Exhibit 10.2

NATIONAL CINEMEDIA, INC.

2007 EQUITY INCENTIVE PLAN

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TABLE OF CONTENTS

 

         Page  

1.

  ESTABLISHMENT AND PURPOSE      1     

1.1

  Establishment      1     

1.2

  Purpose      1   

2.

  DEFINITIONS      1   

3.

  PLAN ADMINISTRATION      7     

3.1

  General      7     

3.2

  Authority of the Committee      7     

3.3

  Deferral Arrangement      8     

3.4

  No Liability      8     

3.5

  Book Entry      8   

4.

  STOCK SUBJECT TO THE PLAN      9     

4.1

  Number of Shares      9     

4.2

  Individual Award Limits      9     

4.3

  Share Counting      9     

4.4

  Substitute Awards      9   

5.

  ELIGIBILITY AND PARTICIPATION      9   

6.

  STOCK OPTIONS      9     

6.1

  Grant of Options      9     

6.2

  Award Agreement      10     

6.3

  Exercise of Option      10     

6.4

  Termination of Service      11     

6.5

  Limitations on Incentive Stock Options      11     

6.6

  Transferability      11     

6.7

  Family Transfers      11     

6.8

  Rights of Holders of Options      12   

7.

  STOCK APPRECIATION RIGHTS      12     

7.1

  Grant of Stock Appreciation Rights      12     

7.2

  Award Agreement      12     

7.3

  Exercise of Stock Appreciation Right      12     

7.4

  Effect of Exercise      13     

7.5

  Termination of Service      13     

7.6

  Transferability      13   

8.

  RESTRICTED STOCK AND RESTRICTED STOCK UNITS      13     

8.1

  Grant of Restricted Stock or Restricted Stock Units      13     

8.2

  Award Agreement      13     

8.3

  Restrictions on Transfer      13     

8.4

  Forfeiture; Other Restrictions      13   

 

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8.5

  Restricted Stock Units      14     

8.6

  Termination of Service      14     

8.7

  Stockholder Privileges      14     

8.8

  Purchase of Restricted Stock      14   

9.

  PERFORMANCE AWARDS      14     

9.1

  Grant of Performance Awards      14     

9.2

  Value of Performance Shares or Units      15     

9.3

  Achievement of Performance Goals      16     

9.4

  Payment of Performance Awards      16     

9.5

  Termination of Service      16     

9.6

  Transferability      16   

10.

  OTHER STOCK-BASED AWARDS      16   

11.

  DIVIDEND EQUIVALENTS      16   

12.

  TAX WITHHOLDING      17   

13.

  PARACHUTE LIMITATIONS      17   

14.

  EFFECT OF CHANGES IN CAPITALIZATION      18     

14.1

  Changes in Stock      18     

14.2

  Change of Control      18     

14.3

  Reorganization in Which the Company Is the Surviving Entity and in Which No
Change of Control Occurs      19     

14.4

  Adjustment      19     

14.5

  No Limitations on the Company      19   

15.

  REQUIREMENTS OF LAW      19     

15.1

  General      19     

15.2

  Rule 16b-3      20   

16.

  GENERAL PROVISIONS      20     

16.1

  Disclaimer of Rights      20     

16.2

  Nontransferability of Awards      20     

16.3

  Changes in Accounting or Tax Rules      21     

16.4

  Nonexclusivity of the Plan      21     

16.5

  Captions      21     

16.6

  Other Award Agreement Provisions      21     

16.7

  Other Employee Benefits      21     

16.8

  Severability      21     

16.9

  Governing Law      21     

16.10

  Section 409A      21   

17.

  AMENDMENT, MODIFICATION AND TERMINATION      22     

17.1

  Amendment, Modification, and Termination      22     

17.2

  Awards Previously Granted      22   

 

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18.

  STOCKHOLDER APPROVAL; EFFECTIVE DATE OF PLAN      22   

19.

  DURATION      23   

 

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NATIONAL CINEMEDIA, INC.

2007 EQUITY INCENTIVE PLAN

 

1. ESTABLISHMENT AND PURPOSE

1.1 Establishment. National CineMedia, Inc., a Delaware corporation (the
“Company”), established the National CineMedia, Inc. 2007 Equity Incentive Plan
(the “Plan”). The Plan, as amended and restated was approved by the stockholders
of the Company on April 26, 2011. The Plan was subsequently amended to
incorporate changes to Section 4.3, Share Counting and Section 3.2, Authority of
the Committee. Section 4.1, Number of Shares, Section 9.2, Value of Performance
Shares or Units, and Section 9.3, Achievement of Performance Goals, were also
amended, subject to approval by the stockholders of the Company, which was
obtained on May 1, 2013. This document incorporates all such amendments. The
Plan permits the grant of incentive stock options, non-qualified stock options,
stock appreciation rights, restricted stock, restricted stock units, performance
awards, and other stock-based and cash awards in accordance with the terms
hereof.

1.2 Purpose. The Plan is intended to enhance the Company’s and its Affiliates’
(as defined herein) ability to attract and retain highly qualified officers,
directors, key employees, and other persons, and to motivate such persons to
serve the Company and its Affiliates and to expend maximum effort to improve the
business results and earnings of the Company, by providing to such persons an
opportunity to acquire or increase a direct proprietary interest in the
operations and future success of the Company.

 

2. DEFINITIONS

For purposes of interpreting the Plan and related documents (including Award
Agreements), the following definitions shall apply:

2.1 “Affiliate” means with respect to the Company, (i) any company or other
trade or business that controls, is controlled by or is under common control
with the Company within the meaning of Rule 405 of Regulation C under the
Securities Act, including without limitation, any Subsidiary, (ii) any
corporation or other entity controlling, controlled by, or under common control
with the Company, including any member of an affiliated group of which the
Company is a common parent corporation or subsidiary corporation (within the
meaning of Section 424 of the Code), and (iii) National CineMedia, LLC.

2.2 “Award” means a grant under the Plan of an Option, Stock Appreciation Right,
Restricted Stock, Restricted Stock Unit, Performance Award, or Other Stock-Based
Award.

2.3 “Award Agreement” means the written or electronic agreement setting forth
the terms and conditions applicable to each Award. The Award Agreement is
subject to the terms and conditions of the Plan. In the event of any
inconsistency between the provisions of the Plan and any Award Agreement, the
provisions of the Plan shall govern, except to the extent the Plan would be
considered to provide an additional benefit as determined under Sections 409A
and 424 of the Code.

2.4 “Benefit Arrangement” means as defined in Section 13.

2.5 “Board” or “Board of Directors” means the board of directors of National
CineMedia, Inc.

2.6 “Business Combination” means as defined in Section 2.8.

 

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2.7 “Cause” means, as determined by the Committee and unless otherwise provided
in an employment, a consulting or other services agreement, if any, between the
Service Provider and the Company or an Affiliate, (i) any willful breach of any
material written policy of the Company or an Affiliate that results in material
and demonstrable liability or loss to the Company or the Affiliate;
(ii) engaging in any conduct involving moral turpitude that causes material and
demonstrable injury, monetarily or otherwise, to the Company or an Affiliate,
including, but not limited to, misappropriation or conversion of assets of the
Company or an Affiliate (other than immaterial assets); (iii) a conviction of or
entry of a plea of nolo contendere to a felony; or (iv) a material breach by the
Service Provider of any term of any employment, consulting or other services,
confidentiality, intellectual property or non-competition agreements, if any,
between the Service Provider and the Company or an Affiliate. No act or failure
to act by the Service Provider shall be deemed “willful” if done, or omitted to
be done, by him or her in good faith and with the reasonable belief that his or
her action or omission was in the best interest of the Company or an Affiliate.

