Document:

EXHIBIT 10.2

 

CONFIDENTIAL SALARY AND BENEFITS CONTINUATION

AGREEMENT AND GENERAL RELEASE

 

This Confidential Salary and Benefits Agreement and
General Release (the “Agreement”) is made and entered into between THQ Inc.
(“THQ”) and Fred A. Gysi (“EXECUTIVE”) upon the following terms and conditions:

 

RECITALS

 

WHEREAS, EXECUTIVE voluntarily resigned from
employment with THQ, with such resignation to be effective on the earlier to
occur of (i) March 31, 2004 and (ii) the date 30 days after the commencement of
employment of a new chief financial officer of THQ (the “Separation Date”);

 

WHEREAS, THQ and EXECUTIVE are parties to a
Confidential Separation Agreement and General Release;

 

WHEREAS, pursuant to the Confidential Separation
Agreement and General Release, THQ is willing to continue EXECUTIVE’s salary
and benefits for a limited period and upon the terms and conditions set forth
in this Agreement;

 

WHEREAS, THQ has no prior legal obligation to provide
the post-separation consideration that is exchanged for the promises herein;

 

WHEREAS, EXECUTIVE has had the opportunity to consult
with counsel before signing this Agreement, has read this Agreement and
understood its contents, and has signed this Agreement voluntarily;

 

NOW, THEREFORE, in consideration of the mutual
promises, consideration, covenants, and conditions provided for in this
Agreement, the adequacy and sufficiency of which are hereby acknowledged, THQ
and EXECUTIVE agree as follows:

 

COVENANTS

 

1.     Post-Separation
Consideration.  In consideration for the agreements,
covenants, and general release contained herein, THQ shall provide EXECUTIVE
with the following post-separation consideration:

 

1a.   Salary Continuation. 
Commencing on the first regular THQ payday following the Separation
Date, THQ shall provide EXECUTIVE with salary continuation payments in the
aggregate equal to twelve months’ base salary based on his current base annual
salary of $241,500.  All salary
continuation payments shall be payable in installments in accordance with THQ’s
regular payroll practices, provided, however, that EXECUTIVE may elect, by
written notice to THQ, to receive all remaining salary continuation payments
from THQ in a single lump

 

 

sum payment.  In addition,
should EXECUTIVE become employed, as a salaried employee or paid consultant, by
a business that is a “competitor” of THQ, THQ may elect to pay EXECUTIVE any
remaining amounts due to EXECUTIVE in a lump sum payment.  For the purposes of this Agreement, a
“competitor” shall mean any person or entity engaged in the business of
designing, developing, publishing or distributing entertainment software, or
content of any type to be distributed by means of wireless media.  Should the salary continuation obligation be
paid in a lump sum pursuant to this paragraph, such lump sum shall be an amount
equal to $241,500 less the amount of all prior payments made pursuant to this
Section 1a (without giving effect to any required withholdings) on the fifth
day after the election by EXECUTIVE or THQ to make a lump sum payment pursuant
to this paragraph All salary continuation payments, including a lump sum
payment, if any, shall be paid less withholdings required by law.  EXECUTIVE agrees that, in the event he
becomes employed at any time while salary continuation payments are due to
EXECUTIVE pursuant to this Agreement, he will promptly advise THQ of the
following: (i) the name and address of his employer; (ii) the business of his
employer and (iii) his date of hire. 
The period during which THQ makes salary continuation payments to
EXECUTIVE pursuant to this Section 1a is herein referred to as the “Salary
Continuation Period.”

 

1b.   Bonuses.  EXECUTIVE
shall be eligible to receive (i) an annual bonus of $80,000 for the fiscal year
ending March 31, 2004, and (ii) his designated profit sharing allocation under
THQ’s existing Profit Sharing Plan for the year ending March 31, 2004; pro
rated in each case to the extent the Separation Date occurs prior to March 31,
2004.  Such bonus shall be paid in
accordance with THQ’s regular practice and shall be paid less withholdings
required by law.

 

1c.   Benefits.  During the
Salary Continuation Period, EXECUTIVE shall be eligible to participate in THQ’s
medical, disability, life insurance and other health and welfare benefits,
including Exec-u-care, at the same level of coverage, upon the same terms and
otherwise to the same extent as such policies and benefits shall have been in
effect immediately prior to the Separation Date.  THQ and EXECUTIVE shall share the costs of the continuation of
such insurance and benefits coverage in the same proportion as such costs were
shared immediately prior to the Separation Date.  .

 

1d.   Extension of Vesting and Exercise Period
for Certain Existing Stock Options.

 

(i)    THQ and EXECUTIVE acknowledge that
EXECUTIVE currently holds options to purchase THQ common stock under one or
more of the following agreements (collectively, the “Option Agreements”): the
Amended and Restated THQ Inc. 1997 Stock Option Plan Incentive Stock Option
Agreement dated November 3, 1999 between THQ and EXECUTIVE (the “1999 Incentive
Option”), the Amended and Restated THQ Inc. 1997 Stock Option Plan
Non-Qualified Stock Option Agreement dated November 3, 1999 between THQ and
EXECUTIVE (the “1999 Non-Qualified Option”), 
the Amended and Restated THQ Inc. 1997 Stock Option Plan Incentive Stock
Option Agreement dated July 21, 2000 between THQ and EXECUTIVE (the “2000
Incentive Option”), the Amended and Restated THQ Inc. 1997  Stock Option Plan Non-Qualified Stock Option
Agreement dated July 21, 2000 between THQ and

 

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EXECUTIVE (the “2000 Non-Qualified Option”), the Amended and Restated
THQ Inc. 1997 Stock Option Plan Incentive Stock Option Agreement dated October
1, 2001 between THQ and EXECUTIVE (the “2001 Incentive Option”), the Amended
and Restated THQ Inc. 1997  Stock Option
Plan Non-Qualified Stock Option Agreement dated October 1, 2001 between THQ and
EXECUTIVE (the “2001 Non-Qualified Option”), the Amended and Restated THQ Inc.
1997 Stock Option Plan Incentive Stock Option Agreement dated February 28, 2002
between THQ and EXECUTIVE (the “2002 Incentive Option”), the Amended and
Restated THQ Inc. 1997 Stock Option Plan Non-Qualified Stock Option Agreement
dated February 28, 2002 between THQ and EXECUTIVE (the “2002 Non-Qualified
Option”), the Amended and Restated THQ Inc. 1997 Stock Option Plan Incentive
Stock Option Agreement dated February 24, 2003 between THQ and EXECUTIVE (the
“2003 Incentive Option”), and the Amended and Restated THQ Inc. 1997 Stock
Option Plan Non-Qualified Stock Option Agreement dated February 24, 2003
between THQ and EXECUTIVE (the “2003 Non-Qualified Option”);

 

(ii)   EXECUTIVE may exercise options vested
under any of the Option Agreements no later than 90 days following the
Separation Date.  Any such options which
are not so exercised shall expire at the end of the ninetieth day following the
Separation Date;

 

(iii)  THQ shall
take all actions necessary to provide that all options unvested under the
Option Agreements as of the Separation Date shall continue to vest during the
Salary Continuation Period and shall be exercisable until the date 90 days
after the end of the Salary Continuation Period with respect to the number of
shares of THQ common stock that are vested under the terms of the applicable
Option as of the last day of the Salary Continuation Period; provided that no
such Option shall vest or be exercisable later than five years after its date
of grant.  EXECUTIVE acknowledges that
this extension of the vesting and exercisability periods under the 1999
Incentive Option, the 2000 Incentive Option, the 2001 Incentive Option, the
2002 Incentive Option and the 2003 Incentive Option constitutes a modification
of the applicable Option under the Internal Revenue Code of 1986, as amended,
and therefore each such Option shall be taxable as a nonstatutory stock option
instead of an incentive stock option.

 

1e.   Computer and Telephone. 
EXECUTIVE shall also be entitled to retain the laptop computer and
cellular telephone that are owned by THQ and currently in EXECUTIVE’s
possession, purged of all confidential proprietary information of THQ.  EXECUTIVE shall be responsible for all
internet service provider, internet connectivity, wireless service provider and
other continuing charges relating to such devices from and after the Separation
Date

 

1f.    Email and Telephone Access.  During the Salary Continuation Period, THQ shall
arrange for EXECUTIVE to have an email account and telephone extension, in each
case subject to THQ’s regular policies and procedures.

