<PAGE> 1
As filed with the Securities and Exchange Commission on July 2, 1997.
Registration No. 333-
- --------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM S-8
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
T.HQ, INC.
(Exact Name of Registrant as Specified in Its Charter)
<TABLE>
<S> <C>
New York 13-3541686
(State or Other Jurisdiction (I.R.S. Employer
of Incorporation or Organization) Identification No.)
</TABLE>
5016 North Parkway Calabasas
Calabasas, California 91302
(Address of Principal Executive Offices with Zip Code)
T.HQ, INC. 1997 STOCK OPTION PLAN
(Full Title of the Plan)
BRIAN J. FARRELL
President and Chief Executive Officer
T.HQ, Inc.
5016 North Parkway Calabasas
Calabasas, California 91302
(818) 591-1310
(Name, Address and Telephone Number,
including Area Code, of Agent For Service)
Copies to:
SHERWIN L. SAMUELS, Esq.
Sidley & Austin
555 West Fifth Street
Los Angeles, California 90013
----------
Approximate date of commencement of proposed sale to the public:
From time to time after the Registration Statement becomes effective.
<PAGE> 2
CALCULATION OF REGISTRATION FEE
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<TABLE>
<CAPTION>
Title of Proposed maximum Proposed maximum
securities to be Amount to be offering price aggregate Amount of
registered registered per share offering price registration fee
- ---------------- ------------ ---------------- ---------------- ----------------
<S> <C> <C> <C> <C>
Common Stock 650,000 shares(1) $10.06(2) $6,519,500(2) $1,975.61(2)
(no par value)
</TABLE>
- --------------------------------------------------------------------------------
(1) This registration statement also covers an indeterminate
number of shares issuable upon exercise of the options
issuable upon adjustment pursuant to the terms of the T.HQ,
Inc. 1997 Stock Option Plan and Rule 416 under the Securities
Act of 1933.
(2) Estimated pursuant to Rules 457(h) and 475(c) under the
Securities Act of 1993, as amended, solely for purposes of
calculating the registration fee, the proposed maximum
offering price is based upon an exercise price of $10.06, the
average of the high and low prices for the common stock on the
NASDAQ National Market System on June 27, 1997 as reported by
the National Association of Securities Dealers Automated
Quotation System.
<PAGE> 3
PART I
Item 1. PLAN INFORMATION.*
Item 2. REGISTRANT INFORMATION AND EMPLOYEE PLAN ANNUAL INFORMATION.*
* Information required by Part I to be contained in the Section 10(a)
Prospectus is omitted from the Registration Statement in accordance with Rule
428 under the Securities Act of 1933, as amended (the "Securities Act"), and the
Note to Part I of Form S-8.
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
Item 3. INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE.
The following documents filed with the Securities and Exchange
Commission (the "Commission") by T.HQ, Inc., a New York corporation (the
"Company" or the "Registrant"), pursuant to the Securities Exchange Act of 1934,
as amended (the "Exchange Act") and the Securities Act, are incorporated by
reference in this Registration Statement:
(a) The Company's Annual Report on Form 10-K for the year ended
December 31, 1996 (as amended by the Form 10-K/A filed with the Commission on
July 2, 1997);
(b) The Company's Quarterly Report on Form 10-Q for the quarter
ended March 31, 1997; and
(c) The Company Form 8-K dated March 28, 1997 (as amended by the
Form 8-K/A filed with the Commission on May 6, 1997); and
(d) The Company's Registration Statement on Form 8-A (Registration
No. 0-18813), filed with the Commission on September 24, 1991.
All documents filed by the Company pursuant to Sections 13(a), 13(c),
14 or 15(d) of the Exchange Act subsequent to the date of this Prospectus and
prior to the termination of the offering made hereby shall be deemed to be
incorporated by reference herein and to be a part hereof from the respective
dates those documents are filed. Any statement contained in a document
incorporated or deemed to be incorporated by reference herein and to be a part
hereof shall be deemed to be modified or superseded for purposes of this
Prospectus to the extent that a statement contained herein or in any other
subsequently filed document which also is or is deemed to be incorporated by
reference herein modifies or supersedes such statement. Any such statement so
modified or superseded shall not be deemed, except as so modified or superseded,
to constitute a part of this Prospectus.
Item 4. DESCRIPTION OF SECURITIES.
The Company's Common Stock is registered under Section 12 of the
Exchange Act. See Item 3(d) above.
Item 5. INTERESTS OF NAMED EXPERTS AND COUNSEL.
Not Applicable.
<PAGE> 4
Item 6. INDEMNIFICATION OF OFFICERS AND DIRECTORS.
Section 145 of the Delaware General Corporation Law permits
indemnification of officers, directors, and other corporate agent under certain
circumstances and subject to certain limitations. The Certificate of
Incorporation of the Company contains a provision eliminating the personal
liability of the directors to the Company or its stockholders to the fullest
extent set forth in Section 102(b)(7) of the Delaware General Corporation Law
and provides for indemnification of directors, officers, employees and agents of
the Company consistent with the provisions of Section 145 of the Delaware
General Corporation Law. The Certificate of Incorporation also provides that the
Company may purchase directors and officers insurance. The Company, however, has
no obligation to purchase such insurance.
Brian J. Farrell, the President and Chief Executive Officer, as well as
a director has entered into a separate employment agreement with the Company.
Pursuant to the terms of the employment agreement, the Company will indemnify
Mr. Farrell for losses, liabilities, damages and expenses incurred as a result
of his acting properly on behalf of the Company.
Item 7. EXEMPTION FROM REGISTRATION CLAIMED.
Not applicable.
Item 8. EXHIBITS.
<TABLE>
<CAPTION>
Number Description of Exhibit
- ------ ----------------------
<S> <C>
4.1 T.HQ, Inc. 1997 Stock Option Plan
4.2 Form of Stock Option Agreement for T.HQ, Inc. 1997 Stock Option Plan.
5 Opinion of Sidley & Austin regarding the validity of the securities being registered.
23.1 Consent of Deloitte & Touche LLP.
23.2 Consent of Sidley & Austin, incorporated by reference to Exhibit 5.
</TABLE>
Item 9. UNDERTAKINGS.
The Company hereby undertakes:
(a) (1) To file, during any period in which offers or sales
are being made, a post-effective amendment to this Registration
Statement:
(i) To include any prospectus required by
Section 10(a)(3) of the Securities Act;
(ii) To reflect in the prospectus any facts
or events arising after the effective date of the Registration
Statement (or the most recent post-effective amendment
thereof) which, individually or in the aggregate, represent a
fundamental change in the information set forth in the
Registration Statement;
(iii) To include any material information
with respect to the plan of distribution not previously
disclosed in the Registration Statement or any material change
to such information in the Registration Statement;
-2-
<PAGE> 5
provided, however, that paragraphs (a)(1)(i) and (a)(1)(ii) do not apply if the
information required to be included in a post-effective amendment by those
paragraphs is contained in periodic reports filed by the Company pursuant to
Section 13 or Section 15(d) of the Exchange Act that are incorporated by
reference in the Registration Statement.
