Document:

Exhibit
10.1

AMENDED AND RESTATED

EMPLOYMENT AGREEMENT

dated as of July 20, 2006 (“this Agreement”)

by and between THQ Inc.,

a Delaware corporation (the “Company”),

and BRIAN J. FARRELL (the “Executive”)

RECITALS

WHEREAS, the
Company and the Executive are parties to an Amended and Restated Employment
Agreement dated as of January 1, 2001, under which the term of Executive’s
“Employment Period” thereunder will expire December 31, 2006; and

WHEREAS the
Board of Directors of the Company (the “Board”) deems it to be in the best
interests of the Company and its shareholders to assure the continued
employment of Executive, and Executive desires to continue such employment,
under the terms of this Agreement;

NOW,
THEREFORE, in consideration of the foregoing and the mutual covenants contained
therein, the parties agree as follows:

1.               EMPLOYMENT; TERM.

The Company
will continue to employ Executive and Executive will continue to be employed by
the Company as the Company’s President and Chief Executive Officer (“CEO”) during
the original and any extended term of this Agreement (“the Employment Term”)
which commences on July 20, 2006 and which shall, unless sooner terminated by
the Company or Executive pursuant to Section 7, continue through
March 31, 2010; provided, however, that, commencing on March 31, 2008
and thereafter, this Agreement shall be automatically extended each year on
March 31 by a period of one (1) additional year if the Company has not
given written notice to Executive, at least ninety (90) calendar days prior to
the relevant March 31, that it has elected not to extend this Agreement.

In the event
the Company elects not to extend this Agreement by providing written notice of
such election at least ninety (90) calendar days prior to a given
March 31, Executive may resign for “Good Reason” pursuant to
Section 7.4(a) hereof and shall thereupon be entitled to the benefits
specified in Section 7.5 hereof. 
Notwithstanding the foregoing, this Agreement shall automatically
terminate on March 31 of the calendar year in which Executive turns
sixty-five (65) years of age.

2.               DUTIES, RESPONSIBILITIES.

(a)           During the Employment Term, Executive
agrees to devote his entire business time, attention and energies to the
business of the Company and its subsidiaries; provided however that Executive
may engage in other activities that do not conflict with or interfere with the
performance of his duties and responsibilities hereunder including without
limitation 

(i) investing
his assets or funds, so long as the business of any such entity in which he
shall make his investments shall not be in direct competition with that of the
Company, except that Executive may invest in an entity in competition with the
Company if its stock is listed for trading on a national stock exchange or
traded in the over-the-counter market and Executive’s holdings represent less
than 5% of its outstanding stock; or (ii) acting as a director, trustee,
officer or upon a committee of any other firm, trust or corporation if such
positions do not unreasonably interfere with the services to be rendered by
Executive hereunder and, as to future outside Board memberships, the Executive
obtains the consent of the Company’s Board of Directors or the Company’s
Nominating/Corporate Governance Committee; or (iii) being involved in
educational, civic or charitable activities which do not unreasonably interfere
with the services to be rendered by Executive hereunder.  During the Employment Term, the Executive
shall, if elected or appointed, serve as a director of the Company.

(b)           As CEO, Executive shall report solely
and directly to the Board.  The Executive
shall at all times be the most senior executive of the Company.  He shall have such senior executive powers,
duties, authorities and responsibilities as are consistent with Executive’s
position and title and as have been historically performed by Executive,
including acting as chairman of any meeting of the Board (unless an independent
Chairman of the Board is elected and except for meetings of the Board’s
independent Directors), supervising financing, acquisitions and similar
transactions and strategic planning for the Company consistent with his title
and position, supervising the chief operating officer of the Company and
directly or indirectly all other employees of the Company, and managing all
activities of the Company, including without limitation, organizational
structure and non-officer compensation. 
Without limitation on the foregoing, Executive shall have (i) complete
senior management authority and responsibility with respect to the management
and operations of the Company and its business, including implementation of the
business strategy of the Company consistent with long-term strategy and
policies approved by the Board, (ii) authority on behalf of the Company to
employ and terminate employment of all Company personnel (other than the
authority to terminate the employment of the CFO or General Counsel or  any Internal Auditor without Board or
relevant Committee approval), and (iii) authority to execute contracts on
behalf of the Company in the discharge of his duties and responsibilities.

3.               COMPENSATION.

As
compensation for Executive’s services to be rendered hereunder during the
Employment Term, the Company will pay to Executive the following:

3.1           Base Salary.  An annual base salary (“Base Salary”)
(payable in substantially equal installments at the Company’s normal pay
periods) during the Employment Term of $626,045, which Base Salary was
established effective as of April 1, 2006. 
The Base Salary shall be subject to annual review commencing at the end
of the first fiscal year of the Company ending during the Employment Term and
at the end of each fiscal year thereafter, and may be increased (but not
decreased) for subsequent fiscal years.

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3.2           Bonus.

(a)           In addition to the Base Salary, the
Executive is also entitled to a bonus (the “Bonus”) for each fiscal year of the
Company commencing during the Employment Term, in accordance with the Company’s
recently adopted Pay-for-Performance Annual Incentive Plan and its successors
for all future years.

(b)           The Board in its sole discretion may
also award to Executive a performance bonus at any time in such amount and in
such form as the Board may determine (the “Performance Bonus”) after taking
into consideration other compensation paid or payable to Executive under this
Agreement, as well as the financial and non-financial progress of the business
of the Company and the contributions of the Executive toward that progress.

(c)           Any Bonus and Performance Bonus shall
be payable as soon as practicable after the end of the fiscal year for which it
is payable.

(d)           The Executive shall also be eligible
for awards of stock options and any other stock or equity based awards that may
be available to executives of the Company.

4.               LOCATION; EXPENSES; ADDITIONAL BENEFITS;
INDEMNIFICATION.

4.1           Location.  Executive’s principal place of business shall
be at the Company’s headquarters in the Los Angeles Metropolitan area, and
Executive shall not be required to relocate outside of the Los Angeles
Metropolitan area.

4.2           Expenses.  The Company shall pay directly, or reimburse
the Executive for, all reasonable and necessary expenses and disbursements
incurred by him for and on behalf of the Company in the performance of his
duties under this Agreement.  For such
purpose, the Executive shall submit to the Company itemized reports of such
expenses in accordance with the Company’s policies.

4.3           Vacation.  The Executive shall be entitled to paid
vacations during the Employment Term in accordance with the Company’s then
prevalent practices for senior executive employees; provided, however, that
Executive shall be entitled to such paid vacations for not less than
four (4) weeks per annum.

4.4           Employee Benefit Plans.  The Executive shall be entitled to
participate in, and to receive benefits under, any employee benefit plans of
the Company (including, without limitation, pension, profit sharing, group life
insurance and group medical insurance plans) as may exist from time to time for
its executive employees.  Subject to the
limitation contained in Section 4.7 below, the Company shall make the
maximum pension and profit sharing contribution for the Executive legally
permitted to be made by an employer and shall permit the Executive to
contribute the maximum pension and profit sharing contribution legally
permitted to be made by an employee each year during the Employment Period.

