as part of designing and administering the Company’s compensation program. Equity-based
awards are generally granted to new key employees on a monthly basis following the commencement of employment and to
existing key employees on an annual basis.
Our compensation program design, and in particular the use of equity awards as a key incentive element, establishes strong
links between our creative teams and long-term value creation for shareholders. Our long-term equity incentive program reflects
the importance of creative talent to our business and allows Take-Two to retain and incentivize key talent.
All grants made to employees, including the NEOs, are approved by the Compensation Committee. The current outstanding
awards granted to our NEOs are governed by the Company’s 2017 Stock Incentive Plan, as amended and restated (the “2017
Plan”), which is discussed further in “Executive Compensation—Narrative Disclosure Regarding Equity Plans and
Employment Agreements.”
The Company generally uses a mix of performance-based and time-based vesting for NEO long-term equity incentive grants to
achieve separate and distinct purposes. Performance-based vesting awards support the goal of retention as well as alignment
of the executives’ incentives with the interests of the Company’s shareholders, while time-based vesting awards emphasize the
retention of skilled executives.
NEO Long-Term Incentives Awarded in Fiscal
2025
In May 2024, the Compensation Committee determined that in June 2024 the Company would issue the following RSUs to Ms.
Goldstein and Mr. Emerson:
|
Time-Based
RSUs (#)
(2)
|
Time-Based
RSUs ($)
(1)
|
Performance-
Based RSUs (#)
(at target)
(2)
|
Performance-
Based RSUs ($)
(at target)
(1)
|
Performance-
Based RSUs (#)
(at max)
(2)
|
Performance-
Based RSUs ($)
(at max)
(1)
|
||||||||||
|
Ms. Goldstein
|
13,791
|
$
2,040,000
|
27,622
|
$
4,080,000
|
55,244
|
$
8,160,000
|
|||||||||
|
Mr. Emerson
|
9,464
|
$
1,400,000
|
18,956
|
$
2,800,000
|
37,912
|
$
5,600,000
|
|||||||||
(1)
As the aggregate grant date fair values of the shares displayed in the Summary Compensation Table for fiscal
2025
and the Grants of Plan-Based Awards table
later in this Proxy Statement are computed in accordance with
US GAAP
, the values in those tables differ from the planning values displayed in the table above.
(2)
The number of RSUs included in each of the above grants was determined by dividing the grant value (which was based in part on peer benchmarking) by the
average of the closing prices of the Company’s common stock on the 30 trading days immediately prior to June 1, 2024.
The Compensation Committee made the fiscal
2025
grants in the form of RSUs, rather than restricted stock, in order to
preserve flexibility to settle the awards in stock, cash or a combination of stock and cash. A portion of these RSUs, equal to
33.3% of the value at target, are time-based RSUs and cliff vest 25% on the first anniversary of the grant date, and then vest in
12 quarterly installments thereafter. The remaining portion of these RSUs, equal to 66.7% of the value at target, are
performance-based RSUs that cliff vest 100% on June 1, 2027, subject to satisfaction of TSR and RCS performance criteria
during the vesting period. For a more detailed description of the TSR and RCS performance criteria, see “Compensation
Discussion and Analysis—Detailed Discussion and Analysis—Fiscal
2025
Fees and Incentives to ZMC” of this
Proxy Statement.
In fiscal 2025, the Compensation Committee decided to add Recurrent Consumer Spending performance-based vesting to our
non-ZMC NEO's awards (in the same proportion included in the awards to ZMC) because it focuses executives' attention on
achieving growth in Recurrent Consumer Spending, which helps reduce the volatility in our business, since our release slate
can vary from year to year, better positioning the Company to achieve our goal of sustained year over year growth. RCS
performance is also a measure of the underlying performance of our mobile business and several of our major console-based
franchises (including NBA 2K and Grand Theft Auto Online), all of which are strategic priorities for our Company.
|
44
|
TAKE-TWO INTERACTIVE SOFTWARE, INC. |
2025
Proxy Statement
|
COMPENSATION DISCUSSION AND ANALYSIS
DETAILED DISCUSSION AND ANALYSIS
NEO Long-Term Incentive Awards Vested in Fiscal
2025
The results and payout levels for the performance-based RSUs granted to Ms. Goldstein and Mr. Emerson prior to fiscal
2025
that vested, or failed to vest, in fiscal
2025
, are as follows:
|
Performance-Based RSUs Vested
(#)
|
Performance-Based RSUs Forfeited
(#)
|
|
|
Ms. Goldstein
|
15,206
(1)
|
13,078
(2)
|
|
Mr. Emerson
|
8,809
(3)
|
9,809
(4)
|
(1)
Represents (i) 6,488 performance-based RSUs originally granted on June 1, 2021, which vested on May 31, 2024 as a result of performance criteria
achievement being between the target and maximum, and (ii) 8,718 performance-based RSUs originally granted on June 1, 2022, which vested on May 31,
2024 as a result of performance criteria achievement being between the threshold and target.
(2)
Represents 13,078 performance-based RSUs originally granted on June 1, 2022, which failed to vest on May 31, 2024 as a result of performance criteria
achievement being between the threshold and targ
et.
(3)
Represents (i) 2,270 performance-based RSUs originally granted on June 1, 2021, which vested on May 31, 2024 as a result of performance criteria
achievement being between the target and maximum, and (ii) 6,539 performance-based RSUs originally granted on June 1, 2022, which vested on May 31,
2024
as a result of performance criteria achievement being between the threshold and target.
(4)
Represents 9,809 performance-based RSUs originally granted on June 1, 2022, which failed to vest on May 31, 2024 as a result of performance criteria
achievement being between the threshold and target.
Additionally, the compensation received by the NEOs is strongly aligned with the Company’s outperformance on TSR during the
same period as evidenced by our ranking in the top quartile (above 75
th
percentile) of all companies in the Nasdaq Composite
Index for the two-year measurement periods that ended on March 31, 2019, 2020 and 2021 and the top half (above
50
th
percentile) of the two-year measurement periods that ended on each of March 31, 2022, 2023 and 2024. Additionally, we
ranked between the 25
th
and 50
th
percentile of all companies in the Nasdaq 100 Index for the two-year measurement period that
ended on March 31, 2024, and in the top quartile (above the 75th percentile) for the three-year measurement period that ended
on March 31, 2025.
For a description of the results and payout levels for performance-based RSUs previously granted to ZMC that vested, or failed
to vest, in fiscal
2025
, see “Certain Relationships and Related Transactions—Management Agreement.”
NEO Long-Term Incentives Awarded in Fiscal
2026
In May 2025, the Compensation Committee determined that the Company would issue the following RSUs to Ms. Goldstein and
Mr. Emerson:
|
Time-Based
RSUs (#)
|
Time-Based
RSUs ($)
(1)
|
Performance-
Based RSUs (#)
(at target)
(2)
|
Performance-
Based RSUs ($)
(at target)
(1)
|
Performance-
Based RSUs (#)
(at max)
(2)
|
Performance-
Based RSUs ($)
(at max)
(1)
|
|||||||||
|
Ms. Goldstein
|
9,045
|
$
2,040,000
|
18,089
|
$
4,080,000
|
36,178
|
$
8,160,000
|
||||||||
|
Mr. Emerson
|
6,207
|
$
1,400,000
|
12,414
|
$
2,800,000
|
24,828
|
$
5,600,000
|
||||||||
(1)
As the aggregate grant date fair values of these awards that will be displayed in the Summary Compensation Table and the Grants of Plan-Based Awards table
in our Proxy Statement for the
2026
Annual Meeting of Shareholders will be computed in accordance with US GAAP, the values in those tables may differ from
the values displayed in the table above.
(2)
For these grants made in fiscal
2026
, the Compensation Committee decided to continue to link 75% to relative TSR performance and 25% to RCS
performance, which aligns with the performance vesting criteria in the RSU grants made to ZMC. The number of RSUs included in each of the above grants
was determined by dividing the grant value (which was based in part on peer benchmarking) by the average of the closing prices of the Company’s common
stock on the 30 trading days immediately prior to June 1, 2025.
SEC regulations generally require that the grant date fair value of equity awards be disclosed in the Summary Compensation
Table for the year in which the equity awards were granted, not the year to which the services relate. As a result, the grant date
value for equity grants made in June 2024 are shown in the Summary Compensation Table on page
50
, and the grant date
value for the equity grants made in June 2025 will be reflected in the Summary Compensation Table in our Proxy Statement for
the
2026
Annual Meeting of Shareholders.
|
TAKE-TWO INTERACTIVE SOFTWARE, INC. |
2025
Proxy Statement
|
45
|
COMPENSATION DISCUSSION AND ANALYSIS
DETAILED DISCUSSION AND ANALYSIS
Other Compensation
401(k) Plan
We maintain a 401(k) savings plan and trust for our eligible employees, including our NEOs (other than Messrs. Zelnick and
Slatoff). The plan permits each participant to make voluntary pre-tax contributions, post-tax “Roth” contributions or a
combination of the two. In addition, we make matching contributions equal to 50% of the participant’s eligible elective deferral
(excluding catch-up contributions) contributed to the 401(k) savings plan, but not more than an amount equal to 50% of the first
8% of the participant’s pre-tax and/or Roth contributions will be matched. See the “All Other Compensation” column in the
Summary Compensation Table for further information regarding these
benefits.
Other Benefits and Perquisites
We provide health insurance, dental insurance, life and accidental death and dismemberment
insurance
and short-term and
long-term disability benefits for our NEOs, including for this purpose Messrs. Zelnick and Slatoff, on the same basis as such
benefits are generally provided to our employees. In addition, we pay a club membership fee on behalf of Mr. Zelnick, which is
used primarily for general corporate and corporate development purposes, for a parking spot at our corporate office in New
York, and for home security measures for Mr. Zelnick. In fiscal 2025, we paid for one instance of private travel for Mr. Emerson
for a family medical issue. We consider the security measures provided to Mr. Zelnick to be a reasonable and necessary
expense for the Company’s benefit. Other than the club membership fee, the parking spot and home security for Mr. Zelnick, no
material perquisites are provided to our NEOs. A spouse or other guest may accompany our NEOs on private aircraft travel
paid for by the Company when such aircraft is already scheduled for business purposes and can accommodate additional
passengers. In those cases, there is no aggregate incremental cost to the Company and, as a result, no amounts are reflected
in the compensation tables in this Proxy Statement. We do not have a formal perquisite policy and do not emphasize special
perquisites for our executive officers, although the Compensation Committee periodically reviews perquisites for our executive
officers in its review of compensation.
Severance and Change in Control Benefits
Severance and Change in Control Benefits for ZMC
Pursuant to the Management Agreement, ZMC would receive the following cash payments and benefits upon a termination by
the Company without “cause” or by ZMC for “good reason” (whether before or after a change in control) (as such terms are
defined in the Management Agreement): (i) the earned but unpaid portion of the management fee, (ii) any accrued but unpaid
annual bonus for a completed fiscal year and (iii) three times the sum of the per annum management fee plus the target bonus
amount. In addition, the Management Agreement provides for certain accelerated vesting of outstanding and unvested equity
awards upon such a termination.
See “Certain Relationships and Related Transactions—Management Agreement” for more details.
The cash payments described above remain consistent whether the termination occurs before or after a change in control, so
ZMC is not entitled to receive any enhanced cash payments in connection with a change in control. With respect to vesting of
equity awards in connection with a change in control, the Management Agreement provides for “double-trigger” vesting (that is,
they require both a change in control of the Company plus a qualifying termination before payments and benefits are paid).
Accordingly, if a change in control occurs during the term of the Management Agreement, outstanding and unvested equity
awards will continue to vest (and performance-based RSUs will continue to vest at target levels) in accordance with the original
vesting schedule, subject to earlier vesting upon a termination of the Management Agreement without cause or for
good reason.
Severance and Change in Control Benefits for Other NEOs
In March 2008, the Compensation Committee approved the Take-Two Interactive Software, Inc. Change in Control Employee
Severance Plan (the “CIC Severance Plan”), a change in control plan pursuant to which certain eligible employees, including
the NEOs other than Messrs. Zelnick and Slatoff, may receive certain “double-trigger” cash severance benefits upon a
termination of employment either by the Company without “cause” or voluntarily for “good reason” (as such terms are defined in
the CIC Severance Plan), in either case during the 12-month period following a change in control of the Company, as well as
vesting of outstanding and unvested equity awards in connection with a change in control of the Company, as described under
“Executive Compensation—Potential Payments Upon Termination or Change in Control” below. The employment agreements
with Ms. Goldstein and Mr. Emerson provide for severance payments in the event of a separation from service from the
|
46
|
TAKE-TWO INTERACTIVE SOFTWARE, INC. |
2025
Proxy Statement
|
COMPENSATION DISCUSSION AND ANALYSIS
DETAILED DISCUSSION AND ANALYSIS
Company under certain conditions, as well as a retention bonus payment to Ms. Goldstein that is payable only if Ms. Goldstein
stays employed in connection with a change in control of the Company. Ms. Goldstein and Mr. Emerson only receive benefits
under the CIC Severance Plan to the extent such benefits would be greater than the benefits under their employment
agreements. See “Executive Compensation—Narrative Disclosure Regarding Equity Plans and Employment Agreements” and
“Executive Compensation—Potential Payments Upon Termination or Change in Control” below for more information. We
believe that these severance benefits assist us in recruiting talented individuals to join and remain a part of our management
team. From time to time, we may recruit executives from other companies where they have job security, tenure and career
opportunities. Accepting a position with us may entail foregoing an otherwise secure position at another employer, and the
benefits provided by the CIC Severance Plan help to mitigate the risk of harm that the executive may suffer in connection with
adverse actions taken by a successor to the Company. Severance benefits also allow our NEOs to focus on the Company’s
business without being unduly distracted by concerns about their job security in the event of a separation from service or a
change in control. Our NEOs are not entitled to any gross-up payments to cover excise taxes imposed by the “golden
parachute” regulations under Sections 280G and 4999 of the Internal Revenue Code, as amended (the “Code”).
VI. Operation of the Compensation Committee
General
The Compensation Committee annually reviews compensation policies and procedures of the Company and evaluates and
approves the NEOs’ compensation. The Compensation Committee also annually reviews the ZMC relationship. This review
includes annual individual interviews with a broad group of executives, excluding our Executive Chairman and CEO and our
President, to seek feedback on the ZMC relationship.
The Compensation Committee held
six
meetings during fiscal
2025
. The Compensation Committee regularly meets at least four
times during the fiscal year.
Role of Management
When determining NEO compensation, the Compensation Committee solicits from the Executive Chairman and CEO an
evaluation of the performance of, and recommendations with respect to compensation decisions for, each of the NEOs other
than himself. In addition, with respect to setting compensation for fiscal
2025
, the Compensation Committee interviewed all of
the NEOs, including the CEO and President, and members of our management team who report to the NEOs in order to better
assess each NEO’s performance. The Compensation Committee also interviewed certain of the foregoing individuals in
connection with its annual review, in conjunction with the Board of Directors, of ZMC’s performance.
Use of Outside Advisors
The Compensation Committee has historically engaged the services of independent compensation consulting firms in
connection with making executive compensation determinations. Consistent with our practice, the Compensation Committee
retained FW Cook to review the compensation programs for our NEOs and our Board of Directors for fiscal
2025
, and to
develop recommendations regarding our compensation programs for fiscal
2025
and fiscal
2026
.
The Compensation Committee has the authority to retain, terminate and set the terms of the Company’s relationship with any
outside advisors that assist the Compensation Committee in carrying out its responsibilities.
The Compensation Committee assessed the independence of FW Cook pursuant to SEC and Nasdaq rules and was satisfied
that the firm is independent and that no conflict of interest exists that would prevent it from serving as an independent advisor to
the Compensation Committee. The Compensation Committee, among other things, reviewed and was satisfied with the
consultant’s policies and procedures to prevent or mitigate conflicts of interest. The Compensation Committee also reviewed
and was satisfied that there were no business or personal relationships or conflicts between members of the Compensation
Committee and the individuals at the consulting firm supporting the Compensation Committee.
|
TAKE-TWO INTERACTIVE SOFTWARE, INC. |
2025
Proxy Statement
|
47
|
COMPENSATION DISCUSSION AND ANALYSIS
DETAILED DISCUSSION AND ANALYSIS
VII. Compensation Governance Practices
Clawback Policy
On November 27, 2023, our Compensation Committee adopted an updated version of the Take-Two Interactive Software, Inc.
Policy for the Recovery of Erroneously Awarded Compensation, which is our “Clawback Policy,” and which was updated to
reflect the Nasdaq listing standards approved in connection with the clawback rule adopted by the SEC in October 2022. Our
NEOs (including ZMC and its shareholders, partners, employees, members and other affiliates who are deemed “Executives”
under the Clawback Policy) are subject to the Clawback Policy. Our Clawback Policy is included as an exhibit to our Annual
Report on Form 10-K for the fiscal year ended March 31, 2024, which is available through our Internet website
at
www.take2games.com
or the SEC’s website at
www.sec.gov
.
Our Clawback Policy requires the repayment of any incentive-based compensation, including without limitation equity awards
(whether vested or unvested), paid to an executive officer (current or former) in the event we are required to prepare an
accounting restatement of our financial results due to material noncompliance with any financial reporting requirements under
applicable securities laws, without regard to whether any misconduct occurred or an executive officer’s responsibility for the
erroneous financial statements. Under our Clawback Policy, incentive-based compensation paid to any executive officer
(current or former) during the three-year period prior to the accounting restatement, that is in excess of what would have been
paid based on the restated financial information, is subject to clawback.
Executive Officer Stock Ownership Requirements and Holding Requirement
The Company has adopted stock ownership requirements for executive officers of the Company as follows:
|
CEO/
PRESIDENT
|
|
6x Base
Salary
|
|
OTHER
NEOs
|
|
3x Base
Salary
|
Executive Chairman and CEO and President
The 2022 Management Agreement and the stock ownership guidelines policy adopted by the Board of Directors both prohibit,
prior to March 31, 2029, ZMC and any Subject Person (as defined in the 2022 Management Agreement, and which includes
each of Messrs. Zelnick and Slatoff individually) from selling or otherwise disposing of any shares of common stock of the
Company, if the Market Value (as defined in the 2022 Management Agreement) of all shares of common stock of the Company
(including any unvested restricted stock and RSUs, but excluding any unvested restricted stock or RSUs that remain subject to
performance-based vesting) held by ZMC and such Subject Persons would be less than six times the
per annum management
fee
(excluding any bonuses).
Other NEOs
NEOs (other than the Executive Chairman and CEO and President who are subject to the requirements described above) shall
own shares of common stock having a value equal to three times their annual base salary within five years after the date of the
adoption of the requirements and future NEOs shall achieve such ownership position within five years after the date of their
appointment as NEOs. All shares that are directly owned by the NEO, shares that are beneficially owned by the NEO, such as
shares held in “street name” through a broker or shares held in trust, and unvested shares of restricted stock and RSUs (other
than any unvested restricted stock or RSUs that remain subject to performance-based vesting) are counted toward satisfying
the requirements.
The policy adopted by the Board of Directors with respect to our stock ownership requirements also include a holding
requirement. Under this requirement, NEOs must retain at least 50% of the total equity credited from grants of equity awards
(net of amounts required to pay taxes and exercise prices) until compliance with the applicable stock ownership requirement is
achieved. All NEOs are in compliance with the applicable stock ownership requirements as of the date of this proxy filing.
|
48
|
TAKE-TWO INTERACTIVE SOFTWARE, INC. |
2025
Proxy Statement
|
COMPENSATION DISCUSSION AND ANALYSIS
DETAILED DISCUSSION AND ANALYSIS
Anti-Hedging Policy
The Company has adopted a Securities Trading Policy that prohibits, among other things, officers, directors, employees and
consultants of the Company, as well as the shareholders, partners, employees, members, and other affiliates of ZMC who are
service providers to the Company subject to such policy, from engaging in the following transactions:
|
•
In and Out Trading. (All purchases of the Company’s
securities in the open market must be held for a
minimum of six months, with exceptions relating to the
exercise of stock options.)
•
Purchases of Company securities on margin or holding
any Company securities in margin accounts.
|
|
|
•
Pledging Company securities as collateral for a loan.
•
Short sales of the Company’s securities.
•
Transactions in puts, calls or other derivatives on the
Company’s securities, as well as any other derivative
or hedging transactions on Company securities.
|
|
Anti-Pledging Policy
As a matter of good corporate governance, our Board of Directors has adopted a formal policy against pledging common stock
pursuant to which members of the Board of Directors and executive officers may not hold common stock in margin accounts
and may not pledge common stock as collateral for a loan. None of our directors or executive officers has pledged any shares
of our common stock.
Impact of Tax and Accounting Rules
As a general matter, the Compensation Committee reviews and considers the various tax and accounting implications of
compensation vehicles utilized by the Company.
With respect to accounting considerations, the Compensation Committee examines the accounting cost associated with equity
compensation in light of requirements under the Accounting Standards Codification (“ASC”) stock compensation guidance,
which generally requires the Company to recognize compensation expense relating to equity awards based upon the grant date
fair value of those awards. The Company also considers the accounting impact of preserving flexibility to settle RSUs awards in
cash, shares, or a combination of cash and shares.
With respect to taxes, the Compensation Committee may consider the anticipated tax treatment of various payments and
benefits to the Company and, when relevant, to its executives. Section 162(m) of the Code generally prohibits any publicly held
corporation from taking a federal income tax deduction for compensation paid in excess of $1 million in any taxable year to the
NEOs, subject to certain exceptions. However, the Company generally believes that it is in our best interest and that of our
shareholders to have the flexibility to pay compensation that was not deductible under the limitations of Section 162(m) of the
Code to provide a compensation package consistent with our program and objectives.
|
TAKE-TWO INTERACTIVE SOFTWARE, INC. |
2025
Proxy Statement
|
49
|
CORPORATE GOVERNANCE AND BOARD PRACTICES
REPORT OF THE COMPENSATION COMMITTEE OF THE BOARD OF DIRECTORS
Report of the Compensation Committee of the Board of Directors
The Compensation Committee has reviewed and discussed with management the Compensation Discussion and Analysis
contained in this Proxy Statement. Based upon this review and discussion, the Compensation Committee recommended to the
Board of Directors of the Company that the Compensation Discussion and Analysis be included in this Proxy Statement.
|
July 28, 2025
|
Submitted by the Compensation Committee
of the Board of Directors:
Michael Sheresky (Chair)
Michael Dornemann
Roland Hernandez
J Moses
|
Risk Assessment of Overall Compensation Program
The Compensation Committee regularly reviews senior executive compensation and Company-wide compensation programs
and policies in an ongoing effort to seek to mitigate potential risks arising from such programs and policies and to ensure that
our compensation structure, elements and incentives are not reasonably likely to have a material adverse effect on
the Company.
The Compensation Committee seeks to design our compensation plans, including our incentive compensation programs, to
incorporate a range of components that we believe help to mitigate potential risks, while rewarding employees for pursuing our
strategic and financial objectives through appropriate risk taking, risk management, and prudent tactical and strategic decision
making. For example, the design of our compensation plans is intended to encourage employees to remain focused on both
near-term and longer-term goals of the Company by using a mix of short-term and long-term incentives to motivate employees
to produce superior results over varying time frames. We believe that the use of long-term incentives for executives provides a
safeguard against excessive risk-taking. Our long-term incentives are designed to deter unnecessary risk-taking by aligning our
employees’ interests with those of shareholders by incorporating equity-based compensation that vests over time and, in some
cases, include a market-based performance metric, which we believe is not susceptible to manipulation by employees and
encourages employees to remain focused on sustained stock price appreciation; maintaining individual bonus caps for senior
executives further mitigates risk.
We have also sought to deter unnecessary risk-taking by applying our Clawback Policy to the senior executives of the
Company, which requires the reimbursement of bonus or incentive compensation and/or the cancellation of outstanding equity
previously granted in certain cases.
In addition, our stock ownership guidelines require that each of our executive officers hold a significant amount of our common
stock or equivalents to further align their interests with shareholders over the long term by having a portion of their personal
investment portfolio consist of our common stock or equivalents. We expect this component to mitigate risk on a prospective
basis. We also prohibit transactions designed to limit or eliminate economic risks to our employees of owning our common
stock, such as options, puts, and calls, so our executives cannot insulate themselves from the effects of poor stock
price performance.
Senior executives from our risk, compliance, administrative, and finance functions, as well as the outside compensation
consultant to our Compensation Committee, are involved in this annual review process. With respect to fiscal
2025
and the
compensation programs in place for fiscal
2025
, based in part on the information and analyses provided by management and
its own advisors, the Compensation Committee concluded that the Company’s compensation programs are not reasonably
likely to have a material adverse effect on the Company.
|
50
|
TAKE-TWO INTERACTIVE SOFTWARE, INC. |
2025
Proxy Statement
|
EXECUTIVE COMPENSATION
The following table sets forth summary information for the fiscal years ended March 31, 2025, March 31, 2024, and
March 31, 2023, with respect to cash and all other compensation paid by the Company to, or earned by, the Company’s NEOs.
Summary Compensation Table
|
Name and
Principal Position
|
Fiscal
Year
|
Salary
($)
|
Stock Awards
($)
(1)
|
Non-Equity
Incentive Plan
Compensation
($)
(2)
|
All Other
Compensation
($)
(3)
|
Total
($)
|
|
Strauss Zelnick
(4)
Executive Chairman and Chief
Executive Officer
|
2025
|
1
|
—
|
—
|
106,456
|
106,457
|
|
2024
|
1
|
—
|
—
|
274,073
|
274,074
|
|
|
2023
|
1
|
—
|
—
|
115,014
|
115,015
|
|
|
Lainie Goldstein
Chief Financial Officer
|
2025
|
1,000,000
|
8,839,424
|
1,495,500
|
13,800
|
11,348,724
|
|
2024
|
1,000,000
|
8,219,600
|
952,800
|
14,081
|
10,186,481
|
|
|
2023
|
1,000,000
|
10,340,393
|
—
|
14,327
|
11,354,720
|
|
|
Karl Slatoff
(4)
President
|
2025
|
1
|
—
|
—
|
—
|
1
|
|
2024
|
1
|
—
|
—
|
—
|
1
|
|
|
2023
|
1
|
—
|
—
|
8,868
|
8,869
|
|
|
Daniel Emerson
Executive Vice President and
Chief Legal Officer
|
2025
|
850,000
|
6,066,139
|
1,059,313
|
56,122
|
8,031,574
|
|
2024
|
850,000
|
5,640,876
|
674,900
|
13,200
|
7,178,976
|
|
|
2023
|
850,000
|
7,254,541
|
—
|
18,826
|
8,123,367
|
(1)
Represents the aggregate grant date fair value of stock awards granted to our NEOs in each of the reporting periods, determined under ASC
Topic 718,
Compensation—Stock Compensation
. For additional information with respect to stock awards granted during fiscal 2025, see Note 16 under the
heading “Stock-Based Compensation” of the Notes to Consolidated Financial Statements included in the Company’s Annual Report on Form 10-K for fiscal
2025. The amounts above reflect the grant date fair value for these awards and do not necessarily correspond to the actual value that might be realized by the
NEOs, which depends on the market value of the Company’s common stock on a date in the future when the stock award vests. For time-based RSUs, that
value is based on the fair market value of the Company’s common stock on the grant date and is determined by multiplying the number of shares subject to the
grant by the closing price per share of the Company’s common stock. The value of the performance-based RSUs reflects the value of the awards at the grant
date based upon the probable outcome of the performance conditions using the Monte Carlo simulation model and is consistent with our estimate of the
aggregate compensation cost to be recognized over the vesting period determined in accordance with ASC Topic 718,
Compensation—Stock Compensation
,
which is less than the maximum possible value. The following table shows the value of the NEOs’ respective performance-based awards on the date of grant at
both the probable outcome of the performance conditions, which is reflected in the table above, as well as the maximum achievement of the applicable
performance conditions.
|
Name
|
Fiscal Year
|
Probable
Outcome
($)
|
Maximum
Performance
($)
|
|
Lainie Goldstein
|
2025
|
6,627,899
|
13,255,798
|
|
2024
|
6,033,708
|
12,067,417
|
|
|
2023
|
7,587,067
|
15,174,134
|
|
|
Daniel Emerson
|
2025
|
4,548,492
|
9,096,984
|
|
2024
|
4,140,732
|
8,281,464
|
|
|
2023
|
5,321,779
|
10,643,558
|
(2)
These amounts represent annual cash incentive payments. For more information, refer to “Compensation Discussion and Analysis—Annual Cash Incentive”
above and the “Grants of Plan-Based Awards” table below.
(3)
The amounts set forth in this column for fiscal 2025 represent (i) the Company’s matching contributions to the Company’s 401(k) plan for Ms. Goldstein and
Mr. Emerson, (ii) a club membership fee paid by the Company on behalf of Mr. Zelnick, used primarily for general corporate and corporate development
purposes, (iii) a parking spot for Mr. Zelnick at the Company’s offices located at 110 West 44th Street, New York, New York 10036 paid for by the Company, (iv)
costs for private travel for Mr. Emerson related to a family medical issue in an aggregate amount equal to $43,139 paid for by the Company, and (v) fees for
home security measures for Mr. Zelnick in an amount equal to $96,870.58 paid for by the Company. The incremental cost to the Company associated with the
home security measures is determined based upon the amount paid by the Company to the applicable outside security provider.
(4)
As discussed in more detail below, Messrs. Zelnick and Slatoff were compensated for their respective services to the Company during fiscal years 2025, 2024
and 2023 pursuant to the Management Agreement. The provisions of the Management Agreement establish the payments and benefits to which ZMC is entitled
as consideration for providing the services set forth therein. In general, in connection with their provision of services to the Company, the actual amount of
compensation received by Messrs. Zelnick and Slatoff is determined in the sole discretion of ZMC and without the Company’s knowledge, except that, under
the terms of the Management Agreement, Mr. Zelnick may not receive more than 60% of the payments and benefits made to ZMC and Mr. Slatoff may not
receive more than 40% of the payments and benefits made to ZMC.
|
TAKE-TWO INTERACTIVE SOFTWARE, INC. |
2025
Proxy Statement
|
51
|
EXECUTIVE COMPENSATION
GRANTS OF PLAN-BASED AWARDS
Grants of Plan-Based Awards
The following table sets forth information concerning awards under the Company’s equity and non-equity incentive plans
granted to each of the NEOs during fiscal
2025
, including performance-based awards and those using time-based vesting.
Assumptions used in the calculation of certain dollar amounts are included in Note 16 to the Company’s audited consolidated
financial statements included in the Company’s Annual Report on Form 10-K for fiscal
2025
.
|
Estimated Future Payouts
Under Non-Equity Incentive
Plan Awards
(1)
|
Estimated Future Payouts
Under Equity Incentive Plan
Awards
(2)
|
All Other
Stock
Awards:
Number of
Shares of
Stock or
Units
(2)
(#)
|
Grant
Date Fair
Value of
Stock
Awards
($)
(4)
|
||||||||
|
Name
|
Grant
Date
|
Approval
Date
|
Threshold
($)
|
Target
($)
|
Maximum
($)
|
Threshold
(#)
|
Target
(#)
|
Maximum
(#)
(3)
|
|||
|
Strauss Zelnick
(5)
|
—
|
—
|
—
|
—
|
—
|
—
|
—
|
—
|
—
|
—
|
|
|
Lainie Goldstein
|
6/1/2024
|
5/29/2024
|
—
|
—
|
—
|
—
|
27,622
|
55,244
|
—
|
6,627,899
|
|
|
6/1/2024
|
5/29/2024
|
—
|
—
|
—
|
—
|
—
|
—
|
13,791
|
2,211,525
|
||
|
—
|
—
|
—
|
1,500,000
|
3,000,000
|
—
|
—
|
—
|
—
|
—
|
||
|
Karl Slatoff
(5)
|
—
|
—
|
—
|
—
|
—
|
—
|
—
|
—
|
—
|
—
|
|
|
Daniel Emerson
|
6/1/2024
|
5/29/2024
|
—
|
—
|
—
|
—
|
18,956
|
37,912
|
—
|
4,548,492
|
|
|
6/1/2024
|
5/29/2024
|
—
|
—
|
—
|
—
|
—
|
—
|
9,464
|
1,517,647
|
||
|
—
|
—
|
—
|
1,062,500
|
2,125,000
|
—
|
—
|
—
|
—
|
—
|
||
(1)
Represents cash performance bonus opportunities ranging from 0% to 300% of base salary for Ms. Goldstein and from 0% to 250% of base salary for Mr.
Emerson. There is no set minimum payout amount. See “Compensation Discussion and Analysis—Annual Cash Incentive.”
(2)
For Ms. Goldstein and Mr. Emerson, 66.7% of the RSUs vest 100% in the third year following the year in which such grants were made on a date determined
by the Compensation Committee at the time of grant, subject to the satisfaction of certain performance criteria based on (i) the Company’s TSR performance
measured against the Nasdaq 100 Index, with respect to 75% of such RSUs, and (ii) the Company’s RCS performance, with respect to 25% of such RSUs, in
each case over a period of approximately three (3) years. The remaining 33.3% of the RSUs vest 25% on June 1, 2025 and thereafter in 12 equal quarterly
installments commencing on September 1, 2025 based on the NEO’s continued service with the Company.
(3)
Represents the maximum shares of performance-based RSUs. Such RSUs will vest, if at all, 100% on June 1, 2027.
(4)
These amounts are valued based on the aggregate grant date fair market value of the award. For additional information with respect to stock awards granted
during fiscal 2025, see Note 16 under the heading “Stock-Based Compensation” of the Notes to Consolidated Financial Statements included in the Company’s
Annual Report on Form 10-K for fiscal 2025. The grant date fair value of equity incentive plan awards that are subject to performance-based vesting conditions
is based upon the probable outcome of such conditions. All amounts reflect the grant date fair value for these awards, excluding the accounting effect of any
estimate of future service-based forfeitures, and do not necessarily correspond to the actual value that might be realized by the NEOs.
(5)
Messrs. Zelnick and Slatoff have not received grants of restricted stock, RSUs or option awards. Messrs. Zelnick and Slatoff are partners in ZMC, to which the
Company has previously granted restricted stock, RSUs and options pursuant to the ZMC Management Agreement.
At target, 67% of equity awards to ZMC for
our CEO and President are conditioned on the achievement of relative TSR and RCS goals measured over a three-year performance period. At maximum, 80%
of their equity awards are similarly linked to performance.
For information regarding the grants made to ZMC, see “Certain Relationships and Related
Transactions—Management Agreement.”
|
52
|
TAKE-TWO INTERACTIVE SOFTWARE, INC. |
2025
Proxy Statement
|
EXECUTIVE COMPENSATION
NARRATIVE DISCLOSURE REGARDING EQUITY PLANS AND EMPLOYMENT AGREEMENTS
Narrative Disclosure Regarding Equity Plans and Employment Agreements
2017 Stock Incentive Plan
The Amended and Restated Take-Two Interactive Software, Inc. 2017 Stock Incentive Plan (the “
2017 Plan
”) was originally
approved by shareholders on September 15, 2017. Under the 2017 Plan, the Company may grant stock-based incentive
compensation awards to eligible employees (including officers), non-employee directors and consultants in the form of stock
options, stock appreciation rights, restricted stock, restricted stock units and other stock-based awards.
Under the 2017 Plan, as of September 15, 2017, the date the Company’s shareholders originally approved the 2017 Plan, the
Company was authorized to issue up to 7,603,745 shares of common stock. In addition, the number of shares of common stock
available for issuance under the 2017 Plan are subject to increase by any shares of common stock subject to an award
outstanding under the 2009 Plan after September 15, 2017, that become eligible for reuse pursuant to the share recycling
provisions of the 2017 Plan. Stock-based awards assumed or substituted by the Company or its affiliates as part of a corporate
transaction (including from an entity that the Company merges with or into, acquires, or engages with in a similar corporate
transaction) will not count against the number of shares of common stock reserved and available for issuance pursuant to the
2017 Plan (except as may be required by Section 422 of the Code). In addition, shares of common stock will not be deemed to
have been issued pursuant to the 2017 Plan with respect to any portion of an award that is settled in cash.
