UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-K/A
AMENDMENT NO. 1
TO THE ANNUAL REPORT ON FORM 10-K FILED BY
INTERPLAY ENTERTAINMENT CORP. ON APRIL 03, 2007
[x] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the Fiscal Year Ended December 31, 2007
or
[_] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES
AND EXCHANGE ACT OF 1934
For the transition period from __________ to __________
Commission File Number 0-24363
Interplay Entertainment Corp.
(Exact name of the registrant as specified in its charter)
Delaware 33-0102707
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
100 N. Crescent Drive, Beverly Hills, California 90210
(Address of principal executive offices)
(310) 432-1958
(Registrant's telephone number, including area code)
Securities registered pursuant to Section 12 (b) of the Act: None
Securities registered pursuant to Section 12 (g) of the Act:
Common Stock, $0.001 par value
Indicate by check mark if the registrant is a well-known seasoned issuer, as
defined in Rule 405 of the Securities Act Yes [_] No [X].
Indicate by check mark if the registrant is not required to file reports
pursuant to Section 13 or Section 15(d) of the Act. Yes [_] No [X ].
Indicate by check mark whether the registrant: (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days. Yes [X] No [_]
Indicate by check mark if disclosure of delinquent filers pursuant to Item 405
of Regulation S-K is not contained herein, and will not be contained, to the
best of registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K. [_]
Indicate by check mark whether the registrant is a large accelerated filer, an
accelerated filer, or a non-accelerated filer. See definition of "accelerated
filer and large accelerated filer" in Rule 12b-2 of the Exchange Act.
Large accelerated filer [_] Accelerated filer [_]
Non- accelerated filer [x] Smaller reporting company [_]
Indicate by check mark whether the registrant is a shell company (as defined in
Rule 12b-2 of the Act). Yes [_] No [x].
As of June 29, 2007, the aggregate market value of voting common stock held by
non-affiliates was approximately $7,000,000 based upon the closing price of the
Common Stock on that date.
Documents incorporated by reference
None
As of March 31, 2008, 103,855,634 shares of Common Stock of the Registrant were
issued and outstanding. This includes 4,658,216 shares of Treasury Stock.
AMENDMENT NO. 1
TO THE ANNUAL REPORT ON FORM 10-K FILED BY
INTERPLAY ENTERTAINMENT CORP. ON APRIL 3, 2008
The following Items comprising Part II Item 9B and Part III were
omitted from the Annual Report on Form 10-K filed by Interplay Entertainment
Corp. (which we will refer to as "we," "us," or "our" in this Amendment) on
April 3, 2008 (the "Form 10-K"), as permitted by rules and regulations
promulgated by the U.S. Securities Exchange Commission (the "SEC"). Part II Item
9B and Part III of that Form 10-K is hereby amended and restated to insert those
Items as set forth herein. All capitalized terms used herein but not defined
shall have the meanings ascribed to them in the Form 10-K.
PART II
ITEM 9B. OTHER INFORMATION
In accordance with resolutions of the Board of Directors of the Company
on October 2, 2006 the base salary of Herve Caen, the Chief Executive Officer
and Interim Chief Financial Officer, which had been reduced to $250,000 per year
through September, 2007, reverted to $460,000 per year as of October 1, 2007.
PART III
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
SUMMARY INFORMATION CONCERNING DIRECTORS, EXECUTIVE OFFICERS AND CERTAIN
SIGNIFICANT EMPLOYEES
The following table sets forth certain information regarding our
directors and executive officers and their ages as of May 10, 2007:
2
Directors Age Present Position
----------------------- --- ---------------------------------------------
Herve Caen ............ 46 Chairman of the Board of Directors, Chief
Executive Officer and Interim Chief Financial
Officer
Eric Caen ............. 42 Director
Michel Welter (1)(2)(3) 49 Director
(1) Member of the Audit Committee of the Board of Directors.
(2) Member of the Compensation Committee of the Board of Directors.
(3) Member of the Independent Committee of the Board of Directors.
Herve Caen and Eric Caen are brothers. There are no other family
relationships between any director and/or any executive officer. The Board of
Directors has determined that there are no other significant employees for
purposes of this Item 10.