4.5           Life and Disability Insurance.  The Company shall provide to Executive, and
pay the premiums on, insurance on Executive’s life in the amount of
$3 million as well as, on an

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after-tax basis, long-term disability insurance for
the Executive covering at least 80% of his Base Salary during the Employment
Term and for a period of twenty-four (24) months thereafter, each of which
shall have the coverage reasonably requested by Executive; provided, however,
that the foregoing coverage shall be subject to any insurance examinations of
Executive required by the insurer. 
Executive shall designate the beneficiaries under the disability and
life insurance policies.

4.6           Perquisites.  Executive shall be entitled to receive all
perquisites made available by the Company (and approved by the Company’s Board
or Compensation Committee) from time to time during the Employment Term to
other senior executives of the Company in the United States.  Without limiting the generality of the
foregoing, Executive shall be entitled to a secretary, a car allowance and
insurance in accordance with the Company’s policy, or, if more beneficial to
Executive, as provided by the Company to any of its senior executives.

4.7           Indemnification.  As a director and officer of the Company, the
Executive shall be entitled to the benefits of all provisions of the
Certificate of Incorporation of the Company, as amended, and the Bylaws of the
Company, as amended, that provide for indemnification of officers and directors
of the Company as well as any Indemnification Agreement that the Company and
Executive have entered or may enter into. 
No such provisions shall be amended in any way to limit or reduce the
extent of the indemnification available to Executive as an officer or director
of the Company, except if and then to the extent required to comply with
applicable laws or regulations.

In addition, and without limitation on the
foregoing:

(i)            to the fullest
extent permitted by law, the Company shall indemnify and save and hold harmless
the Executive from and against any and all claims, demands, liabilities, costs
and expenses, including judgments, fines or amounts paid on account thereof
(whether in settlement or otherwise), and reasonable expenses, including
attorneys’ fees actually and reasonably incurred (except only if and to the
extent that such amounts shall be finally adjudged to have been caused by
Executive’s willful breach of the express provisions of this Agreement) to the
extent that the Executive is made a party to or witness in any action, suit or
proceeding, or if a claim or liability is asserted against Executive (whether
or not in the right of the Company), by reason of the fact that he was or is a
director or officer, or acted in such capacity on behalf of the Company, or by
reason of or arising out of or resulting from entering into this Agreement or
the rendering of services by the Executive pursuant to this Agreement, whether
or not the same shall proceed to judgment or be settled or otherwise brought to
a conclusion.  The Company shall advance
to Executive on demand all reasonable expenses incurred by Executive in connection
with the defense or settlement of any such claim, action, suit or proceeding,
and Executive hereby undertakes to repay such amounts if and to the extent that
it shall be finally adjudged that the Executive is not entitled to be
indemnified by the Company under this Agreement or under the provisions of the
Certificate of Incorporation or Bylaws of the Company as of the date hereof
that govern indemnification of officers or directors of the Company (but giving
effect to future amendments that broaden or expand any such indemnification and
obligations or right more favorably to Executive).  Executive shall also be entitled to recover
any costs of enforcing his rights under this Section (including, without
limitation, reasonable attorneys’ fees and disbursements) in the event any
amount payable hereunder is not paid within thirty (30) days of

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written request therefore by Executive.  The rights of Executive under this
Section shall survive the termination of this Agreement and shall be
applicable for so long as Executive may be subject to any claim, demand,
liability, cost or expense against which this paragraph 4.7 is intended to
protect and indemnify him; and

(ii)           the Company shall,
at no cost to the Executive, use its best efforts to at all times include the
Executive during the Employment Term and for a period of not less than
seven (7) years thereafter, as an insured under any directors and officers
liability insurance policy maintained by the Company, which policy shall
provide such coverage in such amounts as the Board of Directors shall deem
appropriate for coverage of all directors and officers of the Company.

4.8           The Company’s share of the pension
and profit sharing contribution referenced in Section 4.4 and insurance
premiums referenced in Section 4.5 shall not exceed in any calendar year
an aggregate of $50,000.

5.               CERTAIN ADDITIONAL PAYMENTS.

(a)           Anything in this Agreement to the
contrary notwithstanding, in the event it shall be determined that any payment,
benefit or distribution made or provided by the Company or its affiliated companies
to or for the benefit of the Executive (whether paid or payable or distributed
or distributable pursuant to the terms of this Agreement or otherwise, but
determined without regard to any additional payments required under this
Section 5) (a “Payment”) would be subject to the excise tax imposed by
Section 4999 of the Code, or any interest or penalties are incurred by the
Executive with respect to such excise tax (such excise tax, together with any
such interest and penalties, are hereinafter collectively referred to as the “Excise
Tax”), then the Executive shall be entitled to receive an additional payment (a
“Gross-Up Payment”) in an amount such that after payment by the Executive of
all taxes (including any interest or penalties imposed with respect to such
taxes), including, without limitation, any income taxes (and any interest and
penalties imposed with respect thereto) and Excise Tax imposed upon the
Gross-Up Payment, the Executive retains an amount of the Gross-Up Payment equal
to the Excise Tax imposed upon the Payments.

(b)           Subject to the provisions of
paragraph 5(c), all determinations required to be made under this
paragraph 5(b), including whether and when a Gross-Up Payment is required
and the amount of such Gross-Up Payment and the assumptions to be utilized in
arriving at such determination, shall be made by the Company’s public
accounting firm (the “Accounting Firm”) which shall provide detailed supporting
calculations both to the Company and the Executive within 15 business days of
the receipt of notice from the Executive that there has been a Payment, or such
earlier time as is requested by the Company. 
In the event that the Accounting Firm is serving as accountant or
auditor for the individual, entity or group effecting any Change in Control
which may give rise to the Excise Tax, the Executive shall appoint another
nationally recognized public accounting firm to make the determinations
required hereunder (which accounting firm shall then be referred to as the
Accounting Firm hereunder).  All fees and
expenses of the Accounting Firm shall be borne solely by the Company.  Any Gross-Up Payment, as determined pursuant
to this paragraph 5(b), shall be paid by the Company to the Executive
within five days of the receipt of the Accounting Firm’s determination.  If the

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Accounting Firm determines that no Excise Tax is
payable by the Executive, it shall furnish the Executive with a written opinion
that failure to report the Excise Tax on the Executive’s applicable federal
income tax return would not result in the imposition of a negligence or similar
penalty.  Any determination by the
Accounting Firm shall be binding upon the Company and the Executive.  As a result of the uncertainty in the
application of Section 4999 of the Code at the time of the initial
determination by the Accounting Firm hereunder, it is possible that Gross-Up
Payments which will not have been made by the Company should have been made (“Underpayment”),
consistent with the calculations required to be made hereunder.  In the event that the Company exhausts its
remedies pursuant to paragraph 5(c) and the Executive thereafter is
required to make a payment of any Excise Tax, the Accounting Firm shall
determine the amount of the Underpayment that has occurred and any such Underpayment
shall be promptly paid by the Company to or for the benefit of the Executive.

