Document:

Exhibit
10.2

 

March 25, 2008

 

Mr. Seth
Krauss

 

Dear
Seth:

 

As
we have discussed, effective as of the date hereof, the parties have agreed to
extend the term of your (“you” or “Employee”) employment with Take-Two
Interactive Software, Inc. (the “Company”), and to amend the terms thereof
as set forth below in this first amendment (“Amendment”) to your Employment
Agreement with the Company dated February 28, 2007 (the “Agreement”).  All capitalized terms used herein and not
otherwise defined herein shall have the meanings ascribed to such terms in the
Agreement.  Unless explicitly modified
herein, the terms and conditions of the Agreement remain in full force and
effect.

 

	
  Employment Term:

  	
   

  	
  The
  Initial Term of Employee’s employment is extended until October 31, 2010.

  
	
   

  	
   

  	
   

  
	
  Annual Salary:

  	
   

  	
  Effective
  as of March 12, 2008, the Employee’s Salary is hereby increased to
  $500,000.

  
	
   

  	
   

  	
   

  
	
  Annual Bonus:

  	
   

  	
  The
  following sentence is hereby added to the end of Section 3(b) of
  the Agreement:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  “Any
  Bonus earned shall be payable in full in a lump sum cash payment on the first
  Company regular payroll date in the calendar year following the calendar year
  for which it is earned.”

  
	
   

  	
   

  	
   

  
	
  Car Allowance:

  	
   

  	
  Section 3(e) of
  the Agreement is hereby deleted.

  
	
   

  	
   

  	
   

  
	
  Travel Expenses:

  	
   

  	
  Section 5
  of the Agreement is hereby amended and restated in its entirety as follows:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  “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 of this Agreement shall be paid by the Employer.
  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 in accordance with the Company’s business expense
  reimbursement policy. All travel and lodging arrangements shall be made in
  accordance with Employer’s regular policies. To the extent any reimbursement
  that the Employee is entitled to under 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.”

  
	
   

  	
   

  	
   

  
	
  Termination:

  	
   

  	
  The
  phrase “the Employer shall have no further obligation or duties to the
  Employee” in Sections 6(a) and 6(b) of the Agreement and the phrase
  “the Employer shall have no further obligation or duties to Employee” in
  Section 6(c) of the Agreement, are all hereby amended to read as
  follows:

  

 

 

 

 

	
   

  	
   

  	
  “the
  Employer shall have no further obligation or duties hereunder to the
  Employee”

  
	
   

  	
   

  	
   

  
	
  Severance:

  	
   

  	
  Section 6(c) of
  the Agreement is hereby amended and restated in its entirety as follows:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  “In
  the event that Employee’s employment with the Company is terminated by action
  taken by the Company without Cause (other than in accordance with
  Section 6(b) above) or by the delivery by the Company of a notice
  that the Agreement will not be renewed upon the expiration of the Initial
  Term or any Renewal Term in accordance with the provisions of Section 1
  (a “Company Non-Renewal”), then the Company shall have no further obligation
  or duties to Employee, except for the 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 Company, except
  as provided in Section 7. In the event of such termination without
  Cause, subject to Section 9(b) of this Agreement, the Company shall
  pay to Employee in a lump sum payment within 30 days following the date of
  such termination an amount equal to the sum of: (i) one-and-one-half
  times Employee’s Salary at the rate then in effect;
  (ii) one-and-one-half times Employee’s target Bonus for the fiscal year
  in which such termination occurs; (iii) (x) if such termination
  occurs during the first two quarters of the Company’s fiscal year, a pro-rata
  portion of the target Bonus for such fiscal year in which such termination
  occurs based upon the number of days worked by the Employee during such
  fiscal year or (y) if such termination occurs during the third or fourth
  quarters of the Company’s fiscal year, the Employee’s target Bonus for such
  fiscal year; and (iv) 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; provided, that
  if such termination occurs prior to January 1, 2009, then the amount
  equal to the payments Employee would have been entitled to receive under this
  Section 6(c) prior to the first amendment to this Agreement dated
  March 25, 2008, including if such termination occurs upon or following a
  Change in Control (such amount, the “Pre-Amendment Severance Amount”), shall
  be payable as follows: (A) any portion of the Pre-Amendment Severance
  Amount that would have been payable during calendar year 2008 shall be
  payable in 2008 in equal installments semi-monthly, or at such other times as
  the Employee and the Employer may have mutually agreed to pay the Employee’s
  Salary prior to the date of termination (but off employee payroll), and
  (B) the remaining portion of the Pre-Amendment Severance Amount shall be
  payable to Employee in a lump sum payment on the later of January 1,
  2009 or the 30th day following the date of such termination. For the
  avoidance of doubt, in the event of such termination occurring prior to
  January 1, 2009, all amounts set forth in the foregoing sentence other
  than the Pre-Amendment Severance Amount shall be payable within 30 days following
  the date of such termination. In the event of a Company Non-Renewal, subject
  to Section 9(b) of this Agreement, the Company shall pay to the
  Employee an amount equal to sum of (i) Employee’s Salary at the rate
  then in effect, (ii) Employee’s target Bonus for the fiscal year in 

