Exhibit 10.6


 


	
   

  	
  GRANT NO.

  	
   

  



 


REALD INC.

2010 STOCK INCENTIVE PLAN


NONSTATUTORY PERFORMANCE STOCK OPTION AGREEMENT


 


RealD Inc., a Delaware corporation (the “Company” or “RealD”), hereby
grants an Option to purchase shares of its Common Stock (the “Shares”) to the
Optionee named below.  The terms and
conditions of the Option are set forth in this cover sheet, in the attachment
and in the RealD Inc. 2010 Stock Incentive Plan (the “Plan”).


 


Date of Option Grant:                                      ,
2010 [The IPO Date]


 


Name of Optionee:     Michael
V. Lewis


 


Maximum Number of Shares Covered by Option:  275,000 Shares


 


Exercise Price per Share:  $          .      
[The IPO offering price/share]


 


Fair Market Value of a Share on Date of Option Grant:  $          .      
[The IPO offering price/share]


 


Expiration  Date:                            ,
2020 [Ten years from Date of Option Grant]


 


Performance Vesting Computation Date:                                      ,
2013 [Three years from the IPO Date], provided that if an Acceleration Event
occurs before             ,
2013, then the Performance Vesting Computation Date means the effective date of
the Acceleration Event as described in Section 2(a) of this
Agreement.


 


Vesting Schedule:


 


Subject to all the terms of this cover sheet and the attached
Agreement, your right to purchase Shares under this Option shall vest as
described below.  Your Option is
subject to both performance-based and time-based vesting conditions.


 


The Total Shareholder Return and the number of Shares that
can become subject to the Vested Option shall be calculated as
described in the attached Schedule A  on the
Performance Vesting Computation Date. 
The portion of the Option which does not satisfy the performance-based
vesting requirements (i.e., the
Maximum Number of Shares Covered by Option, as set forth above, less the number
of Shares that can become subject to the Vested Option as determined on the
Performance Vesting Computation Date) shall be forfeited without consideration
as of the Performance Vesting Computation Date. 
Additionally, the entire Option shall be immediately forfeited without
consideration upon the termination of your employment with the Company prior to
the Performance Vesting Computation Date, other than a Qualifying Termination
or the termination of your employment due to your death or Disability.


 


The
number of Shares that are not forfeited due to the performance vesting
conditions (as described in the preceding paragraph), will become the Vested
Option, subject to Sections 1 and 6 of the Agreement, upon the following
earliest date to occur (provided you remain employed by the Company through such
date): (i) the Time Vesting End Date, or (ii) the Qualifying
Termination Date, or (iii) the
Termination Date in the event
of a termination of your employment due
to your death or 


 

















 


Disability, or (iv) immediately before the
consummation of a Change in Control or other similar transaction involving the
Company, if you are still employed as the Company’s Chief Executive Officer as of
the consummation of a Change in Control and the Option is not assumed by or
substituted into comparable equity incentives of the acquirer in the Change in
Control transaction, or merger or acquisition or similar transaction involving
the Company, or (v) immediately before the Illiquidity Date
provided you were still employed as the Company’s Chief Executive Officer as of
the consummation of a Change in Control. 
Except as may be provided above, no Shares subject to this Option will
vest after your employment with the Company has terminated for any reason.


 


By signing this cover sheet, you agree to all of
the terms and conditions described in the attached Agreement, Schedule A to the
Agreement and the Plan.  You further
agree that you have received the Plan prospectus, a copy of which is also
enclosed.


 


 


	
  Optionee:

  	
   

  	
   

  
	
   

  	
  (Signature)

  	
   

  
	
   

  	
   

  	
   

  
	
  Company:

  	
   

  	
   

  
	
   

  	
  (Signature)

  	
   

  
	
   

  	
   

  	
   

  
	
  Title:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Attachment

  	
   

  	
   

  



 


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REALD INC.


2010 STOCK INCENTIVE PLAN


 


NONSTATUTORY PERFORMANCE STOCK OPTION AGREEMENT


 


	
  1.

  	
   

  	
  The
  Plan and Other Agreements

  	
   

  	
  The text of the Plan
  is incorporated in this Agreement by reference. Certain capitalized terms
  used in this Agreement are defined in the Plan, the cover sheet and
  Section 2 below. 

   

  This Agreement and
  the Plan constitute the entire understanding between you and the Company
  regarding this Option and may be amended only in a writing signed by the
  parties. Any prior agreements, commitments or negotiations concerning this
  Option are superseded. 

   

  In order to receive any
  payments or benefits under Section 3(d)(i) or
  Section 3(d)(ii), as applicable, of your Employment Agreement,
  including, among other things and without limitation, acceleration of
  vesting, under Section 6 below, as applicable, you must comply with the
  terms of your Employment Agreement and timely execute and deliver to the
  Company (and not revoke) a separation agreement and general release of claims
  in favor of the Company, any affiliates or related entities, and their
  employees and affiliates, in the form and content attached to your Employment
  Agreement as Exhibit A, within the time period specified in the
  release, but in no event after the 60th day following the Qualifying Termination
  Date (however, for the avoidance of doubt, you shall receive payment or
  benefits from the Company of the Accrued Obligations, as applicable,
  regardless of whether a separation agreement and general release of claims in
  the form and content attached as Exhibit A to the Employment
  Agreement is executed and timely provided to the Company).

