UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

SCHEDULE 14A INFORMATION

Proxy Statement Pursuant to Section 14(a) of the Securities Exchange Act of 1934
(Amendment No. __)

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RLJ Entertainment, Inc.

(Name of Registrant as Specified in Its Charter)

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(Name of Person(s) Filing Proxy Statement, if Other Than the Registrant)

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RLJ ENTERTAINMENT, INC.

8515 Georgia Avenue, Suite 650

Silver Spring, Maryland 20910

Dear Fellow Stockholders:

You are cordially invited to attend the 2013 Annual Meeting of Stockholders of RLJ Entertainment, Inc. (or the Company) on Thursday, August 1, 2013 at 11:00 a.m. local time at the Hyatt Regency Bethesda, located at One Bethesda Metro Center (or 7400 Wisconsin Avenue), Bethesda, Maryland 20814.

Our Board of Directors recommends that stockholders vote FOR the following three proposals that will be considered and voted on during the Annual Meeting:

Elect eight directors nominated by the Board of Directors, divided into three classes;

Vote on an advisory basis upon the compensation of the named executive officers as disclosed in the accompanying proxy statement; and

Vote on an advisory basis upon whether the advisory stockholder vote to approve the compensation of the named executive officers should occur every one, two or three years.

Please read the accompanying proxy statement and other documents delivered to you carefully for information about the matters you are being asked to consider and vote upon. Your vote is important. Whether or not you attend the Annual Meeting in person, the Board urges you to promptly vote your proxy as soon as possible by mail using the enclosed postage-paid reply envelope. If you decide to attend the meeting and vote in person, you will, of course, have that opportunity.

Thank you for your continued support.

Sincerely,

	Robert L. Johnson		Miguel Penella
	Chairman of the Board		Chief Executive Officer

RLJ ENTERTAINMENT, INC.

8515 Georgia Avenue, Suite 650

Silver Spring, Maryland 20910

NOTICE OF ANNUAL MEETING OF STOCKHOLDERS

To Be Held On August 1, 2013

To our Stockholders:

On behalf of the Board of Directors, you are cordially invited to attend the 2013 Annual Meeting of Stockholders, which will be held at the Hyatt Regency Bethesda, located at One Bethesda Metro Center (or 7400 Wisconsin Avenue), Bethesda, Maryland 20814 at 11:00 a.m. local time on Thursday, August 1, 2013, for the following purposes:

Elect eight directors nominated by the Board of Directors, divided into three classes;

Vote on an advisory basis on the compensation of the named executive officers as disclosed in the accompanying proxy statement;

Vote on an advisory basis on whether the advisory stockholder vote to approve the compensation of the named executive officers should occur every one, two or three years; and

To discuss and resolve any other matters that properly come before the meeting.

These items of business are more fully described in the proxy statement accompanying this Notice. Please carefully read the accompanying proxy statement and other documents delivered with the proxy statement.

The Board of Directors recommends stockholders vote “FOR” Proposals 1 and 2, and for “ONE YEAR” under Proposal 3, as set forth in the accompanying proxy statement.

Stockholders of record of our Common Stock at the close of business on June 13, 2013 will be entitled to notice of, and to vote at, the Annual Meeting and any adjournments or postponements thereof.

We have enclosed a proxy statement, our 2012 Annual Report, a form of proxy and a postage-paid reply envelope.

Your vote is important, and we appreciate your cooperation in considering and acting on the matters presented.

By order of the Board of Directors,

Miguel Penella

Chief Executive Officer

June 19, 2013

Important Notice Regarding the Availability of Proxy Materials

for the Stockholder Meeting to Be Held on August 1, 2013

The Company’s proxy statement and the 2012 Annual Report are available on the Investors webpages at www.rljentertainment.com or http://phx.corporate-ir.net/phoenix.zhtml?c=109706&p=irol-reports.

IMPORTANT

Whether or not you expect to attend the Annual Meeting in person, we urge you to vote your proxy at your earliest convenience by mail using the enclosed postage-paid reply envelope. This will help ensure the presence of a quorum at the Annual Meeting and will save us the expense of additional solicitation. Sending in your proxy will not prevent you from voting your shares in person at the Annual Meeting if you desire to do so. Your proxy is revocable at your option in the manner described in the accompanying proxy statement.

TABLE OF CONTENTS

Item		Page

Questions and Answers About these Proxy Materials and the Annual Meeting		3
Special Note Regarding Forward-Looking Statements		6
Proposal 1: Election of Directors		7
Board of Directors and Corporate Governance		9
Security Ownership of Certain Beneficial Owners and Management		13
Executive Officers		15
Certain Relationships and Transactions with Related Persons		15
Executive Compensation		17
Compensation Discussion and Analysis		17
Summary Compensation Table for Fiscal Year 2012		19
Employment Agreements		20
Outstanding Equity Awards at Fiscal Year End 2012		21
Director Compensation		21
Director Compensation Table for Fiscal Year 2012		21
Equity Compensation Plan Information		22
Audit Committee Report		22
Principal Accountant		23
Proposal 2: Vote on an advisory basis on the compensation of the named executive officers		24
Proposal 3: Vote on an advisory basis on the frequency of the advisory stockholder vote to approve the compensation of the named executive officers		25
Stockholder Proposals for the 2014 Annual Meeting		25
Householding of Proxies		26
Other Matters		26

Appendix A – Revised Audit Committee Charter

Appendix B – Revised Compensation Committee Charter

Appendix C – Revised Nominating & Governance Committee Charter

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RLJ ENTERTAINMENT, INC.
8515 Georgia Avenue, Suite 650

Silver Spring, Maryland 20910
(301) 608-2115

Proxy Statement
For the 2013 Annual Meeting of Stockholders
To Be Held On Thursday, August 1, 2013

Our Board of Directors (or our Board) is soliciting proxies to be voted at the Annual Meeting of Stockholders on Thursday, August 1, 2013 at 11:00 a.m., local time, and at any adjournments or postponements thereof, for the purposes set forth in the attached Notice of Annual Meeting of Stockholders. Directions to the Hyatt Regency Bethesda (where you will be able to attend the Annual Meeting and vote in person) can be found at http://www.bethesda.hyatt.com/en/hotel/our-hotel/map-and-directions.html?icamp=propMapDirections.

The notice, this proxy statement and the form of proxy enclosed are first being sent to stockholders on or about June 19, 2013. As used in this proxy statement, the terms “RLJE,” “Company,” “we,” “us” and “our” refer to RLJ Entertainment, Inc., and the term “Business Combination” refers to the business combination of RLJE, Image Entertainment, Inc. (or Image) and Acorn Media Group, Inc. (or Acorn) completed on October 3, 2012.

QUESTIONS AND ANSWERS ABOUT THESE PROXY MATERIALS AND THE ANNUAL MEETING

Why am I receiving these materials?

Our Board is providing these proxy materials to you in connection with the 2013 Annual Meeting of Stockholders of the Company, to be held on August 1, 2013. As a stockholder of record of our Common Stock on June 13, 2013, you are invited to attend the Annual Meeting and are entitled to and requested to vote on the proposals described in this proxy statement.

Who is soliciting my vote pursuant to this proxy statement?

Our Board is soliciting your vote at the Annual Meeting. In addition, certain of our officers and employees may solicit, or be deemed to be soliciting, your vote.

Who is entitled to vote?

Only stockholders of record of our Common Stock at the close of business on June 13, 2013 are entitled to vote at the Annual Meeting. If your shares of Common Stock are registered in your name on the records of the Company maintained by the Company's transfer agent, Continental, these proxy materials are being sent to you directly. If your shares are held in “street name,” meaning that they are registered in the name of a broker, nominee, fiduciary or other custodian, then generally only that broker, nominee, fiduciary or other custodian may execute a proxy and vote your shares. If you hold shares in “street name,” these proxy materials are being sent to you by the broker, nominee, fiduciary or other custodian through which you hold your shares.

How many shares are eligible to be voted?

Common Stock. As of the record date of June 13, 2013, we had 13,430,177 shares of Common Stock outstanding. Each outstanding share of our Common Stock entitles its holder to one vote on each matter to be voted on at the Annual Meeting.

What am I voting on?

You are voting on the following matters:

To elect eight directors nominated by the Board of Directors, divided into three classes;

To vote on an advisory basis upon the compensation of the named executive officers as disclosed in this proxy statement;

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To vote on an advisory basis upon whether the advisory stockholder vote to approve the compensation of the named executive officers should occur every one, two or three years; and

Any other matters that properly come before the meeting.

The Board of Directors does not currently know of any other matters that may be brought before the meeting for a vote. However, if any other matters are properly presented for action, it is the intention of the persons named on the proxy card to vote on them according to their best judgment.

How does our Board recommend that I vote?

For the reasons set forth in more detail later in this proxy statement, our Board recommends that you vote:

“FOR” the eight directors nominated by the Board of Directors (Proposal 1);

“FOR” approval of the compensation of the named executive officers (Proposal 2); and

“FOR” holding the advisory stockholder vote to approve the compensation of the named executive officers every one year (Proposal 3).

How may I cast my vote?

Stockholder of Record. If you are the stockholder of record, you may vote by one of the following methods:

in person at the Annual Meeting;

by mail;

by using the Internet; or

by telephone.

Whichever method you use, the proxies identified on the proxy card will vote the shares of which you are the stockholder of record in accordance with your instructions. If you sign, date and return your proxy card without giving specific voting instructions, the proxies will vote your shares for Proposals 1, 2 and 3. The proxies will vote in their discretion with respect to any other matter properly presented for a vote at the Annual Meeting or any adjournment or postponement thereof.

Beneficial Owners of Shares Held in "Street Name." If you are a beneficial owner of shares held in "street name" and do not provide the broker, nominee, fiduciary or other custodian through which you hold your shares with specific voting instructions, under the rules of various national and regional securities exchanges, the organization that holds your shares may generally vote on routine matters but cannot vote on non-routine matters. Of the proposals set forth in this proxy statement, none is considered a routine matter. If the organization that holds your shares does not receive instructions from you on how to vote your shares on a non-routine matter, the organization that holds your shares will inform our inspector of election that it does not have the authority to vote on this matter with respect to your shares. This is generally referred to as a "broker non-vote." When our inspector of election tabulates the votes for any particular matter, broker non-votes will be counted for purposes of determining whether a quorum is present but will not otherwise be counted. Your broker or nominee will usually provide you with the appropriate instruction form at the time you receive this proxy statement. We encourage you to provide voting instructions to the organization that holds your shares by carefully following the instructions in the voting instruction form.

What do I need to bring with me if I attend the Annual Meeting?

If you plan on attending the Annual Meeting, please remember to bring with you photo identification, such as a driver's license. In addition, if you hold shares in "street name" you should bring an account statement or other acceptable evidence of ownership of Common Stock as of the close of business on June 13, 2013, the record date for voting. Finally, if you hold shares in "street name," in order to vote at the Annual Meeting, you will also need a valid “legal proxy” issued in your name, which you can obtain by contacting your account representative at the broker, nominee, fiduciary or other custodian through which you hold your shares.

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How may I cast my vote by mail?

To vote by mail, you may complete the enclosed proxy card and then sign, date and return it in the postage-paid reply envelope provided. Submitting a proxy now will not limit your right to vote at the Annual Meeting if you decide to attend in person.

If your shares are held in "street name," meaning that they are registered in the name of a broker, nominee, fiduciary or other custodian, then generally only that broker, nominee, fiduciary or other custodian may execute a proxy and vote your shares. Your broker, nominee, fiduciary or other custodian should provide you with a voting instruction form for your use to provide them with instructions as to how to vote your shares at the Annual Meeting. If your shares are held of record in "street name" by a broker, nominee, fiduciary or other custodian and you wish to vote in person at the Annual Meeting, you must obtain from the record holder a "legal proxy" issued in your name.

Stockholders that receive more than one proxy card or voting instruction form have shares registered in different forms or in more than one account. Stockholders that receive more than one proxy card are requested to please sign, date and return all proxy cards and provide instructions for all voting instruction forms received to ensure that all of their shares are voted.

Shares represented by a properly executed proxy will be voted at the Annual Meeting and, when instructions have been given by the stockholder, will be voted in accordance with those instructions. Properly executed proxies that do not contain voting instructions with regard to a proposal will be voted "FOR" any such proposal.

How may I cast my vote over the Internet or by telephone?

If you are a stockholder of record, in addition to voting in person or by completing and mailing the proxy card, you may vote by using the Internet or by telephone. If you wish to vote via the Internet, access the website set forth on your proxy card and follow the instructions given. You will need your proxy card in hand when you access the website. Or, you can vote via telephone by calling the telephone number set forth on your proxy card. You will need your proxy card in hand when you call that number. You may vote via the Internet or telephone up until 11:59 p.m. Eastern Time the day before the Annual Meeting.

If you hold your shares in "street name," the broker, nominee, fiduciary or other custodian through which you hold your shares will instruct you as to how your shares may be voted by proxy.

How may I revoke or change my vote?

If you are the record owner of your shares, you may revoke your proxy at any time before it is voted at the Annual Meeting by:

submitting to our Secretary a new proxy card, dated later than the prior proxy card;

delivering written notice to our Secretary at 8515 Georgia Avenue, Suite 650, Silver Spring, Maryland 20910 stating that you are revoking your proxy; or

attending the Annual Meeting and voting your shares in person.

Please note that attendance at the Annual Meeting will not, by itself, constitute revocation of your proxy.

What are the voting requirements?

Quorum Requirement. Delaware law and our bylaws require that a quorum exist for the transaction of business at a stockholder meeting. A quorum for the actions to be taken at the Annual Meeting will consist of a majority of the voting power of the outstanding shares of stock that are entitled to vote at the Annual Meeting. Therefore, at the Annual Meeting, the presence, in person or by proxy, of the holders of shares of Common Stock representing at least 6,715,089 votes will be required to establish a quorum. Proxies marked as abstaining, and any proxies returned by brokers as "broker non-votes" on behalf of shares held in "street name" because beneficial owners' discretion has been withheld as to one or more matters on the agenda for the Annual Meeting, will be treated as present and entitled to vote, and will count towards the establishment of a quorum.

