##### Table of Contents



UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
 Washington, D.C. 20549
 
 FORM 10-K/A
 (Amendment No. 1)
 þ
    
    ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 for
the Fiscal Year Ended March 31, 2008
 OR
 o
    
    TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 for
the Transition Period from  To
 Commission File Number 000-11071
 
 
 IMAGE ENTERTAINMENT, INC.
  
 Delaware
    
    84-0685613(State or other jurisdiction of incorporation)
    
    (I.R.S. Employer Identification Number)
 20525 Nordhoff Street, Suite 200, Chatsworth, California 91311
 (818) 407-9100
  Title of Each Class
    
    Name of Each Exchange on Which RegisteredCommon Stock, par value $0.0001
    
    The NASDAQ Stock Market LLC
 None
 o þ
 o þ
 þ o
 þ
  Large accelerated filer o
    
    Accelerated filer o
    
    Non-accelerated filer þ
    
    Smaller reporting company o
 o þ
 ®
  DOCUMENTS INCORPORATED BY REFERENCE




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##### 



IMAGE ENTERTAINMENT, INC.
Annual Report on Form 10-K/A (Amendment No. 1)
For The Fiscal Year Ended March 31, 2008
 TABLE OF CONTENTS
 PART III
    
    
    3ITEM 10. Directors, Executive Officers and Corporate Governance
    
    
    3ITEM 11. Executive Compensation
    
    
    8ITEM 12. Security Ownership of Certain Beneficial Owners and Management and
Related Stockholder Matters
    
    
    17ITEM 13. Certain Relationships and Related Transactions, and Director Independence
    
    
    20ITEM 14. Principal Accountant Fees and Services
    
    
    21PART IV
    
    
    22ITEM 15. Exhibits and Financial Statement Schedules
    
    
    22SIGNATURES
    
    
    23Exhibit 31.1Exhibit 31.2Exhibit 32.1Exhibit 32.2
  Explanatory Note
   2




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##### Table of Contents



PART III
 
 ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE
 Directors
  Director
    
    
    
    
    
    Principal Occupation and Business Experience During Past Five Years and OtherName
    
    Class
    
    Age
    
    DirectorshipsMartin W. Greenwald
    
    III
    
    
    66
    
    
    Mr. Greenwald has served as our
Chairman of the Board since
1981. From March 2008 to 1981,
Mr. Greenwald also served as
President and Chief Executive
Officer. During his tenure, we
have transitioned from a
leading independent laserdisc
distributor, to a leading
independent DVD distributor,
and a cutting edge supplier of
digital home entertainment.
Mr. Greenwald was previously
involved with the Digital Video
Disc Group (now known as the
Digital Entertainment Group),
and previously chaired the
Laserdisc Association/Optical
Video Disc Association. He has
been a guest lecturer at the
USC Marshall School of Business
and UCLA Anderson School of
Management, and has been a
guest speaker or panelist at
numerous home video
entertainment events. From
1990 to 1998, Mr. Greenwald
served on the board of
directors of The Entertainment
Industry Foundation. He has
been honored with the Visionary
Award from the Entertainment
AIDS Alliance, has served as
director of the Permanent
Charities Committee of the
Entertainment Industries, and
is an active supporter of
Cedars Sinai Hospitals United
Hostesses Charities and Didi
Hirsch Community Mental Health
Centers. Mr. Greenwald is a
graduate of Fairleigh Dickinson
University.David Coriat
    
    II
    
    
    58
    
    
    Mr. Coriat has served as a
member of our Board since 2005.
Since 1986, Mr. Coriat has
served as Executive Vice
President, Chief Financial
Officer and director of Slaight
Communications Holdings Inc.
(formerly Standard Broadcasting
Corporation Limited), the
largest privately-owned
multi-media company in Canada,
prior to the sale of its
broadcasting assets in October
2007, and one of our largest
stockholders. Prior to joining
Standard Broadcasting, Mr.
Coriat enjoyed a successful
career with an international
accounting firm providing
accounting advice to financial
institutions, performing
special investigations and
feasibility studies.Ira Epstein
    
