Exhibit 10.5

 

NON-QUALIFIED STOCK OPTION AGREEMENT
OF
MARQUEE HOLDINGS INC.

 

THIS AGREEMENT (the “Agreement”) is entered into and effective as of
January 26th, 2006 (the “Grant Date”) by and between Marquee Holdings Inc., a
Delaware corporation (the “Company”) and Travis Reid, a Non-Employee Director
and Consultant of the Company (or one of its Plan Subsidiaries), hereinafter
referred to as the “Optionee.”

 

WHEREAS, the Company wishes to afford the Optionee the opportunity to purchase
shares of its Class N common stock, par value $0.01 per share (the “Class N
Common Stock”); and

 

WHEREAS, the Company wishes to carry out the 2004 Stock Option Plan of Marquee
Holdings Inc. (as it may be amended from time to time, the “Plan”), the terms of
which are hereby incorporated by reference and made a part of this Agreement;
and

 

WHEREAS, the Board has determined that it would be to the advantage and best
interest of the Company and its shareholders to grant the Non-Qualified Stock
Option provided for herein to the Optionee as an inducement to enter into or
remain in the service of the Company (or one of its Plan Subsidiaries) and as an
incentive for increased efforts during such service, and has advised the Company
thereof and instructed the undersigned officers to issue said Option;

 

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 below unless the context clearly indicates to the contrary. 
Capitalized terms used in this Agreement and not defined below shall have the
meaning given such terms in the Plan.  The singular pronoun shall include the
plural, where the context so indicates.

 

SECTION 1.1                                      “CAUSE” SHALL HAVE THE MEANING
GIVEN SUCH TERM IN THE SERVICE AGREEMENT BETWEEN THE COMPANY (OR A PLAN
SUBSIDIARY) AND THE OPTIONEE, IF ANY, AND IN THE EVENT THERE IS NO SUCH
AGREEMENT IN EFFECT SHALL MEAN THE OPTIONEE’S (I) WILLFUL OR NEGLIGENT FAILURE
TO SUBSTANTIALLY PERFORM HIS DUTIES WITH THE COMPANY OR ANY PLAN SUBSIDIARY;
(II) WILLFUL OR NEGLIGENT FAILURE TO CARRY OUT, OR COMPLY WITH, IN ANY MATERIAL
RESPECT, ANY LAWFUL AND REASONABLE DIRECTIVE OF THE COMPANY OR ANY PLAN
SUBSIDIARY; (III) COMMISSION AT ANY TIME OF ANY ACT OR OMISSION THAT RESULTS IN,
OR THAT MAY REASONABLY BE EXPECTED TO RESULT IN, A CONVICTION, PLEA OF NO
CONTEST OR IMPOSITION OF UNADJUDICATED PROBATION FOR ANY FELONY OR CRIME
INVOLVING MORAL TURPITUDE; (IV) UNLAWFUL USE (INCLUDING BEING UNDER THE
INFLUENCE) OR POSSESSION OF ILLEGAL DRUGS ON THE COMPANY’S OR ANY PLAN
SUBSIDIARY’S PREMISES OR WHILE PERFORMING ANY DUTIES OR RESPONSIBILITIES WITH
THE COMPANY OR ANY PLAN SUBSIDIARY; OR (V) COMMISSION AT ANY TIME OF ANY ACT OF
FRAUD, EMBEZZLEMENT, MISAPPROPRIATION, MATERIAL MISCONDUCT, OR BREACH OF
FIDUCIARY DUTY AGAINST THE COMPANY OR ANY PLAN SUBSIDIARY (OR ANY PREDECESSOR
THERETO OR SUCCESSOR THEREOF).

 

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SECTION 1.2                                      “CHANGE OF CONTROL” SHALL HAVE
THE MEANING GIVEN SUCH TERM IN THE MANAGEMENT STOCKHOLDERS AGREEMENT.

 

SECTION 1.3                                      “GRANT DATE” SHALL HAVE THE
MEANING SET FORTH IN THE RECITALS HERETO.