On September 16, 2020, the Company’s shareholders approved the Amended and Restated Take-Two Interactive Software,
Inc. 2017 Stock Incentive Plan, which increased the number of shares that may be issued to participants in connection with
awards granted by 2,000,000. On September 14, 2021, the Company’s shareholders approved an amendment to the Amended
and Restated Take-Two Interactive Software, Inc. 2017 Stock Incentive Plan, which increased the number of shares that may
be issued to participants in connection with awards granted by 4,300,000. In addition, the Company assumed certain equity
awards and shares in connection with its acquisitions of Playdots in September 2020 and Zynga in May 2022. On
September 21, 2023, the Company’s shareholders approved an Amended and Restated Take-Two Interactive Software, Inc.
2017 Stock Incentive Plan, which decreased the number of shares that could only be issued to certain employees by 9,123,694
and increased the number of shares that may be issued to all participants in connection with awards granted by 5,500,000.
On July 28, 2025, the Board of Directors approved and adopted an amendment and restatement of the 2017 Plan. If the
amendment and restatement is approved by the shareholders, the number of shares that may be issued to participants in
connection with awards granted will be increased by 5,200,000, which would be added to the 5,943,569 shares available for
issuance under the 2017 Plan as of June 30, 2025, For a more detailed description of the amendment and restatement of the
2017 Plan, see Proposal 3 (“Approval of an Amendment and Restatement of the Amended and Restated 2017 Stock Incentive
Plan”) of this Proxy Statement.
2017 Global Employee Stock Purchase Plan
The Take-Two Interactive Software, Inc. Second Amended and Restated 2017 Global Employee Stock Purchase Plan (the
“
2017 Global ESPP
”) was approved by shareholders on September 15, 2017. The 2017 Global ESPP allows the Company to
provide its employees and employees of certain designated subsidiaries and affiliates an opportunity to obtain a proprietary
interest in the continued growth and prosperity of the Company through ownership of its shares of common stock. For
employees of participating affiliates in countries outside of the United States, the 2017 Global ESPP will be effectuated via
separate offerings under one or more sub-plans of the 2017 Global ESPP in order to achieve tax, employment, securities law or
other purposes and objectives, and to conform the terms of the sub-plans with the laws and requirements of such countries.
Subject to adjustment for certain changes in recapitalization or reorganization, the maximum aggregate number of the
Company’s shares of common stock that may be issued under the 2017 Global ESPP is 9,000,000 shares. The 2017 Global
ESPP became effective as of the first available offering date, which was on May 1, 2018.
|
TAKE-TWO INTERACTIVE SOFTWARE, INC. |
2025
Proxy Statement
|
53
|
EXECUTIVE COMPENSATION
NARRATIVE DISCLOSURE REGARDING EQUITY PLANS AND EMPLOYMENT AGREEMENTS
Employment Agreements
Lainie Goldstein
Ms. Goldstein serves as Chief Financial Officer pursuant to an employment agreement between the Company and Ms.
Goldstein, dated May 12, 2010, as amended on October 25, 2010, August 27, 2012, and May 17, 2018.
Pursuant to the employment agreement, Ms. Goldstein will continue to serve as Chief Financial Officer of the Company until
March 31, 2026
, and thereafter for successive one-year periods until either party elects not to renew the term of the agreement.
On May 17, 2018, the Company entered into a third amendment to its employment agreement with Ms. Goldstein to extend the
term of the agreement through March 31, 2023. In connection with this amendment, effective as of April 1, 2018,
Ms. Goldstein’s base salary was increased to $850,000 with no automatic, annual cost of living increases, but subject to
increase from time to time, as determined by the Company. Such third amendment also provides that Ms. Goldstein will also be
eligible to receive an annual bonus during each fiscal year of her employment at target in the amount of 100% of her base
salary, based on the achievement of certain financial targets by the Company, as set forth in the employment agreement.
Additionally, Ms. Goldstein is eligible to participate in the Company’s long-term incentive compensation program. Based, in part,
on peer benchmarking, as well as Ms. Goldstein’s strong individual performance and value to the organization as a key senior
leader, on May 24, 2022, the Compensation Committee approved, for fiscal 2023, effective April 1, 2022, an increase to
Ms. Goldstein’s (i) base salary to $1,000,000 and (ii) target annual bonus to 150% of her base salary. Ms. Goldstein’s base
salary and target annual bonus remained the same for fiscal 2024 and fiscal 2025, and will remain the same for fiscal 2026.
The employment agreement also provides for certain severance benefits upon termination by the Company without cause or in
connection with a change in control. For more information regarding these severance and change in control benefits, please
refer to “Potential Payments Upon Termination or Change in Control” below.
Ms. Goldstein has agreed not to compete with the Company or solicit any of the Company’s customers or personnel during her
employment and for one year following any termination of her employment, all on the terms set forth in the
employment agreement.
Karl Slatoff
On February 14, 2008, the Company entered into an employment agreement with Mr. Slatoff, pursuant to which Mr. Slatoff
initially served as Executive Vice President. Effective October 25, 2010, Mr. Slatoff was named to the role of Chief Operating
Officer. Effective May 1, 2013, Mr. Slatoff was appointed to the newly created role of President. Pursuant to the agreement, Mr.
Slatoff will continue to serve as President until termination of the 2022 Management Agreement, unless earlier terminated upon
his death or resignation, or by the Board of Directors for any reason. Pursuant to the terms of the employment agreement, Mr.
Slatoff receives an annual salary of $1.00. Additionally, Mr. Slatoff is eligible to participate in all benefits and plans which the
Company may institute from time to time for its executive officers and employees (other than the 401(k) savings plan). The
employment agreement with Mr. Slatoff provides that he is not entitled to receive an annual bonus from the Company. The
employment agreement does not provide for any continued obligations of the Company following a termination of Mr. Slatoff’s
employment other than continued indemnification rights and coverage under the Company’s directors’ and officers’ liability
insurance policies.
Mr. Slatoff has agreed not to compete with the Company, nor to solicit any of the Company’s customers or personnel during his
employment and for one year following his termination for “cause” or without “good reason,” all on the terms set forth in the
employment agreement.
Daniel Emerson
Mr. Emerson serves as Executive Vice President and Chief Legal Officer pursuant to an employment agreement between the
Company and Mr. Emerson, dated January 28, 2015, effective as of October 24, 2014. Pursuant to the employment agreement,
Mr. Emerson will continue to serve in this capacity until his employment is terminated by him or the Company in accordance
with the provisions of the employment agreement.
Pursuant to the terms of the employment agreement, Mr. Emerson received an annual base salary of $850,000 for fiscal 2025,
based, in part, on peer benchmarking, as well as Mr. Emerson’s strong individual performance and value to the organization as
a key senior leader. In fiscal 2025, Mr. Emerson was also eligible to receive an annual bonus at target in the amount of 125% of
his base salary, based on the achievement of certain financial targets by the Company. Additionally, Mr. Emerson is eligible to
participate in the Company’s long-term incentive compensation program. Mr. Emerson’s base salary and target annual bonus
will remain the same for fiscal 2026.
|
54
|
TAKE-TWO INTERACTIVE SOFTWARE, INC. |
2025
Proxy Statement
|
EXECUTIVE COMPENSATION
OUTSTANDING EQUITY AWARDS AT FISCAL YEAR-END
The employment agreement also provides for certain severance benefits upon termination by the Company without cause or in
connection with a change in control. For more information regarding these severance and change in control benefits, please
refer to “Potential Payments Upon Termination or Change in Control” below.
Mr. Emerson has agreed not to solicit any of the Company’s customers or personnel during his employment and for one year
following any termination of his employment, all on the terms set forth in the employment agreement.
Outstanding Equity Awards at Fiscal Year-End
The following table sets forth information concerning RSUs outstanding for each of the NEOs as of March 31, 2025:
|
Stock Awards
|
|||||
|
Name
|
Stock Award
Grant Date
|
Number
of Shares
or Units of
Stock That
Have Not
Vested
(#)
(1)
|
Market Value
of Shares or
Units of Stock
That Have
Not Vested
($)
(2)
|
Equity Incentive
Plan Awards:
Number of
Unearned Shares
or Units of Stock
That Have Not
Vested
(#)
|
Equity Incentive
Plan Awards:
Market Value of
Unearned Shares or
Units of Stock That
Have Not
Vested
($)
(2)
|
|
Strauss Zelnick
(3)
|
—
|
—
|
—
|
—
|
—
|
|
Lainie Goldstein
|
6/1/2024
|
13,791
|
2,858,185
|
55,244
|
11,449,319
|
|
6/1/2023
|
8,937
|
1,852,193
|
63,640
|
13,189,390
|
|
|
6/1/2022
|
5,205
|
1,078,736
|
66,700
|
13,823,575
|
|
|
Karl Slatoff
(3)
|
—
|
—
|
—
|
—
|
—
|
|
Daniel Emerson
|
6/1/2024
|
9,464
|
1,961,414
|
37,912
|
7,857,262
|
|
6/1/2023
|
6,135
|
1,271,479
|
43,674
|
9,051,437
|
|
|
6/1/2022
|
3,573
|
740,504
|
45,774
|
9,486,662
|
|
(1)
Time-based awards and performance-based awards with respect to which the performance criteria have been satisfied, made under the 2017 Plan. The time-
based awards vest, subject to continuing employment, 25% on the anniversary of the grant date and thereafter in 12 equal quarterly installments commencing
on September 1st. The performance-based awards will vest, if at all, 100% on the third anniversary of the grant date.
(2)
Value determined based on the closing price of the Company’s common stock of $207.25 on March 31, 2025, the final business day of fiscal 2025.
(3)
Messrs. Zelnick and Slatoff have not received grants of stock or option awards. Messrs. Zelnick and Slatoff are partners in ZMC, to which the Company has
previously granted restricted stock, RSUs and options pursuant to the ZMC management agreements. Of these grants, no options or shares of restricted stock
remained outstanding and an aggregate of 824,790 time-based and performance-based RSUs (based on the target number of performance-based RSUs
eligible to vest) or 1,423,088 time-based and performance-based RSUs (based on the maximum number of performance-based RSUs eligible to vest)
remained unvested as of March 31, 2025. The value of the unvested RSUs based on the closing price of the common stock on March 31, 2025, was
$170,937,728 (based on the target number of performance-based RSUs eligible to vest) or $294,934,988
(based on the maximum number of performance-
based RSUs eligible to vest).
Stock Vested During Fiscal 2025
The following table sets forth information concerning the vesting of RSUs held by each of the NEOs during fiscal 2025. The
value realized from vested RSUs is deemed to be the market value of the common stock on the date of vesting, based on the
closing price on such date, multiplied by the number of shares.
|
Stock Awards
|
||
|
Name
|
Number of
Shares Acquired
on Vesting (#)
|
Value Realized
on Vesting ($)
|
|
Strauss Zelnick
(1)
|
—
|
—
|
|
Lainie Goldstein
|
33,690
(2)
|
$5,567,262.06
|
|
Karl Slatoff
(1)
|
—
|
—
|
|
Daniel Emerson
|
21,189
(3)
|
$3,510,849.09
|
(1)
As discussed above, Messrs. Zelnick and Slatoff have not received grants of restricted stock, RSUs or option awards, but are partners in ZMC, which has
received certain grants. For information related to shares that vested or failed to vest see “Certain Relationships and Related Transactions—Management
Agreement” and “Pay versus Performance”.
|
TAKE-TWO INTERACTIVE SOFTWARE, INC. |
2025
Proxy Statement
|
55
|
EXECUTIVE COMPENSATION
POTENTIAL PAYMENTS UPON TERMINATION OR CHANGE IN CONTROL
(2)
Represents (i) 1,929 time-based RSUs originally granted on June 1, 2021, which vested on June 1, 2024, (ii) 5,442 time-based RSUs originally granted on
June 1, 2022 which vested on June 1, 2024, (iii) a total of 4,163 time-based RSUs originally granted on June 1, 2022 which vested in four quarterly installments
on each of June 1, 2024, September 1, 2024, December 1, 2024, and March 1, 2025, (iv) a total of 6,950 time-based RSUs originally granted on June 1, 2023
which vested in four quarterly installments on each of June 1, 2024, September 1, 2024, December 1, 2024, and March 1, 2025, (v) 6,488 performance-based
RSUs originally granted on June 1, 2021, which vested on May 31, 2024 as a result of performance criteria achievement being between the target and
maximum, and (vi) 8,718 performance-based RSUs originally granted on June 1, 2022, which vested on May 31, 2024 as a result of performance criteria
achievement being between the threshold and target.
(3)
Represents (i) 675 time-based RSUs originally granted on June 1, 2021, which vested on June 1, 2024, (ii) 4,081 time-based RSUs originally granted on June
1, 2022 which vested on June 1, 2024, (iii) a total of 2,856 time-based RSUs originally granted on June 1, 2022 which vested in four quarterly installments on
each of June 1, 2024, September 1, 2024, December 1, 2024, and March 1, 2025, (iv) a total of 4,768 time-based RSUs originally granted on June 1, 2023
which vested in four quarterly installments on each of June 1, 2024, September 1, 2024, December 1, 2024, and March 1, 2025, (v) 2,270 performance-based
RSUs originally granted on June 1, 2021, which vested on May 31, 2024 as a result of performance criteria achievement being between the target and
maximum, and (vi) 6,539 performance-based RSUs originally granted on June 1, 2022, which vested on May 31, 2024 as a result of performance criteria
achievement being between the threshold and target.
Pension Benefits
We do not currently sponsor or maintain any defined benefit pension or retirement plans providing specified retirement
payments and benefits for our NEOs.
Nonqualified Deferred Compensation Plan Benefits
In fiscal 2025, we did not sponsor or maintain any nonqualified defined contribution or other nonqualified deferred
compensation plans for the benefit of our employees.
Potential Payments Upon Termination or Change in Control
Ms. Goldstein and Mr. Emerson are entitled to receive certain amounts and benefits upon termination of their employment or a
change in control pursuant to their employment agreements. Additionally, Ms. Goldstein and Mr. Emerson are eligible to
participate in the CIC Severance Plan, to the extent they would be entitled to receive greater amounts and benefits under the
CIC Severance Plan than under their employment agreements. Additionally, commencing in fiscal 2024, equity grants made to
Ms. Goldstein and Mr. Emerson (but not to ZMC) included certain special retirement vesting terms. Messrs. Zelnick and Slatoff
are not entitled to directly receive any severance benefits from the Company upon a termination of employment or change in
control. See “Certain Relationships and Related Transactions—Management Agreement” for details regarding certain payments
and benefits that ZMC is entitled to receive upon certain qualifying terminations.
Employment Agreements
Lainie Goldstein
Pursuant to the terms of Ms. Goldstein’s employment agreement, she will be entitled to receive the following severance benefits
upon a termination by the Company without cause (including a non-renewal of the agreement as well as her resignation
following certain events that will be deemed a termination without cause): (i) (w) a continuation of Ms. Goldstein’s then-current
base salary for 24 months, (x) 2 times her target bonus, (y) a prorated target bonus for the year of termination (equal to 50% of
target if such termination occurs during the first half of the year, and 100% of target if such termination occurs during the
second half of the year), and (z) any unpaid bonuses earned in respect of the prior full fiscal year, (ii) reimbursement for the
cost of continued health insurance coverage under COBRA or its equivalent for 24 months, which amount may include a tax
gross up for any cash payment made to Ms. Goldstein in connection with such continuation coverage should such coverage
end prior to expiration of the 24 month period; and (iii) immediate vesting of all restricted equity previously granted to her.
Ms. Goldstein has agreed not to compete with the Company or solicit any of the Company’s customers or personnel during her
employment and for one year following any termination of her employment, all on the terms set forth in the
employment agreement.
The employment agreement also provides that Ms. Goldstein will be eligible to earn a change in control retention bonus. This
retention bonus reflects Ms. Goldstein’s retention during a transition being critical to the Company. Ms. Goldstein is the only
individual at the Company who has a retention bonus. A portion of such bonus, equal to three months’ base salary, will be
|
56
|
TAKE-TWO INTERACTIVE SOFTWARE, INC. |
2025
Proxy Statement
|
EXECUTIVE COMPENSATION
POTENTIAL PAYMENTS UPON TERMINATION OR CHANGE IN CONTROL
payable upon the closing of a change in control, and a portion of the bonus, equal to three months’ base salary, will be payable
on the six month anniversary of such change in control, provided that Ms. Goldstein has continued to be employed by the
Company following such change in control through the applicable payment date (or if Ms. Goldstein undergoes an involuntary
termination of employment prior to the applicable payment date, including a termination by the Company without cause, a non-
renewal of the employment agreement by the Company, or a resignation following the occurrence of certain events or
circumstances that will be deemed tantamount to a termination without cause). The employment agreement also provides that
any amounts received by her in connection with a change in control will be reduced if, pursuant to the excise tax provisions of
the Code relating to “parachute payments,” such reduction would result in a greater after-tax benefit to her.
Daniel Emerson
Pursuant to the terms of Mr. Emerson’s employment agreement, he will be entitled to receive the following severance benefits
following a termination by the Company without cause (including his resignation following certain events that will be deemed a
termination without cause): (i) for a period of 12 months following such termination of employment, continuation of his base
salary and continued participation in Company welfare benefit plans (including, without limitation, any medical benefits in which
he participates) on the same terms and conditions as in effect at the time of the event triggering his entitlement to severance;
(ii) immediate vesting of all restricted equity previously granted to him; and (iii) subject to the effective date of Mr. Emerson’s
termination, payment of the following lump sum amounts: (x) any accrued but unpaid bonuses earned in respect of prior years;
(y) if the termination is effective during the first half of the year, a lump sum payment equivalent to the sum of (1) the accrued
but unpaid bonus for the prior fiscal year and (2) 50% of the target bonus for which Mr. Emerson would otherwise have been
eligible in the current fiscal year; or (z) if such termination occurs during the second half of the year, a lump sum payment
equivalent to the sum of (1) the accrued but unpaid bonus for the prior fiscal year and (2) the target bonus for which
Mr. Emerson would otherwise have been eligible in the current fiscal year. Mr. Emerson has agreed not to solicit any of the
Company’s customers or personnel during his employment and for one year following any termination of his employment, all on
the terms set forth in the employment agreement.
CIC Severance Plan
Pursuant to the CIC Severance Plan, certain eligible employees, including Ms. Goldstein and Mr. Emerson may receive certain
benefits upon a termination of employment either by the Company without “cause” or voluntarily for “good reason,” in either
case during the 12-month period following a change in control of the Company. The benefits that Ms. Goldstein and
Mr. Emerson would be entitled to receive upon a qualifying termination of employment under the CIC Severance Plan consist of
the following:
•
a cash severance payment equal to 150% of the sum of the NEO’s annual base salary and target annual bonus or
incentive opportunity;
•
continued health benefits for a period of 18 months; and
•
full and immediate vesting of all outstanding and unvested equity awards.
For purposes of the CIC Severance Plan, Ms. Goldstein and Mr. Emerson will be deemed to have resigned for “good reason” if
the resignation occurs or occurred, as applicable, in connection with any of the events specified in the employment agreements,
such that the resignation would be or would have been, as applicable, tantamount to a termination without cause under the
terms of the employment agreements. For purposes of the CIC Severance Plan, “cause” generally means a participant’s
continued failure to substantially perform the participant’s duties after receipt of notice from the Company, a participant’s
criminal conviction which is demonstrably injurious to the Company, a participant’s felony conviction, a participant’s gross
negligence which affects the Company or a participant’s failure to adhere to the Company’s written policies or to cooperate in
any investigation or inquiry involving the Company.
Severance benefits provided under the CIC Severance Plan are subject to reduction to avoid any excise tax on “parachute
payments” under Section 280G of the Code if the employee would benefit from such reduction as opposed to receiving the full
severance benefits and paying the excise tax. All employees who accept severance payments and, if applicable, the continued
health coverage under the CIC Severance Plan are required to sign a release and are subject to restrictions on the solicitation
of employees and customers of the Company for a period of six months following termination as well as a non-disparagement
obligation. In addition, all employees who accept any benefits under the CIC Severance Plan are subject to a duty to cooperate
reasonably with the Company in any litigation relating to matters in which the employee was personally involved. We do not
provide for any tax gross-ups in respect of any excise taxes on parachute payments.
|
TAKE-TWO INTERACTIVE SOFTWARE, INC. |
2025
Proxy Statement
|
57
|
EXECUTIVE COMPENSATION
POTENTIAL PAYMENTS UPON TERMINATION OR CHANGE IN CONTROL
Fiscal 2025 Equity Awards Retirement Provision
In fiscal 2025, we decided to add a retirement provision into our annual equity award agreements for all our employees
(including our non-ZMC NEOs) to recognize eligible employees’ long-term contributions and impact to our Company if such
eligible employee retires. The equity awards granted to Ms. Goldstein and Mr. Emerson in fiscal 2025 included such retirement
provisions, whereby, in the case of a retirement, time-vested RSUs will vest in full upon such retirement and will continue to be
settled on the original settlement schedule applicable thereto, and a pro-rated portion of performance-vested RSUs (with such
proration to be determined based on tenure during the performance period) will remain eligible to vest on the original vesting
date applicable thereto based on actual performance, with settlement to occur within 60 days of vesting, if applicable. For
purposes of the awards, “retirement” means a person’s termination at or after attaining (x) age 55, with at least 10 years of
service, or (y) age 60, with at least 5 years of service, and provided that such person satisfies certain advance notice of
retirement requirements as set forth in the grant agreements.
The tables below set forth amounts to be paid or benefits received by those NEOs entitled to receive any amounts or benefits
upon a qualifying termination of their employment or in connection with a change in control, assuming the applicable triggering
event occurred on March 31, 2025 pursuant to their employment agreements and the CIC Severance Plan (to the extent the
benefits under the CIC Severance Plan would be greater than the benefits under the employment agreements).
|
Lainie Goldstein
|
Termination
Without
Cause
($)
(1)
|
Death or
Disability
($)
|
Change in
Control
Termination
Without Cause
or for Good
Reason
($)
|
Retirement
($)
(5)
|
|
|
Salary Payment
|
2,000,000
|
—
|
2,000,000
|
—
|
|
|
Continuation of Medical Insurance
|
$
18,484
|
—
|
18,484
|
—
|
|
|
Acceleration of Equity Awards
(2)
|
$
31,932,044
|
$
31,932,044
|
$
31,932,044
|
$
4,597,841
|
|
|
Bonus Payment
|
4,500,000
|
1,500,000
|
4,500,000
|
—
|
|
|
Stay Bonus
|
—
|
—
|
$
500,000
|
(3)
|
—
|
|
Total Termination Benefits
|
$
38,450,528
|
$
33,432,044
|
$
38,950,528
|
(4)
|
$
4,597,841
|
|
Daniel Emerson
|
Termination
Without
Cause
($)
(1)
|
Death or
Disability
($)
|
Change in
Control
Termination
Without Cause
or for Good
Reason
($)
|
Retirement
($)
(5)
|
|
|
Salary Payment
|
850,000
|
—
|
1,275,000
|
—
|
|
|
Continuation of Welfare Benefits
|
$
35,528
|
—
|
$
53,292
|
—
|
|
|
Acceleration of Equity Awards
(2)
|
$
21,914,408
|
$
21,914,408
|
$
21,914,408
|
—
|
|
|
Bonus Payment
|
1,062,500
|
—
|
1,593,750
|
—
|
|
|
Total Termination Benefits
|
$
23,862,436
|
$
21,914,408
|
$
24,836,450
|
(4)
|
$
—
|
(1)
Under Ms. Goldstein’s and Mr. Emerson’s employment agreements, a termination without cause includes a resignation following certain events so as to be
deemed a termination by the Company without cause and for Ms. Goldstein, the Company’s non-renewal of the employment agreement. For purposes of
Ms. Goldstein’s and Mr. Emerson’s employment agreements, “cause” generally means such person’s continued failure to substantially perform duties under the
employment agreement after receipt of notice from the Company, such person’s criminal conviction which is demonstrably injurious to the Company, such
person’s felony conviction, such person’s gross negligence which significantly affects the Company or such person’s material failure to adhere to the
Company’s material written policies or to cooperate in any investigation or inquiry involving the Company. For purposes of Ms. Goldstein’s and Mr. Emerson’s
employment agreements, Ms. Goldstein’s or Mr. Emerson’s resignation in connection with the following events will be tantamount to a termination without
cause: a material breach of the employment agreement by the Company, a material diminution in such person’s title, status, position or responsibilities, the
Company’s failure to timely pay compensation due under the employment agreement, a material reduction in such person’s salary or any reduction in target
bonus, assignment of duties to such person which are materially inconsistent with the duties set forth in the employment agreement, relocation of such person’s
principal place of employment beyond 10 miles from its then-current location or the failure of any successor to assume the Company’s obligations under the
employment agreement.
(2)
The value of the equity awards is calculated by multiplying the number of shares of restricted stock and RSUs that accelerate by the per share closing price of
the Company’s common stock of $207.25 on March 31, 2025.
|
58
|
TAKE-TWO INTERACTIVE SOFTWARE, INC. |
2025
Proxy Statement
|
EXECUTIVE COMPENSATION
CEO PAY RATIO
(3)
Ms. Goldstein’s employment agreement provides that Ms. Goldstein will be eligible to earn a change in control retention bonus. This change in control retention
bonus reflects Ms. Goldstein’s retention during a transition being critical to the Company. Ms. Goldstein is the only individual at the Company who has a
retention bonus. A portion of such bonus, equal to three months’ base salary, will be payable upon the closing of a change in control, and a portion of the
bonus, equal to three months’ base salary, will be payable on the six month anniversary of such change in control, provided that Ms. Goldstein has continued to
be employed by the Company following such change in control through the applicable payment date (or if Ms. Goldstein undergoes an involuntary termination
of employment prior to the applicable payment date, including a termination by the Company without cause, a non-renewal of the employment agreement by
the Company, or a resignation following the occurrence of certain events or circumstances that will be deemed tantamount to a termination without cause).
(4)
In the event that the total amounts payable in connection with a change in control to Ms. Goldstein or Mr. Emerson would trigger an excise tax on “parachute
payments” under Section 280G of the Code, then the total amounts payable in the scenarios illustrated in this table would be reduced in order to avoid
triggering the excise tax if they would benefit from such reduction as opposed to paying the excise tax.
(5)
Reflects the value of accelerated vesting of the fiscal 2025 equity awards for Ms. Goldstein, who, as of March 31, 2025, met the age and service requirements
for retirement, assuming full vesting of time-vest RSUs and pro-rated vesting of performance-vest RSUs (assuming target levels of achievement). Mr. Emerson
did not meet the age requirement for retirement as of March 31, 2025.
CEO Pay Ratio
Under SEC rules, we are required to provide information regarding the relationship between the annual total compensation of
Mr. Strauss Zelnick, the Company’s Chairman and Chief Executive Officer, and the annual total compensation of the
Company’s median employee (excluding Mr. Zelnick) for fiscal
2025
. With respect to the annual total compensation of
Mr. Zelnick, we used both the amount reported in the Summary Compensation Table, as required by Item 402(u) or Regulation
S-K, and, because such amount does not reflect the amount Mr. Zelnick receives from our payments to ZMC, the maximum
amount Mr. Zelnick was eligible to receive from ZMC in connection with the fees paid by us to ZMC under the Management
Agreement for fiscal
2025
. We believe this provides a better understanding than the ratio based solely on the amount of
Mr. Zelnick’s compensation reported in the “Total” column in the “Summary Compensation Table” included in this
Proxy Statement.
•
Mr. Zelnick’s annual total compensation, as reported in the “Summary Compensation Table” included in this Proxy
Statement, was $
106,457
.
•
The planning value of the total compensation paid to ZMC in fiscal
2025
, as set forth in the “Compensation Discussion and
Analysis-Detailed Discussion and Analysis-Compensation to Executive Chairman and CEO and President-Fiscal
2025
Fees
and Incentives to ZMC” section of this Proxy Statement on page
38
, was
$55,544,000
, and the maximum portion that
Mr. Zelnick could have received was
$33,326,400
. When combined with the compensation received by Mr. Zelnick from the
Company as reported in the “Summary Compensation Table” included in this Proxy Statement, the total maximum amount of
compensation Mr. Zelnick was eligible to receive was
$33,432,857
.
•
The annual total compensation of the median employee (excluding Mr. Zelnick) of the Company (including our consolidated
subsidiaries) was $
73,005
.
•
Based on the above, for fiscal
2025
, the ratio of Mr. Zelnick’s annual total compensation to the annual total compensation of
the median employee was:
•
1.46
to 1 based on Mr. Zelnick’s annual total compensation, as reported in the “Summary Compensation Table” included in
this Proxy Statement, or
•
457.95
to 1 based on the total maximum amount of compensation Mr. Zelnick was eligible to receive from ZMC and the
Company in fiscal
2025
.
This pay ratio is a reasonable estimate calculated in a manner consistent with Item 402(u) of Regulation S-K under the
Securities Act of 1933, as amended. We determined the median of the annual total cash compensation of our employees as of
January 1, 2025, at which time we had approximately
13,265
regular, temporary, and seasonal individuals employed on a full or
part-time basis, globally, approximately
5,258
of whom are U.S. employees, and approximately
8,007
(or approximately
60.36
%
of our total employee population) of whom are located outside of the United States. We did not exclude any of the employees
who are located outside of the United States from the pool used to identify the median employee.
We then compared the annualized base salaries, bonuses and commissions earned by our employees (other than Mr. Zelnick)
to determine the median employee. Once we identified our median employee, we estimated such employee’s annual total
compensation in accordance with the requirements of Item 402(c)(2)(x) of Regulation S-K, yielding the median annual total
compensation disclosed above. There are a wide variety of job functions within our company, across numerous global
jurisdictions. Accordingly, the compensation paid to our employees differs greatly between departments, experience levels, and
locations. We believe that our employees are fairly compensated and appropriately incentivized.
The SEC rules for identifying the median compensated employee and calculating the pay ratio based on that employee’s
annual total compensation, allow companies to adopt a variety of methodologies, to apply certain exclusions, and to make
reasonable estimates and assumptions that reflect their employee populations and compensation practices. Accordingly, the
pay ratio reported by other companies may not be comparable to the pay ratio reported above, as other companies have
different employee populations and compensation practices and may use different methodologies, exclusions, estimates and
assumptions in calculating their own pay ratios.
|
TAKE-TWO INTERACTIVE SOFTWARE, INC. |
2025
Proxy Statement
|
59
|
EXECUTIVE COMPENSATION
PAY VERSUS PERFORMANCE DISCLOSURE
Pay
Versus Performance Disclosure
In accordance with rules adopted by the Securities and Exchange Commission pursuant to the Dodd-Frank Wall Street Reform
and Consumer Protection Act of 2010, we provide the following disclosure regarding executive compensation for our principal
executive officer (“PEO”) and Non-PEO NEOs and Company performance for the fiscal years listed below. The Compensation
Committee did not consider the pay versus performance disclosure below in making its pay decisions for any of the
years shown.
|
Fiscal Year
|
Summary
Compensation
Table Total for
PEO
1
($)
|
Compensation
Actually Paid
to PEO
1,2,3,4
($)
|
Average
Summary
Compensation
Table Total
for Non-PEO
NEOs
1
($)
|
Average
Compensation
Actually Paid
to Non-PEO
NEOs
1,2,3,4
($)
|
Value of Initial Fixed
$100 Investment
based on:
5
|
Net Income
($ Millions)
|
Adjusted
EBITDA
6
($ Millions)
|
|
|
TSR
($)
|
Peer
Group
TSR
($)
|
|||||||
|
2025
|
|
|
|
|
|
|
(
|
|
|
2024
|
|
|
|
|
|
|
(
|
|
|
2023
|
|
|
|
|
|
|
(
|
|
|
2022
|
|
|
|
|
|
|
|
|
|
2021
|
|
|
|
|
|
|
|
|
(1)
Strauss Zelnick
was our PEO for each fiscal year presented. The individuals comprising the Non-PEO NEOs for each fiscal year presented were Lainie
Goldstein, Karl Slatoff, and Daniel Emerson.
(2)
The amounts shown for Compensation Actually Paid have been calculated in accordance with Item 402(v) of Regulation S-K and do not reflect compensation
actually earned, realized, or received by the Company’s NEOs. These amounts reflect the Summary Compensation Table Total with certain adjustments as
described in footnote 4 below.
(3)
Messrs. Zelnick and Slatoff were compensated for their respective services to the Company under the 2022 Management Agreement and, prior to May 23,
2022, the 2017 Management Agreement. The provisions of the 2022 Management Agreement and the 2017 Management Agreement establish the payments
and benefits to which ZMC is entitled as consideration for providing the services set forth therein. In general, in connection with their provision of services to the
Company, the actual amount of compensation received by Messrs. Zelnick and Slatoff is determined in the sole discretion of ZMC and without the Company’s
knowledge, except that, under the terms of the 2022 Management Agreement and the 2017 Management Agreement, Mr. Zelnick may not receive more than
60% of the payments and benefits made to ZMC and Mr. Slatoff may not receive more than 40% of the payments and benefits made to ZMC. Amounts paid by
ZMC to Messrs. Zelnick and Slatoff are not included in this disclosure.
(4)
Compensation Actually Paid reflects the exclusions and inclusions of certain amounts for the PEO and Non-PEO NEOs as set forth below. Equity values are
calculated in accordance with ASC Topic 718. Amounts in the Exclusion of Stock Awards column are the totals from the Stock Awards column set forth in the
Summary Compensation Table.
|
Fiscal Year
|
Summary Compensation
Table Total for PEO
($)
|
Exclusion of Stock
Awards for PEO
($)
|
Inclusion of Equity
Values for PEO
($)
|
Compensation Actually
Paid to PEO
($)
|
|
2025
|
|
|
|
|
|
Fiscal Year
|
Average Summary
Compensation Table
Total for Non-PEO NEOs
($)
|
Average Exclusion of
Stock Awards for
Non-PEO NEOs
($)
|
Average Inclusion of
Equity Values for
Non-PEO NEOs
($)
|
Average Compensation
Actually Paid to
Non-PEO NEOs
($)
|
|
2025
|
|
(
|
|
|
|
60
|
TAKE-TWO INTERACTIVE SOFTWARE, INC. |
2025
Proxy Statement
|
EXECUTIVE COMPENSATION
PAY VERSUS PERFORMANCE DISCLOSURE
The amounts in the Inclusion of Equity Values in the tables above are derived from the amounts set forth in the following tables:
|
Fiscal Year
|
Year-End
Fair Value of
Equity Awards
Granted
During Year
That Remained
Unvested as
of Last Day of
Year for PEO
($)
|
Change in
Fair Value
from Last
Day of Prior
Year to Last
Day of Year
of Unvested
Equity Awards
for PEO
($)
|
Vesting-Date
Fair Value of
Equity Awards
Granted
During Year
that Vested
During Year
for PEO
($)
|
Change in Fair
Value from
Last Day of
Prior Year to
Vesting Date
of Unvested
Equity Awards
that Vested
During Year
for PEO
($)
|
Fair Value at
Last Day of
Prior Year of
Equity Awards
Forfeited
During Year
for PEO
($)
|
Value of
Dividends or
Other Earnings
Paid on Equity
Awards Not
Otherwise
Included for
PEO
($)
|
Total-
Inclusion of
Equity Values
for PEO
($)
|
|
2025
|
|
|
|
|
|
|
|
|
Fiscal Year
|
Average
Year-End
Fair Value of
Equity Awards
Granted
During Year
That Remained
Unvested as
of Last Day of
Year for Non-
PEO NEOs
($)
|
Average
Change in
Fair Value
from Last
Day of Prior
Year to Last
Day of Year
of Unvested
Equity Awards
for Non-PEO
NEOs
($)
|
Average
Vesting-Date
Fair Value of
Equity Awards
Granted
During Year
that Vested
During Year
for Non-PEO
NEOs
($)
|
Average
Change in Fair
Value from
Last Day of
Prior Year to
Vesting Date
of Unvested
Equity Awards
that Vested
During Year
for Non-PEO
NEOs
($)
|
Average
Fair Value at
Last Day of
Prior Year of
Equity Awards
Forfeited
During Year
for Non-PEO
NEOs
($)
|
Average Value
of Dividends
or Other
Earnings Paid
on Equity
Awards Not
Otherwise
Included for
Non-PEO
NEOs
($)
|
Total - Average
Inclusion of
Equity Values
for Non-PEO
NEOs
($)
|
|
2025
|
|
|
|
|
|
|
|
(5)
The Peer Group TSR set forth in this table utilizes the RDG Technology Composite Index, which we have also utilized in the stock performance graph required
by Item 201(e) of Regulation S-K included in our Annual Report on Form 10-K for the year ended March 31, 2025. The comparison assumes $100 was invested
for the period starting March 31, 2020, through the end of the listed fiscal year in the Company and in the RDG Technology Composite Index, respectively.