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  2.

  	
   

  	
  Certain
  Additional Definitions

  	
   

  	
  For purposes of this Option, the following definitions (in addition
  to those terms defined in the Plan and the cover sheet) apply: 

   

  (a)  “Acceleration
  Event” means prior to the third anniversary of the IPO Date, your
  employment is terminated as a result of a Qualifying Termination or due to
  your death or Disability, or there is a Change in Control. The effective date
  of the Acceleration Event shall be: (1) in the case of a Change in
  Control, the consummation date of the Change in Control; (2) in the case
  of termination of employment due to a Qualifying Termination, the Qualifying
  Termination Date; and (3) in the case of termination of employment due
  to your death or Disability, the Termination Date. 

   

  (b) 
  “Cause” has the meaning set forth in
  your Employment Agreement. In addition, all notice, cure, procedural and
  other provisions relating to the determination of Cause shall apply in the 

  



 


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  precise
  manner set forth in the Employment Agreement, and not based on the default
  rules set forth in the Plan. Without limiting the foregoing, the last
  sentence of Section 2(f) of the Plan (i.e.,
  “In each of the foregoing subclauses (i) through (v), whether or not a
  “Cause” event has occurred will be determined by the Company’s chief human
  resources officer or other person performing that function or, in the case of
  Participants who are Directors or Officers or Section 16 Persons, the
  Board, each of whose determination shall be final, conclusive and binding”)
  shall not apply for purposes of this Agreement. 

   

  (c) 
  “Change in Control” has the meaning
  set forth in your Employment Agreement. 

   

  (d)  “Comparison Group”
  means RealD and the other companies listed on Appendix 1 to Schedule
  A (incorporated in this Agreement by this reference thereto) as may be
  adjusted pursuant to Sections 2(c) and 2(d) of Schedule A to
  this Agreement. 

   

  (e) 
  “Disability” has the meaning set forth
  in your Employment Agreement.  

   

  (f)  “Employment Agreement”
  means the employment agreement you entered into with the Company with an
  effective date of April 1, 2010, as may be amended from time to time. 

   

  (g) 
  “Established Securities Market” has
  the meaning set forth in your Employment Agreement. 

   

  (h) 
  “Good Reason” has the meaning set
  forth in your Employment Agreement.  

   

  (i) 
  “IPO Date” means the effective
  date of the initial public offering of the Shares pursuant to an effective registration
  statement filed with the United States Securities and Exchange Commission. 

   

  (j)  “Illiquidity Date”
  means the first date on or after a Change in
  Control wherein the shares of the acquirer of the Company (into which the
  Shares underlying the Option have been converted or substituted) are not
  publicly-traded on an Established Securities Market. 

   

  (k)  “Performance Period” means the
  period commencing on the IPO Date and ending on the Performance Vesting
  Computation Date. 

   

  (l) 
  “Qualifying Termination” has the
  meaning set forth in your Employment Agreement. 

   

  (m) 
  “Qualifying Termination Date” has the
  meaning set forth in 

  



 


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  your
  Employment Agreement. 

   

  (n) 
  “Termination Date” has the meaning set
  forth in your Employment Agreement. 

   

  (o) 
  “Total Shareholder Return” or “TSR” means the total shareholder return measured over the
  Performance Period for a company in the Comparison Group on a per share
  basis, reflecting reinvestment of any dividends paid, which shall be
  calculated by a widely recognized outside and independent valuation firm
  selected by the Board or a Committee using the assumptions and methods
  described in Schedule A to this Agreement. 

   

  (p)  “Vested Option”
  is the number of Shares subject to this Option that were not forfeited due to
  the performance vesting conditions and which become vested as described in
  the Vesting Schedule on the attached cover sheet, and which are available to
  be purchased upon your exercise(s) of this Option. 

   

  (q) 
  “Time  Vesting
  End Date” means the third anniversary of the IPO Date.

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  3.

  	
   

  	
  Nonstatutory
  Stock Option

  	
   

  	
  This Option is not intended to be an Incentive Stock Option under
  section 422 of the Code and will be interpreted accordingly. 

   

  This Option is not intended to be deferred compensation under section
  409A of the Code and will be interpreted accordingly.

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  4.

  	
   

  	
  Vesting

  	
   

  	
  This Option is only exercisable before it expires and only with
  respect to the Vested Option. This Option will vest according to the Vesting
  Schedule described in the cover sheet to this Agreement.

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  5.

  	
   

  	
  Term

  	
   

  	
  Your Option will expire in all cases no later than the Expiration
  Date, as shown on the cover sheet. Your Option will expire earlier if your
  employment with the Company terminates, as described in Sections 6 through 8
  below. 