Required Votes. Each outstanding share of our Common Stock is entitled to one vote on each proposal at the Annual Meeting. Approval of the proposals requires the following affirmative vote:

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Approval required for Proposal 1 (Election of Directors): the candidates for director receiving the highest number of affirmative votes will be elected. In an election of directors by plurality vote, abstentions have no effect, since approval by a percentage of the shares present or outstanding is not required. "Broker non-votes" will also have no effect on this proposal.

Approvals required for all other proposals: each of the remaining proposals requires the affirmative vote of a majority of the voting power represented by stockholders present, in person or by proxy, at the Annual Meeting. Abstentions will have the same effect as a vote against these proposals.

What happens if the Annual Meeting is postponed or adjourned?

If the Annual Meeting is adjourned to another time or place, notice is not required to be provided to the stockholders of the adjourned meeting if the time, place and means of any remote communications by which stockholders and proxy holders may be deemed to be present in person and vote at such adjourned meeting are announced at the meeting at which the adjournment is taken, the adjournment is for no more than 30 days after the date of the original meeting and no new record date is fixed for the adjourned meeting after the adjournment. If we adjourn the Annual Meeting to a later date, we will conduct the same business at the later meeting and, unless we set a new record date, only the stockholders who were eligible to vote at the original meeting will be permitted to vote at the adjourned meeting. Unless we set a new record date for an adjourned meeting and you are no longer a stockholder on the new record date, your proxy will still be effective and may be voted at the adjourned meeting. In that case, you will still be able to change or revoke your proxy until it is voted.

Who is paying for the costs of this proxy solicitation?

The Company will bear the cost of this solicitation of proxies. In addition to mailing these proxy materials, our directors, officers and employees may, without being additionally compensated, solicit proxies personally and by mail, telephone, facsimile, or electronic communication. We will reimburse banks and brokers for their reasonable out-of-pocket expenses related to forwarding proxy materials to beneficial owners of stock or otherwise in connection with this solicitation.

Who are the proxies?

The Board of Directors of the Company has appointed Miguel Penella, H. Van Sinclair and Lisa Wardell to serve as proxies at the Annual Meeting. When you fill out your proxy card and return it, or if you vote electronically, you will be giving the proxies your instruction on how to vote your shares at the Annual Meeting.

Who will count the votes?

Continental, our transfer agent, will receive and tabulate the proxy cards, ballots and voting instruction forms.

Whom should I call if I have questions regarding the Annual Meeting?

If you have questions regarding the Annual Meeting, please contact Dawn Martens (Vice President, Corporate Affairs) at (818) 407-9100.

SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS

This proxy statement contains forward-looking statements that involve risks and uncertainties within the meaning of the Private Securities Litigation Reform Act of 1995. Other than statements of historical fact, all statements made in this proxy statement are forward-looking, including, but not limited to, statements regarding industry prospects, future results of operations or financial position, and statements of our intent, belief and current expectations about our strategic direction, prospective and future results and condition. In some cases, forward-looking statements may be identified by words such as “will,” “should,” “could,” “may,” “might,” “expect,” “plan,” “possible,” “potential,” “predict,” “anticipate,” “believe,” “estimate,” “continue,” “future,” “intend,” “project” or similar words.

Unless otherwise required by law, we undertake no obligation to release publicly any updates or revisions to any such forward-looking statements that may reflect events or circumstances occurring after the date of this proxy statement. There are a number of factors, many of which are beyond our control, that could cause actual conditions, events or results to differ significantly from those described in the forward-looking statements. For a discussion of such factors, please see the section entitled “Risk Factors” in our Annual Report on Form 10-K for the fiscal year ended December 31, 2012.

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PROPOSAL 1: ELECTION OF DIRECTORS

Our Bylaws provide for a Board consisting of a minimum of three and a maximum of nine directors, with the current number set by the Board at eight. All eight directors will be elected at the 2013 Annual Meeting, with the Class I directors elected for a one-year term, the Class II director for a two-year term, and the Class III directors for a three-year term, as follows:

Class	Member(s)	Length of Term if Elected at 2013 Annual Meeting	Term Expires

I	Lisa Wardell Andor (Andy) M. Laszlo	1-year term	2014 Annual Meeting

II	Miguel Penella H. Van Sinclair Morris Goldfarb	2-year term	2015 Annual Meeting

III	Robert L. Johnson Peter Edwards Tyrone Brown	3-year term	2016 Annual Meeting

The following are the nominees for election as directors proposed by the current Board, with information including principal occupation and other business affiliations, age, positions and offices held with us, and the year each current director was first elected. For information regarding each nominee's security ownership, see “Security Ownership of Certain Beneficial Owners and Management” below.

Unless otherwise instructed, the proxy holders will vote the proxies received by them for the nominees named in the table above. Each nominee has consented to serve as a director of the Company if elected, and management has no reason to believe the nominees will be unable to serve as directors. In the event that a nominee becomes unable or declines to serve as a director at the time of the Annual Meeting, the proxy holders will vote the proxies for any substitute nominee who is designated by the current Board to fill the vacancy.

THE BOARD OF DIRECTORS RECOMMENDS THAT STOCKHOLDERS VOTE "FOR" THE NOMINEES.

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Name	Director Since	Age	Principal Occupation and Business Experience During Past Five Years and Other Directorships

Peter Edwards	2012	60	Mr. Edwards was appointed as the Company’s non-executive vice chairman in October 2012. Prior to October 2012, Mr. Edwards served as founder and chairman of Acorn Media Group, Inc., since its inception in 1984. Mr. Edwards has a broad background in communications. Before founding Acorn, his work in emerging communications technologies included consulting for cable companies such as Cablevision and Viacom during the major-city cable television franchising competitions of the 1980s. He also served as a consultant to the City of Reading, Pennsylvania, home of the world’s oldest two-way cable system. Also active in video production, he worked for the Washington bureau of NBC News and independently on a range of documentaries and music videos. Mr. Edwards has a master’s degree from the University of Pennsylvania’s Annenberg School of Communications, where he focused on new communications technologies and markets, and earned his BA from Trinity College. We believe that Mr. Edwards professional background, including his vast experience in communications and video productions, make him well qualified as the Vice Chairman of the Company’s board of directors.

H. Van Sinclair	2012	60	Mr. Sinclair has served as a member of the Company’s board of directors since April 2012 and was the Chief Executive Officer and President of RLJ Acquisition, Inc. from April 2012 until immediately prior to the consummation of the Business Combination. Mr. Sinclair was also a member of RLJ Acquisition, Inc.’s board of directors from November 2010 until immediately prior to the consummation of the Business Combination. Since February 2003, Mr. Sinclair has served as president and chief executive officer of The RLJ Companies. From January 2006 to May 2011, Mr. Sinclair also served as Vice President of Legal and Business Affairs for RLJ Urban Lodging Funds, a private equity fund concentrating on limited and focused service hotels in the United States and for RLJ Development, The RLJ Companies’ hotel and hospitality company. Prior to joining The RLJ Companies, Mr. Sinclair spent 28 years, from October 1978 to February 2003, with the law firm of Arent Fox LLP. Mr. Sinclair remains of counsel to Arent Fox. Mr. Sinclair is a member of the Board of Directors of Vringo, Inc., a publicly-traded company, where he is a member of the Audit Committee. We believe that Mr. Sinclair’s professional background, his prior senior leadership positions at various companies, and extensive legal experience, make him well qualified as a member of the Company’s board of directors.

Tyrone Brown	2012	70	Mr. Brown has served as a member of the Company’s board of directors since October 2012. Mr. Brown was the co-founder of District Cablevision, the DC cable television system, where he was president and a director from 1986 to February 1992. Mr. Brown was an initial investor and director in the successful re-launch after bankruptcy of IRIDIUM, the global mobile satellite system, serving as IRIDIUM’s vice chairman from January 2002 until a successful public offering in October 2009. Mr. Brown also served as a director and principal outside counsel of Black Entertainment Television (BET) until its successful public offering in 1991, and vice president and general counsel of Post-Newsweek Stations, the broadcast station subsidiary of the Washington Post Company from 1971 to 1974. In addition to his entrepreneurial and business activities, Mr. Brown has practiced communications law at a number of major DC law firms and served as a law clerk for the late Chief Justice of the Supreme Court Earl Warren, as an aide to Senator Edmund Muskie and as an FCC Commissioner under the Carter Administration. We believe that Mr. Brown’s professional background in the media sector, his prior senior leadership positions at various companies, and extensive legal experience, make him well qualified as a member of the Company’s board of directors.

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Name	Director Since	Age	Principal Occupation and Business Experience During Past Five Years and Other Directorships

Morris Goldfarb	2012	62	Mr. Goldfarb has served as a member of the Company’s board of directors since April 2012. Mr. Goldfarb previously served as a director of RLJ Acquisition, Inc., from February 2011 until October 2012. He serves as Chairman of the Board and Chief Executive Officer of G-III Apparel Group, Ltd., a designer, manufacturer, importer and marketer of apparel, handbags and luggage. Mr. Goldfarb has served as an executive officer and director of G-III and its predecessors since its formation in 1974. Mr. Goldfarb served as a director of Lakes Entertainment, Inc. from June 1998 until March 2010. We believe that Mr. Goldfarb’s professional background, his senior leadership position at G-III Apparel Group, Ltd., and current and past board positions, make him well qualified as a member of the Company’s board of directors.

Andor (Andy) M. Laszlo	2012	46	Mr. Laszlo has served as a member of the Company’s board of directors since October 2012. Mr. Laszlo has served as a Managing Director at Lazard Capital Markets LLC (LCM) since June 2010, where he serves as Head of Corporate Underwriting and Head of Business Development. Prior to joining LCM, Mr. Laszlo served as a Senior Advisor to Sports Properties Acquisition Corp., a special purpose acquisition company focused on the sports, leisure and entertainment sectors, from November 2007 to April 2010. Between 1997 and 2007, Mr. Laszlo held various senior equity capital markets positions at both Lehman Brothers and Bank of America Securities. Mr. Laszlo was the Head of Media & Telecom equity capital markets for Bank of America Securities based in New York, NY. Prior to that, Mr. Laszlo was Head of Equity Syndicate and Head of Media & Telecom Equity Capital Markets at Lehman Brothers International (Europe), during which time he was based in London, England. In between his tenure at Lehman Brothers and Bank of America, Mr. Laszlo spent approximately one year as the Chief Operating Officer and Head of Business Development at Eagle Rock Capital Management, LLC, a New York-based multi-strategy hedge fund. Mr. Laszlo serves on the Advisory Board of Falconhead Capital Management, a private equity firm based in New York City. He also serves on the board of directors of Radar Detection Holdings Corp. (Escort Radar), a leading designer, manufacturer and distributor of highway radar and laser detectors. Mr. Laszlo began his career as an attorney with Philadelphia, Pennsylvania-based Rawle & Henderson. We believe that Mr. Laszlo’s professional background, including his extensive financial advisory and financing experience, make him well qualified to serve as a member of the Company’s board of directors.

Lisa Wardell	2012	43	Ms. Wardell has served as a member of the Company’s board of directors since October 2012. Ms. Wardell has served as executive vice president and chief operating officer of The RLJ Companies since August 2004. Ms. Wardell also previously served as the chief financial officer and secretary of RLJ Acquisition, Inc., from December 2010 until October 2012. Prior to joining The RLJ Companies, Ms. Wardell was a senior associate at Katalyst Venture Partners, a private equity firm, from September 2000 to January 2003. She serves as a member of the board of directors of DeVry, Inc., a provider of educational services since November 2008, and a member of the Christopher & Banks board since 2011. Ms. Wardell currently also serves on the board of directors of Rollover Systems, Inc., and the RLJ McLarty Landers Automotive Group. We believe that Ms. Wardell’s professional background, her leadership position at The RLJ Companies and her current and past board positions, make her well qualified to serve as a member of the Company’s board of directors.

BOARD OF DIRECTORS AND CORPORATE GOVERNANCE

Director Independence

Our Board reviewed the NASDAQ independence standards with regard to our directors, including whether specified transactions or relationships existed during the past three years, between our directors, or certain family members or affiliates of our directors, and RLJE and our subsidiaries, certain other affiliates, or our independent registered public accounting firm. As a result of the review, our Board determined that Messrs. Brown, Edwards, Goldfarb, Laszlo, Sinclair and Ms. Wardell are “independent” as that term is used in NASDAQ Marketplace Rule 5605. We do not know of any family relationships among or between any of our directors, executive officers or key employees. With regard to the independence of our directors regarding committee independence, see Committees of the Board below.

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Board and Committee Meetings; Annual Meeting Attendance

From the date of the closing of the Business Combination through December 31, 2012, the Board held one meeting. Each of the directors attended more than 75% of the total number of board of directors and committee meetings he or she was eligible to attend. The Company’s non-executive directors meet without management at regularly scheduled executive sessions that are presided over by Mr. Edwards as Vice-Chairman.

The Company does not have a formal written policy requiring directors to attend the Annual Meeting, although directors are encouraged to attend.

Section 16(a) Beneficial Ownership Reporting Compliance

Section 16(a) of the Securities Exchange Act requires our directors, executive officers and the beneficial holders of more than 10% of a registered class of our equity securities to file initial reports of ownership and changes in ownership of our Common Stock and other equity securities with the Securities and Exchange Commission (or SEC). Based solely on our records and written representations from certain of these persons, we believe that during fiscal year 2012 all applicable Section 16(a) filing requirements were met.

Code of Ethics and Governance Guidelines

We have a Code of Ethics and Business Conduct Policy that applies to all of our employees, including our principal executive officer and principal financial and principal accounting officer, and to our directors. We have posted the Code of Ethics and Business Conduct Policy under the menu “Investors – Corporate Governance” on our website at www.rljentertainment.com. If we waive any material portion of our Code of Ethics and Business Conduct Policy that applies to our principal executive officer, principal financial officer or principal accounting officer or amend the Code of Ethics and Business Conduct Policy (other than technical, administrative or other non-substantive amendments), we will disclose that fact on our website at www.rljentertainment.com within four business days.

Committees of the Board

Audit Committee. The Company has an Audit Committee. Effective as of October 23, 2012, our Audit Committee was comprised of Messrs. Brown, Edwards and Laszlo (Chairman), with Mr. Sinclair as an observer. Messrs. Brown, Edwards and Laszlo are independent as that term is used in NASDAQ Marketplace Rule 5605 and in Rule 10A-3(b)(1) under the Securities Exchange Act. The Audit Committee did not meet from the date of the closing of the Business Combination through December 31, 2012, however, after the end of the year there were three meetings held to discuss the fiscal year ended December 31, 2012 results, audit and Form 10-K. A copy of the revised Audit Committee charter is attached in Appendix A to this proxy statement.

