Document:

Exhibit 10.30

 

May 25, 2010

 

Robert Mayson

c/o RealD Inc.

100 N. Crescent Dr., Suite 120

Beverly Hills, CA 90210

 

Dear Robert:

 

On behalf of RealD Inc., a
Delaware corporation  (the “Company”),
I am pleased to provide you with this letter setting forth the terms and
conditions of your continued employment with the Company (the “Agreement”).

 

1.                                       Title; Duties;
Reporting.  You will
continue to serve as the Company’s President of Consumer Electronics and shall
report directly to the Chief Executive Officer of the Company.  You shall be a member of the Company’s senior
management team and shall have such duties and responsibilities as shall be
consistent with your position.  You shall
work out of the Company’s headquarters in Beverly Hills, California.  You will also devote your full time, efforts,
abilities, and energies to promote the general welfare and interests of the
Company and any related enterprises of the Company.  You will loyally, conscientiously, and
professionally do and perform all duties and responsibilities of your position,
as well as any other duties and responsibilities as will be reasonably assigned
to you by the Company, consistent with your position.  You will strictly adhere to and obey all
Company rules, policies, procedures, regulations and guidelines including, but
not limited to, those contained in the Company’s employee handbook, as well as
any others that the Company may establish. 
You will strictly adhere to all applicable state and/or federal laws
and/or regulations relating to your employment with the Company.

 

(a)                                  No Conflicting
Obligations.  By signing
this Agreement, you confirm to the Company that you have no contractual
commitments or other legal obligations that would prohibit you from performing
your duties for the Company.

 

(b)                                 Start Date.  The effective date of this Agreement shall be
April 1, 2010 (the “Effective Date”).

 

(c)                                  Outside
Activities. 
Notwithstanding anything to the contrary contained herein, you may (i) serve
as a director or member of a committee or organization involving no actual or
potential conflict of interest with the Company and its subsidiaries and
affiliates; (ii) deliver lectures and fulfill speaking engagements; (iii) engage
in charitable and community activities; and (iv) invest your personal assets in
such form or

 

 

manner
that will not violate this Agreement; provided, however, that
the activities described in clauses (i), (ii), (iii) or (iv) do not materially
affect or interfere with the performance of your duties and obligations to the
Company and further provided that the Company’s Chief Executive Officer must
provide its advance written consent with respect to the items referenced in
clause (i).

 

2.                                       Term.

 

(a)                                  Length of Term.  The term of this Agreement shall extend from
the Effective Date through March 31, 2013 (“Term”) unless terminated
earlier in accordance with the terms herein. 
On April 1, 2012, and on each subsequent April 1st through and including
April 1, 2015, the end date of the Term shall automatically be extended by one (1)
additional year, unless either party has previously provided written notice to
the other party to not so extend the Term. 
Once such notice has been provided, then the Term shall no longer be
extended on any following April 1st. 
Notwithstanding anything to the contrary, this Agreement shall in all
cases expire no later than (and cannot be extended beyond) March 31, 2017.  Upon expiration of the Term due to either
parties’ providing written notice to not extend the Term then, except as
provided in Section 2(c) below, your employment with the Company shall
terminate (if not terminated earlier in accordance with the terms herein) as of
the end of the Term.   The terms of
Sections 8 through 15 shall survive any termination or expiration of this
Agreement or of your employment.

 

(b)                                 Resignation.  Upon termination of your employment for any
reason, you shall be deemed to have immediately resigned from all positions as
an employee, officer and/or director  with the Company, and any of its affiliates, as of your last
day of employment.

 

(c)                                  At-Will Status.  If the Term ends on March 31, 2017 and if you
are then still employed by the Company, then your employment shall thereafter
continue on an “at will” basis and during such at-will period either party can
terminate your employment without obligation (including without limitation any
obligation to provide severance payments or benefits) and/or the Company can
change any or all of the terms of your employment at any time for any reason or
no reason by providing written notice of the same.  For the avoidance of doubt, no advance
written notice will be required to effectuate a termination of your employment
after the expiration of the Term.

 

(d)                                 No Eligibility for Severance.  For the avoidance of doubt, the act of either
party providing written notice of its intention to not extend the Term, or the
expiration of the Term either on March 31, 2017 or as a result of a party
providing such written notice to not extend the Term, shall not trigger any
rights to or eligibility for severance, including without limitation those
payments and benefits described under Sections 3(d)(i) or 3(d)(ii).

 

2

 

(e)                                  Expiration upon Failure to Relocate.  This Agreement will automatically expire on September
1, 2010 if you do not relocate to the Los Angeles, California area by September
1, 2010, at which time you and the Company will negotiate a new agreement in
good faith.  For the avoidance of doubt,
your employment with the Company shall not terminate as a result of the
expiration of this Agreement pursuant to this Section 2(e); rather if you do
not relocate to the Los Angeles, California area by September 1, 2010, your
employment shall thereafter continue on an “at will” basis, unless and until
you and the Company agree in writing to a new agreement, and during such
at-will period either party can terminate your employment without obligation
(including without limitation any obligation to provide severance payments or
benefits) and/or the Company can change any or all of the terms of your
employment at any time for any reason or no reason by providing written notice
of the same.  For further avoidance of
doubt, the expiration of the Agreement pursuant to this Section 2(e) shall not
trigger any rights to or eligibility for severance, including without
limitation those payments and benefits described under Sections 3(d)(i) or
3(d)(ii).

 

3.                                       Compensation.

 

(a)                                  Base Salary.

 

(i)                                     Your current base salary will be GBP
£154,000 per annum, paid in England and less all applicable English taxes and
required withholdings.

 

(ii)                                  Upon your relocation to the Company’s
Beverly Hills, California office, your initial base salary will be USD $300,000
per annum, less all applicable United States federal, state, and local withholdings
and deductions, payable in accordance with the Company’s standard payroll
procedures.

 

(iii)                               Effective as of June 1, 2011, your base
salary shall be increased by 10%, provided you have satisfied all applicable
performance goals (“MBO Goals”) for the fiscal year ending March 31, 2011.  In addition, your base salary shall be
increased by 10% effective as of June 1, 2012, provided you have satisfied all
MBO Goals for the fiscal year ending March 31, 2012.  All MBO Goals will be prescribed and
established by the Company and you may have input into the development of such
MBO Goals.

 

(iv)                              During the period from the Effective Date
through February 24, 2013, your base salary will increase to no less than USD
$400,000 per annum, less applicable taxes and withholdings, upon the earlier
of: (a) trailing twelve (12) month sales from the Consumer Electronics Division
exceed USD $10 Million; or (b) contracted binding orders from the Consumer
Electronics Division exceed USD $10 Million. 
However with respect to a fiscal year in which your base salary
increases pursuant to this Section 3(a)(iv), you will not be eligible for an
increase under Section 3(a)(iii).

 

3

 

(v)                                 For all purposes of this Agreement, the term
“Base Salary” shall refer to the base salary in effect from time to
time.  During the Term, your Base Salary
will be reviewed annually and is subject to increase (but not decrease) at the
discretion of the Board.

 

(b)                                 Bonus.

 

(i)                                     During the period from February 25, 2010
through February 24, 2013, if trailing twelve (12) month sales from the
Consumer Electronics Division exceed USD $10 Million, you will be eligible for
a one-time bonus of USD $200,000, less all applicable withholdings and
deductions.  Such bonus will be paid
within 30 days after the Company has determined that the foregoing objective
has been satisfied and you must remain continuously employed by the Company
through the date of payment in order to receive such payment.

 

(ii)                                  During the period from February 25, 2010
through February 24, 2013, if contracted binding orders from the Consumer
Electronics Division exceed USD $10 Million, you will be eligible for a
one-time bonus of USD $200,000, less all applicable withholdings and
deductions.  Such bonus will be paid
within 30 days after the Company has determined that the foregoing objective
has been satisfied and you must remain continuously employed by the Company
through the date of payment in order to receive such payment.

