Initial Public Offering (IPO): Pre-Effective Amendment to Registration Statement (General Form) — Form S-1
Filing Table of Contents
Document/Exhibit Description Pages Size
1: S-1/A Amendment No. 3 to Form S-1 106 603K
2: EX-1 Form of Underwriting Agreement 40 120K
3: EX-2.1 Rights Agreement 66 201K
4: EX-5 Opinion of Shack & Siegel, P.C. 2 9K
8: EX-10.17 Credit Agreement 50 162K
5: EX-10.4 Patent License Agreement 7 19K
6: EX-10.5 Employment Agreement-Mr. Neil D. Nicastro 15 37K
7: EX-10.7 Stock Option Plan of the Registrant 10 43K
9: EX-21 Subsidiaries of the Registrant 1 6K
10: EX-23.2 Consent of Ernst & Young LLP 1 7K
EXHIBIT 10.7
MIDWAY GAMES INC.
1996 STOCK OPTION PLAN
ARTICLE I
PURPOSE OF THE PLAN
The 1996 Stock Option Plan (the "Plan) is intended to provide a method
whereby "Employees," "Directors" and "Consultants and Advisers" of Midway Games
Inc. (the "Company") and its "Subsidiaries" (as such quoted terms are
hereinafter defined) may be encouraged to acquire a proprietary interest in the
Company and whereby such individuals may realize benefits from an increase in
the value of the shares of the Common Stock, $.01 par value (the "Common
Stock"), of the Company; to provide such Employees, Directors and Consultants
and Advisers with greater incentive and to encourage their continued provision
of services to the Company; and, generally, to promote the interests of the
Company and all of its stockholders. Under the Plan, from time to time on or
before October 31, 2006, options to purchase shares of Common Stock and related
Stock Appreciation Rights (as hereinafter defined) may be granted to such
persons as may be selected in the manner hereinafter provided on the terms and
subject to the conditions hereinafter set forth.
ARTICLE II
ADMINISTRATION OF THE PLAN
SECTION 1. Subject to the authority as described herein of the Board
of Directors (the "Board") of the Company, the Plan shall be administered by
the Compensation and Stock Option Committee of the Company's Board of Directors
(the "Committee") which is composed of at least two members of the Board who
are Non-Employee Directors (as hereinafter defined). The Committee is
authorized to interpret the Plan and may from time to time adopt such rules and
regulations for carrying out the Plan as it may deem best. All determinations
by the Committee shall be made by the affirmative vote of a majority of its
members but any determination reduced to writing and signed by a majority of
its members shall be fully enforceable and effective as if it had been made by
a majority vote at a meeting duly called and held. Subject to any applicable
provisions of the Plan, all determinations by the Committee or by the Board
pursuant to the provisions of the Plan, and all related orders or resolutions
of the Committee or the Board, shall be final, conclusive and binding on all
persons, including the Company and its stockholders, employees, directors and
optionees.
SECTION 2. All authority delegated to the Committee pursuant to the
Plan, other than decisions relating to selection of individuals for
participation and decisions concerning the timing, pricing and the amount of a
grant, may also be exercised by the Board. No action of the Board taken
pursuant to the provisions of the Plan shall be effective unless at the time
both a majority of the Board and a majority of the directors acting in the
manner are Non-Employee
Directors. In the event of any conflict or inconsistency between
determinations, orders, resolutions or other actions of the Committee and the
Board taken in connection with the Plan, other than with respect to those
decisions set forth in the first sentence hereof which may only be made by the
Committee, the actions of the Board shall control.
SECTION 3. With respect to Section 16 of the Securities Exchange Act
of 1934, as amended (the "1934 Act"), transactions under the Plan are intended
to comply with all applicable conditions of Rule 16b-3 or its successors under
the 1934 Act. To the extent any provision of the Plan or action by the
Committee fails to so comply, it shall be deemed null and void to the extent
permitted by law and deemed advisable by the Committee.
