Document:

Exhibit 10.13

Exhibit 10.13

IMAGE ENTERTAINMENT, INC.

2008 STOCK AWARDS AND INCENTIVE PLAN

(Amended and Restated Effective May 1, 2009)

I. PURPOSE

The purpose of the IMAGE ENTERTAINMENT, INC. 2008 STOCK AWARDS AND INCENTIVE PLAN (the “Plan”)
is to provide a means through which Image Entertainment, Inc., a Delaware corporation (the
“Company”), and its Affiliates, may attract able persons to enter the employ of the Company and its
Affiliates and to provide a means whereby those employees, directors and consultants, upon whom the
responsibilities of the successful administration and management of the Company and its Affiliates
rest, and whose present and potential contributions to the welfare of the Company and its
Affiliates are of importance, can acquire and maintain stock ownership, thereby strengthening their
concern for the welfare of the Company and its Affiliates and their desire to remain in the
Company’s and its Affiliates’ employ. A further purpose of the Plan is to provide such employees,
directors and consultants with additional incentive and reward opportunities designed to enhance
the profitable growth of the Company. Accordingly, the Plan provides for granting Incentive Stock
Options, Nonqualified Stock Options, Stock Appreciation Rights, Restricted Stock Awards,
Performance Awards, Phantom Stock Awards, or any combination of the foregoing, as is best suited to
the circumstances of the particular employee, director or consultant as provided herein.

II. DEFINITIONS

The following definitions shall be applicable throughout the Plan unless specifically modified
by any paragraph:

(a) “Affiliate” means any Parent Corporation and any Subsidiary Corporation.

(b) “Award” means, individually or collectively, any Option, Restricted Stock Award, Phantom
Stock Award, Performance Award, Stock Appreciation Right or Stock Unit.

(c) “Board” means the Board of Directors of the Company.

(d) “Change of Control” means the occurrence of any of the following events: (i) the Company
shall not be the surviving entity in any merger, consolidation or other reorganization (or survives
only as a subsidiary of an entity other than a previously wholly-owned subsidiary of the Company),
(ii) the Company sells, leases or exchanges all or substantially all of its assets to any other
person or entity (other than a wholly-owned subsidiary of the Company), (iii) the Company is to be
dissolved and liquidated, (iv) any person or entity, including a “group” as contemplated by Section
13(d)(3) of the 1934 Act, acquires or gains ownership or control (including, without limitation,
power to vote) of more than 50% of the outstanding shares of the Company’s voting stock (based upon
voting power), or (v) as a result of or in connection with a contested election of directors, the
persons who were directors of the Company before such election shall cease to constitute a majority
of the Board. Notwithstanding anything herein to the contrary, and only to the extent that an Award
is subject to Code Section 409A and would not otherwise comply with Code Section 409A, a “Change of
Control” shall occur only to the extent that the definition of “Change of Control” set forth above
may be interpreted to be consistent with Code Section 409A and the applicable Internal Revenue
Service and Treasury Department regulations thereunder.

 

 

 

(e) “Change of Control Value” shall mean with respect to a Change of Control (i) the per share
price offered to shareholders of the Company in any merger, consolidation, reorganization, sale of
assets or dissolution transaction, (ii) the price per share offered to shareholders of the Company
in any tender offer, exchange offer or sale or other disposition of outstanding voting stock of
the Company, or (iii) if such Change of Control occurs other than as described in clause (i) or
clause (ii), the Fair Market Value per share of the shares into which Awards are exercisable, as
determined by the Committee, whichever is applicable. In the event that the consideration offered
to shareholders of the Company consists of anything other than cash, the Committee shall determine
the fair cash equivalent of the portion of the consideration offered which is other than cash.

(f) “Code” means the Internal Revenue Code of 1986, as amended. Reference in the Plan to any
section of the Code shall be deemed to include any amendments or successor provisions to any
section and any regulations under such section.

(g) “Committee” as used in the Plan means the Board and/or the Compensation Committee of the Board
which shall be constituted entirely of not less than two (2) non-employee directors (within the
meaning of Rule 16b-3), each of whom shall be an “outside director,” within the meaning of Section
162(m) of the Code and applicable interpretive authority thereunder.

(h) “Company” means Image Entertainment, Inc.

(i) A “consultant” means an individual (other than a director) who performs services for the
Employer as an independent contractor.

(j) A “covered employee” means an individual described in Code Section 162(m)(3).

(k) A “director” means an individual who is serving on the Board or on the board of directors
of an Affiliate on the date the Plan is adopted by the Board or who is elected to the Board or the
board of directors of an Affiliate after such date.

(l) An “employee” means any person (including an officer or a director) in an employment
relationship with the Company or any Affiliate.

(m) “Employer” means the Company or an Affiliate.

 

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(n) “Fair Market Value” means, as of any specified date, the closing sales price of the Stock
(i) reported by any interdealer quotation system on which the Stock is quoted on that date or (ii)
if the Stock is listed on a national stock exchange, reported on the stock exchange composite tape
on that date; or, in either case, if no price is reported on that date, on the last preceding date
on which such price of the Stock is so reported, unless the Committee determines otherwise using
such methods or procedures as it may establish. If the Stock is traded over the counter at the time
a determination of its fair market value is required to be made hereunder, its fair market value
shall be deemed to be equal to the average between the reported high and low or closing bid and
asked prices of Stock on the most recent date on which Stock was publicly traded, unless the
Committee determines otherwise using such methods or procedures as it may establish. In the event
Stock is not publicly traded at the time a determination of its value is required to be made
hereunder, the determination of its fair market value shall be made by the Committee in such manner
as it deems appropriate, consistent with Treasury regulations and other formal Internal Revenue
Service guidance under Code Section 409A, with the intent that Options and Stock Appreciation
Rights granted under this Plan shall not constitute deferred compensation subject to Code Section
409A.

(o) “Holder” means an individual who has been granted an Award.

(p) “Incentive Stock Option” means an incentive stock option within the meaning of section
422(b) of the Code.

(q) “1934 Act” means the Securities Exchange Act of 1934, as amended.

