-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, LUlgiY9ztu073a2lj+gss264FlZow7UQsYPft4qJRE3VOlezOO5cMO9+3W++N5ml RtCGvS7SpeX9S63vHAI2vw== 0001017062-98-001672.txt : 19980805 0001017062-98-001672.hdr.sgml : 19980805 ACCESSION NUMBER: 0001017062-98-001672 CONFORMED SUBMISSION TYPE: S-8 PUBLIC DOCUMENT COUNT: 4 FILED AS OF DATE: 19980804 EFFECTIVENESS DATE: 19980804 SROS: NASD FILER: COMPANY DATA: COMPANY CONFORMED NAME: INTERPLAY ENTERTAINMENT CORP CENTRAL INDEX KEY: 0001057232 STANDARD INDUSTRIAL CLASSIFICATION: SERVICES-PREPACKAGED SOFTWARE [7372] IRS NUMBER: 330102707 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: S-8 SEC ACT: SEC FILE NUMBER: 333-60583 FILM NUMBER: 98676843 BUSINESS ADDRESS: STREET 1: 16815 VON KARMAN AVE CITY: IRVINE STATE: CA ZIP: 92606 BUSINESS PHONE: 7145535603 S-8 1 FORM S-8 RE INTERPLAY ENTERTAINMENT As Filed With the Securities and Exchange Commission on August 4, 1998 Registration No. 333-_____ - -------------------------------------------------------------------------------- SECURITIES AND EXCHANGE COMMISSION Washington. D.C. 20549 -------------------- FORM S-8 REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 -------------------- INTERPLAY ENTERTAINMENT CORP. (Exact name of registrant as specified in its charter) Delaware 33-0102707 (State or other jurisdiction of (I.R.S. Employer Identification No.) incorporation or organization) 16815 Von Karman Avenue, Irvine, California 92606 (Address of Principal Executive Offices) (Zip Code) ------------------------- EMPLOYEE STOCK PURCHASE PLAN AMENDED AND RESTATED 1997 STOCK INCENTIVE PLAN INCENTIVE STOCK OPTION AND NONQUALIFIED STOCK OPTION PLAN - 1994 INCENTIVE STOCK OPTION, NONQUALIFIED STOCK OPTION AND RESTRICTED STOCK PURCHASE PLAN - 1991 LEHRBERG EMPLOYMENT AGREEMENT (Full titles of the plans) ------------------------ Christopher J. Kilpatrick, President Interplay Entertainment Corp. 16815 Von Karman Avenue Irvine, California 92606 (Name and address of agent for service) (949) 553-6655 (Telephone number, including area code, of agent for service) Copy to: Nick E. Yocca, Esq. K.C. Schaaf, Esq. Stradling Yocca Carlson & Rauth, a Professional Corporation 660 Newport Center Drive, Suite 1600, Newport Beach, California 92660 (949) 725-4000 Page 1 of 9 Pages Exhibit Index on Page 8 CALCULATION OF REGISTRATION FEE
======================================================================================================= Proposed Maximum Proposed Maximum Title Of Securities Amount To Be Offering Price Aggregate Offering Amount of To Be Registered Registered/(1)/ Per Share Price Registration Fee ======================================================================================================= Common Stock, $0.001 par value 3,871,247 shares (2) $22,588,809 (2) $6,664 =======================================================================================================
(1) Includes additional shares of Common Stock that may become issuable pursuant to the anti-dilution adjustment provisions of the Employee Stock Purchase Plan (the "Purchase Plan"), the Amended and Restated 1997 Stock Incentive Plan (the "1997 Plan"), the Incentive Stock Option and Nonqualified Stock Option Plan-1994 (the "1994 Plan"), the Incentive Stock Option, Nonqualified Stock Option and Restricted Stock Purchase Plan-1991 (the "1991 Plan"), the Employment Agreement, dated December 1, 1991, as amended (the "1991 Employment Agreement"), and the Employment Agreement, dated March 28, 1994, by and between the Registrant and Richard S.F. Lehrberg, as amended (the "1994 Employment Agreement," and collectively with the 1991 Employment Agreement, the "Lehrberg Employment Agreement"). (2) In accordance with Rule 457(h), the aggregate offering price of 1,962,972 shares of Common Stock registered hereby which would be issued upon exercise of options granted under the 1991 Plan, the 1994 Plan, the 1997 Plan and the Lehrberg Employment Agreement is based upon the per share exercise price of such options, the weighted average of which is approximately $4.75 per share. With respect to the remaining 1,708,275 shares of Common Stock registered hereby which would be issued upon exercise of the remaining options and rights to purchase which Registrant is authorized to issue under its 1991 Plan, the 1994 Plan and the 1997 Plan, the aggregate offering price is estimated solely for purposes of calculating the registration fee, in accordance with Rule 457(h) on the basis of the price of securities of the same class, as determined in accordance with Rule 457(c), using the average of the high and low price reported by the Nasdaq National Market for the Common Stock on July 29, 1998, which was $7.0625 per share. For the purposes of the 200,000 shares of Common Stock to be issued under the Purchase Plan, the aggregate offering price was estimated using a per share price of $6.00, or 85% of $7.0625, which price per share is the estimated basis at which the shares will be issued pursuant to the Purchase Plan. PART II INFORMATION REQUIRED IN THE REGISTRATION STATEMENT Item 3. Incorporation of Documents by Reference. - ------------------------------------------------ The following documents are incorporated herein by reference: (a) The Company's Registration Statement on Form S-1 (Registration No. 333-48473) as filed with the Securities and Exchange Commission (the "Commission") on March 23, 1998, as amended; (b) The description of the Registrant's Common Stock that is contained in the Registrant's Registration Statement on Form 8-A filed under Section 12 of the Exchange Act, including any amendment or report filed for the purpose of updating that description. All documents subsequently filed by the Registrant pursuant to Sections 13(a), 13(c), 14 and 15(d) of the Exchange Act, prior to the filing of a post- effective amendment which indicates that all securities offered have been sold or which deregisters all of such securities then remaining unsold, shall be deemed to be incorporated herein by reference and to be a part hereof from the date of filing of such documents, except as to any portion of any future annual or quarterly report to stockholders or document that is not deemed filed under such provisions. For the purposes of this registration statement, any statement in a document incorporated by reference shall be deemed to be modified or superseded to the extent that a statement contained