ARTICLE III
STOCK SUBJECT TO THE PLAN
SECTION 1. The shares to be issued or delivered upon exercise of
options or rights granted under the Plan shall be made available, at the
discretion of the Board, either from the authorized but unissued shares of
Common Stock of the Company or from shares of Common Stock reacquired by the
Company, including shares purchased by the Company in the open market or
otherwise obtained.
SECTION 2. Subject to the provisions of Section 3 of this Article
III, the aggregate number of shares of Common Stock which may be purchased
pursuant to options granted at any time under the Plan shall not exceed
2,000,000. Such number shall be reduced by the aggregate number of shares
covered by options in respect of which Stock Appreciation Rights are exercised.
Shares subject to any options which are canceled, lapse or are otherwise
terminated shall be immediately available for reissuance under the Plan.
SECTION 3. In the event of the payment of any dividends payable in
Common Stock or in the event of any subdivision or combination of the Common
Stock, the number of shares which may be purchased under this Plan shall be
increased or decreased proportionately, as the case may be, and the number of
shares deliverable upon the exercise thereafter of any option theretofore
granted (whether or not then exercisable) shall be increased or decreased
proportionately, as the case may be, without change in the aggregate purchase
price. Subject to any required action by its stockholders, if the Company
shall be the surviving corporation in any merger or consolidation, any option
granted hereunder shall be adjusted so as to pertain and apply to the
securities to which the holder of the number of shares of the Common Stock
subject to the option would have been entitled. In the event that the Company
is merged or consolidated into or with another corporation, or substantially
all of its assets are sold to another corporation, provisions shall be made for
the protection and continuation of any outstanding options by the substitution,
on an equitable basis, of such stock, other securities, cash or combination
thereof as shall be appropriate.
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ARTICLE IV
PURCHASE PRICE OF OPTIONED SHARES
Unless the Committee shall fix a greater purchase price, the purchase
price per share of Common Stock under each option granted to Employees,
Directors, Consultants and Advisers shall not be less than one hundred percent
(100%) of the Fair Market Value (as hereinafter defined) of the Common Stock at
the time such option is granted, but in no case shall such price be less than
the par value of the Common Stock, provided, however, that in the case of an
incentive stock option (as hereinafter defined) granted to an Employee who, at
the time of the grant, owns stock possessing more than ten percent (10%) of the
total combined voting power of all classes of stock of the Company (a "Ten
Percent Stockholder"), such purchase price per share shall be at least one
hundred and ten percent (110%) of the Fair Market Value.
ARTICLE V
ELIGIBILITY OF RECIPIENTS
Options will be granted only to persons who are Employees, Directors,
Consultants or Advisers of the Company or a Subsidiary.
ARTICLE VI
DURATION OF THE PLAN
Unless previously terminated by the Committee or the Board, the Plan
will terminate on October 31, 2006. Such termination will not terminate any
option then outstanding.
ARTICLE VII
GRANT OF OPTIONS TO EMPLOYEES, DIRECTORS, CONSULTANTS AND ADVISERS
SECTION 1. Each option granted under the Plan to Employees shall
constitute either an option intended to qualify under Section 422 of the
Internal Revenue Code of 1986, as amended (the "Code") ("incentive stock
option"), or an option not intended to qualify under such Section 422
("nonqualified stock option), as determined in each case by the Committee and
each option granted to Directors, Consultants and Advisers shall constitute a
nonqualified stock option. With respect to incentive stock options granted to
Employees, to the extent that the aggregate Fair Market Value (determined at
the time an option is granted) of Common Stock of the Company with respect to
which such incentive stock options are exercisable for the first time by any
individual during any calendar year (under the Plan and any other stock option
plan of the Company) exceeds $100,000, such incentive stock options shall be
treated as nonqualified stock options. The foregoing rule shall be applied by
taking incentive stock options into account in the order in which they were
granted. In the event outstanding incentive stock options become
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immediately exercisable under the terms hereof, such incentive stock options
will, to the extent the aggregate Fair Market Value thereof exceeds $100,000,
be treated as nonqualified stock options.
