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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 13D
Under the Securities Exchange Act of 1934
TAKE-TWO INTERACTIVE SOFTWARE, INC.
(Name of Issuer)
Common Stock, par value $.01 per share
(Title of Class of Securities)
874054109
(CUSIP Number)
Ryan A. Brant
575 Broadway
New York, New York 10012
(Name, Address and Telephone Number of Person
Authorized to Receive Notice and Communications)
August 31, 1998
(Date of Event which Requires Filing of this Statement)
If the filing person has previously filed a statement on Schedule 13G to report
the acquisition which is the subject of this Schedule 13D, and is filing this
schedule because of Rules 13d-1(e), 13(d)-1(f) or 13d-1(g), check the following
box |_|.
- ----------
* The remainder of this cover page shall be filled out for a reporting
person's initial filing on this form with respect to the subject class of
securities, and for any subsequent amendment containing information which
would alter disclosures provided in a prior cover page.
The information required on the remainder of this cover page shall not be
deemed to be "filed" for the purpose of Section 18 of the Securities
Exchange Act of 1934 ("Act") or otherwise subject to the liabilities of
that section of the Act but shall be subject to all other provisions of the
Act (however, see the Notes).
<PAGE>
SCHEDULE 13D
CUPSIP NO. 874054109
________________________________________________________________________________
1 NAME OF REPORTING PERSONS
I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS (ENTITIES ONLY)
Robert A. Alexander
________________________________________________________________________________
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP*
(a) [_]
(b) [_]
________________________________________________________________________________
3 SEC USE ONLY
________________________________________________________________________________
4 SOURCE OF FUNDS*
PF
________________________________________________________________________________
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED
PURSUANT TO ITEMS 2(d) OR 2(e) [_]
________________________________________________________________________________
6 CITIZENSHIP OR PLACE OF ORGANIZATION
United States
________________________________________________________________________________
7 SOLE VOTING POWER
NUMBER OF
1,375,000
SHARES _________________________________________________________________
8 SHARED VOTING POWER
BENEFICIALLY
OWNED BY --
_________________________________________________________________
EACH 9 SOLE DISPOSITIVE POWER
REPORTING
1,375,000
PERSON _________________________________________________________________
10 SHARED DISPOSITIVE POWER
WITH
--
________________________________________________________________________________
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
1,375,000
________________________________________________________________________________
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES*
[_]
________________________________________________________________________________
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
9.26%
________________________________________________________________________________
14 TYPE OF REPORTING PERSON*
IN
________________________________________________________________________________
*SEE INSTRUCTIONS BEFORE FILLING OUT!
INCLUDE BOTH SIDES OF THE COVER PAGE, RESPONSES TO ITEM 1-7 (INCLUDING EXHIBITS)
OF THE SCHEDULE, AND THE SIGNATURE ATTESTATION.
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<PAGE>
Item 1. Security and Issuer.
This statement relates to shares of Common Stock, par value $.01 per
share ("Common Stock"), of Take-Two Interactive Software, Inc. (the
"Company"), issued in connection with the acquisition (the "Merger")
of Jack of All Games, Inc. ("JAG") by the wholly-owned subsidiary of
the Company, whereby all of the outstanding shares of capital stock of
JAG were exchanged for shares of the Common Stock.
The principal executive offices of the Company are located at 575
Broadway, New York, New York 10012.
Item 2. Identity and Background.
This Schedule 13D is being filed by Robert A. Alexander.
(a) 1255 Coventry Woods, Cincinnati, Ohio 45230.
(b) R. Alexander is a director of the Company and President of JAG,
the Company's wholly-owned subsidiary following the merger. JAG
is in the business of distributing video games and has its
principal place of business at 2909 Crescentville Road,
Cincinnati, OH, 45069.
(c) During the last five (5) years, R. Alexander has not been
convicted in any criminal proceeding (excluding traffic
violations or similar misdemeanors).
(d) During the last five (5) years, R. Alexander has not been a party
to a civil proceeding of a judicial or administrative body of
competent jurisdiction and as a result of such proceeding was or
is subject to a judgment, decree or final order enjoining future
violations of, or prohibiting or mandating activities subject to,
federal or state securities laws or finding any violation with
respect to such laws.
(e) United States
Item 3. Source and Amount of Funds or Other Consideration.
In connection with the Merger, the Company issued an aggregate of
1,375,000 shares of Common Stock to R.
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<PAGE>
Alexander, a stockholder of JAG. For purposes of this Schedule 13D,
all 1,375,000 shares of Common Stock (the "Shares") are beneficially
owned by R. Alexander.
Item 4. Purpose of Transaction.
R. Alexander acquired the Shares in consideration of the purchase
price under the Merger.
