Exhibit 10.4
EMPLOYMENT AGREEMENT
AGREEMENT entered into on
March 16, 2009 between Take-Two Interactive
Software, Inc., a Delaware corporation (“Take-Two”
or the “Employer” or the “Company”), and
Manuel Sousa (the “Employee”).
W I T N E S
S E T H :
WHEREAS, the Employer desires to
employ the Employee as an Executive Vice President and Head of
Human Resources, 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 employment on such terms and conditions;
NOW, THEREFORE, in consideration of
the mutual covenants and agreements hereinafter set forth, and
intending to be legally bound hereby, the Employer and the Employee
hereby agree as follows:
1. Term . Employer
hereby agrees to employ Employee, and Employee hereby agrees to
serve Employer, for a term commencing March 23, 2009 (the
“Effective Date”) and ending October 31, 2012
(such period being herein referred to as the “Initial
Term,” and any year commencing on the Effective Date or any
anniversary of the Effective Date being hereinafter referred to as
an “Employment Year”). After the Initial Term, this
Agreement shall be renewable automatically for successive one-year
periods (each such period being referred to as a “Renewal
Term” and together with the Initial Term referred to as
“the Term”), unless, at least sixty (60) days prior to
the expiration of the Initial Term or any Renewal Term, either the
Employee or the Employer give written notice that employment will
not be renewed (as the case may be, a “Notice of
Non-Renewal”).
2. Employee Duties
.
(a)
During the Term, the Employee shall serve as an Executive Vice
President and Head of Human Resources and have the duties and
responsibilities customarily associated with such position in a
company the size and nature of the Company. Employee shall report
directly to the Company’s Chief Executive Officer.
(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. The principal place of performance by the Employee
of his duties hereunder shall be the Company’s principal
executive offices in New York, although the Employee may be
required to travel outside of the area where the Company’s
principal executive offices are located in connection with the
business of the Company.
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3.
Compensation .
(a)
The Employer shall pay the Employee an annual salary (the
“Salary”) at a rate of $360,000 per annum. The Salary
shall be 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. During the Initial Term, the Salary shall be subject to
annual review by the Compensation Committee of the Board of
Directors of the Company (the “Committee”) and may be
increased from time-to-time at the discretion of the
Committee.
(b)
Employee is eligible to participate in Take-Two’s corporate
bonus program at a level commensurate with other senior executive
officers of the Company. As part of that program, Employee will be
eligible for a yearly cash bonus based on Take-Two’s global,
corporate EBITDA (based on a budgeted EBITDA (“Budget”)
determined by Take-Two and communicated to Employee within ninety
(90) days following the commencement of each fiscal year). Any
bonus payment earned for Fiscal Year 2009 shall be pro-rated based
upon the Employee’s length of service during Fiscal Year
2009. The amount of bonus earned, if any, shall be based on the
Company’s actual EBITDA performance as compared to its
budgeted EBITDA performance as set forth below:
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Actual EBITDA
|
|
Annual Bonus
|
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Less than 75% of the Budget
|
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No Bonus earned
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75% - 100% of the Budget
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* 10% - 50% of Salary
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100% - 125% of the Budget
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* 50% - 75% of Salary
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Greater than 125% of the Budget
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Capped at 75% of Salary
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*The bonus amount in this range will be
determined based on a proportional sliding scale.
Bonus payments, if earned, for any Fiscal Year
during the Term shall be payable within 60 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(c) hereof).
(c)
Subject to the stockholders of Take-Two approving Take-Two’s
2009 Stock Incentive Plan (the “Stock Plan”),
Take-Two’s management will recommend to the Committee that it
approve a grant of restricted common stock of the Company valued at
$350,000 (the “Initial Shares) to Employee in accordance with
the terms of Take-Two’s long-term equity incentive
compensation program (which currently determines the number of
shares to be granted using the average closing price of the
Company’s common stock for the ten trading days immediately
prior to the date of grant, rounded down to the next whole share).
If the Stock Plan is approved by Take-Two’s stockholders and
the grant of the Initial Shares is approved by the Committee:
(i) $175,000 worth of the Initial Shares shall be granted on
the Company’s first, regularly-scheduled grant date following
its 2009 Annual Meeting of stockholders currently scheduled to
occur on April 23, 2009 (the Company generally only grants
stock on the fifth trading day following the filing of its
quarterly and annual reports), vesting as to one-third of such
shares on each of the first, second and third anniversaries of the
date of grant; and (ii) the remaining $175,000 worth of the
Shares shall be granted on the fifth trading day following the
filing of the Company’s Annual Report on Form 10K for
Fiscal Year 2009, and shall vest over a period of three years
following the date of the grant and shall also be subject
to
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the satisfaction of performance criteria
(currently based on the Company’s stock performance) in
accordance with the Company’s long-term equity incentive
compensation program. The Initial Shares shall also be subject to
the terms and conditions of the Stock Plan and the Company’s
equity grant letter then in effect, subject to and as modified by
the provisions of Section 6(c) of this
Agreement.
