Exhibit 10.14
FORM OF
IMAGE ENTERTAINMENT, INC.
NONQUALIFIED STOCK OPTION AGREEMENT
This Nonqualified Stock Option Agreement (“Option Agreement”) is between Image
Entertainment, Inc., a Delaware corporation (the “Company”), and
                                         (“Optionee”), who agree as follows:
Section 1. Introduction. The Company has heretofore adopted the Image
Entertainment, Inc. 2008 Stock Awards and Incentive Plan (the “Plan”). The
Company, acting through the Committee (as defined in the Plan), has determined
that its interests will be advanced by the issuance to Optionee of a
Nonqualified Stock Option under the Plan. This Nonqualified Stock Option is
subject to all of the terms and conditions as set forth herein and in the Plan.
Section 2. Option. Subject to the terms and conditions contained herein, the
Company hereby grants to Optionee the right and option (“Option”) to purchase
from the Company                      shares of the Company’s common stock,
$0.0001 par value (“Stock”), at a price of $                     per share,
which is not less than the fair market value of the Stock at the date of grant
of this Option.
Section 3. Option Period. Beginning on                      (the “Date of
Grant”), the Option herein granted may be exercised by Optionee in whole or in
part at any time during a ten-year period (the “Option Period”), subject to
earlier termination in accordance with the terms of the Plan and the Option
Agreement, in accordance with the following vesting schedule:

          Number of Shares Purchasable Vesting Date   (cumulative to the extent
more than one Vesting Date is specified)
 
   

Notwithstanding anything in this Option Agreement to the contrary, the
Committee, in its sole discretion, may waive the foregoing schedule of vesting
and upon written notice to Optionee, accelerate the earliest date or dates on
which any portion of the Option granted hereunder is exercisable.

 

 

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Section 4. Procedure for Exercise. The Option herein granted may be exercised by
the delivery by Optionee of written notice to the Secretary of the Company
setting forth the number of shares of Stock with respect to which the Option is
being exercised. The notice shall be accompanied by (i) cash, cashier’s check,
bank draft, or postal or express money order payable to the order of the
Company, or wire transfer, (ii) if permitted by the Committee, shares of Stock
theretofore owned by Optionee duly endorsed for transfer to the Company,
(iii) if permitted by the Committee, the Company’s withholding of shares of
Stock that would otherwise be issued on exercise of the Option, (iv) if the
Stock is registered under the Securities Exchange Act of 1934, as amended, and
to the extent permitted by law, instructions to a broker to deliver to the
Company the total payment required, all in accordance with the regulations of
the Federal Reserve Board, (v) such other consideration as the Committee may
permit, or (vi) any combination of the preceding, equal in value to the
aggregate exercise price. Notice may be delivered by facsimile. The notice shall
specify the address to which the certificates for such shares are to be mailed.
The Option shall be deemed to have been exercised immediately prior to the close
of business on the date (i) written notice of such exercise and (ii) payment in
full of the exercise price for the number of shares for which the Option is
being exercised are both received by the Company and Optionee shall be treated
for all purposes as the record holder of such shares of Stock as of such date.
As promptly as practicable after receipt of such written notice and payment, the
Company shall deliver to Optionee certificates for the number of shares with
respect to which such Option has been so exercised, issued in Optionee’s name or
such other name as Optionee directs; provided, however, that such delivery shall
be deemed effected for all purposes when a stock transfer agent of the Company
shall have deposited such certificates in the United States mail, addressed to
Optionee at the address specified pursuant to this Section 4.
Section 5. Termination of Employment or Service. If, for any reason other than
retirement, death or disability, Optionee ceases to be employed by the Company
or its Affiliates or ceases to serve as a director or consultant, the Option may
be exercised (to the extent Optionee would have been entitled to do so at the
date of termination of employment or cessation of serving as a director or
consultant) during a three-month period after such date (after which period the
Option shall expire), but in no event may the Option be exercised after the
expiration of the Option Period; provided, however, that if Optionee’s
employment or service as a director or consultant is terminated because of the
Optionee’s (a) theft or embezzlement from the Company or its Affiliates,
(b) disclosure of trade secrets of the Company or its Affiliates, (c) failure to
perform his/her job duties and services resulting in a material adverse effect
on the Company or its Affiliates or (d) the commission of a willful, felonious
act while in the employment or service of the Company or its Affiliates (such
reasons shall hereinafter be collectively referred to as “for cause”), then the
Option or unexercised portion thereof shall expire upon such termination of
employment or cessation of serving as a director or consultant.
In the event that Optionee dies or Optionee’s employment or service ceases
because Optionee is determined to be disabled, the Option may be exercised (to
the extent Optionee would have been entitled to do so at the date of death or
termination of employment or service) at any time and from time to time, within
a one year period after such death or termination of employment or service, by
Optionee or his guardian or legal representative or, in the case of death, the
executor or administrator of Optionee’s estate or by the person or persons to
whom Optionee’s rights under this Option Agreement shall pass by will or the
laws of descent and distribution (after which period the Option shall expire),
but in no event may the Option be exercised after the expiration of the Option
Period. Optionee shall be deemed to be disabled if, in the opinion of a
physician selected by the Committee, Optionee is unable to engage in any
substantial gainful activity by reason of any medically determinable physical or
mental impairment which can be expected to result in death or which has lasted
or can be expected to last for a continuous period of not less than 12 months.

