Exhibit
10.1


 


REALD INC.

2004 AMENDED AND RESTATED STOCK INCENTIVE PLAN


(as amended and restated May 4, 2010)


 


SECTION 1.  PURPOSE


 


The purpose of the RealD
Inc. 2004 Amended and Restated Stock Incentive Plan is to attract, retain and
motivate employees, officers, directors, consultants, agents, advisors and
independent contractors of the Company and its Related Companies by providing
them the opportunity to acquire a proprietary interest in the Company and to
link their interests and efforts to the long-term interests of the Company’s
stockholders.


 


The 2004 Amended and
Restated Stock Incentive Plan was originally adopted by the board of directors
of Real D, a California corporation, on May 25, 2004.  On March 29, 2010, in connection with
the approval of the merger of Real D, a California corporation, with and into
RealD Inc., a Delaware corporation, wherein RealD Inc. was the surviving
corporation, the RealD Inc. stockholder also approved the assumption of the
2004 Amended and Restated Stock Incentive Plan. 
The 2004 Amended and Restated Stock Incentive Plan became effective for
RealD Inc. upon the effective date of the merger on April 8, 2010.  The Plan was last amended and restated by the
Board on May 4, 2010.


 


SECTION 2.  DEFINITIONS


 


Certain terms used in the
Plan have the meanings set forth in Appendix A.


 


SECTION 3.  ADMINISTRATION


 


3.1                               Administration of the Plan


 


The Plan shall be
administered by the Board. 
Notwithstanding the foregoing, the Board may delegate concurrent
responsibility for administering the Plan, including with respect to designated
classes of Eligible Persons, to a committee or committees (which term includes
subcommittees) consisting of one or more members of the Board, subject to such
limitations as the Board deems appropriate. 
If and so long as the Common Stock is registered under Section 12(b) or
12(g) of the Exchange Act, the Board shall consider in selecting the
members of any committee acting as Plan Administrator, with respect to any
persons subject to Section 16 of the Exchange Act, the provisions
regarding “non-employee directors” as contemplated by Rule 16b-3(b)(3) under
the Exchange Act, or any successor provision thereto.  Members of any committee shall serve for such
term as the Board may determine, subject to removal by the Board at any
time.  All references in the Plan to the “Plan Administrator” shall be, as
applicable, to the Board or any committee to whom the Board has delegated
authority to administer the Plan.


 


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3.2                               Administration and Interpretation by Plan
Administrator


 


(a)                                  Except for the terms and conditions
explicitly set forth in the Plan, the Plan Administrator shall have full power
and exclusive authority, to the extent permitted by applicable law and subject
to such orders or resolutions not inconsistent with the provisions of the Plan
as may from time to time be adopted by the Board or a committee composed of
members of the Board, to (i) select the Eligible Persons to whom Awards
may from time to time be granted under the Plan; (ii) determine the type
or types of Award to be granted to each Participant under the Plan; (iii) determine
the number of shares of Common Stock to be covered by each Award granted under
the Plan; (iv) determine the terms and conditions of any Award granted
under the Plan; (v) approve the forms of agreements for use under the
Plan; (vi) determine whether, to what extent and under what circumstances
Awards may be settled in cash, shares of Common Stock or other property or
canceled or suspended; (vii) determine whether, to what extent and under
what circumstances cash, shares of Common Stock, other property and other
amounts payable with respect to an Award shall be deferred either automatically
or at the election of the Participant; (viii) interpret and administer the
Plan and any instrument evidencing an Award; (ix) establish such rules and
regulations as it shall deem appropriate for the proper administration of the
Plan; (x) delegate administrative duties to such of the Company’s employees
as it so determines; and (xi) make any other determination and take any other
action that the Plan Administrator deems necessary or desirable for
administration of the Plan.


 


(b)                                 Decisions of the Plan Administrator shall
be final, conclusive and binding on all persons, including the Company, any
Participant, any stockholder and any Eligible Person.  A majority of the members of the Plan
Administrator may determine its actions.


 


(c)                                  The effect on the vesting of an Award of
a Company-approved leave of absence or a Participant’s working less than
full-time shall be determined by the Company’s chief human resources officer or
other person performing that function or, with respect to directors or
executive officers, by the Board, and its determination shall be final.


 


SECTION 4.  SHARES SUBJECT TO THE PLAN


 


4.1                               Authorized Number of Shares


 


Subject to adjustment
from time to time as provided in Section 14.1, a maximum of Five Million
Two Hundred Seven Thousand Three Hundred Nineteen (5,207,319) shares of Common Stock
shall be available for issuance under the Plan. 
Shares issued under the Plan shall be drawn from authorized and unissued
shares.


 


4.2                               Share Usage


 


(a)                                  Shares of Common Stock covered by an
Award shall not be counted as used unless and until they are actually issued
and delivered to a Participant.  If any
Award lapses, expires, terminates or is canceled prior to the issuance of
shares thereunder or if shares of Common Stock are issued under the Plan to a
Participant and thereafter are forfeited to or otherwise reacquired by the
Company, the shares subject to such Awards and the forfeited or reacquired
shares shall again be available for issuance under the Plan.  Any shares of Common Stock (i) tendered
by a Participant or retained by the Company as full or partial payment to the
Company for the


 


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purchase price of
an Award or to satisfy tax withholding obligations in connection with an Award
or (ii) covered by an Award that is settled in cash or in a manner such
that some or all of the shares covered by the Award are not issued shall be
available for Awards under the Plan.  The
number of shares of Common Stock available for issuance under the Plan shall
not be reduced to reflect any dividends or dividend equivalents that are
reinvested into additional shares of Common Stock or credited as additional
shares of Common Stock subject or paid with respect to an Award.


 


(b)                                 The Plan Administrator shall also,
without limitation, have the authority to grant Awards as an alternative to or
as the form of payment for grants or rights earned or due under other
compensation plans or arrangements of the Company.


 


(c)                                  Notwithstanding anything in the Plan to
the contrary, the Plan Administrator may grant Substitute Awards under the
Plan.  In the event that a written
agreement between the Company and an Acquired Entity pursuant to which a merger
or consolidation is completed is approved by the Board and that agreement sets
forth the terms and conditions of the substitution for or conversion or
assumption of outstanding awards of the Acquired Entity, those terms and
conditions shall be deemed to be the action of the Plan Administrator without
any further action by the Plan Administrator, except as may be required for
compliance with Rule 16b-3 under the Exchange Act, and the persons holding
such awards shall be deemed to be Participants.


 


(d)                                 Notwithstanding the foregoing, the
maximum number of shares that may be issued upon the exercise of Incentive
Stock Options shall equal the aggregate share number stated in Section 4.1,
subject to adjustment as provided in Section 14.1.


 


SECTION 5.  ELIGIBILITY


 


An Award may be granted
to any employee, officer or director of the Company or a Related Company whom
the Plan Administrator from time to time selects.  An Award may also be granted to any
consultant, agent, advisor or independent contractor for bona fide services
rendered to the Company or any Related Company that (a) are not in
connection with the offer and sale of the Company’s securities in a
capital-raising transaction and (b) do not directly or indirectly promote
or maintain a market for the Company’s securities.


