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

SCHEDULE 14A

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

 

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100 N. Crescent Drive, Suite 120
Beverly Hills, California 90210

June 15, 2011

Dear Fellow Stockholder:

        On behalf of the Board of Directors and management of RealD Inc., I cordially invite you to attend our annual meeting of stockholders on Friday, July 29, 2011, at 100 N. Crescent Drive, Suite 120, Beverly Hills, California at 10:00 a.m. (Pacific Time).

        The notice of meeting and proxy statement that follow describe the business we will consider at the meeting. We sincerely hope you will be able to attend the meeting. However, whether or not you are present in person, your vote is very important. We are pleased to offer multiple options for voting your shares. You may vote by telephone, via the Internet, by mail or in person as described beginning on page 2 of the proxy statement.

        Thank you for your continued support of RealD Inc.

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RealD Inc.
100 N. Crescent Drive, Suite 120
Beverly Hills, California 90210

NOTICE OF THE 2011 ANNUAL MEETING OF STOCKHOLDERS

TO ALL REALD STOCKHOLDERS:

        NOTICE IS HEREBY GIVEN that the 2011 Annual Meeting of Stockholders (the "Annual Meeting") of RealD Inc., a Delaware corporation, will be held on:

        The foregoing items of business are more fully described in the proxy statement accompanying this notice. On or about June 16, 2011, we will begin mailing to stockholders this notice of the Annual Meeting, the proxy statement and the form of proxy.

        All stockholders are cordially invited to attend the Annual Meeting in person. Only stockholders of record at the close of business on June 13, 2011 (the "Record Date") are entitled to receive notice of, and to vote at, the Annual Meeting or any adjournment or postponement of the Annual Meeting. Any registered stockholder in attendance at the Annual Meeting and entitled to vote may do so in person even if such stockholder returned a proxy.

IMPORTANT: WHETHER OR NOT YOU EXPECT TO ATTEND THE ANNUAL MEETING IN PERSON, PLEASE COMPLETE, DATE AND SIGN THE PROXY CARD AND MAIL IT PROMPTLY, OR YOU MAY VOTE BY TELEPHONE OR VIA THE INTERNET BY FOLLOWING THE DIRECTIONS ON THE PROXY CARD. ANY ONE OF THESE METHODS WILL ENSURE REPRESENTATION OF YOUR SHARES AT THE ANNUAL MEETING. NO POSTAGE NEED BE AFFIXED TO THE COMPANY-PROVIDED PROXY CARD ENVELOPE IF MAILED IN THE UNITED STATES.

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PROXY STATEMENT FOR
2011 ANNUAL MEETING OF STOCKHOLDERS

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REALD INC.
100 N. Crescent Drive, Suite 120
Beverly Hills, CA 90210

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PROXY STATEMENT FOR
2011 ANNUAL MEETING OF STOCKHOLDERS

INFORMATION CONCERNING SOLICITATION AND VOTING

General

        The Board of Directors (the "Board") of RealD Inc., a Delaware corporation, is furnishing this proxy statement and proxy card to you in connection with its solicitation of proxies to be used at RealD Inc.'s Annual Meeting of Stockholders to be held on July 29, 2011 at 10:00 a.m. Pacific Time at RealD Inc., 100 N. Crescent Drive, Suite 120, Beverly Hills, California, or at any adjournment(s), continuation(s) or postponement(s) of the meeting (the "Annual Meeting").

        We use a number of abbreviations in this proxy statement. We refer to RealD Inc. as "RealD," "the Company," or "we," "us" or "our." The term "proxy solicitation materials" includes this proxy statement, the notice of the Annual Meeting, and the proxy card. References to "fiscal 2011" mean our 2011 fiscal year, which began on March 27, 2010 and ended on March 25, 2011. References to "fiscal 2012" mean our 2012 fiscal year, which began on March 26, 2011 and will end on March 23, 2012.

        Our principal executive offices are located at 100 N. Crescent Drive, Suite 120, Beverly Hills, California 90210, and our telephone number is (310) 385-4000.

Delivery of voting materials

        If you would like to reduce our costs in mailing proxy materials, you can consent to receiving all future proxy statements, proxy cards and annual reports electronically via e-mail or the Internet. To sign up for electronic delivery, please follow the instructions provided for voting via the Internet and, when prompted, indicate that you agree to receive or access proxy materials electronically in future years.

        To reduce the expenses of delivering duplicate materials to our stockholders, we are taking advantage of householding rules that permit us to deliver only one set of proxy solicitation materials and our Annual Report on Form 10-K for the fiscal year ended March 25, 2011 (our "2011 Annual Report") to stockholders who share the same address, unless otherwise requested. Each stockholder retains a separate right to vote on all matters presented at the Annual Meeting.

        If you share an address with another stockholder and have received only one set of materials, you may write or call us to request a separate copy of these materials at no cost to you. For future annual meetings, you may request separate materials or request that we only send one set of materials to you if you are receiving multiple copies by writing to us at RealD Inc., 100 N. Crescent Drive, Suite 120, Beverly Hills, California 90210, Attention: Corporate Secretary, or calling us at (310) 385-4000.

        A copy of our 2011 Annual Report has been furnished with this proxy statement to each stockholder. A stockholder may also request a copy of our 2011 Annual Report by writing to our Corporate Secretary at 100 N. Crescent Drive, Suite 120, Beverly Hills, California 90210. Upon receipt of such request, we will provide a copy of our Annual Report without charge, including the financial statements required to be filed with the Securities and Exchange Commission pursuant to Rule 13a-1 of the Securities Exchange Act of 1934 ("Exchange Act"). Our 2011 Annual Report is also available on our website at http://www.reald.com/content/ir-sec-filings.aspx.

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Record date and shares outstanding

        Stockholders who owned shares of our common stock, par value $0.0001 per share, at the close of business on June 13, 2011, which we refer to as the Record Date, are entitled to notice of, and to vote at, the Annual Meeting. As of June 6, 2011, we had 54,168,301 shares of common stock outstanding. For information about beneficial ownership of our issued and outstanding common stock, please see "Security Ownership of Management and Certain Beneficial Owners" below.

Voting

        Each holder of shares of common stock is entitled to one vote for each share of common stock held as of the Record Date. Cumulating votes is not permitted under our Bylaws.

        Many of our stockholders hold their shares through a stockbroker, bank or other nominee, rather than directly in their own name. As summarized below, there are distinctions between shares held of record and those beneficially owned.

        Stockholder of record.    If your shares are registered directly in your name with our transfer agent, Computershare Trust Company N.A., you are considered, with respect to those shares, the stockholder of record and these proxy solicitation materials are being furnished to you directly by us.

        Beneficial owner.    If your shares are held in a stock brokerage account, or by a bank or other nominee (also known as shares registered in "street name"), you are considered the beneficial owner of such shares held in street name, and these proxy solicitation materials are being furnished to you by your broker, bank or other nominee, who is considered, with respect to those shares, the stockholder of record. As the beneficial owner, you have the right to direct your broker, bank or other nominee as to how to vote your shares. If you hold your shares in street name, you are also invited to attend the Annual Meeting. However, since you are not the stockholder of record, you may not automatically vote your shares in person at the Annual Meeting. Shares registered in street name may be voted in person by you only if you obtain a signed proxy from the broker, bank or other nominee who holds your shares, giving you the right to vote the shares. You may contact your broker, bank or other nominee to obtain a proxy card, bring it with you and vote your shares at the Annual Meeting.

        How to vote.    If you hold shares directly as a stockholder of record, you can vote in one of the following three ways:

        (1)    Vote via the Internet at www.proxyvote.com.    Use the Internet to transmit your voting instructions and for electronic delivery of information up until 11:59 p.m. Eastern Time on July 28, 2011. Have your proxy card in hand when you access the website and then follow the instructions.

        (2)    Vote by Telephone at 1-800-690-6903.    Use a touch-tone telephone to transmit your voting instructions up until 11:59 p.m. Eastern Time on July 28, 2011. Have your proxy card in hand when you call and then follow the instructions. Toll free in the U.S. and Canada.

        (3)    Vote by Mail.    Mark, sign and date your proxy card and return it in the postage-paid envelope we have provided with any paper copy of the proxy statement, or return the proxy card to RealD Inc., c/o Broadridge, 51 Mercedes Way, Edgewood, NY 11717. Proxy cards submitted by mail must be received prior to the Annual Meeting.

        If you hold shares beneficially in street name, you may submit your voting instructions in the manner prescribed by your broker, bank or other nominee by following the instructions provided by your broker, bank or other nominee.

        Even if you plan to attend the Annual Meeting, we recommend that you vote your shares in advance as described above so that your vote will be counted if you later decide not to attend the Annual Meeting.

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        Quorum.    A quorum, which is the holders of at least a majority of our stock issued and outstanding and entitled to vote as of the Record Date, is required to be present in person or by proxy at the Annual Meeting in order for us to hold the Annual Meeting and conduct business. Your shares will be counted as being present at the Annual Meeting if you appear in person at the Annual Meeting (and are the stockholder of record for your shares), if you vote your shares by telephone or over the Internet, or if you submit a properly executed proxy card. Abstentions and "broker non-votes" are counted as present and entitled to vote for purposes of determining a quorum. A "broker non-vote" occurs when a nominee holding shares for a beneficial owner does not vote on a particular proposal because the nominee does not have discretionary voting power with respect to that item and has not received instructions from the beneficial owner. Votes against a particular proposal will also be counted both to determine the presence or absence of a quorum and to determine whether the requisite number of voting shares has been obtained.

        Votes required for Proposal One.    Election of a director requires the affirmative vote of the holders of a plurality of votes represented by the shares present in person or represented by proxy at a meeting at which a quorum is present. The three persons receiving the greatest number of votes at the Annual Meeting shall be elected as class I directors for a term expiring at our 2014 annual meeting of stockholders.

