Document:

Exhibit 10.28

 

EMPLOYMENT AGREEMENT

 

This Employment

Agreement (the “Agreement”) between Metro One Telecommunications, Inc., an

Oregon corpora­tion (the “Company”), and Timothy A. Timmins (“Timmins”) is

dated and is entered into as of January 1, 2003.

 

RECITALS

 

A.                                   The

parties acknowledge that Timmins’ abilities and ser­vices are unique and

essential to the prospects of the Company; and

 

B.                                     In

light of the foregoing, the Company desires to continue to em­ploy Timmins as

its President and Chief Executive Officer and to have him continue to serve on

the Company’s Board of Directors, and Timmins desires to accept such continued

employment.

 

AGREEMENT

 

NOW, THEREFORE, the

parties hereto agree as follows:

 

1.                                      Employment. The Company hereby employs Timmins and Timmins

hereby accepts employment by the Company as President and Chief Executive

Officer and agrees to serve on the Company’s Board of Directors.  Under the direction of the Board of

Directors of the Company and subject to the terms and conditions of the Bylaws

of the Company and this Agreement, Timmins shall have management responsibility

for and control of the operations of the business of the Company, shall see

that all orders and resolutions of the Board of Directors of the Company are

carried into effect, and shall perform all such other duties and exercise all

such other powers as are usually incident and pertain to the Chief Executive

Officer of a corporation.  He may, from

time to time, delegate to any other officer or officers any of his duties or

powers.  Timmins shall report regularly

to the Board of Directors of the Company all matters that should, in his

opinion, be brought to the Board’s attention, and shall provide the Board of

Directors with such information and reports as may be requested from time to

time.  Timmins shall not authorize or

take, without the prior approval of the Board of Directors, any action that is

reserved to the Board of Directors under the Bylaws of the Company and shall

not authorize or take any action that is contrary to any directive or

resolution of the Board of Direc­tors, provided in all cases that Timmins has

actual knowledge of such directives or resolutions.

 

2.                                      Attention

and Effort. Timmins shall devote substan­tially all of his working time

and attention to the business and affairs of the Company, subject to the

provisions of Section 8.1 of this Agreement, and shall perform his duties to

the best of his ability and in the best interest of the Company.

 

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3.                                      Term. Unless otherwise terminated as provided in

Sec­tion 5 of this Agreement, Timmins’ term of employment under this Agreement

shall be for a period of two years beginning January 1, 2003 and ending on

December 31, 2004.

 

4.                                      Compensation.

 

4.1                               Base Salary.  Timmins’ compensation shall consist of an annual salary of One Hundred

Eighty Thousand Dollars ($180,000) before all customary withholding of income

and employment taxes (“Base Salary”). 

The Base Salary shall be paid in substantially equal installments in

accordance with the normal payroll practices of the Company.

 

4.2                               Bonus.  The Board of Directors, or its

designated subcommittee, may elect to pay Timmins a bonus or bonuses at any

time, it its sole discretion and based upon whatever factors it deems

appropriate.

 

4.3                               Stock Option. In addition to the payment of any

compensation due to Timmins under Sections 4.1 and 4.2 of this Agreement, the

Company will cause Timmins to be granted a stock option to purchase 50,000

shares of common stock of the Com­pany, exercisable at $5.10 per share (the

closing price on February 10, 2003) (the “Stock Option”).  To the maximum extent possible, the Stock

Option shall be a “incentive stock option” as provided in Section 422 of the

Internal Revenue Code and issued pursuant to the terms of the Company’s 1994

Stock Incentive Plan and shall be vested in Timmins ratably on a quarterly

basis over a period not to exceed four years from the grant date.

 

Upon occurrence of

a fifty percent (50%) or more change in the ownership of the Company, either by

the issuance of the Company’s capital stock, a merger of the Company with or

into another en­tity, or a sale of all or substantially all of the Company’s

assets, the vesting of the Stock Option will be accelerated and the total

number of shares subject to the Stock Option will be vested in Timmins on the

date of such change in ownership.

 

If Timmins’

employment with the Company is termi­nated for any reason, Timmins shall have

ninty (90) days from the Date of Ter­mination (as defined in Section 7.5

hereof) with which to exer­cise the vested portion of his Stock Option to

purchase that num­ber of shares to which he is entitled as of the Date of

Termination.

 

4.4                             Benefits.  In addition to Sections 4.1, 4.2 and 4.3

hereof, Timmins shall be entitled to participate in any employee bene­fit plans

or programs that the Company provides for its employees to the extent he meets

the eligibility requirements for any such plan or program. In addition, Timmins

shall be entitled to paid vacation annually and to paid holidays as provided by

Company policy.

 

5.                                    Early Termination.  Timmins’ employment with the

Com­pany will be terminated prior to the period set forth in Section 3 hereof,

or any extensions or renewals thereof, upon the occur­rence of any of the following

events:

 

5.1                               The death of Timmins;

 

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5.2                               The termination of employment by the

Company for Cause, as defined in

Section 7.2 hereof;

 

5.3                               The termination

of employment by the Company other than for Cause;

 

5.4                               The

termination of employment by the

Company due to Disability, as defined in Section 7.1 hereof;

 

5.5                               The termination of

employment by Timmins for Good Reason, as defined in Section 7.3 hereof; or

 

5.6                               The

termination of employment by Timmins other than for Good Reason, as defined in

Section 7.3 hereof.

 

6.                                      Obligation

Upon Termination.

 

6.1                               If

Timmins’ employment with the Company is terminated by the Company other than

for Cause, or by Timmins for Good Reason, the Company shall be obligated to

continue to pay to Timmins his Base Salary then in effect for a period of one year in accordance with the normal

payroll practices of the Com­pany and to pay any bonus that has been awarded to

Timmins but is unpaid at the Date of Termination and any additional

discretionary bonus that the Board of Directors elects to pay Timmins pursuant

to Section 4.2  hereof, and Timmins shall not be bound by the restrictions

set forth in Sections 8.1  and 8.2  hereof.

 

6.2                               If

Timmins’ employment with the Company is termi­nated due to Disability, the

Company shall be obligated to con­tinue to pay to Timmins (i) his Base Salary

then in effect for a period of one hundred eighty (180) days, reduced by the

amount of any payments during that one hundred eighty (180) days to Timmins

under any disability insurance policy or policies the Company may obtain, and

(ii) any bonus that has been awarded to Timmins but is unpaid at the Date of

Termination and any additional discretionary bonus that the Board of Directors

elects to pay Timmins pursuant to Section 4.2  hereof.

