2K Sports 2008 Annual Report Download - page 33

launched an unsolicited tender offer to acquire all of our outstanding shares of common stock. EA’s
unsolicited tender offer caused our stock price to fluctuate significantly, was a significant distraction for
our management, created uncertainty for our employees, and created uncertainty for current and potential
publishers, developers, distributors and other business partners. Furthermore, stockholder litigation in
connection with EA’s unsolicited tender offer resulted in, and continues to result in, significant legal costs.
If we were to become the target of another unsolicited offer, whether from EA or another party, we could
be subject to any of the aforementioned concerns which could harm our business and have a material
adverse effect on our results of operations.
Item 1B. Unresolved Staff Comments
None
Item 2. Properties
Our principal executive offices are located at 622 Broadway, New York, New York in approximately 48,000
square feet of space under a lease expiring in 2012 for an annual rent of approximately $1,820,000. We also
sublease an additional 16,000 square feet at this location under a lease expiring in 2010 for an annual rent
of approximately $368,000.
Take-Two Interactive Software Europe, our wholly-owned subsidiary, leases 12,500 square feet of office
space in Windsor, United Kingdom for an annual rent of approximately $567,000 plus taxes and utilities,
which expires in 2011. Rockstar North, our wholly-owned subsidiary, leases 42,000 square feet of office
space in Edinburgh, Scotland, for an annual rent of approximately $3,111,000. That lease expires in 2014.
2K corporate offices and two development studios occupy approximately 61,000 square feet of leased
office space in Novato, California. The lease provides for an annual rent of approximately $1,820,000 and
expires in 2013.
In addition, our other subsidiaries lease office space in Sydney and Braddon, Australia; Vienna, Austria;
Mississauga, Toronto and Vancouver, Canada; Brno, Czech Republic; Paris, France; Munich, Germany;
Breda, Netherlands; Madrid, Spain; Milan, Italy; Auckland, New Zealand; Geneva, Switzerland; London,
Lincoln, Newcastle-upon-Tyne and Leeds, United Kingdom; Newton, Singapore; Shanghai, China; and in
the United States Camarillo, San Diego, and Northridge, California; Hunt Valley, Maryland; Andover and
Quincy, Massachusetts; Cincinnati, Ohio; Austin, Texas and Bellevue, Washington; for an aggregate annual
rent of approximately $7,270,000.
Item 3. Legal Proceedings
Various lawsuits, claims, proceedings and investigations are pending involving us and certain of our
subsidiaries as described below in this section. Depending on the amount and the timing, an unfavorable
resolution of some or all of these matters could materially affect our business, financial condition, results
of operations or cash flows. In addition to the matters described herein, we are, or may become, involved
in routine litigation in the ordinary course of business which we do not believe to be material to our
business, financial condition, results of operations or cash flows.
Consumer Class Action—Grand Theft Auto: San Andreas. In July 2005, we received four complaints for
purported class actions, which were consolidated in the U.S. District Court for the Southern District of
New York. The plaintiffs, alleged purchasers of our Grand Theft Auto: San Andreas game, assert that we
engaged in consumer deception and false advertising, breached an implied warranty of merchantability and
were unjustly enriched as a result of our alleged failure to disclose that Grand Theft Auto: San Andreas
contained ‘‘hidden’’ content. The complaints seek unspecified damages, declarations of various violations
of law and litigation costs. Although the Court previously granted preliminary approval of a settlement of
the foregoing consumer class action lawsuits, in July 2008 the Court refused to certify the proposed
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