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EXHIBIT 4.8
FORM OF NON-QUALIFIED STOCK OPTION AGREEMENT
THIS AGREEMENT, dated as of __________, 1998, is made by and
between Regal Cinemas, Inc., a Tennessee corporation hereinafter referred to as
the "Company", and the undersigned employee of the Company or a Subsidiary (as
defined below) or Affiliate (as defined below) of the Company, hereinafter
referred to as "Optionee".
WHEREAS, the Company wishes to afford the Optionee the
opportunity to purchase shares of its common stock (the "Common Stock");
WHEREAS, the Company wishes to carry out the Plan (as
hereinafter defined), the terms of which are hereby incorporated by reference
and made a part of this Agreement; and
WHEREAS, the Committee (as hereinafter defined), appointed to
administer the Plan, has determined that it would be to the advantage and best
interest of the Company and its stockholders to grant the Options (as
hereinafter defined) provided for herein to the Optionee as an incentive for
increased efforts during his term of office with the Company or its
Subsidiaries or Affiliates, and has advised the Company thereof and instructed
the undersigned officers to issue said Options;
NOW, THEREFORE, in consideration of the mutual covenants
herein contained and other good and valuable consideration, receipt of which is
hereby acknowledged, the parties hereto do hereby agree as follows:
ARTICLE I
DEFINITIONS
Whenever the following terms are used in this Agreement, they
shall have the meaning specified in the Plan or below unless the context
clearly indicates to the contrary.
Section 1.1 - Affiliate
"Affiliate" shall mean, with respect to the Company, any
corporation directly or indirectly controlling, controlled by, or under common
control with, the Company.
Section 1.2 - Cause
"Cause" shall mean (i) the Optionee's willful refusal to
perform in any material respect his duties or responsibilities for the Company
or willful disregard in any material respect of any financial or other
budgetary limitations established by the Company's Chief
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Executive Officer or Board of Directors; or (ii) the engaging by the Optionee
in conduct that causes material and demonstrable injury, monetarily or
otherwise, to the Company, including, but not limited to, misappropriation or
conversion of assets of the Company (other than nonmaterial assets); or (iii)
conviction of or entry of a plea of nolo contendere to a felony; or (iv) a
material breach of the Optionee's employment agreement, if any, including,
without limitation, engaging in action in violation of the restrictive
covenants therein.
No act or failure to act by an Optionee shall be deemed "willful" if done, or
omitted to be done, by Optionee in good faith and with the reasonable belief
that his action or omission was in the best interest of the Company.
Section 1.3 - Code
"Code" shall mean the Internal Revenue Code of 1986, as
amended.
Section 1.4 - Committee
"Committee" shall mean the Compensation Committee of the
Company.
Section 1.5 - Cumulative EBITDA Target
"Cumulative EBITDA Target" shall mean the Cumulative EBITDA
Targets as set forth in Schedule A attached hereto.
Section 1.6 - EBITDA
"EBITDA" shall mean, with respect to the Company and its
Subsidiaries on a consolidated basis for any period, the audited consolidated
net income (excluding without duplication, (x) extraordinary gains and losses
in accordance with GAAP (including any FAS 121 writedowns) and (y) gains or
losses on discontinued operations) for such quarter, plus (i) consolidated
interest expense for such period, determined in accordance with GAAP, plus (ii)
any minority interests share of income and losses plus (iii) to the extent
deducted in computing such consolidated net income, the sum of all income
taxes, depreciation, depletion and amortization of property, plant, equipment
and intangibles for such quarter.
Section 1.7 - EBITDA Target
"EBITDA Target" shall mean the EBITDA Targets established by
the Board of Directors and set forth in Schedule A attached hereto.
Section 1.8 - Fiscal Year
"Fiscal Year" shall mean the most recently completed fiscal
year of the Company.
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Section 1.9 - Grant Date
"Grant Date" shall mean the date as of which the Options
provided for in this Agreement were granted, which shall be ________, 1998.
Section 1.10 - Management Stockholder's Agreement
"Management Stockholder's Agreement" shall mean that certain
Management Stockholder's Agreement dated as of ________ __, 199_ between the
Optionee and the Company.