2.8 “Change of Control” means and shall be deemed to have occurred upon the
occurrence of:

(i) The acquisition by any individual, entity or group (within the meaning of
Section 13(d)(3) or 14(d)(2) of the Exchange Act) (a “Person”) of beneficial
ownership (within the meaning of Rule 13d-3 promulgated under the Exchange Act)
of 50% or more of either (x) the then outstanding shares of common stock of the
Company (the “Outstanding Company Common Stock”) or (y) the combined voting
power of the then outstanding voting securities of the Company entitled to vote
generally in the election of directors (the “Outstanding Company Voting
Securities”); provided, however, that for purposes of this subsection (i), the
following acquisitions shall not constitute a Change of Control: (A) any
acquisition directly from the Company, (B) any acquisition by the Company,
(C) any acquisition by any employee benefit plan (or related trust) sponsored or
maintained by the Company or any corporation controlled by the Company, (D) any
acquisition by any corporation pursuant to a transaction which complies with
clauses (A) or (B) of paragraph (iv) below, or (E) any acquisition by a Founding
Member; or

(ii) The acquisition by any Person, other than a Founding Member, of the right
to (A) elect or (B) nominate for election or (C) designate for nomination
pursuant to a Director Designation Agreement dated February 13, 2007 among the
Company and the Founding Members, a majority of the members of the Company’s
Board; or

(iii) The acquisition by any Person, other than the Company or a Founding
Member, of beneficial ownership of more than 50% of the Units of NCM LLC; or

(iv) Consummation of a reorganization, merger or consolidation or sale or other
disposition of all or substantially all of the assets of the Company or an
acquisition of assets of another corporation (a “Business Combination”), in each
case, unless, following such Business Combination, (A) (x) all or substantially
all of the individuals and entities who were the beneficial owners,
respectively, of the Outstanding Company Common Stock and Outstanding Company
Voting Securities immediately prior to such Business Combination beneficially
own, directly or indirectly, more than 50% of, respectively, the then
outstanding shares of common stock and the combined voting power of the then
outstanding voting securities entitled to vote generally in the election of
directors, as the case may be, of the corporation resulting from such Business
Combination (including, without limitation, a corporation which as a result of
such transaction owns the Company or all or substantially all of the Company’s
assets either

 

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directly or through one or more subsidiaries) in substantially the same
proportions as their ownership, immediately prior to such Business Combination
of the Outstanding Company Common Stock and Outstanding Company Voting
Securities, as the case may be; and (y) at least a majority of the members of
the board of directors of the corporation resulting from such Business
Combination were individuals who, as of the Effective Date, constitute the Board
(the “Incumbent Board”); provided, however, that any individual becoming a
director subsequent to the Effective Date whose election, or nomination for
election by the Company’s stockholders, was approved by a vote of at least a
majority of the directors then comprising the Incumbent Board or was designated
pursuant to a Director Designation Agreement dated February 13, 2007 among the
Company and the Founding Members shall be considered as though such individual
were a member of the Incumbent Board, at the time of the execution of the
initial agreement, or of the action of the Board, providing for such Business
Combination or (B) the Founding Members beneficially own, more than 50% of,
respectively, the outstanding shares of common stock or voting power of the then
outstanding voting securities entitled to vote generally in the election of
directors of the corporation resulting from such Business Combination; or

(v) Approval by the stockholders of the Company of a complete liquidation or
dissolution of the Company; or

(vi) Approval by the members of NCM LLC of a complete liquidation or dissolution
of NCM LLC.

2.9 “Code” means the Internal Revenue Code of 1986, as amended, and the
regulations, interpretations, and administrative guidance issued thereunder.

2.10 “Committee” means the Compensation Committee of the Board or any committee
designated by the Board to administer the Plan, or if no committee is appointed,
the Board. The Compensation Committee or the Board may designate one or more
subcommittees to (i) consist solely of persons who satisfy the applicable
requirements of any stock exchange or national market system on which the shares
of Stock may be listed, (ii) consist solely of persons who qualify as an
“outside director” within the meaning of Section 162(m) of the Code, and
(iii) consist solely of persons who qualify as a “non-employee director” within
the meaning of Rule 16b-3 promulgated under the Exchange Act.

2.11 “Company” means National CineMedia, Inc., a Delaware corporation.

2.12 “Corporate Event” means an event described in Section 14.1.

2.13 “Disabled” or “Disability” means, unless otherwise provided in an
employment, a consulting or other services agreement, if any, between the
Participant and the Company or an Affiliate, the Participant is unable to
perform each of the essential duties of such Participant’s position by reason of
a medically determinable physical or mental impairment which is potentially
permanent in character or which can be expected to last for a continuous period
of not less than 12 months; provided that, the following shall apply:

(a) With respect to rules regarding expiration of an Incentive Stock Option
following termination of the Participant’s Service, Disability has the meaning
set forth in Section 22(e)(3) of the Code.

 

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(b) With respect to any Award subject to Section 409A of the Code, the
Participant is: (i) unable to engage in any substantial gainful activity by
reason of any medically determinable physical or mental impairment that can be
expected to result in death or can be expected to last for a continuous period
of not less than 12 months; (ii) by reason of any medically determinable
physical or mental impairment that can be expected to result in death or can be
expected to last for a continuous period of not less than 12 months, is
receiving income replacement benefits for a period of not less than three months
under an accident or health plan covering employees of the Participant’s
employer; or (iii) determined to be totally disabled by the Social Security
Administration.

2.14 “Dividend Equivalents” means any right granted under Section 11.

2.15 “Effective Date” means the effective date of the Plan, February 6, 2007,
the date the Plan was approved by the Board.

2.16 “Employee” means any individual who is a common-law employee of the Company
or an Affiliate determined in accordance with the Company’s standard personnel
policies and practices.

2.17 “Exchange Act” means the U.S. Securities Exchange Act of 1934, as it may be
amended from time to time, or any successor act thereto.

2.18 “Exercise Price” means the price at which a share of Stock may be purchased
pursuant to the exercise of an Option.

2.19 “Fair Market Value” means the value of a share of Stock as of a particular
date, determined as follows: (a) the closing sale price reported for such share
on the national securities exchange or national market system on which such
stock is principally traded, or if no sale of shares is reported for such
trading day, on the next preceding day on which a sale was reported, or (b) if
the shares of Stock are not then listed on a national securities exchange or
national market system, or the value of such shares is not otherwise
determinable, such value as determined by the Committee in good faith in its
sole discretion consistent with the requirements under Section 409A of the Code;
notwithstanding the foregoing, the Fair Market Value of a share of Stock for
purposes of Awards (other than NCM LLC Substitute Awards and other Substitute
Awards) with a Grant Date as of the Company’s initial public offering shall be
the price per share of Stock in such initial public offering, as determined by
the Committee.

2.20 “Family Member” means a person who is a spouse, former spouse, child,
stepchild, grandchild, parent, stepparent, grandparent, niece, nephew,
mother-in-law, father-in-law, son-in-law, daughter-in-law, brother, sister,
brother-in-law, or sister-in-law, including adoptive relationships, of the
Participant, a trust in which any one or more of these persons have more than
fifty percent (50%) of the beneficial interest, a foundation in which any one or
more of these persons (or the Participant) control the management of assets, and
any other entity in which one or more of these persons (or the Participant) own
more than fifty percent (50%) of the voting interests; provided, however, that
to the extent required by applicable law, the term Family Member shall be
limited to a person who is a spouse, former spouse, child, stepchild,
grandchild, parent, stepparent, grandparent, mother-in-law, father-in-law,
son-in-law, daughter-in-law, brother, sister, brother-in-law, or sister-in-law,
including adoptive relationships, of the Participant or a trust or foundation
for the exclusive benefit of any one or more of these persons.

2.21 “Founding Member” means as such term is defined in the Limited Liability
Company Operating Agreement.

 

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2.22 “Good Reason” means, unless otherwise provided in an employment, a
consulting or other services agreement, if any, between the Service Provider and
the Company or an Affiliate, (i) reduction in the Service Provider’s base
salary, (ii) a diminution of the Service Provider’s title, office, position or
authority, excluding for this purpose an action not taken in bad faith and which
is remedied within twenty (20) days after receipt of written notice thereof
given by the Service Provider, (iii) the assignment to the Service Provider of
any duties inconsistent with the Service Provider’s position (including status
or reporting requirements), authority, or material responsibilities, or the
removal of the Participant’s authority or material responsibilities, excluding
for this purpose an action not taken in bad faith and which is remedied by the
Company within twenty (20) days after receipt of notice thereof given by the
Service Provider, (iv) a transfer of the Service Provider’s primary workplace by
more than fifty (50) miles from the current workplace, or (v) a material breach
of any term of any employment, consulting or other services agreement, if any,
between the Service Provider and the Company or an Affiliate by the Company
which is not remedied within twenty (20) days after receipt of written notice
thereof given by the Service Provider.

2.23 “Grant Date” means, as determined by the Committee, the latest to occur of
(i) the date on which the Committee approves an Award, (ii) the date on which
the recipient of an Award first becomes eligible to receive an Award under
Section 5, or (iii) such other date as may be specified by the Committee in the
Award Agreement.

2.24 “Grant Price” means the per share exercise price of a Stock Appreciation
Right granted to a Participant under Section 7.

2.25 “Incentive Stock Option” means an Option to purchase shares of Stock
designated as an Incentive Stock Option that is intended to meet the
requirements of Section 422 of the Code.

2.26 “Incumbent Board” means as defined in Section 2.8.

2.27 “Limited Liability Company Operating Agreement” means the Third Amended and
Restated Limited Liability Company Operating Agreement of National CineMedia,
LLC, dated as of February 13, 2007, by and among the members of National
CineMedia LLC, as it may be amended, modified or replaced from time to time.

2.28 “Minimum Statutory Withholding” means as defined in Section 12.

2.29 “National CineMedia, LLC” means National CineMedia, LLC, a Delaware limited
liability company.

2.30 “NCM LLC Substitute Awards” means Awards granted in substitution for
outstanding unit options and restricted units granted to employees of National
CineMedia, LLC, in connection with its reorganization and related transactions
pursuant to the initial public offering of the Company. The terms and conditions
of NCM LLC Substitute Awards shall comply with the requirements for
substitutions of awards made in connection with a corporate transaction or
certain other adjustments that are not treated as modifications under Regulation
§ 1.424-1 and Section 409A of the Code, as applicable.