 


SECTION 6.  AWARDS


 


6.1                               Form, Grant and Settlement of Awards


 


The Plan Administrator
shall have the authority, in its sole discretion, to determine the type or
types of Awards to be granted under the Plan. 
Such Awards may be granted either alone, in addition to or in tandem
with any other type of Award.  Any Award
settlement may be subject to such conditions, restrictions and contingencies as
the Plan Administrator shall determine.


 


6.2                               Evidence of Awards


 


Awards granted under the
Plan shall be evidenced by a written, including an electronic, agreement that
shall contain such terms, conditions, limitations and restrictions as the Plan
Administrator shall deem advisable and that are not inconsistent with the Plan.


 


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6.3                               Deferrals


 


The Plan Administrator
may permit or require a Participant to defer receipt of the payment of any
Award.  If any such deferral election is
permitted or required, the Plan Administrator, in its sole discretion, shall
establish rules and procedures for such payment deferrals, which may
include the grant of additional Awards or provisions for the payment or
crediting of interest or dividend equivalents, including converting such
credits to deferred stock unit equivalents.


 


6.4                               Dividends and Distributions


 


Participants may, if the
Plan Administrator so determines, be credited with dividends paid with respect
to shares underlying an Award in a manner determined by the Plan Administrator
in its sole discretion.  The Plan
Administrator may apply any restrictions to the dividends or dividend
equivalents that the Plan Administrator deems appropriate.  The Plan Administrator, in its sole
discretion, may determine the form of payment of dividends or dividend
equivalents, including cash, shares of Common Stock, Restricted Stock or Stock
Units.


 


SECTION 7.  OPTIONS


 


7.1                               Grant of Options


 


The Plan Administrator
may grant Options designated as Incentive Stock Options or Nonqualified Stock
Options.


 


7.2                               Option Exercise Price


 


Except in the case of
Substitute Awards, the exercise price for shares purchased under an Option
shall be as established by the Plan Administrator, but shall not be less than (a) 85%
of the Fair Market Value of the Common Stock on the Grant Date with respect to
Nonqualified Stock Options, (b) the minimum exercise price required by Section 8.3
with respect to Incentive Stock Options, and (c) in the case of an Option
granted to a Participant who owns stock possessing more than 10% of the total
combined voting power of all classes of stock of the Company or its parent or
subsidiary companies, 110% of the Fair Market Value of the Common Stock on the
Grant Date.


 


7.3                               Term of Options


 


Subject to earlier
termination in accordance with the terms of the Plan and the instrument
evidencing the Option, the maximum term of an Option (the “Option
Term”) shall be as established for that Option by the Plan
Administrator or, if not so established, shall be ten years from the Grant
Date.  For Incentive Stock Options, the
Option Term shall be as specified in Section 8.4.


 


7.4                               Exercise of Options


 


The Plan Administrator
shall establish and set forth in each instrument that evidences an Option the
time at which, or the installments in which, the Option shall vest and become
exercisable, any of which provisions may be waived or modified by the Plan
Administrator at any time.  If


 


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not so established in the
instrument evidencing the Option, the Option shall vest and become exercisable
according to the following schedule, which may be waived or modified by the
Plan Administrator at any time:


 


	
  Period of Participant’s
  Continuous

  Employment or Service With the

  Company or Its Related Companies

  From the Vesting Commencement Date

  	
   

  	
  Portion of Total Option That

  Is Vested and Exercisable

  
	
   

  	
   

  	
   

  
	
  After 1 year

  	
   

  	
  1/4th

  
	
   

  	
   

  	
   

  
	
  After each additional
  one-month period of continuous service completed thereafter

  	
   

  	
  An additional 1/48th

  
	
   

  	
   

  	
   

  
	
  After 4 years

  	
   

  	
  100%

  



 


To the extent an Option
has vested and become exercisable, the Option may be exercised in whole or from
time to time in part by delivery to the Company of a properly executed stock
option exercise agreement or notice, in a form and in accordance with
procedures established by the Plan Administrator, setting forth the number of
shares with respect to which the Option is being exercised, the restrictions
imposed on the shares purchased under such exercise agreement or notice, if
any, and such representations and agreements as may be required by the Plan
Administrator, accompanied by payment in full as described in Sections 7.5 and
12.  An Option may be exercised only for
whole shares and may not be exercised for less than a reasonable number of
shares at any one time, as determined by the Plan Administrator.


 


7.5                               Payment of Exercise Price


 


The exercise price for
shares purchased under an Option shall be paid in full to the Company by
delivery of consideration equal to the product of the Option exercise price and
the number of shares purchased. Such consideration must be paid before the
Company will issue the shares being purchased and must be in a form or a
combination of forms acceptable to the Plan Administrator for that purchase,
which forms may include:


 


(a)                                  cash;


 


(b)                                 check or wire transfer;


 


(c)                                  tendering (either actually or, if and so
long as the Common Stock is registered under Section 12(b) or 12(g) of
the Exchange Act, by attestation) shares of Common Stock that on the day prior
to the exercise date have a Fair Market Value equal to the aggregate exercise
price of the shares being purchased under the Option (such shares must have
been owned by the Participant for at least six months or any shorter period
necessary to avoid a charge to the Company’s earnings for financial reporting
purposes);


 


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(d)                                 if and so long as the Common Stock is
registered under Section 12(b) or 12(g) of the Exchange Act, and
to the extent permitted by law, delivery of a properly executed exercise
agreement or notice, together with irrevocable instructions to a brokerage firm
designated or approved by the Company to deliver promptly to the Company the
aggregate amount proceeds to pay the Option exercise price and any withholding
tax obligations that may arise in connection with the exercise, all in
accordance with the regulations of the Federal Reserve Board; or


 


(e)                                  such other consideration as the Plan
Administrator may permit.


 


7.6                               Effect of Termination of Service


 


The Plan Administrator
shall establish and set forth in each instrument that evidences an Option
whether the Option shall continue to be exercisable, and the terms and
conditions of such exercise, after a Termination of Service, any of which
provisions may be waived or modified by the Plan Administrator at any
time.  If not so established in the
instrument evidencing the Option, the Option shall be exercisable according to
the following terms and conditions, which may be waived or modified by the Plan
Administrator at any time:


 


(a)                                  Any portion of an Option that is not
vested and exercisable on the date of a Participant’s Termination of Service
shall expire on such date.


 


(b)                                 Any portion of an Option that is vested and
exercisable on the date of a Participant’s Termination of Service shall expire
on the earliest to occur of:


 


(i)                                     if the Participant’s Termination of
Service occurs for reasons other than Cause, Retirement, Disability or death,
the date that is one year after such Termination of Service;


 


(ii)                                  if the Participant’s Termination of
Service occurs by reason of Retirement, Disability or death, the one-year
anniversary of such Termination of Service; and


 


(iii)                               the last day of the Option Term (the “Option Expiration Date”).


 


Notwithstanding the
foregoing, if a Participant dies after the Participant’s Termination of Service
but while an Option is otherwise exercisable, the portion of the Option that is
vested and exercisable on the date of such Termination of Service shall expire
upon the earlier to occur of (y) the Option Expiration Date and (z) the
one-year anniversary of the date of death, unless the Plan Administrator
determines otherwise.