(c)           The Executive shall as soon as
practicable notify the Company in writing of any claim by the Internal Revenue
Service that, if successful, would require the payment by the Company of the
Gross-Up Payment.  Such notification
shall apprise the Company of the nature of such claim and the date on which
such claim is requested to be paid.  The
Executive shall not pay such claim prior to the expiration of the 30-day period
following the date on which the Executive gives such notice to the Company (or
such shorter period ending on the date that any payment of taxes with respect
to such claim is due).  If the Company
notifies the Executive in writing prior to the expiration of such period that
it desires to contest such claim, the Executive shall:

(1)           give the Company any information
reasonably requested by the Company relating to such claim,

(2)           take such action in connection with
contesting such claim as the Company shall reasonably request in writing from
time to time, including, without limitation, accepting legal representation
with respect to such claim by an attorney reasonably selected by the Company,

(3)           cooperate with the Company in good
faith in order effectively to contest such claim, and

(4)           permit the Company to participate in
any proceedings relating to such claim; provided, however, that
the Company shall bear and pay directly all costs and expenses (including
additional interest and penalties) incurred in connection with such contest and
shall indemnify and hold the Executive harmless, on an after-tax basis, for any
Excise Tax or income tax (including interest and penalties with respect
thereto) imposed as a result of such representation and payment of costs and
expenses.  Without limitation on the
foregoing provisions of this paragraph 5(c) the Company shall control all
proceedings taken in connection with such contest and, at its sole option, may
pursue or forgo any and all administrative appeals, proceedings, hearings and
conferences with the taxing authority in respect of such claim and may, at its
sole option, either direct the Executive to pay the tax claimed and sue for a
refund or contest the claim in any permissible manner, and the Executive agrees
to prosecute such contest to a determination before any administrative
tribunal, in a court of initial jurisdiction and in one or more appellate
courts, as the Company shall determine; provided further, that if
the Company directs the Executive to pay such claim and sue for a refund, the
Company shall advance the

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amount of such payment to the Executive on an
interest-free basis and shall indemnify and hold the Executive harmless, on an
after-tax basis, from any Excise Tax or income tax (including interest or
penalties with respect thereto) imposed with respect to such advance or with
respect to any imputed income with respect to such advance; and provided
further, that any extension of the statute of limitations relating to
payment of taxes for the taxable year of the Executive with respect to which
such contested amount is claimed to be due is limited solely to such contested
amount.  Furthermore, the Company’s
control of the contest shall be limited to issues with respect to which a
Gross-Up Payment would be payable hereunder and the Executive shall be entitled
to settle or contest, as the case may be, any other issue raised by the
Internal Revenue Service or any other taxing authority.

(d)           If, after the receipt by the
Executive of an amount advanced by the Company pursuant to paragraph 5(c),
the Executive becomes entitled to receive, and receives, any refund with
respect to such claim, the Executive shall (subject to the Company’s complying
with the requirements of paragraph 5(c)) promptly pay to the Company the
amount of such refund (together with any interest paid or credited thereon
after taxes applicable thereto).  If,
after the receipt by the Executive of an amount advanced by the Company
pursuant to paragraph 5(c), a determination is made that the Executive
shall not be entitled to any refund with respect to such claim and the Company
does not notify the Executive in writing of its intent to contest such denial
of refund prior to the expiration of 30 days after such determination,
then such advance shall be deemed paid to Executive and shall not be required
to be repaid and the amount of such advance shall offset, to the extent
thereof, the amount of Gross-Up Payment required to be paid.

6.               EXCLUSIVE EMPLOYMENT, CONFIDENTIAL INFORMATION, ETC.

6.1           Non-Solicitation.  Executive’s employment hereunder is on an
exclusive basis, and during the period of Executive’s employment hereunder and
thereafter, in the event of Executive’s voluntary resignation without “Good
Reason,” for a period of 12 months following the date of such resignation
(the “Non-Solicitation Period”), Executive will not (x) directly or
indirectly, engage, employ or solicit the employment of any person who is then
or has been within six (6) months prior thereto, an employee of the
Company or any of the Company’s affiliates or predecessors, or
(y) request, advise or suggest to any customer or supplier to the Company
that such person curtail, cancel or withdraw its business from the Company.

6.2           Confidential Information.  Executive shall not during the Employment
Term or at any time thereafter use for Executive’s own purposes, or disclose to
or for the benefit of any third party, any trade secret or other confidential
information of the Company or any of its affiliates or predecessors (except as
may be required by law or in the performance of Executive’s duties hereunder),
and Executive will comply with any confidentiality obligations of the Company
to third parties.  Notwithstanding the
foregoing, confidential information shall be deemed not to include information
which (i) is or becomes generally available to the public other than as a
result of a disclosure by Executive or any other person who directly or
indirectly receives such information from Executive or at Executive’s direction
or (ii) is or becomes available to Executive on a non-confidential basis
from a source which is entitled to disclose it to Executive.

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6.3           Company Ownership.  The results and proceeds of Executive’s
services hereunder, including, without limitation, any works of authorship
resulting from Executive’s services during Executive’s employment with the
Company or any of its affiliates or predecessors and any works in progress,
shall be works-made-for-hire and the Company shall be deemed the sole owner
throughout the universe of any and all rights of whatsoever nature therein,
whether or not now or hereafter known, existing, contemplated, recognized or
developed, with the right to use the same in perpetuity in any manner the
Company determines in its sole discretion without any further payment to
Executive whatsoever.  If for any reason
any of such results and proceeds shall not legally be a work-for-hire or there
are any rights which do not accrue to the Company under the preceding sentence,
then Executive hereby irrevocably assigns and agrees to assigns any and all of
Executive’s right, title and interest thereto, including, without limitation,
any and all copyrights, patents, trade secrets, trademarks and/or other rights
of whatsoever nature therein, whether or not now or hereafter known, existing,
contemplated, recognized or developed to the Company, and the Company shall
have the right to use the same in perpetuity throughout the universe in any
manner the Company determines without any further payment to Executive
whatsoever.  Executive shall, from time
to time as may be requested by the Company, do any and all things which the
Company may deem useful or desirable to establish or document the Company’s
exclusive ownership of any and all rights in any such results and proceeds,
including, without limitation, the execution of appropriate copyright and/or
patent applications or assignments.  To
the extent Executive has any rights in the results and proceeds of Executive’s
services that cannot be assigned in the manner described above, Executive unconditionally
and irrevocably waive the enforcement of such rights.  This paragraph 6.3 is subject to, and shall
not be deemed to limit, restrict, or constitute any waiver by the Company of
any rights of ownership to which the Company may be entitled by operation of
law by virtue of the Company or any of its affiliates or predecessors being
Executive’s employer.

6.4           Return of Property.  All documents, data, recordings, or other
property, whether tangible or intangible, including all information stored in electronic
form, obtained or prepared by or for Executive and utilized by Executive in the
course of Executive’s employment with the Company or any of its affiliates or
predecessors shall remain the exclusive property of the Company; provided
however that Executive may remove all such property which was prepared by or
for Executive’s personal use.