Section 1.11 - Missed Year
"Missed Year" shall mean a Fiscal Year in which the Company's
EBITDA is less than 100% of the EBITDA Target for such Fiscal Year.
Section 1.12 - Options
"Options" shall mean the non-qualified options to purchase
Common Stock granted under this Agreement.
Section 1.13 - Performance Option
"Performance Option" shall mean an Option with respect to
which the commencement of exercisability is governed by Section 3.1(b) hereof.
Section 1.14 - Permanent Disability
The Optionee shall be deemed to have a "Permanent Disability"
if the Optionee is unable to engage in the activities required by the
Optionee's job by reason of any medically determined physical or mental
impairment which can be expected to result in death or which has lasted or can
be expected to last for a continuous period of not less than 12 months.
Section 1.15 - Plan
"Plan" shall mean the 1998 Stock Purchase and Option Plan for
Key Employees of Regal Cinemas, Inc., as amended from time to time.
Section 1.16 - Pronouns
The masculine pronoun shall include the feminine and neuter,
and the singular the plural, where the context so indicates.
Section 1.17 - Secretary
"Secretary" shall mean the Secretary of the Company.
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Section 1.18 - Subsidiary
"Subsidiary" shall mean any corporation in an unbroken chain
of corporations beginning with the Company if each of the corporations, or
group of commonly controlled corporations (other than the last corporation in
the unbroken chain), then owns stock possessing 50% or more of the total
combined voting power of all classes of stock in one of the other corporations
in such chain.
Section 1.19 - Time Option
"Time Option" shall mean an Option with respect to which the
commencement of exercisability is governed by Section 3.1(a) hereof.
ARTICLE II
GRANT OF OPTIONS
Section 2.1 - Grant of Options
For good and valuable consideration, on and as of the date
hereof the Company irrevocably grants to the Optionee a Time Option to purchase
any part or all of an aggregate of the number of shares of its Common Stock set
forth with respect to such Time Option on the signature page hereof and a
Performance Option to purchase any part or all of an aggregate of the number of
shares of its Common Stock set forth with respect to such Performance Option on
the signature page hereof, in each case upon the terms and conditions set forth
in this Agreement.
Section 2.2 - Exercise Price
Subject to Section 2.4, the exercise price of the shares of
stock covered by the Options shall be equal to $5.00.
Section 2.3 - Consideration to the Company
In consideration of the granting of these Options by the
Company, the Optionee agrees to render faithful and efficient services to the
Company or a Subsidiary or Affiliate, with such duties and responsibilities as
the Company shall from time to time prescribe, consistent with Optionee's
position. Nothing in this Agreement or in the Plan shall confer upon the
Optionee any right to continue in the employ of the Company or any Subsidiary
or Affiliate or shall interfere with or restrict in any way the rights of the
Company and its Subsidiaries or Affiliates, which are hereby expressly
reserved, to terminate the employment of the Optionee at any time for any
reason whatsoever, with or without cause, subject to any rights to which the
Optionee is entitled under the terms of the employment agreement, if any,
between Optionee and the Company.
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Section 2.4 - Adjustments in Options Pursuant to Merger, Consolidation, etc.
Subject to Section 9 of the Plan, in the event that the
outstanding shares of the stock subject to an Option are, from time to time,
changed into or exchanged for a different number or kind of shares of the
Company or other securities of the Company by reason of a merger,
consolidation, recapitalization, reclassification, stock split, stock dividend,
combination of shares, or otherwise, the Committee shall make an appropriate
and equitable adjustment in the number and kind of shares and/or the amount of
consideration as to which or for which, as the case may be, such Option, or
portions thereof then unexercised, shall be exercisable. Any such adjustment
made by the Committee shall be final and binding upon the Optionee, the Company
and all other interested persons.