(2) That, for the purpose of determining any
liability under the Securities Act each such post-effective amendment
shall be deemed to be a new registration statement relating to the
securities offered herein, and the offering of such securities at that
time shall be deemed to be the initial bona fide offering thereof.
(3) To remove from registration by means of a
post-effective amendment any of the securities being registered hereby
which remain unsold at the termination of the offering.
(b) That, for the purposes of determining any liability under
the Securities Act, each filing of the Company's Annual Report pursuant to
Section 13(a) or Section 15(d) of the Exchange Act that is incorporated by
reference in the Registration Statement shall be deemed to be a new registration
statement relating to the securities offered herein, and the offering of such
securities at that time shall be deemed to be the initial bona fide offering
thereof.
Insofar as indemnification for liabilities arising under the Securities
Act may be permitted to directors, officers and controlling persons of the
Company pursuant to the foregoing provisions, or otherwise, the Company has been
advised that in the opinion of the Commission such indemnification is against
public policy as expressed in the Securities Act and is, therefore,
unenforceable. In the event that a claim for indemnification against such
liabilities (other than the payment by the Company of expenses incurred or paid
by a director, officer or controlling person of the Company in the successful
defense of any action, suit or proceeding) is asserted by such director, officer
or controlling person in connection with the securities being registered, the
Company will, unless in the opinion of its counsel the matter has been settled
by controlling precedent, submit to a court of appropriate jurisdiction the
question whether such indemnification by it is against public policy as
expressed in the Securities Act and will be governed by the final adjudication
of such issue.
-3-
<PAGE> 6
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as amended,
the Registrant certifies that it has reasonable grounds to believe that it meets
all of the requirements for filing on Form S-8 and has duly caused this
Registration Statement to be signed on its behalf by the undersigned, thereunto
duly authorized, in the City of Calabasas and State of California on the 24th
day of June, 1997.
THQ Inc.
By: /s/ Brian J. Farrell
------------------------------
Brian J. Farrell, President
and Chief Executive Officer
Pursuant to the requirement of the Securities Act, this Registration
Statement has been signed below by the following persons in the capacities and
on the dates indicated.
<TABLE>
<CAPTION>
Signature Title Date
- --------- ----- ----
<S> <C> <C>
/s/ Brian J. Farrell Director, Chief Executive June 24, 1997
- -------------------------- Officer and President (Principal
Brian J. Farrell Executive Officer)
/s/ Lawrence Burstein Director June 24, 1997
- --------------------------
Lawrence Burstein
/s/ Bruce Jagid Director June 24, 1997
- --------------------------
Bruce Jagid
/s/ Jeffrey C. Lapin Director June 24, 1997
- --------------------------
Jeffrey C. Lapin
/s/ L. Michael Haller Director June 24, 1997
- --------------------------
L. Michael Haller
/s/ James L. Whims Director June 24, 1997
- --------------------------
James L. Whims
/s/ Deborah A. Lake Vice President-Finance and June 24, 1997
- -------------------------- Administration
Deborah A. Lake (Principal Financial Officer and
Principal Accounting Officer)
</TABLE>
-4-
<PAGE> 7
INDEX OF EXHIBITS
<TABLE>
<CAPTION>
Number Description of Exhibit
- ------ ----------------------
<S> <C>
4.1 T.HQ, Inc. 1997 Stock Option Plan.
4.2 Form of Stock Option Agreement for T.HQ, Inc. 1997
Stock Option Plan.
5 Opinion of Sidley & Austin regarding the validity of certain
of the securities to be registered.
23.1 Consent of Deloitte & Touche LLP.
23.2 Consent of Sidley & Austin, incorporated by reference to
Exhibit 5 to this registration statement.
</TABLE>
<PAGE> 1
THQ INC.
1997 STOCK OPTION PLAN
I. INTRODUCTION
1.1 PURPOSES. The purposes of the 1997 Stock Option Plan (this
"Plan") of THQ Inc. (the "Company"), and its subsidiaries (individually a
"Subsidiary" and collectively the "Subsidiaries") are (i) to align the interests
of the Company's stockholders and the recipients of options under this Plan by
increasing the proprietary interest of such recipients in the Company's growth
and success, (ii) to advance the interests of the Company by attracting and
retaining officers, other employees, consultants, advisors and well-qualified
persons who are not officers or employees of the Company for service as
directors of the Company, and (iii) to motivate such persons to act in the
long-term best interests of the Company's stockholders. For purposes of this
Plan, references to employment by the Company shall also mean employment by a
Subsidiary.
1.2 ADMINISTRATION. This Plan shall be administered either by
the Board of Directors of the Company (the "Board") or by a stock option
committee (the "Committee") designated by the Board consisting of two or more
members of the Board each of whom shall be a "Non-Employee Director" within the
meaning of Rule 16b-3 under the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), and (if the Board wishes to qualify under Section 162(m) of the
Internal Revenue Code of 1986, as amended (the "Code") an "outside director"
within the meaning of Section 162(m) of the Code. As used herein, the term
"Committee" shall mean the Board if no such committee is designated, and shall
mean such stock option committee during such times as it is so designated.
The Committee shall, subject to the terms of this Plan, select
eligible persons for participation in this Plan and shall determine the number
of shares of Common Stock subject to each option granted hereunder, the exercise
price of such option, the time and conditions of exercise of such option and all
other terms and conditions of such option, including, without limitation, the
form of the written option agreement between the Company and the optionee that
evidences each option and sets forth the terms and conditions of such option
(the "Agreement"). The Committee shall, subject to the terms of this Plan,
interpret this Plan and the application thereof, establish such rules and
regulations it deems necessary or desirable for the administration of this Plan
and may impose, incidental to the grant of an option, conditions with respect to
the grant, such as limiting competitive employment or other activities. All such
interpretations, rules, regulations and conditions shall be final, binding and
conclusive. The Committee may, in its sole discretion and for any reason at any
time, subject to the requirements imposed under Section 162(m) of the Code and
regulations promulgated thereunder in the case of an option intended to be
qualified performance-based compensation, take action such that any or all
outstanding options shall become exercisable in part or in full.
