EMPLOYMENT AGREEMENT

EXECUTION
COPY      

Exhibit 10.3

EMPLOYMENT AGREEMENT

     This Employment Agreement (“Agreement”) by and between Lions Gate Entertainment Corp. (“Lions Gate”) and Michael Burns (“Burns”) is entered into as of September 1, 2006.

     This Agreement relates to the terms and conditions of Burns’ employment with Lions Gate for the term specified herein.

     The parties hereby agree as follows:

     1.  Employment . Lions Gate hereby employs Burns to serve in the capacity of Vice Chairman of Lions Gate on the terms and conditions set forth herein. Burns shall render such services as are customarily provided by persons in the capacity of Vice Chairman in the motion picture industry and as may be reasonably requested by Lions Gate. Burns hereby agrees to comply with all reasonable requirements, directions and requests, and with all reasonable rules and regulations made by Lions Gate in connection with the regular conduct of its business; to render services during Burns’ employment hereunder whenever and wherever and as often as Lions Gate may reasonably require in a competent, conscientious and professional manner, and as instructed by Lions Gate in all matters, including those involving artistic taste and judgment, but there shall be no obligation on Lions Gate to cause or allow Burns to render any services, or to include all or any of Burns’ work or services in any motion picture or other property or production. Notwithstanding the foregoing, Lions Gate acknowledges that Burns is a shareholder of Ignite Entertainment and the parties agree to negotiate at arms length any matters concerning Lions Gate and Ignite.

     2.  Term . Burns’ employment term under this Agreement shall commence on September 1, 2006 and continue through and including September 1, 2010 (the “Term”).

     3.  Base Salary . Lions Gate shall pay Burns an annual fixed salary of US$750,000 (the “Base Salary”) during the Term payable in equal installments in accordance with Lions Gate’s standard payroll practices.

     4.  Bonuses .

          (a) Discretionary Annual Bonus . Burns is eligible to receive a discretionary annual bonus (the “Discretionary Bonus”) based on Lions Gate’s fiscal year. Lions Gate’s Chief Executive Officer shall recommend a bonus amount, if any, for Burns with input from Lions Gate’s Compensation Committee (“Compensation Committee”) and the Compensation Committee shall have sole and absolute discretion regarding the bonus amount and Burns’ entitlement to a bonus. Burns’ entitlement to a bonus and/or the amount of bonus shall be determined using the following criteria (with no emphasis to be derived from the order in which they appear): EBITDA; revenue and bottom line performance; Lions Gate’s ability to pay such bonus; earnings; free cashflow levels; debt reduction; and share price. Lions Gate will be guided, informally, by a formula of 100% of base salary, if annual targets are met, but the Compensation Committee will also consider other criteria, such as transformative transactions for which Burns is materially responsible. The Discretionary Bonus, if any, shall be payable in a

schedule: (i) 333,333 time vesting RSUs shall be granted as soon as practicable after the date hereof (the “Time Vesting RSUs”); (ii) 333,333 performance vesting RSUs shall be granted in four (4) annual grants (one-fourth for each year) with the first such grant to be made as soon as practicable after the date hereof and subsequent grants to be made on September 1, 2007, September 1, 2008, and September 1, 2009 (the “Performance Vesting RSUs”). Such RSUs shall be payable upon vesting in an equal number of common shares of Lions Gate. The foregoing RSUs shall be in addition to any equity interest (whether options, warrants or otherwise) previously granted to Burns pursuant to any previous employment agreement or otherwise, which expressly includes but is not limited to 375,000 phantom shares in favor of Burns granted by agreement dated December 11, 2001 (collectively, the “Pre-existing Equity”).

          (b) Date of Vesting . Subject to Burns’ continued employment hereunder through the relevant vesting date, the RSUs shall vest as follows:

               (i) The Time Vesting RSUs (333,333 RSUs) shall vest in four (4) equal annual installments with the first such installment vesting on September 1, 2007, and the last vesting on September 1, 2010;

               (ii) The Performance Vesting RSUs shall be eligible to vest on an annual schedule with the first grant being eligible to vest on September 1, 2007, the second on September 1, 2008, the third on September 1, 2009, and the fourth on September 1, 2010 (each, a “Performance Vesting Date”); provided, however, that the vesting of the RSUs on each such Performance Vesting Date shall be subject to satisfaction of annual Company performance targets approved in advance by the Compensation Committee for the twelve (12) month period ending on such Performance Vesting Date. The Performance Vesting RSUs provided for by this Section 6(b)(ii) shall vest on a sliding scale basis if the Company performance targets have not been fully met for a particular year. For purposes of example only, if seventy five (75) percent of Company targets have been met for a particular year, seventy five (75) percent of the grant for that year would vest. Notwithstanding the foregoing, the Compensation Committee may, in its sole discretion, provide that any or all of the RSUs scheduled to vest on any such Performance Vesting Date shall be deemed vested as of such date even if the applicable performance targets are not met. Furthermore, the Compensation Committee may, in its sole discretion, provide that any RSUs scheduled to vest on any such Performance Vesting Date that do not vest because the applicable performance targets are not met may vest on any future Performance Vesting Date if the performance targets applicable to such future Performance Vesting Date are exceeded.