  

 

 

2

 

 

	
   

  	
   

  	
  which
  such termination occurs and (iii) all unpaid bonuses with respect to the
  fiscal year in which Employee’s employment terminated, if any, that would
  have been paid but for Company Non-Renewal, which amount shall be paid in a
  lump sum payment paid in the Calendar year in which the Term will expire,
  either upon the expiration of the Term or such earlier date in the calendar
  year in which the Term will expire as may be mutually agreed by the Company
  and the Employee. In the event of any such termination by the Company without
  Cause or upon a Company Non-Renewal, all outstanding options to purchase
  common stock and shares of restricted stock granted to the Employee by the Company
  which have not vested as of the date of such termination shall vest and, as
  applicable, become immediately exercisable.”

  
	
   

  	
   

  	
   

  
	
  Termination

  	
   

  	
   

  
	
  Without Cause:

  	
   

  	
  Section 6(d) of
  the Agreement is hereby amended and restated in its entirety as follows:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  “(d) 
  For purposes of this Agreement, Employee shall be deemed to have been
  terminated by the Employer without Cause if (i) the Employer terminates
  his employment for any reason other than in accordance with Sections
  6(a) or 6(b) above or (ii) the Employee resigns after the
  occurrence of any of the following events without the Employee’s consent:
  (A) a material breach of this Agreement by the Employer; (B) a
  material diminution in Employee’s title, status, position or
  responsibilities; (C) a failure by the Company to timely pay any
  compensation due to the Employee hereunder; (D) a material reduction by
  the Company in the Salary or any reduction in the target percentage of Salary
  payable as a Bonus as set forth in Section 3(b) hereof; (E) the
  assignment to the Employee of duties which are materially inconsistent with
  the duties set forth in Section 2 hereof; (F) any relocation of
  Employee’s principal place of employment beyond 10 miles from its then
  current location; (G) the failure of any successor to the Company to assume the obligations
  of the Company under this Agreement either in writing or by operation of law;
  provided, however, that, any such resignation by
  the Employee will not be deemed to have been a termination by the Employer
  without Cause unless within ninety (90) days of any such event having
  occurred, the Employee shall have provided the Company with written notice
  that such event has occurred, afforded the Company thirty (30) days to cure
  same, and the Company has failed to cure such event within such thirty (30)
  day period. For the avoidance of doubt, a diminution of the Employee’s duties
  shall be deemed to have occurred if a transaction results in a change in the
  nature or scope of the Company’s business or status that causes a diminution
  of duties.”

  
	
   

  	
   

  	
   

  
	
  Accrued Amounts:

  	
   

  	
  A
  new Section 6(g) is hereby added to the Agreement to provide as
  follows:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  “(g) 
  Notwithstanding anything herein to the contrary, upon any termination of
  Employee’s employment, the Employee shall receive from the Company:
  (i) any earned but unpaid Salary through the date of 

  

 

 

3

 

 

	
   

  	
   

  	
  termination,
  paid in accordance with Section 3(a) of this Agreement;
  (ii) reimbursement for any unreimbursed expenses properly incurred
  under, and paid in accordance with, Section 5 of this Agreement through
  the date of termination; (iii) payment for any accrued but unused
  vacation time in accordance with Company policy; and (iv) such vested
  accrued benefits, and other payments, if any, as to which the Employee may be
  entitled under, and in accordance with the terms and conditions of, the
  employee benefit arrangements, plans and programs of the Company as of the
  date of termination.”