   

  If the Expiration Date specified in the attached cover sheet falls on
  a day on which the New York Stock Exchange (“NYSE”) is open for trading, then
  any unexercised portion of this Option that is outstanding shall be forfeited
  without consideration as of 3:45 P.M. New York time on the Expiration
  Date. However, if the Expiration Date specified in the attached cover sheet
  falls on any day on which the NYSE is not open for trading, then your ability
  to exercise this Option will terminate as of 3:45 P.M. New York time on
  the last day in which the NYSE is open for trading that occurs immediately
  prior to the Expiration Date.

  



 


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  6.

  	
   

  	
  Qualifying
  Termination

  	
   

  	
  In
  the event you experience a Qualifying Termination and the Qualifying
  Termination Date occurs both (i) prior to  the third anniversary of the IPO Date and (ii) prior
  to a Change in Control,  the number
  of Shares subject to the Vested Option shall be equal to the product of:
  (a) the number of Shares calculated as described in Schedule A,
  (b) multiplied by a fraction (which in no event shall exceed 1.0), the
  numerator of which shall be equal to the number of days you were employed
  with the Company since the commencement of the IPO Date through the Qualifying
  Termination Date plus 730 days, and the denominator of which shall be 1,096
  days. 

   

  In
  the event you experience a Qualifying Termination and the Qualifying
  Termination Date occurs both (i) prior to  the third anniversary of the IPO Date and (ii) on or
  after a Change in Control,  the
  number of Shares subject to the Vested Option shall be equal to the number of
  Shares calculated as described in Schedule A.

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  7.

  	
   

  	
  Termination
  - for Cause or without Good Reason

  	
   

  	
  If your employment with the Company is terminated by the Company for
  Cause, in accordance with the Employment Agreement governing such a
  termination, then you shall immediately forfeit all rights to your Option
  without consideration, including the Vested Option, and the entire Option
  shall immediately expire, and any rights, payments and benefits with respect
  to the Option shall be subject to reduction or recoupment in accordance with
  the Clawback Policy and Section 13(d) of the Plan. 

   

  In the event that, while
  the Vested Option is outstanding, the Company provides you with written
  notice of its intention to terminate you for Cause in accordance with
  Section 4(b) of the Employment Agreement, you shall be given the
  right to cure any such Cause event if and to the extent you are provided a
  cure right under Section 4(b) of the Employment Agreement (the “Cure
  Period”), any right you have to exercise the Vested Option shall be suspended, and if the
  actions or inactions giving rise to such a termination for Cause are not
  timely cured by you during the Cure Period, then the entire
  Option, including the Vested Option, shall immediately expire, as described
  in the paragraph above. In the event that you timely cure the
  circumstances giving rise to such a termination for Cause within the Cure
  Period, the Company shall effective immediately remove the suspension and
  reinstate your right to exercise the Vested Option.  

   

  If your employment with the Company is terminated by you without Good
  Reason and the Termination Date is prior to the Performance Vesting Computation
  Date, no portion of the Option shall vest and your Option shall be forfeited
  without consideration and the entire Option shall immediately expire on your
  Termination Date. If your employment with the Company is terminated by you
  without Good 

  



 


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  Reason and your Termination Date occurs prior to the end date of the six
  (6) months notice period required under Section 4(g) of the
  Employment Agreement, then your
  Option, including any Vested Option, shall be forfeited without consideration
  and the entire Option shall immediately expire on your Termination Date. If
  your employment with the Company is terminated by you without Good Reason
  after the Performance Vesting Computation Date and your Termination Date
  occurs on or after the end date of the six (6) month notice period
  required under Section 4(g) of the Employment Agreement, the Vested
  Option shall remain exercisable by you in accordance with Section 8
  below.

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  8.

  	
   

  	
  Exercise
  Period After Termination - General

  	
   

  	
  If, while the Vested Option is outstanding, your employment with the
  Company is terminated for any reason (including, but not limited to, death
  and Disability) other than (x) being terminated by the Company for Cause
  or (y) being terminated by you without Good Reason
  on or before March 31, 2017 wherein you failed to provide written
  notice of such termination to the Company at least six (6) months prior
  to your Termination Date, then your Vested Option
  will expire at the earlier of (i) the close of business at Company
  headquarters on the first anniversary of the earlier of your Termination Date
  or Qualifying Termination Date, (ii) the Expiration Date as described in
  Section 5 above, or (iii) the date on which the Option is cancelled
  (and not substituted or assumed) pursuant to a Change in Control or merger or
  acquisition or similar transaction involving the Company. In no
  event is the Vested Option exercisable after the Expiration Date. Moreover,
  the Vested Option will terminate on an earlier date if the Option expires
  earlier as provided herein.

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  9.

  	
   

  	
  Leaves
  of Absence

  	
   

  	
  For purposes of this Option, your employment with the Company does
  not terminate when you go on a bona fide
  leave of absence that was approved by the Company in writing, if the terms of
  the leave provide for continued employment crediting, or when continued
  employment crediting is required by applicable law. Your employment with the
  Company terminates in any event when the approved leave ends unless you
  immediately return to active work. 