        Votes required for Proposal Two.    Ratification of the appointment of our independent registered public accounting firm requires the affirmative vote of the holders of a majority of our stock having voting power and present in person or represented by proxy at the Annual Meeting.

        Votes required for Proposal Three.    The approval of the non-binding advisory vote approving the compensation of RealD's named executive officers requires the affirmative vote of the holders of a majority of our stock having voting power and present in person or represented by proxy at the Annual Meeting.

        Votes required for Proposal Four.    The alternative (every year, every other year or every three years) that receives the largest number of votes (other than "Abstain") will be designated the stockholders' non-binding preference as to frequency of the say-on-pay vote.

        Votes required for Proposal Five.    Approval of our 2011 Employee Stock Purchase Plan requires the affirmative vote of the holders of a majority of our stock having voting power and present in person or represented by proxy at the Annual Meeting.

        Treatment of broker non-votes; Abstentions.    Abstentions and "broker non-votes" are counted as present and entitled to vote for purposes of determining a quorum. Except for the vote to ratify our independent registered public accounting firm, your broker is not entitled to vote your shares on any of the proposals to be considered at the Annual Meeting if no instructions are received from you. If your broker does not vote, this is not considered a vote cast and, therefore, will have no effect. Abstentions generally will count as a vote against a proposal.

How your proxy will be voted

        If you complete and mail your proxy card or vote via the Internet or by telephone, the shares represented by your proxy will be voted at the Annual Meeting in accordance with your instructions. If you submit your proxy card by mail, but do not fill out the voting instructions on the proxy card, the shares represented by your proxy will be voted in favor of Proposals One, Two, Three and, for Proposal Four, in favor of holding future stockholder advisory votes on named executive officer compensation every year. In addition, if any other matters properly come before the Annual Meeting, it is the intention of the persons named in the enclosed proxy card to vote the shares they represent as directed

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by the Board. We have not received notice of any other matters that may properly be presented at the Annual Meeting.

Revoking your proxy

        You may revoke your proxy at any time prior to the date of the Annual Meeting by: (1) submitting a later-dated vote in person at the Annual Meeting, via the Internet, by telephone or by mail; or (2) delivering instructions to us at 100 N. Crescent Drive, Suite 120, Beverly Hills, California 90210 to the attention of our Corporate Secretary. Any notice of revocation sent to us must include the stockholder's name and must be actually received by us prior to the Annual Meeting to be effective. Your attendance at the Annual Meeting after having executed and delivered a valid proxy card or vote via the Internet or by telephone will not in and of itself constitute a revocation of your proxy. If you intend to revoke your proxy by voting in person at the Annual Meeting, you will be required to give oral notice of your intention to do so to the Inspector of Elections at the Annual Meeting. If your shares are held in "street name," you must follow the directions provided by your broker, bank or other nominee regarding how to revoke your proxy.

Solicitation of proxies

        We will pay for the cost of this proxy solicitation. We may reimburse brokerage firms and other persons representing beneficial owners of shares for their expenses in forwarding or furnishing proxy solicitation materials to such beneficial owners. Proxies may also be solicited personally or by telephone, telegram, facsimile, or electronically by certain of our directors, officers, and other employees, without additional compensation.

Voting results

        We will announce preliminary voting results at the 2011 Annual Meeting and we will publish final results in a Current Report on Form 8-K within four business days following the 2011 Annual Meeting.

        WHETHER OR NOT YOU EXPECT TO ATTEND THE ANNUAL MEETING IN PERSON, YOU ARE REQUESTED TO COMPLETE, DATE, AND SIGN THE PROXY CARD AND RETURN IT PROMPTLY, OR VOTE BY TELEPHONE OR VIA THE INTERNET BY FOLLOWING THE DIRECTIONS ON THE PROXY CARD. BY RETURNING YOUR PROXY CARD OR VOTING BY TELEPHONE OR INTERNET PROMPTLY, YOU CAN HELP US AVOID THE EXPENSE OF FOLLOW-UP MAILINGS TO ENSURE A QUORUM IS PRESENT AT THE ANNUAL MEETING. STOCKHOLDERS WHO ATTEND THE ANNUAL MEETING MAY REVOKE AN EARLIER SUBMITTED PROXY AND VOTE THEIR SHARES IN PERSON AS SET FORTH IN THIS PROXY STATEMENT.

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PROPOSAL ONE

ELECTION OF CLASS I DIRECTORS

        Our Board is currently comprised of eight members and divided into three classes, in accordance with Section 3.2 of our Amended and Restated Bylaws. Only the terms of those four directors serving as Class I directors are scheduled to expire at the Annual Meeting. The terms of our other directors expire in subsequent years. The Board has considered and approved the nomination of Joshua Greer, a current Class I director, James Cameron, a current Class I director, and David Habiger, a new director nominee, for election as Class I directors at the Annual Meeting. All of the nominees have consented to being named in this proxy statement and to serve on our Board if elected. Unless otherwise directed, the proxy holders will vote the proxies received by them for the three nominees named below. If any such nominee is unable or declines to serve as a director at the time of the Annual Meeting, the proxies will be voted for any nominee who is designated by the present Board to fill the vacancy. It is not expected that any nominee will be unable or will decline to serve as a director. The Class I directors elected at the Annual Meeting will hold office until the annual meeting of stockholders in 2014 and until their successors are elected. The Class II directors consists of Frank J. Biondi Jr., Sherry Lansing and Richard Grand-Jean, and they will hold office until the annual meeting of stockholders in 2012 and until their successors are elected. The Class III directors consists of Michael V. Lewis and P. Gordon Hodge, and they will hold office until the annual meeting of stockholders in 2013 and until their successors are elected. Additional information, as of March 25, 2011, about the nominees for election and the other six directors is set forth below.

Class I Directors nominated for election in at the Annual Meeting

        Joshua Greer co-founded the Company in 2003 and has served as our President since 2007. Prior to co-founding RealD, Mr. Greer was co-founder and Chief Convergence Officer of Walden Media, a film production and publishing company, from 2000 to 2002. Prior to that, Mr. Greer was President of Digital Domain's New Media Group, a digital production studio. Prior to Digital Domain, Mr. Greer was Chief Executive Officer and co-founder of Digital Planet, a digital design studio. Mr. Greer's experience as our co-founder and President and his involvement with our formation, along with his knowledge of our business, management skills and performance as a board member led our Board to conclude that he should continue to serve as a director. Mr. Greer has elected to resign his role as President, effective July 15, 2011. Mr. Greer will serve as a strategic and technology advisor to the Company and, so long as he is re-elected by our stockholders at the Annual Meeting, will remain on our Board.

        James Cameron has served on our Board since the completion of our IPO on July 21, 2010. Mr. Cameron is an award winning motion picture director, producer, screenwriter and editor. Mr. Cameron's motion pictures are well known by consumers worldwide and include Titanic and Avatar, the two highest grossing motion pictures of all time. Mr. Cameron's experience in the media and entertainment industry led our Board to conclude that he should continue to serve as a director.

        David Habiger has worked with the founding members of Sonic Solutions (NASDAQ: SNIC), or Sonic, from 1992 to March 2011, was President and Chief Executive Officer of Sonic from 2005 to March 2011 and was a director of Sonic from October 2010 to March 2011. Mr. Habiger graduated from St. Norbert College with a bachelor degree in business media in 1991, and graduated from University of Chicago with a Masters in Business Administration in 1998. Mr. Habiger's business

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experience in the digital media and entertainment industries and his in-depth knowledge and understanding of the movie industry led our Board to conclude that he should serve as a director.

        THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE "FOR" THE ELECTION TO THE BOARD OF EACH OF THE PROPOSED CLASS I DIRECTOR NOMINEES IDENTIFIED ABOVE.

Class I Director not up for re-election at the Annual Meeting

        Stephen Royer has served on our Board since 2007, in conjunction with the investment in our Series C mandatorily redeemable convertible preferred stock by Shamrock Capital Growth Fund II, a private equity fund managed by Shamrock Capital Advisors. Mr. Royer is President and Chief Executive Officer of Shamrock Capital Advisors, a private equity group that manages investments in businesses focused on the media, entertainment, and communications industries. Mr. Royer currently serves as a director of Media Storm, LLC and TeleGuam Holdings, LLC, and previously served as a director of NETGEAR, Inc., PortalPlayer, Inc., PRN Corporation, Latin Communications Group, Modern Luxury Media and several other private companies. Prior to joining Shamrock in 1991, Mr. Royer was an investment banker with Lehman Brothers. Mr. Royer will cease to be a member of our Board effective as of the date of the Annual Meeting.

Class II Directors with terms expiring in 2012
(not standing for election at Annual Meeting)

        Frank J. Biondi, Jr. has served on our Board since the completion of our IPO on July 21, 2010. Since 1999, Mr. Biondi has been a senior managing director of WaterView Advisors LLC, a private equity fund specializing in media, and a director of Hasbro, Inc., Amgen, Inc., Cablevision Systems Corporation and Seagate Technology. From 2002 through 2007, Mr. Biondi was a director of The Bank of New York Mellon and Harrah's Entertainment, and from 2008 to 2010, Mr. Biondi was a director of Yahoo! Inc. Mr. Biondi served as Chairman and Chief Executive Officer of Universal Studios from 1996 to 1998 and President and Chief Executive Officer of Viacom Inc. from 1987 through 1996. Mr. Biondi has been a director of over 15 public companies during his career. Mr. Biondi graduated from Princeton University with a bachelor degree in psychology and economics in 1966 and graduated from Harvard University with a master's degree in business in 1968. Mr. Biondi's brings to our Board extensive management advisory experience, experience as a director of public companies and experience in the media and entertainment industry.