The Committee may delegate some or all of its power and
authority hereunder to the Chief Executive Officer or other executive officer of
the Company as the Committee deems appropriate; provided, however, that the
Committee may not delegate its power and authority with regard to the selection
for participation in this Plan of an officer or other person subject to Section
16 of the Exchange Act or decisions concerning the timing, pricing or amount of
an option grant to such an officer or other person.
No member of the Board of Directors or the Committee, and
neither the Chief Executive Officer nor other executive officer to whom the
Committee delegates any of its power and authority hereunder, shall be liable
for any act, omission, interpretation, construction or determination made in
connection with this Plan in good faith, and the members of the Board of
Directors and the Committee and the Chief Executive Officer or other executive
officer shall be entitled to indemnification and reimbursement by the Company in
respect of any claim, loss, damage or expense (including attorneys' fees)
arising therefrom to the full extent permitted by law and under any directors'
and officers' liability insurance that may be in effect from time to time.
<PAGE> 2
A majority of the Committee shall constitute a quorum. The
acts of the Committee shall be either (i) acts of a majority of the members of
the Committee present at any meeting at which a quorum is present or (ii) acts
approved in writing by all of the members of the Committee without a meeting.
1.3 ELIGIBILITY. Participants in this Plan shall consist of
such officers, other employees, consultants and advisors of the Company and its
Subsidiaries from time to time as the Committee in its sole discretion may
select from time to time. The Committee's selection of a person to participate
in this Plan at any time shall not require the Committee to select such person
to participate in this Plan at any other time. Non-employee directors of the
Company shall be eligible to participate in this Plan in accordance with Section
III.
1.4 SHARES AVAILABLE. Subject to adjustment as provided in
Section 4.7, 650,000 shares of the common stock, no par value per share, of the
Company ("Common Stock"), shall be available for grants of options under this
Plan, reduced by the sum of the aggregate number of shares of Common Stock which
become subject to outstanding options. To the extent that shares of Common Stock
subject to an outstanding option are not issued or delivered by reason of the
expiration, termination, cancellation or forfeiture of such option, then such
shares of Common Stock shall again be available under this Plan.
Shares of Common Stock shall be made available from authorized
and unissued shares of Common Stock, or authorized and issued shares of Common
Stock reacquired and held as treasury shares or otherwise or a combination
thereof.
II. STOCK OPTIONS
2.1 GRANTS OF STOCK OPTIONS. The Committee may, in its
discretion, grant options to purchase shares of Common Stock to such eligible
persons as may be selected by the Committee. The Committee may, in its
discretion, grant options to purchase shares of Common Stock to such eligible
persons as may be selected by the Committee. Each option, or portion thereof,
that is not an incentive stock option, shall be a non-qualified stock option. An
incentive stock option shall mean an option to purchase shares of Common Stock
that meets the requirements of Section 422 of the Code, or any successor
provision, which is intended by the Committee to constitute an incentive stock
option. Each incentive stock option shall be granted within ten years of the
effective date of this Plan. To the extent that the aggregate Fair Market Value
(determined as of the date of grant) of shares of Common Stock with respect to
which options designated as incentive stock options are exercisable for the
first time by a participant during any calendar year (under this Plan or any
other plan of the Company, or any Subsidiary as defined in Section 424 of the
Code) exceeds the amount (currently $100,000) established by the Code, such
options shall constitute non-qualified stock options. "Fair Market Value" shall
mean the closing transaction price of a share of Common Stock as reported in the
NASDAQ National Market System, or other exchange where the Common Stock is
listed, on the date as of which such value is being determined or, if there
shall be no reported transactions on such date, on the next preceding date for
which transactions were reported; provided that if Fair Market Value for any
date cannot be determined as above provided, Fair Market Value shall be
determined by the Committee by whatever means or method as the Committee, in the
good faith exercise of its discretion, shall at such time deem appropriate.
2.2 TERMS OF STOCK OPTIONS. Options shall be subject to the
following terms and conditions and shall contain such additional terms and
conditions, not inconsistent with the terms of this Plan, as the Committee shall
deem advisable:
(a) Number of Shares and Purchase Price. The number of shares
of Common Stock subject to an option and the purchase price per share of Common
Stock purchasable upon exercise of the
2
<PAGE> 3
option shall be determined by the Committee; provided, however, that such
purchase price shall not be less than 100% of the Fair Market Value of a share
of Common Stock on the date of grant of such option; provided further, that if
an incentive stock option shall be granted to any person who, at the time such
option is granted, owns capital stock possessing more than ten percent of the
total combined voting power of all classes of capital stock of the Company (or
of any Subsidiary) (a "Ten Percent Holder"), the purchase price per share of
Common Stock shall be the price (currently 110% of Fair Market Value) required
by the Code in order to constitute an incentive stock option.
(b) Option Period and Exercisability. The period during which
an option may be exercised shall be determined by the Committee; provided,
however, that no incentive stock option shall be exercised later than ten years
after its date of grant; provided further, that if an incentive stock option
shall be granted to a Ten Percent Holder, such option shall not be exercised
later than five years after its date of grant. The Committee may, in its
discretion, establish performance measures or other criteria which shall be
satisfied or met as a condition to the grant of an option or to the
exercisability of all or a portion of an option. The Committee shall determine
whether an option shall become exercisable in cumulative or non-cumulative
installments and in part or in full at any time. An exercisable option, or
portion thereof, may be exercised only with respect to whole shares of Common
Stock. Notwithstanding Section 2.3 hereof or the provisions of any Agreement,
the Committee may in its sole and absolute discretion extend the time for the
exercise of any option.
(c) Method of Exercise. An option may be exercised (i) by
giving written notice to the Company specifying the number of whole shares of
Common Stock to be purchased and accompanied by payment therefor in full (or
arrangement made for such payment to the Company's satisfaction) either (A) in
cash, (B) by delivery of previously owned whole shares of Common Stock (which
the optionee has held for at least six months prior to the delivery of such
shares or which the optionee purchased on the open market and in each case for
which the optionee has good title, free and clear of all liens and encumbrances)
having an aggregate Fair Market Value, determined as of the date of exercise,
equal to the aggregate purchase price payable by reason of such exercise, (C) in
cash by a broker-dealer acceptable to the Company to whom the optionee has
submitted an irrevocable notice of exercise, or (D) a combination of (A), (B)
and (C), in each case to the extent not prohibited by the Agreement relating to
the option and (ii) by executing such documents as the Company may reasonably
request; provided, however, that notwithstanding the foregoing or anything in
the Agreement relating to such option to the contrary, the Company shall have
sole discretion to disapprove of an election pursuant to clauses (B)-(D). Any
fraction of a share of Common Stock which would be required to pay such purchase
price shall be disregarded and the remaining amount due shall be paid in cash by
the optionee. No certificate representing Common Stock shall be delivered until
the full purchase price therefor has been paid (or arrangement made for such
payment to the Company's satisfaction).