 

1g.   Directors’ and Officers’ Insurance
Coverage.  EXECUTIVE shall continue to be covered under
THQ’s existing Directors’ and Officers’ insurance policy for his actions as
Senior Vice President—Finance and Chief Financial Officer of THQ up to and
including the Separation Date, in accordance with and subject to the terms and
conditions of such policy.

 

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2.     Proprietary
Information and Inventions.  Except as
specifically set forth in Section 1e of this Agreement, EXECUTIVE shall
immediately return to THQ all documents, information (whether stored on
computer, computer disks, or other media), and other property belonging to THQ,
including without limitation, credit cards, security key cards, telephone
cards, computer software or hardware, THQ identification cards, THQ records and
copies of records, correspondence and copies of correspondence, other books or
manuals issued or owned by THQ, any and all information relating to THQ’s financial
situation, business plans, forecasts or strategy and all THQ intellectual
property.

 

2a.   EXECUTIVE acknowledges that his
employment with THQ created a relationship of confidence and trust between
EXECUTIVE and THQ with respect to Confidential Information (as hereinafter
defined) disclosed to EXECUTIVE, or known or made available to EXECUTIVE as a
result of his relationship with THQ. 
“Confidential Information” includes, but is not limited to, customer
lists, vendor lists, joint venture lists, databases, computer programs and
software, frameworks, designs, models, marketing programs and plans, sales,
financial, marketing, training and technical information and plans, business
methods, business policies, personnel information and policies, procedures, techniques,
research or development projects or results, trade secrets (which EXECUTIVE
agrees include THQ customer and prospective customer lists), pricing policies,
intellectual property, any and all information relating to projected
acquisitions, dispositions, joint ventures or other business arrangements
whether involving THQ or third parties, properties or management agreements,
management organization information (including data and other information
relating to members of THQ’s Board of Directors and management), operating
policies or manuals, business plans, purchasing agreements, financial records,
or other financial, commercial, business or technical information relating to
THQ or any of its subsidiaries or information designated as confidential or proprietary
that THQ or any of its subsidiaries may receive belonging to suppliers,
customers or others who do business with THQ or any of its subsidiaries,
information concerning how THQ creates, develops, acquires or maintains its
products and marketing plans, targets its potential customers, and operates its
businesses, other than information which is otherwise available in the public
domain (other than by reason of the breach of EXECUTIVE of any confidentiality
agreement with THQ) or which was known to EXECUTIVE prior to the date as of
which he commenced employment with THQ or any of its predecessors or
affiliates.

 

2b.   At all times following the Separation
Date, EXECUTIVE agrees that he will not disclose, use, disseminate, lecture
upon, publish or use for the direct or indirect benefit of, any person
(including EXECUTIVE), firm, association or other entity (other than THQ)
Confidential Information unless EXECUTIVE first secures THQ’s written
consent.  EXECUTIVE will continue to
abide by the confidential provisions of EXECUTIVE’s Confidential Information
Agreement signed by EXECUTIVE on October 25, 1997 (the “Confidential
Information Agreement”), which shall remain in full force and effect.

 

2c.   EXECUTIVE represents that, in the course
of his employment, he has not, solely or jointly with another or others,
conceived or made any formulas, processes, techniques, test data, discoveries,
improvements, innovations, concepts and ideas, whether patentable or not, with
the use of THQ’s facilities, materials, equipment, trade secrets, personnel, or
time, or

 

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suggested by or resulting from any task assigned to EXECUTIVE or work
performed by EXECUTIVE for, or on behalf of THQ relating to his employment.

 

3.     Securities Laws.

 

3a.   EXECUTIVE acknowledges and understands
that any offer to purchase or sell, purchase, sale, transfer or assignment of
securities of THQ by EXECUTIVE is subject to the provisions of the Securities
Act of 1933, as amended (the “1933 Act”), the Securities Exchange Act of 1934,
as amended (the “1934 Act”), and the rules promulgated thereunder including,
without limitation, Rule 144 under the 1933 Act and Section 16 and Rule 10b-5
under the 1934 Act.

 

3b.   EXECUTIVE will cease to be an “Executive
Officer”  (as defined in Rule 3b-7
promulgated under Section 16 of the 1934 Act) of THQ as of the Separation Date.
EXECUTIVE acknowledges his continuing obligation to comply with Section 16 of
the 1934 Act and the rules and regulations of the Securities and Exchange
Commission promulgated thereunder, including without limitation the obligation
to file on a timely basis reports on Form 4 and Form 5 regarding certain
transactions in the securities of THQ.

 

3c.   THQ acknowledges and agrees that,
following the Separation Date, EXECUTIVE will not be considered an officer,
employee, or “Insider” for the purposes of the THQ Confidentiality and Insider
Trading Policy (the “Policy”), and will not be subject to the Policy.

 

4.     General
Release.

 

4a.   Except for the obligations arising out of
this Agreement and the Option Agreements, EXECUTIVE for himself and on behalf
of each and all of his respective legal predecessors, successors, assigns,
fiduciaries, heirs, parents, spouses, companies, affiliates, and each of the
foregoing’s respective past, present, and future officers, principals,
directors, partners, employees, agents, attorneys, trustees, administrators,
executors, and representatives (all herein referred to as the “EXECUTIVE
RELEASORS”), does hereby fully and forever release, absolve, discharge, and
covenant not to sue THQ, and each and all of its legal predecessors,
successors, assigns, owners, fiduciaries, divisions, parents, subsidiaries,
affiliates, and related entities, and each of the foregoing’s respective past,
present, and future officers, principals, directors, partners, employees,
agents, attorneys, trustees, administrators, executors, and representatives
(all herein referred to as the “THQ RELEASED PARTIES”) of, from, and for, any
and all claims, demands, damages, debts, controversies, liabilities, losses,
accounts, reckonings, obligations, costs, expenses, attorneys’ fees, actions,
liens, causes, and/or causes of action, at law or in equity, whether known or
unknown (collectively, the “Executive’s Released Claims”), which the EXECUTIVE
RELEASORS now have, have ever had, or may have in the future against the THQ
RELEASED PARTIES based upon, arising out of, concerning, relating to, by virtue
of, or resulting from any act, omission, matter, fact, occurrence, transaction,
thing, state of facts, claim, contention, statement, or event occurring or
existing at any time from the beginning of the world up to and including the
Separation Date.  Without limiting the
generality

 

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of the foregoing, this General Release applies to any and all claims,
demands, damages, debts, controversies, liabilities, losses, accounts,
reckonings, obligations, costs, expenses, attorneys’ fees, actions, liens,
causes, and/or causes of action which in any way are based upon, concern,
relate to, arise out of, are by virtue of, or result from, EXECUTIVE’s
employment with THQ, including, but not limited to, any claims which could have
been raised under any state’s Fair Employment and Housing Act, Title VII of the
Civil Rights Act of 1964 as amended, the Age Discrimination in Employment Act
(ADEA), the American’s with Disabilities Act (ADA), and the Employees
Retirement Income Security Act (ERISA), or any other federal, state, or local
law, regulation, ordinance, or common law claim.  Without limiting the generality of the foregoing, EXECUTIVE
agrees, to the extent permitted by law, not to file against any of the THQ
RELEASED PARTIES any complaint or charge with the Equal Employment Opportunity
Commission, the California Fair Employment and Housing Commission, the federal
or California Department of Labor, or with any other local, state, or federal
agency or court based upon, arising out of, concerning, relating to, by virtue
of, or resulting from any of the Executive’s Released Claims, and that if any
agency or court assumes jurisdiction over any of the Executive’s Released
Claims, EXECUTIVE will request such agency or court to withdraw from the
matter.  EXECUTIVE also acknowledges
that, except for the payments and benefits required by paragraph 3 above,
EXECUTIVE has been paid all wages, accrued vacation pay, severance and
separation pay, and all other monies and benefits to which EXECUTIVE was
entitled.