 


Also notwithstanding the
foregoing, in case a Participant’s Termination of Service occurs for Cause, all
Options granted to the Participant shall automatically expire upon first
notification to the Participant of such termination, unless the Plan
Administrator determines otherwise.  If a
Participant’s employment or service relationship with the Company is suspended
pending an investigation of whether the Participant shall be terminated for
Cause, all the Participant’s rights under any Option shall likewise be
suspended during the period of investigation. 
If any facts that would constitute termination for Cause are discovered
after a Participant’s Termination of Service, any Option then held by the
Participant may be immediately terminated by the Plan Administrator, in its
sole discretion.


 


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(c)                                  A Participant’s change in status from an
employee of the Company or a Related Company to a nonemployee director,
consultant, advisor or independent contractor of the Company or a Related
Company or a change in status from a nonemployee director, consultant, advisor
or independent contractor of the Company or a Related Company to an employee of
the Company or a Related Company shall not be considered a Termination of
Service for purposes of this Section 7.6.


 


SECTION 8.  INCENTIVE STOCK OPTION LIMITATIONS


 


Notwithstanding any other
provisions of the Plan, the terms and conditions of any Incentive Stock Options
shall in addition comply in all respects with Section 422 of the Code or
any successor provision and any applicable regulations thereunder, including,
to the extent required thereunder, the following:


 


8.1                               Dollar Limitation


 


To the extent the
aggregate Fair Market Value (determined as of the Grant Date) of Common Stock
with respect to which a Participant’s Incentive Stock Options become
exercisable for the first time during any calendar year (under the Plan and all
other stock option plans of the Company and its parent and subsidiary
corporations) exceeds $100,000, such portion in excess of $100,000 shall be
treated as a Nonqualified Stock Option. 
In the event the Participant holds two or more such Options that become
exercisable for the first time in the same calendar year, such limitation shall
be applied on the basis of the order in which such Options are granted.


 


8.2                               Eligible Employees


 


Individuals who are not
employees of the Company or one of its parent or subsidiary corporations may
not be granted Incentive Stock Options.


 


8.3                               Exercise Price


 


The exercise price of an
Incentive Stock Option shall be at least 100% of the Fair Market Value of the
Common Stock on the Grant Date and, in the case of an Incentive Stock Option
granted to a Participant who owns more than 10% of the total combined voting
power of all classes of the stock of the Company or of its parent or subsidiary
corporations (a “Ten Percent Stockholder”),
shall not be less than 110% of the Fair Market Value of the Common Stock on the
Grant Date.  The determination of more
than 10% ownership shall be made in accordance with Section 422 of the
Code.


 


8.4                               Option Term


 


Subject to earlier
termination in accordance with the terms of the Plan and the instrument
evidencing the Option, the Option Term of an Incentive Stock Option shall not
exceed ten years, and in the case of an Incentive Stock Option granted to a Ten
Percent Stockholder, shall not exceed five years.


 


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8.5                               Exercisability


 


An Option designated as
an Incentive Stock Option shall cease to qualify for favorable tax treatment as
an Incentive Stock Option to the extent it is exercised (if permitted by the
terms of the Option) (a) more than three months after the date of a
Participant’s Termination of Service if termination was for reasons other than
death or Disability, (b) more than one year after the date of a Participant’s
Termination of Service if termination was by reason of Disability, or (c) after
the Participant has been on leave of absence for more than 90 days, unless the
Participant’s reemployment rights are guaranteed by statute or contract.


 


8.6                               Taxation of Incentive Stock Options


 


In order to obtain
certain tax benefits afforded to Incentive Stock Options under Section 422
of the Code, the Participant must hold the shares acquired upon the exercise of
an Incentive Stock Option for two years after the Grant Date and one year after
the date of exercise.  A Participant may
be subject to the alternative minimum tax at the time of exercise of an
Incentive Stock Option.  The Participant
shall give the Company prompt notice of any disposition of shares acquired on
the exercise of an Incentive Stock Option prior to the expiration of such
holding periods.


 


8.7                               Code Definitions


 


For the purposes of this Section 8,
“disability,” “parent corporation” and “subsidiary corporation” shall have the
meanings attributed to those terms for purposes of Section 422 of the
Code.


 


SECTION 9.  STOCK APPRECIATION RIGHTS


 


9.1                               Grant of Stock Appreciation Rights


 


The Plan Administrator
may grant Stock Appreciation Rights to Participants at any time on such terms
and conditions as the Plan Administrator shall determine in its sole
discretion. An SAR may be granted in tandem with an Option or alone (“freestanding”).  The grant price of a tandem SAR shall be
equal to the exercise price of the related Option. The grant price of a
freestanding SAR shall be determined in accordance with the procedure for
Options set forth in Section 7.2. 
An SAR may be exercised upon such terms and conditions and for the term
as the Plan Administrator determines in its sole discretion; provided, however,
that, subject to earlier termination in accordance with the terms of the Plan
and the instrument evidencing the SAR, the term of a freestanding SAR shall be
as established for that SAR by the Plan Administrator or, if not so
established, shall be ten years, and in the case of a tandem SAR, (a) the
term shall not exceed the term of the related Option and (b) the tandem
SAR may be exercised for all or part of the shares subject to the related
Option upon the surrender of the right to exercise the equivalent portion of the
related Option, except that the tandem SAR may be exercised only with respect
to the shares for which its related Option is then exercisable.


 


9.2                               Payment of SAR Amount


 


Upon the exercise of an
SAR, a Participant shall be entitled to receive payment from the Company in an
amount determined by multiplying: (a) the difference between the Fair
Market


 


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Value of the Common Stock
for the date of exercise over the grant price of the SAR by (b) the number
of shares with respect to which the SAR is exercised.  At the discretion of the Plan Administrator
as set forth in the instrument evidencing the Award, the payment upon exercise
of an SAR may be in cash, in shares, in some combination thereof or in any
other manner approved by the Plan Administrator in its sole discretion.


 


SECTION 10.  STOCK AWARDS, RESTRICTED STOCK AND STOCK UNITS


 


10.1                        Grant of Stock Awards, Restricted Stock and Stock
Units


 


The Plan Administrator
may grant Stock Awards, Restricted Stock and Stock Units on such terms and
conditions and subject to such repurchase or forfeiture restrictions, if any,
which may be based on continuous service with the Company or a Related Company
or the achievement of any performance goals, as the Plan Administrator shall
determine in its sole discretion, which terms, conditions and restrictions
shall be set forth in the instrument evidencing the Award.


 


10.2                        Vesting of Restricted Stock and Stock Units


 


Upon the satisfaction of
any terms, conditions and restrictions prescribed with respect to Restricted
Stock or Stock Units, or upon a Participant’s release from any terms,
conditions and restrictions of Restricted Stock or Stock Units, as determined
by the Plan Administrator, and subject to the provisions of Section 12, (a) the
shares of Restricted Stock covered by each Award of Restricted Stock shall
become freely transferable by the Participant, and (b) Stock Units shall
be paid in shares of Common Stock or, if set forth in the instrument evidencing
the Award, in cash, or a combination of cash and shares of Common Stock.  Any fractional shares subject to such Awards
shall be paid to the Participant in cash.