2.3 TERMINATION OF EMPLOYMENT.
(a) Total Disability. Unless otherwise specified in the
Agreement relating to an option, if an optionee's employment with the Company
terminates by reason of Total Disability, each option held by such optionee
shall be exercisable only to the extent that such option is exercisable on the
effective date of such optionee's termination of employment and may thereafter
be exercised by such optionee (or such optionee's legal representative or
similar person) until and including the earliest to occur of (i) the date which
is one year (or such other period as set forth in the Agreement relating to such
option) after the effective date of such optionee's termination of employment,
and (ii) the expiration date of the term of such option. For purposes of this
Plan, "Total Disability" shall, with respect to any optionee who at such time is
employed by the Company, mean the permanent and total disability of such
optionee as described in such optionee's written employment agreement; and
otherwise shall mean the inability of such optionee substantially to perform
such optionee's duties and responsibilities for a continuous period of six
months.
3
<PAGE> 4
(b) Death. Unless otherwise specified in the Agreement
relating to an option, if an optionee's employment with the Company terminates
by reason of death, each option held by such optionee shall be exercisable only
to the extent that such option is exercisable on the date of such optionee's
death and may thereafter be exercised by such optionee's executor,
administrator, legal representative, beneficiary or similar person until and
including the earliest to occur of (i) the date which is one year (or such other
period as set forth in the Agreement relating to such option) after the date of
death and (ii) the expiration date of the term of such option.
(c) Termination for Cause. Unless otherwise specified in the
Agreement relating to an option, if the employment of the holder of such option
is terminated by the Company for Cause, such option shall terminate
automatically on the date of such termination. For purposes of this Plan,
"Cause" shall, with respect to any optionee who at such time has a written
employment agreement with the Company, have the meaning ascribed thereto in such
agreement and (i) shall also include an optionee's termination of his employment
for any reason, but (ii) shall not include termination by reason of an
optionee's Total Disability notwithstanding any language to the contrary in such
employment agreement; and otherwise shall mean the willful and continued failure
to substantially perform the duties with the Company (other than a failure
resulting from the optionee's Total Disability), the willful engaging in conduct
which is demonstrably injurious to the Company or any Subsidiary, monetarily or
otherwise, including conduct that, in the reasonable judgment of the Company,
does not conform to the standard of the Company's executives, any act of
dishonesty, commission of a felony or a significant violation of any statutory
or common law duty of loyalty to the Company, or such optionee's termination of
his employment for any reason.
(d) Other Termination. Unless otherwise specified in the
Agreement relating to an option, if an optionee's employment with the Company is
terminated by the Company for any reason other than Total Disability, death or
for Cause, each option held by such optionee shall be exercisable only to the
extent that such option is exercisable on the effective date of such optionee's
termination of employment and may thereafter be exercised by such optionee (or
such optionee's legal representative or similar person) until and including the
earliest to occur of (i) the date which is three months (or such other period as
set forth in the Agreement relating to such option) after the effective date of
such optionee's termination of employment, and (ii) the expiration date of the
term of such option.
(e) Death Following Termination of Employment. Subject to
paragraph (f) below and unless otherwise specified in the Agreement relating to
an option, if an optionee dies during the period set forth in Section 2.3(a)
following termination of employment by reason of Total Disability, or if an
optionee dies during the period set forth in Section 2.3(d) following
termination of employment for any other reason other than Total Disability,
death or for Cause, each option held by such optionee shall be exercisable only
to the extent that such option is exercisable on the date of such optionee's
death and may thereafter be exercised by such optionee's executor,
administrator, legal representative, beneficiary or similar person, as the case
may be, until and including the earliest to occur of (i) the date which is one
year (or such other period as set forth in the Agreement relating to such
option) after the date of death and (ii) the expiration date of the term of such
option.
(f) Termination of Employment - Incentive Stock Options.
Unless otherwise specified in the Agreement relating to the option, if the
employment with the Company of a holder of an incentive stock option terminates
by reason of Permanent and Total Disability (as defined in Section 22(e)(3) of
the Code), each incentive stock option held by such optionee shall be
exercisable only to the extent that such option is exercisable on the effective
date of such optionee's termination of employment by reason of Permanent and
Total Disability, and may thereafter be exercised by such optionee (or such
optionee's legal representative or similar person) until and including the
earliest to occur of (i) the date which is one year (or such other period as set
forth in the Agreement relating to such option) after the effective date of such
optionee's termination
4
<PAGE> 5
of employment by reason of Permanent and Total Disability and (ii) the
expiration date of the term of such option.
Unless otherwise specified in the Agreement relating to the
option, if the employment with the Company of a holder of an incentive stock
option terminates by reason of death, each incentive stock option held by such
optionee shall be exercisable only to the extent that such option is exercisable
on the date of such optionee's death and may thereafter be exercised by such
optionee's executor, administrator, legal representative, beneficiary or similar
person until and including the earliest to occur of (i) the date which is one
year (or such shorter period as set forth in the Agreement relating to such
option) after the date of death and (ii) the expiration date of the term of such
option.
If the employment with the Company of a holder of an incentive
stock option terminates for any reason other than Permanent and Total Disability
or death or for Cause, each incentive stock option held by such optionee shall
become fully exercisable, and may thereafter be exercised by such holder (or
such holder's legal representative or similar person) until and including the
earliest to occur of (i) the date which is three months after the effective date
of such optionee's termination of employment and (ii) the expiration date of the
term of such option.
If the holder of an incentive stock option dies during the
period set forth in the first paragraph of this Section 2.3(f) following
termination of employment by reason of Permanent and Total Disability (or such
other period as set forth in the Agreement relating to such option), or if the
holder of an incentive stock option dies during the period set forth in the
third paragraph of this Section 2.3(f) following termination of employment for
any reason other than Permanent and Total Disability or death, each incentive
stock option held by such optionee shall be exercisable only to the extent such
option is exercisable on the date of the optionee's death and may thereafter be
exercised by the optionee's executor, administrator, legal representative,
beneficiary or similar person until and including the earliest to occur of (i)
the date which is one year (or such shorter period as set forth in the Agreement
relating to such option) after the date of death and (ii) the expiration date of
the term of such option.
III. PROVISIONS RELATING TO NON-EMPLOYEE DIRECTORS
3.1 ELIGIBILITY. Each member of the Board of Directors of the
Company who is not an employee, either full-time or part-time, of the Company or
any Subsidiary (a "non-employee director") shall be granted options to purchase
shares of Common Stock in accordance with this Section III. All options granted
under this Section III shall constitute non-qualified stock options.