   

  The Company determines which leaves count for this purpose (along
  with determining the effect of a leave of absence on vesting of the Option),
  and when your employment terminates for all purposes under the Plan.

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  10.

  	
   

  	
  Notice
  of Exercise

  	
   

  	
  When you wish to exercise this Option, you must notify the Company by
  filing a “Notice of Exercise” form at the address given on the form. Your
  notice must specify how many Shares you wish to purchase. Your notice must
  also specify how your Shares should be registered (in your name only or in
  your and your spouse’s names as community property or as joint tenants with
  right of survivorship). The notice 

  



 


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  will be effective
  when it is received by the Company. 

   

  If someone else wants
  to exercise this Option after your death, that person must prove to the
  Company’s satisfaction that he or she is entitled to do so.

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  11.

  	
   

  	
  Form of
  Payment

  	
   

  	
  When you submit your
  notice of exercise, you must include payment of the Exercise Price for the
  Shares you are purchasing. Payment may be made in one (or a combination) of
  the following forms: 

   

  ·                  Cash, your personal
  check, a cashier’s check or a money order. 

   

  ·                  Shares
  which have already been owned by you for more than six (6) months and
  which are surrendered to the Company. The Fair Market Value of the Shares,
  determined as of the effective date of the Option exercise, will be applied
  to the Exercise Price. 

   

  ·                  To the extent a public market for the Shares exists as determined by
  the Company, by Cashless Exercise (as defined in the Plan) through delivery
  (on a form prescribed by the Company) of an irrevocable direction to a
  securities broker to sell Shares and to deliver all or part of the sale
  proceeds to the Company in payment of the aggregate Exercise Price.

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  12.

  	
   

  	
  Withholding
  Taxes

  	
   

  	
  You
  will be solely responsible for payment of any and all applicable taxes
  associated with this Option.  

   

  You will not be allowed to exercise this Option unless you make
  acceptable arrangements to pay any withholding or other taxes that may be due
  as a result of the Option exercise or sale of Shares acquired under this
  Option.

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  13.

  	
   

  	
  Restrictions on Exercise and Resale

  	
   

  	
  By signing this Agreement, you agree not to (i) exercise this Option
  (“Exercise Prohibition”), or (ii) sell, transfer, dispose of, pledge,
  hypothecate, make any short sale of, or otherwise effect a similar
  transaction of any Shares acquired under this Option (each a “Sale
  Prohibition”) at a time when applicable laws, regulations or Company or
  underwriter trading policies prohibit the exercise or disposition of Shares. The
  Company will not permit you to exercise this Option if the issuance of Shares
  at that time would violate any law or regulation. Notwithstanding
  anything to the contrary, this Option is granted on the condition that the
  Company’s stockholders approve the Plan prior to April 9, 2011.
  You understand and agree that this Option may not
  be exercised unless the Company’s stockholders timely approve the Plan. If
  the Company’s stockholders do not approve the Plan prior to April 9,
  2011, then this Option shall be immediately forfeited without consideration.
  The Company shall have the right to designate one or more periods of
  time, each of which 

  



 


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  generally
  will not exceed one hundred eighty (180) days in length (provided
  however, that such period may be extended in connection with the Company’s
  release (or announcement of release) of earnings results or other material
  news or events), and to impose an Exercise Prohibition and/or Sale
  Prohibition, if the Company determines (in its sole discretion) that such
  limitation(s) is needed in connection with a public offering of Shares
  or to comply with an underwriter’s request or trading policy, or could in any
  way facilitate a lessening of any restriction on transfer pursuant to the
  Securities Act or any state securities laws with respect to any issuance of
  securities by the Company, facilitate the registration or qualification of
  any securities by the Company under the Securities Act or any state
  securities laws, or facilitate the perfection of any exemption from the
  registration or qualification requirements of the Securities Act or any
  applicable state securities laws for the issuance or transfer of any
  securities. The Company may issue stop/transfer instructions and/or
  appropriately legend any stock certificates issued pursuant to this Option in
  order to ensure compliance with the foregoing. Any such Exercise Prohibition
  shall not alter the vesting schedule set forth in this Agreement other than
  to limit the periods during which this Option shall be exercisable. 

   

  If
  the sale of Shares under the Plan is not registered under the Securities Act,
  but an exemption is available which requires an investment or other
  representation, you shall represent and agree at the time of exercise that
  the Shares being acquired upon exercise of this Option are being acquired for
  investment, and not with a view to the sale or distribution thereof, and
  shall make such other representations as are deemed necessary or appropriate
  by the Company and its counsel. 

   

  You
  may also be required, as a condition of exercise of this Option, to enter
  into any Company stockholder agreement or other agreements that are
  applicable to stockholders.

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  14.

