Exhibit
C

      


      POINT.360

      NON-QUALIFIED
STOCK OPTION AGREEMENT

       

      THIS
NON-QUALIFIED STOCK OPTION AGREEMENT (this “Agreement”), is made as of the
________ day of ___________, 201__ by and between Point.360, a Californian
corporation (the “Company”), and _______________ (“Optionee”).

       

      RECITAL

       

      Pursuant
to the 2010 Incentive Plan (the “Plan”) of the Company, the Board of Directors
of the Company or a committee to which administration of the Plan is delegated
by the Board of Directors (in either case, the “Administrator”) has authorized
the granting to Optionee as an employee, director, consultant or adviser of the
Company of a non-qualified stock option to purchase the number of shares of
common stock of the Company specified in Section 1 hereof, at the price
specified therein, such option to be for the term and upon the terms and
conditions hereinafter stated.

       

      AGREEMENT

       

      NOW,
THEREFORE, in consideration of the promises and of the undertakings of the
parties hereto contained herein, it is hereby agreed:

       

      1.           Number of Shares; Option
Price.  Pursuant to said action of the Administrator, the
Company hereby grants to Optionee the option (“Option”) to purchase, upon and
subject to the terms and conditions of the Plan, ________ shares of common stock
of the Company (“Shares”) at the price of $________ per Share (which price shall
be no less than the fair market value of a Share on the date of grant of this
Option).

       

      2.           Term.  This
Option shall expire on the day before the ________ anniversary of the date of
grant of the Option (the “Expiration Date”), unless such Option shall have been
terminated prior to that date in accordance with the provisions of the Plan or
this Agreement.  The term “Affiliate” as used herein shall have the
meaning as set forth in the Plan.

       

      3.           Shares Subject to
Exercise.  This Option shall be exercisable in installments as
to ___ percent (__%) of the Shares on and after each of the first ____
anniversaries of the date hereof provided, however, that an
installment shall not become exercisable if the Optionee is not employed as an
employee, director, consultant or adviser of the Company, or its Affiliate, as
of such anniversary date.  Once exercisable, the Option shall
thereafter remain exercisable as to such Shares for the term specified in
Section 2 hereof, unless Optionee’s employment is terminated pursuant to Section
6 hereof or the Option is terminated pursuant to a Corporate Transaction (as
defined in Section 15 hereof).  The Administrator may condition the
exercise of the Option on the Optionee’s entering into a shareholders agreement
with the Company and/or other shareholders which will restrict the
transferability of the Shares and contain other customary provisions including
rights of repurchase or first refusal on the part of the Company and may include
“drag along” rights.

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

       

      4.           Method and Time of
Exercise.  The Option may be exercised by written notice
delivered to the Company at its principal executive office stating (i) that
Optionee is in compliance with the non-compete provisions of Section 16 hereof,
(ii) that Optionee has no plan to violate Section 16 in the future, (iii) that
Optionee agrees to notify the Company within ten (10) days of a violation of
Section 16 hereof, and (iv) the number of shares with respect to which the
Option is being exercised, together with:

       

      (A)           a
check or money order made payable to the Company in the amount of the exercise
price and any withholding tax, as provided under Section 5 hereof;
or

       

      (B)           if
expressly authorized in writing by the Administrator, in its sole discretion, at
the time of the Option exercise, the tender to the Company of shares of the
Company’s common stock owned by Optionee having a fair market value not less
than the exercise price, plus the amount of applicable federal, state and local
withholding taxes; or

       

      (C)           if
expressly authorized in writing by the Administrator, subject to Sarbanes Oxley,
in its sole discretion, at the time of the Option exercise, the Optionee’s full
recourse promissory note in a form approved by the Company; or

       

      (D)           if
any other method such as cashless exercise is expressly authorized in writing by
the Administrator, in its sole discretion, at the time of the Option exercise,
the tender of such consideration having a fair market value not less than the
exercise price, plus the amount of applicable federal, state and local
withholding taxes.

       

      Only
whole shares may be purchased.

       

      5.           Tax
Withholding.  As a condition to exercise of this Option, the
Company may require Optionee to pay over to the Company all applicable federal,
state and local taxes which the Company is required to withhold with respect to
the exercise of this Option.  At the discretion of the Administrator
and upon the request of Optionee, the minimum statutory withholding tax
requirements may be satisfied by the withholding of Shares otherwise issuable to
Optionee upon the exercise of this Option.