 

4b.   Except for the obligations arising out of
this Agreement, the 1999 Incentive Option, the 1999 Non-Qualified Option, the
2000 Incentive Option, the 2000 Non-Qualified Option, the 2001 Incentive
Option, the 2001 Non-Qualified Option, the 2002 Incentive Option, the 2002
Non-Qualified Option, the 2003 Incentive Option and the 2003 Non-Qualified
Option, THQ for itself and on behalf of each and all of its legal predecessors,
successors, assigns, owners, fiduciaries, divisions, parents, subsidiaries,
affiliates, and related entities, and each of the foregoing’s respective past,
present, and future officers, principals, directors, partners, employees,
agents, attorneys, trustees, administrators, executors, and representatives
(all herein referred to as the “THQ RELEASORS”), does hereby fully and forever release,
absolve, discharge, and covenant not to sue EXECUTIVE, each and all of his
respective legal predecessors, successors, assigns, fiduciaries, heirs,
parents, spouses, companies, affiliates, and each of the foregoing’s respective
past, present, and future officers, principals, directors, partners, employees,
agents, attorneys, trustees, administrators, executors, and representatives
(all herein referred to as the “EXECUTIVE RELEASED PARTIES”), of, from, and
for, any and all claims, demands, damages, debts, controversies, liabilities,
losses, accounts, reckonings, obligations, costs, expenses, attorneys’ fees,
actions, liens, causes, and/or causes of action, at law or in equity, whether
known or unknown, which the THQ RELEASORS now have, have ever had, or may have
in the future against the EXECUTIVE RELEASED PARTIES based upon, arising out
of, concerning, relating to, by virtue of, or resulting from any act, omission,
matter, fact, occurrence, transaction, thing, state of facts, claim,
contention, statement, or event occurring or existing at any time from the
beginning of the world up to and including the Separation Date.  Without limiting the generality of the
foregoing, this General Release applies to any and all claims, demands,
damages, debts, controversies, liabilities, losses, accounts, reckonings,
obligations, costs, expenses, attorneys’ fees, actions, liens, causes, and/or
causes of action which

 

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in any way are based upon, concern, relate to, arise out of, are by
virtue of, or result from EXECUTIVE’s employment with THQ.

 

5.     Waiver
of Section 1542.  EXECUTIVE and THQ each acknowledge that he
or it has read and understood the following language contained in Section 1542
of the California Civil Code:

 

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.

 

Having
reviewed this provision, EXECUTIVE and THQ each hereby voluntarily waives and
relinquishes any and all rights or benefits he or it may have under this
provision, or any other provision of statutory or common law of similar effect,
and each hereby fully releases the other from liability for any unknown claims.

 

6.     Tax
Consequences.  The Company makes no representations or
warranties with respect to the tax consequences to EXECUTIVE of any of the
severance consideration provided under this Agreement.  EXECUTIVE shall be solely responsible for
the reporting and payment of local, state and/or federal taxes, if any,
attributable to the severance consideration, and any penalties or assessments
thereon.  EXECUTIVE agrees to defend,
indemnify, and hold harmless THQ from any claims, demands, deficiencies,
penalties, assessments, executions, judgments, or recoveries by any government
agency against THQ for any amounts claimed due on account of EXECUTIVE’s
failure to pay federal or state taxes or damages sustained by THQ by reason of
any such claims, including reasonable attorneys’ fees.

 

7.     Cooperation. 
As a material term hereof, for a period of four (4) months after the
Separation Date, EXECUTIVE will in good faith voluntarily cooperate with THQ
and answer questions THQ may ask him regarding matters which EXECUTIVE oversaw
or worked on during his employment at THQ or at THQ’s predecessors or
affiliates.  EXECUTIVE shall not receive
any additional compensation for such cooperation.

 

8.     No
Admission; Integration; Modification.  Neither this
Agreement nor anything contained in this Agreement shall be construed as an
admission of any fact, issue, liability or wrongdoing by either party
hereto.  With the exception of the
Confidential Information Agreement and the Option, each of which shall remain
in full force and effect, this Agreement supersedes all prior agreements and
understandings and constitutes the only and entire agreement between THQ and
EXECUTIVE concerning the terms of EXECUTIVE’s severance.  This Agreement shall govern in the event of
any inconsistency between this Agreement and the Confidential Information
Agreement.  THQ and EXECUTIVE
acknowledge they have not executed this Agreement in reliance upon any promise,
representation, statement,

 

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warranty or agreement other than those expressed herein.  This Agreement may be modified only in a
writing signed by the parties hereto.

 

9.     Binding
Arbitration.  This Agreement shall be governed by and
construed in accordance with the internal substantive laws of the State of
California.  Except for claims seeking
provisional or permanent injunctive relief, any and all disputes arising from
or in connection with this Agreement shall be submitted to final and binding
arbitration in Los Angeles County, California before an experienced employment
arbitrator licensed to practice law in California pursuant to the Employment
Dispute rules of the American Arbitration Association. The arbitrator shall be
selected by both parties in accordance with California Code of Civil Procedure
section 1281.6 from (1) the American Arbitration Association; (2) Judicial
Arbitration and Mediation Services, Inc.; or (3) Action Dispute
Resolution.  Either party desiring to
arbitrate shall give written notice to the other party within a reasonable
period of time after the party becomes aware of the need for arbitration and
within the applicable statute of limitations prescribed by law.  The decision of the arbitrator shall be final
and binding.  Judgment on any award rendered
by such arbitrator may be entered in any court having jurisdiction over the
subject matter of the controversy.  To
the extent permitted by applicable law, the prevailing party shall be entitled
to recover its reasonable attorneys’ fees, costs and expenses related to the
arbitration from the other party, in addition to any other relief to which the
prevailing party may be entitled.  This
arbitration provision does not prohibit a party from seeking and obtaining
injunctive relief from a court of competent jurisdiction pending the outcome of
arbitration.  A party bringing an action
for injunctive relief shall not be deemed to have waived its right to demand
arbitration of all disputes.

 

10.   Remedies; Attorneys’ Fees. 
EXECUTIVE agrees that THQ has the right to enforce this Agreement and
any of its provisions by injunction, specific performance or other equitable
relief without prejudice to any other rights or remedies THQ may have at law or
in equity for breach of this Agreement. 
If any action is brought to enforce the terms of this Agreement, the
prevailing party will be entitled to recover its reasonable attorneys’ fees,
costs and expenses from the other party, in addition to any other relief to
which the prevailing party may be entitled.

 

11.   Miscellaneous. 
THQ and EXECUTIVE agree that no waiver by any party of any particular
provision or right under this Agreement shall be deemed to be a waiver of any
other provision or right herein.  The
parties further agree that each provision or term of this Agreement is intended
to be severable from the others so that if any particular provision or term
hereof is or determined to be illegal or invalid for any reason whatsoever,
such illegality or invalidity shall not affect the legality or validity of the
remaining provisions and terms hereof. 
The parties agree that the language of this Agreement shall be construed
as a whole according to its fair meaning, and not strictly for or against any
of the parties hereto.

 

12.   ADEA Waiver and Notification. 
In compliance with the requirements of the Age Discrimination In
Employment Act (ADEA), as amended by the Older Workers’ Benefit Protection Act
of 1990, EXECUTIVE acknowledges by his signature below that, with respect to
the Released Matters, and the rights and claims under the ADEA waived and
released in this

 

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Agreement, he has read and understands this Agreement, including,
without limitation, the following:

 

a.     That he is advised to consult
with an attorney before signing this Agreement;

 

b.     That he is releasing THQ
from, among other things, any claims which he may have against it pursuant to
the Age Discrimination In Employment Act as amended;

 

c.     That the releases contained
in this Agreement do not cover rights or claims that may arise after he signs
this Agreement;

 

d.     That he has been given a
period of twenty-one (21) days in which to consider this Agreement; and

 

e.     That he may revoke this
Agreement during the seven (7) day period following his execution of this Agreement.

 

13.   Counterparts. 
This Agreement may be signed in counterparts, and a facsimile signature
shall have the same force and effect as an original penned in ink.

 

IN WITNESS WHEREOF, the parties hereto have caused
this Agreement to be executed as of the day and year indicated below.

 

	
   

  	
  THQ INC.

