Form 4: Take-Two Interactive Chief Legal Officer Discloses Recent Stock Transactions and Equity Grants

Take-Two Interactive Software Inc.'s Chief Legal Officer, Daniel P. Emerson, reported recent stock transactions including a charitable gift, a significant equity grant, and a 'sell to cover' tax-related sale.

Summary

• Daniel P. Emerson, Chief Legal Officer of Take-Two Interactive Software Inc. (TTWO), reported several transactions involving the company's common stock.
• On May 30, 2025, Mr. Emerson made a charitable gift of 45 shares of common stock, reducing his direct beneficial ownership.
• On June 1, 2025, he was granted 31,035 restricted units under the 2017 Stock Incentive Plan, comprising 6,207 time-based restricted units and 24,828 performance-based restricted units.
• The time-based units vest 25% on June 1, 2026, and quarterly thereafter, while performance-based units vest 100% on June 1, 2028, subject to performance criteria (ranging from zero to 24,828 shares, with 12,414 at target performance).
• On June 2, 2025, Mr. Emerson sold 27,056 shares at $225.223 per share. This sale was a non-discretionary 'sell to cover' transaction executed under a Rule 10b5-1 plan to satisfy tax withholding obligations from previously granted restricted units.
• Following these transactions, Mr. Emerson's direct beneficial ownership stands at 152,271 shares, which includes 153 shares from an employee stock purchase plan, 24,086 shares of common stock, 21,618 unvested time-based restricted stock units, and 106,414 unvested performance-based restricted stock units.

Sentiment

Score: 7

Explanation: The filing indicates a substantial equity grant to a key executive, aligning their incentives with long-term company performance. While there was a sale of shares, it was a non-discretionary 'sell to cover' for tax purposes, which is a routine event and not indicative of a negative outlook from the executive.

Positives

• Grant of 31,035 restricted units aligns management incentives with long-term company performance and shareholder value.
• The equity grant includes both time-based and performance-based components, encouraging sustained commitment and achievement of strategic goals.
• The performance-based units have a potential maximum payout of 200% of target (24,828 shares), indicating strong upside potential for the executive if performance criteria are met.

Negatives

• Sale of 27,056 shares, even if for tax purposes, reduces the direct ownership stake of a key executive.
• The charitable gift of 45 shares also slightly reduces direct ownership.

Risks

• The vesting of performance-based restricted units is subject to the satisfaction of certain performance criteria, meaning the actual number of shares received could range from zero to the maximum of 24,828.
• Unvested awards (21,618 time-based RSUs and 106,414 performance-based RSUs) are subject to forfeiture if vesting conditions are not met or employment ceases.

Future Outlook

NA

Industry Context

This Form 4 filing details an insider transaction for Take-Two Interactive Software, a leading video game developer and publisher. Such equity grants and 'sell to cover' transactions are common practices in the executive compensation structures across the technology and entertainment industries, aiming to align executive interests with shareholder value while managing tax liabilities. The grant of performance-based units is a standard mechanism to incentivize executives based on company performance, a trend seen across many publicly traded companies.

Related Party Transactions

• The grant of restricted units to Daniel P. Emerson, Chief Legal Officer, is a related party transaction as it involves compensation from the company to an executive officer.
• The sale of shares by Daniel P. Emerson to cover tax withholding obligations related to previously granted restricted units is also a related party transaction.

Stakeholder Impact

• Shareholders: The equity grant aligns the Chief Legal Officer's interests with shareholder value creation through long-term vesting and performance-based incentives. The 'sell to cover' transaction is a routine event for tax purposes and generally not seen as a negative signal.
• Employees: The mention of the 2017 Stock Incentive Plan and the Global Employee Stock Purchase Plan indicates ongoing equity compensation programs that can benefit employees.

Next Steps

• Vesting of 6,207 time-based restricted units will commence on June 1, 2026, with subsequent quarterly installments.
• Vesting of 24,828 performance-based restricted units is scheduled for June 1, 2028, contingent on the satisfaction of performance criteria.

Key Dates

Recommendation

Keywords

Take-Two Interactive Software, TTWO, SEC Form 4, Insider Trading, Stock Grant, Restricted Stock Units, RSU, Performance-Based Equity, Time-Based Equity, Rule 10b5-1, Sell to Cover, Executive Compensation, Daniel P. Emerson, Chief Legal Officer, Equity Compensation