in this registration statement modifies or supersedes a statement in such document. Any statement so modified or superseded shall not be deemed, except as so modified or superseded, to constitute a part of this registration statement. Item 6. Indemnification of Directors and Officers. - -------------------------------------------------- The Company's Bylaws provide that the Company will indemnify its directors and officers and may indemnify its employees and other agents to the fullest extent permitted by the General Corporation Law of the State of Delaware (the "DGCL"). The Company believes that indemnification under its Bylaws covers at least negligence and gross negligence by indemnified parties, and permits the Company to advance litigation expenses in the case of stockholder derivative actions or other actions, against an undertaking by the indemnified party to repay such advances if it is ultimately determined that the indemnified party is not entitled to indemnification. The Company maintains liability insurance for its officers and directors. In addition, the Company's Certificate of Incorporation provides that, pursuant to the DGCL, its directors shall not be liable for monetary damages for breach of the directors' fiduciary duty to the Company and its stockholders. This provision in the Certificate of Incorporation does not eliminate the directors' fiduciary duty, and in appropriate circumstances equitable remedies such as injunctive or other forms of non-monetary relief will remain available under the DGCL. In addition, each director will continue to be subject to liability for breach of the director's duty of loyalty to the Company for acts or omissions not in good faith or involving intentional misconduct, for knowing violations of law, for actions leading to improper personal benefit to the director, and for payment of dividends or approval of stock repurchases or redemptions that are unlawful under the DGCL. The provision also does not affect a director's responsibilities under any other law, such as the federal securities laws or state or federal environmental laws. The Company has entered into separate indemnification agreements with its directors and officers. These agreements require the Company, among other things, to indemnify them against liabilities that may arise by reason of their status or service as directors or officers (other than liabilities arising from actions not taken in good faith or in a manner the indemnitee believed to be opposed to the best interests of the Company), and to advance their expenses incurred as a result of any proceeding against them as to which they could be indemnified. Insofar as indemnification for liabilities arising under the Securities Act of 1933, as amended (the "1933 Act"), may be permitted to directors, officers or persons controlling the Company pursuant to the foregoing provisions, the Company has been informed that in the opinion of the Commission, such indemnification is against public policy as expressed in the 1933 Act and is therefore unenforceable. Item 8. Exhibits. - ----------------- The following exhibits are filed as part of this Registration Statement: Number Description ------ ----------- 4.1 Amended and Restated 1997 Stock Incentive Plan (the "1997 Plan") (incorporated by reference to Exhibit 10.1 to the Company's Registration Statement on Form S-1, Registration No. 333-48473). 4.2 Form of Stock Option Agreement pertaining to the 1997 Plan (incorporated by reference to Exhibit 10.2 to the Company's Registration Statement on Form S-1, Registration No. 333-48473). 4.3 Form of Restricted Stock Purchase Agreement pertaining to the 1997 Plan (incorporated by reference to Exhibit 10.3 to the Company's Registration Statement on Form S-1, Registration No. 333-48473). 4.4 Incentive Stock Option and Nonqualified Stock Option Plan-1994 (the "1994 Plan") (incorporated by reference to Exhibit 10.4 to the Company's Registration Statement on Form S-1, Registration No. 333-48473). 4.5 Form of Nonqualified Stock Option Agreement pertaining to the 1994 Plan (incorporated by reference to Exhibit 10.5 to the Company's Registration Statement on Form S-1, Registration No. 333-48473). 4.6 Incentive Stock Option, Nonqualified Stock Option and Restricted Stock Purchase Plan-1991 (the "1991 Plan") as amended (incorporated by reference to Exhibit 10.6 to the Company's Registration Statement on Form S-1, Registration No. 333-48473). 4.7 Form of Incentive Stock Option Agreement pertaining to the 1991 Plan (incorporated by reference to Exhibit 10.7 to the Company's Registration Statement on Form S-1, Registration No. 333-48473). 4.8 Form of Nonqualified Stock Option Agreement pertaining to the 1991 Plan (incorporated by reference to Exhibit 10.8 to the Company's Registration Statement on Form S-1, Registration No. 333-48473). 4.9 Employee Stock Purchase Plan (incorporated by reference to Exhibit 10.10 to the Company's Registration Statement on Form S- 1, Registration No. 333-48473). 4.10 Employment Agreement between the Company and Richard S.F. Lehrberg, dated December 1, 1991, as amended. 4.11 Employment Agreement between the Company and Richard S.F. Lehrberg, dated March 28, 1994, as amended (incorporated by reference to Exhibit 10.28 to the Company's Registration Statement on Form S-1, Registration No. 333-48473). 5.1 Opinion of Stradling Yocca Carlson & Rauth, a Professional Corporation, Counsel to the Registrant. 23.1 Consent of Stradling Yocca Carlson & Rauth, a Professional Corporation (included in the Opinion filed as Exhibit 5.1). 23.2 Consent of Arthur Andersen LLP, independent auditors. 