 


10.3                        Waiver of Restrictions


 


Notwithstanding any other
provisions of the Plan, the Plan Administrator, in its sole discretion, may
waive the repurchase or forfeiture period and any other terms, conditions or
restrictions on any Restricted Stock or Stock Unit under such circumstances and
subject to such terms and conditions as the Plan Administrator shall deem appropriate.


 


10.4                        Minimum Purchase Price


 


The purchase price for
any shares of Common Stock that may be purchased under the Plan (“Stock Purchase Rights”) shall be at
least 85% of the Fair Market Value of the Common Stock at the time the
Participant is granted the Stock Purchase Right or at the time the purchase is
consummated.  Notwithstanding the
foregoing, to the extent required by applicable law, the purchase price shall
be at least 100% of the Fair Market Value of the Common Stock at the time the
Participant is granted the Stock Purchase Right or at the time the purchase is
consummated in the case of any person who owns stock possessing more than 10%
of the total combined voting power of all classes of stock of the Company or
its parent or subsidiary companies.


 


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SECTION 11.  OTHER STOCK OR CASH-BASED AWARDS


 


Subject to the terms of
the Plan and such other terms and conditions as the Plan Administrator deems
appropriate, the Plan Administrator may grant other incentives payable in cash
or in shares of Common Stock under the Plan as it determines.


 


SECTION 12.  WITHHOLDING


 


The Company may require
the Participant to pay to the Company the amount of (a) any taxes that the
Company is required by applicable federal, state, local or foreign law to
withhold with respect to the grant, vesting or exercise of an Award (“tax withholding obligations”) and (b) any
amounts due from the Participant to the Company or to any Related Company (“other obligations”).  The Company shall not be required to issue
any shares of Common Stock or otherwise settle an Award under the Plan until
such tax withholding obligations and other obligations are satisfied.


 


The Plan Administrator
may permit or require a Participant to satisfy all or part of the Participant’s
tax withholding obligations and other obligations by (a) paying cash to
the Company, (b) having the Company withhold an amount from any cash
amounts otherwise due or to become due from the Company to the Participant, (c) having
the Company withhold a number of shares of Common Stock that would otherwise be
issued to the Participant (or become vested in the case of Restricted Stock)
having a Fair Market Value equal to the tax withholding obligations and other
obligations, or (d) surrendering a number of shares of Common Stock the
Participant already owns having a value equal to the tax withholding
obligations and other obligations.  The
value of the shares so withheld may not exceed the employer’s minimum required
tax withholding rate, and the value of the shares so surrendered may not exceed
such rate to the extent the Participant has owned the surrendered shares for
less than six months if such limitation is necessary to avoid a charge to the
Company for financial reporting purposes.


 


SECTION 13.  ASSIGNABILITY


 


No Award or interest in
an Award may be sold, assigned, pledged (as collateral for a loan or as
security for the performance of an obligation or for any other purpose) or
transferred by a Participant or made subject to attachment or similar
proceedings otherwise than by will or by the applicable laws of descent and
distribution, except to the extent the Participant designates one or more
beneficiaries on a Company-approved form who may exercise the Award or receive
payment under the Award after the Participant’s death.  During a Participant’s lifetime, an Award may
be exercised only by the Participant. Notwithstanding the foregoing and to the
extent permitted by Section 422 of the Code, the Plan Administrator, in
its sole discretion, may permit a Participant to assign or transfer an Award,
subject to such terms and conditions as the Plan Administrator shall specify.


 


SECTION 14.  ADJUSTMENTS


 


14.1                        Adjustment of Shares


 


In the event, at any time
or from time to time, a stock dividend, stock split, spin-off, combination or
exchange of shares, recapitalization, merger, consolidation, a statutory share
exchange, 


 


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distribution to
stockholders other than a normal cash dividend, or other change in the Company’s
corporate or capital structure results in (a) the outstanding shares of
Common Stock, or any securities exchanged therefor or received in their place,
being exchanged for a different number or kind of securities of the Company or any
other company or (b) new, different or additional securities of the
Company or any other company being received by the holders of shares of Common
Stock, then the Plan Administrator shall make proportional adjustments in (i) the
maximum number and kind of securities available for issuance under the Plan; (ii) the
maximum number and kind of securities issuable as Incentive Stock Options as
set forth in Section 4.2(d); and (iii) the number and kind of
securities that are subject to any outstanding Award and the per share price of
such securities, without any change in the aggregate price to be paid therefor.


 


The determination by the
Plan Administrator as to the terms of any of the foregoing adjustments shall be
conclusive and binding.


 


Notwithstanding the
foregoing, the issuance by the Company of shares of stock of any class, or
securities convertible into shares of stock of any class, for cash or property,
or for labor or services rendered, either upon direct sale or upon the exercise
of rights or warrants to subscribe therefor, or upon conversion of shares or
obligations of the Company convertible into such shares or other securities,
shall not affect, and no adjustment by reason thereof shall be made with
respect to, outstanding Awards.  Also
notwithstanding the foregoing, a dissolution or liquidation of the Company or a
Company Transaction shall not be governed by this Section 14.1 but shall
be governed by Sections 14.2 and 14.3, respectively.


 


14.2                        Dissolution or Liquidation


 


To the extent not
previously exercised or settled, and unless otherwise determined by the Plan
Administrator in its sole discretion, Options, Stock Appreciation Rights and
Stock Units shall terminate immediately prior to the dissolution or liquidation
of the Company.  To the extent a vesting
condition, forfeiture provision or repurchase right applicable to an Award has
not been waived by the Plan Administrator, the Award shall be forfeited
immediately prior to the consummation of the dissolution or liquidation.


 


14.3                        Company Transaction


 


14.3.1              Effect
of a Company Transaction


 


Notwithstanding any other
provision of the Plan to the contrary, unless the Plan Administrator shall
determine otherwise at the time of grant with respect to a particular Award, in
the event of a Company Transaction that is not a Related Party Transaction, all
outstanding Awards shall become fully and immediately exercisable, and all
applicable deferral and restriction limitations and forfeiture provisions shall
lapse, immediately prior to the Company Transaction, and then terminate upon
effectiveness of the Company Transaction, unless such Awards are assumed,
converted or substituted for by the Successor Company.  Notwithstanding the foregoing, with respect
to Options or Stock Appreciation Rights, the Plan Administrator, in its sole
discretion, may instead provide that a Participant’s outstanding Options or
SARs shall terminate upon consummation of such Company Transaction and that
each such Participant shall receive, in exchange therefor, a cash payment equal
to the amount (if any) by which (a) the Acquisition 


 


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Price multiplied by the
number of shares of Common Stock subject to such outstanding Options or SARs
(whether or not then exercisable) exceeds (b) the respective aggregate
exercise price for such Options or grant price for such SARs.