 

6.3                               If Timmins’ employment with the Company is

terminated due to Timmins’ death, the Company shall be obligated to continue to

pay to Timmins’ estate: (i) his Base Salary then in effect for a period of one

year following Timmins’ death, and (ii) any bonus that has been awarded

to Timmins but is unpaid at the Date of Termination and any additional

discretionary bonus that the Board of Directors elects to pay Timmins pursuant

to Section 4.2  hereof.  The Company may purchase a life insurance

policy or policies covering the term of Timmins’ employment under this

Agreement and its obligations thereunder in the event of Timmins’ death.

 

6.4                               If

Timmins’ employment by the Company is termi­nated by Timmins other than for

Good Reason or by the Company

for Cause, Timmins shall be paid his Base Salary then in effect for a period of

six months following the Date of Termination in accor­dance with the normal

payroll practices of the Company and Timmins shall be bound by the restrictions

set forth in Sections 8.1 and 8.2 hereof for a period of one year following the

Date of Termination.  If

 

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Timmins’

employment is terminated under this Section 6.4, Timmins shall not be entitled

to any bonus in respect of the fiscal year of the Company in which the Date of

Termination occurs.

 

6.5                               Retirement

- Not Applicable.

 

6.6                             No

Excess Parachute. 

Notwithstanding anything in this Agreement to the contrary, Timmins will

not be entitled to any payment pursuant to this Agreement to the extent that

such payment, in addition to any other payments or benefits to which Timmins

may be entitled, results in an “excess parachute payment” within the meaning of

Section 280G(b) (1) of the Internal Revenue Code of 1986, as amended (the

“Code”).  The determination required

pursuant to this Section 6.6 shall be made after reasonable consultation with

both the Company and Timmins by a national accounting firm, selected by the Company

and agreeable to Timmins, and shall be binding and conclusive on the Company

and Timmins.

 

7.                                      Definitions.

 

7.1                             Disability. Termination by the Company of Timmins’

employment based on “Disability” shall mean termination because of Timmins’

absence from his duties with the Company on a full-time basis for one hundred

fifty (150) consecutive days, as a result of his incapacity due to physical or

mental illness, unless within thirty (30) days after Notice of Termination (as

defined in Section 7.4) is given following such absence Timmins shall have

returned to the full-time performance of his duties.

 

7.2                               Cause.

 

(a) Termination by

the Company of Timmins’ employ­ment for “Cause” shall mean termination upon (i)

material breach by Timmins of his duties or obligations hereunder, which breach

is not cured within fifteen (15) business days following receipt of the notice

set forth in Section 7.2(b) hereof; (ii) the willful engag­ing by Timmins in

conduct materially injurious to the Company, monetarily or otherwise; (iii)

acts of fraud, theft or illegal acts, whether or not related to Timmins’

employment hereunder; or (iv) the refusal of Timmins to follow lawful

instructions of the Board of Directors, which do not violate the provisions of

this Agreement, where such refusal is not cured within fifteen (15) business

days following Timmins’ receipt of the notice set forth in Section 7.2(b)

hereof.  For purposes of this Section

7.2, no act, or failure to act, on Timmins’ part shall be considered “willful”

unless done, or omitted to be done, by him not in good faith and without

reasonable belief that his action or omission was in the best interest of the

Company.  Any act, or failure to act,

based upon authority given pursuant to a resolution duly adopted by the Board

of Directors or based upon the advice of counsel for the Company shall be

conclusively presumed to be done, or omitted to be done, by Timmins in good

faith and in the best interests of the Company.

 

(b)

Notwithstanding Section 7.2(a) hereof, Timmins shall not be terminated for

Cause unless and until such termination is ordered by the Company’s Board of

the Directors at a special meeting held not less than fifteen (15) business

days following the delivery to Timmins of a notice from the Company, or any two

of its directors, setting forth (i) the date, time and place of the Board of

Directors meeting, (ii) the proposed termination of Timmins for

 

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Cause, (iii) specification of the clause of Section 7.2(a) under which

termination is proposed to be effected, (iv) specification of the facts

proposed as the basis for such termination, and (v) if termination is proposed

to be effected pursuant to Section 7.2(a)(i) or (a)(iv), a statement of

Timmins’ right to cure any basis for the termination prior to the date of the

meeting. Timmins shall be entitled to attend and participate in the Board of

Directors meeting and neither the Board (or any member of the Board) nor

Timmins may have counsel present. If the Board orders Timmins’ termination at

the meeting, the Date of Termination shall be the date of the meeting if

termination is effected pursuant to Section 7.2(a)(ii) or (a)(iii) or five

business days following the meeting if termination is effected pursuant to

Section 7.2(a)(i) or (a) iv).

 

7.3                               Good

Reason.                         Termination by Timmins of his employ­ment

for “Good Reason” shall mean termination based on:

 

(a)                                  (i)

the assignment to him of any duties incon­sistent with his position, duties,

responsibilities and status with the Company on the date hereof, (ii) a change

in his position or title, or a diminution of his responsibilities, or any

removal of Timmins from or any failure to reappoint Timmins to any of such

positions, except in connection with the termination of Timmins’ employment for

Cause, Disability or death, or (iii) any determination by the Board of

Directors (in which Timmins does not acquiesce in his capacity as a director)

to terminate an active business segment of the Corporation, unless the Board of

Directors determines in good faith that the continuation of such business

segment is not in the best interest of the Corporation;

 

(b)                                 the

Company’s requiring Timmins to be based anywhere other than the Portland,

Oregon area except for required travel on the Company’s business;

 

(c)                                  the

Company’s breach of any of the provisions of this Agreement, which breach is

not cured by the Company within fifteen (15) business days following its

receipt of a notice from Timmins specifying the breach; or

 

(d)                                 a petition being filed by or against the Com­pany

under the federal bankruptcy laws or under any statute of any state in

connection with insolvency or reorganization, or for the appointment of a

receiver or trustee of all or a portion of the Company’s property, and any such

petition is not denied or stayed within thirty (30) days or any receiver or

trustee is not dis­charged or removed within thirty (30) days after the filing

of such petition (in which event Timmins shall receive no salary or bonus

payments beyond those paid or accrued prior to the Date of Termination and

shall have no obligations to the Company hereunder from and after the Date of

Termination).

