**Exhibit 10.3**

 

THQ Inc.27001 Agoura Road, Suite 325Calabasas Hills, California  91301

 

 

November16, 2002

 

Jeffrey C. LapinTHQ Inc.27001 Agoura RoadSuite 325Calabasas Hills, CA  91301

 

DearJeff:

 

Please refer to the Amended and Restated Employment Agreementdated as of January 1, 2001 (“the Employment Agreement”) between THQ Inc., aDelaware corporation (the “Company”) and you (the “Executive”).

 

The Company and the Executive desire to amend theEmployment Agreement as provided below (defined terms have the same meaning asin the Employment Agreement unless otherwise provided):

 

# 1.                                       EmploymentTermination.

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The Employment Term ended on November 8, 2002(the “Employment Termination Date”). Executive shall forthwith voluntarily resign as an officer and directorof the Company.  Executive acknowledgesreceipt of all compensation and expense reimbursement due him through theEmployment Termination Date.

 

# 2.                                       Effectof Employment Termination.

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On and as of the Employment Termination Date:

 

## (a)                                  Allprovisions of Section 4 of the Employment Agreement shall be deemed toterminate on the Employment Termination Date, except that Section 4.7 of theEmployment Agreement shall continue to be applicable to Executive for theperiod stated therein;

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## (b)                                 Theprovisions of paragraphs 6.1 through 6.6 of the Employment Agreement shall, asprovided therein, continue to be applicable subsequent to the expiration of theEmployment Term thereunder (except that Executive may retain his laptopcomputer, purged of all company documents and files, Playstation 2 unit and hischronological files (purged of all company and business materials), and forpurposes of Section 6.1 only of the Employment Agreement, the Executive’stermination at the end of such Employment Term shall be deemed to be avoluntary resignation without “good reason”. Executive shall be free to accept employment with and be employed by anyother person, firm or corporation, notwithstanding the provisions ofclause (y) of paragraph 6.1 of the Employment Agreement, but only if theannouncement thereof does not occur prior to the close of

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business on November 21, 2002. Further, in the event of Executive’s employment in or by a CompetingBusiness, Executive agrees (i) through March 31, 2006, Executive will notsolicit Nickelodeon on behalf of the Competing Business with respect to thedevelopment or exploitation of video games primarily geared to children underthe age of 12, and (ii) for a period of eight months from November 8, 2002Executive will not solicit Nickelodeon on behalf of the Competing Business withrespect to video games geared to other audiences.  Notwithstanding the above provisions of clause (b) of thisSection 2, the parties acknowledge that the provisions of the first twosentences of paragraph 6.3 of the Employment Agreement shall not be applicableto Executive’s activities subsequent to expiration of the Consulting Term.

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# 3.                                       Medicaland Dental Insurance.

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The Company shall provide to the Executive and hisfamily medical and dental insurance to the same extent as it provides to othersenior executive officers through the earlier of (i) the expiration of theoriginal Employment Term as provided in the Employment Agreement, or (ii) thedate on which Executive becomes eligible for substantially equivalent medicaland dental insurance coverage from a third party employer provided without costto Executive.

 

# 4.                                       Officeand Secretary.

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The Company shall provide Executive with appropriateoffice space and secretarial assistance through the earlier of (i) six monthsafter the Employment Termination Date or (ii) the date on which Executiveaccepts employment with any other person, firm or corporation or (iii) changeshis principal residence from Los Angeles County, California.

 

# 5.                                       ConsultingServices.

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## (a)                                  TheCompany hereby retains Executive as a consultant, and Executive hereby agreesto be retained by the Company as a consultant on such matters as the Board ofDirectors shall reasonably determine for the period commencing on theEmployment Termination Date and ending on December 31, 2005 (such periodreferred to herein as the “Consulting Term”). The Company acknowledges that it is not retaining Executive’s exclusiveservices under this Section 5, and that Executive shall be free to engage insuch other employment and business activities as Executive in his solediscretion may determine.  Executiveshall be under no obligation to account for any amounts he may otherwise earnor receive during or after the Consulting Term, whether by other employment orotherwise, and the Company shall have no right or claim to any compensation orprofit that may inure to Executive during such period or otherwise.

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## (b)                                 Executive’sconsulting services hereunder shall be rendered at such times and places asshall be mutually convenient for the Company and Executive, after giving effectto any other employment Executive chooses to engage in and taking into accountExecutive’s availability.  In any case,Executive shall not be required to spend more than 40 hours in any month duringthe Consulting Term in the performance of his duties under this Section 5.