As part of the Merger, an existing member of the Company's board of
directors (the "Board") resigned, effective at the closing of the
Merger, and R. Alexander was appointed to fill the vacancy on the
Board thereby created. In addition, the Company engaged R. Alexander
as President of JAG following the Merger.
Except as set forth in this Item 4, R. Alexander does not have any
present plans or proposals that relate to or that would result in any
of the actions specified in clauses (a) through (j) of Item 4 of
Schedule 13D.
Item 5. Interest in Securities of the Issuer.
(a) The calculations in this Item 5 are based upon 14,853,863 shares
of Common Stock issued and outstanding as of August 31, 1998
following the Merger. For purposes hereof, R. Alexander
beneficially owns 1,375,000 shares of Common Stock, comprising
9.26% of the issued and outstanding shares of Common Stock. The
foregoing calculations are made pursuant to Rule 13d-3
promulgated under the Securities Exchange Act of 1934.
(b) R. Alexander is the sole owner of the Shares and has the sole
power to vote and dispose of all of such Shares.
(c) R. Alexander has not effected any transactions in shares of the
Common Stock or in any options or warrants to purchase Common
Stock in the past 60 days.
(d) R. Alexander affirms that no other person has the right to
receive or the power to direct the receipt of dividends from, or
the proceeds from the sale of, the Shares of Common Stock
beneficially owned by him.
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<PAGE>
(e) It is inapplicable for the purposes herein to state the date on
which R. Alexander ceased to be the owner of more than five
percent (5%) of the Shares.
Item 6. Contracts, Arrangements, Understandings or Relationships with Respect to
Securities of the Issuer.
The Company executed a registration rights agreement (the "Rights
Agreement") with R. Alexander pursuant to which he was granted certain
registration rights with respect to the Shares.
R. Alexander agreed in the Rights Agreement to lock-up the Shares, in
the event that the Company files a registration statement for gross
proceeds to the Company in excess of $12,000,000 in an underwritten
public offering, which lock-up shall be on the terms and conditions
imposed by such offering.
R. Alexander also entered into an employment agreement with JAG
following the Merger (the "Employment Agreement") pursuant to which
employment agreement, as subsequently amended, he received options to
purchase up to an aggregate of 100,000 additional shares of Common
Stock, at an exercise price of $5.625 per share. Under the terms of
the Employment Agreement, such options vest in two (2) equal
installments on each of August 31, 1998 and 1999.
Except as provided in the Rights Agreement, the Employment Agreement
and in each of Items 4 and 5 hereof, R. Alexander does not have any
contract, arrangement, understanding or relationship (legal or
otherwise) with any person with respect to any securities of the
Company other than as set forth in Items 3 and 4.
Item 7. Material to be Filed as Exhibits.
Exhibit 1 - Form of Registration Rights Agreement dated
August 31, 1998 among the Company and R.
Alexander, among others.
Exhibit 2 - Employment Agreement between R. Alexander and
JAG, dated August 31, 1998.
Exhibit 3 - Amendment to Employment Agreement, dated
September 10, 1998.
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<PAGE>
SIGNATURES
After reasonable inquiry and to the best of our knowledge and belief, the
undersigned certifies that the information set forth in this statement is true,
complete and correct.
Dated September 10, 1998 By:/s/ Robert A. Alexander
-------------------------------
Robert A. Alexander
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REGISTRATION RIGHTS AGREEMENT
Registration Rights Agreement dated as of August 31, 1998, by and between
Take-Two Interactive Software, Inc., a Delaware corporation (the "Company"), and
the persons whose names and addresses appear on the signature page attached
hereto (each a "Holder" and collectively, the "Holders").
WHEREAS, the Company issued to the Holders pursuant to the merger of a
wholly-owned subsidiary of the Company with and into Jack of All Games, Inc.
("Jack"), an aggregate of 2,750,000 shares (the "Shares") of the Company's
Common Stock, par value $.01 per share, as described in the Agreement and Plan
of Merger dated August 22, 1998 by and among the Company and its subsidiary,
Jack and each of the Holders (the "Merger Agreement"); and
WHEREAS, pursuant to the Merger Agreement, the Company has agreed to grant
to the Holders registration rights set forth herein with respect to the Shares.
NOW, THEREFORE, the parties do hereby agree as follows:
1. Registration. (a) The Company shall include a number of Shares
having a market value of $1,500,000 (as measured by the average of the
closing bid price of the Common Stock on the five trading days immediately
preceding the filing of a registration statement) in the next registration
statement, if any, for an underwritten public offering for gross proceeds
to the Company of greater than $12,000,000 (the "Company Offering");
provided, however, that if in the opinion of the Company's underwriter or
managing underwriter of the underwriting group for such offering, the
inclusion of all or a portion of the Shares, when added to the securities
being registered by the Company or selling shareholder(s), if any, will
exceed the maximum amount of the Company's securities which can be marketed
(i) at a price reasonably related to their then current market value, or
(ii) without otherwise having an adverse effect on the offering, then the
Company may exclude from such offering all or a portion of the Shares which
it has sought to register.