2.31 “Non-Qualified Stock Option” means any Option other than an Incentive Stock
Option.

2.32 “Option” means an option to purchase one or more shares of Stock at a
stated or formula price for a specified period of time. An Option granted under
the Plan shall be either an Incentive Stock Option or a Non-Qualified Stock
Option.

 

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2.33 “Other Agreement” means as defined in Section 13.

2.34 “Other Stock-Based Award” means an equity-based Award that is granted to a
Participant under Section 10.

2.35 “Outstanding Company Common Stock” means as defined in Section 2.8.

2.36 “Outstanding Company Voting Securities” means as defined in Section 2.8.

2.37 “Parachute Payment” means as defined in Section 13.

2.38 “Participant” means any eligible individual as defined in Section 5 who is
granted an Award under the Plan.

2.39 “Performance Award” means an Award made subject to the achievement of
performance goals granted under Section 9, denominated in shares of Stock
(“Performance Shares”) or units (“Performance Units”), the value of which at the
time it is payable is determined based upon the extent to which the
corresponding performance goals have been achieved.

2.40 “Performance Period” means the period of time during which the performance
goals must be achieved in order to determine the degree of vesting or payout
with respect to an Award, not to exceed ten (10) years. Performance Periods may
be overlapping.

2.41 “Person” means as defined in Section 2.8.

2.42 “Plan” means this National CineMedia, Inc. 2007 Equity Incentive Plan, as
amended from time to time.

2.43 “Purchase Price” means the purchase price for each share of Stock pursuant
to a grant of Restricted Stock.

2.44 “Restricted Stock” means an Award of shares of Stock granted under
Section 8.

2.45 “Restricted Stock Unit” or “RSU” means a bookkeeping entry representing the
equivalent of shares of Stock granted under Section 8.

2.46 “Restriction Period” means the period during which Restricted Stock and
Restricted Stock Units are subject to a substantial risk of forfeiture (based
upon the passage of time, the achievement of performance goals or upon the
occurrence of other events as determined by the Committee, in its discretion),
as provided in Sections 8.3 and 8.4.

2.47 “Securities Act” means the U.S. Securities Act of 1933, as it may be
amended from time to time, or any successor act thereto.

2.48 “Service” means service as a Service Provider to the Company or an
Affiliate. Unless otherwise stated in the applicable Award Agreement, a
Participant’s change in position or duties shall not result in interrupted or
terminated Service, so long as such Participant continues to be a Service
Provider to the Company or an Affiliate. Subject to the preceding sentence,
whether a termination of Service shall have occurred for purposes of the Plan
shall be determined by the Committee, which determination shall be final,
binding and conclusive.

 

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2.49 “Service Provider” means an employee, officer or director of the Company or
an Affiliate, or a consultant or adviser currently providing services to the
Company or an Affiliate.

2.50 “Stock” or “Common Stock” means a share of National CineMedia, Inc., common
stock, $0.01 par value per share.

2.51 “Stock Appreciation Right” or “SAR” means an Award granted under Section 7.

2.52 “Subsidiary” means any “subsidiary corporation” of the Company within the
meaning of Section 424(f) of the Code.

2.53 “Substitute Awards” means Awards (excluding NCM LLC Substitute Awards)
granted in substitution for, or in assumption of, outstanding awards previously
granted by an entity acquired by the Company or a Subsidiary or an Affiliate or
with which the Company or Subsidiary or Affiliate combines. The terms and
conditions of any Substituted Awards shall comply with the requirements for
substitutions or assumptions of awards made in connection with a corporate
transaction or certain other adjustments that are not treated as modifications
under Regulation § 1.424-1 and Section 409A of the Code, as applicable.

 

3. PLAN ADMINISTRATION

3.1 General. The Board shall have such powers and authorities related to the
administration of the Plan as are consistent with the Company’s certificate of
incorporation and bylaws and applicable law. The Board shall have the power and
authority to delegate its responsibilities hereunder to the Committee, which
shall have full power and authority to act in accordance with its charter, and
with respect to the authority of the Board to act hereunder, all references to
the Board shall be deemed to include a reference to the Committee, to the extent
such power or responsibilities have been delegated. Except as otherwise may be
required by applicable law, regulatory requirement or the certificate of
incorporation or the bylaws of the Company, the Board shall have full power and
authority to take all actions and to make all determinations required or
provided for under the Plan, any Award or any Award Agreement, and shall have
full power and authority to take all such other actions and make all such other
determinations not inconsistent with the specific terms and provisions of the
Plan that the Board deems to be necessary or appropriate to the administration
of the Plan, any Award or any Award Agreement. The interpretation and
construction by the Board of any provision of the Plan, any Award or any Award
Agreement shall be final, binding and conclusive.

3.2 Authority of the Committee. The Board from time to time may delegate to one
or more Committees such powers and authorities related to the administration and
implementation of the Plan, as set forth in this Section 3 and in other
applicable provisions, as the Board shall determine. Unless otherwise expressly
determined by the Board, any such action or determination by the Committee shall
be final, binding and conclusive. To the extent permitted by law, the Committee
may delegate its authority under the Plan to a member of the Board or an
executive officer of the Company. Subject to the other terms and conditions of
the Plan, the Committee shall have full and final authority, including but not
limited to:

(a) designate Participants;

(b) determine the type or types of Awards to be made to a Participant;

(c) determine the number of shares of Stock to be subject to an Award;

 

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(d) establish the terms and conditions of each Award (including, but not limited
to, the Exercise Price of any Option, the Grant Price of any Stock Appreciation
Right, the nature and duration of any restriction or condition (or provision for
lapse thereof) relating to the vesting, exercise, transfer, or forfeiture of an
Award or the shares of Stock subject thereto, and any terms or conditions that
may be necessary to qualify Options as Incentive Stock Options);

(e) prescribe the form of each Award Agreement; and

(f) amend, modify, or supplement the terms of any outstanding Award including
the authority to modify Awards to foreign nationals or individuals who are
employed outside the United States to recognize differences in local law, tax
policy, or custom.

Notwithstanding the foregoing, no amendment or modification may be made to an
outstanding Option or Stock Appreciation Right that (i) causes the Option or
Stock Appreciation Right to become subject to Section 409A of the Code,
(ii) reduces the Exercise Price or Grant Price, either by lowering the Exercise
Price or Grant Price or by canceling the outstanding Option or Stock
Appreciation Right and granting a replacement Award in the form of cash, or an
Option or Stock Appreciation Right with a lower Exercise Price or Grant Price,
or (iii) would be treated as a repricing under the rules of the exchange upon
which shares of Stock of the Company trade, without, with respect to item (i),
the Participant’s written prior approval, and with respect to items (ii) and
(iii), without the approval of the stockholders of the Company, provided, that,
appropriate adjustments may be made to outstanding Options and Stock
Appreciation Rights pursuant to Section 14.

As a condition to any Award, the Committee shall have the right, at its
discretion, to require Participants to return to the Company Awards previously
granted under the Plan. The Committee shall have the right, in its discretion,
to make Substitute Awards. Subject to the terms and conditions of the Plan, any
such subsequent Award shall be upon such terms and conditions as are specified
by the Committee at the time the new Award is granted. The Company may retain
the right in an Award Agreement to cause a forfeiture of the gain realized by a
Participant on account of actions taken by the Participant in violation or
breach of or in conflict with any non-competition agreement, any agreement
prohibiting solicitation of employees or clients of the Company or any Affiliate
thereof or any confidentiality obligation with respect to the Company or any
Affiliate thereof or otherwise in competition with the Company or any Affiliate
thereof, to the extent specified in such Award Agreement applicable to the
Participant. Furthermore, the Company may annul an Award if the Participant is
an employee of the Company or an Affiliate thereof and is terminated for Cause
as defined in the applicable Award Agreement or the Plan, as applicable.

3.3 Deferral Arrangement. The Committee may permit or require the deferral of
any Award payment into a deferred compensation arrangement, subject to such
rules and procedures as it may establish in accordance with Section 409A of the
Code, which may include provisions for the payment or crediting of interest or
Dividend Equivalents, including converting such credits into deferred Stock
units.

3.4 No Liability. No member of the Board or of the Committee shall be liable for
any action or determination made in good faith with respect to the Plan, any
Award or any Award Agreement.

3.5 Book Entry. Notwithstanding any other provision of this Plan to the
contrary, the Company may elect to satisfy any requirement under this Plan for
the delivery of stock certificates through the use of book-entry.

 

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4. STOCK SUBJECT TO THE PLAN

4.1 Number of Shares. Subject to adjustment as provided in Section 14, the
maximum number of shares of Stock available for issuance under the Plan shall be
12,876,000 shares (including NCM LLC Substitute Awards). Subject to adjustment
as provided in Section 14, 500,000 shares of Stock available for issuance under
the Plan shall be available for issuance pursuant to Incentive Stock Options.
Such maximum numbers may be increased from time to time by approval of the Board
and by the stockholders of the Company if, in the opinion of counsel for the
Company, stockholder approval is required. Stock issued or to be issued under
the Plan shall be authorized but unissued shares; or, to the extent permitted by
applicable law, issued shares that have been reacquired by the Company.