 

7.4                             Notice

of Termination.                       Any

purported termina­tion by the Company pursuant to Sections 5.2, 5.3 or 5.4

hereof or by Timmins pursuant to Sections 5.5 or 5.6 hereof shall be

communicated by written Notice of Termination to the other party hereto. For

purposes of this Agreement, a “Notice of Termina­tion” shall mean a notice

which shall indicate the specific ter­mination provision in this Agreement

relied upon and, if appli­ca­ble, shall set forth in reasonable detail the

facts and cir­cum­stances claimed to provide a basis for termination of

Timmins’ employment under the provisions so indicated or the jus­tification for

the existence of

 

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Good Reason.

 

7.5                             Date

of Termination. “Date of Termination” shall mean (a) if Timmins’

employment is to be terminated for Disabil­ity, thirty (30) days after Notice

of Termination is given (provided that Timmins shall not have returned to the

performance of his duties on a full-time basis during the thirty (30)-day

period described in Section 7.1), (b) if Timmins’ employment is to be

terminated by the Company for Cause, the date set forth in Section 7.2(b)

hereof, and (c) if Timmins’ employment is to be terminated by Timmins or by the

Company for any other reason, the date specified in the Notice of Termination,

which date shall be no earlier than the date on which a Notice of Termination

is given, unless an earlier date has been agreed to by the party receiving the

Notice of Termination either in advance of, or after, receiving such Notice of

Termination.  Notwithstanding anything

in the foregoing to the contrary, if the party receiving the Notice of

Termination has not previously agreed to the termi­nation, then within thirty

(30) days af­ter any Notice of Termina­tion is given, the party receiving such

Notice of Termination may notify the other party that a dispute ex­ists

concerning the ter­mination, in which event the Date of Termination shall be

the date set either by mutual written agree­ment of the parties or by the

arbitrator in a proceeding as provided in Section 14 hereof.

 

8.                                      Noncompetition;

Nonsolicitation and Confidentiality.

 

8.1                               Scope

of Noncompetition.  Timmins agrees that he will not, during the

term of his employment (or for a period of one year thereafter if his

employment is terminated by the Com­pany pursuant to Section 5.2 or by Timmins

pursuant to Section 5.6), directly or indirectly, be employed by, own, manage,

operate, join, control or participate in the ownership, manage­ment, operation

or control of or be connected with in any manner any business which engages in

any business activity in any loca­tion throughout the world which is in direct

competition with the business conducted or intended (which intention is

documented) to be conducted by the Company (provided, however, that follow­ing

the Date of Termination, this Section shall be limited to any business which

engages in any business activity which is then in direct competition with the

business of the Company).  Timmins shall

be deemed to be connected with such a business if such business is carried on

by a partnership in which he is a general or limited partner or employee, a

company or association of which he is a shareholder, officer or director, or a

partnership, company or association of which he is an employee, member,

consultant or agent. Notwithstanding the foregoing, the following shall not

constitute violations of this Section 8.1: (a) ownership not ex­ceeding five

percent (5%) of the voting stock of any publicly-held corporation or limited

partnership, or (b) any other activities approved by the Company’s Board of

Directors.

 

8.2                               Scope of Nonsolicitation. Timmins shall not directly or indirectly

solicit or entice any employee or consult­ant of the Company to cease his or

her relationship with the Com­pany or solicit, entice or in any way divert any

customer or sup­plier of the Company to do business with any entity described

herein. This Section 8.2 shall apply: (i) during the period of Timmins’

employment by the Company, and (ii) in the event of termi­nation by the Company

pursuant to Section 5.2 or by Timmins pursuant to Section 5.6, for one year

following the Date of Termination.

 

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8.3                               Equitable  Relief.  Timmins acknowledges that the provisions of this Section 8 are

essential to the Company, that the Company would not enter into this Agreement

if it did not include this covenant not to compete and nonsolicitation covenant

and that damages sustained by the Company as a result of a breach of this

covenant not to compete and nonsolicitation covenant can­not be adequately

remedied by damages, and Timmins agrees that the Company, in addition to any

other remedy it may have under this Agreement or at law, and notwithstanding

Section 14 hereof, shall be entitled to injunctive and other equitable relief

to prevent or curtail any breach of this Section 8.

 

8.4                               Confidentiality. During the period of his employment

hereunder, Timmins agrees not to directly or indirectly dis­close to any

person, other than an employee of the Company or a person to whom disclosure is

reasonably necessary or appropriate in connection

with the furtherance of the business of the Com­pany, any trade secret or

proprietary or material confidential information of the Company or of any

company affiliated with the Company obtained by him while in the employ of the

Company; pro­vided, however, that “Confidential Information” shall not include

any information known generally to the public; for purposes of this Section

8.4, Confidential Information shall include every form in which such

information shall exist, whether written, oral, film, tape, computer disk or

other form of media. For the period ending two years following the Date of

Termination of his employment hereunder, Timmins agrees not to disclose any

Confidential Information of the type described in the preceding sentence.

 

9.                                      Indemnification

Rights.

 

9.1                               Definitions.                                As

used in this Section 9:

 

(a) The term

“Proceeding” shall include any threatened, pending or completed action, suit,

arbitration, ad­ministrative hearing or any other proceeding, whether brought

in the right of the Company or otherwise and whether of a civil, crimi­nal,

administrative or investigative nature, in which Timmins may be or may have

been involved as a party or otherwise by reason of the fact that Timmins is or

was a director, officer, employee or agent of the Company or, while a director

or officer of the Company, is or was serving at the request of the Company as a

director, officer, partner, trustee, employee or agent of another foreign or

domestic corporation, partnership, joint venture, trust, employee benefit plan

(its participants or bene­ficiaries) or other enterprise, whether or not

serving in such capacity at the time any liability or expense is incurred for

which indemnification or reimbursement can be provided under this Agreement.

 

(b) The term

“Expenses” shall include, without limitation, expense of investigations,

judicial or administrative proceedings or appeals, attorneys’ fees and

disbursements and any expenses of establishing a right to indemnification under

this Agreement, but shall not include amounts paid in settlement by Timmins or

the amount of judgments or fines against Timmins.

 

(c) The term “Fines” shall include any excise tax

assessed with respect to any employee benefit plan.