 

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Subject to the discretion of the Committee, if Optionee ceases to be an employee
of the Company (including as an officer of the Company) as a result of
Retirement, Optionee need not exercise the Option within three (3) months of
termination of employment but will be entitled to exercise the Option within the
maximum term of the Option to the extent the Option was otherwise exercisable at
the date of Retirement. The term “Retirement” as used herein means such
termination of employment in accordance with the retirement policies of the
Company and its Affiliates then in effect.
It is Optionee’s responsibility to be aware of the date on which the Option
terminates.
Section 6. Leave of Absence. The Committee shall have the discretion to
determine whether and to what extent the vesting of the Option shall be tolled
during any unpaid leave of absence; provided, however, that in the absence of
such determination, vesting of the Option shall be tolled during any such unpaid
leave (unless otherwise required by any applicable law, rule or regulation). In
the event of military leave, vesting shall toll during any unpaid portion of
such leave, provided that, upon Optionee’s returning from military leave (under
conditions that would entitle him or her to protection upon such return under
the Uniform Services Employment and Reemployment Rights Act), he or she shall be
given vesting credit with respect to the Option to the same extent as would have
applied had the Optionee continued to provide services to the Company throughout
the leave on the same terms as he or she was providing services immediately
prior to such leave.
Section 7. Transferability. The Option shall not be transferable by Optionee
otherwise than by Optionee’s will or by the laws of descent and distribution.
During the lifetime of Optionee, the Option shall be exercisable only by
Optionee or his authorized legal representative. Any heir or legatee of Optionee
shall take rights herein granted subject to the terms and conditions hereof. No
such transfer of this Option Agreement to heirs or legatees of Optionee shall be
effective to bind the Company unless the Company shall have been furnished with
written notice thereof and a copy of such evidence as the Committee may deem
necessary to establish the validity of the transfer and the acceptance by the
transferee or transferees of the terms and conditions hereof.
Section 8. No Rights as Shareholder. Optionee shall have no rights as a
shareholder with respect to any shares of Stock covered by this Option Agreement
until the Option is exercised by written notice and accompanied by payment as
provided in Section 4 of this Option Agreement.

 

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Section 9. Extraordinary Corporate Transactions. The existence of outstanding
Options shall not affect in any way the right or power of the Company or its
shareholders to make or authorize any or all adjustments, recapitalizations,
reorganizations, exchanges or other changes in the Company’s capital structure
or its business, or any merger or consolidation of the Company, or any issuance
of Stock or other securities or subscription rights thereto, or any issuance of
bonds, debentures, preferred or prior preference stock ahead of or affecting the
Stock or the rights thereof, or the dissolution or liquidation of the Company,
or any sale or transfer of all or any part of its assets or business, or any
other corporate act or proceedings, whether of a similar character or otherwise.
If the Company undergoes a “Change of Control” (as defined in the Plan) or other
corporate reorganization described in Section XIII of the Plan, the Option
granted hereunder shall be governed by Section XIII of the Plan.
Section 10. Changes in Capital Structure. If the outstanding shares of Stock or
other securities of the Company, or both, for which the Option is then
exercisable shall at any time be changed or exchanged by declaration of a stock
dividend, stock split or combination of shares, the number and kind of shares of
Stock or other securities subject to the Plan or subject to the Option, and the
exercise price, shall be appropriately and equitably adjusted so as to maintain
the proportionate number of shares or other securities without changing the
aggregate exercise price.
Section 11. Compliance with Securities Laws. Upon the acquisition of any shares
pursuant to the exercise of the Option herein granted, Optionee (or any person
acting under Section 7) will enter into such written representations, warranties
and agreements as the Company may reasonably request in order to comply with
applicable securities laws or with this Option Agreement.
Section 12. Compliance with Laws. Notwithstanding any of the other provisions
hereof, Optionee agrees that he or she will not exercise the Option granted
hereby, and that the Company will not be obligated to issue any shares pursuant
to this Option Agreement, if the exercise of the Option or the issuance of such
shares of Stock would constitute a violation by Optionee or by the Company of
any provision of any law or regulation of any governmental authority.
Section 13. Tax Provisions.
(a) Withholding of Tax. To the extent that the exercise of the Option or the
disposition of shares of Stock acquired by exercise of the Option results in
compensation income to Optionee for federal or state income tax purposes,
Optionee shall pay to the Company at the time of such exercise or disposition
such amount of money as the Company may require to meet its obligation under
applicable tax laws or regulations and, if Optionee fails to do so, the Company
is authorized to withhold from any cash remuneration then or thereafter payable
to Optionee, any tax required to be withheld by reason of such resulting
compensation income or Company may otherwise refuse to issue or transfer any
shares otherwise required to be issued or transferred pursuant to the terms
hereof.
(b) Tax Consequences. Optionee has reviewed, or has had the opportunity to
review but chose not to do so, with Optionee’s own tax or legal advisors the
federal, state, local and foreign tax consequences that may arise upon the
grant, vesting or exercise of the Option and the disposition of any shares of
Stock subject to the Option. Optionee understands that Optionee (and not the
Company) shall be responsible for any tax liability that may arise with respect
to the Option and the disposition of any shares subject thereto.