BACKGROUND INFORMATION CONCERNING DIRECTORS AND EXECUTIVE OFFICERS
Herve Caen has been our Chief Executive Officer and Interim Chief
Financial Officer since 2002. Mr. Caen has served as Chairman of our Board of
Directors since 2001. Mr. Caen joined us as President and Director in 1999. Mr.
Caen served as Chairman of the Board of Directors of Titus Interactive S.A., an
interactive entertainment software company (placed in involuntary bankruptcy in
January 2005 and previously the parent of the Company) between 1991 and 2005.
Mr. Caen also held various executive positions within the Titus group between
1985 and 2005.
Eric Caen has served as a director since 1999. He is the Chief
Executive Officer of Glow Entertainment Group. a video rental and video on
demand provider operating in France and Germany. He was a Director of Titus
Interactive S.A., an interactive entertainment software company between 1991 and
2005. Mr. Caen also held various executive positions within the Titus group
between 1985 and 2005.
Michel Welter has served as a director since 2001, and has been the
sole independent director since 2004. He has been involved in the trading and
exploitation of animated TV series through his company Weltertainment since
2002. From 2000 to 2001 he served as President of CineGroupe International, a
Canadian company, which develops, produces and distributes animated television
series and movies. From 1990 to the end of 2000, Mr. Welter served as President
of Saban Enterprises where he launched the international merchandising for the
hit series "Power Rangers" and was in charge of international business
development where he put together numerous co-productions with companies in
Europe and Asia.
SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934, as amended,
requires our executive officers, directors, and persons who own more than 10% of
a registered class of our equity securities to file reports of ownership and
changes in ownership with the SEC. Executive officers, directors and greater
than 10% stockholders are required by SEC rules and regulations to furnish us
with all Section 16(a) forms they file. Based solely on our review of the copies
of the forms received by us and representations from certain reporting persons
that they have complied with the relevant filing requirements, we believe that,
during the year ended December 31, 2007, all our executive officers, directors
and greater than 10% stockholders complied with all Section 16(a) filing
requirements, except for Financial Planning and Development S.A. with respect to
its holding of 56.3% of the Company's Common Stock.
AUDIT COMMITTEE INDEPENDENCE AND AUDIT COMMITTEE FINANCIAL EXPERT.
The Audit Committee currently consists of Michel Welter. The Board has
determined that there is no "audit committee financial expert", as that term is
defined in Section 407 of the Sarbanes-Oxley Act of 2002 and pursuant to the
rules and regulations of the SEC. The Board determined that Mr. Welter is,
"independent", as that term is defined under the rules of the National
Association of Securities Dealers, Inc.
CODE OF ETHICS
We have adopted a Code of Ethics for all of our employees, including
our principal executive officer, principal financial officer, principal
accounting officer or controller and any person performing similar functions.
The Code of Ethics was filed as an exhibit to the Amendment No. 1 to the 10-K
for the period ended December 31, 2003.
3
ITEM 11. EXECUTIVE COMPENSATION
The following is the Report of the Compensation Committee describing
the compensation policies applicable to the Company's executive officers. This
information shall not be deemed to be "soliciting material" or to be "filed"
with the SEC nor shall this information be incorporated by reference into any
future filing under the Securities Act of 1933, as amended, or the Securities
Exchange Act of 1934, as amended, except to the extent that the Company
specifically incorporates it by reference into a filing.
COMPENSATION COMMITTEE REPORT
The Compensation Committee has reviewed and discussed with management
the following Compensation Discussion and Analysis. Based on its review and
discussions with management, the Compensation Committee recommended to the Board
of Directors that the Compensation Discussion and Analysis be included in our
Annual Report on Form 10-K/A relating to 2007.
The Compensation Committee
Michel Welter
COMPENSATION DISCUSSION AND ANALYSIS
The following Compensation Discussion and Analysis describes the
material elements of compensation for our executive officer of Interplay
identified in the Summary Compensation Table (our "Named Executive Officer").
The Compensation Committee of the Board of Directors (the "Committee") makes all
decisions for the total direct compensation -- that is, the base salary, annual
bonus, long-term equity compensation and perquisites -- of our officers,
including the Named Executive Officer.