 


14.3.2              Assumption, Conversion or Substitution


 


For the purposes of this Section 14.3,
an Award shall be considered assumed, converted or substituted for if following
the Company Transaction, the option or right confers the right to purchase or
receive, for each share of Common Stock subject to the Award immediately prior
to the Company Transaction, the consideration (whether stock, cash, or other
securities or property) received in the Company Transaction by holders of
Common Stock for each share held at the effective time of the Company
Transaction (and if holders were offered a choice of consideration, the type of
consideration chosen by the holders of a majority of the outstanding shares);
provided, however, that if such consideration received in the Company
Transaction is not solely common stock of the Successor Company, the Plan
Administrator may, with the consent of the Successor Company, provide for the
consideration to be received upon the exercise or settlement of the Award, for
each share of Common Stock subject to the Award, to be solely common stock of
the Successor Company substantially equal in fair market value to the per share
consideration received by holders of Common Stock in the Company Transaction.
The determination of such substantial equality of value of consideration shall
be made by the Plan Administrator, and its determination shall be conclusive
and binding.


 


14.3.3              Acceleration Following a Company Transaction


 


If an Award is assumed,
converted or exchanged in a Company Transaction and does not otherwise
accelerate at that time, in the event that a Participant’ employment or service
relationship with the Successor Company should terminate (i) in connection
with the Company Transaction or (ii) subsequently within one year
following such Company Transaction, and such employment or service relationship
is not terminated by the Successor Company for Cause or by the Participant
voluntarily without Good Reason, then, any portion of the Participant’s Awards
that remain unvested or subject to forfeiture or other restrictions shall
immediately vest and become exercisable, and any forfeiture provisions or other
restrictions shall lapse effective upon such termination of employment or
Service Relationship.


 


14.4                        Further Adjustment of Awards


 


Subject to Sections 14.2
and 14.3, the Plan Administrator shall have the discretion, exercisable at any
time before a sale, merger, consolidation, a statutory share exchange, reorganization,
liquidation, dissolution or change in control of the Company, as defined by the
Plan Administrator, to take such further action as it determines to be
necessary or advisable with respect to Awards. 
Such authorized action may include (but shall not be limited to)
establishing, amending or waiving the type, terms, conditions or duration of,
or restrictions on, Awards so as to provide for earlier, later, extended or
additional time for exercise, lifting restrictions and other modifications, and
the Plan Administrator may take such actions with respect to all Participants,
to certain categories of Participants or only to individual Participants.  The Plan Administrator may take such action
before or after granting Awards to which the action relates and before or


 


12














 


after any public
announcement with respect to such sale, merger, consolidation, reorganization,
liquidation, dissolution or change in control that is the reason for such
action.


 


14.5                        No Limitations


 


The grant of Awards shall
in no way affect the Company’s right to adjust, reclassify, reorganize or
otherwise change its capital or business structure or to merge, consolidate,
dissolve, liquidate or sell or transfer all or any part of its business or
assets.


 


14.6                        Fractional Shares


 


In the event of any
adjustment in the number of shares covered by any Award, each such Award shall
cover only the number of full shares resulting from such adjustment.


 


SECTION 15.  FIRST REFUSAL AND REPURCHASE RIGHTS


 


15.1                        First Refusal Rights


 


Until the date on which
the initial registration of the Common Stock under Section 12(b) or
12(g) of the Exchange Act first becomes effective, the Company shall have
the right of first refusal with respect to any proposed sale or other
disposition by a Participant of any shares of Common Stock issued pursuant to
an Award.  Such right of first refusal
shall be exercisable in accordance with the terms and conditions established by
the Plan Administrator and set forth in the stock purchase agreement evidencing
the purchase of the shares.


 


15.2                        Repurchase Rights for Vested Shares


 


Until the date on which
the initial registration of the Common Stock under Section 12(b) or
12(g) of the Exchange Act first becomes effective, upon a Participant’s
Termination of Service, all vested shares of Common Stock issued pursuant to an
Award (whether issued before or after such Termination of Service) shall be
subject to repurchase by the Company, at the Company’s sole discretion, at the
Fair Market Value of such shares on the date of such repurchase.  Notwithstanding the foregoing, in the event
that (i) a Participant’s employment or service relationship with the
Company or a Related Company is terminated without Cause and (ii) Participant’s
vested shares constitute more than one percent (1%) of the Company’s total
outstanding shares of capital stock (calculated on a fully-diluted as-converted
basis), said shares shall not be subject to repurchase by the Company.  The terms and conditions upon which such
repurchase right shall be exercisable (including the period and procedure for
exercise) shall be established by the Plan Administrator and set forth in the
stock purchase agreement evidencing the purchase of the shares.


 


15.3                        Repurchase Rights for Unvested Shares


 


The Plan Administrator
may, in its sole discretion, authorize the issuance of unvested shares of
Common Stock pursuant to the exercise of a Nonqualified Stock Option.  Should the Participant cease to be employed
by or provide services to the Company or a Related Company, then all shares of
Common Stock issued upon exercise of an Option that are unvested at the time of
cessation of employment or service relationship shall be subject to repurchase
at the lesser of the


 


13

















 


exercise price paid for
such shares and the Fair Market Value of the Common Stock at the time of
repurchase.  The terms and conditions
upon which such repurchase right shall be exercisable (including the period and
procedure for exercise) shall be established by the Plan Administrator and set
forth in the stock purchase agreement evidencing the purchase of the shares.


 


Except as otherwise
provided in the instrument evidencing the Award, in the event of a Company
Transaction, the Company’s repurchase rights shall automatically be assigned to
the Successor Company; provided, however, that such repurchase rights shall
automatically lapse if and to the same extent that the vesting schedule for
outstanding Options accelerates in connection with the Company Transaction.


 


The Plan Administrator
shall have the discretionary authority, exercisable either before or after a
Participant’s Termination of Service, to waive the Company’s outstanding
repurchase rights with respect to one or more shares purchased or purchasable
by the Participant under an Option and thereby accelerate the vesting of such
shares in whole or in part at any time.


 


15.4                        Repurchase Conditions


 


Notwithstanding the
foregoing, to the extent required by applicable law:


 


(a)                                  the Company’s repurchase right set forth
in Section 15.2 must be exercised for cash or cancellation of purchase
money indebtedness for the shares within 90 days of Termination of Service (or
in the case of securities issued pursuant to Awards after the date of
Termination of Service, within 90 days after the date of issuance), and
publicly traded; and


 


(b)                                 the Company’s repurchase right set forth
in Section 15.3 shall lapse at the rate of at least 20% of the shares per
year over five years from the date the Award is granted and the right to
repurchase shall be exercised for cash or cancellation of purchase money
indebtedness for the shares within 90 days of termination of employment (or in
the case of securities issued pursuant to Awards after the date of termination,
within 90 days after the date of issuance);


 


provided, however, that
the securities held by an officer, director or consultant of the Company or a
Related Company shall not be subject to these repurchase conditions.


 


15.5                        General


 


The Company may not
exercise its first refusal or repurchase rights under Section 15.1 or
15.2, respectively, earlier than six months and one day following the date the
shares were purchased by a Participant (or any shorter period determined by the
Company to be sufficient to avoid a charge to the Company’s earnings for
financial reporting purposes or required by applicable law).


 


The Company’s first
refusal and repurchase rights under this Section 15 are assignable by the
Company at any time.