    II
    
    
    76
    
    
    Mr. Epstein has served as a
member of our Board since 1990.
Mr. Epstein is an
entertainment attorney
representing high-profile
clients in the television and
motion picture industries, as
well as related businesses
throughout the entertainment
industry. Mr. Epstein has been
Of Counsel to the international
law firm of Greenberg Traurig,
LLP since June 2002. From 1993
to June 2002, he was Of Counsel
to the Beverly Hills
entertainment law firm
Weissmann, Wolff, Bergman,
Coleman, Silverman & Holmes,
LLP. From 1975 to 1993, Mr.
Epstein was the managing
partner of the entertainment
law firm Cooper, Epstein &
Hurewitz. He has held officer
and director positions in
numerous corporations, formerly
served as a Member of the Board
of Trustees of the San Diego
Arts Performance League,
currently serves as a member of
the Board of Directors of the
North Coast Repertory Company,
where he served as Vice
President prior to serving as
President for the past four
years, and serves as a member
of the San Dieguito Planning
Group, the North San Diego
zoning and land use advisory
group to the San Diego Board of
Supervisors. Mr. Epstein
obtained his J.D. from
University of Nebraska College
of Law, and was a Captain in
the Judge Advocate General Air
Force.Gary Haber
    
    III
    
    
    62
    
    
    Mr. Haber has served as a
member of our Board since 2005.
Mr. Haber is a respected
30-year entertainment industry
Certified Public Accountant.
Since its founding in 1977, Mr.
Haber has served as principal
of Haber Corporation Certified
Public Accountants, providing
financial and business
management services to top
internationally-recognized
artists in the music and
entertainment industry. Haber
Corporation also offers a
variety of other services,
including royalty participation
accounting, royalty compliance
audits, publishing
administration, concert tour
accounting, and valuations of
copyrights and masters. Mr.
Haber has spoken in the past at
the Southern Regional
Entertainment and Sports Law
Seminar, and guest lectured at
UCLA. He serves as President
of the Nashville Screenwriters
Conference, Treasurer and a
member of the Board of
Directors of the Association of
Independent Music Publishers
(AIMP), and serves on the
Boards of Directors of the
Alliance of Artists Recording
Companies (AARC), and the
Academy of Country Music. Mr.
Haber has a B.S. in Accounting
from Long Island University.
  3




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Director
    
    
    
    
    
    Principal Occupation and Business Experience During Past Five Years and OtherName
    
    Class
    
    Age
    
    DirectorshipsM. Trevenen Huxley
    
    I
    
    
    56
    
    
    Mr. Huxley is a leading digital
media consultant who has served
as a member of our Board since
1998 and previously as a
consultant for our digital
rights subsidiary, Egami Media,
Inc. (Egami), from April 2005
through November 2006. In
1990, Mr. Huxley co-founded
Muze Inc., which became the
leading entertainment product
database in the United States,
served as its President and
Chief Executive Officer from
1992 to March 1998, and its
Executive Vice President for
Business Development until
November 2002. He led the
technology team that developed
and deployed over 5,000
entertainment information
kiosks in retail music, book
and video stores throughout the
U.S. and spearheaded efforts
that led to the use of Muze
data by most of the major
Internet entertainment
retailers and portal sites,
including Amazon and Yahoo!
From 1998 to 2000, Mr. Huxley
served as Co-Chair of an EC
project funded under the
European Commission Info 2000
Program, which developed an
analysis of the requirements
for metadata for e-commerce in
intellectual property in the
network environment. He serves
on the Board of Directors of
The Center for Social and
Emotional Education, a
non-profit organization based
in New York City.Robert J. McCloskey
    
    I
    
    
    60
    
    
    Mr. McCloskey has served as a
member of our Board since 2002.
Mr. McCloskey is retired after
acting as President and Chief
Executive Officer of Shopcast
Television (TV) since 2006.
From 1987 to 2004, Mr.
McCloskey served as Chairman of
the Home Entertainment Group of
Standard Broadcasting, as well
as President and Chief
Executive Officer of Video One
Canada Limited. Prior to
joining Standard Broadcasting,
he spent 17 years in the
consumer products industry in
numerous senior domestic and
international assignments with
General Foods, Pepsico,
Rothmans International and
Nabisco. Mr. McCloskey has a
B.S. from Cornell University
and an M.B.A. from York
University.
 Executive Officers
  Name
    
    Age
    
    PositionCurrent Executive OfficersDavid Borshell
    
    
    43
    
    
    PresidentJeff M. Framer
    
    
    47
    
    
    Chief Financial OfficerWilliam Bill V. Bromiley
    
    
    46
    
    
    Chief Acquisitions OfficerDerek Rick Eiberg
    
    
    41
    
    
    Executive Vice President, Operations and Chief Technology OfficerFormer Executive OfficersMartin W. Greenwald
    
    
    66
    
    
    Former President and Chief Executive Officer(1) (current Chairman of the Board)Jeffrey Fink
    
    
    51
    
    
    Former Chief Marketing Officer
 (1)
    
