EMPLOYMENT AGREEMENT
                            DATED AS OF JUNE 30, 1999
                            BY AND BETWEEN THQ INC.,
                     A DELAWARE CORPORATION (THE "COMPANY"),
                     AND BRIAN J. FARRELL (THE "EXECUTIVE")
         The parties hereto desire to replace the Executive's existing
employment agreement with the Company with this Agreement and to provide for the
Executive's continued employment by the Company in accordance with the terms and
provisions set forth below:
         NOW, THEREFORE, the parties agree as follows:
         1. EMPLOYMENT: TERM.
         The Company will continue to employ the Executive, and the Executive
will continue to work for the Company, as its President and Chief Executive
Officer until December 31, 2001, unless sooner terminated in accordance with
Section 7 hereof. Such period, together with the period of any extension or
renewal of such employment, is referred to herein as the "Employment Period."
         2. DUTIES.
         During the Employment Period, the Executive shall serve as the
President and Chief Executive Officer of the Company and of its subsidiaries and
affiliated companies, and perform such further duties as shall, from time to
time, be reasonably delegated or assigned to the Executive by the Board of
Directors of the Company consistent with his position and abilities.
         3. DEVOTION OF TIME.
         During the Employment Period, the Executive shall: (i) expend
substantially all of his working time for the Company; (ii) devote his best
efforts, energy and skill to the services of the Company and the promotion of
its interests; and (iii) not take part in activities reasonably known by the
Executive to be detrimental to the best interests of the Company.
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         4. COMPENSATION.
            4.1 In consideration for the services to be performed by the
Executive during the Employment Period hereunder, the Company shall compensate
the Executive at an annual base salary (payable at the normal pay periods of the
Company) during the Employment Period of $300,000, commencing January 1, 1997,
which amount increased to $360,000 commencing January 1, 1999. The base salary
shall be subject to annual review commencing at the end of 1999 and at the end
of each year thereafter, and may be increased (but not decreased) for subsequent
            4.2 In addition to the annual base salary payable to the Executive
pursuant to the provisions of Section 4.1 hereof, the Executive is also entitled
to a bonus for each fiscal year of the Company commencing during the Employment
Period, equal to the lesser of (i) 100% of his annual base salary for that year,
or (ii) 4.5% of the Company's net income before taxes for such year (prorated
for partial years). Net income before taxes shall be determined by the
independent public accountants for the Company in accordance with generally
accepted accounting principles consistently applied.
            4.3 The Executive shall also be eligible for awards of options and
any other stock or equity based awards that may be available to executives of
the Company.
            5.1 The Executive shall receive an automobile allowance for the use
of any automobile owned or leased by him, consistent with the Company's past
            5.2 The Company shall pay directly, or reimburse the Executive for
all other reasonable and necessary expenses and disbursements incurred by him
for and on behalf of the Company in the performance of his duties under this
Agreement. For such purpose, the Executive shall submit to the Company itemized
reports of such expenses in accordance with the Company's policies.
            5.3 The Executive shall be entitled to paid vacations during the
Employment Period in accordance with the Company's then prevalent practices for
executive employees; provided, however, that the Executive shall be entitled to
such paid vacations for not less than four (4) weeks per annum.
            5.4 The Executive shall be entitled to participate in, and to
receive benefits under, any employee benefit plans of the Company (including,
without limitation, pension, profit sharing, group life insurance and group
medical insurance plans) as may exist from time to time for its executive
employees. Subject to the limitation contained in Section 5.7 below, the Company
shall make the maximum pension and profit sharing contribution for the Executive
legally permitted to be made by an employer and shall permit the Executive to
contribute the maximum pension and
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profit sharing contribution legally permitted to be made by an employee,
equaling an aggregate of $30,000 (the current maximum allowable payment) each
year during the Employment Period.