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Dated:  March
  31, 2004

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  	
   

  
	
   

  	
  Title:

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  EXECUTIVE

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Dated:  March
  31, 2004

  	
   

  	
   

  	
   

  
	
   

  	
  Fred A. Gysi

  	
   

  	
   

  

 

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CONFIDENTIAL SEPARATION AGREEMENT AND GENERAL RELEASE

 

This Confidential Separation Agreement and General
Release (the “Agreement”) is made and entered into between THQ Inc. (“THQ”) and
Fred A. Gysi (“EXECUTIVE”) upon the following terms and conditions:

 

RECITALS

 

WHEREAS, EXECUTIVE has voluntarily resigned from
employment with THQ effective on the earlier to occur of (i) March 31, 2004 and
(ii) the date 30 days after the commencement of employment of a new chief
financial officer of THQ (the “Separation Date”);

 

WHEREAS, EXECUTIVE has agreed to continue to provide
services to THQ for a transitional period, as more fully described below;

 

WHEREAS, THQ and EXECUTIVE wish to agree to certain
terms regarding EXECUTIVE’s transitional period with and ultimate separation
from THQ;

 

WHEREAS, THQ has no prior legal obligation to provide
or offer severance or other post-separation consideration to EXECUTIVE;

 

WHEREAS, EXECUTIVE has had the opportunity to consult
with counsel before signing this Agreement, has read this Agreement and understood
its contents, and has signed this Agreement voluntarily;

 

NOW, THEREFORE, in consideration of the mutual
promises, consideration, covenants, and conditions provided for in this
Agreement, the adequacy and sufficiency of which are hereby acknowledged, THQ
and EXECUTIVE agree as follows:

 

COVENANTS

 

1.     Effective
Date.  The “Effective Date” of this Agreement shall
be the day upon which this Agreement has been executed by both of the parties
hereto.  If the parties sign this
Agreement on different dates, the Effective Date shall be the later of those
dates. This Agreement shall become binding upon and effective as to THQ and
EXECUTIVE on the Effective Date.

 

2.     Resignation. 
Pursuant to EXECUTIVE’s resignation from THQ and THQ’s acceptance
thereof,  EXECUTIVE’s last day of
employment shall be the Separation Date.

 

3.     Transitional Period. 
Beginning on the Effective Date of this Agreement through the Separation
Date (the “Transitional Period”), EXECUTIVE shall continue to perform as the
Senior Vice President-Finance, Chief Financial Officer and Treasurer of THQ and
shall perform such other transitional responsibilities as directed by the
President and/or the Board of

 

 

Directors.  EXECUTIVE shall
perform these duties diligently, to the best of his abilities, and on a full
time basis, and shall act in THQ’s best interest.  During the Transitional Period, and in exchange for EXECUTIVE’s
diligent performance of his duties and the other promises and agreements
herein, EXECUTIVE shall continue to receive his current salary and benefits.

 

4.     Salary
and Benefits Continuation Offer.  In the event
EXECUTIVE faithfully performs his duties and obligations under this Agreement,
on the Separation Date THQ shall offer EXECUTIVE a written Salary and Benefits
Continuation package in the form of Exhibit A attached hereto.  This Salary and Benefits Continuation
package offer will become effective in accordance with its terms upon signature
by the parties.  In the event EXECUTIVE
fails to perform his duties and obligations under this Agreement diligently and
competently, or otherwise violates this Agreement or engages in misconduct, THQ
may terminate EXECUTIVE’s employment prior to the Separation Date without any
further obligation hereunder.

 

5.     General
Release.

 

5a.   Except for the obligations arising out of
this Agreement, the Amended and Restated THQ Inc. 1997 Stock Option Plan
Incentive Stock Option Agreement dated November 3, 1999 between THQ and
EXECUTIVE (the “1999 Incentive Option”), the Amended and Restated THQ Inc. 1997
Stock Option Plan Non-Qualified Stock Option Agreement dated November 3, 1999
between THQ and EXECUTIVE (the “1999 Non-Qualified Option”), the Amended and
Restated THQ Inc. 1997 Stock Option Plan Incentive Stock Option Agreement dated
July 21, 2000 between THQ and EXECUTIVE (the “2000 Incentive Option”), the
Amended and Restated THQ Inc. 1997 
Stock Option Plan Non-Qualified Stock Option Agreement dated July 21,
2000 between THQ and EXECUTIVE (the “2000 Non-Qualified Option”), the Amended
and Restated THQ Inc. 1997 Stock Option Plan Incentive Stock Option Agreement
dated October 1, 2001 between THQ and EXECUTIVE (the “2001 Incentive Option”),
the Amended and Restated THQ Inc. 1997 
Stock Option Plan Non-Qualified Stock Option Agreement dated October 1,
2001 between THQ and EXECUTIVE (the “2001 Non-Qualified Option”), the Amended
and Restated THQ Inc. 1997 Stock Option Plan Incentive Stock Option Agreement
dated February 28, 2002 between THQ and EXECUTIVE (the “2002 Incentive
Option”), the Amended and Restated THQ Inc. 1997 Stock Option Plan
Non-Qualified Stock Option Agreement dated February 28, 2002 between THQ and
EXECUTIVE (the “2002 Non-Qualified Option”), the Amended and Restated THQ Inc.
1997 Stock Option Plan Incentive Stock Option Agreement dated February 24, 2003
between THQ and EXECUTIVE (the “2003 Incentive Option”), and the Amended and
Restated THQ Inc. 1997 Stock Option Plan Non-Qualified Stock Option Agreement
dated February 24, 2003 between THQ and EXECUTIVE (the “2003 Non-Qualified
Option”), EXECUTIVE for himself and on behalf of each and all of his respective
legal predecessors, successors, assigns, fiduciaries, heirs, parents, spouses,
companies, affiliates, and each of the foregoing’s respective past, present,
and future officers, principals, directors, partners, employees, agents,
attorneys, trustees, administrators, executors, and representatives (all herein
referred to as the “EXECUTIVE RELEASORS”), does hereby fully and forever
release, absolve, discharge, and covenant not to sue THQ, and each and all of
its legal predecessors, successors, assigns, owners, fiduciaries, divisions,
parents, subsidiaries,

 

2

 

affiliates, and related entities, and each of the foregoing’s
respective past, present, and future officers, principals, directors, partners,
employees, agents, attorneys, trustees, administrators, executors, and
representatives (all herein referred to as the “THQ RELEASED PARTIES”) of,
from, and for, any and all claims, demands, damages, debts, controversies,
liabilities, losses, accounts, reckonings, obligations, costs, expenses,
attorneys’ fees, actions, liens, causes, and/or causes of action, at law or in
equity, whether known or unknown (collectively, the “Released Claims”), which the
EXECUTIVE RELEASORS now have, have ever had, or may have in the future against
the THQ RELEASED PARTIES based upon, arising out of, concerning, relating to,
by virtue of, or resulting from any act, omission, matter, fact, occurrence,
transaction, thing, state of facts, claim, contention, statement, or event
occurring or existing at any time from the beginning of the world up to and
including the Separation Date.  Without
limiting the generality of the foregoing, this General Release applies to any
and all claims, demands, damages, debts, controversies, liabilities, losses,
accounts, reckonings, obligations, costs, expenses, attorneys’ fees, actions,
liens, causes, and/or causes of action which in any way are based upon,
concern, relate to, arise out of, are by virtue of, or result from EXECUTIVE’s
employment with THQ, including, but not limited to, any claims which could have
been raised under any state’s Fair Employment and Housing Act, Title VII of the
Civil Rights Act of 1964 as amended, the Age Discrimination in Employment Act
(ADEA), the American’s with Disabilities Act (ADA), and the Employees
Retirement Income Security Act (ERISA), or any other federal, state, or local
law, regulation, ordinance, or common law claim.  Without limiting the generality of the foregoing, EXECUTIVE
agrees, to the extent permitted by law, not to file against any of the THQ
RELEASED PARTIES any complaint or charge with the Equal Employment Opportunity
Commission, the California Fair Employment and Housing Commission, the federal
or California Department of Labor, or with any other local, state, or federal
agency or court based upon, arising out of, concerning, relating to, by virtue
of, or resulting from any of the Released Claims, and that if any agency or
court assumes jurisdiction over any of the Released Claims, EXECUTIVE will
request such agency or court to withdraw from the matter.

