EMPLOYMENT AGREEMENT

Exhibit 10.1

EMPLOYMENT AGREEMENT

                                This EMPLOYMENT AGREEMENT (this " Agreement ") is hereby entered into on August 14, 2008 between Take-Two Interactive Software, Inc., a Delaware corporation (the " Company "), and Gary Dale (the " Employee ").

W I T N E S S E T H :

                                WHEREAS, the Employee and the Company are parties to that certain Employment Term Sheet, dated November 15, 2007, as amended by the letter agreement between the Employee and the Company, dated March 15, 2008 (collectively, the " Prior Agreement ") pursuant to which Employee currently serves as Executive Vice President of the Company;

                                WHEREAS, effective as of July 1, 2008 (the " Effective Date "), the Employer desires to continue to employ the Employee as its Chief Operating Officer (" COO ") and to be assured of his services as such on the terms and conditions hereinafter set forth; and

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

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

1.  Term .  The Company hereby agrees to continue to employ the Employee, and the Employee hereby agrees to continue to serve the Company, for the period commencing as of the Effective Date and ending on October 31, 2011 (the " Expiration Date "), unless earlier terminated as provided in this Agreement.  The period of time between the Effective Date and the termination of the Employee’s employment under this Agreement shall be referred to herein as the " Term ."

2.  Employee Duties; Location .

(a)           During the Term, the Employee shall serve as COO and have the duties and responsibilities customarily associated with such position in a company the size and nature of the Company.  Employee shall report solely and directly to the Chief Executive Officer of Company (" CEO ").

(b)           The Employee shall devote substantially all of his business time, attention, knowledge and skills faithfully, diligently and to the best of his ability, in furtherance of the business and activities of the Company.  Notwithstanding the foregoing, the Employee shall be permitted to engage, or continue participation, in (i) charitable, civic, educational, professional, community or industry affairs, (ii) managing his and his family’s personal passive investments and (iii) such other activities as may hereafter be specifically approved in writing by the CEO, which in each case and in the aggregate do not materially interfere or conflict with the

performance of the Employee’s obligations hereunder.

(c)  The Employee’s principal place of employment for his duties hereunder shall initially be the Company’s executive offices in England.  Employee and the Company hereby agree that he will relocate his principal place of employment for his duties hereunder to the Company’s principal executive offices in New York City by no later than July 1, 2009 (the " Relocation ").

(d)  The Employee acknowledges and agrees that he shall travel as reasonable and necessary outside of the area of where his principal place of employment is then located in connection with the business of the Company as necessary to fulfill his duties under this Agreement, including, without limitation, travel to New York City upon the CEO’s reasonable request prior to the Relocation.

3.             Compensation .

(a)           During the Term, the Company shall pay the Employee a salary at a rate of $612,000 per annum, payable in equal semi-monthly installments in accordance with the Company’s normal payroll practices and procedures in effect from time to time for the payment of salaries to executive officers located in the United States; provided, however, that prior to the Relocation, such salary shall be payable in British Pounds at the rate of £313,000 per annum, payable in monthly installments in accordance with the Company’s normal payroll practices and procedures as in effect for time to time for employees located in England.  During the Term, the Employee’s salary shall be subject to annual review at the end of each fiscal year of the Company (" Fiscal Year ") by the Compensation Committee (the " Compensation Committee ") of the Board of Directors of the Company (the " Board ") and may be increased (but not decreased) from time to time at the discretion of the Compensation Committee.  Such salary as increased from time to time shall be referred to herein as the " Salary ".

(b)           During the Term, the Employee shall be entitled to receive an annual bonus (" Bonus ") with respect to each Fiscal Year during the Term based upon the actual global, corporate EBITDA of the Company (defined as the global, corporate net income recorded for the Company, adding back in interest, depreciation, amortization and tax expenses) as compared to the Company’s budgeted global, corporate EBITDA for such Fiscal Year as follows:

*The Bonus in this range will be determined based on a proportional sliding scale (for example, at 90% of Budget the Bonus will be  approximately 34% of Salary and at 110% of Budget the Bonus will be 60% of Salary).