            5.5 The Company shall provide to the Executive, and (subject to the
limitation contained in Section 5.7 below) pay the premiums therefor, insurance
on the Executive's life in an amount equal to $1,500,000 as well as disability
insurance for the Executive during the Employment Period and for a period of
twelve (12) months thereafter, each of which shall have the coverage reasonably
requested by the Executive; provided, however, that the foregoing coverage shall
be subject to any insurance examinations of the Executive required by the
insurer. The Executive shall designate the beneficiaries under the disability
and life insurance policies.
            5.6 As a director and officer of the Company, the Executive shall be
entitled to the benefits of all provisions of the Articles of Incorporation of
the Company, as amended, and the Bylaws of the Company, as amended, that provide
for indemnification of officers and directors of the Company. No such provisions
shall be amended in any way to limit or reduce the extent of the indemnification
available to the Executive as an officer or director of the Company.
         In addition, to the fullest extent permitted by law, the Company shall
indemnify and save and hold harmless the Executive from and against any and all
claims, demands, liabilities, costs and expenses, including judgments, fines or
amounts paid on account thereof (whether in settlement or otherwise), and
reasonable expenses, including attorneys' fees actually and reasonably incurred
(except only if and to the extent that such amounts shall be finally adjudged to
have been caused by the Executive's willful breach of the express provisions of
this Agreement) to the extent that the Executive is made a party to or witness
in any action, suit or proceeding, or if a claim or liability is asserted
against the Executive (whether or not in the right of the Company), by reason of
the fact that he was or is a director or officer, or acted in such capacity on
behalf of the Company, or by reason of or arising out of or resulting from
entering into this Agreement or the rendering of services by the Executive
pursuant to this Agreement, whether or not the same shall proceed to judgment or
be settled or otherwise brought to a conclusion. The Company shall advance to
the Executive on demand all reasonable expenses incurred by the Executive in
connection with the defense or settlement of any such claim, action, suit or
proceeding, and the Executive hereby undertakes to repay such amounts if and to
the extent that it shall be finally adjudged that the Executive is not entitled
to be indemnified by the Company under this Agreement or under the provisions of
the Certificate of Incorporation or Bylaws of the Company as of the date hereof
that govern indemnification of officers or directors of the Company (but giving
effect to future amendments that broaden or expand any such indemnification and
obligations or right more favorably to the Executive). The Executive shall also
be entitled to recover any costs of enforcing his rights under this Section
(including, without limitation, reasonable attorneys' fees and disbursements) in
the event any amount payable hereunder is not paid within thirty (30) days of
written request therefore by the Executive. The rights of the Executive under
this Section shall survive the termination of this Agreement and shall be
applicable for so long as the Executive may be subject to any claim, demand,
liability, cost or expense against which this Section is intended to protect and
indemnify him.
<PAGE>   4
         Notwithstanding anything contained in this Agreement to the contrary,
the Company shall, at no cost to the Executive, use its best efforts to at all
times include the Executive during the term of the Employment Period and for a
period of not less than four (4) years thereafter, as an insured under any
directors and officers liability insurance policy maintained by the Company,
which policy shall provide such coverage in such amounts as the Board of
Directors shall deem appropriate for coverage of all directors and officers of
the Company.
            5.7 The Company's share of the pension and profit sharing
contribution referenced in Section 5.4 and insurance premiums referenced in
Section 5.5 shall not exceed in any calendar year an aggregate of $30,000.
            6.1 During the Employment Period and thereafter, the Executive shall
not reveal, divulge or make known to any person, firm, corporation or other
business organization, and shall not directly or indirectly use for his own
benefit, or for the benefit of anyone else, any secret or confidential
information used by the Company in its business, including, without limitation,
(i) pricing information, (ii) the terms of the Company's existing contracts with
suppliers, licensors and/or developers, (iii) any material information
pertaining to the Company's customers and their requirements, and (iv) any other
of the Company's trade secrets, all of which shall be collectively referred to
hereafter as the "Confidential Information."