ARTICLE III
PERIOD OF EXERCISABILITY
Section 3.1 - Commencement of Exercisability
(a) Time Options shall become exercisable as follows:
Percentage of Option
Date Option Shares Granted As to Which
Becomes Exercisable Option Is Exercisable
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On or after the first anniversary
of the Grant Date 20%
On or after the second anniversary
of the Grant Date 40%
On or after the third anniversary
of the Grant Date 60%
On or after the fourth anniversary
of the Grant Date 80%
On or after the fifth anniversary
of the Grant Date 100%
(b) Performance Options shall become exercisable as
follows:
(i) Unless otherwise provided in this Agreement, the
Performance Options shall become exercisable with respect to one-third of the
shares of Common Stock subject to such Performance Option on each of the first
three anniversaries of the Grant Date to the extent that the Company's EBITDA
for the Fiscal Year equals or exceeds the EBITDA Target.
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(ii) If the Optionee's Performance Options do not become
exercisable in the first or second year following the Grant Date pursuant to
the above, the Optionee may "catch-up" in the second or third year based on the
Cumulative EBITDA Target with respect to such year.
(iii) Notwithstanding the foregoing, the Performance Option
shall become exercisable as to 100% of the shares of Common Stock subject to
the Performance Option on the ninth anniversary of the Grant Date (but only to
the extent such Performance Option has not otherwise terminated or become
exercisable) at an exercise price of $5.00 per share, as adjusted pursuant to
Section 2.4 herein, whether or not the EBITDA Targets are achieved.
(c) Notwithstanding the foregoing, all Options shall
become immediately exercisable as to 100% of the shares of Common Stock subject
to such Options immediately prior to a Change of Control (as defined in the
Plan) (but only to the extent such Option has not otherwise terminated or
become unexercisable).
(d) In the event of Optionee's termination of employment
because of death or Permanent Disability, the Time Options shall immediately
become exercisable as to all shares of Common Stock subject thereto.
(e) In the event of a termination of Optionee's
employment for Cause, all Options (whether or not exercisable) shall
immediately terminate without any payment.
(f) In the event of a termination of Optionee's
employment without Cause or Optionee's resignation, all unexercisable Options
shall terminate without any payment.
Section 3.2 - Expiration of Options
Except as otherwise provided in Section 5 or 6 of the
Management Stockholder's Agreement, the Options may not be exercised to any
extent by the Optionee after the first to occur of the following events:
(a) The tenth anniversary of the Grant Date; or
(b) The first anniversary of the date of the Optionee's
termination of employment by reason of death, Permanent Disability,
termination without Cause or resignation for Good Reason; or
(c) 90 days after resignation by the Optionee without Good
Reason; or
(d) The date the Option is terminated pursuant to the
Management Stockholder's Agreement; or
(e) The date of termination of Optionee's employment by the
Company for Cause; or
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(f) If the Committee so determines pursuant to Section 9 of
the Plan, the effective date of a merger, consolidation or other
transaction or capital change of the Company as provided in the Plan,
so long as the Optionee has a reasonable opportunity to exercise prior
to such effective date.
For purposes of this Agreement, the term "Good Reason" shall
mean (i) a reduction in the Optionee's base salary or an amendment to the
Company's annual cash bonus plan which would materially impair the ability of
the Optionee to receive a bonus (other than the establishment in good faith of
the "EBITDA" or other performance targets by the Company's Board of Directors)
or (ii) other than as approved by the current chief executive officer of the
Company, a substantial reduction in the Optionee's duties and responsibilities
or a transfer of the Optionee's primary workplace by more than fifty (50) miles
from the current workplace; provided, however, that in the event the Optionee
is party to a written employment agreement, the definition of "Good Reason"
therein shall supersede the preceding definition.
ARTICLE IV
EXERCISE OF OPTION
Section 4.1 - Person Eligible to Exercise
During the lifetime of the Optionee, only he may exercise an
Option or any portion thereof. After the death of the Optionee, any
exercisable portion of an Option may, prior to the time when an Option becomes
unexercisable under Section 3.2, be exercised by his personal representative or
by any person empowered to do so under the Optionee's will or under the then
applicable laws of descent and distribution.
Section 4.2 - Partial Exercise
Any exercisable portion of an Option or the entire Option, if
then wholly exercisable, may be exercised in whole or in part at any time prior
to the time when the Option or portion thereof becomes unexercisable under
Section 3.2; provided, however, that any partial exercise shall be for whole
shares of Common Stock only.
