EXHIBIT 10.02
ISO/NQSO-
FORM OF
INTERPLAY ENTERTAINMENT CORP.
STOCK OPTION AGREEMENT
TYPE OF OPTION (CHECK ONE): /_/ INCENTIVE /_/ NONQUALIFIED
This Stock Option Agreement (the "Agreement") is entered into as of
__________, by and between Interplay Entertainment Corp., a Delaware corporation
(the "Company") and __________ (the "Optionee") pursuant to the Company's Third
Amended and Restated 1997 Stock Incentive Plan (the "Plan").
1. GRANT OF OPTION. The Company hereby grants to Optionee an
option (the "Option") to purchase all or any portion of a total of
____________shares of the Common Stock of the Company (the "Shares") at a
purchase price of $________Dollars per share (the "Exercise Price"), subject to
the terms and conditions set forth herein and the provisions of the Plan. If the
box marked "Incentive" above is checked, then this Option is intended to qualify
as an "incentive stock option" as defined in Section 422 of the Internal Revenue
Code of l986, as amended (the "Code"). If this Option fails in whole or in part
to qualify as an incentive stock option, or if the box marked "Nonqualified" is
checked, then this Option shall to that extent constitute a nonqualified stock
option.
2. VESTING OF OPTION. Subject to the terms of Section 8 below,
the right to exercise this Option shall vest in installments, in the amounts and
on the dates set forth below, provided that Optionee remains in the "Continuous
Service" (as defined in Section 3 below) of the Company as of the date of
vesting:
[vesting schedule insert]
The "Vesting Start Date" shall be the date of this agreement. No Shares
shall vest after the date of termination of Optionee's Continuous Service, but
this Option shall continue to be exercisable in accordance with Section 3 hereof
with respect to that number of shares that have vested as of the date of
termination of Optionee's Continuous Service.
3. TERM OF OPTION. Optionee's right to exercise this Option shall
terminate upon the first to occur of the following:
(a) the expiration of ten (10) years from the date of
this Agreement;
(b) the expiration of three (3) months from the date of
termination of Optionee's Continuous Service if such termination occurs for any
reason other than Disability (as defined in Section 2.9 of the Plan), death or
Cause (as defined in Section 2.4 of the Plan);
provided, however, that if Optionee dies during such three-month period the
provisions of Section 3(e) below shall apply;
(c) as of the commencement of business on the date of
termination of Optionee's Continuous Service if such termination occurs for
Cause (as defined in Section 2.4 of the Plan);
(d) the expiration of one (1) year from the date of
termination of Optionee's Continuous Service if such termination is due to the
Disability (as defined in Section 2.9 of the Plan) of the Optionee;
(e) the expiration of one (1) year from the date of
termination of Optionee's Continuous Service if such termination is due to
Optionee's death or if death occurs during the three-month period following
termination of Optionee's Continuous Service pursuant to Section 3(b) above, as
the case may be; or
(f) upon the consummation of a "Change in Control" (as
defined in Section 2.5 of the Plan), unless otherwise provided pursuant to
Section 8 below.
As used herein, the term "Continuous Service" means (i) employment by
either the Company or any parent or subsidiary corporation of the Company, or by
a corporation or a parent or subsidiary of a corporation issuing or assuming a
stock option in a transaction to which Section 424(a) of the Code applies, which
is uninterrupted except for vacations, illness (except for Disability, as
defined in Section 2.9 of the Plan), or leaves of absence which are approved in
writing by the Company or any of such other employer corporations, if
applicable, (ii) service as a member of the Board of Directors of the Company
until Optionee resigns, is removed from office, or Optionee's term of office
expires and he or she is not reelected, or (iii) so long as Optionee is engaged
as a consultant or service provider to the Company or other corporation referred
to in clause (i) above.
4. EXERCISE OF OPTION. On or after the vesting of any portion of
this Option in accordance with Sections 2 or 8 hereof, as applicable, and until
termination of the right to exercise this Option in accordance with Section 3
above, the portion of this Option which has vested may be exercised in whole or
in part by the Optionee (or Permitted Transferee, if applicable, or, after his
or her death, by the person designated in Section 5 below) upon delivery of the
following to the Company at its principal executive offices:
(a) a written notice of exercise which identifies this
Agreement and states the number of Shares then being purchased (but no
fractional Shares may be purchased);
(b) a check or cash in the amount of the Exercise Price
(or payment of the Exercise Price in such other form of lawful consideration as
the Administrator may approve from time to time under the provisions of Section
5.3 of the Plan);
(c) a check or cash in the amount reasonably requested by
the Company to satisfy the Company's withholding obligations under federal,
state or other applicable tax laws
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with respect to the taxable income, if any, recognized by the Optionee in
connection with the exercise of this Option (unless the Company and Optionee
shall have made other arrangements for deductions or withholding from Optionee's
wages, bonus or other compensation payable to Optionee, or by the withholding of
Shares issuable upon exercise of this Option or the delivery of Shares owned by
the Optionee in accordance with Section 10.1 of the Plan, provided such
arrangements satisfy the requirements of applicable tax laws); and
(d) a letter, if requested by the Company, in such form
and substance as the Company may require, setting forth the investment intent of
the Optionee, or person designated in Section 5 below, as the case may be.