    See Directors above for Mr. Greenwalds biography.
      4




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Section 16(a) Beneficial Ownership Reporting Compliance
  Code of Ethics and Governance Guidelines
 www.image-entertainment.com
 Director Independence
  Committees of the Board and Attendance at Meetings
     5




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##### Table of Contents



Audit Committee.
 (1)
    
    monitor the integrity of our financial reporting process and systems of
internal controls regarding finance, accounting and legal compliance,
 (2)
    
    select our independent auditors, monitor the independence and performance of
our independent auditors and internal auditing department, and
 (3)
    
    provide an avenue of communication among the independent auditors, management,
the internal auditing department, and the Board.
 Compensation Committee.
 Nominating and Governance Committee.
   Annual Meeting Attendance.
 Executive Sessions of Non-Management Directors.
  6




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Communications with Directors
  AUDIT COMMITTEE REPORT (1)
  Communication with Audit
Committees
 Independence Discussions with Audit Committees
   AUDIT
    
    COMMITTEEGary Haber, ChairmanDavid CoriatIra S. Epstein
 
 (1)
    
    The foregoing report of the Audit Committee does not constitute soliciting
material and shall not be deemed filed or incorporated by reference into any other of our filings
under the Securities Act of 1933 or the Exchange Act, except to the extent we specifically
incorporate such report by reference therein.  7




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##### Table of Contents



NOMINATIONS AND GOVERNANCE COMMITTEE REPORT
   NOMINATIONS AND GOVERNANCE COMMITTEEDavid Coriat, ChairmanRobert J. McCloskey
 
 ITEM 11. EXECUTIVE COMPENSATION
 Compensation Discussion and Analysis
 Overview of Compensation Program.
 Compensation Program Objectives.
  
    
    base salary,
 
    
    long-term incentive compensation in the form of stock-based awards, including
options and restricted stock unit awards, and
 
    
    short-term incentive compensation in the form of annual cash bonuses based on our
financial performance.
  8




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##### Table of Contents



Base Salary.
 Bonuses.
  Option Grants.
  Restricted Stock Unit Grants.
 Retirement, Perquisites and Other Benefits.
  9




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##### Table of Contents



Compensation of Chief Executive Officer.
 Section 162(m) Policy.
 Compensation of Non-Employee Directors.
 COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION (1)
   COMPENSATION COMMITTEERobert J. McCloskey, ChairmanIra S. Epstein
 
 (1)
    
    The Compensation Committee Report on Executive Compensation shall not be deemed to
be incorporated by reference by any general statement incorporating by reference this Form 10-K/A
into any of our filings pursuant to the Securities Act of 1933 or the Securities Exchange Act of
1934, except to the extent we specifically incorporate this section by reference therein, and shall
not be deemed soliciting material or otherwise deemed filed under either of the Acts.  10




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Summary Compensation Table for Fiscal Years 2007 and 2008
  Change inPension Valueand Non-Non-
    
    
    QualifiedEquity
    
    
    DeferredStock
    
    
    Option
    
    
    Incentive
    
    
    Compensation
    
    
    All Other
    
    
    TotalName &
    
    Fiscal
    
    
    Salary
    
    
    Bonus
    
    
    Awards
    
    
    Awards
    
    
    Plan
    
    
    Earnings
    
    
    Compensation
    
    
    CompensationPrincipal Position
    
    Year
    
    
    ($)(1)
    
    
    ($)
    
    
    ($)
    
    
    ($)
    
    
    Bonus ($)
    
    
    ($)
    
    
    ($)(2)
    
    
    ($)Current Executive
OfficersDavid Borshell,
    
    
    2008
    
    
    $
    317,984
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    $
    36,234
    
    
    $
    354,218President
    
    
    2007
    
    
    
    302,842
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    31,679
    
    
    
    334,521Jeff M. Framer,
    
    
    2008
    
    
    
    299,984
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    34,414
    
    
    
    334,398Chief Financial Officer
    
    
    2007
    
    
    
    285,699
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    31,168
    
    
    
    316,867Former Executive
OfficersMartin W. Greenwald,
    
    
    2008
    
    
    
    713,199
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    76,151
    
    
    
    789,350President
& Chief Executive Officer
    
    
    2007
    
    
    
    679,237
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    81,380
    
    
    
    760,617Jeffrey Fink,
    
    
    2008
    
    
    
    72,981
    
    
    
    
    
    
    
    
    (3)
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    348,983
    
    
    
    421,964Chief Marketing Officer
    
    
    2007
    
    
    
    47,596
    
    
    
    
    
    
    
    
    (3)
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1,923
    
    
    
    49,519
 
 (1)
    
    The salary figure for Mr. Greenwald includes a component characterized as an unaccountable
personal expense allowance in his employment agreement.(2)
    
    Fiscal year 2008 includes: a.
    