  	
   

  	
  Transfer
  of Option

  	
   

  	
  Prior to your death, only you may exercise this Option. Without the
  prior written consent of the Company as provided in its sole and absolute
  discretion, you cannot transfer, assign, alienate, pledge, attach, sell, or
  encumber this Option. If you attempt to do any of these things without the
  Company’s prior written consent, this Option will immediately become invalid.
  You may, however, dispose of this Option in your will or it may be
  transferred by the laws of descent and distribution. Regardless of any
  marital property settlement agreement, the Company is not obligated to honor
  a notice of exercise from your spouse, nor is the Company obligated to
  recognize your spouse’s interest in your Option in any other way.

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  15.

  	
   

  	
  Retention
  Rights

  	
   

  	
  Your Option or this Agreement does not give you the right to be
  retained by the Company (or any Parent or any Subsidiaries or 

  



 


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  Affiliates) in any capacity; provided, however, the foregoing
  statement shall not limit any of your rights under the Employment Agreement.
  Subject to the Employment Agreement, the Company (or any Parent and any
  Subsidiaries or Affiliates) reserves the right to terminate your Service at
  any time and for any reason. 

   

  This Option and the Shares subject to the Option are not intended to
  constitute or replace any pension rights or compensation and are not to be
  considered compensation of a continuing or recurring nature, or part of
  Optionee’s normal or expected compensation, and in no way represent any
  portion of Optionee’s salary, compensation or other remuneration for any
  purpose, including but not limited to, calculating any severance,
  resignation, termination, redundancy, dismissal, end of service payments,
  bonuses, long-service awards, pension or retirement benefits or similar
  payments.

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  16.

  	
   

  	
  Stockholder
  Rights

  	
   

  	
  Other than with regard to other Company securities which you may own,
  you, or your estate or heirs, have no rights as a stockholder of the Company
  with regard to the Option until a certificate for your Option’s Shares has
  been issued. No adjustments are made for dividends or other rights if the
  applicable record date occurs before your stock certificate is issued, except
  as described in the Plan.

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  17.

  	
   

  	
  Adjustments

  	
   

  	
  In the event of a
  stock split, a stock dividend or a similar change in the Company stock, the
  number of Shares covered by this Option (rounded down to the nearest whole
  number) and the Exercise Price per Share may be adjusted pursuant to the
  Plan. Your Option shall be subject to the terms of the agreement of merger,
  liquidation or reorganization in the event the Company is subject to such
  corporate activity, subject, if applicable, to the Change in Control vesting
  provisions described in the Vesting Schedule.

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  18.

  	
   

  	
  Legends

  	
   

  	
  All certificates representing the Shares issued upon exercise of this
  Option shall, if applicable, have endorsed thereon the following legends:

  
	
   

  	
   

  	
   

  	
   

  	
   

  “THE SHARES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO CERTAIN
  RESTRICTIONS ON TRANSFER SET FORTH IN AN AGREEMENT BETWEEN THE COMPANY AND
  THE REGISTERED HOLDER, OR HIS OR HER PREDECESSOR IN INTEREST. A COPY OF SUCH
  AGREEMENT IS ON FILE AT THE PRINCIPAL OFFICE OF THE COMPANY AND WILL BE
  FURNISHED UPON WRITTEN REQUEST TO THE SECRETARY OF THE COMPANY BY THE HOLDER
  OF RECORD OF THE SHARES REPRESENTED BY THIS CERTIFICATE.”

  



 


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  “THE SHARES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE
  SECURITIES ACT OF 1933, AS AMENDED, AND MAY NOT BE SOLD, PLEDGED, OR
  OTHERWISE TRANSFERRED WITHOUT AN EFFECTIVE REGISTRATION THEREOF UNDER SUCH
  ACT OR AN OPINION OF COUNSEL, SATISFACTORY TO THE COMPANY AND ITS COUNSEL,
  THAT SUCH REGISTRATION IS NOT REQUIRED.”

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  19.

  	
   

  	
  Applicable
  Law

  	
   

  	
  This Agreement will
  be interpreted and enforced under the laws of the State of California without
  reference to the conflicts of law provisions thereof.

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  20.

  	
   

  	
  Voluntary
  Participant

  	
   

  	
  You acknowledge that
  you are voluntarily participating in the Plan.

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  21.

  	
   

  	
  No
  Rights to Future Awards

  	
   

  	
  Subject to the
  Employment Agreement, your rights, if any, in respect of or in connection
  with any future Awards are derived solely from the discretionary decision of
  the Company to permit you to participate in the Plan and to benefit from a
  discretionary future Award. By accepting this Option, you expressly
  acknowledge that there is no obligation on the part of the Company to
  continue the Plan and/or grant any additional Awards to you or benefits in
  lieu of Options or any other Awards even if Options have been granted
  repeatedly in the past. All decisions with respect to future Option grants,
  if any, will be at the sole discretion of the Committee.

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  22.

  	
   

  	
  Future
  Value

  	
   

  	
  The future value of
  the underlying Shares is unknown and cannot be predicted with certainty. If
  the underlying Shares do not increase in value after the Date of Option
  Grant, the Option will have little or no value. If you exercise the Option
  and obtain Shares, the value of the Shares acquired upon exercise may
  increase or decrease in value, even below the Exercise Price.

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  23.