5. DEATH OF OPTIONEE; NO ASSIGNMENT. The rights of the Optionee
under this Agreement may not be assigned or transferred except by will or by the
laws of descent and distribution, and may be exercised during the lifetime of
the Optionee only by such Optionee. Any attempt to sell, pledge, assign,
hypothecate, transfer or dispose of this Option in contravention of this
Agreement or the Plan shall be void and shall have no effect. If the Optionee's
Continuous Service terminates as a result of his or her death, and provided
Optionee's rights hereunder shall have vested pursuant to Section 2 or Section 8
hereof, as applicable, Optionee's legal representative, his or her legatee, or
the person who acquired the right to exercise this Option by reason of the death
of the Optionee (individually, a "Successor") shall succeed to the Optionee's
rights and obligations under this Agreement. After the death of the Optionee,
only a Successor may exercise this Option. Notwithstanding any portion of the
foregoing to the contrary, the Administrator, in its sole discretion, may permit
the transfer of a Nonqualified Option as follows: (i) by gift to a member of the
Participant's immediate family or (ii) by transfer by instrument to a trust
providing that the Option is to be passed to beneficiaries upon death of the
trustor (either or both (i) or (ii) referred to as a "Permitted Transferee").
For purposes of this Section, "immediate family" shall mean the Optionee's
spouse (including a former spouse subject to terms of a domestic relations
order); child, stepchild, grandchild, child-in-law; parent, stepparent,
grandparent, parent-in-law; sibling and sibling-in-law, and shall include
adoptive relationships. A Permitted Transferee may not further assign, sell or
transfer the transferred Option, in whole or in part, other than by will or by
operation of the laws of descent and distribution. In addition a Permitted
Transferee shall agree in writing to be bound by the provisions of this
Agreement and the Plan.
6. REPRESENTATIONS AND WARRANTIES OF OPTIONEE.
(a) Optionee hereby represents and warrants that this
Option and, when applicable, the Shares being acquired by Optionee are for
Optionee's personal account, not as a nominee or an agent, and are for
investment purposes only, and not with a present intention of selling or
otherwise disposing of the Option or the Shares or with a view to or for resale
in connection with, any distribution or public offering thereof within the
meaning of the Securities Act of 1933, as amended (the "Securities Act").
(b) Optionee agrees that the Company may issue Shares
upon the exercise of the Option without registering such Shares under the
Securities Act, on the basis of certain exemptions from such registration
requirement. Accordingly, Optionee agrees that his or her
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exercise of the Option may be expressly conditioned upon his or her delivery to
the Company of an investment certificate including such representations and
undertakings as the Company may reasonably require in order to assure the
availability of such exemptions.
(c) Optionee further agrees that the certificates
evidencing the Shares may bear a legend indicating such non-registration under
the Securities Act and the resulting restrictions on transfer. Optionee
acknowledges that, because Shares received upon exercise of this Option may be
unregistered, Optionee may be required to hold the Shares indefinitely unless
they are subsequently registered for resale under the Securities Act or an
exemption from such registration is available.
(d) Optionee further represents and warrants that
Optionee is either an accredited investor within the meaning of Regulation D
under the Securities Act, or by reason of Optionee's business or financial
experience, or the business or financial experience of its professional advisor,
Optionee has the capacity to protect Optionee's own interests in connection with
this transaction.
(e) Optionee further represents and warrants that
Optionee has been furnished with such materials and has been given access to
such information relating to the Company as Optionee or Optionee's qualified
representative has requested and Optionee has been afforded the opportunity to
ask questions regarding the Company, the Option and the Shares, all as Optionee
has found necessary to make an informed investment decision.
(f) Optionee acknowledges receipt of a copy of the Plan
and understands that all rights and obligations connected with this Option are
set forth in this Agreement and in the Plan.
7. ADJUSTMENTS UPON CHANGES IN CAPITAL STRUCTURE. In the event
that the outstanding shares of Common Stock of the Company are hereafter
increased or decreased or changed into or exchanged for a different number or
kind of shares or other securities of the Company by reason of a
recapitalization, stock split, reverse stock split, combination of shares,
reclassification, stock dividend or other change in the capital structure of the
Company, then appropriate adjustment shall be made by the Administrator to the
number of Shares subject to the unexercised portion of this Option and to the
Exercise Price per share, in order to preserve, as nearly as practical, but not
to increase, the benefits of the Optionee under this Option, in accordance with
the provisions of Section 4.2 of the Plan.