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## (c)                                  Forhis consulting services under this Section 5, Executive shall be paid by theCompany at the annual rate of $350,000 during the period of the Consulting Termending on December 31, 2003, $325,000 during the year of the Consulting Termending December 31, 2004 and $300,000 during the year of the Consulting Termending December 31, 2005, each such amount to be payable in as nearly equalmonthly installments as is feasible during the year in question [and each suchpayment to be subject to applicable federal and state withholding].  The Company shall also reimburse Executivein accordance with the Company’s policies and procedures for all properexpenses incurred by the Executive in providing consulting services hereunder.

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## (d)                                 Inthe event of a “Change of Control” of the Company, as defined in Section 7.7(e)of the Employment Agreement, all amounts remaining unpaid under this Section 5for the then current and any future periods under this Agreement shall becomeimmediately due and payable without any diminution or discount.

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## (e)                                  Theamounts payable above shall be due and payable without regard to the extent towhich the Company shall request Executive’s consulting services hereunder andwithout regard to the number of hours actually devoted by Executive to suchconsulting services.  Furthermore, theabove payments and reimbursements shall continue to be made notwithstanding anycharge or allegation that Executive has not or may not have fulfilled hisobligations under this Agreement until and unless the Arbitrator under Section8 hereof shall have determined that Executive has given the Company “Cause” toterminate Executive’s consulting services under this Agreement.  “Cause” shall be the same as defined asdefined in Section 7.3 of the Employment Agreement (substituting references tothis Agreement for references therein to the Employment Agreement), and no“Cause” shall be determined unless and until the Company has followed theprocedures set forth in the second paragraph of Section 7.3 of the EmploymentAgreement (again substituting references to this Agreement for referencestherein to the Employment Agreement).

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## (f)                                    TheExecutive shall perform the consulting services described in Section 5 hereofas an independent contractor without the power to bind or represent the Companyfor any purpose whatsoever.  Except asand to the extent otherwise provided herein, the Executive shall not, by virtueof being a consultant hereunder, be eligible to receive any employee benefitsfor which officers or other employees of the Company are eligible at any timeduring the Consulting Term.

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## (g)                                 Notwithstandingthe above provisions of this Section 5, the Consulting Term shall be terminatedearlier than December 31, 2005 in the event and at such time as Executiveagrees to commence employment or act as an officer, director, agent of orconsultant for any person, firm or corporation (or division or operating unitthereof) primarily in the business of developing and publishing interactivegames (“Competing Business”).  In thatevent, the Consulting Term shall terminate and all consulting services whichwould otherwise be required of Executive as well as all payments hereunder thatwould otherwise be required of the Company, shall thereafter cease.

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# 6.                                       Standstill,Etc.

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## (a)                                  Executiveagrees that for a period of 3 years following the Employment Termination Date(the Standstill “Period”), neither Executive nor any person or entitycontrolled by Executive shall directly or indirectly, without the consent ofthe Company, (i) commence or be involved with others who commence anytender or exchange offer, proxy contest or solicitation or any similartransaction involving the Company, or (ii) purchase or be part of a groupwhich purchases any shares of common stock of the Company in excess of 4.9% ofthe then outstanding common stock or any other class of securities of theCompany in excess of 4.9% of the outstanding securities of such class.

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## (b)                                 NeitherExecutive or the Company or any current or future executive officers ordirectors of the Company (collectively, the “Company Parties”) shall make anydisparaging comments or remarks respecting the other party.  For this purpose, “disparaging” shall belimited to comments or remarks which impugn or cast doubt upon past, present orfuture employment performance or business accomplishments or businessactivities, or the likelihood of future business success, which comments orremarks are made in such a way as to be reasonably likely to have a deleteriousaffect on the reasonable efforts of the other party to further his or itsbusiness career or business.

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# 7.                                       (IntentionallyOmitted)

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# 8.                                       Representationsand Warranties.

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## (a)                                  Executiverepresents and warrants that there is not now pending any action, complaint,petition, charge, grievance, or any other form of administrative, legal orarbitral proceeding by Executive against the Company or any of its officers ordirectors or any other of the Company Parties.

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## (b)                                 TheCompany represents and warrants that any and all actions on the part of theBoard of Directors of the Company, or any committee of the

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## Board of Directorsnecessary to authorize or implement any of the provisions of this Agreementhave been duly and validly taken.

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# 9.                                       MutualRelease.