(r) “Nonqualified Stock Option” means an option granted under Paragraph VII of the Plan to
purchase Stock which does not constitute an Incentive Stock Option.

(s) “Option” means an Award granted under Paragraph VII of the Plan and includes both
Incentive Stock Options to purchase Stock and Nonqualified Stock Options to purchase Stock.

(t) “Option Agreement” means a written agreement between the Company and a Holder with respect
to an Option.

(u) “Parent Corporation” means a “parent corporation” of the Company within the meaning of
Code Section 424(e).

(v) “Performance Award” means an Award granted under Paragraph X of the Plan.

(w) “Performance Award Agreement” means a written agreement between the Company and a Holder
with respect to a Performance Award.

(x) “Phantom Stock Award” means an Award granted under Paragraph XI of the Plan.

(y) “Phantom Stock Award Agreement” means a written agreement between the Company and a Holder
with respect to a Phantom Stock Award.

(z) “Plan” means the Image Entertainment, Inc. 2008 Stock Awards and Incentive Plan, as
amended from time to time.

 

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(aa) “Restricted Stock Agreement” means a written agreement between the Company and a Holder
with respect to a Restricted Stock Award.

(bb) “Restricted Stock Award” means an Award granted under Paragraph IX of the Plan.

(cc) “Rule 16b-3” means SEC Rule 16b-3 promulgated under the 1934 Act, as such may be amended
from time to time, and any successor rule, regulation or statute fulfilling the same or a similar
function.

(dd) “Spread” means, in the case of a Stock Appreciation Right, an amount equal to the excess,
if any, of the Fair Market Value of a share of Stock on the date such right is exercised over the
exercise price of such Stock Appreciation Right.

(ee) “Stock” means the common stock, $0.0001 par value of the Company.

(ff) “Stock Appreciation Right” means an Award granted under Paragraph VIII of the Plan.

(gg) “Stock Appreciation Rights Agreement” means a written agreement between the Company and a
Holder with respect to an Award of Stock Appreciation Rights.

(hh) “Stock Unit” means a right, granted to a Holder under Paragraph XII hereof, to receive
Stock, cash or a combination thereof at the end of a specified period of time.

(ii) “Stock Unit Agreement” means a written agreement between the Company and a Holder with
respect to a Stock Unit Award.

(jj) “Subsidiary Corporation” means a “subsidiary corporation” of the Company within the
meaning of Code Section 424(f).

III. EFFECTIVE DATE AND DURATION OF THE PLAN

This Plan shall be effective on July 30, 2008 which is the date of its adoption by the Board
(the “Effective Date”), subject to the approval of the Plan by the Company’s shareholders within
twelve months after the Effective Date. If the Plan is not so approved by the Company’s
shareholders, (a) the Plan shall not be effective, and (b) any grants of Awards under the Plan
shall immediately expire and be of no force and effect. No Awards may be granted under the Plan
after the tenth anniversary of the Effective Date. The Plan shall remain in effect until all Awards
granted under the Plan have been satisfied or expired.

 

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IV. ADMINISTRATION

(a) Committee. The Plan shall be administered by the Committee. The Committee shall hold its
meetings at such times and places as it may determine. A majority of its members shall constitute a
quorum, and all determinations of the Committee shall be made by not less than a majority of its
members. Any decision or determination reduced to writing and signed by a majority of the members
shall be fully effective as if it had been made by a majority vote of its members at a meeting duly
called and held. The Committee may designate the Secretary of the Company or other Company
employees to assist the Committee in the administration of this Plan, and may grant authority to
such persons to execute Award agreements or other documents on behalf of the Committee and the
Company.

(b) Powers. Subject to the provisions of the Plan, the Committee shall have sole authority, in
its discretion, to determine which employees, directors or consultants shall receive an Award, the
time or times when such Award shall be made, whether an Incentive Stock Option, Nonqualified
Option, Stock Unit or Stock Appreciation Right shall be granted, the number of shares of Stock
which may be issued under each Option, Stock Appreciation Right or Restricted Stock Award, and the
value of each Performance Award and Phantom Stock Award. In making such determinations the
Committee may take into account the nature of the services rendered by the respective employees,
their present and potential contributions to the Employer’s success and such other factors as the
Committee in its discretion shall deem relevant. The Committee, in its sole discretion, and subject
to Code Section 409A and other applicable laws, may waive compliance with any provision of any
Award, or any related agreement, may extend the date through which any Award is exercisable, and/or
may accelerate the earliest date on which such Award becomes exercisable, vested, free from
restrictions or payable, provided in each case such action does not adversely affect the rights of
the Holder.

(c) Additional Powers. The Committee shall have such additional powers as are delegated to it
by the other provisions of the Plan. Subject to the express provisions of the Plan, the Committee
is authorized to construe the Plan and the respective agreements executed thereunder, to prescribe
such rules and regulations relating to the Plan as it may deem advisable to carry out the Plan, and
to determine the terms, restrictions and provisions of each Award, including such terms,
restrictions and provisions as shall be requisite in the judgment of the Committee to cause
designated Options to qualify as Incentive Stock Options, and to make all other determinations
necessary or advisable for administering the Plan. The Committee may correct any defect or supply
any omission or reconcile any inconsistency in any agreement relating to an Award in the manner and
to the extent it shall deem expedient to carry it into effect. The determinations of the Committee
on the matters referred to in this Article IV shall be conclusive.

(d) Expenses. All expenses and liabilities incurred by the Committee in the administration of
this Plan shall be borne by the Company. The Committee may employ attorneys, consultants,
accountants or other persons to assist the Committee in the carrying out of its duties hereunder.