        Sherry Lansing has served on our Board since the completion of our IPO on July 21, 2010. Since 2006, Ms. Lansing has been a director of Qualcomm Incorporated. From 2009 to the present, Ms. Lansing has also been a director of Dole Food Company, Inc. Ms. Lansing is the founder and chair of the Sherry Lansing Foundation, a philanthropic organization focusing on cancer research, health and education. From 1992 to 2005, she was the chair of the Motion Picture Group of Paramount Pictures where she oversaw the release of more than 200 motion pictures, including Academy Award® winners Forrest Gump, Braveheart and Titanic. From 1984 to 1990, she operated her own production

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company, Lansing Productions, and co-founded Jaffe/Lansing Productions. In 1980, she became the motion picture industry's first female to oversee all aspects of a studio's motion picture production when she was appointed President of Production at 20th Century Fox. She holds additional trustee, chair and advisory positions with the Friends of Cancer Research, the American Association of Cancer Research, and the Carter Center and Stop Cancer, a non-profit philanthropic group she founded in partnership with Dr. Armand Hammer. Ms. Lansing is also a regent of the University of California and serves as Chair of the University Health Services Committee. Ms. Lansing graduated from Northwestern University with a bachelor degree in speech, and a minor in English and mathematics. Ms. Lansing brings to our Board extensive management experience, public company board of directors experience, and experience in the media and entertainment industry.

        Richard L. Grand-Jean has served on our Board since the completion of our IPO on July 21, 2010. Since 2008, Mr. Grand-Jean has been a managing director of Hall Capital Partners LLC, leading the firm's business development efforts. From 1992 through 2008, Mr. Grand-Jean was President of Global Film Equity Corp, an investment and consulting firm. From 1995 through 2008, Mr. Grand-Jean was also President of Abel's Hill Capital Corp., a firm specializing in providing advisory services largely for media and entertainment companies. From 1971 to 1992, Mr. Grand-Jean was a partner and managing director of Salomon Brothers. Mr. Grand-Jean graduated from Princeton University with a bachelor degree in public affairs in 1964, and graduated from University of Chicago School of Law with a juris doctorate in 1967. Mr. Grand-Jean brings to our Board extensive management experience and experience in the media and entertainment industry.

Class III Directors with terms expiring in 2013
(not standing for election at Annual Meeting)

        Michael V. Lewis co-founded the Company and has served as Chairman of our Board since 2003. Prior to co-founding RealD, Mr. Lewis was Chief Executive Officer and co-founder of L-Squared Entertainment, a digital entertainment studio, from 1993 to 2001. While at L-Squared, he served as Producer on the 3D IMAX motion picture The Magic Box and as co-Producer on T-Rex: Back to the Cretaceous. Prior to L-Squared, Mr. Lewis was Senior Vice President of InterMedia/FilmEquities Inc., a media investment banking and advisory company. Mr. Lewis' experience as our Chairman and Chief Executive Officer and involvement with our formation, along with his knowledge of our business, management skills and performance brings a unique perspective to our Board.

        P. Gordon Hodge has served on our Board since 2010. Mr. Hodge was a founding member of El Molino Media LLC, a company formed in 2009 to invest in and acquire out-of-favor media assets. Prior to joining our board of directors, he was a founding partner and managing director of Thomas Weisel Partners LLC, a publicly-traded investment banking firm where he covered media, entertainment and internet sectors as a research analyst from 1999 to 2007 and as an investment banker from 2007 to 2009. Mr. Hodge graduated from Stanford University with a master's degree in business in 1992. Mr. Hodge brings to our Board extensive financial experience, experience in the entertainment industry, management experience and independence.

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BOARD STRUCTURE

Determination of independence

        It is our policy that a majority of our directors be independent. Our Board has determined that six of our eight directors, namely Mr. Cameron, Mr. Royer, Mr. Biondi, Ms. Lansing, Mr. Grand-Jean and Mr. Hodge, and our director nominee Mr. Habiger, each meet the standards for independence as defined by applicable listing standards of the New York Stock Exchange and rules and regulations of the Securities Exchange Commission. Our Board has also determined that Mr. Lewis, our Chief Executive Officer, and Mr. Greer, our President, are not "independent" as defined by applicable listing standards of the New York Stock Exchange. There are no family relationships among any of our directors or executive officers.

Leadership structure and risk oversight

        Our Board believes that Michael Lewis' service as both Chairman of our Board and Chief Executive Officer is in the best interest of RealD and its stockholders. Mr. Lewis possesses detailed and in-depth knowledge of the issues, opportunities, and challenges facing RealD, and is thus best positioned to develop agendas that ensure that the Board's time and attention are focused on the most critical matters. His combined role enables decisive leadership, ensures clear accountability, and enhances the Company's ability to communicate its message and strategy clearly and consistently to our stockholders, employees, and customers. The Board believes its administration of its risk oversight function to date has not affected our Board's leadership structure.

        Our Board is actively involved in oversight of risks that could affect the Company. This oversight is conducted primarily through committees of the Board, as disclosed in the descriptions of each of the committees below and in the charters of each of the committees, but the full Board has retained responsibility for general oversight of risks. The Board satisfies this responsibility through full reports by each committee chair regarding the committee's considerations and actions, as well as through regular reports directly from officers responsible for oversight of particular risks within the Company. In addition, in October 2010 Mr. Biondi was elected to be our Lead Independent Director.

Board meetings

        Our Board held three meetings during fiscal year 2011. During fiscal year 2011, each director attended at least 75% of the aggregate number of meetings of the Board and its committees on which such director served other than Mr. Cameron, who attended two of our three Board meetings. Our independent directors intend to but have not yet held regular executive sessions without management present.

Board committees

        We believe that good corporate governance is important to ensure that we are managed for the long-term benefit of our stockholders. Our Board has established committees to ensure that we maintain strong corporate governance standards. Our Board has standing audit, compensation, and nominating and corporate governance committees. In addition, from time to time, special committees may be established under the direction of our Board when necessary to address specific issues The charters of our Board committees are available on our website at http://reald.com/content/investor-relations.aspx. You may also request copies of our committee charters free of charge by writing to

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RealD Inc., 100 N. Crescent Drive, Suite 120, Beverly Hills, California 90210, Attention: Corporate Secretary. Below is a summary of our committee structure and membership information.

Audit committee

        The members of our audit committee are Messrs. Grand-Jean, Hodge and Biondi. Mr. Hodge chairs the audit committee. Each member of our audit committee satisfies the independence standards established by Rule 10A-3 under the Exchange Act, the SEC and the NYSE, as applicable to our company. Our audit committee assists our Board in its oversight of the integrity of our financial statements and our independent registered public accounting firm's qualifications, independence and performance. Mr. Hodge is our "audit committee financial expert," as that term is currently defined in Item 407(d)(5) of Regulation S-K. The audit committee held six meetings during fiscal 2011.

        Our audit committee's responsibilities include:

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reviewing and discussing with management and our independent registered public accounting firm our annual and quarterly financial statements, earnings releases and related disclosures;



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reviewing and discussing with management and our independent registered public accounting firm our internal controls and internal auditing procedures, including any material weaknesses in either;



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discussing our accounting policies and all material correcting adjustments with our management and our independent registered public accounting firm;



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monitoring our control over financial reporting and disclosure controls and procedures;



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appointing, overseeing, setting the compensation for and, when necessary, terminating the engagement of our independent registered public accounting firm;



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approving all audit services and all permitted non-audit, tax and other services to be performed by our independent registered public accounting firm;



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discussing with our independent registered public accounting firm its independence and ensuring that it receives the written disclosures regarding these communications required by the Public Company Accounting Oversight Board;



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reviewing and approving all transactions or series of similar transactions to which we were or are a party in which the amount involved exceeded or exceeds $120,000, and in which any of our directors, executive officers, holders of more than 5% of any class of our voting securities, or any member of the immediate family of any of the foregoing persons, had or will have a direct or indirect material interest, other than compensation arrangements with directors and executive officers;



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recommending whether the audited financial statements should be included in our Annual Report on Form 10-K and preparing the audit committee report required by SEC rules;



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reviewing all material communications between our management and our independent registered public accounting firm;

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approving, reviewing and updating our code of business conduct and ethics; and



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establishing procedures for the receipt, retention, investigation and treatment of accounting related complaints and concerns.

Nominating and corporate governance committee

        The members of our nominating and corporate governance committee are Messrs. Biondi, Grand-Jean and Hodge. Mr. Grand-Jean chairs the nominating and corporate governance committee. In the event he is elected to the Board at the Annual Meeting, we intend to appoint Mr. Habiger to the nominating and corporate governance committee to replace Mr. Biondi who will resign from the committee if Mr. Habiger is appointed. The nominating and corporate governance committee held two meetings during fiscal 2011.

        Our nominating and corporate governance committee's responsibilities include:

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identifying individuals qualified to become members of our Board;



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recommending to our board of directors the persons to be nominated for election as directors;



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assisting our Board in recruiting such nominees;



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recommending to our Board qualified individuals to serve as committee members;



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performing an annual evaluation of our Board;



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evaluating the need and, if necessary, creating a plan for the continuing education of our directors; and



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assessing and reviewing our corporate governance guidelines and recommending any changes to our Board.

Compensation committee

        The members of our compensation committee are Messrs. Biondi and Grand-Jean and Ms. Lansing. Mr. Biondi chairs the compensation committee. In the event he is elected to our Board, we intend to appoint Mr. Habiger to the compensation committee to replace Mr. Grand-Jean who will resign from the committee if Mr. Habiger is appointed. In addition, each member of our compensation committee as well as Mr. Habiger qualifies as a "non-employee director" under Rule 16b-3 of the Exchange Act. Our compensation committee assists our Board in the discharge of its responsibilities relating to the compensation of our executive officers and board of directors. The compensation committee held two meetings during fiscal 2011.

