Document:

Form of Option Agreement

 Exhibit 10.1 
 FORM OF 
 NON-QUALIFIED STOCK OPTION AGREEMENT 
 PURSUANT TO THE BLOCKBUSTER INC. 
 AMENDED AND RESTATED 1999 LONG-TERM MANAGEMENT INCENTIVE PLAN 
 (AS AMENDED THROUGH OCTOBER 6, 2004) 
 This Stock Option Agreement (this “Agreement”) is entered into by and between Blockbuster Inc., a Delaware corporation (the
“Company”), and «First_Name» «MI» «Last_Name» (the “Participant”). The Company and the Participant agree as follows: 
 1. Grant of Stock Option. Pursuant to the Blockbuster Inc. Amended and Restated 1999 Long-Term Management Incentive Plan (the “Plan”) and
a duly adopted resolution of the Board of Directors (the “Board”) of the Company, the Company hereby grants to the Participant an option (the “Stock Option”) to purchase from the Company a total of «Granted» shares
(the “Optioned Shares”) of the Company’s Class A Common Stock (the “Common Stock”) at an exercise price (the “Exercise Price”) of
$                     per share, subject to the terms and conditions set forth in this Agreement and in the Plan. Capitalized terms used and
not otherwise defined herein shall have the meanings assigned to them in the Plan. The Date of Grant of this Stock Option is
                    , 20    . This Stock Option is not intended to qualify as an Incentive Stock Option.

 2. Interpretation. This Stock Option and its exercise are subject to the terms and conditions of the Plan, which terms and
conditions are incorporated herein by reference; however, unless specifically permitted by the Board or the Compensation Committee of the Board (the “Committee”), the terms of the Plan shall not be considered an enlargement of any benefits
under this Agreement. In the event of any conflict or inconsistency between the terms hereof and the terms of the Plan, the terms of the Plan shall be controlling. This Stock Option is subject to any rules promulgated pursuant to the Plan by the
Board or the Committee and communicated to the Participant in writing. 
 3. Vesting; Time of Exercise. Except as specifically
provided otherwise in this Agreement and subject to certain restrictions and conditions set forth in the Plan, this Stock Option may be exercised, in whole or in part, in accordance with the following schedule: 
  

			
	 Percentage Exercisable
	 	 Date Optioned Shares Become Exercisable

	 0%
	 	Immediately
	 33 1/3%
	 	First Anniversary of the Date of Grant
	 66 1/6%
	 	Second Anniversary of the Date of Grant
	 100%
	 	Third Anniversary of the Date of Grant

 Any vested but unexercised portion of this Stock Option from one annual period may be carried over
to a subsequent annual period or periods, and the right of the Participant to exercise 

 
this Stock Option as to such unexercised portion shall continue for the entire term set forth in Section 4 below. In no event, however, may this Stock
Option be exercised, in whole or in part, after the expiration of the term set forth in Section 4 below. 
 4. Term; Rights in Event
of Termination of Service, Death or Permanent Disability. Except as provided otherwise in an employment agreement between the Company and the Participant in effect on the Date of Grant, this Stock Option, and all unexercised Optioned Shares
granted to the Participant hereunder, will terminate and be forfeited at the first of the following to occur: 
 (a) 5 p.m. on
the date which is the tenth anniversary of the Date of Grant (the “Expiration Date”); 
 (b) 5 p.m. on the date that
is twelve (12) months following the date of the Participant’s death or the date of the onset of the Participant’s Permanent Disability; 
 (c) 5 p.m. on the date that is six (6) months following the date of the Participant’s termination of service with the Company or any of its subsidiaries by reason of a voluntary termination by the
Participant or due to termination by the Company or any of its subsidiaries other than due to a Termination for Cause; or 
 (d) 5 p.m. on the date of termination of the Participant’s service with the Company or any of its subsidiaries due to a Termination for Cause. 
 Unless otherwise provided in an employment agreement between the Company and the Participant in effect on the Date of Grant, in the event of the Participant’s death, Permanent Disability or termination of service
with the Company or any of its subsidiaries under subsections (b) or (c) above, this Stock Option will be exercisable, for the periods indicated above, only to the extent that it has vested (pursuant to Section 3 above) as of the date
of death, onset of Permanent Disability or termination of service, as applicable. 
 5. Who May Exercise. Subject to the terms and
conditions set forth in Sections 3 and 4 above, during the lifetime of the Participant, this Stock Option may be exercised only by the Participant. In the event of the Participant’s termination of service with the Company or any of its
subsidiaries as a result of death prior to the termination date specified in Section 4(a) hereof, this Stock Option may be exercised by the person(s) who acquires the right to exercise this Stock Option by will or the laws of descent and
distribution; provided that this Stock Option shall remain subject to the other terms of this Agreement, the Plan, and all applicable laws, rules, and regulations. 
 6. Restrictions. This Stock Option may be exercised only with respect to full shares, and no fractional share of stock shall be issued. 
 7. Manner of Exercise. Subject to such administrative regulations as the Board or the Committee may from time to time adopt, this Stock Option may
be exercised by the delivery to the Company of (a) written notice (a “Notice of Exercise”) setting forth the number of shares of Common Stock with respect to which this Stock Option is to be exercised and the date of 

  