6.5           Injunctive Relief.  The Company has entered into this Agreement
in order to obtain the benefit of Executive’s unique skills, talent, and
experience.  Executive acknowledges and
agrees that any violation of paragraphs 6.1 through 6.4 hereof will result
in irreparable damage to the Company, and accordingly, the Company may obtain
injunctive and other equitable relief for any breach or threatened breach of such
paragraphs, in addition to any other remedies available to the Company.

6.6           Survival; Modification of Terms.  Executive’s obligations under
paragraphs 6.1 through 6.4 hereof shall remain in full force and effect
for the entire period provided therein notwithstanding the termination of the
Employment Term pursuant to Section 7 hereof or otherwise.  Executive and the Company agree that the
restrictions and remedies contained in paragraphs 6.1 through 6.4 are reasonable
and that it is Executive’s intention and the intention of the Company that such
restrictions and remedies shall be enforceable to the fullest extent
permissible by law.  If it shall be found
by a court of competent jurisdiction that any such

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restriction or remedy is unenforceable but would be
enforceable if some part thereof were deleted or the period or area of
application reduced, then such restriction or remedy shall apply with such
modification as shall be necessary to make it enforceable.

7.               TERMINATION.

7.1           Disability or Death.  In the event Executive, as a result of his
medical condition, is not expected to be substantially able to perform
Executive’s duties for a six (6) consecutive month period, the Board at
any time after such disability has in fact continued for 60 consecutive
days, may determine (“the Disability Determination”) that the Company requires
such duties and responsibilities be performed by another executive.  The Executive’s employment hereunder shall
automatically terminate upon his death.

7.2           Voluntary Resignation.  The Executive’s employment hereunder shall
automatically be terminated upon the Executive’s voluntary resignation from the
Company.  Executive’s resignation shall
be in writing and specify an effective date no less than thirty (30) days after
the date of notice.

7.3           Termination for Cause.  The Company may, at its option, terminate
Executive’s employment under this Agreement for “Cause” in the manner herein
set forth, and the Company shall thereafter have no further obligations under
this Agreement, including, without limitation, any obligation to pay Salary or
Bonus or provide benefits under this Agreement for any period subsequent to
termination.  For purposes of this
Agreement, “Cause” shall mean embezzlement, fraud or other conduct related to
the Company which would constitute a felony, conviction of a felony, or if
Executive materially breaches this Agreement (including, without limitation,
Executive’s continued failure (to the extent which would constitute “gross
negligence”) or refusal substantially to perform Executive’s lawful obligations
under Sections 2 or 6 hereof, except in the event of Executive’s
disability as set forth in paragraph 7.1).

Notwithstanding
the foregoing, termination by the Company for Cause shall not be effective
until and unless (i) in the event of any act or circumstance alleged to be
a basis for termination for “Cause”, the Executive is given written notice by
the Board of such alleged act or circumstance, and such alleged act or
circumstance shall not have been cured by the Executive within 20 days of
receipt of such notice, to the satisfaction of the Board in the exercise of its
reasonable judgment (or, if within such 20-day period the Executive commences
and proceeds to take all reasonable actions to effect such cure, within such
reasonable additional time period (no longer than 60 days) as may be
necessary), and (ii) notice of intention to terminate for Cause has been
given by the Company within sixty (60) days after the Board learns of the
act, failure or event constituting “Cause,” and (iii) the Board has voted
(at an in-person meeting of the Board duly called and held as to which
termination of Executive is an agenda item) by a vote of at least 80% of the
members of the Board to terminate Executive for Cause after Executive has been
given notice of the particular acts or circumstances which are the basis for
the alleged termination for Cause and has been afforded at least 20 days
notice of the meeting and an opportunity to present his position in writing and
to be present with his counsel at such meeting and to present his case thereat,
and (iv) the Board has given notice of termination to Executive within
three days after such meeting, and (v) if Executive has commenced an
expedited arbitration in the manner prescribed below within 15 days after
such notice of termination,

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disputing the Company’s right under this Agreement to
terminate for Cause, the Arbitrator shall have determined that the Executive is
terminable for Cause.  Upon the giving of such notice of
termination, (x) Executive shall be deemed suspended with pay until he
shall be deemed to have been terminated for Cause hereunder or until the
Arbitrator shall have determined that Executive is not terminable for Cause and
(y) while suspended, Executive shall cease to act as an executive of the
Company and shall depart the premises of the Company.  If Executive or his representative fails to
file a demand for arbitration with the American Arbitration Association (“AAA”)
and pay the requisite fees pursuant to the national Rules of the AAA within
15 days of receipt of notice of termination from the Board, and diligently
pursue such proceeding in accordance with the procedures set forth in
Section 14 hereof, such termination shall be conclusively presumed to have
been for Cause.

7.4           “Good
Reason” Termination.

(a)           Executive may resign and terminate
Executive’s employment hereunder for “Good Reason” at any time during the
Employment Term by written notice to the Company not more than sixty
(60) days after the occurrence of the event constituting “Good Reason”.  Such notice shall state an effective date no
earlier than 20 days after the date it is given.  The Company shall have 15 days from the
giving of such notice within which to cure. 
Good Reason shall mean any of the following, without Executive’s prior
written consent (other than in connection with the termination of Executive’s
employment for “Cause” (as defined above) or in connection with Executive’s
Disability):

(i)            the assignment to
Executive by the Company of duties inconsistent with Executive’s positions,
duties, responsibilities, titles or offices, or the withdrawal of a material
part of Executive’s responsibilities or a change in Executive’s reporting
relationship, as set forth in Section 2;

(ii)           a reduction by the
Company in Executive’s Base Salary or Bonus set forth in Section 3 hereof
(or other benefits set forth in Section 4 hereof) as in effect at the date
hereof as the same may be increased from time to time during the Employment
Term;

(iii)          the Company’s
requiring Executive to be based anywhere other than the Los Angeles
metropolitan area, except for required travel on the Company’s business to an
extent substantially consistent with business travel obligations of other
senior executives of the Company;

(iv)          the failure or delay
of the Company to provide to the Executive any of the payments or benefits
contemplated in Sections 3 and 4 hereof or any other material breach by
the Company of its obligations hereunder;

(v)           as provided in
Section 1 hereof; or

(vi)          the failure of the
Board or its nominating committee at any time to nominate Executive for
election or re-election by the shareholders of the Company to the Company’s
Board.

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(b)           Termination Without Cause.  The Company may terminate Executive’s
employment under this Agreement without “Cause” (as defined above in
paragraph 7.3) at any time during the Employment Term by written notice to
Executive; provided, however, that the Company may terminate Executive’s
employment pursuant to this paragraph only with the affirmative vote of eighty
percent of the members of the Board.