 

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V. STOCK SUBJECT TO THE PLAN

(a) Stock Grant and Award Limits. The Committee may from time to time grant Awards to one or
more employees, directors or consultants determined by it to be eligible for participation in the
Plan in accordance with the provisions of Paragraph VI. Subject to Paragraph XIII, the maximum
aggregate number of shares of Stock that may be issued under the Plan is 1,000,000, any or all of
which may be issued through Incentive Stock Options. Shares of Stock shall be deemed to have been
issued under the Plan only to the extent actually issued and delivered pursuant to an Award. To the
extent that an Award (other than an Award of Restricted Stock) lapses or is canceled or the rights
of its Holder terminate or the Award is settled in cash, any Stock subject to such Award shall
again be available for grant under an Award. Should any shares of Restricted Stock be forfeited,
such shares may not again be subject to an Award under the Plan. Any shares of Stock which may
remain unissued and which are not subject to outstanding Awards at the termination of this Plan
shall cease to be reserved for the purpose of this Plan, but until termination of this Plan or the
termination of the last of the Awards granted under this Plan, whichever last occurs, the Company
shall at all times reserve a sufficient number of shares to meet the requirements of this Plan.

Notwithstanding any provision in the Plan to the contrary, no shares of Stock may be subject
to Options granted under the Plan to any one individual during any one year period, no shares of
Stock may be subject to Stock Appreciation Rights granted under the Plan to any one individual
during any one year period, and no shares of Stock may be granted under the Plan as a Restricted
Stock Award to any one individual during any one year period that would exceed the limit of Section
162(m) of the Code. The number of shares of Stock that may be issued to individuals as set forth in
the preceding sentence shall be subject to adjustment in the same manner as provided in Section
XIII hereof with respect to shares of Stock subject to Options, Stock Appreciation Rights or
Restricted Stock Awards then outstanding. The limitations set forth in this paragraph shall be
applied in a manner which will permit compensation generated under the Plan with respect to
“covered employees” to constitute “performance-based” compensation for purposes of Section 162(m)
of the Code, including, without limitation, counting against such maximum number of shares of
Stock, to the extent required under Section 162(m) of the Code and applicable interpretive
authority thereunder, any shares of Stock subject to Options or Stock Appreciation Rights that
expire, are canceled or repriced or Restricted Stock Awards that are forfeited.

(b) Stock Offered. The stock to be offered pursuant to the grant of an Award may be authorized
but unissued Stock or Stock previously issued and outstanding and reacquired by the Company.

VI. ELIGIBILITY

The Committee, in its sole discretion, shall determine who shall receive Awards under the
Plan. Awards other than Incentive Stock Options may be granted to all employees, directors and
consultants of the Company or its Affiliates, including Affiliates that become such after adoption
of the Plan. Incentive Stock Options may be granted to all employees of the Company or its
Affiliates, including Affiliates that become such after adoption of the Plan. A recipient of an
Award must be an employee, director or consultant at the time the Award is granted. An Award may be
granted on more than one occasion to the same person, and, subject to the limitations set forth in
the Plan, such Award may include an Incentive Stock Option or a Nonqualified Stock Option, a Stock
Appreciation Right, a Restricted Stock Award, a Performance Award, a Phantom Stock Award or any
combination thereof.

 

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VII. STOCK OPTIONS

(a) Option Period. The term of each Option shall be as specified by the Committee at the date
of grant.

(b) Limitations on Exercise of Option. An Option shall be exercisable in whole or in such
installments and at such times as determined by the Committee.

(c) Special Limitations on Incentive Stock Options. Except as otherwise provided under the
Code or applicable regulations, to the extent that the aggregate Fair Market Value (determined at
the time the option is granted) of the Stock with respect to which Incentive Stock Options
(determined without regard to this sentence) are exercisable for the first time by any Holder
during any calendar year under all plans of the Company and its Parent Corporation or Subsidiary
Corporations exceeds $100,000, such options shall be treated as Nonqualified Stock Options. The
Committee shall determine, in accordance with applicable provisions of the Code, Treasury
Regulations and other administrative pronouncements, which of a Holder’s Incentive Stock Options
will not constitute Incentive Stock Options because of such limitation and shall notify the Holder
of such determination as soon as practicable after such determination. No Incentive Stock Option
shall be granted to an individual if, at the time the Option is granted, such individual owns stock
possessing more than 10% of the total combined voting power of all classes of stock of the Company
or of its Parent Corporation or Subsidiary Corporation, within the meaning of section 422(b)(6) of
the Code, unless (i) at the time such Option is granted the exercise price is at least 110% of the
Fair Market Value of the Stock subject to the Option and (ii) such Option by its terms is not
exercisable after the expiration of five years from the date of grant.

(d) Option Agreement. Each Option shall be evidenced by an Option Agreement in such form and
containing such provisions not inconsistent with the provisions of the Plan as the Committee from
time to time shall approve, including, without limitation, provisions to qualify an Incentive Stock
Option under section 422 of the Code. An Option Agreement may provide for the payment of the
exercise price, in whole or in part, 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) subject to the approval by
the Committee, tendering shares of Stock theretofore owned by the Holder duly endorsed for transfer
to the Company, (iii) subject to the approval by the Committee, the Company’s withholding of shares
of Stock that would otherwise be issued on exercise of the Option, (iv) so long as the Stock is
registered under Section 12(b) or 12(g) of the 1934 Act, and to the extent permitted by law,
delivery of a properly executed exercise agreement or notice, together with irrevocable
instructions to a brokerage firm designated or approved by the Company to deliver promptly to the
Company the aggregate amount of proceeds to pay the Option exercise price and any withholding tax
obligations that may arise in connection with the exercise, 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 full amount of the exercise price. Each Option
shall specify the effect of termination of employment or service as a director or consultant (by
retirement, disability, death or otherwise) on the exercisability of the Option. An Option
Agreement may also include, without limitation, provisions relating to (i) vesting of Options,
subject to the provisions hereof accelerating such vesting on a Change of Control, (ii) tax matters
(including provisions (y) permitting the delivery of additional shares of Stock or the withholding
of shares of Stock from those acquired upon exercise to satisfy federal or state income tax
withholding requirements and (z) dealing with any other applicable employee wage withholding
requirements), and (iii) any other matters not inconsistent with the terms and provisions of this
Plan that the Committee shall in its sole discretion determine. The terms and conditions of the
respective Option Agreements need not be identical.