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## (a)                                  Exceptfor the obligations set forth in this Agreement, Executive hereby fully,unconditionally and irrevocably releases the Company, all officers anddirectors of the Company (the “General Releasees”) of and from any and allclaims, demands, actions and causes of action of any kind and nature, in law,equity or otherwise, under contract, tort, statutory or common law, known orunknown, suspected or unsuspected, disclosed or undisclosed, which Executivemay have had, may now have or may in the future have by reason of any matter,cause or thing done, omitted or suffered to be done prior to the datehereof.  In addition, and withoutlimitation on the foregoing, except for the obligations in this Agreement,Executive hereby fully, unconditionally and irrevocably releases the GeneralReleasees and all entities controlled by or under common control with any ofthem, all past and present employees, officers and directors of any of theGeneral Releasees and any of such entities and all owners or direct or indirectinterests in any of the General Releasees or such entities, and theirrespective counsel, of an from any and all claims, demands, actions and causesof action of any kind and nature, in law, equity or otherwise under contract,tort, statutory or common law, known or unknown, suspected or unsuspected,disclosed or undisclosed, directly or indirectly, which Executive may have had,may now have, or may in the future have, arising out of or in nay way connectedwith Executive’s relationship in any and all capacities with the Company priorto the date hereof, and the employment of Executive by the Company or thetermination of that employment, including without limitation, claims if any,pursuant to the Employment Agreement or pursuant to any federal, state or locallaw, such as, but not limited to, the Age Discrimination in Employment Act of 1967, 29 U.S.C. § 621, etseq.;Title VII of the Civil rights Act of 1964, as amended, 42 U.S.C. Section2000(e), etseq.; the Civil Rights Act of 1866, as amended, 42U.S.C. Section 1981, etseq.; the Fiar Labor Standards Act of1939, as amended, 29 U.S.C. Section 201, etseq.; the Equal PayAct, 29 U.S.C. Section 206(d); the Orders of the California Industrial WelfareCommission regulating wages, hours and working conditions; each and everyprovision of the California Labor and Insurance Codes; Article 1, § 1 of theCalifornia Constitution; the Rehabilitation Act of 1973, as amended, 29 U.S.C.,Section 701, etseq.; Americans with Disabilities Act, 104 Stat.327; the Employee  Retirement IncomeSecurity Act of 1974, 29 U.S.C., Section 1001, etseq.; theNational Labor Regulations Act, as amended, 29 U.S.C., Section 151, etseq.;the California Fair Employment and Housing Act, as amended, CaliforniaGovernment Code, Section 12900, etseq.; the Uruh Civil RightsAct, as amended, California Civil Code, Section 51, etseq.

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## (b)                                 Exceptfor the obligations set forth in this Agreement, the Company on its own behalfand on behalf of all General Releasees hereby fully, unconditionally andirrevocably releases Executive of and from any and all claims,

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## demands, actions andcauses of action of any  kind andnature, in law, equity or otherwise, under contract, tort, statutory or commonlaw, know or unknown, suspected or unsuspected, disclosed or undisclosed, whichany of them may have had, may now have or may in the future have by reason ofany matter, cause or thing done, omitted or suffered to be done prior to thedate hereof.  Except for the obligationsset forth in this Agreement, the Company on its own behalf and on behalf of allthe persons and entities released in any way by Executive under Paragraph (a)of Section 9, hereby fully, unconditionally and irrevocably releases Executiveof and from any and all claims, demands, actions and causes of action of anykind and nature, in law, equity or otherwise, under contract, tort, statutoryor common law, known or unknown, suspected or unsuspected, and disclosed orundisclosed, which any of them may have had, may now have or may in the futurehave arising out of or in any way connected with Executive’s relationship inany and all capacities with the Company prior to the date hereof, and theemployment of Executive by the Company or the termination of thatemployment.  Without limitation on thegenerality of the foregoing, included in the foregoing release is a release ofany and all such claims, demand, actions, and causes of action, directly orindirectly arising out of or in any way connected with Executive’s relationshipin any and all capacities with the Company prior to the date hereof, includingbut not limited to the employment of Executive by the Company or thetermination of that employment or Executive’s actions or non-actions as anofficer of the Company.

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## (c)                                  Executiveand the Company each acknowledge that he or it has read and understands Section1542 of the Civil Code of the State of California which reads as follows:

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Ageneral release does not extend to claims which the creditor does not know orsuspect to exist in his favor at the time of executing the release, which ifknown by him must have materially affected his settlement with the debtor.

 

Executive and the Company each hereby expressly waivesand relinquishes all rights and benefits under that section and any similar lawof any state or territory of the United States with respect to the release heor it is granting in this Agreement.

