Exhibit 10.17


 


Confidential treatment has been requested for portions of this exhibit.
The copy filed herewith omits the information subject to the confidentiality
request. Omissions are designated as [***]. A complete version of this exhibit
has been filed separately with the Securities and Exchange Commission.


 


REAL
D


 


NONQUALIFIED
STOCK OPTION GRANT


 


May 19,
2009


 


REAL D (the “Company”)
hereby grants to Optionee a nonqualified stock option (the “Option”) to
purchase shares of the Company’s Common Stock. The Option is subject to all the
terms and conditions set forth in this Stock Option Grant (this “Grant”), as
well as in the Stock Option Agreement (the “Agreement”) and the Joinder to the
Third Amended and Restated Shareholders Agreement (the “Joinder”), each of
which is attached to and incorporated into this Grant in its entirety.


 


	
  Optionee:

  	
  Cinemark USA, Inc.

  
	
   

  	
   

  
	
  Grant
  Date:

  	
  May 19, 2009

  
	
   

  	
   

  
	
  Number
  of Shares Subject to Option:

  	
  815,187

  
	
   

  	
   

  
	
  Exercise
  Price (per Share):

  	
  $0.01

  
	
   

  	
   

  
	
  Option
  Expiration Date:

  	
  The Ten (10) year
  anniversary of the Grant Date (subject to earlier termination in accordance
  with the terms of the Agreement)

  
	
   

  	
   

  
	
  Type
  of Option:

  	
  Nonqualified Stock
  Option

  
	
   

  	
   

  
	
  Vesting
  Commencement; Vesting and Exercisability Schedule:

  	
  [***]

  



 


1

















 


Additional
Terms/Acknowledgement: The undersigned Optionee acknowledges receipt of, and understands and
agrees to, the terms and conditions of this Grant and the attached Agreement
and Joinder. Optionee further acknowledges that, as of the Grant Date, this
Grant, the Agreement and the Joinder set forth the entire understanding between
Optionee and the Company regarding the Option and supersede all prior oral and
written agreements on the subject.


 


 


	
  REAL D

  	
   

  	
  OPTIONEE

  
	
   

  	
   

  	
  CINEMARK USA, INC.

  
	
   

  	
   

  	
   

  
	
  By:

  	
  /s/ Michael V. Lewis

  	
   

  	
  By:

  	
  /s/ Walter Hebert

  
	
   

  	
  Michael V. Lewis

  	
   

  	
  Name:

  	
  Walter Hebert

  
	
   

  	
  Chief Executive Officer

  	
   

  	
  Title:

  	
  SR. V.P.

  
	
   

  	
   

  	
   

  	
  Date:

  	
  5/19/09

  
	
   

  	
   

  	
   

  
	
  Attachments:

  	
   

  	
  300 Dallas Parkway, Suite 500

  
	
  1. Stock Option Agreement

  	
   

  	
  Plano, Texas 75093

  
	
  2. Notice of Exercise

  	
   

  	
  Facsimile: (972) 665-1004

  
	
  3. Joinder to shareholders Agreement

  	
   

  	
   

  
	
   

  	
   

  	
  Taxpayer ID: 75-2206284

  



 


2

















 


REAL D


 


STOCK
OPTION AGREEMENT


 


Pursuant to the Stock
Option Grant (the “Grant”) and this Stock Option Agreement (the “Agreement”),
REAL D has granted Optionee a Nonqualified Stock Option to purchase the number
of shares of the Company’s Common Stock (the “Shares”) at the exercise price
indicated in the Grant.


 


Certain definitions used
in this Agreement are as defined in Section 13 of this Agreement.