Historical stock performance is not necessarily indicative of future stock performance.
(6)
We determined
Adjusted EBITDA
to be the most important financial performance measure used to link Company performance to Compensation Actually Paid to
our NEOs in fiscal 2025. Adjusted EBITDA is a non-GAAP measure, which is defined as GAAP net income (loss) excluding the change in deferred net revenue
and related cost of revenue, stock-based compensation, business reorganization, interest expense (income), depreciation and amortization, goodwill
impairment, amortization and impairment of intangible assets, bonus, income taxes, impact of the revaluation of the Turkish Lira against the U.S. Dollar, fair
value adjustments related to certain equity investments and acquisition-related costs. A reconciliation of GAAP net income to Adjusted EBITDA for fiscal 2025 is
provided in Annex A. Adjusted EBITDA may not have been the most important financial performance measure in prior fiscal years, and we may determine a
different financial performance measure to be the most important financial performance measure in future fiscal years.
|
TAKE-TWO INTERACTIVE SOFTWARE, INC. |
2025
Proxy Statement
|
61
|
EXECUTIVE COMPENSATION
PAY VERSUS PERFORMANCE DISCLOSURE
The following chart sets forth the relationship between Compensation Actually Paid to our PEO, the average of Compensation
Actually Paid to our Non-PEO NEOs, and our Adjusted EBITDA during the five most recent
ly compl
eted fiscal years.
|
62
|
TAKE-TWO INTERACTIVE SOFTWARE, INC. |
2025
Proxy Statement
|
EXECUTIVE COMPENSATION
PAY VERSUS PERFORMANCE DISCLOSURE
Return (“TSR”)
The following chart sets forth the relationship between Compensation Actually Paid to our PEO, the average of Compensation
Actually Paid to our Non-PEO NEOs, and the cumulative TSR over the five most recently completed fiscal years for the
Company and the RDG Technology Compo
site Index.
|
TAKE-TWO INTERACTIVE SOFTWARE, INC. |
2025
Proxy Statement
|
63
|
EXECUTIVE COMPENSATION
PAY VERSUS PERFORMANCE DISCLOSURE
The following chart sets forth the relationship between Compensation Actually Paid to our PEO, the average of Compensation
Actually Paid to our Non-PEO NEOs, and our Net Income during the five m
ost rece
ntly completed fiscal year.
|
64
|
TAKE-TWO INTERACTIVE SOFTWARE, INC. |
2025
Proxy Statement
|
EXECUTIVE COMPENSATION
SUPPLEMENTAL PAY VERSUS PERFORMANCE DISCLOSURE
The following table presents the financial performance measures that the Company considers to have been the most important
in linking Compensation Actually Paid to our NEOs for fiscal
2025
to Company performance. The measures in this table are
not ranked.
|
|
|
|
|
|
Supplemental Pay Versus Performance Disclosure
The following disclosure provides an alternative to the Pay Versus Performance disclosure above by incorporating the
maximum compensation opportunities allocable by ZMC to Messrs. Zelnick and Slatoff under the 2022 Management Agreement
and the 2017 Management Agreement. Refer to the Compensation Discussion & Analysis for further detail on these
arrangements. This disclosure is supplementary and is not intended to satisfy the requirements of Item 402(v) of Regulation S-
K. The Compensation Committee did not consider the disclosure below in making its pay decisions for any of the years shown.
|
Summary
Compensation
Table Total
(Adjusted
for Maximum
ZMC
Opportunity)
for PEO
1,2
($)
|
Compensation
Actually Paid
(Adjusted
for Maximum
ZMC
Opportunity)
to PEO
1,2,3,4
($)
|
Average
Summary
Compensation
Table Total
(Adjusted
for Maximum
ZMC
Opportunity)
for Non-PEO
NEOs
1,2
($)
|
Average
Compensation
Actually Paid
(Adjusted
for Maximum
ZMC
Opportunity)
to Non-PEO
NEOs
1,2,3,4
($)
|
Value of Initial Fixed
$100 Investment
based on:
5
|
||||
|
Fiscal Year
|
TSR
($)
|
Peer
Group
TSR
($)
|
Net
Income
($ Millions)
|
Adjusted
EBITDA
6
($ Millions)
|
||||
|
2025
|
43,302,010
|
118,690,718
|
16,044,732
|
44,748,653
|
174.73
|
220.69
|
(4,478.90)
|
901.00
|
|
2024
|
32,754,669
|
46,964,443
|
13,006,396
|
16,636,856
|
125.19
|
205.89
|
(3,744.2)
|
845.2
|
|
2023
|
50,006,805
|
42,108,832
|
17,582,716
|
13,563,715
|
100.58
|
165.71
|
(1,124.7)
|
940.6
|
|
2022
|
21,499,437
|
16,151,492
|
8,062,073
|
5,691,540
|
129.62
|
183.07
|
418.0
|
827.2
|
|
2021
|
22,619,255
|
42,685,643
|
8,722,480
|
15,884,714
|
148.98
|
170.46
|
588.9
|
1,066.1
|
(1)
Strauss Zelnick was our PEO for each year presented. The individuals comprising the Non-PEO NEOs for each year presented were Lainie Goldstein, Karl
Slatoff, and Daniel Emerson.
(2)
Messrs. Zelnick and Slatoff were compensated for their respective services to the Company under the 2022 Management Agreement and, prior to May 23,
2022, the 2017 Management Agreement. The provisions of the 2022 Management Agreement and the 2017 Management Agreement establish the payments
and benefits to which ZMC is entitled as consideration for providing the services set forth therein. In general, in connection with their provision of services to the
Company, the actual amount of compensation received by Messrs. Zelnick and Slatoff is determined in the sole discretion of ZMC and without the Company’s
knowledge, except that, under the terms of both Management Agreements, Mr. Zelnick may not receive more than 60% of the payments and benefits made to
ZMC and Mr. Slatoff may not receive more than 40% of the payments and benefits made to ZMC. The data in this supplementary table reflect the maximum
compensation opportunities of Messrs. Zelnick and Slatoff under these agreements.
(3)
The amounts shown for Compensation Actually Paid (Adjusted for Maximum ZMC Opportunity) do not reflect compensation actually earned, realized, or
received by the Company’s NEOs.
(4)
Compensation Actually Paid (Adjusted for Maximum ZMC Opportunity) reflects: (1) the exclusion of Stock Awards from the Summary Compensation Table for
all the NEOs and, for Messrs. Zelnick and Slatoff, the exclusion of the accounting value of stock awards that could be granted to each by ZMC under the 2022
Management Agreement and 2017 Management agreement, assuming their maximum ZMC compensation opportunities; and (2) the inclusion of the value of
equity awards granted by the Company to non-ZMC NEOs and, for, Messrs. Zelnick and Slatoff, to ZMC, assuming their maximum ZMC compensation
opportunities. The equity award adjustments for each applicable year in this supplementary disclosure include the addition or subtraction of amounts as would
be required under Regulation S-K, Item 402(v)(iii).
(5)
See the section of this Proxy Statement captioned Pay Versus Performance Disclosure for the methodology used in calculating TSR and Peer Group TSR.
(6)
See the section of this Proxy Statement captioned Pay Versus Performance Disclosure for a description of this performance measure.
|
TAKE-TWO INTERACTIVE SOFTWARE, INC. |
2025
Proxy Statement
|
65
|
EXECUTIVE COMPENSATION
COMPENSATION OF DIRECTORS DURING 2025 FISCAL YEAR
Supplemental Tabular List of Most Important Financial Performance Measures
The following supplemental table presents the financial performance measures that the Company considers to have been the
most important in linking Compensation Actually Paid (Adjusted for Maximum ZMC Opportunity) to our PEO and other NEOs for
fiscal 2025 to Company performance. The measures in this table are not ranked.
|
Adjusted EBITDA
Relative TSR
Recurrent Consumer Spending
|
Policies Related to the Grant of Certain Equity Awards
Accordingly, we have no specific policy or practice on the timing of grants of such awards in relation to the disclosure of material
non-public information by us, which would require disclosure under Item 402(x) of Regulation S-K. In the event we determine to
grant new awards of stock options or similar equity awards in the future, the Compensation Committee will evaluate the
appropriate steps to take in relation to the foregoing. We have
not timed
the release of material non-public information for
purposes of affecting the value of executive compensation.
Compensation of Directors During 2025 Fiscal
Year
The Compensation Committee reviews and makes recommendations to the Board regarding the form and amount of
compensation for non-employee directors. Typically, on an annual basis, the Committee considers a board compensation study
by its independent compensation consultant to support the Committee in its deliberations.
Such compensation may include, but is not limited to, the following elements: board or committee retainer, board or committee
meeting fees, committee chair retainer or fees, equity compensation, benefits and perquisites. All directors who served during
fiscal 2025, other than Mr. Zelnick, are regarded as non-employee directors.
The key elements of the compensation payable to our non-employee directors are as follows:
|
Component
|
Value of Award
Under Current
Policy
(1)
|
Notes
|
||
|
Annual Retainer
|
For Each Non-Employee Director
|
$300,000
|
$235,000 restricted stock/
$65,000 cash
|
|
|
Lead Independent
Director Additional Fees
|
For Lead Independent Director
|
$200,000
|
$100,000 restricted stock/
$100,000 cash
|
|
|
Committee Fees
|
Audit Committee
|
Chair
|
$40,000
|
—
|
|
Other Members
|
$20,000
|
—
|
||
|
Compensation
Committee
|
Chair
|
$30,000
|
—
|
|
|
Other Members
|
$15,000
|
—
|
||
|
Corporate Governance
Committee
|
Chair
|
$20,000
|
—
|
|
|
Other Members
|
$10,000
|
—
|
||
|
Executive Committee
|
Chair
|
N/A
|
Lead Independent Director
serves as Executive Committee
Chair for no additional fee
|
|
|
Other Independent
Members
|
$25,000
|
—
|
||
(1)
In December 2024, the Compensation Committee recommended, and the Board of Directors agreed, effective for fiscal 2026, an increase to the fee payable to
the Chair of the Corporate Governance Committee to $30,000.
Each non-employee director may make an election to receive up to 100% of their annual retainer and committee fees in shares
of restricted stock. For fiscal 2025, Ms. Siminoff and Messrs. Gordon and Viera elected to receive 100% of these fees in
restricted stock.
|
66
|
TAKE-TWO INTERACTIVE SOFTWARE, INC. |
2025
Proxy Statement
|
EXECUTIVE COMPENSATION
DIRECTOR COMPENSATION TABLE
The restricted stock portion of the annual retainer is granted in four equal quarterly installments and vests on the first
anniversary of the grant date (discussed below). Grants of restricted stock are generally made on the fifth trading day following
the filing of the Company’s Annual Report on Form 10-K or Quarterly Report on Form 10-Q, as applicable. The number of
shares of restricted stock granted is determined by dividing the dollar value of the restricted stock to be delivered by the
average of the closing prices of our common stock on the 30 trading days prior to the fifth trading day following the filing of the
Company’s Annual Report on Form 10-K or Quarterly Report on Form 10-Q, as applicable.
Under the 2017 Plan, the maximum value of awards granted to non-employee directors in any one calendar year, together with
any cash fees paid to such directors during such calendar year in respect of such director’s service as a member of the Board
of Directors during such year, may not, absent extraordinary circumstances, exceed $750,000 in total value. As determined by
the Compensation Committee in its discretion, this limit may be increased for a non-executive chair of the Board of Directors or,
in extraordinary circumstances, for other individual non-employee directors; provided that the non-employee director receiving
such additional compensation may not participate in the decision to award such compensation.
Reimbursement of Certain Expenses
Non-employee directors are reimbursed for travel expenses to attend Board of Directors and committee meetings and to attend
director education seminars in accordance with policies approved from time to time.
Director Stock Ownership Requirements
Under the stock ownership requirements for non-employee directors of the Company, non-employee directors are required to
own shares of common stock having a value equal to five times the annual cash retainer. Current non-employee directors are
required to achieve such stock position within five years after the date of the adoption of the requirements and future non-
employee directors shall achieve such ownership position within five years after the date of their election to the Board of
Directors. Information regarding executive officer stock ownership requirements is set forth in this Proxy Statement under
“Compensation Discussion and Analysis.” Each non-employee director owned shares in excess of the requirements as of the
record date.
Director Compensation Table
The following table sets forth information concerning the compensation of the Company’s non-employee directors during
fiscal
2025
.
|
Name
|
Fees Earned or
Paid in Cash
($)
|
Stock
Awards
($)
(1)
|
Total
($)
|
|
Michael Dornemann
|
120,000
|
253,881
|
373,881
|
|
Roland Hernandez
|
80,000
|
253,881
|
333,881
|
|
J Moses
|
100,000
|
253,881
|
353,881
|
|
Michael Sheresky
|
117,500
|
253,881
|
371,381
|
|
LaVerne Srinivasan
|
165,000
|
362,438
|
527,438
|
|
Susan Tolson
|
105,000
|
253,881
|
358,881
|
|
Paul Viera
(2)
|
85,000
|
253,881
|
338,881
|
|
William “Bing” Gordon
(3)
|
65,000
|
253,881
|
318,881
|
|
Strauss Zelnick
(4)
|
—
|
—
|
—
|
|
Ellen Siminoff
(5)
|
95,000
|
253,881
|
348,881
|
(1)
Represents the aggregate grant date fair value of awards granted to our directors during fiscal 2025, determined under ASC Topic 718,
Compensation—Stock
Compensation
. For additional information with respect to stock awards granted during fiscal 2025, see Note 16 under the heading “Stock-Based
Compensation” of the Notes to Consolidated Financial Statements included in the Company’s Annual Report on Form 10-K for fiscal 2025. The amounts above
reflect the grant date fair value for these awards, excluding the accounting effect of any estimate of future forfeitures, and do not necessarily correspond to the
actual value that might be recognized by the directors. As of March 31, 2025, Messrs. Dornemann, Gordon, Hernandez, Moses, Sheresky and Viera, and
Mses. Siminoff, Srinivasan and Tolson held 1,469, 1,469, 1,469, 1,469, 1,469, 1,469,
1,469, 2,097, and 1,469 outstanding unvested restricted stock
awards, respectively.
(2)
For fiscal 2025, Mr. Viera elected to receive all of his annual retainer and committee fees in shares of common stock. In accordance with SEC regulations,
these amounts are reported in the table as fees earned or paid in cash, rather than as stock awards. On May 30, 2024, August 16, 2024, November 14, 2024
and February 14, 2025, respectively, 144, 143, 131 and 112 shares of stock were granted to Mr. Viera with grant date fair values of $23,008, $21,441, $23,774
and $23,381, respectively, as computed in accordance with ASC 718,
Compensation—Stock Compensation
.
|
TAKE-TWO INTERACTIVE SOFTWARE, INC. |
2025
Proxy Statement
|
67
|
EXECUTIVE COMPENSATION
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
(3)
For fiscal 2025, Mr. Gordon elected to receive all of his annual retainer and committee fees in shares of common stock. In accordance with SEC regulations,
these amounts are reported in the table as fees earned or paid in cash, rather than as stock awards. On May 30, 2024, August 16, 2024, November 14, 2024
and February 14, 2025, respectively, 110, 109, 100, and 85 shares of stock were granted to Mr. Gordon with grant date fair values of $17,576, $16,343,
$18,148, and $17,745, respectively, as computed in accordance with ASC 718,
Compensation—Stock Compensation
.
(4)
Mr. Zelnick serves as our CEO and therefore he does not receive any compensation for serving as a director.
(5)
For fiscal 2025, Ms. Siminoff elected to receive all of her annual retainer and committee fees in shares of common stock. In accordance with SEC regulations,
these amounts are reported in the table as fees earned or paid in cash, rather than as stock awards. On May 30, 2
024, August 16, 2024, November 14, 2024
and February 14, 2025, respectively, 162, 160, 146, and 125 shares of stock were granted to Ms. Siminoff with grant date fair values of $25,884, $23,990,
$26,496, and $26,095,
respectively, as computed in accordance with ASC 718,
Compensation—Stock Compensation.
Compensation Committee Interlocks and Insider Participation
During fiscal
2025
, Messrs. Dornemann, Hernandez, Moses and Sheresky served as members of the Compensation
Committee. During fiscal
2025
:
•
none of the members of the Compensation Committee was an officer (or former officer) or employee of the Company or any
of its subsidiaries;
•
none of the members of the Compensation Committee had a direct or indirect material interest in any transaction in which
the Company was a participant and the amount involved exceeded $120,000;
•
none of the Company’s executive officers served on the compensation committee (or another board committee with similar
functions or, if none, the entire board) of another entity where one of that entity’s executive officers served on the Company’s
Compensation Committee;
•
none of the Company’s executive officers was a director of another entity where one of that entity’s executive officers served
on the Company’s Compensation Committee; and
•
none of the Company’s executive officers served on the compensation committee (or another board committee with similar
functions or, if none, the entire board of directors) of another entity where one of that entity’s executive officers served as a
director on the Board of Directors.
|
68
|
TAKE-TWO INTERACTIVE SOFTWARE, INC. |
2025
Proxy Statement
|
VOTING SECURITY OWNERSHIP OF CERTAIN
BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth certain information as of July 17, 2025 (unless otherwise noted) relating to the beneficial
ownership of shares of the common stock by (i) each person or entity who is known by the Company to own beneficially five
percent or more of the outstanding common stock, (ii) each current director, (iii) each director nominee, (iv) each of the NEOs
and (v) all current directors and executive officers as a group.
|
Name and Address
of Beneficial Owner
(1)
|
Number of Shares
of Common Stock
Beneficially Owned
(2)
|
Percentage of
Outstanding Common
Stock Beneficially
Owned
|
|
The Vanguard Group, Inc.
(3)
|
18,764,271
|
10.17
%
|
|
BlackRock, Inc.
(4)
|
12,726,923
|
6.90
%
|
|
The Public Investment Fund
(5)
|
11,414,680
|
6.19
%
|
|
State Street Corporation
(6)
|
8,976,671
|
4.87
%
|
|
Strauss Zelnick
(7)
|
1,645,348
|
*
|
|
Karl Slatoff
(8)
|
1,328,797
|
*
|
|
Lainie Goldstein
(9)
|
315,657
|
*
|
|
Daniel Emerson
(10)
|
152,271
|
*
|
|
J Moses
|
23,647
|
*
|
|
Michael Sheresky
|
64,940
|
*
|
|
Michael Dornemann
|
21,694
|
*
|
|
LaVerne Srinivasan
|
11,026
|
*
|
|
Susan Tolson
|
30,901
|
*
|
|
Paul Viera
(11)
|
90,665
|
*
|
|
Roland Hernandez
|
9,506
|
*
|
|
William B. Gordon
|
60,573
|
*
|
|
Ellen Siminoff
(12)
|
14,551
|
*
|
|
All directors and executive officers as a group (13 persons)
(13)
|
2,489,774
|
1.34
%
|
*
Less than 1%.
(1)
Unless otherwise indicated, the address of each beneficial owner is Take-Two Interactive Software, Inc., 110 West 44th Street, New York, New York 10036. The
address of BlackRock, Inc. is 55 East 52nd Street, New York, New York 10055. The address for Vanguard Group, Inc. is 100 Vanguard Blvd., Malvern,
Pennsylvania 19355. The address for the Public Investment Fund is The Public Investment Fund, P.O. Box 6847, Riyadh 11452, Kingdom of Saudi Arabia. The
address for State Street Corporation is 1 Congress Street, Suite 1, Boston, MA 02114-2016.
(2)
Unless otherwise indicated, the Company believes that all persons named in the table have sole voting and investment power with respect to all shares
beneficially owned by them. A person is deemed to be the beneficial owner of securities that may be acquired by such person within 60 days after
July 17, 2025, and is not deemed to be the beneficial owner of securities that may not be acquired within 60 days after July 17, 2025. Each beneficial owner’s
percentage ownership is determined by assuming that exercisable securities that are held by such person (but not those held by any other person), and which
are exercisable within 60 days after July 17, 2025, have been exercised.
(3)
Based on information contained in a report on Schedule 13G/A filed with the SEC on February 13, 2024.
(4)
Based on information contained in a report on Schedule 13G/A filed with the SEC on January 26, 2024.
(5)
Based on information contained in a report on Schedule 13G/A filed with the SEC on February 14, 2024.
(6)
Based on information contained in a report on Schedule 13G filed with the SEC on January 29, 2024.
|
TAKE-TWO INTERACTIVE SOFTWARE, INC. |
2025
Proxy Statement
|
69
|
VOTING SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
(7)
Mr. Zelnick is a partner at ZMC. The shares listed include 326,495 shares of common stock held by Zelnick/Belzberg Living Trust (such shares are indirectly
held by Mr. Zelnick), 39,051 shares of common stock held by the Wendy Jay Belzberg 2012 Family Trust (such shares are indirectly held by Mr. Zelnick), and
1,279,802 RSUs held by ZMC (such units are not held individually by Mr. Zelnick). Mr. Zelnick disclaims beneficial ownership of the securities held by each of
the Zelnick/Belzberg Living Trust, the Wendy Jay Belzberg 2012 Family Trust, and ZMC except to the extent of his pecuniary interest therein. The 1,279,802
RSUs held by ZMC consist of (a) unvested RSUs granted to ZMC on June 1, 2023, settle-able for up to 425,045 shares of common stock that will vest, if at all,
June 1, 2026 with respect to the remaining time-based RSUs included in such grant and on June 1, 2026 with respect to the performance-based RSUs
included in such grant, (b) unvested RSUs granted to ZMC on June 3, 2024, settle-able for up to 482,180 shares of common stock that will vest, if at all, in
equal installments on June 1, 2026 and June 1, 2027 with respect to the remaining time-based RSUs included in such grant and on June 1, 2027 with respect
to the performance-based RSUs included in such grant, and (c) unvested RSUs granted to ZMC on June 2, 2025, settle-able for up to 372,577 shares of
common stock that will vest, if at all, in equal installments on June 1, 2026, June 1, 2027 and June 1, 2028 with respect to the time-based RSUs included in
such grant and on June 1, 2028 with respect to the performance-based RSUs included in such grant, subject in each case to acceleration or forfeiture under
certain circumstances. A portion of each grant is subject to time-based vesting and the other portion is subject to performance-based vesting.
(8)
Mr. Slatoff is a partner at ZMC. The shares listed include 48,995 shares of common stock held by Mr. Slatoff, and 1,279,802 RSUs held by ZMC (such units are
not held individually by Mr. Slatoff). Mr. Slatoff disclaims beneficial ownership of the securities held by ZelnickMedia and ZMC except to the extent of his
pecuniary interest therein. The 1,279,802 RSUs held by ZMC consist of (a) unvested RSUs granted to ZMC on June 1, 2023, settle-able for up to 425,045
shares of common stock that will vest, if at all, June 1, 2026 with respect to the remaining time-based RSUs included in such grant and on June 1, 2026 with
respect to the performance-based RSUs included in such grant, (b) unvested RSUs granted to ZMC on June 3, 2024, settle-able for up to 482,180 shares of
common stock that will vest, if at all, in equal installments on June 1, 2026 and June 1, 2027 with respect to the remaining time-based RSUs included in such
grant and on June 1, 2027 with respect to the performance-based RSUs included in such grant, and (c) unvested RSUs granted to ZMC on June 2, 2025,
settle-able for up to 372,577 shares of common stock that will vest, if at all, in equal installments on June 1, 2026, June 1, 2027 and June 1, 2028 with respect
to the time-based RSUs included in such grant and on June 1, 2028 with respect to the performance-based RSUs included in such grant, subject in each case
to acceleration or forfeiture under certain circumstances. A portion of each grant is subject to time-based vesting and the other portion is subject to
performance-based vesting.
(9)
The shares listed include (i) 129,098 shares of common stock held by Ms. Goldstein, (ii) 31,497 unvested time-based RSUs held by Ms. Goldstein, and
(iii) 155,062 unvested performance-based RSUs held by Ms. Goldstein. Such unvested awards will vest, or fail to vest, in accordance with the terms of the
applicable award agreements.
(10)
The shares listed include (i) 24,239 shares of common stock held by Mr. Emerson, (ii) 21,618 unvested time-based RSUs held by Mr. Emerson, and
(iii) 106,414 unvested performance-based RSUs held by Mr. Emerson. Such unvested awards will vest, or fail to vest, in accordance with the terms of the
applicable award agreements.
(11)
The shares listed include 75,000 shares of common stock held by The PEV Revocable Living Trust (such securities are indirectly held by Mr. Viera), which were
purchased on the open market in August 2018.
(12)
The shares listed include (i) 6,835 shares of common stock held by Ms. Siminoff, (ii) 3,290 shares of common stock held by the EFS 2022 Irrevocable Trust
(such securities are indirectly held by Ms. Siminoff) and (iii) 4,426 shares of common stock held by the D&E Living trust (such securities are indirectly held by
Ms. Siminoff).
(13)
The 1,279,802 RSUs held by ZMC that are beneficially owned by Messrs. Zelnick and Slatoff, are only included once.
|
70
|
TAKE-TWO INTERACTIVE SOFTWARE, INC. |
2025
Proxy Statement
|
CERTAIN RELATIONSHIPS AND
RELATED TRANSACTIONS
Management Agreement
The Company and ZMC are parties to a management agreement (the “2022 Management Agreement”) that became effective
on May 23, 2022 (the “Effective Date”), which superseded the prior management agreement with ZelnickMedia dated as of
November 17, 2017 (the “2017 Management Agreement”). In fiscal 2025, ZMC provided financial and management consulting
services to the Company pursuant to the 2022 Management Agreement. References to the “Management Agreement” in this
Proxy Statement refer to both the 2017 Management Agreement and the 2022 Management Agreement interchangeably.
Term and Personnel
The 2022 Management Agreement provides for a term that commenced on the Effective Date and continues through March 31,
2029 (the “
MA Term
”), unless earlier terminated in accordance with its terms. Under the Management Agreement, ZMC
continues to provide certain individuals as it deems appropriate for the performance of the Management Agreement.
Specifically (i) Mr. Zelnick serves as Executive Chairman of the Board of Directors and CEO of the Company, (ii) Mr. Slatoff
serves as the Company’s President, and (iii) other ZMC personnel as appropriate provide services to the Company on a
project-by-project, as needed basis.
If Mr. Zelnick or any other employee of ZMC acting in an executive capacity for the Company pursuant to the Management
Agreement is unable or unavailable to serve in such capacity (other than due to a termination by the Company without Cause
or their resignation for Good Reason (as such terms are defined in such person’s employment agreement with the Company or,
in the case of Mr. Zelnick, in the Management Agreement)), and ZMC is unable to provide a qualified individual within a
reasonable period of time to serve in such capacity who is reasonably satisfactory to the Board of Directors, then the Company
may fill such position with a person not affiliated with ZMC and deduct the costs of such person’s compensation from ZMC’s
compensation under the Management Agreement (with such deduction limited to no more than 60% of the aggregate
compensation payable to ZMC if such person replaces Mr. Zelnick and no more than 40% of the aggregate compensation
payable to ZMC if such person replaces Mr. Slatoff).
Management Fee and Annual Bonus Opportunity
Under the 2022 Management Agreement, the Company pays a monthly management fee equal to $275,000.00 per month
($3,300,000 annualized). The management fee will not be decreased during the MA Term. In addition to the monthly
management fee, ZMC receives an annual bonus, subject to the achievement by the Company of certain performance
thresholds in respect of each of the fiscal years ending March 31, 2023, 2024, 2025, 2026, 2027, 2028 and 2029. For each
fiscal year (other than for the period from April 1, 2022, to May 23, 2022), the annual bonus opportunity ranges from $0 (at 80%
of the Target, as defined in the 2022 Management Agreement) to $13,200,000 (at 150% of the Target or greater). The annual
bonus opportunity will not be increased or decreased during the MA Term. If the 2022 Management Agreement is terminated by
the Company without Cause (as defined in the 2022 Management Agreement) or by ZMC for Good Reason (as defined in the
2022 Management Agreement) (whether before or after a Change in Control (as defined in the 2022 Management Agreement)),
ZMC is entitled to be paid on the date of termination an amount equal to the sum of (i) the earned but unpaid portion of the
management fee, (ii) any accrued but unpaid annual bonus for a completed fiscal year and (iii) three times the sum of the per
annum management fee plus the Target bonus amount.
Expense Reimbursement
ZMC is entitled to the reimbursement of reasonable out-of-pocket expenses in connection with the Management Agreement
and the rendering of services thereunder.
|
TAKE-TWO INTERACTIVE SOFTWARE, INC. |
2025
Proxy Statement
|
71
|
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
MANAGEMENT AGREEMENT
Limits on Compensation
Under the Management Agreement, no more than 60% of the aggregate compensation payable to ZMC under the Management
Agreement (whether in the form of the management fee, the annual bonus or the RSU awards) shall be received by or
conveyed to Mr. Zelnick (or such other employee of ZMC that serves as Executive Chairman and CEO of the Company) and no
more than 40% of such aggregate compensation shall be received by or conveyed to Mr. Slatoff (or such other employee of
ZMC that serves as the President of the Company).
Restrictions on Sale of Vested Stock
Under the 2022 Management Agreement, prior to March 31, 2029 (or earlier in the event of a Change in Control) ZMC and any
Subject Person (as defined in the 2022 Management Agreement) are prohibited from selling or otherwise disposing of any
shares of common stock of the Company, if the Market Value (as defined in the 2022 Management Agreement) of all shares of
common stock of the Company (including restricted stock and RSUs, but excluding any unvested restricted stock or RSUs that
remain subject to performance-based vesting), after giving effect to such proposed sale or other disposition, owned by ZMC
and each Subject Person in the aggregate as of the trading day immediately preceding the date of the proposed sale or
disposition, would be less than six times (6x) the per annum management fee (excluding any bonuses).
Awards under the 2022 Management Agreement
Under the 2022 Management Agreement, as further described below, the Company granted RSUs to ZMC under the 2017 Plan
on June 1, 2022 consisting of transition period two year cliff vest RSUs (the “2022 Transition Period 2 Year Cliff Vest Restricted
Units”), three year transition period cliff vest RSUs (the “2022 Transition Period 3 Year Cliff Vest Restricted Units”), and annual
grant RSUs (the “2022 Annual Grant Restricted Units” and, together with the 2022 Transition Period 2 Year Cliff Vest Restricted
Units and the 2022 Transition Period 3 Year Cliff Vest Restricted Units, the “2022 New Deal Restricted Units”), on June 1, 2023
(the “2023 Restricted Units”), on June 3, 2024 (the “2024 Restricted Units”) and on June 2, 2025 (the “2025 Restricted Units”).
The 2022 Transition Period 2 Year Cliff Vest Restricted Units, comprised of both time-based and performance-based RSUs as
described below, were granted pursuant to the terms of a Restricted Unit Agreement dated June 1, 2022, by and between the
Company and ZMC (the “2022 Transition Period 2 Year Cliff Vest Restricted Unit Agreement”). The 2022 Transition Period 3
Year Cliff Vest Restricted Units, comprised of both time-based and performance-based RSUs as described below, were granted
pursuant to the terms of a Restricted Unit Agreement dated June 1, 2022, by and between the Company and ZMC (the “2022
Transition Period 3 Year Cliff Vest Restricted Unit Agreement”). The 2022 Annual Grant Restricted Units, comprised of both
time-based and performance-based RSUs as described below, were granted pursuant to the terms of a Restricted Unit
Agreement dated June 1, 2022, by and between the Company and ZMC (the “2022 Annual Grant Restricted Unit Agreement”
and, together with the 2022 Transition Period 2 Year Cliff Vest Restricted Unit Agreement and the 2022 Transition Period 3 Year
Cliff Vest Restricted Unit Agreement, the “2022 New Deal Restricted Unit Agreements”). The 2023 Restricted Units, comprised
of both time-based and performance-based RSUs as described below, were granted pursuant to the terms of a Restricted Unit
Agreement dated June 1, 2023, by and between the Company and ZMC (the “2023 Restricted Unit Agreement”). The 2024
Restricted Units, comprised of both time-based and performance-based RSUs as described below, were granted pursuant to
the terms of a Restricted Unit Agreement dated June 3, 2024, by and between the Company and ZMC (the “2024 Restricted
Unit Agreement”). The 2025 Restricted Units, comprised of both time-based and performance-based RSUs as described below,
were granted pursuant to the terms of a Restricted Unit Agreement dated June 2, 2025, by and between the Company and
ZMC (the “2025 Restricted Unit Agreement”). Under the 2022 Management Agreement, the Company, in its discretion, may
grant additional annual equity awards to ZMC over the course of the MA Term.
2022 Transition Period 2 Year Cliff Vest Restricted Units
Time-Based Award
On June 1, 2022, the Company issued to ZMC 37,733 time-based RSUs (such number determined by dividing $4,618,519 by
the average of the closing prices of the Company’s common stock for each trading day during the 10 trading day period
immediately prior to June 1, 2022), all of which units vested on May 31, 2024 (the “2022 Transition Period 2 Year Cliff Vest
Time-Based Award”).
|
72
|
TAKE-TWO INTERACTIVE SOFTWARE, INC. |
2025
Proxy Statement
|
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
MANAGEMENT AGREEMENT
Performance-Based Award
On June 1, 2022, the Company issued to ZMC 150,932 performance-based RSUs (the “2022 Transition Period 2 Year Cliff Vest
Performance Award”), representing the maximum number of performance-based RSUs that are eligible to vest (with the target
number of performance-based RSUs of 75,466 based on $9,237,037 divided by the average of the closing prices of the
Company’s common stock for each trading day during the 10 trading day period immediately prior to June 1, 2022). The 2022
Transition Period 2 Year Cliff Vest Performance Award was divided into the following two categories based on the applicable
performance-vesting criteria (as described in the 2022 Transition Period 2 Year Cliff Vest Restricted Unit Agreement): Recurrent
Consumer Spending Performance-Based Units and TSR Performance-Based Units. The results and payout levels for the 2022
Transition Period 2 Year Cliff Vest Performance Award, which vested or failed to vest, on May 31, 2024, are as follows:
|
2022 Transition Period 2 Year Cliff Vest Performance Award
Vested
(#)
|
2022 Transition Period 2 Year Cliff Vest Performance Award
Forfeited
(#)
|
||
|
Based on
Achievement
of Recurrent
Consumer Spending
Performance-Vesting
Criteria
|
Based on
Achievement of
TSR Performance-
Vesting Criteria
|
Based on
Achievement
of Recurrent
Consumer Spending
Performance-Vesting
Criteria
|
Based on
Achievement of
TSR Performance-
Vesting Criteria
|
|
37,732
|
45,280
|
—
|
67,920
|
2022 Transition Period 3 Year Cliff Vest Restricted Units
Time-Based Award
On June 1, 2022, the Company issued to ZMC 41,303 time-based RSUs (such number determined by dividing $5,055,556 by
the average of the closing prices of the Company’s common stock for each trading day during the 10 trading day period
immediately prior to June 1, 2022), all of which units vested on May 30, 2025 (the “2022 Transition Period 3 Year Cliff Vest
Time-
Based Award”).