 

## (d)                                 Theforegoing releases in this paragraph 9 do not apply to the rights andobligations of the parties under vested outstanding options to purchase sharesof the Company’s stock previously granted to Executive by the Company.

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# 10.                                 Notices.  All notices and other communicationsrequired or permitted hereunder shall be in writing and shall be deemed givenwhen (i) delivered personally or by overnight courier to the following addressof the other party hereto (or such other address for such party as shall bespecified by notice given pursuant to this Section) or (ii) sent by facsimileto the following facsimile number of the other party

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# hereto (or such other facsimile number for such partyas shall be specified by notice given pursuant to this Section), with theconfirmatory copy delivered by overnight courier to the address of such partypursuant to this Section:

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If to the Company, to:

 

THQInc.

27001Agoura Road

Suite325

Calabasas Hills, CA  91301Attention:  Chief Executive Officer

 

If to the Executive, to:

 

Jeffrey C. Lapinc/o Kenwick, Inc.

8509 So. LaCienega Boulevard

Inglewood,California 90301

Attention:  Z.L. Lapin

 

# 11.                                 Severability.  Whenever possible, each provision of thisAgreement shall be interpreted in such manner as to be effective and validunder applicable law, but if any provision of this Agreement is held to beinvalid, illegal or unenforceable in any respect under applicable law or rulein any jurisdiction, such invalidity, illegality or unenforceability shall notaffect the validity, legality or enforceability of any other provision of thisAgreement or the validity, legality or enforceability of such provision in anyother jurisdiction, but this Agreement shall be reformed, construed andenforced in such jurisdiction as if such invalid, illegal or unenforceableprovision had never been contained herein.

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# 12.                                 Successorsand Assigns.  This Agreement shallbe enforceable by the Consultant and his heirs, executors, administrators andlegal representatives, and by the Company and its successors and assigns.

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# 13.                                 GoverningLaw.  This Agreement shall begoverned by and construed and enforced in accordance with the internal laws ofthe State of California without regard to principles of conflict of laws.

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# 14.                                 Amendmentand Waiver.  The provisions of thisAgreement may be amended or waived only by the written agreement of the Companyand the Executive, and no course of conduct or failure or delay in enforcingthe provisions of this Agreement shall affect the validity, binding effect orenforceability of this Agreement.

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# 15.                                 Counterparts.  This Agreement may be executed in twocounterparts, each of which shall be deemed to be an original and both of whichtogether shall constitute one and the same instrument.

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# 16.                                 Settlementof Claims.  It is understood thatthis is a compromise settlement of disputed claims, and that the promises ofpayments in consideration of this Agreement shall not be construed to be anadmission of any liability or obligation whatever, by either party to the otherparty, or to any other person whomsoever.

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# 17.                                 Arbitration.  Any and all disputes, controversies orclaims (“Dispute”) between the parties relating to the interpretation orenforcement or performance of this Agreement shall be resolved by bindingarbitration in accordance with the then current Commercial Arbitration Rules ofthe American Arbitration Association, subject to only the following provisions:

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## (a)                                  TheArbitrator shall be determined from a list of names of five impartialarbitrators (each of whom shall be a retired judge of the Superior Court of theState of California or a retired Justice of the Court of Appeal of the State ofCalifornia) experienced in commercial arbitration matters supplied by theAmerican Arbitration  Association (The“Association) chosen by Executive and the Company each in turn striking a namefrom the list until one name remains.

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## (b)                                 TheArbitrator shall determine whether and to what extent any party shall beentitled to damages or equitable relief.

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## (c)                                  TheArbitrator shall not have the power to add to nor modify any of the terms orconditions of this Agreement.  TheArbitrator’s decision shall not go beyond what is necessary for theinterpretation and application of the provision of this Agreement in respect ofthe issue before the Arbitrator.  TheArbitrator shall not substitute his or her judgment for that of the parties inthe exercise of rights granted or retained by this Agreement.  The Arbitrator’s award or other permittedremedy, if any, and the decision shall be based upon the issue as drafted andsubmitted by the respective parties and the relevant and competent evidenceadduced at the hearing.