OUR BUSINESS ENVIRONMENT
Our Mission. We are a publisher and licensor of interactive
entertainment software for both core gamers and the mass market. We are most
widely known for our titles in the action/arcade, adventure/role playing game
(RPG), and strategy/puzzle categories. We have produced and licensed titles for
many of the most popular interactive entertainment software platforms. We seek
to publish or license out interactive entertainment software titles that are, or
have the potential to become, franchise software titles that can be leveraged
across several releases and/or platforms, and have published or licensed many
such successful franchise titles to date. We are committed to developing and
delivering quality game experience for gamers around the world! As to our
officers and employees, our mission is to create an environment that is open,
honest and entrepreneurial, where each is challenged to reach his or her full
potential.
Our Values. Each of our employees is required to promote honest and
ethical conduct both within our organization and in our relations with customers
or business partners.
COMPENSATION PROGRAM OBJECTIVES AND REWARDS
Compensation Philosophy. In determining the compensation for an
executive officer, we have the following objectives:
o To attract and retain officers by maintaining competitive
compensation packages;
o To motivate officers to achieve and maintain superior
performance levels;
o To achieve a lean and flexible business model by rewarding
executives who are versatile and capable across multiple
business functions; and
o To support overall business objectives designed to increase
returns to our stockholders.
4
We measure the success of our compensation programs by the following:
o The overall performance of our business and the engagement of
our officers in improving performance;
o Our ability to attract and retain key talent; and
o The perception of employees that dedication, skill and focus
on success of the enterprise will be rewarded.
We generally seek to pay officers total compensation competitive with
that paid to officers of other companies of similar size in our industry.
All of the compensation and benefits for our officers serve the primary
purpose of attracting, retaining and motivating the highly talented individuals
who perform the work necessary for us to succeed in our mission while upholding
our values in a highly competitive marketplace. Beyond that, we design different
elements of compensation to promote individually tailored goals.
PERFORMANCE AGAINST OBJECTIVES
A substantial percentage of officer compensation, including for the
Named Executive Officer, depends on the officer's achievement of individual
objectives. We generally establishes these objectives early in the fiscal year.
The Committee confers with the CEO to establish his objectives, and the
Committee also measures performance against objectives. For other officers, the
CEO confers with the executive then submits proposed objectives to the
Committee. In designing objectives, the Committee and the CEO seek to fulfill
our strategic plan while promoting the individual's professional development.
Objectives may include financial objectives, such as sales targets or cost
reduction, as well as qualitative factors such as leadership, management
development, and the quality of execution of business strategies that drive the
growth of our business. As soon as practicable after the end of the year,
supervisors measure performance against objectives. For officers, the CEO
conducts this evaluation and reports to the Committee.
ELEMENTS OF COMPENSATION
The elements of compensation that may be paid to our officers include
base salary and equity compensation.
Base Salaries. We generally negotiate base salaries at a level
necessary to attract and retain the talent we need to execute our plans. The
Committee considers such factors as its subjective assessment of the executive's
scope of responsibility, level of experience, individual performance, and past
and potential contribution to our business. From time to time the Committee will
seek market data compiled by compensation consultants, but generally does not
rely on such data.
The Committee determines base salaries for officers, including the
Named Executive Officer, early each year. For officers other than himself, the
CEO proposes any change in base salary based on:
o his evaluation of individual performance and expected future
contributions;
o the general development of our business;
o a review of survey data when deemed necessary, and
o comparison of the base salaries of the officers who report
directly to the CEO to provide for internal equity.
In October 2006 the Company reduced the base salary of Herve Caen, our
CEO and interim CFO, from $460,000 to $250,000 through September, 2007 and as of
October 1, 2007 his salary reverted to $460,000 per year.
Annual Cash Bonuses. The Committee has exclusive discretion to award
bonuses to our officers, including our Named Executive Officer, as an incentive
for employee productivity and effectiveness over the course of each fiscal year.
The CEO recommends executive bonuses to the Committee. The Committee decides
based on achievement of performance objectives
5
and a subjective analysis of the executive's level of responsibility. The
Compensation Committee also considers other types and amounts of compensation
that may be paid to the executive.
The Committee determines bonuses in part based on our achievement of
corporate goals such as revenue and net income results versus the prior year and
our performance relative to our industry, as well as the performance of the
individual against preset personal objectives.