(b) The Company shall include a number of Shares having a market value
of $3,500,000 (as measured by the average of the closing bid price of the
Common Stock on the five trading days immediately preceding the filing of a
registration statement) in a registration statement on Form S-3 (the
"Registration Statement") to be filed with the Securities and Exchange
Commission under the Securities Act of 1933, as amended (the "Act") as soon
as reasonably practicable following the date the Company first publishes at
least thirty (30) days of combined
<PAGE>
results of operations of the Company and Jack in accordance with applicable
accounting rules relating to a "pooling of interests" (which is anticipated
to be on or before November 15, 1998) and use its reasonable efforts to
cause such Registration Statement to become effective under the Act in the
event the Company Offering is not consummated on or before December 15,
1998 (and such Secondary Offering is not, subject to the good faith mutual
determination of the Holder and the Company, still pending at such time);
provided that in the event a Company Offering is in process, the Holder
agrees not to sell or otherwise dispose of the Shares in accordance with
Section 3 hereof.
(c) The Company shall include a number of Shares having a market value
of up to $5,000,000 less the market value of any Shares registered pursuant
to paragraph (a) above in a Registration Statement 180 days following the
effective date of a Company Offering and shall use reasonable efforts to
cause the Registration Statement to become effective under the Act so as to
permit a public offering and sale of the Shares for a period of nine (9)
months.
(d) The Company shall use reasonable efforts to include a number of
Shares having a market value of $2,000,000 (as measured by the average of
the closing bid price of the Common Stock on the five trading days
immediately preceding the filing of a registration statement) in a
registration statement, if any, for any underwritten public offering
subsequent to the Company Offering for gross proceeds to the Company of
greater than $12,000,000 having an effective date on or before the first
anniversary of the date of this Agreement (a "Subsequent Offering");
provided, however, that if in the opinion of the Company's underwriter or
managing underwriter of the underwriting group for such offering, the
inclusion of all or a portion of the Shares, when added to the securities
being registered by the Company or selling shareholder(s), if any, will
exceed the maximum amount of the Company's securities which can be marketed
(i) at a price reasonably related to their then current market value, or
(ii) without otherwise having an adverse effect on the offering, then the
Company may exclude from such offering all or a portion of the Shares which
it has sought to register.
(e) The rights granted herein shall be pro rata with respect to the
Holders.
2. Covenants of the Company With Respect to Registration. The Company
hereby covenants and agrees as follows:
(a) Following the effective date of any registration statement, the
Company shall, upon the request of the Holder, forthwith supply such
reasonable number of copies of the registration statement and prospectus as
shall be reasonably requested by the Holder to permit the Holder to make a
public
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<PAGE>
distribution of the Shares. The obligations of the Company hereunder with
respect to the Shares are expressly conditioned on the Holder's furnishing
to the Company such appropriate information concerning the Holder, the
Shares and the terms of the Holder's offering of such shares as the Company
may request.
(b) The Company will pay all costs, fees and expenses in connection
with any Registration Statement filed; provided, that the Holder shall be
solely responsible for the fees of any counsel retained by the Holder in
connection with such registration and any transfer taxes or underwriting
discounts, selling commissions or selling fees applicable to the Shares
sold by the Holder pursuant thereto.
(c) The Company will use reasonable efforts to qualify or register the
Shares included in a registration statement for offering and sale under the
securities or blue sky laws of such states as are reasonably requested by
the Holder, provided that the Company shall not be obligated to execute or
file any general consent to service of process (unless the Company is
already then subject to service in such jurisdiction) or to qualify as a
foreign corporation to do business under the laws of any such jurisdiction,
except as may be required by the Act and its rules and regulations.
(d) Notwithstanding anything contained herein to the contrary, the
Company will have no obligation to register the Shares if it receives a
written opinion of counsel that the Shares are eligible for sale under Rule
144.
3. Covenant of the Holder. The Holder, upon receipt of notice from the
Company that an event has occurred which requires a post-effective amendment to
a registration statement or a supplement to the prospectus included therein,
shall promptly discontinue the sale of Shares until the Holder receives a copy
of a supplemented or amended prospectus from the Company, which the Company
shall provide as soon as reasonably practicable after such notice. The Holder
hereby agrees that if requested by an underwriter, it will agree not to sell or
otherwise dispose of the Shares on the same terms as management of the Company,
except for the Shares sold, if any, pursuant to Section 1(a).