Performance-Based Award
On June 1, 2022, the Company issued to ZMC 165,214 performance-based RSUs (the “2022 Transition Period 3 Year Cliff Vest
Performance Award”), representing the maximum number of performance-based RSUs that are eligible to vest (with the target
number of performance-based RSUs of 82,607 based on $10,111,111 divided by the average of the closing prices of the
Company’s common stock for each trading day during the 10 trading day period immediately prior to June 1, 2022). The 2022
Transition Period 3 Year Cliff Vest Performance Award was divided into the following two categories based on the applicable
performance-vesting criteria (as described in the 2022 Transition Period 3 Year Cliff Vest Restricted Unit Agreement): Recurrent
Consumer Spending Performance-Based Units and TSR Performance-Based Units. The results and payout levels for the 2022
Transition Period 3 Year Cliff Vest Performance Award, which vested
or failed to vest
, on May 30, 2025, are as follows:
|
2022 Transition Period 3 Year Cliff Vest Performance Award
Vested
(#)
|
2022 Transition Period 3 Year Cliff Vest Performance Award
Forfeited
(#)
|
||
|
Based on
Achievement
of Recurrent
Consumer Spending
Performance-Vesting
Criteria
|
Based on
Achievement of
TSR Performance-
Vesting Criteria
|
Based on
Achievement
of Recurrent
Consumer Spending
Performance-Vesting
Criteria
|
Based on
Achievement of
TSR Performance-
Vesting Criteria
|
|
41,304
|
123,910
|
—
|
—
|
|
TAKE-TWO INTERACTIVE SOFTWARE, INC. |
2025
Proxy Statement
|
73
|
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
MANAGEMENT AGREEMENT
2022 Annual Grant Restricted Units
Time-Based Award
On June 1, 2022, the Company issued to ZMC 56,100 time-based RSUs (such number determined by dividing $6,866,667 by
the average of the closing prices of the Company’s common stock for each trading day during the 10 trading day period
immediately prior to June 1, 2022), all of which units have vested as of May 30, 2025, (the “2022 Annual Grant Time-Based
Award” and, together with the 2022 Transition Period 2 Year Cliff Vest Time-Based Award and 2022 Transition Period 3 Year
Cliff Vest Time-Based Award, the “2022 New Deal Time-Based Awards”).
Performance-Based Award
On June 1, 2022, the Company issued to ZMC 224,402 performance-based RSUs (the “2022 Annual Grant Performance Award”
and, together with the 2022 Transition Period 2 Year Cliff Vest Performance Award and the 2022 Transition Period 3 Year Cliff Vest
Performance Award, the “2022 New Deal Performance Awards”), representing the maximum number of performance-based
RSUs
that are eligible to vest (with the target number of performance-based RSUs of 112,201 based on $13,733,333 divided by the
average
of the closing prices of the Company’s common stock for each trading day during the 10 trading day period
immediately prior to June 1, 2022). The 2022 Annual Grant Performance Award was divided into the following two categories
based on the applicable performance-vesting criteria (as described in the 2022 Annual Grant Restricted Unit Agreement):
Recurrent Consumer Spending Performance-Based Units and TSR Performance-Based Units. The results and payout levels for
the 2022 Annual Grant Performance Award, which vested
or failed to vest,
on
May 30, 2025, are as follows:
|
2022 Annual Grant Performance Award Vested
(#)
|
2022 Annual Grant Performance Award Forfeited
(#)
|
||
|
Based on
Achievement
of Recurrent
Consumer Spending
Performance-Vesting
Criteria
|
Based on
Achievement of
TSR Performance-
Vesting Criteria
|
Based on
Achievement
of Recurrent
Consumer Spending
Performance-Vesting
Criteria
|
Based on
Achievement of
TSR Performance-
Vesting Criteria
|
|
56,100
|
168,302
|
—
|
—
|
2023 Restricted Units
Time-Based Award
On June 1, 2023, the Company issued to ZMC 96,734 time-based RSUs (such number determined by dividing $12,409,320 by
the average of the closing prices of the Company’s common stock for each trading day during the 30 trading day period
immediately prior to June 1, 2023), 32,244 of which units vested on May 31, 2024, 32,245 of which units vested on
May 30, 2025, and the remainder will vest on June 1, 2026, provided that the 2022 Management Agreement has not been
terminated prior to such dates (the “2023 Time-Based Award”).
Performance-Based Award
On June 1, 2023, the Company issued to ZMC 392,800 performance-based RSUs (the
“2023 Performance Award”
),
representing the maximum number of performance-based RSUs that are eligible to vest (with the target number of
performance-based RSUs of 196,400 based on $25,194,680 divided by the average of the closing prices of the Company’s
common stock for each trading day during the 30 trading day period immediately prior to June 1, 2023), which units have been
divided into two categories of vesting as follows: (i) on June 1, 2026, a number of Recurrent Consumer Spending Performance-
Based Units (as defined in the 2023 Restricted Unit Agreement) will vest equal to the product of (x) the target number of
Recurrent Consumer Spending Performance-Based Units in such vesting tranche (49,100) multiplied by (y) the Recurrent
Consumer Spending Vesting Percentage (as defined the 2023 Restricted Unit Agreement) on March 31, 2026, which ranges
from 0% to 200%, and (ii) on June 1, 2026, a number of TSR Performance-Based Units (as defined in the 2023 Restricted Unit
Agreement) will vest equal to the product of (x) the target number of TSR Performance-Based Units in such vesting tranche
(147,300) multiplied by (y) the TSR Vesting Percentage (as defined in the 2023 Restricted Unit Agreement) on March 31, 2026,
which ranges from 0% to 200%.
|
74
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TAKE-TWO INTERACTIVE SOFTWARE, INC. |
2025
Proxy Statement
|
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
MANAGEMENT AGREEMENT
2024 Restricted Units
Time-Based Award
On June 3, 2024, the Company issued to ZMC 101,999 time-based RSUs (such number determined by dividing $15,073,410
by the average of the closing prices of the Company’s common stock for each trading day during the 30 trading day period
immediately prior to June 3, 2024), 33,999 of which units vested on May 30, 2025, and the remainder will vest in equal
installments on June 1, 2026 and June 1, 2027, provided that the 2022 Management Agreement has not been terminated prior
to such dates (the “2024 Time-Based Award”).
Performance-Based Award
On June 3, 2024, the Company issued to ZMC 414,180 performance-based RSUs (the “2024 Performance Award”),
representing the maximum number of performance-based RSUs that are eligible to vest (with the target number of
performance-based RSUs of 207,090 based on $30,603,590 divided by the average of the closing prices of the Company’s
common stock for each trading day during the 30 trading day period immediately prior to June 3, 2024), which units have been
divided into two categories of vesting as follows: (i) on June 1, 2027, a number of Recurrent Consumer Spending Performance-
Based Units (as defined in the 2024 Restricted Unit Agreement) will vest equal to the product of (x) the target number of
Recurrent Consumer Spending Performance-Based Units in such vesting tranche (51,773) multiplied by (y) the Recurrent
Consumer Spending Vesting Percentage (as defined the 2024 Restricted Unit Agreement) on March 31, 2027, which ranges
from 0% to 200%, and (ii) on June 1, 2027, a number of TSR Performance-Based Units (as defined in the 2024 Restricted Unit
Agreement) will vest equal to the product of (x) the target number of TSR Performance-Based Units in such vesting tranche
(155,317) multiplied by (y) the TSR Vesting Percentage (as defined in the 2024 Restricted Unit Agreement) on March 31, 2027,
which ranges from 0% to 200%.
2025 Restricted Units
Time-Based Award
On June 2, 2025, the Company issued to ZMC 73,623 time-based RSUs (such number determined by dividing $16,604,940 by
the average of the closing prices of the Company’s common stock for each trading day during the 30 trading day period
immediately prior to June 2, 2025), which units will vest in equal installments on June 1, 2026, June 1, 2027 and June 1, 2028,
provided that the 2022 Management Agreement has not been terminated prior to such dates (the “2025 Time-Based Award”).
Performance-Based Award
On June 2, 2025, the Company issued to ZMC 298,954 performance-based RSUs (the “2025 Performance Award”),
representing the maximum number of performance-based RSUs that are eligible to vest (with the target number of
performance-based RSUs of 149,477 based on $33,713,060 divided by the average of the closing prices of the Company’s
common stock for each trading day during the 30 trading day period immediately prior to June 2, 2025), which units have been
divided into two categories of vesting as follows: (i) on June 1, 2028, a number of Recurrent Consumer Spending Performance-
Based Units (as defined in the 2025 Restricted Unit Agreement) will vest equal to the product of (x) the target number of
Recurrent Consumer Spending Performance-Based Units in such vesting tranche (37,369) multiplied by (y) the Recurrent
Consumer Spending Vesting Percentage (as defined the 2025 Restricted Unit Agreement) on March 31, 2028, which ranges
from 0% to 200%, and (ii) on June 1, 2028, a number of TSR Performance-Based Units (as defined in the 2025 Restricted Unit
Agreement) will vest equal to the product of (x) the target number of TSR Performance-Based Units in such vesting tranche
(112,018) multiplied by (y) the TSR Vesting Percentage (as defined in the 2025 Restricted Unit Agreement) on March 31, 2028,
which ranges from 0% to 200%.
Awards under the 2017 Management Agreement
Under the 2017 Management Agreement, as further described below, the Company granted RSUs to ZelnickMedia, including
the following RSU awards which vested or were otherwise outstanding during fiscal 2025, as described below: RSUs granted
April 13, 2022 (the “2022 Restricted Units,” and together with the 2022 New Deal Restricted Units, the 2023 Restricted Units,
the 2024 Restricted Units, and the 2025 Restricted Units, the “Restricted Units”) under the 2017 Plan. The 2022 Restricted
Units, comprised of both time-based and performance-based RSUs as described below, were granted pursuant to the terms of
a Restricted Unit Agreement, dated April 13, 2022, by and between the Company and ZelnickMedia (the “2022 Restricted Unit
Agreement,” and together with the 2022 New Deal Restricted Unit Agreements, the 2023 Restricted Unit Agreement, the 2024
Restricted Unit Agreement, and the 2025 Restricted Unit Agreement, the “Restricted Unit Agreements”). As of March 31, 2025,
all restricted stock units granted prior to April 1, 2022 have vested and/or have been forfeited pursuant to their terms.
|
TAKE-TWO INTERACTIVE SOFTWARE, INC. |
2025
Proxy Statement
|
75
|
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
MANAGEMENT AGREEMENT
2022 Restricted Units
Time-Based Award
The Company issued to ZelnickMedia 57,197 time-based RSUs (such number determined by dividing $8,775,000 by the
average of the closing prices of the Company’s common stock for each trading day during the 10 trading day period
immediately prior to April 1, 2022), all of which units vested on April 12, 2024 (the “2022 Time-Based Award”, and together with
the 2022 New Deal Time-Based Awards, the 2023 Time-Based Award, the 2024 Time-Based Award and the 2025 Time-Based
Award, the “Time-
Based Awards”).
Performance-Based Award
The Company issued to ZelnickMedia 139,816 performance-based RSUs (the “2022 Performance Award”, and together with
the 2022 New Deal Performance Awards, the 2023 Performance Award, the 2024 Performance Award, and the 2025
Performance Awards, the “Performance Awards”), which represents the maximum number of performance-based RSUs that are
eligible to vest (with the target number of performance-based RSUs of 69,908 based on $10,725,000 divided by the average of
the closing prices of the Company’s common stock for each trading day during the 10 trading day period immediately prior to
April 1, 2022). The 2022 Performance Award was divided into the following three categories based on the applicable
performance-vesting criteria (as described in the 2022 Restricted Unit Agreement): IP Performance-Based Units, Recurrent
Consumer Spending Performance-Based Units, and TSR Performance-Based Units. The results and payout levels for the 2022
Performance Award, which vested or failed to vest, on April 12, 2024, are as follows:
|
2022 Performance Award Vested
(#)
|
2022 Performance Award Forfeited
(#)
|
||||
|
Based on
Achievement of
IP Performance-
Vesting Criteria
|
Based on
Achievement
of Recurrent
Consumer Spending
Performance-Vesting
Criteria
|
Based on
Achievement of
TSR Performance-
Vesting Criteria
|
Based on
Achievement of
IP Performance-
Vesting Criteria
|
Based on
Achievement of
Recurrent
Consumer Spending
Performance-Vesting
Criteria
|
Based on
Achievement of
TSR Performance-
Vesting Criteria
|
|
17,476
|
17,478
|
85,986
|
—
|
—
|
18,876
|
Treatment of Awards on Termination or Change in Control
Upon a termination of the 2022 Management Agreement by the Company without Cause or by ZMC for Good Reason, or if the
Company and ZMC fail to enter into a new management agreement on substantially similar terms in the aggregate as those
provided under the 2022 Management Agreement upon the expiration of the MA Term, or otherwise fail to agree to extend the
MA Term, any then-unvested Time-Based Awards will immediately vest in full, and any then-unvested Performance Awards will
vest either (x) based on the assumption that the applicable performance measure was achieved at the target level of
performance for the applicable performance period, or (y) prior to a Change in Control (as defined in the 2022 Management
Agreement), solely for TSR Performance-Based Units (as defined in the applicable Restricted Unit Agreement), based on the
actual level of performance achieved as of the date of termination.
In the event that any portion of a Performance Award will not have vested as of the applicable performance vesting date, or
upon a termination of the 2022 Management Agreement by the Company for Cause or by ZMC without Good Reason, ZMC will
forfeit to the Company any and all Restricted Units that have not vested as of such date. In addition, ZMC will forfeit to the
Company all then-unvested Time-Based Awards if the 2022 Management Agreement is terminated by the Company for Cause
or by ZMC without Good Reason prior to the applicable time vesting date.
If a Change in Control occurs during the MA Term, the 2022 Management Agreement will not automatically terminate and all
unvested RSUs granted pursuant to the applicable Restricted Unit Agreement will remain subject to the same vesting terms set
forth in the applicable Restricted Unit Agreement, except that Performance Awards will vest based on the assumption of that the
applicable performance measure was achieved at the target level of performance for the applicable performance period.
Settlement of Restricted Units
Pursuant to the Management Agreement, the Company will have the right to elect to settle the RSUs granted to ZMC pursuant
to the Management Agreement in shares of the Company’s common stock that will be issued pursuant to the 2017 Plan.
|
76
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TAKE-TWO INTERACTIVE SOFTWARE, INC. |
2025
Proxy Statement
|
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
POLICY ON TRANSACTIONS WITH RELATED PERSONS
Registration Statement
Pursuant to the Management Agreement, within 45 days following the request of ZMC, the Company will file a Registration
Statement on Form S-3 registering for resale any of the shares of the Company’s common stock issuable pursuant to awards
granted to ZMC under the Restricted Unit Agreements. The Company most recently filed a registration statement on Form S-3
on June 2, 2025, covering such shares.
The foregoing descriptions of the Management Agreement and the Restricted Unit Agreements (including the Time-Based
Awards and the Performance Awards issuable to ZMC thereunder) are only a summary and are qualified in their entirety by
reference to the full text of the 2017 Management Agreement (and the Restricted Unit Agreement attached as Exhibit A thereto),
which is attached as Exhibit 10.1 to the Company’s Current Report on Form 8-K dated November 22, 2017 and incorporated
herein by reference, the 2022 Restricted Unit Agreement, which is attached as Exhibit 10.2 to the Company’s Registration
Statement on Form S-3 dated April 13, 2022 and incorporated herein by reference, the 2022 Management Agreement, which is
attached as Exhibit 10.1 to the Company’s Current Report on Form 8-K dated May 5, 2022 and incorporated herein by
reference, the 2022 New Deal Restricted Unit Agreements, which are attached as Exhibits 10.3, 10.4 and 10.5 to the
Company’s Quarterly Report on Form 10-Q dated August 9, 2022 and incorporated herein by reference, the 2023 Restricted
Unit Agreement, which is attached as Exhibit 10.2 to the Company’s Registration Statement on Form S-3 dated June 1, 2023
and incorporated herein by reference, the 2024 Restricted Unit Agreement, which is attached as Exhibit 10.2 to the Company’s
Registration Statement on Form S-3 dated June 3, 2024 and incorporated herein by reference, and the 2025 Restricted Unit
Agreement, which is attached as Exhibit 10.2 to the Company’s Registration Statement on Form S-3 dated June 2, 2025 and
incorporated herein by reference.
Policy on Transactions with Related Persons
The Board of Directors has adopted a policy requiring that any transaction: (1) involving the Company or any of its subsidiaries
and (2) in which one of our directors, nominees for director, executive officers, or greater than five percent shareholders, or their
immediate family members, have a direct or indirect material interest; be approved or ratified by a majority of the independent
directors of the full Board of Directors.
In determining whether to approve or ratify any such transaction, the independent directors of the Board of Directors must
consider, in addition to other factors deemed appropriate, whether the transaction is on terms no less favorable to the Company
than those for transactions involving unrelated parties. No director may participate in any review, approval or ratification of any
transaction if the director, or an immediate family member of such director, has a direct or indirect material interest in
the transaction.
Transactions with Related Persons
During fiscal
2025
, we were not a participant in any financial transaction, arrangement or relationship in which a related person
had or will have a direct or indirect material interest, in an amount exceeding $120,000, except for the transactions described
above with ZMC and the following transaction which the independent directors of the Board of Directors had previously
reviewed, approved and ratified in accordance with its policy on transactions with related persons.
During fiscal
2024
, the Company entered into an Initial Collaboration Agreement with the Qiddiya Investment Company (“QIC”),
which is owned by the Public Investment Fund, a shareholder holding more than 5% of Take-Two’s common stock. Pursuant to
the Initial Collaboration Agreement, the Company and QIC agreed to explore a potential business collaboration relating to the
Qiddiya planned entertainment and tourism project located in Saudi Arabia. Pursuant to the Initial Collaboration Agreement,
QIC paid a commitment fee equal to approximately $1.2 million to the Company in fiscal 2025.
|
TAKE-TWO INTERACTIVE SOFTWARE, INC. |
2025
Proxy Statement
|
77
|
SECTION 16(A) BENEFICIAL
OWNERSHIP COMPLIANCE
The members of our Board of Directors, our executive officers and persons who beneficially own more than 10% of our
outstanding common stock are subject to the reporting requirements of Section 16(a) of the Securities Exchange Act of 1934,
as amended, which requires them to file reports with respect to their ownership of our common stock and their transactions in
such common stock. Based solely upon a review of the copies of Section 16(a) reports that we have received from such
persons or entities for transactions in our common stock and their common stock holdings for fiscal 2025, we believe that all
reporting requirements under Section 16(a) for such fiscal year were met in a timely manner by our directors, executive officers
and persons who beneficially own more than 10% of our outstanding common stock.
|
78
|
TAKE-TWO INTERACTIVE SOFTWARE, INC. |
2025
Proxy Statement
|
PROPOSAL 3: APPROVAL OF AN AMENDMENT AND
RESTATEMENT OF THE AMENDED AND RESTATED
2017 STOCK INCENTIVE PLAN
|
Executive Summary Of Proposal
|
||
|
Summary of Proposal:
|
To amend and restate the Amended and Restated Take-Two Interactive Software, Inc.
2017 Stock Incentive Plan (the “2017 Plan”) to increase the share reserve under the
2017 Plan by 5,200,000 shares of common stock.
|
|
|
Number of Shares Available for
Grant under the 2017 Plan:
|
5,943,569 as of June 30, 2025
|
|
|
Number of Shares Subject to
Outstanding Awards under the
2017 Plan:
|
9,521,810 as of June 30, 2025
|
|
|
Number of Total Shares of Common
Stock Outstanding:
|
184,404,145 as of June 30, 2025
|
|
|
Uses of Equity Compensation:
|
Equity is an essential tool to attract and retain highly-skilled creative talent, and it
aligns the interests of creative employees with shareholders.
•
Our creative employees at our Rockstar Games, 2K, and Zynga labels drive our
business, are critical to our continued success, and help us build
shareholder value.
•
We believe our use of equity throughout Take-Two, and beyond the executive level
is a strategic advantage and vital to our ownership culture, as evidenced by 90% of
our full-time employees being eligible to participate in the 2017 Plan.
•
Two-thirds of equity grants to ZMC and our non-ZMC NEOs are performance-
based and, therefore, at risk.
•
In fiscal 2025, equity awards were primarily used to incentivize and retain
employees at our labels as illustrated below:
|
Fiscal 2025 Share Grant Distribution
|
TAKE-TWO INTERACTIVE SOFTWARE, INC. |
2025
Proxy Statement
|
79
|
PROPOSAL 4: APPROVAL OF AN AMENDMENT AND RESTATEMENT OF THE AMENDED AND RESTATED 2017 STOCK INCENTIVE PLAN
|
Executive Summary Of Proposal
|
||
|
Certain Plan Highlights:
|
•
Limits on certain awards to individual participants
•
Non-liberal recycling of shares used to satisfy tax withholding obligations or as
payment for the exercise price or base price for stock options and SARs
•
No evergreen provision for share reserve
•
Dividends and dividend equivalents on awards do not vest and are not paid until
the award is earned and vested
•
Annual compensation limits for non-employee directors
•
No repricing of underwater stock options or SARs without shareholder approval
•
No discounted stock options or SARs
•
Clawback provisions
•
Non-liberal change in control provisions
•
No automatic grants
•
Double-trigger acceleration of vesting for equity assumed or substituted for in
connection with a change in control
|
Proposed Amendment and Restatement of the 2017 Plan
At the Annual Meeting, the Company’s shareholders will be asked to approve an amendment and restatement of the 2017 Plan
to increase the available shares reserved thereunder by 5,200,000 shares as well as to extend the term of the 2017 Plan, which
is set to expire on September 15, 2027, to September 18, 2035. The amendment and restatement of the 2017 Plan was
approved unanimously by the Board of Directors at its meeting on July 28, 2025. No other changes are contemplated by the
amendment and restatement of the 2017 Plan.
The 2017 Plan was first adopted by the Company in September 2017 and has been amended or amended and restated in each
of 2020, 2021 and 2023. The 2017 Plan is designed to enable the Company to offer eligible employees, consultants and non-
employee directors, stock-based incentives in the Company to attract, retain and reward such individuals and strengthen the
mutuality of interests between such individuals and the Company’s shareholders.
As discussed below, the Board of Directors believes the 2017 Plan is essential to the Company’s continued success as it
remains committed to the Company’s historical philosophy of incentivizing employees by tying a significant portion of their
compensation to the interests of the Company’s shareholders. As of June 30, 2025, there were 5,943,569 shares available for
grant under the 2017 Plan. The Company has determined that an increase to the shares reserved under the 2017 Plan by
5,200,000 shares, together with an extension of the 2017 Plan term for ten years from the date of shareholder approval, will
allow the Company to continue providing meaningful incentives to its service providers on a Company-wide basis under the
2017 Plan. If approved, we anticipate that the share reserve available under the 2017 Plan would allow us to maintain our
regular equity compensation program without interruption for the next two or three years. The share reserve, including the new
proposed shares, is subject to certain equitable and other adjustments as described below and in the 2017 Plan.
If the amendment and restatement of the 2017 Plan is not approved, the Company would be at a significant disadvantage
relative to its competitors for recruiting, retaining and motivating the high caliber individuals critical to our growth and profitability
and could be forced to increase cash compensation, thereby reducing resources available to meet our business needs. Since
our inception, the Board has sought to align the interests of our employees with the long-term interests of shareholders through,
among other things, a determination to place a significant emphasis on equity-based compensation as a component of our
compensation programs. The Board of Directors believes that equity compensation of the type available for grant under the
2017 Plan, a cash- and stock-based incentive plan, furthers the Company’s goal of creating long-term value for the Company’s
shareholders by fostering an ownership culture that encourages a focus on long-term performance, retention, and shareholder
value-creation, and exposes the Company’s employees to economic diminishment if the Company’s share performance lags.
|
80
|
TAKE-TWO INTERACTIVE SOFTWARE, INC. |
2025
Proxy Statement
|
PROPOSAL 4: APPROVAL OF AN AMENDMENT AND RESTATEMENT OF THE AMENDED AND RESTATED 2017 STOCK INCENTIVE PLAN
Alignment of the 2017 Plan with the Interests of the Company and Shareholders
The Board of Directors believes that using equity to retain and motivate the Company’s key employees is critical to the
achievement of the Company’s strategy and long-term goals and it considered the following factors, among other things, when
adopting the amendment and restatement of the 2017 Plan:
•
Allows us to recruit and retain top talent.
The Board of Directors believes that the proposed increase in the shares available
under the 2017 Plan will serve a critical role in attracting and retaining high caliber individuals essential to the
Company’s success.
•
Allows us to align participant and shareholder interests.
The Board of Directors believes that stock ownership by employees,
consultants and non-employee directors provides performance incentives and fosters long-term commitment to our benefit
and to the benefit of our shareholders.
•
Allows us to pay for performance.
The Board of Directors believes that equity compensation, by its very nature, is
performance-based compensation and that the 2017 Plan reflects our pay-for-performance philosophy and motivates our
employees, consultants and non-employee directors to enhance our growth and profitability.
•
Allows us to maintain one single comprehensive long-term incentive plan.
The Board of Directors believes that the 2017 Plan
will best serve our long-term goals.
Key Features of the 2017 Plan
The 2017 Plan and the Company’s related governance practices and policies include many features that are designed to
protect shareholder interests. A summary of these features follows, and a more detailed description of the features is included
under the heading “Summary of the 2017 Plan” below. The summaries in this proposal do not provide a complete description of
all the provisions of the 2017 Plan and are qualified in their entirety by reference to the full text of the 2017 Plan, as amended
and restated, which is attached to this Proxy Statement as
Annex B.
•
Annual limits on certain awards to individual participants.
The 2017 Plan contains limits on the number of certain types of
awards that may be granted to individual participants in a given fiscal year, as discussed below.
•
Non-liberal recycling for stock options and stock appreciation rights.
The 2017 Plan provides that, with respect to stock
options and stock appreciation rights, shares used to satisfy tax withholding obligations or as payment for the exercise price
or base price will constitute shares delivered to the participant and will not be available for future grant under the 2017 Plan.
•
Provides for a fixed reserve of shares of common stock.
The number of shares of common stock available for grant under
the 2017 Plan is fixed and will not automatically increase because of an “evergreen” feature; shareholder approval is
required to issue any additional shares, allowing the Company’s shareholders to have direct input on our equity
compensation program.
•
Limits annual compensation for non-employee directors.
The 2017 Plan imposes a $750,000 annual limit on the cash and
equity compensation payable to the Company’s non-employee directors, subject to certain limited exceptions.
•
Requires minimum vesting periods for certain awards.
Awards of stock options and stock appreciation rights under the 2017
Plan must vest over a period of not less than one year from the date of grant.
•
Provides for limited terms.
The maximum term of a stock option or stock appreciation right under the 2017 Plan is 10 years.
•
Prohibits repricing of stock options and stock appreciation rights.
The 2017 Plan prohibits the repricing of stock options and
stock appreciation rights, as well as the cash buyout of underwater awards, without prior shareholder approval.
•
No discounted stock options or stock appreciation rights.
All stock options and stock appreciation rights must have an
exercise price or base price equal to or greater than the fair market value of the underlying shares on the date of grant.
•
Double-trigger vesting.
Pursuant to the 2017 Plan, the vesting of awards that are assumed or substituted in connection with
a change in control only accelerates as a result of the change in control if a participant experiences a qualifying termination
within one year following the change in control.
•
No dividends or dividend equivalents on unearned awards.
The 2017 Plan also prohibits the current payment of dividends or
dividend equivalent rights on unvested or unearned awards, including performance awards.
•
Prohibits certain detrimental activities by participants.
The 2017 Plan provides that awards will be subject to forfeiture or
recovery in the event that a participant engages in detrimental activities, as discussed below.
|
TAKE-TWO INTERACTIVE SOFTWARE, INC. |
2025
Proxy Statement
|
81
|
PROPOSAL 4: APPROVAL OF AN AMENDMENT AND RESTATEMENT OF THE AMENDED AND RESTATED 2017 STOCK INCENTIVE PLAN
•
Non-liberal definition of change in control.
The change in control definition contained in the 2017 Plan is not a “liberal”
definition that would be triggered on mere shareholder approval of a transaction.
•
Clawback.
Awards granted under the 2017 Plan are subject to the Company’s clawback and/or recoupment policies.
•
Limitation on amendments.
Amendments to the 2017 Plan must be approved by the Company’s shareholders if shareholder
approval is required by applicable law or the applicable rules of the national securities exchange on which the Company’s
shares of common stock are principally listed or if the amendment would diminish the prohibitions on repricing stock options
or stock appreciation rights.
•
No automatic grants.
The 2017 Plan does not provide for automatic grants to any participant.
•
Independent Compensation Committee.
Our Compensation Committee consists entirely of independent directors.
•
No tax gross-ups.
The 2017 Plan does not provide for any tax gross-ups.
Key Data
The following table includes information regarding the Company’s outstanding awards and shares of common stock available
for future awards under the 2017 Plan as of June 30, 2025 as if the amendment and restatement of the 2017 Plan were not
approved under this proposal. The 2017 Plan is the only active equity-based plan under which the Company can currently grant
equity awards, although the Company also maintains
the 2017 Global ESPP as described in “Executive Compensation—
Narrative Disclosure Regarding Equity Plans and Employment Agreements—2017 Global Employee Stock Purchase Plan.”
|
Amended and Restated
2017 Plan
|
|
|
Total shares of common stock underlying outstanding stock options
|
219
|
|
Weighted average exercise price of outstanding stock options
|
$33.2
|
|
Weighted average remaining contractual life of outstanding stock options
|
4.69 years
|
|
Total shares subject to outstanding, unvested full-value awards
(1)
|
9,521,591
|
|
Total shares of common stock currently available for grant
|
5,943,569
|
(1)
Number of shares reflects maximum achievement for performance-based awards.
The Compensation Committee carefully monitors the Company’s annual burn rate and total fully-diluted overhang by granting
only the number of stock-based awards that it believes is necessary to attract, reward and retain key employees, officers and
other service providers. Burn rate, or run rate, refers to how fast a company uses the supply of shares authorized for issuance
under its stock incentive plan. Over the last three fiscal years, the Company has maintained an average burn rate of only 1.29%
of shares of common stock outstanding per year. The following table shows the Company’s burn rate percentage over the past
three fiscal years:
|
Key Equity Metric
|
2025
|
2024
|
2023
|
||
|
Burn Rate
(1)
|
1.20%
|
1.12%
|
1.56
%
|
(1)
Burn rate is calculated by dividing the number of shares of common stock subject to time-based equity awards granted plus performance awards earned/vested
during the fiscal year by the weighted average number of shares of common stock outstanding during the fiscal year.
After giving effect to the proposed increase to the share reserve the total fully-diluted overhang as of June 30, 2025, would be
10.07%. In this context, fully-diluted overhang is calculated as the sum of grants outstanding and shares available for future
awards (numerator) divided by the sum of the numerator and basic common shares outstanding, with all data effective as of
June 30, 2025.
Our future share usage could be impacted by a number of factors such as award type mix; hiring and promotion activity at the
executive level; the rate at which shares are returned to the 2017 Plan’s reserve upon the awards’ expiration, forfeiture or cash
settlement; the future performance of our stock price; the consequences of acquiring other companies; and other factors.
Summary of the 2017 Plan
The following is a summary of certain material features of the 2017 Plan.
|
82
|
TAKE-TWO INTERACTIVE SOFTWARE, INC. |
2025
Proxy Statement
|
PROPOSAL 4: APPROVAL OF AN AMENDMENT AND RESTATEMENT OF THE AMENDED AND RESTATED 2017 STOCK INCENTIVE PLAN
Purpose
The 2017 Plan is designed to assist the Company in attracting, retaining, motivating and rewarding certain of the Company’s
key employees, including our highly-skilled creative talent, officers, directors and other service providers, and to promote the
creation of long-term value for the Company’s shareholders by closely aligning the interests of such individuals with those of
the shareholders.
Administration
The 2017 Plan will be administered by the Company’s Compensation Committee (the “Committee”), which will have the
authority to designate participants, grant awards, determine the number of shares of common stock to be covered by awards,
determine the terms and conditions of any awards, including when an award may be granted, and construe and interpret the
2017 Plan and related award agreements. The Committee has the authority to accelerate the vesting of outstanding awards at
any time and for any reason, including upon a “corporate event” (as defined in the 2017 Plan), subject to the 2017 Plan’s
double-trigger vesting limitation, or in the event of certain types of terminations of employment. To the extent permitted by
applicable law, the Committee is permitted to delegate its authority under the 2017 Plan to officers or employees of the
Company, although any award granted to any person who is not an employee of the Company (including any non-employee
director of the Company or its affiliates), who is subject to Section 16 of the Exchange Act must be expressly approved by
the Committee.
Shares of Stock Available for Issuance Under the 2017 Plan and Limits
on Awards
As of June 30, 2025, 5,943,569 shares of common stock were available for issuance under the 2017 Plan, subject to
adjustment as provided in the 2017 Plan. If the proposed amendment to and restatement of the 2017 Plan is approved by
shareholders, an additional 5,200,000 shares of our common stock will be available for future issuance under the 2017 Plan. In
addition, the number of shares of common stock available for issuance under the 2017 Plan will be subject to increase by any
shares of common stock subject to an award outstanding under the 2009 Plan after June 30, 2017 (a “Prior Plan Award”) that
becomes eligible for reuse pursuant to the share recycling provisions of the 2017 Plan, as described below.
Stock-based awards assumed or substituted by the Company or its affiliates as part of a corporate transaction (including from
an entity that the Company merges with or into, acquires, or engages with in a similar corporate transaction), will not count
against the number of shares of common stock reserved and available for issuance pursuant to the 2017 Plan except as may
be required by Section 422 of the Code. In addition, shares of common stock will not be deemed to have been issued pursuant
to the 2017 Plan with respect to any portion of an award that is settled in cash. To the extent that any such award expires or is
cancelled, forfeited, settled in cash or otherwise terminated without delivery to the participant of the full number of shares of
stock to which the award related, the undelivered shares will generally become available for grant to participants who were not
employed or retained by the Company or its affiliates at the time of such assumption or substitution. However, as a result of the
approval of the amendment and restatement of the 2017 Plan in September 2023, to the extent that any Zynga Award (as
defined in the 2017 Plan) expires or is cancelled, forfeited, settled in cash or otherwise terminated without delivery to the
participant of the full number of shares of stock to which the award related, the undelivered shares will generally become
available for grant to any and all participants in the 2017 Plan, regardless of whether such participant was employed or retained
by the Company or its affiliates at the time of such assumption or substitution.
If any award granted under the 2017 Plan or any Prior Plan Award expires or is canceled, forfeited, settled in cash or otherwise
terminated without delivery of shares to a participant, the undelivered shares will again become available for awards under the
2017 Plan. In addition, the number of shares available for awards under the 2017 Plan will be increased by any shares
tendered by a participant or withheld by the Company to pay any tax withholding obligation with respect to any “full value
award” (as such term is defined in the 2017 Plan) or any full value Prior Plan Award. The following shares will be deemed to
constitute shares delivered to a participant and will not be deemed to again be available for delivery under the 2017 Plan:
(i) shares tendered by the participant or withheld by the Company in payment of the exercise price of a stock option under the
2017 Plan or the Prior Plan, (ii) shares tendered by the participant or withheld by the Company to satisfy any tax withholding
obligation with respect to “exercisable awards” (as such term is defined in the 2017 Plan) or options or stock appreciation rights
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under the Prior Plan, (iii) shares subject to a stock appreciation right under the 2017 Plan or the Prior Plan that are not issued in
connection with its stock settlement on exercise thereof, and (iv) shares reacquired by the Company on the open market or
otherwise using cash proceeds from the exercise of stock options under the 2017 Plan or the Prior Plan.
