As reported by Reuters, Take-Two Interactive has created a new severance plan for its employees who could possibly be laid off if Electronic Arts successfully completes its proposed buyout. As described in the company's SEC filing, the plan, which was adopted on March 3, would provide executives up to 1.5 times their salary and bonus for up to 18 months if they are fired without cause within a year of an acquisition of Take-Two. In addition, non-executive employees would receive up to six months in salary.
Importantly, Take-Two noted that this new severance plan does not apply to Chairman Strauss Zelnick, Chief Executive Ben Feder, and other top executives who are covered under a separate management agreement.
Ultimately, the severance plan is designed to reassure Take-Two's key employees. "The bid probably created fairly large internal disruption and without a severance plan, employees are worried about losing their jobs," commented Janco Partners analyst Mike Hickey. "They want to keep people focused and give them some sort of support," he added.
With GTA IV's all-important launch on April 29 fast approaching the last thing Take-Two would want is for its employees to lose focus or confidence.