4. Indemnification. The Company agrees to indemnify, defend and hold
harmless the Holder from and against any and all losses, claims, damages and
liabilities caused by or arising out of any untrue statement of a material fact
contained in a registration statement or prospectus included therein or caused
by or arising out of any omission to state therein a material fact required to
be stated therein or necessary to make the statements therein, in light of
circumstances which they are made, not misleading, except insofar as such
losses, claims, damages or liabilities are caused by any such untrue statement
or omission based upon information furnished or required to be
-3-
<PAGE>
furnished in writing to the Company by the Holder expressly for use therein;
provided, however, that the indemnification in this Section shall not inure to
the benefit of the Holder on account of any such loss, claim, damage or
liability arising from the sale of Shares by the Holder, if a copy of a
subsequent prospectus correcting the untrue statement or omission in such
earlier prospectus was provided to the Holder by the Company prior to the sale
and the subsequent prospectus was not delivered or sent by the Holder to the
purchaser prior to such sale. The Holder agrees to indemnify the Company, its
directors, each officer signing a registration statement, each person who
controls the Company within the meaning of the Act, any underwriter and any
person who controls any underwriter within the meaning of the Act from and
against any and all losses, claims, damages and liabilities caused by or arising
out of any untrue statement of a material fact contained in a registration
statement or prospectus included therein, or caused by or arising out of any
omission to state therein a material fact required to be stated therein or
necessary to make the statements therein not misleading, in each case, only
insofar as such losses, claims, damages or liabilities are caused by any untrue
statement or omissions based upon information furnished in writing to the
Company by the Holder expressly for use therein.
5. Governing Law.
(a) This Agreement shall be governed as to validity, interpretation,
construction, effect and in all other respects by the internal substantive
laws of the State of New York, without giving effect to the choice of law
rules thereof.
(b) Each of the Company and the Holder hereby irrevocably and
unconditionally consents to submit to the jurisdiction of the courts of the
State of New York and of the United States located in the County of New
York, State of New York (the "New York Courts") for any litigation arising
out of or relating to this Agreement and the transactions contemplated
hereby (and agrees not to commence any litigation relating thereto except
in such courts), waives any objection to the laying of venue of any such
litigation in the New York Courts and agrees not to plead or claim that
such litigation brought in any New York Courts has been brought in an
inconvenient forum.
6. Notices. All notices, requests, demands and other communications
hereunder shall be in writing and shall be deemed duly given when delivered by
hand or mailed by express, registered or certified mail, postage prepaid, return
receipt requested, as follows:
If to the Company, at:
Take-Two Interactive Software, Inc.
575 Broadway
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<PAGE>
New York, New York 10012
Attn: Ryan A. Brant, Chairman
with a copy of the same to:
Tenzer Greenblatt LLP
405 Lexington Avenue, 23rd Floor
New York, New York 10174
Attn: Barry S. Rutcofsky, Esq.
If to the Holder(s), at that address set forth under their name on the
signature page.
with a copy of the same to:
Keating Meuthing & Klekamp, P.L.L.
One East Fourth Street
Cincinnati, Ohio 45202
Attn: Gehl Babinec, Esq.
Or such other address as has been indicated by either party in accordance
with a notice duly given in accordance with the provisions of this Section.
7. Amendment. This Agreement may only be amended by a written instrument
executed by the Company and the Holders.
8. Entire Agreement. This Agreement constitutes the entire agreement of the
parties hereto with respect to the subject matter hereof, and supersedes all
prior agreements and understandings of the parties, oral and written, with
respect to the subject matter hereof.
9. Assignment; Benefits. This Agreement and the rights granted hereunder
may not be assigned by any Holder and any purported assignment shall be void ab
initio; provided that the Holders may assign the rights granted herewith to (i)
immediate family members (including in connection with estate planning and
family trusts) (ii) the other Holders and (iii) Nicholas A. Alexander. Nothing
herein contained, express or implied, is intended to confer upon any person
other than the parties hereto any rights or remedies under or by reason of this
Agreement.
10. Headings. The headings contained herein are for the sole purpose of
convenience of reference, and shall not in any way limit or affect the meaning
or interpretation of any of the terms or provisions of this Agreement.
11. Severability. Any provision of this Agreement which is held by a court
of competent jurisdiction to be prohibited or unenforceable in any
jurisdiction(s) shall be, as
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<PAGE>
to such jurisdiction(s), ineffective to the extent of such prohibition or
unenforceability without invalidating the remaining provisions of this Agreement
or affecting the validity or enforceability of such provision in any other
jurisdiction.
12. Execution in Counterparts. This Agreement may be executed in one or
more counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same document.
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<PAGE>
IN WITNESS WHEREOF, this Agreement has been executed and delivered by the
parties hereto as of the date first above written.