 

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9.2                               Indemnity

in Third-Party Proceedings. The Company shall indemnify Timmins in

accordance with the provisions of this Section 9.2 if Timmins is a party to any

Proceeding (other than a Proceeding by or in the right of the Company), against all Expenses, judgments, Fines

and amounts paid in settlement actu­ally and reasonably incurred by Timmins in

connection with such Proceeding, but only if Timmins acted in good faith and in

a man­ner which he reasonably believed to be in or at least not opposed to the

best interests of the Company and, in the case of a criminal proceeding, had no

reasonable cause to believe that his conduct was unlawful.  Timmins’ conduct with respect to an empoyee

benefit plan for a purpose he reasonably believed to be in the interest of the

partici­pants in and beneficiaries of the plan shall satisfy the foregoing

requirement that he shall have acted in a manner “reasonably believed to be in

or at least not opposed to the best interests of the Company.”

 

9.3                               Indemnity in Proceedings by or in the Right of the  Company. The Company shall indemnify Timmins in accordance with the provisions

of this Section 9.3 if Timmins is a party to any Proceeding by or in the right

of the Company, against all Expenses actually and reasonably incurred by

Timmins in connection with the defense or settlement of such Proceeding, but

only if Timmins acted in good faith and in a manner which Timmins reasonably

believed to be in or at least not opposed to the best interests of the Company,

except that no indemnification for Expenses shall be made under this Section 9.3

in respect of any claim, issue or matter as to which Timmins shall have been

finally adjudged by a court to be liable to the Company, unless and only to the

extent that any court in which such Proceeding was brought shall determine upon

application that, despite the adjudication of liability but in view of all the

relevant circumstances of the case, Timmins is fairly and reasonably entitled

to indemnity.

 

9.4                               Indemnification

of Expenses of Successful Party. Not­withstanding any other provisions

of this Agreement, to the ex­tent that Timmins has been successful, on the

merits or other­wise, in defense of any Proceeding or in defense of any claim,

issue or matter therein,

including the dismissal of an action without prejudice, Timmins shall be

indemnified against all Ex­penses incurred in connection therewith.

 

9.5                               Expenses

as a Witness. Notwith­standing any other provisions of this Agreement,

to the extent that Timmins appears as a witness in any proceeding or in respect

of any claim, issue or matter therein, at a time when he has not been made a

named defendant or respondent, Timmins shall be entitled to payment or

reimbursement of all expenses  incurred

by him in connection therewith.

 

9.6                               Additional

Indemnification.

 

(a)  Notwithstanding

any limitation in Sections 9.2, 9.3 or 9.4, the Company shall indemnify Timmins

to the full­est extent not prohibited by law if Timmins is a party to any

Proceeding (including a Proceeding by or in the right of the Com­pany to

procure a judgment in its favor) against all Expenses, judgments, Fines and

amounts paid in settlement actually and rea­sona­bly incurred by Timmins in

connection with such Proceeding.

 

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(b) For purposes

of paragraph (a), the meaning of the phrase “to the fullest extent not

prohibited by law,” shall in­clude, but not be limited to the fullest extent

permitted by the Oregon Business Corporation Act (the “Act”) or any amendments

to or replacements of the Act adopted after the date of this Agree­ment that increase

the extent to which a Company may indemnify its officers and directors. Should

the Company incorpo­rate in another state or be succeeded by a corporation of

another state, the meaning of the phrase “to the fullest extent not pro­hibited

by law” shall include, but not be limited to the fullest extent permitted by

the laws of that state.

 

(c) In the event that a court of competent jurisdiction finds that the

indemnification provided in paragraph (a) is not lawful due to its scope or

otherwise, such finding shall not render such indemnification unenforceable but

such court shall redefine the scope of indemnification set forth so as to

render such indemnification valid and enforceable.

 

9.7                               Exclusions.

Notwithstanding any provision in this Agreement, the Company shall not be

obligated under this Agreement to make any indemnity:

 

(a) for which any

payment has actually been made to or on behalf of Timmins under any insurance

policy or other in­demnity provision, except with respect to any excess beyond

the amount paid under such insurance or other indemnity provision;

 

(b) for any breach

of his duty of loyalty as a director to the corporation or its shareholders;

 

(c) for any act or

omission by Timmins not in good faith or which involves intentional misconduct

or a know­ing violation of law;

 

(d) for any

unlawful distribution under the Act;

 

(e) for any

transaction in which he derived an improper personal benefit;

 

(f) for an

accounting of profits made from the purchase and sale by Timmins of securities

of the Company within the meaning of Section 16(b) of the Securities Exchange

Act of 1934 and amendments thereto or similar provisions of any state statutory

law or common law;

 

(g) if a court

having jurisdiction in the matter shall finally determine that such

indemnification is not lawful under any applicable statute or public policy

(and, in this re­spect, both the Company and Timmins have been advised that the

Securities and Exchange Commission believes that indemnifi­cation for

liabilities arising under the federal securities laws is against public policy

and is, therefore, unenforceable and that claims for indemnification should be

submitted to appropri­ate courts for adjudication); or

 

(h) in connection

with any Proceeding (or part thereof) initiated by Timmins, or any Proceeding

by Timmins against the Company or its directors, officers, employees or other

indemnities, unless: (i) such indemnification is expressly required to be made

 

9

 

by law; (ii) the

Proceeding was authorized by the Board of Directors of the Company; (iii) such

indemnification is pro­vided by the Company, in its sole discretion, pursuant

to the powers vested in the Company under applicable law; or (iv) the

Proceeding is initiated pursuant to Section 9.11 hereof and Timmins is

successful in whole or in part in such Proceeding.

 

9.8                               Advancement

of Expenses.  The Expenses

incurred by Timmins in any Proceeding shall be paid or reimbursed by the

Company in advance of the final disposition of the Proceeding at the written

request of Timmins, if Timmins:

 

(a) furnishes the

Company a written affirmation of Timmins’ good faith belief that Timmins is

entitled to be indem­nified by the Company under this Agreement; and

 

(b) furnishes the

Company a written undertaking to repay such advances to the extent that it is

ultimately deter­mined by a court that Timmins is not entitled to be

indemnified by the Company (in which event Timmins shall repay such ad­vances).

Such advances shall be made without regard to Timmins’ ability to repay such

expenses and without regard to Timmins’ ultimate entitlement to indemnification

under the other provisions of this Agreement.

 

Notwithstanding

the foregoing, no such payment or reimbursement shall be made by the Company pursuant

to this Section 9.8 if prior thereto the Board of Directors requests an opinion

of counsel and such counsel opines that such payment or reimbursement comes

within the prohibition in Section 402 of the Sarbanes-Oxley Act of 2002.