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exercise thereof (the “Exercise Date”), which shall be at least five (5) business days after giving such notice, unless an earlier time shall
have been approved by the Board or the Committee; and (b) consideration with a value equal to the aggregate Exercise Price for the shares to be purchased, which shall be determined by multiplying the number of shares with respect to which this
Stock Option is being exercised by the Exercise Price. The aggregate Exercise Price shall be payable as follows: (i) in cash or by certified check, bank draft, or money order payable to the order of the Company; (ii) in the discretion of
the Board or the Committee, in shares of Common Stock (provided that such shares of Common Stock have been held for at least six months by the Participant), valued at their Fair Market Value on the Exercise Date; (iii) in the discretion of the
Board or the Committee, by delivery (including by facsimile) to the Company or its designated agent of an executed irrevocable Notice of Exercise together with irrevocable instructions from the Participant to a broker or dealer, reasonably
acceptable to the Company, to sell certain of the shares of Common Stock purchased upon exercise of this Stock Option or to pledge such shares as collateral for a loan and promptly deliver to the Company the amount of such sale or loan proceeds
necessary to pay such Exercise Price; and/or (iv) in any other form of valid consideration that is acceptable to the Board or the Committee in its sole discretion; provided that, with respect to a cashless exercise of this Stock Option (in
accordance with clause (iii) above), this Stock Option will be deemed exercised on the date of sale of the shares of Common Stock received upon exercise. The Notice of Exercise shall be signed by the person or persons exercising this Stock
Option and, in the event this Stock Option is being exercised (pursuant to Section 5 hereof) by any person or persons other than the Participant, such notice shall be accompanied by proof satisfactory to the Company’s counsel of the right
of such person(s) to exercise this Stock Option. 
 8. Issuance of Shares. Upon satisfaction of the conditions set forth in
Section 7 above, the Company shall evidence the purchase of the Optioned Shares then being purchased by the Participant (or the person(s) exercising the Participant’s Stock Option in the event of the Participant’s death) in any manner
deemed appropriate by the Company (including, but not limited to, a book entry for the shares or a certificate for such shares); provided that the obligation of the Company to deliver shares of Common Stock shall be subject to compliance with all
applicable requirements of federal, state, and foreign securities laws. In addition, the Stock Option may not be exercised unless (a) a registration statement under the Securities Act of 1933, as amended (the “Act”), is at the time of
exercise of the Stock Option in effect with respect to the shares issuable upon exercise of the Stock Option or (b) in the opinion of legal counsel to the Company, the shares issuable upon exercise of the Stock Option may be issued in
accordance with the terms of an applicable exemption from the registration requirements of the Act. PARTICIPANTS ARE CAUTIONED THAT THE STOCK OPTION MAY NOT BE EXERCISED UNLESS THE FOREGOING CONDITIONS ARE SATISFIED. ACCORDINGLY, PARTICIPANTS MAY
NOT BE ABLE TO EXERCISE THE STOCK OPTION WHEN DESIRED EVEN THOUGH THE STOCK OPTION IS VESTED. The inability of the Company to obtain from any regulatory body having jurisdiction the authority, if any, deemed by the Company’s legal counsel to be
necessary to the lawful issuance and sale of any shares subject to the Stock Option will relieve the Company of any liability in respect of the failure to issue or sell such shares as to which such requisite authority has not been obtained. As a
condition to the exercise of the Stock Option, the Company may require the Participant to satisfy any qualifications that may be necessary or appropriate to evidence compliance with any applicable law or regulation and to make any representation or
warranty with respect to such compliance as may be requested by the Company. 
  

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 In accordance with Section 10.3 of the Plan, the Company or any subsidiary of the Company shall have
the right to withhold any amount necessary, and/or make such other arrangements as it considers necessary, to satisfy any federal, state or provincial, local or other tax obligations required by the laws of the United States and/or any other
applicable jurisdiction. 
 If the Participant fails to pay for any of the Optioned Shares specified in the Participant’s Notice of
Exercise or fails to accept delivery thereof, then the Participant’s right to purchase such Optioned Shares may be terminated by the Company. 
 9. Non-Assignability. This Stock Option is not transferable by the Participant except by will or the laws of descent and distribution. The Participant may not assign this Agreement or any of his rights under this Agreement without
the Company’s prior written consent, and any purported or attempted assignment without such prior written consent shall be void. 
 10.
Rights as Stockholder. The Participant will have no rights as a stockholder with respect to any shares covered by this Stock Option until the issuance to the Participant of the shares. 
 11. Adjustment of Number of Shares and Related Matters. The number and kind of shares of Common Stock covered by this Stock Option, and the Option
Exercise Price thereof, shall be subject to adjustment in accordance with Article IX of the Plan. 
 12. Investment
Representation. Unless the Common Stock is issued to the Participant in a transaction registered under applicable federal and state securities laws, by his or her execution hereof, the Participant represents and warrants to the Company that all
Common Stock which may be purchased hereunder will be acquired by the Participant for investment purposes for his or her own account and not with any intent for resale or distribution in violation of federal or state securities laws. Unless the
Common Stock is issued to the Participant in a transaction registered under the applicable federal and state securities laws, all book entries made, or certificates issued, with respect to the Common Stock shall bear an appropriate restrictive
investment legend. 
 13. Participant’s Acknowledgments. The Participant acknowledges receipt of a copy of the Plan and
represents that he or she is familiar with the terms and provisions thereof, and hereby accepts this Stock Option subject to all the terms and provisions thereof. The Participant hereby agrees to accept as binding, conclusive, and final all
decisions or interpretations of the Board and/or the Committee upon any questions arising under the Plan or this Agreement. As partial consideration for the granting of this Stock Option, the Participant agrees to keep confidential all information
and knowledge he or she has relating to the manner and amount of his or her participation in the Plan; provided, however, that such information may be disclosed as required by law and may be given in confidence to the Participant’s spouse and
tax and financial advisors. In the event any breach of this promise comes to the attention of the Company, it shall take into consideration that breach in determining whether to recommend the grant of any future similar award to the Participant, as
a factor weighing against the advisability of granting any such future award. 
  