  	
   

  	
  No
  Advice Regarding Grant

  	
   

  	
  The Company has not
  provided any tax, legal or financial advice, nor has the Company made any
  recommendations regarding your participation in the Plan, or your acquisition
  or sale of the underlying Shares. You are hereby advised to consult with your
  own personal tax, legal and financial advisors regarding your participation
  in the Plan before taking any action related to the Plan.

  



 


11

















 


	
  24.

  	
   

  	
  Other
  Plan Provisions

  	
   

  	
  The Company agrees
  that the following sections of the Plan shall not apply to this Agreement or
  the Option granted hereunder: (a) Section 15(b)(ii) of the
  Plan; and (b) the provisions in the first sentence of
  Section 4(d) of the Plan relating to rights of first refusal and
  rights of repurchase.

  



 


By signing the cover sheet of this Agreement, you
agree to all of the terms and conditions described above and in the Plan.


 


12

















 


REALD INC.

NOTICE OF EXERCISE OF


NONSTATUTORY PERFORMANCE
STOCK OPTION BY OPTIONEE


 


RealD Inc.

100 N. Crescent Drive, Suite 120


Beverly Hills, California 90210

Attention:  Secretary


 


	
  Re:

  	
  Exercise of Nonstatutory Performance Stock Option to Purchase Shares
  of Company Stock

  
	
   

  	
   

  
	
   

  	
  Michael V. Lewis

  	
   

  
	
   

  	
  [PRINT NAME OF
  OPTIONEE]

  	
   

  



 


Pursuant to the Nonstatutory Performance Stock Option Agreement dated                                       ,
2010 between RealD Inc., a Delaware corporation, (the “Company”) and me, made
pursuant to the 2010 Stock Incentive Plan  (the “Plan”),
I hereby request to purchase               
Shares (whole number only and must be not less than 25 Shares or the remaining
number of vested Shares under this Option) of common stock of the Company (the “Shares”),
at the exercise price of $                    
per Share.  I am hereby making full
payment of the aggregate exercise price by one or more of the following forms
of payment in accordance with the whole number percentages that I have provided
below.  I further understand and agree
that I will timely satisfy any and all applicable tax withholding obligations
as a condition of this Option exercise.


 


	
  Percentage

  of Payment

  	
   

  	
  Form of Payment As Provided In the Nonstatutory Performance Stock

  Option Agreement

  
	
   

  	
   

  	
   

  
	
   

  	
  %

  	
  Cash/My Personal Check/Cashier’s Check/Money Order (payable to “RealD
  Inc.”)

  
	
   

  	
   

  	
   

  
	
   

  	
  %

  	
  Cashless Exercise as provided in the Nonstatutory Performance Stock
  Option Agreement

  
	
   

  	
   

  	
   

  
	
   

  	
  %

  	
  Surrender of vested Shares (Valued At Their Fair Market Value) Owned
  By Me For More Than Six (6) Months

  
	
   

  	
   

  	
   

  
	
  100

  	
  %

  	
   

  



 


	
  Check one:

  	
   ̈

  	
  The Shares certificate is to be issued and registered in my name
  only.

  
	
   

  	
   

  	
   

  
	
   

  	
   ̈

  	
  The Shares
  certificate is to be issued and registered in my name and my spouse’s
  name.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  [PRINT SPOUSE’S NAME, IF CHECKING SECOND BOX]

  



 


Check one (if checked second box above):


 


	
   

  	
   

  	
   ̈
  Community Property or
   ̈ Joint
  Tenants With Right of Survivorship

  



 


I acknowledge that I have received, understand and continue to be bound
by all of the terms and conditions set forth in the Plan and in the
Nonstatutory Performance Stock Option Agreement.


 


	
  Dated:

  	
   

  	
   

  	
   

  



 


 


	
   

  	
   

  	
   

  
	
  (Optionee’s
  Signature)

  	
   

  	
  (Spouse’s
  Signature)**

  
	
   

  	
   

  	
  **Spouse must sign this Notice of Exercise if listed
  above.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  (Full
  Address)

  	
   

  	
  (Full
  Address)

  



 






*THIS
NOTICE OF EXERCISE MAY BE REVISED BY THE COMPANY AT ANY TIME WITHOUT
NOTICE.


 

















 


Schedule A


to
Nonstatutory Performance Stock Option Agreement


 


1. 
Calculation.  The number
of Shares that can become subject to the Vested Option for purposes of this
Option will be calculated as follows:


 


a.             First Step:


 


For
RealD and for each other company in the Comparison Group, determine the Total
Shareholder Return (as described in Section 2(b) below) over the
Performance Period.


 


b.             Second Step:


 


Rank
the TSRs determined in the first step from low to high (with the company having
the lowest TSR being ranked number 1, the company with the second lowest TSR
ranked number 2, and so on) and determine the RealD percentile rank based upon
its position in the list by dividing RealD’s position by the total number of
companies (including RealD) in the Comparison Group and rounding the quotient
to the nearest hundredth. For example, if RealD were ranked 21st on the list out of 40 companies, its
percentile rank would be 21/40 or 52.5%.