 

9.9                               Notification

and Defense of Claim.       Not later than

thirty (30) days after receipt by Timmins of notice of the com­mencement of any

Proceeding, Timmins will, if a claim of indemnifica­tion relating thereto is to

be made against the Company under this Agreement, notify the Company in writing

of the commencement thereof, and include in such written notice any

documentation and information reasonably available to Timmins which is

reasonably necessary to determine whether and to what extent Timmins is

entitled to in­demnification; provided, however, that the omission to notify

the Company will not relieve the Company from any liability which it may have

to Timmins otherwise than under this Agreement. With re­spect to any such

Proceeding as to which Timmins notifies the Com­pany of the commencement

thereof:

 

(a) The Company will be entitled to participate

therein at its own expense.

 

(b) Except as otherwise provided below, the Com­pany may, at its option

and jointly with any other indemnifying party similarly notified and electing

to assume such defense, assume the defense thereof, with legal counsel

reasonably satis­factory to Timmins. Timmins shall have the right to employ

sepa­rate counsel in such Proceeding, but the Company shall not be liable to

Timmins under this Agreement, including Section 9.8 hereof, for the fees and

expenses of such counsel incurred after notice from the Company of its

assumption of the defense, unless: (i) Timmins reasonably concludes that there

may be a conflict of interest between the Company and Timmins in the conduct of

the defense of such Proceeding; or (ii) the Company does not employ counsel to

assume the defense of such Proceeding. The Company shall not be entitled to

assume the defense of any Proceeding brought by or on behalf of the

 

10

 

Company or as to which Timmins shall have made the conclusion provided

for in clause (i) above.

 

(c) If two or more

persons who may be entitled to indemnification from the Company, including

Timmins, are parties to any Proceeding, the Company may require Timmins to

engage the same legal counsel as the other parties. Timmins shall have the

right to employ separate legal counsel in such Proceeding, but the Company

shall not be liable to Timmins under this Agreement, including Section 9.8

hereof, for the fees and expenses of such counsel incurred after notice from

the Company of the re­quirement to engage the same counsel as other parties,

unless Timmins reasonably concludes that there may be a conflict of in­terest

between Timmins and any of the other parties required by the Company to be

represented by the same legal counsel.

 

(d) The Company

shall not be liable to indemnify Timmins under this Agreement for any amounts

paid in settlement of any Proceeding effected without its written consent,

which shall be not unreasonably withheld. The Company shall be permit­ted to

settle any Proceeding the defense of which it assumed, ex­cept the Company

shall not settle any action or claim in any man­ner which would impose any

penalty or limitation on Timmins with­out Timmins’ written consent, which shall

not be unreasonably withheld.

 

9.10                        Procedure

Upon Application for Indemnification. 

Any indemnification or reimbursement under Sections 9.2, 9.3, 9.4,

9.5, or 9.6 of this Agreement shall be made no later than thirty (30) days

after re­ceipt of the written request of Timmins for such indemnifica­tion or

reimbursement and shall not require that a determination be made in accor­dance

with the Act by the persons specified in the Act that indemnifi­cation is

required under this Agreement.

 

9.11                        Enforcement. Any right to indemnification or advances

granted by this Agreement to Timmins shall be enforceable by or on behalf of

Timmins in any court of competent juris­diction if (i) the claim for

indemnification or advances is denied, in whole or in part, by the Company or

(ii) no disposition of such claim is made within sixty (60) days of a written

request therefor. Timmins, in such enforcement action, if successful in whole

or in part, shall be entitled to be paid also the expense of prosecuting the

claim. It shall be a defense to any such enforcement action (other than an

action brought to enforce a claim for advancement of Expenses pursuant to

Section 9.8 hereof if the required affirmation and undertaking have been

tendered to the Company) that Timmins is not entitled to indemnification under

this Agreement, but the burden of proving such defense shall be on the Company.

Neither the failure of the Company (including its Board of Directors or its

shareholders) to make a determination prior to the commencement of such

enforcement action that indemnification of Timmins is proper in the

circumstances, nor an actual determination by the Company (including its Board

of Directors or its shareholders) that such indemnification is improper shall

be a defense to the action or create a presumption that Timmins is not entitled

to indemnification under this Agreement or otherwise. The termination of any

Proceeding by judgment, order of court, settlement, conviction or upon a plea

of nolo contendere, or its equivalent, shall not, of itself, create a

presumption or be determinative that Timmins is not entitled to indemnification

under this Agreement or otherwise.

 

9.12                        Partial

Indemnification.               If Timmins is

entitled un­der any provisions

 

11

 

of this Agreement

to indemnification by the Company for some or a portion of the Expenses, judgments, Fines and amounts

paid in settlement actually and reasonably incurred by Timmins in the

investigation, defense, appeal or settle­ment of any Proceeding, but not,

however, for the total amount thereof, the Company shall indemnify Timmins for

the portion of such Expenses, judgments, Fines and amounts paid in settlement

to which Timmins is entitled.

 

9.13                        Non-Exclusivity

and Continuity of Rights.  The

in­demnification provided by this Agreement shall not be deemed exclusive of

any other rights to which Timmins may be entitled under the Articles of

Incorporation of the Company, the Bylaws, any other agreement, any vote of

shareholders or directors, the Act, or otherwise, both as to action in Timmins’

official capac­ity and as to action in another capacity while holding such of­fices.

The indemnification under this Agreement shall continue as to Timmins even

though Timmins ceases to be a director or officer and shall inure to the

benefit of the estate, heirs and personal repre­sentatives of Timmins.

 

9.14                        Liability

Insurance.  The Company shall

purchase and maintain in effect a Director and Officer Liability Insurance

Policy insuring Timmins against liability asserted against or incurred by him

as a director or officer of the Company or any of its subsidiaries or

affiliates, with such terms of coverage and for such amounts as are reasonably

satisfactory to the Board of Directors.