 

5b.   Except for the obligations arising out of
this Agreement, the 1999 Incentive Option, the 1999 Non-Qualified Option, the
2000 Incentive Option, the 2000 Non-Qualified Option, the 2001 Incentive
Option, the 2001 Non-Qualified Option, the 2002 Incentive Option, the 2002
Non-Qualified Option, the 2003 Incentive Option and the 2003 Non-Qualified
Option, THQ for itself and on behalf of each and all of its legal predecessors,
successors, assigns, owners, fiduciaries, divisions, parents, subsidiaries,
affiliates, and related entities, and each of the foregoing’s respective past,
present, and future officers, principals, directors, partners, employees,
agents, attorneys, trustees, administrators, executors, and representatives
(all herein referred to as the “THQ RELEASORS”), does hereby fully and forever
release, absolve, discharge, and covenant not to sue EXECUTIVE, each and all of
his respective legal predecessors, successors, assigns, fiduciaries, heirs,
parents, spouses, companies, affiliates, and each of the foregoing’s respective
past, present, and future officers, principals, directors, partners, employees,
agents, attorneys, trustees, administrators, executors, and representatives
(all herein referred to as the “EXECUTIVE RELEASED PARTIES”), of, from, and
for, any and all claims, demands, damages, debts, controversies, liabilities,
losses, accounts, reckonings, obligations, costs, expenses, attorneys’ fees,
actions, liens, causes, and/or causes of action, at law or in equity, whether
known or unknown, which the THQ RELEASORS now have, have ever

 

3

 

had, or may have in the future against the EXECUTIVE RELEASED PARTIES
based upon, arising out of, concerning, relating to, by virtue of, or resulting
from any act, omission, matter, fact, occurrence, transaction, thing, state of
facts, claim, contention, statement, or event occurring or existing at any time
from the beginning of the world up to and including the Separation Date.  Without limiting the generality of the
foregoing, this General Release applies to any and all claims, demands,
damages, debts, controversies, liabilities, losses, accounts, reckonings,
obligations, costs, expenses, attorneys’ fees, actions, liens, causes, and/or
causes of action which in any way are based upon, concern, relate to, arise out
of, are by virtue of, or result from EXECUTIVE’s employment with THQ.

 

6.     Waiver
of Section 1542.  EXECUTIVE and THQ each acknowledge that he
or it has read and understood the following language contained in Section 1542
of the California Civil Code:

 

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.

 

Having
reviewed this provision, EXECUTIVE and THQ each hereby voluntarily waives and
relinquishes any and all rights or benefits he or it may have under this
provision, or any other provision of statutory or common law of similar effect,
and each hereby fully releases the other from liability for any unknown claims.

 

7.     Return of Company Property. 
On or before the Separation Date, EXECUTIVE will return to THQ all
documents, inventions, information (whether stored on computer, computer disks,
or other media), and other property belonging to THQ in EXECUTIVE’s possession,
including without limitation, (i) any and all information relating to THQ’s
financial situation, business plans, forecasts or strategy; and (ii) all THQ
intellectual property.

 

8.     Cooperation. 
As a material term hereof, for a period of four (4) months after the
Separation Date, EXECUTIVE will in good faith voluntarily cooperate with THQ
and answer questions THQ may ask him regarding matters which EXECUTIVE oversaw
or worked on during his employment at THQ or at THQ’s predecessors or
affiliates.  EXECUTIVE shall not receive
any additional compensation for such cooperation.

 

9.     No
Admission; Integration; Modification.  Neither this
Agreement nor anything contained in this Agreement shall be construed as an
admission of any fact, issue, liability or wrongdoing by either party
hereto.  With the exception of the
Confidential Information Agreement signed by EXECUTIVE on October 25, 1997, the
1999 Incentive Option, the 1999 Non-Qualified Option, the 2000 Incentive
Option, the 2000 Non-Qualified Option, the 2001 Incentive Option, the 2001
Non-Qualified Option, the 2002 Incentive Option,

 

4

 

the 2002 Non-Qualified Option, the 2003 Incentive Option and the 2003
Non-Qualified Option, each of which shall remain in full force and effect, this
Agreement supersedes all prior agreements and understandings and constitutes
the only and entire agreement between THQ and EXECUTIVE concerning the terms of
EXECUTIVE’s transitional employment with and resignation from THQ.  THQ and EXECUTIVE acknowledge they have not
executed this Agreement in reliance upon any promise, representation,
statement, warranty or agreement other than those expressed herein.  This Agreement may be modified only in a
writing signed by the parties hereto.

 

10.   Governing
Law; Binding Arbitration.  This Agreement shall be
governed by and construed in accordance with the substantive laws of the State
of California.  Except for claims
seeking provisional or permanent injunctive relief, any and all disputes
arising from or in connection with this Agreement shall be submitted to final
and binding arbitration in Los Angeles County, California before an experienced
employment arbitrator licensed to practice law in California pursuant to the
Employment Dispute rules of the American Arbitration Association. The arbitrator
shall be selected by both parties in accordance with California Code of Civil
Procedure section 1281.6 from (1) the American Arbitration Association; (2)
Judicial Arbitration and Mediation Services, Inc.; or (3) Action Dispute
Resolution.  Either party desiring to
arbitrate shall give written notice to the other party within a reasonable
period of time after the party becomes aware of the need for arbitration and
within the applicable statute of limitations prescribed by law.  The decision of the arbitrator shall be
final and binding.  Judgment on any
award rendered by such arbitrator may be entered in any court having
jurisdiction over the subject matter of the controversy.  To the extent permitted by applicable law,
the prevailing party shall be entitled to recover its reasonable attorneys’
fees, costs and expenses related to the arbitration from the other party, in
addition to any other relief to which the prevailing party may be
entitled.  This arbitration provision
does not prohibit a party from seeking and obtaining injunctive relief from a
court of competent jurisdiction pending the outcome of arbitration.  A party bringing an action for injunctive
relief shall not be deemed to have waived its right to demand arbitration of
all disputes.

 

11.   Miscellaneous. 
THQ and EXECUTIVE agree that no waiver by any party of any particular
provision or right under this Agreement shall be deemed to be a waiver of any
other provision or right herein.  The
parties further agree that each provision or term of this Agreement is intended
to be severable from the others so that if any particular provision or term
hereof is or determined to be illegal or invalid for any reason whatsoever,
such illegality or invalidity shall not affect the legality or validity of the
remaining provisions and terms hereof. 
The parties agree that the language of this Agreement shall be construed
as a whole according to its fair meaning, and not strictly for or against any
of the parties hereto.

 

12.   Counterparts. 
This Agreement may be signed in counterparts, and a facsimile signature
shall have the same force and effect as an original penned in ink.

 

5

 

IN WITNESS WHEREOF, the parties hereto have caused
this Agreement to be executed as of the day and year indicated below.

 

	
   

  	
   

  	
  THQ INC.

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Date:                   ,
  2004

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Title:

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  EXECUTIVE

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Date:                   ,
  2004

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Fred A. Gysi

  	
   

  

 

6

 

Exhibit A

to

Confidential Separation
Agreement

and General Release

 

CONFIDENTIAL SALARY AND BENEFITS CONTINUATION

AGREEMENT AND GENERAL RELEASE

 

This Confidential Salary and Benefits Agreement and
General Release (the “Agreement”) is made and entered into between THQ Inc.
(“THQ”) and Fred A. Gysi (“EXECUTIVE”) upon the following terms and conditions:

 

RECITALS

 

WHEREAS, EXECUTIVE voluntarily resigned from
employment with THQ, with such resignation to be effective on the earlier to
occur of (i) March 31, 2004 and (ii) the date 30 days after the commencement of
employment of a new chief financial officer of THQ (the “Separation Date”);

 

WHEREAS, THQ and EXECUTIVE are parties to a
Confidential Separation Agreement and General Release;

 

WHEREAS, pursuant to the Confidential Separation
Agreement and General Release, THQ is willing to continue EXECUTIVE’s salary
and benefits for a limited period and upon the terms and conditions set forth
in this Agreement;

 

WHEREAS, THQ has no prior legal obligation to provide
the post-separation consideration that is exchanged for the promises herein;

 

WHEREAS, EXECUTIVE has had the opportunity to consult
with counsel before signing this Agreement, has read this Agreement and
understood its contents, and has signed this Agreement voluntarily;

 

NOW, THEREFORE, in consideration of the mutual
promises, consideration, covenants, and conditions provided for in this
Agreement, the adequacy and sufficiency of which are hereby acknowledged, THQ
and EXECUTIVE agree as follows:

 

COVENANTS

 

1.     Post-Separation
Consideration.  In consideration for the agreements,
covenants, and general release contained herein, THQ shall provide EXECUTIVE
with the following post-separation consideration:

 

7

 