       

      6.           Exercise on Termination of
Employment.  If for any reason Optionee ceases to be employed
by the Company or any of its Affiliates (such event being called a
“Termination”), other than For Cause, as defined below, this Option (to the
extent then exercisable) may be exercised in whole or in part at any time within
90 days of the
date of such Termination, but in no event after the earlier of the Expiration
Date or a Corporate Transaction which terminates the Option pursuant to Section
15 hereof.  For purposes of this Agreement, “employment” includes
service as an employee, director, consultant or adviser.  For purposes
of this Agreement, Optionee’s employment shall not be deemed to terminate by
reason of a transfer to or from the Company or an Affiliate or among such
entities, or sick leave, military leave or other leave of absence approved by
the Administrator, if the period of any such leave does not exceed ninety (90)
days or, if longer, if Optionee’s right to reemployment by the Company or any
Affiliate is guaranteed either contractually or by statute.  For
purposes of this Agreement, “For Cause” shall mean Optionee’s loss of employment
by the Company or any of its Affiliates due to Optionee’s (a) willful breach or
habitual neglect or continued incapacity to perform Optionee’s required duties,
(b) commission of acts of dishonesty, fraud, misrepresentation or other acts of
moral turpitude as would prevent the effective performance of Optionee’s duties
or (c) termination for cause under any employment agreement between the Company
and Optionee (as defined therein).  In the event Optionee’s employment
by the Company or any of its Affiliates is Terminated For Cause, then the Option
shall cease to be exercisable as of the date of such Termination.

       

      
        
          
          

        

        
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      7.           Non-Transferability.  Except
with the express written approval of the Administrator, this Option may not be
assigned or transferred except by will or by the laws of descent and
distribution, and may be exercised only by Optionee during the Optionee’s
lifetime and after the Optionee’s death, by the Optionee’s personal
representative or by the person entitled thereto under the Optionee’s will or
the laws of intestate succession.

       

      8.           Optionee Not a
Stockholder.  Optionee shall have no rights as a stockholder
with respect to the Shares covered by this Option until the date of issuance of
a stock certificate or stock certificates to the Optionee upon exercise of this
Option.  No adjustment will be made for dividends or other rights for
which the record date is prior to the date such stock certificate or
certificates are issued.

       

      9.           No Right to
Employment.  Nothing in the Option granted hereby shall
interfere with or limit in any way the right of the Company or of any of its
Affiliates to terminate Optionee’s employment, consulting or advising at any
time, nor confer upon Optionee any right to continue in the employ of, consult
with, or advise the Company or any of its Affiliates.

       

      10.         Modification and
Termination.  The rights of Optionee are subject to
modification and termination in certain events as provided in Sections 6.1 and
6.2 of the Plan.

       

      11.         Restrictions on Sale of
Shares.  Optionee represents and agrees that upon the
Optionee’s exercise of this Option, in whole or in part, unless there is in
effect at that time under the Securities Act of 1933 a registration statement
relating to the Shares issued to the Optionee, the Optionee will acquire the
Shares issuable upon exercise of this Option for the purpose of investment and
not with a view to their resale or further distribution, and that upon such
exercise thereof the Optionee will furnish to the Company a written statement to
such effect, satisfactory to the Company in form and
substance.  Optionee agrees that any certificates issued upon exercise
of this Option may bear a legend indicating that their transferability is
restricted in accordance with applicable state and federal securities
law.  Any person or persons entitled to exercise this Option under the
provisions of Sections 6 and 7 hereof shall, upon each exercise of this Option
under circumstances in which Optionee would be required to furnish such a
written statement, also furnish to the Company a written statement to the same
effect, satisfactory to the Company in form and substance.

       

      12.         Plan
Governs.  This Agreement and the Option evidenced hereby are
made and granted pursuant to the Plan and are in all respects limited by and
subject to the express terms and provisions of the Plan, as it may be construed
by the Administrator.  Optionee hereby acknowledges receipt of a copy
of the Plan.

       

      
        
          
          

        

        
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      13.           Notices.  All
notices to the Company shall be addressed to the Corporate Secretary at the
principal executive office of the Company at 2777 N. Ontario Street, Burbank, CA
91504, and all notices to Optionee shall be addressed to Optionee at the address
of Optionee on file with the Company, or to such other address as either may
designate to the other in writing.  A notice shall be deemed to be
duly given if and when enclosed in a properly addressed sealed envelope
deposited, postage prepaid, with the United States Postal Service.  In
lieu of giving notice by mail as aforesaid, written notices under this Agreement
may be given by personal delivery to Optionee or to the Corporate Secretary (as
the case may be).

       

      14.           Sale or Other
Disposition.  If Optionee at any time contemplates the
disposition (whether by sale, gift, exchange, or other form of transfer) of any
Shares acquired by exercise of this Option, the Optionee shall first notify the
Company in writing of such proposed disposition and cooperate with the Company
in complying with all applicable requirements of law, which, in the judgment of
the Company, must be satisfied prior to such disposition.