        Our compensation committee's responsibilities, among other things, include:

•

reviewing and approving on an annual basis the corporate goals and objectives relevant to executive officer compensation and evaluating the performance of our executive officers in light of those goals and objectives;



•

reviewing and approving, or recommending for approval by the independent directors on an annual basis, our Chief Executive Officer's corporate goals and objectives and setting our Chief Executive Officer's compensation, including salary, bonus, incentive and equity compensation, based on its evaluation of the Chief Executive Officer's performance in light of the established goals and objectives;



•

reviewing and approving, or recommending for approval by the independent directors a proposal submitted by the Chief Executive Officer for other executive officers' compensation, including

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salary, bonus, and incentive and equity compensation and any other forms of executive compensation;

•

providing oversight of management's decisions concerning the performance and compensation of our other officers, employees, consultants and advisors, which authority it may delegate to other appropriate supervisory personnel;



•

reviewing and administering our incentive compensation plans and equity-based plans and recommending changes in such plans to the board of directors as needed;



•

reviewing and making recommendations to our Board with respect to director compensation;



•

selecting, retaining and terminating compensation consultants, outside counsel and other advisors as it deems necessary or appropriate in its sole discretion, including the sole authority to approve the fees and retention terms relating to the consultants, counsel and advisors, which fees shall be borne by the Company;



•

reviewing and discussing with management the compensation discussion and analysis required to be included in our filings with the SEC, including this proxy statement, and recommending whether the compensation discussion and analysis should be included in such filings;



•

preparing the compensation committee report required by SEC rules; and



•

assisting our Board in developing and evaluating potential candidates for executive positions and overseeing the development of management succession planning, including planning with respect to our Chief Executive Officer

Compensation committee interlocks and insider participation

        None of the members of our compensation committee is or has at any time during the past fiscal year been an officer or employee of the Company. None of the members of the compensation committee has formerly been an officer of the Company. None of our executive officers serves, or in the past fiscal year has served, as a member of the board of directors or compensation committee of any other entity that has one or more executive officers serving as a member of our Board or compensation committee. For a description of transactions between us and members of the compensation committee and entities affiliated with such members, please see "Certain relationships and related transactions."

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CORPORATE GOVERNANCE

Stockholder communications with board of directors

        We provide a process by which stockholders may send communications to our Board, any committee of the Board, our non-management directors or any particular director. Stockholders can contact our non-management directors by sending such communications to the chairman of the nominating and corporate governance committee, c/o Corporate Secretary, RealD Inc., 100 N. Crescent Drive, Suite 120, Beverly Hills, California 90210. Stockholders wishing to communicate with a particular Board member, a particular Board committee or the Board as a whole, may send a written communication to our Corporate Secretary, RealD Inc., 100 N. Crescent Drive, Suite 120, Beverly Hills, California 90210. The Corporate Secretary will forward such communication to the full Board, to the appropriate committee or to any individual director or directors to whom the communication is addressed, unless the communication is unduly hostile, threatening, illegal, or harassing, in which case the Corporate Secretary has the authority to discard the communication or take appropriate legal action regarding the communication.

Directors' attendance at our annual meetings

        Although we do not have a formal policy that mandates the attendance of our directors at our annual stockholder meetings, our directors are encouraged to attend. All directors are expected to attend the 2011 Annual Meeting.

Submission of stockholder proposal for the 2012 Annual Meeting

        As a RealD stockholder, you may submit a proposal, including director nominations, for consideration at future annual meetings of stockholders.

        Stockholder proposals.    For stockholder proposals to be considered for inclusion in our 2012 proxy statement, the written proposal must be received by our Corporate Secretary, at our corporate offices at 100 N. Crescent Drive, Suite 120, Beverly Hills, California 90210, no earlier than March 30, 2012 and no later than April 29, 2012. We have discretionary power, but are not obligated, to consider stockholder proposals submitted after April 29, 2012. If the date of the 2012 annual meeting is moved more than 30 days before or more than 60 days after July 29, 2012 (the one year anniversary of the 2011 annual meting), such stockholder notice by must be so delivered, or mailed and received, not earlier than the 120th and not later than the 90th day prior to such annual meeting or, if later, the 10th day following the day on which public disclosure of the date of such annual meeting was first made. Such proposals will also need to comply with Securities and Exchange Commission regulations, such as Rule 14a-8 of the Exchange Act regarding the inclusion of stockholder proposals in any company-sponsored proxy material.

        Nomination of director candidates.    Our nominating and corporate governance committee will consider director candidates recommended by our stockholders. Such nominations should be directed to the nominating and corporate governance committee, c/o Corporate Secretary, RealD Inc., 100 N. Crescent Drive, Suite 120, Beverly Hills, California 90210. In addition, the stockholder must give notice of a nomination to our Corporate Secretary, and such notice must be received within the time period described above under "Stockholder Proposals." Any such stockholder proposal must include the following:

•

the name and address of the director nominee and the stockholder making such nomination;



•

the class or series and number of shares of the Company that are, directly or indirectly, owned of record or beneficially owned (within the meaning of Rule 13d-3 under the Exchange Act) by the director nominee and the stockholder making such nomination, except that such director nominee and nominating stockholder shall in all events be deemed to beneficially own any

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shares of any class or series of the Company as to which such nominating stockholder has a right to acquire beneficial ownership at any time in the future;

•

a representation that the director nominee and/or nominating stockholder is a holder of record of stock of the Company entitled to vote at such meeting and intends to appear in person at the meeting to propose such nominee;



•

a representation whether the director nominee and/or the nominating stockholder or the beneficial owner, if any, intends or is part of a group which intends (A) to deliver a proxy statement and/or form of proxy to holders of at least the percentage of the Company's outstanding capital stock required to approve the election of such director nominee and/or (B) otherwise to solicit proxies or votes from stockholders in support of the election of such director nominee;



•

as to such nominating stockholder information regarding any of the following Disclosable Interests (as defined in our Bylaws): (1) any derivative, swap or other transaction or series of transactions engaged in, directly or indirectly, by such nominating stockholder, the purpose or effect of which is to give such nominating stockholder economic risk similar to ownership of shares of any class or series of the Company, including due to the fact that the value of such derivative, swap or other transactions are determined by reference to the price, value or volatility of any shares of any class or series of the Company, or which derivative, swap or other transactions provide, directly or indirectly, the opportunity to profit from any increase in the price or value of shares of any class or series of the Company ("Synthetic Equity Interests"), which Synthetic Equity Interests shall be disclosed without regard to whether (A) the derivative, swap or other transactions convey any voting rights in such shares to such nominating stockholder, (B) the derivative, swap or other transactions are required to be, or are capable of being, settled through delivery of such shares or (C) such nominating stockholder may have entered into other transactions that hedge or mitigate the economic effect of such derivative, swap or other transactions, (2) any proxy (other than a revocable proxy or consent given in response to a solicitation made pursuant to, and in accordance with, Section 14(a) of the Exchange Act by way of a solicitation statement filed on Schedule 14A), agreement, arrangement, understanding or relationship pursuant to which such nominating stockholder has or shares a right to vote any shares of any class or series of the Company, (3) any agreement, arrangement, understanding or relationship, including any repurchase or similar so-called "stock borrowing" agreement or arrangement, engaged in, directly or indirectly, by such nominating stockholder, the purpose or effect of which is to mitigate loss to, reduce the economic risk (of ownership or otherwise) of shares of any class or series of the Company by, manage the risk of share price changes for, or increase or decrease the voting power of, such nominating stockholder with respect to the shares of any class or series of the Company, or which provides, directly or indirectly, the opportunity to profit from any decrease in the price or value of the shares of any class or series of the Company ("Short Interests"), (4) any rights to dividends on the shares of any class or series of the Company owned beneficially by such nominating stockholder that are separated or separable from the underlying shares of the Company, (5) any performance related fees (other than an asset based fee) that such nominating stockholder is entitled to based on any increase or decrease in the price or value of shares of any class or series of the Company, or any Synthetic Equity Interests or Short Interests, if any, (6) (A) if such nominating stockholder is not a natural person, the identity of the natural person or persons associated with such nominating stockholder responsible for the formulation of and decision to propose the director nominee to be considered for election at the meeting (such person or persons, the "Responsible Person"), the manner in which such Responsible Person was selected, any fiduciary duties owed by such Responsible Person to the equity holders or other beneficiaries of such Proposing Person, the qualifications and background of such Responsible

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Person and any material interests or relationships of such Responsible Person that are not shared generally by any other record or beneficial holder of the shares of any class or series of the Corporation and that reasonably could have influenced the decision of such nominating stockholder to propose such director nominee to be considered for election before the meeting, and (B) if such nominating stockholder is a natural person, the qualifications and background of such natural person and any material interests or relationships of such natural person that are not shared generally by any other record or beneficial holder of the shares of any class or series of the Company and that reasonably could have influenced the decision of such nominating stockholder to propose such director nominee election to be considered for election at the meeting, (7) any significant equity interests or any Synthetic Equity Interests or Short Interests in any principal competitor of the Company held by such Proposing Persons, (8) any direct or indirect interest of such Proposing Person in any contract with the Company, any affiliate of the Company or any principal competitor of the Company (including, in any such case, any employment agreement, collective bargaining agreement or consulting agreement), (9) any pending or threatened litigation in which such Proposing Person is a party or material participant involving the Company or any of its officers or directors, or any affiliate of the Company, (10) any material transaction occurring during the prior 12 months between such Proposing Person, on the one hand, and the Company, any affiliate of the Company or any principal competitor of the Company, on the other hand, (11) a summary of any material discussions regarding the director nominee proposed to be elected at the meeting (A) between or among any of the Proposing Persons or (B) between or among any Proposing Person and any other record or beneficial holder of the shares of any class or series of the Company (including their names) and (12) any other information relating to such Proposing Person that would be required to be disclosed in a proxy statement or other filing required to be made in connection with solicitations of proxies or consents by such Proposing Person in support of the director nominee proposed to be elected at the meeting pursuant to Section 14(a) of the Exchange Act;