 

(iii)                               During the period from the Effective Date
through February 24, 2013, if there is a Change in Control (as defined below)
of the Company, you will receive a one-time, lump sum “Change in Control
Retention Bonus” in the amount of USD $500,000, less all applicable
withholdings and deductions, which shall be paid on the first anniversary of
the Change in Control.  You must be
continuously employed by the Company (or its successor or acquirer) through the
date of payment to receive this bonus subject to Section 3(d).

 

(iv)                              During each fiscal year of the Term,
beginning with the fiscal year ending March 31, 2011, you will
annually be eligible to earn a cash performance bonus (“Performance Bonus”)
with a target amount of eighty percent (80%) of your Base Salary.  However, for the fiscal years ending March 31,
2011, March 31, 2012 and March 31, 2013, your Performance Bonus shall equal the
greater of: (a) $300,000, or (b) a target amount of eighty percent (80%) of
your Base Salary.  Your actual bonus
amount under clause (b) for fiscal year 2011, if any, shall be based on your
successful completion of the performance objectives (“MBO Goals”) prescribed and established by the Company.  Thereafter, the MBO Goals will continue to be prescribed and
established by the Company and you may have input into the development of such
MBO Goals (provided that MBO Goals may be replaced with a successor incentive
plan for you (and/or other employees) at the direction of a compensation
committee of the Board acting in good faith). 
The Performance Bonus shall be paid to you no later than the 15th day of the third 

 

4

 

month immediately following the fiscal year with respect to which the
Performance Bonus relates.  To earn any
Performance Bonus, you must remain employed by the Company through the end of
the fiscal year(s) with respect to which the Performance Bonus relates, except
in the event a “Pro-Rated Bonus” (defined below) is payable pursuant to Section
3(d)(i)(B) below (Qualifying Termination), Section 4(d) below (death) or Section
4(e) below (Disability).

 

(c)                                  Company-Sponsored
Benefits.

 

As a member of the senior management team of the Company, you will also
be eligible to receive all employee benefits pursuant to the Company’s standard
benefit plans that the Company generally provides to the other members of the
senior management team that may be in effect from time to time.  These currently include, without limitation,
paid vacation, group health benefits, 401(k) retirement benefits, business
expense reimbursements, PTO, sick time and Company paid holidays.  The Company may, in its sole discretion and
from time to time, amend or eliminate any of these benefits.

 

(d)                                 Severance and
Other Termination Benefits.

 

(i)                                     Qualifying
Termination.  If your
employment is terminated during the Term without Cause (as defined
below) by the Company or by you for “Good Reason” (as defined below) (each, a “Qualifying
Termination”), the Company shall pay you (or cause to occur, as applicable)
each of the following:

 

(A)                              cash severance
installment payments in an aggregate amount equal to one hundred percent (100%)
of your annual Base Salary as in effect on your Termination Date (“Cash
Severance”) being paid in ten monthly pro-rata installments with the first
installment of Cash Severance being paid on the 90th day after
your “separation from service” (within the meaning of Internal Revenue Code (“Code”)
Section 409A) from the Company (“Termination Date”) and the last
installment being paid on the first anniversary of the Termination Date;

 

(B)                                a pro-rated cash Performance Bonus, calculated as
follows:  the product of (x) the
Performance Bonus that would have been earned during the fiscal year in which
the Qualifying Termination occurred, assuming that the Qualifying Termination
had not occurred and that you remained as President of Consumer Electronics of
the Company through the end of such fiscal year, which Performance Bonus, if
any, shall be based on the extent to which the Company achieved the MBO Goals
(or the performance standards set forth in any successor incentive plan) during
such fiscal year, multiplied by (y) a fraction, the numerator of which is the
number of days of the Company’s fiscal year prior to the Termination Date and
the denominator of which is 365 days. 
This pro-rated 

 

5

 

Performance Bonus (a “Pro-Rated Bonus”) shall
be paid to you no later than the 15th day of the third month immediately following
the fiscal year in which the Qualifying Termination has occurred;

 

(C)                                the Company will continue to pay the cost
(to the same extent that the Company was doing so immediately before the
Termination Date) for all group employee benefit coverage continuation under
the Consolidated Omnibus Budget Reconciliation Act of 1985 (“COBRA”) to
the same extent provided by the Company’s group plans immediately before the
Termination Date for twelve (12) months after the Termination Date or until you
become eligible for group insurance benefits from another employer, whichever
occurs first, provided that you timely elect COBRA coverage (“COBRA Benefits”).  You agree (i) at any time either before or
during the period of time you are receiving benefits under this subsection (C),
to inform the Company promptly in writing if you become eligible to receive
group health coverage from another employer; and (ii) that you may not increase
the number of your designated dependents, if any, during this time unless you
do so at your own expense.  The period of
such COBRA Benefits shall be considered part of your COBRA coverage entitlement
period, and may, for tax purposes, be considered income to you; and

 

(D)                               the “Accrued Obligations” (defined below) as of the
Termination Date.

 

For avoidance of doubt, the payments and benefits that may be provided
under Sections 3(d)(i) above or 3(d)(ii) below shall not be provided more than
once and if payments and benefits are provided under either one of these
subsections, then no payments or benefits will otherwise be provided again
under either one of these subsections.

 

(ii)                                  Change in
Control.  If, during the Term, there is a Qualifying
Termination and your Termination Date occurs (because of such Qualifying
Termination) during the time period that commences on the date that is ninety
(90) days before a “Change in Control” (defined below) and extends through the
date that is twenty-four (24) months after a Change in Control, then: (a) the
amount of the total Cash Severance in Section 3(d)(i)(A) shall be equal to one
hundred percent (100%) of the then annual Base Salary plus (x) the $500,000
Change in Control Retention Bonus, less all applicable withholdings and
deductions, if the Change in Control occurs prior to February 25, 2013, or (y) an
additional eighty percent (80%) of the then annual Base Salary if the Change in
Control occurs after February 24, 2013; (b) the duration of your COBRA Benefits
under Section 3(d)(i)(C) shall be increased from twelve months to eighteen (18)
months; and (c) one hundred percent (100%) of the Options (defined below), 

 

6

 

including any additional stock options and other equity compensation
incentives granted to you during the Term (collectively, the “Equity
Incentives”)(but excluding any portion of the Performance Option or any
other performance awards which are/were forfeited due to failure to achieve the
requisite performance objectives) which are outstanding and unvested as of the
Termination Date shall become fully vested and exercisable as of the later of
your Termination Date or immediately prior to the date of the Change in
Control.  Subject to Section 15 below,
your Cash Severance shall instead be fully paid to you in a single lump sum
payment on the 90th day after your Termination Date.  For avoidance of doubt, the payments and benefits
that may be provided under Sections 3(d)(i) or 3(d)(ii) shall not be duplicated
and if payments and benefits are provided under one such subsection then no
payments or benefits will be provided under the other subsection and
vice-versa.

 

(iii)                               Release of
Claims.  Notwithstanding anything to the
contrary, in order to receive any payments or benefits under Section 3(d)(i) or
Section 3(d)(ii) as applicable, you must timely execute and deliver (and not
revoke) a separation agreement and general release of claims in favor of the
Company, any affiliates or related entities, and their employees and
affiliates, in the form and content attached as Exhibit A hereto, within
the time period specified in the release, but in no event after the 60th day following the Termination Date.  However, you shall receive payment or benefits from the
Company of the Accrued Obligations, as applicable, regardless of
whether a separation agreement and general release of claims in the form and
content attached as Exhibit A hereto is executed and timely provided to
the Company.