(d)
Beginning with Fiscal Year 2010, Employee shall be eligible to
participate in Take-Two’s annual long-term equity incentive
compensation program at a level commensurate with other senior
executive officers of the Company. Within Employee’s
participation level, actual grant values will be determined by the
Committee, in consultation with the Company’s Chief Executive
Officer, and shall take into consideration job performance and
achievement of any defined goals and objectives. Any and all grants
made to Employee will vest in accordance with the terms of
Take-Two’s annual long-term equity incentive compensation
program for senior executive officers of the Company (currently 50%
time vest over three years and 50% time and performance vest over
three years). Nothing in this paragraph obligates the Company to
continue its annual long-term equity incentive compensation program
or establishes any obligation to Employee beyond participation in a
plan, it if exists, at a level commensurate with other senior
executive officers of the Company.
4. Benefits
.
(a)
During the Term, the Employee shall have the right to receive or
participate in all benefits and plans which the Company may from
time-to-time institute during such period for its employees in
general and for which the Employee is eligible. 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
(“PTO 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 Employer, and at such time or times as are not inconsistent
with the reasonable business needs of the Company. Such PTO days
shall be accrued and calculated by calendar year, shall be
pro-rated during the first partial year of employment to reflect
time actually employed and shall not be carried over to a
subsequent year unless permitted by Company policy.
5. Travel Expenses .
All travel and other expenses incident to the rendering of services
reasonably incurred on behalf of the Employer by the Employee
during the Term shall be paid by the Employer in accordance with
Take-Two’s Travel and Entertainment Policy. If any such
expenses are paid in the first instance by the Employee, the
Employer shall reimburse him therefor on presentation of
appropriate receipts for any such expenses. All travel and lodging
arrangements shall be made in accordance with Employer’s
regular policies.
6.
Termination . Notwithstanding the provisions of
Section 1 hereof, the Employee’s employment with the
Employer may be earlier terminated as follows:
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(a)
By action taken by the Board or the Chief Executive Officer, the
Employee may be discharged for Cause (as hereinafter defined),
effective as of such time as the Board or the Chief Executive
Officer shall determine. Upon discharge of the Employee pursuant to
this Section 6(a), the Employer shall have no further
obligation or duties to the Employee, except for payment of Salary
through the effective date of termination and as provided in
Section 8(g), and the Employee shall have no further
obligations or duties to the Employer, except as provided in
Section 7.
(b)
In the event of (i) the death of the Employee or (ii) by
action of the Board or the Chief Executive Officer and the
inability of the Employee, by reason of physical or mental
disability, to continue substantially to perform his duties
hereunder for a period of 180 consecutive days, during which 180
day period Salary and any other benefits hereunder shall not be
suspended or diminished. Upon any termination of the
Employee’s employment under this Section 6(b), the
Employer shall have no further obligations or duties to the
Employee, except as provided in Section 8(g).
(c)
In the event that Employee’s employment with the Employer is
terminated by action taken by the Company without Cause (other than
in accordance with Section 6(b) above), then the Employer
shall have no further obligation or duties to Employee, except for
payment of the amounts described in this Section 6(c) and
as provided in Section 8(g), and Employee shall have no
further obligations or duties to the Employer, except as provided
in Section 7. In the event of such termination, upon the
Employee’s executing a general release of claims against the
Company within thirty (30) days of the termination date, the
Employee shall be entitled to the following: (i) a lump sum
payment, made within thirty (30) days of the execution date of the
general release, equal to the sum of (x) the Employee’s
Salary at the rate then in effect and (y) all unpaid bonuses
with respect to the last full fiscal year of Employee’s
employment with the Company, if any, that would have been paid but
for such termination without Cause. In the event of such
termination without Cause or upon expiration of the Term as a
result of the delivery by the Company to the Employee of a Notice
of Non-Renewal, 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.
(d)
Employee shall be eligible to participate in the Take-Two
Interactive Software, Inc. Change in Control Employee Severance
Plan as a Tier 1 employee.
(e)
For purposes of this Agreement, Employee shall also be deemed to
have been terminated by the Employer without Cause if Employee
provides Employer with at least thirty (30) days prior written
notice of Employee’s intent to terminate employment, provided
such notice is provided within a period not to exceed ninety (90)
days (and the effective date of such termination does not exceed
one-hundred twenty (120) days) from th
