This Compensation Committee Charter (this “Charter”) has been adopted by
the Board of Directors (the “Board”) of Take-Two Interactive Software, Inc.
The Compensation Committee (the “Committee”) is responsible for
formulating, evaluating and approving compensation of the Company’s
“officers” (as that term is defined in Section 16 of the Securities
Exchange Act of 1934, as amended, and the rules and regulation promulgated
thereunder (the “Exchange Act”)) and key employees, overseeing all
compensation programs involving the issuance of the Company’s stock and
other equity securities of the Company, evaluating the Company’s policies
and practices of compensating its employees, including non-executive
officers, as they relate to risk management practices and risk-taking
incentives, and preparing an annual report on executive compensation for
inclusion in the Company’s proxy statement for each annual meeting of
stockholders in accordance with applicable rules and regulations of the
Securities and Exchange Commission (the “SEC”).
The Committee shall consist of three or more members, each of whom must
qualify as independent directors (“Independent Directors”) under the
listing standards of NASDAQ, SEC rules and applicable law, subject to any
exception allowed thereunder and any waivers granted by NASDAQ. In
addition, each member of the Committee must also qualify as both a
“nonemployee director” under Rule 16b-3 promulgated under the Exchange Act,
and an “outside director” under Section 162(m) of the Internal Revenue Code
of 1986, as amended (“Section 162(m)”), or, in each case, any successor
The members of the Committee will be appointed by and serve at the
discretion of the Board, upon the recommendation of the Corporate
Governance Committee. Except as provided in this Charter, Committee members
will be appointed annually for a term of one year or until their successors
have been duly appointed and qualified. Committee members may be removed at
any time, and vacancies will be filled, by a majority vote of the directors
on the Board (upon the recommendation of the Corporate Governance
Unless a Chairman of the Committee is appointed by the Board, the members
of the Committee shall designate a Chairman by majority vote of the full
A member shall promptly notify the Committee and the Board if the member is
no longer an Independent Director and such member shall automatically be
removed from the Committee unless the Board determines that an exception to
the Independent Director requirement is available under the NASDAQ and SEC
rules and applicable law with respect to such member’s continued membership
on the Committee and that such exception should be made.
Meetings and Procedures
The Committee shall fix its own rules of procedure, which shall be
consistent with the Certificate of Incorporation and Bylaws of the Company
and this Charter. In the event the Committee fails to adopt any particular
rule of procedure, the comparable provision set forth in the Company’s
Bylaws applicable to Board committees (or if no such provision exists,
applicable to the Board) shall apply to the Committee.
The Committee shall meet at least two times annually and more frequently as
The Chairman of the Committee or a majority of the members of the Committee
may call special meetings of the Committee.
The Chairman of the Committee shall set the agenda of items to be addressed
at each meeting and shall, if practicable, circulate the agenda to each
member of the Committee in advance of each meeting (at least three days in
advance in the case of the annual meeting).
A majority of the members of the Committee shall constitute a quorum and
the Committee may act by a majority of its members unless otherwise
specified in this Charter.
The Committee may form subcommittees for any purpose that the Committee
deems appropriate and may, subject to applicable law, delegate to such
subcommittees such power and authority as the Committee deems appropriate.
The Committee may, subject to applicable law, delegate to any member
thereof such power and authority to execute documents and carry out actions
on behalf of the Committee as the Committee deems appropriate.
The Committee may request that any directors, officers or employees of the
Company, or other persons whose advice and counsel are sought by the
Committee, attend any meeting of the Committee, meet with any Committee
members or representative of the Committee’s counsel, officers or experts
and/or provide such pertinent information as the Committee requests, except
that the Chairman and the Chief Executive Officer (the “CEO”) of the
Company shall not attend any portion of the meeting of the Committee at
which their respective compensation is voted on or deliberated.
Following each of its meetings, the Committee shall report on the meeting
to the Board, which report shall include a description of all significant
actions taken or matters discussed by the Committee at the meeting.
The Committee will keep written minutes of its meetings, which minutes
shall be provided to the Board and maintained with the books and records of
Responsibilities and Duties
The Committee shall have the following duties and responsibilities:
Establish a compensation policy for executive officers designed to (i)
enhance the profitability of the Company and increase shareholder value,
(ii) reward executive officers for their contribution to the Company’s
growth and profitability, (iii) recognize individual initiative,
leadership, achievement, and other contributions, and (iv) provide
competitive compensation that will attract and retain qualified executive
Establish appropriate compensation and reimbursement policies for
non-employee members of the Board and Board committees. Such compensation
may include, but is not limited to, the following elements: retainer,
meeting fees, committee fees, committee chair fees, equity or stock
compensation, benefits and perquisites.