The budgeted global, corporate EBITDA for the Company with respect to each Fiscal Year shall be determined by the CEO and the Board after good faith consultation with the Employee and in

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accordance with past practices and shall be communicated to the Employee in writing within 90 days following the commencement of each such Fiscal Year.  The actual global, corporate EBITDA with respect to each Fiscal Year during the Term shall be calculated by the Company in the same manner as the budgeted global, corporate EBITDA for such Fiscal Year and shall be communicated to the Employee in writing along with a calculation of the Bonus within 45 days following the end of such Fiscal Year.

Notwithstanding the foregoing, the Employee’s Bonus for Fiscal Year 2008 shall not be less than $275,000 (the " 2008 Minimum Bonus ").  For the avoidance of doubt, the Employee’s employment shall be deemed continuous since November 1, 2007 for purposes of determining the Employee’s Bonus eligibility for Fiscal Year 2008, notwithstanding the July 1, 2008 Effective Date of this Agreement.

The Bonus, if earned, for any Fiscal Year during the Term shall be payable within 45 days following the end of such Fiscal Year; provided that Employee is employed by the Company on such date (subject to the provisions of Section 6 hereof).  Notwithstanding the foregoing, the Employee shall be entitled to a Bonus for Fiscal Year 2011, payable within 45 days following the end of such Fiscal Year, to the extent earned if the Employee is employed on the Expiration Date and the Company determines that on the Expiration Date there did not exist circumstances pursuant to which the Company would have had grounds to terminate the Employee’s employment under this Agreement for Cause (as defined below).

(c)           During the Term, the Employee shall be eligible to participate in any equity compensation programs the Company adopts and maintains for its executive officers as in effect from time to time (currently, the Company’s Long Term and Annual Incentive Compensation Program) at a level commensurate with other senior executive officers of the Company.

(d)           The Employee shall receive a one-time grant of 75,000 shares of restricted common stock of the Company under the Company’s Incentive Stock Plan, as amended (the " Sign-on Grant ").  The Sign-on Grant shall be granted on the Company’s next quarterly grant date following the Effective Date (i.e. on the fifth trading day following the filing by the Company of its quarterly report on Form 10-Q for the quarter ending July 31, 2008) and shall vest as to one-third of such shares on each of the first, second and third anniversaries of the date of grant, subject to the provisions of Sections 6(a)(II) and (III) and Sections 7(b)(ii) and (iii) of this Agreement.

(e)           In addition to the foregoing, the Compensation Committee and the CEO shall review Employee’s compensation on an annual basis and may in their sole discretion from time to time award to the Employee additional cash bonuses and other compensation in the form of stock, stock options or other property or rights in respect of his employment hereunder.

4.  Benefits .

(a)           During the Term, the Employee shall have the right to receive or participate in all benefits and plans which the Company may from time to time institute during such period for its executive officers and for its employees in general in the Employee’s then principal place of employment, subject to the Employee’s satisfying the applicable eligibility

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requirements.  Without limiting the foregoing, during the period that the Employee’s principal place of employment is in the Company’s executive offices in London, England, the Employee shall be entitled to receive a standard contribution of 7.5% of Salary under the Company’s pension plan.  Nothing paid to the Employee under any plan or arrangement presently in effect or made available in the future shall be deemed to be in lieu of the Salary or any other obligation payable to the Employee pursuant to this Agreement.

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

5.  Expenses .

(a)           All travel and other expenses incident to the rendering of services reasonably incurred on behalf of the Company by the Employee during the Term shall be paid by the Company, including without limitation, the cost of first class airfare for flights of seven hours or more in duration for which the Employee is required to sleep on such flight for business the following day.  If any such expenses are paid in the first instance by the Employee, the Company shall reimburse him therefore, in accordance with the Company’s reimbursement policy as in effect from time to time, on presentation of appropriate receipts for any such expenses.  All travel and lodging arrangements shall be made in accordance with the Company’s regular policies.

(b)           The Company will promptly reimburse the Employee for his reasonable moving expenses incurred in connection with his moving his (including his spouse and children’s) permanent residence from London, England to the New York City area.  In the event the Employee’s employment hereunder is terminated in accordance with the provisions of Sections 6(a)(II) or (III), or if the Employer does not offer Employee continued employment by the Company on similar or better terms for the period following the Expiration Date (and provided that Employee has not given notice of termination under Section 6(a)(IV)), then the Company will promptly reimburse Employee for his reasonable moving expenses incurred in connection with moving his (including his spouse and children’s) back to London, England, from the New York City area, provided that such relocation occurs within 180 days following such termination.  The reimbursement of such moving expenses shall be subject to the Company’s policies, including the presentation of documentation and the advance approval of such expenses by the Company.