 

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(e) Exercise Price and Payment. The price at which a share of Stock may be purchased upon
exercise of an Option shall be determined by the Committee, but (i) such exercise price shall never
be less than the Fair Market Value of Stock on the date the Option is granted and (ii) such
exercise price shall be subject to adjustment as provided in Paragraph XIII. The Option or portion
thereof may be exercised by delivery of an irrevocable notice of exercise to the Company. The
exercise price of the Option or portion thereof shall be paid in full in the manner prescribed by
the Committee.

(f) Shareholder Rights and Privileges. The Holder shall be entitled to all the privileges and
rights of a shareholder only with respect to such shares of Stock as have been purchased under the
Option and for which certificates of stock have been registered in the Holder’s name.

(g) Options and Rights in Substitution for Stock Options Granted by Other Corporations.
Options and Stock Appreciation Rights may be granted under the Plan from time to time in
substitution for stock options held by individuals employed by corporations who become employees as
a result of a merger or consolidation of the employing corporation with the Company, an Affiliate,
or any Subsidiary Corporation, or the acquisition by the Company, an Affiliate or a Subsidiary
Corporation of the assets of the employing corporation, or the acquisition by the Company, an
Affiliate or a Subsidiary Corporation of stock of the employing corporation with the result that
such employing corporation becomes a Subsidiary Corporation.

(h) All Options granted under this Plan are subject to, and may not be exercised before, the
approval of this Plan by the shareholders of the Company prior to the first anniversary date of the
Board meeting held to approve this Plan, by the affirmative vote of the holders of a majority of
the outstanding shares of the Company present, or represented by proxy, and entitled to vote at a
meeting at which a quorum is present, or by written consent in accordance with the laws of the
State of Delaware.

 

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VIII. STOCK APPRECIATION RIGHTS

(a) Stock Appreciation Rights. A Stock Appreciation Right is the right to receive an amount
equal to the Spread with respect to a share of Stock upon the exercise of such Stock Appreciation
Right. Stock Appreciation Rights may be granted in connection with the grant of an Option, in which
case the Option Agreement will provide that exercise of Stock Appreciation Rights will result in
the surrender of the right to purchase the shares under the Option as to which the Stock
Appreciation Rights were exercised. Alternatively, Stock Appreciation Rights may be granted
independently of Options in which case each Award of Stock Appreciation Rights shall be evidenced
by a Stock Appreciation Rights Agreement which shall contain such terms and conditions as may be
approved by the Committee. The Spread with respect to a Stock Appreciation Right may be payable
either in cash, shares of Stock with a Fair Market Value equal to the Spread or in a combination of
cash and shares of Stock. With respect to Stock Appreciation Rights that are subject to Section 16
of the 1934 Act, however, the Committee shall, except as provided in Paragraph XIII(c), retain sole
discretion (i) to determine the form in which payment of the Stock Appreciation Right will be made
(i.e., cash, securities or any combination thereof) or (ii) to approve an election by a Holder to
receive cash in full or partial settlement of Stock Appreciation Rights. Each Stock Appreciation
Rights Agreement shall specify the effect of termination of employment or service as a director or
consultant (by retirement, disability, death or otherwise) on the exercisability of the Stock
Appreciation Rights.

(b) Other Terms and Conditions. At the time of such Award, the Committee may, in its sole
discretion, prescribe additional terms, conditions or restrictions relating to Stock Appreciation
Rights. Such additional terms, conditions or restrictions shall be set forth in the Stock
Appreciation Rights Agreement made in conjunction with the Award. Such Stock Appreciation Rights
Agreements may also include, without limitation, provisions relating to (i) vesting of Awards,
subject to the provisions hereof accelerating vesting on a Change of Control, (ii) tax matters
(including provisions covering applicable wage withholding requirements), and (iii) any other
matters not inconsistent with the terms and provisions of this Plan, that the Committee shall in
its sole discretion determine. The terms and conditions of the respective Stock Appreciation Rights
Agreements need not be identical.

(c) Exercise Price. The exercise price of each Stock Appreciation Right shall be determined by
the Committee, but such exercise price (i) shall never be less than the Fair Market Value of a
share of Stock on the date the Stock Appreciation Right is granted (or such greater exercise price
as may be required if such Stock Appreciation Right is granted in connection with an Incentive
Stock Option that must have an exercise price equal to 110% of the Fair Market Value of the Stock
on the date of grant pursuant to Paragraph VII(c)) and (ii) shall be subject to adjustment as
provided in Paragraph XIII.

(d) Exercise Period. The term of each Stock Appreciation Right shall be as specified by the
Committee at the date of grant.

(e) Limitations on Exercise of Stock Appreciation Right. A Stock Appreciation Right shall be
exercisable in whole or in such installments and at such times as determined by the Committee.

 

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IX. RESTRICTED STOCK AWARDS

(a) Forfeiture Restrictions to be Established by the Committee. Shares of Stock that are the
subject of a Restricted Stock Award shall be subject to restrictions on disposition by the Holder
and an obligation of the Holder to forfeit and surrender the shares to the Company under certain
circumstances (the “Forfeiture Restrictions”). The Forfeiture Restrictions shall be determined by
the Committee in its sole discretion and set forth in the Restricted Stock Agreement, and the
Committee may provide that the Forfeiture Restrictions shall lapse upon either A) (i) the
attainment of one or more performance goals established by the Committee that are based on (1) the
price of a share of Stock, (2) the Company’s earnings per share, (3) the Company’s net earnings,
(4) the earnings of a business unit of the Company designated by the Committee, (5) the return on
shareholders’ equity achieved by the Company, (6) the Company’s return on assets, (7) the Company’s
net interest margin, or (8) the Company’s efficiency ratio, (ii) the Holder’s continued employment
with the Employer for a specified period of time, or (iii) a combination of the factors listed in
clauses (i) and (ii) of this sentence; or B) any other criteria the Committee determines. Each
Restricted Stock Award may have different Forfeiture Restrictions, in the discretion of the
Committee. The Forfeiture Restrictions applicable to a particular Restricted Stock Award shall not
be changed except as permitted by Paragraph IX(b) or Paragraph XIII.