 


The details of the Option
are as follows:


 


1.             Vesting and
Exercisability. Subject
to Section 9 of this Agreement and the other limitations contained herein,
the Option will vest and become exercisable as provided in the Grant, and the
vested portion of the Option shall be exercisable at any time and from time to
time until the Option Expiration Date set forth in the Grant. The Company has
taken all action necessary to authorize the issuance of the Option and the
issuance of shares of Common Stock upon exercise hereof. The Company covenants
and agrees that it will reserve and set apart and have at all times, free from
preemptive rights, a number of shares of authorized but unissued Common Stock
or other securities deliverable upon the exercise of the Option from time to
time sufficient to enable it at any time to fulfill all its obligations
hereunder. The Company represents and warrants that the Company has 27,472,060 shares
of outstanding Capital Stock and that the Shares covered by the Option comprise
not less than 2.37% of the outstanding Capital Stock, inclusive of the Shares
as of the Grant Date.  In the event the
Shares comprise less than 2.37% of the outstanding Capital Stock as of the
Grant Date, the Company covenants and agrees to amend and restate the Option to
increase the number of shares covered by the Option to 2.37% of the Outstanding
Capital Stock as of the  Grant Date.  All Shares issued upon the exercise of the
Option and the payment therefor shall be validly issued, fully paid, non-assessable
and free from preemptive rights.


 


All Shares issued upon
the exercise of the Option and the payment therefor shall be validly issued,
fully paid, non-assessable and free from preemptive rights.


 


2.             Securities Law
Compliance. Notwithstanding
any other provision of this Agreement, Optionee may not exercise the Option
unless the Shares issuable upon exercise are registered under the Securities
Act or, if such Shares are not then so registered, the Company has determined
that such exercise and issuance would be exempt from the registration
requirements of the Securities Act. The exercise of the Option must also comply
with other applicable laws and regulations governing the Option, and Optionee
may not exercise the Option if the Company determines that such exercise would
not be in material compliance with such laws and regulations applicable to
Optionee.


 


3.             Method of Exercise. Optionee may exercise the Option, in
whole or in part, and to the extent then vested, by giving written notice to
the Company, in form of Attachment A hereto, which will state Optionee’s
election to exercise the Option and the number of Shares for which Optionee is
exercising the Option. The written notice must be accompanied by full payment
of the exercise price for the number of Shares Optionee is purchasing. Optionee
may


 

















 


make this payment in any
combination of the following: (a) by cash; or (b) by check or wire
transfer acceptable to the Company.


 


4.             No Rights as
Shareholder. Optionee
shall have no rights as a shareholder of any shares of Common Stock of the
Company covered by the Option until the date of issuance of a stock certificate
to Optionee. Except as otherwise provided in Section 7 hereof, the Company
will make no adjustment for dividends (ordinary or extraordinary, whether in
cash, securities or other property) or distributions or other rights for which
the record date is prior to the date the stock certificate is issued.


 


5.             Joinder to Third Amended
and Restated Shareholders Agreement.  Upon Optionee’s
exercise of the Option, in whole or in part, the Company will, at the time of
such exercise, require Optionee to execute and deliver to the Company that
certain Joinder to Third Amended and Restated Shareholders Agreement (the “Shareholders
Agreement”), in the form attached to this Agreement as Exhibit B
(the “Joinder”), pursuant to which Optionee will agree that the Shares acquired
by it upon exercise of the Option will be subject to, among other things, the
Company’s Rights of First Refusal, Right of Co-Sale and Put Right; Drag-Along
Right as contained therein. Optionee acknowledges and agrees that it has
previously been provided, for its review, a current form of the Shareholders
Agreement, and will have reviewed such Shareholders Agreement, with its
counsel, prior to its execution of the Grant.


 


6.             Non-transferability of
Option. The
rights of the Optionee under this Option may not be assigned or transferred
except to the extent that Shares are transferable pursuant to a Permitted
Transfer under the Shareholders Agreement (as defined therein). This Option
shall be exercisable only by the Optionee or a Permitted Transferee. Any
attempt to assign or transfer this Option, in any manner, in contravention of
this Option shall be void and shall have no effect.


 


7.             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,
distribution to shareholders 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 Company shall make proportional
adjustments in the number and kind of securities that are subject to this
Option and the related exercise price, without any change in the aggregate
price to be paid therefor. The determination by the Company 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, this Option. Also notwithstanding the foregoing, a dissolution or


 


2

















 


liquidation of the
Company or a Company Transaction (as defined in Section 13) shall not be
governed by this Section 7, but shall be governed by Section 8 and Section 9,
respectively.