 


c.             Third Step:


 


Determine
the percentile rank for RealD calculated in the second step into the appropriate
row in the left-hand column of the table below and determine the number of
Shares that can become subject to the Vested Option, which is the figure in the
right-hand column of the table below corresponding to that percentile
rank.  Use linear interpolation between
points in the table below to determine the percentile rank and the number of
Shares that can become subject to the Vested Option if RealD’s percentile rank
is greater than 10% and less than 60% but not exactly one of the percentile
ranks listed in the left-hand column. 
Any Shares which do not vest pursuant to the preceding calculation shall
be immediately forfeited without consideration. 
For example, if RealD’s percentile rank is 52.5%, the number of Shares
that can become subject to the Vested Option would be 233,750 Shares and 41,250
Shares would be immediately forfeited without consideration.


 


	
  3-Yr Relative

  Shareholder Return

  	
   

  	
  Number of

  Shares that can

  Become Subject

  to Vested Option

  	
   

  
	
  < 10th Percentile

  	
   

  	
  0

  	
   

  
	
  20th Percentile

  	
   

  	
  55,000

  	
   

  
	
  30th Percentile

  	
   

  	
  110,000

  	
   

  
	
  40th Percentile

  	
   

  	
  165,000

  	
   

  
	
  50th Percentile

  	
   

  	
  220,000

  	
   

  
	
  >60th Percentile

  	
   

  	
  275,000

  	
   

  



 

















 


2. Rules.  The following rules apply to the
computation of the number of Shares that can become subject to the Vested
Option:


 


a.     The minimum number of Shares
subject to the Vested Option is zero and the maximum number of Shares that can
become subject to the Vested Option is 275,000.


 


b.     For purposes of computing
Total Shareholder Return for RealD and each other company in the Comparison
Group, the per share stock price for each company at the beginning and end of
the Performance Period will be determined using the arithmetic mean of the
closing price of the company’s stock on each of the 20 consecutive trading days
ending on and including the first day or last day of the Performance Period, as
the case may be, except that RealD’s beginning stock price will be its opening IPO
price (i.e., the same price as the Exercise Price per Share, as shown on the
attached cover sheet) and in the event of a Change in Control that occurs prior
to the Time Vesting End Date, RealD’s end stock price will be the per share
transaction price of the Change in Control.


 


c.     A company shall be removed
from the Comparison Group if it has been acquired by another company (whether by
a peer company or otherwise, but not including internal reorganizations) or has
sold all or substantially all of its assets at any time during the Performance
Period.  A company that is removed from
the Comparison Group before the Performance Vesting Computation Date will not
be included at all in the computation of the Number of Shares that can Become
Subject to the Vested Option.


 


d.     A company from the
Comparison Group shall be treated as having “-100%” TSR for purposes of the
First Step of the Calculation described in Section 1(a) of this Schedule
A if it “Fails.”  A company in the
Comparison Group will be deemed to have “Failed” if it:


 


i.              files for
bankruptcy, liquidation or reorganization; or


 


ii.             is the subject
of an involuntary bankruptcy proceeding that is not dismissed within 30 days;
or


 


iii.            ceases to
conduct substantial business operations; or


 


iv.            is the subject
of a stockholder-approved plan of liquidation or dissolution.


 


e.     RealD shall rely on press
releases, public filings, website postings, and other reasonably reliable
information available regarding a peer company in making a determination that a
company has been acquired or “Failed.”


 


2

















 


Appendix 1
to


Schedule A
to


Nonstatutory
Performance Option Agreement


 


Comparison
Group


 


	
   

  	
   

  	
  Last 4Q

  	
   

  	
  3/31/2010

  	
   

  
	
  Company

  	
   

  	
  Revenue ($M)

  	
   

  	
  Market Cap ($M)

  	
   

  
	
  VIRGIN
  MEDIA INC

  	
   

  	
  $

  	
  6,151

  	
   

  	
  $

  	
  5,686

  	
   

  
	
  WASHINGTON
  POST -CL B

  	
   

  	
  $

  	
  4,570

  	
   

  	
  $

  	
  4,116

  	
   

  
	
  INTERPUBLIC
  GROUP OF COS

  	
   

  	
  $

  	
  6,028

  	
   

  	
  $

  	
  4,044

  	
   

  
	
  GANNETT
  CO

  	
   

  	
  $

  	
  5,613

  	
   

  	
  $

  	
  3,933

  	
   

  
	
  CLEAR
  CHANNEL OUTDOOR HLDGS

  	
   

  	
  $

  	
  2,698

  	
   

  	
  $

  	
  3,775

  	
   

  
	
  DREAMWORKS
  ANIMATION INC

  	
   

  	
  $

  	
  725

  	
   

  	
  $

  	
  3,426

  	
   

  
	
  SIRIUS
  XM RADIO INC

  	
   

  	
  $

  	
  2,473

  	
   

  	
  $

  	
  3,382

  	
   

  
	
  LAMAR
  ADVERTISING CO -CL A

  	
   

  	
  $

  	
  1,056

  	
   