    Medical and dental insurance premiums and other payments in excess of
those provided to other employees of $32,102 for Mr. Greenwald, $19,053 for each of
Mr. Borshell and Mr. Framer, and $3,812 for Mr. Fink.b.
    
    Term life insurance premium payments of $36,662 for Mr. Greenwald.c.
    
    Auto allowances paid and other personal auto expenses of $7,389 for Mr.
Greenwald, $12,600 for each of Mr. Borshell and Mr. Framer and $2,692 for Mr. Fink.d.
    
    Our contributions to a 401(k) plan of $4,582 for Mr. Borshell, $2,762
for Mr. Framer and $956 for Mr. Fink.e.
    
    Accrued vacation of $6,523 for Mr. Fink paid to him upon his June 2007
employment termination.f.
    
    Settlement payment of $335,000 pursuant to the Settlement Agreement and
Release of Claims between the Company and Mr. Fink entered into on March 18, 2008.
The agreement provided for a lump sum payment of wages to Mr. Fink of $275,000 and
payment of attorneys fees and costs payable on behalf of Mr. Fink in the amount of
$60,000, bringing the overall settlement value to $335,000.
  a.
    
    Medical and dental insurance premiums and other payments in excess of
those provided to other employees of $32,135 for Mr. Greenwald, $14,101 for Mr.
Borshell and $14,334 for Mr. Framer.b.
    
    Term life insurance premium payments of $24,752 for Mr. Greenwald.c.
    
    Auto allowances paid and other personal auto expenses of $7,389 for Mr.
Greenwald, $12,600 for each of Mr. Borshell and Mr. Framer and $1,923 for Mr. Fink.d.
    
    Our contributions to a 401(k) plan of $4,478 for Mr. Borshell and
$3,734 for Mr. Framer.
  11




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##### Table of Contents



(3)
    
    Mr. Fink received 10,000 Restricted Stock Units (RSUs) vesting over three years when he
joined Image, which RSUs were terminated when his employment with us ceased in June 2007. The
fair market value of Images stock on the date of grant was $3.49. The total value of the
RSUs would have been booked quarterly over the three year vesting period. The fiscal year
2007 stock awards value was the portion of value of the RSUs booked to compensation expense.
The amount was reversed in fiscal year 2008 when his employment with us ceased and the RSUs
were terminated. None of the RSUs vested. Employment Agreements
  Fiscal 2008 Agreements:
 Term.
 Base Salary.
 Cash Bonus.
 Stock-Based Awards.
 Severance.
 Termination.
 Fringe Benefits.
  12




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Change of Control Provisions.
 Potential Payments Upon Termination or Change of Control.
  Mr. Borshell
 
    
    upon death or permanent disability, would receive approximately $220,644, which includes
(i) base salary for six months of $159,138, (ii) pro-rated bonus for six months of zero,
(iii) insurance for six months of $12,541, and (iv) accrued vacation of $48,965;
    
    for termination by us without cause, or for termination by Mr. Borshell for good
reason, would receive approximately $574,356, which includes (i) base salary of $318,275,
(ii) pro-rated bonus of zero, (iii) fringe benefits of $84,402 (includes insurance, car
allowance and accrued vacation) through the remainder of the term, and (iv) severance ((A)
base salary for six months of $159,138, (B) pro-rated bonus for six months of zero and (C)
insurance for six months of $12,541); and
    
    for termination by us without cause following a change of control, would receive
approximately $594,356, which includes (i) base salary of $318,275, (ii) pro-rated bonus of
zero, (iii) fringe benefits of $84,402 (includes insurance, car allowance and accrued
vacation), for the longer of one year following termination or the expiration of the term
(with the foregoing calculation assuming expiration of the term, which is one year), (v)
severance ((A) base salary for six months of $159,138, (B) pro-rated bonus for six months
of zero and (C) insurance for six months of $12,541), and (vi) actual legal fees estimated
at $20,000.
 Mr. Framer
 
    
    upon death or permanent disability, would receive approximately $208,864, which includes
(i) base salary for six months of $150,130, (ii) pro-rated bonus for six months of zero,
(iii) insurance for six months of $12,541, and (iv) accrued vacation of $46,194;
    