 


SECTION 16.  MARKET STANDOFF


 


In the event of an
underwritten public offering by the Company of its equity securities pursuant
to an effective registration statement filed under the Securities Act,
including the Company’s


 


14

















 


initial public offering,
no person may sell, make any short sale of, loan, hypothecate, pledge, grant
any option for the purchase of, or otherwise dispose of or transfer for value
or otherwise agree to engage in any of the foregoing transactions with respect
to any shares issued pursuant to an Award granted under the Plan without the
prior written consent of the Company or its underwriters.  Such limitations shall be in effect for such
period of time as may be requested by the Company or such underwriters;
provided, however, that in no event shall such period exceed 180 days following
the effective date of the registration statement.  The limitations of this Section 16 shall
in all events terminate two years after the effective date of the Company’s
initial public offering.


 


In the event of any stock
split, stock dividend, recapitalization, combination of shares, exchange of
shares or other change affecting the Company’s outstanding Common Stock
effected as a class without the Company’s receipt of consideration, any new,
substituted or additional securities distributed with respect to the purchased
shares shall be immediately subject to the provisions of this Section 16,
to the same extent the purchased shares are at such time covered by such
provisions.


 


In order to enforce the
limitations of this Section 16, the Company may impose stop-transfer
instructions with respect to the purchased shares until the end of the
applicable standoff period.


 


SECTION 17.  AMENDMENT AND TERMINATION


 


17.1                        Amendment, Suspension or Termination


 


The Board may amend,
suspend or terminate the Plan or any portion of the Plan at any time and in
such respects as it shall deem advisable; provided, however, that, to the
extent required by applicable law, regulation or stock exchange rule,
stockholder approval shall be required for any amendment to the Plan.  Subject to Section 17.3, the Board may
amend the terms of any outstanding Award, prospectively or retroactively.


 


17.2                        Term of the Plan


 


The Plan shall have no
fixed expiration date.  After the Plan is
terminated, no future Awards may be granted, but Awards previously granted
shall remain outstanding in accordance with their applicable terms and
conditions and the Plan’s terms and conditions. 
Notwithstanding the foregoing, no Incentive Stock Options may be granted
more than ten years after the Effective Date and no Award may be granted to a
resident of California more than ten years after the Effective Date.


 


17.3                        Consent of Participant


 


The amendment, suspension
or termination of the Plan or a portion thereof or the amendment of an
outstanding Award shall not, without the Participant’s consent, materially
adversely affect any rights under any Award theretofore granted to the
Participant under the Plan.  Any change
or adjustment to an outstanding Incentive Stock Option shall not, without the
consent of the Participant, be made in a manner so as to constitute a “modification”
that would cause such Incentive Stock Option to fail to continue to qualify as
an Incentive Stock Option.


 


15

















 


Notwithstanding the
foregoing, any adjustments made pursuant to Sections 14.2 and 14.3 shall not be
subject to these restrictions.


 


SECTION 18.  GENERAL


 


18.1                        No Individual Rights


 


No individual or
Participant shall have any claim to be granted any Award under the Plan, and
the Company has no obligation for uniformity of treatment of Participants under
the Plan.


 


Furthermore, nothing in
the Plan or any Award granted under the Plan shall be deemed to constitute an
employment contract or confer or be deemed to confer on any Participant any
right to continue in the employ of, or to continue any other relationship with,
the Company or any Related Company or limit in any way the right of the Company
or any Related Company to terminate a Participant’s employment or other
relationship at any time, with or without cause.


 


18.2                        Issuance of Shares


 


Notwithstanding any other
provision of the Plan, the Company shall have no obligation to issue or deliver
any shares of Common Stock under the Plan or make any other distribution of
benefits under the Plan unless, in the opinion of the Company’s counsel, such
issuance, delivery or distribution would comply with all applicable laws
(including, without limitation, the requirements of the Securities Act or the
laws of any state or foreign jurisdiction) and the applicable requirements of
any securities exchange or similar entity.


 


The Company shall be
under no obligation to any Participant to register for offering or resale or to
qualify for exemption under the Securities Act, or to register or qualify under
the laws of any state or foreign jurisdiction, any shares of Common Stock,
security or interest in a security paid or issued under, or created by, the
Plan, or to continue in effect any such registrations or qualifications if
made.


 


As a condition to the exercise
of an Option or any other receipt of Common Stock pursuant to an Award under
the Plan, the Company may require (a) the Participant to represent and
warrant at the time of any such exercise or receipt that such shares are being
purchased or received only for the Participant’s own account and without any
present intention to sell or distribute such shares and (b) such other
action or agreement by the Participant as may from time to time be necessary to
comply with the federal, state and foreign securities laws. At the option of
the Company, a stop-transfer order against any such shares may be placed on the
official stock books and records of the Company, and a legend indicating that
such shares may not be pledged, sold or otherwise transferred, unless an
opinion of counsel is provided (concurred in by counsel for the Company)
stating that such transfer is not in violation of any applicable law or
regulation, may be stamped on stock certificates to ensure exemption from
registration.  The Plan Administrator may
also require the Participant to execute and deliver to the Company a purchase
agreement or such other agreement as may be in use by the Company at such time
that describes certain terms and conditions applicable to the shares.


 


To the extent the Plan or
any instrument evidencing an Award provides for issuance of stock certificates
to reflect the issuance of shares of Common Stock, the issuance may be effected
on a 


 


16

















 


noncertificated basis, to
the extent not prohibited by applicable law or the applicable rules of any
stock exchange.


 


18.3                        Indemnification


 


To the maximum extent
permitted by law, each person who is or shall have been a member of the Board,
or a committee appointed by the Board to whom authority was delegated in
accordance with Section 3.1 shall be indemnified and held harmless by the
Company against and from any loss, cost, liability or expense that may be
imposed upon or reasonably incurred by such person in connection with or
resulting from any claim, action, suit or proceeding to which such person may
be a party or in which such person may be involved by reason of any action
taken or failure to act under the Plan and against and from any and all amounts
paid by such person in settlement thereof, with the Company’s approval, or paid
by such person in satisfaction of any judgment in any such claim, action, suit
or proceeding against such person; provided, however, that such person shall
give the Company an opportunity, at its own expense, to handle and defend the
same before such person undertakes to handle and defend it on such person’s own
behalf, unless such loss, cost, liability or expense is a result of such person’s
own willful misconduct or except as expressly provided by statute.


 


The foregoing right of
indemnification shall not be exclusive of any other rights of indemnification
to which such person may be entitled under the Company’s certificate of
incorporation or bylaws, as a matter of law, or otherwise, or of any power that
the Company may have to indemnify such person or hold such person harmless.


 


18.4                        Code Section 409A.


 


The Plan and Awards
granted hereunder are intended to comply with the requirements of Code Section 409A
and shall be interpreted in a manner consistent with such intention.  If upon a Participant’s “separation from
service” within the meaning of Code Section 409A, he/she is then a “specified
employee” (as defined in Code Section 409A), then solely to the extent
necessary to comply with Code Section 409A and avoid the imposition of
taxes under Code Section 409A, the Company shall defer payment of “nonqualified
deferred compensation” subject to Code Section 409A payable as a result of
and within six (6) months following such separation from service under
this Plan until the earlier of (i) the first business day of the seventh
month following the Participant’s separation from service, or (ii) ten (10) days
after the Company receives written confirmation of the Participant’s
death.  Any such delayed payments shall be
made without interest.