SECTION 2. The Committee shall from time to time determine the
Employees, Directors, Consultants and Advisers to be granted options, it being
understood that options may be granted at different times to the same person,
provided, however, that no one person may receive an option or options under
the Plan covering more than fifty percent (50%) of the total number of shares
subject to the Plan. In addition, the Committee shall determine subject to the
terms of the Plan: (a) the number of shares subject to each option, (b) the
time or times when the options will be granted, (c) whether such options shall
be incentive stock options, nonqualified stock options or both, (d) whether
Stock Appreciation Rights will be granted in connection with the grant of
options, (e) the purchase price of the shares subject to each option, which
price shall be not less than that specified in Article IV, (f) the time or
times when each option and any related Stock Appreciation Rights may be
exercised and (g) the terms and conditions pursuant to which each grant shall
be issued.
SECTION 3. All instruments evidencing options granted to Employees,
Directors, Consultants and Advisers under the Plan shall be in such form, which
shall be consistent with the Plan and any applicable determinations, orders,
resolutions or other actions of the Committee or the Board.
SECTION 4. The Committee, in its sole discretion, on the granting of
an option to an Employee, Director, Consultant or Adviser under the Plan may
also grant Stock Appreciation Rights relating to any number of shares but,
except as hereinafter provided, not more than fifty percent (50%) of the number
of shares covered by such option shall include Stock Appreciation Rights. Such
options shall be subject to such terms and conditions, not inconsistent with
the Plan, that the Committee shall impose, including the following:
(i) Stock Appreciation Rights may be granted only in writing
and only attached to an underlying option at the time of the grant of
the option;
(ii) Stock Appreciation Rights may be exercised only at the
time when the option to which it is attached is exercisable;
(iii) Stock Appreciation Rights shall entitle the optionee
(or any person entitled to act under the provisions of the Plan) to
surrender unexercised all or part of the then exercisable portion of
the option to which the Stock Appreciation Rights are attached to the
Company and to receive from the Company in exchange therefor a payment
in cash equal to the excess, if any, of the then value of one share
covered by such portion over the option price per share specified in
such option, multiplied by the number of shares covered by the portion
of the option so surrendered (which excess is herein called the
"Appreciated Value"). For purposes of computation of the Appreciated
Value, the value of one share shall be deemed to be the average Fair
Market Value of such share during
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the four-week period immediately preceding the date of notice of
exercise of the Stock Appreciation Rights;
(iv) if Stock Appreciation Rights attached to an option are
exercised, such option shall be deemed to have been canceled to the
extent of the number of shares surrendered on exercise of the Stock
Appreciation Rights and no further options may be granted covering
such shares; and
(v) if an option to which Stock Appreciation Rights are
attached is exercised, such Stock Appreciation Rights shall be
canceled to the extent necessary to cause the number of shares to
which such Stock Appreciation Rights relate not to exceed the number
of remaining shares subject to such option.
ARTICLE VIII
NON-TRANSFERABILITY OF OPTIONS
No incentive stock option or any related Stock Appreciation Rights
granted under the Plan shall be transferable by the optionee otherwise than by
will or by the laws of descent and distribution, and any such incentive stock
option or any related Stock Appreciation Rights shall be exercised during the
lifetime of the optionee solely by him or her. Nonqualified stock options
granted under the Plan shall be transferable, if at all, as set forth in the
individual agreements pursuant to which each grant shall be issued.
ARTICLE IX
EXERCISE OF OPTIONS
SECTION 1. Each option (and any related Stock Appreciation Rights)
granted under the Plan shall terminate not later than the expiration of ten
years from the date on which it was granted; provided, however, that in the
case of an incentive stock option granted to an Employee who, at the time of
the grant is a Ten Percent Stockholder, such period shall not exceed five (5)
years from the date of grant.
SECTION 2. Except in the cases provided for in Article XII hereof,
each option (and any related Stock Appreciation Rights) granted under the Plan
may be exercised only while the optionee is an Employee or Non-Employee
Director of the Company.