7.5           Termination
Payments, Etc.

(a)           In the event that Executive’s
employment terminates pursuant to paragraph 7.4(a) or 7.4(b) hereof,
Executive shall be entitled to receive from the Company (at the Company’s
expense), subject to applicable withholding taxes:

(i)            a lump sum payment,
payable within 30 days of termination, equal to three (3) times the
sum of (x) Executive’s annual Base Salary as provided in paragraph 3.1 on
the date of termination plus (y) bonus compensation at the annual
rate of the highest Bonus and Performance Bonus amounts received by Executive
during any prior fiscal year (but no less than $460,000);

(ii)           medical and dental
insurance coverage for Executive and his family for the greater of three years
or the balance of the Employment Term or, if earlier, the date on which
Executive becomes eligible for substantially equivalent medical and dental
coverage from a third party employer provided without cost to Executive;

(iii)          life and disability
insurance coverage as set forth in paragraph 4.5 until the end of the
later of (x) three years after the date of Executive’s employment termination,
or (y) the end of the Employment Term (the amount of such insurance to be
reduced by the amount of any insurance provided by a new employer without cost
to Executive);

(iv)          Executive’s
perquisites as provided in paragraph 4.6 until the end of the later of (x)
three years after the date of Executive’s employment termination, or (y) the
end of the Employment Term, payable in accordance with the Company’s then
effective payroll practices;

(v)           all stock options,
stock appreciation rights and restricted stock to the extent not yet fully
vested or having all restrictions lapse shall become fully vested and non-restricted
on the date of termination of Executive’s employment; and all such stock
options and stock appreciation rights shall be exercisable for their full
stated term as specified at the time of grant and without further extension
thereof;

(vi)          immediate vesting of
Executive’s rights in all other employee benefit and compensation plans;

(vii)         fees and
disbursements of Executive’s counsel incurred as a result of the termination of
Executive’s employment; and

(viii)        provision of an
appropriate office and secretarial assistance for at least six (6) months after
the termination of Executive’s employment.

 11
 

(b)           The Executive shall be under no
obligation to mitigate the amount of any payment or benefit provided for above
under paragraph 7.5(a) by seeking other employment or otherwise, nor shall
such payments be offset or reduced by any compensation which the Executive may
receive from future employment or otherwise.

(c)           The payments and benefits provided
for above in paragraph 7.5(a) are in lieu of any severance or income
continuation or income protection under any Company plan that may now or
hereafter exist and shall be deemed to satisfy and be in full and final
settlement of all obligations of the Company for severance or income
continuation or income protection to Executive under this Agreement.

(d)           Except as otherwise provided in
paragraph 7.5(a)(ii) through 7.5(a)(vi) coverage under all the Company
benefit plans and programs will terminate upon the termination of Executive’s
employment except to the extent otherwise expressly provided in such plans or
programs.

7.6           Death or Disability.  If Executive dies prior to the end of the
Employment Term or if the Board makes a Disability Determination, Executive or
his beneficiary or estate shall be entitled to receive (in addition to amounts
and benefits under any life insurance policy or disability program or policy)
Executive’s Salary up to the date on which the death or Disability
Determination occurs and a pro-rated Bonus for the fiscal year in which the
death or Disability Determination occurs. 
In addition, the vesting or lapsing of restrictions of all stock
options, stock appreciation rights and restricted stock granted to Executive
that are not exercisable or remain restricted as of the date on which the death
or Disability Determination occurs shall be accelerated, and Executive or his
beneficiary or estate shall be entitled to exercise such stock options and
stock appreciation rights, together with all stock options and stock
appreciation rights that are exercisable as of the date of death or Disability
Determination, through the stated expiration date of such stock options and
stock appreciation rights.

In addition,
in the event of such a termination the Company shall within 20 days of
such termination pay to the Executive or his personal representative, as the
case may be, severance pay in a lump sum equal to his then annual Base Salary
for one year as set forth in paragraph 3.1 hereof.

7.7           Change of Control.  Notwithstanding any other provision herein,
in order to protect the Executive against the possible consequences and
uncertainties of a Change of Control (as hereinafter defined) of the Company
and thereby induce the Executive to remain in the employ of the Company, the
Company agrees that in the event of a Change of Control this Agreement shall
continue to be operative according to its terms except that:

(a)           If the Executive’s employment is
terminated by the Company other than for “Cause” (as defined in
paragraph 7.3 hereof) within one year subsequent to a Change of Control or
if the Executive voluntarily terminates such employment within one year
subsequent to a Change of Control for any reason (whether or not Good Reason)
(the “Evaluation Period”), then in either such event, the Executive shall be
entitled to the payments and benefits of paragraph 7.5 as if the
termination had occurred under paragraphs 7.4(a) or 7.4(b).

 12
 

(b)           [Intentionally omitted.]

(c)           The Company shall pay or reimburse
the Executive for all fees and disbursements of counsel, if any, incurred by
the Executive as a result of the termination of his employment by the Company
or his voluntary termination of such employment during the Evaluation Period
following a Change of Control (including, without limitation, those which may
be incurred by the Executive in seeking to obtain or enforce any right or
benefit provided by this Agreement).

(d)           The Executive shall be under no
obligation to mitigate the amount of any payment provided for under this
paragraph 7.7 by seeking other employment or otherwise nor shall such
amount be offset by any compensation which the Executive may receive from
future employment or otherwise.

(e)           For purposes of this Agreement, a “Change
in Control” with respect to the Company shall be deemed to have taken place if,
at any time during the Employment Term, any of the following events occur:

(i)            Any person, entity
or group, as those terms are used in Section 13(d) and
Section 14(d)(2) of the Securities Exchange Act of 1934, as amended (the “Exchange
Act”), becomes, is discovered to be, or files a report on Schedule 13D or
14D-1 (or any successor schedule, form or report) disclosing that such
person, entity or group is, a beneficial owner (as defined in Rule 13d-3
under the Exchange Act or any successor rule or regulation), directly or
indirectly, of securities of the Company representing 25% or more of the
combined voting power of the Company’s then outstanding securities entitled to
vote generally in the election of directors;

(ii)           Individuals who, as
of April 1, 2006, constitute the Board of Directors of the Company cease
for any reason to constitute at least a majority of the Board of Directors of
the Company, unless any such change is approved by a vote of at least 80% of
the members of the Board of Directors of the Company (including Executive) in
office immediately prior to such cessation;

(iii)          The Company is
merged, consolidated or reorganized into or with another corporation or other
legal person, or securities of the Company are exchanged for securities of
another corporation or other legal person, and immediately after such merger,
consolidation, reorganization or exchange less than a majority of the combined
voting power of the then outstanding securities of such corporation or person
immediately after such transaction are held, directly or indirectly, in the
aggregate by the holders of securities entitled to vote generally in the
election of directors of the Company immediately prior to such transaction;

(iv)          The Company in any
transaction or series of related transactions, sells all or substantially all
of its assets to any other corporation or other legal person and less than a
majority of the combined voting power of the then-outstanding securities of
such corporation or person immediately after such sale or sales are held,
directly or indirectly, in the aggregate by the holders of securities entitled
to vote generally in the election of directors of the Company immediately prior
to such sale;

 13
 

(v)           The Company and its
affiliates shall sell or dispose of (in a single transaction or series of
related transactions) business operations that generated two-thirds of the
consolidated revenues (determined on the basis of the Company’s four most
recently completed fiscal quarters for which reports have been filed under the
Exchange Act) of the Company and its subsidiaries immediately prior thereto;

(vi)          The Company files a
report or proxy statement with the Securities and Exchange Commission pursuant
to the Securities Exchange Act of 1934 disclosing in response to Form 8-K
or Schedule 14A (or any successor schedule, form or report or item
therein) that a change in control of the Company has or may have occurred or
will or may occur in the future pursuant to any then existing contract or
transaction;

(vii)         Any other
transaction or series of related transactions occur that have substantially the
effect of the transaction specified in any of the preceding clauses in this
paragraph 7.7(e).

