MOVI Movie Gallery (MM)

On October 11, 2007, Movie Gallery US, LLC, a wholly owned subsidiary of Movie Gallery, Inc. (together with its subsidiaries, the “Company”), entered into an Executive Employment Agreement, effective September 22, 2007, with Thomas D. Johnson, Jr., the Company’s Executive Vice President and Chief Financial Officer (the “Employment Agreement”). The terms of the Employment Agreement are substantially similar to the terms of employment agreements that the Company has previously entered into with its other Executive Vice Presidents.

Under the Employment Agreement, Mr. Johnson will continue to receive an annual base salary of $325,000, subject to such increases as the Company’s board of directors in its sole discretion deems appropriate in accordance with the Company’s customary procedures regarding the salaries of its executive officers. Mr. Johnson is also eligible to participate in the executive officer bonus program and other incentive, bonus, cash and equity compensation plans of the Company. The Employment Agreement provides for an initial term of twelve months, subject to automatic renewal thereafter for additional one-year terms unless either party gives notice of its intent not to renew at least thirty days prior to the expiration of the then-current term. Pursuant to the Employment Agreement, either the Company or Mr. Johnson may terminate his employment at any time. However, if the company terminates Mr. Johnson due to a Termination Without Cause or upon a Constructive Termination, each as defined in the Employment Agreement, Mr. Johnson is entitled to severance in an amount between one and one and a half times his annual base salary and any and all stock options held by Mr. Johnson become fully vested.

In addition, the Employment Agreement also provides that Mr. Johnson agrees not to disclose Company trade secrets for so long as such information is protected under applicable law, not to disclose other confidential information of the Company for five years after termination, and, for one year after termination, not to compete with the Company, to be employed by or perform services for a competitor of the Company, to solicit any employee of the Company, or to otherwise invest in or assist any competitor of the Company. Furthermore, Mr. Johnson agrees not to disparage the Company for one year following termination. A copy of the Employment Agreement is attached hereto as Exhibit 99.1 and is incorporated herein by reference in its entirety.