Section 4.3 - Manner of Exercise
An Option, or any exercisable portion thereof, may be
exercised solely by delivering to the Secretary or his office all of the
following prior to the time when the Option or such portion becomes
unexercisable under Section 3.2:
(a) Notice in writing signed by the Optionee or the other
person then entitled to exercise the Option or portion thereof,
stating that the Option or portion thereof is thereby exercised, such
notice complying with all applicable rules established by the
Committee;
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(b) Full payment (in cash, by check or by a combination
thereof) for the shares with respect to which such Option or portion
thereof is exercised;
(c) A bona fide written representation and agreement, in a
form satisfactory to the Committee, signed by the Optionee or other
person then entitled to exercise such Option or portion thereof,
stating that the shares of stock are being acquired for his own
account, for investment and without any present intention of
distributing or reselling said shares or any of them except as may be
permitted under the Securities Act of 1933, as amended (the "Act"),
and then applicable rules and regulations thereunder, and that the
Optionee or other person then entitled to exercise such Option or
portion thereof will indemnify the Company against and hold it free
and harmless from any loss, damage, expense or liability resulting to
the Company if any sale or distribution of the shares by such person
is contrary to the representation and agreement referred to above;
provided, however, that the Committee may, in its absolute discretion,
take whatever additional actions it deems appropriate to ensure the
observance and performance of such representation and agreement and to
effect compliance with the Act and any other federal or state
securities laws or regulations;
(d) Full payment to the Company of all amounts which, under
federal, state or local law, it is required to withhold upon exercise
of the Option; and
(e) In the event the Option or portion thereof shall be
exercised pursuant to Section 4.1 by any person or persons other than
the Optionee, appropriate proof of the right of such person or persons
to exercise the option.
Without limiting the generality of the foregoing, the Committee may require an
opinion of counsel reasonably acceptable to it to the effect that any
subsequent transfer of shares acquired on exercise of an Option does not
violate the Act, and may issue stop-transfer orders covering such shares.
Share certificates evidencing stock issued on exercise of this Option shall
bear an appropriate legend referring to the provisions of subsection (c) above
and the agreements herein. The written representation and agreement referred
to in subsection (c) above shall, however, not be required if the shares to be
issued pursuant to such exercise have been registered under the Act, and such
registration is then effective in respect of such shares.
Section 4.4 - Conditions to Issuance of Stock Certificates
The shares of stock deliverable upon the exercise of an
Option, or any portion thereof, may be either previously authorized but
unissued shares or issued shares which have then been reacquired by the
Company. Such shares shall be fully paid and nonassessable. The Company shall
not be required to issue or deliver any certificate or certificates for shares
of stock purchased upon the exercise of an Option or portion thereof prior to
fulfillment of all of the following conditions:
(a) The obtaining of approval or other clearance from any
state or federal governmental agency which the Committee shall, in its
absolute discretion, determine to be necessary or advisable; and
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(b) The lapse of such reasonable period of time following the
exercise of the Option as the Committee may from time to time
establish for reasons of administrative convenience.
(c) The execution of a Management Stockholder's Agreement by
and between the Company and the Executive (unless such an agreement
already exists) that covers the shares purchased upon exercise of an
Option.
Section 4.5 - Rights as Stockholder
The holder of an Option shall not be, nor have any of the
rights or privileges of, a stockholder of the Company in respect of any shares
purchasable upon the exercise of the Option or any portion thereof unless and
until certificates representing such shares shall have been issued by the
Company to such holder.
ARTICLE V
MISCELLANEOUS
Section 5.1 - Administration
The Committee shall have the power to interpret the Plan and
this Agreement and to adopt such rules for the administration, interpretation
and application of the Plan as are consistent therewith and to interpret or
revoke any such rules. All actions taken and all interpretations and
determinations made by the Committee shall be final and binding upon the
Optionee, the Company and all other interested persons. No member of the
Committee shall be personally liable for any action, determination or
interpretation made in good faith with respect to the Plan or the Options. In
its absolute discretion, the Board of Directors may at any time and from time
to time exercise any and all rights and duties of the Committee under the Plan
and this Agreement.
