Take-Two takes up severance plan

EA-targeted publisher adopts package that would provide financial support for employees fired in the wake of a buyout in order to alleviate "understandable concerns."

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Following EA's seemingly impromptu "friendly" acquisition offer to the tune of $2 billion or $26 per share, Take-Two's stock rocketed moonward more than 50 percent, surpassing the bid and topping off at $27.61. However, with Take-Two's board outright rejecting the offer on grounds that it was undervalued--despite that fact that it offered then-shareholders a more than 60 percent premium--interest in the stock has begun to dwindle, with the asking price dipping below $25 today.

Although investors may have begun to lose confidence in their ability to cash in on the buyout, Take-Two has laid out a severance plan in case the company is bought out, reports Reuters. According to the news service, the plan went into effect on March 3 and was confirmed by a Securities and Exchange Commission filing dated March 7.

Reuters reports that executive employees will receive 1.5 times their salary as well as a bonus for up to 18 months in the eventuality that they are fired "without cause within a year of a change in control." All other employees will be paid out up to six months' worth of their salary. The plan does not include certain top executives, including board chair Strauss Zelnick and CEO Ben Feder, because they are covered under a different severance package.

According to an SEC filing, the plan's implementation is intended to provide security and peace of mind to employees concerned over the takeover bid. "Our 'Change in Control Employee Severance Plan' provides for minimum levels of compensation for all employees in the event that an employee's position is terminated as a result of a change in control of the Company," reads an open letter to employees disclosed through the SEC filing. "These types of plans are fairly common for publicly traded companies. In fact, both Electronic Arts and THQ have change-in-control severance plans."

Speaking to Reuters, Janco Partners analyst Mike Hickey noted, "The bid probably created fairly large internal disruption, and without a severance plan, employees are worried about losing their jobs. They want to keep people focused and give them some sort of support."

Since EA disclosed its buyout offer, Take-Two's board has cited several reasons to dally over what some industry watchers have called an overvalued offer. Most recently, the publisher said it was entertaining "informal indications of interest" from other unnamed suitors. However, one publisher not interested in Take-Two is Activision, which said two weeks ago that the tumultuous Take-Two didn't meet its acquisition criteria.

Discussion

118 comments
hadrian8
hadrian8

I bet the severance package is for the 2K sports team(s). We all know EA ain't gonna keep them around when in this generation of games you can just change the practice arena for NBA Live every few months, say it's a new game and call it a day. And as much as it hurts to say this I kinda hope Sega isn't one of the unofficial buyers. I have the Virtua Fighter games still got my old consoles and the few worthwhile games they've put out since they killed Sonic (I'm 26 trust me he's dead that's not Sonic in this new crap bearing the name) I don't have too much faith in Sega. I hope Sony or Microsoft buys them. Or a gamer Legion! I'd get in on that and it would ruffle a let of feathers.

Ek-Andy
Ek-Andy

When i see the take two logo on a game i usually see that as a mark of quality. I dont think ive seen a Take Two game that has underperformed. You also see alot of really strong fairly original games published by Take Two like Oblivion, Bioshock, and GTA. But although this is great for the gamer, it will probably essentially kill the company. These huge 3 year projects cost the publisher alot of money, and when you get the same sucess from a game you could have done in a year it stats to sting a little. EA and Activision know this, and they fully intend to take advantage of it, but i can understand why Activision have no intrest in 2K seeing as they only publish games developed by their in house developers, and game adaptions of movies. It would be a real shame to see 2K go, because without them i think we would see a whole lot less of the turly great games weve seen in the past, created by developers who actually care, becuase no ones willing to take them on.

DiamondDogs
DiamondDogs

@NinjaMunkey01 I've got that same thought with Burnout Paradise. I'm not really sold on the showtime mode & I'm not exactly fond of the stunt, aggression & speed classes. I liked it the way it was in Burnout 3. I knew something was screwed up when I got Burnout Revenge. Since then it's been all progressively going downhill. BTW. Are there any issues with Mass Effect other than what's in reviews? I've been wanting to buy it for a while now.

DiamondDogs
DiamondDogs

Ok. I made a mistake. I thought they did lose them. Oh well.

VenomRitual
VenomRitual

@delta. MS didn't lose bungie. they still work together. bungie just didn't want to do halo games for the next number of years. but i agree with you, I like EA as a distributor, not a publisher. i was really dissapointed in my BFME 2 expansion pack. i hope EA reads these posts and realize how much some of us hate them.

NinjaMunkey01
NinjaMunkey01

I hate EA, all there games are now rubbish. I got burnout paradise not long ago, it not very good, MOH is now worse than ever before, NFS is ruined! C&C was not bad though. i hope these guys dont get Take-two though, GTA is great. If EA does buy them out, they would be smart to just leave the devs to do their work, any interferance from EA is BAD.

