FORM OF STOCK OPTION AGREEMENT

Exhibit 10.2

FORM OF STOCK OPTION AGREEMENT [FOR EMPLOYEES]

  This Award will evidence the grant to you on «Date» (the “Award Date”) by the Compensation Committee of the Board of Directors of Midway Games Inc. (the “Company”) of an Option pursuant to the Company’s 2005 Long-Term Incentive Plan (the “Plan”) to purchase up to «NumberofOptions» («numberofoptions2») shares (“Option Shares”) of the common stock, par value $.01 per share, of the Company at a price of «exerciseprice» Dollars ($«exerciseprice2») per share and the terms and conditions of such Award. Under applicable provisions of the Internal Revenue Code of 1986, as amended, the Option is treated as a non-qualified stock option. Capitalized terms used but not defined herein shall have the meanings ascribed to them in the Plan.

     1. The Option is subject to the terms and conditions of this Agreement and of the Plan.

     2. As used in this Agreement, the Company, its subsidiaries and affiliates are collectively referred to as the “Employer Group”.

     3. This Agreement and the terms of the Award shall be governed by and construed and interpreted in accordance with the substantive laws of the State of Delaware, without giving effect to any conflicts of law rule or principle that might require the application of the laws of another jurisdiction.

     4. In consideration of the granting of this Option, and in addition to the Company’s rights under any other similar provisions in the Plan, you agree you will not disclose, discuss, copy or otherwise use or allow to be used, in any manner, in competition with or contrary to the interests of any member of the Employer Group, the customer lists, product research, engineering data or other trade secrets of any member of the Employer Group. Nothing in this Agreement or in the Plan shall confer upon you any right to continue in the service of the Employer or any member of the Employer Group or shall interfere with or restrict in any way the rights of any member of the Employer Group, which are hereby expressly reserved.

     5. You acknowledge and agree that the Company may establish, from time to time, 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 the Option. By the execution hereof, you hereby agree to pay to the Company [or your Employer] all such amounts requested by the Company to permit the Company to take any tax deduction available to it resulting from the exercise of the Option. You also agree to comply with any procedures established from time to time by the Company, to ensure that the Company receives prompt

notice of 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.

     6. Subject to the restrictions and conditions under this Agreement and the Plan, the Option may be exercised, from the respective dates set forth below with respect to the number of Option Shares set forth opposite such date, until the expiration or termination of the Option:

     7. The Option, to the extent not previously exercised or terminated, shall expire on the day preceding the tenth anniversary of the Award Date.

     8. The Option may be exercised in whole or in part (but not as to fractional shares), to the extent that the Option is then exercisable, subject to the restrictions and conditions under this Agreement and the Plan, by delivering to the Company a written notice of exercise in the form attached hereto as Exhibit A, together with payment in full in cash or cash equivalent (which may be such person’s personal check) or, to the extent permitted by applicable law, in shares of Stock alre