Under the 2017 Plan, the maximum value of awards granted to non-employee directors in any one calendar year, together with
any cash fees paid to such directors during such calendar year in respect of the Director’s service as a member of the Board
during such year, may not, absent extraordinary circumstances, exceed $750,000 in total value. As determined by the
Committee in its discretion, this limit may be increased for a non-executive chair of the Board of Directors or, in extraordinary
circumstances, for other individual non-employee directors; provided that the non-employee director receiving such additional
compensation may not participate in the decision to award such compensation.
Awards and the shares authorized under the 2017 Plan are subject to adjustment as described below under “Changes in
Capital Structure.”
The maximum number of shares of common stock reserved for issuance under the 2017 Plan that may be issued or transferred
upon exercise or settlement of incentive stock options is 7,200,000 shares.
Awards and the shares of common stock authorized under the 2017 Plan, as well as any individual share limits, are subject to
adjustment as described below under “Changes in Capital Structure.”
The closing price of a share of common stock as reported on The Nasdaq Stock Market on July 17, 2025, was $233.92 per
share of common stock.
Eligibility
The following individuals will be eligible to participate in the 2017 Plan:
•
employees and officers of the Company or its affiliates,
•
non-employee directors of the Company or its affiliates;
•
other persons who provide bona fide services to the Company or its affiliates as a consultant or advisor, which are not in
connection with the offer and sale of securities in a capital-raising transaction, and do not, directly or indirectly, promote or
maintain a market for the Company’s or its affiliates’ securities, and who are designated as eligible by the Committee; and
•
prospective employees of the Company or its affiliates, although such individuals may not receive any payment or exercise
any rights relating to awards until they have actually commenced employment.
As of March 31, 2025, there were approximately 11,598 employees (90% of regular full-time employees), 9
independent directors, and 2 consultants and service providers (including ZMC) eligible to be selected by the Committee for
participation in the 2017 Plan.
Grants of Awards
Pursuant to the 2017 Plan, the Committee may grant awards of non-qualified stock options, incentive stock options, stock
appreciation rights, restricted stock, restricted stock units, performance awards (including cash-based performance awards),
and other stock-based awards. Awards will vest in accordance with the terms of the applicable award agreement. In addition,
other than with respect to a “substitute award” (as such term is defined in the 2017 Plan), and except with respect to a
maximum of 5% of the shares authorized for grant under the 2017 Plan, no award of options or stock appreciation rights
granted under the 2017 Plan may vest over a period that is less than one year from the date of grant, except that the foregoing
minimum vesting period will not apply in the event of a participant’s
termination of employment without “cause,” a participant’s
termination of employment due to “retirement” (as such term is defined in the 2017 Plan), death or disability, or a “corporate
event,” subject to the 2017 Plan’s double-trigger vesting limitation.
Stock Options
The Company has not recently granted stock options to anyone, including the Company’s NEOs, and has no present intention
to grant stock options in the near term. However, the Company did assume stock options in connection with its acquisition of
Playdots in September 2020 and its acquisition of Zynga in May 2022. The 2017 Plan allows the grant of both incentive stock
options, within the meaning of Section 422(b) of the Code, and non-qualified stock options.
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A stock option granted under the 2017 Plan provides a participant with the right to purchase, within a specified period of time, a
stated number of shares of common stock at the price specified in the applicable award agreement. The exercise price
applicable to a stock option will be set by the Committee at the time of grant and will not be less than the fair market value of a
share of common stock on the date of grant.
The maximum term of a stock option granted under the 2017 Plan is 10 years from the date of grant (or five years in the case of
an incentive stock option granted to a 10% shareholder). Payment of the exercise price of a stock option may be made in a
manner approved by the Committee, which may include any of the following payment methods: cash, shares of common stock,
pursuant to a broker-assisted cashless exercise in accordance with procedures approved by the Committee, pursuant to a
delivery of a notice of “net exercise,” or in any other form of consideration approved by the Committee.
The 2017 Plan provides that participants whose employment is terminated (i) for “cause” (as such term is defined in the 2017
Plan), or (ii) due to the participant’s voluntary termination (including “retirement”) after the occurrence of an event that would be
grounds for a termination for “cause,” will forfeit all of their stock options, whether or not vested. Participants terminated for any
other reason will forfeit their unvested stock options and retain their vested stock options, and will have one year (in the case of
a termination by reason of “retirement,” death or disability) or 90 days (in all other cases) following their termination date to
exercise their vested stock options. In addition, if a participant dies within any such post-termination exercise period, all vested
stock options will be exercisable by the person(s) to whom such participant’s rights under the stock options pass by will or by
the applicable laws of descent and distribution until 12 months following the date of death. The Committee may also exercise its
discretion to provide for different treatment of stock options upon termination. No incentive stock options may be granted under
the 2017 Plan following the 10
th
anniversary of the earlier of (i) the date the 2017 Plan was adopted by the Board of Directors
and (ii) the date the shareholders of the Company approve the 2017 Plan.
Stock Appreciation Rights
The Company has not recently granted stock appreciation rights to anyone, including the Company’s “named executive
officers,” and has no present intention to grant stock appreciation rights in the near term. However, to maintain maximum
flexibility, the 2017 Plan allows the grant of stock appreciation rights. A stock appreciation right is a conditional right to receive
an amount equal to the value of the appreciation in the shares of common stock over a specified period. Stock appreciation
rights may be settled in shares of common stock, cash or other property, as specified in the award agreement or as determined
by the Committee. The base price applicable to a stock appreciation right will be set by the Committee at the time of grant and
will not be less than the fair market value of a share of common stock on the date of grant.
The maximum term of a stock appreciation right granted under the 2017 Plan is 10 years from the date of grant. Upon exercise
of a stock appreciation right, payment in respect of such stock appreciation right may be made in cash, shares of common
stock, or property as specified in the applicable award agreement or as determined by the Committee, in each case having a
value in respect of each share of common stock underlying the portion of the stock appreciation right so exercised, equal to the
difference between the base price of such stock appreciation right and the fair market value of a share of common stock on the
exercise date.
The 2017 Plan provides that participants whose employment is terminated (i) for “cause,” or (ii) due to the participant’s
voluntary termination (including “retirement”) after the occurrence of an event that would be grounds for a termination for
“cause,” will forfeit all of their stock appreciation rights, whether or not vested. Participants terminated for any other reason will
forfeit their unvested stock appreciation rights and retain their vested stock appreciation rights, and will have one year (in the
case of a termination by reason of “retirement,” death or disability) or 90 days (in all other cases) following their termination date
to exercise their vested stock appreciation rights. In addition, if a participant dies within any such post-termination exercise
period, all vested stock appreciation rights will be exercisable by the person(s) to whom such participant’s rights under the stock
appreciation rights pass by will or by the applicable laws of descent and distribution until 12 months following the date of death.
The Committee may also exercise its discretion to provide for different treatment of stock appreciation rights upon termination.
Restricted Stock
An award of restricted stock is a grant of shares of common stock which are subject to limitations on transfer during a restricted
period established in the applicable award agreement. Holders of restricted stock will generally have the rights and privileges of
a shareholder with respect to their restricted stock.
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Except as otherwise provided by the Committee, in the event a participant is terminated for any reason, the vesting of the
participant’s restricted stock will cease, and as soon as practicable following the termination, the Company will repurchase all of
such participant’s unvested shares of restricted stock at a purchase price equal to the original purchase price paid for the
restricted stock, or if the original purchase price was $0, the unvested shares of restricted stock will be forfeited to the Company
by the participant for no consideration.
Restricted Stock Units
A restricted stock unit is a notional unit representing the right to receive one share of common stock (or the cash value of one
share of common stock) on a specified settlement date. When a participant satisfies the conditions of the restricted stock unit
award established by the Committee in the applicable award agreement, the award will be settled in shares of common stock,
cash or property, as determined by the Committee in its discretion.
Except as otherwise provided by the Committee, in the event a participant is terminated for any reason, the vesting with respect
to the participant’s restricted stock units will cease, all of the participant’s unvested restricted stock units will be forfeited for no
consideration as of the date of such termination, and any shares of common stock remaining undelivered with respect to the
participant’s vested restricted stock units will be delivered on the delivery date or dates specified in the applicable
award agreement.
Performance Awards
A performance award (which may be classified as a performance share, performance unit or cash award) represents the right to
receive certain amounts based on the achievement of pre-determined performance goals during a designated performance
period. The terms of each performance award will be set forth in the applicable award agreement. The Committee will be
responsible for setting the applicable performance goals.
Performance goals may be established on a Company-wide basis, project or geographical basis or, as the context permits, with
respect to one or more business units, divisions, lines of business or business segments, subsidiaries, products, regions, or
other operational units or departments of the Company (or in combination thereof) or may be related to the performance of an
individual participant and may be expressed in absolute terms, or relative or comparative to (i) current internal targets or
budgets, (ii) the past performance of the Company (including the performance of one or more subsidiaries, divisions, or
operating units), (iii) the performance of one or more similarly situated companies, (iv) the performance of an index covering
multiple companies, or (v) other external measures of the selected performance criteria.
The Committee, in its sole discretion, will make appropriate adjustments in the method of calculating the attainment of
applicable performance goals to provide for objectively determinable adjustments, modifications or amendments to any of the
business criteria described above, including, without limitation, for one or more of the following items of gain, loss, profit or
expense: (i) determined to be items of an unusual nature or of infrequency of occurrence or non-recurring in nature; (ii) related
to changes in accounting principles under “generally accepted accounting principles” or tax laws; (iii) related to currency
fluctuations; (iv) related to financing activities (e.g., effect on earnings per share of issuing convertible debt securities);
(v) related to restructuring, divestitures, productivity initiatives or new business initiatives; (vi) related to discontinued operations
that do not qualify as a segment of business under “generally accepted accounting principles”; (vii) attributable to the business
operations of any entity acquired by the Company during the fiscal year; (viii) non-operating items; and (ix) acquisition or
divestiture expenses.
Performance awards that have been earned as a result of the relevant performance goals being achieved may be paid in the
form of cash, common stock or other awards under the 2017 Plan (or some combination thereof). Except as otherwise provided
by the Committee, if a participant is terminated for any reason prior to the end of an applicable performance period, the
participant will forfeit all performance awards held by such participant.
Other Stock-Based Awards
The 2017 Plan authorizes the Committee to grant other awards that may be denominated in, payable in, valued in, or otherwise
related to the Company’s common stock. Such awards and the terms applicable to such awards will be set forth in
award agreements.
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Treatment of Dividends and Dividend Equivalents on Unvested Awards
The 2017 Plan provides that, with respect to any award that provides for or includes a right to dividends or dividend equivalents,
if dividends are declared during the period that an equity award is outstanding, such dividends (or dividend equivalents) will
either (i) not be paid or credited with respect to such award or (ii) be accumulated but remain subject to vesting requirement(s)
to the same extent as the applicable award and will only be paid at the time or times such vesting requirement(s) are satisfied.
Except as otherwise determined by the Committee, no interest will accrue or be paid on the amount of any cash dividends
withheld. No dividends or dividend equivalents will be paid on options or stock appreciation rights.
Detrimental Activity
Unless otherwise determined by the Committee at the time of grant, the award agreements will provide that (i) in the event that
a participant engages in “detrimental activity” (as such term is defined in the 2017 Plan) prior to the vesting of any “full value
award” or the exercise of any “exercisable award,” all awards held by such participant will terminate and expire, (ii) as a
condition of the exercise of an “exercisable award,” a participant will be required to certify in a manner acceptable to the
Company (or shall be deemed to have certified) that the participant is in compliance with the terms and conditions of the 2017
Plan and that the participant has not engaged in, and does not intend to engage in, any “detrimental activity,” and (iii) in the
event the participant engages in “detrimental activity” during the one-year period commencing on the later of (a) the date a “full
value award” vests or the date an “exercisable award” is exercised, or (b) the date of the participant’s termination date, the
Company will be entitled to recover from the participant at any time within one year after such date, and the participant will pay
over to the Company, an amount equal to any gain realized (whether at the time of vesting, exercise or thereafter).
Clawback; Sub-Plans
All awards granted under the 2017 Plan will be subject to incentive compensation clawback and recoupment policies
implemented by the Board of Directors (or a committee or subcommittee of the Board of Directors) from time to time, in addition
to the recoupment provisions relating to a participant’s “detrimental activity.” In addition, the Committee may adopt such
procedures and sub-plans as are necessary or appropriate to permit participation in the 2017 Plan by individuals who are non-
U.S. nationals or are primarily employed or providing services outside the United States, and may modify the terms of any
awards granted to such participants in a manner deemed by the Committee to be necessary or appropriate in order that such
awards conform with the laws of the country or countries where such participants are located.
No Repricing of Awards
No awards may be repriced without shareholder approval. For purposes of the 2017 Plan, “repricing” means any of the
following: (i) changing the terms of the award to lower its exercise price or base price (other than on account of capital
adjustments as described below under “Changes in Capital Structure”), (ii) any other action that is treated as a repricing under
“generally accepted accounting principles,” and (iii) repurchasing for cash or canceling an award in exchange for another award
at a time when its exercise price or base price is greater than the fair market value of the underlying common stock.
Changes in Capital Structure
In the event of (i) any change in the Company’s outstanding common stock or capital structure by reason of stock dividends,
extraordinary cash dividends, stock splits, reverse stock splits, spinoffs, recapitalizations, reorganizations, mergers,
amalgamations, consolidations, combinations, exchanges, or other relevant changes in capitalization, (ii) the declaration of any
extraordinary dividend, or (iii) any change in applicable laws or circumstances that results or could result in the substantial
dilution or enlargement of participants’ rights under the 2017 Plan, the Committee will equitably and proportionately adjust or
substitute, as determined by the Committee, in its sole discretion, the aggregate number of shares of common stock that may
be granted pursuant to awards, the number of common stock covered by outstanding awards under the 2017 Plan, the per-
share price of common stock underlying outstanding awards under the 2017 Plan, and, if applicable, the performance
objectives that must be achieved before such performance-based award shall become earned. The Committee may, in its
discretion, provide that an adjustment take the form of a cash payment to the holder of an outstanding award with respect to all
or part of an outstanding award, which payment will be subject to such terms and conditions (including timing of payment(s),
vesting and forfeiture conditions) as the Committee may determine in its sole discretion.
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Corporate Events
For purposes of the 2017 Plan, a “corporate event” means:
•
a merger, amalgamation, or consolidation involving the Company in which the Company is not the surviving corporation,
•
a merger, amalgamation, or consolidation involving the Company in which the Company is the surviving corporation but the
holders of common stock receive securities of another corporation or other property or cash,
•
a “change in control”, or
•
a reorganization, dissolution or liquidation of the Company.
Pursuant to the 2017 Plan, in connection with a corporate event, the Committee may take any of the following actions:
•
require that outstanding awards be assumed or substituted in connection with such event,
•
accelerate the vesting of any outstanding awards not assumed or substituted in connection with such event, subject to the
consummation of such event; provided that any awards that vest subject to the achievement of performance criteria will be
deemed earned (i) based on actual performance through the date of the corporate event or (ii) at the target level (or if no
target is specified, the maximum level), in the event actual performance cannot be measured through the date of the
corporate event, in each case, with respect to any unexpired performance periods or performance periods for which
satisfaction of the performance criteria or other material terms for the applicable performance period has not been certified
by the Committee prior to the date of the corporate event,
•
cancel outstanding awards not assumed or substituted in connection with such event upon the consummation of such event
(whether vested or unvested) and provide award holders with the per-share consideration being received by the Company’s
shareholders in connection with such event in exchange for their awards (or, with respect to a cash award, the amount
payable pursuant to the award),
•
cancel all outstanding “exercisable awards” (as such term is defined in the 2017 Plan), whether vested or unvested, not
assumed or substituted in connection with such event as of the consummation of such event, and provide the holder at least
20 days to exercise each such “exercisable award” canceled prior to the consummation of such event, or
•
replace outstanding awards with a cash incentive program that preserves the value of the replaced awards and contains
identical vesting conditions.
Pursuant to the 2017 Plan, no award agreement will provide that the vesting, payment, purchase or distribution of any award
that is assumed or substituted in connection with a “change in control” will be accelerated by reason of a “change in control” for
any participant unless the participant’s employment is involuntarily terminated during the one-year period commencing on the
“change in control.” For this purpose, a participant’s termination will be deemed to have been involuntarily terminated as a result
of “change in control” if a participant (i) is involuntarily terminated other than for “cause” (including the participant’s resignation
for “good reason” (or similar term)), as defined in the applicable service agreement between the participant and the Company or
in a change in control, retention, severance or similar plan defining such terms in which the participant participates or (ii) is
terminated under circumstances which entitle the participant to mandatory severance payment(s) pursuant to applicable law.
Non-Transferability of Awards
Awards are generally non-transferable other than by will or the laws of descent and distribution, provided, however, that except
with respect to incentive stock options, awards and a participant’s rights under the 2017 Plan are transferable for no value to
the extent provided in an award agreement or otherwise determined at any time by the Committee.
Termination and Amendment
The Board of Directors or the Committee may amend or terminate the 2017 Plan at any time, except that no amendment may,
without shareholder approval, violate the shareholder approval requirements of the national securities exchange on which the
shares of common stock are principally listed. Unless sooner terminated, the 2017 Plan will terminate on the day before the 10
th
anniversary of the date the shareholders of the Company most recently approved the 2017 Plan (which will be
September 18, 2035, if the amendment and restatement of the 2017 Plan is approved by shareholders at the Annual Meeting).
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Certain U.S. Federal Income Tax Consequences
The following is a brief discussion of certain U.S. federal income tax consequences for awards granted under the 2017 Plan.
The 2017 Plan is not subject to the requirements of the Employee Retirement Income Security Act of 1974, as amended, and it
is not, nor is it intended to be, qualified under Section 401(a) of the Code. This discussion is based on current law, is not
intended to constitute tax advice, and does not address all aspects of U.S. federal income taxation that may be relevant to a
particular participant in light of his or her personal circumstances and does not describe foreign, state, or local tax
consequences, which may be substantially different. Holders of awards under the 2017 Plan are encouraged to consult with
their own tax advisors.
Non-Qualified Stock Options and Stock Appreciation Rights
With respect to non-qualified stock options and stock appreciation rights, (i) no income is realized by a participant at the time
the award is granted; (ii) generally, at exercise, ordinary income is realized by the participant in an amount equal to the
difference between the exercise or base price paid for the stock and the fair market value of the stock on the date of exercise,
and the participant’s employer is generally entitled to a tax deduction in the same amount subject to applicable tax withholding
requirements; and (iii) upon a subsequent sale of the stock received on exercise, appreciation (or depreciation) after the date of
exercise is treated as either short-term or long-term capital gain (or loss) depending on how long the stock has been held, and
no deduction will be allowed to such participant’s employer.
Incentive Stock Options
No income is realized by a participant upon the grant or exercise of an incentive stock option; however, such participant will
generally be required to include the excess of the fair market value of the stock at exercise over the exercise price in his or her
alternative minimum taxable income. If shares of stock are issued to a participant pursuant to the exercise of an incentive stock
option, and if no disqualifying disposition of such shares of stock is made by such participant within two years after the date of
grant or within one year after the transfer of such shares of stock to such participant, then (i) upon sale of such shares of stock,
any amount realized in excess of the exercise price will be taxed to such participant as a long-term capital gain, and any loss
sustained will be a long-term capital loss, and (ii) no deduction will be allowed to the participant’s employer for federal income
tax purposes.
If stock acquired upon the exercise of an incentive stock option are disposed of prior to the expiration of either holding period
described above, generally (i) the participant will realize ordinary income in the year of disposition in an amount equal to the
excess (if any) of the fair market value of such stock at exercise (or, if less, the amount realized on the disposition of such
stock) over the exercise price paid for such stock and (ii) the participant’s employer will generally be entitled to deduct such
amount for federal income tax purposes. Any further gain (or loss) realized by the participant will be taxed as short-term or long-
term capital gain (or loss), as the case may be, and will not result in any deduction by the employer.
Subject to certain exceptions for disability or death, if an incentive stock option is exercised more than three months following
termination of employment, the exercise of the stock option will generally be taxed as the exercise of a non-qualified
stock option.
Other Stock-Based Awards
The tax effects related to other stock-based awards under the 2017 Plan are dependent upon the structure of the
particular award.
Withholding
At the time a participant is required to recognize ordinary compensation income resulting from an award, such income will be
subject to federal (including, except as described below, Social Security and Medicare tax) and applicable state and local
income tax and applicable tax withholding requirements. If such participant’s year-to-date compensation on the date of exercise
exceeds the Social Security wage base limit for such year ($176,100 in 2025), such participant will not have to pay Social
Security taxes on such amounts. The Company is required to report to the appropriate taxing authorities the ordinary income
received by the participant, together with the amount of taxes withheld to the Internal Revenue Service and the appropriate
state and local taxing authorities.
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Section 162(m)
In general, Section 162(m) of the Code denies a publicly held corporation a deduction for federal income tax purposes for
compensation in excess of $1 million per year per person to its Chief Executive Officer and Chief Financial Officer at any time
during the taxable year and the three other most highly compensated officers (other than the Chief Executive Officer and Chief
Financial Officer) for the taxable year, and once an individual becomes a Covered Employee for any taxable year beginning
after December 31, 2016, that individual will remain a Covered Employee for all future years, including following any termination
of employment.
Section 409A
Certain awards under the 2017 Plan may be subject to Section 409A of the Code, which regulates “nonqualified deferred
compensation” (as defined in Section 409A of the Code). If an award under the 2017 Plan (or any other Company plan) that is
subject to Section 409A of the Code is not administered in compliance with Section 409A of the Code, then all compensation
under the 2017 Plan that is considered “nonqualified deferred compensation” (and awards under any other Company plan that
are required pursuant to Section 409A of the Code to be aggregated with the award under the 2017 Plan) will be taxable to the
participant as ordinary income in the year of the violation, or if later, the year in which the compensation subject to the award is
no longer subject to a substantial risk of forfeiture. In addition, the participant will be subject to an additional tax equal to 20% of
the compensation that is required to be included in income as a result of the violation, plus interest from the date that the
compensation subject to the award was required to be included in taxable income.
Certain Rules Applicable to “Insiders”
As a result of the rules under Section 16(b) of the Exchange Act, depending upon the particular exemption from the provisions
of Section 16(b) utilized, “insiders” (as defined in Section 16(b)) may not receive the same tax treatment as set forth above with
respect to the grant and/or exercise or settlement of awards. Generally, insiders will not be subject to taxation until the
expiration of any period during which they are subject to the liability provisions of Section 16(b) with respect to any particular
award. Insiders should check with their own tax advisors to ascertain the appropriate tax treatment for any particular award.
New Plan Benefits
Because awards to be granted in the future under the 2017 Plan are at the discretion of the Committee, it is not possible to
determine the benefits or the amounts that have been or will be received by eligible participants under the 2017 Plan.
Future Plan Awards.
No awards have been granted to any employee, officer, non-employee director or consultant pursuant to the 2017 Plan that are
contingent upon the approval by our shareholders of the 2017 Plan. We anticipate that other equity-based awards may be
granted in the discretion of the Committee under the 2017 Plan out of the additional shares of our common stock to be reserved
for issuance in connection with the approval of the 2017 Plan; however, the number of shares of our common stock that may be
so granted will be based upon various prospective factors, including the nature of services to be rendered by our employees,
officers, non-employee directors and consultants, and their potential contributions to our success. Accordingly, the number,
type, and grantee(s) of actual future awards cannot be determined at this time.
Vote Required
Approval of this proposal requires the affirmative vote of a majority of the votes cast at the Annual Meeting.
Recommendation
|
|
THE BOARD OF DIRECTORS BELIEVES THAT AN AMENDMENT AND RESTATEMENT OF THE AMENDED AND
RESTATED TAKE-TWO INTERACTIVE SOFTWARE, INC. 2017 STOCK INCENTIVE PLAN IS IN THE BEST INTERESTS
OF THE COMPANY AND UNANIMOUSLY RECOMMENDS THAT SHAREHOLDERS VOTE
“FOR”
THE APPROVAL OF
THE AMENDMENT AND RESTATEMENT OF THE AMENDED AND RESTATED 2017 STOCK INCENTIVE PLAN.
|
|
90
|
TAKE-TWO INTERACTIVE SOFTWARE, INC. |
2025
Proxy Statement
|
PROPOSAL 4: APPROVAL OF AN AMENDMENT AND RESTATEMENT OF THE AMENDED AND RESTATED 2017 STOCK INCENTIVE PLAN
Equity Compensation Plan Information
The following table presents information concerning our equity compensation plans as of March 31, 2025:
|
Plan Category
|
Number of
Securities
to be Issued
Upon Exercise
of Outstanding
Options,
Warrants
and Rights
(1)(2)
|
Weighted-
Average
Exercise Price
of Outstanding
Options,
Warrants
and Rights
($)
(3)
|
Weighted-
Average
Remaining
Contractual Life
of Outstanding
Options,
Warrants
and Rights
(years)
(3)
|
Number of
Securities
Remaining
Available for
Future Issuance
Under Equity
Compensation
Plans (Excluding
Securities
Reflected in the
First Column)
|
|
Equity compensation plans approved by shareholders
|
8,602,475
|
$
33.62
|
4.69
|
15,938,885
(4)
|
|
Equity compensation plans not approved by shareholders
|
—
|
—
|
—
|
—
|
|
Total
|
8,602,475
|
33.62
|
4.69
|
15,938,885
|
(1)
As of March 31, 2025, the Company also had 13,849 shares of outstanding restricted stock, which are not reflected in the table because they are treated as
issued and outstanding and will not have additional dilutive impact on the Company when the awards vest.
(2)
As of March 31, 2025, the Company had 219 stock options outstanding, all of which were assumed by the Company in connection with its acquisitions of
Playdots in September 2020 and Zynga in May 2022, which options are included in the amount shown.
(3)
Relates only to the Company’s outstanding options.
(4)
As of March 31, 2025, consisted of (i) 8,391,426 shares of common stock remaining available for future issuance under the 2017 Plan and (ii 7,547,459 shares
of common stock remaining available for future issuance under the 2017 Global ESPP. After giving effect to the purchase on April 30, 2025, by our employees
of an aggregate of 192,706 shares of common stock pursuant to the 2017 Global ESPP, there were 7,354,753 shares of common stock remaining available for
future issuance under the 2017 Global ESPP.
|
TAKE-TWO INTERACTIVE SOFTWARE, INC. |
2025
Proxy Statement
|
91
|
PROPOSAL 4: RATIFICATION OF APPOINTMENT
OF INDEPENDENT REGISTERED PUBLIC
ACCOUNTING
FIRM
The Audit Committee of the Board of Directors has appointed Ernst & Young LLP (“Ernst & Young”) as the Company’s
independent registered public accounting firm to audit its consolidated financial statements for its
fiscal year ending March 31,
2026
. Although action by the shareholders on this matter is not required, the Audit Committee believes it is appropriate to seek
shareholder ratification of the appointment of the independent registered public accounting firm to provide a forum for
shareholders to express their views with regard to the Audit Committee’s appointment. If the shareholders do not ratify the
appointment of Ernst & Young, the selection of independent registered public accounting firms may be reconsidered by the
Audit Committee; provided, however, that the Audit Committee retains the right to continue to engage Ernst & Young. In
addition, notwithstanding the ratification of Ernst & Young as the Company’s independent registered public accounting firm for
the
fiscal year ending March 31, 2026
, the Audit Committee retains the right to replace Ernst & Young at any time without
shareholder approval.
|
|
THE BOARD OF DIRECTORS BELIEVES THAT RATIFICATION OF THE APPOINTMENT OF ERNST & YOUNG LLP IS IN
THE BEST INTERESTS OF THE COMPANY AND UNANIMOUSLY RECOMMENDS THAT SHAREHOLDERS
VOTE
“FOR”
SUCH RATIFICATION.
|
|
92
|
TAKE-TWO INTERACTIVE SOFTWARE, INC. |
2025
Proxy Statement
|
INDEPENDENT REGISTERED PUBLIC ACCOUNTANTS
Ernst & Young has been the Company’s independent registered public accounting firm and has audited the Company’s financial
statements since April 2006. In selecting the Company’s independent registered public accounting firm, the Audit Committee
assesses the firm’s qualifications and performance; the quality and candor of their communications with the Audit Committee
and the Company; independence; objectivity, and professionalism; benefits of audit firm or lead partner rotations; and the
comprehensiveness of evaluations of internal controls. The Audit Committee also considers the relative costs, benefits,
challenges, and other potential impacts of selecting a different independent public accounting firm. The Company has been
advised that representatives of Ernst & Young will be present at the Annual Meeting with the opportunity to make a statement if
the representatives desire to do so. It is expected that the representatives will be available to respond to appropriate questions
relating to the Company’s financial statements.
Pre-Approval Policies and Procedures
Pursuant to its charter, the Audit Committee is responsible for reviewing and pre-approving all audit and non-audit services. In
reviewing and approving audit and non-audit service fees, the Audit Committee considers a number of factors, including the
scope and quality of work, as well as an assessment of the impact on auditor independence of non-audit fees and services. The
Audit Committee may delegate pre-approval authority to the chair or another member of the Audit Committee, in which case
such approval must be presented to the full Audit Committee at its next scheduled meeting. The Audit Committee pre-approved
all audit, audit-related and tax services provided by Ernst & Young for the recently completed fiscal year.
Lead Audit Partner
In accordance with SEC rules, audit partners are subject to rotation requirements to limit the number of consecutive years an
individual partner may provide service to our Company. For lead audit partners, the maximum number of consecutive years of
service in that capacity is five years. The process for consideration and selection of the Company’s lead audit partner pursuant
to this rotation policy involves a comprehensive interview process in which management and the chair of the Audit
Committee participate.
Independent Auditor Fee Information
Fees for professional services provided by Ernst & Young in each of the last two fiscal years, in each of the following categories
including related expenses are set forth below. The Audit Committee believes that the professional services performed by Ernst
& Young were compatible with maintaining Ernst & Young’s independence.
|
3/31/2025
|
3/31/2024
|
|
|
Audit fees
(1)
|
$
5,767,000
|
$
6,509,000
|
|
Audit-related fees
|
8,000
|
7,000
|
|
Tax fees
(2)
|
1,661,000
|
1,233,000
|
|
Total fees
|
$
7,436,000
|
$
7,749,000
|
(1)
Audit fees were for audit services, including (a) the annual audit (including required quarterly reviews), subsidiary audits and other procedures required to be
performed by the independent auditor to be able to form an opinion on the Company’s consolidated financial statements, (b) the audit of the effectiveness of the
Company’s internal control over financial reporting, (c) consultation with management as to the accounting or disclosure treatment of transactions or events
and/or the actual or potential impact of final proposed rules, standards or interpretations by the SEC, the Financial Accounting Standards Board or other
regulatory or standard-setting bodies, (d) international statutory audits, and (e) services that only the independent auditor reasonably can provide, such as
services associated with SEC registration statements, periodic reports and other documents filed with the SEC or other documents issued in connection with
securities offerings and assistance in responding to SEC comment letters.
(2)
Tax fees were for services related to (a) tax compliance (including the preparation, review and filing of tax returns) and advice and (b) tax planning and
tax advice.
|
TAKE-TWO INTERACTIVE SOFTWARE, INC. |
2025
Proxy Statement
|
93
|
REPORT OF THE AUDIT COMMITTEE OF THE BOARD
OF
DIRECTORS
Notwithstanding anything to the contrary set forth in any of our previous or future filings under the Securities Act of 1933 or the
Securities Exchange Act of 1934 that might incorporate this Proxy Statement or future filings with the SEC, in whole or in part,
the following report shall not be deemed to be “soliciting material” or “filed” with the SEC and shall not be deemed to be
incorporated by reference into any such filing.
Review of the Company’s Audited Financial Statements for the
Fiscal Year Ended
March 31, 2025
The Audit Committee oversees the Company’s financial reporting process on behalf of the Board of Directors. The Company’s
management has the primary responsibility for the financial statements, for maintaining effective internal control over financial
reporting and for assessing the effectiveness of internal control over financial reporting. In fulfilling its oversight responsibilities,
the Audit Committee reviewed and discussed the audited consolidated financial statements included in the Annual Report on
Form 10-
K for the
fiscal year ended March 31, 2025
, with Company management, including a discussion of the quality, not just
the acceptability, of the accounting principles; the reasonableness of significant judgments; and the clarity of disclosures in the
financial statements.
The Audit Committee reviewed with the independent registered public accounting firm, which is responsible for expressing an
opinion on the conformity of those audited consolidated financial statements with U.S. generally accepted accounting principles,
its judgments as to the quality, not just the acceptability, of the Company’s accounting principles and such other matters as are
required to be discussed with the Audit Committee by the applicable requirements of the Public Company Accounting Oversight
Board (United States), rules of the SEC, and other applicable regulations. In addition, the Audit Committee has received the
written disclosures and the letter from the independent registered accounting firm required by applicable requirements of the
Public Company Accounting Oversight Board regarding the independent registered public accounting firm’s communications
with the Audit Committee concerning independence, and has discussed with the independent registered public accounting firm
the independent registered public accounting firm’s independence.
The Audit Committee also reviewed management’s report on its assessment of the effectiveness of the Company’s internal
control over financial reporting and the independent registered public accounting firm’s report on the effectiveness of the
Company’s internal control over financial reporting.
The Audit Committee discussed with the Company’s internal auditors and independent registered public accounting firm the
overall scope and plans for their respective audits. The Audit Committee meets with the internal auditors and the independent
registered public accounting firm, with and without management present, to discuss the results of their examinations, their
evaluations of the Company’s internal control, including internal control over financial reporting, and the overall quality of the
Company’s financial reporting.
In reliance on the reviews and discussions referred to above, the Audit Committee recommended to the Board of Directors, and
the Board of Directors has approved, that the audited consolidated financial statements and management’s assessment of the
effectiveness of the Company’s internal control over financial reporting be included in the Annual Report on Form 10-K for the
fiscal year ended March 31, 2025
, filed by the Company with the SEC. The Audit Committee also has appointed Ernst & Young
as the Company’s independent registered public accounting firm for the
fiscal year ended March 31, 2025
.
|
Dated:
July 28, 2025
|
Submitted by the Audit Committee of the Board of Directors:
Susan Tolson (Chair)
Ellen Siminoff
Paul Viera
|
|
94
|
TAKE-TWO INTERACTIVE SOFTWARE, INC. |
2025
Proxy Statement
|
CAUTIONARY NOTE ABOUT FORWARD-
LOOKING
STATEMENTS
The statements contained in this Proxy Statement which are not historical facts, including statements relating to the Company’s
outlook, are considered forward-looking statements under federal securities laws and may be identified by words such as
“anticipates,” “believes,” “estimates,” “expects,” “intends,” “plans,” “potential,” “predicts,” “projects,” “seeks,” “should,” “will,” or
words of similar meaning and include, but are not limited to, statements regarding the outlook for the Company’s future
business and financial performance. Such forward-looking statements are based on the current beliefs of our management as
well as assumptions made by and information currently available to them, which are subject to inherent uncertainties, risks and
changes in circumstances that are difficult to predict. Actual outcomes and results may vary materially from these forward-
looking statements based on a variety of risks and uncertainties including:
risks relating to the timely release and significant
market acceptance of our games;
the risks of conducting business internationally, including as a result of unforeseen
geopolitical events; the impact of changes in interest rates by the Federal Reserve and other central banks, including on our
short-term investment portfolio; the impact of inflation; volatility in foreign currency exchange rates; our dependence on key
management and product development personnel; our dependence on our NBA 2K and Grand Theft Auto products and our
ability to develop other hit titles; our ability to leverage opportunities on PlayStation
®
5 and Xbox Series X|S; factors affecting our
mobile business, such as player acquisition costs; and the ability to maintain acceptable pricing levels on our games. Other
important factors and information are contained in the Company’s most recent Annual Report on Form 10-K, including the risks
summarized in the section titled “Risk Factors,” and the Company’s other periodic filings with the SEC, which can be accessed
at www.take2games.com. All forward-looking statements are qualified by these cautionary statements and speak only as of the
date they are made. The Company undertakes no obligation to update any forward-looking statement, whether as a result of
new information, future events or otherwise.