24.1 Power of Attorney (included on signature page to the Registration Statement at page S-1). Item 9. Undertakings. - --------------------- (a) The undersigned Registrant hereby undertakes: (1) To file, during any period in which offers or sales are being made, a post-effective amendment to this registration statement: (i) To include any prospectus required by Section 10(a)(3) of the Securities Act; (ii) To reflect in the prospectus any facts or events arising after the effective date of this Registration Statement (or the most recent post-effective amendment thereof) which, individually or in the aggregate, represent a fundamental change in the information set forth in the registration statement; (iii) To include any material information with respect to the plan of distribution not previously disclosed in the registration statement or any material change to such information in the registration statement. Provided, however, that paragraphs (a)(1)(i) and (a)(1)(ii) shall not -------- ------- apply if the information required to be included in a post-effective amendment by these paragraphs is contained in periodic reports filed by the registrant pursuant to Section 13 or Section 15(d) of the Exchange Act that are incorporated by reference in the registration statement. (2) That, for the purpose of determining any liability under the Securities Act, each such post-effective amendment shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof. (3) To remove from registration by means of a post-effective amendment any of the securities being registered which remain unsold at the termination of the offering. (b) The undersigned Registrant hereby undertakes that, for purposes of determining any liability under the Securities Act, each filing of the Registrant's annual report pursuant to Section 13(a) or Section 15(d) of the Exchange Act that is incorporated by reference in the registration statement shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof. (c) Insofar as indemnification for liabilities arising under the Securities Act may be permitted to directors, officers and controlling persons of the Registrant pursuant to the foregoing provisions, or otherwise, the Registrant has been advised that in the opinion of the Securities and Exchange Commission such indemnification is against public policy as expressed in the Securities Act and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by the Registrant of expenses incurred or paid by a director, officer or controlling person of the Registrant in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, the Registrant will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Securities Act and will be governed by the final adjudication of such issue. SIGNATURES Pursuant to the requirements of the Securities Act of 1933, as amended, the Registrant certifies that it has reasonable grounds to believe that it meets all of the requirements for filing on Form S-8 and has duly caused this registration statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Irvine, State of California, on the 4th day of August, 1998. INTERPLAY ENTERTAINMENT CORP. By: /s/ BRIAN FARGO ------------------------------------------------- Brian Fargo Chairman of the Board and Chief Executive Officer POWER OF ATTORNEY We, the undersigned directors and officers of Interplay Entertainment Corp., do hereby constitute and appoint Brian Fargo and Christopher J. Kilpatrick, or either of them, our true and lawful attorneys and agents, to sign for us or any of us in our names and in the capacities indicated below, any and all amendments (including post-effective amendments) to this Registration Statement, and to file the same, with all exhibits thereto and other documents required in connection therewith, and to do any and all acts and things in our names and in the capacities indicated below, which said attorneys and agents, or either of them, may deem necessary or advisable to enable said corporation to comply with the Securities Act of 1933, as amended, and any rules, regulations, and requirements of the Securities and Exchange Commission, in connection with this Registration Statement; and we do hereby ratify and confirm all that the said attorneys and agents, or either of them, shall do or cause to be done by virtue hereof. Pursuant to the requirements of the Securities Act of 1933, this registration statement has been signed by the following persons in the capacities and on the date indicated.
Signature Title Date --------- ----- ---- /s/ BRIAN FARGO _______________________________ Brian Fargo Chairman of the Board of Directors July 31, 1998 and Chief Executive Officer (Principal Executive Officer) /s/ CHRISTOPHER J. KILPATRICK _______________________________ Christopher J. Kilpatrick President and Director July 31, 1998 /s/ JAMES C. WILSON _______________________________ James C. Wilson Chief Financial Officer July 31, 1998 (Principal Financial and Accounting Officer) /s/ RICHARD S.F. LEHRBERG _______________________________ Richard S.F. Lehrberg Executive Vice President and July 30, 1998 Director
Signature Title Date --------- ----- ---- /s/ MARK PINKERTON - ------------------------- Mark Pinkerton Director July 30, 1998 /s/ CHARLES S. PAUL - ------------------------- Charles S. Paul Director July 31, 1998 /s/ PAUL A. RIOUX - ------------------------- Paul A. Rioux Director July 28, 1998 /s/ DAVID R. DUKES - ------------------------- David R. Dukes Director July 31, 1998 EXHIBIT INDEX Sequential Number Description Page Number ------ ----------- ----------- 4.1 Amended and Restated 1997 Stock Incentive Plan (the "1997 Plan") (incorporated by reference to Exhibit 10.1 to the Company's Registration Statement on Form S-1, Registration No. 333-48473). 4.2 Form of Stock Option Agreement pertaining to the 1997 Plan (incorporated by reference to Exhibit 10.2 to the Company's Registration Statement on Form S-1, Registration No. 333-48473). 4.3 Form of Restricted Stock Purchase Agreement pertaining to the 1997 Plan (incorporated by reference to Exhibit 10.3 to the Company's Registration Statement on Form S-1, Registration No. 333-48473). 4.4 Incentive Stock Option and Nonqualified Stock Option Plan-1994 (the "1994 Plan") (incorporated by reference to Exhibit 10.4 to the Company's Registration Statement on Form S-1, Registration No. 333-48473). 4.5 Form of Nonqualified Stock Option Agreement pertaining to the 1994 Plan (incorporated by reference to Exhibit 10.5 to the Company's Registration Statement on Form S-1, Registration No. 333-48473). 4.6 Incentive Stock Option, Nonqualified Stock Option and Restricted Stock Purchase Plan-1991 (the "1991 Plan") as amended (incorporated by reference to Exhibit 10.6 to the Company's Registration Statement on Form S-1, Registration No. 333-48473). 4.7 Form of Incentive Stock Option Agreement pertaining to the 1991 Plan (incorporated by reference to Exhibit 10.7 to the Company's Registration Statement on Form S-1, Registration No. 333-48473). 4.8 Form of Nonqualified Stock Option Agreement pertaining to the 1991 Plan (incorporated by reference to Exhibit 10.8 to the Company's Registration Statement on Form S-1, Registration No. 333-48473). 