4.2 Individual Award Limits. Subject to adjustment as provided in Section 14,
the maximum number of shares of Stock that may be covered by an Award granted
under the Plan (other than NCM LLC Substitute Awards and other Substitute
Awards) to a single Participant in any calendar year shall not exceed 500,000
shares. The maximum dollar amount that may be awarded (other than NCM LLC
Substitute Awards and other Substitute Awards) to a single Participant in any
calendar year shall not exceed $5,000,000.

4.3 Share Counting. The Committee may adopt reasonable counting procedures to
ensure appropriate counting, avoid double counting (as, for example, in the case
of Substitute Awards or tandem Awards) and make adjustments in accordance with
Section 14. If the Exercise Price of any Option granted under the Plan, or if
pursuant to Section 12 the tax withholding obligation of any Participant with
respect to an Option or other Award, is satisfied by tendering shares of Stock
to the Company (either by actual delivery or by attestation) or by withholding
shares of Stock, the number of shares of Stock tendered or withheld shall be
deemed delivered for purposes of determining the maximum number of shares of
Stock available for delivery under the Plan. In other words, these shares will
not be available for reissuance under the Plan. To the extent that an Award
under the Plan is canceled, expired, forfeited, settled by issuance of fewer
shares than the number underlying the Award, or otherwise terminated without
delivery of shares to the Participant, the shares of Stock retained or returned
to the Company will be available under the Plan.

4.4 Substitute Awards. In the case of other Substitute Awards (excluding NCM LLC
Substitute Awards), the shares of Stock subject to the Substitute Award shall
not be counted against the number of shares reserved under the Plan.

 

5. ELIGIBILITY AND PARTICIPATION

Individuals eligible to participate in this Plan include all Service Providers
of the Company, or any Affiliate; provided, however, to the extent required
under Section 409A of the Code, an Affiliate of the Company shall include only
an entity in which the Company possesses at least twenty percent (20%) of the
total combined voting power of the entity’s outstanding voting securities or
such other threshold ownership percentage permitted under Section 409A of the
Code. Subject to the provisions of this Plan, the Committee may, from time to
time, select from all eligible individuals, those individuals to whom Awards
shall be granted. An eligible person may receive more than one Award, subject to
such restrictions as are provided herein.

 

6. STOCK OPTIONS

6.1 Grant of Options. Subject to the provisions of this Plan, Options may be
granted to Participants in such number, and upon such terms, and at any time and
from time to time as shall be determined by the Committee, it its sole
discretion; provided that Incentive Stock Options may be granted only to
eligible Employees of the Company or of any parent corporation or subsidiary
corporation (as permitted by Section 422 of the Code).

 

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6.2 Award Agreement. Each Option granted under the Plan shall be evidenced by an
Award Agreement that shall specify the Exercise Price, the number of shares of
Stock covered by the Option, the maximum duration of the Option, the conditions
upon which an Option shall become vested and exercisable and such other
provisions as the Committee shall determine, consistent with the terms of the
Plan. The Award Agreement shall specify whether the Option is intended to be an
Incentive Stock Option or a Non-Qualified Stock Option.

(a) Exercise Price. The Exercise Price for each Option shall be as determined by
the Committee and shall be specified in the Award Agreement. The Exercise Price
shall be: (i) not less than one hundred percent (100%) of the Fair Market Value
of a share of Stock on the Grant Date, (ii) set at a premium to the Fair Market
Value of a share of Stock on the Grant Date, or (iii) indexed to the Fair Market
Value of a share of Stock on the Grant Date, with the index determined by the
Committee, in its discretion; provided, however, with respect to NCM LLC
Substitute Awards and other Substitute Awards, the Exercise Price is not
required to be at least equal to the Fair Market Value on the Grant Date. In no
case shall the Exercise Price of any Option be less than the par value of a
share of Stock.

(b) Number of Shares. Each Award Agreement shall state that it covers a
specified number of shares of Stock, as determined by the Committee.

(c) Term. Each Option shall terminate as set forth in the Award Agreement and
all rights to purchase shares of Stock shall expire at such time as the
Committee shall determine at the time of grant; provided, however, no Option
shall be exercisable later than the tenth (10th) anniversary of the Grant Date,
except as may be required with respect to NCM LLC Substitute Awards or other
Substitute Awards.

(d) Restrictions on Exercise. The Award Agreement shall set forth any
installment or other restrictions on exercise of the Option during the term of
the Option. Each Option shall become exercisable and shall vest over such period
of time, or upon such events, as determined by the Committee.

6.3 Exercise of Option.

(a) Manner of Exercise. An Option granted hereunder shall be exercised, in whole
or in part, by providing written or electronic notice, on a form provided by the
Company, to the Committee (or an officer designated by the Committee),
specifying the number of shares of Stock to be purchased and accompanied by full
payment of the Exercise Price for the shares and satisfaction of any tax
withholding requirements.

(b) Payment. A condition to the issuance or other delivery of shares of Stock as
to which an Option shall be exercised shall be the payment of the Exercise Price
and satisfaction of any tax withholding requirements. The Exercise Price of an
Option shall be payable to the Company in full, in any method permitted under
the Award Agreement, including: (i) in cash or in cash equivalents acceptable to
the Company; (ii) by tendering (either by actual delivery or by attestation)
unrestricted shares of Stock already owned by the Participant (for at least six
(6) months or such other period as may be required by the Committee) on the date
of surrender to the extent the shares of Stock have a Fair Market Value on the
date of surrender equal to the aggregate Exercise Price of the shares as to
which such Option shall be exercised, provided that, in the case of an Incentive
Stock Option, the right to make payment in the form of already owned shares of
Stock may be authorized only at the time of grant, (iii) any other method
approved or accepted by the Committee in its sole discretion, including, but not

 

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limited to a cashless (broker-assisted) exercise, or (iv) any combination of the
foregoing. Unless otherwise determined by the Committee, all payments under all
of the methods indicated above shall be paid in United States dollars.

(c) Delivery of Shares. Promptly after the exercise of an Option by a
Participant and the payment in full of the Exercise Price, such Participant
shall be entitled to the issuance of certificates evidencing such Participant’s
ownership of the shares of Stock purchased upon exercise of the Option.
Notwithstanding any other provision of this Plan to the contrary, the Company
may elect to satisfy any requirement under this Plan for the delivery of
certificates through the use of book-entry.

6.4 Termination of Service. Each Award Agreement shall set forth the extent to
which the Participant shall have the right to exercise the Option following
termination of the Participant’s Service. Such provisions shall be determined in
the sole discretion of the Committee, need not be uniform among all Options
issued pursuant to the Plan, and may reflect distinctions based on the reasons
for termination of Service.

6.5 Limitations on Incentive Stock Options.

(a) Initial Exercise. The aggregate Fair Market Value of the shares of Stock
with respect to which Incentive Stock Options are exercisable for the first time
by a Participant in any calendar year, under the Plan or otherwise, shall not
exceed $100,000. For this purpose, the Fair Market Value of the shares of Stock
shall be determined as of the Grant Date and each Incentive Stock Option shall
be taken into account in the order granted.

(b) Ten Percent Stockholders. An Incentive Stock Option granted to a Participant
who is the holder of record of more than ten percent (10%) of the combined
voting power of all classes of stock of the Company shall have an Exercise Price
at least equal to one hundred and ten percent (110%) of the Fair Market Value of
a share of Stock on the Grant Date of the Option and the term of the Option
shall not exceed five (5) years.

(c) Notification of Disqualifying Disposition. If any Participant shall make any
disposition of shares of Stock acquired pursuant to the exercise of an Incentive
Stock Option under the circumstances described in Section 421(b) of the Code
(relating to certain disqualifying dispositions), the Participant shall notify
the Company of such disposition within ten (10) days thereof.

6.6 Transferability. Except as provided in Section 6.7, during the lifetime of a
Participant, only the Participant (or, in the event of legal incapacity or
incompetency, the Participant’s guardian or legal representative) may exercise
an Option. Except as provided in Section 6.7, no Option shall be assignable or
transferable by the Participant to whom it is granted, other than by will or the
laws of descent and distribution.

6.7 Family Transfers. If authorized in the applicable Award Agreement, a
Participant may transfer, not for value, all or part of an Option to any Family
Member. For the purpose of this Section 6.7, a “not for value” transfer is a
transfer which is (i) a gift, (ii) a transfer under a domestic relations order
in settlement of marital property rights; or (iii) unless applicable law does
not permit such transfers, a transfer to an entity in which more than fifty
percent (50%) of the voting interests are owned by Family Members (or the
Participant) in exchange for an interest in that entity. Following a transfer
under this Section 6.7, any such Option shall continue to be subject to the same
terms and conditions as were applicable immediately prior to transfer.
Subsequent transfers of transferred Options are prohibited except to Family
Members of the original Participant in accordance with this Section 6.7 or by
will or the laws of descent and distribution. The events of termination of
Service under an Option shall continue to be applied with respect to the
original Participant, following which the Option shall be exercisable by the
transferee only to the extent, and for the periods specified in the applicable
Award Agreement.