            6.2 The services of the Executive are unique, extraordinary and
essential to the business of the Company, particularly in view of the
Executive's access to Confidential Information. Accordingly, the Executive
agrees that if his employment hereunder shall at any time be terminated
voluntarily by the Executive, or by the Company for cause (as defined in Section
7.3), the Executive will not at any time within twelve months of such
termination, without the prior written approval of the Board of Directors of the
Company, directly or indirectly engage in any business activity competitive with
the business of the Company. Furthermore, the Executive agrees that, during such
twelve month period, he shall not solicit, directly or indirectly or knowingly
affect to the Company's detriment any relationship of the Company with any
customer, supplier, licensor, developer or employee of the Company or knowingly
cause any customer, supplier, licensor or developer to refrain from entrusting
additional business to the Company. If the employment of the Executive hereunder
is terminated by the Company other than for cause, the restraints on the
Executive set forth in the preceding two sentences shall be inapplicable. If
this Agreement shall not be renewed by either the Company or by the Executive
prior to its scheduled expiration date as recited in Section 1, such restraints
will apply for the period from January 1, 2002 through March 31, 2002.
            6.3 In the event that any of the provisions of Section 6.1 and 6.2
hereof shall be adjudicated to exceed the time, geographic or other limitations
permitted by applicable law in any jurisdiction, then such provision shall be
deemed reformed in any such jurisdiction to the maximum time, geographic or
other limitations permitted by applicable law.
<PAGE>   5
            6.4 As used in this Section 6, the term "Company" shall mean and
include any and all subsidiaries of the Company which either now exist or which
may hereafter be organized.
            6.5 The Executive hereby acknowledges and agrees that, in the event
he shall violate any provisions of this Section 6, the Company will be without
an adequate remedy at law and accordingly, will be entitled to enforce such
restrictions by temporary or permanent injunctive or mandatory relief obtained
in any action or proceeding instituted in any court of competent jurisdiction
without the necessity of proving damages and without prejudice to any other
remedies which it may have at law or in equity.
            7.1 The Executive's employment hereunder shall automatically be
terminated upon the death of the Executive or the Executive's voluntarily
leaving the employ of the Company. In addition, the Executive's employment by
the Company may be terminated by the Company as follows:
                7.1.1 Upon thirty (30) days' prior written notice by the
Company, in the event of the Executive's disability as set forth in Section 7.2
below; or
                7.1.2 Upon thirty (30) days' prior written notice by the
Company, in the event that the Company terminates the Executive's employment
hereunder for cause as set forth in Section 7.3 below.
         7.2 The Executive shall be deemed disabled hereunder if in the opinion
of the Board of Directors of the Company, as confirmed by competent medical
advice, he shall become physically or mentally unable to perform his duties for
the Company hereunder and such incapacity shall have continued for any period of
six (6) consecutive months.
         7.3 For purposes hereof, "Cause" shall be limited to the following: (a)
the Executive's willful malfeasance or gross negligence; (b) any material
misrepresentation or concealment of a material fact made by the Executive in
connection with this Agreement; or (c) the material breach of any covenant made
by the Executive hereunder.
         Notwithstanding the foregoing, termination by the Company for Cause
shall not be effective until and unless (i) in the event of any acts or
circumstances alleged to be a basis for termination that is capable of cure by
the Executive, the Executive is given written notice by the Board of such
alleged acts or circumstances, and such alleged acts or circumstances shall not
have been cured by the Executive within 20 days of receipt of such notice to the
satisfaction of the Board in the exercise of its reasonable judgment (or, if
within such 20-day period the Executive commences and proceeds to take all
reasonable actions to effect such cure, within such reasonable additional time
period (no longer than 60 days) as may be necessary), (ii) notice of intention
to terminate for Cause has been given by the Company within four months after
the Board learns of
<PAGE>   6
the act, failure or event constituting "Cause" and (iii) the Board has voted (at
a meeting of the Board duly called and held as to which termination of the
Executive is an agenda item) by a majority vote to terminate the Executive for
Cause after the Executive has been given notice of the particular acts or
circumstances which are the basis for the alleged termination for Cause and has
been afforded at least 20 days notice of the meeting and an opportunity to
present his position in writing and the Board has given notice of termination to
the Executive within three days thereafter, and (iii) if the Executive has
commenced an expedited arbitration in the manner prescribed below within 15 days
after such notice of termination, disputing the Company's right under this
Agreement to terminate for Cause, the Arbitrator shall have determined that the
Executive is terminable for Cause. Unless a majority of the Board at the time of
the giving of such notice of termination is then comprised of persons other than
Jeffrey C. Lapin, Bruce Jagid, Lawrence Burstein, L. Gregory Ballard, James
Whims and L. Michael Haller, then upon the giving of such notice of termination,
the Executive (x) shall be deemed suspended with pay until he shall be deemed to
have been terminated for Cause hereunder or until the Arbitrator shall have
determined that the Executive is not terminable for Cause and (y) while
suspended, the Executive shall cease to act as an executive of the Company and
shall depart the premises of the Company. If the Executive or his representative
fails to file a demand for arbitration with the American Arbitration Association
and file the requisite fees pursuant to Rule 4 of the national Rules within 15
days of receipt of notice of termination from the Board, and diligently pursue
such proceeding in accordance with the procedures set forth in Section 15
hereof, such termination shall be conclusively presumed to have been for Cause.