1a.   Salary Continuation. 
Commencing on the first regular THQ payday following the Separation
Date, THQ shall provide EXECUTIVE with salary continuation payments in the
aggregate equal to twelve months’ base salary based on his current base annual
salary of $241,500.  All salary
continuation payments shall be payable in installments in accordance with THQ’s
regular payroll practices, provided, however, that EXECUTIVE may elect, by
written notice to THQ, to receive all remaining salary continuation payments
from THQ in a single lump sum payment. 
In addition, should EXECUTIVE become employed, as a salaried employee or
paid consultant, by a business that is a “competitor” of THQ, THQ may elect to
pay EXECUTIVE any remaining amounts due to EXECUTIVE in a lump sum
payment.  For the purposes of this
Agreement, a “competitor” shall mean any person or entity engaged in the
business of designing, developing, publishing or distributing entertainment
software, or content of any type to be distributed by means of wireless media.  Should the salary continuation obligation be
paid in a lump sum pursuant to this paragraph, such lump sum shall be an amount
equal to $241,500 less the amount of all prior payments made pursuant to this
Section 1a (without giving effect to any required withholdings) on the fifth
day after the election by EXECUTIVE or THQ to make a lump sum payment pursuant
to this paragraph All salary continuation payments, including a lump sum
payment, if any, shall be paid less withholdings required by law.  EXECUTIVE agrees that, in the event he
becomes employed at any time while salary continuation payments are due to
EXECUTIVE pursuant to this Agreement, he will promptly advise THQ of the
following: (i) the name and address of his employer; (ii) the business of his
employer and (iii) his date of hire. 
The period during which THQ makes salary continuation payments to
EXECUTIVE pursuant to this Section 1a is herein referred to as the “Salary
Continuation Period.”

 

1b.   Bonuses.  EXECUTIVE
shall be eligible to receive (i) an annual bonus of $80,000 for the fiscal year
ending March 31, 2004, and (ii) his designated profit sharing allocation under
THQ’s existing Profit Sharing Plan for the year ending March 31, 2004; pro
rated in each case to the extent the Separation Date occurs prior to March 31,
2004.  Such bonus shall be paid in
accordance with THQ’s regular practice and shall be paid less withholdings
required by law.

 

1c.   Benefits.  During the
Salary Continuation Period, EXECUTIVE shall be eligible to participate in THQ’s
medical, disability, life insurance and other health and welfare benefits,
including Exec-u-care, at the same level of coverage, upon the same terms and
otherwise to the same extent as such policies and benefits shall have been in
effect immediately prior to the Separation Date.  THQ and EXECUTIVE shall share the costs of the continuation of
such insurance and benefits coverage in the same proportion as such costs were
shared immediately prior to the Separation Date.  .

 

1d.   Extension of Vesting and Exercise Period
for Certain Existing Stock Options.

 

(i)    THQ and EXECUTIVE acknowledge that
EXECUTIVE currently holds options to purchase THQ common stock under one or
more of the following agreements (collectively, the “Option Agreements”): the
Amended and Restated THQ Inc. 1997 Stock Option Plan Incentive Stock Option
Agreement dated November 3, 1999 between THQ and

 

8

 

EXECUTIVE (the “1999 Incentive Option”), the Amended and Restated THQ
Inc. 1997 Stock Option Plan Non-Qualified Stock Option Agreement dated November
3, 1999 between THQ and EXECUTIVE (the “1999 Non-Qualified Option”),  the Amended and Restated THQ Inc. 1997 Stock
Option Plan Incentive Stock Option Agreement dated July 21, 2000 between THQ
and EXECUTIVE (the “2000 Incentive Option”), the Amended and Restated THQ Inc.
1997  Stock Option Plan Non-Qualified
Stock Option Agreement dated July 21, 2000 between THQ and EXECUTIVE (the “2000
Non-Qualified Option”), the Amended and Restated THQ Inc. 1997 Stock Option
Plan Incentive Stock Option Agreement dated October 1, 2001 between THQ and
EXECUTIVE (the “2001 Incentive Option”), the Amended and Restated THQ Inc.
1997  Stock Option Plan Non-Qualified
Stock Option Agreement dated October 1, 2001 between THQ and EXECUTIVE (the
“2001 Non-Qualified Option”), the Amended and Restated THQ Inc. 1997 Stock
Option Plan Incentive Stock Option Agreement dated February 28, 2002 between
THQ and EXECUTIVE (the “2002 Incentive Option”), the Amended and Restated THQ
Inc. 1997 Stock Option Plan Non-Qualified Stock Option Agreement dated February
28, 2002 between THQ and EXECUTIVE (the “2002 Non-Qualified Option”), the
Amended and Restated THQ Inc. 1997 Stock Option Plan Incentive Stock Option
Agreement dated February 24, 2003 between THQ and EXECUTIVE (the “2003
Incentive Option”), and the Amended and Restated THQ Inc. 1997 Stock Option
Plan Non-Qualified Stock Option Agreement dated February 24, 2003 between THQ
and EXECUTIVE (the “2003 Non-Qualified Option”);

 

(ii)   EXECUTIVE may exercise options vested
under any of the Option Agreements no later than 90 days following the
Separation Date.  Any such options which
are not so exercised shall expire at the end of the ninetieth day following the
Separation Date;

 

(iii)  THQ shall
take all actions necessary to provide that all options unvested under the
Option Agreements as of the Separation Date shall continue to vest during the
Salary Continuation Period and shall be exercisable until the date 90 days
after the end of the Salary Continuation Period with respect to the number of
shares of THQ common stock that are vested under the terms of the applicable
Option as of the last day of the Salary Continuation Period; provided that no
such Option shall vest or be exercisable later than five years after its date
of grant.  EXECUTIVE acknowledges that
this extension of the vesting and exercisability periods under the 1999
Incentive Option, the 2000 Incentive Option, the 2001 Incentive Option, the
2002 Incentive Option and the 2003 Incentive Option constitutes a modification
of the applicable Option under the Internal Revenue Code of 1986, as amended,
and therefore each such Option shall be taxable as a nonstatutory stock option
instead of an incentive stock option.

 

1e.   Computer and Telephone. 
EXECUTIVE shall also be entitled to retain the laptop computer and
cellular telephone that are owned by THQ and currently in EXECUTIVE’s
possession, purged of all confidential proprietary information of THQ.  EXECUTIVE shall be responsible for all
internet service provider, internet connectivity, wireless service provider and
other continuing charges relating to such devices from and after the Separation
Date

 

1f.    Email and Telephone Access.  During the Salary Continuation Period, THQ shall
arrange for EXECUTIVE to have an email account and telephone extension, in each
case subject to THQ’s regular policies and procedures.

 

9

 

1g.   Directors’ and Officers’ Insurance
Coverage.  EXECUTIVE shall continue to be covered under
THQ’s existing Directors’ and Officers’ insurance policy for his actions as
Senior Vice President—Finance and Chief Financial Officer of THQ up to and
including the Separation Date, in accordance with and subject to the terms and
conditions of such policy.

 

2.     Proprietary
Information and Inventions.  Except as
specifically set forth in Section 1e of this Agreement, EXECUTIVE shall
immediately return to THQ all documents, information (whether stored on
computer, computer disks, or other media), and other property belonging to THQ,
including without limitation, credit cards, security key cards, telephone
cards, computer software or hardware, THQ identification cards, THQ records and
copies of records, correspondence and copies of correspondence, other books or
manuals issued or owned by THQ, any and all information relating to THQ’s
financial situation, business plans, forecasts or strategy and all THQ
intellectual property.