Bonuses to Named Executive Officer. Annual bonuses for executives and
other key employees are tied directly to the Company's financial performance as
well as individual performance. The purpose of annual cash bonuses is to reward
executives for achievements of corporate, financial and operational goals.
Annual cash bonuses are intended to reward the achievement of outstanding
performance. If certain objective and subjective performance goals are not met,
annual bonuses are reduced or not paid. No bonus was paid to any employee in
fiscal year 2007, including the Named Executive Officer.
Equity Compensation. The Committee believes that long-term equity
incentive awards serve to align the interests of the officers with the interests
of our stockholders. In 2006 we made awards of warrants and options to the Named
Executive Officer and our other board members as part of restructuring of
certain compensatory arrangements. Although we made no further awards during
2007, we do intend in the future to make awards under our stock plan for
employees, officers and directors, our 1997 Plan.
The purpose of the 1997 Plan is to create an opportunity for executives
and other key employees to share in the enhancement of stockholder value through
stock options. The overall goal of this component of pay is to create a strong
link between our management and our stockholders through management stock
ownership and the achievement of specific corporate financial measures that
result in the appreciation of our share price. The Compensation Committee
generally has followed the practice of granting options on terms that provide
that the options become exercisable in installments over a two to five year
period. The Compensation Committee believes that this feature not only provides
an employee retention factor but also makes longer-term growth in share prices
important for those receiving options.
No Stock options were granted to our officers in 2007. The Compensation
Committee continues to review the desirability of issuing stock options to our
officers in any given fiscal year to provide incentives in connection with our
corporate objectives. Stock options become valuable if the price of our common
stock rises after we grant the options. The Committee sets the exercise price of
a stock option on the date of grant at fair market value, which is generally the
closing price of our common stock on the over-the-counter market bulletin board
on that date. Under the 1997 Plan, we may not grant stock options having an
exercise price below fair market value of our common stock on the date of grant.
To encourage retention by providing a long-term incentive, the ability to
exercise an option may vest over a period of three or five years. We do not
backdate options or grant options retroactively.
Awards in 2007. During fiscal year 2007, the Board of Directors granted
no options or warrants to officers or directors, including the Named Executive
Officer.
Change in Control Arrangements. All of the warrants and options held by
the Named Executive Officer have already vested.
Perquisites. No perquisites are provided to our officers.
Benefits. Our officers, including the Named Executive Officer,
participate in a variety of health and welfare, and paid time-off benefits
designed to enable us to attract and retain our workforce in a competitive
marketplace.
Policy under Section 162(m) of the Internal Revenue Code. We have not
formulated a policy for qualifying compensation paid to executive officers for
deductibility under Section 162(m) of the Internal Revenue Code, and do not
foresee the necessity of doing so in the near future. Should limitations on the
deductibility of compensation become a material issue, the Compensation
Committee will determine whether such a policy should be implemented, either in
general or with respect to specific transactions.
6
SUMMARY COMPENSATION
The following table summarizes the compensation of the Named Executive
Officer for the fiscal year ended December 31, 2007. The Named Executive Officer
is the Chief Executive Officer and Interim Chief Financial Officer. There are no
other executive officers of the Company.
Name and All Other
Principal Stock Option Compensation
Position Year Salary($) Bonus($) Awards($) Awards($) ($) Total($)
------------ ------------ ------------ ------------ ------------ ------------ ------------
Herve Caen 2007(1)(2)(3) 565,000 -- -- -- 5,000 570,000
Herve Caen 2006(1)(4)(5) 407,500 -- -- -- 15,000 422,500
Chief Executive Officer and
Interim Chief Financial
Officer
(1) In October 2006, our Compensation Committee approved a reduction in Mr.
Caen's annual base salary from $460,000 as Chief Executive Officer and
Interim Chief Financial Officer to $250,000 per annum through
September, 2007. Mr Caen's annual base salary reverted to $460,000 as
of October 1, 2007. Mr. Caen received warrants and options as part of
restructuring his compensatory arrangements in 2006 (see outstanding
equity awards information below).
(2) Of $565,000 paid during 2007, $302,000 was paid as compensation earned
in 2007, and $180,000 and $83,0000 were paid respectively as
compensation earned but previously unpaid in 2006 and 2005.