(b) Other Terms and Conditions. Stock awarded pursuant to a Restricted Stock Award shall be
represented by a stock certificate registered in the name of the Holder of such Restricted Stock
Award. Unless otherwise provided in the Restricted Stock Agreement, the Holder shall have the right
to receive dividends with respect to Stock subject to a Restricted Stock Award, to the extent any
such dividends are declared by the Company, to vote Stock subject thereto and to enjoy all other
shareholder rights, except that (i) the Holder shall not be entitled to delivery of the stock
certificate until the Forfeiture Restrictions shall have expired, (ii) the Company shall retain
custody of the Stock until the Forfeiture Restrictions shall have expired, (iii) the Holder may not
sell, transfer, pledge, exchange, hypothecate or otherwise dispose of the Stock until the
Forfeiture Restrictions shall have expired, and (iv) a breach of the terms and conditions
established by the Committee pursuant to the Restricted Stock Agreement shall cause a forfeiture of
the Restricted Stock Award. Unless otherwise provided in a Restricted Stock Agreement, dividends
payable with respect to a Restricted Stock Award will be paid to a Holder in cash on the day on
which the corresponding dividend on shares of Stock is paid to shareholders, or as soon as
administratively practicable thereafter, but in no event later than the fifteenth (15th)
day of the third calendar month following the day on which the corresponding dividend on shares of
Stock is paid to shareholders. The Committee may provide in a Restricted Stock Agreement that
payment of dividends with respect to a Restricted Stock Award shall be subject to the attainment of
one or more performance goals established by the Committee that are based on the criteria set forth
in paragraph (a) above.

At the time of such Award, the Committee may, in its sole discretion, prescribe additional
terms, conditions or restrictions relating to Restricted Stock Awards, including, but not limited
to, rules pertaining to the termination of employment or service as a director or consultant (by
retirement, disability, death or otherwise) of a Holder prior to expiration of the Forfeiture
Restrictions. Such additional terms, conditions or restrictions shall be set forth in a Restricted
Stock Agreement made in conjunction with the Award. Such Restricted Stock Agreement may also
include, without limitation, provisions relating to (i) vesting of Awards, subject to any
provisions hereof accelerating vesting on a Change of Control, (ii) tax matters (including
provisions (y) covering any applicable employee wage withholding requirements and (z) requiring or
prohibiting an election by the Holder under section 83(b) of the Code), and (iii) any other matters
not inconsistent with the terms and provisions of this Plan that the Committee shall in its sole
discretion determine. The terms and conditions of the respective Restricted Stock Agreements need
not be identical.

 

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(c) Payment for Restricted Stock. The Committee shall determine the amount and form of any
payment for Stock received pursuant to a Restricted Stock Award, provided that in the absence of
such a determination, a Holder shall not be required to make any payment for Stock received
pursuant to a Restricted Stock Award, except to the extent otherwise required by law.

(d) Agreements. At the time any Award is made under this Paragraph IX, the Company and the
Holder shall enter into a Restricted Stock Agreement setting forth each of the matters as the
Committee may determine to be appropriate. The terms and provisions of the respective Restricted
Stock Agreements need not be identical.

(e) Certification. With respect to a Restricted Stock Award granted to a “covered employee,”
if the lapse of the Forfeiture Restrictions imposed upon such Restricted Stock Award, or the
payment of dividends with respect to such Restricted Stock Award, is conditioned in whole or in
part on the attainment of performance goals, the Committee shall certify in writing whether such
performance goals and any other conditions on the lapse of Forfeiture Restrictions or payment of
dividends have been satisfied.

X. PERFORMANCE AWARDS

(a) Performance Period. The Committee shall establish, with respect to and at the time of
grant of each Performance Award, a performance period over which the performance of the Holder
shall be measured.

(b) Performance Awards. Each Performance Award shall have a maximum value established by the
Committee at the time of such Award.

(c) Performance Measures. Prior to or upon the commencement of each performance period (or at
such later time as may be permitted for qualified performance-based compensation under Section
162(m) and the regulations thereunder), the Committee shall establish written performance goals for
each Performance Award granted to a Holder for such performance period. The performance goals shall
be based on one or more of the following criteria: A) (1) the price of a share of Stock, (2) the
Company’s earnings per share, (3) the Company’s net earnings, (4) the earnings of a business unit
of the Company designated by the Committee, (5) the return on shareholders’ equity achieved by the
Company, (6) the Company’s return on assets, (7) the Company’s net interest margin, or (8) the
Company’s efficiency ratio; or B) any other criteria the Committee determines.

At the time of establishing the performance goals, the Committee shall specify (i) the formula
to be used in calculating the compensation payable to a Holder if the performance goals are
obtained, and (ii) the individual employee or class of employees to which the formula applies. The
Committee may also specify a minimum acceptable level of achievement of the relevant performance
goals, as well as one or more additional levels of achievement, and a formula to determine the
percentage of the Performance Award deemed to have been earned by the Holder upon attainment of
each such level of achievement, which percentage may exceed 100%. The performance goals and amount
of each Performance Award need not be the same as those relating to any other Performance Award,
whether made at the same or a different time.

 

11

 

Notwithstanding the terms of any Performance Award, the Committee, in its sole and absolute
discretion, may reduce the amount of the Performance Award payable to any Holder for any reason,
including the Committee’s judgment that the performance goals have become an inappropriate measure
of achievement, a change in the employment status, position or duties of the Holder, unsatisfactory
performance of the Holder, or the Holder’s service for less than the entire performance period.
Notwithstanding the foregoing, the reduction of a Performance Award payable to a Holder may not
result in an increase in the amount of a Performance Award payable to another Holder.

(d) Awards Criteria. In determining the value of Performance Awards, the Committee shall take
into account a Holder’s responsibility level, contributions, performance, potential, other Awards
and such other considerations as it deems appropriate.

(e) Certification. Promptly after the date on which the necessary information for a particular
performance period becomes available, the Committee shall determine, and certify in writing (with
respect to each Holder who is a “covered employee”), the extent to which the Performance Award for
such performance period has been earned, through the achievement of the relevant performance goals,
by each Holder for such performance period.