 

10.                               Notice.

Every notice required by the terms of this Agreement shall be given in

writing by serving the same upon the party to whom it was addressed personally

or by registered or certified mail, return receipt requested, at the address

set forth below or at such other address as may hereafter by desig­nated by

notice given in compliance with the terms hereof:

 

	

  If to Timmins:

  	

   

  	

  Mr. Timothy A. Timmins

  
	

   

  	

   

  	

  14355 SW McFarland

  Boulevard

  
	

   

  	

   

  	

  Tigard, Oregon 97224

  
	

   

  	

   

  	

   

  
	

  If to the Company:

  	

   

  	

  Mr. William D. Rutherford

  
	

   

  	

   

  	

  Chairman of the Board

  
	

   

  	

   

  	

  Metro One Telecommunications, Inc.

  
	

   

  	

   

  	

  11200 Murray Scholls Place

  
	

   

  	

   

  	

  Beaverton, Oregon 97007

  

 

Notices given by mail

shall be deemed delivered upon deposit in the United States mail as set forth

above.

 

11.                               Insurance.

The Company may, at its election and for its benefit, insure Timmins

against accidental loss or death, and Timmins shall submit to such physical

examination and supply such in­formation as may be required in connection therewith.

 

12.                               Assignment. Timmins agrees that this Agreement may be

transferred or assigned by the Company to (a) any company result­ing from any

merger, consolidation or other reorganization to which the Company is a party

or (b) any corporation, partnership, association

 

12

 

or other person to which the Company may transfer all or substantially

all of its assets and business, and such transferee or as­signee  shall succeed to the rights and obligations

of the Company hereunder. Timmins shall not assign his rights or delegate his

duties hereunder.

 

13.                               Waiver.

No waiver of any of the provisions hereof shall be valid unless in writing,

signed by the party against whom such claim or waiver is sought to be enforced,

nor shall failure to enforce any right hereunder constitute a continuing waiver

of the same or a waiver of any other right hereunder.

 

14.                               Arbitration.

Any controversies or claims arising out of or relating to this Agreement or

the breach hereof shall be fully and finally settled by arbitration in

Portland, Oregon in accordance with the Commercial Arbitration Rules of the

American Arbitration Association then in effect. Judgment only may be en­tered

on the arbitration award in the Multnomah County Circuit Court; provided,

however, that Timmins shall be entitled to seek specific performance in such

court of his right to be paid his Base Salary then in effect until the Date of

Termination during the pendency of any dispute or controversy under this Agreement.

The prevailing party shall be entitled to costs, ex­penses and reasonable

attorneys’ fees. Arbitration shall be conducted in accordance with the

provisions for expedited procedures of the Commercial Arbitration Rules.

 

15.                               Entire

Agreement. This Agreement shall constitute the en­tire agreement

between the Company and Timmins with respect to the subject matter herein and

shall supersede all prior contracts or agreements between the Company and

Timmins with respect to such subject matter, including without limitation the

Employment Agreement dated as of August 1, 1995, as amended.

 

16.                               Amendment.

No modification of any of the provisions hereof shall be binding upon either

Timmins or the Company unless in writing, signed by the party against whom such

modification is sought to be enforced.

 

17.                               Applicable

Law. This Agreement shall be governed by the substantive laws of the

State of Oregon, without regard to its conflicts of law provisions.

 

18.                               Severability. In the event that any provision of this

Agreement shall be determined by any arbitrator or court  of com­petent jurisdiction to be

unenforceable or otherwise invalid for any reason, including by not limited to

the duration of such pro­vision, its geographical scope or the extent of the

activities prohibited or required by it, such provision shall be enforced and

vali­dated to the extent permitted by law, and the arbitrator or court  shall have the power to reform such

provision to the extent nec­essary for such provision to be enforceable under

ap­plicable law. All provisions of this Agreement are severable, and the un­enforceability

or invalidity of any single provision hereof shall not affect the remaining

provisions.

 

19.                               Attorneys’

Fees. In the event any suit or action shall be instituted arising from

or in connection with this Agreement, the prevailing party shall be entitled,

in addition to court costs, to reasonable attorneys’ fees in the amount fixed

by the trial judge or allowed by the appellate court in the event of any ap­peal.

 

13

 

20.                               Headings.

The headings or titles in this Agreement are for the purpose of reference

only and shall not in any way affect the interpretation or construction of this

Agreement.

 

IN WITNESS WHEREOF, the parties have executed and

entered into this Agreement on the date set forth above.

 

 

	

   

  	

   

  	

   

  
	

   

  	

  TIMOTHY A. TIMMINS

  	

   

  
	

   

  	

   

  	

   

  
	

   

  	

   

  	

   

  
	

   

  	

  Date

  	

   

  
	

   

  	

   

  	

   

  
	

   

  	

  METRO ONE TELECOMMUNICATIONS, INC.

  
	

   

  	

   

  	

   

  
	

   

  	

  By:

  	

   

  	

   

  
	

   

  	

   

  	

  William D. Rutherford

  	

   

  
	

   

  	

   

  	

  Chairman of the Board of Directors

  	

   

  
	

   

  	

   

  	

   

  
	

   

  	

   

  	

   

  
	

   

  	

  Date

  

 

14Exhibit 10.3

 

THQ Inc.

27001 Agoura Road, Suite 325

Calabasas Hills, California  91301

 

 

November
16, 2002

 

Jeffrey C. Lapin

THQ Inc.

27001 Agoura Road

Suite 325

Calabasas Hills, CA  91301

 

Dear
Jeff:

 

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

 

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

 

1.                                       Employment
Termination.

 

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

 

2.                                       Effect
of Employment Termination.

 

On and as of the Employment Termination Date:

 

(a)                                  All
provisions of Section 4 of the Employment Agreement shall be deemed to
terminate on the Employment Termination Date, except that Section 4.7 of the
Employment Agreement shall continue to be applicable to Executive for the
period stated therein;

 

(b)                                 The
provisions of paragraphs 6.1 through 6.6 of the Employment Agreement shall, as
provided therein, continue to be applicable subsequent to the expiration of the
Employment Term thereunder (except that Executive may retain his laptop
computer, purged of all company documents and files, Playstation 2 unit and his
chronological files (purged of all company and business materials), and for
purposes of Section 6.1 only of the Employment Agreement, the Executive’s
termination at the end of such Employment Term shall be deemed to be a
voluntary resignation without “good reason”. 
Executive shall be free to accept employment with and be employed by any
other person, firm or corporation, notwithstanding the provisions of
clause (y) of paragraph 6.1 of the Employment Agreement, but only if the
announcement thereof does not occur prior to the close of

 

 

 

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

 

3.                                       Medical
and Dental Insurance.

 

The Company shall provide to the Executive and his
family medical and dental insurance to the same extent as it provides to other
senior executive officers through the earlier of (i) the expiration of the
original Employment Term as provided in the Employment Agreement, or (ii) the
date on which Executive becomes eligible for substantially equivalent medical
and dental insurance coverage from a third party employer provided without cost
to Executive.