 

2a.   EXECUTIVE acknowledges that his
employment with THQ created a relationship of confidence and trust between
EXECUTIVE and THQ with respect to Confidential Information (as hereinafter
defined) disclosed to EXECUTIVE, or known or made available to EXECUTIVE as a
result of his relationship with THQ. 
“Confidential Information” includes, but is not limited to, customer
lists, vendor lists, joint venture lists, databases, computer programs and
software, frameworks, designs, models, marketing programs and plans, sales,
financial, marketing, training and technical information and plans, business
methods, business policies, personnel information and policies, procedures,
techniques, research or development projects or results, trade secrets (which
EXECUTIVE agrees include THQ customer and prospective customer lists), pricing
policies, intellectual property, any and all information relating to projected
acquisitions, dispositions, joint ventures or other business arrangements
whether involving THQ or third parties, properties or management agreements,
management organization information (including data and other information
relating to members of THQ’s Board of Directors and management), operating
policies or manuals, business plans, purchasing agreements, financial records,
or other financial, commercial, business or technical information relating to
THQ or any of its subsidiaries or information designated as confidential or
proprietary that THQ or any of its subsidiaries may receive belonging to
suppliers, customers or others who do business with THQ or any of its
subsidiaries, information concerning how THQ creates, develops, acquires or
maintains its products and marketing plans, targets its potential customers,
and operates its businesses, other than information which is otherwise
available in the public domain (other than by reason of the breach of EXECUTIVE
of any confidentiality agreement with THQ) or which was known to EXECUTIVE
prior to the date as of which he commenced employment with THQ or any of its
predecessors or affiliates.

 

2b.   At all times following the Separation
Date, EXECUTIVE agrees that he will not disclose, use, disseminate, lecture
upon, publish or use for the direct or indirect benefit of, any person
(including EXECUTIVE), firm, association or other entity (other than THQ)
Confidential Information unless EXECUTIVE first secures THQ’s written
consent.  EXECUTIVE will continue to
abide by the confidential provisions of EXECUTIVE’s Confidential Information
Agreement signed by EXECUTIVE on October 25, 1997 (the “Confidential Information
Agreement”), which shall remain in full force and effect.

 

10

 

2c.   EXECUTIVE represents that, in the course
of his employment, he has not, solely or jointly with another or others,
conceived or made any formulas, processes, techniques, test data, discoveries,
improvements, innovations, concepts and ideas, whether patentable or not, with
the use of THQ’s facilities, materials, equipment, trade secrets, personnel, or
time, or suggested by or resulting from any task assigned to EXECUTIVE or work performed
by EXECUTIVE for, or on behalf of THQ relating to his employment.

 

3.     Securities Laws.

 

3a.   EXECUTIVE acknowledges and understands
that any offer to purchase or sell, purchase, sale, transfer or assignment of
securities of THQ by EXECUTIVE is subject to the provisions of the Securities
Act of 1933, as amended (the “1933 Act”), the Securities Exchange Act of 1934,
as amended (the “1934 Act”), and the rules promulgated thereunder including,
without limitation, Rule 144 under the 1933 Act and Section 16 and Rule 10b-5
under the 1934 Act.

 

3b.   EXECUTIVE will cease to be an “Executive
Officer”  (as defined in Rule 3b-7
promulgated under Section 16 of the 1934 Act) of THQ as of the Separation Date.
EXECUTIVE acknowledges his continuing obligation to comply with Section 16 of
the 1934 Act and the rules and regulations of the Securities and Exchange
Commission promulgated thereunder, including without limitation the obligation
to file on a timely basis reports on Form 4 and Form 5 regarding certain
transactions in the securities of THQ.

 

3c.   THQ acknowledges and agrees that,
following the Separation Date, EXECUTIVE will not be considered an officer,
employee, or “Insider” for the purposes of the THQ Confidentiality and Insider
Trading Policy (the “Policy”), and will not be subject to the Policy.

 

4.     General
Release.

 

4a.   Except for the obligations arising out of
this Agreement and the Option Agreements, EXECUTIVE for himself and on behalf
of each and all of his respective legal predecessors, successors, assigns,
fiduciaries, heirs, parents, spouses, companies, affiliates, and each of the
foregoing’s respective past, present, and future officers, principals,
directors, partners, employees, agents, attorneys, trustees, administrators,
executors, and representatives (all herein referred to as the “EXECUTIVE
RELEASORS”), does hereby fully and forever release, absolve, discharge, and
covenant not to sue THQ, and each and all of its legal predecessors,
successors, assigns, owners, fiduciaries, divisions, parents, subsidiaries,
affiliates, and related entities, and each of the foregoing’s respective past,
present, and future officers, principals, directors, partners, employees,
agents, attorneys, trustees, administrators, executors, and representatives
(all herein referred to as the “THQ RELEASED PARTIES”) of, from, and for, any
and all claims, demands, damages, debts, controversies, liabilities, losses,
accounts, reckonings, obligations, costs, expenses, attorneys’ fees, actions,
liens, causes, and/or causes of action, at law or in equity, whether known or
unknown (collectively, the “Executive’s Released Claims”), which the EXECUTIVE
RELEASORS now have, have ever had, or may have in the

 

11

 

future against the THQ RELEASED PARTIES based upon, arising out of,
concerning, relating to, by virtue of, or resulting from any act, omission,
matter, fact, occurrence, transaction, thing, state of facts, claim,
contention, statement, or event occurring or existing at any time from the beginning
of the world up to and including the Separation Date.  Without limiting the generality of the foregoing, this General
Release applies to any and all claims, demands, damages, debts, controversies,
liabilities, losses, accounts, reckonings, obligations, costs, expenses,
attorneys’ fees, actions, liens, causes, and/or causes of action which in any
way are based upon, concern, relate to, arise out of, are by virtue of, or
result from, EXECUTIVE’s employment with THQ, including, but not limited to, any
claims which could have been raised under any state’s Fair Employment and
Housing Act, Title VII of the Civil Rights Act of 1964 as amended, the Age
Discrimination in Employment Act (ADEA), the American’s with Disabilities Act
(ADA), and the Employees Retirement Income Security Act (ERISA), or any other
federal, state, or local law, regulation, ordinance, or common law claim.  Without limiting the generality of the
foregoing, EXECUTIVE agrees, to the extent permitted by law, not to file
against any of the THQ RELEASED PARTIES any complaint or charge with the Equal
Employment Opportunity Commission, the California Fair Employment and Housing
Commission, the federal or California Department of Labor, or with any other
local, state, or federal agency or court based upon, arising out of,
concerning, relating to, by virtue of, or resulting from any of the Executive’s
Released Claims, and that if any agency or court assumes jurisdiction over any
of the Executive’s Released Claims, EXECUTIVE will request such agency or court
to withdraw from the matter.  EXECUTIVE
also acknowledges that, except for the payments and benefits required by
paragraph 3 above, EXECUTIVE has been paid all wages, accrued vacation pay,
severance and separation pay, and all other monies and benefits to which
EXECUTIVE was entitled.

 

4b.   Except for the obligations arising out of
this Agreement, the 1999 Incentive Option, the 1999 Non-Qualified Option, the
2000 Incentive Option, the 2000 Non-Qualified Option, the 2001 Incentive
Option, the 2001 Non-Qualified Option, the 2002 Incentive Option, the 2002
Non-Qualified Option, the 2003 Incentive Option and the 2003 Non-Qualified
Option, THQ for itself and on behalf of each and all of its legal predecessors,
successors, assigns, owners, fiduciaries, divisions, parents, subsidiaries,
affiliates, and related entities, and each of the foregoing’s respective past,
present, and future officers, principals, directors, partners, employees,
agents, attorneys, trustees, administrators, executors, and representatives
(all herein referred to as the “THQ RELEASORS”), does hereby fully and forever
release, absolve, discharge, and covenant not to sue EXECUTIVE, each and all of
his respective legal predecessors, successors, assigns, fiduciaries, heirs,
parents, spouses, companies, affiliates, and each of the foregoing’s respective
past, present, and future officers, principals, directors, partners, employees,
agents, attorneys, trustees, administrators, executors, and representatives
(all herein referred to as the “EXECUTIVE RELEASED PARTIES”), of, from, and
for, any and all claims, demands, damages, debts, controversies, liabilities,
losses, accounts, reckonings, obligations, costs, expenses, attorneys’ fees,
actions, liens, causes, and/or causes of action, at law or in equity, whether
known or unknown, which the THQ RELEASORS now have, have ever had, or may have
in the future against the EXECUTIVE RELEASED PARTIES based upon, arising out
of, concerning, relating to, by virtue of, or resulting from any act, omission,
matter, fact, occurrence, transaction, thing, state of facts, claim,
contention, statement, or event occurring

 

12

 

or existing at any time from the beginning of the world up to and
including the Separation Date.  Without
limiting the generality of the foregoing, this General Release applies to any
and all claims, demands, damages, debts, controversies, liabilities, losses,
accounts, reckonings, obligations, costs, expenses, attorneys’ fees, actions,
liens, causes, and/or causes of action which in any way are based upon,
concern, relate to, arise out of, are by virtue of, or result from EXECUTIVE’s
employment with THQ.