Compensation Committee. The Company has a Compensation Committee. Effective as of October 23, 2012, our Compensation Committee was comprised of Messrs. Brown (Chairman), Goldfarb and Sinclair. Messrs. Brown, Goldfarb and Sinclair are independent as that term is used in NASDAQ Marketplace Rule 5605. The Compensation Committee met two times from the date of the closing of the Business Combination through December 31, 2012. A copy of the revised Compensation Committee charter is attached in Appendix B to this proxy statement.

Nominations and Governance Committee. The Company has a Nominations and Governance Committee. Effective as of October 23, 2012, our Nominations and Governance Committee was comprised of Messrs. Edwards, Sinclair and Ms. Wardell (Chairman). Messrs. Edwards, Sinclair and Ms. Wardell are independent as that term is used in NASDAQ Marketplace Rule 5605. The Nominations and Governance Committee did not meet from the date of the closing of the Business Combination through December 31, 2012, however, after the end of the year a meeting was held to review the nominees for election at the annual meeting. A copy of the revised Nominations and Governance Committee charter is attached in Appendix C to this proxy statement.

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Director Nominations and Qualifications

Board Member Qualification Criteria. The Nominations and Governance Committee has adopted board member qualification criteria, which set forth the attributes and qualifications considered by the committee in evaluating nominees for director. The primary qualities and characteristics the committee looks for in nominees for director are:

Management and leadership experience;

Relevant knowledge and diversity of background and experience; and

Personal and professional ethics, integrity and professionalism.

The committee also believes that the board should be composed of individuals who have achieved a high level of distinction in business, law, education or public service and who possess one or more of the following specific qualities or skills:

Financial expertise;

General knowledge of the entertainment industry;

Legal or accounting experience; and

CEO, CFO or other senior management experience.

The Nominations and Governance Committee does not have a formal policy regarding the consideration of diversity in identifying director nominees. In determining whether to recommend a director nominee, the Nominations and Governance Committee considers and discusses diversity, among many other factors, with a broad view toward the needs of the entire board of directors. When identifying and recommending director nominees, the Nominations and Governance Committee views diversity expansively to include, without limitation, concepts such as race, gender, national origin, differences of viewpoint, professional experience, education, skill and other qualities or attributes that can contribute to board heterogeneity. The Nominations and Governance Committee believes that including diversity as one of the many factors considered in selecting director nominees is consistent with the committee's goal of creating a board of directors that best serves the needs of the Company and the interests of its stockholders.

Internal Process for Identifying Candidates. Members of the Nominations and Governance Committee or other directors or executive officers may, from time to time, identify potential candidates for nomination to the Board. All proposed nominees, including candidates recommended for nomination by stockholders in accordance with the procedures described below, will be evaluated in light of the board member qualification criteria and the projected needs of the Board at the time. The committee may retain a search firm to assist in identifying potential candidates for nomination to the Board. The search firm's responsibilities may include identifying and evaluating candidates believed to possess the qualities and characteristics set forth in the board member qualification criteria, providing background information on potential nominees and interviewing and screening nominees if requested to do so by the Nominations and Governance Committee. All of the current directors were interviewed by all members of the then-current Board, and based on their interviews and qualifications, were elected to the Board. In connection with the Annual Meeting, the Nominations and Governance Committee has reviewed the qualifications of the current directors and recommended them to the Board for nomination for election by the stockholders at the Annual Meeting.

Stockholder Recommendations for Directors. The Nominations and Governance Committee will consider candidates recommended by stockholders for election to our board. A stockholder who wishes to recommend a candidate for evaluation by the committee should forward the candidate’s name, business or residence address, principal occupation or employment and a description of the candidate's qualifications to the Chairman of the Nominations and Governance Committee, care of the Corporate Secretary, RLJ Entertainment, Inc., 8515 Georgia Avenue, Suite 650, Silver Spring, Maryland 20910.

In order for a candidate proposed by a stockholder to be considered by the committee for inclusion as a Board nominee at the 2014 Annual Meeting of Stockholders, the candidate must meet the board member qualification criteria described above and must be expressly interested and willing to serve as a director. In addition, the corporate secretary must receive the request for consideration and all required information no later than 5:00 p.m., local time, on April 3, 2014.

Proposals should be sent via registered, certified or express mail. The corporate secretary will send properly submitted stockholder recommendations to the chairman of the Nominations and Governance Committee. Individuals recommended to the committee by stockholders in accordance with these procedures will be evaluated by the committee in the same manner as individuals who are recommended through other means.

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Article 12, Section 12.03 of our Bylaws also permits a stockholder to propose a candidate at an Annual Meeting of Stockholders who is not otherwise nominated by the Board through the process described above if the stockholder complies with the advance notice, information and consent provisions contained in the Bylaws. To comply with the advance notice provision of the by-laws, a stockholder who wishes to nominate a director at the 2014 Annual Meeting of Stockholders must provide us written notice no earlier than April 3, 2014 and no later than May 3, 2014. You may contact our corporate secretary to obtain the specific information that must be provided with the advance notice.

Leadership Structure

The positions of Chairman and Chief Executive Officer currently are separated at the Company. The Board believes that this structure best serves the Company’s needs at this time. The Board believes that its current structure helps maintain separate oversight of management. The Board intends to periodically review and consider whether the positions of Chairman and Chief Executive Officer should be combined or separated as part of its regular review of the effectiveness of our governance structure.

Board Role in Risk Oversight

The Board is actively involved in the oversight of risks that could affect the Company. This oversight is conducted at the Board level and, where relevant to a committee’s duties, through the committees of the Board. While the Board and its committees oversee risk management strategy, management is responsible for implementing and supervising day-to-day risk management processes. We believe this division of risk management responsibilities is the most effective approach for addressing the risks that the Company faces. The existing Board leadership structure discussed above encourages communication between management, the Chairman and the independent directors. We believe that this communication improves the Company’s identification and implementation of effective risk management strategies.

Risk-Related Compensation Policies and Practices

The Compensation Committee has reviewed the risk profile of its executive and non-executive compensation programs. The Compensation Committee believes that the Company’s compensation policies and practices do not create risks that are reasonably likely to have a material adverse effect on the Company.

Communications with the Board

Individuals may communicate with the Board or any director by writing c/o RLJ Entertainment, Inc., 8515 Georgia Avenue, Suite 650, Silver Spring, Maryland 20910, attention Corporate Secretary. Communications to the non-employee directors may be sent to the same address. We promptly forward all such correspondence to the indicated directors.

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SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

The following table sets forth certain information as of June 1, 2013, with respect to the beneficial ownership of shares of our Common Stock owned by (i) each person, who, to our knowledge based on Schedules 13D or 13G or other reports filed with the SEC, is the beneficial owner of more than 5% of our outstanding Common Stock, (ii) each person who is a director, (iii) each Named Executive Officer, and (iv) all of our directors and executive officers as a group.

Name of Beneficial Owner	Shares of Common Stock Beneficially Owned(1)		Percent of Common Stock(2)
RLJ SPAC Acquisition, LLC(3)		6,974,178		40.56	%
Robert L. Johnson (3)		6,974,178		40.56	%
Wexford Spectrum Investors (4)		2,850,000		19.39	%
JH Evergreen Management, LLC (5)		1,934,275		14.46	%
Senator Investment Group LP (6)		1,372,500		9.39	%
Peter Edwards (7)		1,276,310		9.15	%
Angelo, Gordon & Co., LP (8)		1,252,103		8.84	%
Morris Goldfarb (9)		263,763		1.96	%
Theodore S. Green (10)		193,868		1.45	%
John W. Hyde (11)		165,783		1.24	%
John P. Avagliano (12)		81,333		*
Miguel Penella (13)		67,252		*
H. Van Sinclair (14)		44,596		*
Lisa Wardell (14)		25,430		*
Tyrone Brown (14)		6,263		*
Andor (Andy) M. Laszlo (14)		6,263		*
All directors and executive officers as a group (9 persons)		8,664,055		48.39	%

*Less than 1%

Notes to Beneficial Ownership Table:

(1)

Beneficial ownership is determined in accordance with SEC rules. For the number of shares beneficially owned by those listed above, we rely on information confirmed by each beneficial owner. Except as indicated by footnote below, each person named reportedly has sole voting and investment powers with respect to the Common Stock beneficially owned by that person, subject to applicable community property and similar laws. Except as indicated by footnote below, each owner’s mailing address is c/o RLJ Entertainment, Inc., 8515 Georgia Avenue, Suite 650, Silver Spring, Maryland 20910.

(2)

On June 1, 2013, there were 13,377,546 shares of our Common Stock, $0.001 par value, outstanding. Common Stock not outstanding but which underlies options and warrants vested or exercisable as of, or vesting or exercisable within, 60 days after June 1, 2013, is deemed to be outstanding for the purpose of computing the percentage of the Common Stock beneficially owned by each named person or entity (and the directors and executive officers as a group), but is not deemed to be outstanding for any other purpose.

(3)

The RLJ Companies, LLC is the sole manager and is the sole voting member of RLJ SPAC Acquisition, LLC. Robert L. Johnson is the sole manager and the sole voting member of The RLJ Companies, LLC. Mr. Johnson disclaims beneficial ownership of these shares except to the extent of his pecuniary interest therein. Includes 3,157,511 shares of the Common Stock and warrants to purchase 3,816,667 shares of the Common Stock.

(4)

Information presented regarding Wexford Spectrum Investors LLC (or WSI) is based solely on the information provided in the Schedule 13G/A filed on February 11, 2013 and the Form 3 filed on February 25, 2013. Wexford Capital LP (or Wexford Capital) may, by reason of its status as manager of WSI, be deemed to own beneficially the securities of which WSI possesses beneficial ownership. Wexford GP LLC (or Wexford GP) may, as the General Partner of Wexford Capital, be deemed to own beneficially the securities of which WSI possesses beneficial ownership. Each of Charles E. Davidson (or Davidson) and Joseph M. Jacobs (or Jacobs) may, by reason of his status as a controlling person of Wexford GP, be deemed to own beneficially the securities of which WSI possesses beneficial ownership. Each of Wexford Capital, Wexford GP, Davidson and Jacobs shares the power to vote and to dispose of the securities beneficially owned by WSI. Each of Wexford Capital, Wexford GP, Davidson and Jacobs disclaims beneficial ownership of the securities owned by WSI and this report shall not be deemed as an admission that they are the beneficial owners of such securities except, in the case of Davidson and Jacobs, to the extent of their respective interests in each member of WSI. The mailing address for WSI and the other affiliate filers is 411 West Putnam Avenue, Suite 125, Greenwich, Connecticut 06830.

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(5)

Information presented regarding JH Evergreen Management, LLC (or JH Evergreen Management), JH Partners Evergreen Fund, L.P. (or JH Evergreen), JH Investment Partners III, LP (or JHIP III), JH Investment Partners GP Fund III, LLC (or JHIP GP III, and collectively the JH Entities) and John C. Hansen is based on information provided by JH Partners and certain of its affiliates. The mailing address of JH Evergreen Management and the other affiliate filers is 451 Jackson Street, San Francisco, California 94111-1615. Mr. Hansen disclaimed beneficial ownership of such shares except to the extent of his pecuniary interest therein. Includes 1,647,489 shares of the Common Stock held by JH Evergreen, 196,505 shares of the Common Stock held by JHIP III, and 90,282 shares of the Common Stock held by JHIP GP III. Does not include warrants to purchase 114,228 shares of the Common Stock held by JH Evergreen, warrants to purchase 13,625 shares of the Common Stock held by JHIP III, and warrants to purchase 6,261 shares of the Common Stock held by JHIP GP III, none of which are exercisable within 60 days of June 1, 2013.

(6)	Information presented regarding Senator Investment Group LP is based solely on the information provided in the Schedule 13G/A filed on February 14, 2013. The mailing address of Senator Investment Group LP is 510 Madison Avenue, 28th Floor, New York, New York 10022.

(7)

Includes 6,263 shares of the Common Stock subject to restricted stock awards held by Mr. Edwards, 692,523 shares of the Common Stock and warrants to purchase 577,524 shares of the Common Stock held by a trust established by Mr. Edwards for estate planning purposes. Does not include warrants to purchase 30,001 shares of the Common Stock held by trusts established by Mr. Edwards for estate planning purposes which are not exercisable within 60 days of June 1, 2013.

(8)

Information presented regarding Angelo, Gordon & Co., L.P. (or Angelo, Gordon); John M. Angelo, in his capacities as a managing member of JAMG LLC, which is the general partner of AG Partners, L.P., which is the sole general partner of Angelo, Gordon, and as the chief executive officer of Angelo, Gordon; and Michael L. Gordon, in his capacities as the other managing member of JAMG LLC, which is the general partner of AG Partners, L.P., which is the sole general partner of Angelo, Gordon, and as the chief operating officer of Angelo, Gordon is based solely on the information provided in the Schedule 13G/A filed on February 14, 2013. The mailing address for Angelo, Gordon and the other affiliate filers is 245 Park Avenue, New York, New York 10167.

(9)	Includes 157,500 shares of the Common Stock, 6,263 shares of the Common Stock subject to restricted stock awards, and warrants to purchase 100,000 shares of the Common Stock.

(10)

Includes 149,405 shares of the Common Stock and 44,444 shares of the Common Stock held in escrow until April 3, 2014, subject to forfeiture to the JH Entities. Also includes 19 shares held as custodian for Mr. Green’s children. Does not include warrants to purchase 6,818 shares of the Common Stock which are not exercisable within 60 days of June 1, 2013.

(11)

Includes 128,005 shares of the Common Stock, of which 87,907 shares are held through PSO, his wholly owned consulting business, and 37,778 shares of the Common Stock held in escrow until April 3, 2014, subject to forfeiture to the JH Entities. Does not include warrants to purchase 5,795shares of the Common Stock which are not exercisable within 60 days of June 1, 2013.

(12)	Includes 63,555 shares of the Common Stock and 17,778 shares of the Common Stock held in escrow until April 3, 2014, subject to forfeiture to the JH Entities. Does not include warrants to purchase 2,727 shares of the Common Stock which are not exercisable within 60 days of June 1, 2013.