 

(iv)                              Golden
Parachute Excise Tax.  If
any payment or benefit received or to be received by you (including any payment
or benefit received pursuant to this Agreement or otherwise) would be (in whole
or part) subject to the excise tax imposed by Code Section 4999, or any
successor provision thereto, or any similar tax imposed by state or local law,
or any interest or penalties with respect to such excise tax (such tax or
taxes, together with any such interest and penalties, are hereafter
collectively referred to as the “Excise Tax”), then, the payments or
benefits provided under this Agreement or any other agreement pursuant to which
you receive payments that give rise to the Excise Tax will either be (a) paid in
full or (b) reduced to the extent necessary to make such payments and benefits
not subject to such Excise Tax.  The
Company shall reduce or eliminate the payments first by reducing those payments
that are not payable in cash and then by reducing or eliminating cash payments,
in each case in reverse order beginning with payments that are to be paid the
farthest in time from the determination. 
You shall receive the greater, on an after-tax basis, of (a) or
(b).  However, if the imposition of such
Excise Tax could be avoided by approval of stockholders as described in Code Section
280G(b)(5)(B), then you may request the Company to solicit a vote of such
stockholders (described in Code Section 280G(b)(5)(B) and in which case you
will cooperate and execute any such waivers of compensation 

 

7

 

as may be necessary to enable the stockholder vote to comply with the
requirements specified under Code Section 280G and the regulations promulgated
thereunder.  In no event will the Company
be required to gross up any payment or benefit to you to avoid the effects of
the Excise Tax or to pay any regular or excise taxes arising from the
application of the Excise Tax.  Unless
the Company and you otherwise agree in writing, any parachute payment
calculation will be made in writing by independent public accountants selected
by the Company, whose calculations will be conclusive and binding upon the
Company and you for all purposes.  The
Company and you will furnish to the accountants such information and documents
as the accountants may reasonably request in order to make a parachute payment
determination.  The accountants also will
provide its calculations, together with detailed supporting documentation, both
to the Company and to you, before making any payments that may be subject to
the Excise Tax.  As expressly permitted
by Q/A #32 of the Code Section 280G regulations, with respect to performing any
present value calculations that are required in connection with this Section, the
parties affirmatively elect to utilize the Applicable Federal Rates that are in
effect in May, 2010 (the “May 2010 AFRs”) and the accountants shall
therefore use such May 2010 AFRs in their determinations and calculations.

 

(e)                                  Expense
Reimbursement.  You shall be
reimbursed for all documented reasonable business expenses that are incurred in
the ordinary course of business in accordance with the Company’s expense
reimbursement policy as in effect from time to time.  Any reimbursements or in-kind benefits
provided under this Agreement that are subject to Section 409A shall be made or
provided in compliance with the requirements of Section 409A, including, where
applicable, the requirement that (i) any reimbursement is for expenses incurred
during the period of time specified in this Agreement, (ii) the amount of
expenses eligible for reimbursement, or in-kind benefits provided, during a
fiscal year may not affect the expenses eligible for reimbursement or in-kind
benefits to be provided, in any other fiscal year, (iii) the reimbursement of
an eligible expense will be made no later than the last day of the fiscal year
following the year in which the expense is incurred, and (iv) the right to
reimbursement or in-kind benefits is not subject to liquidation or exchange for
another benefit.

 

4.                                       Other Termination Rules.

 

Notwithstanding
anything to the contrary in this Agreement whether express or implied, the
Company may at any time terminate your employment with the Company and the Term,  for any reason or no reason, and with or without
Cause, and you may resign from your employment with or without Good Reason and
terminate the Term, all as set forth in greater detail in this Section 4.  If your employment terminates due to your resignation
without Good Reason, or due to your death or Disability or by the Company for
Cause, or the Agreement is terminated at the end of the Term due to non-renewal
in accordance with Section 2, then you will not be eligible for any severance
benefits, except as provided in Sections 4(d) and 4(e).

 

8

 

(a)                                  The following
definitions shall apply for purposes of this Agreement:

 

(i)                                     “Accrued Obligations” shall mean the
sum of (i) any portion of your accrued but unpaid Base Salary through the Termination
Date; (ii) subject to Section 15, any compensation previously earned but
deferred by you (together with any interest or earnings thereon) that has not
yet been paid and that is not otherwise to be paid at a later date pursuant to
any deferred compensation arrangement of the Company to which you are a party,
if any; (iii) your accrued but unpaid vacation pay through the Termination
Date; (iv) any reimbursements that you are entitled to receive under Section 3(e)
of the Agreement or otherwise; and (v) any vested benefits or amounts that you
are otherwise entitled to receive under any plan, policy, practice or program
of or any other contract or agreement with the Company in accordance with the
terms thereof (other than any such plan, policy, practice or program of the
Company that provides benefits in the nature of severance or continuation pay).

 

(ii)                                  “Cause” shall mean (i) your
commission of fraud, (ii) your willful misconduct, (iii) your material
violation of Company policies or practices, (iv) your use or disclosure of
Confidential Information (as defined below) that is unauthorized by this
Agreement, or (v) your performance of any act or omission which, if you were
prosecuted, would constitute a felony, in each case as determined by the Board
of Directors of the Company (the “Board”) (or a committee of members of
the Board), whose determination shall be conclusive and binding.

 

(iii)                               “Change in Control” shall mean:

 

(1)                                  any person or group of persons (as defined
in Section 13(d) and 14(d) of the Securities Exchange Act of 1934, as amended (
the “Exchange Act”) together with its affiliates, but excluding (i) the
Company or any of its subsidiaries, (ii) any employee benefit plans of the
Company, or (iii) a corporation or other entity owned, directly or indirectly,
by the stockholders of the Company in substantially the same proportions as
their ownership of stock of the Company (individually, a “Person” and
collectively, “Persons”), is or becomes, directly or indirectly, the “beneficial
owner” (as defined in Rule 13d-3 under the Exchange Act) of securities of the
Company representing 50% or more of the combined voting power of the Company’s
then-outstanding securities (not including in the securities beneficially owned
by such Person any securities acquired directly from the Company or its
affiliates);

 

(2)                                  the consummation of a merger or
consolidation of the Company or any direct or indirect subsidiary of the
Company with any other corporation or other entity regardless of which entity
is the survivor, 

 

9

 

other than a
merger or consolidation which would result in the voting securities of the
Company outstanding immediately prior thereto continuing to represent (either
by remaining outstanding or being converted into voting securities of the
surviving entity) more than 50% of the combined voting power of the voting
securities of the Company, such surviving entity or any parent thereof
outstanding immediately after such merger or consolidation;

 

(3)                                  there is consummated an agreement for the
sale or disposition of all or substantially all of the Company’s assets; or

 

(4)                                  any liquidation or dissolution of the
Company.

 

(iv)                              “Confidential Information” shall
mean:  The Company’s confidential and
proprietary business information, including but not limited to the Company’s
products, services, customers, contracts, fees, prices, costs, business
affairs, marketing, accounting, financial statements, employees, research,
inventions, data, software, and any other confidential and proprietary business
information of any kind, nature or description, tangible or intangible, in
whatever form.

 

(v)                                 “Disability” shall mean your medically-determined
incapacity due to physical or mental illness which makes you unable to perform
substantially the duties pertaining to your employment with or without
reasonable accommodation for a period of six (6) consecutive months.

 

(vi)                              “Good Reason” shall mean any one or
more of the following: (1) a material diminution in your Base Salary, (2) a
material diminution in your authority, duties, reporting or responsibilities as
the Company’s Chief Financial Officer, (3) a material change in the geographic
location at which you must perform your services to the Company, which shall be
defined to be a relocation of your principal workplace to a new location that
is more than thirty miles away from the workplace location specified in Section
1 above, or (4) a material breach by the Company of this Agreement.  Notwithstanding the foregoing, a diminution in your authority, duties,
reporting or responsibilities as the Company’s Chief Operating Officer,
including any reduction, sharing or relinquishment of your title and/or role as
Chief Operating Officer,
shall not constitute Good Reason.