  
	
   

  	
   

  	
   

  
	
  Equity:

  	
   

  	
  Employee
  shall be eligible to participate in the Company’s equity compensation program
  at a level commensurate with other executive officers of the Company. Within
  Employee’s participation level, actual grant values will be determined by the
  Company’s Chief Executive Officer, in consultation with and approval by the
  Compensation Committee of the Board of Directors of the Company, and shall
  take into consideration job performance and achievement of certain
  to-be-defined goals and objectives. Any and all grants of restricted stock
  made to Employee will vest in accordance with the Company’s equity
  compensation program for executive officers (50% time vest over three years
  and 50% performance vest over three years).

  
	
   

  	
   

  	
   

  
	
  Non-Renewal Notice:

  	
   

  	
  The
  sixty (60) day notice period referred to in Section 1 of the Agreement
  is hereby extended to ninety (90) days.

  
	
   

  	
   

  	
   

  
	
  Death and Disability

  	
   

  	
   

  
	
  Benefits:

  	
   

  	
  The
  last sentence of Section 6(b) of the Agreement is hereby amended
  and restated in its entirety as follows:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  “Upon
  any termination of the Employee’s employment under this Section 6(b),
  subject to the Section 9(b) of this Agreement, the Company shall
  pay to the Employee a pro-rata portion of Employee’s target Bonus for the
  fiscal year in which such termination occurs based on the number of days worked
  by the Employee in the Company’s fiscal year in which his employment was so
  terminated, and all outstanding options to purchase common stock and shares
  of restricted stock granted to Employee by the Company but not yet vested
  shall immediately vest, and the Company shall have no further obligations or
  duties to Employee, except as provided in Section 8(g) of the
  Agreement.”

  
	
   

  	
   

  	
   

  
	
  280G:

  	
   

  	
  To
  the extent that any amounts payable to (or for the benefit of) Employee
  pursuant to the Agreement or this Amendment, as well as any other “parachute
  payments,” as such term is defined under Section 280G of the U.S.
  Internal Revenue Code (the “Code”), payable to (or for the benefit of)
  Employee with respect to the Company, exceed the limitation of
  Section 280G of the Code such that an excise tax will be imposed under
  Section 4999 of the Code, the provisions of Exhibit A attached
  hereto shall apply and are incorporated herein.

  
	
   

  	
   

  	
   

  
	
  409A:

  	
   

  	
  A
  new Section 9 is hereby added to the Agreement to provide as follows:

  

 

 

4

 

 

	
   

  	
   

  	
  “9.
  Section 409A.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  (a) 
  The intent of the parties is that payments and benefits under this Agreement
  comply with Section 409A of the Code as amended, and the regulations and
  guidance promulgated thereunder (collectively “Section 409A”) and,
  accordingly, to the maximum extent permitted, this Agreement shall be
  interpreted to be in compliance therewith.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  (b) 
  A termination of employment shall not be deemed to have occurred for purposes
  of any provision of this Agreement that provides for the payment of any
  amounts or benefits upon or following a termination of employment unless such
  termination is also a “Separation from Service” within the meaning of
  Section 409A and, for purposes of any such provision of this Agreement, references
  to a “resignation,” “termination,” “termination of employment” or like terms
  shall mean Separation from Service. If the Employee is deemed on the date of
  termination of his employment to be a “specified employee”, within the
  meaning of that term under Section 409A(a)(2)(B) of the Code and
  using the identification methodology selected by the Company from time to
  time, or if none, the default methodology, then with regard to any payment or
  the providing of any benefit made subject to this Section 9(b), to the
  extent required to be delayed in compliance with
  Section 409A(a)(2)(B) of the Code, and any other payment or the
  provision of any other benefit that is required to be delayed in compliance
  with Section 409A(a)(2)(B) of the Code, such payment or benefit
  shall not be made or provided prior to the earlier of (i) the expiration
  of the six-month period measured from the date of the Employee’s Separation
  from Service or (ii) the date of the Employee’s death. On the first day
  of the seventh month following the date of Employee’s Separation from Service
  or, if earlier, on the date of his death, (x) all payments delayed
  pursuant to this Section 9(b) (whether they would have otherwise
  been payable in a single sum or in installments in the absence of such delay)
  shall be paid or reimbursed to the Employee in a lump sum, and any remaining
  payments and benefits due under this Agreement shall be paid or provided in
  accordance with the normal payment dates specified for them herein and
  therein.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  (c) 
  With regard to
  any installment payments provided for herein, each installment thereof shall
  be deemed a separate payment for purposes of Section 409A.”