(f)            Notwithstanding the provisions of
Section 7.7(e)(i) through 7.7(e)(vi) hereof, unless otherwise determined
in a specific case by majority vote of the Board of Directors of the Company, a
Change in Control shall not be deemed to have occurred for purposes of this
Agreement solely because (i) the Company, (ii) an entity in which the
Company directly or indirectly beneficially owns 50% or more of the voting
securities or (iii) any Company-sponsored employee stock ownership plan,
or any other employee benefit plan of the Company, either files or becomes
obligated to file a report or a proxy statement under or in response to
Schedule 13D, Schedule 14D-1, Form 8-K or
Schedule 14A (or any successor schedule, form or report or item thereon)
under the Exchange Act, disclosing beneficial ownership by it of shares of
stock of the Company, or because of the Company reports that a Change in
Control of the Company has or may have occurred or will or may occur in the
future by reason of such beneficial ownership.

8.               IRC § 409A AND RABBI TRUST.

(a)           Notwithstanding any provision of this
Agreement to the contrary, if, at the time of Executive’s termination of
employment with the Company, he is a “specified employee” as defined in
Section 409A of the Internal Revenue Code (the “Code”), and one or more of
the payments or benefits received or to be received by Executive pursuant to
this Agreement would constitute deferred compensation subject to
Section 409A, no such payment or benefit will be provided under this
Agreement until the earliest of (A) the date which is six (6) months
after his “separation from service” for any reason, other than death or “disability”
(as such terms are used in Section 409A(a)(2) of the Code), (B) the
date of his death or “disability” (as such term is used in
Section 409A(a)(2)(C) of the Code) or (C) the effective date of a “change
in the ownership or effective control” of the Company (as such term is used in
Section 409A(a)(2)(A)(v) of the Code) (the “Deferred Payment”).  The provisions of this Section 8 shall
only apply to the extent required to avoid Executive’s incurrence of any
penalty tax or interest under Section 409A of the Code or any regulations
or Treasury guidance promulgated thereunder. 
In addition, if in the Company’s good faith judgment after considering
any concerns raised by Executive, the Company believes that this Agreement
needs to be reformed to comply with Section 409A of the Code or any
regulations or Treasury guidance promulgated thereunder, the Company shall

 14
 

reform the provisions of this Agreement to maintain to
the maximum extent practicable the original intent of the applicable provisions
without violating the provisions of Section 409A of the Code.  In no event shall the Company be required to
indemnify or otherwise be liable to Executive for any amounts payable by him under
Section 409A so long as the Company has acted in good faith in its attempt
to comply with the requirements of this Agreement with regard to
Section 409A.

(b)           In the event the six-month delay
described in this Section 8 applies, the Company shall make an irrevocable
contribution in the amount of the Deferred Payment to the rabbi trust
contemplated by paragraph 8(c) below, which amount (along with any net
income received by the trust) shall be paid by the trust to Executive on the
six-month anniversary of his termination of employment.

(c)           Immediately prior to a Change in
Control, involuntary termination without Cause, or voluntary termination for
Good Reason, the Company shall establish a “grantor trust” within the meaning
of sections 671, et. seq. of the Code with terms reasonably
acceptable to the Executive, for the purpose of protecting the payment, in the
event of a Change in Control of the Company, involuntary termination without
Cause, or voluntary termination for Good Reason, of any unfunded obligations of
the Company to the Executive.  The grantor
trust shall be funded only to the extent consistent with
Section 409A(b)(2) of the Code.

9.               SUCCESSORS; BINDING AGREEMENT.

Neither of the
parties hereto shall have the right to assign this agreement or any rights or
obligations hereunder without the prior written consent of the other
party.  Subject to the foregoing, this
Agreement shall inure to the benefit of and be binding upon the parties and
their successors and assigns.

10.                               COUNTERPARTS.

This Agreement
may be executed in several counterparts, each of which shall be an original but
together shall constitute one in the same instrument.

11.                               NOTICES.

Any notice
required or permitted to be given under this Agreement shall be in writing and
shall be deemed to have been duly given when (i) delivered personally;
(ii) sent by facsimile or other similar electronic device and confirm;
(iii) delivered by courier or overnight express; or (iv) three
business days after being sent by registered or certified mail, postage
prepaid, addressed as follows:

	
  If to the Company:

  	
  THQ Inc.

  
	
   

  	
  29903 Agoura Road

  
	
   

  	
  Agoura Hills, California 91301

  
	
   

  	
  Attention: Secretary

  
	
   

  	
   

  
	
  If to Executive:

  	
  Brian J. Farrell

  
	
   

  	
  [latest address on file with the Company]

  

 

 15
 

or to such other address as a party may furnish to the other party in
writing in accordance herewith, except that notices of change of address shall
be effective only upon receipt.

12.                               GOVERNING
LAW.

This Agreement
shall be governed by and construed and enforced in accordance with the internal
laws of California without reference to conflicts of laws, principles or rules.

13.                               WAIVER.

No waiver by
either party hereto of any provision of this Agreement shall be deemed a waiver
of any preceding or succeeding breach of such provision or as a waiver of any
other provision hereof.

14.                               ARBITRATION.

In the event
of any controversy, dispute or claim arising out of or related to this
Agreement or the Executive’s employment by the Company, the parties shall
negotiate in good faith in an attempt to reach a mutually acceptable settlement
of such dispute.  If negotiations in good
faith do not result in a settlement of any such controversy, dispute or claim,
it shall be finally settled by expedited arbitration in accordance with the
National Rules of the American Arbitration Association governing employment
disputes, subject to the following:

(a)           The Arbitrator shall be determined
from a list of names of five impartial arbitrators each of whom shall be an
attorney experienced in arbitration matters concerning executive employment
disputes, supplied by the American Arbitration Association (the “Association”)
and chosen by Executive and the Company each in turn striking a name from the
list until one name remains.

(b)           The Arbitrator shall determine whether
and to what extent any party shall be entitled to damages under this Agreement.

(c)           The Arbitrator shall not have the
power to add to nor modify any of the terms or conditions of the this
Agreement.  The Arbitrator’s decision
shall not go beyond what is necessary for the interpretation and application of
the provision of this Agreement in respect of the issue before the
Arbitrator.  The Arbitrator shall not
substitute his or her judgment for that of the parties in the exercise of
rights granted or retained by this Agreement. 
The Arbitrator’s award or other permitted remedy, if any, and the
decision shall be based upon the issue as drafted and submitted by the
respective parties and the relevant and competent evidence adduced at the
hearing.