(f) Payment. After the Committee has determined and certified in writing (if required with
respect to a “covered employee”) the extent to which a Performance Award has been earned, the
Holder of a Performance Award shall be entitled to receive payment of an amount, not exceeding the
maximum value of the Performance Award, based on the achievement of the performance measures for
such performance period, as determined by the Committee. Payment of a Performance Award will be
made in the calendar year immediately following the calendar year in which the performance period
ends, and may be made in cash, Stock or a combination thereof, as determined by the Committee.
Payment shall be made in a lump sum. Any payment to be made in Stock shall be based on the Fair
Market Value of the Stock on the payment date.

(g) Termination of Employment. A Performance Award shall terminate if the Holder does not
remain continuously in the employ of the Employer at all times during the applicable performance
period, except as may be determined by the Committee or as may otherwise be provided in the Award
at the time granted.

(h) Agreements. At the time any Award is made under this Paragraph X, the Committee may
require the Holder to enter into a Performance Award Agreement with the Company setting forth each
of the matters contemplated hereby, and, in addition such matters are set forth in Paragraph IX(b)
as the Committee may determine to be appropriate. The terms and provisions of the respective
agreements need not be identical.

 

12

 

XI. PHANTOM STOCK AWARDS

(a) Phantom Stock Awards. Phantom Stock Awards are rights to receive shares of Stock (or cash
in an amount equal to the Fair Market Value thereof), or rights to receive an amount equal to any
appreciation in the Fair Market Value of Stock (or portion thereof) over a specified period of
time, which vest over a period of time or upon the occurrence of an event (including without
limitation a Change of Control) as established by the Committee, without payment of any amounts by
the Holder thereof (except to the extent otherwise required by law) or satisfaction of any
performance criteria or objectives. Each Phantom Stock Award shall have a maximum value established
by the Committee at the time of such Award.

(b) Award Period. The Committee shall establish, with respect to and at the time of each
Phantom Stock Award, a period over which or the event upon which the Award shall vest with respect
to the Holder.

(c) Awards Criteria. In determining the value of Phantom Stock Awards, the Committee shall
take into account an employee’s responsibility level, performance, potential, other Awards and such
other considerations as it deems appropriate.

(d) Payment. Following the end of the vesting period for a Phantom Stock Award, but in no
event later than June 15 of the calendar year immediately following the calendar year in which the
vesting period ends, the Holder of a Phantom Stock Award shall be entitled to receive payment of an
amount, not exceeding the maximum value of the Phantom Stock Award, based on the then vested value
of the Award. Payment of a Phantom Stock Award may be made in cash, Stock or a combination thereof
as determined by the Committee. Payment shall be made in a lump sum. Any payment to be made in
Stock shall be based on the Fair Market Value of the Stock on the payment date. Cash dividend
equivalents may be paid during or after the vesting period with respect to a Phantom Stock Award,
as determined by the Committee.

(e) Termination of Employment. A Phantom Stock Award shall terminate if the Holder does not
remain continuously in the employ of the Employer at all times during the applicable vesting
period, except as may be determined by the Committee or as may otherwise be provided in the Award
at the time granted.

(f) Agreements. At the time any Award is made under this Paragraph XI, the Company and the
Holder shall enter into a Phantom Stock Award Agreement setting forth each of the matters
contemplated hereby and, in addition, such matters as are set forth in Paragraph IX(b) as the
Committee may determine to be appropriate. The terms and provisions of the respective agreements
need not be identical.

XII. STOCK UNITS

(a) Stock Units. The Committee is authorized to grant Stock Units to Holders, comprised of
rights to receive Stock, cash, or a combination thereof at the end of a specified time period,
subject to the following terms and conditions:

(b) Award and Restrictions. Satisfaction and entitlement of an Award of Stock Units on the
part of a Holder shall occur upon expiration of the time period specified for such Stock Units by
the Committee (or, if permitted by the Committee, as elected by the Holder). In addition, Stock
Units shall be subject to such restrictions (which may include a risk of forfeiture) as the
Committee may impose, if any, which restrictions may lapse at the expiration of the time period or
at earlier specified times (including based on achievement of performance goals and/or future
service requirements), separately or in combination, in installments or otherwise, as the Committee
may determine. Stock Units may be satisfied by delivery of Stock, cash equal to the Fair Market
Value of the specified number of shares of Stock covered by the Stock Units, or a combination
thereof, as determined by the Committee at the date of grant or thereafter. Prior to satisfaction
and entitlement in favor of a Holder of an Award of Stock Units, an Award of Stock Units carries no
voting or dividend or other rights associated with share ownership.

 

13

 

(c) Forfeiture. Except as otherwise determined by the Committee, upon termination of a
Holder’s continuous employment during the applicable time period thereof to which forfeiture
conditions apply (as provided in the Award agreement evidencing the Stock Units), the Holder’s
Stock Units (other than those Stock Units subject to deferral at the election of the Holder) shall
be forfeited and no satisfaction or entitlement shall accrue; provided that the Committee may
provide, by rule or regulation or in any Award agreement, or may determine in any individual case,
that restrictions or forfeiture conditions relating to Stock Units shall be waived in whole or in
part in the event of terminations resulting from specified causes, and the Committee may in other
cases waive in whole or in part the forfeiture of Stock Units.

XIII. RECAPITALIZATION OR REORGANIZATION

(a) The shares with respect to which Awards may be granted are shares of Stock as presently
constituted, but if, and whenever, prior to the expiration of an Award theretofore granted, the
Company shall effect a subdivision or consolidation by the Company, the number of shares of Stock
with respect to which such Award may thereafter be exercised or satisfied, as applicable, (i) in
the event of an increase in the number of outstanding shares shall be proportionately increased,
and the exercise price per share shall be proportionately reduced, and (ii) in the event of a
reduction in the number of outstanding shares shall be proportionately reduced, and the exercise
price per share shall be proportionately increased.