Section 5.2 - Options Not Transferable
Except as provided in the Management Stockholder's Agreement,
neither the Options nor any interest or right therein or part thereof shall be
liable for the debts, contracts or engagements of the Optionee or his
successors in interest or shall be subject to disposition by transfer,
alienation, anticipation, pledge, encumbrance, assignment or any other means
whether such disposition be voluntary or involuntary or by operation of law by
judgment, levy, attachment, garnishment or any other legal or equitable
proceedings (including bankruptcy), and any attempted disposition thereof shall
be null and void and of no effect; provided, however, that this Section 5.2
shall not prevent transfers made solely for estate planning purposes or by will
or by the applicable laws of descent and distribution.
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Section 5.3 - Shares to Be Reserved
The Company shall at all times during the term of the Options
reserve and keep available such number of shares of stock as will be sufficient
to satisfy the requirements of this Agreement.
Section 5.4 - Notices
Any notice to be given under the terms of this Agreement to
the Company shall be addressed to the Company in care of its Secretary, and any
notice to be given to the Optionee shall be addressed to him at the address
given beneath his signature hereto. By a notice given pursuant to this Section
5.4, either party may hereafter designate a different address for notices to be
given to him. Any notice which is required to be given to the Optionee shall,
if the Optionee is then deceased, be given to the Optionee's personal
representative if such representative has previously informed the Company of
his status and address by written notice under this Section 5.4. Any notice
shall have been deemed duly given when enclosed in a properly sealed envelope
or wrapper addressed as aforesaid, deposited (with postage prepaid) in a post
office or branch post office regularly maintained by the United States Postal
Service.
Section 5.5 - Titles
Titles are provided herein for convenience only and are not to
serve as a basis for interpretation or construction of this Agreement.
Section 5.6 - Applicability of Plan and Management Stockholder's Agreement
The Options and the shares of Common Stock issued to the
Optionee upon exercise of the Options shall be subject to all of the terms and
provisions of the Plan and the Management Stockholder's Agreement, to the
extent applicable to the Options and such shares. In the event of any conflict
between this Agreement and the Plan, the terms of the Plan shall control. In
the event of any conflict between this Agreement or the Plan and the Management
Stockholder's Agreement, the terms of the Management Stockholder's Agreement
shall control.
Section 5.7 - Amendment
This Agreement may be amended only by a writing executed by
the parties hereto which specifically states that it is amending this
Agreement.
Section 5.8 - Governing Law
The laws of the State of New York shall govern the
interpretation, validity and performance of the terms of this Agreement
regardless of the law that might be applied under principles of conflicts of
laws.
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Section 5.9 - Jurisdiction
Any suit, action or proceeding against the Optionee with
respect to this Agreement, or any judgment entered by any court in respect of
any thereof, may be brought in any court of competent jurisdiction in the State
of New York, and the Optionee hereby submits to the non-exclusive jurisdiction
of such courts for the purpose of any such suit, action, proceeding or
judgment. The Optionee hereby irrevocably waives any objections which he may
now or hereafter have to the laying of the venue of any suit, action or
proceeding arising out of or relating to this Agreement brought in any court of
competent jurisdiction in the State of New York, and hereby further irrevocably
waives any claim that any such suit, action or proceeding brought in any such
court has been brought in any inconvenient forum. No suit, action or
proceeding against the Company with respect to this Agreement may be brought in
any court, domestic or foreign, or before any similar domestic or foreign
authority other than in a court of competent jurisdiction in the State of New
York, and the Optionee hereby irrevocably waives any right which he may
otherwise have had to bring such an action in any other court, domestic or
foreign, or before any similar domestic or foreign authority. The Company
hereby submits to the jurisdiction of such courts for the purpose of any such
suit, action or proceeding.
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IN WITNESS WHEREOF, this Agreement has been executed and
delivered by the parties hereto.
REGAL CINEMAS, INC.
By
-----------------------------
Name:
Title:
Aggregate number of shares of
Common Stock for which the Time
Option granted hereunder is
exercisable:
Aggregate number of shares of
------------------------- Common Stock for which the
Performance Option granted
------------------------- hereunder is exercisable:
Optionee
-------------------------
-------------------------
Address
Optionee's Taxpayer
Identification Number:
-------------------------