         7.4 In the event that the Executive's employment shall be terminated
due to the Executive's death or disability, then the Company shall within 20
days of such termination pay to the Executive or his personal representative, as
the case may be, severance pay in a lump sum amount equal to his then annual
base salary, as set forth in Section 4 hereof, for a period of twelve months
from the date of such termination. If, however, subject to the provisions of
Sections 7.5 and 7.6 hereafter, this Agreement shall be terminated for any other
reason whatsoever, then the Company shall not obligated to make any severance
payments whatsoever to the Executive hereunder, except the compensation set
forth in Section 4 hereof which shall have accrued but be unpaid at the
effective time of termination.
         7.5 In the event that the Executive's employment shall be terminated
due to the Executive's death or disability, effective as of the date of such
termination all Options (as herein after defined) not previously fully vested
shall become immediately vested and exercisable (not withstanding any provision
of the Company's stock option plan(s) to the contrary). The Options shall be
exercisable for the full Option term as is provided in such plan(s) and/or the
agreement(s) pursuant to which the Options were granted, notwithstanding any
subsequent events.
         7.6 Notwithstanding any other provision herein, in order to protect the
Executive against the possible consequences and uncertainties of a Change of
Control (as hereinafter defined) of the Company and thereby induce the Executive
to remain in the employ
<PAGE>   7
of the Company, the Company undertakes the obligations and makes the agreements
set forth in Exhibit I to this Agreement (which provisions are hereby
incorporated herein).
         The Company expressly agrees that the Executive, as a condition of his
employment, need not relocate his residence from the community in which he
presently resides. Any demand or requirement by the Company that the Executive
principally perform his duties at a location or office that requires more than
an additional hour of one-way commutation time than the Executive currently
experiences shall, in the absence of the Executive's consent (which may be
withheld for any reason), constitute a termination without cause by the Company
of the Executive's employment thereunder.
         During the Employment Period, the Executive shall, if elected or
appointed, serve as a Director of the Company and/or any subsidiary of the
Company upon such terms as shall be mutually agreed upon by the Executive and
the Company.
         10. ASSIGNMENT.
         This Agreement, as it relates to the employment of the Executive, is a
personal contract and the rights and interests of the Executive hereunder may
not be sold, transferred, assigned, pledged or hypothecated, except as otherwise
set forth herein. This Agreement shall inure to the benefit of and be binding
upon the Company and its successors and assigns, including without limitation,
any corporation or other entity into which the Company is merged or which
acquires all of the outstanding share of the Company's capital stock or all or
substantially all of the assets of the Company.
         11. RIGHT TO PAYMENTS.
         The Executive shall not under any circumstances have any option or
right to require payments hereunder otherwise than in accordance with the terms
hereof. To the extent permitted by law, the Executive shall not have any power
of anticipation, alienation or assignment of payments contemplated hereunder,
and all rights and benefits of the Executive shall be for the sole personal
benefit of the Executive, and no other person shall acquire any right, title or
interest hereunder by reason of any sale, assignment, transfer, claim or
judgment or bankruptcy proceedings against the Executive.