SECTION 3. A person electing to exercise an option or Stock
Appreciation Rights then exercisable shall give written notice to the Company
of such election and, if electing to exercise an option, of the number of
shares of Common Stock such person has elected to purchase. A person
exercising an option shall at the time of purchase tender the full purchase
price of such shares, which tender, except as provided in Section 4 of this
Article IX, shall be made in cash or cash equivalent (which may be such
person's personal check) or, to the extent permitted by
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applicable law, in shares of Common Stock already owned by such person (which
shares shall be valued for such purpose on the basis of their Fair Market Value
on the date of exercise), or in any combination thereof. In the event of
payment in shares of Common Stock already owned, such shares shall be
appropriately endorsed for transfer to the Company. The Company shall have no
obligation to deliver shares of Common Stock pursuant to the exercise of any
option, in whole or in part, until such payment in full of the purchase price
therefor is received by the Company. No optionee, or legal representative,
legatee or distributee of such optionee, shall be or be deemed to be a holder
of any shares of Common stock subject to such option or entitled to any rights
of a stockholder of the Company in respect of any shares of Common Stock
covered by such option until such shares have been paid for in full and issued
or delivered by the Company.
SECTION 4. In order to assist an optionee in the exercise of an
option granted under the Plan, the Committee or Board may, in its discretion,
authorize, either at the time for the grant of the option or thereafter (a) the
extension of a loan to the optionee by the Company, (b) the payment by the
optionee of the purchase price of the Common Stock in installments, (c) the
guarantee by the Company of a loan obtained by the optionee from a third party
or (d) make such other reasonable arrangements to facilitate the exercise of
options in accordance with applicable law. The Committee or Board shall
authorize the terms of any such loan, installment payment arrangement or
guarantee, including the interest rate (which, in the case of incentive stock
options, shall be not less than the higher of (i) the "prime rate" as from time
to time in effect at a commercial bank of recognized standing, and (ii) the
rate of interest from time to time imputed under Section 483 of the Code and
terms of repayment thereof, and shall cause the instrument evidencing any such
option to be amended, if required, to provide for any such extension of credit.
Loans, installment payment arrangements and guarantees may be authorized
without security, and the maximum amount of any such loan or guarantee shall be
the purchase price of the Common Stock being acquired, plus related interest
payments.
SECTION 5. Each option shall be subject to the requirement that if at
any time the Board shall in its discretion determine that the listing,
registration or qualification of the shares of Common Stock subject to such
option upon any securities exchange or under any state or Federal law, or the
consent or approval of any governmental regulatory body, is necessary or
desirable as a condition of or in connection with, the granting of such option
or the issuance or purchase of shares thereunder, such option may not be
exercised in whole or in part unless such listing, registration, qualification,
consent or approval shall have been effected or obtained free from any
conditions not reasonably acceptable to the Board. Unless at the time of
exercise of an option and the issuance of Common Stock so purchased, there
shall be in effect as to such Common Stock a registration statement under the
Securities Act of 1933, as amended (the "Act"), the holder of such option shall
deliver a certification (a) acknowledging that such shares of Common Stock may
be "restricted securities" as defined in Rule 144 promulgated under the Act;
and (b) containing such optionee's agreement that such Common Stock may not be
sold or otherwise disposed of except in compliance with applicable provisions
of the Act. In the event that the Common Stock is then listed on a national
securities exchange, the Company shall use
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its best efforts to cause the listing of the shares of Common Stock subject to
options upon such exchange.
SECTION 6. All payments made by the Company pursuant to Section 4 of
this Article IX shall be subject to withholding in respect of such income or
other taxes as may be required by law to be paid or withheld. The Company may
establish appropriate procedures to provide for payment or withholding of such
income or other taxes as may be required by law to be paid or withheld in
connection with the exercise of options under the Plan, and to ensure that the
Company receives prompt advice concerning the occurrence of any event which may
create, or affect the timing or amount of, any obligation to pay or withhold
any such taxes or which may make available to the Company any tax deduction
resulting from the occurrence of such event.