(c)           To the extent any reimbursement to Employee set forth in this Agreement is includable in the Employee’s gross income for Federal income tax purposes, such reimbursement shall be made no later than March 15 of the calendar year next following the calendar year in which the expense to be reimbursed is incurred.

6.  Termination .

(a)           Notwithstanding the provisions of Section 1 hereof, the Employee’s employment with the Company may be earlier terminated as follows:

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(I)            By action taken by the Board or the Chairman of the Company (the " Chairman "), the Employee may be discharged for Cause (as herein-after defined), effective as of such time as the Board or the Chairman shall determine.  Upon discharge of the Employee pursuant to this Section 6(a)(I), the Company shall have no further obligation or duties to the Employee, except for (i) payment of any accrued but unpaid Salary through the effective date of termination, paid in accordance with the Company’s normal payroll practices and procedures; (ii) payment for any accrued but unused vacation time though the effective date of termination, paid in accordance with the Company’s policies; (iii) reimbursement for any unreimbursed expenses incurred, and paid in accordance with, Section 5 of this Agreement through the effective date of termination; (iv) such vested accrued benefits, if any, as to which the Employee may be entitled under any applicable employee benefit plan or program of the Company in which he is a participant as of the effective date of termination (other than any severance pay plan), which shall be paid or provided in accordance with the terms of the applicable plan or program (subsections (i) through (iv), collectively, the " Accrued Amounts "), (v) as otherwise provided in this Section 6(a)(I), and (vi) as provided in Section 9(g).  In the event of a termination pursuant to this Section 6(a)(I), the Employee shall have no further obligations or duties to the Company except, subject to the following sentence, as provided in Section 8.  In the event of a termination pursuant to this Section 6(a)(I), the restrictions set forth in Section 8(b) shall not apply following the effective date of termination unless the Company elects on or prior to the effective date of termination, in its sole discretion, to enforce the restrictions set forth therein for a period of six (6) months from the effective date of termination.  In the event the Company makes such election, then subject to the Employee executing and providing to the Company within 60 days following the effective date of termination a fully effective general release of all claims against the Company and its affiliates, officers and directors substantially in the form attached as Exhibit A hereto (with such changes therein, if any, as are legally necessary at the time of execution to make it enforceable, the " Release "), which the Company shall provide to the Employee within seven (7) days following the effective date of termination, the Employee will receive continued payment of the Salary for a period of six (6) months following the effective date of termination as if the Employee had remained an employee.  In the event that the Employee executes and delivers the Release to the Company in accordance with any of the provisions of this Section 6, the Company shall consider in good faith whether to provide Employee with a reciprocal release.  Subject to Section 9(h)(ii), such continued payment of the Salary shall be paid in accordance with the Company’s normal payroll practices and procedures (but off employee payroll); provided that, the first payment shall be made on the first Company payroll date on or after the 60 ^th day after the effective date of termination and shall include payment of any amounts that would otherwise be due prior thereto.

(II)           In the event of (i) the death of the Employee or (ii) by action of the Board or the Chairman due to the Employee suffering a Disability (as defined below).  Upon any termination of the Employee’s employment under this Section 6(a)(II), the Company shall have no further obligations or duties to the Employee, except for (i) the Accrued Amounts; (ii) any accrued and earned but unpaid Bonus for the prior Fiscal Year paid in accordance with Section 3(b) (including payment timing); (iii) a pro-rata portion of the Employee’s target Bonus (based on achieving 100% of Budget) for the Fiscal Year in which such termination occurs (determined by multiplying the amount of such target Bonus by a fraction, the numerator of which is the number of days during the Fiscal Year of termination that the Employee is employed by the Company and the denominator of which is 365), paid within 45 days following the end of the

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Fiscal Year in which such termination occurs; and (iv) and as provided in Section 9(g).  In addition, in the event of such termination, all outstanding options and shares of restricted stock granted to the Employee (including, without limitation, the Sign-On Grant) which have not vested as of the date of such termination shall immediately vest and, as applicable, become immediately exercisable.  In the event of a termination pursuant to this Section 6(a)(II) due to the Employee suffering a Disability, the Employee shall have no further obligations or duties to the Company except, subject to the following sentence, as provided in Section 8; provided that the provisions of Section 8(b) shall not apply following the effective date of termination.