 

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6.8 Rights of Holders of Options. Unless otherwise stated in the applicable
Award Agreement, an individual holding or exercising an Option shall have none
of the rights of a stockholder of the Company (for example, the right to receive
cash or dividend payments or distributions attributable to the subject shares of
Stock or to direct the voting of the shares of Stock) until the shares of Stock
covered thereby are fully paid and issued to such individual. Except as provided
in Section 14 hereof, no adjustment shall be made for dividends, distributions
or other rights for which the record date is prior to the date of such issuance.

 

7. STOCK APPRECIATION RIGHTS

7.1 Grant of Stock Appreciation Rights. Subject to the provisions of this Plan,
Stock Appreciation Rights may be granted to Participants at any time and from
time to time as shall be determined by the Committee. The Committee may grant
freestanding Stock Appreciation Rights, Stock Appreciation Rights that are
granted in tandem with an Option, or any combination thereof.

7.2 Award Agreement. Each Stock Appreciation Right shall be evidenced by an
Award Agreement that shall specify the Grant Price, the number of shares of
Stock covered by the Stock Appreciation Right, the maximum duration of the Stock
Appreciation Right, the conditions upon which the Stock Appreciation Right shall
become vested and exercisable and such other provisions as the Committee shall
determine, consistent with the terms of the Plan.

(a) Grant Price. The Grant Price for each Stock Appreciation Right shall be
determined by the Committee and shall be specified in the Award Agreement. Other
than with respect to Substitute Awards, the Grant Price shall not be less than
one hundred percent (100%) of the Fair Market Value of a share of Stock on the
Grant Date of the Stock Appreciation Right.

(b) Number of Shares. Each Award Agreement shall state that it covers a
specified number of shares of Stock, as determined by the Committee.

(c) Term. Each Stock Appreciation Right shall terminate and all rights with
respect to the Stock Appreciation Right shall expire at such time as the
Committee shall determine at the time of grant; provided, however, no Stock
Appreciation Rights shall be exercisable later than the tenth (10th) anniversary
of the Grant Date.

(d) Restrictions on Exercise. The Award Agreement shall set forth any
installment or other restrictions on exercise of the Stock Appreciation Right
during its term. Each Stock Appreciation Right shall become exercisable and
shall vest over such period of time, or upon such events, as determined by the
Committee (including based on achievement of performance goals or future service
requirements).

7.3 Exercise of Stock Appreciation Right. A Participant desiring to exercise a
Stock Appreciation Right shall give written or electronic notice, on a form
provided by the Company, of such exercise to the Company with the information
the Company deems reasonably necessary to exercise the Stock Appreciation Right.
If a Stock Appreciation Right is issued in tandem with an Option, except as may
otherwise be provided by the Committee, the Stock Appreciation Right shall be
exercisable during the period that its related Option is exercisable. Upon the
exercise of a Stock Appreciation Right, a Participant shall be entitled to
receive payment from the Company in an amount determined by multiplying:

(a) The excess of the Fair Market Value of a share of Stock on the date of
exercise over the Grant Price; by

(b) The number of shares of Stock with respect to which the Stock Appreciation
Right is exercised.

 

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At the discretion of the Committee, the payment upon exercise may be in cash,
shares of Stock or any combination thereof, or in any other manner approved by
the Committee in its sole discretion. The Committee’s determination as to the
form of settlement shall be set forth in the Award Agreement.

7.4 Effect of Exercise. If a Stock Appreciation Right is issued in tandem with
an Option, the exercise of the Stock Appreciation Right or the related Option
will result in an equal reduction in the number of corresponding shares of Stock
subject to the Option or Stock Appreciation Right that were granted in tandem
with such Stock Appreciation Right and Option.

7.5 Termination of Service. Upon the termination of Service of a Participant,
any Stock Appreciation Rights then held by such Participant shall be exercisable
within the time periods, and upon the same conditions with respect to the
reasons for termination of Service, as are specified in Section 6.4 with respect
to Options.

7.6 Transferability. A Stock Appreciation Right shall only be transferable upon
the same terms and conditions with respect to transferability, as are specified
in Sections 6.6 and 6.7 with respect to Options.

 

8. RESTRICTED STOCK AND RESTRICTED STOCK UNITS

8.1 Grant of Restricted Stock or Restricted Stock Units. Subject to the
provisions of this Plan, the Committee at any time and from time to time, may
grant shares of Restricted Stock or Restricted Stock Units to Participants in
such amounts as the Committee shall determine.

8.2 Award Agreement. Each grant of Restricted Stock or Restricted Stock Units
shall be evidenced by an Award Agreement that shall specify the Restriction
Period, the number of shares of Restricted Stock or the number of Restricted
Stock Units granted and such other provisions as the Committee shall determine.

8.3 Restrictions on Transfer. Except as provided in this Plan or an Award
Agreement, the shares of Restricted Stock and Restricted Stock Units may not be
sold, transferred, pledged, assigned or otherwise alienated or hypothecated
until the end of the Restriction Period established by the Committee and
specified in the Award Agreement (and in the case of Restricted Stock Units
until the date of delivery or other payment), or upon earlier satisfaction or
any other conditions, as specified by the Committee, in its sole discretion. All
rights with respect to the Restricted Stock or Restricted Stock Units granted to
a Participant shall be available during his or her lifetime only to such
Participant, except as otherwise provided in an Award Agreement or at any time
by the Committee.

8.4 Forfeiture; Other Restrictions. The Committee shall impose such other
conditions and restrictions on any shares of Restricted Stock or Restricted
Stock Units as it may deem advisable including a requirement that the
Participant pay a specified amount to purchase each share of Restricted Stock,
restrictions based upon the achievement of specific performance goals,
time-based restrictions on vesting following the attainment of the performance
goals, time-based restrictions or restrictions under applicable laws or under
the requirements of any stock exchange or market upon which shares of Stock are
then listed or traded, or holding requirements or sale restrictions placed on
the shares of Stock by the Company upon vesting of such Restricted Stock or
Restricted Stock Units.

 

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8.5 Restricted Stock Units. A holder of Restricted Stock Units shall have no
rights other than those of a general creditor of the Company. Restricted Stock
Units represent an unfunded and unsecured obligation of the Company, subject to
the terms and conditions of the applicable Award Agreement. Restricted Stock
Units may be settled in cash or Stock, as determined by the Committee and set
forth in the Award Agreement.

8.6 Termination of Service. Unless otherwise provided by the Committee in the
applicable Award Agreement, upon the termination of a Participant’s Service with
the Company or an Affiliate, any shares of Restricted Stock or Restricted Stock
Units held by such Participant that have not vested, or with respect to which
all applicable restrictions and conditions have not lapsed, shall immediately be
deemed forfeited, and the Participant shall have no further rights with respect
to such Awards, including but not limited to any right to vote Restricted Stock
or any right to receive dividends with respect to Restricted Stock or Restricted
Stock Units.

8.7 Stockholder Privileges. Unless otherwise determined by the Committee and set
forth in the Award Agreement:

(a) A Participant holding shares of Restricted Stock shall have voting rights
with respect to the shares during the Restriction Period. The Committee may
provide in an Award Agreement that the Participant shall be entitled to receive
Dividend Equivalents during the Restriction Period in accordance with
Section 11.

(b) A Participant holding Restricted Stock Units shall have no rights of a
stockholder of the Company with respect to the Restricted Stock Units. The
Committee may provide in an Award Agreement that the holder of such Restricted
Stock Units shall be entitled to receive Dividend Equivalents in accordance with
Section 11.

8.8 Purchase of Restricted Stock. The Participant shall be required, to the
extent required by applicable law, to purchase the shares of Restricted Stock
from the Company at a Purchase Price equal to the greater of (i) the aggregate
par value of the shares of Stock represented by such Restricted Stock or
(ii) the Purchase Price, if any, specified in the Award Agreement. The Purchase
Price shall be payable in cash or in cash equivalents acceptable to the Company.
In addition, to the extent the Award Agreement so provides, payment of the
Purchase Price may be made in any other form that is consistent with applicable
laws, regulations and rules, or, in the discretion of the Committee, in
consideration for past Services rendered to the Company or an Affiliate. Upon
the expiration or termination of the Restriction Period and the satisfaction of
any other conditions prescribed by the Committee, having properly paid the
Purchase Price, the restrictions applicable to Restricted Stock shall lapse,
and, unless otherwise provided in the Award Agreement, a certificate for such
shares of Stock shall be delivered, free of all such restrictions, to the
Participant or the Participant’s beneficiary or estate, as the case may be.