 

(vii)                           “Separation from Service” has the
meaning set forth in Treasury Regulations Section 1.409A-1(h)(1).

 

(viii)                        “termination or resignation for Good
Reason” shall mean any termination or resignation by you of your employment
for Good Reason.

 

10

 

(ix)                                “termination without Cause” shall
mean any termination of your employment by the Company for any reason other
than Cause or your death or Disability.

 

(b)                                 Termination for Cause.  The Company may terminate your employment
and the Term at any time for Cause, provided, however, that in the event the
Board determines to terminate your employment for Cause, such termination shall
only become effective if the Board shall first provide you with written notice
detailing the alleged grounds for such Cause, and if such act or omission is
susceptible to cure, provide you a 30 day period to cure such act or
omission.  Upon a termination of your
employment by the Company for Cause, you only will be entitled to any salary
and other benefits earned, but unpaid (including accrued but unpaid vacation),
and any reimbursement for expenses owed to you by the Company, as of the
Termination Date.

 

(c)                                  Termination without Cause.   The
Company shall have the unilateral right to terminate your employment
and the Term at any time
without Cause, and without notice, in the Company’s sole and absolute
discretion.  Any such termination without
Cause shall not constitute a breach of any term of this Agreement, express or
implied, or a wrongful deprivation of your office or position.  If the Company terminates your employment and
the Term without Cause,
it shall be treated as a Qualifying Termination and the Company shall have no
obligation to you, except to continue to pay you (or cause to occur, if
applicable) the amounts (and actions) set forth in Section 3(d)(i) above
in accordance with the terms thereof and any related provisions of this
Agreement.

 

(d)                                 Termination due to Death.  Your
employment and the Term  will be automatically terminated on the date of your death.  In the event of your death, the Company
shall pay your estate or assignees (or allow your estate or assignees to
retain, as applicable) within thirty (30) days of the Termination Date the
Accrued Obligations, subject to Section 15 below.  In addition, you shall be eligible to receive
a Pro-Rated Bonus for the year in which your employment is terminated,
calculated with reference to the Termination Date and calculated and paid as
provided in Section 3(d)(i)(B) above. 
The vested
Equity Incentives as of the date of your death shall be exercisable by your
estate or assignees until the earliest of (x) twelve (12) months following
the Termination Date; (y) the scheduled expiration date of the Equity
Incentives; or (z) the date on which the Equity Incentives are canceled
(and not substituted or assumed) pursuant to a Change in Control or merger or
acquisition or similar transaction involving the Company.

 

(e)                                  Termination due to Disability.  If you are
subject to a Disability, and if within thirty (30) days after written notice is
provided to you by the Company you shall not have returned to perform
substantially your duties, your employment and the Term may be terminated by the
Company for Disability.  During any
period prior to such termination during which you are unable to perform
substantially such duties due to Disability, the Company shall continue to pay
all amounts required to be paid under this Agreement (including without
limitation your Base Salary), offset by any amounts payable to your under any
disability insurance plan or policy provided by the Company, 

 

11

 

and the Company shall continue to provide all benefits to you
hereunder.  Upon termination of your
employment due to Disability, the Company shall pay you (or allow you to
retain, as applicable) within thirty (30) days of such termination the Accrued
Obligations, subject to Section 15 below. 
In addition, you shall be eligible to receive a Pro-Rated Bonus for the
year in which your employment is terminated, calculated with reference to the
Termination Date and calculated and paid as provided in Section 3(d)(i)(B) above.  The vested Equity Incentives as of the Termination
Date shall be exercisable by you until the earliest of (x) twelve (12)
months following the Termination Date; (y) the scheduled expiration date
of the Equity Incentives; or (z) the date on which the Equity Incentives
are canceled (and not substituted or assumed) pursuant to a Change in Control
or merger or acquisition or similar transaction involving the Company.

 

(f)                                    Resignation for Good Reason.  You
may terminate your employment and the Term at any time for Good Reason,
provided that you provide written notice to the Company describing the
existence of any Good Reason condition(s) within ninety (90) days of the
date of the initial existence of the condition(s) or else you will be
deemed to have waived any Good Reason with respect to such condition(s).  Upon the Company’s receipt of such written
notice, the Company shall then have thirty (30) days during which it may cure
or remedy the condition(s).  If the
Company does cure or remedy the condition(s) during such thirty (30) day
period then Good Reason will be deemed to have not occurred with respect to
such condition(s).  If the Company does
not cure or remedy the condition(s) during such thirty (30) day period
then your employment with the Company and the Term shall be terminated for Good
Reason as of the day following the expiration of the thirty (30) day
cure/remedy period.  If you terminate
your employment for Good Reason in accordance with the provisions of this Section 4(f),
it shall be treated as a Qualifying Termination and the Company shall pay you
(or cause to occur, if applicable) the amounts (and actions) set forth in Section 3(d)(i) above
in accordance with the terms thereof and any related provisions of this
Agreement.

 

(g)                                 Resignation without Good Reason.  You
may terminate your employment and the Term at any time for no reason, or for
any reason that does not otherwise constitute Good Reason, in your sole and
absolute discretion, but only if you provide written notice to the Company at
least six (6) months prior to the effective date of your resignation (and
such notice must specify the effective date of your resignation of employment).
 In the event you so terminate your
employment without Good Reason, you shall only be entitled to receive (subject
to Section 15 below) the Accrued Obligations through the effective date of
your resignation, as well as all other compensation and benefits required under
this Agreement through the effective date of your resignation, and neither you
nor the Company shall have any further obligations to the other except as set
forth in Section 8 (Confidential Information), Section 9 (Covenants)
and Sections 10 through and including 15. 
However, in the event you terminate your employment without Good Reason
and your Termination Date occurs prior to the end of the required minimum
six-month notice period provided in this Section 4(g), then all of the
Options and any additional stock options or stock appreciation rights granted
to you after March 31, 2010 shall immediately expire and be forfeited as
of such 

 

12

 

Termination
Date.  The Company is not obligated to
actually utilize your services at any time during the six-month period
preceding the effective date of your resignation, and may prevent you from
accessing any of the Company premises or resources during such six-month
period.  Additionally, as long as the Company
provides you with any compensation and benefits that would have been earned by
you pursuant to Sections 3(a), 3(b) and 3(c) during the six-month
period preceding the effective date of your resignation had you remained
employed during such period, the Company may terminate your employment prior to
the expiration of such six-month period without triggering any rights to or
eligibility for severance, including without limitation those payments and
benefits described under Sections 3(d)(i) or 3(d)(ii).