INFORMATION ABOUT THE ANNUAL MEETING
AND
VOTING
What matters will be considered at the Annual Meeting?
|
•
the election as directors of the 10 nominees named in the attached Proxy Statement;
•
the approval, on a non-binding advisory basis, of the compensation of the Company’s “named executive officers” as
disclosed in this Proxy Statement;
•
the approval of an amendment and restatement of the 2017 Plan to increase the available shares reserved thereunder;
•
the ratification of the appointment of Ernst & Young LLP as our independent registered public accounting firm for the
fiscal year ending March 31, 2026
; and
•
such other business that may properly come before the Annual Meeting or any adjournment thereof.
|
How does the Board of Directors recommend that shareholders vote on these matters?
The Board of Directors believes that the election of the nominated directors, the approval on an advisory basis of the
compensation of the named executive officers, the approval of an amendment and restatement of the Amended and Restated
Take-Two Interactive Software, Inc. 2017 Stock Incentive Plan and the ratification of the appointment of Ernst & Young as our
independent registered accounting firm are in the best interests of the Company and its shareholders and, accordingly,
recommends a vote “FOR” for each of these proposals.
|
TAKE-TWO INTERACTIVE SOFTWARE, INC. |
2025
Proxy Statement
|
95
|
INFORMATION ABOUT THE ANNUAL MEETING AND VOTING
Who is entitled to vote?
Shareholders of record as of the close of business on July 23, 2025 (the “Record Date”) are entitled to attend and vote at the
Annual Meeting. Each shareholder is entitled to one vote for each share of common stock held on each matter submitted to a
vote at the Annual Meeting.
Why did I receive a one-page notice in the mail regarding the Internet availability of
proxy materials instead of a full set of proxy materials?
The rules of the SEC permit us to make our proxy materials available to beneficial owners of our stock electronically over the
Internet without mailing printed copies of the proxy materials. Accordingly, we are sending a Notice of Internet Availability of
Proxy Materials (
“Notice of Internet Availability”
) to our beneficial owners. All beneficial owners will have the ability to access the
proxy materials, including this Proxy Statement and our 2025 Annual Report, on the website referred to in the Notice of Internet
Availability or to request a printed set of the proxy materials. Instructions on how to access the proxy materials over the Internet
or how to request a printed copy can be found in the Notice of Internet Availability. In addition, beneficial owners may request to
receive proxy materials in printed form by mail or electronically by email on an ongoing basis. Conversely, if your shares are
registered directly with Equiniti Trust Company LLC, you will not receive a Notice of Internet Availability, and instead will receive
a full copy of the Proxy Statement and Annual Report.
What does it mean if I receive more than one Notice of Internet Availability or
proxy card?
It may mean that you hold shares registered in more than one account. Follow the voting instructions provided on each Notice
of Internet Availability that you received to ensure that all of your shares are voted. If you received paper proxy cards, sign and
return all proxy cards to ensure that all of your shares are voted. You may call Equiniti Trust Company LLC at 1-800-937-5449 if
you have any questions regarding the share information or your address appearing on the paper proxy card.
How do I vote?
You can vote by proxy over the Internet by following the instructions provided in the Notice of Internet Availability.
If you received a full set of proxy materials and your shares are registered directly with Equiniti Trust Company LLC, you may
vote via the Internet at www.proxyvote.com. Although we encourage you to vote via the Internet, you may also sign and date
each paper proxy card you receive and return it in the prepaid envelope; the paper proxy card also contains instructions for
voting by telephone. The enclosed proxy will be voted in accordance with the instructions thereon. Unless otherwise stated, all
shares represented by such proxy will be voted as instructed. Proxies may be revoked in the manner described above.
If you hold your shares through a stockbroker, nominee, fiduciary or other custodian you may also be able to vote through a
program provided through Broadridge Financial Solutions (“Broadridge”) that offers Internet voting options. If your shares are
held in an account at a brokerage firm or bank participating in the Broadridge program, you are offered the opportunity to elect
to vote via the Internet. Votes submitted via the Internet through the Broadridge program must be received by 11:59 p.m.
(Eastern Time) on September 17,
2025.
What happens if I do not give specific voting instructions?
For Shares Directly Registered in the Name of the Shareholder:
If you return your signed proxy but do not indicate your voting
preferences, the Company will vote on your behalf “FOR” the election of the nominated directors, “FOR” the approval on an
advisory basis of the compensation of the named executive officers, “FOR” an amendment and restatement of the 2017 Plan,
and “FOR” the ratification of the appointment of Ernst & Young. If any other matter properly comes before the shareholders for a
vote at the Annual Meeting, the proxy holders will vote your shares in accordance with their best judgment.
|
96
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TAKE-TWO INTERACTIVE SOFTWARE, INC. |
2025
Proxy Statement
|
INFORMATION ABOUT THE ANNUAL MEETING AND VOTING
For Shares Registered in the Name of a Brokerage Firm or Bank:
If your shares are held in street name, your broker or
nominee will ask you how you want your shares to be voted. If you provide voting instructions, your shares must be voted as
you direct. If you do not furnish voting instructions, one of two things can happen, depending upon whether a proposal is
“routine.” Under the rules that govern brokers that have record ownership of shares beneficially owned by their clients, brokers
have discretion to cast votes on routine matters, such as the ratification of the appointment of independent registered public
accounting firms, without voting instructions from their clients. Brokers are not permitted, however, to cast votes on “non-
routine” matters, such as the election of directors, the non-binding advisory vote to approve the compensation of the
Company’s “named executive officers” as disclosed in this Proxy Statement, and the approval of an amendment and
restatement of the 2017 Plan, without such voting instructions. A “broker non-vote” occurs when a broker holding shares for a
beneficial owner does not vote on a particular proposal because the broker does not have discretionary voting power for that
proposal and has not received voting instructions from the beneficial owner.
What is an abstention?
An abstention is a properly signed proxy card that is marked “abstain” or properly completed instructions via the Internet to the
same effect.
How do I sign the paper proxy card?
Sign your name exactly as it appears on the proxy card. If you are signing in a representative capacity (for example, as an
attorney, executor, administrator, guardian, trustee or the officer or agent of a company), you should indicate your name and
title or capacity. If the stock is held in custody for a minor (for example, under the Uniform Transfers to Minors Act), the
custodian should sign the proxy card, not the minor. If the stock is held in joint ownership, both owners must sign.
May I attend the Annual Meeting via the Internet? May I vote my shares at the
Annual Meeting?
Shareholders may attend our Annual Meeting via the Internet at www.virtualshareholdermeeting.com/TTWO2025. Shareholders
will not be able to attend the Annual Meeting in person.
Access to the Annual Meeting
The live audio webcast of the Annual Meeting will begin promptly at 9:00 a.m. Eastern Time. Online access to the audio
webcast will open approximately 15 minutes prior to the start of the Annual Meeting to allow time for our shareholders to log in
and test their devices’ audio system. We encourage our shareholders to access the meeting in advance of the designated
start time.
Log-in Instructions
To attend the Annual Meeting, shareholders will need to log-in to www.virtualshareholdermeeting.com/TTWO
2025
using the
16-
digit control number on the on the Notice of Internet Availability or proxy card.
Submitting Questions and Voting at the Annual Meeting
Shareholders may submit questions relevant to the business of the Annual Meeting and vote on the day of, or during, the
Annual Meeting on www.virtualshareholdermeeting.com/TTWO
2025
. To demonstrate proof of stock ownership, you will need to
enter the 16-digit control number received with your Notice of Internet Availability or proxy card to submit questions and vote at
our Annual Meeting. We intend to answer questions submitted during the meeting that are pertinent to the items being brought
before shareholder vote at the Annual Meeting, as time permits, and in accordance with the rules of conduct for the Annual
Meeting. To ensure that the Annual Meeting is conducted in a manner that is fair to all shareholders, the chair of the meeting
may exercise broad discretion in recognizing shareholders who wish to participate, the order in which questions are asked, and
the amount of time devoted to any one question. We reserve the right to edit or reject questions we deem inappropriate.
While all shareholders can vote during the Annual Meeting as described above, we encourage you to vote by proxy card or the
Internet in advance even if you plan to attend the meeting so that your vote will be counted if you later decide not to attend our
Annual Meeting.
|
TAKE-TWO INTERACTIVE SOFTWARE, INC. |
2025
Proxy Statement
|
97
|
INFORMATION ABOUT THE ANNUAL MEETING AND VOTING
Technical Assistance
We have retained Broadridge to host our virtual annual meeting and to distribute, receive, count and tabulate proxies. On the
day of our Annual Meeting, our support team at Broadridge will be available to answer your questions regarding how to attend
and participate at our Annual Meeting via the Internet or if you encounter any technical difficulty accessing or during the virtual
meeting, in each case by calling the technical support number that will be posted on the virtual annual meeting log-in page.
Your attendance at the Annual Meeting in and of itself will not automatically revoke a proxy that was
submitted via the Internet or telephone or by mail.
Who will count the votes?
A representative of Broadridge will tabulate the votes and act as independent inspector of election.
What constitutes a quorum?
The holders of a majority of the outstanding shares of common stock on the Record Date present in person or represented by
proxy constitutes a quorum for the Annual Meeting. As of the close of business on the Record Date, 184,467,164 shares of
common stock were issued and outstanding. Subject to the rules regarding the votes necessary to adopt the proposals
discussed below, abstentions and broker non-votes (as described above) will be counted for purposes of determining whether a
quorum is present. Once a share is represented for any purpose at the Annual Meeting, it will be deemed present for quorum
purposes for the remainder of the Annual Meeting (including any meeting resulting from an adjournment or postponement of the
Annual Meeting, unless a new record date is set).
What vote is needed to approve the matters to be presented at the Annual Meeting?
In an uncontested election for directors, a director shall be elected at the Annual Meeting if the number of votes that are cast
“FOR” his or her election by holders of the stock present in person or represented by proxy entitled to vote on the election of
directors exceeds the number of votes cast “AGAINST” his or her election by such holders. The Company’s bylaws provide that
any incumbent nominee for director who fails to meet this standard shall promptly tender the individual’s resignation to the
Corporate Governance Committee for consideration following certification of the shareholder vote. See above under the
heading “Election of Directors (Proposal 1)—Policy on Majority Voting for Directors.” A “FOR” vote by a majority of the votes
cast is required to approve, on a non-binding advisory basis, the compensation of the Company’s “named executive officers” as
disclosed in this Proxy Statement; a “FOR” vote by a majority of the votes cast is required to approve the amendment and
restatement of the 2017 Plan pursuant to applicable Nasdaq rules; and a “FOR” vote by the holders of a majority of the shares
present in person or represented by proxy and entitled to vote is required to ratify the appointment of Ernst & Young and to
approve any shareholder proposal. For purposes of determining approval of a matter presented at the Annual Meeting,
abstentions will be deemed present and entitled to vote (but not cast), other than for purposes of the non-binding advisory vote
to approve the compensation of the Company’s “named executive officers” as disclosed in this Proxy Statement, and the
proposal to approve the amendment and restatement of the 2017 Plan, for which an abstention will have the effect of a vote
“against” such proposals, while broker non-votes will not be deemed present and entitled to vote. An abstention will also have
the effect of a vote “against” the proposal to ratify the appointment of Ernst & Young. Both abstentions and broker non-votes will
be counted for purposes of determining whether a quorum is present.
|
98
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TAKE-TWO INTERACTIVE SOFTWARE, INC. |
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Proxy Statement
|
INFORMATION ABOUT THE ANNUAL MEETING AND VOTING
Will any other matters be acted on at the Annual Meeting?
If any other matters are properly presented at the Annual Meeting or any adjournment, the persons named in the proxy will
have discretion to vote on those matters. As of the date by which shareholder proposals must have been received by the
Company to be presented at the Annual Meeting, and as of the date of this Proxy Statement, the Company did not know of any
other matters to be presented at the Annual Meeting.
Who pays for this proxy solicitation?
The Company will bear the entire cost of soliciting proxies, including the costs of preparing, assembling, printing and mailing
this Proxy Statement, the proxy and any additional soliciting material furnished to shareholders. The Company has retained
MacKenzie Partners, Inc., a proxy solicitation firm, to solicit proxies for a fee of
$20,000
, p
lus reimbursement of its out-of-pocket
expenses. Arrangements will be made with brokerage houses and other custodians, nominees and fiduciaries to send proxies
and proxy materials to the beneficial owners of stock, and these entities may be reimbursed by the Company for their
expenses. Proxies also may be solicited by directors, officers or employees of the Company in person or by telephone, e-mail
or other means. No additional compensation will be paid to such individuals for these services.
How may I communicate with the Board of Directors?
Shareholders wishing to send communications to the Board of Directors individually or as a group may do so by writing to: The
Board of Directors of Take-Two Interactive Software, Inc., 110 West 44
th
Street, New York, New York 10036, Attention: Investor
Relations. You should identify your communication as being from a shareholder of the Company. The Company may require
reasonable evidence that your communication or other submission is made by a shareholder of the Company before
transmitting your communication to the Board of Directors.
|
TAKE-TWO INTERACTIVE SOFTWARE, INC. |
2025
Proxy Statement
|
99
|
AVAILABILITY OF CERTAIN DOCUMENTS
Householding of Annual Meeting materials
Some banks, brokers and other nominee record holders may participate in the practice of “householding” Proxy Statements and
their accompanying documents and/or Notices of Internet Availability. This means that only one copy of our Proxy Statement
and/or Notice of Internet Availability is sent to multiple shareholders in your household. We will promptly deliver a separate copy
of these documents without charge to you upon written request to Take-Two Interactive Software, Inc., 110 West 44
th
Street,
New York, New York 10036, Attn: Investor Relations; our main telephone number is (646) 536-2842. If you want to receive
separate copies of our Proxy Statements and/or Notice of Internet Availability in the future, or if you are receiving multiple
copies and would like to receive only one copy per household, you should contact your bank, broker or other nominee record
holder, or you may contact us at the above address.
Additional information
We are required to file annual, quarterly and current reports, Proxy Statements and other reports with the SEC. Copies of these
filings are available through our Internet website at www.take2games.com or the SEC’s website at www.sec.gov. We will furnish
copies of our SEC filings (without exhibits), including our Annual Report on Form 10-K for the
fiscal year ended March 31, 2025
,
without charge to any shareholder upon written request to Take-Two Interactive Software, Inc., 110 West 44
th
Street, New York,
New York 10036, Attn: Investor
Relations.
NO INCORPORATION BY REFERENCE
In its filings with the SEC, the Company sometimes “incorporates by reference” certain information. This means that we are
referring you to information that has previously been filed with the SEC and the information should be considered as part of the
particular filing. As provided under SEC regulations, the “Report of the Audit Committee of the Board of Directors” and the
“Report of the Compensation Committee of the Board of Directors” contained in this Proxy Statement specifically are not
incorporated by reference into any other filings with the SEC and shall not be deemed to be “soliciting material.”
|
100
|
TAKE-TWO INTERACTIVE SOFTWARE, INC. |
2025
Proxy Statement
|
SHAREHOLDER PROPOSALS FOR NEXT
ANNUAL MEETING
The Company currently anticipates holding its Annual Meeting of Shareholders for its
fiscal year ending March 31, 2026
, in
September
2026
. The Company’s bylaws require that, for nominations of directors or other business to be properly brought
before an Annual Meeting, written notice of such nomination or proposal for other business must be delivered to the Secretary
of the Company at the Company’s principal executive offices at Take-Two Interactive Software, Inc., 110 West 44th Street, New
York, New York 10036, Attn: Corporate Secretary.
Such notice must contain certain information concerning the nominating or
proposing shareholder and, as applicable, certain information concerning the nominee and must be delivered by the
shareholder (who must be entitled to vote at the meeting), in the case of the
2026
Annual Meeting of Shareholders, no earlier
than May 21,
2026
and no later than June 20,
2026
. Such notice must contain the information required by the Company’s
bylaws, including the information required by Rule 14a-19 of the Exchange Act in the case of a shareholder who intends to
solicit proxies in compliance with such rule. A copy of the applicable provisions of the Bylaws may be obtained by any
shareholder, without charge, upon written request to the Secretary of the Company at the address set forth above.
In addition to the foregoing, and in accordance with the rules of the SEC, in order for a shareholder proposal, relating to a
proper subject, to be considered for inclusion in the Company’s proxy statement and form of proxy relating to the 2026 Annual
Meeting of Shareholders, such proposal must be received by the Secretary of the Company at the address set forth above not
later than April 3,
2026
in the form required under and subject to the other requirements of the applicable rules of the SEC.
OTHER MATTERS
The Board of Directors is aware of no other matter, except for those incident to the conduct of the Annual Meeting, that are to
be presented to shareholders for formal action at the Annual Meeting. If, however, any other matter properly comes before the
Annual Meeting or any adjournment thereof, it is the intention of the persons named in the proxy to vote the proxy in
accordance with their judgment.
|
TAKE-TWO INTERACTIVE SOFTWARE, INC. |
2025
Proxy Statement
|
A-1
|
ANNEX A
Reconciliation of GAAP Net Income to Adjusted EBITDA
|
(in thousands)
|
Fiscal Year Ended
March 31, 2025
|
|
GAAP Net Loss
|
$
(4,478.9)
|
|
Net effect from deferral in net revenues and related cost of goods sold
|
$
12.9
|
|
Stock-based compensation
|
$
324.0
|
|
Business reorganization
|
$
106.5
|
|
Business acquisitions
|
$
90.1
|
|
Interest expense (income)
|
$
68.7
|
|
Depreciation and amortization
|
$
229.4
|
|
Goodwill impairment
|
$
3,545.2
|
|
Amortization and impairment of intangible assets
|
$
847.0
|
|
Bonus
|
$
142.5
|
|
Income taxes
|
$
(12.4)
|
|
Other
|
$
26.0
|
|
Adjusted EBITDA
|
$
901.0
|
|
B-1
|
TAKE-TWO INTERACTIVE SOFTWARE, INC. |
2025
Proxy Statement
|
ANNEX B
Amended and Restated Take-Two Interactive Software, Inc. 2017 Stock Incentive Plan
1.
Purpose.
The purpose of the Plan is to assist the Company in attracting, retaining, motivating, and rewarding certain employees,
officers, directors, and consultants of the Company and its Affiliates and promoting the creation of long-term value for
stockholders of the Company by closely aligning the interests of such individuals with those of such stockholders. The
Plan authorizes the award of Stock-based and cash-based incentives to Eligible Persons to encourage such Eligible
Persons to expend maximum effort in the creation of stockholder value.
The Plan was originally adopted on September 15, 2017, was amended effective September 4, 2020, was amended and
restated on September 16, 2020, was amended on July 26, 2021, was amended on May 23, 2022, was amended on
July 24, 2023, and was finally amended and restated in its present form on July 28, 2025, subject to the approval by the
stockholders of the Company of such July 28, 2025 amendment and restatement, which increases the number of
shares reserved for issuance under the Plan at the annual meeting of such stockholders on September 18, 2025. For the
avoidance of doubt, if such stockholder approval is not received, all other provisions of the amended and restated Plan,
as in effect prior to the July 28, 2025 amendment and restatement shall remain in effect. If such stockholder approval is
received, the Plan, in its present form, shall succeed the prior version of the Plan for Awards granted on or after the
effective date of such stockholder approval. The adoption and effectiveness of the Plan in its present form will not,
however, affect the terms or conditions of any awards granted under the prior version of the Plan prior to the Effective
Date, including, without limitation, the provisions of the prior version of the Plan which were intended to ensure
compliance with Section 162(m) of the Code prior to the changes thereto implemented by the Tax Cuts and Jobs Act
of 2017.
2.
Definitions.
For purposes of the Plan, the following terms shall be defined as set forth below:
(a)
“
Affiliate
” means, with respect to a Person, any other Person that, directly or indirectly through one or more
intermediaries, controls, is controlled by, or is under common control with, such Person.
(b)
“
Award
” means any Option, Restricted Stock, Restricted Stock Unit, Stock Appreciation Right, Performance Award,
or other Stock-based award granted under the Plan.
(c)
“
Award Agreement
” means an Option Agreement, a Restricted Stock Agreement, an RSU Agreement, a SAR
Agreement, a Performance Award Agreement, or an agreement governing any other Stock-based Award granted
under the Plan.
(d)
“
Board
” means the Board of Directors of the Company.
(e)
“
Business
” means (1) any business or activity then conducted by the Company or any of its Affiliates, or (2) any
business that the Company or any of its Affiliates has a bona fide intention to conduct and of which the Participant
is aware as of such time.
(f)
“
Cause
” means, with respect to a Participant and in the absence of an Award Agreement or Participant Agreement
otherwise defining Cause, (1) the Participant’s plea of nolo contendere to, conviction of or indictment for, any crime
(whether or not involving the Company or its Affiliates) (i) constituting a felony or (ii) that has, or could reasonably
be expected to result in, an adverse impact on the performance of the Participant’s duties to the Service Recipient,
or otherwise has, or could reasonably be expected to result in, an adverse impact on the business or reputation of
the Company or its Affiliates; (2) conduct of the Participant, in connection with his or her employment or service,
that has resulted, or could reasonably be expected to result, in material injury to the business or reputation of the
Company or its Affiliates; (3) any material violation of the policies of the Service Recipient, including, but not limited
to, those relating to sexual harassment or the disclosure or misuse of confidential information, or those set forth in
the manuals or statements of policy of the Service Recipient; (4) the Participant’s act(s) of gross negligence or
willful misconduct in the course of his or her employment or service with the Service Recipient;
(5) misappropriation by the Participant of any assets or business opportunities of the Company or its Affiliates;
(6) embezzlement or fraud committed by the Participant, at the Participant’s direction, or with the Participant’s prior
actual knowledge; (7) willful neglect in the performance of the Participant’s duties for the Service Recipient or willful
|
TAKE-TWO INTERACTIVE SOFTWARE, INC. |
2025
Proxy Statement
|
B-2
|
ANNEX B
or repeated failure or refusal to perform such duties, unless such act or acts or failure or failures to act are cured
within ten (10) days after written notice is given to the Participant by the Company; (8) a Participant’s
insubordination, dishonesty, failure to cooperate in any investigation or inquiry involving the Company,
incompetence, moral turpitude, misconduct, refusal to perform his or her duties or responsibilities for any reason
other than illness or incapacity or materially unsatisfactory performance of his or her duties for the Company or an
Affiliate as determined by the Company in its sole discretion; or (9) with respect to a non-employee director, an act
or failure to act that constitutes cause for removal of a director under applicable Delaware law. If, subsequent to
the Termination of a Participant for any reason other than by the Service Recipient for Cause, it is discovered that
the Participant’s employment or service could have been terminated for Cause, such Participant’s employment or
service shall, at the discretion of the Committee, be deemed to have been terminated by the Service Recipient for
Cause for all purposes under the Plan, and the Participant shall be required to repay to the Company all amounts
received by him or her in respect of any Award following such Termination that would have been forfeited under the
Plan had such Termination been by the Service Recipient for Cause. In the event that there is an Award Agreement
or Participant Agreement defining Cause, “Cause” shall have the meaning provided in such agreement, and a
Termination by the Service Recipient for Cause hereunder shall not be deemed to have occurred unless all
applicable notice and cure periods in such Award Agreement or Participant Agreement are complied with.
(g)
A “
Change in Control
” shall be deemed to have occurred:
(1)
upon any “person” as such term is used in Sections 13(d) and 14(d) of the Exchange Act (other than the
Company, any trustee or other fiduciary holding securities under any employee benefit plan of the Company,
or any company owned, directly or indirectly, by the stockholders of the Company in substantially the same
proportions as their ownership of Stock of the Company), becoming the beneficial owner (as defined in Rule
13d-3 under the Exchange Act), directly or indirectly, of securities of the Company representing fifty percent
(50%) or more of the combined voting power of the Company’s then outstanding securities;
(2)
consummation of a merger or consolidation of the Company or a subsidiary with any other corporation, other
than a merger or consolidation which would result in the voting securities of the Company outstanding
immediately prior thereto continuing to represent (either by remaining outstanding or by being converted into
voting securities of the surviving entity) more than fifty percent (50%) of the combined voting power of the
voting securities of the Company or such surviving entity or such surviving entity’s parent outstanding
immediately after such merger or consolidation, where such voting power among the holders of such voting
securities is in substantially the same proportion as the voting power of such voting securities among the
holders thereof immediately prior to such merger or consolidation; or
(3)
upon the approval by the stockholders of the Company of a plan of complete liquidation or dissolution of the
Company or the consummation of a sale or disposition by the Company of all or substantially all of the
Company’s assets other than the sale or disposition of all or substantially all of the assets of the Company to
a person or persons who beneficially own, directly or indirectly, at least fifty percent (50%) or more of the
combined voting power of the outstanding voting securities of the Company at the time of the sale.
Notwithstanding anything herein to the contrary, (x) a Change in Control shall not be deemed to occur solely because any
person acquires beneficial ownership of fifty percent (50%) or more of the combined voting power of the Company’s then
outstanding securities as a result of an acquisition of Company voting securities by the Company that reduces the
number of Company voting securities outstanding; provided that if after such acquisition by the Company such person
becomes the beneficial owner of additional Company voting securities that increases the percentage of outstanding
Company voting securities beneficially owned by such person, a Change in Control shall then be deemed to occur,
(y) with respect to the payment of any amount that constitutes a deferral of compensation subject to Section 409A of the
Code payable upon a Change in Control, a Change in Control shall not be deemed to have occurred, unless the Change
in Control constitutes a change in the ownership or effective control of the Company or in the ownership of a substantial
portion of the assets of the Company under Section 409A(a)(2)(A)(v) of the Code, and (z) in no event shall stockholder
approval of a transaction which, if consummated, would constitute a Change in Control, constitute a Change in Control.
For the avoidance of doubt, and notwithstanding anything herein to the contrary, with respect to any portion of any Award
under this Plan that constitutes a deferral of compensation subject to Section 409A of the Code, (A) a liquidation of the
Company shall not constitute a Change in Control and (B) a Change in Control shall be deemed to have occurred upon
the consummation of a sale or disposition by the Company of all or substantially all of the Company’s assets other than
the sale or disposition of all or substantially all of the assets of the Company to a person or persons who beneficially own,
directly or indirectly, at least fifty percent (50%) or more of the combined voting power of the outstanding voting securities
of the Company at the time of the sale.
|
B-3
|
TAKE-TWO INTERACTIVE SOFTWARE, INC. |
2025
Proxy Statement
|
ANNEX B
(h)
“
Code
” means the U.S. Internal Revenue Code of 1986, as amended from time to time, including the rules and
regulations thereunder and any successor provisions, rules and regulations thereto.
(i)
“
Committee
” means the Compensation Committee of the Board or such other committee consisting of two or more
individuals appointed by the Board to administer the Plan and each other individual or committee of individuals
designated to exercise authority under the Plan.
(j)
“
Company
” means Take-Two Interactive Software, Inc., a Delaware corporation, and its successors by operation
of law.
(k)
“
Competitor
” means any Person (other than the Company and its Affiliates) engaged in the Business.
(l)
“
Corporate Event
” has the meaning set forth in Section 11(b) hereof.
(m)
“
Customer
” means any Person who is a customer or client of the Company or any of its Affiliates that is a
professional contractor and with whom the Participant had business-related contact (whether in person, by
telephone or by paper or electronic correspondence) on behalf of the Company or any of its Affiliates.
(n)
“
Data
” has the meaning set forth in Section 21(h) hereof.
(o)
“
Detrimental Activity
” means:
(1)
disclosing, divulging, furnishing or making available to anyone at any time, except as necessary in the
furtherance of Participant’s responsibilities to the Company or any of its Affiliates, either during or
subsequent to Participant’s service relationship with the Company or any of its Affiliates, any knowledge or
information with respect to confidential or proprietary information, methods, processes, plans or materials of
the Company or any of its Affiliates, or with respect to any other confidential or proprietary aspects of the
business of the Company or any of its Affiliates, acquired by the Participant at any time prior to the
Participant’s Termination;
(2)
any activity while employed by, or performing services for, the Company or any of its Affiliates, that results, or
if known could reasonably be expected to result, in the Participant’s Termination for Cause;
(3)
(i) directly or indirectly soliciting, enticing or inducing any employee of the Company or any of its Affiliates to
be employed by a Person that is, directly or indirectly, in competition with the business or activities of the
Company or any of its Affiliates; (ii) directly or indirectly approaching any such employee for these purposes;
(iii) authorizing or knowingly approving the taking of such actions by other Persons on behalf of any such
Person, or assisting any such Person in taking such actions; (iv) directly or indirectly soliciting Customers to
purchase products on behalf of a Competitor; or (v) directly or indirectly soliciting Suppliers to provide
products or services to support a Competitor;
(4)
direct or indirect Disparagement, or inducing others to engage in Disparagement; or
(5)
a material breach of any agreement between the Participant and the Company or any of its Affiliates (including,
without limitation, any Participant Agreement, noncompetition, nonsolicitation or confidentiality agreement).
Unless otherwise determined by the Committee at grant and set forth in an Award Agreement, Detrimental Activity shall
not be deemed to occur after the end of the one-year period following the Participant’s Termination. Notwithstanding the
foregoing, a Participant’s engagement in any activity described in Sections 21(o)(2) and (3) shall not constitute
“Detrimental Activity.” For purposes of subsections (1), (3) and (5) above, the Committee has the authority to provide the
Participant with written authorization to engage in the activities contemplated thereby and no other Person shall have
authority to provide the Participant with such authorization.
(p)
“
Disability
” means, in the absence of an Award Agreement or Participant Agreement otherwise defining Disability,
the permanent and total disability of such Participant within the meaning of Section 22(e)(3) of the Code. In the
event that there is an Award Agreement or Participant Agreement defining Disability, “Disability” shall have the
meaning provided in such Award Agreement or Participant Agreement.
(q)
“
Disparagement
” means making comments or statements to the press, the Company’s or its Affiliates’ employees,
consultants or any individual or entity with whom the Company or its Affiliates has a business relationship that could
reasonably be expected to adversely affect in any manner: (1) the conduct of the business of the Company or its
Affiliates (including, without limitation, any products or business plans or prospects); or (2) the business reputation
of the Company or its Affiliates, or any of their products, or their past or present officers, directors or employees.
|
TAKE-TWO INTERACTIVE SOFTWARE, INC. |
2025
Proxy Statement
|
B-4
|
ANNEX B
(r)
“
Disqualifying Disposition
” means any disposition (including any sale) of Stock acquired upon the exercise of an
Incentive Stock Option made within the period that ends either (1) two years after the date on which the Participant
was granted the Incentive Stock Option or (2) one year after the date upon which the Participant acquired
the Stock.
(s)
“
Effective Date
” means the date on which the Plan is most recently approved by the stockholders of the Company.
(t)
“
Eligible Person
” means (1) each employee and officer of the Company or any of its Affiliates, (2) each non-
employee director of the Company or any of its Affiliates; (3) each other Person who provides bona fide services to
the Company or any of its Affiliates as a consultant or advisor, which are not in connection with the offer and sale of
securities in a capital-raising transaction, and do not, directly or indirectly, promote or maintain a market for the
Company’s or its Affiliates’ securities, and who is designated as eligible by the Committee, and (4) each natural
Person who has been offered employment by the Company or any of its Affiliates;
provided
that such prospective
employee may not receive any payment or exercise any right relating to an Award until such Person has
commenced employment or service with the Company or its Affiliates;
provided further, however
, that (i) with
respect to any Award that is intended to qualify as a “stock right” that does not provide for a “deferral of
compensation” within the meaning of Section 409A of the Code, the term “Affiliate” as used in this Section 2(t) shall
include only those corporations or other entities in the unbroken chain of corporations or other entities beginning
with the Company where each of the corporations or other entities in the unbroken chain other than the last
corporation or other entity owns stock possessing at least fifty percent (50%) or more of the total combined voting
power of all classes of stock in one of the other corporations or other entities in the chain, and (ii) with respect to
any Award that is intended to be an Incentive Stock Option, the term “Affiliate” as used in this Section 2(t) shall
include only those entities that qualify as a “subsidiary corporation” with respect to the Company within the
meaning of Section 424(f) of the Code. An employee on an approved leave of absence may be considered as still
in the employ of the Company or any of its Affiliates for purposes of eligibility for participation in the Plan.
(u)
“
Exchange Act
” means the U.S. Securities Exchange Act of 1934, as amended from time to time, including the
rules and regulations thereunder and any successor provisions, rules and regulations thereto.
(v)
“
Exercisable Awards
” means Options or Stock Appreciation Rights or similar other Stock-based Award that
provides for a Participant to receive the excess (if any) of the Fair Market Value of the Stock on the date of
exercise over the Fair Market Value on the date of grant.
(w)
“
Expiration Date
” means, with respect to an Option or Stock Appreciation Right, the date on which the term of such
Option or Stock Appreciation Right expires, as determined under Section 5(b) or 8(b) hereof, as applicable.
(x)
“
Fair Market Value
” means, as of any date when the Stock is listed on one or more national securities exchanges,
the closing price reported on the principal national securities exchange on which such Stock is listed and traded on
the date of determination or, if the closing price is not reported on such date of determination, the closing price
reported on the most recent date prior to the date of determination. If the Stock is not listed on a national securities
exchange, “
Fair Market Value
” shall mean the amount determined by the Board in good faith, and in a manner
consistent with Section 409A of the Code, to be the fair market value per share of Stock.
(y)
“
Full Value Award
” means an Award other than an Exercisable Award, and which is settled by the issuance of
shares of Stock.
(z)
“
GAAP
” has the meaning set forth in Section 9(f)(3) hereof.
(aa)
“
General Share Reserve
” has the meaning set forth in Section 4(b) hereof.
(bb)
“
Incentive Stock Option
” means an Option intended to qualify as an “incentive stock option” within the meaning of
Section 422 of the Code.
(cc)
“
Nonqualified Stock Option
” means an Option not intended to be an Incentive Stock Option.
(dd)
“
Option
” means a conditional right, granted to a Participant under Section 5 hereof, to purchase Stock at a
specified price during a specified time period.
(ee)
“
Option Agreement
” means a written agreement between the Company and a Participant evidencing the terms and
conditions of an individual Option Award.
(ff)
“
Participant
” means an Eligible Person who has been granted an Award under the Plan or, if applicable, such other
Person who holds an Award.
|
B-5
|
TAKE-TWO INTERACTIVE SOFTWARE, INC. |
2025
Proxy Statement
|
ANNEX B
(gg)
“
Participant Agreement
” means an employment or other services agreement between a Participant and the Service
Recipient that describes the terms and conditions of such Participant’s employment or service with the Service
Recipient and is effective as of the date of determination.
(hh)
“
Performance Award
” means an Award granted to a Participant under Section 9 hereof, which Award is subject to
the achievement of Performance Objectives during a Performance Period. A Performance Award shall be
designated as a Performance Share, a Performance Unit or a Performance Cash Award at the time of grant.
(ii)
“
Performance Award Agreement
” means a written agreement between the Company and a Participant evidencing
the terms and conditions of an individual Performance Award.