 

9. PERFORMANCE AWARDS

9.1 Grant of Performance Awards. Subject to the provisions of this Plan, the
Committee, at any time and from time to time, may grant Performance Shares or
Performance Units to Participants in such amounts and upon such terms as the
Committee shall determine.

 

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9.2 Value of Performance Shares or Units. Each Performance Share shall have an
initial value equal to the Fair Market Value of a Share on the Grant Date. Each
Performance Unit shall have an initial value that is established by the
Committee at the time of grant.

(a) General. The Committee shall set performance goals in its discretion which,
depending upon the extent to which the performance goals are achieved, will
determine the number or value of Performance Shares or Performance Units that
will be paid to the Participant.

(b) Covered Employees. The Committee may grant one or more Awards to
Participants who are, or may become, “covered employees” designed to qualify as
performance-based compensation under Section 162(m) of the Code with the grant,
vesting or payout of such Awards contingent on the achievement of
pre-established performance goals. For this purpose a “covered employee” is
determined within the meaning of Section 162(m) of the Code.

(i) For such Awards, the Committee shall establish, in writing, (a) the
“Performance Goals” (as defined in Section 9.2(b)(iii) below) and target levels
that must be attained to be eligible for the grant, vesting or payout of the
Award, and (b) the formula, matrix or other objective standard to be used in
determining the amount earned by the Participant.

(ii) The maximum Award payable for this purpose to any Participant who is
determined to be a “covered employee” for purposes of Section 162(m) of the Code
with respect to any calendar year shall not exceed 500,000 shares for Awards
payable in shares or $5,000,000 for Awards payable in cash.

(iii) The “Performance Goals” applicable to each such Participant shall provide
for a targeted level or levels of achievement using one or more of the following
measures as to any Performance Period: (a) cash flow, (b) cost initiatives,
(c) debt ratios and other measures of credit quality or liquidity, (d) earnings,
(e) earnings per share, (f) economic profit, (g) economic value added,
(h) enterprise value, (i) free cash flow, (j) margins (gross or net), (k) market
share, (l) market value, (m) net income, (n) operating income, (o) return on
assets, (p) return on capital, (q) return on equity, (r) return on investment,
(s) revenue (gross or net), (t) stock price, (u) strategic objectives, and
(v) total shareholder return.

(iv) Any Performance Goal used may be established and measured (a) in absolute
terms, (b) in combination with another Performance Goal or Goals (for example,
as a ratio or matrix), (c) in relative terms (for example, as compared to
results for other periods, as compared to another company or companies, or an
index or indices), (d) on a per-share or per-capita basis, (e) against the
performance of the Company as a whole or a specific business unit(s), business
segment(s) or product(s) of the Company, (f) on a pre-tax or after-tax basis,
and/or (g) on a GAAP (generally accepted accounting principles) or non-GAAP
basis. Prior to the date the Performance Goals are determined for the
Performance Period, the Committee will determine whether the attainment of the
Performance Goal shall be measured by adjusting the evaluation of the attainment
of the Performance Goal to exclude (1) any extraordinary or non-recurring items
as described in the applicable accounting rules, (2) the effect of any changes
in accounting principles affecting the reported results of the Company or a
business unit, (3) mergers and acquisitions, or (4) any other adjustment
consistent with the requirements of Section 162(m) of the Code.

 

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9.3 Achievement of Performance Goals.

(a) General. Subject to the provisions of this Plan, after the applicable
Performance Period has been completed, the Committee shall determine the number
of Performance Shares or value of Performance Units the Participant has earned
over the Performance Period based upon the extent to which the performance goals
have been achieved.

(b) Covered Employees. Following the end of each Performance Period, the
Committee shall certify in writing prior to the grant, vesting or payout of an
Award granted pursuant to Section 9.2(b), the extent to which the Performance
Goals for the Performance Period and any other material terms were satisfied for
each such Participant. The amount earned for a Participant shall not exceed the
maximum Award amount set forth in Section 9.2(b). The Committee has the
discretion to reduce or eliminate (but not increase) the amount of the Award
otherwise payable.

9.4 Payment of Performance Awards. The time and form of payment of Performance
Awards earned by the Participant shall be as determined by the Committee and as
set forth in the Award Agreement. Any payment of shares of Stock may be granted
subject to any restrictions deemed appropriate by the Committee. The Committee
may provide in an Award Agreement for the payment of Dividend Equivalents in
accordance with Section 11.

9.5 Termination of Service. Each Award Agreement shall set forth the extent to
which the Participant shall have the right to retain Performance Shares or
Performance Units following termination of Service. Such provisions shall be
determined in the sole discretion of the Committee and need not be uniform among
all Awards of Performance Shares or Performance Units and may reflect
distinctions based upon the reason for termination.

9.6 Transferability. Except as otherwise provided in an Award Agreement,
Performance Awards may not be sold, transferred, pledged, assigned or otherwise
alienated or hypothecated, other than by the laws of descent and distribution.

 

10. OTHER STOCK-BASED AWARDS

From time to time during the duration of this Plan, the Committee may, in its
sole discretion, adopt one or more incentive compensation arrangements for
Participants pursuant to which the Participants may acquire shares of Stock
under the Plan, whether by purchase, outright grant, or otherwise. Any such
arrangements shall be subject to the general provisions of this Plan and all
shares of Stock issued pursuant to such arrangements shall be issued under this
Plan.

 

11. DIVIDEND EQUIVALENTS

Subject to the terms of the Plan and any applicable Award Agreement, a
Participant shall, if so determined by the Committee, be entitled to receive,
currently, or on a deferred basis, dividends or Dividend Equivalents, with
respect to the shares of Stock covered by the Award. The Committee may provide
that any dividends paid on shares of Stock subject to an Award must be
reinvested in additional shares of Stock, which may or may not be subject to the
same vesting conditions and restrictions applicable to the Award.
Notwithstanding the award of Dividend Equivalents or dividends, a Participant
shall not be entitled to receive a special or extraordinary dividend or
distribution unless the Committee shall have expressly authorized such receipt.
All distributions, if any, received by a Participant with respect to an Award as
a result of any split, Stock dividend, combination of shares of Stock, or other
similar transaction shall be subject to the restrictions applicable to the
original Award. Notwithstanding the foregoing, with respect to Restricted Stock
granted as NCM LLC Substitute Awards and Restricted

 

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Stock granted to directors immediately upon completion of the Company’s initial
public offering, during the Restriction Period, such Participants shall be
entitled to receive regular cash dividends declared and paid with respect to the
shares of Restricted Stock.

 

12. TAX WITHHOLDING

The Company or any Affiliate, as the case may be, shall have the right to deduct
from payments of any kind otherwise due to a Participant any federal, state, or
local taxes, domestic or foreign, of any kind required by law with respect to
the vesting of or other lapse of restrictions applicable to Awards or upon the
issuance of any shares of Stock or payment of any kind upon the exercise of any
Options or Stock Appreciation Rights. At the time of such vesting, lapse,
payment, or exercise, the Participant shall pay to the Company or Affiliate, as
the case may be, any amount that the Company or Affiliate may reasonably
determine to be necessary to satisfy such withholding obligation.

Subject to the prior approval of the Company or the Affiliate, which may be
withheld by the Company or the Affiliate, as the case may be, in its sole
discretion, the Participant may elect to have shares of Stock withheld or to
deliver shares to satisfy the minimum statutory withholding rates for federal,
state and local income taxes and employment taxes that are applicable to
supplemental taxable income (“Minimum Statutory Withholding”) obligations. The
Participant may elect to satisfy Minimum Statutory Withholding obligations, in
whole or in part, (i) by causing the Company or the Affiliate to withhold shares
of Stock otherwise issuable to the Participant or (ii) by delivering to the
Company or the Affiliate shares of Stock already owned by the Participant (for
any minimum period required by the Committee). The shares of Stock so delivered
or withheld shall have an aggregate Fair Market Value not in excess of such
withholding obligations. The Fair Market Value of the shares of Stock used to
satisfy such withholding obligation shall be determined by the Committee as of
the date that the amount of tax to be withheld is to be determined. A
Participant who has made an election pursuant to this Section 12 may satisfy his
or her withholding obligation only with shares of Stock that are not subject to
any repurchase, forfeiture, unfulfilled vesting, or other similar requirements.