3.2 GRANTS OF STOCK OPTIONS. Each non-employee director
shall be granted non-qualified stock options as follows:
(a) Time of Grant. Commencing on July 1, 1997 (or, if later, on the
date on which a person is first elected or begins to serve as a non-employee
director other than by reason of termination of employment with the Company or
any Subsidiary), and, on each January 1st, April 1st, July 1st and October 1st
thereafter, each person who is a non-employee director on such date shall be
granted an option to purchase 2,500 shares of Common Stock (which amount shall
be pro-rated if such person is first elected or begins to serve as a
non-employee director on a date other than the dates set forth above) at a
purchase price per share equal to the Fair Market Value of the Common Stock on
the date of grant of such option.
(b) Option Period and Exercisability. Each option granted under this
Article III shall be fully exercisable on and after its date of grant. Each
option granted under this Article III shall expire five years after its date of
grant. An exercisable option, or portion thereof, may be exercised in whole or
in part only with
5
<PAGE> 6
respect to whole shares of Common Stock. Options granted under this Article III
shall be exercisable in accordance with Section 3.2(c).
(c) Termination of Directorship.
(i) Total Disability. Unless otherwise specified in the
Agreement relating to an option, if an optionee's directorship with the Company
terminates by reason of Total Disability, each option held by such optionee
shall be exercisable only to the extent that such option is exercisable on the
effective date of such optionee's termination of directorship and may thereafter
be exercised by such optionee (or such optionee's legal representative or
similar person) until and including the earliest to occur of (i) the date which
is one year (or such other period as set forth in the Agreement relating to such
option) after the effective date of such optionee's termination of directorship
and (ii) the expiration date of the term of such option. For purposes of this
Plan, "Total Disability" of a non-employee director shall mean the inability of
such optionee substantially to perform such optionee's duties and
responsibilities as a director for a continuous period of six months.
(ii) Death. Unless otherwise specified in the Agreement
relating to an option, if an optionee's directorship with the Company terminates
by reason of death, each option held by such optionee shall be exercisable only
to the extent that such option is exercisable on the date of such optionee's
death and may thereafter be exercised by such optionee's executor,
administrator, legal representative, beneficiary or similar person until and
including the earliest to occur of (i) the date which is one year (or such other
period as set forth in the Agreement relating to such option) after the date of
death and (ii) the expiration date of the term of such option.
(iii) Termination for Cause. Unless otherwise specified in the
Agreement relating to an option, if the holder of such option is removed from
the Board of Directors for Cause, such option shall terminate automatically on
the date of such termination.
(iv) Other Termination. Unless otherwise specified in the
Agreement relating to an option, if an optionee's directorship with the Company
is terminated by the Company for any reason other than Total Disability, death
or for Cause, each option held by such optionee shall be exercisable only to the
extent that such option is exercisable on the effective date of such optionee's
termination of directorship and may thereafter be exercised by such optionee (or
such optionee's legal representative or similar person) until and including the
earliest to occur of (i) the date which is three months (or such other period as
set forth in the Agreement relating to such option) after the effective date of
such optionee's termination of directorship and (ii) the expiration date of the
term of such option.
(v) Death Following Termination. Unless otherwise specified in
the Agreement relating to an option, if an optionee dies during the period set
forth in Section 3.2(c)(i) following termination of directorship by reason of
Total Disability, or if an optionee dies during the period set forth in Section
3.2(c)(iv) following termination of directorship for any other reason other than
Total Disability, for Cause or death, each option held by such optionee shall be
exercisable only to the extent that such option is exercisable on the date of
such optionee's death and may thereafter be exercised by such optionee's
executor, administrator, legal representative, beneficiary or similar person, as
the case may be, until and including the earliest to occur of (i) the date which
is one year (or such other period as set forth in the Agreement relating to such
option) after the date of death and (ii) the expiration date of the term of such
option.
IV. GENERAL
4.1 EFFECTIVE DATE AND TERM OF PLAN. This Plan shall be
submitted to the stockholders of the Company for approval and, if approved by
the affirmative vote of a majority of the shares of Common
6
<PAGE> 7
Stock present in person or represented by proxy at the 1997 annual meeting of
the stockholders, shall become effective as of March 28, 1997, the date of
approval of this Plan by the stockholders. No option may be exercised prior to
the date of such stockholder approval. This Plan shall terminate ten years after
its effective date, unless terminated earlier by the Board. Termination of this
Plan shall not affect the terms or conditions of any option granted prior to
termination.
4.2 AMENDMENTS. The Board may amend this Plan as it shall deem
advisable, subject to any requirement of stockholder approval required by
applicable law, rule or regulation; provided, however, that no amendment shall
be made without stockholder approval if such amendment would (a) increase the
maximum number of shares of Common Stock available under this Plan (subject to
Section 4.7), or (b) extend the term of this Plan; and, provided, further, that
this Plan shall not be amended in a manner which fails to comply with Rule
16b-3(c)(2)(ii)(B) under Section 16 of the Exchange Act. No amendment may impair
the rights of a holder of an outstanding option without the consent of such
holder or effect any change inconsistent with Section 422 of the Code; provided
further, that the number of shares of Common Stock subject to an option granted
to non-employee directors pursuant to Article III, the purchase price therefor,
the date of grant of any such option, the termination provisions relating
thereto, and the category of persons eligible to be granted such options shall
not be amended more than once every six months, other than to comply with
changes in the Code and the Employee Retirement Income Security Act of 1974, as
amended ("ERISA"), or the rules and regulations thereunder.
4.3 AGREEMENT. No option shall be valid until an Agreement is
executed by the Company and the optionee and, upon execution by the Company and
the optionee and delivery of the Agreement to the Company, such option shall be
effective as of the effective date set forth in the Agreement.
4.4 NON-TRANSFERABILITY. No option hereunder shall be
transferable other than (i) by will or the laws of descent and distribution or
pursuant to beneficiary designation procedures approved by the Company or (ii)
as otherwise permitted under Rule 16b-3 under the Exchange Act as set forth in
the Agreement relating to such option. Except to the extent permitted by the
foregoing sentence, each option may be exercised during the optionee's lifetime
only by the optionee or the optionee's legal representative or similar person.
Except as permitted by the second preceding sentence, no option hereunder shall
be sold, transferred, assigned, pledged, hypothecated, encumbered or otherwise
disposed of (whether by operation of law or otherwise) or be subject to
execution, attachment or similar process. Upon any attempt to so sell, transfer,
assign, pledge, hypothecate, encumber or otherwise dispose of any option
hereunder, such option and all rights thereunder shall immediately become null
and void.
