8-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Form 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of

The Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): December 10, 2007

Hot Topic, Inc.

(Exact name of registrant as specified in its charter)

California	0-28784	77-0198182
(State or other jurisdiction of incorporation)	(Commission File Number)	(I.R.S. Employer Identification No.)
18305 E. San Jose Avenue, City of Industry, California		91748
(Address of principal executive offices)		(Zip Code)

Registrant’s telephone number, including area code: (626) 839-4681

Not Applicable.

(Former name or former address, if changed since last report.)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

¨ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

¨ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

¨ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

¨ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Item 5.02. Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.

(e) On December 10, 2007, we entered into Stock Option Cancellation Agreements with certain of our executive officers, pursuant to which certain stock options previously granted to each such executive officer were cancelled in exchange for a nominal payment by us of $1.00 in the aggregate. The shares underlying the cancelled stock options will become available for future issuance under our 2006 Equity Incentive Plan, thereby temporarily postponing the need to seek shareholder approval of an increase in the share reserve of such plan.

The Stock Option Cancellation Agreements indicated that other than such nominal payment, the applicable executive officers had not received, and would not receive, any additional consideration in exchange for the cancellation of such options. Accordingly, while each such executive officer will be eligible to receive future equity grants in connection with our regular grant practices, no such executive officer will receive any future equity award in exchange for the cancellation of such options.

The executive officers that entered into Stock Option Cancellation Agreements, and the aggregate number of shares underlying the stock options cancelled pursuant to such agreements, are as follows:

Name	Title	Aggregate Number of Shares Underlying Stock Options
Elizabeth McLaughlin	Chief Executive Officer	300,000
Gerald Cook	President, Hot Topic	100,000
James McGinty	Chief Financial Officer	50,000

A copy of the form of Stock Option Cancellation Agreement is attached as Exhibit 10.1 hereto and is incorporated herein by reference.

Item 9.01 Financial Statements and Exhibits.

(d) Exhibits.

Number	Description
10.1	Form of Stock Option Cancellation Agreement

2.

SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

HOT TOPIC, INC.
By:	/s/ James McGinty
	James McGinty Chief Financial Officer

Date: December 12, 2007

3.

EXHIBIT INDEX

Number	Description
10.1	Form of Stock Option Cancellation Agreement

4.

EX-10.1

Exhibit 10.1

HOT TOPIC, INC.

STOCK OPTION CANCELLATION AGREEMENT

THIS STOCK OPTION CANCELLATION AGREEMENT (this “Agreement”) is made and entered into as of December 10, 2007, by and between HOT TOPIC, INC., a California corporation (the “Company”), and [                                ] (“Optionholder”).

RECITALS

WHEREAS, the Company previously granted to Optionholder the following stock option to purchase shares (the “Shares”) of the Company’s Common Stock (the “Option”) pursuant to the Company’s 1996 Equity Incentive Plan:

Date of Grant Number of Shares Exercise Price

WHEREAS, as of the date of this Agreement, the entire Option remains unexercised.

WHEREAS, the Company’s Board of Directors has determined that it is in the best interests of the Company and its stockholders to cancel the Option in exchange for paying $1.00 in the aggregate to Optionholder (the “Consideration”).

WHEREAS, other than the Consideration, the Optionholder has not received, and will not receive any additional consideration in exchange for the cancellation of the Option.

WHEREAS, Optionholder has decided to voluntarily consent to this Agreement and the cancellation of the Option subject to the terms described herein.

AGREEMENT

In consideration of the mutual promises and covenants herein, the parties hereto, each intending to be legally bound, agree as follows:

1. Cancellation of Option. The Option is hereby canceled in exchange for the Company’s payment to Optionholder of the sum of $1.00 in the aggregate, less applicable deductions and tax withholdings, the receipt of which payment is hereby acknowledged. Optionholder hereby irrevocably relinquishes any right or interest that Optionholder may have had, may have or may acquire in the future with respect to the Option and to the Shares.

2. Return of Outstanding Option Documents. Immediately upon execution of this Agreement, Optionholder shall deliver to the Company all copies of the stock option grant notice and stock option agreement previously delivered to Optionholder by the Company in connection with the grant of the Option.

3. Further Assurances. Optionholder agrees to execute and/or cause to be delivered to the Company such instruments and other documents, and shall take such other actions, as the Company may reasonably request for the purpose of carrying out or evidencing the cancellation of the Option.

4. Legal Advice. Optionholder acknowledges and represents that Optionholder has had the opportunity to consult with a legal advisor in connection with this Agreement and that Optionholder is not relying upon the Company for any legal advice.

5. Governing Law. This Agreement shall be governed in all respects by the laws of the State of California, without regard to that State’s conflicts of laws principles.

6. Counterparts. This Agreement may be executed in any number of counterparts, each of which shall be an original, but all of which together shall constitute one instrument.

2.

IN WITNESS WHEREOF, this Stock Option Cancellation Agreement has been executed by the parties hereto as of the date first above written.

HOT TOPIC, INC.

By:

Name:

Title:

OPTIONHOLDER:

[NAME]

3.