EXHIBIT 10.7
ISO-____
INCENTIVE COMMON STOCK OPTION AGREEMENT
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THIS INCENTIVE COMMON STOCK OPTION AGREEMENT (the "Agreement"), made this
_____ day of _______________, between INTERPLAY PRODUCTIONS, a California
corporation (hereinafter referred to as the "Company"), and
___________________________, an employee of the Company, its parent or one or
more of its subsidiaries (the "Optionee"), is made with reference to the
following facts:
R E C I T A L S
- - - - - - - -
A. Optionee is employed with the Company and is a valued and key employee
of the Company.
B. The Company desires, by affording the Optionee an opportunity to
purchase shares of Common Stock of the Company (hereinafter called "Shares"), as
hereinafter provided, to carry out the purpose of the "Incentive Stock Option,
Nonqualified Stock Option and Restricted Stock Purchase Plan - 1991" (the
"Plan").
NOW, THEREFORE, in consideration of the mutual covenants hereinafter set
forth, and for good and valuable consideration, the parties hereto have agreed,
and do hereby agree, as follows:
1. Grant of Option.
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The Company hereby irrevocably grants to the Optionee the right and option
(hereinafter called the "Option") to purchase all or any part of an aggregate of
______ Shares (such number being subject to adjustment as provided herein) on
the terms and conditions herein set forth. The Option granted herein is an
"incentive option" within the meaning of the Plan and Section 422A of the
Internal Revenue Code of 1986, as amended.
2. Purchase Price.
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The purchase price of the Shares covered by the Option shall be $_____ per
share, representing one hundred percent (100%) of the fair market value of the
shares as determined pursuant to Section 5 of the Plan as of the date hereof.
3. Term of Option.
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The term of the Option shall commence on the date hereof and all rights to
purchase shares hereunder shall cease at 11:59 P.M. on the day before the
________ (___th) anniversary of the date hereof, subject to earlier termination
as provided herein. Except as may otherwise be provided in this Agreement,
options granted hereunder may be cumulative and exercised as follows:
[To be determined on an option by option basis.]
During the Period: Optionee May Purchase:
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On or before __________, 19_ __% of the Shares
After _______, 19__, but
before __________, 19_ __% of the Shares
After ______, 19__, but
before , 19_ __% of the Shares
After ______, 19__, but
before , 19_ __% of the Shares
After ______, 19__, but
before __________, 19_ __% of the Shares
The purchase price of the Shares as to which the Option shall be exercised shall
be paid in full at the time of exercise (i) in cash or by certified check or by
bank draft; (ii) subject to any legal restrictions on the acquisition or
purchase of such shares by the Company and with the prior written consent and
approval of the Company, by the delivery of shares of Common Stock of the
Company which shall be deemed to have a value to the Company equal to the
aggregate fair market value of such shares determined in accordance with Section
5 of the Plan; or with such consent and approval, any combination of (i) or (ii)
above. Except as provided in Paragraph 5 hereof, the Option may not be exercised
at any time unless the Optionee shall have been continuously, from the date
hereof to the date of the exercise of the Option, an employee of the Company,
its parent, if any, or of one or more of its subsidiaries or a corporation or a
parent or subsidiary of a corporation issuing or assuming an option to which
Section 425(a) of the Internal Revenue Code of 1986, as amended, applies
(collectively, the "Affiliates"). The holder of the Option shall not have any of
the rights of a shareholder with respect to the shares covered by the Option as
to any shares of Common Stock not actually issued and delivered to Optionee.
4. Nontransferability.
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The Option shall not be transferable otherwise than by will or the laws of
descent and distribution, and the Option may be exercised, during the lifetime
of the Optionee, only by Optionee. More particularly (but without limiting the
generality of the foregoing), the Option may not be assigned, transferred
(except as provided in Paragraph 6 hereof), pledged or hypothecated in any way,
shall not be assignable by operation of law and shall not be subject to
execution, attachment or similar process. Any attempted assignment, transfer,
pledge, hypothecation or other disposition of the Option contrary to the
provisions hereof, and the levy of any execution, attachment or similar process
upon the Option, shall be null and void and without effect.