 

4.                                       Office
and Secretary.

 

The Company shall provide Executive with appropriate
office space and secretarial assistance through the earlier of (i) six months
after the Employment Termination Date or (ii) the date on which Executive
accepts employment with any other person, firm or corporation or (iii) changes
his principal residence from Los Angeles County, California.

 

5.                                       Consulting
Services.

 

(a)                                  The
Company hereby retains Executive as a consultant, and Executive hereby agrees
to be retained by the Company as a consultant on such matters as the Board of
Directors shall reasonably determine for the period commencing on the
Employment Termination Date and ending on December 31, 2005 (such period
referred to herein as the “Consulting Term”). 
The Company acknowledges that it is not retaining Executive’s exclusive
services under this Section 5, and that Executive shall be free to engage in
such other employment and business activities as Executive in his sole
discretion may determine.  Executive
shall be under no obligation to account for any amounts he may otherwise earn
or receive during or after the Consulting Term, whether by other employment or
otherwise, and the Company shall have no right or claim to any compensation or
profit that may inure to Executive during such period or otherwise.

 

2

 

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

 

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

 

(d)                                 In
the 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 5
for the then current and any future periods under this Agreement shall become
immediately due and payable without any diminution or discount.

 

(e)                                  The
amounts payable above shall be due and payable without regard to the extent to
which the Company shall request Executive’s consulting services hereunder and
without regard to the number of hours actually devoted by Executive to such
consulting services.  Furthermore, the
above payments and reimbursements shall continue to be made notwithstanding any
charge or allegation that Executive has not or may not have fulfilled his
obligations under this Agreement until and unless the Arbitrator under Section
8 hereof shall have determined that Executive has given the Company “Cause” to
terminate Executive’s consulting services under this Agreement.  “Cause” shall be the same as defined as
defined in Section 7.3 of the Employment Agreement (substituting references to
this Agreement for references therein to the Employment Agreement), and no
“Cause” shall be determined unless and until the Company has followed the
procedures set forth in the second paragraph of Section 7.3 of the Employment
Agreement (again substituting references to this Agreement for references
therein to the Employment Agreement).

 

(f)                                    The
Executive shall perform the consulting services described in Section 5 hereof
as an independent contractor without the power to bind or represent the Company
for any purpose whatsoever.  Except as
and to the extent otherwise provided herein, the Executive shall not, by virtue
of being a consultant hereunder, be eligible to receive any employee benefits
for which officers or other employees of the Company are eligible at any time
during the Consulting Term.

 

3

 

(g)                                 Notwithstanding
the above provisions of this Section 5, the Consulting Term shall be terminated
earlier than December 31, 2005 in the event and at such time as Executive
agrees to commence employment or act as an officer, director, agent of or
consultant for any person, firm or corporation (or division or operating unit
thereof) primarily in the business of developing and publishing interactive
games (“Competing Business”).  In that
event, the Consulting Term shall terminate and all consulting services which
would otherwise be required of Executive as well as all payments hereunder that
would otherwise be required of the Company, shall thereafter cease.

 

6.                                       Standstill,
Etc.

 

(a)                                  Executive
agrees that for a period of 3 years following the Employment Termination Date
(the Standstill “Period”), neither Executive nor any person or entity
controlled by Executive shall directly or indirectly, without the consent of
the Company, (i) commence or be involved with others who commence any
tender or exchange offer, proxy contest or solicitation or any similar
transaction involving the Company, or (ii) purchase or be part of a group
which purchases any shares of common stock of the Company in excess of 4.9% of
the then outstanding common stock or any other class of securities of the
Company in excess of 4.9% of the outstanding securities of such class.

 

(b)                                 Neither
Executive or the Company or any current or future executive officers or
directors of the Company (collectively, the “Company Parties”) shall make any
disparaging comments or remarks respecting the other party.  For this purpose, “disparaging” shall be
limited to comments or remarks which impugn or cast doubt upon past, present or
future employment performance or business accomplishments or business
activities, or the likelihood of future business success, which comments or
remarks are made in such a way as to be reasonably likely to have a deleterious
affect on the reasonable efforts of the other party to further his or its
business career or business.

 

7.                                       (Intentionally
Omitted)

 

8.                                       Representations
and Warranties.

 

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

 

(b)                                 The
Company represents and warrants that any and all actions on the part of the
Board of Directors of the Company, or any committee of the

 

4

 

Board of Directors
necessary to authorize or implement any of the provisions of this Agreement
have been duly and validly taken.

 

9.                                       Mutual
Release.

 

(a)                                  Except
for the obligations set forth in this Agreement, Executive hereby fully,
unconditionally and irrevocably releases the Company, all officers and
directors of the Company (the “General Releasees”) of and from any and all
claims, demands, actions and causes of 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, which Executive
may 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 date
hereof.  In addition, and without
limitation on the foregoing, except for the obligations in this Agreement,
Executive hereby fully, unconditionally and irrevocably releases the General
Releasees and all entities controlled by or under common control with any of
them, all past and present employees, officers and directors of any of the
General Releasees and any of such entities and all owners or direct or indirect
interests in any of the General Releasees or such entities, and their
respective counsel, of an from any and all claims, demands, actions and causes
of 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 connected
with Executive’s relationship in any and all capacities with the Company prior
to the date hereof, and the employment of Executive by the Company or the
termination of that employment, including without limitation, claims if any,
pursuant to the Employment Agreement or pursuant to any federal, state or local
law, such as, but not limited to, the Age 
Discrimination in Employment Act of 1967, 29 U.S.C. § 621, et  seq.;
Title VII of the Civil rights Act of 1964, as amended, 42 U.S.C. Section
2000(e), et  seq.; the Civil Rights Act of 1866, as amended, 42
U.S.C. Section 1981, et  seq.; the Fiar Labor Standards Act of
1939, as amended, 29 U.S.C. Section 201, et  seq.; the Equal Pay
Act, 29 U.S.C. Section 206(d); the Orders of the California Industrial Welfare
Commission regulating wages, hours and working conditions; each and every
provision of the California Labor and Insurance Codes; Article 1, § 1 of the
California Constitution; the Rehabilitation Act of 1973, as amended, 29 U.S.C.,
Section 701, et  seq.; Americans with Disabilities Act, 104 Stat.
327; the Employee  Retirement Income
Security Act of 1974, 29 U.S.C., Section 1001, et  seq.; the
National Labor Regulations Act, as amended, 29 U.S.C., Section 151, et  seq.;
the California Fair Employment and Housing Act, as amended, California
Government Code, Section 12900, et  seq.; the Uruh Civil Rights
Act, as amended, California Civil Code, Section 51, et  seq.