(jj)
“
Performance Cash Award
” means a Performance Award which is a cash award, the payment of which is subject to
the achievement of Performance Objectives during a Performance Period. A Performance Cash Award may also
require the completion of a specified period of employment or service.
(kk)
“
Performance Objectives
” means the performance objectives established pursuant to the Plan for Participants who
have received Performance Awards.
(ll)
“
Performance Period
” means the period of time designated by the Committee over which the achievement of one
or more Performance Objectives will be measured for the purpose of determining a Participant’s right to and the
payment of an Award. Performance Periods may be of varying and overlapping duration, at the sole discretion of
the Committee.
(mm)
“
Performance Share
” means a Performance Award denominated in shares of Stock which may be earned in whole
or in part based upon the achievement of Performance Objectives during a Performance Period.
(nn)
“
Performance Unit
” means a Performance Award denominated as a notional unit representing the right to receive
one share of Stock (or the cash value of one share of Stock, if so determined by the Committee) which may be
earned in whole or in part based upon the achievement of Performance Objectives during a Performance Period.
(oo)
“
Person
” means any individual, corporation, partnership, firm, joint venture, association, joint-stock company, trust,
unincorporated organization, or other entity.
(pp)
“
Plan
” means this Amended and Restated Take-Two Interactive Software, Inc. 2017 Stock Incentive Plan, as
amended from time to time.
(qq)
“
Playdots Awards
” has the meaning set forth in Section 4(a) hereof.
(rr)
“
Playdots Share Reserve
” has the meaning set forth in Section 4(a).
(ss)
“
Prior Plan
” means the Take-Two Interactive Software, Inc. 2009 Stock Incentive Plan, as amended and restated.
(tt)
“
Prior Plan Award
” has the meaning set forth in Section 4(a) hereof.
(uu)
“
Qualified Member
” means a member of the Committee who is a “Non-Employee Director” within the meaning of
Rule 16b-3 under the Exchange Act and an “independent director” as defined under, as applicable, the Nasdaq
Listing Rules, the NYSE Listed Company Manual or other applicable stock exchange rules.
(vv)
“
Qualifying Committee
” has the meaning set forth in Section 3(b) hereof.
(ww)
“
Retirement
” means, unless otherwise provided in an Award Agreement, voluntary Termination at or after age 65 or
such earlier date after age 50 as may be approved by the Committee, in its sole discretion, at the time of grant, or
thereafter provided that the exercise of such discretion does not make the applicable Award subject to
Section 409A of the Code, except that Retirement shall not include any Termination with or without Cause. With
respect to a Participant’s Termination of directorship, unless otherwise provided in an Award Agreement,
Retirement means the failure to stand for reelection or the failure to be reelected on or after a Participant has
attained age 65 or, with the consent of the Board, provided that the exercise of such discretion does not make the
applicable Award subject to Section 409A of the Code, before age 65 but after age 50.
(xx)
“
Restricted Stock
” means Stock granted to a Participant under Section 6 hereof that is subject to certain
restrictions and to a risk of forfeiture.
(yy)
“
Restricted Stock Agreement
” means a written agreement between the Company and a Participant evidencing the
terms and conditions of an individual Restricted Stock Award.
(zz)
“
Restricted Stock Unit
” means a notional unit representing the right to receive one share of Stock (or the cash
value of one share of Stock, if so determined by the Committee) on a specified settlement date.
|
TAKE-TWO INTERACTIVE SOFTWARE, INC. |
2025
Proxy Statement
|
B-6
|
ANNEX B
(aaa)
“
RSU Agreement
” means a written agreement between the Company and a Participant evidencing the terms and
conditions of an individual Award of Restricted Stock Units.
(bbb)
“
SAR Agreement
” means a written agreement between the Company and a Participant evidencing the terms and
conditions of an individual Award of Stock Appreciation Rights.
(ccc)
“
Securities Act
” means the U.S. Securities Act of 1933, as amended from time to time, including the rules and
regulations thereunder and any successor provisions, rules and regulations thereto.
(ddd)
“
Service Recipient
” means, with respect to a Participant holding an Award, either the Company or an Affiliate of the
Company by which the original recipient of such Award is, or following a Termination was most recently, principally
employed or to which such original recipient provides, or following a Termination was most recently providing,
services, as applicable.
(eee)
“
Stock
” means the common stock, par value $0.01 per share, of the Company, and such other securities as may
be substituted for such stock pursuant to Section 11 hereof.
(fff)
“
Stock Appreciation Right
” means a conditional right to receive an amount equal to the value of the appreciation in
the Stock over a specified period.
(ggg)
“
Substitute Award
” has the meaning set forth in Section 4(a) hereof.
(hhh)
“
Supplier
” means any Person who supplies products or services to the Company or any of its Affiliates and with
whom a Participant had business-related contact (whether in person, by telephone or by paper or electronic
correspondence) on behalf of the Company or any of its Affiliates.
(iii)
“
Termination
” means the termination of a Participant’s employment or service, as applicable, with the Service
Recipient;
provided, however,
that, if so determined by the Committee at the time of any change in status in
relation to the Service Recipient (e.g., a Participant ceases to be an employee and begins providing services as a
consultant, or vice versa), such change in status will not be deemed a Termination hereunder. Unless otherwise
determined by the Committee, in the event that the Service Recipient ceases to be an Affiliate of the Company (by
reason of sale, divestiture, spin-off, or other similar transaction), unless a Participant’s employment or service is
transferred to another entity that would constitute the Service Recipient immediately following such transaction,
such Participant shall be deemed to have suffered a Termination hereunder as of the date of the consummation of
such transaction. Notwithstanding anything herein to the contrary, a Participant’s change in status in relation to the
Service Recipient (for example, a change from employee to consultant) shall not be deemed a Termination
hereunder with respect to any Awards constituting “nonqualified deferred compensation” subject to Section 409A of
the Code that are payable upon a Termination unless such change in status constitutes a “separation from service”
within the meaning of Section 409A of the Code. Any payments in respect of an Award constituting nonqualified
deferred compensation subject to Section 409A of the Code that are payable upon a Termination shall be delayed
for such period as may be necessary to meet the requirements of Section 409A(a)(2)(B)(i) of the Code. On the first
business day following the expiration of such period, the Participant shall be paid, in a single lump sum without
interest, an amount equal to the aggregate amount of all payments delayed pursuant to the preceding sentence,
and any remaining payments not so delayed shall continue to be paid pursuant to the payment schedule applicable
to such Award.
(jjj)
“
Zynga Awards
” has the meaning set forth in Section 4(a) hereof.
(kkk)
“
Zynga Share Reserve
” has the meaning set forth in Section 4(a) hereof.
3.
Administration.
(a)
Authority of the Committee
. Except as otherwise provided below, the Plan shall be administered by the Committee.
The Committee shall have full and final authority, in each case subject to and consistent with the provisions of the
Plan, to (1) select Eligible Persons to become Participants, (2) grant Awards, (3) determine the type, number of
shares of Stock subject to, other terms and conditions of, and all other matters relating to, Awards, (4) prescribe
Award Agreements (which need not be identical for each Participant) and rules and regulations for the
administration of the Plan, (5) construe and interpret the Plan and Award Agreements and correct defects, supply
omissions, and reconcile inconsistencies therein, (6) suspend the right to exercise Awards during any period that
the Committee deems appropriate to comply with applicable securities laws, and thereafter extend the exercise
period of an Award by an equivalent period of time or such shorter period required by, or necessary to comply with,
applicable law, (7) determine when an Award may be granted hereunder; and (8) make all other decisions and
determinations as the Committee may deem necessary or advisable for the administration of the Plan. Any action
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Proxy Statement
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ANNEX B
of the Committee shall be final, conclusive, and binding on all Persons, including, without limitation, the Company,
its stockholders and Affiliates, Eligible Persons, Participants, and beneficiaries of Participants. Notwithstanding
anything in the Plan to the contrary, the Committee shall have the ability to accelerate the vesting of any
outstanding Award at any time and for any reason, including (i) upon a Corporate Event, subject to Section 11(d),
(ii) in the event of a Participant’s Termination by the Service Recipient other than for Cause, subject to
Section 4(e), or (iii) in the event of a Participant’s Termination due to the Participant’s death, Disability or
Retirement. For the avoidance of doubt, the Board shall have the authority to take all actions under the Plan that
the Committee is permitted to take.
(b)
Manner of Exercise of Committee Authority
. At any time that a member of the Committee is not a Qualified
Member, any action of the Committee relating to an Award granted or to be granted to a Participant who is then
subject to Section 16 of the Exchange Act in respect of the Company, must be taken by the remaining members of
the Committee or a subcommittee, designated by the Committee or the Board, composed solely of two or more
Qualified Members (a “
Qualifying Committee
”). Any action authorized by such a Qualifying Committee shall be
deemed the action of the Committee for purposes of the Plan. The express grant of any specific power to a
Qualifying Committee, and the taking of any action by such a Qualifying Committee, shall not be construed as
limiting any power or authority of the Committee.
(c)
Delegation
. To the extent permitted by applicable law, the Committee may delegate to officers or employees of the
Company or any of its Affiliates, or committees thereof, the authority, subject to such terms as the Committee shall
determine, to perform such functions under the Plan, including, but not limited to, administrative functions, as the
Committee may determine appropriate. The Committee may appoint agents to assist it in administering the Plan.
Any actions taken by an officer or employee delegated authority pursuant to this Section 3(c) within the scope of
such delegation shall, for all purposes under the Plan, be deemed to be an action taken by the Committee.
Notwithstanding the foregoing or any other provision of the Plan to the contrary, any Award granted under the Plan
to any Eligible Person who is not an employee of the Company or any of its Affiliates (including any non-employee
director of the Company or any Affiliate) or to any Eligible Person who is subject to Section 16 of the Exchange Act
must be expressly approved by the Committee or Qualifying Committee in accordance with subsection (b) above.
(d)
Section 409A; Section 457A
. The Committee shall consider compliance with Sections 409A and 457A of the Code
in connection with any grant of an Award under the Plan, to the extent applicable. While the Awards granted
hereunder are intended to be structured in a manner to avoid the imposition of any penalty taxes under
Sections 409A and 457A of the Code, in no event whatsoever shall the Company or any of its Affiliates be liable for
any additional tax, interest, or penalties that may be imposed on a Participant as a result of Section 409A or
Section 457A of the Code or any damages for failing to comply with Section 409A or Section 457A of the Code or
any similar state or local laws (other than for withholding obligations or other obligations applicable to employers, if
any, under Section 409A or Section 457A of the Code).
4.
Shares Available Under the Plan; Other Limitations.
(a)
Number of Shares Available for Delivery
. Subject to adjustment as provided in Section 11 hereof and subject to
increase by any shares of Stock subject to an award outstanding under the Prior Plan after June 30, 2017 (a “
Prior
Plan Award
”) that becomes eligible for reuse pursuant to Section 4(b), the total number of shares of Stock reserved
and available for delivery in connection with Awards under the Plan shall equal 20,665,314 (the “
General Share
Reserve
”). Shares of Stock delivered under the Plan shall consist of authorized and unissued shares or previously
issued shares of Stock reacquired by the Company on the open market or by private purchase;
provided
, that if
authorized but previously unissued shares of Stock are issued under the Plan, such shares shall not be issued for
consideration that is less than as permitted under applicable law. Notwithstanding the foregoing, (i) except as may
be required by reason of Section 422 of the Code, the number of shares of Stock available for issuance hereunder
shall not be reduced by shares issued pursuant to Awards issued or assumed in connection with a merger or
acquisition as contemplated by, as applicable, NYSE Listed Company Manual Section 303A.08, NASDAQ Listing
Rule 5635(c) and IM-5635-1, AMEX Company Guide Section 711, or other applicable stock exchange rules, and
their respective successor rules and listing exchange promulgations (each such Award, a “
Substitute Award
”); and
(ii) shares of Stock shall not be deemed to have been issued pursuant to the Plan with respect to any portion of an
Award that is settled in cash. In addition, effective September 4, 2020, subject to Section 11 hereof, 50,743 shares
of Stock (the “
Playdots Share Reserve
”) became available for issuance for Awards to Eligible Persons (other than
Eligible Persons who were employed by the Company or any subsidiary of the Company immediately prior to the
acquisition of Playdots, Inc.) through December 7, 2027, of which no shares of Stock remain available for issuance
for Awards to Eligible Persons, and of which 65 shares of Stock remain currently outstanding pursuant to the grant
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2025
Proxy Statement
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B-8
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ANNEX B
of Options that were either assumed by the Company as Substitute Awards in connection with the acquisition of
Playdots, Inc. or that were granted from the Playdots Share Reserve following the acquisition of Playdots, Inc. (the
“
Playdots Awards
”). In addition, effective May 23, 2022, subject to Section 11 hereof, 15,368,500 shares of Stock
(the “
Zynga Share Reserve
”) became available for issuance for Awards to Eligible Persons (other than Eligible
Persons who were employed by the Company or any subsidiary of the Company immediately prior to the
acquisition of Zynga Inc.), of which, following the July 24, 2023 amendment and restatement of the Plan, no shares
of Stock remain available for issuance for Awards to Eligible Persons, and of which 741,556 shares of Stock
remain currently outstanding pursuant to the grant of Options or Restricted Stock Units that were either assumed
by the Company as Substitute Awards in connection with the acquisition of Zynga Inc. or that were granted from
the Zynga Share Reserve following the acquisition of Zynga Inc. (the “
Zynga Awards
”).
(b)
Share Counting Rules
. The Committee may adopt reasonable counting procedures to ensure appropriate counting,
avoid double-counting (as, for example, in the case of tandem awards or Substitute Awards) and adjust if the
number of shares of Stock actually delivered differs from the number of shares previously counted in connection
with an Award. Other than with respect to a Substitute Award, to the extent that an Award or Prior Plan Award
expires or is canceled, forfeited, settled in cash, or otherwise terminated without delivery to the Participant of the
full number of shares of Stock to which the Award or Prior Plan Award related, the undelivered shares of Stock will
again be available for grant. To the extent that a Playdots Award expires or is canceled, forfeited, settled in cash, or
otherwise terminated without delivery to the Participant of the full number of shares of Stock to which the Playdots
Award related, the undelivered shares of Stock will again be available for grant pursuant to the Playdots Share
Reserve. To the extent that a Zynga Award expires or is canceled, forfeited, settled in cash, or otherwise
terminated without delivery to the Participant of the full number of shares of Stock to which the Zynga Award
related, the undelivered shares of Stock will again be available for grant pursuant to General Share Reserve. The
number of shares of Stock available for the purpose of Awards under the Plan shall be increased by any shares of
Stock tendered by the Participant or withheld by the Company to pay any tax withholding obligation with respect to
any Full Value Award or any full value Prior Plan Award. Notwithstanding anything to the contrary contained herein,
the following shares of Stock shall be deemed to constitute shares delivered to the Participant and shall not be
deemed to again be available for delivery under the Plan: (i) shares tendered by the Participant or withheld by the
Company in payment of the exercise price of an Option or an option under the Prior Plan, (ii) shares tendered by
the Participant or withheld by the Company to satisfy any tax withholding obligation with respect to Options or
Stock Appreciation Rights or options or stock appreciation rights under the Prior Plan, (iii) shares subject to a Stock
Appreciation Right or a stock appreciation right under the Prior Plan that are not issued in connection with its stock
settlement on exercise thereof, and (iv) shares reacquired by the Company on the open market or otherwise using
cash proceeds from the exercise of Options or options under the Prior Plan.
(c)
Incentive Stock Options
. No more than 7,200,000 shares of Stock (subject to adjustment as provided in Section 11
hereof) reserved for issuance hereunder may be issued or transferred upon exercise or settlement of Incentive
Stock Options.
(d)
Shares Available Under Acquired Plans
. To the extent permitted by NYSE Listed Company Manual
Section 303A.08, NASDAQ Listing Rule 5635(c) or other applicable stock exchange rules, subject to applicable
law, in the event that a company acquired by the Company or with which the Company combines has shares
available under a pre-existing plan approved by stockholders and not adopted in contemplation of such acquisition
or combination, the shares available for grant pursuant to the terms of such pre-existing plan (as adjusted, to the
extent appropriate, using the exchange ratio or other adjustment or valuation ratio of formula used in such
acquisition or combination to determine the consideration payable to the holders of common stock of the entities
party to such acquisition or combination) may be used for Awards under the Plan and shall not reduce the number
of shares of Stock reserved and available for delivery in connection with Awards under the Plan;
provided
that
Awards using such available shares shall not be made after the date awards could have been made under the
terms of such pre-existing plan, absent the acquisition or combination, and shall only be made to individuals who
were not employed by the Company or any subsidiary of the Company immediately prior to such acquisition or
combination. For the avoidance of doubt, the forgoing provision is not intended to limit the treatment of Zynga
Awards pursuant to Section 4(b) hereof, which treatment was approved by the Company’s stockholders pursuant
to the July 24, 2023 amendment and restatement of the Plan.
(e)
Minimum Vesting Period
. Other than with respect to a Substitute Award and except with respect to a maximum of
five percent (5%) of the shares of Stock authorized for grant under the Plan, no Award of Options or Stock
Appreciation Rights may vest over a period that is less than one (1) year from the date of grant;
provided, however,
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Proxy Statement
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ANNEX B
that the foregoing minimum vesting period shall not apply in the event of a Participant’s Termination without Cause
or a Participant’s Termination due to death, Disability or Retirement or in the event of a Corporate Event, subject to
Section 11(d).
(f)
Limitation on Awards to Non-Employee Directors
. Notwithstanding anything herein to the contrary, the maximum
value of any Awards granted to a non-employee director of the Company in any one calendar year, taken together
with any cash fees paid to such non-employee director during such calendar year in respect of the Director’s
service as a member of the Board during such year, shall not exceed $750,000 in total value (calculating the value
of any such Awards based on the grant date fair value of such Awards for financial reporting purposes and
excluding, for this purpose, the value of any dividend equivalent payments paid pursuant to any Award granted in a
previous year);
provided
, that the Committee may make exceptions to this limit for a non-executive chair of the
Board or, in extraordinary circumstances, for other individual non-employee directors, as the Committee may
determine in its discretion, provided that the non-employee director receiving such additional compensation may
not participate in the decision to award such compensation.
5.
Options.
(a)
General
. Certain Options granted under the Plan may be intended to be Incentive Stock Options; however, no
Incentive Stock Options may be granted hereunder following the tenth (10
th
) anniversary of the earlier of (i) the
date the Plan is adopted by the Board and (ii) the date the stockholders of the Company approve the Plan. Options
may be granted to Eligible Persons in such form and having such terms and conditions as the Committee shall
deem appropriate;
provided,
however
, that Incentive Stock Options may be granted only to Eligible Persons who
are employees of the Company or an Affiliate (as such definition is limited pursuant to Section 2(t) hereof) of the
Company. The provisions of separate Options shall be set forth in separate Option Agreements, which agreements
need not be identical.
(b)
Term
. The term of each Option shall be set by the Committee at the time of grant;
provided, however,
that no
Option granted hereunder shall be exercisable after, and each Option shall expire, ten (10) years from the date it
was granted.
(c)
Exercise Price
. The exercise price per share of Stock for each Option shall be set by the Committee at the time of
grant and shall not be less than the Fair Market Value on the date of grant, subject to Section 5(g) hereof in the
case of any Incentive Stock Option. Notwithstanding the foregoing, in the case of an Option that is a Substitute
Award, the exercise price per share of Stock for such Option may be less than the Fair Market Value on the date of
grant;
provided
, that such exercise price is determined in a manner consistent with the provisions of Section 409A
of the Code and, if applicable, Section 424(a) of the Code.
(d)
Payment for Stock
. Payment for shares of Stock acquired pursuant to an Option granted hereunder shall be made
in full upon exercise of the Option in a manner approved by the Committee, which may include any of the following
payment methods: (1) in immediately available funds in U.S. dollars, or by certified or bank cashier’s check, (2) by
delivery of shares of Stock having a value equal to the exercise price, (3) by a broker-assisted cashless exercise in
accordance with procedures approved by the Committee, whereby payment of the Option exercise price or tax
withholding obligations may be satisfied, in whole or in part, with shares of Stock subject to the Option by delivery
of an irrevocable direction to a securities broker (on a form prescribed by the Committee) to sell shares of Stock
and to deliver all or part of the sale proceeds to the Company in payment of the aggregate exercise price and, if
applicable, the amount necessary to satisfy the Company’s withholding obligations, or (4) by any other means
approved by the Committee (including, by delivery of a notice of “net exercise” to the Company, pursuant to which
the Participant shall receive the number of shares of Stock underlying the Option so exercised reduced by the
number of shares of Stock equal to the aggregate exercise price of the Option divided by the Fair Market Value on
the date of exercise). Notwithstanding anything herein to the contrary, if the Committee determines that any form of
payment available hereunder would be in violation of Section 402 of the Sarbanes-Oxley Act of 2002, such form of
payment shall not be available.
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TAKE-TWO INTERACTIVE SOFTWARE, INC. |
2025
Proxy Statement
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B-10
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ANNEX B
(e)
Vesting
. Options shall vest and become exercisable in such manner, on such date or dates, or upon the
achievement of performance or other conditions, in each case as may be determined by the Committee and set
forth in an Option Agreement;
provided, however
, that notwithstanding any such vesting dates, the Committee may
in its sole discretion accelerate the vesting of any Option at any time and for any reason. Unless otherwise
specifically determined by the Committee, the vesting of an Option shall occur only while the Participant is
employed by or rendering services to the Service Recipient, and all vesting shall cease upon a Participant’s
Termination for any reason. If an Option is exercisable in installments, such installments or portions thereof that
become exercisable shall remain exercisable until the Option expires, is canceled or otherwise terminates.
(f)
Termination of Employment or Service
. Except as provided by the Committee in an Option Agreement, Participant
Agreement or otherwise:
(1)
In the event of a Participant’s Termination prior to the applicable Expiration Date for any reason other than
(i) by the Service Recipient for Cause, (ii) a voluntary Termination by the Participant (including a Participant’s
Retirement) after the occurrence of an event that would be grounds for a Termination for Cause, or (iii) by
reason of the Participant’s Retirement, death or Disability, (A) all vesting with respect to such Participant’s
Options outstanding shall cease, (B) all of such Participant’s unvested Options outstanding shall terminate
and be forfeited for no consideration as of the date of such Termination, and (C) all of such Participant’s
vested Options outstanding shall remain exercisable by the Participant during the period commencing on the
Participant’s Termination date and ending on the earlier of (x) the applicable Expiration Date and (y) the date
that is ninety (90) days after the date of such Termination, and shall terminate and be forfeited for no
consideration upon such date unless previously exercised.
(2)
In the event of a Participant’s Termination prior to the applicable Expiration Date by reason of such
Participant’s Retirement, death or Disability, (i) all vesting with respect to such Participant’s Options
outstanding shall cease, (ii) all of such Participant’s unvested Options outstanding shall terminate and be
forfeited for no consideration as of the date of such Termination, and (iii) all of such Participant’s vested
Options outstanding shall remain exercisable by the Participant (or, in the event of a Participant’s death, by
the Person or Persons to whom such Participant’s rights under the Options pass by will or by the applicable
laws of descent and distribution) during the period commencing on the Participant’s Termination date and
ending on the earlier of (A) the applicable Expiration Date and (B) the date that is twelve (12) months after
the date of such Termination, and shall terminate and be forfeited for no consideration upon such date
unless previously exercised. Notwithstanding anything herein to the contrary, if a Participant dies within any
post-Termination exercise period described in this Section 5(f), all Options that were held by such Participant
that were vested and exercisable at the time of the Participant’s Termination shall thereafter be exercisable
by the Person or Persons to whom such Participant’s rights under the Options pass by will or by the
applicable laws of descent and distribution until the earlier of (x) the applicable Expiration Date and (y) the
date that is twelve (12) months after the date of death.
(3)
In the event of a Participant’s Termination prior to the applicable Expiration Date by reason of (i) a
Termination by the Service Recipient for Cause, or (ii) a voluntary Termination by the Participant (including a
Participant’s Retirement) after the occurrence of an event that would be grounds for a Termination for Cause,
all of such Participant’s Options outstanding (whether or not vested) shall immediately terminate and be
forfeited for no consideration as of the date of such Termination.
(g)
Special Provisions Applicable to Incentive Stock Options
.
(1)
No Incentive Stock Option may be granted to any Eligible Person who, at the time the Option is granted,
owns directly, or indirectly within the meaning of Section 424(d) of the Code, stock possessing more than ten
percent (10%) of the total combined voting power of all classes of stock of the Company or of any parent or
subsidiary thereof, unless such Incentive Stock Option (i) has an exercise price of at least one hundred ten
percent (110%) of the Fair Market Value on the date of the grant of such Option and (ii) cannot be exercised
more than five (5) years after the date it is granted.
(2)
To the extent that the aggregate Fair Market Value (determined as of the date of grant) of Stock for which
Incentive Stock Options are exercisable for the first time by any Participant during any calendar year (under
all plans of the Company and its Affiliates) exceeds $100,000, such excess Incentive Stock Options shall be
treated as Nonqualified Stock Options.
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Proxy Statement
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ANNEX B
(3)
Each Participant who receives an Incentive Stock Option must agree to notify the Company in writing
immediately after the Participant makes a Disqualifying Disposition of any Stock acquired pursuant to the
exercise of an Incentive Stock Option.
6.
Restricted Stock.
(a)
General
. Restricted Stock may be granted to Eligible Persons in such form and having such terms and conditions
as the Committee shall deem appropriate. The provisions of separate Awards of Restricted Stock shall be set forth
in separate Restricted Stock Agreements, which agreements need not be identical. Subject to the restrictions set
forth in Section 6(b) hereof, and except as otherwise set forth in the applicable Restricted Stock Agreement, the
Participant shall generally have the rights and privileges of a stockholder as to such Restricted Stock, including the
right to vote such Restricted Stock.
(b)
Vesting and Restrictions on Transfer
. Restricted Stock shall vest in such manner, on such date or dates, or upon
the achievement of performance or other conditions, in each case as may be determined by the Committee and
set forth in a Restricted Stock Agreement;
provided, however
, that notwithstanding any such vesting dates, the
Committee may in its sole discretion accelerate the vesting of any Award of Restricted Stock at any time and for
any reason. Unless otherwise specifically determined by the Committee, the vesting of an Award of Restricted
Stock shall occur only while the Participant is employed by or rendering services to the Service Recipient, and all
vesting shall cease upon a Participant’s Termination for any reason. In addition to any other restrictions set forth in
a Participant’s Restricted Stock Agreement, the Participant shall not be permitted to sell, transfer, pledge, or
otherwise encumber the Restricted Stock prior to the time the Restricted Stock has vested pursuant to the terms of
the Restricted Stock Agreement.
(c)
Termination of Employment or Service
. Except as provided by the Committee in a Restricted Stock Agreement,
Participant Agreement or otherwise, in the event of a Participant’s Termination for any reason prior to the time that
such Participant’s Restricted Stock has vested, (1) all vesting with respect to such Participant’s Restricted Stock
outstanding shall cease, and (2) as soon as practicable following such Termination, the Company shall repurchase
from the Participant, and the Participant shall sell, all of such Participant’s unvested shares of Restricted Stock at a
purchase price equal to the original purchase price paid for the Restricted Stock;
provided
that, if the original
purchase price paid for the Restricted Stock is equal to zero dollars ($0), such unvested shares of Restricted Stock
shall be forfeited to the Company by the Participant for no consideration as of the date of such Termination.
7.
Restricted Stock Units.
(a)
General
. Restricted Stock Units may be granted to Eligible Persons in such form and having such terms and
conditions as the Committee shall deem appropriate. The provisions of separate Restricted Stock Units shall be set
forth in separate RSU Agreements, which agreements need not be identical.
(b)
Vesting
. Restricted Stock Units shall vest in such manner, on such date or dates, or upon the achievement of
performance or other conditions, in each case as may be determined by the Committee and set forth in an RSU
Agreement;
provided
,
however
, that notwithstanding any such vesting dates, the Committee may in its sole
discretion accelerate the vesting of any Restricted Stock Unit at any time and for any reason. Unless otherwise
specifically determined by the Committee, the vesting of a Restricted Stock Unit shall occur only while the
Participant is employed by or rendering services to the Service Recipient, and all vesting shall cease upon a
Participant’s Termination for any reason.
(c)
Settlement
. Restricted Stock Units shall be settled in Stock, cash, or property, as determined by the Committee, in
its sole discretion, on the date or dates determined by the Committee and set forth in an RSU Agreement.
(d)
Termination of Employment or Service
. Except as provided by the Committee in an RSU Agreement, Participant
Agreement or otherwise, in the event of a Participant’s Termination for any reason prior to the time that such
Participant’s Restricted Stock Units have been settled, (1) all vesting with respect to such Participant’s Restricted
Stock Units outstanding shall cease, (2) all of such Participant’s unvested Restricted Stock Units outstanding shall
be forfeited for no consideration as of the date of such Termination, and (3) any shares remaining undelivered with
respect to vested Restricted Stock Units then held by such Participant shall be delivered on the delivery date or
dates specified in the RSU Agreement.
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TAKE-TWO INTERACTIVE SOFTWARE, INC. |
2025
Proxy Statement
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B-12
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ANNEX B
8.
Stock Appreciation Rights.
(a)
General
. Stock Appreciation Rights may be granted to Eligible Persons in such form and having such terms and
conditions as the Committee shall deem appropriate. The provisions of separate Stock Appreciation Rights shall be
set forth in separate SAR Agreements, which agreements need not be identical.
(b)
Term
. The term of each Stock Appreciation Right shall be set by the Committee at the time of grant;
provided,
however
, that no Stock Appreciation Right granted hereunder shall be exercisable after, and each Stock
Appreciation Right shall expire, ten (10) years from the date it was granted.
(c)
Base Price
. The base price per share of Stock for each Stock Appreciation Right shall be set by the Committee at
the time of grant and shall not be less than the Fair Market Value on the date of grant.
Notwithstanding the foregoing, in the case of a Stock Appreciation Right that is a Substitute Award, the base price per share of
Stock for such Stock Appreciation Right may be less than the Fair Market Value on the date of grant;
provided,
that such base
price is determined in a manner consistent with the provisions of Section 409A of the Code.
(d)
Vesting
. Stock Appreciation Rights shall vest and become exercisable in such manner, on such date or dates, or
upon the achievement of performance or other conditions, in each case as may be determined by the Committee
and set forth in a SAR Agreement;
provided
,
however
, that notwithstanding any such vesting dates, the Committee
may in its sole discretion accelerate the vesting of any Stock Appreciation Right at any time and for any reason.
Unless otherwise specifically determined by the Committee, the vesting of a Stock Appreciation Right shall occur
only while the Participant is employed by or rendering services to the Service Recipient, and all vesting shall cease
upon a Participant’s Termination for any reason. If a Stock Appreciation Right is exercisable in installments, such
installments or portions thereof that become exercisable shall remain exercisable until the Stock Appreciation Right
expires, is canceled or otherwise terminates.
(e)
Payment upon Exercise
. Payment upon exercise of a Stock Appreciation Right may be made in cash, Stock, or
property as specified in the SAR Agreement or determined by the Committee, in each case having a value in
respect of each share of Stock underlying the portion of the Stock Appreciation Right so exercised, equal to the
difference between the base price of such Stock Appreciation Right and the Fair Market Value of one (1) share of
Stock on the exercise date. For purposes of clarity, each share of Stock to be issued in settlement of a Stock
Appreciation Right is deemed to have a value equal to the Fair Market Value of one (1) share of Stock on the
exercise date. In no event shall fractional shares be issuable upon the exercise of a Stock Appreciation Right, and
in the event that fractional shares would otherwise be issuable, the number of shares issuable will be rounded
down to the next lower whole number of shares, and the Participant will be entitled to receive a cash payment
equal to the value of such fractional share.
(f)
Termination of Employment or Service
. Except as provided by the Committee in a SAR Agreement, Participant
Agreement or otherwise:
(1)
In the event of a Participant’s Termination prior to the applicable Expiration Date for any reason other than
(i) by the Service Recipient for Cause, (ii) a voluntary Termination by the Participant (including a Participant’s
Retirement) after the occurrence of an event that would be grounds for a Termination for Cause, or (iii) by
reason of the Participant’s Retirement, death or Disability, (A) all vesting with respect to such Participant’s
Stock Appreciation Rights outstanding shall cease, (B) all of such Participant’s unvested Stock Appreciation
Rights outstanding shall terminate and be forfeited for no consideration as of the date of such Termination,
and (C) all of such Participant’s vested Stock Appreciation Rights outstanding shall remain exercisable by
the Participant during the period commencing on the Participant’s Termination date and ending on the earlier
of (x) the applicable Expiration Date and (y) the date that is ninety (90) days after the date of such
Termination, and shall terminate and be forfeited for no consideration upon such date unless
previously exercised.
(2)
In the event of a Participant’s Termination prior to the applicable Expiration Date by reason of such
Participant’s Retirement, death or Disability, (i) all vesting with respect to such Participant’s Stock
Appreciation Rights outstanding shall cease, (ii) all of such Participant’s unvested Stock Appreciation Rights
outstanding shall terminate and be forfeited for no consideration as of the date of such Termination, and
(iii) all of such Participant’s vested Stock Appreciation Rights outstanding shall remain exercisable by the
Participant (or, in the event of a Participant’s death, by the Person or Persons to whom such Participant’s
rights under the Stock Appreciation Rights pass by will or by the applicable laws of descent and distribution)
during the period commencing on the Participant’s Termination date and ending on the earlier of (A) the
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ANNEX B
applicable Expiration Date and (B) the date that is twelve (12) months after the date of such Termination,
and shall terminate and be forfeited for no consideration upon such date unless previously exercised.
Notwithstanding anything herein to the contrary, if a Participant dies within any post-Termination exercise
period described in this Section 8(f), all Stock Appreciation Rights that were held by such Participant that
were vested and exercisable at the time of the Participant’s Termination shall thereafter be exercisable by
the Person or Persons to whom such Participant’s rights under the Stock Appreciation Rights pass by will or
by the applicable laws of descent and distribution until the earlier of (x) the applicable Expiration Date and
(y) the date that is twelve (12) months after the date of death.
(3)
In the event of a Participant’s Termination prior to the applicable Expiration Date by reason of (i) a
Termination by the Service Recipient for Cause, or (ii) a voluntary Termination by the Participant (including a
Participant’s Retirement) after the occurrence of an event that would be grounds for a Termination for Cause,
all of such Participant’s Stock Appreciation Rights outstanding (whether or not vested) shall immediately
terminate and be forfeited for no consideration as of the date of such Termination.
9.
Performance Awards.
(a)
General.
Performance Awards may be granted to Eligible Persons in such form and having such terms and
conditions as the Committee shall deem appropriate. The provisions of separate Performance Awards, including
the determination of the Committee with respect to the form of payout of Performance Awards, shall be set forth in
separate Performance Award Agreements, which agreements need not be identical.
(b)
Value of Performance Awards.
Each Performance Unit shall have an initial value that is established by the
Committee at the time of grant. Each Performance Share shall have an initial value equal to the Fair Market Value
of the Stock on the date of grant. Each Performance Award Agreement in respect of any Performance Cash Award
shall specify the dollar amount payable under the Performance Cash Award. In addition to any other non-
performance terms included in the Performance Award Agreement, the Committee shall set the applicable
Performance Objectives in its discretion, which objectives, depending on the extent to which they are met, will
determine the value and number of Performance Units or Performance Shares, or the value of a Performance
Cash Award, as the case may be, that will be paid out to the Participant.
(c)
Earning of Performance Awards.