Company: TAKE-TWO INTERACTIVE SOFTWARE, INC.
By: /s/ Ryan A. Brant
-----------------------------------
Name: Ryan A. Brant
Title: Chairman
Holders:
/s/ David Rosenbaum
-----------------------------------
David Rosenbaum
Address: 540 Locust Run Road
Cincinnati, OH 45245
Number of Shares: 1,237,500
/s/ Thomas Rosenbaum
-----------------------------------
Thomas Rosenbaum
Address: 614 Woodburn Lane
Loveland, OH 45140
Number of Shares: 137,500
/s/ Robert Alexander
-----------------------------------
Robert Alexander
Address: 1255 Coventry Woods
Cincinnati, OH 45230
Number of Shares: 1,375,000
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EMPLOYMENT AGREEMENT
AGREEMENT dated as of August 31, 1998 between Jack of All Games, Inc., an
Ohio corporation (the "Employer" or the "Company"), and Robert Alexander (the
"Employee").
W I T N E S S E T H :
WHEREAS, the Employer desires to employ the Employee as its President 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; and
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 five (5) year period commencing as of
the date of this Agreement (the "Effective Date") (any year commencing on
the Effective Date or any anniversary of the Effective Date being
hereinafter referred to as an "Employment Year") unless earlier terminated
pursuant to Section 6 hereof.
2. Employee Duties.
(a) During the term of this Agreement, the Employee shall have
the duties and responsibilities of President reporting directly to the
Chief Executive Officer and the Board of Directors (the "Board") of
the Employer. It is understood that such duties and responsibilities
shall be reasonably related to the Employee's position.
(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 located at 2909 Crescentville Road, Ohio, 45069, 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.
<PAGE>
3. Compensation.
(a) During the term of this Agreement, the Employer shall pay the
Employee a salary (the "Salary") at a rate of $233,000 per annum in
respect of each Employment Year, payable in equal installments
bi-weekly, or at such other times as may mutually be agreed upon
between the Employer and the Employee. Such Salary may be increased
from time to time at the discretion of the Board.
(b) In addition to the foregoing, the Employee shall be eligible
for a quarterly incentive bonus (the "Bonus") up to an amount of
$25,000 per quarter, based on certain gross margin and earning targets
with respect to each quarter of the Company's fiscal year, as mutually
agreed to by the parties. Gross margin and earnings shall be
calculated in accordance with generally accepted accounting principles
applied on a basis consistent with those utilized in the preparation
of the Company's financial statements. Gross margin and earnings for
each quarter shall be determined no later than 45 days following the
end of such quarter and the Bonus attributable thereto shall be paid
to Employee within ten (10) business days following the date of such
determination, and shall be accompanied by a copy of the determination
of such amount, certified by the Chief Financial Officer or Controller
of Take-Two Interactive Software, Inc. (the "Parent") as having been
determined in accordance with the provisions of this Section 3(b).
(c) In addition to the foregoing, and subject to the terms and
conditions of the Parent's 1997 Stock Option Plan (the "Plan"), a copy
of which has been made available to the Employee, the Employee shall
be granted as a matter of separate agreement, and not in lieu of
Salary or any other compensation for services, the right and option
(the "Option"), in the form of incentive stock options to the extent
available, to purchase pursuant to the Plan all or any part of an
aggregate of up to 125,000 shares of the authorized but unissued
common stock, par value $.01 per share, of the Parent (the "Shares"),
at the exercise price of $5.625 per Share, exercisable during the five
(5) year period, with respect to any incentive stock options, or ten
(10) year period (with respect to all other options granted pursuant
hereto) commencing as of the date hereof and terminating on the close
of business on August 31, 2008 or August 31, 2003, respectively, as
follows: (i) 62,500 of the Shares are immediately vested and may be
purchased as of the date hereof and (ii) an additional 62,500 of the
Shares may be purchased commencing on the first anniversary hereof;
and then, only to the extent that the Employee is still eligible under
the terms of the Plan; provided, however, in the event that the
Employee is terminated by reason of death or disability pursuant to
Section 6(b) hereof or in the event of any transaction pursuant to
Section 4 of the Plan, any options not vested at the time of
termination pursuant thereto shall immediately vest.
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<PAGE>
4. Benefits.
(a) During the term of this Agreement, the Employee shall have
the right to receive or participate in all benefits and plans, as set
forth on Schedule A hereto ("Benefits"), or as the Company and Parent
may from time to time institute during such period for its senior
management employees 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 payable to the Employee pursuant to this Agreement.
(b) During the term of this Agreement, 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 available to the
Company's senior management employees. 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.
5. Travel Expenses. All travel and other expenses incident to the
rendering of services reasonably incurred on behalf of the Company 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.