4.5 TAX WITHHOLDING. The Company shall have the right to
require, prior to the issuance or delivery of any shares of Common Stock,
payment by the optionee of any Federal, state, local or other taxes which may be
required to be withheld or paid in connection with an option hereunder. Unless
otherwise provided in an Agreement relating to an option, the optionee may elect
that (i) the Company shall withhold whole shares of Common Stock which would
otherwise be delivered upon exercise of the option having an aggregate Fair
Market Value determined as of the date the obligation to withhold or pay taxes
arises in connection with the option (the "Tax Date") in the amount necessary to
satisfy any such obligation or (ii) the optionee satisfy any such obligation by
any of the following means: (A) a cash payment to the Company, (B) delivery to
the Company of previously owned whole shares of Common Stock (which the optionee
has held for at least six months prior to the delivery of such shares or which
the optionee purchased on the open market and in each case for which the
optionee has good title, free and clear of all liens and encumbrances) having an
aggregate Fair Market Value determined as of the Tax Date, equal to the amount
necessary to satisfy any such obligation, (C) a cash payment by a broker-dealer
acceptable to the Company to whom the optionee has submitted an irrevocable
notice of exercise, or (D) any combination of (A), (B) and (C), in each case to
the extent not prohibited by the Agreement relating to the option. Any fraction
of a share of Common Stock which would be required to satisfy such an obligation
shall be disregarded and the remaining amount due shall be paid
7
<PAGE> 8
in cash by the optionee; provided, however, that the Committee shall have sole
discretion to disapprove of an election pursuant to any of clauses (B)-(D) and
that in the case of an optionee who is subject to Section 16 of the Exchange
Act, the Company may require that the method of satisfying any such obligation
be in compliance with Section 16 and the rules and regulations thereunder. Any
fraction of a share of Common Stock which would be required to satisfy such an
obligation shall be disregarded and the remaining amount due shall be paid in
cash by the optionee.
4.6 RESTRICTIONS ON SHARES. Each option hereunder shall be
subject to the requirement that if at any time the Company determines that the
listing, registration or qualification of the shares of Common Stock subject to
such option upon any securities exchange or under any law, or the consent or
approval of any governmental body, or the taking of any other action is
necessary or desirable as a condition of, or in connection with, the delivery of
shares thereunder, such shares shall not be delivered unless such listing,
registration, qualification, consent, approval or other action shall have been
effected or obtained, free of any conditions not acceptable to the Company. The
Company may require that certificates evidencing shares of Common Stock
delivered pursuant to any option hereunder bear a legend indicating that the
sale, transfer or other disposition thereof by the holder is prohibited except
in compliance with the Securities Act of 1933, as amended, and the rules and
regulations thereunder.
4.7 ADJUSTMENT. In the event of any stock split, stock
dividend, recapitalization, reorganization, merger, consolidation, combination,
exchange of shares, liquidation, spin-off or other similar change in
capitalization or event, or any distribution to holders of Common Stock other
than a regular cash dividend, the number and class of securities available under
this Plan, the number and class of securities subject to each outstanding option
and the purchase price per security shall be appropriately adjusted by the
Committee, such adjustments to be made in the case of outstanding options
without an increase in the aggregate purchase price. The decision of the
Committee regarding any such adjustment shall be final and binding. If any
adjustment would result in a fractional security being (a) available under this
Plan, such fractional security shall be disregarded, or (b) subject to an option
under this Plan, the Company shall pay the optionee, in connection with the
first exercise of the option in whole or in part occurring after such
adjustment, an amount in cash determined by multiplying (A) the fraction of such
security (rounded to the nearest hundredth) by (B) the excess, if any, of (x)
the Fair Market Value on the exercise date over (y) the exercise price of the
option.
4.8 EFFECT OF CERTAIN TRANSACTIONS.
(a) In the event that the Company enters into an agreement (a)
to dispose of all or substantially all of its assets, in contemplation of the
distribution of the net proceeds of such sale to the Company's shareholders, or
(b) to consummate a merger or consolidation in which the Company is not the
surviving or resulting corporation (such distribution, merger, consolidation or
sale being hereinafter referred to as a "Transaction"), then (unless otherwise
specified in the Agreement relating to an option), the Committee shall provide,
at its election made in its sole and absolute discretion, for one or more of the
following: (i) for each outstanding option, whether or not then exercisable, to
be replaced with a comparable option to purchase shares of capital stock of a
successor or purchasing corporation or parent thereof, or (ii) for each
outstanding option, whether or not then exercisable, to be assumed by a
successor or purchasing corporation or parent thereof (and, in the event of such
assumption, each outstanding option shall continue to be exercisable, on the
terms and subject to the conditions set forth in, and in cumulative amounts at
the times provided in, the Agreement relating to such option but shall, from and
after the consummation of such Transaction, be exercisable for the capital
stock, cash and/or other property received by the common stockholders of the
Company in such Transaction in an amount equal to what the holder of such option
would have received had he exercised such option immediately prior to the
consummation of such Transaction), or (iii) for each outstanding option, whether
or not then exercisable, to become exercisable during such period prior to the
scheduled consummation of such Transaction as may be specified by the Committee;
provided, however, that such elections of the Committee shall apply identically,
by their terms, to all holders of options granted under
8
<PAGE> 9
this Plan (unless otherwise required by an Agreement). In the event the
Committee elects to cause the options not then otherwise exercisable to become
exercisable prior to such Transaction (an "Accelerated Option"), any exercise of
an Accelerated Option shall be conditioned upon, and shall be effective only
concurrently with, the consummation of such Transaction; and if such Transaction
is not consummated, the exercise of such Accelerated Options shall be of no
further force or effect (and an optionee may elect, with respect to the exercise
during such period of an option that was otherwise exercisable, to so condition
such exercise upon the consummation of the Transaction). All options not
exercised prior to the consummation of such Transaction (and which are not being
assumed by a successor or purchasing corporation or parent thereof) shall
terminate and be of no further force or effect as of the consummation of such
Transaction.
(b) With respect to any optionee who is subject to Section 16
of the Exchange Act, (i) notwithstanding the exercise periods set forth in
Section 2.3 and 3.2(c), or as set forth pursuant to such Section in any
Agreement to which such optionee is a party, and (ii) notwithstanding the
expiration date of the term of such option, in the event the Company is involved
in a business combination that is intended to be treated as a pooling of
interests for financial accounting purposes (a "Pooling Transaction") or
pursuant to which such optionee receives a substitute option to purchase
securities of any entity, including an entity directly or indirectly acquiring
the Company, then each option (or option in substitution thereof) held by such
optionee shall be exercisable to the extent set forth in the Agreement
evidencing such option until and including the latest of (x) the date set forth
pursuant to the then applicable paragraph of Section 2.3, 3.2(c) or the
expiration date of the term of the option, as the case may be, (y) the date
which is six months and one day after the consummation of such business
combination and (z) the date which is ten business days after the date of
expiration of any period during which such optionee may not dispose of a
security issued in the Pooling Transaction in order for the Pooling Transaction
to be accounted for as a pooling of interests.
