Exhibit
10.19


 


INCENTIVE STOCK OPTION AGREEMENT

OF

MARQUEE HOLDINGS INC.


 


THIS AGREEMENT (the “Agreement”) is
entered into as of December 23, 2004 (the “Grant Date”) by and between Marquee
Holdings Inc., a Delaware corporation (the “Company”) and [name], an
Employee 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 common stock, par value
$0.01 per share (“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 Committee appointed to
administer the Plan pursuant to Section 6.1 of the Plan (the “Committee”)
has determined that it would be to the advantage and best interest of the
Company and its shareholders to grant the Incentive 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
mean the occurrence of, after the Effective Date, any of the following events:


 


(a)           any “person” or “group” as such terms are used in
Sections 13(d) and 14(d) of the Exchange Act other than one or more Permitted
Holders is or becomes the “beneficial owner” (as defined in Rules 13d-3 and
13d-5 under the Exchange Act, except that such person or group shall be deemed
to have “beneficial ownership” of all shares that any such person or group has
the right to acquire, whether such right is exercisable immediately or only
after the passage of time), directly or indirectly, by way of merger,
consolidation or other business combination or purchase of 50% or more of the
total voting power of the Voting Stock of the Company or of AMCE (for purposes
of calculating the total voting power of the Voting Stock held by a group
solely in the context of a merger, consolidation or other business combination
with a Person engaged in a line of business similar to that of the Company or
of AMCE and its Subsidiaries on August 18, 2004, the voting power beneficially
owned by the Permitted Holders or by Permitted Co-Investors, to the extent such
voting power of the Voting Stock was acquired by such Permitted Co-Investors on
or before January 31, 2005 in transactions that satisfy the definition of
Permitted Co-Investor, shall be excluded in an amount equal to the lesser of
the total voting power of the Voting Stock beneficially owned by such Permitted
Co-Investors on (x) January 31, 2005 or (y) the date of such merger,
consolidation or other business combination);


 


(b)           the adoption of a plan relating to the liquidation or
dissolution of the Company or AMCE;


 


(c)           the sale, lease, transfer or other conveyance, in one
or a series of related transactions, of all or substantially all of the assets
of the Company or of AMCE and its Subsidiaries, taken as a whole, to any Person
other than one or more Permitted Holders; or


 


(d)           a change of control under the indentures relating to
the 91/2% Senior Subordinated Notes due 2011 (the “2011
Notes”), the 97/8% Senior
Subordinated Notes due 2012 or the 8% Senior Subordinated Notes due 2014 issued
by AMCE (other than a change of control under the indenture relating to the
2011 Notes resulting from the Transactions);


 


provided, however, that for the avoidance of doubt, the closing of the
Merger of Marquee Inc. with and into AMCE as of the Effective Date shall not
constitute and shall not be deemed to cause or result in a Change of Control
hereunder.


 


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 Management Stockholders Agreement dated
December 23, 2004 by and among the Company, the Principal Investors and certain
management stockholders which contains terms applicable to Options, the shares
of Common Stock acquired upon Option exercise and other shares of 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.


 


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Section
1.5             “Option” shall mean the
Incentive Stock Option to purchase Common Stock granted under this Agreement.


 


Section
1.6             “Plan” shall have the meaning
set forth in the Recitals hereto.


 


Section
1.7             “Transactions” shall mean the
transactions set forth in the Agreement and Plan of Merger by and among the
Company, Marquee Inc. and AMCE, dated as of July 22, 2004 and the transactions
related thereto.


 


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 employ 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 five hundred (500) shares of 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 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.


 


Section 2.4             Adjustments
to Options.  The Committee shall make
adjustments with respect to the Option in accordance with the provisions of
Section 7.1 of the Plan; provided, however,
that each such adjustment shall be made in such manner as not to constitute a “modification”
within the meaning of Section 424(h)(3) of the Code, unless the Optionee
consents to an adjustment which would constitute such a “modification.”


 


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 five equal and cumulative installments
provided that the Optionee remains continuously employed in active service by
the Company from the Grant Date through such date as follows:


 


(i)            The first
installment shall consist of 20% of the shares covered by the Option and shall
become exercisable on the first anniversary of the Grant Date;


 


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(ii)           The second
installment shall consist of 20% of the shares covered by the Option and shall
become exercisable on the second anniversary of the Grant Date;


 


(iii)          The
third installment shall consist of 20% of the shares covered by the Option and
shall become exercisable on the third anniversary of the Grant Date;


 


(iv)          The fourth
installment shall consist of 20% of the shares covered by the Option and shall
become exercisable on the fourth anniversary of the Grant Date; and.


 


(v)           The fifth
installment shall consist of 20% of the shares covered by the Option and shall
become exercisable on the fifth anniversary of the Grant Date.


 


(b)           No portion
of the Option which is unexercisable at Termination of Employment 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)           If the
Optionee owned (within the meaning of Section 424(d) of the Code), at the time
the Option was granted, more than ten percent of the total combined voting
power of all classes of stock of the Company or any Subsidiary or parent
corporation thereof (within the meaning of Section 422 of the Code), the fifth
anniversary of the Grant Date; or


 


(c)           Except as
the Committee may otherwise approve, the date that is six (6) months following
the date of the Optionee’s Termination of Employment for any reason other than
(i) termination by the Company for Cause; or (ii) the Optionee’s death or
disability (as defined in Section 22(e)(3) of the Code); or


 


(d)           Except as
the Committee may otherwise approve, the date of the Optionee’s Termination of
Employment by reason of termination by the Company for Cause; or


 


(e)           In the
case of an Optionee whose Termination of Employment is by reason of his or her
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
Employment.


 


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.


 


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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.


 


Section 3.6             Special
Tax Consequences.  The Optionee
acknowledges that, to the extent that the aggregate Fair Market Value of Common
Stock with respect to which “incentive stock options” (within the meaning of
Section 422 of the Code, but without regard to Section 422(d) of the Code),
including the Option, are exercisable for the first time by the Optionee during
any calendar year (under the Plan and all other incentive stock option plans of
the Company, any Subsidiary and any parent corporation thereof (within the
meaning of Section 422 of the Code)) exceeds $100,000, such options shall be
treated as Non-Qualified Options to the extent required by Section 422 of the
Code.  The Optionee further acknowledges
that the rule set forth in the preceding sentence shall be applied by taking
options into account in the order in which they were granted.  For purposes of these rules, the Fair Market
Value of Common Stock shall be determined as of the time the option with
respect to such Common Stock is granted.


 


ARTICLE IV.

OTHER PROVISIONS


 


Section 4.1             Not
a Contract of Employment.  Nothing in
this Agreement or in the Plan shall confer upon the Optionee any right to
continue in the employ of the Company or any 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 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 “Exit Sale” 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             Notification
of Disposition.  The Optionee shall
give prompt notice to the Company of any disposition or other transfer of any
shares of Common Stock acquired under this Agreement if such disposition or
transfer is made (a) within two years from the Grant Date or (b) within one
year after the transfer of such shares to him. 
Such notice shall specify the date of such disposition or other transfer
and the amount realized, in cash, other property, assumption of indebtedness or
other consideration, by the Optionee in such disposition or other transfer.


 


Section 4.5             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


 


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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 4.6             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, this Agreement has been
executed and delivered by the parties hereto.


 


	
   

  	
  MARQUEE HOLDINGS INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
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  Name

  
	
   

  	
   

  
	
   

  	
  Residence Address:

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Optionee’s
  Social Security Number: 

  	
   

  	
   

  
						



 


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EXHIBIT A


 


MANAGEMENT STOCKHOLDERS AGREEMENT