 

5.                                       Equity
Compensation.

 

(a)                                  On or before
the effective date of an initial public offering (“IPO”), if any, of the Company’s common
shares pursuant to an effective registration statement filed with the United
States Securities and Exchange Commission, you  will be granted
a non-qualified stock option to purchase 70,000 shares of common stock (the “Annual
Grant  Option”) of the Company and a second non-qualified stock
option to purchase 250,000 shares of common stock (the “Relocation Option”)
of the Company and a third non-qualified stock option to purchase 40,000 shares
of common stock (the “Performance Option” and together with the Annual
Grant Option and Relocation Option, the “Options”) of the Company.  The Annual Grant Option and Relocation Option
will vest over four years subject to your continued employment with the
Company, except as otherwise provided herein. 
Fifty percent of the Performance Option will vest over four years
subject to your continued employment with the Company and the other fifty
percent will be based both on a three year time-based cliff vesting schedule
and on relative total shareholder return objectives over a three (3) year
period as measured against a peer group of companies as described in the
Performance Option agreement attached as Exhibit B.  If the Options are granted on the IPO date,
then their per share exercise prices will be determined by the Board based upon
the IPO price, but in any event will be equal to not less than the fair market
value of a Company common share on the date of grant as determined in
accordance with the Company’s 2004 Amended and Restated Stock Plan or 2010
Stock Incentive Plan, or any successor plan thereto (“Stock Plan”).  In the event of a Change in Control that
occurs prior to both the IPO date and September 30, 2010, the Options will
be granted as of the date immediately prior to the consummation date of the
Change in Control and will have per share exercise prices determined by the
Board based on the Change in Control transaction price, but in any event will
be equal to not less than the fair market value of a Company common share on
the date of grant as determined in accordance with the terms of the Stock
Plan.  The Options will be on other terms
and conditions set forth in the stock option agreements evidencing the grants,
which stock option agreements will include the terms and conditions of the
Options as set forth in this Agreement, and which you must execute as a
condition of grant, with vesting to commence on the date of the grant and in
accordance with the vesting schedule set forth in the Stock Plan and Option
agreements consistent with the terms of this Agreement.  Further details on the Stock Plan and the
specific 

 

13

 

terms and conditions applicable to any Options granted to you will be
provided upon final approval of such grant by the Board.  Copies of the Plan and the option grant
notices and stock option agreements evidencing any Options granted to you will
be delivered to you at the time of the grant. 
The number of shares
subject to the Options will be proportionately adjusted upon any stock split of
the Company’s common shares which occurs before the Options are granted.

 

Your current outstanding stock option to purchase 20,000 Company common
shares that was granted to you in February 2009 is fully vested and
exercisable as of the Effective Date as a result of your achievement of the
performance-based vesting conditions required by the stock option agreement
evidencing this grant. Your February 2009 stock option shall remain
subject to the term and conditions in such stock option agreement and the
Company’s 2004 Amended and Restated Stock Incentive Plan.

 

(b)                                 You shall be
eligible to be considered for additional equity awards during each year of the Term at the discretion of the
Board (or an appropriate committee thereof).

 

6.                                       Contingencies.  Your employment pursuant to this Agreement is
contingent upon your providing the Company with: (a) a resignation of your
directorship for RealD Europe, in the form provided by RealD Europe, and (b) the
legally required proof of your identity and authorization to work in the United
States effective upon your relocation.

 

7.                                       Relocation
Expenses.

 

(a)                                  The Company
will reimburse you for up to two (2) site visits (of up to 4 days each)
for you and your spouse to the Los Angeles, California area, to be completed no
later than September 1, 2010.  The
Company will pay for airfare at Business Class rates, hotel rooming
charges, and the use of a rental car. 
You must submit your request for reimbursement for all such expenses to
the Company by not later than October 31, 2010 and you will receive
reimbursement for validly incurred amounts within 60 days of the Company’s
receipt of your reimbursement request.

 

(b)                                 Provided you
relocate to the Los Angeles, California area by September 1, 2010, you
will be entitled to receive an allowance covering up to six (6) months of
paid temporary lodging in Los Angeles. 
You must commence such temporary lodging in the Los Angeles, California
area no later than June 1, 2010. 
This housing allowance may be used for rental of an apartment or a
house, hotel or motel rooming charges, home mortgage payments made during your
first six (6) months of employment in Los Angeles, and/or one-time travel
expenses for you and your family between Los Angeles, California and
London.  This temporary housing allowance
may not exceed in the aggregate an amount of USD $20,000 and will only be
available for such expenses that are incurred between the Start Date through November 30,
2010.  You must submit your request for
reimbursement for all such expenses to the Company by not later than December 15,
2010 and you will receive reimbursement for validly incurred amounts (subject
to the 

 

14

 

USD $20,000 limit) within 45 days of the Company’s receipt of your
reimbursement request.  No expenses will
be reimbursed if incurred after your Termination Date.

 

(c)                                  If you complete
your relocation to the Los Angeles, California area by September 1, 2010,
you will also be eligible for a one-time, lump-sum relocation payment of USD
$200,000 (“Relocation Payment”). 
Such Relocation Payment will be paid to you within 30 days after you
start working full time out of the Company’s Beverly Hills, California office (“Relocation
Date”).  In the event that within one
year of the Relocation Date, either you voluntarily resign your employment with
the Company or your employment is terminated by the Company for Cause, then you
must repay the entire Relocation Payment to the Company within 30 days of your
Termination Date.

 

(d)                                 In addition, in
the event of a reimbursement or benefits payable under this Section 7 that
constitutes an item of deferred compensation that is subject to Section 409A,
(i) the amount of expense reimbursement in one calendar year can in no way
affect the amount of reimbursement in another calendar year for you; (ii) in
all events such reimbursement(s) must be made no later than the last day
of the year following the calendar year in which the expense is incurred; and (iii) no
such reimbursement(s) may be subject to liquidation for cash or exchange
for another benefit.

 

8.                                       Confidential
Information.  As an
employee of the Company, you will have access to certain confidential
information of the Company and you may, during the course of your employment or
thereafter, develop certain information or inventions which will be the
property of the Company.  In
consideration of, and as a condition to, your employment with the Company, and
as an essential inducement to the Company to enter into this Agreement, this
Agreement is expressly subject to your executing (and complying with) the RealD
Inc. Employee Invention Assignment and Confidentiality Agreement (the “Confidentiality
Agreement”) in the form enclosed hereto as Exhibit C.

 

9.                                       Covenants.  You agree to timely and fully comply with all
of the covenants set forth in this Section 9 and further understand and
agree that such covenants shall survive any termination of your employment and
termination or expiration of this Agreement.

 

(a)                                  Return of
Company Property.  On your
Termination Date, or at any other time as required by the Company, you will
immediately surrender to the Company all Company property, including but not
limited to Confidential Information (as such term is defined in the
Confidentiality Agreement), keys, key cards, computers, telephones, pagers,
credit cards, automobiles, equipment, and/or other similar property of the
Company.

 

(b)                                 Nondisparagement.  You will not at any time during the period of
your employment with the Company and during any period in which you are
receiving severance payments under Section 3(d), make (or direct anyone
else to make) any disparaging statements (oral or written) about the Company,
or any of its affiliated entities, officers, directors, employees,
stockholders, representatives or agents, or any of 

 

15

 

the Company’s products or services or work-in-progress, that are
harmful to their businesses, business reputations or personal reputations.

 

(c)                                  Cooperation.                           You agree that,
upon the Company’s request and without any payment therefore, you shall
reasonably cooperate with the Company (and be available as necessary) after the
Termination Date in connection with any matters involving events that occurred
during your period of employment with the Company.

 

(d)                                 Amounts Due.  You will fully pay off any outstanding
amounts owed to the Company no later than their applicable due date or within
thirty days of the Termination Date (if no other due date has previously been
established).  Within thirty (30) days of
the Termination Date, you will submit any outstanding business expense reports
to the Company for business expenses incurred prior to the Termination Date.

 

(e)                                  Company
Resources.  As of the
Termination Date, you will no longer represent that you are an officer,
director or employee of the Company or any Company affiliate and you will
immediately discontinue using the Company mailing address, telephone, facsimile
machines, voice mail and e-mail.

 

(f)                                    Notice of New
Employment.  You will
provide written notice to the Company within three (3) business days after
the date that you agree to accept new full or part time employment or agree to
provide consulting or other services to another entity or venture.

 

(g)                                 Representations.  You represent that you have not entered into
any agreements, understandings, or arrangements with any person or entity that
you would breach as a result of, or that would in any way preclude or prohibit
you from entering into, this Agreement with the Company or performing any of
the duties and responsibilities provided for in this Agreement.  You represent that you do not possess any confidential,
proprietary business information belonging to any other entity, and will not
use any confidential, proprietary business information belonging to any other
entity in connection with your employment with the Company.  You represent that you are
not resigning employment or relocating any residence in reliance on any promise
or representation by the Company regarding the kind, character, or existence of
such work, or the length of time such work will last, or the compensation
therefor.

