The New York Times reported on Wednesday that the board of directors for video game publisher Take-Two Interactive Software, facing a buyout offer from Electronic Arts, approved new compensation packages for its management firm that would take effect with a merger or acquisition.
The new measures, approved within days of EA's initial offer, concern Take-Two's agreement with management firm ZelnickMedia. Under the revised terms, in the event of a takeover, ZelnickMedia would be awarded two restricted stock grants of 780,000 shares.
At EA's $26-per-share offer, that would be worth $20 million. Additionally, Take-Two's monthly management fees to the firm would rise from $62,500 to $208,333; the annual bonus to ZelnickMedia would rise from $750,000 to $2.5 million.
Take-Two representatives say the move has nothing to do with EA's proposed acquisition. "The board discussions surrounding the ZelnickMedia management agreement began well before the company received a formal offer from EA on Feb. 6, 2008," Take-Two spokesman Steve Lipin told the Times, "and were not initiated as a result of conversations with any potential acquirer."
He added that Take-Two's shareholders have not yet approved the new compensation packages.