8. CHANGE IN CONTROL. In the event of a Change in Control of the
Company (as defined in Section 2.5 of the Plan), the Plan and the Option shall
terminate, unless the Administrator, to the extent permitted by applicable law,
but otherwise in its sole discretion provides for: (i) the continuation of the
Option (if the Company is the surviving entity); (ii) the assumption of the
Option and the Plan by the surviving entity or its parent; (iii) the
substitution by the surviving entity or its parent of the Option with an option
containing substantially the same terms; (iv) the cancellation of the Option
without payment of any consideration, provided that if such Option would be
canceled in accordance with the foregoing, the Administrator shall cause written
notice of the proposed transaction to be given to the Optionee not less than 15
days
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prior to the anticipated effective date of the proposed transaction and on or
before the effective date of the proposed transaction, Optionee shall have the
right to exercise the vested portion of the Option; or (v) the acceleration of
vesting or the adjustment of other terms of the Option, provided that if the
Option would be accelerated or otherwise adjusted in accordance with the
foregoing, the Administrator shall cause written notice of the proposed
transaction to be given to the Optionee not less than 15 days prior to the
anticipated effective date of the proposed transaction and on or before the
effective date of the proposed transaction, Optionee shall have the right to
exercise the Option as accelerated or otherwise adjusted.
9. NO EMPLOYMENT CONTRACT CREATED. Neither the granting of this
Option nor the exercise hereof shall be construed as granting to the Optionee
any right with respect to continuance of employment by the Company or any of its
subsidiaries. The right of the Company or any of its subsidiaries to terminate
at will the Optionee's employment at any time (whether by dismissal, discharge
or otherwise), with or without cause, is specifically reserved.
10. RIGHTS AS STOCKHOLDER. The Optionee (or transferee of this
option by will or by the laws of descent and distribution or any Permitted
Transferee) shall have no rights as a stockholder with respect to any Shares
covered by this Option until the date of the issuance of a stock certificate or
certificates to him or her for such Shares, notwithstanding the exercise of this
Option.
11. "MARKET STAND-OFF" AGREEMENT. Optionee agrees that, if
requested by the Company or the managing underwriter of any proposed public
offering of the Company's securities, Optionee (or a Successor or Permitted
Transferee as applicable) will not sell or otherwise transfer or dispose of any
Shares held by Optionee (or a Successor or Permitted Transferee as applicable)
without the prior written consent of the Company or such underwriter, as the
case may be, during such period of time, not to exceed 180 days following the
effective date of the registration statement filed by the Company with respect
to such offering, as the Company or the underwriter may specify.
12. INTERPRETATION. This Option is granted pursuant to the terms
of the Plan, and shall in all respects be interpreted in accordance therewith.
The Administrator shall interpret and construe this Option and the Plan, and any
action, decision, interpretation or determination made in good faith by the
Administrator shall be final and binding on the Company and the Optionee. As
used in this Agreement, the term "Administrator" shall refer to the committee of
the Board of Directors of the Company appointed to administer the Plan, and if
no such committee has been appointed, the term Administrator shall mean the
Board of Directors.
13. NOTICES. Any notice, demand or request required or permitted
to be given under this Agreement shall be in writing and shall be deemed given
when delivered personally or three (3) days after being deposited in the United
States mail, as certified or registered mail, with postage prepaid, and
addressed, if to the Company, at its principal place of business, Attention: the
Chief Financial Officer, and if to the Optionee, at his or her most recent
address as shown in the employment or stock records of the Company.
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14. ANNUAL AND OTHER PERIODIC REPORTS. During the term of this
Agreement, the Company will furnish or make available to the Optionee copies of
all annual and other periodic financial and informational reports that the
Company distributes generally to its stockholders.
15. GOVERNING LAW. The validity, construction, interpretation, and
effect of this Option shall be governed by and determined in accordance with the
laws of the State of California.
16. SEVERABILITY. Should any provision or portion of this
Agreement be held to be unenforceable or invalid for any reason, the remaining
provisions and portions of this Agreement shall be unaffected by such holding.
17. COUNTERPARTS. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original and all of which
together shall be deemed one instrument.
[SIGNATURE PAGE IMMEDIATELY FOLLOWS]
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IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date first above written.
INTERPLAY ENTERTAINMENT CORP. "OPTIONEE"
By:
-------------------------------- -----------------------------------
[name] Name
Chief Executive Officer