4.9 Employee Stock Purchase Plan (incorporated by reference to Exhibit 10.10 to the Company's Registration Statement on Form S-1, Registration No. 333-48473). 4.10 Employment Agreement between the Company and Richard S.F. Lehrberg, dated December 1, 1991, as amended. 4.11 Employment Agreement between the Company and Richard S.F. Lehrberg, dated March 28, 1994, as amended (incorporated by reference to Exhibit 10.28 to the Company's Registration Statement on Form S-1, Registration No. 333-48473). 5.1 Opinion of Stradling Yocca Carlson & Rauth, a Professional Corporation, Counsel to the Registrant. 23.1 Consent of Stradling Yocca Carlson & Rauth, a Professional Corporation (included in the Opinion filed as Exhibit 5.1). 23.2 Consent of Arthur Andersen LLP, independent auditors. 24.1 Power of Attorney (included on signature page to the Registration Statement at page S-1). EX-4.10 2 LEHRBERG EMPLOYMENT AGREEMENT EXHIBIT 4.10 ------------ LEHRBERG EMPLOYMENT AGREEMENT July 22, 1998 Christopher J. Kilpatrick President Interplay Entertainment Corp. 16815 Von Karman Avenue Irvine, California 92606 RE: Stock Options Dear Chris: This letter shall confirm that, as a holder of a non-statutory option (the "Option") to purchase 510,374 shares of Common Stock of Interplay Entertainment Corp., a Delaware corporation ("Interplay"), I hereby agree that the Option shall not be assignable or transferable except by will or the laws of descent and distribution and during my lifetime, the Option will only be exercisable by me. Please confirm Interplay's agreement to these terms, by countersigning in the space provided below. Sincerely, /s/ RICHARD S.F. LEHRBERG Richard S.F. Lehrberg ACCEPTED AND AGREED: INTERPLAY ENTERTAINMENT CORP. By: /s/ CHRISTOPHER J. KILPATRICK -------------------------------------- Christopher J. Kilpatrick, President AMENDMENT TO EMPLOYMENT AGREEMENT THIS AMENDMENT TO EMPLOYMENT AGREEMENT (this "Amendment") is dated as of this 30th day of March, 1992 by and between INTERPLAY PRODUCTIONS, a California corporation (the "Company") and DICK LEHRBERG (the "Employee"). WHEREAS, the Company and the Employee entered into an Employment Agreement dated December 1, 1991; and WHEREAS, the Company and the Employee desire to amend the Employment Agreement as set forth herein. NOW, THEREFORE, in consideration of the premises and mutual covenants herein contained, it is agreed as follows: 1. Exhibit A to the Employment Agreement is amended to provide that the option shall be for an aggregate of 95,684 shares. 2. Except as set forth above, the Employment Agreement remains in full force and effect, and is unaltered or amended as of this date. INTERPLAY PRODUCTIONS By: /s/ BRIAN FARGO ----------------------------------- Brian Fargo, President "Company" /s/ RICHARD LEHRBERG --------------------------------------- Dick Lehrberg "Employee" EMPLOYMENT AGREEMENT This Employment Agreement (the "Agreement"), made this 1st day of December, 1991, by and between INTERPLAY PRODUCTIONS, a California corporation (the "Company") and DICK LEHRBERG ("Employee"). W I T N E S S E T H - - - - - - - - - - WHEREAS, the Company desires to employ Employee and Employee desires to be employed by the Company upon the terms and conditions set forth herein. NOW, THEREFORE, in consideration of the premises and mutual covenants herein contained, it is agreed as follows: 1. Employment. The Company hereby employs Employee as Vice President, and ----------- Employee hereby accepts employment by the Company upon the terms and conditions herein set forth. The primary place of employment shall be at Palo Alto, California, or at such other location as the Company and Employee may jointly designate. 2. Term. The term of this Agreement shall commence on January 1, 1992, ----- and shall expire on the two (2) year anniversary date thereafter, unless sooner terminated by either party hereto as hereinafter set forth. 3. Duties. Employee will, during the term hereof: ------- (a) faithfully and diligently do and perform all such acts and duties and furnish such services as the Board of Directors or the President of the Company shall reasonably and lawfully direct, and do and perform all acts in the ordinary course of the Company's business (with such limits as the Board or the President of the Company may prescribe) necessary and conducive to the Company's best interests; and (b) devote his full time, energy, and skill to the business of the Company and to the promotion of the Company's best interests, except for vacations and absences made necessary because of illness, provided, however, that the following activities shall not violate this Section and provided that such activities do not unreasonably interfere with Employee's obligations to the Company: (i) reasonable efforts in connection with the "winding down" of Employee's consulting business; (ii) passive investments permitted under Subsection 8(a) below: (iii) service as a member of a board of directors or advisory board of a non-competitive entity; and (iv) voluntary contributions of time or resources to charitable and/or community organizations. (c) Notwithstanding the above, the Company acknowledges that the Employee has substantial ongoing contractual obligations which make it impossible for Employee to provide immediate full-time services to the Company. Therefore, the Company and the Employee agree that all service obligations of Employee, and the Company's fixed salary obligations under Paragraph 4(a)(i), shall be reduced by multiplying such obligations by the following percentages:
Amount of Reduction of Employee's Date and Company's Obligations ---- --------------------------------- December 1, 1991 66-2/3% January 1, 1991 50% February 1, 1991 33-1/3% March 1, 1991 0%