•

as to each director nominee, (1) all information relating to such proposed nominee that is required to be disclosed in a proxy statement or other filings required to be made in connection with solicitations of proxies for election of directors in a contested election pursuant to Section 14(a) under the Exchange Act (including such proposed nominee's written consent to being named in the proxy statement as a nominee and to serving as a director if elected), (2) a description of all direct and indirect compensation and other material monetary agreements, arrangements and understandings during the past three years, and any other material relationships, between or among any nominating stockholder, on the one hand, and each proposed nominee, his or her respective affiliates and associates and any other persons with whom such proposed nominee (or any of his or her respective affiliates and associates) is Acting in Concert (as defined in our Bylaws), on the other hand, including, without limitation, all information that would be required to be disclosed pursuant to Item 404 under Regulation S-K if such nominating stockholder were the "registrant" for purposes of such rule and the proposed nominee were a director or executive officer of such registrant, and (3) a completed and signed questionnaire, representation and agreement in a form provided by the Company; and



•

any other information (1) as may reasonably be required by the Company to determine the eligibility of such proposed nominee to serve as an independent director of the Company in accordance with the Company's corporate governance guidelines, as the same may be in effect from time to time, or (2) that could be material to a reasonable stockholder's understanding of the independence or lack of independence of such proposed nominee.

        If a director nomination is made pursuant to the process set forth above, the nominating and corporate governance committee will apply the same criteria in evaluating the nominee as it would any other board nominee candidate, and will recommend to our Board whether or not the stockholder

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nominee should be included as a candidate for election in our proxy statement. The nominee and nominating stockholder should be willing to provide any information reasonably requested by the nominating and corporate governance committee in connection with its evaluation. The chairperson of the stockholder meeting shall make the final determination whether the procedures for nomination in the Company's bylaws have been complied with. If the procedures have not been complied with, the chairperson of the stockholder meeting may declare that nomination is defective and shall be disregarded at the stockholder meeting.

        Once either a search firm engaged by the nominating and corporate governance committee or a stockholder has provided our nominating and corporate governance committee with the identity of a prospective director nominee candidate, the nominating and corporate governance committee will communicate the identity and known background and experience of the candidate to our Board. If warranted by a polling of our Board, members of our nominating and corporate governance committee and/or other members of our senior management may interview the candidate. If the nominating and corporate governance committee reacts favorably to a candidate, the candidate will next be invited to interview with the members of our Board who are not on the nominating and corporate governance committee. The nominating and corporate governance committee will then make a final determination whether to recommend the candidate to the Board for directorship. The nominating and corporate governance committee currently has not set specific minimum qualifications or criteria for nominees that it proposes for Board membership, but evaluates the entirety of each candidate's credentials. The nominating and corporate governance committee believes, however, that we will be best served if our directors bring to the Board a variety of diverse experience and backgrounds and, among other things, demonstrated integrity, executive leadership and financial, marketing or business knowledge and experience.

Certain relationships and related transactions

        The following is a summary of transactions, during our last three fiscal years, to which we were or are a party, in which the amount involved exceeded or exceeds $120,000 and in which any of our directors, executive officers, holders of more than 5% of our common stock or any member of the immediate family of any of the foregoing persons had or will have a direct or indirect material interest. This description does not include compensation arrangement with our directors and executive officers, which are described under "Management—compensation of directors" and "Compensation discussion and analysis" below or compensation approved by our compensation committee that is earned by executive officers that are not named executive officers.

Investors' rights agreement

        We are a party to an amended and restated investors' rights agreement, dated December 24, 2007 (and subsequently amended on June 25, 2010), with Shamrock Capital Growth Fund II, L.P., or SCGF II, Pequot Capital Management, Inc., Manatuck Hill Partners LLC, Messrs. Lewis and Greer and certain other security holders. Under this agreement, these security holders have the right to require us to register all or a portion of their shares of common stock for public resale pursuant to the Securities Act under certain circumstances and subject to certain limitations. In addition, pursuant to the investors' rights agreement, SCGF II was entitled to an annual monitoring fee of $350,000, which right expired upon the completion of our IPO. We paid $350,000 in monitoring fees under the agreement in each of fiscal years 2008, 2009 and 2010 and we paid $175,000 in monitoring fees under the agreement in fiscal 2011 before the IPO. Mr. Royer, a member of our board of directors, may be deemed to have indirectly received a portion of these fees as a result of his ownership interests in and relationship with SCGF II.

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        Under the investors' rights agreement, the holders of (i) 10,810,301 shares of common stock, including Messrs. Lewis and Greer and (ii) 1,379,267 shares of common stock issuable upon exercise of options possess certain rights with respect to the registration of these shares under the Securities Act.

        SCGF II was entitled to request that we file a registration statement covering the registration of the securities subject to such request, provided that the anticipated aggregate public offering price of the securities subject to such request (before any underwriting discounts and commissions) was in excess of $20.0 million. We were only required to effect two such demand registrations. We could have also postponed the filing of any such registration statement for up to 90 days once in any 12-month period if our board of directors determined in good faith that the filing would have been seriously detrimental to our stockholders or us. We could have further postponed any demand registration if we intended to register any shares of common stock under the Securities Act in connection with a public offering within 90 days of such demand registration request until 180 days after the effective date of the registration statement for such public offering, provided that we were actively employing in good faith reasonable best efforts to cause such registration statement to become effective. If we register any shares of our stock under the Securities Act solely for cash, certain security holders have the right to include in such registration the shares of common stock held by them, subject to specified exemptions. The stockholders with such piggyback registration rights have the right to include in such registration the shares of common stock held by them, subject to specified exceptions. The underwriters of any offering effected pursuant to the investors' rights agreement have the right to limit the number of shares registered by these stockholders due to marketing reasons. If the total number of shares of common stock these stockholders wish to include exceeds the total number of shares which the underwriters determine the stockholders may sell in the offering, the shares to be included in the registration will be subject to cutbacks as specified in the investors' rights agreement.

        If we are eligible to file a registration statement on Form S-3, any security holder party to the investors' rights agreement (other than Messrs. Lewis and Greer) may request that we register their shares of common stock for resale on a Form S-3 registration statement, provided that the total price of the shares to be offered to the public is not less than $2.0 million. We may also postpone the filing of any such registration statement for up to 90 days once in any 12-month period if our Board determines in good faith that the filing would be seriously detrimental to our stockholders or us. We are also not obligated to file a Form S-3 registration statement if we have already effected two registrations on Form S-3 within the 12-month period preceding the date of such request or in any jurisdiction where we would be required to qualify to do business or to execute a general consent to service of process in connection with effecting such registration, qualification or compliance.

Indemnification agreements

        Our certificate of incorporation and bylaws require us to indemnify our directors and executive officers to the fullest extent permitted by law. Additionally, as permitted by Delaware law, we have entered into indemnification agreements with each of our directors and executive officers that require us to indemnify such persons, to the fullest extent authorized or permitted under Delaware law, against any and all costs and expenses (including attorneys', witness or other professional fees) actually and reasonably incurred by such persons in connection with the investigation, defense, settlement or appeal of any action, hearing, suit or other proceeding, whether pending, threatened or completed, to which any such person may be made a witness or a party by reason of (1) the fact that such person is or was a director, officer, employee or agent of our company or its subsidiaries, whether serving in such capacity or otherwise acting at the request of our company or its subsidiaries and (2) anything done or not done, or alleged to have been done or not done, by such person in that capacity. The indemnification agreements also require us to advance expenses incurred by directors and executive officers within 30 days after receipt of a written request, provided that such persons undertake to repay such amounts if it is ultimately determined that they are not entitled to indemnification. Additionally,

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the agreements set forth certain procedures that will apply in the event of a claim for indemnification thereunder, including a presumption that directors and executive officers are entitled to indemnification under the agreements and that we have the burden of proof to overcome that presumption in reaching any contrary determination. We are not required to provide indemnification under these agreements for certain matters, including: (1) indemnification beyond that permitted by Delaware law; (2) indemnification for liabilities for which the executive officer or director is reimbursed pursuant to such insurance as may exist for such person's benefit; (3) indemnification related to disgorgement of profits under Section 16(b) of the Securities Exchange Act of 1934; (4) in connection with certain proceedings initiated against us by the director or executive officer; or (5) indemnification for settlements the director or executive officer enters into without our written consent. The indemnification agreements require us to maintain directors' and executive officers' insurance in full force and effect while any director or executive officer continues to serve in such capacity and so long as any such person may incur costs and expenses related to indemnified legal proceedings.

Procedures for related party transactions

        It is our policy that all related party transactions must be reviewed and approved by our audit committee. In approving or rejecting such proposed transactions, our audit committee considers the relevant facts and circumstances available and deemed relevant to our audit committee, including the material terms of the transactions, risks, benefits, costs, availability of other comparable services or products and, if applicable, the impact of such proposed transaction on a director's independence. Our audit committee approves only those transactions that, in light of known circumstances, are in, or are not inconsistent with, our best interests, as our audit committee determines in the good faith exercise of its discretion. The policies and procedures for approving related party transactions are set forth in our audit committee charter. Under our code of business conduct and ethics, our employees, officers and directors are discouraged from entering into any transaction that may cause a conflict of interest for us. In addition, they are required to report any potential conflict of interest, including related party transactions, to our nominating and corporate governance committee, to our audit committee or our general counsel.