DiamondDogs
DiamondDogs

Honestly. As a gamer AND a stockholder, I do not in any way want TTWO becoming part of EA at all. As the gamer, there would be no more competition & EA can continue to slack off with their games. Honestly, they've used the engine from Lord of the Rings: Battle for middle earth on 7 different games that are out now or are being developed. They more or less trashed Command and Conquer & from what I've heard, Army of Two is a letdown. Battlefield 2: Modern Combat.... enough said. They have this mentality that we don't have to try as hard anymore as long as we buy the competition, hence NBA Live & Madden. (Note: I haven't played an NHL game since 2003 (HORRIBLE) & their attempt at college baseball was less than stellar, & I haven't played a NASCAR game since they tried total team control (GAG!!)) We're just being force-fed the same crap & they expect us to roll over & buy their product. As a stockholder, EA lost more money last year than take-two. Take two lost 138.41 million on 981.79 million dollars of growth, compared to EA's loss of 385 million on 3.5 billion dollars of growth. It's not a great feeling that you could potentially end up owning a company, that although yes, they made 3.5 billion, they lost about 12 percent of what they made on growth. Now lets look at option number 3, which is my personal favorite, even though there's really been no word about it at all. Microsoft. 57.90 billion in growth & made 16.96 billion in income for a profit margin of 29 percent. It would make logical sense for Microsoft to buy Take-Two, as they lost a big developer with Bungie, who also had Bizarre creations. And all it takes is a big offer from Sony or Nintendo & bye bye Halo Wars, Project Gotham Racing & whatever else I'm forgetting. An acqusition of TTWO now would strengthen Microsoft's game division to the point that EA would be forced to develop better games, or Microsoft would bypass them altogether. If you don't agree with me. Well I'm sorry that you don't see my point. But if you want more, I can be emailed at youngsy87@gmail.com

Hvac0120
Hvac0120

@LindBergh2007 That is a great idea. I am not sure if Sega has anyone talented enough for GTA, but I am sure that Sega would do their best to keep as much of the Rockstar teams in place as they could. It's got to be hard for people at T2 to concentrate from day to day when they have this issue dwelling on whether they will still have a job 6 months from now or not. 6 months of pay is good, but they still have to find another place to work within that time frame or start collecting unemployment.

beckoflight
beckoflight

Dammit EA make your good RTS games .... but STAY of other companies like UBI & T2 !

mrkame16
mrkame16

EA is a beast out of control !!!

LindBergh2007
LindBergh2007

Here's an idea: What If SEGA brought Take 2? not only would they get thiere Sega sports franchise back, they would alos purchase the GTA franchise. SEGA owning Take is a MUCH better idea then EA owning take 2.

ColdfireTrilogy
ColdfireTrilogy

Well if EA buys Take-Two then something went seriously wrong being that TTWO made one of the best selling games of all time someone up high does not know how to manage their funds apparently .... and if they get bought out might as well say good bye to new innovation and hello to GTA 16 ... 1 per year with the same damn game play over and over with little improvement and a constant removal of anything fun ....

RLJSlick
RLJSlick

EA why don't you guys just go away, far far away?

cooldude03
cooldude03

Take-Two keeps on improving and innovating the games they make and until last year EA just kept publishing the same old franchises. EA believes in safe business and Take-Two is willing to take risks. If EA does buyout Take-Two I believe that us as gamers will pay the price. We're looking at a future of the same old games every year. As far as Take-Two is concerned at least they're looking out for their employees best interest. Unlike Ea who close down their development studios just to save a buck (Oh you developed Fight Night thankyou now hit the road). EA doesn't make fresh, innovative gaming experiences. Instead they run beloved franchises into the ground.

thekey
thekey

So I guess EA is going to make a console next. Being that there won't be hardly any more great 3rd party games.

snozberry
snozberry

The executives already make more money than the lower employees. Then they will be offered a severance package of 1.5 times their salary as well as a bonus for up to 18 months while the rest only get 6 months regular salary. This is SCREWED UP !!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!

markharris31
markharris31

Laws only apply when an acquisition/merger creates an unfair competitive environment. An EA acquisition of Take Two would not, in all likelihood, create such a situation. While I'm not a huge fan of the game industry's recent round of mergers, the law is still, technically, on their side.

memnoch2099
memnoch2099

!@#$%^ There goes the 2K series and Oblivion

YTP_1991
YTP_1991

EA WILL RUIN GTA MARK MY WORDS PEOPLE

Bigrobowski
Bigrobowski

If this means the return of the MVP baseball series,I'm all for it,just as long as they leave GTA alone...

zeus_gb
zeus_gb

Monopoly commission?