4. Compensation. ------------- (a) Subject to the provisions of Paragraph 6 and 7 hereof, the Company shall pay to Employee for all services to be performed by Employee during the term of this Agreement; (i) a fixed annual salary of eighty-four thousand dollars ($84,000) per annum, payable at the rate of seven thousand ($7,000.00) per month, in periodic payments in accordance with the Company's practices for other executive, managerial, and supervisory employees, as such practices may be determined from time to time. The Board of Directors of the Company will review such fixed salary annually and, in its discretion, may grant increases thereof based upon Employee's performance; (ii) an advance against bonuses under Subsection 4(a)(iii), below, equal to one thousand dollars ($1,000) per month, prorated and payable concurrently with the periodic salary payments provided in Subsection 4(a)(i), above; (iii) a bonus equal to ten percent (10%) of the difference between net profits after taxes of the Company for the fiscal year ended March 31, 1989 (the "Base Year") on the one hand, which the Company and Employee agree is $633,258 for purposes of this Agreement, and, on the other, each fiscal year of Employee's employment by the Company commencing on December 1, 1991 and continuing until the earlier of (i) termination of Employee's employment with the Company or (ii) such time as Employee and the Company mutually agree to modify this provision. Net profits after tax shall be determined in accordance with generally accepted accounting principles. The bonus calculated hereunder shall not exceed two hundred and fifty thousand ($250,000.00) per fiscal year. Any bonus with respect to any stub year shall be calculated by (a) multiplying the net profits after taxes of the Company in the Base Year by (b) the number of days of a partial year as to which the bonus is to be paid, divided by 365 (the "Proration Ratio") and subtracting such number from (x) the net profits after taxes of the Company for the full year in which the stub period occurred, multiplied by (y) the Proration Ratio. In calculating net profits after tax for the purpose of this Subsection, the deduction from revenues for all compensation paid or accrued to Brian Fargo and/or members of his immediate family shall be limited for calculation purposes (but shall not limit actual compensation) to an amount 2 equal to two hundred and fifty thousand dollars ($250,000.00). The Company shall accrue an amount (without any prepayment funding obligation) equal to Employee's bonus which shall be deemed earned but unpaid compensation until such time as such bonus is paid to Employee. Employee shall be entitled to draw up to 75% against the reserve on a semi-annual basis, provided, however, that Employee agrees to endeavor to coordinate such withdrawals with the Company so as not to unreasonably impair the Company's cash flow during any time of the year when the business cash requirements are greatest. (iv) Any additional or special compensation, such as incentive pay or bonuses, based upon Employee's performance, as the Board of Directors in its discretion, may from time to time determine. Any payments under this Paragraph 4(a)(iv) shall be paid at such time as may be determined by the Board of Directors of the Company; and (v) A special, nonrecurring bonus of $5,000 on January 1, 1992, $5,000 on February 1, 1992, $5,000 on March 1, 1992 and $5,000 on April 1, 1992. All such payments will be subject to such deductions as may be required to be made pursuant to law, government regulation or order, or by agreement with, or consent of, Employee. Advances against bonuses paid under Paragraph 4(a)(ii) or (iii), to the extent not earned in the year in which they are paid, shall be carried over to subsequent periods and credited against future bonus payments (but not credited under any circumstances against compensation due under Paragraph 4(a)(i)). (b) In addition to the salary payments set forth above, the Company agrees that during the term of this Agreement: (i) Employee shall be entitled to advancements, reimbursements, and/or use of a Company credit card for all reasonable expenses actually and necessarily incurred by him on its behalf in the course of this employment hereunder, for which he shall submit vouchers in a form satisfactory to the Company and which are approved by the Company in its reasonable discretion; (ii) Employee shall be entitled to receive securities of the Company pursuant to the terms set forth on Exhibit A. 5. Benefits. Employee shall be entitled to participate in such life -------- insurance, medical, dental, pension, vacation and retirement plans and other programs as may be approved from time to time by the Company for the benefit of its employees. With regard to insurance plans (other than disability), Employee may alternatively request that the Company pay the costs of Employee's present insurance policies; provided, however, that the Company shall not be required to pay costs of coverage in excess of those which would otherwise be paid for coverage provided to Employer's employees at a similar level through the Company's insurance plans. 6. Disability. Company shall procure and maintain for Employee a policy ---------- of disability insurance with benefits equal to eighty percent (80%) of Employee's monthly compensation. In the event that Employee is permanently disabled, as determined by the disability insurance carrier, Employee's obligation to perform such services will terminate and the Company may terminate this Agreement upon notice equal to the waiting period for the commencement of disability benefits provided under the policy of disability insurance. In the event of such termination (a) Employee's 3 compensation as defined in Paragraph 4(a)(i-iii) hereof shall terminate at the end of the notice period, and (b) Employee will not be entitled to the Severance Pay described in Paragraph 7 hereof. 7. Termination. ----------- (a) Employee's employment with the Company will be terminated (1) by reason of Employee's death, (2) by reason of Employee becoming permanently disabled as defined in Paragraph 6, (3) by the Company for cause, (4) by reason of Employee voluntarily terminating this Agreement, or (5) by the Company, provided, however, that the Company cannot terminate the Employee without cause until after June 1, 1992. For purposes of the preceding sentence, "cause" shall be deemed to exist if, and only if: (i) Employee willfully refuses to perform services hereunder; (ii) Employee materially breaches any provision of this Agreement; (iii) Employee engages in acts of dishonesty or fraud in connection with his services hereunder; or (iv) Employee engages in other serious misconduct of such a nature that the continued employment of Employee may reasonably be expected to adversely affect the business or properties of the Company. In the event of termination of employment pursuant to this subparagraph (a), then, except as otherwise provided in Paragraph 6 and 7, all obligations of the Company hereunder shall terminate. (b) If Employee's