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AUDIT COMMITTEE REPORT

        The audit committee of our Board serves as the representative of the Board with respect to its oversight of:

•

our accounting and financial reporting processes and the audit of our financial statements;



•

the integrity of our financial statements;



•

our internal controls;



•

our compliance with legal and regulatory requirements and efficacy of and compliance with our corporate policies;



•

the independent registered public accounting firm's appointment, qualifications and independence; and



•

the performance of our internal audit function.

        The audit committee also reviews the performance of our independent registered public accounting firm, Ernst & Young LLP, in the annual audit of our financial statements and in assignments unrelated to the audit, and reviews the independent registered public accounting firm's fees.

        The audit committee provides our Board such information and materials as it may deem necessary to make our Board aware of financial matters requiring the attention of our Board. The audit committee reviews our financial disclosures, and meets privately, outside the presence of our management, with our independent registered public accounting firm. In fulfilling its oversight responsibilities, the audit committee reviewed and discussed the audited financial statements in our 2011 Annual Report with management, including a discussion of the quality and substance of the accounting principles, the reasonableness of significant judgments made in connection with the audited financial statements, and the clarity of disclosures in the financial statements. The audit committee reports on these meetings to our Board.

        Our management has primary responsibility for preparing our financial statements and for our financial reporting process. In addition, our management is responsible for establishing and maintaining adequate internal control over financial reporting. Our independent registered public accounting firm, Ernst & Young LLP, is responsible for expressing an opinion on the conformity of our financial statements to generally accepted accounting principles, and on the effectiveness of our internal control over financial reporting.

        The audit committee reports as follows:

        (1)   The audit committee has reviewed and discussed the audited financial statements for fiscal year 2011 with our management.

        (2)   The audit committee has discussed with Ernst & Young LLP, our independent registered public accounting firm, the matters required to be discussed by Statement on Auditing Standards No. 61 and Rule 2-07 of Regulation S-X.

        (3)   The audit committee has received the written disclosures and the letter from Ernst & Young LLP required by the applicable requirements of the Public Company Accounting Oversight Board, and has discussed with Ernst & Young LLP its independence, including whether Ernst & Young LLP's provision of non-audit services to us is compatible with its independence.

        The audit committee has adopted a policy that requires advance approval of all audit, audit-related, tax services, and other services performed by the independent registered public accounting firm. The policy provides for pre-approval by the audit committee (or by one or more members of the audit committee pursuant to any delegated authority) of specifically defined audit and non-audit

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services. Unless the specific service has been previously pre-approved with respect to that fiscal year, the audit committee (or any member or members of the audit committee with such delegated authority) must approve the specific service before the independent registered public accounting firm is engaged to perform such services for us.

        Based on the review and discussion referred to in items (1) through (3) above, the audit committee recommended to our Board, and the Board approved, the inclusion of our audited financial statements in our Annual Report on Form 10-K for the fiscal year ended March 25, 2011, as filed with the Securities and Exchange Commission. The audit committee also recommended the reappointment of Ernst & Young LLP as our independent registered public accounting firm for fiscal year 2012.

        The foregoing report was submitted by the audit committee of the Board and shall not be deemed to be "soliciting material" or to be "filed" with the SEC or subject to Regulation 14A promulgated by the SEC or Section 18 of the Exchange Act, and shall not be deemed incorporated by reference into any prior or subsequent filing by us under the Securities Act of 1933 or the Exchange Act.

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EXECUTIVE OFFICERS

        The following table sets forth the name, age and position held by each of our executive officers as of March 25, 2011:

        Michael V. Lewis co-founded the Company and has served as Chairman of our Board since 2003. Prior to co-founding RealD, Mr. Lewis was Chief Executive Officer and co-founder of L-Squared Entertainment, a digital entertainment studio, from 1993 to 2001. While at L-Squared, he served as Producer on the 3D IMAX motion picture The Magic Box and as co-Producer on T-Rex: Back to the Cretaceous. Prior to L-Squared, Mr. Lewis was Senior Vice President of InterMedia/FilmEquities Inc., a media investment banking and advisory company.

        Joshua Greer co-founded the Company in 2003 and has served as our President since 2007. He is also a member of our Board. Prior to co-founding RealD, Mr. Greer was co-founder and Chief Convergence Officer of Walden Media, a film production and publishing company, from 2000 to 2002. Prior to that, Mr. Greer was President of Digital Domain's New Media Group, a digital production studio. Prior to Digital Domain, Mr. Greer was Chief Executive Officer and co-founder of Digital Planet, a digital design studio. Mr. Greer has elected to resign his role as President, effective July 15, 2011. Mr. Greer will serve as a strategic and technology advisor to the Company and, so long as he is re-elected by our stockholders at the Annual Meeting, will remain on the Company's Board of Directors.

        Joseph Peixoto has served as our President, Worldwide Cinema, since 2005. Mr. Peixoto joined RealD from United Cinemas International where he served as President and Chief Executive Officer from 1998 to 2004. Prior to United Cinemas, from 1992 to 1998, Mr. Peixoto was President of Famous Players, a Canadian-based theater chain owned by Paramount/Viacom.

        Andrew A. Skarupa has served as our Chief Financial Officer and Chief Operating Officer since 2005. Prior to joining RealD, Mr. Skarupa served from 2004 to 2005 as Vice President of Finance at WaterMark Sports, a designer and producer of outdoor products. Before WaterMark, Mr. Skarupa served as Chief Financial Officer of Alliant Protection Services, an electronics security company from 2002 to 2004. Before joining Alliant, Mr. Skarupa served as Vice President of Finance for Free-PC, an idealab network company acquired by eMachines. Prior to Free-PC, Mr. Skarupa served as Vice President of Finance for idealab. Mr. Skarupa joined idealab after working at MiniMed, a publicly held medical device manufacturer. Prior to MiniMed, Mr. Skarupa was an auditor at Deloitte & Touche in Los Angeles. Mr. Skarupa is a licensed CPA.

        Robert Mayson joined RealD in 2008 as Managing Director of RealD Europe Ltd. Mr. Mayson was appointed President, Consumer Electronics in 2010. Prior to joining us, Mr. Mayson served as General Manager and Vice President of Digital Motion Imaging for Kodak, managing Kodak's global digital cinema and post production business.

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        Craig Gatarz joined RealD as Executive Vice President and General Counsel in January 2010. Mr. Gatarz previously served as the Chief Administrative Officer and General Counsel for Vuclip, a mobile video search company, from 2008 to 2010. Prior to Vuclip, Mr. Gatarz served as Chief Operating Officer and General Counsel of JAMDAT Mobile Inc., a publicly traded mobile games publisher, from 2000 until its acquisition by Electronic Arts, Inc. in 2006. Prior to JAMDAT Mobile, Mr. Gatarz served as General Counsel of Netgateway, Inc., an e-commerce provider, from 1999 to 2000. From 1990 to 1999, Mr. Gatarz practiced law at the firm of Jones, Day, Reavis & Pogue.

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COMPENSATION DISCUSSION AND ANALYSIS

        The purpose of this compensation discussion and analysis section is to provide information about the material elements of compensation that are paid or awarded to, or earned by, our "named executive officers" in fiscal 2011. Our named executive officers are our principal executive officer, principal financial officer, and the three other most highly compensated executive officers. For fiscal 2011, the named executive officers and their positions were:

•

Michael V. Lewis, Chief Executive Officer, Director and Chairman of the Board;



•

Andrew A. Skarupa, Chief Financial Officer and Chief Operating Officer;



•

Joseph Peixoto, President of Worldwide Cinema;



•

Robert Mayson, President of Consumer Electronics; and



•

Craig Gatarz, Executive Vice President and General Counsel.

        This compensation discussion and analysis section addresses and explains the compensation practices that were followed in fiscal 2011, the numerical and related information contained in the summary compensation and related tables presented below, and actions taken regarding executive compensation after the end of fiscal 2011, that could affect a fair understanding of a named executive officer's compensation during fiscal 2011.

Overview of Fiscal 2011

        Fiscal 2011 was a year in which we achieved many important corporate milestones, such as our IPO in July 2010 and subsequent secondary offering in December 2010, and also produced superior financial results which improved upon our fiscal 2010 results. The following table highlights just a few of these accomplishments which were instrumental in significantly increasing stockholder value and positioning us for continued future short and long term success in a highly competitive and evolving industry.

        Our share price closed at $25.86 on June 1, 2011, which represents an overall market capitalization which is greater than $1.3 billion, or an increase of approximately $500 million in our market capitalization since our IPO in July 2010.

        Executive management played a principal role in generating these excellent results and helps demonstrate that our compensation programs are reflective of pay for performance. In connection with our IPO, we implemented a number of compensation actions to (i) account for our becoming a publicly traded corporation and (ii) reward and further incentivize our named executive officers for successfully growing the Company. In particular, the following actions, which are described in greater detail in the following sections, were taken in fiscal 2011:

•

adoption of our new omnibus 2010 Stock Incentive Plan for providing equity compensation to key service providers including our named executive officers;

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•

adoption of our new 2010 Management Incentive Plan for providing a structured cash incentive compensation program for our executive officers based on the attainment of key performance objectives;



•

adoption of new employment agreements for the named executive officers which generally all follow the same structure and format and which are intended to provide reasonable and competitive incentive and retention features;



•

adoption of a recoupment of incentive compensation policy to enable the recovery of certain previously paid compensation to our officers under certain circumstances including if there is a restatement of our financial reports;



•

an increase in base salaries for the named executive officers which are reflective of our becoming a rapidly growing publicly traded corporation and which are reasonable both in terms of salaries paid to peer companies and internally within our Company;



•

an award of an annual cash based performance bonus opportunity for each named executive officer for fiscal 2011 to ensure that our officers are motivated and focus on key enumerated Company performance objectives; and



•

an award of both performance and time-based stock options to our named executive officers, including our co-founder who previously held only fully vested shares, in order to provide long-term retention incentives and which provide value to the officers only if our Company's value appreciates and with respect to the performance options only if our total shareholder return outperforms specified peer companies. These stock options were granted with a per share exercise price that was equal to our IPO initial offering price so that the stock options produce economic benefit to the officers only to the extent that our share value is greater than its value as of our IPO.