 

5.     Waiver
of Section 1542.  EXECUTIVE and THQ each acknowledge that he
or it has read and understood the following language contained in Section 1542
of the California Civil Code:

 

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.

 

Having
reviewed this provision, EXECUTIVE and THQ each hereby voluntarily waives and
relinquishes any and all rights or benefits he or it may have under this
provision, or any other provision of statutory or common law of similar effect,
and each hereby fully releases the other from liability for any unknown claims.

 

6.     Tax
Consequences.  The Company makes no representations or
warranties with respect to the tax consequences to EXECUTIVE of any of the
severance consideration provided under this Agreement.  EXECUTIVE shall be solely responsible for
the reporting and payment of local, state and/or federal taxes, if any,
attributable to the severance consideration, and any penalties or assessments
thereon.  EXECUTIVE agrees to defend,
indemnify, and hold harmless THQ from any claims, demands, deficiencies,
penalties, assessments, executions, judgments, or recoveries by any government
agency against THQ for any amounts claimed due on account of EXECUTIVE’s
failure to pay federal or state taxes or damages sustained by THQ by reason of
any such claims, including reasonable attorneys’ fees.

 

7.     Cooperation. 
As a material term hereof, for a period of four (4) months after the
Separation Date, EXECUTIVE will in good faith voluntarily cooperate with THQ
and answer questions THQ may ask him regarding matters which EXECUTIVE oversaw
or worked on during his employment at THQ or at THQ’s predecessors or
affiliates.  EXECUTIVE shall not receive
any additional compensation for such cooperation.

 

8.     No
Admission; Integration; Modification.  Neither this
Agreement nor anything contained in this Agreement shall be construed as an
admission of any fact, issue, liability or wrongdoing by either party
hereto.  With the exception of the
Confidential Information Agreement and the Option, each of which shall remain
in full force and effect, this Agreement supersedes all prior agreements and
understandings and constitutes the only and entire agreement between THQ and
EXECUTIVE concerning the terms of EXECUTIVE’s

 

13

 

severance.  This Agreement shall
govern in the event of any inconsistency between this Agreement and the
Confidential Information Agreement.  THQ
and EXECUTIVE acknowledge they have not executed this Agreement in reliance
upon any promise, representation, statement, warranty or agreement other than
those expressed herein.  This Agreement
may be modified only in a writing signed by the parties hereto.

 

9.     Binding
Arbitration.  This Agreement shall be governed by and
construed in accordance with the internal substantive laws of the State of
California.  Except for claims seeking
provisional or permanent injunctive relief, any and all disputes arising from
or in connection with this Agreement shall be submitted to final and binding
arbitration in Los Angeles County, California before an experienced employment
arbitrator licensed to practice law in California pursuant to the Employment
Dispute rules of the American Arbitration Association. The arbitrator shall be
selected by both parties in accordance with California Code of Civil Procedure
section 1281.6 from (1) the American Arbitration Association; (2) Judicial
Arbitration and Mediation Services, Inc.; or (3) Action Dispute
Resolution.  Either party desiring to
arbitrate shall give written notice to the other party within a reasonable
period of time after the party becomes aware of the need for arbitration and
within the applicable statute of limitations prescribed by law.  The decision of the arbitrator shall be
final and binding.  Judgment on any
award rendered by such arbitrator may be entered in any court having
jurisdiction over the subject matter of the controversy.  To the extent permitted by applicable law,
the prevailing party shall be entitled to recover its reasonable attorneys’
fees, costs and expenses related to the arbitration from the other party, in
addition to any other relief to which the prevailing party may be entitled.  This arbitration provision does not prohibit
a party from seeking and obtaining injunctive relief from a court of competent
jurisdiction pending the outcome of arbitration.  A party bringing an action for injunctive relief shall not be
deemed to have waived its right to demand arbitration of all disputes.

 

10.   Remedies; Attorneys’ Fees. 
EXECUTIVE agrees that THQ has the right to enforce this Agreement and
any of its provisions by injunction, specific performance or other equitable
relief without prejudice to any other rights or remedies THQ may have at law or
in equity for breach of this Agreement. 
If any action is brought to enforce the terms of this Agreement, the
prevailing party will be entitled to recover its reasonable attorneys’ fees,
costs and expenses from the other party, in addition to any other relief to
which the prevailing party may be entitled.

 

11.   Miscellaneous. 
THQ and EXECUTIVE agree that no waiver by any party of any particular
provision or right under this Agreement shall be deemed to be a waiver of any
other provision or right herein.  The
parties further agree that each provision or term of this Agreement is intended
to be severable from the others so that if any particular provision or term
hereof is or determined to be illegal or invalid for any reason whatsoever,
such illegality or invalidity shall not affect the legality or validity of the
remaining provisions and terms hereof. 
The parties agree that the language of this Agreement shall be construed
as a whole according to its fair meaning, and not strictly for or against any
of the parties hereto.

 

14

 

12.   ADEA Waiver and Notification. 
In compliance with the requirements of the Age Discrimination In
Employment Act (ADEA), as amended by the Older Workers’ Benefit Protection Act
of 1990, EXECUTIVE acknowledges by his signature below that, with respect to
the Released Matters, and the rights and claims under the ADEA waived and
released in this Agreement, he has read and understands this Agreement,
including, without limitation, the following:

 

a.     That he is advised to consult
with an attorney before signing this Agreement;

 

b.     That he is releasing THQ
from, among other things, any claims which he may have against it pursuant to
the Age Discrimination In Employment Act as amended;

 

c.     That the releases contained
in this Agreement do not cover rights or claims that may arise after he signs
this Agreement;

 

d.     That he has been given a
period of twenty-one (21) days in which to consider this Agreement; and

 

e.     That he may revoke this
Agreement during the seven (7) day period following his execution of this
Agreement.

 

13.   Counterparts. 
This Agreement may be signed in counterparts, and a facsimile signature
shall have the same force and effect as an original penned in ink.

 

IN WITNESS WHEREOF, the parties hereto have caused
this Agreement to be executed as of the day and year indicated below.

 

	
   

  	
  THQ INC.

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Date:
                      ,
  2004

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
  Title:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  EXECUTIVE

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Date:
                      ,
  2004

  	
   

  	
   

  
	
   

  	
  Fred A. Gysi

  	
   

  

 

15EXHIBIT
10.26

 

SECOND
AMENDMENT TO THE CONFIDENTIAL LICENSE AGREEMENT

FOR GAME
BOY, GAME BOY COLOR AND GAME BOY POCKET

HANDHELD
VIDEO GAME SYSTEMS

 

THIS SECOND AMENDMENT (“Second Amendment”) amends that certain
Confidential License Agreement for Nintendo Game Boy, Game Boy Color and Game
Boy Pocket Handheld Video Game Systems dated March 9, 1999, and amended by the
First Amendment dated March 8, 2002, between Nintendo of America Inc.
(“Nintendo”) and THQ Inc. (“Licensee”) (“Original Agreement”).

 

RECITALS

 

The Original Agreement expired on March 8, 2004, and the parties desire
to extend the Term of the Original Agreement for an additional two (2) years.

 

The definitions in the Original Agreement are incorporated by reference
into this Second Amendment and shall be deemed to have the same meanings as
those ascribed to them in the Original Agreement unless otherwise set forth
herein.

 

NOW, THEREFORE, the parties agree as follows:

 

1.                                       The
definition of “Term” as set forth in Section 2.19 of the Original Agreement is
hereby deleted in its entirety and replaced with the following:

 

“‘Term’ shall mean
seven (7) years from the Effective Date.”

 

2.                                       All
other terms and conditions of the Original Agreement shall remain in full force
and effect.  This Second Amendment may
be signed in counterparts and by facsimile, which together shall constitute one
original Second Amendment. This Second Amendment shall be effective as of March
8, 2004.

 

IN WITNESS WHEREOF, the parties have entered into this Second
Amendment.

 

	
  NINTENDO:

  	
  LICENSEE:

  
	
   

  	
   

  
	
  Nintendo of America Inc.

  	
  THQ Inc.

  
	
   

  	
   

  
	
  By:

  	
   

  	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Its:

  	
   

  	
   

  	
  Its:

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Date:

  	
   

  	
   

  	
  Date:

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