(3) $5,000 was accrued as director's fees but was not paid.
(4) Of $407,500 accrued during 2006, only $249,167 was paid during 2006 to
Mr. Caen.
(5) $15,000 was accrued during 2006 as director's fees but was not paid.
GRANTS OF PLAN BASED AWARDS
FOR FISCAL YEAR ENDED
DECEMBER 31, 2007
The following table provides information on stock options and warrants
granted in 2007 to our Named Executive Officer. By providing the Grant Date Fair
Value of Awards in the table we do not imply any assurance that such values will
ever be realized.
All Other
All Other Option and
Stock Awards: Warrant Awards: Exercise or
Number of Number of Base Price of Grant Date
Shares of Securities Option and Closing Fair Value
Grant Approval Stock or Underlying Warrant Awards Price on Of Awards
Name Date Date Units(#) Options(#) ($/Sh) Grant Date($/Sh) ($(1)
-----------------------------------------------------------------------------------------------------------
-- -- -- -- -- -- -- --
(1)
(1) No Awards were made in fiscal year 2007.
7
OUTSTANDING EQUITY AWARDS
AT FISCAL YEAR-END
DECEMBER 31, 2007
The following table shows the number of shares covered by exercisable
and unexercisable options and warrants held by our Named Executive Officer on
December 31, 2007. No other equity awards have been made to our Named Executive
Officer.
Number of Number of
Securities Securities
Underlying Underlying
Unexercised Unexercised Option or Option or
Options or Options or Warrant Warrant
Warrants Warrants Exercise Expiration
Exercisable Unexercisable Price($) Date
------------ ------------ ------------ ------------
Herve Caen ....... 6,120,000 --(1)(2)(3) .0279 10/02/2016
(1) 100% of the securities vested on October 2, 2006.
(2) Pricing was determined over an average closing price over ten days
subsequent to the resolution authorizing the issuance of the options
and warrants to the Named Executive Officer.
(3) The 6,100,000 warrants were issued to the officer to reduce his
compensation and to convert a portion of his unpaid compensation into a
conditional demand note. The 20,000 options were granted as directors'
fees.
OPTION EXERCISES AND STOCK VESTED AS OF
FISCAL YEAR-END DECEMBER 31, 2007
The table below shows the number of shares of our common stock acquired
by the Named Executive Officer during 2007 on the exercise of options and
warrants. No stock awards to the Named Executive Officer vested in 2007.
Option Awards
-------------------------------------------
Number of Shares Value Realized
Acquired on Exercise on Exercise
Name (#) ($)
-------------------- --------------------
Herve Caen .................... 0 0
8
2007 DIRECTOR COMPENSATION
The chart below summarizes remuneration paid to non-employee directors
during 2007 in the form of cash or stock option awards or warrants. The value
shown for stock options or warrants is the dollar amount we recognized for
financial statement reporting purposes in 2007 in accordance with FAS 123R.
Fees Earned or Warrants or All Other
Paid in Cash Option Awards Compensation Total
Name ($) ($) ($) ($)
-------------- -------------- -------------- --------------
Eric Caen ........ 5,000 -- -- 5,000
Michel Welter (1). 8,750 -- -- 8,750
(1) Included in the fees earned by Michel Welter is compensation for his
services on the Audit, Compensation and Independent Committees.
EMPLOYMENT AGREEMENTS
Mr. Herve Caen currently serves as our Chief Executive Officer and
interim Chief Financial Officer. We previously entered into an employment
agreement with Mr. Herve Caen for a term of three years through November 2002,
pursuant to which he currently serves as our Chairman of the Board of Directors
and Chief Executive Officer. The employment agreement provided for an annual
base salary of $250,000 (subsequently increased to $460,000), with such annual
raises as may be approved by the Board of Directors, plus annual bonuses at the
discretion of the Board of Directors. In October 2006 the Company reduced the
base salary of Mr. Caen from $460,000 to $250,000 and as of October 1, 2007 his
salary reverted to $460,000 per year. Mr. Caen is also entitled to participate
in the incentive compensation and other employee benefit plans established by us
from time to time
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
The Compensation Committee currently consists of Michel Welter. During
2007 and 2006, decisions regarding executive compensation were made by our
Compensation Committee. Neither the current member of our Compensation Committee
nor any of our executive officer or directors had a relationship that would
constitute an interlocking relationship with executive officers and directors of
another entity.