(III)         In the event that Employee’s employment with the Company is terminated by action taken by the Company without Cause (as defined below) (other than in accordance with Section 6(a)(II) above), or the Employee resigns for Good Reason (as defined below) effective at any time on or prior to the 120 ^th day after the initial existence of the applicable Good Reason event, then the Company shall have no further obligation or duties to Employee, except for (i) payment of the Accrued Amounts; (ii) as provided in Section 9(g); and, (iii) subject to the Employee executing and providing to the Company within 60 days following the effective date of termination a fully effective copy of the Release, which the Company shall provide to the Employee within seven (7) days following the effective date of termination, (A) subject to Section 9(h)(ii), a lump sum payment on the 60 ^th day following such termination equal to the sum of (x) an amount equal to the annual Salary at the rate then in effect, (y) the Termination Bonus (as hereinafter defined; and together with the Salary amount set forth in the immediately preceding clause (x), the " Severance Payment "), plus (z) an amount equal to any accrued and earned but unpaid Bonus for the prior Fiscal Year that would have been paid but for such termination without Cause or resignation for Good Reason; and (B) for a period of twelve (12) months from the date of termination, provide continued health benefits in the event such termination occurs prior to the Relocation, or, if such termination occurs after the Relocation and subject to Employee’s timely election of continuation coverage under the Consolidated Budget Omnibus Reconciliation Act of 1985, as amended (" COBRA "), the Company will pay Employee’s COBRA medical insurance premium, provided that Employee is eligible and remains eligible for COBRA coverage and provided further that if Employee obtains other employment that offers substantially similar or improved group health benefits, the Company’s obligation under this sentence shall immediately cease.  In the event of such termination without Cause or resignation for Good Reason, all outstanding options and shares of restricted stock granted to the Employee which have not vested as of the date of such termination shall immediately vest and, as applicable, become immediately exercisable.  For purposes of this Section 6(a)(III), the " Termination Bonus " shall be an amount equal to (i) if such termination without Cause or resignation for Good Reason occurs on or prior to the last day of Fiscal Year 2008, the 2008 Minimum Bonus; or (ii) if such termination without Cause or resignation for Good Reason occurs after Fiscal Year 2008, 50% of the Salary at the rate then in effect.  In the event of a termination or resignation pursuant to this Section 6(a)(III), the Employee shall have no further obligations or duties to the Company except, subject to the following sentence, as provided in Section 8.  In the event of a termination or resignation pursuant to this Section 6(a)(III), the restrictions set forth in Section 8(b) shall apply for a period of one (1) year following the effective date of termination unless the Employee elects in writing within 45 days following the effective date of termination, in his sole discretion, to forfeit his right to receive the Severance Payment, in which the event the restrictions set forth in Section 8(b) shall not apply following the effective date of termination.

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(IV)       By the Employee at any time without Good Reason on at least ninety (90) days prior written notice to the Company (which termination the Company may, its sole discretion, make effective earlier than the date set forth in such notice).  In the event the Employee terminates his employment with the Company without Good Reason, the Employee shall have no further obligations or duties to the Company except, subject to the following sentence, as provided in Section 8, and the Company shall have no further obligation or duties to Employee, except for the Accrued Amounts.  In the event of a termination pursuant to this Section 6(a)(IV), the restrictions set forth in Section 8(b) shall apply for a period of six (6) months following the date of such notice of termination; provided, however, that in the event that such notice of termination is delivered to the Company less than six (6) months prior to the Expiration Date, the restrictions set forth in Section 8(b) shall not apply after the Expiration Date unless the Company elects on or prior to the Expiration Date, in its sole discretion, to enforce the restrictions set forth therein for the remainder of the six-month restriction period following the Expiration Date and, subject to the Employee executing and providing to the Company a fully effective copy of the Release within 60 days following the date the Company makes such election, which the Company shall provide to the Employee within seven (7) days following the date it makes such election, the Employee will receive payment of the Salary for a period commencing as of November 1, 2008 and continuing for the remainder of the six-month restriction period following the Expiration Date as if the Employee had remained an employee.  Subject to Section 9(h)(ii), such continued payment of Salary shall be paid in accordance with the Company’s normal payroll practices and procedures (but off employee payroll).