  
	
   

  	
   

  	
   

  
	
  Legal Fees:

  	
   

  	
  The
  Company shall promptly pay upon presentation of appropriate documentation the
  reasonable legal fees incurred by the Employee in connection with the
  negotiation and documentation of this Amendment.  In addition, in the event of a claim or other dispute under
  this Amendment or under the Agreement, the Company shall promptly pay or
  reimburse the Employee for all reasonable legal fees and expenses incurred by
  the Employee as incurred and submitted for payment or reimbursement; provided
  that, if the Employee is not the prevailing party with respect to the case
  which is or has become unappealable, then the Employee shall thereafter pay
  his own costs and expenses in respect thereof and promptly (and in no event
  more than 14 days after demand 

  

 

 

5

 

 

	
   

  	
   

  	
  therefor
  by the Company) return to the Company any amounts previously paid by the
  Company under this sentence with respect to such claim or other dispute.

  

 

Any
terms and conditions of employment set out in the Agreement and not explicitly
modified herein shall remain in full force and effect for the duration of the
Term.  The Agreement and this Amendment
comprise the parties’ entire agreement and supersede any and all other
agreements, either oral or in writing, between you and the Company with respect
to your employment with the Company, and contain all of the covenants and
agreements between the parties with respect to such employment in any manner
whatsoever.  Any modification or
termination of these agreements will be effective only if in writing and signed
by the party to be charged.  Please
indicate your acceptance of this Amendment by signing below and returning an
executed copy of this letter to me.

 

 

6

 

 

Please
contact me with any questions or concerns.

 

Sincerely,

 

 

/s/
Karl Slatoff

 

Karl
Slatoff

Executive
Vice President

Take-Two
Interactive Software, Inc.

 

 

 

 

	
  /s/
  Seth Krauss

  	
   

  	
  Date:

  	
  March 25,
  2008

  
	
  SETH
  KRAUSS

  	
   

  	
   

  	
   

  

 

 

7

 

 

EXHIBIT A

 

PARACHUTE TAX INDEMNITY PROVISIONS

 

This Exhibit A sets forth the terms and provisions
applicable to Employee pursuant to the provisions of the 280G Section of
the Amendment.  This Exhibit A shall
be subject in all respects to the terms and conditions of the Agreement and the
Amendment.  Capitalized terms used
without definition in this Exhibit A shall have the meanings set forth in
the Agreement or the Amendment.

 

(i)            In
the event that Employee shall become entitled to payments and/or benefits
provided by the Agreement or the Amendment or any other amounts to (or for the
benefit of) Employee that constitute “parachute payments,” as such term is
defined under Section 280G of the Code, as a result of a change in
ownership or effective control of the Company or in the ownership of a
substantial portion of the assets of the Company (collectively, the “Company
Payments”), and such Company Payments will be subject to the tax (the “Excise
Tax”) imposed by Section 4999 of the Code (and similar tax, if any,
that may hereafter be imposed by any taxing authority), the Company shall pay
to Employee at the time specified in clause (v) hereof an additional
amount (the “Gross-Up Payment”) such that the net amount retained by
Employee from the Company Payments together with the Gross-Up Payment, after
deduction of any Excise Tax on the Company Payments and any U.S. federal,
state, and local income or payroll tax upon the Gross-Up Payment provided for
by this clause (i), but before deduction for any U.S. federal, state, and local
income or payroll tax on the Company Payments, shall be equal to the Company
Payments.