       

      15.           Corporate
Transactions.  In the event of a Corporate Transaction (as
defined below), the Administrator shall notify Optionee at least thirty (30)
days prior thereto or as soon as may be practicable.  To the extent
not previously exercised, this Option shall terminate immediately prior to the
consummation of such Corporate Transaction unless the Administrator determines
otherwise in its sole discretion; provided, however, that the
Administrator, in its sole discretion, may (i) permit exercise of this Option
prior to its termination, even if this Option would not otherwise have been
exercisable, and (ii) provide that this Option shall be assumed or an equivalent
option substituted by an applicable successor corporation or any Affiliate of
the successor corporation.  A “Corporate Transaction” means (i) a
liquidation or dissolution of the Company; (ii) a merger or consolidation of the
Company with or into another corporation or entity (other than a merger with a
wholly-owned subsidiary); (iii) a tender offer shall be made and consummated for
the ownership of 35% ore more of the outstanding voting securities of the
Company; (iv) a sale of all or substantially all of the assets of the Company;
or (v) a purchase or other acquisition of more than 50% of the outstanding
capital stock of the Company by one person, other than Haig Bagerdjian, or more
than one person acting in concert with persons other than Haig
Bagerdjian..

       

      16.           Non-Compete
Agreement.  Notwithstanding anything to the contrary provided
herein, as a condition to the receipt of Shares pursuant to the exercise of this
Option, at any time during which this Option is outstanding and for six (6)
months after any exercise of this Option or the receipt of Shares pursuant to
the exercise of this Option, Optionee shall not directly or indirectly, as
agent, employee, consultant, stockholder, partner or in any other capacity, own,
operate, manage, control, engage in, invest in or participate in any manner in,
act as a consultant or advisor to, render services for, or otherwise assist any
person or entity that engages in or owns, invests in, operates, manages or
controls, any venture or enterprise that directly or indirectly competes with
the Company, provided, however, that nothing
contained herein shall be construed to prevent Optionee from investing in the
stock of any competing corporation listed on a national securities exchange or
traded in the over-the-counter market, but only if Optionee is not involved in
the business of said corporation and if Optionee (together with Optionee’s
spouse, parents, siblings, and children) does not own more than an aggregate of
five percent (5%) of the stock of such corporation.  Optionee agrees
to notify the Company within ten (10) days of any violation of this Section
16.  Failure to comply with this Section 16 shall cause such Option
and the exercise or issuance of Shares hereunder to be rescinded and the benefit
of such exercise or issuance to be repaid to the Company.  Optionee
agrees and understands that Optionee’s failure to comply with this Section 16
will subject Optionee’s benefit from the Option to be forfeited and repaid to
the Company, and Optionee agrees to do so within ten (10) days of notification
by the Company.

       

      
        
          
          

        

        
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      IN
WITNESS WHEREOF, the parties hereto have executed this Agreement as of the date
and year first above written.

       

      
        
          
            
              
                
                  
                    
                      
                        
                          
                            
                              
                                
                                  
                                    
                                      
                                        
                                          
                                            
                                              
                                                
                                                  
                                                    
                                                      
                                                        
                                                          
                                                            
                                                              
                                                                
                                                                  
                                                                    
                                                                      
                                                                        
                                                                          
                                                                            
                                                                              
                                                                                
                                                                                  
                                                                                    
                                                                                      
                                                                                        
                                                                                          
                                                                                            
                                                                                              
                                                                                                
                                                                                                  
                                                                                                    
                                                                                                      
                                                                                                        
                                                                                                          
                                                                                                            
                                                                                                              
                                                                                                                
                                                                                                                  
                                                                                                                    
                                                                                                                      
                                                                                                                        
                                                                                                                          
                                                                                                                            
                                                                                                                              	 	
                                                                                                                                      POINT.360

                                                                                                                                    
	 
      	 
	 	By: 	 
	 
      	 	
                                                                                                                                      Name:

                                                                                                                                    	 
	 
      	 	
                                                                                                                                      Title:

                                                                                                                                    	 
	 
      	 	 
      	 
	 	
                                                                                                                                      OPTIONEE:

                                                                                                                                    
	 
      	 
	 
      	By: 	
                                                                                                                                        
      

                                                                                                                                    
	 
      	 
	 
      	Address:
	 	 
	 	 
	 	 
	 	 
	 	 
	 	 
	 
      	Social
      Security
Number


                                                                                                                            

                                                                                                                          

                                                                                                                        

                                                                                                                      

                                                                                                                    

                                                                                                                  

                                                                                                                

                                                                                                              

                                                                                                            

                                                                                                          

                                                                                                        

                                                                                                      

                                                                                                    

                                                                                                  

                                                                                                

                                                                                              

                                                                                            

                                                                                          

                                                                                        

                                                                                      

                                                                                    

                                                                                  

                                                                                

                                                                              

                                                                            

                                                                          

                                                                        

                                                                      

                                                                    

                                                                  

                                                                

                                                              

                                                            

                                                          

                                                        

                                                      

                                                    

                                                  

                                                

                                              

                                            

                                          

                                        

                                      

                                    

                                  

                                

                              

                            

                          

                        

                      

                    

                  

                

              

            

          

        

      


      
        
           


        

        
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