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 14. Law Governing. This Agreement shall be governed by, construed, and enforced in accordance with
the laws of the State of Delaware (excluding any conflict of laws rule or principle of Delaware law that might refer the governance, construction, or interpretation of this Agreement to the laws of another state), except to the extent Delaware law
is preempted by federal law. The obligation of the Company to sell and deliver Common Stock hereunder is subject to applicable laws and to the approval of any governmental authority required in connection with the authorization, issuance, sale, or
delivery of such Common Stock. 
 15. No Right to Continued Employment. Nothing herein shall be construed to confer upon the
Participant the right to continue in the employment of the Company or any of its subsidiaries or interfere with or restrict in any way the right of the Company or any subsidiary to discharge the Participant at any time (subject to any contractual
rights of the Participant). Furthermore, nothing in this Agreement shall in any way be construed as imposing on the Company or any of its subsidiaries a contractual obligation between the Company or any of its subsidiaries and the Participant other
than with respect to the specific offer contemplated by this Agreement. 
 16. Legal Construction. In the event that any one or more
of the terms, provisions, or agreements that are contained in this Agreement shall be held by a Court of competent jurisdiction to be invalid, illegal, or unenforceable in any respect for any reason, the invalid, illegal, or unenforceable term,
provision, or agreement shall not affect any other term, provision, or agreement that is contained in this Agreement and this Agreement shall be construed in all respects as if the invalid, illegal, or unenforceable term, provision, or agreement had
never been contained herein. 
 17. Covenants and Agreements as Independent Agreements. Each of the covenants and agreements that is
set forth in this Agreement shall be construed as a covenant and agreement independent of any other provision of this Agreement. The existence of any claim or cause of action of the Participant against the Company, whether predicated on this
Agreement or otherwise, shall not constitute a defense to the enforcement by the Company of the covenants and agreements that are set forth in this Agreement. 
 18. Entire Agreement. Except as specifically stated otherwise herein, this Agreement, together with the Plan, supersedes any and all other prior understandings and agreements, either oral or in writing, between
the parties with respect to the subject matter hereof and constitutes the sole and only agreement between the parties with respect to the said subject matter. All prior negotiations and agreements between the parties with respect to the subject
matter hereof are merged into this Agreement. Each party to this Agreement acknowledges that no representations, inducements, promises, or agreements, oral or otherwise, have been made by any party or by anyone acting on behalf of any party, which
are not embodied in this Agreement or the Plan and that any agreement, statement or promise that is not contained in this Agreement or the Plan shall not be valid or binding or of any force or effect. 
  

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 19. Parties Bound. The terms, provisions, representations, warranties, covenants, and agreements
that are contained in this Agreement shall apply to, be binding upon, and inure to the benefit of the parties and their respective heirs, executors, administrators, legal representatives, and permitted successors and assigns. 
 20. Modification. No change or modification of this Agreement shall be valid or binding upon the parties unless the change or modification is in
writing and signed by the parties. Notwithstanding the preceding sentence, (a) the Company may amend the Plan to the extent permitted in the Plan, and (b) the Company may amend the Agreement if the Board or Committee determines, in its
sole discretion, that amendment is necessary or advisable in light of any addition to or change in any federal or state, tax or securities law or other law or regulation, which addition or change occurs after the Date of Grant and by its terms
applies to the Stock Option. 
 21. Headings. The headings that are used in this Agreement are used for reference and convenience
purposes only and do not constitute substantive matters to be considered in construing the terms and provisions of this Agreement. 
 22.
Gender and Number. Words of any gender used in this Agreement shall be held and construed to include any other gender, and words in the singular number shall be held to include the plural, and vice versa, unless the context requires
otherwise. 
 23. Notice. Any notice required or permitted to be delivered hereunder must be in writing and shall be deemed to be
delivered only when actually received by the Company or by the Participant, as the case may be, at the respective addresses set forth below, or at such other addresses as they have theretofore specified by written notice delivered in accordance
herewith: 
  

	 	(a)	Notice to the Company shall be delivered as follows: 

 Blockbuster Inc. 
 1201 Elm Street 
 Suite 2100 
 Dallas, TX 75270 
 Attn: Corporate Secretary 
  

	 	(b)	Notice to the Participant shall be delivered to the Participant’s home or business address as specified in the records of the Company. 

 Any person entitled to notice hereunder may, by written form, waive such notice. 
 24. Miscellaneous. 
 (a) Furnish
Information. The Participant agrees to furnish the Company all information requested by the Company to enable it to comply with any reporting or other requirement imposed upon the Company by or under any applicable statute or regulation.

  

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 (b) Remedies. The Company shall be entitled to recover from the Participant reasonable
attorneys’ fees incurred in connection with the enforcement of the terms and provisions of this Agreement whether by an action to enforce specific performance or for damages for its breach or otherwise. 
 (c) No Liability for Good Faith Determinations. The Company and the members of the Committee and the Board shall not be liable for any act,
omission or determination taken or made in good faith with respect to this Agreement or the Stock Option granted hereunder. 
 (d)
Execution of Receipts and Releases. Any payment of cash or any issuance or transfer of shares of Common Stock or other property to the Participant, or to the person(s) who acquires the right to exercise this Stock Option in the event of the
Participant’s death in accordance with the provisions of Section 5 hereof, shall, to the extent thereof, be in full satisfaction of all claims of such persons hereunder. The Company may require the Participant (or the person(s) who
acquires the right to exercise this Stock Option in accordance with Section 5), as a condition precedent to such payment or issuance, to execute a release and receipt therefor in such form as it shall determine. 
 (e) No Guarantee of Interests. The Board, the Committee and the Company do not guarantee the Common Stock of the Company from loss or
depreciation. 
 (f) Company Records. Records of the Company regarding the Participant’s service and other matters shall be
conclusive for all purposes hereunder, unless determined by the Company to be incorrect. 
 (g) Company Action. Any action required of
the Company shall be by resolution of the Board or the Committee or by a person authorized to act by resolution of the Board or the Committee. 
 IN WITNESS WHEREOF, the Company has caused this Agreement to be executed by its duly authorized officer, and the Participant, to evidence his or her consent and approval of all the terms hereof, has duly executed this Agreement, as of the
         day of                     , 20    . 
  

			
	BLOCKBUSTER INC.
		
	By:	 	  

		 	John Antioco
		 	Chairman of the Board and
		 	Chief Executive Officer
	
	PARTICIPANT
	
	  

	«First_Name» «MI» «Last_Name»

  

 - 7 -Agreement, dated May 23, 2007

 Exhibit 10.1 
 Execution Copy 
 AGREEMENT 
 This AGREEMENT (this “Agreement”) is entered into as of May 23, 2007 by and between American Bank Note Holographics, Inc., a
Delaware corporation (the “Company”), and William M. Hitchcock, Randall C. Bassett, David H. Hancock, the SEP IRA F/B/O Norman H. Pessin (the “Pessin IRA”), Sandra F. Pessin, Levy, Harkins & Co., Inc.,
a Delaware corporation (“Levy Harkins”), The Gracy Fund, L.P., a Delaware limited partnership (“The Gracy Fund”), Edwin A. Levy, James Lebenthal and Michael J. Harkins. 
 WHEREAS, William M. Hitchcock, Randall C. Bassett, David H. Hancock, the Pessin IRA, Sandra F. Pessin, Levy Harkins, The Gracy Fund,
Edwin A. Levy and James Lebenthal (together, the “Voting Agreement Members”) entered into that certain Voting Agreement dated March 28, 2007 (the “Voting Agreement”). 
 WHEREAS, Michael J. Harkins (together with the Voting Agreement Members, the “Participating Stockholders”) is President of Levy
Harkins and a general partner of The Gracy Fund, which are parties to the Voting Agreement. 
 WHEREAS, the Voting Agreement Members,
pursuant to the terms of the Voting Agreement, and Michael J. Harkins, by nature of his position with Levy Harkins and The Gracy Fund, beneficially own 20.9% of the outstanding shares of common stock of the Company (“Common Stock”).

 WHEREAS, on March 23, 2007, certain Voting Agreement Members recommended to the Board of Directors of the Company (the
“Board”) nomination of five director candidates to replace the Company’s current Board at the Company’s 2007 annual meeting (the “Annual Meeting”) and on March 30, 2007 and April 9, 2007, the
Participating Stockholders filed Schedules 13D to disclose the possibility that they might commence a contested election of directors at the Annual Meeting if the Board does not accept their slate of nominees. 
 WHEREAS, the Participating Stockholders and the Company engaged in discussions to determine the best course for the Board and wish to set forth the terms
for resolving the matters between the Participating Stockholders and the Company. 
 NOW, THEREFORE, in consideration of the foregoing, the
parties hereto agree as follows: 
 1. Board and Committee Composition. 
 (a) Upon the execution and delivery of this Agreement by the parties hereto, (i) the Board will be expanded to seven (7) members,
(ii) Randall Bassett and Eric Haskell shall be appointed to the Board, (iii) the Strategic Advisory Committee of the Board shall be constituted, to be governed by the charter attached hereto as Exhibit A, (iv) Randall Bassett, Richard
Robbins and Kenneth Traub shall be appointed as the members of the Strategic Advisory Committee, with Randall Bassett appointed as chairman of the Strategic Advisory Committee, and (v) the Compensation Committee shall be expanded to four
(4) members and Eric Haskell shall be appointed to the Compensation Committee. 

 (b) The Company will nominate and recommend for election by the stockholders of the Company the following
slate of seven (7) directors to stand for election at the Annual Meeting: Salvatore D’Amato, Jordan Davis, Fred Levin, Richard Robbins and Kenneth Traub (each, a “Company Nominee”), and Randall Bassett and Eric Haskell
(each, a “Stockholder Nominee”). If each Stockholder Nominee is elected and chosen to serve as a member of the Board, each Stockholder Nominee will serve as a member of the Board, and the respective committees to which each
Stockholder Nominee is appointed pursuant to paragraph 1(a) above, for the same term as the Company Nominees elected to the Board at the Annual Meeting, which term shall expire when his successor is duly elected at the 2008 annual meeting and
qualified or upon his death, resignation or removal, all as provided in the Company’s bylaws. 
 (c) Immediately following the
conclusion of the Annual Meeting, the Nominating Committee of the Board shall be constituted, to be governed by the charter attached as Exhibit B hereto, and consisting of the following members: Randall Bassett, Eric Haskell and Fred Levin. If at
any time following the Annual Meeting, the Participating Stockholders beneficially own, as defined in Rule 13d-3 promulgated under the Securities Exchange Act, less than 10% of the outstanding shares of Common Stock for a period continuing for more
than 30 days, the Nominating Committee shall be automatically disbanded, without any action on the part of the Board. At or about the time the Nominating Committee submits any recommendations to the Board for the Company’s 2008 regular annual
meeting, it shall solicit a representation from the Participating Stockholders with respect to their then current aggregate beneficial ownership of Common Stock. If the Nominating Committee has not been disbanded pursuant to this paragraph 1(c), the
Company shall nominate and recommend for election by the stockholders of the Company at the 2008 annual meeting the nominees selected by the Nominating Committee. Before the first meeting of the Board held after the 2008 annual meeting of the
Company’s stockholders, the Company shall not make any change in the size or, except as set forth in paragraph 1(d) below, membership of the Nominating Committee or amend the charter of the Nominating Committee. 
 (d) If a vacancy shall occur in the Board of Directors following the Annual Meeting and before the Company’s 2008 regular annual meeting with
respect to a seat held by a Company Nominee, a qualified individual shall be appointed to fill such vacancy by the remaining Company Nominees. If such vacancy shall also cause a vacancy to occur on the Nominating Committee of the Board with respect
to the seat held by a Company Nominee, the remaining Company Nominees shall appoint a Company Nominee who is an independent director to fill such vacancy on the Nominating Committee. If a vacancy shall occur in the Board of Directors following the
Annual Meeting and before the Company’s 2008 regular annual meeting with respect to a seat held by a Stockholder Nominee, a qualified individual shall be appointed to fill such vacancy by the remaining Stockholder Nominee. If at any time
following the Annual Meeting and before the Company’s 2008 regular annual meeting vacancies shall occur simultaneously with respect to both seats held by Stockholder Nominees, the Board shall (subject to the exercise of the Board’s
fiduciary duties) appoint to one or both vacancies, as a new Stockholder Nominee, an individual or individuals selected from that list of individuals attached hereto as Exhibit C. In such event, if the Board chooses to appoint only one individual

  

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from the list on Exhibit C, such new Stockholder Nominee shall appoint a qualified individual to fill the remaining vacancy in accordance with this paragraph
1(d). The Board shall appoint to the Nominating Committee, and to any other committees of the Board in which a vacancy shall occur with respect to a seat held by a Stockholder Nominee, any new Stockholder Nominee appointed under this paragraph 1(d)
to fill a vacancy in the Board of Directors. 
 2. Expense Reimbursement. The Company will pay the Participating Stockholders’
expenses, including legal fees, in an aggregate amount of up to $75,000, in connection with their efforts to nominate a slate of directors. The Participating Stockholders will provide the Company with a reasonably detailed itemized invoice listing
the expenses incurred by them. The Company will pay such invoiced amounts by wire transfer of immediately available funds as soon as practicable upon the receipt by the Company from the Participating Stockholders of the invoice. 
 3. Termination of the Voting Agreement. The Voting Agreement Members hereby mutually agree to terminate the Voting Agreement, and this Agreement
shall constitute written agreement to so do pursuant to Section 3.2 of the Voting Agreement, to be effective as of the date of this Agreement, immediately following and contingent upon the effectiveness of this Agreement. 
 4. Company Representations and Warranties. The Company represents and warrants to the Participating Stockholders as follows: 
 (a) The Company is a corporation duly organized, validly existing and in good standing under the laws of the State of Delaware. The Company has the full
power and authority to execute, deliver and carry out the terms and provisions of this Agreement, and has taken all necessary action to authorize the execution, delivery and performance of this Agreement; and 
 (b) This Agreement has been duly and validly authorized, executed and delivered by the Company and constitutes a valid and binding obligation of the
Company, enforceable in accordance with its terms, and no other proceeding on the part of the Company is necessary to authorize the execution, delivery and performance of this Agreement. 
 5. Participating Stockholders Representations and Warranties. 
 (a) Levy Harkins represents and warrants to the Company (i) that it is a corporation duly organized, validly existing and in good standing under the laws of the State of Delaware, has the full power and authority
to execute, deliver and carry out the terms and provisions of this Agreement and has taken all necessary action to authorize the execution and performance of this Agreement and (ii) that this Agreement has been duly and validly authorized,
executed and delivered by Levy Harkins and constitutes a valid and binding obligation of Levy Harkins, enforceable in accordance with its terms, and no other proceeding on the part of Levy Harkins is necessary to authorize the execution, delivery
and performance of this Agreement. 
 (b) The Gracy Fund represents and warrants to the Company (i) that it is a limited partnership
duly organized, validly existing and in good standing under the laws of the 

  

 3 

 
State of Delaware, has the full power and authority to execute, deliver and carry out the terms and provisions of this Agreement and has taken all necessary
action to authorize the execution and performance of this Agreement and (ii) that this Agreement has been duly and validly authorized, executed and delivered by The Gracy Fund and constitutes a valid and binding obligation of The Gracy Fund,
enforceable in accordance with its terms, and no other proceeding on the part of The Gracy Fund is necessary to authorize the execution, delivery and performance of this Agreement. 
 (c) The Pessin IRA represents and warrants to the Company (i) that it has the full power and authority to execute, deliver and carry out the terms
and provisions of this Agreement and has taken all necessary action to authorize the execution and performance of this Agreement and (ii) that this Agreement has been duly and validly authorized, executed and delivered by the Pessin IRA and
constitutes a valid and binding obligation of the Pessin IRA, enforceable in accordance with its terms, and no other proceeding on the part of the Pessin IRA is necessary to authorize the execution, delivery and performance of this Agreement.

 6. Standstill Provisions. Provided that the Company is not in material default under this Agreement, the Participating Stockholders
agree, jointly and severally, through the conclusion of the 2007 annual meeting of the Company and for a period of one year thereafter, provided that the provisions of this paragraph 6 and paragraph 8 below shall not apply to the 2008
regular annual meeting of the Company (the “Standstill Period”), none of the Participating Stockholders nor any of their affiliates, associates or representatives shall, other than as a duly elected member of the Board, in any
manner, directly or indirectly, unless such shall have been specifically invited in writing by the Company: 
 (a) Seek, offer or propose
(whether publicly or otherwise) to effect or participate in, or, in any way, assist any other person to seek, offer or propose (whether publicly or otherwise) to effect or participate in (i) any tender or exchange offer, merger or other
business combination involving the Company or any of affiliates, (ii) any recapitalization, restructuring, liquidation, dissolution or other material transaction outside the scope of the Company’s traditional business operations with
respect to the Company or any of its affiliates or (iii) any “solicitation” of “proxies” (as such terms are used in the proxy rules of the Securities and Exchange Commission); 
 (b) Otherwise act, alone or in concert with others, to seek to control the management, the Board or the policies of the Company, including without
limitation, by (i) initiating or instituting a stockholder solicitation for any such purpose, or (ii) nominating or causing others to nominate, or otherwise seeking to elect directors of the Company other than those nominated by the Board;
or 
 (c) Enter into any discussions or arrangements with any third party with respect to any of the foregoing. 
 Notwithstanding anything to the contrary in Section 4, the mere act of purchasing or selling any capital stock of the Company beneficially owned by
any of the Participating Stockholders shall not by itself be deemed to constitute the participation in, or assistance by, any of the Participating Stockholders with respect to any of the foregoing. 
  

 4 

 7. Withdrawal of Shareholder Proposal. The Participating Stockholders shall withdraw a proposal
submitted to the Company on March 23, 2007, to recommend to the Board to nominate their own slate of directors at the Annual Meeting (the “Stockholder Proposal”). 
 8. Voting. 
 (a) At any meeting of the
stockholders of the Company held at any time between the date of this Agreement and the expiration of the Standstill Period, each Participating Stockholder shall (i) vote, or cause to be voted, all shares of common stock of the Company
beneficially owned by him or her, as of the record date for such meeting (“Voting Securities”), in favor of the election to the Board of the persons nominated by the Board for election to the Board at such meeting; and (ii) not
vote, or cause not to be voted, any such Voting Securities in favor of the removal from the Board of any director or in favor of any candidates or slate of candidates for election to the Board not nominated by the Board. 
 (b) At any meeting of the stockholders of the Company held at any time between the date of this Agreement and the expiration of the Standstill Period,
the Participating Stockholders shall cause all Voting Securities to be present, in person or proxy, so that all such Voting Securities can be counted for the purpose of determining the presence of a quorum at each such meeting. 
 9. Mutual Release; Covenants not to Sue. 
 (a) The Company shall fully release, exonerate, and discharge each of the Participating Stockholders and their respective affiliates, associates, representatives, employees, agents and advisors (each, a “Stockholder
Releasee”) from any and all liability and responsibility for any and all Claims (as hereinafter defined); and covenants and agrees not to participate in, commence or permit (to the extent within its control) the assertion or commencement of
any demand, allegation, litigation, proceeding or action relating to any Claim, and not to encourage, assist or cooperate with any person in pursuing or asserting any Claim, against any Stockholder Releasee. 
 (b) The Participating Stockholders shall, jointly and severally, fully release, exonerate and discharge the Company and each of its affiliates,
associates, representatives, employees, agents and advisors (each, a “Company Releasee”) from any and all liability and responsibility for any and all Claims (as hereinafter defined); and covenant and agree not to participate in,
commence or permit (to the extent within its respective control) the assertion or commencement of any demand, allegation, litigation, proceeding or action relating to any Claim, and not to encourage, assist or cooperate with any person in pursuing
or asserting any Claim against any Company Releasee. 
 As used in this Agreement, “Claim” means any actual or alleged liability,
claim, action, suit, cause of action, obligation, contract, judgment, penalty or expense (including, without limitation, reasonable attorneys’ fees and expenses, and the costs of investigation and litigation), whether in law or in equity,
whether known or unknown, whether matured or unmatured and whether foreseen or unforeseen, that any party to this Agreement may or could have had, or now or hereafter may have, for, upon, or by reason of, any matter, cause or thing whatsoever
resulting 

  

 5 

 
from, arising out of, relating to, connected in any way with, or alleged, suggested or mentioned in connection with, (i) the Stockholder Proposal or any
part or aspect thereof, (ii) any action taken, or statement made, in connection with the Stockholder Proposal, or (iii) any action, failure to act, representation, event, transaction, occurrence or other subject matter resulting from,
arising out of, relating to, or alleged in connection with the foregoing; provided, however, that “Claim” shall not mean any of the foregoing to the extent they result from, arise out of, relate to, connect in any way with, or are alleged,
suggested or mentioned in connection with, the enforcement of this Agreement. 
 10. Publicity. As soon as practical after the
execution of this Agreement, the Company shall issue a press release in the form and substance reasonably satisfactory to both the Company and the Participating Stockholders. No public announcement or disclosure will be made by any party with
respect to the subject matter of this Agreement without the prior written consent of the Company and the Participating Stockholders; provided, however, that the provisions of this paragraph will not prohibit (a) any disclosure either party
reasonably believes is required by any applicable law (in which case the disclosing party will provide the other party with the opportunity to review the disclosure in advance) or (b) any disclosure made in connection with the enforcement of
any right or remedy relating to this Agreement or other documents contemplated hereby. 
 11. Specific Performance. Each of the
parties acknowledges and agrees that the other party would be damaged irreparably in the event any of the provisions of this Agreement are not performed in accordance with their specific terms or otherwise are breached. Accordingly, each of the
parties agrees that, without posting bond or other undertaking, the other party shall be entitled to an injunction or injunctions to prevent breaches of the provisions of this Agreement and to enforce specifically this Agreement and the terms and
provisions hereof in any claim, action, cause of action or suit (whether in contract or tort or otherwise), litigation (whether at law or in equity, whether civil or criminal), controversy, assessment, arbitration, investigation, hearing, charge,
complaint, demand, notice or proceeding to, from, by or before any governmental authority (an “Action”) instituted in any court of the United States or any state thereof having jurisdiction over the parties and the matter in
addition to any other remedy to which it may be entitled, at law or in equity. Each party further agrees that, in the event of any Action for specific performance in respect of such breach, it shall not assert the defense that a remedy at law would
be adequate. 
 12. Amendments and Waivers. No amendment or waiver of any provision of this Agreement will be valid and binding unless
it is in writing and signed, in the case of an amendment, by the Company and the Participating Stockholders, or in the case of a waiver, by the party against whom the waiver is to be effective. No waiver by any party of any breach or violation or,
default under or inaccuracy in any representation, warranty or covenant hereunder, whether intentional or not, will be deemed to extend to any prior or subsequent breach, violation, default of, or inaccuracy in, any such representation, warranty or
covenant hereunder or affect in any way any rights arising by virtue of any prior or subsequent such occurrence. No delay or omission on the part of any party in exercising any right, power or remedy under this Agreement will operate as a waiver
thereof. 
  

 6 

 13. Counterparts. This Agreement may be executed in any number of counterparts, each of which will
be deemed an original, but all of which together will constitute but one and the same instrument. This Agreement will become effective when duly executed by each party hereto. 
 14. Severability. Any term or provision of this Agreement that is invalid or unenforceable in any situation in any jurisdiction will not affect
the validity or enforceability of the remaining terms and provisions hereof or the validity or enforceability of the offending term or provision in any other situation or in any other jurisdiction. In the event that any provision hereof would, under
applicable law, be invalid or unenforceable in any respect, each party hereto intends that such provision will be construed by modifying or limiting it so as to be valid and enforceable to the maximum extent compatible with, and possible under,
applicable law. 
 15. Governing Law. This Agreement, the rights of the parties and all Actions arising in whole or in part under or
in connection herewith, will be governed by and construed in accordance with the domestic substantive laws of Delaware, without giving effect to any choice or conflict of law provision or rule that would cause the application of the laws of any
other jurisdiction. 
 16. WAIVER OF JURY TRIAL. To the extent not prohibited by applicable law that cannot be waived, the parties
hereby waive, and covenant that they will not assert (whether as plaintiff, defendant or otherwise), any right to trial by jury in any action arising in whole or in part under or in connection with this agreement or any of the contemplated
transactions, whether now existing or hereafter arising, and whether sounding in contract, tort or otherwise. The parties agree that any of them may file a copy of this paragraph with any court as written evidence of the knowing, voluntary and
bargained-for agreement among the parties irrevocably to waive its right to trial by jury in any proceeding whatsoever between them relating to this agreement or any of the contemplated transactions will instead be tried in a court of competent
jurisdiction by a judge sitting without a jury. 
 [Next page is the signature page.] 
  

 7 

 IN WITNESS WHEREOF, the undersigned parties have duly executed this Agreement as of the date first
written above. 
  

			
	 Company:

	
	AMERICAN BANK NOTE HOLOGRAPHICS, INC.
		
	By:	 	 /s/ Kenneth H. Traub

	Name:	 	Kenneth H. Traub
	Title:	 	President and CEO
	
	Participating Stockholders:
	
	 /s/ William M. Hitchcock

	William M. Hitchcock
	
	 /s/ Randall C. Bassett

	Randall C. Bassett
	
	 /s/ David H. Hancock

	David H. Hancock
	
	SEP IRA F/B/O NORMAN H. PESSIN
		
	By:	 	 /s/ Norman H. Pessin

		 	Norman H. Pessin
	
	 /s/ Sandra F. Pessin

	Sandra F. Pessin

 [SIGNATURES CONTINUE ON FOLLOWING PAGE.] 
  

 8 

			
	LEVY, HARKINS & CO., INC.
		
	By:	 	 /s/ Michael J. Harkins

		 	Michael J. Harkins, President
	
	THE GRACY FUND, L.P.
		
	By:	 	 /s/ Edwin A. Levy

		 	Edwin A. Levy, General Partner
		
	By:	 	 /s/ James Lebenthal

		 	James Lebenthal, General Partner
		
	By:	 	 /s/ Michael J. Harkins

		 	Michael J. Harkins, General Partner
	
	 /s/ Edwin A. Levy

	Edwin A. Levy
	
	 /s/ James Lebenthal

	James Lebenthal
	
	 /s/ Michael J. Harkins

	Michael J. Harkins

  

 9 

 EXHIBIT A 
 AMERICAN BANK NOTE HOLOGRAPHICS, INC. 
 STRATEGIC ADVISORY COMMITTEE CHARTER 
 Strategic Advisory Committee Purpose and Role 
 The Strategic Advisory
Committee is established to assist and provide advice to the Board of Directors (the “Board”), regarding the monitoring and implementation of the Company’s review of financial and strategic alternatives to maximize the value of the
Company for its shareholders (the “Strategic Plan”), as well as general strategic planning from time to time. The Board shall have final authority over all recommendations of the Committee. 
 Responsibilities 
 The Committee shall provide advice and assistance
to the Board with regard to: 
  

	1.	The Company’s then current Strategic Plan. 

  

	2.	The Company’s long-term strategy, which may include goals for future years and evaluations of evolving and emerging technologies and changes in products and services in the
markets the Company serves. 

  

	3.	Evaluating material acquisitions and dispositions and similar transactions and other potential growth and expansion opportunities for the Company. 

  

	4.	Strategic issues or opportunities material to the Company outside the scope of the Company’s traditional business operations. 

  

	5.	Such other responsibilities as are delegated to the Committee by the Board. 

 Composition and Meetings. 
 The Committee shall consist at all times of no fewer than three members who shall be members of the Board. The
members of the Committee, including the Chairperson of the Committee, shall be appointed and replaced by the Board. The Committee will have at least two (2) regularly scheduled meetings each year either in person or telephonically, and at such
times and places as the Committee shall determine, but may meet as often as may be deemed necessary or appropriate in its judgment. The Committee may ask members of management or others to attend meetings and provide pertinent information as
necessary. The Committee shall report to the Board, as requested or as the Committee deems necessary, on a regular basis but not less frequently than annually. Minutes will be prepared, and the Committee will report the results of its meetings to
the Board. Committee members will be furnished copies of the minutes of each meeting and any action taken by written consent. The Committee is governed by the same rules regarding meetings, action without meetings, notice, waiver of notice, and
quorum and voting requirements applicable to the Board. 
 The Committee shall, on an annual basis, evaluate the performance of the Committee. 

 EXHIBIT B 
 AMERICAN BANK NOTE HOLOGRAPHICS, INC. 
 NOMINATING COMMITTEE 
 CHARTER 
 Purpose 
 The Nominating Committee (the “Committee”) of the Board of Directors (the “Board”) of American Bank Note Holographics, Inc. (the
“Company”) is established for the purpose of assisting the Board in its selection of individuals (i) beginning with the 2008 annual meeting of the stockholders of the Company, as nominees for election to the Board at annual meetings
of the Company’s stockholders or (ii) after the 2008 annual meeting of the stockholders of the Company, to fill any vacancies or newly created directorships on the Board. Notwithstanding the foregoing, the Committee shall have no right to
make any recommendations with respect to the expansion of the size of the Board. 
 The Committee will exercise its business judgment in
carrying out the responsibilities described in this charter in a manner that the Committee members reasonably believe to be in the best interests of the Company and its stockholders. No provision of this charter, however, is intended to create any
right in favor of any third party, including any stockholder, officer, director or employee of the Company or any subsidiary thereof, in the event of a failure to comply with any provision of this charter. 
 Committee Membership 
 The Committee shall consist of
no fewer than three (3) members. The members of the Committee shall be appointed by the Board. Committee members shall serve at the pleasure of the Board. The Board shall also appoint one member of the Committee to act as the Chairperson of the
Committee. The Chairperson and each other member of the Committee shall serve until the earlier of, (i) the date on which he or she is no longer a member of the Board or (ii) his or her resignation or removal by the Board. The Board may
appoint additional or replacement members of the Committee from time to time. 
 Meetings 
 The Committee shall meet at least once annually, or more frequently as circumstances dictate. The Chairman of the Board or any member of the Committee may
call meetings of the Committee. All meetings may be held telephonically. The Committee may invite to its meetings any director, management of the Company and such other persons as it deems appropriate to carry out its responsibilities. No action may
be taken by the Committee unless approved by a majority of the members of the Committee. 

 Committee Authority and Responsibilities 
 The Committee shall have such other authority as shall be necessary or appropriate to effectuate its purposes as set forth in this Charter. 
 Specific duties and responsibilities of the Committee include, but are not limited to, the following: 
 1. To establish criteria for the selection of new directors to serve on the Board. 
 2. To identify individuals believed to be qualified candidates to serve on the Board. In identifying candidates for membership on the Board, the
Committee shall take into account all factors it considers appropriate, which may include (a) ensuring the board, as a whole, is diverse and consists of individuals with various and relevant career experience, relevant technical skills,
industry knowledge and experience, financial expertise (including expertise that could qualify a director as a “financial expert,” as that term is defined by the SEC), local or community ties, (b) minimum individual qualifications,
including strength of character, mature judgment, familiarity with the Company’s business and industry, independence of thought and ability to work collegially. The Committee may also consider the extent to which the candidate would fill a
present need on the Board. 
 3. To seek, interview and screen individuals qualified to become Board members for recommendation to the Board
and evaluate such individuals using the Committee’s selection criteria. 
 4. To develop lists of desirable director nominees and share
information concerning potential nominees and the process with the Board, soliciting input from Board members. 
 5. To recommend to the
Board, for its selection, those qualified individuals, consistent with criteria approved by the Committee, as the Committee shall deem appropriate (i) as nominees for election by the stockholders to the Board at the next annual meeting of the
stockholders of the Company or (ii) to fill any vacancies or newly created directorships on the Board. 
 6. To evaluate the
qualifications of nominees submitted by the Company’s stockholders using the same selection criteria the Committee uses to evaluate other potential nominees. 
 7. To extend to each prospective director nominee approved by the Board the invitation to stand for election to the Board. 
 8. Annually, to review and reassess the adequacy of this charter and recommend any proposed changes to the Board for approval. 
 9.To perform such other duties as the Board may from time to time direct or as may be required by, or as the Committee shall deem appropriate under, applicable laws, rules and regulations. 

 EXHIBIT C 
 Replacement Stockholder Nominees 
 David F. Waguespack 
 Peter Woodward 
 J. Patrick Collins

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