 

(h)                                 Clawback Policy.  Without limiting the requirement in Section 1
that you will strictly adhere to and obey Company policies, you understand and
agree that the Company may in the future implement a policy on the recoupment
of compensation (“Clawback Policy”).  As
a result, you may be
required to repay to the Company certain previously paid compensation (that was
earned or accrued on or after the Effective Date) in accordance with any such
Clawback Policy and/or in accordance with applicable law.

 

(i)                                     Violations.  You acknowledge that (i) upon a
violation of any of the covenants contained in this Section 9; or (ii) if
the Company is terminating your 

 

16

 

employment for Cause as provided under this Agreement, the Company
would sustain irreparable harm as a result and that the Company would not have
entered into this Agreement without such restrictions, and, therefore, you
agree that in addition to any other remedies which the Company may have, the
Company shall be entitled, without bond of any kind, to seek equitable relief
including specific performance and injunctions restraining you from committing
or continuing any such violation.

 

10.                                 Entire
Agreement.  This
Agreement and its attachments, the Employee Invention Assignment and
Confidentiality Agreement, and the Company’s Stock Plan, and any other
agreements referenced herein, as amended or superseded from time to time,
contain the entire agreement between you and the Company regarding their terms
and supersede any and all prior written or oral understandings including
without limitation that certain employment agreement by and between REAL D and
Robert Mayson, dated February 25, 2010. 
Except as otherwise provided herein, this Agreement may not be amended
or modified except in a writing, executed by you and a duly authorized officer
of the Company other than yourself.  This
Agreement may be executed by facsimile signatures and in counterparts, each of
which shall constitute an original, and all of which shall constitute one and
the same instrument.  Notwithstanding Section 3
above, this Agreement cancels and is in substitution of your Director Services
Agreement, and any other agreements related to your employment, with RealD
Europe Limited dated November 2008 (collectively “RealD Europe
Agreement”) which is hereby terminated by mutual agreement, except for only
Clauses 12, 14, 18 with respect to your employment in the United Kingdom, and
Schedule 2 thereof, which will continue in full force and effect.  The obligations set forth in Schedule 2 of
the RealD Europe Agreement will continue during the three (3) months
immediately following the execution of this Agreement.  Clause 13 of the RealD Europe Agreement RealD
Europe Limited remains effective for any intellectual property, inventions, and
patents made or acquired by you prior to execution of this Agreement.

 

11.                                 Choice of Law;
Severability; Waiver.  This
Agreement will be governed by the laws of the State of California, United
States, without reference to the conflict of law provisions thereof.  If any provision of this Agreement, or
portion thereof, shall be held invalid or unenforceable by a court of competent
jurisdiction, such invalidity or unenforceability shall attach only to such
provision or portion thereof, and shall not in any manner affect or render invalid
or unenforceable any other provision, or portion thereof, of this
Agreement.  For the avoidance of doubt,
the laws of England shall not apply to your employment or termination in, or
transfer to, the United States.  You will
remain responsible for any taxes or reporting obligations, if any, under the
laws of England for any income or benefits received by you.  No breach of any provision hereof can be
waived unless in writing.  Waiver of any
one breach of any provision hereof will not be deemed to be a waiver of any
other breach of the same or any other provision of this Agreement.

 

12.                                 Successors and
Assigns.  The Company
may assign this Agreement to any successor (whether by amalgamation, merger,
consolidation, sale of assets, purchase or otherwise) to all or substantially
all of the equity, assets or business of the Company, and this Agreement will
be binding upon and inure to the benefit of such successors and assigns,
including any successor entity.  You may
not assign this Agreement or your obligations hereunder.

 

17

 

13.                                 Notice.  Any and all notices required or permitted to
be given to you or the Company pursuant to the provisions of this Agreement
will be in writing, and will be effective and deemed to provide such party
sufficient notice hereunder on the earliest of the following: (i) at the
time of personal delivery, if delivery is in person; (ii) one (1) business
day after deposit with an express overnight courier for United States
deliveries, or two (2) business days after such deposit for deliveries
outside of the United States; (iii) three (3) business days after
deposit in the United States mail by certified mail (return receipt requested)
for United States deliveries.  All
notices that the Company
is required to or may desire to give you that are not delivered personally
will be sent with postage and/or other charges prepaid and properly addressed to you at your home address of
record with the Company, or at such other address as you may from time to time
designate by one of the indicated means of notice herein.  All notices that you are required to or may desire to give to the
Company that are not delivered personally will be sent with postage
and/or other charges prepaid and properly addressed to the Company’s General Counsel at its
principal office, or at such other office as the Company may from time to time
designate by one of the indicated means of notice herein.

 

14.                                 Withholding and
Taxes.  The Company shall have the
right to withhold and deduct from any payment hereunder any federal, state or
local taxes of any kind required by law to be withheld with respect to any such
payment.  The Company (including without
limitation members of the Board) shall not be liable to you or other persons as
to any unexpected or adverse tax consequence realized by you and you shall be
solely responsible for the timely payment of all taxes arising from this
Agreement that are imposed on you.

 

15.                                 Section 409A.  The payments under this Agreement are
intended to be exempt from the application of Section 409A pursuant to the
“short-term deferral” exception and “separation pay plan” exception under Section 409A
to the fullest extent possible.  Each
individual payment provided under Sections 3(d), 4(d) or 4(e) is intended
to be a separate payment and not a series of payments for purposes of Section 409A.  Anything in this Agreement to the contrary
notwithstanding, if the severance payment above constitutes an item of
nonqualified deferred compensation subject to Section 409A, the Company
and you shall take all steps necessary (including with regard to any
post-termination services you may perform) to ensure that any such termination
constitutes a “separation from service” within the meaning of Section 409A.  In addition, if you are deemed at the time of
your “separation from service” to be a “specified employee” within the meaning
of that term under Section 409A and to the extent delaying commencement of
payment of nonqualified deferred compensation (that is payable on account of
your separation from service) is required in order to avoid the imposition of
taxes under Section 409A, then all such payments and benefits will instead
be paid to you in a lump sum without interest on the earlier of (a) the
first business day of the seventh month following your “separation from service”
or (b) five business days after the date the Company receives written
confirmation of your death.  It is
intended that payments under this Agreement will be exempt from or comply with Section 409A,
but the Company makes no representation or covenant to ensure that the payments
under this Agreement are exempt from, or compliant with, Section 409A, and
will have no liability to you or any other party if a payment under this
Agreement that is intended to be exempt from, or compliant with, Section 409A
is not so exempt or compliant.

 

18

 

16.                                 Exhibits.  All Exhibits attached to this Agreement shall
be incorporated herein by this reference as though fully set forth herein.

 

A duplicate original of this
Agreement is enclosed for your records. 
If you decide to accept the terms of this Agreement, please sign the
enclosed copy of this Agreement and the Employee Invention Assignment and Confidentiality
Agreement in the spaces indicated and return it to me.  Your signature will acknowledge that you have
read and understood and agreed to the terms and conditions of this Agreement
and Employee Invention Assignment and Confidentiality Agreement.  Should you have anything else that you wish
to discuss, please do not hesitate to contact me.

 

 

	
   

  	
  Sincerely,

  
	
   

  	
   

  
	
   

  	
  RealD
  Inc.

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Michael
  V. Lewis

  
	
   

  	
   

  	
  Chief Executive Officer

  

 

19

 

I have read, understand, and
accept this offer.  Furthermore, in
choosing to accept this offer, I agree that I am not relying on any
representations, whether verbal or written, except as specifically set out
within this Agreement.