         12. NOTICES.
         For purposes of this Agreement, all notices and other communications
required or permitted hereunder shall be in writing and shall be deemed to have
<PAGE>   8
been duly given when delivered or three days after deposit in the United States
mail, certified and return receipt requested, postage prepaid, addressed (i) if
to the Executive, to the residence address of the Executive maintained from time
to time by the Company; and if to the Company, to its chief executive office,
addressed to the attention Vice President - Finance; (ii) to such other address
as either party may have furnished to the other in writing in accordance
herewith, except that notices of change of address shall be effective only upon
         13. GOVERNING LAW.
         This Agreement shall be governed by and construed and enforced in
accordance with the internal laws of California without reference to conflicts
of laws, principles or rules.
         14. WAIVER.
         The waiver by either party of a breach of any provision of this
Agreement shall not operate or be construed as a Agreement shall be held to be
invalid or unenforceable, such invalidity or unenforceability shall attach only
to such provision and not in any way affect or render invalid or unenforceable
any other provisions of this Agreement, and this Agreement shall be carried out
as if such invalid or unenforceable provisions were not embodied therein.
         15. ARBITRATION.
         Except as provided below, in the event of any controversy, dispute or
claim arising out of or related to this Agreement or the Executive's employment
by the Company, the parties shall negotiate in good faith in an attempt to reach
a mutually acceptable settlement of such dispute. If negotiations in good faith
do not result in a settlement of any such controversy, dispute or claim, it
shall be finally settled by expedited arbitration in accordance with the
National Rules of the American Arbitration Association governing employment
disputes, subject to the following:
         15.1 The Arbitrator shall be determined from a list of names of five
impartial arbitrators each of whom shall be an attorney experienced in
arbitration matters concerning executive employment disputes, supplied by the
American Arbitration Association (the "Association") chosen by Executive and the
Company each in turn striking a name from the list until one name remains.
         15.2 The Arbitrator shall determine whether and to what extent any
party shall be entitled to damages under this Agreement.
         15.3 The Arbitrator shall not have the power to add to nor modify any
of the terms or conditions of the this Agreement. The Arbitrator's decision
shall not go beyond what is necessary for the interpretation and application of
the provision of this Agreement in respect of the issue before the Arbitrator.
The Arbitrator shall not substitute his or her judgment for that of the parties
in the exercise of rights granted or retained by this Agreement. The
Arbitrator's award
<PAGE>   9
or other permitted remedy, if any, and the decision shall be based upon the
issue as drafted and submitted by the respective parties and the relevant and
competent evidence adduced at the hearing.
         15.4 The Arbitrator shall have the authority to award any remedy or
relief provided for in this Agreement, in addition to any other remedy or relief
(including provisional remedies and relief) that a court of competent
jurisdiction could order or grant. In addition, the Arbitrator shall have the
authority to decide issues relating to the interpretation, meaning or
performance of this Agreement even if such decision would constitute an advisory
opinion in a court proceeding or if the issues would otherwise not be ripe for
resolution in a court proceeding, and any such decision shall bind the parties
in their continuing performance of this Agreement. The Arbitrator's written
decision shall be rendered within sixty days of the hearing. The decision
reached by the Arbitrator shall be final and binding upon the parties as to the
matter in dispute. To the extent that the relief or remedy granted by the
Arbitrator is relief or remedy on which a court could enter judgment, a judgment
upon the award rendered by the Arbitrator shall be entered in any court having
jurisdiction thereof (unless in the case of an award of damages, the full amount
of the award is paid within 10 days of its determination by the Arbitrator).
Otherwise, the award shall be binding on the parties in connection with their
continuing performance of this Agreement and in any subsequent arbitral or
judicial proceedings between the parties.
         15.5 The arbitration shall take place in Los Angeles, California.
         15.6 The arbitration proceeding and all filing, testimony, documents
and information relating to or presented during the arbitration proceeding shall
be disclosed exclusively for the purpose of facilitating the arbitration process
and for no other purpose and shall be deemed to be information subject to the
confidentiality provisions of this Agreement.