ukillwegrill
ukillwegrill

I like EA,but come on,Were Gonna have Burger spnsoers in everything

freshgman
freshgman

EA is takin over. Thats what a good business does. Why all the hate

ALLoY1717
ALLoY1717

Yey for TT, sticking it to EA. In all fairness EA is becoming too big, isn't there laws against that sort of stuff?

aslkyu
aslkyu

Hey here's an idea for you EA.......GET BENT.......

sean_ph
sean_ph

well, you gotta blame yourselves for making EA so big. i mean, who buys all those copies of Madden?

chutup
chutup

NOOOO don't you dare EA

TehUndeadHorror
TehUndeadHorror

"both Electronic Arts and THQ have change-in-control severance plans." Bet you EA doesn't.

postbox
postbox

Noooooooooo!, it's the end of NBA 2K sports series :((((((((((((((((

PandaBear86
PandaBear86

EA's motto: "If you cannot beat your competitors, buy them"

Dryker
Dryker

Besides the obvious reason of, "We're more important", I'd like to know why the highest paid employees get more than three times more of a percentage ( and then some ) of their salary than the lower paid ones?

mrbojangles25
mrbojangles25

"No this is the end of Video games as we know it. soon EA is going to buy out every company and have exclusive rights to every game." No, then the Indy develoeprs will fill the void. You guys just gotta stop slobberng over every pretty screenshot and embrace good gameplay for a change. AND STOP BUYING MADDEN/TIGER WOODS!

WhiteSnake5000
WhiteSnake5000

@JustinMatthew If EA bought out Take-Two, and GTAV was released by EA, there is a chance that the game wouldn't exactly be from Take-Two considering that there is also a chance that the original team that made the previous games would somehow not be involved. The GTA series could become just a way for EA to milk the money out of us like they do with their sports games like Madden, they could be releasing a new one every year and it could be real crap. You don't know how far they can take this...

thekey
thekey

@reddlibra69 "THIS IS THE END OF G.T.A. :-( AND ANY "M" RATED GAME FROM TAKE TWO O.M.G. THIS SUCKS! I HOPE GAMES FROM THEM DO NOT SUCK WHEN THIS HAPPENS." No this is the end of Video games as we know it. soon EA is going to buy out every company and have exclusive rights to every game.

WhiteSnake5000
WhiteSnake5000

Well, which ever way it goes, Take-Two will be known for standing up to the bully known as EA and unlike EA they will be known for NOT treating their employees like complete garbage. Oh yeah, I can also foretell that EA will be making a lot of more crappy sports games (most likely other games as well) with any real competition out of the way, IF they are to be successful with their endeavors.

JustinMatthew
JustinMatthew

"If ea buys T2 gta IV will be the last game i buy from them." I seriously doubt that. As soon as Grand Theft Auto V comes out in 2012, you're gonna buy it. Don't deny it.

technowiz999
technowiz999

Personally I like like EA games. They may be unoriginal, but like Pong they are still fun to play. The thing that does scares me is that T2 makes incredibly unique games and EA would tend to degenerate the quality. The one thing about takeovers is that the offices don't usually get moved, so the control of the office by the parent company is still minor. The higher ups in EA just put super strict deadlines on the new branches which causes worse games to be published. The funny thing is that people complain about EA stressing their employees, but really they have some of the better working conditions around. Again, not supporting a buyout but it might not be the worst thing that could happen (the worst would be another stupid life consuming MMORPG) Think of what GTA would become then >.

reddlibra69
reddlibra69

THIS IS THE END OF G.T.A. :-( AND ANY "M" RATED GAME FROM TAKE TWO O.M.G. THIS SUCKS! I HOPE GAMES FROM THEM DO NOT SUCK WHEN THIS HAPPENS.

360player_eq12
360player_eq12

If ea buys T2 gta IV will be the last game i buy from them.

NA3D
NA3D

Come on T2, EA can afford 1.5 the yearly salary of all of your employees, haha.

SEEDman_X
SEEDman_X

EA is the evil M$ in the game industry

Vambran
Vambran

I hope EA gets bought out one day and everybody gets laid off. Eye for an Eye.

Mattyrock
Mattyrock

Jeez, why does EA wanna buy out great gaming companies, I mean they really don't need them, EA makes great games, why do they need to buy out companies?! It's getting ridiculous. They're fine on their own!

parrot_of_adun
parrot_of_adun

Well it's a good thing T2 has their employees interests in mind. If it were EA being bought out, they would likely give a pay-cut (to lessen the load I suppose).

tmorri603
tmorri603

All EA wants to do is close the 2k series so they can have total control of sports. Then they can get really lazy with making games.

redskinStu
redskinStu

It doesn't matter if Take-2 gets bought out, cut-up, sold-off and sold-out. Another, new studio will emerge with fresh ideas. Whoever these guys are, wherever they work, someone new will come along to fill the void. The EA machine is only part of the video game Industry. There are other Sid Meiers out there waiting to be discovered.