(d)           The Arbitrator shall have the
authority to award any remedy or relief provided for in this Agreement, in
addition to any other remedy or relief (including provisional remedies and
relief) that a court of competent jurisdiction could order or grant.  In addition, the Arbitrator shall have the
authority to decide issues relating to the interpretation, meaning or
performance of this Agreement even if such decision would constitute an
advisory opinion in a court proceeding or if the issues would otherwise not be
ripe for resolution in a court proceeding, and any such decision shall bind the
parties in their continuing performance of this Agreement.  The Arbitrator’s

 16
 

written decision shall be rendered within sixty days
of the hearing.  The decision reached by
the Arbitrator shall be final and binding upon the parties as to the matter in
dispute.  To the extent that the relief
or remedy granted by the Arbitrator is relief or remedy on which a court could
enter judgment, a judgment upon the award rendered by the Arbitrator shall be
entered in any court having jurisdiction thereof (unless in the case of an
award of damages, the full amount of the award is paid within 10 days of
its determination by the Arbitrator). 
Otherwise, the award shall be binding on the parties in connection with
their continuing performance of this Agreement and in any subsequent arbitral
or judicial proceedings between the parties.

(e)           The arbitration shall take place in
Los Angeles, California.

(f)            The arbitration proceeding and all
filing, testimony, documents and information relating to or presented during
the arbitration proceeding shall be disclosed exclusively for the purpose of
facilitating the arbitration process and for no other purpose and shall be
deemed to be information subject to the confidentiality provisions of this
Agreement.

(g)           The parties shall continue performing
their respective obligations under this Agreement notwithstanding the existence
of a dispute while the dispute is being resolved unless and until such
obligations are terminated or expire in accordance with the provisions hereof.

(h)           The Arbitrator may order a
pre-hearing exchange of information including depositions, interrogatories,
production of documents, exchange of summaries of testimony or exchange of
statements of position, and the Arbitrator shall limit such disclosure to avoid
unnecessary burden to the parties and shall schedule promptly all discovery and
other procedural steps and otherwise assume case management initiative and
control to effect an efficient and expeditious resolution of the dispute.  At any oral hearing of evidence in connection
with an arbitration proceeding, each party and its counsel shall have the right
to examine its witness and to cross-examine the witnesses of the other
party.  No testimony of any witness shall
be presented in written form unless the opposing party or parties shall have
the opportunity to cross-examine such witness, except as the parties otherwise
agree in writing.

(i)            Notwithstanding the dispute
resolution procedures contained in this Section 14, either party may apply
to any court having jurisdiction (i) to enforce this Agreement to
arbitrate, (ii) to seek provisional injunctive relief so as to maintain
the status quo until the arbitration award is rendered or the Dispute is
otherwise resolved, or (iii) to challenge or vacate any final judgment,
award or decision of the Arbitrator that does not comport with the express
provisions of this Section 14.

15.                               ATTORNEYS’
FEES.

The Company
shall pay or reimburse the Executive for all reasonable fees and disbursements
of the Executive’s counsel in connection with the negotiation and execution of
this Agreement.  In addition, in the
event of any arbitration or judicial proceeding hereunder, the prevailing party
shall be entitled to recover his or its reasonable attorneys fees and costs.

 17
 

16.                               HEADINGS.

The Article,
Section, paragraph and subparagraph headings are for convenience of reference
only and shall not define or limit the provisions hereof.

17.                               ENTIRE
AGREEMENT.

This Agreement
constitutes the entire agreement between the parties with respect to the
subject matter hereof and there are no representations, warranties or
commitments except as set forth herein. 
This Agreement supersedes any other prior and contemporaneous agreements,
understandings, negotiations and discussions, whether written or oral, of the
parties hereto relating to the subject matter of this Agreement.  This Agreement shall be deemed part of any
Award Agreement pursuant to which Executive receives any equity-based
award.  This Agreement may be amended
only in a writing executed by the parties hereto.

18.                               SEVERABILITY.

If any
provision of this Agreement, as applied to either party or to any
circumstances, shall be adjudged by a court to be void or unenforceable, the
same shall be deemed stricken from this Agreement and shall in no way affect
any other provision of this Agreement or the validity or enforceability of this
Agreement.

19.                               SUPERSEDES
PREVIOUS AGREEMENT.

Effective as
of the date of this Agreement, this Agreement shall supersede and cancel all
prior agreements relating to Executive’s employment by the Company or any of
its affiliates and predecessors, including, without limitation, the employment
agreement between Executive and THQ Inc. dated as of January 1, 2001, and
any amendments thereto.  Notwithstanding
the preceding sentence, this Agreement is not intended, and shall not be
construed, to affect Executive’ s rights in any compensation or benefits that
have been granted or accrued prior to the Effective Date or rights contained in
any Indemnification Agreement entered into prior to the Effective Date.

 18
 

IN WITNESS
WHEREOF, the undersigned have executed this Agreement as of the date and year
first above written.

	
  

  	
  Company:

  
	
   

  	
   

  
	
   

  	
  THQ Inc., a Delaware Corporation

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Its:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Executive:

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Brian J. Farrell

  

 

 19Exhibit
10.2

29903 Agoura Road

Agoura Hills, California 91301

Phone (818) 871-5000

Fax: (818) 871-7400

AMENDED
AND RESTATED 1997 STOCK OPTION PLAN

PERFORMANCE
ACCELERATED

RESTRICTED STOCK UNIT AWARD AGREEMENT

	
  Holder:

  	
  [NAME]

  
	
  Number of Performance Accelerated

  	
   

  
	
  Restricted Stock Units Awarded: *

  	
  *

  
	
   

  	
   

  
	
  Date of Grant:

  	
  *

  

 

*  As set forth
in the Notice of Grant of Performance Accelerated Restricted Stock Units (your “Notice”)
to which this Performance Accelerated Restricted Stock Unit Award Agreement is
attached.

THIS PERFORMANCE
ACCELERATED RESTRICTED STOCK UNIT AWARD AGREEMENT (the “Agreement”), dated as
of Date of Grant, is made between THQ INC., a Delaware corporation, currently
having its executive office at 29903 Agoura Road, Agoura Hills, California
91301 (the “Company”), and the holder identified above (“Holder”).

1.             Grant of Award.  Pursuant to the THQ Inc. Amended and Restated
1997 Stock Option Plan, a copy of which is attached hereto as Exhibit B
(the “Plan”), governed by and subject to the terms and conditions set forth in
this Agreement, and subject to Holder’s electronic acceptance or, if local law
requires, execution and return to the Company of a copy of the Notice to which
this Agreement is attached, the Company hereby awards to Holder the number of
Performance Accelerated Restricted Stock Units as set forth in your Notice (the
“Units”), upon and subject to the restrictions, terms and conditions set forth
in this Agreement (this “Award”).

2.             Award Subject to the Plan and
Acceptance of Agreement.  Holder
acknowledges and agrees that this Award is subject to the terms and conditions
set forth in the Plan.  In the event of
any conflict between the Plan and this Agreement, the terms of the Plan shall
take precedence.  Further, Holder
acknowledges that the Award shall be null and void unless and until the Holder
shall accept this Agreement by electronically accepting the Notice and
Agreement, or, if local law requires, executing the Notice in the space
provided and returning such original execution copy (including this Agreement)
to the Company.