    for termination by us without cause, or for termination by Mr. Framer for good reason,
would receive approximately $544,563, which includes (i) base salary of $300,259, (ii)
pro-rated bonus of zero, (iii) fringe benefits of $81,633 (includes insurance, car
allowance and accrued vacation) through the remainder of the term, and (iv) severance ((A)
base salary for six months of $150,130, (B) pro-rated bonus for six months of zero and (C)
insurance for six months of $12,541); and
    
    for termination by us without cause following a change of control, would receive
approximately $564,563, which includes (i) base salary of $300,259, (ii) pro-rated bonus of
zero, (iii) fringe benefits of $81,633 (includes insurance, car allowance and accrued
vacation), for the longer of one year following termination or the expiration of the term
(with the foregoing calculation assuming expiration of the term, which is one year), (iv)
severance ((A) base salary for six months of $150,130, (B) pro-rated bonus for six months
of zero, and (C) insurance for six months of $12,541), and (v) actual legal fees estimated
at $20,000.
   13




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Fiscal 2009 Agreements:
 Term.
 Base Salary.
   Grants of Plan-Based Awards for Fiscal Year 2008
   14




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##### Table of Contents



Outstanding Equity Awards at Fiscal Year End 2008
  EquityIncentiveEquity
    
    
    PlanIncentive
    
    
    Awards:Plan
    
    
    MarketAwards:
    
    
    or PayoutEquity
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    No. of
    
    
    Value ofIncentive
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Market
    
    
    Unearned
    
    
    UnearnedPlan
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Value of
    
    
    Shares,
    
    
    Shares,Awards:
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Shares or
    
    
    Units or
    
    
    Units orNo. of
    
    
    No. of
    
    
    No. of
    
    
    
    
    
    
    
    
    
    
    No. of
    
    
    Units of
    
    
    Other
    
    
    OtherSecurities
    
    
    Securities
    
    
    Securities
    
    
    
    
    
    
    
    
    
    
    Shares or
    
    
    Stock
    
    
    Rights
    
    
    RightsUnderlying
    
    
    Underlying
    
    
    Underlying
    
    
    
    
    
    
    
    
    
    
    Units of
    
    
    That
    
    
    That
    
    
    ThatUnexercised
    
    
    Unexercised
    
    
    Unexercised
    
    
    Option
    
    
    Option
    
    
    Stock That
    
    
    Have Not
    
    
    Have Not
    
    
    Have NotOptions (#
    
    
    Options (#
    
    
    Unearned
    
    
    Exercise
    
    
    Expiration
    
    
    Have Not
    
    
    Vested
    
    
    Vested
    
    
    VestedName
    
    Exercisable)
    
    
    Unexercisable)
    
    
    Options (#)
    
    
    Price ($)
    
    
    Date
    
    
    Vested (#)
    
    
    ($)
    
    
    (#)
    
    
    ($)Current Executive
OfficersDavid Borshell
    
    
    108,000
    
    
    
    
    
    
    
    
    
    
    $
    3.80
    
    
    
    9/21/2014
    (4)
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    60,000
    
    
    
    
    
    
    
    
    
    
    
    5.00
    
    
    
    9/21/2014
    (4)52,250
    
    
    
    
    
    
    
    
    
    
    
    1.75
    
    
    
    10/1/2011
    (2)42,000
    
    
    
    
    
    
    
    
    
    
    
    1.78
    
    
    
    3/5/2013
    (3)40,000
    
    
    
    
    
    
    
    
    
    
    
    3.75
    
    
    
    7/2/2010
    (1)35,000
    
    
    
    
    
    
    
    
    
    
    
    3.39
    
    
    
    1/4/2016
    (5)Jeff M. Framer
    
    
    84,000
    
    
    
    
    
    
    
    
    
    
    $
    3.80
    
    
    
    9/21/2014
    (4)
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    40,000
    
    
    
    
    
    
    
    
    
    
    
    5.00
    
    
    
    9/21/2014
    (4)42,250
    
    
    
    
    
    
    
    
    
    
    
    1.75
    
    
    
    10/1/2011
    (2)32,000
    
    
    
    
    
    
    
    
    
    
    
    1.78
    
    
    
    3/5/2013
    (3)40,000
    
    
    
    
    
    
    
    
    
    
    
    3.75
    
    
    
    7/2/2010
    (1)35,000
    
    
    
    
    
    
    
    
    
    
    
    3.39
    
    
    
    1/4/2016
    (5)Former Executive
OfficersMartin W. Greenwald
    
    
    120,000
    
    
    
    
    
    
    
    
    
    
    $
    3.80
    
    
    