9
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND
RELATED STOCKHOLDER MATTERS
EQUITY COMPENSATION PLAN INFORMATION
WHENEVER WE USE A GENERAL STATEMENT TO INCORPORATE THIS 10-K/A BY
REFERENCE INTO ANOTHER OF OUR DOCUMENTS FILED WITH THE SEC, THE FOLLOWING TABLE
IS EXCLUDED. THE FOLLOWING TABLE WILL NOT BE DEEMED FILED UNDER THE SECURITIES
ACT OR THE EXCHANGE ACT UNLESS WE EXPLICITLY INCORPORATE IT BY REFERENCE IN SUCH
A FILING.
The following table summarizes information about the options and other
equity compensation under our equity plans as of the close of business on
December 31, 2007.
Number of Securities
Remaining Available
Number of Securities for Future Issuance
to be Issued Upon under Equity
Exercise of Compensation Plans
Outstanding Options, (excluding securities
Warrants and Rights Weighted Average reflected in column (a))
Plan Category (#) (a) Exercise Price($)(b) (#) (c)
------------------------------------- -------------------- -------------------- --------------------
Equity Compensation Plans
Approved by Stockholders .......... 1,410,000(1) 0.044 8,590,000
Equity Compensation Plans
Not Approved by Stockholders ...... 7,330,298(2) 0.38 0
-------------------- --------------------
TOTAL ............................... 8,740,298 8,590,000
==================== ====================
(1) The Company has one stock option plan currently outstanding. Under the
1997 Stock Incentive Plan, as amended (the "1997 Plan"), the Company
may grant options to its employees, consultants and directors, which
generally vest from three to five years. At the Company's 2002 annual
stockholders' meeting, its stockholders voted to approve an amendment
to the 1997 Plan to increase the number of authorized shares of common
stock available for issuance under the 1997 Plan from four million to
10 million. The Company's Incentive Stock Option, Nonqualified Stock
Option and Restricted Stock Purchase Plan- 1991, as amended (the "1991
Plan"), and the Company's Incentive Stock Option and Nonqualified Stock
Option Plan-1994, as amended, (the "1994 Plan"), have been terminated.
(2) During fiscal year 2006, the Board of Directors granted to the Named
Executive Officer 6,100,000 warrants to Durchase the Company's common
stock at an immediately exercisable exercise price of $.0279 per share
(average closing price over ten days prior to the resolution
authorizing the issuance of the warrants). 170,000 warrants were issued
to Mr. Welter and 100,000 were issued to Eric Caen each at the same
exercise price as the Named executive Officer. The remaining 960,298
warrants were issued in prior years to persons not currently affiliated
with us.
SECURITY OWNERSHIP OF PRINCIPAL STOCKHOLDERS AND MANAGEMENT
The following table shows, as of March 31, 2008 information concerning
the shares of common stock beneficially owned by each person known by Interplay
to be the beneficial owner of more than 5% of our Common Stock (other than
directors, executive officers and depositaries). This information is based on
publicly available information filed with the SEC as March 31, 2008.
Titus Interactive SA (placed in involuntary bankruptcy in January,
2005) controlled and now Financial Planning and Development S.A. ("FPD")
controls a majority of our voting stock and can elect a majority of our Board of
Directors and prevent an acquisition of us that is favorable to our other
stockholders. Alternatively, Titus could and FPD can also cause a sale of
control of our Company that may not be favorable to our other stockholders.
10
Shares Percent
Beneficially of
Name and Address Owned Class(1)
------------------------------------------------- ------------ ------------
Financial Planning And Development S.A. (1)(2) .. 58,426,293 56.3%
38 Avenue Du X Septembre
L-2550
Luxembourg
(1) Based on 103,855,634 shares of common stock outstanding as of March 31,
2008 (inclusive of treasury shares). Under Rule 13d-3 of the Securities
Exchange Act of 1934, certain shares may be deemed to be beneficially
owned by more than one person (if, for example, a person shares the
power to vote or the power to dispose of the shares). As a result, the
percentage of outstanding shares of any person as shown in this table
does not necessarily reflect the person's actual ownership or voting
power with respect to the number of shares of Common Stock actually
outstanding as of March 31, 2008.