Historical compensation decisions before July 2010 Initial Public Offering

        Prior to our IPO in July 2010, we were a privately-held company with relatively few stockholders. As such, we had not been subject to stock exchange listing or SEC rules requiring a majority of our Board to be independent or relating to the formation and functioning of Board committees, including audit, compensation and nominating committees. Most, if not all, of our compensation policies and determinations for our named executive officers prior to our IPO, including those made for fiscal 2010, had been the product of recommendations by Mr. Lewis, our Chief Executive Officer (who is also a director), to our Board, which after discussions with the Board, were generally approved by the Board as recommended.

Overview, objectives and compensation philosophy

        During fiscal 2011 and until our IPO in July 2010, our full Board was responsible for determining the compensation of the named executive officers and overseeing any compensation programs. Our Board oversaw the compensation program for these executives to ensure consistency with our corporate goals and objectives. Our Board was also responsible for designing and executing our compensation program with respect to the named executive officers. For details on the experience and background of our directors, see "Proposal One—Election of Class I Directors." Effective upon the closing of our IPO, we formed a compensation committee which took over these responsibilities from our Board for fiscal 2011 and is now responsible for these determinations and oversight.

        The primary goals of our compensation program and policies are to attract, retain and reward talented executives, ensure compensation is closely aligned with our corporate strategies and objectives and the long-term interests of our stockholders and ensure that total compensation is fair, reasonable and competitive within our industry. Our compensation committee reviewed overall Company and

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individual performance in connection with its review and determination of each named executive officer's compensation.

        We believe that we have assembled an outstanding management team that has produced excellent results. We believe our growth demonstrates the success and effectiveness of our past compensation decisions. We believe that the compensation amounts paid to our named executive officers for their services in fiscal 2011 were fair, reasonable and in our best interests.

Components of executive compensation

        The compensation of the named executive officers has three primary components:

•

annual base salary;



•

cash bonus opportunity; and



•

long-term equity-based compensation.

        Perquisites, and benefits generally available to other employees, represent only a minor portion of the total compensation of the named executive officers.

        Not all components were historically provided to each of the named executive officers. Rather, historical compensation for the named executive officers was highly individualized, resulted from arm's-length negotiations and was based on a variety of informal factors. The Board, with recommendations from our Chief Executive Officer (who is also a director), determined the appropriate level for each compensation component based in part, but not exclusively, on our recruiting and retention goals, the experience and performance of an executive, the length of service of an executive, the compensation levels of our other executive officers, our overall performance and available resources and our need for a particular position to be filled, each as of the time of the applicable compensation decision.

        However, with the consummation of our IPO, our compensation committee has developed a more structured approach to compensating our named executive officers and all officers generally have the same compensatory features and provisions with the exception of compensation amounts for the respective officers.

Annual base salary

        Base salary is provided to our named executive officers in order to be competitive in the marketplace and so that not all of their compensation is at risk. In general, base salaries for our named executive officers take into account the executive's qualifications, experience, prior salary and the compensation levels of our other executive officers. The base salaries of the named executive officers are periodically reviewed and approved by our compensation committee, based on, in the case of the named executive officers other than our Chief Executive Officer, recommendations from our Chief Executive Officer, and adjustments are made to base salaries based on the scope of an executive's responsibilities and individual performance and contribution. In connection with our IPO, as discussed more fully below, the base salaries of the executive officers were increased by our compensation committee.

Cash bonus opportunity

        In addition to base salaries, performance based cash bonuses can be earned by our named executive officers. For fiscal 2011, certain annual cash bonuses were made pursuant to the terms of an executive's employment agreement and provided compensation that was directly linked to achievement of corporate goals and objectives. At this stage in the Company's development, the compensation committee has determined that earnings are the most important financial metric for the Company. Therefore, the Company has established earnings before interest, taxes, depreciation, and amortization

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("Adjusted EBITDA") as the primary performance goal upon which all of the named executive officers' annual performance bonuses will be determined. The annual bonus is intended to motivate the executives and have them focus on achieving near term important corporate objectives.

        The annual bonus arrangements for fiscal 2011 are further described in "Summary compensation table-fiscal year 2011" and "Grants of plan-based awards-fiscal year 2011."

Long-term equity-based compensation

        Historically, we provided long-term equity incentive compensation, except to our co-founder Mr. Lewis, to retain our named executive officers and to provide for a significant portion of their compensation to be at risk and linked directly with the appreciation of stockholder value. Long-term compensation has generally been provided through equity awards in the form of stock options with time or performance-based vesting conditions subject to continued service and under the terms and conditions of our 2004 Amended and Restated Stock Incentive Plan, which we refer to as the 2004 Plan, and award agreements. Through possession of stock options, our executives participate in the long-term results of their efforts, whether by appreciation of the Company's value or the impact of business setbacks, either Company-specific or industry based.

        Prior to our IPO, we had previously not provided long-term equity incentive compensation to our co-founder, Mr. Lewis. Shortly before our IPO, Mr. Lewis held approximately 14.7% of the fully diluted Company shares, which, prior to our IPO, we had believed provided sufficient retention value and investment in the long-term value of the Company. Effective with our IPO, our Board provided equity compensation to all of our named executive officers, including Mr. Lewis, in order to provide necessary incentive compensation and retention incentives. The compensation levels of the named executive officers, including the equity holdings of each, reflect to a significant degree the varying roles and responsibilities of such executives, as well as the length of time those executives have served the Company. These are described more fully below and in the compensation tables.

        Upon joining us, generally each named executive officer, excluding Mr. Lewis, was granted an initial option award. In determining the number of shares subject to each award, our Board and Chief Executive Officer considered the number of options and shares owned by other executives in comparable positions within the Company and the executive's duties and responsibilities. Periodic awards to executive officers (other than to our Chief Executive Officer) were made based on recommendations from our Chief Executive Officer to our Board, based on our Chief Executive Officer's assessment of such executive's sustained performance and contribution to the Company over time, their ability to impact results that drive value to our stockholders and their organization level. No forms of equity other than stock options were awarded to any of the named executive officers under the 2004 Plan.

        The stock option grant agreements, provided with each grant under the 2004 Plan, generally provide for some or all of the unvested options to vest immediately when certain events occur, including a company transaction. The term "company transaction" under the 2004 Plan is generally defined to include (i) a merger or consolidation of the Company with or into another company or entity who is not an affiliate of ours; (ii) the acquisition of at least 80% of our voting securities by any person other than an affiliate of ours that holds our equity securities; or (iii) the sale or conveyance of all or substantially all of the Company assets to a person who is not an affiliate of ours. For example, in the event of a company transaction in which the named executive officer's option is not substituted, assumed or converted, then the named executive officer's option shall fully vest and become exercisable immediately prior to the consummation of the company transaction. Further, the outstanding unvested portion of the option will become fully vested upon an involuntary termination of the named executive officer's employment, without cause or for good reason, within the 12-month period following a company transaction. Unvested stock options are subject to forfeiture for non-qualifying terminations of

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employment. See "Potential payments upon termination or company transaction" for definitions of "cause" and "good reason."

        As discussed below, we adopted the RealD Inc. 2010 Stock Incentive Plan, which we refer to as the 2010 Stock Plan, to replace the 2004 Stock Incentive Plan for future equity compensation awards. All fiscal 2011 option grants were issued under the 2010 Stock Plan.

        Details on previously granted awards under the 2004 Plan and 2010 Stock Plan to the named executive officers are provided in the "Outstanding equity awards at 2011 fiscal year-end" and the "Grants of plan-based awards—fiscal year 2011" tables below.

Employee benefits and perquisites

        We have not offered extensive or elaborate benefits to the named executive officers. We have sought to compensate our named executive officers at levels that eliminated the need for perquisites and enabled each individual officer to provide for his own needs. We have offered other employee benefits to the named executive officers for the purpose of meeting current and future health needs for the executives. These benefits, which have been generally offered to all eligible employees, include medical, dental, and life insurance benefits, short-term disability pay, long-term disability insurance, flexible spending accounts for medical and dependent care expense reimbursements and a 401(k) retirement savings plan, described further in "Incentive compensation plans" below.

Company transaction and severance

        Each of the named executive officers, pursuant to each of their employment agreements, is eligible to receive contractually-provided severance benefits. These severance benefits are intended to provide compensation while the named executive officer searches for new employment after experiencing an involuntary termination of employment from us. We believe that providing severance protection for these named executive officers upon their involuntary termination of employment is an important retention tool that is necessary in the competitive marketplace for talented executives. We believe that the amounts of these payments and benefits and the periods of time during which they would be provided are fair and reasonable. We have not historically taken into account any amounts that may be received by a named executive officer following termination of employment when establishing current compensation levels. Our stock option grant agreements with the named executive officers also generally provide for some or all of the unvested options to vest immediately when certain events occur, including a company transaction, described below under "Executive employment agreements." For further details of the potential amounts that a named executive officer may receive in connection with a company transaction and termination, see "Potential payments upon termination or company transaction" below.

Compensation of the chief executive officer and other named executive officers

        The base salary, bonus and equity compensation for each of the named executive officers for fiscal 2011 is reported below under the "Summary compensation table—fiscal year 2011." Further information regarding the compensation of our named executive officers is described below under "Executive employment agreements."

        The Company's current approach is to annually review the named executive officer's compensation for adjustments and equity grants with any such adjustments and/or new equity grants becoming effective on or about July 1, after the release of the prior fiscal year's financial results.

