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).


 

















 


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

  



 

















 


EXHIBIT A


 


MANAGEMENT STOCKHOLDERS AGREEMENT