    9/21/2014
    (4)
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    80,000
    
    
    
    
    
    
    
    
    
    
    
    5.00
    
    
    
    9/21/2014
    (4)72,500
    
    
    
    
    
    
    
    
    
    
    
    1.75
    
    
    
    10/1/2011
    (2)62,000
    
    
    
    
    
    
    
    
    
    
    
    1.78
    
    
    
    3/5/2013
    (3)120,000
    
    
    
    
    
    
    
    
    
    
    
    3.75
    
    
    
    7/2/2010
    (1)45,000
    
    
    
    
    
    
    
    
    
    
    
    3.39
    
    
    
    1/4/2016
    (5)Jeffrey Fink
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
 (1)
    
    Stock Options granted on July 3, 2000 that were fully vested on July 3, 2003 (one-seventh of
the grant vested every six months beginning on July 3, 2000).(2)
    
    Stock Options granted on October 1, 2001 that were fully vested on October 1, 2004
(one-twelfth of the grant vested every three months beginning on January 2, 2002).
  15




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##### Table of Contents



(3)
    
    Stock Options granted on March 6, 2003 that were fully vested on March 6, 2006 (one-twelfth
of the grant vested every three months beginning on June 6, 2003).(4)
    
    Stock Options granted on September 22, 2004 (one-twentieth of the grant vested every three
months beginning on December 22, 2004). Vesting was accelerated on March 29, 2006 for all
unvested options. All options are vested and exercisable, but are subject to a lock-up period
equal to the original vesting schedule. The lock-up period will expire on September 22, 2009,
the date the options would have fully vested.(5)
    
    Stock Options granted on January 5, 2006 (one-twentieth of the grant vested every three
months beginning on April 5, 2006). Vesting was accelerated on March 29, 2006 for all
unvested options. All options are vested and exercisable, but are subject to a lock-up period
equal to the original vesting schedule. The lock-up period will expire on January 5, 2011,
the date the options would have fully vested. Option Exercises and Stock Vested in Fiscal Year 2008 (1)
  Director Compensation for Fiscal Year 2008
  Fees Earned or
    
    
    
    
    
    
    All OtherName
    
    Paid in Cash (1)
    
    
    Stock Awards
    
    
    Compensation
    
    
    TotalDavid Coriat
    
    $
    10,500
    
    
    $
    6,266
    
    
    
    
    
    
    $
    16,766Ira S. Epstein
    
    $
    11,500
    
    
    $
    6,266
    
    
    
    
    
    
    $
    17,766Gary Haber (2)
    
    $
    20,000
    
    
    $
    6,266
    
    
    
    
    
    
    $
    26,266M. Trevenen Huxley
    
    $
    8,000
    
    
    $
    6,266
    
    
    
    
    
    
    $
    14,266Robert J. McCloskey
    
    $
    8,500
    
    
    $
    6,266
    
    
    
    
    
    
    $
    14,766
 (1)
    
    Cash compensation for Board and committee meeting attendance and service as a committee
chairman.(2)
    
    Audit Committee Chairman fee of $10,000, paid quarterly, and total meeting fees of $10,000.
 Compensation Committee Interlocks and Insider Participation
   16




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##### Table of Contents



ITEM 12.
    
    SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS
  Percent ofShares of Common Stock
    
    
    CommonName of Beneficial Owner
    
    Beneficially Owned(1)
    
    
    Stock(2)Image Investors Co.(3)
    
    
    6,069,767
    
    
    
    27.77
    %MMCAP International Inc.,
SPC and MM Asset
Management Inc.(4)
    
    
    2,488,417
    
    
    
    11.39
    %Standard Broadcasting
Corp. Ltd. (now known as
Slaight Communications
Holdings Inc.)(5)
    
    
    1,542,283
    
    
    
    7.06
    %Martin W. Greenwald(6)
    
    
    1,321,604
    
    
    
    5.91
    %David Borshell(7)
    
    
    357,657
    
    
    
    1.61
    %Jeff M. Framer(8)
    
    
    292,031
    
    
    
    1.32
    %Ira S. Epstein(9)
    
    
    72,904
    
    
    
    *Rick Eiberg(10)
    
    
    57,500
    
    
    
    *M. Trevenen Huxley(11)
    
    
    44,904
    
    
    
    *Robert J. McCloskey(12)
    
    
    33,184
    
    
    
    *Gary Haber(13)
    
    
    28,884
    
    
    
    *David Coriat(14)
    
    
    8,184
    
    
    
    *Bill Bromiley
    
    
    -0-
    
    
    