(b) If the Company recapitalizes or otherwise changes its capital structure, thereafter upon
any exercise or satisfaction, as applicable, of an Award theretofore granted the Holder shall be
entitled to (or entitled to purchase, if applicable) under such Award, in lieu of the number of
shares of Stock then covered by such Award, the number and class of shares of stock and securities
to which the Holder would have been entitled pursuant to the terms of the recapitalization if,
immediately prior to such recapitalization, the Holder had been the holder of record of the number
of shares of Stock then covered by such Award.

(c) In the event of a Change of Control, all outstanding Awards shall immediately vest and
become exercisable or satisfiable, as applicable, and the Committee, in its discretion, may take
any other action with respect to outstanding Awards that it deems appropriate, which action may
vary among Awards granted to individual Holders; provided, however, that such action shall not
reduce the value of an Award. In particular, with respect to Options, the actions the Committee may
take upon a Change of Control include, but are not limited to, the following: (i) accelerating the
time at which Options then outstanding may be exercised so that such Options may be exercised in
full for a limited period of time on or before a specified date (before or after such Change of
Control) fixed by the Committee, after which specified date all unexercised Options and all rights
of Holders thereunder shall terminate, (ii) requiring the mandatory surrender to the Company by
selected Holders of some or all of the outstanding Options held by such Holders (irrespective of
whether such Options are then exercisable) as of a date, before or after such Change of Control,
specified by the Committee, in which event the Committee shall thereupon cancel such Options and
the Company shall pay to each such Holder an amount of cash per share equal to the excess, if any,
of the Change of Control Value of the shares subject to such Option over the exercise price(s)
under such Options for such shares, (iii) make such adjustments to Options then outstanding as the
Committee deems appropriate to reflect such Change of Control (provided, however, that the
Committee may determine in its sole discretion that no adjustment is necessary to Options then
outstanding), or (iv) provide that the number and class of shares of Stock covered by an Option
theretofore granted shall be adjusted so that such Option shall thereafter cover the number and
class of shares of Stock or other securities or property (including, without limitation, cash) to
which the Holder would have been entitled pursuant to the terms of the agreement of merger,
consolidation or sale of assets and dissolution if, immediately prior to such merger, consolidation
or sale of assets and dissolution, the Holder had been the holder of record of the number of shares
of Stock then covered by such Option. The provisions contained in this paragraph shall not
terminate any rights of the Holder to further payments pursuant to any other agreement with the
Company following a Change of Control.

 

14

 

(d) In the event of changes in the outstanding Stock by reason of recapitalization,
reorganizations, mergers, consolidations, combinations, exchanges or other relevant changes in
capitalization occurring after the date of the grant of any Award and not otherwise provided for by
this Paragraph XIII, any outstanding Awards and any agreements evidencing such Awards shall be
subject to adjustment by the Committee at its discretion as to the number and price of shares of
Stock or other consideration subject to such Awards. In the event of any such change in the
outstanding Stock, the aggregate number of shares available under the Plan may be appropriately
adjusted by the Committee, whose determination shall be conclusive.

(e) The existence of the Plan and the Awards granted hereunder shall not affect in any way the
right or power of the Board or the shareholders of the Company to make or authorize any adjustment,
recapitalization, reorganization or other change in the Company’s capital structure or its
business, any merger or consolidation of the Company, any issue of debt or equity securities ahead
of or affecting Stock or the rights thereof, the dissolution or liquidation of the Company or any
sale, lease, exchange or other disposition of all or any part of its assets or business or any
other corporate act or proceeding.

(f) Any adjustment provided for in Subparagraphs (a), (b), (c) or (d) above shall be subject
to any required shareholder action.

(g) Except as hereinbefore expressly provided, the issuance by the Company of shares of stock
of any class or securities convertible into shares of stock of any class, for cash, property, labor
or services, upon direct sale, upon the exercise of rights or warrants to subscribe therefor, or
upon conversion of shares of obligations of the Company convertible into such shares or other
securities, and in any case whether or not for fair value, shall not affect, and no adjustment by
reason thereof shall be made with respect to, the number of shares of Stock subject to Awards
theretofore granted or the exercise price per share, if applicable.

 

15

 

XIV. AMENDMENT AND TERMINATION OF THE PLAN

The Board in its discretion may terminate the Plan at any time with respect to any shares for
which Awards have not theretofore been granted. The Board shall have the right to alter or amend
the Plan or any part thereof from time to time; provided that, except as provided herein or in an
agreement governing an Award, no change in any Award theretofore granted may be made which would
impair the rights of the Holder without the consent of the Holder (unless such change is required
in order to cause the benefits under the Plan to qualify as performance-based compensation within
the meaning of section 162(m) of the Code, if applicable, and applicable interpretive authority
thereunder), and provided, further, that the Board may not, without approval of the shareholders,
amend the Plan:

(a) to increase the maximum number of shares which may be issued on exercise or surrender of
an Award, except as provided in Paragraph XIII;

(b) to change the class of employees eligible to receive Awards or materially increase the
benefits accruing to employees under the Plan;

(c) to extend the maximum period during which Awards may be granted under the Plan;

(d) to modify materially the requirements as to eligibility for participation in the Plan;

(e) to decrease any authority granted to the Committee hereunder in contravention of Rule
16b-3; or

(f) if such approval is required to comply with Rule 16b-3, if applicable, any rule of any
stock exchange or automated quotation system on which Stock may then be listed or quoted, or
Sections 162(m) or 422 of the Code or any successor provisions, if applicable.

XV. MISCELLANEOUS

(a) No Right to An Award. Neither the adoption of the Plan by the Company nor any action of
the Board or the Committee shall be deemed to give an employee any right to be granted an Award to
purchase Stock, a right to a Stock Appreciation Right, a Restricted Stock Award, a Performance
Award or a Phantom Stock Award or any of the rights hereunder except as may be evidenced by an
Award or by an Option Agreement, Stock Appreciation Rights Agreement, Restricted Stock Agreement,
Performance Award Agreement or Phantom Stock Award Agreement on behalf of the Company, and then
only to the extent and on the terms and conditions expressly set forth therein. The Plan shall be
unfunded. The Company shall not be required to establish any special or separate fund or to make
any other segregation of funds or assets to assure the payment of any Award.