 

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Section 14. No Right to Employment or Service. Optionee shall be considered to
be in the employment of the Company or its Affiliates or in service as a
director or consultant so long as he or she remains an employee, director or
consultant of the Company or its Affiliates. Any questions as to whether and
when there has been a termination of such employment or service as a director or
consultant and the cause of such termination shall be determined by the
Committee, and its determination shall be final. Nothing contained herein shall
be construed as conferring upon Optionee the right to continue in the employ of
the Company or its Affiliates or to continue service as a director or
consultant, nor shall anything contained herein be construed or interpreted to
limit the “employment at will” relationship between Optionee and the Company or
its Affiliates.
Section 15. Resolution of Disputes. As a condition of the granting of the Option
hereby, Optionee and Optionee’s heirs, personal representatives and successors
agree that any dispute or disagreement which may arise hereunder shall be
determined by the Committee in its sole discretion and judgment, and that any
such determination and any interpretation by the Committee of the terms of this
Option Agreement shall be final and shall be binding and conclusive, for all
purposes, upon the Company, Optionee, and Optionee’s heirs, personal
representatives and successors.
Section 16. Legends on Certificate. The certificates representing the shares of
Stock purchased by exercise of the Option will be stamped or otherwise imprinted
with legends in such form as the Company or its counsel may require with respect
to any applicable restrictions on sale or transfer and the stock transfer
records of the Company will reflect stop-transfer instructions with respect to
such shares.
Section 17. Notices. Except as expressly provided otherwise in this Option
Agreement, every notice hereunder shall be in writing and shall be given by
registered or certified mail. All notices of the exercise of any Option
hereunder shall be directed to Image Entertainment, Inc., 20525 Nordhoff Street,
Suite 200, Chatsworth, California 91311, Attention: Corporate Secretary. Any
notice given by the Company to Optionee directed to Optionee at the address on
file with the Company shall be effective to bind Optionee and any other person
who shall acquire rights hereunder. The Company shall be under no obligation
whatsoever to advise Optionee of the existence, maturity or termination of any
of Optionee’s rights hereunder and Optionee shall be deemed to have familiarized
himself or herself with all matters contained herein and in the Plan which may
affect any of Optionee’s rights or privileges hereunder.
Section 18. Construction and Interpretation. Whenever the term “Optionee” is
used herein under circumstances applicable to any other person or persons to
whom this award, in accordance with the provisions of Section 7 hereof, may be
transferred, the word “Optionee” shall be deemed to include such person or
persons.

 

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Section 19. Agreement Subject to Plan. This Option Agreement is subject to the
Plan. The terms and provisions of the Plan (including any subsequent amendments
thereto) are hereby incorporated herein by reference thereto. In the event of a
conflict between any term or provision contained herein and a term or provision
of the Plan, the applicable terms and provisions of the Plan will govern and
prevail. All definitions of words and terms contained in the Plan shall be
applicable to this Option Agreement.
Section 20. Binding Effect. This Option Agreement shall be binding upon and
inure to the benefit of any successors to the Company and all persons lawfully
claiming under Optionee as provided herein.
Section 21. Entire Agreement; Amendment. This Option Agreement and any other
agreements and instruments contemplated by this Option Agreement contain the
entire agreement of the parties, and this Option Agreement may be amended only
in writing signed by both parties.
IN WITNESS WHEREOF, this Nonqualified Stock Option Agreement has been executed
as of the                       day of                      , 20        .

                      Image Entertainment, Inc.    
 
               
 
  By:                         
 
    Title:           
 
     
 
   
 
                    OPTIONEE    
 
                         
 
               
 
  Address:                         
 
                             
 
                             

 

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NOTICE OF EXERCISE
To: Image Entertainment, Inc.
Date: ____________________
The undersigned, pursuant to the provisions set forth in the attached
Nonqualified Stock Option Agreement, hereby irrevocably elects to purchase:
                     Shares covered by such Option.
The undersigned herewith makes payment of the full Exercise Price for such
Shares at the price per Share provided for in such Nonqualified Stock Option
Agreement, which is an aggregate of $                    , and makes payment of
$                     for required tax withholding.
In exercising the Option, the undersigned hereby confirms and acknowledges that
the Shares are being acquired solely for the account of the undersigned and not
a nominee for any other party, and for investment, and that the undersigned will
not offer, sell or otherwise dispose of any such Shares except under
circumstances that will not result in a violation of the Securities Act of 1993,
as amended, or any applicable state securities laws.
Please issue a certificate representing said Shares in the name of the
undersigned.

         
 
  OPTIONEE:    
 
       
 
 
 
Signature    
 
       
 
 
 
Print Name    
 
       
 
 
 
Address    
 
       
 
 
 
Social Security No.