6. Termination. Notwithstanding the provisions of Section 1 hereof,
the Employee's employment with the Employer may be earlier terminated as
follows:
(a) By action taken by the Board, the Employee may be discharged
for cause (as hereinafter defined), effective as of such time as the
Board 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 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) the
inability of the Employee, by reason of physical or mental disability,
to continue substantially to perform his duties hereunder for a period
of 100 consecutive days, (the "Disability Period") during which
Disability 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), (y) any options granted pursuant
to Section 3(c) hereof and not yet vested shall immediately vest in
the Employee and (z) the Employer shall have no further obligations or
duties to the Employee, except payment of Salary
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<PAGE>
and such incentive compensation and Benefits, if any, having accrued
to the Employee pursuant to Section 3(b) hereof through the date of
death or the expiration of the Disability Period, as applicable, and
as provided in Sections 5.
(c) In the event that Employee's employment with the Employer is
terminated by action taken by the Board without cause, then the
Employer shall have no further obligation or duties to Employee,
except for (i) payment of Salary and such incentive compensation, if
any, having accrued to the Employee (or having vested, in the case of
the Options) as provided in Section 3 hereof through the date of
termination and as provided in Section 5, and (ii) payment of Salary
and health and life insurance benefits as indicated on Schedule A
hereto for 30 months following the date of such termination or the
remaining term of this Agreement, whichever is less, and Employee
shall have no further obligations or duties to the Employer, except as
provided in Section 7.
(d) For purposes of this Agreement, the Company shall have
"cause" to terminate the Employee's employment under this Agreement
upon (i) the failure by the Employee to substantially perform his
duties under this Agreement, (ii) the engaging by the Employee in
criminal misconduct (including embezzlement and criminal fraud) which
is materially 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 resulting in material harm to the Company or
(v) willful other misconduct of the Employee in the performance of his
duties hereunder resulting in harm to the Company. The Company shall
give written notice to the Employee, 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
(iv) above.
(e) Notwithstanding anything to the contrary contained in this
Section 6, in the event that the Employee terminates his employment
for any reason during the term of this Agreement (other than in the
event of death), the provisions of Sections 7(b) (non-compete) and
7(c) (non-solicitation) (the "Restrictive Covenants") shall be
extended from one (1) year to 30 months after the date of termination;
provided, however, in no event shall the period of the Restrictive
Covenants be extended beyond the six (6) year anniversary of the
Effective Date.
7. Confidentiality; Noncompetition. In addition to and supplementing
the covenants contained in Section 5.2 of the Agreement and Plan of Merger
(the "Merger Agreement"), dated August 22, 1998, among the Parent, JAG
Acquisition Corp., Jack of All Games, Inc. and Employee, the Employer and
Employee agree as follows:
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<PAGE>
(a) The Employer and the Employee acknowledge that the services
to be performed by the Employee under this Agreement may result in the
Employee being in possession of confidential information relating to
the business practices of the Company and the Parent. The term
"confidential information" shall mean any and all information (verbal
and written) relating to the Company, the Parent or any of their
respective affiliates, or any of their respective activities, other
than such information which can be shown by the Employee to be in the
public domain other than as the result of breach of the provisions of
this Section 7(a), including, but not limited to, information relating
to: existing and proposed projects, source codes, object codes,
forecasts, assumptions, trade secrets, personnel lists, financial
information, research projects, services, pricing, customers, customer
lists and prospects, product sourcing, marketing and selling and
servicing. The Employee agrees that he will not, at any time during or
after the termination of his employment, directly or indirectly, use,
communicate, disclose or disseminate to any person, firm or
corporation any confidential information.
(b) The Employee hereby agrees that he shall not, during the
period of his employment and for a period of one (1) year following
such employment (subject to Sections 6(c) and 6(e) hereof), directly
or indirectly, within any county (or adjacent county) in the States of
Ohio and New York or in any State within the United States or
territory outside the United States in which the Company is engaged in
business during the period of the Employee's employment or on the date
of termination of the Employee's employment, engage, have an interest
in or render any services to any business (whether as owner, manager,
operator, licensor, licensee, lender, partner, stockholder, joint
venturer, employee, consultant or otherwise) competitive with the
Parent's or the Company's business activities engaged in business
during the period of the Employee's employment or on the date of
termination of the Employee's employment.
(c) The Employee hereby agrees that he shall not, during the
period of his employment and for a period of one (1) year following
such employment (subject to Sections 6(c) and 6(e) hereof), directly
or indirectly, take any action which constitutes an interference with
or a disruption of any of the Parent's or Company's business
activities including, without limitation, the solicitations of the
Parent's or Company's customers, or persons listed on the personnel
lists of the Parent or Company. At no time during the term of this
Agreement, or thereafter shall the Employee directly or indirectly,
disparage the commercial, business or financial reputation of the
Parent or Company.