employment with the Company shall terminate by Employee's death or disability, Employee's estate shall be entitled to payment of any portion of his compensation pursuant to subparagraph 4(a)(i-iii) which is earned but unpaid as of the date of termination. (c) If Employee's employment with the Company shall terminate by the Company with cause or by Employee voluntarily, Employee shall be entitled to payment of any portion of his compensation pursuant to subparagraph 4(a)(i-iii) which is earned but unpaid as of the date of termination. (d) If Employee's employment with the Company shall terminate by the Company without cause, Employee shall be entitled to any portion of his compensation pursuant to subparagraph 4(a)(i-iii) which is earned but unpaid as of the date of termination and to severance pay equal to the lesser of $42,000 or the compensation which would be paid to Employee under Paragraph 4(a)(i) through the end of the term of this Agreement. No severance pay shall be paid as a result of the termination of this Agreement on the two (2) year anniversary date. (e) In the event of a change in "control" of the Company, as "control" is defined under Section 160(a) of the California Corporations Code. If Employee's employment with the Company shall be terminated by the Company, whether voluntarily or involuntarily, in connection with such change in control, Employee shall be entitled to any portion of his compensation pursuant to subparagraph 4(a)(i-iii) which is earned but unpaid as of the date of termination and to severance pay equal to Employee's compensation pursuant to subparagraph 4(a)(i) for a period six (6) months following the date of termination of employment. 8. Restrictive Covenant. During the term of this Agreement, Employee -------------------- shall not: (a) within the State of California, engage in, or work for, or own, manage, operate, control or participate in the ownership, management, operation or control of, or be connected with, or have any financial interest in, any individual, partnership, firm, corporation or 4 institution engaged in the same or similar activities to those now or hereafter carried on by the Company, provided, however, that passive investment (not exceeding ten percent of the voting power) in publicly-held corporations outside the Company; (b) solicit any of employees, agents or representatives of the Company for employment or independent contract outside the Company; and (c) directly or indirectly divert or attempt to divert from the Company any business in which the Company has been actively engaged during the term hereof, nor interfere with the relationships of the Company with its dealers, distributors, sources of supply or customers. Any breach of this restrictive covenant by Employee will result in the forfeiture by Employee and all other persons of any and all rights to Severance Pay unpaid at the time of breach and in such event the Company shall have no further obligation to pay any amounts related thereto. 9. Nondisclosure of Confidential Information: Discoveries and ---------------------------------------------------------- Developments. Employee acknowledges that the Company may disclose certain - ------------- confidential information to Employee during the term of this Agreement to enable him to perform his duties hereunder. Employee hereby covenants and agrees that he will not, without the prior written consent of the Company, during the term of this Agreement or at any time thereafter, disclose or permit to be disclosed to any third party by any method whatsoever any of the confidential information of the Company. For purposes of this Agreement, "confidential information" shall include, but not be limited to, any and all records, notes, memoranda, data, ideas, processes, methods, techniques, systems, formulas, patents, models, devices, programs, computer software, writings, research, personal information, customer information, the Company's financial information, plans, or any other information of whatever nature in the possession or control of the Company which ahs not been published or disclosed to the general public, or which gives to the Company an opportunity to obtain an advantage over competitors who do not know of or use it. Confidential information shall not include information which (i) is generally known or becomes part of the public domain through no fault of Employee; (ii) is disclosed by Company to third parties without restriction on subsequent disclosure; (iii) was known to Employee prior to the commencement of his relationship with the Company; (iv) is provided to Employee by a third party without breach of any separate non-disclosure agreement; or (v) is required to be disclosed under applicable law. Employee further agrees that if his employment hereunder is terminated for any reason, he will leave with the Company and will not take originals or copies of any and all records, papers, programs, computer software and documents and all matter of whatever nature which bears secret or confidential information of the Company. Employee agrees promptly to reduce to writing and to disclose and assign, and hereby does assign, to the Company, its parent, subsidiaries, successors, assigns and nominees, all inventions, discoveries, improvements, copyrightable material, trademarks, programs, computer software and ideas concerning the same, capable of use in connection with the business of the Company, which Employee may make or conceive, either solely or jointly with others, during the period of his employment by the Company, its parent, subsidiaries or successors; provided, however, that Section 2870 of the California Labor Code (a copy of which is attached hereto as Exhibit B) exempts from this provision any invention as to which Employee can prove the following: 5 (i) Employee developed the invention entirely on his own time; (ii) Employee did not use any equipment, supplies, facility or trade secret information of the Company in the invention's development; and (iii) At the time the invention was conceived or reduced to practice, it did not relate to the Company's business or the Company's actual or demonstrably anticipated research or development; and (iv) The invention did not result from work that Employee performed for the Company. Employee acknowledges that all original works of authorship and mask works which are made by him (solely or jointly with