 

13. PARACHUTE LIMITATIONS

Notwithstanding any other provision of this Plan or of any other agreement,
contract, or understanding heretofore or hereafter entered into by a Participant
with the Company or any Affiliate, except an agreement, contract, or
understanding hereafter entered into that expressly modifies or excludes
application of this Section 13 (an “Other Agreement”), and notwithstanding any
formal or informal plan or other arrangement for the direct or indirect
provision of compensation to the Participant (including groups or classes of
participants or beneficiaries of which the Participant is a member), whether or
not such compensation is deferred, is in cash, or is in the form of a benefit to
or for the Participant (a “Benefit Arrangement”), if the Participant is a
“disqualified individual,” as defined in Section 280G(c) of the Code, any Awards
held by that Participant and any right to receive any payment or other benefit
under this Plan shall not become exercisable or vested (i) to the extent that
such right to exercise, vesting, payment, or benefit, taking into account all
other rights, payments, or benefits to or for the Participant under this Plan,
all Other Agreements, and all Benefit Arrangements, would cause any payment or
benefit to the Participant under this Plan to be considered a “parachute
payment” within the meaning of Section 280G(b)(2) of the Code as then in effect
(a “Parachute Payment”) and (ii) if, as a result of receiving a Parachute
Payment, the aggregate after-tax amounts received by the Participant from the
Company under this Plan, all Other Agreements, and all Benefit Arrangements
would be less than the maximum after-tax amount that could be received by the
Participant without causing any such payment or benefit to be considered a
Parachute Payment. In the event that the receipt of any such right to exercise,
vesting, payment, or benefit under this Plan, in conjunction with all other
rights, payments or benefits to or for the Participant under any Other Agreement
or any Benefit Arrangement would cause the Participant

 

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to be considered to have received a Parachute Payment under this Plan that would
have the effect of decreasing the after-tax amount received by the Participant
as described in clause (ii) of the preceding sentence, then the amount payable
to the Participant under any Benefit Arrangement in cash that constitutes a
Parachute Payment shall first be reduced to the extent necessary, or eliminated,
so as to avoid having the payment or benefit to the Participant under this Plan
be deemed to be a Parachute Payment. Cash payable under any such Benefit
Arrangement shall be reduced, or eliminated, in the order that such payments
would be made to the Participant under the provisions of such Benefit
Arrangement, with the payments to be made to the Participant at the earliest
date reduced first and any required additional reductions made from cash
payments with respect to any such Benefit Arrangement reduced in order of time
of payment, so that the Benefit Arrangement payable in cash that would be paid
furthest in time from the date of the event triggering the payments would be
reduced or eliminated last.

 

14. EFFECT OF CHANGES IN CAPITALIZATION

14.1 Changes in Stock. The number of shares of Stock for which Awards may be
made under the Plan shall be proportionately increased or decreased for any
increase or decrease in the number of shares of Stock on account of any
recapitalization, reclassification, split, reverse split, combination, exchange,
dividend or other distribution payable in shares of Stock, or for any other
increase or decrease in such shares of Stock effected without receipt of
consideration by the Company occurring after the Effective Date (any such event
hereafter referred to as a “Corporate Event”). In addition, subject to the
exception set forth in the second sentence of Section 14.4, the number and kind
of shares for which Awards are outstanding shall be proportionately increased or
decreased for any increase or decrease in the number of shares of Stock on
account of any Corporate Event. Any such adjustment in outstanding Options or
Stock Appreciation Rights shall not increase the aggregate Exercise Price or
Grant Price payable with respect to shares that are subject to the unexercised
portion of an outstanding Option or Stock Appreciation Right, as applicable, and
the adjustment shall comply with the requirements under Section 409A of the
Code. The conversion of any convertible securities of the Company shall not be
treated as an increase in shares effected without receipt of consideration.
Notwithstanding the foregoing, in the event of any distribution to the Company’s
stockholders of securities of any other entity or other assets (including an
extraordinary cash dividend but excluding a non-extraordinary dividend payable
in cash or in stock of the Company) without receipt of consideration by the
Company, the Company shall proportionately adjust (i) the number and kind of
shares subject to outstanding Awards and/or (ii) the Exercise Price per share of
outstanding Options and the Grant Price of outstanding Stock Appreciation Rights
to reflect such distribution. Notwithstanding the foregoing, upon the occurrence
of any event or transaction contemplated in this Section 14.1, any changes
contemplated herein shall be modified to the minimum extent necessary, in the
sole discretion of the Committee, to avoid any tax that may otherwise become due
under Section 409A of the Code.

14.2 Change of Control. Subject to the exception set forth in the second
sentence of Section 14.4, if, within three months prior to or one year after the
consummation of a Change of Control, a Participant’s Service is terminated by
either the Company, an Affiliate or a successor in interest to the Company or an
Affiliate without Cause or by the Participant for Good Reason, then all of the
Participant’s Options and Stock Appreciation Rights outstanding hereunder shall
become immediately exercisable and all outstanding other Awards shall be deemed
to have vested, with all restrictions and conditions applicable to such Awards
deemed lapsed.

Provision may be made in writing in connection with a Change of Control for the
assumption or continuation of the Awards theretofore granted, or for the
substitution for such Awards for new options, restricted stock or other equity
awards relating to the stock or units of a successor entity, or a parent or
subsidiary thereof, with appropriate adjustments as to the number of shares or
units (disregarding any consideration that is not common stock) and option
prices, in which event the Awards theretofore granted shall continue in the
manner and under the terms so provided.

 

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14.3 Reorganization in Which the Company Is the Surviving Entity and in Which No
Change of Control Occurs. Subject to the exception set forth in the second
sentence of Section 14.4, if the Company shall be the surviving entity in any
reorganization, merger, or consolidation of the Company with one or more other
entities and in which no Change of Control occurs, any Award theretofore made
pursuant to the Plan shall pertain to and apply solely to the securities to
which a holder of the number of securities subject to such Award would have been
entitled immediately following such reorganization, merger, or consolidation,
and, in the case of Options and Stock Appreciation Rights, with a corresponding
proportionate adjustment of the Exercise Price or Grant Price per share so that
the aggregate Exercise Price or Grant Price thereafter shall be the same as the
aggregate Exercise Price or Grant Price of the shares of Stock remaining subject
to the Option or Stock Appreciation Right immediately prior to such
reorganization, merger, or consolidation. Subject to any contrary language in an
Award Agreement evidencing any other Award, any restrictions applicable to such
Award shall apply as well to any replacement shares of Stock received by the
Participant as a result of the reorganization, merger or consolidation.
Notwithstanding the foregoing, upon the occurrence of any event or transaction
contemplated in this Section 14.3, any changes contemplated herein shall be
modified to the minimum extent necessary, in the sole discretion of the
Committee, to avoid any tax that may otherwise become due under Section 409A of
the Code.

14.4 Adjustment. Adjustments under Section 14 related to shares of Stock or
securities of the Company shall be made by the Committee, whose determination in
that respect shall be final, binding and conclusive. The Committee may provide
in the Award Agreements at the time of Award, or any time thereafter with the
consent of the Participant, for different provisions to apply to an Award in
place of those described in Sections 14.1, 14.2 and 14.3. Notwithstanding the
foregoing, any different provisions or changes to provisions contemplated herein
shall be modified to the minimum extent necessary, in the sole discretion of the
Committee, to avoid any tax that may otherwise become due under Section 409A of
the Code.

14.5 No Limitations on the Company. The making of Awards pursuant to the Plan
shall not affect or limit in any way the right or power of the Company to make
adjustments, reclassifications, reorganizations, or changes of its capital or
business structure or to merge, consolidate, dissolve, or liquidate, or to sell
or transfer all or any part of its business or assets.

 

15. REQUIREMENTS OF LAW

15.1 General. The Company shall not be required to issue or sell any shares of
Stock under any Award if the issuance or sale of such shares would constitute a
violation by the Participant, any other individual exercising an Option or Stock
Appreciation Right, or the Company of any provisions of any law or regulation of
any governmental authority, including without limitation any federal or state
securities laws or regulations. If at any time the Company shall determine, in
its discretion, that the listing, registration or qualification of any shares
subject to an Award upon any securities exchange or under any governmental
regulatory body is necessary or desirable as a condition of, or in connection
with, the issuance or purchase of shares of Stock hereunder, no shares of Stock
may be issued or sold to the Participant or any other individual exercising an
Option or Stock Appreciation Right pursuant to such Award unless such listing,
registration, qualification, consent or approval shall have been effected or
obtained free of any conditions not acceptable to the Company, and any delay
caused thereby shall in no way affect the date of termination of the Award.
Specifically, in connection with the Securities Act, upon the exercise of any
Option or the delivery of any shares of Stock underlying an Award, unless a
registration statement under the Securities Act is in effect with respect to the
shares of Stock covered by

 

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such Award, the Company shall not be required to issue or sell such shares of
Stock unless the Committee has received evidence satisfactory to it that the
Participant or any other individual exercising an Option may acquire such shares
of Stock pursuant to an exemption from registration under the Securities Act.
Any determination in this connection by the Committee shall be final, binding,
and conclusive. The Company may, but shall in no event be obligated to, register
any securities covered hereby pursuant to the Securities Act. The Company shall
not be obligated to take any affirmative action in order to cause the exercise
of an Option or the issuance or sale of shares of Stock pursuant to the Plan to
comply with any law or regulation of any governmental authority. As to any
jurisdiction that expressly imposes the requirement that an Option shall not be
exercisable until the shares of Stock covered by such Option are registered or
are exempt from registration, the exercise of such Option (under circumstances
in which the laws of such jurisdiction apply) shall be deemed conditioned upon
the effectiveness of such registration or the availability of such an exemption.