(d) For purposes of clarification, but not of limitation, the
Employee hereby acknowledges and agrees that the provisions of
subparagraphs 7(b) and (c) above shall serve as a prohibition against
him, during the period referred to therein,
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<PAGE>
directly or indirectly, hiring, offering to hire, enticing, soliciting
or in any other manner persuading or attempting to persuade any
officer, employee, agent, lessor, lessee, licensor, licensee or
customer who has been previously contacted by either a representative
of the Parent or Company, including the Employee, to discontinue or
alter his or its relationship with the Parent or Company.
(e) Upon the termination of the Employee's employment for any
reason whatsoever, all documents, records, notebooks, equipment, price
lists, specifications, programs, customer and prospective customer
lists and other materials which refer or relate to any aspect of the
business of the Company or Parent which are in the possession of the
Employee including all copies thereof, shall be promptly returned to
the Company.
(f) The Company shall be the sole owner of all products and
proceeds of the Employee's services hereunder, including, but not
limited to, all materials, ideas, concepts, formats, suggestions,
developments, arrangements, packages, programs and other intellectual
properties that the Employee may acquire, obtain, develop or create in
connection with and during the term of the Employee's employment
hereunder, free and clear of any claims by the Employee (or anyone
claiming under the Employee) of any kind or character whatsoever
(other than the Employee's right to receive payments hereunder). The
Employee shall, at the request of the Company, execute such
assignments, certificates or other instruments as the Company may from
time to time deem necessary or desirable to evidence, establish,
maintain, perfect, protect, enforce or defend its right, or title and
interest in or to any such properties.
(g) The parties hereto hereby acknowledge and agree that (i) the
Company would be irreparably injured in the event of a breach by the
Employee of any of his obligations under this Section 7, (ii) monetary
damages would not be an adequate remedy for any such breach, and (iii)
the Company shall be entitled to injunctive relief, in addition to any
other remedy which it may have, in the event of any such breach.
(h) The rights and remedies enumerated in Section 7(g) shall be
in addition to, and not in lieu of, any other rights and remedies
available to the Company under law or in equity.
(i) If any provision contained in this Section 7 is found to be
unenforceable by reason of the extent, duration or scope thereof, or
otherwise, then the court making such determination shall have the
right to reduce such extent, duration, scope or other provision and in
its reduced form any such restriction shall thereafter be enforceable
as contemplated hereby.
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<PAGE>
(j) It is the intent of the parties hereto that the covenants
contained in this Section 7 shall be enforced to the fullest extent
permissible under the laws and public policies of each jurisdiction in
which enforcement is sought (the Employee hereby acknowledging that
said restrictions are reasonably necessary for the protection of the
Company). Accordingly, it is hereby agreed that if any of the
provisions of this Section 7 shall be adjudicated to be invalid or
unenforceable for any reason whatsoever, said provision shall be (only
with respect to the operation thereof in the particular jurisdiction
in which such adjudication is made) construed by limiting and reducing
it so as to be enforceable to the extent permissible, without
invalidating the remaining provisions of this Agreement or affecting
the validity or enforceability of said provision in any other
jurisdiction.
8. General. This Agreement is further governed by the following
provisions:
(a) Notices. All notices relating to this Agreement shall be in
writing and shall be either personally delivered, sent by telecopy
(receipt confirmed) or mailed by certified mail, return receipt
requested, to be delivered at such address as is indicated below, or
at such other address or to the attention of such other person as the
recipient has specified by prior written notice to the sending party.
Notice shall be effective when so personally delivered, one business
day after being sent by telecopy or three (3) days after being mailed.
To the Employer:
Jack of All Games, Inc.
2909 Crescentville Road
Cincinnati, Ohio 45069
Attention: Chief Executive Officer
Telecopier: (513) 326-3026
With copies to:
Take-Two Interactive Software, Inc.
575 Broadway
New York, New York 10012
Attention: Ryan A. Brant, Chief Executive Officer
Telecopier:
and
Tenzer Greenblatt LLP
405 Lexington Avenue
New York, New York 10174
Attention: Kenneth Selterman, Esq.
Telecopier: 212-885-5001
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<PAGE>
To the Employee:
Robert Alexander
Jack of All Games, Inc.
2909 Crescentville Road
Cincinnati, Ohio 45069
Telecopier:
With a copy to:
Keating Muething & Klekamp, P.L.L.
One East Fourth Street
Cincinnati, Ohio 45202
Attention: Gehl Babinec, Esq.
Telecopier: (513) 579-6457
(b) Parties in Interest. Employee may not delegate his duties or
assign his rights hereunder. This Agreement shall inure to the benefit
of, and be binding upon, the parties hereto and their respective
heirs, legal representatives, successors and permitted assigns.