5. Termination of Employment.
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In the event that the Optionee shall cease to be employed by the Company,
or a parent or subsidiary of the Company, or a corporation or a parent or
subsidiary of a corporation issuing or assuming an option to which Section
425(a) of the Internal Revenue Code of 1986, as amended, applies, for any reason
whatsoever, this Option shall terminate immediately; provided, however, that
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the Optionee shall have the right to exercise this Option at any time within
three (3) months after such cessation, but in no event later than the date of
expiration of the option period, if such cessation is for any reason other than
death or disability of the Optionee, or at any time within one (1) year after
such cessation if such cessation is due to the Optionee's death or disability
(within the meaning of Section 22(e)(3) of the Internal Revenue Code of l986, as
amended but in no event later than the date of expiration of the option period);
but the number of Shares purchasable in any such event upon such exercise of the
Option shall not in any case exceed the number which would have been purchasable
if the Optionee had exercised the Option on the date of such cessation.
6. Other Expirations.
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In addition to any other event causing an expiration or termination of this
Option, this Option shall expire and all rights to purchase Shares shall cease
(to the extent not theretofore terminated or expired as herein provided) upon
the effective date of the dissolution or liquidation of the Company or upon a
merger, consolidation, acquisition of property or shares, separation or
reorganization of the Company with one or more entities, corporate or otherwise,
as a result of which the Company is not the surviving entity, or as a result of
which the Company is the surviving entity, but the ownership of more than 50% of
the outstanding shares of capital stock of the Company following the transaction
changes as a result of such transaction, or of a sale of substantially all of
the property or shares of the Company to another entity, corporate or otherwise;
provided, however, that the Company may, in its discretion, and immediately
prior to any such transaction, cause a new option to be substituted for this
Option or cause this Option to be assumed by an employer entity or a parent or
subsidiary of such entity; and such new option shall apply to all shares issued
in addition to or substitution, replacement or modification of the shares
theretofore covered by such option; provided that,
(1) the excess of the aggregate fair market value of the shares
subject to the option immediately after the substitution or assumption over
the aggregate option price of such shares shall not be more than the excess
of the aggregate fair market value of all shares subject to the option
immediately before such substitution or assumption over the aggregate
option price of such shares; and
(2) the new option or the assumption of the existing option shall not
give the Optionee additional benefits which he did not have under the old
option or prior to such assumption; and
(3) an appropriate adjustment of the original option price shall be
made among original shares subject to the option and any additional shares
or shares issued in substitution, replacement or modification thereof.
If no provision is made for the continuance of the option plan and the
assumption of this Option, or the substitution for this Option of new options as
hereinabove provided, then the Company shall cause written notice to be given to
the Optionee of the proposed transaction not less than thirty (30) days prior to
the anticipated effective date thereof, and this Option, if not already
exercisable, shall thereupon become immediately exercisable and the Optionee
shall have the right to exercise this Option effectively concurrently with and
only on the happening of the consummation of the proposed transaction.
Notwithstanding anything to the contrary, the failure of the Company to give
thirty (30) days' written notice of the proposed transaction to the Optionee
shall not affect the validity of nor shall it necessitate a delay in
consummation of the proposed transaction.
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7. Adjustments.