(13)	Includes 33,626 shares of the Common Stock and warrants to purchase 33,626 shares of the Common Stock.

(14)	Includes 6,263 shares of the Common Stock subject to restricted stock awards.

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EXECUTIVE OFFICERS

The following table sets forth the name, age and position of each of our executive officers as of June 1, 2013.

Name	Age		Position
Executive Officers
Robert L. Johnson		67	Chairman of the Board
Miguel Penella		44	Chief Executive Officer
Drew Wilson		44	Chief Financial Officer

Biographical information for Messrs. Johnson and Penella is set forth above under “ELECTION OF DIRECTORS.”

Mr. Wilson was appointed as the Company’s Chief Financial Officer in May 2013. Mr. Wilson was a private investor from January 2013 to May 2013. He served in executive positions with Discovery Communications, LLC, a media company with cable and free to air networks, from 2002 to December 2012. He was Senior Vice President, Division CFO and Corporate Controller from October 2009 to December 2012, Senior Vice President and Division CFO - Digital Distribution, Digital Media, Commerce & Education from March 2009 to December 2012, Senior Vice President and Division CFO - Commerce & Education from October 2007 to February 2009, Vice President and Controller - International Networks Division from December 2003 to October 2007 and was Vice President and Divisional Controller - Consumer Products Division from March 2002 to December 2003. Prior to joining Discovery Communications, he was Director, Corporate Accounting and Reporting for Host Marriott Corporation (now called Host Hotels) from 1997 to 2002. Previously Mr. Wilson held management positions with Crown Books, a bookstore retailer, and Price Waterhouse LLP.

CERTAIN RELATIONSHIPS AND TRANSACTIONS WITH RELATED PERSONS

Our policy on related-person transactions is included in our revised Code of Conduct, which has been reviewed and approved by the Board effective as of October 3, 2012. Our policy states that each executive officer, director or nominee for director will disclose to the Audit Committee of the Board the following information regarding a related-person transaction for review, approval or ratification by the Audit Committee: (i) the name of the related-person (as defined by Item 404(a) of Regulation S-K under the Securities Exchange Act), and if he or she is an immediate family member of an executive officer, director or nominee for director, the nature of such relationship; (ii) the related-person’s interest in the transaction; (iii) the approximate dollar value of the amount involved in the transaction; (iv) the approximate dollar value of the amount of the related-person’s interest in the transaction; and (v) in the case of indebtedness, the largest total amount of principal outstanding since the beginning of our last fiscal year, the amount of principal outstanding as of the latest practicable date, the amount of principal paid since the beginning of our last fiscal year, and the rate or amount of interest payable on the indebtedness.

The Audit Committee’s decision whether or not to approve or ratify the related-person transaction is made in light of its determination as to whether consummation of the transaction is believed by the Audit Committee to not be or have been contrary to our best interests. The Audit Committee may take into account the effect of a director’s related-person transaction on such person’s status as an independent member of our Board and eligibility to serve on Board committees under SEC and stock exchange rules, as applicable.

On October 3, 2012, in connection with the consummation of the Business Combination, the Company, RLJ Acquisition, Inc., JH Partners Evergreen Fund, LP (“JH I”), JH Investment Partners III, LP (“JH II”), JH Investment Partners GP Fund III, LLC (“JH III” and, together with JH I and JH II, the “JH Parties”), Drawbridge Special Opportunities Fund, LP, Miguel Penella, certain stockholders of Acorn, Peter Edwards as the Acorn Representative, RLJ SPAC Acquisition, LLC, William S. Cohen, and Morris Goldfarb entered into an amended and restated registration rights agreement (the “Registration Rights Agreement”), pursuant to which the Company has agreed to register certain of its securities held by the stockholders who are a party to the Registration Rights Agreement under the Securities Act of 1933, as amended (the “Securities Act”). Such stockholders are entitled under such agreement to make up to three demands, excluding short form registration demands, that the Company register certain of its securities held by them for sale under the Securities Act. In addition, such stockholders have the right to include their securities in other registration statements filed by the Company. However, the Registration Rights Agreement provides that no stockholder (other than the Sponsor) may make a demand (i) with respect to a registration statement on Form S-1 until October 3, 2013 or (ii) with respect to a registration statement on Form S-3 until July 3, 2013.

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On April 2, 2012, the former majority stockholder of Image Entertainment, Inc., JH Evergreen Management, LLC, and three management members of Image, Theodore Green, John Hyde and John Avagliano, entered into an escrow agreement, whereby JH Evergreen Management, LLC would place into escrow 100,000 shares of the Common Stock that would be received by Messrs. Green (44,444 shares), Hyde (37,778 shares) and Avagliano (17,778 shares) upon consummation of the Image Merger (as defined in the 2012 Form 10-K). The release of these shares from escrow to Messrs. Green, Hyde and Avagliano is contingent, in part, upon a future price target of $7.50 per share being obtained related to the Common Stock and the payment of certain amounts due to JH Evergreen Management, LLC both occurring within an 18-month period following the Business Combination. Mr. Green resigned from the Company on January 14, 2013, Mr. Hyde resigned from the Company on April 23, 2013, and Mr. Avagliano resigned from the Company on May 24, 2013. The release of these shares from escrow is not contingent upon employment by the Company of Messrs. Green, Hyde, or Avagliano. The shares have not yet been released from escrow as of June 1, 2013.

Mr. Laszlo, who serves as a director on the Company’s Board and as Chairman of the Audit Committee, has served as a Managing Director at Lazard Capital Markets LLC (“LCM”) since June 2010. Mr. Laszlo serves as LCM’s Head of Corporate Underwriting and Head of Business Development. On October 3, 2012, in connection with the consummation of the Business Combination, LCM received investment banking fees of $4.55 million paid at the closing of the Business Combination which included $3.59 million accrued prior to 2012. On October 23, 2012, in connection with the election of Mr. Laszlo to the Board, the Company entered into an Indemnity Agreement with Mr. Laszlo.

John Hyde, who was our Vice Chairman until his resignation on April 23, 2013, owns PSO, which is one of our content providers. PSO receives royalty payments based upon a contractual percentage of net revenues derived from the distribution of the entertainment programming licensed. The royalties paid in consideration for the content distribution, in the opinion of management, is fair and reasonable, and is on terms no less favorable than terms generally available to other third party content suppliers under the same or similar circumstances. The amount of royalties paid was $294,311 for fiscal year ended December 31, 2012.

In connection with the acquisition of Agatha Christie Limited, Acorn Media Group, Inc. borrowed $2.7 million on February 29, 2012, from stockholders of Acorn Media Group, Inc. (the “Subordinated Loans”), including a trust established by Mr. Edwards. Amounts outstanding under the Subordinated Loans were subordinated to those amounts outstanding under the Term Loan (as defined in the 2012 Form 10-K), accrued interest at a rate of 12.5% per annum, but interest was only required to be paid upon maturity along with all outstanding principal on February 28, 2015. The Subordinated Loans were fully repaid in connection with the Image and Acorn Media Group, Inc. mergers, including a payment of $2,300,000 of principal and $173,000 of interest to the trust established by Mr. Edwards.

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EXECUTIVE COMPENSATION

Compensation Discussion and Analysis

Expected Compensation Policies

The Company has not yet developed a comprehensive executive officer compensation program and philosophy. The Company expects that such a program and philosophy will be completed during the 2013 fiscal year and will be substantially as described below.

Executive Compensation

Prospective Policy. The Company intends to seek to provide total compensation packages that are competitive, are tailored to the unique characteristics and needs of the Company within its industry and will adequately reward its executives for their roles in creating value for the Company’s stockholders. The Company intends to be competitive in its executive compensation with other similarly situated companies in its industry. The compensation decisions regarding the Company’s executives will be based on its need to attract individuals with the skills necessary to achieve its business plan, to reward those individuals fairly over time and to retain those individuals who continue to perform at or above the Company’s expectations. The Compensation Committee will determine, or recommend to the Board for determination, the compensation paid to executive officers.

The Company anticipates that its executives’ compensation will consist of three primary components: salary, incentive bonus and stock-based awards issued under an incentive plan. The Company anticipates determining the appropriate level for each compensation component based in part, but not exclusively, on its view of internal equity and consistency, individual performance, the Company’s performance and other information deemed relevant and timely.

2012 Arrangements. In connection with the Business Combination, the Company recognized the need to develop a compensation strategy that would create incentives to retain the current executive team members from Image and Acorn and to offer an opportunity to participate in the Company’s future growth. In anticipation of the closing of the Business Combination, the Company in 2012 engaged Farient Advisors to conduct an initial analysis of competitive pay practices and to develop a preliminary compensation strategy. Farient developed a peer group companies comparable to the Company from a size and business standpoint. The peer companies identified were: Gaiam, Inc., Lions Gate Entertainment Corp., LodgeNet Interactive Corporation, Navarre Corp., NTN Buzztime Inc., Perform Group plc and Entertainment One LTD (the “Peer Group”). Farient provided the Company data with respect to the executive salaries, short-term cash incentives and long-term equity incentives provided by the Peer Group. Based upon this data, the Company determined to adjust the historical salary of Mr. Green, its Chief Executive Officer, to the approximate median for the Peer Group and to adjust the historical salaries of Messrs. Avagliano, Penella and Hyde to above median amounts, based upon the desire to provide retention incentives and the anticipated growth of the Company’s business. The Company also began to develop short-term cash incentives and long-term equity incentives, but these arrangements were not completed by the end of the year and currently are being revised in view of the promotion of Mr. Penella and the subsequent departures of Messrs. Green, Avagliano and Hyde.

Based upon existing compensation arrangements with Acorn, Mr. Penella received a bonus of $500,000, based upon the overall performance of the Acorn business and his personal performance for 2012. This bonus was determined by the Acorn board of directors in its discretion and was the same amount as the bonus paid in 2011. In addition, he received a $600,000 retention bonus in connection with the Business Combination. The Acorn Board of Directors determined in their discretion to award retention bonuses to all current Acorn employees, and special consideration was given to retain employees who were expected to participate actively in the sale of the company. Mr. Green’s, Mr. Avagliano’s and Mr. Hyde’s agreements provided for an annual cash bonus opportunity targeted at 50% of base compensation, subject to Image achieving specified earnings before interest, taxes, depreciation and amortization (or EBITDA) goals, with partial bonus eligibility if at least 85% of the applicable goal is achieved. The minimum EBITDA goal was not met, and accordingly Messrs. Green, Avagliano and Hyde did not receive cash bonuses for 2012.

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Director Compensation

Beginning November 1, 2012, the non-executive members of our Board, Peter Edwards, H. Van Sinclair, Tyrone Brown, Morris Goldfarb, Andor (Andy) M. Laszlo and Lisa Wardell, receive an annual retainer of $50,000. In addition, the non-executive directors would be reimbursed for reasonable travel expenses to attend Board or committee meetings. Executive directors receive no additional compensation for their service as directors.

For fiscal year 2012, our non-executive directors were each granted a restricted stock award, valued at $50,000, for 6,263 shares of our Common Stock, based upon the five-day trailing average closing stock price of $7.98. The restricted stock awards were granted under our 2012 Incentive Compensation Plan on November 1, 2012 and vest 100% on the one-year anniversary of the date of grant provided the recipient continues to serve as a director.

Compensation Committee Information

The Board has established a Compensation Committee that, among other duties, to review and approve compensation paid to the Company’s executive officers and directors and administer an incentive plan. The Compensation Committee is charged with performing an annual review of the Company’s executive officers’ cash compensation, bonus and equity holdings to determine whether they provide adequate incentives and motivation to executive officers and whether they adequately compensate the executive officers relative to comparable officers in other companies. In addition to the guidance provided by the Compensation Committee, the Company may utilize the services of third parties from time to time in connection with the hiring and compensation awarded to executive employees. This may include subscriptions to executive compensation surveys and other databases.

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Summary Compensation Table for Fiscal Year 2012

The following table sets forth the compensation of those persons who served as our principal executive officer, principal financial officer and our other executive officers (collectively, the Named Executive Officers) for fiscal year 2012, which ended on December 31, 2012. The Business Combination of RLJ Entertainment, Inc., Image Entertainment, Inc. and Acorn Media Group, Inc. was completed on October 3, 2012. The compensation included in this table includes both amounts prior to the closing and amounts after the closing. Amounts prior to the closing were attributable to the applicable predecessor and amounts after the closing were attributable to RLJE.

Name & Principal Position	Fiscal Year	Salary ($)		Bonus ($)⁽²⁾		Stock Awards ($)		Option Awards ($)		All Other Compensation ($)⁽³⁾		Total ($)
Theodore S. Green,	2012		358,077		––		––		––		3,000		361,077
Former Chief Executive Officer⁽¹⁾	2011		300,000		––		––		––		2,769		302,769

Miguel Penella,	2012		450,000		1,100,000		––		––		1,129,089		2,679,089
Chief Executive Officer	2011		427,083		500,000		––		––		643,020		1,570,103

John P. Avagliano,	2012		343,462		––		––		––		103,900		447,362
Chief Financial Officer⁽⁴⁾	2011		300,000		50,000		––		––		129,404		479,404

Robert L. Johnson	2012		61,538		––		––		––		––		61,538
Chairman⁽⁵⁾

John W. Hyde,	2012		––		––		––		––		327,885		327,885
Vice Chairman⁽⁶⁾	2011		––		––		––		––		311,539		311,539

___________________________

(1)	Mr. Green resigned effective as of January 14, 2013.

(2)	Fiscal year 2012 includes for Mr. Penella, retention bonus in connection with the Business Combination of $600,000.

(3)	Fiscal year 2012 includes:

(i)

For Mr. Penella, other compensation for forgiveness of note principal payments and interest due of $1,100,000.

(ii)

For Mr. Avagliano, reimbursable commuting expenses of $94,969.

(iii)

For Mr. Hyde, consulting fees of $327,885.

Fiscal year 2011 includes:

(i)

For Mr. Penella, other compensation for forgiveness of note principal payments and interest due of $600,000.

(ii)

For Mr. Avagliano, reimbursable commuting expenses of $123,404.

(iii)

For Mr. Hyde, consulting fees of $311,539.

(4)	Mr. Avagliano resigned effective as of May 24, 2013.

(5)	Mr. Johnson joined RLJE on October 3, 2012 as a result of the Business Combination.