 

SECTION 1.4                                      “MANAGEMENT STOCKHOLDERS
AGREEMENT” SHALL MEAN THAT CERTAIN AMENDED AND RESTATED MANAGEMENT STOCKHOLDERS
AGREEMENT DATED JANUARY       , 2006 BY AND AMONG THE COMPANY AND CERTAIN
STOCKHOLDERS OF THE COMPANY WHICH CONTAINS TERMS APPLICABLE TO OPTIONS, THE
SHARES OF CLASS N COMMON STOCK ACQUIRED UPON OPTION EXERCISE AND OTHER SHARES OF
CLASS N COMMON STOCK, IF ANY, HELD BY THE OPTIONEE DURING THE TERM OF SUCH
AGREEMENT, AND ATTACHED HERETO AS EXHIBIT A, AS THE SAME MAY BE AMENDED FROM
TIME TO TIME. AS A CONDITION TO THE GRANT OF THE OPTION, THE OPTIONEE SHALL
BECOME A PARTY TO THE MANAGEMENT STOCKHOLDERS AGREEMENT.

 

SECTION 1.5                                      “OPTION” SHALL MEAN THE
NON-QUALIFIED STOCK OPTION TO PURCHASE CLASS N COMMON STOCK GRANTED UNDER THIS
AGREEMENT.

 

SECTION 1.6                                      “PLAN” SHALL HAVE THE MEANING
SET FORTH IN THE RECITALS HERETO.

 

SECTION 1.7                                      “TERMINATION OF SERVICE” SHALL
HAVE THE MEANING SET FORTH IN SECTION 3(B) OF THIS AGREEMENT.

 

ARTICLE II.
GRANT OF OPTION

 

SECTION 2.1                                      GRANT OF OPTION.  IN
CONSIDERATION OF THE OPTIONEE’S AGREEMENT TO ENTER INTO OR REMAIN IN THE SERVICE
OF THE COMPANY OR ONE OF ITS PLAN SUBSIDIARIES, AND FOR OTHER GOOD AND VALUABLE
CONSIDERATION, AS OF THE GRANT DATE, THE COMPANY IRREVOCABLY GRANTS TO THE
OPTIONEE THE OPTION TO PURCHASE ANY PART OR ALL OF AN AGGREGATE OF SIX HUNDRED
(600) SHARES OF CLASS N COMMON STOCK UPON THE TERMS AND CONDITIONS SET FORTH IN
THE PLAN AND THIS AGREEMENT.

 

SECTION 2.2                                      OPTION SUBJECT TO PLAN.  THE
OPTION GRANTED HEREUNDER IS SUBJECT TO THE TERMS AND PROVISIONS OF THE PLAN,
INCLUDING WITHOUT LIMITATION, ARTICLE V AND SECTIONS 7.1, 7.2 AND 7.3 THEREOF.

 

SECTION 2.3                                      OPTION PRICE.  THE PURCHASE
PRICE OF THE SHARES OF CLASS N COMMON STOCK COVERED BY THE OPTION SHALL BE
$1,000.00 PER SHARE (WITHOUT COMMISSION OR OTHER CHARGE), WHICH IS THE FAIR
MARKET VALUE AS OF THE GRANT DATE.

 

ARTICLE III.
EXERCISABILITY

 

SECTION 3.1                                      COMMENCEMENT OF EXERCISABILITY

 

(A)          SUBJECT TO SUBSECTIONS (B) AND (C) AND SECTION 3.3, THE OPTION
SHALL BECOME EXERCISABLE IN THREE EQUAL AND CUMULATIVE INSTALLMENTS PROVIDED
THAT THE OPTIONEE REMAINS CONTINUOUSLY IN ACTIVE SERVICE WITH THE COMPANY AND
ITS PLAN SUBSIDIARIES FROM THE GRANT DATE THROUGH SUCH DATE AS FOLLOWS:

 

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(I)                                     THE FIRST INSTALLMENT SHALL CONSIST OF
TWO HUNDRED (200) OF THE SHARES COVERED BY THE OPTION AND SHALL BECOME
EXERCISABLE ON DECEMBER 23, 2006;

 

(II)                                  THE SECOND INSTALLMENT SHALL CONSIST OF
TWO HUNDRED (200) OF THE SHARES COVERED BY THE OPTION AND SHALL BECOME
EXERCISABLE ON DECEMBER 23, 2007; AND

 

(iii)                               The third installment shall consist of two
hundred (200) of the shares covered by the Option and shall become exercisable
on December 23, 2008.