ARTICLE X
ADJUSTMENTS
SECTION 1. New option rights may be substituted for the options
granted under the Plan, or the Company's duties as to options outstanding under
the Plan may be assumed, by a corporation other than the Company, or by a
parent or subsidiary of the Company or such corporation, in connection with any
merger, consolidation, acquisition, separation, reorganization, liquidation or
like occurrence in which the Company is involved. Notwithstanding the
foregoing or the provisions of this Article X, in the event such corporation,
or parent or subsidiary of the Company or such corporation, does not substitute
new option rights for, and substantially equivalent to, the options granted
hereunder, or assume the options granted hereunder, the options granted
hereunder shall terminate and thereupon become null and void (i) upon
dissolution or liquidation of the Company, or similar occurrence, (ii) upon any
merger, consolidation, acquisition, separation, reorganization, or similar
occurrence, where the Company will not be a surviving entity or (iii) upon a
transfer of substantially all of the assets of the Company or more than 80% of
the outstanding shares in a single transaction; provided, however, that each
optionee shall have the right immediately prior to or concurrently with such
dissolution, liquidation, merger, consolidation, acquisition, separation,
reorganization or similar occurrence, to exercise any unexpired option granted
hereunder whether or not then exercisable.
SECTION 2. The existence of outstanding options shall not affect in
any way the right or power of the Company or its stockholders to make or
authorize any or all adjustments, recapitalizations, reorganizations or other
changes in the Company's capital structure or its business, or any merger or
consolidation of the Company, or any issuance of Common Stock or subscription
rights thereto, or any issuance of bonds, debentures, preferred or prior
preference stock ahead of or affecting the shares or the rights thereof, or the
dissolution or liquidation of the Company, or any sale or transfer of all or
any part of its assets or business, or any other corporate act or proceeding,
whether of a similar character or otherwise.
SECTION 3. In the event that the Committee determines that any
dividend or other distribution (whether in the form of cash, shares, other
securities, or other property),
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recapitalization, stock split, reverse stock split, reorganization, merger,
consolidation, split-up, spin-off, combination, repurchase, or exchange of
shares or other securities of the Company, issuance of warrants or other rights
to purchase shares or other securities of the Company, or other corporate
transaction or event affects the shares such that an adjustment is determined
by the Committee to be appropriate in order to prevent dilution or enlargement
of the benefits or potential benefits intended to be made available under the
Plan, then the Committee shall, in such manner as it may deem equitable, adjust
any or all of (i) the number of shares or other securities of the Company (or
number and kind of other securities or property) with respect to which options
may be granted, (ii) the number of shares or other securities of the Company
(or number and kind of other securities or property) subject to outstanding
options and (iii) the grant or exercise price with respect to any option or, if
deemed appropriate, make provision for a cash payment to the holder of an
outstanding option; provided, in each case, that with respect to incentive
stock options no such adjustment shall be authorized to the extent that such
authority would cause the Plan to violate Section 422(b)(1) of the Code.
Without limiting the generality of the foregoing, any such adjustment shall be
deemed to have prevented any dilution and enlargement of an optionee's rights
if such optionee receives in any such adjustment rights which are substantially
similar) after taking into account the fact that the optionee has not paid the
applicable exercise price) to the rights the optionee would have received had
he or she exercised his or her outstanding options and become a stockholder of
the Company immediately prior to the event giving rise to such adjustment.
SECTION 4. Adjustments and elections under this Article X shall be
made by the Committee whose determination as to what adjustments, if any, shall
be made and the extent thereof shall be final, binding and conclusive.
ARTICLE XI
PRIVILEGES OF STOCK OWNERSHIP
No optionee shall be entitled to the privileges of stock ownership as
to any shares of Common Stock not actually issued and delivered to him or her.
ARTICLE XII
TERMINATION OF SERVICE OR EMPLOYMENT
SECTION 1. In the event that an optionee shall cease his or her
relationship with the Company or a Subsidiary by voluntarily terminating such
relationship without the written consent of the Company or a Subsidiary, or if
the Company or a Subsidiary shall terminate for cause such relationship, the
option held by such optionee shall terminate forthwith.
