IMAGE ENTERTAINMENT, INC.
ELIGIBLE DIRECTOR
NON-QUALIFIED STOCK OPTION AGREEMENT
THIS AGREEMENT dated as of the 17th day of
September, 1998, between Image Entertainment, Inc., a
California corporation (the "Corporation"), and Xxxx
Xxxxxxxx Xxxxxx (the "Director").
W I T N E S S E T H
WHEREAS, the Corporation has adopted (subject to
shareholder approval) a 1998 Incentive Plan (the "Plan").
WHEREAS, pursuant to Section 1.3 of the Plan, the
Corporation through the Board of Directors may grant a
discretionary option to a person in connection with his
becoming a director; and
WHEREAS, concurrently with the adoption of the
Plan, the shareholders elected the Director as a new
director and the Board desires to provide for his
compensation on substantially the same terms as the other
non-employee directors for the current year; and
WHEREAS, the Board of Directors on September 17,
1998 authorized the grant of an option (this "Option") to
the Director upon the terms and conditions evidenced hereby,
as contemplated by the Plan.
NOW, THEREFORE, in consideration of the services
rendered and to be rendered by the Director and as a further
inducement to those services, the Corporation and the
Director agree to the terms and conditions set forth herein,
as contemplated by the terms of the Plan.
1. Option Grant. This Agreement evidences the
grant to the Director of an Option to purchase an aggregate
of 15,000 shares of Common Stock (the "Shares"), subject to
the terms and conditions and to adjustment as set forth
herein or in or pursuant to the Plan and (except as
expressly provided herein) the 1994 Eligible Directors Stock
Option Plan, as amended (the "1994 Plan"). Director
acknowledges that this grant is in lieu of any grant under
the 1994 Plan.
2. Exercise Price. This Option entitles the
Director to purchase (subject to the terms of Sections 3
through 5 below), all or any part of the Shares at a price
per share of $7.94.
3. Option Exercisability and Term. This Option
shall first become and remain exercisable as to 7,500 shares
on January 13, 1999 and as to an additional 3,750 shares on
each of July 13, 1999 and January 13, 2000, subject to
shareholder approval of the Plan, to adjustments under the
Plan and Section 3.4 of the 1994 Plan, and to the
acceleration provisions under Section 3.5 of the 1994 Plan.
This Option shall expire on July 12, 2008, unless earlier
terminated in accordance with the terms of Section 4 below.
4. Service and Effect of Termination of Service
or Other Event. The Director agrees to serve as a director
in accordance with the provisions of the Corporation's
Articles of Incorporation, Bylaws and applicable law. If
the Director's services as a member of the Board shall
terminate or in the other circumstances addressed in Article
3 of the 1994 Plan, this Option shall terminate prior to its
expiration at the times and to the extent set forth therein,
to the same extent as if this Option had been granted under
the 1994 Plan.
5. General Terms. Except as expressly provided
herein, this Option and this Agreement are subject to, and
the Corporation and the Director agree to be bound by, the
provisions of the 1994 Plan that apply to annual option
grants and to the provisions of the Plan that are applicable
to discretionary option grants thereunder. Such provisions
are incorporated herein by this reference. The Director
acknowledges receiving a copy of the Plan and the 1994 Plan
and reading their applicable provisions.
6. Nontransferability. This Option shall be non-
transferable.
7. Miscellaneous. This Option is not intended as
and shall not be deemed to be an incentive stock option
within the meaning of Section 422 of the Code.
IN WITNESS WHEREOF, the parties have executed this
Agreement as of the date first above written.
IMAGE ENTERTAINMENT, INC. Optionee Director: Xxxx Xxxxxxxx Xxxxxx
(a California corporation)
/s/ Xxxx Xxxxxxxx Huxley
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By /s/ Xxxxxx X. Xxxxxxxxx (Signature)
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Title President 39 Broadway
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(Address)
Xxxxxxxx, XX 00000
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(City, State, Zip Code)
SPOUSAL CONSENT
In consideration of the execution of the foregoing
Stock Option Agreement by Image Entertainment, Inc., I,
____________________________, the spouse of the Director
therein named, do hereby agree to be bound by all of the
terms and provisions thereof and of the Plans referred to
therein.
DATED: 9/29, 1998
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/s/ Xxxxxxxx X. Xxxxxx
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(Signature of Spouse)