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The number and class of shares subject to this Option, and the purchase
price per share (but not the total purchase price), and the minimum number of
shares as to which this Option may be exercised at any one time, shall all be
proportionately adjusted in the event of any change or increase or decrease in
the number of issued shares of Common Stock in the Company, without receipt of
consideration by the Company, which result from a split-up or consolidation of
shares, payment of a share dividend (in excess of two percent (2%)), a
recapitalization, combination of shares or other like capital adjustment, so
that, upon exercise of this Option, the Optionee shall receive the number and
class of shares Optionee would have received had Optionee been the holder of the
number of shares of Common Stock in the Company, for which this Option is being
exercised, on the date of such change or increase or decrease in the number of
issued shares of Common Stock in the Company. Subject to any required action by
its shareholders, if the Company shall be a surviving entity in any
reorganization, merger or consolidation (other than in a merger, consolidation
or reorganization which is subject to Paragraph 6 above), this Option shall be
proportionately adjusted so as to apply to the securities to which the holder of
the number of shares of Common Stock in the Company subject to this Option would
have been entitled. Adjustments under this paragraph shall be made by the Board
of Directors whose determination with respect thereto shall be final and
conclusive. No fractional share shall be issued under this Option or upon any
such adjustment. No adjustments shall be made for issuances of any securities if
any consideration is received by the Company.
8. Repurchase of Shares.
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The Optionee agrees to sign the form of Buy-Sell Agreement attached
hereto. Optionee shall have no right to any shares subject to this Option unless
such Buy-Sell Agreement is signed and agreed to by the Optionee.
9. Notice.
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All notices, requests, consents and other communications hereunder shall be
in writing and shall be deemed to have been duly given if delivered or mailed,
by United States certified or registered mail, prepaid, to the parties or their
assignees at the addresses set forth opposite their signatures below (or such
other address as shall be given in writing by either party to the other).
10. Method of Exercising Option.
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Subject to the terms and conditions of this Option Agreement, this
Option may be exercised by written notice to the Company, at its principal
office in the State of California, which presently is located at ▇▇▇▇ ▇. ▇▇▇▇▇,
▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇. Such notice shall state the election to
exercise the Option and the number of shares in respect of which it is being
exercised and shall be signed by the person or persons so exercising the Option.
Such notice shall be accompanied by payment in cash, certified check, bank draft
or (subject to the limitations and with the prior approval required under
Paragraph 3 above) certificates for shares of the Common Stock of the Company
equal to at the time of exercise, in the aggregate, the full purchase price of
such shares, and the Company shall deliver a certificate or certificates
representing the shares subject to such exercise as soon as practicable after
the notice shall be received. The certificate or certificates for the shares as
to which the Option shall have been so exercised shall be registered in the name
of the person or persons so exercising the Option and shall be delivered as
provided above to or upon the written order of the person or persons exercising
the Option. In the event the Option shall be exercised by any person or
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persons other than the Optionee in accordance with the terms hereof, such notice
shall be accompanied by appropriate proof of the right of such person or persons
to exercise the Option. All shares that shall be purchased upon the exercise of
the Option as provided herein shall be fully paid and nonassessable. The holder
of this Option shall not be entitled to the privileges of share ownership as to
any shares of Common Stock not actually issued and delivered to Optionee. The
Optionee hereby certifies that all shares of Common Stock in the Company
purchased or to be purchased by Optionee pursuant to the exercise of this Option
are being or are to be acquired by Optionee for investment and not with a view
to the distribution thereof. In addition, as a condition to the effectiveness of
any exercise of this Option and the Company's obligation to issue a stock
certificate pursuant hereto, the person exercising the Option shall execute and
deliver to the Company with the notice provided for above an investment letter
in the form attached hereto as Exhibit A.
11. No Agreement to Employ.
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Nothing in this Agreement shall be construed to constitute or be evidence
of any agreement or understanding, express or implied, on the part of the
Company to employ or retain Optionee for any specific period of time.
12. General.
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The Company shall at all times during the term of the Option reserve and
keep available such number of shares of Common Stock as will be sufficient to
satisfy the requirements of this Option Agreement, shall pay all original issue
and transfer taxes with respect to the issue and transfer of shares pursuant
hereto and all other fees and expenses necessarily incurred by the Company in
connection therewith, and will from time to time use its best efforts to comply
with all laws and regulations, which, in the opinion of counsel for the Company,
shall be applicable thereto.
This Agreement contains the entire agreement of the parties hereto, and
supersedes all prior agreements written or oral, with respect to the subject
matter hereof. This Agreement may only be amended or altered by a written
instrument signed by the parties hereto.