(6)	Mr. Hyde resigned effective as of April 23, 2013. Mr. Hyde previously provided all services to RLJE through Producers Sales Organization (or PSO), his wholly-owned consulting business.

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Employment Agreements

We did not enter into new employment agreements in connection with the Business Combination. However, we adopted the employment agreements with Mr. Green and Mr. Avagliano, the consulting agreement with Mr. Hyde and his wholly owned consulting business, PSO, and the employment letter with Mr. Penella, which were in place prior to the Business Combination.

Agreements with Mr. Green, Mr. Avagliano, Mr. Hyde and PSO

The agreements with Mr. Green, Mr. Avagliano, Mr. Hyde and PSO were effective as of April 14, 2010 and were amended as of July 12, 2010 and October 4, 2012. Certain terms of these agreements are summarized below.

Term. Each of the agreements provided for a term of three years beginning on April 14, 2010 and, subject to advance-notice termination provisions, renewed automatically for successive one-year terms. Mr. Green resigned effective as of January 14, 2013, Mr. Hyde resigned effective as of April 23, 2013, and Mr. Avagliano resigned effective May 23, 2013, and their agreements have been terminated.

Base Compensation. The amended agreements provided for minimum annual base salaries or annual consulting fees of $475,000 to Mr. Green and $425,000 to Messrs. Avagliano and Hyde, to be reviewed annually by the board of directors.

Cash Bonus Opportunity. Each agreement provided that the executive officer was eligible for an annual cash bonus opportunity targeted at 50% of base compensation, subject to Image achieving specified earnings before interest, taxes, depreciation and amortization (or EBITDA) goals, with partial bonus eligibility if at least 85% of the applicable goal is achieved. The minimum EBITDA goal was not met for the 2012 fiscal year and, as a result, none of these executive officers received a cash bonus for such year.

Reimbursements. The agreements provided that Messrs. Green and Avagliano would be reimbursed for expenses related to commuting from New York to Los Angeles, including the cost of business class air travel exceeding three hours, temporary housing and auto use. Mr. Avagliano’s agreement provided that he would be reimbursed for reasonable expenses, not to exceed $120,000, related to relocation of his home and family from New York to Los Angeles, as well as a tax gross-up for income taxes arising from such reimbursement, not to exceed $75,000.

Severance Benefits. The agreements provided that each executive officer would be entitled to specified severance benefits, subject to execution of a customary general release of claims, if his employment or consulting engagement was terminated without “cause” or he terminated his employment or consulting engagement for “good reason” including: (i) a payment equal to 12 months of salary or consulting fees, as applicable, and a pro rata bonus opportunity; (ii) in the case of Messrs. Green and Avagliano, continuation of healthcare benefits for 12 months; and (iii) reimbursement of incurred expenses, and in the case of Mr. Avagliano, reimbursement for relocation expenses actually incurred by Mr. Avagliano on or six months prior to termination of employment (up to an aggregate cap of $120,000 and a tax gross-up cap on any such amounts of $75,000).

For purposes of the agreements, “cause” generally meant an executive officer’s (i) conviction of a felony or of any crime involving moral turpitude, dishonesty, fraud, embezzlement, theft or misrepresentation; (ii) gross neglect or gross misconduct in connection with the performance of the executive officer’s duties (other than due to the executive officer’s physical or mental illness); (iii) material breach of the employment or consulting agreement, the Company’s proprietary information agreement or certain other Company material policies, rules and regulations; or (iv) willful engagement in any other conduct that involves a material breach of a fiduciary obligation or that would reasonably be expected to have a material and adverse economic effect upon the Company and its subsidiaries, subject to certain notice and opportunity to cure provisions set forth in the agreements.

For purposes of the agreements, “good reason” generally meant, without the executive officer’s prior written consent, (i) a material diminution in the executive officer’s salary or consulting fees, as applicable; (ii) a material diminution in the executive officer’s authority, duties or responsibilities, including a material adverse change in the executive officer’s reporting relationships; (iii) a material breach of the employment or consulting agreement by the company; (iv) the failure of the company to issue certain equity awards to the executive officer by November 30, 2010; or (v) except for Mr. Green, requiring the executive officer to change the principal location of his employment or engagement outside the Los Angeles, California area, subject in each case to certain notice and opportunity to cure provisions set forth in the agreements. Mr. Green’s employment agreement also provided that “good reason” meant (x) the failure of the company or its stockholders to reelect or to reappoint him as Chairman of the Board, unless cause for removal exists or (y) the appointment of a co-chairman of the Board. Mr. Hyde’s consulting agreement also provided that “good reason” meant the termination of employment of Mr. Green.

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The agreements provided that each executive officer would receive a tax gross-up to the extent that payments under the employment or consulting agreements were “parachute payments” under Section 280G of the Internal Revenue Code of 1986, as amended (or the Code), and subject to an excise tax under Section 4999 of the Code, subject to specified limitations set forth in the agreements, including an aggregate cap of $1 million on total gross-up payments to the executive officers under their employment and consulting agreements.

The agreements also contained non-competition and non-solicitation covenants. Timing of severance payments under the agreements could be adjusted in certain circumstances to the extent necessary for compliance with or exemption from Section 409A of the Code.

Letter Agreement with Mr. Penella

The agreement with Mr. Penella was effective as of January 15, 2004. The agreement provides that Mr. Penella is an employee at will. It provides for an annual salary of $155,000, a bonus of up to $50,000 and severance of six month’s salary in the event of termination without cause.

Outstanding Equity Awards at Fiscal Year End 2012

There were no outstanding equity awards at December 31, 2012.

DIRECTOR COMPENSATION

Beginning November 1, 2012, the non-executive members of our board of directors, Peter Edwards, H. Van Sinclair, Tyrone Brown, Morris Goldfarb, Andor (Andy) M. Laszlo and Lisa Wardell, receive an annual retainer of $50,000. In addition, the non-executive directors would be reimbursed for reasonable travel expenses to attend Board or committee meetings. Executive directors receive no additional compensation for their service as directors.

Director Compensation Table for Fiscal Year 2012

The following table sets forth information regarding the compensation earned by our non-executive directors in fiscal year 2012:

Name	Fees Earned or Paid in Cash ($)⁽¹⁾		Stock Awards ($)⁽²⁾		Option Awards ($)		All Other Compensation ($)		Total ($)

Peter Edwards	$	12,500	$	50,000	$	––	$	––	$	62,500
H. Van Sinclair		12,500		50,000		––		––		62,500
Tyrone Brown		12,500		50,000		––		––		62,500
Morris Goldfarb		12,500		50,000		––		––		62,500
Andor (Andy) M. Laszlo		12,500		50,000		––		––		62,500
Lisa Wardell		12,500		50,000		––		––		62,500

(1)	Annual retainer fee paid quarterly.

(2)

Amount represents the grant date fair value for restricted stock awards granted during fiscal year 2012. The per share grant date fair value of each of the restricted stock awards for 6,263 shares was $7.98, the five-day trailing average of our closing stock price on the date of grant of the award. As of fiscal year end 2012, no shares had vested in accordance with their vesting schedule.

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EQUITY COMPENSATION PLAN INFORMATION

The following table sets forth certain information as of December 31, 2012 with respect to our equity compensation plans (including individual compensation arrangements) under which our equity securities are authorized for issuance, aggregated by (i) all compensation plans previously approved by our security holders, and (ii) all compensation plans not previously approved by our security holders:

Plan Category

Number of securities to be issued upon exercise of outstanding options, warrants and rights ⁽¹⁾

Weighted-average exercise price of outstanding options, warrants and rights

Number of securities remaining

available for future issuance under equity compensation plans (excluding securities referenced in the first column) ⁽²⁾

Equity compensation plans approved by security holders

1,244,153

––

1,206,575

Equity compensation plans not approved by security holders:

––

Total

1,244,153

––

1,206,575

Notes to Equity Compensation Plan Information Table:

(1)	Future equity awards may be granted under our 2012 Incentive Compensation Plan.

(2)	Reflects awards to directors under our 2012 Incentive Compensation Plan.

AUDIT COMMITTEE REPORT

The Board maintains an Audit Committee, currently composed of three of the Company’s independent directors. The Board and the Audit Committee believe that the Audit Committee’s current membership satisfies the applicable rules of the NASDAQ Stock Market and the SEC. The Audit Committee oversees the Company’s financial processes on behalf of the Board. Management has the primary responsibility for the financial statements and the reporting process, including the systems of internal controls. The independent registered public accounting firm BDO USA, LLP is responsible for expressing an opinion on the conformity of those financial statements with generally accepted accounting principles in accordance with the standards of the Public Company Accounting Oversight Board.

In fulfilling its oversight responsibilities, the Audit Committee reviewed the audited financial statements in the Annual Report on Form 10-K for the year ended December 31, 2012 with management, including a discussion of the quality, and not just the acceptability, of the accounting principles, the reasonableness of significant judgments and the clarity of disclosures in the financial statements and management’s assessment of the effectiveness of the Company’s internal controls over financial reporting.

The Audit Committee discussed with the Company’s independent registered public accounting firm the overall scope and plans for their audit. The Audit Committee met with the independent auditors, with and without management present, to discuss the results of their examination and the overall quality of the Company’s financial reporting.

The Audit Committee reviewed with the independent registered public accounting firm their judgments as to the quality, and not just the acceptability, of the Company’s accounting principles and such other matters as are required to be discussed with the Audit Committee under generally accepted auditing standards, including Statement on Auditing Standards No. 61, as amended, Communication with Audit Committees. In addition, the Audit Committee has received the written disclosures and the letter from the independent registered public accounting firm required by applicable requirements of the Public Company Accounting Oversight Board regarding the independent registered public accounting firm’s communications with the Audit Committee concerning independence and has discussed with the independent registered public accounting firm their independence from management and the Company.

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Based on the reviews and discussions referred to above, the Audit Committee recommended to the Board that the audited financial statements be included in Company’s Annual Report for filing with the SEC.

	AUDIT COMMITTEE

	Andor M. Laszlo, Chairman
	Peter Edwards
	Morris Goldfarb

PRINCIPAL ACCOUNTANT

BDO USA, LLP, Los Angeles, California, which was appointed our independent registered public accounting firm in October 2012, has audited our financial statements for the fiscal year ended December 31, 2012 and is currently serving as the Company's independent registered public accounting firm. The Audit Committee approved this appointment.

A representative of BDO USA, LLP is expected to be present at the Annual Meeting, to have an opportunity to make a statement if they desire to do so, and to be available to respond to appropriate questions.

The following table summarizes the aggregate fees for professional services provided by BDO USA, LLP related to the fiscal year ended December 31, 2012. No fees were paid with respect to the fiscal year ended December 31, 2011.

	2012
Audit Fees	$	748,000
Audit-Related Fees		––
Tax Fees		163,000
All Other Fees		––

Total Fees	$	911,000

Audit Fees. Audit fees consisted of fees billed for professional services rendered for: (i) the audit of our consolidated financial statements; (ii) the review of interim consolidated financial statements for our quarterly filings; and (iii) any services that are normally provided by our principal accountant in connection with statutory and regulatory filings or engagements.

Audit-Related Fees. There were no audit-related fees during the fiscal year ended December 31, 2012.

Tax Fees. BDO USA, LLP began providing tax advice and compliance services in October 2012 but did not provide tax planning for us in the fiscal year ended December 31, 2012.

All Other Fees. There were no other fees during the fiscal year ended December 31, 2012.

Policy on Audit Committee Pre-Approval of Audit and Permissible Non-Audit Services of Independent Registered Public Accounting Firm

Our Audit Committee’s policy is to pre-approve the audit and non-audit services provided by the independent registered public accounting firm, in order to assure that the provision of such services does not impair the auditor’s independence. As provided in our Audit Committee Charter, our Audit Committee believes that the combination of general pre-approval of certain types of audit services (e.g., quarterly reviews, annual audit and review of certain other documents filed with the SEC) and specific pre-approval of other services results in an effective and efficient procedure to pre-approve services performed by the independent registered public accounting firm. Unless a type of service to be provided by the independent registered public accounting firm has received general pre-approval, it will require specific pre-approval by the Audit Committee. In determining whether to grant general or specific pre-approval, our Audit Committee will consider whether such services are consistent with the applicable rules and regulations on auditor independence. The term of any pre-approval is 12 months from the date of pre-approval, unless the Audit Committee specifically provides for a different period. Pre-approval is generally provided for up to one year and any pre-approval is detailed as to the particular service or category of services and is generally subject to a specific budget. With respect to each proposed pre-approved service, the independent registered public accounting firm is required to provide to the Audit Committee detailed back-up documentation regarding the specific services to be provided.

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All of the fees paid to BDO USA, LLP in fiscal 2012 were pre-approved by the Audit Committee. Our Audit Committee has considered whether the provision of services other than those described above under the heading of “Audit Fees” are compatible with maintaining the independence of BDO USA, LLP.

PROPOSAL 2: VOTE ON AN ADVISORY BASIS ON THE COMPENSATION OF

THE NAMED EXECUTIVE OFFICERS

Pursuant to the Dodd-Frank Wall Street Reform and Consumer Protection Act, we are providing our stockholders with the opportunity to vote, on an advisory basis, on the compensation of our Named Executive Officers as disclosed in this proxy statement in accordance with the compensation disclosure rules of the SEC.

As discussed in our Compensation Discussion and Analysis starting on page 18, the compensation of our Named Executive Officers during 2012 was based upon agreements entered by Acorn and Image prior to the Business Combination and modified in connection with the closing of the Business Combination. After the end of the year, Messrs. Green, Avagliano and Hyde resigned and their employment agreements were terminated. The Company assumed Mr. Penella’s 2004 employment letter agreement with Acorn. The Company contemplates that during 2013 Mr. Penella and the Company will enter into a new employment agreement based upon the considerations set forth in the Compensation Discussion and Analysis. Accordingly, the historical compensation data provided in this proxy statement does not reflect the Company’s prospective compensation policies, and stockholders should consider the Board’s and the Compensation Committee’s intentions and plans as described in the Compensation Discussion and Analysis with respect to prospective compensation policies.

The Company believes that the 2012 salary arrangements accomplished their intended purposes by encouraging Messrs. Green, Avagliano and Hyde to remain with the Company through the successful completion of the Business Combination. Further, the Company believes that Mr. Penella’s 2012 salary and bonus arrangements accomplished their intended purposes by compensating him for the favorable results of Acorn operations during 2012 and encouraging him to remain with the Company through the successful completion of the Business Combination.