 

(B)         NO PORTION OF THE OPTION WHICH IS UNEXERCISABLE AT TERMINATION OF
SERVICE SHALL THEREAFTER BECOME EXERCISABLE.

 

(C)          ALL UNEXERCISED AND OUTSTANDING OPTIONS SHALL ACCELERATE AND BECOME
EXERCISABLE IMMEDIATELY PRIOR TO A CHANGE OF CONTROL.

 

SECTION 3.2                                      DURATION OF EXERCISABILITY. 
THE INSTALLMENTS PROVIDED FOR IN SECTION 3.1 ARE CUMULATIVE.  EACH SUCH
INSTALLMENT WHICH BECOMES EXERCISABLE PURSUANT TO SECTION 3.1 SHALL REMAIN
EXERCISABLE UNTIL IT BECOMES UNEXERCISABLE.

 

SECTION 3.3                                      EXPIRATION OF OPTION.  THE
OPTION MAY NOT BE EXERCISED TO ANY EXTENT BY ANYONE AFTER THE FIRST TO OCCUR OF
THE FOLLOWING EVENTS:

 

(A)          THE TENTH ANNIVERSARY OF THE GRANT DATE; OR

 

(B)         EXCEPT AS THE BOARD MAY OTHERWISE APPROVE, THE DATE THAT IS NINETY
(90) DAYS FOLLOWING THE DATE OF THE LATER OF THE OPTIONEE’S TERMINATION OF
CONSULTANCY TERMINATION OF DIRECTORSHIP (SUCH LATER EVENT, HIS “TERMINATION OF
SERVICE”) FOR ANY REASON OTHER THAN (I) TERMINATION BY THE COMPANY (OR A PLAN
SUBSIDIARY) FOR CAUSE; OR (II) THE OPTIONEE’S DEATH OR DISABILITY (AS DEFINED IN
SECTION 22(E)(3) OF THE CODE); OR

 

(C)          EXCEPT AS THE BOARD MAY OTHERWISE APPROVE, THE DATE OF THE
OPTIONEE’S TERMINATION OF SERVICE BY REASON OF TERMINATION BY THE COMPANY (OR A
PLAN SUBSIDIARY) FOR CAUSE; OR

 

(D)         IN THE CASE OF THE OPTIONEE’S TERMINATION OF SERVICE BY REASON OF
HIS DEATH OR DISABILITY (WITHIN THE MEANING OF SECTION 22(E)(3) OF THE CODE),
THE EXPIRATION OF 12 MONTHS FROM THE DATE OF THE OPTIONEE’S TERMINATION OF
SERVICE.

 

SECTION 3.4                                      PARTIAL EXERCISE.  ANY
EXERCISABLE PORTION OF THE 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; PROVIDED, HOWEVER,
THAT EACH PARTIAL EXERCISE SHALL BE FOR NOT LESS THAN ONE (1) SHARE.

 

SECTION 3.5                                      EXERCISE OF OPTION.  THE
EXERCISE OF THE OPTION SHALL BE GOVERNED BY THE TERMS OF THIS AGREEMENT AND THE
TERMS OF THE PLAN, INCLUDING, WITHOUT LIMITATION, THE PROVISIONS OF ARTICLE V OF
THE PLAN.

 

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ARTICLE IV.
OTHER PROVISIONS

 

SECTION 4.1                                      NOT A CONTRACT OF EMPLOYMENT OR
OTHER SERVICE.  NOTHING IN THIS AGREEMENT OR IN THE PLAN SHALL CONFER UPON THE
OPTIONEE ANY RIGHT TO CONTINUE IN THE SERVICE OF THE COMPANY OR ANY OF ITS
SUBSIDIARIES OR SHALL INTERFERE WITH OR RESTRICT IN ANY WAY THE RIGHTS OF THE
COMPANY OR ITS SUBSIDIARIES, WHICH ARE HEREBY EXPRESSLY RESERVED, TO DISCHARGE
THE OPTIONEE AT ANY TIME FOR ANY REASON WHATSOEVER, WITH OR WITHOUT CAUSE,
EXCEPT AS MAY OTHERWISE BE PROVIDED BY ANY WRITTEN AGREEMENT ENTERED INTO BY AND
BETWEEN THE COMPANY AND ITS SUBSIDIARIES AND THE OPTIONEE.