SECTION 2. If the holder of an option shall voluntarily terminate his
or her relationship with the Company or a Subsidiary with the written consent
of the Company, which written consent expressly sets forth a statement to the
effect that options which are exercisable on the
8
date of such termination shall remain exercisable, or if the optionee's
relationship with the Company or a Subsidiary shall have terminated by the
Company or a Subsidiary for reasons other than cause, except as may be provided
in the terms and conditions pursuant to which each option is granted, such
optionee may exercise his or her option to the extent exercisable at the time
of such termination, at any time prior to the expiration of three months after
such termination or the date of expiration of the option as fixed at the time
of grant, whichever shall first occur. Options granted under the Plan to
Employees shall not be affected by any change in the position of employment so
long as the holder thereof continues to be an Employee.
SECTION 3. Should an optionee die during the existence of his or her
relationship with the Company, all of the optionee's options shall be
terminated except that any option (and any related Stock Appreciation Rights)
to the extent exercisable by the optionee at the time of such death, may be
exercised within one year after the date of such death but not later than the
expiration date of the option solely in accordance with all of the terms and
conditions of the Plan by the optionee's personal representatives or by the
person or persons to whom the optionee's rights under the option shall pass by
will or by the applicable laws of descent and distribution.
ARTICLE XIII
AMENDMENTS TO PLAN
The Board may at any time terminate or from time to time amend, modify
or suspend the Plan; provided, however, that no such amendment or modification
without the approval of the stockholders of the Company shall:
(i) materially increase the benefits accruing to
participants under the Plan;
(ii) materially increase the maximum number (determined as
provided in the Plan) of shares of Common Stock which may be purchased
pursuant to options granted under the Plan; or
(iii) materially modify the requirements as to eligibility
for participation in the Plan.
The amendment or termination of the Plan shall not, without the written consent
of an optionee, adversely affect any rights or obligations under any option
theretofore granted to such optionee under the Plan.
ARTICLE XIV
EFFECTIVE DATE OF PLAN
The Plan shall be effective on October 24, 1996.
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ARTICLE XV
DEFINITIONS
For the purposes of this Plan, the following terms shall have the
meanings indicated:
Consultants and Advisers: Such term shall include any third party
retained or engaged by the Company or any Subsidiary to provide services to the
Company or such Subsidiary, including any employee of such third party
providing such services.
Director: Such term shall include any director of the Company.
Employee: Such term shall include any officer as well as any
full-time salaried key executive, managerial, professional, administrative, or
key employee of the Company or a Subsidiary. Such term shall also include an
employee on approved leave of absence provided such employee's right to
continue employment with the Company or a Subsidiary upon expiration of such
employee's leave of absence is guaranteed either by statute or by contract with
or by a policy of the Company or a Subsidiary.
Fair Market Value: The closing sale price of a share of Common Stock
on the date in question (or, if there is no reported sale on such date, on the
last preceding date on which any reported sale occurred) on the consolidated
tape for New York Stock Exchange-listed stocks or, if on such date the Common
Stock is not quoted on such consolidated tape, on the New York Stock Exchange,
or if on such date the Common Stock is not listed on the New York Stock
Exchange, such value as shall be determined by the Committee or Board in a
manner consistent with the provisions of the Code.
Non-Employee Director: Such term shall have the meaning ascribed
thereto in Rule 16b-3 promulgated under the 1934 Act.
Person: Such term shall have the meaning ascribed to it under the
1934 Act.
Stock Appreciation Rights: Means the rights granted by the Committee
pursuant to Section 4 of Article VI hereof.
Subsidiary: Means and includes a "Subsidiary Corporation" of the
Company (as defined in Section 424 of the Code).
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Dates Referenced Herein and Documents Incorporated by Reference
| Referenced-On Page |
|---|
| This ‘S-1/A’ Filing | | Date | | First | | Last | | | Other Filings |
|---|
| |  |
| | 10/31/06 | | 1 | | 3 |
| Filed on: | | 10/25/96 | | | | | | | 8-A12B |
| | 10/24/96 | | 9 |
| List all Filings |
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