    *Jeffrey Fink
    
    
    -0-
    
    
    
    *All current directors and
executive officers as a
group (10 persons)
    
    
    2,216,852
    
    
    
    9.57
    %
 
 *
    
    Less than 1%Notes to Beneficial Ownership Table:(1)
    
    The number of shares beneficially owned includes shares of common stock in which a person has
sole or shared voting power and/or sole or shared investment power. Except as noted below,
each person named reportedly has sole voting and investment powers with respect to the common
stock beneficially owned by that person, subject to applicable community property and similar
laws. Except as noted below, each owners mailing address is c/o Image Entertainment, Inc.,
20525 Nordhoff Street, Suite 200, Chatsworth, California 91311.(2)
    
    On July 11, 2008, there were 21,855,718 shares of our common stock, $.0001 par value,
outstanding. Common stock not outstanding but which underlies options and rights (including
warrants) vested as of, or vesting within, 60 days after July 11, 2008, is deemed to be
outstanding for the purpose of computing the percentage of the common stock beneficially owned
by each named person (and the directors and executive officers as a group), but is not deemed
to be outstanding for any other purpose.(3)
    
    The mailing address of Image Investors Co. is 21 Main Street  Suite 202, Hackensack, New
Jersey 07601. All of the shares of common stock are held of record by Image Investors Co.
(IIC). The shares of common stock listed in the table as beneficially owned by IIC may also
be deemed to be beneficially owned by John W. Kluge and Stuart Subotnick by virtue of their
being directors, executive officers and the only stockholders of IIC. With respect to these
shares, Messrs. Kluge and Subotnick share voting and investment powers. Ownership based on
information provided on Amendment No. 17 (filed June 23, 2008) to Schedule 13D dated July 18,
1988, filed with the SEC on behalf of IIC.(4)
    
    The mailing address of MMCAP International Inc. SPC is P.O. Box 32021, SMB, Admiral Financial
Centre, 90 Fort Street, Grand Cayman, Cayman Islands BWI. The mailing address of MM Asset
Management Inc. is 120 Adelaide Street West, Suite 2601, Toronto, Ontario, Canada M5H 1T1.
The information provided herein is based on information provided on Amendment No. 2 (filed
March 10, 2008) to Schedule 13G, dated July 16, 2007, filed
with the SEC on behalf of MMCAP International Inc. SPC and MM Asset Management Inc. The parties
share voting and dispositive power with respect to the shares indicated as beneficially owned by
them.  17




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##### Table of Contents



(5)
    
    The mailing address of Standard Broadcasting Corporation Limited (now known as Slaight
Communications Holdings Inc.) is 2 St. Clair Avenue West, Suite 1100, Toronto, Ontario, Canada
M4V 1L6. Ownership based on information provided on Amendment No. 2 (filed May 11, 2006) to
Schedule 13G dated September 25, 2002, filed with the SEC on behalf of Standard Broadcasting
Corporation Limited.(6)
    
    Includes vested options to purchase 499,500 shares of common stock and 1,030 shares owned by
MomAnDad, Inc., of which Martin W. Greenwald is a 50% owner.(7)
    
    Includes vested options to purchase 337,250 shares of common stock.(8)
    
    Includes vested options to purchase 273,250 shares of common stock.(9)
    
    Includes vested options to purchase 55,000 shares of common stock.(10)
    
    Includes vested options to purchase 57,500 shares of common stock.(11)
    
    Includes vested options to purchase 25,000 shares of common stock.(12)
    
    Includes vested options to purchase 30,000 shares of common stock.(13)
    
    Includes vested options to purchase 25,000 shares of common stock.(14)
    
    Includes vested options to purchase 5,000 shares of common stock. Change in Control
  Equity Compensation Plans
  Number of securities
    
    
    Weighted-average
    
    
    Number of securities remainingto be issued upon
    
    
    exercise price of
    
    
    available for future issuance underexercise of
    
    
    outstanding
    
    
    equity compensation plansoutstanding options,
    
    
    options, warrants
    
    
    (excluding securities referenced inPlan Category
    
    warrants and rights (1)
    
    
    and rights
    
    
    the first column)Equity compensation
plans approved by
security holders
    
    
    2,124,081
    
    
    
    3.509
    
    
    
    418,875Equity compensation
plans not approved
by security
holders:Compensatory
warrants issued
to service
providers
(2)
    
    
    1,000,000
    
    
    
    4.250
    
    
    
    Total
    
    
    3,124,081
    
    
    
    3.746
    
    
    
    418,875
 Notes to Equity Compensation Plans Table:(1)
    
    Includes options granted to employees and directors.(2)
    
    In August 2006, we issued a five-year warrant in connection with a convertible debt financing
to an investor to purchase up to 1,000,000 shares at $4.25 per share.
 