(2) Titus owned and now FPD owns approximately 58 million shares of common
stock. As a consequence, Titus could and TPD can control substantially
all matters requiring stockholder approval, including the election of
directors, subject to our stockholders' cumulative voting rights, and
the approval of mergers or other business combination transactions.
This concentration of voting power could discourage or prevent a change
in control that otherwise could result in a premium in the price of our
common stock. Further, Titus could and FPD can cause a sale of control
of our Company that may not be favorable to our stockholders. Such a
sale, including if it involves a dispersion of shares to multiple
stockholders, further could have the effect of making any business
combination, or a sale of all of our shares as a whole, more difficult.
The following table shows, as of March 31, 2008, information with
respect to the shares of Common Stock beneficially owned by (1) each director
and director nominee, (2) each person (other than a person who is also a
director or a director nominee) who is an executive officer named in the Summary
Compensation Table below, and (3) all executive officers and directors as a
group.
Shares Beneficially Owned
--------------------------------------------
Shares of Shares Subject to
Common Options Exercisable
Stock on or Before Percent of
Name(1) Owned(2) March 31, 2008(3) Total Class(4)
----------------------------- --------- ------------------- ---------- ----------
Herve Caen**(5) ............. 8,681,306 6,120,000 14,801,306 14.2%
Eric Caen ................... 30,001 170,000 200,001 *
Michel Welter ............... 60,001 240,000 300,001 *
*
All current directors
and executive officers
as a group ................ 8,771,308 6,530,000 15,301,308 14.7%
* Less than 1%.
** Current Director or Nominee
(1) The business address of each person named is c/o Interplay
Entertainment Corp., 100 N. Crescent Drive Suite 324, Beverly Hills,
California 90210.
(2) Pursuant to Rule 13d-3(a), includes all shares of common stock over
which the listed person has, directly or indirectly, through any
contract, arrangement, understanding, relationship, or otherwise,
voting power, which includes the power to vote, or to direct the voting
of, the shares, or investment power, which includes the power to
dispose, or to direct the disposition of, the shares. Interplay
11
believes that each individual or entity named has sole investment and
voting power with respect to shares of Common Stock indicated as
beneficially owned by him or her, subject to community property laws,
where applicable, except where otherwise noted. Restricted shares are
listed even when unvested and subject to forfeiture because the holder
has the power to vote the shares.
(3) In accordance with Rule 13d-3(d)(1) under the Securities Exchange Act
of 1934, each listed person is deemed the beneficial owner of shares
that the person has a right to acquire by exercise of a vested option
or other right on or before the date that is 60 days before March 31,
2008 (January 31, 2008).
(4) Based on 103,855,634 shares of Common Stock outstanding on the stock
records as of March 31, 2008(inclusive of treasury shares). The
percentages are calculated in accordance with Rule 13d-3(d)(1), which
provides that shares not outstanding that are subject to options,
warrants, rights or conversion privileges exercisable on or before the
date that is 60 days before March 31, 2008 (January 31, 2008) are
deemed outstanding for the purpose of calculating the number and
percentage that each person owns, but not deemed outstanding for the
purpose of calculating the percentage that any other listed person
owns.
(5) Includes 8,681,306 shares of our common stock held by Mrs. Solange
Caen, Herve Caen's spouse.
12
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
The Independent Committee currently consists of Mr. Welter. The
Independent Committee reviews Related Persons transactions. Mr. Welter did not
act as the Independent Committee during 2007 because the Company did not enter
into any Related Person transactions during 2007.
REVIEW OF RELATED PERSON TRANSACTIONS
The Board of Directors has adopted a written Related Person Transaction
Policy, which requires the approval of the Independent Committee for all covered
transactions. The Policy applies to any transaction or series of transactions in
which Interplay or a subsidiary is a participant, and a "Related Person" as
defined in the Policy, including executive officers, directors and their
immediate family members, has a direct or indirect material interest. Under the
Policy, all Related Person Transactions must be submitted to the Independent
Committee for review, approval, ratification or other action. Based on its
consideration of all of the relevant facts and circumstances, and full
disclosure of the Related Person's interest in the transaction, the Independent
Committee will decide whether or not to approve the transaction and will approve
only those transactions that are in the best interests of the Company.