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        Our Board used the same general set of criteria to ascertain the compensation for each ensuing year for the named executive officers. Our Board's objective in setting the named executive officer's compensation, which is primarily based on the recommendation from our Chief Executive Officer (other than for compensation for the Chief Executive Officer), is to provide them with a fair, reasonable and competitive level of compensation, taking into account:

•

their and the Company's performance;



•

their responsibilities and length of service to the Company;



•

their past compensation; and



•

their compensation relative to each other.

Tax and accounting considerations

        In fiscal 2011, while our Board generally considered the financial accounting and tax implications of its executive compensation decisions, neither element was a material consideration in the compensation awarded to our named executive officers during such fiscal year.

Fiscal 2011 compensation decisions

Peer group information and compensation consultant reports

        Our Board (and after its formation, our compensation committee) engaged an independent outside compensation consultant, Frederic W. Cook & Co., Inc., or Cook, to assess our current compensation program's effectiveness in supporting our business strategy and ability to sustain our projected growth, to construct a peer group of companies, provide marketplace information, provide advice on competitive market practices and also provide a framework for transitioning our compensation programs and processes to public company norms as we approached our IPO. Cook had not previously provided any other services to us. Additionally, Cook does not receive any fees or income from, nor does it perform any services for, our compensation committee or the Company other than providing advice on executive and director compensation pursuant to its engagement.

Public-company peer group

        In early 2010, Cook recommended using the following publicly-held companies to be the peer group for purposes of providing a competitive framework for transitioning our compensation programs to that of a publicly-traded company in our industry:

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(1)

Pursuant to the named executive officer's May 2010 employment agreement, the named executive officer's annual base salary was increased to the amount reflected in this column, retroactive to January 1, 2010. See "Executive employment agreements" for additional details regarding the named executive officer's May 2010 employment agreement.

(2)

Mr. Mayson's base salary did not change upon the occurrence of our IPO. As explained in greater detail in "Executive employment agreements," Mr. Mayson's annual base salary increased to $300,000 upon his July 2010 relocation to the Company's Beverly Hills, California office.

(3)

Pursuant to Mr. Gatarz's October 2010 employment agreement, his annual base salary was increased to the amount reflected in this column, retroactive to July 21, 2010, the closing date of our IPO. See "Executive employment agreements" for additional details regarding Mr. Gatarz's October 2010 employment agreement.

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(1)

Pursuant to Mr. Mayson's May 2010 employment agreement, Mr. Mayson's performance bonus for fiscal 2011 was an amount equal to the greater of $300,000 or a target amount of eighty percent (80%) of his annual base salary, as reflected above. See "Executive employment agreements" below for additional details regarding Mr. Mayson's May 2010 employment agreement.

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(1)

Pursuant to Mr. Mayson's May 2010 employment agreement, on July 15, 2010, Mr. Mayson was also granted a nonstatutory stock option to purchase 375,000 shares of common stock of the Company, in addition to the awards referenced in the above table. This additional option to purchase 375,000 shares has a $16.00 per share exercise price, was awarded to Mr. Mayson in connection with his promotion to President of Consumer Electronics and vests over a four-year time period subject to Mr. Mayson's continued service with the Company. See "Executive employment agreements" for additional details regarding the terms of Mr. Mayson's equity grants.

(2)

Pursuant to Mr. Gatarz's January 2010 employment agreement, on July 15, 2010, Mr. Gatarz was also granted a nonstatutory stock option to purchase 300,000 shares of common stock of the Company, in addition to the awards referenced in the above table. This additional option to purchase 300,000 shares has a $16.00 per share exercise price, was awarded to Mr. Gatarz in connection with his offer of employment and vests over a four-year time period subject to Mr. Gatarz's continued service with the Company. See "Executive employment agreements" for additional details regarding the terms of Mr. Gatarz's equity grants.

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(1)

Pursuant to the May 2010 employment agreements for Messrs. Lewis, Skarupa and Peixoto, and Mr. Gatarz's October 2010 employment agreement, each of the named executive officers received a base salary increase that was effective upon the July 21, 2010 effective date of the Company's initial public offering. Accordingly, the amounts in this column for Messrs. Lewis, Skarupa, Peixoto and Gatarz reflect the named executive officer's salary during the time period of April 1, 2010 through July 20, 2010 based on an annual salary of $600,000, $350,000, $575,000 and $250,000, respectively, and during the time period of July 21, 2010 through March 25, 2011 based on an annual salary of $700,000, $420,000, $625,000 and $290,000, respectively. Mr. Mayson's May 2010 employment agreement did not provide for an increase in base salary upon the occurrence of our IPO. Rather it provided for a base salary of GBP £154,000 (which is approximately $234,398, assuming a conversion rate on April 1, 2010 of GBP £1 to $1.52207), until Mr. Mayson's July, 2010 relocation to the Company's Beverly Hills, California office upon which his base salary increased to $300,000.

(2)

Represents the discretionary portion of the fiscal 2011 performance-based bonuses under the 2010 Management Incentive Plan that was awarded above the fiscal 2011 target amount as reflected and described in footnote 4 below and in "Fiscal 2011 performance-based bonus targets and total award amounts" above. Additionally, pursuant to Mr. Mayson's May 2010 employment agreement, he received a $200,000 relocation bonus upon his July, 2010 relocation to the Company's Beverly Hills, California office.

(3)

Represents the total grant date fair value, as determined under Financial Accounting Standards Board (FASB) Accounting Standards Codification (ASC) Topic 718, Stock Compensation, of all option awards granted to the named executive officer during fiscal 2011 and which are described in the "Grants of plan-based awards-fiscal year 2011" table below. Assumptions used to calculate these amounts are included in Note 9, "Share-based compensation," to our consolidated financial statements for the year ended March 25, 2011, which are included in our Annual Report on Form 10-K that was filed with the SEC on June 9, 2011.

(4)

Represents the target amount of the fiscal 2011 performance-based bonuses that was paid under the 2010 Management Incentive Plan and a portion of the additional bonus earned by Mr. Peixoto as described in

footnote 6 directly below. An additional amount that was paid over the fiscal 2011 target amount of the fiscal 2011 performance-based bonuses is reflected in the "bonus" column to this table as described in footnote (2) above. The fiscal 2011 performance-based bonuses will be paid in the form of cash and a restricted stock units grant to each of the named executive officers. Further details on the fiscal 2011 performance-based bonuses paid under the 2010 Management Incentive Plan are described in "Fiscal 2011 performance-based bonus targets and total award amounts" above and the "Grants of Plan-based awards-fiscal year 2011" table below.

(5)

Represents annual car allowance.

(6)

In addition to his eligibility for a fiscal 2011 performance based cash bonus under the 2010 Management Incentive Plan, for which Mr. Peixoto earned $1,250,000, he was also eligible to receive a one-time bonus equal to $1,000,000 if and when our actual installed base of RealD Cinema Systems exceeded 4,000 theatres. This bonus was required to be paid in installments and was subject to Mr. Peixoto's continued service through the date of each payment. This 4,000 theatre performance target was reached during the second half of fiscal 2010, and $500,000 was paid during fiscal 2010. The remaining installment of $500,000 was paid to Mr. Peixoto during the first quarter of fiscal 2011.

(7)

Mr. Gatarz was not a named executive officer in fiscal 2010 and first became a named executive officer in fiscal 2011.

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(1)

Each named executive officer was eligible to earn a fiscal 2011 performance-based bonus pursuant to his employment agreement as discussed in "Executive employment agreements" and "Fiscal 2011 performance-based bonus targets and total award amounts" and as implemented under the 2010 Management Incentive Plan. Pursuant to the May 2010 employment agreement for Mr. Mayson, he was eligible to receive the greater of $300,000, or the target amount of 80% of his base salary for fiscal 2011. The performance bonus was based on attaining fiscal 2011 Adjusted EBITDA of $40 million with individual performance objectives also secondarily considered. The named executive officers were eligible to earn a performance bonus upon the attainment of 80% of the fiscal 2011 Adjusted EBITDA target goal and could earn up to a maximum amount of 2.5 times his respective target. These threshold and maximum limits mirrored the Company's approach for our non-executive annual bonus plan. The 2010 Management Incentive Plan also has an annual maximum limit of $5 million that can be paid to any one participant. The Company's actual Adjusted EBITDA was $62.2 million and exceeded the EBITDA target by over fifty percent (50%), and the bonus amounts paid therefore exceeded the target amounts and are reported above in the Summary compensation table.

(2)

This column shows the aggregate grant date fair value of stock options under applicable SEC rules granted to the named executive officer in the table in fiscal 2011 and are further described in the "Outstanding equity awards at 2011 fiscal year-end" table below and the "Fiscal 2011

stock option grants to named executive officers" above. For each of the two sets of stock options granted to each of the named executive officers, fair value is calculated using the Black-Scholes value on the July 15, 2010 grant date of $9.45 and $8.77, respectively. For Mr. Gatarz's third stock option of 300,000 shares, fair value is calculated using the Black-Scholes value on the July 15, 2010 grant date of $8.64. For additional information on the valuation assumptions, refer to Note 9, "Share-based compensation," to our consolidated financial statements for the fiscal year ended March 25, 2011, in our Annual Report on Form 10-K which was filed with the SEC on June 9, 2011.

(3)

The number of shares subject to the option that will vest is based on the Company's total shareholder return on the performance vesting computation date in relation to the comparison group. In order for any portion of the shares subject to the option to vest, the Company's percentile ranking in the comparison group based on it total shareholder return on the performance vesting computation date must be in the 10^th percentile or above. Further details related to these performance-based stock options are described in the "Executive employment agreements" section and the "Outstanding equity awards at 2011 fiscal year-end" table below.

(4)

Further details related to these time-based stock options are described in the "Executive employment agreements" section and the "Outstanding equity awards at 2011 fiscal year-end" table below.