THQ announced today that its board of directors has agreed to implement a stockholder rights program for the company. The plan will assure that all current THQ shareholders receive fair compensation in the event of an unsolicited takeover attempt. THQ was quick to point out, however, that the measure was not taken to deter any existing efforts to control the company, but rather as a pre-emptive measure.

　　In the simplest terms, the company will issue dividends to current THQ shareholders in the form of a preferred-stock purchase right. This entitles the owner to buy one-hundredth of the newly issued preferred stock, which is equal in value and voting rights to one share of THQ common stock. In the event of a takeover attempt or if any one person acquires over 15 percent of the company's stock, the purchase-right holder can buy, at the exercise price, the number of current shares of THQ common stock at two times the price of the right. In this scenario, THQ reserves the right to buy back the purchase rights at a significantly reduced price.

　　The company's board of directors also amended several bylaws, which are now designed to ensure its preparedness in the event of a takeover attempt.