others) after the date hereof and within the scope of his employment and which are protectable by copyright or under the Semiconductor Chip Protection Act of 1984 are "works made for hire" as that term is defined in the United States Copyright Act (17 USC, Section 101). All works which Employee has developed prior to this date and which are to be retained as the property of Employee are set forth on Exhibit C. Employee further acknowledges that in the event that such works of authorship or mask works are not deemed to be "works made for hire," Employee will assign all right, title and interest in such works of authorship or mask works, and without limiting the foregoing, all programs, computer software, ideas, inventions, discoveries, improvements, copyrightable material and trademarks of Employee not listed on Exhibit C to the Company. Without limiting the foregoing, Employee agrees, without charge to the Company and at the Company's expense, to execute, acknowledge and deliver to the Company all such papers, including applications for patents, applications for copyright and trademark registrations, and assignments thereof, as may be necessary, and at all times to assist the Company, its parent, subsidiaries, successors, assigns and nominees in every proper way to patent or register said programs, computer software, ideas, inventions discoveries, improvements, copyrightable material or trademarks in any and all countries and to vest title thereto in the Company, its parent, subsidiaries, successors, assigns or nominees. Employee will promptly report to the Company all discoveries, inventions, or improvements of whatsoever nature conceived or made by him at any time he was employed by the Company, its parent, subsidiaries or successors. All such discoveries, inventions and improvements which are applicable in any way to the Company's business shall be the sole and exclusive property of the Company. The covenants set forth in this paragraph which are made by Employee are in consideration of the employment, or continuing employment of, and the compensation paid to, Employee during his employment by the Company. The foregoing covenants will not prohibit Employee from disclosing confidential or other information to other employees of the Company or to third parties to the extent that such disclosure is necessary to the performance of his duties under this Agreement. 6 Any breach of the covenants in this Paragraph will result in the forfeiture by Employee of any and all rights to Severance Pay unpaid at the time of breach and in such event the Company shall have no further obligation to pay any amounts related thereto. 10. Additional Remedies. The parties to this Agreement acknowledge that ------------------- the subject matter of this Agreement relates to the establishment of a relationship of trust based upon the unique characteristics of each of the parties. Consequently, each of the parties shall be entitled, in addition to any other remedies and damages available, to injunctive relief to restrain the violation of the commitments hereunder by the other party or by any person or persons acting on such other party's behalf, including without limitation, the restrictions in Paragraphs 8 and 9 above. 11. Nonassignment. This Agreement is personal to Employee and Company and ------------- shall not be assigned by either party without the express written consent of the other party, neither party may hypothecate, delegate, encumber, alienate, transfer or otherwise dispose of his/its rights and duties hereunder. 12. Waiver. The waiver by either party of a breach by the other party of ------ any provision of this Agreement shall not be construed as a waiver of any subsequent breach. 13. Severability. If any clause, phrase, provision or portion of this ------------ Agreement or the application thereof to any person or circumstance shall be invalid or unenforceable under any applicable law, such event shall not affect or render invalid or unenforceable the remainder of the Agreement and shall not affect the application of any clause, provision, or portion hereof to other persons or circumstances. 14. Benefit. The provisions of this Agreement shall inure to the benefit ------- of Employee and the Company, and each of their permitted successors and assigns, and shall be binding upon the Company and Employee, and each of their heirs, personal representatives and successors, executors, administrators, or trustees, as applicable. 15. Relevant Law. This Agreement shall be construed and enforced in ------------ accordance with the laws of the State of California. 16. Notices. All notices, requests, demands and other communications in ------- connection with this Agreement shall be made in writing and shall be deemed to have been given when delivered by hand or 48 hours after mailing at any general or branch United States Post Office, by registered or certified mail, postage prepaid, addressed as follows, or to such other address as shall have been designed in writing by the addressee: (a) If the Company: Interplay Productions 3710 S. Susan, Suite 100 Santa Ana, California 92704 Attn: Brian Fargo, President 7 (b) If to Employee: Dick Lehrberg 1085 University Avenue Palo Alto, California 94301 17. Legal Expenses. The prevailing party in any legal action brought by -------------- one party against the other and arising out of this Agreement shall be entitled, in addition to any other rights and remedies available to it at law or in equity, to reimbursement for its costs and expenses (including court costs and reasonable fees for attorneys and expert witnesses) incurred with respect to any such action. The term "prevailing party" for the purposes of this Section shall include a defendant has by motion, judgment, verdict or dismissal by the court, successfully defended against any claim that has been asserted against it. 18. Entire Agreement. This Agreement sets forth the entire understanding ---------------- of the parties and supersedes all prior agreements, arrangements, and communications, whether oral or written, pertaining to the subject matter hereof; and this Agreement shall not be modified or amended except by written agreement of the Company and Employee. IN WITNESS WHEREOF, the parties hereto have executed this Agreement on the date first set forth above. EMPLOYER: INTERPLAY PRODUCTION By:/s/ BRIAN FARGO ------------------------------------ EMPLOYEE: /s/ DICK LEHRBERG --------------------------------------- Dick Lehrberg 8 EXHIBIT A Securities Employee shall have the right to purchase 93,159 shares of Common Stock of the Company (the "Shares") at $1.38 (the "Purchase Price"). The Company represents that there are 941,000 shares of Common Stock outstanding as of this date. The Shares will be subject to vesting in accordance with the following schedule:
Shares Vested Date On Such Date ---- ------------- Signing 32,935 02/01/92 9,410 08/01/92 9,410 02/01/93 9,410 08/01/93 9,410 02/01/94 9,410 08/01/94 4,705 02/01/95 8,469
The Employee will enter into a Buy-Sell Agreement with the Company providing the Company with a right to repurchase the Shares upon termination of employment, regardless of the reason of such termination, on the following terms: (a) If the Shares are unvested, the Company will have a right to repurchase such Shares equal to the initial Purchase Price. (b) If the Shares are vested, and termination of employment is (i) a result of a voluntary decision of the Employee, the repurchase price shall be equal to the Employee, the repurchase price shall be equal to the initial purchase price, plus 10%, unless termination is within the first year of this Agreement, in which case the repurchase price shall be the initial purchase price; (ii) by the Company for cause, the repurchase price shall be equal to the initial purchase price; and (iii) if the termination is by the Company without cause, or is a result of death or disability, the purchase price shall be equal to the book value at the time of termination, plus ten percent (10%) or, if higher, the value the Company receives for shares of Common Stock after such repurchase in a public offering, merger or other transaction in which the Company receives at least $1,000,000 and which closes within 30 days after the repurchase of Shares from the Employee. The purchase price for the Shares shall be paid by the issuance of the promissory note providing for repayment at such time, or from time to time, as the Employee shall voluntarily decide. The promissory note shall bear interest at the rate of 7% simple interest per annum until paid. The promissory note shall be secured solely by the Shares and the Company will have no general right of recourse against Employee as a result of a default under the promissory note. The Shares shall not be subject to transfer until the promissory note has been repaid in full and the restrictions set forth in the Buy-Sell Agreement have been satisfied. 2 EXHIBIT B California Labor Code Section 2870 Employment Agreements; Assignment of Right ------------------------------------------ "(a) Any provision in an employment agreement which provides that an employee shall assign or offer to assign any of his or her rights in an invention to his or her employer shall not apply to an invention that the employee developed entirely on his or her own time without using the employer's equipment, supplies, facilities, or trade secret information except for those inventions that either: (1) Relate at the time of conception or reduction to practice of the invention to the employer's business, or actual or demonstrably anticipated research or development of the employer. (2) Result from any work performed by the employee for the employer. (b) to the extent a provision in an employment agreement purports to require an employee to assign an invention otherwise excluded from being required to be assigned under subdivision (a), the provision is against the public policy of this state and is unenforceable." EXHIBIT C Employee's Prior Developed Works EX-5.1 3 OPINION OF STRADLING YOCCA CARLSON & RAUTH EXHIBIT 5.1 ----------- SYCR OPINION Stradling Yocca Carlson & Rauth A PROFESSIONAL CORPORATION ATTORNEYS AT LAW 660 NEWPORT CENTER DRIVE, SUITE 1600 NEWPORT BEACH, CALIFORNIA 92660-6441 TELEPHONE (949) 725-4000 FACSIMILE (949) 725-4100 SAN FRANCISCO OFFICE 44 MONTGOMERY STREET, SUITE 2950 SAN FRANCISCO, CALIFORNIA 94104 TELEPHONE (415) 765-9180 FACSIMILE (415) 765-9187 July 31, 1998 Interplay Entertainment Corp. 16815 Von Karman Avenue Irvine, California 92606 Re: Registration Statement on Form S-8 (Employee Stock Purchase Plan, Amended and Restated 1997 Stock Incentive Plan, Incentive Stock Option and Nonqualified Stock Option Plan--1994, Incentive Stock Option, Nonqualified Stock Option and Restricted Stock Purchase Plan--1991, and Lehrberg Employment Agreement) Ladies and Gentlemen: At your request, we have examined the form of Registration Statement on Form S-8 (the "Registration Statement") being filed by Interplay Entertainment Corp., a Delaware corporation (the "Company"), with the Securities and Exchange Commission in connection with the registration under the Securities Act of 1933, as amended, of an aggregate of 3,871,247 shares of the Company's common stock, $.001 par value ("Common Stock"), issuable under the Company's Employee Stock Purchase Plan, Amended and Restated 1997 Stock Incentive Plan, Incentive Stock Option and Nonqualified Stock Option Plan 1994, Incentive Stock Option, Nonqualified Stock Option and Restricted Stock Purchase Plan 1991, and Lehrberg Employment Agreement (the "Plans"). We have examined the proceedings heretofore taken and are familiar with the additional proceedings proposed to be taken by the Company in connection with the authorization, issuance and sale of the securities referred to above. Based on the foregoing, it is our opinion that the 3,871,247 shares of Common Stock, when issued under the Plans and against full payment therefor in accordance with the respective terms and conditions of the Plans, will be legally and validly issued, fully paid and nonassessable. We consent to the use of this opinion as an exhibit to the Registration Statement. Very truly yours, STRADLING YOCCA CARLSON & RAUTH EX-23.2 4 CONSENT OF ARTHUR ANDERSEN, LLP EXHIBIT 23.2 CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS As independent public accountants, we hereby consent to the incorporation by reference in this registration statement of our reports dated March 20, 1998 included in Interplay Entertainment Corp.'s Form S-1 registration statement for the year ended December 31, 1997 and to all references to our Firm included in this registration statement. /s/ ARTHUR ANDERSEN LLP ARTHUR ANDERSEN LLP Orange County, California July 31, 1998 -----END PRIVACY-ENHANCED MESSAGE-----