 


8.             Dissolution or
Liquidation. In
the event of the proposed dissolution or liquidation of the Company that does
not constitute a Company Transaction, Outstanding Options shall terminate as of
a date fixed by the Company, provided that not less than fifteen (15) days
prior written notice of the date fixed for the date of dissolution or
liquidation is given to Optionee, and Optionee shall have the right to exercise
the Option to the extent vested and exercisable and purchase and receive the
full number of shares of Common Stock not previously exercised. Failing such
exercise, any unexercised portion of the Option of the dissolution or
liquidation date shall be forfeited and cancelled.


 


9.             Company Transaction.


 


(a)           Effect of a Company
Transaction. Notwithstanding
any other provision of the Grant or this Agreement to the contrary (including Section 1
of this Agreement), in the event of a Company Transaction that is not a Related
Party Transaction (as defined in Section 13), this Option, to the extent
it then remains unexercised, subject to the Company’s compliance with Section 9(b) below,
and unless the Option is assumed, converted or substituted for by the Successor
Company (as defined in Section 13), shall become fully and immediately
exercisable immediately prior to such Company Transaction, and then terminate
upon the effectiveness of such Company Transaction. Notwithstanding the
foregoing, the Company, in its sole discretion, may instead provide that this
Option shall terminate upon consummation of such Company Transaction that is
not a Related Party Transaction, but that Optionee shall receive, in exchange
for such terminated Option, a cash payment equal to the amount (if any) by
which (a) the Acquisition Price (as defined in Section 13) multiplied
by the number of shares of Common Stock then subject to such outstanding Option
(and whether or not then exercisable) exceeds (b) the respective aggregate
exercise price for such Option (the “Option Cash Out”).


 


(b)           Notification. The Company will provide Optionee with
notice of any pending Company Transaction that is not a Related Party
Transaction at least ten (10) business days prior to the anticipated
effectiveness thereof. Upon notification in accordance with this Section 9(b),
the Option will be treated in accordance with Section 9(a) above, and
if the Option is not assumed, converted or substituted for by the Successor
Company, or subject to the Option Cash Out, all as provided in Section 9(a),
then Optionee may exercise this Option for all of the Shares then subject to
the Option, at any time before the occurrence of such Company Transaction (but
subject to occurrence thereof), regardless of whether the Option is then fully
vested and exercisable in full.


 


(c)           Assumption, Conversion
or Substitution. For
the purposes of this Section 9, the Option 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 Option 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


 


3

















 


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 Company may, with the consent of the
Successor Company, provide for the consideration to be received upon the
exercise or settlement of the Option, for each share of Common Stock subject to
the Option, 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 Company in
good faith, and its determination shall be conclusive and binding. The Company
agrees that in all Company Transactions that are Related Party Transactions,
the Company will assume, convert or substitute this Option as provided this Section 9(c).


 


(d)           No Limitations. The Grant 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.


 


(e)           Fractional Shares. In the event of any adjustment in the
number of shares covered by the Option, the Option shall cover only the number
of full shares resulting from
such adjustment.


 


10.           Issuance of Shares. Notwithstanding any other provision of the Grant or
this Agreement, the Company shall have no obligation to issue or deliver any
shares of Common Stock upon exercise of the Option or make any other
distribution of benefits upon exercise of the Option 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 Optionee 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 upon exercise of the Option;
provided, however, the Company agrees to comply with applicable laws relating
to private placement to Optionee of the shares of Common Stock including the
filing, as applicable, of Form D.


 


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 Company may also require Optionee 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.


 


4

















 


Upon exercise of the
Option, the issuance of shares of Common Stock may be effected on a
noncertiticated basis, to the extent not prohibited by applicable law or the
applicable rules of any stock exchange.


 


11.           Severability. If any provision of the Grant, this
Agreement or the Joinder is determined to be invalid, illegal or unenforceable
in any jurisdiction, or as to any person, such provision shall be construed or
deemed amended to conform to applicable laws, or, if it cannot be construed or
deemed amended without, in the Company’s determination, materially altering the
intent of the Grant, this Agreement or the Joinder, such provision shall be
stricken as to such jurisdiction or person, and the remainder of the Grant,
this Agreement or the Joinder, as applicable, and the Option, shall remain in
full force and effect.