          (c) Acceleration of Vesting : If the vesting of the RSUs are accelerated pursuant to Paragraph 8(b) or Paragraph 12(b) below, then the foregoing requirement that Burns be an employee shall not apply with respect to any of the foregoing vesting dates.

     7.  Options .

          (a) Grant of Options . Provided that Burns’ employment hereunder has not been terminated for cause (as defined herein), death, or disability (as defined herein) or at his own election and subject to regulatory approval, if required, Burns shall be granted, as soon as practicable after the date hereof, an option to purchase 1,050,000 shares of Lions Gate stock (“the Option”) at a per-share exercise price equal to the closing price of a Lions Gate common share on the date the Option is granted. The foregoing Option shall be in addition to any Pre-existing Equity as well as the RSU grants provided for in this agreement.

          (b) Date of Vesting; Date Exercisable . Subject to Burns’ continued employment hereunder, the Option shall vest and become exercisable as to 262,500 shares on each of September 1, 2007, September 1, 2008, September 1, 2009 and September 1, 2010; provided, however, if the vesting of the option and rights to exercise are accelerated pursuant to Paragraph 8(b) or Paragraph 12(b) below, then the foregoing requirement that Burns be an employee shall not apply with respect to any of the foregoing vesting dates.

     8.  Change of Control . In the event of a “Change of Control” as defined below, the following shall apply:

          (a) Change of Control definition . For purposes of this Agreement, the term “Change of Control” shall mean:

               (i) if any person, other than a trustee or other fiduciary holding securities of Lions Gate under an employee benefit plan of Lions Gate, becomes the beneficial owner, directly or indirectly, of securities of Lions Gate representing 33% or more of the outstanding shares of common stock of Lions Gate as a result of one or more related transactions in the context of a merger, consolidation, sale or other disposition of equity interests or assets of Lions Gate;

               (ii) if, as a result of one or more related transactions in the context of a merger, consolidation, sale or other disposition of equity interests or assets of Lions Gate, there is a sale or disposition of 33% or more of Lions Gate’s assets (or consummation of any transaction, or series of related transactions, having similar effect);

               (iii) if, as a result of one or more related transactions in the context of a merger, consolidation, sale or other disposition of equity interests or assets of Lions Gate, there occurs a change or series of changes in the composition of the Board as a result of which half or less than half of the directors are incumbent directors;

               (iv) if, as a result of one or more related transactions in the context of a merger, consolidation, sale or other disposition of equity interests or assets of Lions Gate, a shareholder or group of shareholders acting in concert obtain control of 33% or more of the outstanding shares;

               (v) if, as a result of one or more related transactions in the context of a merger, consolidation, sale or other disposition of equity interests or assets of Lions Gate, a shareholder or group of shareholders acting in concert obtain control of half of the Board;

               (vi) if there is a dissolution or liquidation of Lions Gate; or

               (vii) if there is any transaction or series of related transactions that has the substantial effect of any one or more of the foregoing.

          (b) Unvested Restricted Stock Units/Options . If a Change in Control occurs while Burns is employed by Lions Gate hereunder:

               (i) Any then-unvested portion of the Time Vesting RSUs granted pursuant to Section 6(b)(i) above and any then-unvested portion of the Option shall immediately and fully vest, and the Option shall become immediately and fully exercisable.

               (ii) The Performance Vesting RSUs granted pursuant to Section 6(b)(ii) above that are eligible to vest on the next Performance Vesting Date after the date of such Change in Control (but not including any RSUs that were eligible to vest on any preceding Performance Vesting Date and did not vest on such date) shall immediately and fully vest. Unless otherwise provided by the Compensation Committee, any RSUs that have not vested after giving effect to the foregoing sentence shall immediately terminate.

          (c) Severance .

               (i) If, in connection with a Change of Control, Burns’ employment by Lions Gate is terminated for any reason, excepting only termination for cause (as set forth in Paragraph 11(d) below) and termination at Burns’ election (pursuant to Paragraph 8(c)(ii) below), then notwithstanding anything to the contrary in Paragraph 12 below Burns shall be entitled to the payment of US$1,800,000 or the remainder of the Base Salary to be paid for the Term (whichever amount is greater) together with the Options and the RSUs vested as a result of the Change of Control as described above as well as Discretionary Bonus, if any.

               (ii) For a period of fifteen (15) days following the effective date of the Change of Control (i.e., the date of the formal closing of the transaction) or notice from Lions Gate (whichever is later), Burns shall have the right, exercisable in his sole discretion, to terminate his employment hereunder by giving written notice thereof to Lions Gate within such fifteen (15) day period, in which event Burns shall be entitled to the payment of US$1,800,000 or the remainder of the Base Salary to be paid for the Term (whichever amount is greater) together with the Options and the RSUs vested as a result of the Change of Control as described above as well as Discretionary Bonus, if any.

          (d) Waiver of Stock Price Bonus Condition Precedent . If at the time of the effective date of a Change of Control Lions Gate’s share price is US$13.00, $16.00 or $19.00 per share or greater than any of the foregoing, then Lions Gate shall pay Burns any applicable Stock Price Bonus, without regard to the potential condition precedent or reduction set forth in Paragraph 5 above, within five (5) business days following such Change of Control.

     9.  Benefits . During the Term, Burns sh