 

 

	
   

  	
   

  
	
  Employee Signature

  	
   

  

 

 

	
   

  	
   

  
	
  Printed Name

  	
   

  

 

 

Date:  May     , 2010

 

 

	
  Enclosures:

  	
  Duplicate Original Letter

  
	
   

  	
  EXHIBIT A:

  	
  FORM OF SEPARATION
  AGREEMENT AND RELEASE OF CLAIMS

  
	
   

  	
  EXHIBIT B:

  	
  PERFORMANCE OPTION
  AGREEMENT

  
	
   

  	
  EXHIBIT C:

  	
  EMPLOYEE INVENTION
  ASSIGNMENT

  AND CONFIDENTIALITY AGREEMENT

  

 

20

 

EXHIBIT
A

FORM OF
SEPARATION AGREEMENT AND RELEASE OF CLAIMS

 

[SEE EXHIBIT NUMBER 10.31]

 

 

EXHIBIT
B

PERFORMANCE OPTION AGREEMENT

 

[SEE EXHIBIT NUMBER 10.7]

 

 

EXHIBIT C

EMPLOYEE INVENTION ASSIGNMENT AND CONFIDENTIALITY AGREEMENT

 

[SEE EXHIBIT NUMBER 10.32]Exhibit 10.31

 

SEPARATION
AGREEMENT AND GENERAL RELEASE OF CLAIMS

 

This Separation Agreement
and General Release of Claims (the “Agreement”) is entered into by and
between RealD Inc., a Delaware corporation (the “Company”), and
[                    ]
(“Executive”) (together “the Parties”).  This Agreement is effective only if it has
been executed by each of the Parties and the revocation period has expired
without revocation as set forth in Sections 5(c) and (d) below (the “Effective
Date”).

 

WHEREAS,
Executive was an employee of the Company and served as its President of
Worldwide Cinema pursuant to an employment agreement with the Company with an
effective date of April 1, 2010 (the “Employment Agreement”);

 

WHEREAS, the
Company and Executive mutually agree that (i) Executive’s employment with
the Company was terminated [by the Company without Cause] [by Executive for
Good Reason] (a “Qualifying Termination”) on [DATE] (the “Termination
Date”), and (ii) that Executive will release the Company and its
affiliates from any and all claims as of the Effective Date;

 

WHEREAS, [a
Change in Control (as defined in the Employment Agreement) occurred on [DATE];]
and

 

WHEREAS, in
accordance with the Employment Agreement, a Qualifying Termination of Executive’s
employment means that Executive is eligible to receive certain separation
benefits provided that, among other things, Executive timely complies with the
requirements of Section 3(d)(iv) of the Employment Agreement.

 

NOW,
THEREFORE, in
consideration of the mutual promises contained herein, the Parties agree as
follows:

 

1.     Qualifying Termination of
Employment.  Executive and
the Company acknowledge and agree that Executive’s employment with the Company
terminated as of the close of business on the Termination Date without regard
to whether Executive signs this Agreement or agrees to the following terms and
conditions, and that such termination was treated as a Qualifying Termination
by the Company.  As of the Termination
Date, it is mutually agreed that Executive is no longer [an employee] [or
director] of the Company and no longer holds any positions or offices with the
Company [except for his membership on the Company’s Board of Directors].

 

2.     Separation Benefits.  In consideration for Executive’s general
release of all claims set forth below and Executive’s other obligations under
this Agreement and in satisfaction of all of the Company’s obligations to
Executive and further provided that: (i) this Agreement is signed by
Executive and delivered to the Company on or before [DATE], (ii) this
Agreement is not revoked by Executive under Section 5 below and therefore
becomes effective on or before [DATE], (iii) Executive remains in
continuing material compliance with all of the terms of this Agreement, and (iv) the
termination of Executive’s employment with the Company is treated as 

 

1

 

a Qualifying Termination
by the Company, then the Company agrees to provide (and continue to provide)
the separation benefits specified in Section 3(a) below to Executive.

 

In the event that the
Company believes you are not in continuing material compliance with the terms
of this Agreement, then the Company shall provide you
with written notice of the same and the Company’s intention to terminate the
separation benefits specified in Section 3(a) below within ninety
(90) days of the date on which the general counsel of the Company or a member
of the Board (other than you) first becomes aware of the initial existence of
the condition(s) giving rise to such lack of material compliance.   If the Company does not timely provide such
notice during the applicable 90 days, then the Company will be deemed to have
waived the right to assert any such breach with respect to such condition(s) provided
that at least one of such persons with knowledge of the initial existence of
the condition(s) remains in service with the Company through the
conclusion of the ninety day notice period. 
Notwithstanding the foregoing, in the event that
the actions or inactions giving rise to such lack of material compliance are
reasonably capable of being cured, the written notice from the Company shall
provide you with at least twenty (20) days to cure such noncompliance, prior to
the effective date of the termination of separation benefits specified in Section 3(a) below.  During such twenty (20) day period, the
Company will suspend payment(s) of the separation benefits specified in Section 3(a) below,
and if the actions or inactions giving rise to such lack of material compliance
are not timely cured, then the Company shall immediately terminate any and all
such separation payments and benefits. 
In the event that you cure the circumstances giving rise to such lack of
material compliance within such twenty (20) day period, the Company shall
remove the suspension and continue to provide the separation payments and
benefits specified in Section 3(a) below.

 

3.     Payments,
Benefits and Taxes.

 

(a)   Separation Benefits.  The Company will provide to Executive the
payments and benefits specified in Section 3(d)(i) (or Section 3(d)(ii) if
a Change in Control is consummated before the 90th day after the Termination Date) of the
Employment Agreement, subject to Section 3(d)(v) of the Employment
Agreement, but in no event will payments be provided under both Sections 3(d)(i) and
3(d)(ii) of the Employment Agreement. 
Subject to Section 3(e) below, such payments and benefits will
be provided to Executive at the times specified in the Employment Agreement.

 

(b)   Taxes. 
Any tax obligations of Executive and tax liability therefore, including
without limitation any penalties or interest based upon such tax obligations,
that arise from the benefits and payments made to Executive shall be Executive’s
sole responsibility and liability.  All
payments or benefits made under this Agreement to Executive shall be subject to
applicable tax withholding laws and regulations and Executive shall be required
to timely and fully satisfy any such withholding as a condition of receipt of
any payments or benefits.  The terms of Section 12
of the Employment Agreement are also applicable to this Agreement and to all
payments and benefits provided hereunder.

 

(c)   WARN Payments.  The payments to Executive hereunder shall be
considered as including any and all payments by the Company that could or in
fact become payable in 

 

2

 

connection with the
Executive’s termination of employment pursuant to any applicable legal
requirements, including, without limitation, the Worker Adjustment and
Retraining Notification Act (the “WARN” Act), California Labor Code
sections 1400-1408, or any other similar foreign, federal or state law.

 

(d)   Full Payment.  Except with respect to any “Excluded Claims”
(defined below), Executive represents and warrants to the Company that, as of
the Effective Date, the payments set forth in Section 3(a) herein
constitute all payments or obligations owed by the Company to Executive in
connection with any employment, severance, retention, or a change in control plan
or arrangement.

 

(e)   Internal Revenue Code Section 409A.  The
terms of Section 13 of the Employment Agreement are also applicable to
this Agreement and to all payments and benefits provided hereunder.

 

4.     Executive’s
Representations, Warranties and Covenants.

 

(a)   Executive reaffirms that he will continue to
be bound by, and will continue to comply with, all of the terms and conditions
and covenants in Sections 6 and 7 of the Employment Agreement and also all
terms and conditions of the Confidentiality Agreement (as such term is defined
in the Employment Agreement).

 

(b)   Executive represents and warrants to the
Company that, as of the Effective Date, Executive has no outstanding agreement
or obligation that is in conflict with any of the provisions of this Agreement,
or that would preclude Executive from complying with the provisions hereof, and
further certifies that Executive will not enter into any such conflicting
agreement.