 


18.5                        No Rights as a Stockholder


 


Unless otherwise provided
by the Plan Administrator or in the instrument evidencing the Award or in a
written employment, services or other agreement, no Option, Stock Appreciation
Right or Stock Unit shall entitle the Participant to any cash dividend, voting
or other right of a stockholder unless and until the date of issuance under the
Plan of the shares that are the subject of such Award.


 


17

















 


18.6                        Compliance With Laws and Regulations


 


In interpreting and
applying the provisions of the Plan, any Option granted as an Incentive Stock
Option pursuant to the Plan shall, to the extent permitted by law, be construed
as an “incentive stock option” within the meaning of Section 422 of the
Code.


 


18.7                        Participants in Other Countries or Jurisdictions


 


Without amending the
Plan, the Plan Administrator may grant Awards to eligible persons who are
foreign nationals on such terms and conditions different from those specified
in the Plan, which may, in the judgement of the Plan Administrator, be
necessary or desirable to foster and promote achievement of the purposes of the
Plan and shall have the authority to adopt such modifications, procedures, and
subplans and the like as may be necessary or desirable to comply with
provisions of the laws or regulations of other countries or jurisdictions in
which the Company or any Related Company may operate or have employees to
ensure the viability of the benefits from Awards granted to Participants
employed in such countries or jurisdictions, meet the requirements that permit
the Plan to operate in a qualified or tax efficient manner, comply with
applicable foreign laws or regulations and meet the objectives of the Plan.


 


18.8                        No Trust or Fund


 


The Plan is intended to
constitute an “unfunded” plan.  Nothing
contained herein shall require the Company to segregate any monies or other
property, or shares of Common Stock, or to create any trusts, or to make any
special deposits for any immediate or deferred amounts payable to any
Participant, and no Participant shall have any rights that are greater than
those of a general unsecured creditor of the Company.


 


18.9                        Successors


 


All obligations of the
Company under the Plan with respect to Awards shall be binding on any successor
to the Company, whether the existence of such successor is the result of a
direct or indirect purchase, merger, consolidation, or otherwise, of all or
substantially all the business and/or assets of the Company.


 


18.10                 Severability


 


If any provision of the
Plan or any Award is determined to be invalid, illegal or unenforceable in any
jurisdiction, or as to any person, or would disqualify the Plan or any Award
under any law deemed applicable by the Plan Administrator, such provision shall
be construed or deemed amended to conform to applicable laws, or, if it cannot
be so construed or deemed amended without, in the Plan Administrator’s
determination, materially altering the intent of the Plan or the Award, such
provision shall be stricken as to such jurisdiction, person or Award, and the
remainder of the Plan and any such Award shall remain in full force and effect.


 


18.11                 Choice of Law


 


The Plan, all Awards
granted thereunder and all determinations made and actions taken pursuant
hereto, to the extent not otherwise governed by the laws of the United States,
shall be governed by the laws of the State of California without giving effect
to principles of conflicts of law.


 


18

















 


18.12                 Financial Reports


 


To the extent required by
applicable law, the Company shall provide annual financial statements of the
Company to each Participant. Such financial statements need not be audited and
need not be issued to employees whose duties within the Company assure them
access to equivalent information.


 


18.13                 Legal Requirements


 


The granting of Awards
and the issuance of shares of Common Stock under the Plan is subject to all
applicable laws, rules and regulations, and to such approvals by any
governmental agencies or national securities exchanges as may be required.


 


19

















 


PLAN ADOPTION AND AMENDMENTS

ADJUSTMENTS SUMMARY PAGE


 


	
  Date of

  Board Action

  	
   

  	
  Action

  	
   

  	
  Section/Effect of

  Amendment

  	
   

  	
  Date of

  Stockholder

  Approval

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  May 25, 2004

  	
   

  	
  Initial Plan Adoption

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  June     ,
  2004

  	
   

  	
  Restated Plan Adoption

  	
   

  	
   

  	
   

  	
  June     ,
  2004

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  June 9, 2005

  	
   

  	
  Restated Plan Adoption

  	
   

  	
  Section 4 - Increase
  the number of shares reserved under the Plan

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Restated Plan Adoption

  	
   

  	
  Section 4 - Increase
  the number of shares reserved under the Plan

  	
   

  	
  January     ,
  2006

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  February 15, 2007

  	
   

  	
  Restated Plan Adoption

  	
   

  	
  Section 4 - Increase
  the number of shares reserved under the Plan

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  January 11, 2008

  	
   

  	
  Restated Plan Adoption

  	
   

  	
  Section 4 - Increase
  the number of shares reserved under the Plan

  	
   

  	
  January 11, 2008

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  June 10, 2009

  	
   

  	
  Restated Plan Adoption

  	
   

  	
  Section 4 - Increase
  the number of shares reserved under the Plan

  	
   

  	
  June 10, 2009

  



 

















 


APPENDIX A


 


“Acquired
Entity” means any entity acquired by the Company or a Related
Company or with which the Company or a Related Company merges or combines.


 


“Acquisition
Price” means the fair market value of the securities, cash or
other property, or any combination thereof, receivable upon consummation of a
Company Transaction in respect of a share of Common Stock.


 


“Award”
means any Option, Stock Appreciation Right, Stock Award, Restricted Stock,
Stock Unit or cash-based award or other incentive payable in cash or in shares
of Common Stock, as may be designated by the Plan Administrator from time to
time.


 


“Board”
means the Board of Directors of the Company.


 


“Cause,”
unless otherwise defined in the instrument evidencing the Award or in a written
employment, services or other agreement between the Participant and the Company
or a Related Company, means dishonesty, fraud, serious willful misconduct,
unauthorized use or disclosure of confidential information or trade secrets, or
conviction or confession of a felony, in each case as determined by the Company’s
chief human resources officer or other person performing that function or, in
the case of directors and executive officers, the Board, each of whose
determination shall be conclusive and binding.


 


“Code”
means the Internal Revenue Code of 1986, as amended from time to time.


 


“Common
Stock” means the common stock, $0.0001 par value per share, of
the Company.


 


“Company”
means RealD Inc., a Delaware corporation.


 


“Company
Transaction,” unless otherwise defined in the instrument
evidencing the Award or in a written employment, services or other agreement
between the Participant and the Company or a Related Company, means
consummation of


 


(a)                                  a merger or consolidation of the Company
with or into any other company or other entity,


 


(b)                                 a statutory share exchange pursuant to
which the Company’s outstanding shares are acquired or a sale in one
transaction or a series of transactions undertaken with a common purpose of at
least 80% of the Company’s outstanding voting securities, or


 


(c)                                  a sale, lease, exchange or other transfer
in one transaction or a series of related transactions undertaken with a common
purpose of all or substantially all of the Company’s assets.


 


Where a series of
transactions undertaken with a common purpose is deemed to be a Company
Transaction, the date of such Company Transaction shall be the date on which
the last of such transactions is consummated.