 

(ii)           Notwithstanding
the foregoing provisions of this Exhibit A to the contrary, if it shall be
determined that Employee is entitled to a Gross-Up Payment, but the Company
Payments do not exceed 115% of the greatest amount (the “Reduced Amount”)
that could be paid to Employee such that the receipt of the Company Payments
would not give rise to any Excise Tax, then no Gross-Up Payment shall be made
to Employee and the Company Payments, in the aggregate, shall be reduced to the
Reduced Amount.  In the event that the
Internal Revenue Service or court ultimately makes a determination that the “excess
parachute payments” plus the “base amount” is an amount other than as
determined initially, an appropriate adjustment shall be made with regard to the
Gross-Up Payment or Reduced Amount, as applicable, to reflect the final
determination and the resulting impact on whether this clause (ii) applies.

 

(iii)          For
purposes of determining whether any of the Company Payments and Gross-Up
Payment (collectively, the “Total Payments”) will be subject to the
Excise Tax and the amount of such Excise Tax, (A) the Total Payments shall
be treated as “parachute payments” within the meaning of Section 280G(b)(2) of
the Code, and all “parachute payments” in excess of the “base amount” (as
defined under Section 280G(b)(3) of the Code) shall be treated as
subject to the Excise Tax, unless and except to the extent that, in the opinion
of the Company’s independent certified public accountants appointed prior to
any change in ownership (as defined under Section 280G(b)(2) of the
Code) or a certified public accountant
appointed following a change in ownership that is mutually acceptable to the
Company and the Employee, or tax counsel selected by such accountants or
the Company (the “Accountants”) such Total Payments (in whole or in
part):  (1) do not constitute “parachute
payments,” (2) represent reasonable compensation for services actually
rendered within the meaning of Section 280G(b)(4) of the Code in
excess of the “base amount” or (3) are otherwise not subject to the Excise
Tax, and (B) 

 

 

1

 

 

the
value of any non-cash benefits or any deferred payment or benefit shall be
determined by the Accountants in accordance with the principles of Section 280G
of the Code.  In the event that the
Accountants are serving as accountants or auditors for the individual, entity
or group effecting the change in control (within the meaning of Section 280G
of the Code), Employee may appoint another nationally recognized accounting
firm to make the determinations hereunder (which accounting firm shall then be
referred to as the “Accountants” hereunder). 
All determinations hereunder shall be made by the Accountants which
shall provide detailed supporting calculations both to the Company and Employee
at such time as it is requested by the Company or Employee.  The determination of the Accountants, subject
to the adjustments provided below, shall be final and binding upon the Company
and Employee.

 

(iv)          For
purposes of determining the amount of the Gross-Up Payment, Employee’s marginal
blended actual rates of federal, state and local income taxation in the
calendar year in which the change in ownership or effective control that
subjects Employee to the Excise Tax occurs shall be used.  In the event that the Excise Tax is
subsequently determined by the Accountants to be less than the amount taken
into account hereunder at the time the Gross-Up Payment is made, Employee shall
repay to the Company, at the time that the amount of such reduction in Excise
Tax is finally determined, the portion of the prior Gross-Up Payment
attributable to such reduction (plus the portion of the Gross-Up Payment
attributable to the Excise Tax and U.S. federal, state and local income tax
imposed on the portion of the Gross-Up Payment being repaid by Employee if such
repayment results in a reduction in Excise Tax or a U.S. federal, state and
local income tax deduction), plus interest on the amount of such repayment at
the rate provided in Section 1274(b)(2)(B) of the Code.  Notwithstanding the foregoing, in the event
that any portion of the Gross-Up Payment to be refunded to the Company has been
paid to any U.S. federal, state and local tax authority, repayment thereof (and
related amounts) shall not be required until actual refund or credit of such
portion has been made to Employee, and interest payable to the Company shall
not exceed the interest received or credited to Employee by such tax authority
for the period it held such portion. 
Employee and the Company shall mutually agree upon the course of action
to be pursued (and the method of allocating the expense thereof) if Employee’s
claim for refund or credit is denied.  In
the event that the Excise Tax is later determined by the Accountants or the
Internal Revenue Service (or other taxing authority) to exceed the amount taken
into account hereunder at the time the Gross-Up Payment is made (including by
reason of any payment the existence or amount of which cannot be determined at
the time of the Gross-Up Payment), the Company shall make an additional
Gross-Up Payment in respect of such excess (plus any interest or penalties
payable with respect to such excess) promptly after the amount of such excess
is finally determined.

 

(v)           The
Gross-Up Payment or portion thereof provided for in clause (iv) above
shall be paid not later than the sixtieth (60th) day following an event
occurring which subjects Employee to the Excise Tax; provided, however,
that if the amount of such Gross-Up Payment or portion thereof cannot be
finally determined on or before such day, the Company shall pay to Employee on
such day an estimate, as determined in good faith by the Accountants, of the
minimum amount of such payments and shall pay the remainder of such payments
(together with interest at the rate provided in Section 1274(b)(2)(B) of
the Code), subject to further payments pursuant to clause (iv) above, as
soon as the amount thereof can reasonably be determined, but in no event later
than the ninetieth (90th) day after the occurrence of the event subjecting
Employee to the Excise Tax.  Subject to
clauses (iv) and (ix) of this Exhibit A, in the event that the
amount of the estimated payments exceeds the amount subsequently determined to
have been due, such excess shall constitute a loan by the Company to Employee,
payable on the fifth (5th) day after demand by the Company (together with
interest at the rate provided in Section 1274(b)(2)(B) of the Code).

 

 

2

 

 

(vi)          In
the event of any controversy with the Internal Revenue Service (or other taxing
authority) with regard to the Excise Tax, Employee shall permit the Company to
control issues related to the Excise Tax (at its expense), provided that such
issues do not potentially materially adversely affect Employee, but Employee
shall control any other issues.  In the
event that the issues are interrelated, Employee and the Company shall in good
faith cooperate so as not to jeopardize resolution of either issue, but if the
parties cannot agree, Employee shall make the final determination with regard
to the issues.  In the event of any
conference with any taxing authority as to the Excise Tax or associated income
taxes, Employee shall permit the representative of the Company to accompany
Employee, and Employee and Employee’s representative shall cooperate with the
Company and its representative.

 

(vii)         The
Company shall be responsible for all charges of the Accountants.

 

(viii)        The
Company and Employee shall promptly deliver to each other copies of any written
communications, and summaries of any verbal communications, with any taxing
authority regarding the Excise Tax covered by this Exhibit A.

 

(ix)           Nothing
in this Exhibit A is intended to violate the Sarbanes-Oxley Act of 2002
and to the extent that any advance or repayment obligation hereunder would do
so, such obligation shall be modified so as to make the advance a nonrefundable
payment to Employee and the repayment obligation null and void.

 

(x)            Notwithstanding
the foregoing, any payment or reimbursement made pursuant to this Exhibit A
shall be paid to Employee promptly and in no event later than the end of the
calendar year next following the calendar year in which the related tax is paid
by Employee.

 

(xi)           The
provisions of this Exhibit A shall survive the termination of Employee’s
employment with the Company for any reason and any amount payable under this Exhibit A
shall be subject to the provisions of Section 9 of the Agreement.

 

 

3Exhibit
10.3

 

 

 

March 25,
2008

 

Mr. Gary
Dale

 

 

Dear
Gary:

 

This
letter agreement (“Amendment”) shall amend your Term Sheet dated November 15,
2007 (the “Employment Agreement”) with Take-Two Interactive Software, Inc.
(“Take-Two”) as hereinafter set forth. 
All capitalized terms used herein and not otherwise defined herein shall
have the meanings ascribed to such terms in the Employment Agreement.  Unless explicitly modified herein, the terms
and conditions of the Employment Agreement remain in full force and effect.

 

Termination:                                                                        1.  The first paragraph of Section 4 of the
Employment Agreement is hereby amended and restated in its entirety as follows:

 

“In the event that Take-Two
terminates your employment for Cause (as defined below), you shall be entitled
to the applicable minimum statutory notice provisions.  In the event that Take-Two terminates your
employment without Cause, Take-Two shall provide you with your contractual
benefits as in effect at the time of such termination for a period of twelve
months following such termination and shall pay to you an amount equal to
twelve-month’s Salary at the rate then in effect in lieu of notice, which
amount shall be payable in a lump sum within 30 days following the date of such
termination.  In the event of such
termination without Cause, Take-Two shall also pay to you in a lump sum on such
date:  (i) the Termination Bonus (as
hereinafter defined), if applicable; and (ii) all other earned but unpaid
bonuses as of the date of such termination without Cause, if any, that would
have been paid but for such termination without Cause.  For purposes of this Section, the “Termination
Bonus” shall be an amount equal to (x) 25% of your annual Salary at the
rate then in effect if such termination without Cause occurs on or prior to the
last day of the second fiscal quarter of Take-Two’s fiscal year (“Fiscal Year”),
or (y) 50% of your annual Salary at the rate then in effect if such
termination without Cause occurs on or after the first day of the third fiscal
quarter of a Fiscal Year; provided, however that the Termination Bonus shall
only be payable with respect to Fiscal Years commencing on or after November 1,
2008.”