 

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

 

5

 

demands, actions and
causes of action of any  kind and
nature, in law, equity or otherwise, under contract, tort, statutory or common
law, know or unknown, suspected or unsuspected, disclosed or undisclosed, which
any of them may 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
date hereof.  Except for the obligations
set forth in this Agreement, the Company on its own behalf and on behalf of all
the persons and entities released in any way by Executive under Paragraph (a)
of Section 9, hereby fully, unconditionally and irrevocably releases Executive
of and from any and all claims, demands, actions and causes of action of any
kind and nature, in law, equity or otherwise, under contract, tort, statutory
or common law, known or unknown, suspected or unsuspected, and disclosed or
undisclosed, which any of them may have had, may now have or may in the future
have arising out of or in any way connected with Executive’s relationship in
any and all capacities with the Company prior to the date hereof, and the
employment of Executive by the Company or the termination of that
employment.  Without limitation on the
generality of the foregoing, included in the foregoing release is a release of
any and all such claims, demand, actions, and causes of action, directly or
indirectly arising out of or in any way connected with Executive’s relationship
in any and all capacities with the Company prior to the date hereof, including
but not limited to the employment of Executive by the Company or the
termination of that employment or Executive’s actions or non-actions as an
officer of the Company.

 

(c)                                  Executive
and the Company each acknowledge that he or it has read and understands Section
1542 of the Civil Code of the State of California which reads as follows:

 

A
general release does not extend to claims which the creditor does not know or
suspect to exist in his favor at the time of executing the release, which if
known by him must have materially affected his settlement with the debtor.

 

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

 

(d)                                 The
foregoing releases in this paragraph 9 do not apply to the rights and
obligations of the parties under vested outstanding options to purchase shares
of the Company’s stock previously granted to Executive by the Company.

 

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

 

6

 

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

 

If to the Company, to:

 

THQ
Inc.

27001
Agoura Road

Suite
325

Calabasas Hills, CA  91301

Attention:  Chief Executive Officer

 

If to the Executive, to:

 

Jeffrey C. Lapin

c/o Kenwick, Inc.

8509 So. La
Cienega Boulevard

Inglewood,
California 90301

Attention:  Z.L. Lapin

 

11.                                 Severability.  Whenever possible, each provision of this
Agreement shall be interpreted in such manner as to be effective and valid
under applicable law, but if any provision of this Agreement is held to be
invalid, illegal or unenforceable in any respect under applicable law or rule
in any jurisdiction, such invalidity, illegality or unenforceability shall not
affect the validity, legality or enforceability of any other provision of this
Agreement or the validity, legality or enforceability of such provision in any
other jurisdiction, but this Agreement shall be reformed, construed and
enforced in such jurisdiction as if such invalid, illegal or unenforceable
provision had never been contained herein.

 

12.                                 Successors
and Assigns.  This Agreement shall
be enforceable by the Consultant and his heirs, executors, administrators and
legal representatives, and by the Company and its successors and assigns.

 

13.                                 Governing
Law.  This Agreement shall be
governed by and construed and enforced in accordance with the internal laws of
the State of California without regard to principles of conflict of laws.

 

14.                                 Amendment
and Waiver.  The provisions of this
Agreement may be amended or waived only by the written agreement of the Company
and the Executive, and no course of conduct or failure or delay in enforcing
the provisions of this Agreement shall affect the validity, binding effect or
enforceability of this Agreement.

 

7

 

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

 

16.                                 Settlement
of Claims.  It is understood that
this is a compromise settlement of disputed claims, and that the promises of
payments in consideration of this Agreement shall not be construed to be an
admission of any liability or obligation whatever, by either party to the other
party, or to any other person whomsoever.

 

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

 

(a)                                  The
Arbitrator shall be determined from a list of names of five impartial
arbitrators (each of whom shall be a retired judge of the Superior Court of the
State of California or a retired Justice of the Court of Appeal of the State of
California) experienced in commercial arbitration matters supplied by the
American Arbitration  Association (The
“Association) 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 or equitable relief.

 

(c)                                  The
Arbitrator shall not have the power to add to nor modify any of the terms or
conditions of 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 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

 

8

 

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 proceeding 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 subjection 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. 
In the event that the Arbitrator determines that the Company in bad
faith has failed to continue to perform its payment or other obligations to
Executive under this Agreement without a determination by the Arbitrator that
it is entitled to do so, the Arbitrator shall have the authority to accelerate
the full amount of all sums which are then or which may thereafter become due
or payable under this Agreement from the Company to Executive or to require
that the Company post an unconditional Bank letter of credit which Executive
may draw upon at any time for the amount of all such sums which may thereafter
become payable by the Company to Executive and in addition, order that the
Company pay all of Executive’s legal fees and other costs in connection with
the Arbitration and any enforcement of the Arbitrator’s judgment or award.

 

(h)                                 The
Arbitrator may, in his or her sole discretion, order a pre-hearing exchange of
information including production of documents, exchange of summaries of
testimony or exchange of statements of position, 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.  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.  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.

 

(i)                                     Notwithstanding
the dispute resolution procedures contained in this Section 18, either party
may apply to any court having jurisdiction (i) to enforce

 

9

 

this quo until the
arbitration award is rendered or the Dispute is otherwise resolved, or (iii) to
challenge or vacate any final judgement, award or decision of the Arbitrator
that does not comport with the express provisions of this Section 18.

 

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

 

19.                                 Costs
and Expenses.  The Company and
Executive shall each bear their own legal fees in connection with the
negotiation, preparation, execution and enforcement of this Agreement except
that the Company shall pay directly $6,000 of Executive’s legal fees.  In other respects, except as specifically
provided herein, Executive and the Company will each bear their own costs and
expenses including attorney’s fees incurred in or arising out of or the matters
released herein.

 

20.                                 Headings.

 

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

 

Please confirm your agreement to the foregoing by
signing 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

  

 

10

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