 

















 


“Disability,”
unless otherwise defined by the Plan Administrator or in the instrument evidencing
the Award or in a written employment, services or other agreement between the
Participant and the Company or a Related Company, means a mental or physical
impairment of the Participant that is expected to result in death or that has
lasted or is expected to last for a continuous period of 12 months or more and
that causes the Participant to be unable to perform his or her material duties
for the Company or a Related Company and to be engaged in any substantial
gainful activity, in each case as determined by the Company’s chief human
resources officer or other person performing that function or, in the case of
directors and executive officers, the Board, each of whose determination shall
be conclusive and binding.


 


“Effective
Date” means May 25, 2004.


 


“Eligible
Person” means any person eligible to receive an Award as set
forth in Section 5.


 


“Exchange
Act” means the Securities Exchange Act of 1934, as amended from
time to time.


 


“Fair
Market Value” means the per share fair market value of the
Common Stock as established in good faith by the Board or, if the Common Stock
is publicly traded, the average of the high and low trading prices for the
Common Stock on any given date during regular trading or, if not trading on
that date, such price on the last preceding date on which the Common Stock was
traded, unless determined otherwise by the Plan Administrator using such
methods or procedures as it may establish.


 


“Good
Reason,” unless otherwise defined in the instrument evidencing
the Award or in a written employment, services or other agreement between the
Participant and the Company or a Related Company, means the occurrence of any
of the following events or conditions and the failure of the Successor Company
to cure such event or condition within 30 days after receipt of written notice
from the Participant:


 


(a)                                  a change in the Participant’s status,
title, position or responsibilities (including reporting responsibilities)
that, in the Participant’s reasonable judgment, represents a substantial
reduction in the Participant’s status, title, position or responsibilities as
in effect immediately prior thereto; the assignment to the Participant of any
duties or responsibilities that, in the Participant’s reasonable judgment, are
materially inconsistent with the Participant’s status, title, position or
responsibilities; or the Participant’s removal from or any failure to reappoint
or reelect the Participant to any of such positions, except in connection with
the termination of the Participant’s employment for Cause, as a result of the
Participant’s Disability or death, or by the Participant other than for Good
Reason;


 


(b)                                 a reduction in the Participant’s annual
base salary;


 


(c)                                  the Successor Company’s requiring the
Participant (without the Participant’s consent) to be based at any place
outside a 50-mile radius of the Participant’s place of employment prior to the
Company Transaction, except for reasonably required travel on the Successor
Company’s business that is not materially greater than such travel requirements
prior to the Company Transaction;


 

















 


(d)                                 the Successor Company’s failure to (i) continue
in effect any material compensation or benefit plan (or the substantial
equivalent thereof) in which the Participant were participating at the time of
a Company Transaction, including, but not limited to, the Plan, or (ii) provide
the Participant with compensation and benefits substantially equivalent (in
terms of benefit levels and/or reward opportunities) to those provided for
under each material employee benefit plan, program and practice as in effect
immediately prior to the Company Transaction;


 


(e)                                  any material breach by the Successor
Company of its obligations to the Participant under the Plan or any
substantially equivalent plan of the Successor Company; or


 


(f)                                    any purported termination of the
Participant’s employment or service relationship for Cause by the Successor
Company that is not in accordance with the definition of Cause under the Plan.


 


“Grant
Date” means the later of (a) the date on which the Plan Administrator
completes the corporate action authorizing the grant of an Award or such later
date specified by the Plan Administrator or (b) the date on which all
conditions precedent to an Award have been satisfied, provided that conditions
to the exercisability or vesting of Awards shall not defer the Grant Date.


 


“Incentive
Stock Option” means an Option granted with the intention that it
qualify as an “incentive stock option” as that term is defined for purposes of Section 422
of the Code or any successor provision.


 


“Nonqualified
Stock Option” means an Option other than an Incentive Stock
Option.


 


“Option”
means a right to purchase Common Stock granted under Section 7.


 


“Option
Expiration Date” has the meaning set forth in Section 7.6.


 


“Option
Term” means the maximum term of an Option as set forth in Section 7.3.


 


“Participant”
means any Eligible Person to whom an Award is granted.


 


“Plan”
means the RealD Inc. 2004 Amended and Restated Stock Incentive Plan as it may
be amended from time to time.


 


“Plan
Administrator” has the meaning set forth in Section 3.1.


 


“Related
Company” means any entity that, directly or indirectly, is in
control of, is controlled by or is under common control with the Company.


 


“Related
Party Transaction” means (a) a merger or consolidation of
the Company, or a statutory share exchange pursuant to which the Company’s
outstanding shares are acquired, in which the holders of the outstanding voting
securities of the Company immediately prior to the merger or consolidation hold
at least a majority of the outstanding voting securities of the Successor
Company immediately after the merger, consolidation or statutory share
exchange; (b) a sale, lease, exchange or other transfer of all or
substantially all of the Company’s assets to a majority-owned subsidiary
company; or (c) a transaction undertaken for the principal purpose of 


 

















 


restructuring the capital
of the Company, including, but not limited to, reincorporating the Company in a
different jurisdiction, converting the Company to a limited liability company
or creating a holding company.


 


“Restricted
Stock” means an Award of shares of Common Stock granted under Section 10,
the rights of ownership of which may be subject to restrictions prescribed by
the Plan Administrator.


 


“Retirement,”
unless otherwise defined in the instrument evidencing the Award or in a written
employment, services or other agreement between the Participant and the Company
or a Related Company, means “retirement” as defined for purposes of the Plan by
the Plan Administrator or the Company’s chief human resources officer or other
person performing that function or, if not so defined, means Termination of
Service on or after the date the Participant reaches “normal retirement age,”
as that term is defined in Section 411(a)(8) of the Code.


 


“Securities
Act” means the Securities Act of 1933, as amended from time to
time.


 


“Stock
Appreciation Right” or “SAR” means
a right granted under Section 9.1 to receive the excess of the Fair Market
Value of a specified number of shares of Common Stock over the grant price.


 


“Stock
Award” means an Award of shares of Common Stock granted under Section 10,
the rights of ownership of which are not subject to restrictions prescribed by
the Plan Administrator.


 


“Stock
Unit” means an Award denominated in units of Common Stock
granted under Section 10.


 


“Substitute
Awards” means Awards granted or shares of Common Stock issued by
the Company in assumption of, or in substitution or exchange for, awards
previously granted by an Acquired Entity.


 


“Successor
Company” means the surviving company, the successor company, the
acquiring company or its parent, as applicable, in connection with a Company
Transaction.


 


“Termination
of Service” means a termination of employment or service
relationship with the Company or a Related Company for any reason, whether
voluntary or involuntary, including by reason of death, Disability or
Retirement.  Any question as to whether
and when there has been a Termination of Service for the purposes of an Award
and the cause of such Termination of Service shall be determined by the Company’s
chief human resources officer or other person performing that function or, with
respect to directors and executive officers, by the Board, and its
determination shall be conclusive and binding. 
Transfer of a Participant’s employment or service relationship between
the Company and any Related Company shall not be considered a Termination of
Service for purposes of an Award.  Unless
the Board determines otherwise, a Termination of Service shall be deemed to
occur if the Participant’s employment or service relationship is with an entity
that has ceased to be a Related Company.


 


“Vesting
Commencement Date” means the Grant Date or such other date
selected by the Plan Administrator as the date from which the Award begins to
vest.