3.             Account.  The Company shall credit to a bookkeeping
account (the “Account”) maintained by the Company for the Holder’s benefit the
Units, each of which shall be deemed to be the equivalent of one share of
Common Stock.  Whenever any cash
dividends are declared on the Common Stock, on the date such dividend is paid,
the Company will credit the Account of the Holder with a number of Dividend
Equivalent Stock Units equal to the result of dividing (i) the product of the
total number of Units (and Dividend Equivalent Units) credited to the Holder’s
Account on the record date for such dividend and the per share amount of such
dividend by (ii) the Fair Market Value of one share of Common Stock on the date
such dividend is paid by the Company to the holders of Common Stock.  The Dividend Equivalent Stock Units shall be
or become vested to the same extent as the Units that resulted in the crediting
of such Dividend Equivalent Stock Units.

4.             Vesting.  The Units subject to the Award shall vest at
the times and in the amounts set forth in your Notice, or earlier pursuant to
Section 3.3 of the Plan or in accordance with Section 5.8 of the Plan.  As used herein, the term “vest” shall mean no
longer subject to forfeiture.

5.             Payment of the
Account.  Unless the Holder has made
a deferral election in accordance with the Company’s Performance Accelerated
Restricted Stock Unit Deferred Compensation Plan, the Company shall make a lump
sum payment to the Holder in shares of Common Stock with respect to the Units
and Dividend Equivalent Units then credited to the Account each time the Units
vest.  The number of shares of Common
Stock payable shall be equal to the sum of the number of Units and Dividend
Equivalent Units credited to the Account.

6.             Additional Terms and Conditions
of Award.

6.1           Nontransferability of Award.  This Agreement shall not be assignable or
transferable by the Holder (other than by will or the laws of descent and
distribution) or by the Company (other than to successors of the Company) and
no amounts payable under this Agreement, or any rights therein, shall be
subject in any manner to any anticipation, alienation, sale, transfer,
assignment, pledge, encumbrance, levy, lien, attachment, garnishment, debt or
other charge or disposition of any kind.

6.2.          Source of Payments.  The Holder’s right to receive payment under
this Agreement shall be an unfunded entitlement and shall be an unsecured claim
against the general assets of the Company. 
The Holder has only the status of a general unsecured creditor
hereunder, and this Agreement constitutes only a promise by the Company to pay
the value of the Account each time the Units vest.

6.3.          Investment Representation.  The Holder hereby represents and covenants
that (a) any share of Common Stock acquired upon the vesting of the Award will
be acquired for investment and not with a view to the distribution thereof
within the meaning of the Securities Act of 1933, as amended (the “Securities
Act”), unless such acquisition has been registered under the Securities Act
and any applicable state securities law; (b) any subsequent sale of any such
shares shall be made either pursuant to an effective registration statement
under the Securities Act and any applicable state securities laws, or pursuant
to an exemption from registration under the Securities Act and such state
securities laws; and (c) if requested by the Company, the Holder shall submit a
written statement, in form satisfactory to the Company, to the effect that such
representation (x) is true and correct as of the date of acquisition of any
Shares hereunder or (y) is true and correct as of the date of any sale of any
such shares, as applicable.  As a further
condition precedent to the delivery to the Holder of any shares of Common Stock
payable under the Award, the Holder shall comply with all regulations and
requirements of any regulatory authority having control of or supervision over
the issuance of the shares and, in connection therewith, shall execute any
documents which the Board of Directors (the “Board”) or any committee
authorized by the Board (collectively, the “Committee”) shall in its sole
discretion deem necessary or advisable.

6.4           Compliance with Applicable Law.  The Award is subject to the condition that if
the listing, registration or qualification of the shares of Common Stock
payable under the Award upon any securities exchange or under any law, or the
consent or approval of any governmental body, or the taking of any other action
is necessary or desirable as a condition of, or in connection with, the
delivery of shares hereunder, the shares shall not be delivered, in

 2
 

whole or in part, unless
such listing, registration, qualification, consent or approval shall have been
effected or obtained, free of any conditions not acceptable to the Company.

6.5           Award Confers No Rights to
Continued Employment or Service.  In
no event shall the granting of the Award or its acceptance by the Holder give
or be deemed to give the Holder any right to continued employment by the
Company or any affiliate of the Company or any right to continued service as a
member of the Board.

6.6           Decisions of Committee.  The Committee shall have the right to resolve
all questions which may arise in connection with the Award.  Any interpretation, determination or other
action made or taken by the Committee regarding the Plan or this Agreement
shall be final, binding and conclusive.

6.7           Agreement Subject to the Plan.  This Agreement is subject to the provisions
of the Plan and shall be interpreted in accordance therewith.  The Holder hereby acknowledges receipt of a
copy of the Plan.

7.             Miscellaneous Provisions.

7.1           Binding Effect.  This Agreement shall be binding upon and
inure to the benefit of any successor or successors of the Company and any
person or persons who shall, upon the death of the Holder, acquire any rights
hereunder in accordance with this Agreement or the Plan.

7.2           Notices.  All notices, requests or other communications
provided for in this Agreement shall be made, (x) if to the Company, to its
executive office, c/o Chief Legal Officer, 29903 Agoura Road, Agoura Hills,
California 91301, and (y) if to the Holder, to the last known mailing address
of the Holder contained in the records of the Company.  All notices, requests or other communications
provided for in this Agreement shall be made in writing either (a) by personal
delivery to the party entitled thereto, (b) by facsimile with confirmation of
receipt, (c) by mailing in the United States mails to the last known address of
the party entitled thereto or (d) by express courier service.  The notice, request or other communication
shall be deemed to be received upon personal delivery, upon confirmation of
receipt of facsimile transmission, or upon receipt by the party entitled
thereto if by United States mail or express courier service; provided, however,
that if a notice, request or other communication is not received during regular
business hours, it shall be deemed to be received on the next succeeding
business day of the Company.

7.3           Governing Law.  This Agreement, the Award and all
determinations made and actions taken pursuant hereto and thereto, to the
extent not otherwise governed by the laws of the United States, shall be
governed by the laws of the State of Delaware and construed in accordance
therewith without giving effect to conflicts of laws principles.

7.4           Counterparts.  This Agreement may be executed in two
counterparts each of which shall be deemed an original and both of which
together shall constitute one and the same instrument.

8.             Electronic Delivery.  The Company may, in its sole discretion and
to the extent allowed under local law, deliver by electronic means any
documents related to the Award granted under and participation in the Plan or
future awards that may be granted under the Plan, and required Holder to
participate in the Plan by electronic means, including electronic acceptance of
awards.  Holder hereby consults to
receive such

 3
 

documents by electronic delivery and agrees to
participate in the Plan through an on-line or electronic system established and
maintained by the Company or a third party designated by the Company.

Furthermore,
Holder agrees and consents to receiving delivery of any and all annual reports
and proxy statements of the Company by electronic means.  Such electronic means shall include, but not
be limited to, email delivery of such documents or email notification of an
Internet or intranet web link for access to such documents.  However, if the Holder requests physical delivery
of such documents, such request shall be made in writing in accordance with
Section 7.2 of this Agreement and Company shall provide such documents within a
reasonable time of such request.

#  #  #

 4

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