The advisory resolution set forth below, commonly known as a “say-on-pay” proposal, gives stockholders the opportunity to express their views on the executive compensation program for our Named Executive Officers. The “say-on-pay” proposal is not intended to address any specific item of compensation, but rather the overall compensation of our Named Executive Officers and the executive compensation policies and practices described in this proxy statement. We will ask our stockholders to vote “FOR” the following resolution at the Annual Meeting:

“RESOLVED, that the stockholders of RLJ Entertainment, Inc. approve, on an advisory basis, the compensation of the Named Executive Officers, as disclosed in the Company’s Proxy Statement for the 2013 Annual Meeting of Stockholders, pursuant to the compensation disclosure rules of the Securities and Exchange Commission (Item 402 of Regulation S-K), including the Compensation Discussion and Analysis, the Summary Compensation Table and narrative discussions and the other related tables and disclosures.”

THE BOARD RECOMMENDS THAT STOCKHOLDERS VOTE “FOR” THE APPROVAL OF THE COMPENSATION OF OUR NAMED EXECUTIVE OFFICERS, AS DISCLOSED IN THIS PROXY STATEMENT PURSUANT TO THE COMPENSATION DISCLOSURE RULES OF THE SEC.

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PROPOSAL 3: VOTE ON AN ADVISORY BASIS ON THE FREQUENCY OF THE ADVISORY STOCKHOLDER VOTE TO APPROVE THE COMPENSATION OF THE NAMED EXEECUTIVE OFFICERS

Pursuant to the Dodd-Frank Act, we are providing our stockholders with the opportunity to vote, on an advisory basis, regarding whether the executive compensation “say-on-pay” advisory vote (as described in Proposal 2 of this proxy statement) should occur every one, two or three years. This proposal is commonly known as a “say-on-frequency” proposal. Stockholders will also have the option to abstain from voting on the matter.

The Board believes that an advisory vote on executive compensation once every year is the best approach for the Company and its stockholders for several reasons, including the following:

•

We believe that furnishing our stockholders with an annual say-on-pay advisory vote will provide valuable feedback to the Compensation Committee and the Board on our compensation philosophy, policies and practices as disclosed in the proxy statement each year. We believe this voting frequency provides the highest level of communication between stockholders, on the one hand, and the Compensation Committee and Board, on the other hand.

•

We believe an annual executive compensation advisory vote is consistent with our goal to regularly receive input from our stockholders on corporate governance matters and executive compensation philosophy, policies and practices. We understand that our stockholders may from time to time have different views as to what is the best approach for the Company, and we look forward to hearing from them in annual executive compensation advisory votes.

•

We believe that providing the executive compensation advisory vote every two or three years may prevent stockholders from communicating in a meaningful and coherent way. For example, we may not know whether the stockholder vote approves or disapproves of compensation for the reporting period or compensation for the previous reporting periods, or both. As a result, it could be difficult to discern the implications of the executive compensation advisory vote.

The form of proxy card relating to our 2013 Annual Meeting of Stockholders enables stockholders to vote, by checking the appropriate box, to have the vote on executive compensation take place every 1 year, every 2 years or every 3 years, or to abstain from voting.

THE BOARD RECOMMENDS THAT STOCKHOLDERS VOTE FOR ONCE EVERY“ONE YEAR” AS THE FREQUENCY FOR THE ADVISORY VOTE REGARDING THE COMPENSATION OF OUR NAMED EXECUTIVE OFFICERS.

STOCKHOLDER PROPOSALS FOR THE 2014 ANNUAL MEETING

The deadline for submitting proposals for inclusion in our proxy materials for the 2014 Annual Meeting is February 19, 2014, by which date you must submit your proposal in writing to our Corporate Secretary at our principal executive offices at 8515 Georgia Avenue, Suite 650, Silver Spring, Maryland 20910. We recommend that such proposals be sent by certified mail, return receipt requested. Such proposals will also need to comply with the rules of the SEC regarding the inclusion of stockholder proposals in our proxy materials, and may be omitted if not in compliance with applicable requirements.

Stockholders that intend to present a proposal before the 2014 Annual Meeting but do not intend for the proposal to be included in our proxy materials for the 2014 Annual Meeting must provide notice of such proposal to our Corporate Secretary at the address indicated above no earlier than April 3, 2014 and no later than May 3, 2014. The notice of such proposal must comply with the applicable provisions of our Bylaws.

In addition, our Bylaws permit stockholders to nominate directors for election at a meeting of stockholders. To nominate a director, the stockholder must provide the information required by our Bylaws. In addition, the stockholder must give timely notice to our Corporate Secretary in accordance with our Bylaws, which for the 2014 Annual Meeting means that notice must be provided to our Corporate Secretary at the address indicated above no earlier than April 3, 2014 and no later than May 3, 2014.

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For proposals that are timely filed, we retain discretion to vote proxies we receive provided that (1) we include in the proxy statement advice on the nature of the proposal and how we intend to exercise our voting discretion, and (2) the proponent does not issue a proxy statement.

HOUSEHOLDING OF PROXIES

The SEC has adopted rules that permit companies and intermediaries such as brokers to satisfy delivery requirements for annual reports and proxy statements with respect to two or more stockholders sharing the same address by delivering a single annual report or proxy statement addressed to those stockholders. This process, which is commonly referred to as “householding,” potentially provides extra convenience for stockholders and cost savings for companies. We and some brokers household annual reports and proxy materials, delivering a single annual report or proxy statement to multiple stockholders sharing an address unless contrary instructions have been received from the affected stockholders.

Once you have received notice from your broker or us that they or we will be householding materials to your address, householding will continue until you are notified otherwise or until you revoke your consent. You may request to receive at any time a separate copy of our annual report or proxy statement, by sending a written request to RLJ Entertainment, Inc., 8515 Georgia Avenue, Suite 650, Silver Spring, Maryland 20910, Attention: Dawn Martens, or calling us at (818) 407-9100.

If, at any time, you no longer wish to participate in householding and would prefer to receive a separate annual report or proxy statement in the future, please notify your broker if your shares are held in a brokerage account (or in "street name") or us if you are a stockholder of record. If, at any time, you and another stockholder sharing the same address wish to participate in householding and prefer to receive a single copy of our annual report or proxy statement, please notify your broker if your shares are held in a brokerage account (or in "street name") or us if you are a stockholder of record. You can notify us by sending a written request to RLJ Entertainment, Inc., 8515 Georgia Avenue, Suite 650, Silver Spring, Maryland 20910, Attention: Dawn Martens, or calling us at (818) 407-9100.

OTHER MATTERS

Management does not know of any matters to be presented at the Annual Meeting other than those set forth herein and in the notice accompanying this proxy statement.

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Appendices

Appendix A – Audit Committee Charter

Appendix B – Compensation Committee Charter

Appendix C – Nominating & Governance Committee Charter

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Appendix A

As adopted by the Board of Directors
October 3, 2012, and revised April 30, 2013

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Audit Committee Charter

I. Purpose

The Audit Committee (the “Committee”) is appointed by the Board of Directors (the “Board”) of RLJ Entertainment, Inc. (together with its subsidiaries, the “Company”) to oversee the accounting and financial reporting processes of the Company and its subsidiaries and the audits of the financial statements of the Company.

II. Committee Membership

The Committee shall consist of at least three directors, each of whom has been determined by the Board to be “independent” in accordance with the requirements of Rule 10A-3 of the Securities Exchange Act of 1934, as amended, the rules of The NASDAQ Stock Market LLC and any additional requirements that the Board deems necessary.

Each Committee member must be able to read and understand fundamental financial statements, including the Company’s balance sheet, income statement and cash flow statement. In addition, at least one member of the Committee must have past employment experience in finance or accounting, requisite professional certification in accounting or other comparable experience or background that leads to financial sophistication. If required by Item 407(d)(5)(ii) of Regulation S-K or the rules of The NASDAQ Stock Market LLC, at least one member of the Committee shall be an “audit committee financial expert” as defined in Item 407(d)(5)(ii) of Regulation S-K. A person who satisfies this definition of audit committee financial expert will also be presumed to have financial sophistication. No Committee member shall have participated in the preparation of the financial statements of the Company or any current subsidiary of the Company at any time during the three years prior to the proposed appointment of such Committee member. No director may serve as a member of the Committee if such director serves on the audit committees of more than two (2) other public companies, unless the Board determines that such simultaneous service would not impair the ability of such director to effectively serve on the Committee. Notwithstanding the foregoing, except as otherwise required by law, the failure to meet these qualification requirements shall not invalidate decisions made or actions taken by the Committee.

Committee members shall be appointed and replaced by the Board on the recommendation of the Nominating and Corporate Governance Committee. The members of the Committee shall serve for such term or terms as the Board may determine or until earlier resignation or death. The Board shall designate the chairperson of the Committee, and if the Board does not designate a chairperson the Committee, by majority vote, shall do so. The Board may remove any member from the Committee at any time with or without cause.

III. Committee Meetings and Procedures

The Committee shall meet as often as it determines necessary to carry out its authority and responsibilities, but in any event no less than once in each fiscal quarter, at such times and places as the Committee determines. The Committee shall maintain minutes of its meetings and records relating to those meetings and shall report regularly to the Board on its activities, as appropriate.

The chairperson of the Committee shall, in consultation with Committee members and members of management, be responsible for calling meetings of the Committee, establishing meeting agendas and supervising the meetings. Any Committee member may, by written request, call a meeting of the Committee at any time. Additionally, any Committee member may submit items to be included in the agenda for, and may raise subjects that are not on the agenda at, any meeting.

Unless provided otherwise by law, this Charter, or the Amended and Restated Articles of Incorporation (the “Articles of Incorporation”) or the Company’s Bylaws (the “Bylaws”), each as amended from time to time, a majority of Committee members, present in person or by telephone, shall constitute a quorum and the vote of a majority of Committee members present or otherwise able to be cast at a meeting at which there is a quorum is necessary to constitute the act of the Committee. No action by the Committee, however, shall be valid unless taken at a meeting for which adequate notice has been given or duly waived by Committee members. The Committee may also take action by unanimous written consent.

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The Committee must meet periodically with the management, including the Principal Financial and Accounting Officer(s), the chief internal audit executive, and the independent auditors in separate executive sessions, to discuss any matters that the Committee or any of the above persons or firms believe warrants Committee attention, and shall invite such parties to its meetings as it deems appropriate, to assist in carrying out its duties and responsibilities. However, the Committee shall meet regularly without such non-members present.

The Committee may form subcommittees for any purpose that the Committee deems appropriate and may delegate to such subcommittees such power and authority as the Committee deems appropriate; provided, however, that the Committee shall not delegate to a subcommittee any power or authority required by any law, regulation or listing standard to be exercised by the Committee as a whole.

IV. Committee Duties and Responsibilities

In carrying out its responsibilities, the Committee’s policies and procedures should remain flexible, in order to best react to changing conditions and to help ensure that the Company’s accounting and reporting practices follow all requirements and are of the highest reliability. The following duties and responsibilities are within the authority of the Committee. Consistent with and subject to applicable laws, rules and regulations, the Committee shall:

A. Select, Evaluate, and Oversee the Auditors

Be directly responsible for the appointment, compensation, retention, oversight of the work, and, if necessary, termination of any registered public accounting firm engaged for the purpose of preparing or issuing an audit report or performing other services for the Company. Each such registered public accounting firm must report directly to the Committee (the registered public accounting firm engaged to prepare or issue an audit report for inclusion in the Company’s Annual Report on Form 10-K is referred to herein as the “independent auditors”).

Review and, in its sole discretion, approve in advance the independent auditors’ annual engagement letter, including the proposed fees contained therein, and establish policies and procedures for the Committee’s pre- approval of permitted services by the independent auditors or other registered public accounting firms on an on-going basis. Review and, in its sole discretion, approve all audit and all permitted non-audit engagements and relationships between the Company and such independent auditors (which approval should be made after receiving input from the Company’s management, if desired). Approval of permitted non-audit services may be made by the Committee or by one or more members of the Committee as designated by the chairperson of the Committee.

Review the performance of the independent auditors, including the lead partner of the independent auditors, and, in its sole discretion (subject, if applicable, to stockholder ratification), make decisions regarding the termination and replacement of the independent auditors when circumstances warrant.

At least annually evaluate the independence of the independent auditors by, among other things:

(a)

obtaining and reviewing from the independent auditors a formal written statement delineating all relationships between the independent auditors and the Company;

(b)

actively engaging in a dialogue with the independent auditors with respect to any disclosed relationships or services that may impact the objectivity and independence of the independent auditors;

(c)

taking, or recommending that the Board take, appropriate action to oversee the independence of the independent auditors; and

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(d)

monitoring compliance by the independent auditors with the audit partner rotation requirements contained in the rules and regulations promulgated by the SEC.

B. Oversee Annual Audit and Quarterly Reviews

Review and discuss with the independent auditors their annual audit plan, including the timing and scope of audit activities. The Committee shall also monitor the plan’s progress and results during the year.

Review with management, the independent auditors and the Company’s internal audit department, the following information which is required to be reported by the independent auditors:

(a)

all critical accounting policies and practices to be used;

(b)

all alternative treatments of financial information that have been discussed by the independent auditors and management, ramifications of the use of such alternative disclosures and treatments, and the treatment preferred by the independent auditors;

(c)

all other material written communications between the independent auditors and management, such as any management letter and any schedule of unadjusted differences; and

(d)

any material financial arrangements of the Company which do not appear on the financial statements of the Company.

Resolve all disagreements between the independent auditors and management regarding financial reporting.

C. Oversee Financial Reporting Process and Internal Controls

1. Review and evaluate:

(a)

the adequacy and effectiveness of the Company’s accounting and internal control policies and procedures on a regular basis, including the responsibilities, budget, and staffing of the Company’s internal audit function, through inquiry and periodic meetings with the independent auditors and internal audit department;

(b)

the yearly report prepared by management, and, if required, attested to by the independent auditors, assessing the effectiveness of the Company’s internal control over financial reporting and stating management’s responsibility for establishing and maintaining adequate internal control over financial reporting prior to its inclusion in the Company’s Annual Report on Form 10-K; and

(c)

the Committee’s level of involvement and interaction with the Company’s internal audit function, including the Committee’s line of authority and role in appointing employees in the internal audit function.