4.9 NO RIGHT OF PARTICIPATION OR EMPLOYMENT. No person shall
have any right to participate in this Plan. Neither this Plan nor any option
granted hereunder shall confer upon any person any right to continued employment
by the Company, any Subsidiary or any affiliate of the Company or affect in any
manner the right of the Company, any Subsidiary or any affiliate of the Company
to terminate the employment of any person at any time without liability
hereunder.
4.10 RIGHTS AS STOCKHOLDER. No person shall have any rights as
a stockholder of the Company with respect to any shares of Common Stock which
are subject to an option hereunder until such person becomes a stockholder of
record with respect to such shares of Common Stock.
4.11 DESIGNATION OF BENEFICIARY. If permitted by the Company,
an optionee may file with the Committee a written designation of one or more
persons as such optionee's beneficiary or beneficiaries (both primary and
contingent) in the event of the optionee's death. To the extent an outstanding
option granted hereunder is exercisable, such beneficiary or beneficiaries shall
be entitled to exercise such option.
Each beneficiary designation shall become effective only when
filed in writing with the Committee during the optionee's lifetime on a form
prescribed by the Committee. The spouse of a married optionee domiciled in a
community property jurisdiction shall join in any designation of a beneficiary
other than such spouse. The filing with the Committee of a new beneficiary
designation shall cancel all previously filed beneficiary designations.
If an optionee fails to designate a beneficiary, or if all
designated beneficiaries of an optionee predecease the optionee, then each
outstanding option hereunder held by such optionee, to the extent exercisable,
may be exercised by such optionee's executor, administrator, legal
representative or similar person.
9
<PAGE> 10
4.12 GOVERNING LAW. This Plan, each option hereunder and the
related Agreement, and all determinations made and actions taken pursuant
thereto, to the extent not otherwise governed by the laws of the United States,
shall be governed by the laws of the State of Delaware and construed in
accordance therewith without giving effect to principles of conflicts of laws.
4.13 FOREIGN EMPLOYEES. Without amending this Plan, the
Committee may grant options to eligible persons who are foreign nationals on
such terms and conditions different from those specified in this Plan as may in
the judgment of the Committee be necessary or desirable to foster and promote
achievement of the purposes of this Plan and, in furtherance of such purposes
the Committee may make such modifications, amendments, procedures, subplans and
the like as may be necessary or advisable to comply with provisions of laws in
other countries or jurisdictions in which the Company or its Subsidiaries
operates or has employees.
10
<PAGE> 1
THQ INC, 1997 STOCK OPTION PLAN
STOCK OPTION AGREEMENT
Date: , 199_
Number of Shares
Underlying Option:
This Stock Option Agreement (the "Agreement"), dated as of
______________, 199_ is made between THQ INC., a Delaware corporation, having
its principal offices at 5016 North Parkway Calabasas, Calabasas, California
(the "Company") and __________________ (the "Optionee"), having an address at
_______________________________________.
W I T N E S S E T H :
1. Grant of Option. Pursuant to the provisions of the THQ Inc. 1997
Stock Option Plan, a copy of which is annexed hereto as Exhibit A (the "Plan"),
the Company hereby grants to the Optionee, subject to the terms and conditions
herein set forth, the right and option (the "Option") to purchase from the
Company, all or any part of an aggregate of ________shares (the "Shares") of the
Company's common stock, no par value per share (the "Common Stock"), at the
purchase price of $_____ per Share, such Option to be exercisable as hereinafter
provided.
2. Terms and Conditions. It is understood and agreed that this Option,
and the exercise of said Option, is subject to the terms and conditions set
forth in the Plan, and in addition, any terms and conditions set forth herein.
3. Limitation on Exercisability of Option. This Option shall be
exercisable by the Optionee to the extent of the following number of Shares
commencing on the following dates:
<TABLE>
<CAPTION>
Number of Shares Date After Which Shares Can Be Purchased
---------------- ----------------------------------------
<S> <C>
______ Shares
______ Shares
______ Shares
</TABLE>
4. Expiration of Option. This Option shall not be exercisable after
5:00 p.m. P.D.T. on _________________.
5. Non-Assignability of Option. This Option shall not be given,
granted, sold, exchanged, transferred, pledged, assigned or otherwise encumbered
or disposed of by the
<PAGE> 2
Optionee, otherwise than by will or the laws of descent and distribution, and,
during the lifetime of the Optionee, shall not be exercisable by any other
person, but only by the Optionee.
6. Method of Exercise of Option. The Option may be exercised (i) by
giving written notice to the Company specifying the number of whole Shares to be
purchased and accompanied by payment therefor in full (or arrangement made for
such payment to the Company's satisfaction) either (A) in cash, (B) by delivery
of previously owned whole Shares (which the Optionee has held for at least six
months prior to the delivery of such shares or which the Optionee purchased on
the open market and in each case for which the Optionee has good title, free and
clear of all liens and encumbrances) having an aggregate fair market value,
determined as of the date of exercise, equal to the aggregate purchase price
payable by reason of such exercise, (C) in cash by a broker-dealer acceptable to
the Company to whom the Optionee has submitted an irrevocable notice of
exercise, or (D) a combination of (A), (B) and (C) and (ii) by executing such
documents as the Company may reasonably request; provided, however, that the
Company shall have sole discretion to disapprove of an election pursuant to
clauses (B)-(D). Any fraction of a Share which would be required to pay such
purchase price shall be disregarded and the remaining amount due shall be paid
in cash by the Optionee. No certificate representing Common Stock shall be
delivered until the full purchase price therefor has been paid (or arrangement
made for such payment to the Company's satisfaction).
7. Death or Termination of Employment or Services. If the employment of
the Optionee as an employee by, or the services of the Optionee as a
non-employee director for, the Company shall be terminated for Cause (as defined
below), this Option shall expire automatically upon the date of such
termination. If such employment or services shall be terminated for any other
reason (excluding death and total disability, as discussed below), then this
Option may not be exercised at any time later than three (3) months after such
termination or expiration of the Optionee's services as an employee or
non-employee director. If the Optionee ceases employment or services as a
non-employee director because of permanent and total disability then such
Options may be exercised at any time within one (1) year after cessation of
employment or service. If the Optionee dies while employed by, or serving as a
non-employee director for, the Company, or within three (3) months after
termination of employment or services by the Company for reasons other than for
Cause, then such Options may be exercised by the estate of the employee or
non-employee director or by a person who acquired the right to exercise such
Options by bequest or inheritance or by reason of the death of such employee or
non-employee director at any time within the earlier of (i) one (1) year after
such death and (ii) the expiration date of the term of such Option.