Determine the extent to which (i) any executive officer shall have a role
in determining or recommending the amount or form of executive officer
and/or director compensation and (ii) any compensation consultant shall
have a role in determining or recommending the amount or form of executive
officer and/or director compensation.
Review compensation practices and trends of other peer companies to
determine the adequacy of the Company’s executive officer compensation
Review and consider participation and eligibility in the various components
of the total executive officer compensation package.
Oversee and provide recommendations to the Board on the Company’s
submissions to shareholders on matters relating to executive compensation,
including advisory votes on executive compensation and equity compensation
Annually review and approve corporate goals and objectives relevant to the
Chairman, the CEO and other executive officer compensation, evaluate the
Chairman’s, the CEO’s and other executive officers’ performance in light of
those goals and objectives, and approve the Chairman’s, the CEO’s and other
executive officers’ compensation levels based on this evaluation (the
approval of the compensation of executive officers other than the Chairman
and the CEO may be done in consultation with the Chairman and the CEO, who
may not vote on such matters).
Establish and review policies with respect to management perquisites and
other non-cash benefits.
Approve employment contracts, severance arrangements, change in control
provisions and other compensatory arrangements with executive officers.
Approve and administer cash incentives and deferred compensation plans for
executive officers (including any modification to such plans) and oversight
of performance objectives and funding for incentive plans in which
executive officers are eligible to participate.
Approve and oversee compensation programs and arrangements involving the
use of the Company’s stock and other equity securities and make grants
Review and analyze the Company’s policies and practices of compensating its
employees, including non-executive officers, as they relate to risk
management practices and risk-taking incentives.
Monitor compliance by management and directors with the Company’s stock
ownership requirements, if applicable.
Review the Company’s compensation recoupment or “clawback” policy, and its
methods of enforcing such policy, and recommending to the Board any changes
required by applicable law, SEC rules or NASDAQ listing requirements.
Periodically review executive supplementary benefits and, as appropriate,
the Company’s retirement, benefit, and special compensation programs
involving significant cost.
Review matters relating to management succession, including, but not
limited to, compensation for terminated executive officers.
Prepare the Compensation Committee Report, and prepare and consider whether
to recommend the Compensation Discussion and Analysis, for inclusion in the
Company’s proxy statement for each annual meeting of stockholders in
accordance with applicable SEC rules and regulations.
Annually review an assessment of any potential conflict of interest raised
by the work of any compensation consultant (whether retained by the
Committee or management) that is involved in determining or recommending
executive compensation and, as necessary, review and discuss the
disclosures relating to any relationships with such persons that are
required to be disclosed in accordance with applicable legal authority or
Annually evaluate the Committee’s performance, including by reviewing the
Committee’s compliance with this Charter, and cooperate with the Corporate
Governance Committee in its evaluation thereof.
Review and reassess the adequacy of this Charter annually and recommend to
the Board any appropriate changes, and cooperate with the Corporate
Governance Committee in its evaluation thereof.
Report regularly to the Board and other committees, as applicable, with
respect to compensation matters, policies and practices of the Company or
any of the foregoing matters, and make recommendations to the Board or such
committees, as appropriate.
Perform any other activities or functions consistent with this Charter, the
Company’s Bylaws, the listing standards of the NASDAQ, SEC rules and
applicable law as the Committee or the Board deems necessary or
Investigations and Studies; Outside Advisors; Reliance
The Committee may conduct or authorize such investigations into or studies
of matters within the scope of the Committee’s duties and responsibilities,
and may retain, at the Company’s expense, such experts and other
professionals, as it deems necessary or appropriate to carry out its
duties. Without limiting the foregoing, the Committee shall have the sole
authority, in its discretion, to decide whether to retain a compensation
consultant to assist in the evaluation of executive officer and/or director
compensation pursuant to this Charter. The Committee may retain such
consultants only after assessing such consultant’s independence in
accordance with applicable Nasdaq and SEC rules and regulations. If the
Committee decides to retain such a consultant, the Committee shall have the
sole authority to approve the consultant’s fees and other retention terms,
with such fees to be borne by the Company, and to terminate the consultant
at any time.
In carrying out its duties, the Committee may act in reliance on
management, the independent public accountants, the internal auditors,
internal and outside counsel and such other outside advisors and experts,
as it deems necessary or appropriate. Prior to retaining any external firm,
advisor, expert or the like, the Committee Chair will consult with the
Company’s General Counsel in order to ensure that there is no conflict of
interests due to a prior and existing relationship between such party and
the Company; provided that the Committee shall have the final discretion to
retain any such accountants, auditors, counsel and other advisors.
This Charter is in all respects subject to the provisions of the
Certificate of Incorporation and Bylaws of the Company. This Charter may be
amended from time to time upon the approval of the Board.