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## (d)                                 TheArbitrator shall have the authority to award any remedy or relief provided forin this Agreement, in addition to any other remedy or relief (includingprovisional remedies and relief) that a court of competent jurisdiction couldorder or grant.  In addition, theArbitrator shall have the authority to decide issues relating to theinterpretation, meaning or performance of this Agreement even if such decisionwould constitute an advisory opinion in a court proceeding or if the issueswould otherwise not be ripe for resolution in a court proceeding, and any suchdecision shall bind the parties in their continuing performance of thisAgreement.  The Arbitrator’s writtendecision shall be rendered within sixty days of the hearing.  The decision reached by the Arbitrator shallbe final and binding upon the parties as to the matter in

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## dispute.  To the extent that the relief or remedygranted by the Arbitrator is relief or remedy on which a court could enterjudgment, a judgment upon the award rendered by the Arbitrator shall be enteredin any court having jurisdiction thereof (unless in the case of an award ofdamages, the full amount of the award is paid within 10 days of itsdetermination by the Arbitrator). Otherwise, the award shall be binding on the parties in connection withtheir continuing performance of this Agreement and in any subsequent arbitralor judicial proceeding between the parties.

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## (e)                                  Thearbitration shall take place in Los Angeles, California.

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## (f)                                    Thearbitration proceeding and all filing, testimony, documents and informationrelating to or presented during the arbitration proceeding shall be disclosedexclusively for the purpose of facilitating the arbitration process and for noother purpose and shall be deemed to be information subjection to theconfidentiality provisions of this Agreement.

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## (g)                                 Theparties shall continue performing their respective obligations under thisAgreement notwithstanding the existence of a Dispute while the Dispute is beingresolved unless and until such obligations are terminated or expire inaccordance with the provisions hereof. In the event that the Arbitrator determines that the Company in badfaith has failed to continue to perform its payment or other obligations toExecutive under this Agreement without a determination by the Arbitrator thatit is entitled to do so, the Arbitrator shall have the authority to acceleratethe full amount of all sums which are then or which may thereafter become dueor payable under this Agreement from the Company to Executive or to requirethat the Company post an unconditional Bank letter of credit which Executivemay draw upon at any time for the amount of all such sums which may thereafterbecome payable by the Company to Executive and in addition, order that theCompany pay all of Executive’s legal fees and other costs in connection withthe Arbitration and any enforcement of the Arbitrator’s judgment or award.

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## (h)                                 TheArbitrator may, in his or her sole discretion, order a pre-hearing exchange ofinformation including production of documents, exchange of summaries oftestimony or exchange of statements of position, and shall schedule promptlyall discovery and other procedural steps and otherwise assume case managementinitiative and control to effect an efficient and expeditious resolution of theDispute.  No testimony of any witnessshall be presented in written form unless the opposing party or parties shallhave the opportunity to cross-examine such witness, except as the partiesotherwise agree in writing.  At any oralhearing of evidence in connection with an arbitration proceeding, each partyand its counsel shall have the right to examine its witness and tocross-examine the witnesses of the other party.

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## (i)                                     Notwithstandingthe dispute resolution procedures contained in this Section 18, either partymay apply to any court having jurisdiction (i) to enforce

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## this quo until thearbitration award is rendered or the Dispute is otherwise resolved, or (iii) tochallenge or vacate any final judgement, award or decision of the Arbitratorthat does not comport with the express provisions of this Section 18.

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# 18.                                 Integration;Counterparts.  This Agreement andthe Employment Agreement contains the entire agreement between the parties andconstitutes the complete, final and exclusive embodiment of their agreementwith respect to the subject matter hereof. This Agreement is executed without reliance upon any promise, warrantyor representation by the parties or any representative of the parties otherthan those expressly contained herein, and the parties have carefully read thisAgreement, and sign the same of their own free will.  This agreement may be executed in counterparts.

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# 19.                                 Costsand Expenses.  The Company andExecutive shall each bear their own legal fees in connection with thenegotiation, preparation, execution and enforcement of this Agreement exceptthat the Company shall pay directly $6,000 of Executive’s legal fees.  In other respects, except as specificallyprovided herein, Executive and the Company will each bear their own costs andexpenses including attorney’s fees incurred in or arising out of or the mattersreleased herein.

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# 20.                                 Headings.

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The article, section and paragraph headings are forconvenience of reference only, and shall not define or limit the provisions ofthis Agreement.

 

Please confirm your agreement to the foregoing bysigning and returning a copy of this letter.

 

 
|   | Yours very truly, |
|--------|-------------------|
|   |              |
|   | THQ Inc.          |
|   |              |
|   | By:               | /s/ Brian J. Farrell |   |
|   |              | Brian J. Farrell |
|   |              | Chief Executive Officer |

 

 

AGREED TO:

 

 
| /s/ Jeffrey C. Lapin |   |
|----------------------|--------|
| Jeffrey C. Lapin     |

 

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