Upon the expiration of the applicable Performance Period or other non-
performance-based vesting period, if longer, the holder of a Performance Award shall be entitled to receive the
following payouts: (1) if the holder holds Performance Units or Performance Shares, payout on the value and
number of the applicable Performance Units or Performance Shares earned by the Participant over the
Performance Period, or (2) if the holder holds a Performance Cash Award, payout on the value of the Performance
Cash Award earned by the Participant over the Performance Period, in any case, to be determined as a function of
the extent to which the corresponding Performance Objectives have been achieved and any other non-
performance-based terms met. The Committee may specify a target, threshold or maximum amount payable and
may set a formula for determining the amount of Performance Awards earned if performance is at or above the
threshold level but falls short of the maximum achievement of the specified Performance Objectives. Unless
otherwise specifically determined by the Committee, a Participant shall be eligible to earn a Performance Award
only while the Participant is employed by or rendering services to the Service Recipient.
(d)
Form and Timing of Payment of Performance Awards.
Payment of earned Performance Awards shall be as
determined by the Committee and as evidenced in the Performance Award Agreement. Subject to the terms of the
Plan, the Committee, in its sole discretion, may pay earned Performance Units and Performance Shares in the
form of cash, Stock, or other Awards (or in any combination thereof) equal to the value of the earned Performance
Units or Performance Shares, as the case may be, at the close of the applicable Performance Period, or as soon
as practicable after the end of the Performance Period. Unless otherwise determined by the Committee, earned
Performance Cash Awards shall be paid in cash. Any cash, Stock, or other Awards issued in connection with a
Performance Award may be issued subject to any restrictions deemed appropriate by the Committee.
(e)
Termination of Employment or Service.
Except as provided by the Committee in a Performance Award Agreement,
Participant Agreement or otherwise, if, prior to the end of an applicable Performance Period, a Participant
undergoes a Termination for any reason, all of such Participant’s Performance Awards shall be forfeited by the
Participant to the Company for no consideration.
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ANNEX B
(f)
Performance Objectives.
(1)
Each Performance Award shall specify the Performance Objectives that must be achieved before such
Performance Award shall become earned. The Company may also specify a minimum acceptable level of
achievement below which no payment will be made and may set forth a formula for determining the amount
of any payment to be made if performance is at or above such minimum acceptable level but falls short of the
maximum achievement of the specified Performance Objectives.
(2)
Performance Objectives shall be determined by the Committee. Performance Objectives may be established
on a Company-wide basis, project or geographical basis or, as the context permits, with respect to one or
more business units, divisions, lines of business or business segments, subsidiaries, products, or other
operational units or administrative departments of the Company (or in combination thereof) or may be related
to the performance of an individual Participant and may be expressed in absolute terms, or relative or
comparative to (A) current internal targets or budgets, (B) the past performance of the Company (including
the performance of one or more subsidiaries, divisions, or operating units), (C) the performance of one or
more similarly situated companies, (D) the performance of an index covering multiple companies, or (E) other
external measures of the selected performance criteria.
(3)
The business criteria mentioned above (i) may be combined with cost of capital, assets, invested capital and
stockholders’ equity to form an appropriate measure of performance and (ii) shall have any reasonable
definitions that the Committee may specify. Unless specified otherwise by the Committee (i) in the
Performance Award Agreement at the time the Performance Award is granted or (ii) in such other document
setting forth the Performance Objectives at the time the Performance Objectives are established, the
Committee, in its sole discretion, will appropriately make adjustments in the method of calculating the
attainment of Performance Objectives for a Performance Period to provide for objectively determinable
adjustments, modifications or amendments, to any of the business criteria described above, including, without
limitation, for one or more of the following items of gain, loss, profit or expense: (A) determined to be items of
an unusual nature or of infrequency of occurrence or non-recurring in nature; (B) related to changes in
accounting principles under GAAP or tax laws (including, without limitation, any adjustments that would result
in the Company paying non-deductible compensation to a Participant); (C) related to currency fluctuations;
(D) related to financing activities (e.g., effect on earnings per share of issuing convertible debt securities);
(E) related to restructuring, divestitures, productivity initiatives or new business initiatives; (F) related to
discontinued operations that do not qualify as a segment of business under GAAP; (G) attributable to the
business operations of any entity acquired by the Company during the fiscal year; (H) non-operating items;
and (I) acquisition or divestiture expenses.
10.
Other Stock-Based Awards.
The Committee is authorized, subject to limitations under applicable law, to grant to Participants such other Awards that
may be denominated or payable in, valued in whole or in part by reference to, or otherwise based upon or related to
Stock, as deemed by the Committee to be consistent with the purposes of the Plan. The Committee may also grant Stock
as a bonus (whether or not subject to any vesting requirements or other restrictions on transfer), and may grant other
Awards in lieu of obligations of the Company or an Affiliate to pay cash or deliver other property under the Plan or under
other plans or compensatory arrangements, subject to such terms as shall be determined by the Committee. The terms
and conditions applicable to such Awards shall be determined by the Committee and evidenced by Award Agreements,
which agreements need not be identical.
11.
Adjustment for Recapitalization, Merger, etc.
(a)
Capitalization Adjustments.
The aggregate number of shares of Stock that may be delivered in connection with
Awards (as set forth in Section 4 hereof), the numerical share limits in Section 4 hereof, the number of shares of
Stock covered by each outstanding Award, the price per share of Stock underlying each such Award, and, if
applicable, the Performance Objectives that must be achieved before such Performance Award shall become
earned shall be equitably and proportionally adjusted or substituted, as determined by the Committee, in its sole
discretion, as to the number, price, or kind of a share of Stock or other consideration subject to such Awards (1) in
the event of changes in the outstanding Stock or in the capital structure of the Company by reason of stock
dividends, extraordinary cash dividends, stock splits, reverse stock splits, spinoffs, recapitalizations,
reorganizations, mergers, amalgamations, consolidations, combinations, subdivisions, exchanges, reclassifications
or other relevant changes in capitalization occurring after the date of grant of any such Award (including any
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Proxy Statement
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ANNEX B
Corporate Event); (2) in connection with any extraordinary dividend declared and paid in respect of shares of
Stock, whether payable in the form of cash, stock, or any other form of consideration; or (3) in the event of any
change in applicable laws or circumstances that results in or could result in, in either case, as determined by the
Committee in its sole discretion, any substantial dilution or enlargement of the rights intended to be granted to, or
available for, Participants in the Plan. In lieu of or in addition to any adjustment pursuant to this Section 11(a), if
deemed appropriate, the Committee may provide that an adjustment take the form of a cash payment to the holder
of an outstanding Award with respect to all or part of an outstanding Award, which payment shall be subject to such
terms and conditions (including timing of payment(s), vesting and forfeiture conditions) as the Committee may
determine in its sole discretion. The Committee will make such adjustments, substitutions or payment, and its
determination will be final, binding and conclusive. The Committee need not take the same action or actions with
respect to all Awards or portions thereof or with respect to all Participants. The Committee may take different
actions with respect to the vested and unvested portions of an Award.
(b)
Corporate Events.
Notwithstanding the foregoing, except as provided by the Committee in an Award Agreement,
Participant Agreement or otherwise, in connection with (i) a merger, amalgamation, or consolidation involving the
Company in which the Company is not the surviving corporation, (ii) a merger, amalgamation, or consolidation
involving the Company in which the Company is the surviving corporation but the holders of shares of Stock
receive securities of another corporation or other property or cash, (iii) a Change in Control, or (iv) the
reorganization, dissolution or liquidation of the Company (each, a “Corporate Event”), the Committee may provide
for any one or more of the following:
(1)
The assumption or substitution of any or all Awards in connection with such Corporate Event, in which case
the Awards shall be subject to the adjustment set forth in subsection (a) above, and to the extent that such
Awards are Performance Awards or other Awards that vest subject to the achievement of Performance
Objectives or similar performance criteria, such Performance Objectives or similar performance criteria shall
be adjusted appropriately to reflect the Corporate Event;
(2)
The acceleration of vesting of any or all Awards not assumed or substituted in connection with such
Corporate Event, subject to the consummation of such Corporate Event; provided that any Performance
Awards or other Awards that vest subject to the achievement of Performance Objectives or similar
performance criteria will be deemed earned (i) based on actual performance through the date of the
Corporate Event, or (ii) at the target level (or if no target is specified, the maximum level), in the event actual
performance cannot be measured through the date of the Corporate Event, in each case, with respect to all
unexpired Performance Periods or Performance Periods for which satisfaction of the Performance Objectives
or other material terms for the applicable Performance Period has not been certified by the Committee prior
to the date of the Corporate Event;
(3)
The cancellation of any or all Awards not assumed or substituted in connection with such Corporate Event
(whether vested or unvested) as of the consummation of such Corporate Event, together with the payment to
the Participants holding vested Awards (including any Awards that would vest upon the Corporate Event but
for such cancellation) so canceled of an amount in respect of cancellation equal to the amount payable
pursuant to any Cash Award or, with respect to other Awards, an amount based upon the per-share
consideration being paid for the Stock in connection with such Corporate Event, less, in the case of
Exercisable Awards, the applicable exercise or base price; provided, however, that holders of Exercisable
Awards shall be entitled to consideration in respect of cancellation of such Awards only if the per-share
consideration less the applicable exercise or base price is greater than zero dollars ($0), and to the extent
that the per-share consideration is less than or equal to the applicable exercise or base price, such Awards
shall be canceled for no consideration;
(4)
The cancellation of any or all Exercisable Awards not assumed or substituted in connection with such
Corporate Event (whether vested or unvested) as of the consummation of such Corporate Event; provided
that all Exercisable Awards to be so canceled pursuant to this paragraph (4) shall first become exercisable for
a period of at least twenty (20) days prior to such Corporate Event, with any exercise during such period of
any unvested Exercisable Awards to be (A) contingent upon and subject to the occurrence of the Corporate
Event, and (B) effectuated by such means as are approved by the Committee; and
(5)
The replacement of any or all Awards (other than Awards that are intended to qualify as “stock rights” that do
not provide for a “deferral of compensation” within the meaning of Section 409A of the Code) with a cash
incentive program that preserves the value of the Awards so replaced (determined as of the consummation of
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Proxy Statement
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B-16
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ANNEX B
the Corporate Event), with subsequent payment of cash incentives subject to the same vesting conditions as
applicable to the Awards so replaced and payment to be made within thirty (30) days of the applicable
vesting date.
Payments to holders pursuant to paragraph (3) above shall be made in cash or, in the sole discretion of the
Committee, and to the extent applicable, in the form of such other consideration necessary for a Participant to
receive property, cash, or securities (or a combination thereof) as such Participant would have been entitled to
receive upon the occurrence of the transaction if the Participant had been, immediately prior to such transaction,
the holder of the number of shares of Stock covered by the Award at such time (less any applicable exercise or
base price). In addition, in connection with any Corporate Event, prior to any payment or adjustment contemplated
under this subsection (b), the Committee may require a Participant to (A) represent and warrant as to the
unencumbered title to his or her Awards, (B) bear such Participant’s pro-rata share of any post-closing indemnity
obligations, and be subject to the same post-closing purchase price adjustments, escrow terms, offset rights,
holdback terms, and similar conditions as the other holders of Stock, and (C) deliver customary transfer
documentation as reasonably determined by the Committee. The Committee need not take the same action or
actions with respect to all Awards or portions thereof or with respect to all Participants. The Committee may take
different actions with respect to the vested and unvested portions of an Award.
(c)
Fractional Shares.
Any adjustment provided under this Section 11 may, in the Committee’s discretion, provide for
the elimination of any fractional share that might otherwise become subject to an Award. No cash settlements shall
be made with respect to fractional shares so eliminated.
(d)
Double-Trigger Vesting.
Notwithstanding any other provisions of the Plan, an Award Agreement or a Participant
Agreement to the contrary, no Award Agreement or Participant Agreement shall provide that the vesting, payment,
purchase or distribution of an Award will be accelerated by reason of a Change in Control for any Participant
unless the Participant’s employment is involuntarily terminated as a result of the Change in Control. For purposes
of this Section 11(d), a Participant’s employment will be deemed to have been involuntarily terminated as a result
of a Change in Control if it is involuntarily terminated other than for Cause (including the Participant’s resignation
for “good reason” (or similar term) as defined in the applicable Award Agreement, Participant Agreement, or in a
written change in control, retention, severance or similar agreement between the Company and a Participant, or in
a change in control, retention, severance or similar plan maintained by the Company in which the Participant
participates), or is terminated under circumstances which entitle the Participant to mandatory severance
payment(s) pursuant to applicable law, at any time beginning on the date of the Change in Control up to and
including the first (1
st
) anniversary of the Change in Control (or, if applicable, such longer post-Change in Control
period as may be determined by the Committee).
12.
Use of Proceeds.
The proceeds received from the sale of Stock pursuant to the Plan shall be used for general corporate purposes.
13.
Rights and Privileges as a Stockholder.
Except as otherwise specifically provided in the Plan, no Person shall be entitled to the rights and privileges of Stock
ownership in respect of shares of Stock that are subject to Awards hereunder until such shares have been issued to
that Person.
14.
Transferability of Awards.
Awards may not be sold, transferred, pledged, assigned, or otherwise alienated or hypothecated, other than by will or by
the applicable laws of descent and distribution, and to the extent subject to exercise, Awards may not be exercised during
the lifetime of the grantee other than by the grantee. Notwithstanding the foregoing, except with respect to Incentive
Stock Options, Awards and a Participant’s rights under the Plan shall be transferable for no value to the extent provided
in an Award Agreement or otherwise determined at any time by the Committee.
15.
Employment or Service Rights.
No individual shall have any claim or right to be granted an Award under the Plan or, having been selected for the grant
of an Award, to be selected for the grant of any other Award. Neither the Plan nor any action taken hereunder shall be
construed as giving any individual any right to be retained in the employ or service of the Company or an Affiliate of
the Company.
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ANNEX B
16.
Compliance with Laws.
The obligation of the Company to deliver Stock upon issuance, vesting, exercise, or settlement of any Award shall be
subject to all applicable laws, rules, and regulations, and to such approvals by governmental agencies as may be
required. Notwithstanding any terms or conditions of any Award to the contrary, the Company shall be under no obligation
to offer to sell or to sell, and shall be prohibited from offering to sell or selling, any shares of Stock pursuant to an Award
unless such shares have been properly registered for sale with the U.S. Securities and Exchange Commission pursuant
to the Securities Act (or with a similar non-U.S. regulatory agency pursuant to a similar law or regulation) or unless the
Company has received an opinion of counsel, satisfactory to the Company, that such shares may be offered or sold
without such registration pursuant to an available exemption therefrom and the terms and conditions of such exemption
have been fully complied with. The Company shall be under no obligation to register for sale or resale under the
Securities Act any of the shares of Stock to be offered or sold under the Plan or any shares of Stock to be issued upon
exercise or settlement of Awards. If the shares of Stock offered for sale or sold under the Plan are offered or sold
pursuant to an exemption from registration under the Securities Act, the Company may restrict the transfer of such
shares and may legend the Stock certificates representing such shares in such manner as it deems advisable to ensure
the availability of any such exemption.
17.
Withholding Obligations.
As a condition to the issuance, vesting, exercise, or settlement of any Award (or upon the making of an election under
Section 83(b) of the Code), the Committee may require that a Participant satisfy, through deduction or withholding from
any payment of any kind otherwise due to the Participant, or through such other arrangements as are satisfactory to the
Committee, the amount of all federal, state, and local income and other taxes of any kind required or permitted to be
withheld in connection with such issuance, vesting, exercise, or settlement (or election). The Committee, in its discretion,
may permit shares of Stock to be used to satisfy tax withholding requirements, and such shares shall be valued at their
Fair Market Value as of the issuance, vesting, exercise, or settlement date of the Award, as applicable. Depending on the
withholding method, the Company may withhold by considering the applicable minimum statutorily required withholding
rates or other applicable withholding rates in the applicable Participant’s jurisdiction, including maximum applicable rates
that may be utilized without creating adverse accounting treatment under Financial Accounting Standards Board
Accounting Standards Codification Topic 718 (or any successor pronouncement thereto) and is permitted under
applicable withholding rules promulgated by the Internal Revenue Service or another applicable governmental entity.
18.
Amendment of the Plan or Awards.
(a)
Amendment of Plan
. The Board or the Committee may amend the Plan at any time and from time to time.
(b)
Amendment of Awards
. The Board or the Committee may amend the terms of any one or more Awards at any time
and from time to time.
(c)
Stockholder Approval
; No Material Impairment. Notwithstanding anything herein to the contrary, no amendment to
the Plan or any Award shall be effective without stockholder approval to the extent that such approval is required
pursuant to applicable law or the applicable rules of each national securities exchange on which the Stock is listed.
Additionally, no amendment to the Plan or any Award shall materially impair a Participant’s rights under any Award
unless the Participant consents in writing (it being understood that no action taken by the Board or the Committee
that is expressly permitted under the Plan, including, without limitation, any actions described in Section 11 hereof,
shall constitute an amendment to the Plan or an Award for such purpose). Notwithstanding the foregoing, subject
to the limitations of applicable law, if any, and without an affected Participant’s consent, the Board or the
Committee may amend the terms of the Plan or any one or more Awards from time to time as necessary to bring
such Awards into compliance with applicable law, including, without limitation, Section 409A of the Code.
(d)
No Repricing of Awards Without Stockholder Approval
. Notwithstanding subsection (a) or (b) above, or any other
provision of the Plan, the repricing of Awards shall not be permitted without stockholder approval. For this purpose,
a “repricing” means any of the following (or any other action that has the same effect as any of the following):
(1) changing the terms of an Award to lower its exercise or base price (other than on account of capital
adjustments resulting from share splits, etc., as described in Section 11(a) hereof), (2) any other action that is
treated as a repricing under GAAP, and (3) repurchasing for cash or canceling an Award in exchange for another
Award at a time when its exercise or base price is greater than the Fair Market Value of the underlying Stock,
unless the cancellation and exchange occurs in connection with an event set forth in Section 11(b) hereof.
19.
Termination or Suspension of the Plan.
The Board or the Committee may suspend or terminate the Plan at any time. Unless sooner terminated, the Plan shall
terminate on the day before the tenth (10
th
) anniversary of the Effective Date. No Awards may be granted under the Plan
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ANNEX B
while the Plan is suspended or after it is terminated; provided, however, that following any suspension or termination of
the Plan, the Plan shall remain in effect for the purpose of governing all Awards then outstanding hereunder until such
time as all Awards under the Plan have been terminated, forfeited, or otherwise canceled, or earned, exercised, settled,
or otherwise paid out, in accordance with their terms.
20.
Effective Date of the Plan.
The Plan is effective as of the Effective Date.
21.
Miscellaneous.
(a)
Treatment of Dividends and Dividend Equivalents on Unvested Awards
. Notwithstanding any other provision of the
Plan to the contrary, with respect to any Award that provides for or includes a right to dividends or dividend
equivalents, if dividends are declared during the period that an equity Award is outstanding, such dividends (or
dividend equivalents) shall either (i) not be paid or credited with respect to such Award or (ii) be accumulated but
remain subject to vesting requirement(s) to the same extent as the applicable Award and shall only be paid at the
time or times such vesting requirement(s) are satisfied. Except as otherwise determined by the Committee, no
interest will accrue or be paid on the amount of any cash dividends withheld. No dividends or dividend equivalents
shall be paid on Options or Stock Appreciation Rights.
(b)
Detrimental Activity
. Unless otherwise determined by the Committee at grant, each Award Agreement shall provide
that (i) in the event the Participant engages in Detrimental Activity prior to vesting of any Full Value Award or
exercise of any Exercisable Award, all Awards, as applicable, held by the Participant shall thereupon terminate and
expire, (ii) as a condition of the exercise of an Exercisable Award, the Participant shall be required to certify in a
manner acceptable to the Company (or shall be deemed to have certified) that the Participant is in compliance with
the terms and conditions of the Plan and that the Participant has not engaged in, and does not intend to engage in,
any Detrimental Activity, and (iii) in the event the Participant engages in Detrimental Activity during the one-year
period commencing on the later of (x) the date an Exercisable Award is exercised or the date a Full Value Award
becomes vested, or (y) the date of the Participant’s Termination, the Company shall be entitled to recover from the
Participant at any time within one year after such date, and the Participant shall pay over to the Company, an
amount equal to any gain realized (whether at the time of vesting, exercise or thereafter).
(c)
Certificates
. Stock acquired pursuant to Awards granted under the Plan may be evidenced in such a manner as the
Committee shall determine. If certificates representing Stock are registered in the name of the Participant, the
Committee may require that (1) such certificates bear an appropriate legend referring to the terms, conditions, and
restrictions applicable to such Stock, (2) the Company retain physical possession of the certificates, and (3) the
Participant deliver a stock power to the Company, endorsed in blank, relating to the Stock. Notwithstanding the
foregoing, the Committee may determine, in its sole discretion, that the Stock shall be held in book-entry form
rather than delivered to the Participant pending the release of any applicable restrictions.
(d)
Other Benefits
. No Award granted or paid out under the Plan shall be deemed compensation for purposes of
computing benefits under any retirement plan of the Company or its Affiliates nor affect any benefits under any
other benefit plan now or subsequently in effect under which the availability or amount of benefits is related to the
level of compensation.
(e)
Corporate Action Constituting Grant of Awards
. Corporate action constituting a grant by the Company of an Award
to any Participant will be deemed completed as of the date of such corporate action, unless otherwise determined
by the Committee, regardless of when the instrument, certificate, or letter evidencing the Award is communicated
to, or actually received or accepted by, the Participant. In the event that the corporate records (e.g., Committee
consents, resolutions or minutes) documenting the corporate action constituting the grant contain terms
(e.g., exercise price, vesting schedule or number of shares of Stock) that are inconsistent with those in the Award
Agreement as a result of a clerical error in connection with the preparation of the Award Agreement, the corporate
records will control and the Participant will have no legally binding right to the incorrect term in the
Award Agreement.
(f)
Clawback/Recoupment Policy
. Notwithstanding anything contained herein to the contrary, in addition to the
recoupment provisions set forth herein relating to Detrimental Activity, all Awards granted under the Plan shall be
and remain subject to any incentive compensation clawback or recoupment policy currently in effect or as may be
adopted by the Board (or a committee or subcommittee of the Board) and, in each case, as may be amended from
time to time. No such policy adoption or amendment shall in any event require the prior consent of any Participant.
No recovery of compensation under such a clawback policy will be an event giving rise to a right to resign for “good
reason” or “constructive termination” (or similar term) under any agreement with the Company or any of its
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ANNEX B
Affiliates. In the event that an Award is subject to more than one such policy, the policy with the most restrictive
clawback or recoupment provisions shall govern such Award, subject to applicable law.
(g)
Non-Exempt Employees
. If an Option is granted to an employee of the Company or any of its Affiliates in the
United States who is a non-exempt employee for purposes of the Fair Labor Standards Act of 1938, as amended,
the Option will not be first exercisable for any shares of Stock until at least six (6) months following the date of
grant of the Option (although the Option may vest prior to such date). Consistent with the provisions of the Worker
Economic Opportunity Act, (1) if such employee dies or suffers a Disability, (2) upon a Corporate Event in which
such Option is not assumed, continued, or substituted, (3) upon a Change in Control, or (4) upon the Participant’s
retirement (as such term may be defined in the applicable Award Agreement or a Participant Agreement, or, if no
such definition exists, in accordance with the Company’s then current employment policies and guidelines), the
vested portion of any Options held by such employee may be exercised earlier than six (6) months following the
date of grant. The foregoing provision is intended to operate so that any income derived by a non-exempt
employee in connection with the exercise or vesting of an Option will be exempt from his or her regular rate of pay.
To the extent permitted and/or required for compliance with the Worker Economic Opportunity Act to ensure that
any income derived by a non-exempt employee in connection with the exercise, vesting or issuance of any shares
under any other Award will be exempt from such employee’s regular rate of pay, the provisions of this
Section 21(g) will apply to all Awards.
(h)
Data Privacy
. As a condition of receipt of any Award, each Participant explicitly and unambiguously consents to the
collection, use, and transfer, in electronic or other form, of personal data as described in this Section 21(h) by and
among, as applicable, the Company and its Affiliates for the exclusive purpose of implementing, administering, and
managing the Plan and Awards and the Participant’s participation in the Plan. In furtherance of such
implementation, administration, and management, the Company and its Affiliates may hold certain personal
information about a Participant, including, but not limited to, the Participant’s name, home address, telephone
number, date of birth, social security or insurance number or other identification number, salary, nationality, job
title(s), information regarding any securities of the Company or any of its Affiliates, and details of all Awards
(the “Data”). In addition to transferring the Data amongst themselves as necessary for the purpose of
implementation, administration, and management of the Plan and Awards and the Participant’s participation in the
Plan, the Company and its Affiliates may each transfer the Data to any third parties assisting the Company in the
implementation, administration, and management of the Plan and Awards and the Participant’s participation in the
Plan. Recipients of the Data may be located in the Participant’s country or elsewhere, and the Participant’s country
and any given recipient’s country may have different data privacy laws and protections. By accepting an Award,
each Participant authorizes such recipients to receive, possess, use, retain, and transfer the Data, in electronic or
other form, for the purposes of assisting the Company in the implementation, administration, and management of
the Plan and Awards and the Participant’s participation in the Plan, including any requisite transfer of such Data as
may be required to a broker or other third party with whom the Company or the Participant may elect to deposit
any shares of Stock. The Data related to a Participant will be held only as long as is necessary to implement,
administer, and manage the Plan and Awards and the Participant’s participation in the Plan. A Participant may, at
any time, view the Data held by the Company with respect to such Participant, request additional information about
the storage and processing of the Data with respect to such Participant, recommend any necessary corrections to
the Data with respect to the Participant, or refuse or withdraw the consents herein in writing, in any case without
cost, by contacting his or her local human resources representative. The Company may cancel the Participant’s
eligibility to participate in the Plan, and in the Committee’s discretion, the Participant may forfeit any outstanding
Awards if the Participant refuses or withdraws the consents described herein. For more information on the
consequences of refusal to consent or withdrawal of consent, Participants may contact their local human
resources representative.
(i)
Participants Outside of the United States
. The Committee may modify the terms of any Award under the Plan made
to or held by a Participant who is then a resident, or is primarily employed or providing services, outside of the
United States in any manner deemed by the Committee to be necessary or appropriate in order that such Award
shall conform to laws, regulations, and customs of the country in which the Participant is then a resident or
primarily employed or providing services, or so that the value and other benefits of the Award to the Participant, as
affected by non–U.S. tax laws and other restrictions applicable as a result of the Participant’s residence,
employment, or providing services abroad, shall be comparable to the value of such Award to a Participant who is
a resident, or is primarily employed or providing services, in the United States. An Award may be modified under
this Section 21(i) in a manner that is inconsistent with the express terms of the Plan, so long as such modifications
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2025
Proxy Statement
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B-20
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ANNEX B
will not contravene any applicable law or regulation or result in actual liability under Section 16(b) of the Exchange
Act for the Participant whose Award is modified. Additionally, the Committee may adopt such procedures and sub-
plans as are necessary or appropriate to permit participation in the Plan by Eligible Persons who are non–U.S.
nationals or are primarily employed or providing services outside the United States.
(j)
Change in Time Commitment
. In the event a Participant’s regular level of time commitment in the performance of
his or her services for the Company or any of its Affiliates is reduced (for example, and without limitation, if the
Participant is an employee of the Company and the employee has a change in status from a full-time employee to
a part-time employee) after the date of grant of any Award to the Participant, the Committee has the right in its sole
discretion to (i) make a corresponding reduction in the number of shares of Stock subject to any portion of such
Award that is scheduled to vest or become payable after the date of such change in time commitment, and (ii) in
lieu of or in combination with such a reduction, extend the vesting or payment schedule applicable to such Award.
In the event of any such reduction, the Participant will have no right with respect to any portion of the Award that is
so reduced or extended.
(k)
No Liability of Committee Members
. Neither any member of the Committee nor any of the Committee’s permitted
delegates shall be liable personally by reason of any contract or other instrument executed by such member or on
his or her behalf in his or her capacity as a member of the Committee or for any mistake of judgment made in good
faith, and the Company shall indemnify and hold harmless each member of the Committee and each other
employee, officer, or director of the Company to whom any duty or power relating to the administration or
interpretation of the Plan may be allocated or delegated, against all costs and expenses (including counsel fees)
and liabilities (including sums paid in settlement of a claim) arising out of any act or omission to act in connection
with the Plan, unless arising out of such Person’s own fraud or willful misconduct; provided, however, that approval
of the Board shall be required for the payment of any amount in settlement of a claim against any such Person.
The foregoing right of indemnification shall not be exclusive of any other rights of indemnification to which such
Persons may be entitled under the Company’s certificate or articles of incorporation or by-laws, each as may be
amended from time to time, as a matter of law, or otherwise, or any power that the Company may have to
indemnify them or hold them harmless.
(l)
Payments Following Accidents or Illness
. If the Committee shall find that any Person to whom any amount is
payable under the Plan is unable to care for his or her affairs because of illness or accident, or is a minor, or has
died, then any payment due to such Person or his or her estate (unless a prior claim therefor has been made by a
duly appointed legal representative) may, if the Committee so directs the Company, be paid to his or her spouse,
child, relative, an institution maintaining or having custody of such Person, or any other Person deemed by the
Committee to be a proper recipient on behalf of such Person otherwise entitled to payment. Any such payment
shall be a complete discharge of the liability of the Committee and the Company therefor. The Committee may in
its sole discretion require the transferee of a Participant to supply it with written notice of the Participant’s death or
Disability and to supply it with a copy of the will (in the case of the Participant’s death) or such other evidence as
the Committee deems necessary to establish the validity of the transfer of an Award. The Committee may, in its
discretion, also require the agreement of the transferee to be bound by all of the terms and conditions of the Plan.
(m)
Governing Law
. The Plan shall be governed by and construed in accordance with the laws of State of Delaware
without reference to the principles of conflicts of laws thereof.
(n)
Electronic Delivery
. Any reference herein to a “written” agreement or document or “writing” will include any
agreement or document delivered electronically or posted on the Company’s intranet (or other shared electronic
medium controlled or authorized by the Company to which the Participant has access) to the extent permitted by
applicable law.
(o)
Reformation; Permitted Disclosures.
(1)
If any provision regarding Detrimental Activity or any other provision set forth in the Plan or an Award
Agreement is found by any court of competent jurisdiction or arbitrator to be invalid, void or unenforceable or
to be excessively broad as to duration, activity, geographic application or subject, such provision or provisions
shall be construed, by limiting or reducing them to the extent legally permitted, so as to be enforceable to the
maximum extent compatible with then applicable law.
(2)
Nothing contained in this Plan or any Award Agreement shall prohibit or prevent a Participant from
(i) reporting possible violations of federal law or regulations, including any possible securities laws violations,
to any governmental agency or entity, including the U.S. Department of Justice, the U.S. Securities and
Exchange Commission, the U.S. Congress, or any agency Inspector General; (ii) making any other
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Proxy Statement
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ANNEX B
disclosures that are protected under the whistleblower provisions of Federal law or regulations; (iii) otherwise
fully participating in any Federal whistleblower programs, including any such programs managed by the U.S.
Securities and Exchange Commission or the Occupational Safety and Health Administration; or (iv) receiving
individual monetary awards or other individual relief by virtue of participating in any such Federal
whistleblower programs.
(3)
Under the Federal Defend Trade Secrets Act of 2016, a Participant shall not be held criminally or civilly liable
under any Federal or state trade secret law for the disclosure of a trade secret that is made (i) (A) in
confidence to a Federal, state, or local government official, either directly or indirectly, or to an attorney; and
(B) solely for the purpose of reporting or investigating a suspected violation of law; (ii) to a Participant’s
attorney in relation to a lawsuit for retaliation against a Participant for reporting a suspected violation of law;
or (iii) in a complaint or other document filed in a lawsuit or other proceeding, if such filing is made under seal.
(p)
Arbitration
. All disputes and claims of any nature that a Participant (or such Participant’s transferee or estate) may
have against the Company arising out of or in any way related to the Plan or any Award Agreement must be
submitted solely and exclusively to binding arbitration in accordance with the then-current employment arbitration
rules and procedures of the American Arbitration Association (AAA) to be held in New York, New York. All
information regarding the dispute or claim and arbitration proceedings, including any settlement, shall not be
disclosed by the Participant or any arbitrator to any third party without the written consent of the Company, except
with respect to judicial enforcement of any arbitration award. Any arbitration claim must be brought solely in the
Participant’s (or such Participant’s transferee’s or estate’s) individual capacity and not as a claimant or class
member (or similar capacity) in any purported multiple-claimant, class, collective, representative or similar
proceeding, and the arbitrator may not permit joinder of any multiple claimants and their claims without the express
written consent of the Company. Any arbitrator selected to adjudicate the claim must be knowledgeable in the
industry standards and practices, and, by signing an Award Agreement, each Participant will be deemed to agree
that any claims pursuant to the Plan or an Award Agreement is inherently a matter involving interstate commerce
and thus, notwithstanding the choice of law provision included herein, the Federal Arbitration Act shall govern the
interpretation and enforcement of this arbitration provision. The arbitrator shall not be permitted to award any
punitive or similar damages, but may award attorney’s fees and expenses to the prevailing party in any arbitration.
Any decision by the arbitrator shall be binding on all parties to the arbitration.
(q)
Statute of Limitations
. A Participant or any other person filing a claim for benefits under the Plan must file the claim
within one (1) year of the date the Participant or other person knew or should have known of the facts giving rise to
the claim. This one-year statute of limitations will apply in any forum where a Participant or any other person may
file a claim and, unless the Company waives the time limits set forth above in its sole discretion, any claim not
brought within the time periods specified shall be waived and forever barred.
(r)
Funding
. No provision of the Plan shall require the Company, for the purpose of satisfying any obligations under
the Plan, to purchase assets or place any assets in a trust or other entity to which contributions are made or
otherwise to segregate any assets, nor shall the Company be required to maintain separate bank accounts, books,
records, or other evidence of the existence of a segregated or separately maintained or administered fund for such
purposes. Participants shall have no rights under the Plan other than as unsecured general creditors of the
Company, except that insofar as they may have become entitled to payment of additional compensation by
performance of services, they shall have the same rights as other employees and service providers under
general law.
(s)
Reliance on Reports
. Each member of the Committee and each member of the Board shall be fully justified in
relying, acting, or failing to act, and shall not be liable for having so relied, acted, or failed to act in good faith, upon
any report made by the independent public accountant of the Company and its Affiliates and upon any other
information furnished in connection with the Plan by any Person or Persons other than such member.
(t)
Vesting of Awards
. Notwithstanding any other provisions of the Plan or an Award Agreement to the contrary, in the
event that the vesting date for all or a portion of an Award occurs on a date which is not a trading day on the
principal national securities exchange in the United States on which the shares of Stock are then traded, such
portion of the Award will vest on the trading day immediately prior to the vesting date for the Award.
(u)
Titles and Headings
. The titles and headings of the sections in the Plan are for convenience of reference only, and
in the event of any conflict, the text of the Plan, rather than such titles or headings, shall control.
* * *
TABLE OF CONTENTS
Proxy SummaryProposal 1: Election of DirectorsCorporate Governance and Board PracticesBoard Leadership StructureBoard CommitteesDirector Selection ProcessAttendance at Shareholder MeetingsMeetings of DirectorsBoard OversightSustainability MattersBoard and Governance PoliciesOther Executive OfficersProposal 2: Non-binding Advisory Vote to Approve the Compensation of the Companys Named Executive OfficersCompensation Discussion and AnalysisExecutive SummaryDetailed Discussion and AnalysisI. Objectives and Philosophy of Executive CompensationII. Competitive Market PositioningIII. Compensation to Executive Chairman and CEO and PresidentIV. Other NEO CompensationV. Principal Elements of Non-ZMC Related Executive CompensationVI. Operation of the Compensation CommitteeVII. Compensation Governance PracticesReport of the Compensation Committee of the Board of DirectorsRisk Assessment of Overall Compensation ProgramExecutive CompensationVoting Security Ownership of Certain Beneficial Owners and ManagementCertain Relationships and Related Transactions