UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported)
January 21, 2002
INTERPLAY ENTERTAINMENT CORP.
(Exact name of registrant as specified in its charter)
Delaware 0-24363 33-0102707
(State or other jurisdiction (Commission (IRS Employer
of incorporation) File Number) Identification No.)
16815 Von Karman Avenue, Irvine, CA 92606
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (949) 553-6655
ITEM 5. - OTHER EVENTS.
On January 28, 2002, the Board of Directors appointed Herve Caen, the
President and a director of the Company, as interim Chief Executive Officer.
ITEM 6. - RESIGNATIONS OF REGISTRANT'S DIRECTORS.
In a letter dated January 7, 2002, Brian Fargo informed the Company of
his resignation as a director, Chairperson of the Board of Directors and
Chief Executive Officer of the Company, effective January 21, 2002. Mr. Fargo
stated several reasons for his resignation, which are summarized below. The
full text of Mr. Fargo's resignation letter is attached as an exhibit to this
Form 8-K.
Mr. Fargo gave as reasons for his resignation the alleged reduction in
his responsibilities as chief executive of the Company commencing in September
2001, including his supervision of the Company's legal and contractual affairs,
global strategy and development of corporate relationships, and internal and
external product development activities. Mr. Fargo cites as specific examples
the instruction to company departments to report directly to Herve Caen, the
Company's President, and Nathan Peck, the Company's Chief Administrative
Officer. Mr. Fargo also references actions by Messrs. Caen and Peck to stop an
audit by the Company of Virgin Interactive Entertainment Limited, which Mr.
Fargo alleges is contrary to his express instructions in September 2001 to
continue to seek the audit. Mr. Fargo also references the return by the Company
of $1 million to Titus Interactive S.A. without his approval.
In response to reasons given by Mr. Fargo, the Company offers the
following:
Mr. Fargo has not regularly attended to his responsibilities as Chief
Executive Officer of the Company for more than 4 months. Instead, Mr. Fargo has
focused his energies on attempting to secure a highly lucrative severance and
separation package for himself. The Company is investigating whether Mr. Fargo,
during his 4-month absence from the Company, has improperly engaged in
competition with the Company by, among other things, soliciting Company
employees. The Company is considering pursing civil actions against Mr. Fargo
for breach of his duties to the Company.
As to Mr. Fargo's contention that he has been effectively removed from
his ability to supervise the Company's affairs, including its legal and
contractual affairs, its global corporate strategy, its development of corporate
relationships and its internal and external product development, the Company
contends that he could not have supervised these functions while absent from the
workplace for a third of the year. The supervision of these affairs requires
regular attendance. To the extent Mr. Fargo is not currently supervising these
functions, it is as a result of his own misconduct and his failure to perform
the duties and responsibilities owed by him to the Company. Having absented
himself from the Company, it is inequitable for Mr. Fargo to claim that he does
not have supervisory authority over these important and necessary corporate
functions.
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Mr. Fargo's allegation that Virgin has refused to let the Company's
auditors perform an audit is without merit. Had Mr. Fargo been attending work,
he would have known that the audit is currently in progress.
The circumstances of the Company's repayment to Titus of $1 million,
which is referred to in Mr. Fargo's letter as a reason for his resignation, has
been publicly disclosed in the Company's filings with the Securities and
Exchange Commission. The Company agreed to sell to Titus certain distribution
rights to the Company's products. Because of Titus' relationship with the
Company, the transaction was conditional upon approval of the transaction by a
Board committee of disinterested directors, of which Mr. Fargo was a member.
Titus advanced $1 million to the Company to be held as a good faith deposit
against the purchase price pending approval of the transaction by Mr. Fargo and
the other committee members. The Board committee, however, never approved the
transaction. Consequently, the agreement was terminated and the $1 million
deposit was returned to Titus.
In response to Mr. Fargo's letter, the Company informed Mr. Fargo that
his actions constituted violations of his employment agreement, and provided him
with thirty (30) days to cure his performance defects and immediately carry out
the responsibilities and duties required of him by his employment agreement. Mr.
Fargo declined to return to work at the Company, and his resignation took effect
on Monday, January 21, 2002.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
INTERPLAY ENTERTAINMENT CORP.
January 24, 2002 /S/ HERVE CAEN
-----------------------------------
Herve Caen
President
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EXHIBIT INDEX
EXHIBIT NUMBER DESCRIPTION
99.1 Letter from Brian Fargo