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): July 1, 2008

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.

(b) Pursuant to a mutual separation agreement, Hot Topic, Inc. and Michael Crooke, the former President of our Hot Topic division, agreed to end Mr. Crooke’s employment with us effective as of July 1, 2008.

(e) On July 7, 2008, we entered into a Stock Option Cancellation Agreement with Elizabeth McLaughlin, our Chief Executive Officer, pursuant to which the stock option to purchase 100,000 shares of common stock granted on June 2, 2008 to Ms. McLaughlin in connection with the appointment of Mr. Crooke as President of our Hot Topic division was cancelled. A copy of the 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.

Exhibit No.	Description
10.1	Stock Option Cancellation Agreement dated July 7, 2008.

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: July 8, 2008

INDEX TO EXHIBITS

Exhibit No.	Description
10.1	Stock Option Cancellation Agreement dated July 7, 2008.

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 July 7, 2008, by and between HOT TOPIC, INC., a California corporation (the “Company”), and Elizabeth McLaughlin (“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 2006 Equity Incentive Plan:

Date of Grant	Number of Shares	Exercise Price
June 2, 2008	100,000	$5.07

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:	/s/ James McGinty
Name:	James McGinty
Title:	CFO
OPTIONHOLDER:
	/s/ Elizabeth McLaughlin
	ELIZABETH MCLAUGHLIN