 

SECTION 4.2                                      SHARES SUBJECT TO PLAN AND
MANAGEMENT STOCKHOLDERS AGREEMENT.  THE OPTIONEE ACKNOWLEDGES THAT ANY SHARES
ACQUIRED UPON EXERCISE OF THE OPTION ARE SUBJECT TO THE TERMS OF THE PLAN AND
THE MANAGEMENT STOCKHOLDERS AGREEMENT INCLUDING, WITHOUT LIMITATION, THE
RESTRICTIONS SET FORTH IN SECTION 5.6 OF THE PLAN.  THE OPTIONEE FURTHER
ACKNOWLEDGES THAT THE OPTION IS SUBJECT TO THE TERMS OF THE MANAGEMENT
STOCKHOLDERS AGREEMENT INCLUDING, WITHOUT LIMITATION, THE “CALL RIGHTS” AND THE
“DRAG-ALONG” CONTAINED IN SECTIONS 2 AND 3 OF THE MANAGEMENT STOCKHOLDERS
AGREEMENT.

 

SECTION 4.3                                      CONSTRUCTION.  THIS AGREEMENT
SHALL BE ADMINISTERED, INTERPRETED AND ENFORCED UNDER THE LAWS OF THE STATE OF
DELAWARE.

 

SECTION 4.4                                      CONFORMITY TO SECURITIES LAWS. 
THE OPTIONEE ACKNOWLEDGES THAT THE PLAN IS INTENDED TO CONFORM TO THE EXTENT
NECESSARY WITH ALL PROVISIONS OF THE SECURITIES ACT AND THE EXCHANGE ACT AND ANY
AND ALL REGULATIONS AND RULES PROMULGATED THEREUNDER BY THE SECURITIES AND
EXCHANGE COMMISSION, INCLUDING WITHOUT LIMITATION RULE 16B-3.  NOTWITHSTANDING
ANYTHING HEREIN TO THE CONTRARY, THE PLAN SHALL BE ADMINISTERED, AND THE OPTION
IS GRANTED AND MAY BE EXERCISED, ONLY IN SUCH A MANNER AS TO CONFORM TO SUCH
LAWS, RULES AND REGULATIONS.  TO THE EXTENT PERMITTED BY APPLICABLE LAW, THE
PLAN AND THIS AGREEMENT SHALL BE DEEMED AMENDED TO THE EXTENT NECESSARY TO
CONFORM TO SUCH LAWS, RULES AND REGULATIONS.

 

SECTION 4.5                                      AMENDMENT, SUSPENSION AND
TERMINATION.  THE OPTION MAY BE WHOLLY OR PARTIALLY AMENDED OR OTHERWISE
MODIFIED, SUSPENDED OR TERMINATED AT ANY TIME OR FROM TIME TO TIME BY THE
COMMITTEE OR THE BOARD, PROVIDED THAT, EXCEPT AS PROVIDED BY SECTION 7.1 OF THE
PLAN, NEITHER THE AMENDMENT, SUSPENSION NOR TERMINATION OF THIS AGREEMENT SHALL,
WITHOUT THE CONSENT OF THE OPTIONEE, MATERIALLY AND ADVERSELY ALTER OR IMPAIR
ANY RIGHTS OR OBLIGATIONS UNDER THE OPTION.

 

 

[signature page follows]

 

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IN WITNESS WHEREOF, the parties hereto have executed this Non-Qualified Stock
Option Agreement as of the date first written above.

 

 

 

 

MARQUEE HOLDINGS INC.

 

 

 

 

 

 

 

By:

/s/ Craig R. Ramsey

 

 

Name: Craig R. Ramsey

 

 

Title: Executive Vice President and Chief

 

 

Financial Officer

 

 

 

 

 

 

 

/s/ Travis Reid

 

Travis Reid

 

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EXHIBIT A

 

MANAGEMENT STOCKHOLDERS AGREEMENT

 

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