         15.7 The parties shall continue performing their respective obligations
under this Agreement notwithstanding the existence of a dispute while the
dispute is being resolved unless and until such obligations are terminated or
expire in accordance with the provisions hereof.
         15.8 The Arbitrator may order a pre-hearing exchange of information
including depositions, interrogatories, production of documents, exchange of
summaries of testimony or exchange of statements of position, and the Arbitrator
shall limit such disclosure to avoid unnecessary burden to the parties and shall
schedule promptly all discovery and other procedural steps and otherwise assume
case management initiative and control to effect an efficient and expeditious
resolution of the dispute. At any oral hearing of evidence in connection with an
arbitration proceeding, each party and its counsel shall have the right to
examine its witness and to cross-examine the witnesses of the other party. No
testimony of any witness shall be presented in written form unless the opposing
party or parties shall have the opportunity to cross-examine such witness,
except as the parties otherwise agree in writing.
<PAGE>   10
         15.9 Notwithstanding the dispute resolution procedures contained in
this Section 15, either party may apply to any court having jurisdiction (i) to
enforce this Agreement to arbitrate, (ii) to seek provisional injunctive relief
so as to maintain the status quo until the arbitration award is rendered or the
dispute is otherwise resolved, (iii) to challenge or vacate any final judgment,
award or decision of the Arbitrator that does not comport with the express
provisions of this Section 15, or (iv) to enforce or interpret the Company's
obligations, or to resolve any other dispute that arises, in whole or in part,
under the provisions set forth in Exhibit I hereto.
         16. ATTORNEYS' FEES.
         If any contest or dispute shall arise under the provisions of this
Agreement or involving the failure or refusal of the Company to perform fully in
accordance with the terms of this Agreement, the Company bear the expense of,
and shall pay and advance to the Executive, on a current basis, all legal fees
and expenses, if any, incurred by the Executive in connection with such contest
or dispute, together with interest in an amount equal to the prime or reference
rate of the Company's principal bank from time to time in effect, but in no
event higher than the maximum legal rate permissible under applicable law, such
interest to accrue from the date the Company receives the Executive's statement
for such fees and expenses through the date of payment thereof; provided,
however, that in the event the resolution of any such contest or dispute
includes a finding denying, in total, the Executive's claims in such contest or
dispute, (i) the Company shall be entitled to deduct and withhold from any funds
payable by the Company to the Executive the amount advanced to the Executive
pursuant to this Section 16, and (ii) to the extent not deducted by the Company
in such manner, the Executive shall be required to reimburse the Company, in
twelve equal monthly installments commencing 30 days after such resolution, such
         17. HEADINGS.
         The Article, Section, paragraph and subparagraph headings are for
convenience of reference only and shall not define or limit the provisions
         18. ENTIRE AGREEMENT.
         This Agreement constitutes the entire agreement between the parties
with respect to the subject matter hereof and there are no representations,
warranties or commitments except as set forth herein. This Agreement replaces
the Executive's existing employment agreement in its entirety and supersedes any
other prior and contemporaneous agreements, understandings, negotiations and
discussions, whether written or oral, of the parties hereto relating to the
transactions contemplated by this Agreement; provided, however, that it is the
intention of the parties that this Agreement shall be interpreted and applied in
conjunction with the term of any option, warrant or other right now in existence
or hereinafter granted to the Executive to acquire shares of capital stock of
the Company. In the event of any conflict, however, the terms of this
<PAGE>   11
Agreement shall govern and prevail. This Agreement may be amended only in a
writing executed by the parties hereto affected by such amendment.
         IN WITNESS WHEREOF, the undersigned have executed this Agreement as of
the date and year first above written.
                                        THQ INC., a Delaware Corporation
                                        By: /s/ Fred Gysi
                                            Fred Gysi, Vice President -
                                            Finance and Administration
                                            /s/ Brian J. Farrell

                                            BRIAN J. FARRELL