 


12.           Choice of Law. The Grant, this Agreement and the
Joinder, and the Option granted pursuant to the Grant, and all determinations
made and actions taken pursuant thereto, 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.


 


13.           Definitions.


 


“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.


 


“Company Transaction” 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.


 


“Outstanding Common Stock” means the then outstanding shares of the
Company’s capital stock, on a fully-diluted, as converted, as exercised, as
exchanged basis, including all outstanding convertible securities and all
options, warrants and rights to acquire capital stock,


 


5

















 


regardless of whether
such options, warrants and rights to acquire capital stock are vested or
unvested.


 


“Pre-Existing Auditorium” means all Systems that have been
installed by Licensee pursuant to the REAL D 1.0 System License Agreement
(2006) dated as of July 13, 2006 as amended to the date hereof.


 


“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.


 


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


 


14.           “Market Stand-Off” Agreement. Optionee hereby agrees that, during the
period of duration specified by the underwriter of Common Stock or other
securities of the Company following the effective date of a registration
statement of the Company filed under the Securities Act relating to a public
offering of the Company’s Common Stock, it shall not, to the extent requested
in writing by the Company and such underwriter, directly or indirectly sell,
offer to sell, contract to sell (including, without limitation, any short
sale), grant any option to purchase or otherwise transfer or dispose of (other
than to donees who agree to be similarly bound) any securities of the Company
held by it at any time during such period, except Common Stock included in such
registration; provided, however, that such market stand-off time period shall
not exceed 180 days.


 


In order to enforce the
foregoing covenant, the Company may impose stop-transfer instructions with
respect to the Common Stock of Optionee (and the shares or securities of every
other person subject to the foregoing restriction) until the end of such
period.


 


Notwithstanding the
foregoing, the obligations described in this Section 16 shall not apply to
a registration relating solely to employee benefit plans on Form S-I or Form S-8
or similar forms which may be promulgated in the future, or a registration
relating solely to a Commission Rule 145 transaction on Form S-4 or
similar forms which may be promulgated in the future.


 


6

















 


15.           Notices. Any notice or other communications relating
to this Agreement shall be in writing and delivered personally or mailed by
certified mail, return receipt requested or sent by overnight courier, to the
party concerned at the address set forth below:


 


	
  If to the Company:

  	
  REAL D

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Attn: Company Secretary

  
	
   

  	
   

  
	
  If to Optionee:

  	
  Cinemark USA, Inc.

  
	
   

  	
  3900 Dallas Parkway, Suite 500

  
	
   

  	
  Plano, Texas 75093

  
	
   

  	
  Attn: General Counsel

  



 


Either party may change
the address for the giving of notices at any time by notice given to the other
party under the provisions of this Section 15.


 


7

















 


ATTACHMENT “A”


 


NOTICE OF EXERCISE


 


	
  TO:

  	
  REAL D, Inc.

  
	
   

  	
  Attention: President

  
	
   

  	
  100 N. Crescent Dr.,
  Suite 120

  
	
   

  	
  Beverly Hills, CA 90210

  
	
   

  	
  Fax:                         

  



 


1.             The undersigned hereby elects to acquire
[      ] shares of Common Stock of REAL D, Inc.
pursuant to the terms of the attached Option.


 


2.             Enclosed is a check in the amount of
$          representing
payment in full for the purchase price of the shares being purchased.


 


3.             Please issue a certificate or certificates
representing said shares of Common Stock in the name of the undersigned or in
such other name as is specified below:


 


	
   

  	
   

  	
   

  
	
   

  	
  (Name)

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  (Address)

  	
   

  



 


4.             The undersigned hereby represents and warrants that
the aforesaid shares of Common Stock are being acquired for the account of the
undersigned for investment and not with a view to, or for resale, in connection
with the distribution thereof, and that the undersigned has no present
intention of distributing or reselling such shares.


 


 


	
   

  	
  CINEMARK USA, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Name:

  	
   

  
	
   

  	
  Title:

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  	
  Date: