N'Gai Croal
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Feb 29, 2008 12:24 PM
Ever since Electronic Arts made public its intent to acquire Take-Two, newspapers, Web sites and blogs have been abuzz with reporting, rumor and speculation. Over the past couple of days, several business reporters have focused on the recently revised employment contract forTake-Two CEO Strauss Zelnick's ZelnickMedia, which is managing Take-Two. Even though Zelnick admitted to the Wall Street Journal that he originally hadn't planned to remain in the job more than six months, and even though there was significant interest in Take-Two by potential acquirers, ZelnickMedia now has an extra year tacked on to its management contract to go along with an increase in its annual mangement fee from $750,000 to $2.5 million. The Wall Street Journal described the agreement as follows:
Between those two offers [from EA to purhcase Take-Two], on Feb. 14, Take-Two's board of directors approved an amendment to an earlier agreement that more than tripled ZelnickMedia's cash compensation for providing financial and management consulting services to the company, boosting to $2.5 million a year from $750,000 the annual management fee it pays the firm. The board also boosted to $2.5 million from $750,000 the maximum annual bonus the firm is eligible to receive, according to a filing with securities regulators.
The board further granted ZelnickMedia 1.5 million Take-Two restricted shares, worth about $40 million at current prices, an award that still needs to be approved by shareholders at the company's annual meeting. Roughly half of that award will vest immediately if Take-Two is acquired in the near-term and various other conditions are met.
Having speculated on the ramifications of this news earlier in the week, we caught up with Electronic Arts vice president of corporate communications Jeff Brown to see if it had any way impacted EA's plans. Here's what he told us over email:
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