(b) Employees’ Rights Unsecured. The right of an employee to receive Stock, cash or any other
payment under this Plan shall be an unsecured claim against the general assets of the Company. The
Company may, but shall not be obligated to, acquire shares of Stock from time to time in
anticipation of its obligations under this Plan, but a Holder shall have no right in or against any
shares of Stock so acquired. All Stock shall constitute the general assets of the Company and may
be disposed of by the Company at such time and for such purposes as it deems appropriate.

 

16

 

(c) No Employment Rights Conferred. Nothing contained in the Plan shall (i) confer upon any
employee any right with respect to continuation of employment with any Employer or (ii) interfere
in any way with the right of any Employer to terminate an employee’s employment at any time.

(d) Other Laws; Withholding. The Company shall not be obligated to issue any Stock pursuant to
any Award granted under the Plan at any time when the shares covered by such Award have not been
registered under the Securities Act of 1933 and such other state and federal laws, rules or
regulations as the Company or the Committee deems applicable and, in the opinion of legal counsel
for the Company, there is no exemption from the registration requirements of such laws, rules or
regulations available for the issuance and sale of such shares. Unless the Awards and Stock covered
by this Plan have been registered under the Securities Act of 1933, or the Company has determined
that such registration is unnecessary, each Holder exercising an Award under this Plan may be
required by the Company to give representation in writing that such Holder is acquiring such shares
for his or her own account for investment and not with a view to, or for sale in connection with,
the distribution of any part thereof. No fractional shares of Stock shall be delivered, nor shall
any cash in lieu of fractional shares be paid. The Company shall have the right to deduct in
connection with all Awards any taxes required by law to be withheld and to require any payments
required to enable it to satisfy its withholding obligations.

(e) No Restriction on Corporate Action. Nothing contained in the Plan shall be construed to
prevent the Company, an Affiliate or any Subsidiary from taking any corporate action which is
deemed by the Company, an Affiliate or any Subsidiary to be appropriate or in its best interest,
whether or not such action would have an adverse effect on the Plan or any Award made under the
Plan. No employee, beneficiary or other person shall have any claim against the Company, an
Affiliate or any Subsidiary as a result of any such action.

(f) Restrictions on Transfer. An Award shall not be transferable otherwise than by will or the
laws of descent and distribution and shall be exercisable during the Holder’s lifetime only by such
Holder or the Holder’s guardian or legal representative.

(g) Beneficiary Designation. Each Holder may name, from time to time, any beneficiary or
beneficiaries (who may be named contingently or successively) to whom any benefit under the Plan is
to be paid in case of his or her death before he or she receives any or all of such benefit. Each
designation will revoke all prior designations by the same Holder, shall be in a form prescribed by
the Committee, and will be effective only when filed by the Holder in writing with the Committee
during his lifetime. In the absence of any such designation, benefits remaining unpaid at the
Holder’s death shall be paid to his estate.

(h) Rule 16b-3. It is intended that the Plan and any grant of an Award made to a person
subject to Section 16 of the 1934 Act meet all of the requirements of Rule 16b-3. If any provision
of the Plan or any such Award would disqualify the Plan or such Award under, or would otherwise not
comply with, Rule 16b-3, such provision or Award shall be construed or deemed amended to conform to
Rule 16b-3.

 

17

 

(i) Section 162(m). If the Company is subject to Section 162(m) of the Code, it is intended
that the Plan comply fully with and meet all the requirements of Section 162(m) of the Code so that
Awards may, if intended, constitute “performance-based” compensation within the meaning of such
section. If any provision of the Plan would disqualify the Plan or would not otherwise permit the
Plan to comply with Section 162(m) as so intended, such provision shall be construed or deemed
amended to conform to the requirements or provisions of Section 162(m); provided that no such
construction or amendment shall have an adverse effect on the economic value to a Holder of any
Award previously granted hereunder.

(j) Code Section 409A. It is intended that any grant of an Award to which section 409A of the
Code is applicable shall satisfy all of the requirements of such Code section and the applicable
regulations issued thereunder to the extent necessary.

(k) Indemnification. Each person who is or shall have been a member of the Committee or of the
Board shall be indemnified and held harmless by the Company against and from any loss, cost,
liability, or expense that may be imposed upon or reasonably incurred by him in connection with or
resulting from any claim, action, suit, or proceeding to which he may be a party or in which he may
be involved by reason of any action taken or failure to act under the Plan and against and from any
and all amounts paid by him in settlement thereof, with the Company’s approval, or paid by him in
satisfaction of any judgment in any such action, suit, or proceeding against him, provided he shall
give the Company an opportunity, at its own expense, to handle and defend the same before he
undertakes to handle and defend it on his own behalf. The foregoing right of indemnification shall
not be exclusive of any other rights or indemnification to which such persons may be entitled under
the Company’s Articles of Incorporation or Bylaws, as a matter of law, or otherwise, or any power
that the Company may have to indemnify them or hold them harmless.

(l) Governing Law. This Plan shall be construed in accordance with the laws of the State of
California.

 

18

 

PLAN ADOPTION AND AMENDMENTS/ADJUSTMENTS

SUMMARY PAGE

	 	 	 	 	 	 	 
	Date of Board	 	 	 	Section/Effect	 	Date of Stockholder
	Action	 	Action	 	of Amendment	 	Approval
	 
	 	 	 	 	 	 
	July 30, 2008

	 	Initial Plan Adoption
	 	 	 	October 17, 2008
	 
	 	 	 	 	 	 
	May 1, 2009

	 	Amendment and
Restatement of Plan
	 	Amended Paragraph
II(n) definition of
“Fair Market Value”

Amended Paragraph
VII(d) to include
additional payment
methods for option
exercises
	 	Not Required

 

19Exhibit 10.14

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.

 

 

 

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.

 

2

 

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.

 

3

 

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.

 

4

 

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.

 

5

 

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: 	 	 	 	 	 
	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 

 

6

 

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.

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