  	
  $

  	
  3,159

  	
   

  
	
  INTERACTIVE
  DATA CORP

  	
   

  	
  $

  	
  760

  	
   

  	
  $

  	
  3,024

  	
   

  
	
  REGAL
  ENTERTAINMENT GROUP

  	
   

  	
  $

  	
  2,894

  	
   

  	
  $

  	
  2,706

  	
   

  
	
  WILEY
  (JOHN) & SONS -CL A

  	
   

  	
  $

  	
  1,667

  	
   

  	
  $

  	
  2,568

  	
   

  
	
  LIVE
  NATION ENTERTAINMENT

  	
   

  	
  $

  	
  4,181

  	
   

  	
  $

  	
  2,440

  	
   

  
	
  MORNINGSTAR INC

  	
   

  	
  $

  	
  479

  	
   

  	
  $

  	
  2,346

  	
   

  
	
  CINEMARK HOLDINGS INC

  	
   

  	
  $

  	
  1,976

  	
   

  	
  $

  	
  2,041

  	
   

  
	
  DEX ONE CORP

  	
   

  	
  $

  	
  2,202

  	
   

  	
  $

  	
  1,925

  	
   

  
	
  TIVO INC

  	
   

  	
  $

  	
  239

  	
   

  	
  $

  	
  1,882

  	
   

  
	
  NEW YORK TIMES CO -CL A

  	
   

  	
  $

  	
  2,440

  	
   

  	
  $

  	
  1,625

  	
   

  
	
  MEREDITH CORP

  	
   

  	
  $

  	
  1,353

  	
   

  	
  $

  	
  1,560

  	
   

  
	
  VALASSIS COMMUNICATIONS INC

  	
   

  	
  $

  	
  2,244

  	
   

  	
  $

  	
  1,376

  	
   

  
	
  MADISON SQUARE GARDEN -SPN

  	
   

  	
  $

  	
  2,105

  	
   

  	
  $

  	
  1,347

  	
   

  
	
  WORLD WRESTLING ENTMT INC

  	
   

  	
  $

  	
  475

  	
   

  	
  $

  	
  1,271

  	
   

  
	
  REALD INC - FY12 IPO ESTIMATE

  	
   

  	
  $

  	
  193

  	
   

  	
  $

  	
  1,145

  	
   

  
	
  WARNER MUSIC GROUP CORP

  	
   

  	
  $

  	
  3,216

  	
   

  	
  $

  	
  1,068

  	
   

  
	
  SCHOLASTIC CORP

  	
   

  	
  $

  	
  1,870

  	
   

  	
  $

  	
  1,020

  	
   

  
	
  BELO CORP -SER A COM

  	
   

  	
  $

  	
  590

  	
   

  	
  $

  	
  878

  	
   

  
	
  HARTE HANKS INC

  	
   

  	
  $

  	
  860

  	
   

  	
  $

  	
  818

  	
   

  
	
  DG FASTCHANNEL INC

  	
   

  	
  $

  	
  191

  	
   

  	
  $

  	
  789

  	
   

  
	
  NATIONAL CINEMEDIA INC

  	
   

  	
  $

  	
  381

  	
   

  	
  $

  	
  744

  	
   

  
	
  ARBITRON INC

  	
   

  	
  $

  	
  385

  	
   

  	
  $

  	
  709

  	
   

  
	
  SUPERMEDIA INC

  	
   

  	
  $

  	
  2,512

  	
   

  	
  $

  	
  610

  	
   

  
	
  DTS INC

  	
   

  	
  $

  	
  78

  	
   

  	
  $

  	
  596

  	
   

  
	
  CKX INC

  	
   

  	
  $

  	
  318

  	
   

  	
  $

  	
  569

  	
   

  
	
  KNOLOGY INC

  	
   

  	
  $

  	
  426

  	
   

  	
  $

  	
  495

  	
   

  
	
  EW SCRIPPS -CL A

  	
   

  	
  $

  	
  802

  	
   

  	
  $

  	
  462

  	
   

  
	
  ENTERCOM COMMUNICATIONS CORP

  	
   

  	
  $

  	
  372

  	
   

  	
  $

  	
  443

  	
   

  
	
  MCCLATCHY CO -CL A

  	
   

  	
  $

  	
  1,472

  	
   

  	
  $

  	
  413

  	
   

  
	
  SINCLAIR BROADCAST GP -CL A

  	
   

  	
  $

  	
  656

  	
   

  	
  $

  	
  406

  	
   

  
	
  MEDIACOM COMMUNICATIONS CORP

  	
   

  	
  $

  	
  1,460

  	
   

  	
  $

  	
  402

  	
   

  
	
  ASCENT MEDIA CORP

  	
   

  	
  $

  	
  454

  	
   

  	
  $

  	
  386

  	
   

  
	
  DOLAN MEDIA CO

  	
   

  	
  $

  	
  263

  	
   

  	
  $

  	
  330

  	
   

  
	
  VALUE LINE INC

  	
   

  	
  $

  	
  59

  	
   

  	
  $

  	
  230