  18




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##### Table of Contents



Stock Performance Graph
  COMPARISON OF FIVE YEAR CUMULATIVE TOTAL RETURN*
AMONG IMAGE ENTERTAINMENT, INC., THE NASDAQ COMPOSITE INDEX,
AND OUR PEER GROUP
 
 *
    
    $100 invested on 3/31/03 in stock or index-including reinvestment of dividends. Fiscal year
ending March 31. 3/03
    
    
    3/04
    
    
    3/05
    
    
    3/06
    
    
    3/07
    
    
    3/08Image Entertainment, Inc.
    
    
    100.00
    
    
    
    139.83
    
    
    
    231.78
    
    
    
    156.78
    
    
    
    177.54
    
    
    
    71.19NASDAQ Composite
    
    
    100.00
    
    
    
    151.41
    
    
    
    152.88
    
    
    
    181.51
    
    
    
    190.24
    
    
    
    177.63Peer Group
    
    
    100.00
    
    
    
    238.58
    
    
    
    318.22
    
    
    
    221.99
    
    
    
    240.74
    
    
    
    167.28
  19




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##### Table of Contents



ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE
      Director Independence
   20




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##### Table of Contents



ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES
 Independent Registered Public Accounting Firm.
 Principal Accountant Fees and Services.
 2008
    
    
    2007Audit Fees
    
    $
    362,803
    
    
    $
    323,372Audit-Related Fees
    
    
    
    
    
    
    Tax Fees
    
    
    
    
    
    
    All Other Fees
    
    
    7,925
    
    
    
    Total Fees
    
    $
    370,728
    
    
    $
    323,372
     Policy on Audit Committee Pre-Approval of Audit and Permissible Non-Audit Services of
Independent Registered Public Accounting Firm.
   21




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##### Table of Contents



PART IV
 
 ITEM 15. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES
   31.1*
    
    Certification by the President, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to
Section 302 of the Sarbanes-Oxley Act of 2002.31.2*
    
    Certification by the Chief Financial Officer, pursuant to 18 U.S.C. Section 1350, as adopted
pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.32.1*
    
    Certification by the President, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to
Section 906 of the Sarbanes-Oxley Act of 2002.32.2*
    
    Certification by the Chief Financial Officer, pursuant to 18 U.S.C. Section 1350, as adopted
pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
 *
    
    Exhibit(s) not previously filed with the Securities and Exchange Commission.  22




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##### Table of Contents



SIGNATURES
  IMAGE ENTERTAINMENT, INC.A Delaware corporationDated: July 29, 2008
    
    /s/ DAVID BORSHELLDAVID BORSHELLPresident (Principal Executive Officer)
  Dated: July 29, 2008
    
    /s/ DAVID BORSHELLDAVID BORSHELLPresident (Principal Executive Officer)Dated: July 29, 2008
    
    /s/ JEFF M. FRAMERJEFF M. FRAMERChief Financial Officer (Principal Financial and Accounting Officer)Dated: July 29, 2008
    
    /s/ MARTIN W. GREENWALDMARTIN W. GREENWALDChairman of the Board and DirectorDated: July 29, 2008
    
    /s/ DAVID CORIATDAVID CORIATDirectorDated: July 29, 2008
    
    /s/ IRA EPSTEINIRA EPSTEINDirectorDated: July 29, 2008
    
    /s/ GARY HABERGARY HABERDirectorDated: July 29, 2008
    
    /s/ M. TREVENEN HUXLEYM. TREVENEN HUXLEYDirectorDated: July 29, 2008
    
    /s/ ROBERT J. MCCLOSKEYROBERT J. MCCLOSKEYDirector
  23




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##### Table of Contents



EXHIBIT INDEX
 ExhibitNo.
    
    Description31.1*
    
    Certification by the President, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to
Section 302 of the Sarbanes-Oxley Act of 2002.31.2*
    
    Certification by the Chief Financial Officer, pursuant to 18 U.S.C. Section 1350, as adopted
pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.32.1*
    
    Certification by the President, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to
Section 906 of the Sarbanes-Oxley Act of 2002.32.2*
    
    Certification by the Chief Financial Officer, pursuant to 18 U.S.C. Section 1350, as adopted
pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
 *
    
    Exhibit(s) not previously filed with the Securities and Exchange Commission.  24