15.2 Rule 16b-3. During any time when the Company has a class of equity security
registered under Section 12 of the Exchange Act, it is the intent of the Company
that Awards pursuant to the Plan and the exercise of Options granted hereunder
will qualify for the exemption provided by Rule 16b-3 under the Exchange Act. To
the extent that any provision of the Plan or action by the Committee does not
comply with the requirements of Rule 16b-3, it shall be deemed inoperative to
the extent permitted by law and deemed advisable by the Committee, and shall not
affect the validity of the Plan. In the event that Rule 16b-3 is revised or
replaced, the Committee may exercise its discretion to modify this Plan in any
respect necessary to satisfy the requirements of, or to take advantage of any
features of, the revised exemption or its replacement.

 

16. GENERAL PROVISIONS

16.1 Disclaimer of Rights. No provision in the Plan, in any Award or in any
Award Agreement shall be construed to confer upon any individual the right to
remain in the employ or service of the Company or any Affiliate, or to interfere
in any way with any contractual or other right or authority of the Company
either to increase or decrease the compensation or other payments to any
individual at any time, or to terminate any employment or other relationship
between any individual and the Company or any Affiliate. The obligation of the
Company to pay any benefits pursuant to this Plan shall be interpreted as a
contractual obligation to pay only those amounts described herein, in the manner
and under the conditions prescribed herein. The Plan shall in no way be
interpreted to require the Company to transfer any amounts to a third party
trustee or otherwise hold any amounts in trust or escrow for payment to any
participant or beneficiary under the terms of the Plan.

16.2 Nontransferability of Awards. Except as provided in Sections 6.6 and 7.6 or
otherwise at the time of grant or thereafter, no right or interest of any
Participant in an Award granted pursuant to the Plan, shall be assignable or
transferable during the lifetime of the Participant, either voluntarily or
involuntarily, or subjected to any lien, directly or indirectly, by operation of
law, or otherwise, including execution, levy, garnishment, attachment, pledge or
bankruptcy. In the event of a Participant’s death, a Participant’s rights and
interests in Awards shall only be transferable by will or the laws of descent
and distribution to the extent provided under this Plan, and payment of any
amounts due thereunder shall be made to, and exercise of any Option or Stock
Appreciation Right may be made by, the Participant’s legal representatives,
heirs or legatees. If in the opinion of the Committee a person entitled to
payments or to exercise rights with respect to the Plan is unable to care for
his or her affairs because of mental condition, physical condition or age,
payment due such person may be made to, and such rights shall be exercised by,
such person’s guardian, conservator or other legal personal representative upon
furnishing the Committee with evidence satisfactory to the Committee of such
status.

 

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16.3 Changes in Accounting or Tax Rules. Except as provided otherwise at the
time an Award is granted, notwithstanding any other provision of the Plan to the
contrary, if, during the term of the Plan, any changes in the financial or tax
accounting rules applicable to any Award shall occur which, in the sole judgment
of the Committee, may have a material adverse effect on the reported earnings,
assets or liabilities of the Company, the Committee shall have the right and
power to modify as necessary, any then outstanding and unexercised Options,
Stock Appreciation Rights and other outstanding Awards as to which the
applicable services or other restrictions have not been satisfied.

16.4 Nonexclusivity of the Plan. The adoption of the Plan shall not be construed
as creating any limitations upon the right and authority of the Committee to
adopt such other incentive compensation arrangements (which arrangements may be
applicable either generally to a class or classes of individuals or specifically
to a particular individual or particular individuals) as the Committee in its
discretion determines desirable.

16.5 Captions. The use of captions in this Plan or any Award Agreement is for
the convenience of reference only and shall not affect the meaning of any
provision of the Plan or such Award Agreement.

16.6 Other Award Agreement Provisions. Each Award Agreement may contain such
other terms and conditions not inconsistent with the Plan as may be determined
by the Committee, in its sole discretion.

16.7 Other Employee Benefits. The amount of any compensation deemed to be
received by a Participant as a result of the exercise of an Option or Stock
Appreciation Right, the sale of Shares received upon such exercise, the vesting
of any Restricted Stock, receipt of Performance Shares, distributions with
respect to Restricted Stock Units or Performance Units, or Other Stock-Based
Awards shall not constitute “earnings” or “compensation” with respect to which
any other employee benefits of such employee as determined, including without
limitation, benefits under any pension, profit sharing, 401(k), life insurance
or salary continuation plan.

16.8 Severability. If any provision of the Plan or any Award Agreement shall be
determined to be illegal or unenforceable by any court of law in any
jurisdiction, the remaining provisions hereof and thereof shall be severable and
enforceable in accordance with their terms, and all provisions shall remain
enforceable in any other jurisdiction.

16.9 Governing Law. The validity and construction of this Plan and the Award
Agreements shall be construed in accordance with and governed by the laws of the
State of Delaware other than any conflicts or choice of law rule or principle
that might otherwise refer construction or interpretation of this Plan and the
Award Agreements to the substantive laws of any other jurisdiction.

16.10 Section 409A.

(a) Time and Form of Payment. Notwithstanding anything contained in this Plan or
in an Award Agreement to the contrary, the time and form of payment of an Award
that is subject to the limitations imposed by Section 409A of the Code, shall be
set forth in the applicable Award Agreement on or before the time at which the
Participant obtains a legally binding right to the Award (or such other time
permitted under Section 409A of the Code) and such time and form of payment
shall comply with the requirements of Section 409A of the Code.

(b) Delay in Payment. Notwithstanding anything contained in this Plan or an
Award Agreement to the contrary, if the Participant is deemed by the Company at
the time of the Participant’s

 

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“separation from service” with the Company to be a “specified employee” as
determined under Section 409A of the Code, any “nonqualified deferred
compensation” to which the Participant is entitled in connection with such
separation from service after taking into account all applicable exceptions from
Section 409A, shall not be paid or commence payment until the date that is the
first business day following the six month period after the Participant’s
separation from service (or if earlier, the Participant’s death). Such delay in
payment shall only be effected with respect to each separate payment to the
extent required to avoid adverse tax treatment to the Participant under
Section 409A of the Code. Any compensation which would have otherwise been paid
during the delay period (whether in a lump sum or in installments) in the
absence of this Section 16.10 shall be paid to the Participant (or his or her
beneficiary or estate) in a lump sum payment on the first business day following
the expiration of the delay period.

(c) Key Definitions. For purposes of this Plan, the term “termination of
employment” shall mean “separation from service” and the terms “separation from
service,” “specified employee” and “nonqualified deferred compensation” shall
have the meanings ascribed to the terms pursuant to Section 409A and other
applicable guidance.

(d) Amendments. Notwithstanding anything in the Plan to the contrary, the Plan
and Awards granted under the Plan are intended to be eligible for certain
regulatory exceptions to the limitations of, or to comply with, the requirements
of Section 409A of the Code. The Committee, in the exercise of its sole
discretion and without the consent of the Participant, may amend or modify the
terms of an Award in any manner and delay the payment of any amounts payable
pursuant to an Award to the minimum extent necessary to reasonably comply with
the requirements of Section 409A of the Code, provided that the Company shall
not be required to assume any increased economic burden. No action taken by the
Committee with respect to the requirements of Section 409A of the Code shall be
deemed to adversely affect a Participant’s rights with respect to an Award or to
require the consent of such Participant. The Committee reserves the right to
make additional changes to the Plan and Awards from time to time to the extent
it deems necessary with respect to Section 409A of the Code.

 

17. AMENDMENT, MODIFICATION AND TERMINATION

17.1 Amendment, Modification, and Termination. Subject to Sections 3.2, 16.10
and 17.2, the Board may at any time terminate, and from time to time may amend
or modify the Plan provided, however, that no amendment or modification may
become effective without approval of the stockholders of the Company if
stockholder approval is required to enable the Plan to satisfy any applicable
statutory or regulatory requirements, or if the Company, on the advice of
counsel, determines that stockholder approval is otherwise necessary or
desirable.

17.2 Awards Previously Granted. Except as otherwise may be required under
Section 16.10, notwithstanding Section 17.1 to the contrary, no amendment,
modification or termination of the Plan or Award Agreement shall adversely
affect in any material way any previously granted Award, without the written
consent of the Participant holding such Award.

 

18. STOCKHOLDER APPROVAL; EFFECTIVE DATE OF PLAN

The Plan was effective as of the Effective Date, February 6, 2007. The Plan, as
amended and restated was approved by the stockholders of the Company on
April 26, 2011. This restated Plan document includes all amendments through
May 1, 2013, including the amendment approved by stockholders on May 1, 2013.

 

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19. DURATION

Unless sooner terminated by the Board, this Plan shall terminate automatically
10 years from the Effective Date. After the Plan is terminated, no Awards may be
granted. Awards outstanding at the time the Plan is terminated shall remain
outstanding in accordance with the terms and conditions of the Plan and the
Award Agreement.

 

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