(c) Entire Agreement. This Agreement supersedes any and all other
agreements, either oral or in writing, between the parties hereto with
respect to the employment of the Employee by the Employer and contains
all of the covenants and agreements between the parties with respect
to such employment in any manner whatsoever; provided that the
provisions of Section 5.2 of the Merger Agreement shall also apply to
Employee. Any modification or termination of this Agreement will be
effective only if it is in writing signed by the party to be charged.
(d) Governing Law. This Agreement shall be governed by and
construed in accordance with the laws of the State of New York.
Employee agrees to and hereby does submit to jurisdiction before any
state or federal court of record in New York City, New York, or in the
state and county in which such violation may occur, at Employer's
election.
(e) Employee Warranty. Employee hereby warrants and represents as
follows:
(i) That the execution of this Agreement and the discharge
of Employee's obligations hereunder will not breach or conflict
with any other contract, agreement, or understanding between
Employee and any other party or parties.
(ii) Employee has ideas, information and know-how relating
to the type of business conducted by Employer, and Employee's
disclosure of such ideas, information and know-how to Employer
will not conflict with or violate the rights of any third party
or parties.
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<PAGE>
(f) Company Warranty. The Company hereby warrants and represents
that the execution of this Agreement and the discharge of the
Company's obligations hereunder will not breach or conflict with any
other contract, agreement, or understanding between the Company and
any other party or parties.
(g) Severability. In the event that any term or condition in this
Agreement shall for any reason be held by a court of competent
jurisdiction to be invalid, illegal or unenforceable in any respect,
such invalidity, illegality or unenforceability shall not affect any
other term or condition of this Agreement, but this Agreement shall be
construed as if such invalid or illegal or unenforceable term or
condition had never been contained herein.
(h) Execution in Counterparts. This Agreement may be executed by
the parties in one or more counterparts, each of which shall be deemed
to be an original but all of which taken together shall constitute one
and the same agreement, and shall become effective when one or more
counterparts has been signed by each of the parties hereto and
delivered to each of the other parties hereto.
IN WITNESS WHEREOF, the parties hereto have executed and delivered this
Agreement as of the date first above written.
JACK OF ALL GAMES, INC.
By: /s/ Ryan A. Brant
-------------------------------------
Name: Ryan A. Brant
Title: Chairman of the Board
/s/ Robert Alexander
-------------------------------------
Robert Alexander
JACK OF ALL GAMES, INC.
2909 Crescentville Road
West Chester, OH 45069
September 10, 1998
Robert Alexander
1255 Coventry Woods
Cincinnati, Ohio 45230
Re: Amendment to Employment Agreement
Dear Mr. Alexander:
Reference is made to the employment agreement, dated August 31, 1998,
between you and Jack of All Games, Inc.
This letter confirms our agreement that Section 3(c) of the Employment
Agreement, with respect to Options granted to the employee, is hereby amended in
its entirety to provide for 100,000 Options in lieu of 125,000 Options, to read
as follows:
"(c) In addition to the foregoing, and subject to the terms and
conditions of the Parent's 1997 Stock Option Plan (the "Plan"), a copy of
which has been made available to the Employee, the Employee shall be
granted as a matter of separate agreement, and not in lieu of Salary or any
other compensation for services, the right and option (the "Option"), in
the form of incentive stock options to the extent available, to purchase
pursuant to the Plan all or any part of an aggregate of up to 100,000
shares of the authorized but unissued common stock, par value $.01 per
share, of the Parent (the "Shares"), at the exercise price of $5.625 per
Share, exercisable during the five (5) year period, with respect to any
incentive stock options, or ten (10) year period (with respect to all other
options granted pursuant hereto) commencing as of the date hereof and
terminating on the close of business on August 31, 2008 or August 31, 2003,
respectively, as follows: (i) 50,000 of the Shares are immediately vested
and may be purchased as of the date hereof and (ii) an additional 50,000 of
the Shares may be purchased commencing on the first anniversary hereof; and
then, only to the extent that the Employee is still eligible under the
terms of the Plan; provided, however, in the event
<PAGE>
Robert Alexander
September 10, 1998
Page 2
that the Employee is terminated by reason of death or disability pursuant
to Section 6(b) hereof or in the event of any transaction pursuant to
Section 4 of the Plan, any options not vested at the time of termination
pursuant thereto shall immediately vest."
Except as set forth herein, the Employment Agreement shall remain in full
force and effect.
Very truly yours,
JACK OF ALL GAMES, INC.
By: /s/ Nicolas A. Alexander
--------------------------------
Nicolas A. Alexander
Chief Executive Officer
AGREED AND ACCEPTED:
/s/ Robert A. Alexander
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Robert A. Alexander