After death or termination, such exercise may then only be to
purchase those number of Shares subject to this Option that the Optionee was
entitled to purchase, upon exercise of this Option, prior to such termination,
resignation or expiration of the Optionee's employment or services as a
non-employee director. Provided, however, that nothing in this Section 7 shall
extend the term of the Option beyond the term set forth in Section 4, nor give
any person the right to purchase Shares subject to this Option which could not
be purchased by
-2-
<PAGE> 3
the Optionee prior to the termination of his services as an employee or a
non-employee director. For purposes of the Agreement, "Cause" shall, with
respect to any Optionee who at such time has a written employment agreement with
the Company, have the meaning ascribed thereto in such agreement and (i) shall
also include an Optionee's termination of his employment or service as a
non-employee director for any reason, but (ii) shall not include termination by
reason of an Optionee's total disability notwithstanding any language to the
contrary in such employment agreement; and otherwise shall mean the willful and
continued failure to substantially perform the duties with the Company (other
than a failure resulting from the optionee's total disability), the willful
engaging in conduct which is demonstrably injurious to the Company or any
subsidiary, monetarily or otherwise, including conduct that, in the reasonable
judgment of the Company, does not conform to the standard of the Company's
executives, any act of dishonesty, commission of a felony or a significant
violation of any statutory or common law duty of loyalty to the Company, or such
optionee's termination of his employment or service as a non-employee director
for any reason.
8. Investment Representation. The Optionee represents that at the time
of any exercise of this Option, where the Shares are not registered under the
Securities Act of 1933, as amended, such Shares will be acquired for investment
and not for resale or with a view to the distribution thereof.
9. Adjustments Upon Changes in Capitalization. In the event of changes
in the outstanding Common Stock or the Company by reason of stock dividends,
split-ups, recapitalizations, mergers, consolidations, combinations, exchanges
or shares, separations, reorganizations, or liquidations, the number of Shares
issuable upon the exercise of this Option, the option price thereof and any
limitation on exercise set forth in Section 3 hereof shall be correspondingly
adjusted by the Company. Any such adjustment in the number of Shares shall apply
proportionately to only the then unexercised portion of this Option. If
fractional Shares would result from any such adjustment, the adjustment shall be
revised to the next lower whole number of Shares.
10. No Rights as Stockholder. The Optionee shall have no rights as a
stockholder in respect to the Shares as to which this Option shall not have been
exercised any payment made as herein provided.
11. Optionee Bound by Plan. The Optionee hereby acknowledges receipt
of a copy of the Plan and agrees to be bound by all the terms and provisions
thereof, including the terms and provisions adopted after the granting of this
Option, but prior to complete exercise hereof.
12. Binding Effect. Except as herein otherwise expressly provided,
this Agreement shall be binding upon and inure to the benefit of the parties
hereto, their legal representatives, successors and assigns.
13. Conflict. In the event of any conflict between the Plan and this
Agreement, the terms of the Plan shall take precedence.
-3-
<PAGE> 4
14. Governing Law. This Agreement shall be governed by and construed
in accordance with the laws of the State of Delaware.
15. Notices. Any notice hereunder shall be delivered by hand or by
registered or certified mail, return receipt requested to a party at its address
set forth above with a copy of any correspondence to the Company to Sidley &
Austin, 555 West Fifth Street, Los Angeles, CA 90013-1010, Attn: Sherwin L.
Samuels, Esq., subject to the right of either party to designate at any time
hereafter, in writing, some other address.
16. Counterparts. This Agreement may be exercised in counterparts,
each of which shall constitute one and the same instrument.
-4-
<PAGE> 5
IN WITNESS WHEREOF, THQ Inc. has caused this Agreement to be
executed by an appropriate officer and the Optionee has executed this Agreement,
both as of the day and year first written.
THQ Inc.
--------------------------------------------
Name:
Title:
OPTIONEE
--------------------------------------------
-5-
<PAGE> 1
EXHIBIT 5
[Sidley & Austin Letterhead]
July 2, 1997
T.HQ, Inc.
5016 North Parkway Calabasas
Calabasas, California 91302
Re: 650,000 shares of Common Stock, par value, $.0001 per
-----------------------------------------------------
share, of T.HQ, Inc.
--------------------
Gentlemen:
We refer to the Registration Statement on Form S-8 (the
"Registration Statement") being filed by T.HQ, Inc., a New York corporation (the
"Company"), with the Securities and Exchange Commission under the Securities Act
of 1933, as amended (the "Securities Act"), relating to the registration of
650,000 shares (the "Shares") of common stock, par value $.0001 per share (the
"Common Stock"), of the Company which may be issued upon the exercise of options
granted pursuant to the Company's 1997 Stock Option Plan (the "Plan").
We have acted as counsel to the Company in connection with the
Plan and the issuance and sale of the Shares and have examined such records,
documents and questions of law, and satisfied ourselves as to such matters of
fact, as we have considered relevant and necessary as a basis for this opinion.
In addition, we have examined the originals, or photocopies, of such other
corporate records of the Company, certificates of public officials and of
officers of the Company and such agreements, instruments and other documents as
we have deemed necessary as a basis for the opinions expressed below. As to the
questions of fact material to such opinions, we have, when relevant facts were
not independently established by us, relied upon a certificate of the Company or
its officers or of public officials.
Based on the foregoing, we are of the opinion that the Shares
are duly authorized, legally issued, fully paid and nonassessable.
We do not find it necessary for purposes of this opinion to
cover, and accordingly we express no opinion as to, the application of the
securities or "Blue Sky" laws of the various states to the sale of the Shares.
This opinion is limited to the General Corporation Law of the State of Delaware.
<PAGE> 2
Page 2
We hereby consent to the filing of this opinion as an exhibit
to the Registration Statement and to all references to our firm in the
Registration Statement.
Very truly yours,
/s/ Sidley & Austin
<PAGE> 1
INDEPENDENT AUDITORS' CONSENT
We consent to the incorporation by reference in this Registration Statement of
T-HQ, Inc. on Form S-8 of our report dated February 7, 1997 (March 11, 1997 as
to Note 12) appearing in the Annual Report on Form 10-K (as amended by the Form
10-K/A) of T-HQ, Inc. for the year ended December 31, 1996.
Deloitte & Touche LLP
Los Angeles, California
July 1, 1997