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IN WITNESS WHEREOF, the Company has caused this Option Agreement to be duly
executed by its officers thereunto duly authorized, and the Optionee has
hereunto set his hand, all as of the day and year first above written.
INTERPLAY PRODUCTIONS
▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ By: ________________________________
____________________________________________
"Company"
___________________
___________________ ________________________________
"Optionee"
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EXHIBIT A
TO INCENTIVE COMMON STOCK OPTION AGREEMENT
Interplay Productions
▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Gentlemen:
1. (a) In connection with the acquisition of _________ shares of the
common stock of INTERPLAY PRODUCTIONS, a California corporation (the "Company"),
by the undersigned, the undersigned represents that the shares which the
undersigned is acquiring are being acquired for investment and not with a view
to the sale or distribution of any part thereof, and that the undersigned has no
present intent of selling or otherwise distributing the same.
You have advised the undersigned that the shares have not been
registered under the Securities Act of 1933, as amended (the "Act"), as the
offering of the shares is to be effected pursuant to an exemption from the
registration provisions of such Act, and, in this connection, you are relying in
part on the representations of the undersigned set forth herein.
Without in any way limiting the representations set forth above, the
undersigned further agrees in no event to make any dispositions of all or any
part of said shares unless and until (i) the undersigned shall have notified you
of the proposed disposition; (ii) the undersigned shall have furnished you with
an opinion of counsel to the effect that such disposition will not require
registration of such shares under the Act, and (iii) such opinion of counsel
shall have been concurred in by the Company's counsel and the Company shall have
advised you of such concurrence.
(b) The undersigned acknowledges receipt of all information as the
undersigned deems necessary and appropriate to enable the undersigned to
evaluate the financial risk inherent in acquiring said shares and acknowledges
receipt of satisfactory and complete information covering the business and
financial condition of the Company, including the opportunity to obtain
information regarding the Company's financial status, in response to all
inquiries in respect thereof.
2. (a) The undersigned represents that he is an investor of sufficient
sophistication to evaluate the merits and risks involved in acquiring the shares
and to make an informed investment decision based on the undersigned's personal
knowledge of the business and affairs of the Company, based upon such additional
information as he may have requested and received from the Company, and the
independent inquiries and investigations undertaken by the undersigned. The
undersigned certifies that his financial situation is such that he is able to
bear the economic risk of the investment in the securities.
(b) The undersigned understands and agrees that the certificate
evidencing said shares will bear the following legends, in addition to any other
legends called for under the Plan:
THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933; THEY HAVE BEEN ACQUIRED
BY THE HOLDER FOR INVESTMENT AND MAY NOT BE SOLD, TRANSFERRED OR
OTHERWISE DISPOSED OF, EXCEPT AS MAY BE AUTHORIZED UNDER THE
SECURITIES ACT OF 1933 AND APPLICABLE STATE SECURITIES LAWS, AND THE
RULES AND REGULATIONS PROMULGATED THEREUNDER.
3. (a) The undersigned recognizes that said shares are unregistered and
must by held indefinitely unless they are subsequently registered under the Act
or an exemption from such registration is available, and further recognizes that
you are under no obligation to register said shares or to comply with any
exemption from such registration.
(b) The undersigned understands that Rule 144 under the Act does not
presently apply and may never apply to the Company's securities because the
Company does not now, and may never, file reports required by the Securities
Exchange Act of 1934, as amended ("Exchange Act"), and has not made, and may
never make, publicly available the information required by Rule 15c2-11 of the
Exchange Act. Furthermore, if Rule 144 were available, the undersigned
understands that sales of securities made in reliance thereof could be made only
in certain limited amounts, after certain holding periods and only when there
was available specified current public information, all in accordance with the
terms and conditions of said Rule. The undersigned understands that, in the case
of securities to which said Rule is not applicable, compliance with some other
exemption under the Act will be required.
DATED: _________________, 19__ _____________________________________