Review with the Chief Executive Officer, Principal Financial and Accounting Officer(s) and independent auditors, periodically, the following:

(a)

all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the Company’s ability to record, process, summarize and report financial information; and

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(b)

any fraud, whether or not material, that involves management or other employees who have a significant role in the Company’s internal control over financial reporting.

Discuss with management guidelines and policies governing the process by which senior management of the Company and the relevant departments of the Company, including the internal audit department, assess and manage the Company’s exposure to risk, as well as the Company’s major financial risk exposures and the steps management has taken to monitor and manage such exposures.

Review with management the progress and results of all internal audit projects, and, when deemed necessary or appropriate by the Committee, assign additional internal audit projects to the chief internal audit executive.

Receive periodic reports from the independent auditors, management and chief internal audit executive to assess the impact of significant accounting or financial reporting developments on the Company.

Review and discuss with the independent auditors the results of the year- end audit of the Company, including any comments or recommendations of the independent auditors. Based on such review and discussions and on such other considerations as it determines appropriate, recommend to the Board whether the Company’s financial statements should be included in the Annual Report on Form 10-K.

Establish and maintain free and open means of communication between and among the Committee, the independent auditors, the Company’s internal audit department and management, including providing such parties with appropriate opportunities to meet separately and privately with the Committee on a periodic basis.

Discuss the Company’s earnings, press releases (including the use of “pro forma” or “adjusted” information), as well as financial information and earnings guidance provided by the Company to analysts and rating agencies. This discussion may be general in nature (i.e., to discuss the types of information to be disclosed and type of presentations to be made). The Committee need not discuss in advance each earnings release or each instance in which the Company may provide earnings guidance.

D. Miscellaneous

Establish and implement policies and procedures for the Committee’s review and approval or disapproval of proposed transactions or courses of dealings with respect to which executive officers or directors or members of their immediate families have an interest (including all transactions required to be disclosed by Item 404(a) of Regulation S-K).

Discuss with management and the independent auditors any correspondence from or with regulators or governmental agencies, any employee complaints or any published reports that raise material issues regarding the Company’s financial statements, financial reporting process, accounting policies or internal audit function.

Discuss with the Company’s General Counsel or outside counsel any legal matters brought to the Committee’s attention that could reasonably be expected to have a material impact on the Company’s financial statements.

Prepare the report required by the rules of the SEC to be included in the Company’s annual proxy statement.

Review and approve in advance any services provided by the independent auditors to the Company’s executive officers or members of their immediate family.

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Establish procedures for (i) the receipt, retention and treatment of complaints received by the Company regarding accounting, internal accounting controls or auditing matters, and (ii) the confidential, anonymous submission by employees of the Company of concerns regarding questionable accounting or auditing matters.

Establish and monitor procedures for the receipt, retention and treatment of reports of evidence of a material securities law violation.

Oversee the hiring policies for employees or former employees of the independent auditors, which must include the restrictions set forth in the rules and regulations promulgated by the SEC.

Perform such additional activities, and consider such other matters, within the scope of its responsibilities, as the Committee or the Board deems necessary or appropriate.

V. Committee Evaluations; Charter Review

At least annually, the Committee shall conduct, and review with the Board, an evaluation of its performance. The Committee may conduct this performance evaluation in such manner as the Committee, in its business judgment, deems appropriate.

At least annually the Committee shall review and assess the adequacy of this Charter and recommend any proposed changes to the Board for approval.

VI. Investigations and Studies; Outside Advisors

The Committee shall have the resources and authority to appropriately discharge its duties and responsibilities without seeking approval of the Board or management. In particular, the Committee may:

conduct or authorize investigations into or studies of matters within the Committee’s scope of responsibilities, and

retain, at the Company’s expense, independent counsel or other consultants or advisors as it deems appropriate.

* * * * *

If any term of this Charter conflicts with any term of the Articles of Incorporation or the Bylaws, the terms of the Articles of Incorporation or the Bylaws, as the case may be, shall control.

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Appendix B

As adopted by the Board of Directors
October 3, 2012, and revised April 30, 2013

RLJ Entertainment, Inc.

Compensation Committee Charter

I. Purpose

The Compensation Committee (the “Committee”) is appointed by the Board of Directors (the “Board”) of RLJ Entertainment, Inc. (together with its subsidiaries, the “Company”) to discharge the Board’s responsibilities relating to:

oversight of the Company's compensation policies, plans and benefits programs;

oversight of the compensation of the Company's Chief Executive Officer (the “CEO”) and other executive officers (including officers reporting under Section 16 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”)), including approval and evaluation of the executive officer compensation plans, policies and programs of the Company; and

administration the Company's equity compensation plans for its employees.

The compensation programs for the Company's executive officers shall be (i) designed to attract, motivate and retain talented executives responsible for the success of the Company, (ii) determined within a competitive framework and (iii) based on the achievement of the Company's overall financial results, individual contributions and a compensation philosophy of “pay for performance.”

II. Committee Membership

The Committee members shall be appointed by, and shall serve at the discretion of, the Board. The Committee shall consist of no fewer than two members of the Board, each of whom shall be “independent” in accordance with the provisions of Rule 10C-1(b)(1)(ii)(A) and (B) under the Exchange Act and the rules of The NASDAQ Stock Market LLC. In addition, each member of the Committee must qualify as “non-employee directors” for the purposes of Rule 16b-3 under the Exchange Act, and a majority of the Committee members as “outside directors” for the purposes of Section 162(m) of the Internal Revenue Code, as amended. Notwithstanding the foregoing, except as otherwise required by law, the failure to meet these qualification requirements shall not invalidate decisions made or actions taken by the Committee.

Committee members shall be appointed and replaced by the Board based on the recommendation of the Nominating and Corporate Governance Committee. The Board shall designate a Committee chairperson. The members of the Committee shall serve for such term or terms as the Board may determine or until earlier resignation or death. The Board may remove any member from the Committee at any time with or without cause.

III. Committee Meetings and Procedures

The Committee shall meet as often as it determines is necessary to carry out its authority and responsibilities, but in any event no less than four times per year.

The chairperson of the Committee shall, in consultation with the other Committee members and members of management, be responsible for calling meetings of the Committee, establishing meeting agendas and supervising the meetings. Any Committee member may, by written consent, call a meeting of the Committee at any time. Additionally, any Committee member may submit items to be included in the agenda for, and may raise subjects that are not on the agenda at, any meeting. The Committee is governed by the same rules regarding meetings (including meetings in person or by telephone or other similar communications equipment), action without meetings, notice, waiver of notice, and quorum and voting requirements as are applicable to the Board.

The Committee, in its discretion, may ask members of management or others to attend and participate in its meetings. However, the Committee shall meet regularly without such members present, and in all cases the CEO and any other such officers shall not be present at meetings at which their compensation or performance is discussed or determined.

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The Committee shall maintain minutes of its meetings and records relating to those meetings and shall report regularly to the Board on its activities, as appropriate.

IV. Committee Authority and Responsibilities

A. Executive Compensation Programs

The Committee shall review and approve all compensation programs applicable to executive officers, including, without limitation, base salaries, bonuses, annual and long-term incentive compensation, equity-based compensation, perquisites and retirement benefits. In connection with this evaluation, the Committee may request and receive input from other non-employee Board members either formally or informally. For purposes of this charter, the term “executive officers” shall mean the individuals designated as executive officers pursuant to Section 16(b) of the Exchange Act, and any employee of the Company whose annual compensation (excluding equity-based compensation) exceeds (or is proposed to exceed) $1 million per year.

B. Employee Compensation

In consultation with senior management, the Committee shall also establish, review, and evaluate the long-term strategy of employee compensation and the forms of equity, incentive and other compensation paid by the Company.

C. Chief Executive Officer

The Committee shall review and approve corporate goals and objectives relevant to the compensation of the CEO, evaluate the performance of the CEO, in light of those goals and objectives, at least annually and determine the compensation level of the CEO based on this evaluation. In determining the long-term incentive component of the CEO’s compensation, the Committee will consider, among other factors, the Company’s performance and relative stockholder return, the value of similar incentive awards to executives in similar positions at comparable companies and the awards given to the CEO in past years, as well as such other factors as the Committee deems appropriate.

D. Director Compensation

The Committee shall review at least annually the compensation payable to the Company’s directors and shall recommend modifications to the Board.

E. Succession Planning

The Committee may develop and recommend to the Board for approval a CEO succession plan (the “Succession Plan”), review the Succession Plan periodically, develop and evaluate potential candidates for executive positions and recommend to the Board any changes to, and any candidates for succession under, the Succession Plan

F. Administer Equity Compensation Plans

The Committee shall exercise all authority of the Board under all of the Company’s long-term incentive or equity compensation plans, programs and arrangements (the “Plans”) and administer the Plans in accordance with their terms. Such authority shall include without limitation: (i) participating in the establishment of grant guidelines and general size of overall grants, (ii) selecting participants in the Plans, (iii) interpreting and making all factual determinations regarding the Plans, (iv) approving awards under the Plans and (v) determining rules, regulations and guidelines relating to the Plans as the Committee may deem necessary or proper.

G. Employment and Severance Arrangements

The Committee shall review and approve all new and amended employment, consulting, retirement, severance, change-in-control, and similar plans, programs, agreements and arrangements applicable to any current or former executive officers.

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H. Tax Compliance

The Committee shall oversee the Company’s policies on structuring compensation programs for executive officers to determine tax deductibility and determine whether to seek to maintain tax deductibility. To the extent that the Company provides for performance-based compensation subject to the requirements of Section 162(m), the Compensation Committee (or, to the extent necessary, a subcommittee thereof comprised of solely of two or more “outside directors” (as defined in Section 162(m)) then serving on the Committee) shall establish and certify the attainment of performance goals as contemplated in, and as required by, Section 162(m).

I. Risk Assessment

The Committee shall review at least annually the potential risk to the Company from its compensation programs and policies, including any incentive plans, evaluate compensation policies and practices that could mitigate any such risk, and determine if disclosure regarding potential material compensation-related risk is necessary in the Company’s proxy statement for its annual meeting of stockholders.

J. Proxy Disclosure

The Committee shall review and discuss with management the compensation-related disclosure included in the Company’s proxy statement and annual report in Form 10-K including without limitation, the “Compensation Discussion and Analysis” (the “CD&A”). Based on such review and discussion, the Committee shall make a recommendation to the Board as to whether the CD&A should be included in the Company’s annual report on Form 10-K and, as applicable, the Company’s proxy statement. The Committee shall produce an annual report on executive compensation for inclusion in the Company’s proxy statement in accordance with applicable laws. In addition, the Committee shall review and recommend to the Board for approval the frequency with which the Company will conduct Say on Pay Votes, taking into account the results of the most recent stockholder advisory vote on frequency of Say on Pay Votes required by Section 14A of the Exchange Act, and review and approve the proposals regarding the Say on Pay Vote and the frequency of the Say on Pay Vote to be included in the Company's proxy statement.

K. Stockholder Approvals

The Committee shall oversee the Company’s submissions to stockholders on matters relating to executive compensation, including advisory votes on executive compensation and the frequency of such votes and approval of compensatory plans and any amendments to such plans. In conjunction with the Nominating and Corporate Governance Committee of the Board, the Committee shall determine the appropriate engagement with stockholder groups and proxy advisory firms on matters relating to executive compensation.

L. Delegation

The Committee shall have the power to delegate its authority and duties to subcommittees, individual Committee members, or management, as it deems appropriate in accordance with applicable laws, rules and regulations, provided that no subcommittee shall consist of fewer than two members.

V. Committee Evaluations; Charter Review

At least annually, the Committee shall review and assess the adequacy of this Charter recommend any proposed changes to the Board for approval.

VI. Investigations and Studies; Outside Advisors

The Committee shall have the resources and authority to appropriately discharge its duties and responsibilities without seeking approval of the Board or management. In particular, the Committee may:

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conduct or authorize investigations into or studies of matters within the Committee’s scope of responsibilities, and

retain, at the Company’s expense, independent counsel or other consultants or advisers as it deems appropriate, including compensation consultants to advise the Committee with respect to amounts or forms of director compensation and benefits and the Company employee and executive compensation and benefits; provided that prior to selecting or receiving advice from such counsel, consultant or adviser, other than in-house counsel, the Committee shall take into consideration the independence factors specified in NASDAQ Stock Market Rule 5605(d)(3)(D).

Without limiting the generality of the foregoing, the Committee shall have the sole authority to retain or terminate any compensation consultant to the Committee, including the sole authority to approve or disapprove the fees sought by such consultant (such fees to be borne by the Company) and other retention terms.

* * * * *

If any term of this Charter conflicts with any term of the Articles of Incorporation or the Bylaws, the terms of the Articles of Incorporation or the Bylaws, as the case may be, shall control.

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Appendix C

As adopted by the Board of Directors
October 3, 2012, and revised April 30, 2013

RLJ Entertainment, Inc.

Nominating and Corporate Governance Committee Charter

I. Purpose

The Nominating and Corporate Governance Committee (the “Committee”) is appointed by the Board of Directors (the “Board”) of RLJ Entertainment, Inc. (together with its subsidiaries, the “Company”) to (1) identify and to recommend to the Board individuals qualified to serve as directors of the Company and on committees of the Board; (2) advise the Board with respect to the Board composition, committees and procedures; (3) oversee the evaluation of the Board; and (4) develop and maintain the Company’s corporate governance policies. Such activities shall be conducted in a manner consistent with the Company’s Amended and Restated Articles of Incorporation and Amended and Bylaws (respectively, the “Articles of Incorporation” and the “Bylaws”), each as amended from time to time.

II. Committee Membership

The Committee members shall be appointed by, and shall serve at the discretion of, the Board. The Committee shall consist of no fewer than two members of the Board. The Board may designate one member of the Committee as its chairperson. The Committee, in its sole discretion, may form and delegate any of its responsibilities, along with the authority to take action in relation to such responsibilities, to one or more subcommittees when appropriate. Members of the Committee shall be determined by the Board to be “independent” in accordance with the rules of The NASDAQ Stock Market LLC. Notwithstanding the foregoing, except as otherwise required by law, the failure to meet these qualification requirements shall not invalidate decisions made or actions taken by the Committee.