(b)           The Employee’s employment with the Company shall automatically terminate on the Expiration Date unless otherwise mutually agreed by the parties.  In the event of a termination of the Employee’s employment on the Expiration Date, the Company shall have no further obligation or duties to Employee, except for the Accrued Amounts and as otherwise provided in this Section 6(b), and the Employee shall have no further obligations or duties to the Company except, subject to the following sentence, as provided in Section 8.  In the event of a termination of the Employee’s employment on the Expiration Date, the restrictions set forth in Section 8(b) shall not apply following the Expiration Date unless the Company elects on or prior to the Expiration Date, in its sole discretion, to enforce the restrictions set forth therein for a period of six months from the effective date of termination.  In the event the Company makes such election, then subject to the Employee executing and providing to the Company within 60 days following the effective date of termination a fully effective copy of the Release, which the Company shall provide to the Employee within seven (7) days following the Expiration Date, the Employee will receive continued payment of the Salary for a period of six (6) months following the Expiration Date as if the Employee had remained an employee.  Subject to Section 9(h)(ii), such continued payment of the Salary shall be paid in accordance with the Company’s normal payroll practices and procedures (but off employee payroll); provided that, the first payment shall be made on the first Company payroll date on or after the 60 ^th day after the Expiration Date and shall include payment of any amounts that would otherwise be due prior thereto.

(c)           For purposes of this Agreement, " Good Reason " shall mean the occurrence of any of the following events without the Employee’s consent:  (i) a material breach of this Agreement by the Company or a material diminution in the Employee’s title, position, authority, duties or responsibilities; (ii) the assignment to the Employee of duties or responsibilities substantially inconsistent with his position or duties; (iii) a change in reporting such that the Employee does not report solely and directly to the CEO; or (iv) the Company

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requiring that the principal place of employment for his duties hereunder be located outside of a ten (10) mile radius of London, England, or Windsor, England prior to July 1, 2009, or New York City, New York, after July 1, 2009. provided , however , that no such event shall constitute Good Reason unless, within ninety (90) days of any such events having occurred, the Employee shall have provided the Company with written notice specifying the events that have occurred and afforded the Company thirty (30) days to cure same.

(d)           For purposes of this Agreement, the Company shall have " Cause " to terminate the Employee’s employment under this Agreement upon (i) the continued failure by the Employee to substantially perform his duties under this Agreement after receipt of notice from the Company requesting such performance, (ii) the criminal conviction of Employee by plea or after trial of having engaged in criminal misconduct (including embezzlement and fraud) which is demonstrably injurious to the Company, monetarily or otherwise, (iii) the conviction of the Employee of a felony; (iv) gross negligence on the part of the Employee which adversely affects the Company; or (v) a material failure of the Employee to adhere to the Company’s material written policies or to cooperate in any bonafide investigation or inquiry involving the Company.  The Company shall give written notice to the Employee of any proposed termination for Cause, which notice shall specify the grounds for the proposed termination, and the Employee shall be given thirty (30) days to cure if the grounds arise under clauses (i) or (v) above (in the event employee cures the event giving rise to Cause set forth in such written notice within said 30 day period, Cause for termination shall not exist).

(e)           For purposes of this Agreement, " Disability " shall mean the Employee’s suffering a physical or mental impairment that prevents him from substantially performing his duties hereunder for a period of 180 consecutive days (including weekends and holidays), during which 180 day period the Salary and any other benefits hereunder shall not be suspended or diminished.

7.  Change in Control .

(a)           For purposes of this Agreement, a "Change in Control" shall be deemed to occur (i) upon the acquisition by any person, entity or group of beneficial ownership of 50 percent or more of either the outstanding shares of common stock of the company or the combined voting power of the then outstanding voting securities of the company entitled to vote generally in the election of directors; (ii) upon a merger or consolidation of the Company