 

2.  The fourth paragraph of Section 4
of the Employment Agreement is hereby amended and restated in its entirety as
follows:

 

“In the event that Take-Two terminates your employment without Cause or
if you terminate your employment for “good reason” in accordance with the third
paragraph of Section 4 of the Employment Agreement, then all outstanding
options to purchase common stock and shares of restricted stock granted to you
by Take-Two shall immediately vest and become immediately exercisable, if
applicable.  “Good Reason” shall 

 

 

 

1

 

 

also include any reduction of your salary or a material diminution of
your title, duties, responsibilities or reporting or a material breach by
Take-Two of the terms of this agreement, provided that you provide Take-Two
with notice of any such reduction,  material diminution or material breach
and Take-Two fails to cure such reduction, material diminution or material
breach within 30 days of its receipt of such notice.”

 

3.  For purposes of the Employment Agreement, Take-Two shall have “Cause”
to terminate your employment under the Employment Agreement upon (i) the
continued failure by you to substantially perform your duties under the
Employment Agreement after receipt of notice from Take-Two requesting such
performance; (ii) your criminal conviction by plea or after trial of having
engaged in criminal misconduct (including embezzlement and fraud) which is
demonstrably injurious to Take-Two, monetarily or otherwise; (iii) your
conviction of a felony; (iv) gross negligence on your part affecting
Take-Two; or (v) your material failure to cooperate in any investigation
or inquiry involving Take-Two.  Take-Two
shall give written notice to you of any proposed termination for Cause, which
notice shall specify the grounds for the proposed termination, and you shall be
given thirty (30) days to cure if the grounds arise under clauses (i) or (v) above
(in the event you cure the event giving rise to Cause set forth in such written
notice within said 30 day period, Cause for termination shall not exist).

 

Bonus:                                                                                                         Section 8
of the Employment Agreement is hereby amended to provide that in the event (i) you
remain employed by Take-Two on, and have not given notice of termination prior
to, October 31, 2008 or (ii) your employment is terminated by the
Company without “Cause” prior to October 31, 2008, then you will receive a
minimum bonus payment for Take-Two’s 2008 Fiscal Year equal to your Targeted
Bonus, payable within 45 days following the end of the Fiscal Year or the date
of such termination without Cause, whichever is earlier.

 

Any
terms and conditions of employment set out in the Employment Agreement and not
explicitly modified herein shall remain in full force and effect for the
duration of your employment.  The
Employment Agreement and this Amendment comprise the parties’ entire agreement
and supersede any and all other agreements, either oral or in writing, between
you and Take-Two with respect to your employment with Take-Two (other than Take-Two’s
Employee Change in Control Severance Plan dated March 3, 2008, under which
you shall be entitled to participate in accordance with its terms), and contain
all of the covenants and agreements between the parties with respect to such
employment in any manner whatsoever.  Any
modification or termination of these agreements will be effective only if in
writing and signed by the party to be charged.

 

 

 

2

 

 

Please indicate your acceptance of this Amendment by signing below and
returning an executed copy of this letter to me.

 

Please
contact me with any questions or concerns.

 

Sincerely,

 

	
  /s/
  KARL SLATOFF

  
	
   

  
	
  Karl
  Slatoff

  
	
  Executive
  Vice President

  
	
  Take-Two
  Interactive Software, Inc.

  

 

 

 

 

 

	
  /s/GARY
  DALE

  	
   

  	
  Date:

  	
  March 25,
  2008

  	
   

  
	
  GARY
  DALE

  	
   

  	
   

  	
   

  	
   

  
						

 

 

 

3

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