The members of the Committee shall serve for such term or terms as the Board may determine or until earlier resignation or death. The Board may remove any member from the Committee at any time with or without cause.

III. Committee Meetings and Procedures

The Committee shall meet as often as it determines is necessary to carry out its authority and responsibilities, but in any event no less than four times per year.

The chairperson of the Committee shall, in consultation with the other Committee members and members of management, be responsible for calling meetings of the Committee, establishing meeting agendas and supervising the meetings. Any Committee member may, by written request, call a meeting of the Committee at any time. Additionally, any Committee member may submit items to be included in the agenda for, and may raise subjects that are not on the agenda at, any meeting. The Committee is governed by the same rules regarding meetings (including meetings in person or by telephone or other similar communications equipment), action without meetings, notice, waiver of notice, and quorum and voting requirements as are applicable to the Board.

The Committee, in its discretion, may ask members of management or others to attend and participate in its meetings.

The Committee shall maintain minutes of its meetings and records relating to those meetings and shall report regularly to the Board on its activities, as appropriate.

IV. Committee Authority and Responsibilities

A. Board Candidates and Nominees

The Committee shall have the following authority and responsibilities with respect to Board candidates and nominees:

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To assist in identifying and recruiting director nominees for election by the stockholders or appointment by the Board, as the case may, including persons suggested by stockholders or others.

To review the background and qualifications of individuals being considered as director candidates. Among the qualifications considered in the selection of candidates, the Committee shall look at the following attributes and criteria of candidates: experience, knowledge, skills, expertise, diversity, personal and professional integrity, character, business judgment, time availability in light of other commitments, dedication, independence and such other relevant factors that the Committee considers appropriate in the context of the needs of the Board.

To select and approve the nominees for director to be submitted to a stockholder vote at the annual meeting of stockholders.

To review the suitability for continued service as a director of each Board member (A) at the time of annual nomination for reelection and (B) in the event that (i) an employee director’s employment with the Company is terminated for any reason, (ii) a non-employee director changes his or her primary job responsibility in effect at the time such director was most recently elected to the Board or (iii) other change in status that makes termination of service desirable or in the best interest of the Company.

To evaluate and approve, in accordance with Company policy, requests from directors, including those who are also members of management, who seek board memberships at other publicly held companies (other than subsidiaries, controlled affiliated, private companies, or non-profit organizations).

The foregoing notwithstanding, if the Company is legally required by contract or otherwise to permit a third party to designate one or more of the directors to be elected or appointed, then the nomination or appointment of such directors shall be governed by such requirements.

B. Board Composition and Procedures

The Committee shall have the following authority and responsibilities with respect to the composition and procedures of the Board as a whole:

To evaluate periodically the size of the Board and recommend to the Board any appropriate increase or decrease.

To review at least annually with the Board the composition of the Board as a whole and to recommend, if necessary, measures to be taken so that the Board reflects the appropriate balance of knowledge, skills and expertise, contains at least the minimum number of independent directors required by the rules of The NASDAQ Stock Market LLC and otherwise complies with any applicable requirements that deems necessary or appropriate.

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To make recommendations concerning any other aspect of these procedures.

C. Board Committees

The Committee shall have the following authority and responsibilities with respect to the committee structure of the Board:

To make recommendations to the Board regarding the size and composition of each standing committee of the Board, including the identification of individuals qualified to serve as members of a committee, including the Committee, and to recommend individual directors to fill any vacancy that might occur on a committee, including the Committee.

To review periodically committee assignments and report any recommendations to the Board.

To recommend that the Board establish committees as desirable or necessary in order to address ethical, legal or other matters. The Committee’s power to make such a recommendation under this Charter shall be without prejudice to the right of any other committee of the Board, or any individual director, to make such a recommendation at any time.

D. Corporate Governance

The Committee shall have the following authority and responsibilities with respect to corporate governance:

To develop and recommend to the Board a set of corporate governance guidelines applicable to the Company, to review these principles at least once a year and to recommend any changes to the Board, and to oversee the Company's corporate governance practices, including reviewing and recommending to the Board for approval any changes to the other documents and policies in the Company's corporate governance framework, including the Articles of Incorporation and Bylaws.

To develop and recommend to the Board for approval a Company policy on approval of related party transactions and to review and approve any transaction between the Company and any related person (as defined in Item 404 of Regulation S-K).

To develop and recommend to the Board for approval standards for determining whether a director has a relationship with the Company that would impair his or her independence.

To review and discuss with management the disclosure regarding the operations of the Committee and director independence, and to recommend that this disclosure be, included in the Company's proxy statement or annual report on Form 10-K, as applicable.

To monitor compliance with the Company’s Code of Ethics and Business Conduct (the “Code”), and to investigate any alleged breach or violation of the Code and to enforce the provisions of the Code.

To review and resolve potential conflicts of interest involving directors and senior executives.

To consider any other corporate governance issues that arise and to develop appropriate recommendations for the Board.

E. Evaluation of the Board

The Committee shall have the following authority and responsibilities with respect to evaluation of the Board:

To oversee the evaluation of the Board as a whole.

To receive comments from all directors and evaluate and report at least annually to the Board on the performance and effectiveness of the Board, to be discussed with the full Board following the end of each fiscal year.

To prepare, for the Board’s review and approval, Board and director assessment methods and criteria, taking the Chief Executive Officer’s, Chairman’s and Co-Chairman’s views into consideration.

F. Evaluate Stockholders’ Nominees

The Committee shall review the qualifications of, and make recommendations to the Board regarding independent director candidates submitted to the Company by stockholders, and review and evaluate any stockholder proposals relating to the nomination by stockholders of any candidates to the Board or the right of any stockholder to do so.

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G. Stockholder Approvals

The Committee shall determine the appropriate engagement with stockholder groups and proxy advisory firms on the Company’s submissions to stockholders. In the case of matters relating to executive compensation, this shall be done in conjunction with the Compensation Committee of the Board.

H. Perform Additional Duties

The Committee shall perform such additional activities, and consider such other matters, within the scope of its responsibilities as the Committee or the Board deems necessary or appropriate.

V. Committee Evaluations; Charter Review

At least annually, the Committee shall review and assess the adequacy of this Charter recommend any proposed changes to the Board for approval.

VI. Investigations and Studies; Outside Advisors

The Committee shall have the resources and authority to appropriately discharge its duties and responsibilities without seeking approval of the Board or management. In particular, the Committee may:

conduct or authorize investigations into or studies of matters within the Committee’s scope of responsibilities, and

retain, at the Company’s expense, independent counsel or other consultants or advisors as it deems appropriate.

Without limiting the generality of the foregoing, the Committee shall have the sole authority to retain, set the compensation for, oversee the work of, and terminate any search firm used to identify director candidates, including the sole authority to approve or disapprove fees sought by such search firm (such fees to be borne by the Company) and other retention terms.

* * * * *

If any term of this Charter conflicts with any term of the Articles of Incorporation or the Bylaws, the terms of the Articles of Incorporation or the Bylaws, as the case may be, shall control.

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PROXY

Please mark

your votes

like this

1.	(Proposal 1) Elect eight directors nominated by the Board of Directors, divided into three classes.	For all nominees listed below (except as indicated)	Withhold authority to vote for all nominees	2.	(Proposal 2) Vote on an advisory basis on the compensation of the named executive officers as disclosed in the accompanying proxy statement.
		o	o		o FOR o AGAINST o ABSTAIN
	NOMINEES:
	01 Lisa Wardell (1-year term) 02 Andy Laszlo (1-year term) 03 Miguel Penella (2-year term) 04 H. Van Sinclair (2-year term)	05 Morris Goldfarb (2-year term) 06 Robert L. Johnson (3-year term) 07 Peter Edwards (3-year term) 08 Tyrone Brown (3-year term)		3.	(Proposal 3) Vote on an advisory basis on whether the advisory stockholder vote to approve the compensation of the named executive officers should occur every one, two or three years.

	(Instruction: To withhold authority to vote for any individual nominee(s), write the name(s) of such nominee(s) below.)				o ONE YEAR o TWO YEARS o THREE YEARS oABSTAIN

				4.	The proxies are authorized to vote in their discretion upon such other business as may properly come before the Annual Meeting and any matters incident to the conduct of the Meeting.

				Please indicate if you plan to attend this meeting oYES o NO

	COMPANY ID:

	PROXY NUMBER:

	ACCOUNT NUMBER:

Signature

Signature (Joint Owners)

Date

, 2013.

Please date this Proxy and sign exactly as your name appears hereon. If shares are jointly held, this Proxy should be signed by each joint owner. Executors, administrators, guardians or others signing in a fiduciary capacity should state their full titles. A Proxy executed by a corporation should be signed in its name by its president or other authorized officer. A Proxy executed by a partnership should be signed in its name by an authorized person.

▲ FOLD AND DETACH HERE AND READ THE REVERSE SIDE ▲

VOTE BY INTERNET OR TELEPHONE

Q U I C K ★ ★ ★ E A S Y ★ ★ ★ I M M E D I AT E

As a stockholder of RLJ Entertainment, Inc., you have the option of voting your shares electronically through the Internet or on the telephone, eliminating the need to return the proxy card. Your electronic vote authorizes the named proxies to vote your shares in the same manner as if you marked, signed, dated and returned the proxy card. Votes submitted electronically over the Internet or by telephone must be received by 7:00 p.m., Eastern time, on Wednesday, July 31, 2013.



Vote Your Proxy on the Internet: Go to www.cstproxyvote.com Have your proxy card available when you access the above website. Follow the prompts to vote your shares.	OR	Vote Your Proxy by Phone: Call 1 (866) 894-0537 Use any touch-tone telephone to vote your proxy. Have your proxy card available when you call. Follow the voting instructions to vote your shares.	OR	Vote Your Proxy by mail: Mark, sign, and date your proxy card, then detach it, and return it in the postage-paid envelope provided.

PLEASE DO NOT RETURN THE PROXY CARD IF YOU ARE VOTING ELECTRONICALLY OR BY PHONE

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RLJ ENTERTAINMENT, INC.

C/O INVESTOR RELATIONS

8515 GEORGIA AVENUE, SUITE 650

SILVER SPRING, MARYLAND 20910

Proxy Solicited by the Board of Directors for the Annual Meeting of Stockholders

August 1, 2013

The undersigned appoints Miguel Penella, H. Van Sinclair and Lisa Wardell, and each of them, proxies (each with full power of substitution) to represent the undersigned at the RLJ Entertainment, Inc. Annual Meeting of Stockholders to be held on August 1, 2013, and any adjournments or postponements thereof and to vote the shares of the Company’s common stock held of record by the undersigned on June 13, 2013 as directed on the reverse side.

The shares represented by this Proxy will be voted as directed on the reverse side. If no direction is indicated, the shares represented by this Proxy will be voted FOR the election of directors in Proposal 1, FOR approval of the compensation of the named executive officers in Proposal 2, and for holding the advisory stockholder vote to approve the compensation of the named executive officers every ONE YEAR in Proposal 3. The undersigned acknowledges receipt of the Notice of Annual Meeting of Stockholders and the Proxy Statement dated June 19, 2013.

THIS PROXY CARD IS VALID ONLY WHEN SIGNED AND DATED

PLEASE PROMPTLY COMPLETE, DATE AND SIGN THIS PROXY AND RETURN IT IN THE ENVELOPE PROVIDED.

(Continued, and to be marked, dated and signed, on the other side)

DETACH AND RETURN THIS PORTION ONLY

▲ FOLD AND DETACH HERE AND READ THE REVERSE SIDE ▲

KEEP THIS PORTION FOR YOUR RECORDS

Important Notice Regarding the Availability of Proxy Materials for the Annual Meeting of Stockholders to be held August 1, 2013.

The Proxy Statement and our 2012 Annual Report to Stockholders are available at:

http://phx.corporate-ir.net/phoenix.zhtml?c=109706&p=irol-reports

Director Since

Principal Occupation and Business Experience
During Past Five Years and Other Directorships

Robert L. Johnson

Mr. Johnson was appointed as the Company’s chairman in October 2012. From November 2010 to October 2012, Mr. Johnson served as the chairman of the board of RLJ Acquisition, Inc., a special purpose acquisition company that created the Company. Mr. Johnson founded The RLJ Companies, an innovative business network that owns or holds interests in a diverse portfolio of companies in the banking, private equity, real estate, hospitality, professional sports, film production, gaming, and automobile dealership industries, and has served as its chairman since February 2003. Prior to forming The RLJ Companies, Mr. Johnson was founder and chief executive officer of Black Entertainment Television (BET), which was acquired by Viacom Inc. in 2001. He continued to serve as chief executive officer of BET until February 2006. In July 2007, Mr. Johnson was named by USA Today as one of the 25 most influential business leaders of the past 25 years. Mr. Johnson currently serves on the boards of directors of RLJ Lodging Trust, KB Homes, Lowe’s Companies, Inc., Rollover Systems, Inc. and Strayer Education, Inc. He previously served as a director of Hilton Hotels Corporation, US Airways Group, Inc., General Mills, Inc. and IMG Worldwide, Inc. We believe that Mr. Johnson’s professional background, his prior senior leadership positions at various companies, and current and past board positions, make him well qualified as a Chairman of the Company’s board of directors.

Miguel Penella

Mr. Penella was appointed as the Company’s Chief Executive Officer on January 18, 2013. From October 2012 until January 18, 2013, Mr. Penella served as Chief Operating Officer. Mr. Penella has served as a director of the Company since October 2012. From April 2007 to October 2012, Mr. Penella served as chief executive officer of Acorn Media Group, Inc., which was acquired by the Company in October 2012, where he oversaw operations and was the driving force behind the worldwide expansion of both the Acorn and Acacia brands. From 2004 to April of 2007, Mr. Penella was president of Acorn’s direct-to-consumer operations offering DVDs and other high quality products through catalogs and online marketing vehicles. Mr. Penella came to Acorn from Time-Life where he rose in the ranks from circulation director of the catalog department to director of catalogs for the music division and then to vice president of customer marketing in 2001. Previously, he worked in catalog management for the National Direct Marketing Corporation and the National Wildlife Federation. A native of Valencia, Spain, Mr. Penella has an MBA in international marketing and finance from Adelphi University. We believe that Mr. Penella’s professional background, his position in the Company and his prior senior leadership positions at various companies make him well qualified as a member of the Company’s board of directors.