Item 14. PRINCIPAL ACCOUNTING FEES AND SERVICES
PRINCIPAL ACCOUNTANT FEES AND SERVICES
The following table summarizes the aggregate fees for professional
services provided by Jeffrey S. Gilbert C.P.A. related to fiscal 2006 and fiscal
2007:
2006 2007
------- -------
Audit Fees(1) .............................. $59,000 $62,000
Audit-related Fees(2) ...................... 4,500 0
Tax-related Fees(3) ........................ 14,500 8,000
(1) Both 2006 and 2007 Audit Fees include: (i) the audit of our
consolidated financial statements included in our Form 10-K and
services attendant to, or required by, statute or regulation; (ii)
reviews of the interim condensed consolidated financial statements
included in our quarterly reports on Form 10-Q for 2007 ; (iii) other
services related to SEC fillings; and (iv) associated expense
reimbursements.
(2) Audit-related Fees for 2006 include the fees for the audit of our
employee benefit plan. The plan has been terminated.
(3) Tax related fees were for tax preparation for Federal and California
Franchise tax returns for the tax year 2006.
The Audit Committee administers Interplay's engagement of Jeffrey S.
Gilbert C.P.A. and pre-approves all audit and permissible non-audit services on
a case-by-case basis. In approving non-audit services, the Audit Committee
considers whether the engagement could compromise the independence of Jeffrey S.
Gilbert C.P.A. and whether, for reasons of efficiency or convenience, it is in
the best interest of Interplay to engage its independent registered public
accounting firm to perform the services. The Audit Committee has determined that
performance by Jeffrey S. Gilbert C.P.A. of the non-audit services related to
the fees shown in the table above did not affect that firm's independence.
Prior to engagement, the Audit Committee pre-approves all independent
auditor services, and the Audit Committee pre-approved all fees and services of
Jeffrey S. Gilbert C.P.A., for work done in 2006 and 2007. The fees are budgeted
and the Audit Committee requires the independent auditor and management to
report actual fees versus the budget periodically throughout the year by
category of service. During the year, circumstances may arise when it may become
necessary to engage the independent registered public accounting firm for
additional services not contemplated in the original pre-approval categories. In
those instances, the Audit Committee requires specific pre-approval before
engaging the independent registered public accounting firm.
13
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the Registrant has duly caused this report to be signed on
its behalf by the undersigned, thereto duly authorized, at Beverly Hills,
California this 29th day of April 2008.
INTERPLAY ENTERTAINMENT CORP.
By: /s/ Herve Caen
---------------------------------------------
Herve Caen
Its: Chief Executive Officer and
Interim Chief Financial Officer
(Principal Executive and
Financial and Accounting Officer)
Pursuant to the requirements of the Securities Exchange Act of 1934, as
amended, this Annual Report on Form 10-K/A has been signed below by the
following persons on behalf of the Registrant and in the capacities and on the
dates indicated.
SIGNATURE TITLE DATE
--------- ----- ----
/s/Herve Caen
------------------------ Chief Executive Officer, April 29, 2008
Herve Caen Interim Chief Financial
Officer and Director
(Principal Executive and
Financial and Accounting Officer)
/s/*Eric Caen
------------------------- Director April 29, 2008
Eric Caen
/s/* Michel Welter
------------------------- Director April 29, 2008
Michel Welter
* By Herve Caen, pursuant to power of attorney.
14
EXHIBIT INDEX
EXHIBIT
NO. DESCRIPTION
------- -----------------------------------------------------------------------
31.1 Certification of Chief Executive Officer pursuant to Rule 13a-14(a) and
Rule 15d-14(a) under the Securities Exchange Act of 1934, as amended.
31.2 Certification of Chief Financial Officer pursuant to Rule 13a-14(a) and
Rule 15d-14(a) under the Securities Exchange Act of 1934, as amended.
32.1 Certification of Chief Executive Officer and interim Chief Financial
Officer pursuant to 18 U.S.C. Section 1350 as Adopted Pursuant to
Section 906 of the Sarbanes-Oxley Act of 2002 by Herve Caen.
15