 

(c)   Executive represents and warrants to the
Company that, as of the Effective Date, Executive has not filed any claim
against the Company or its affiliates and has not assigned to any third party
any claims against the Company or its affiliates.

 

(d)   Executive acknowledges that Executive has had
the opportunity to fully review this Agreement and, if Executive so chooses, to
consult with counsel, and is fully aware of Executive’s rights and obligations
under this Agreement.

 

5.     Executive’s Release of
Claims.  In exchange for
the Company’s promises set forth herein, all of which are good and valuable
consideration, Executive hereby covenants not to sue and releases and forever
discharges the Company, its owners, parents, subsidiaries, attorneys, insurers,
agents, employees, stockholders, directors, officers, affiliates, predecessors
and successors of and from any and all rights, claims, actions, demands, causes
of action, obligations, attorneys’ fees, costs, damages, and liabilities of
whatever kind or nature, in law or in equity, that Executive may have (whether
known or not known) (collectively, “Claims”), accruing to Executive as
of the Effective Date, that Executive has ever had, including but not limited
to Claims based on and/or arising under Title VII of the Civil Rights Act
of 1964, as amended, The 

 

3

 

Americans with
Disabilities Act, The Family Medical Leave Act, The Equal Pay Act, The Employee
Retirement Income Security Act, The Fair Labor Standards Act, and/or the
California Fair Employment and Housing Act; The California Constitution, The
California Government Code, The California Labor Code, The Industrial Welfare
Commission’s Orders, the Worker Adjustment and Retraining Notification Act,
California Labor Code sections 1400-1408, and any and all other Claims
Executive may have under any other federal, state or local Constitution,
Statute, Ordinance and/or Regulation; and all other Claims arising under common
law including but not limited to tort, express and/or implied contract and/or
quasi-contract, arising out of or, in any way, related to Executive’s previous
relationship with the Company as an employee, consultant and/or director.  Furthermore, Executive acknowledges that
Executive is waiving and releasing any rights Executive may have under the
Older Workers Benefit Protection Act and Age Discrimination in Employment Act
of 1967 (“ADEA”), as amended, and that this waiver and release is
knowing and voluntary.  Executive
acknowledges that the consideration given for this waiver and release is in
addition to anything of value to which Executive was already entitled.  Executive further acknowledges that Executive
has been advised by this writing that in accordance with ADEA:

 

(a)          Executive should consult
with an attorney prior to executing this Agreement;

 

(b)         Executive has at least
twenty-one (21) days within which to consider this Agreement;

 

(c)          Executive has up to
seven (7) days following the execution of this Agreement by the Executive
to revoke the Agreement by timely providing written notice of revocation to the
Company; and

 

(d)         this Agreement shall not
be effective until the revocation period in Section 5(c) has expired
without revocation by Executive.

 

The Company and Executive agree that the release set forth in this Section 5
shall be and remain in effect in all respects as a complete general release as
to the matters released.  Notwithstanding
anything to the contrary herein, the Parties agree that Executive is not
waiving any Claims he may have that arise from or are incurred in connection
with any of the following matters (collectively, the “Excluded Claims”).  (i) the Company’s breach of its
obligations under Section 3(a) above or under Section 3(d)(i) and
3(d)(ii) of the Employment Agreement; (ii) claims for indemnification
under Section 2802 of the California Labor Code, under the Company’s
Certificate of Incorporation, Articles of Incorporation or by-laws, pursuant to
that certain Indemnification Agreement (as amended from time to time) dated April 10,
2010, and under any insurance policy of the Company or the established policies
of the Company or any affiliate thereof expressly providing for such indemnity
between Executive and the Company or any affiliate thereof; (iii) claims
for any vested benefits under the terms of any of the Company’s pension, profit
sharing, health, welfare, stock option, restricted stock, stock incentive,
deferred compensation, supplemental compensation and any other welfare, benefit
or other plan of the 

 

4

 

Company; (iv) claims for workers’ compensation benefits; and (v) any
transactions or agreements entered into, and any occurrences, acts or omissions
occurring, after the Effective Date.

 

6.     Civil Code Section 1542.  Executive and the Company acknowledge that
they are familiar with the provisions of California Civil Code Section 1542,
which provides as follows:

 

A GENERAL RELEASE
DOES NOT EXTEND TO CLAIMS WHICH THE CREDITOR DOES NOT KNOW OR SUSPECT TO EXIST
IN HIS FAVOR AT THE TIME OF EXECUTING THE RELEASE, WHICH IF KNOWN BY HIM MUST
HAVE MATERIALLY AFFECTED HIS SETTLEMENT WITH THE DEBTOR.

 

Executive, being aware of
said Code section, agrees to expressly waive any rights Executive may have
thereunder (except with respect to Excluded Claims), as well as under any other
statute or common law principles of similar effect.

 

7.     Labor Code Section 206.5.  Upon receipt by Executive of the “Accrued
Obligations” (as such term is defined in the Employment Agreement) including
all of his salary and unused vacation time, each accrued through the
Termination Date, Executive acknowledges that these payments represent all such
monies due to Executive through the Termination Date.  In light of the payment by the Company of all
wages due, or to become due to Executive (excluding any additional amounts
payable to Executive under Section 3(d) of the Employment Agreement),
California Labor Code Section 206.5 is not applicable to the Parties
hereto.  That section provides in
pertinent part as follows:

 

No employer shall
require the execution of any release of any claim or right on account of wages
due, or to become due, or made as an advance on wages to be earned, unless
payment of such wages has been made.

 

8.     Governing Law.  This Agreement will be governed by the
internal substantive laws, but not the choice of law rules, of the State of
California.

 

9.     Assignment.  This Agreement and all rights under this
Agreement will be binding upon and inure to the benefit of and be enforceable
by the Parties hereto and their respective owners, agents, officers,
stockholders, employees, directors, attorneys, insurers, subsidiaries, parents,
affiliates, successors, personal or legal representatives, executors,
administrators, heirs, distributes, devisees, legatees, and assigns.  This Agreement is personal in nature, and
none of the Parties to this Agreement will, without the written consent of the
other, assign or transfer this Agreement or any right or obligation under this
Agreement to any other person or entity; except that the rights and obligations
of the Company under this Agreement may be assigned (without the consent of the
Executive) to an entity which becomes the successor to the Company as the
result of a merger or other corporate reorganization or similar transaction or
sale of substantially 

 

5

 

all the assets to a
successor which continues the business of the Company or any other subsidiary
of the Company.

 

10.   Notices.  The terms of Section 11 of the
Employment Agreement are also applicable to this Agreement.

 

11.   Integration and
Interpretation.  This
Agreement, and the surviving provisions of the Employment Agreement, represents
the entire agreement and understanding between the parties as to the subject
matter hereof and supersedes all prior agreements whether written or oral.  The terms of this Agreement have been
voluntarily agreed to by Executive and Company, and the language used in this
Agreement shall be deemed to be the language chosen to express the mutual
intent of the Parties.  This Agreement
shall be construed without regard to any presumption or rule requiring
construction against Company or Executive, or in favor of the Party receiving a
particular benefit under this Agreement.

 

12.   Modification.  This Agreement may only be amended in a
writing signed by Executive and an authorized representative of the Company and
which expressly references that this Agreement is being amended.  No waiver, alteration, or modification of any
of the provisions of this Agreement will be binding unless in writing and
signed by the party against whom enforcement of the change or modification is
sought.  Failure or delay on the part of
either party hereto to enforce any right, power, or privilege hereunder will
not be deemed to constitute a waiver thereof. 
Additionally, a waiver by either party or a breach of any promise hereof
by the other party will not operate as or be construed to constitute a waiver
of any subsequent waiver by such other party.

 

13.   Severability.  Whenever possible, each provision of this
Agreement will be interpreted in such a manner as to be effective and valid
under applicable law, but if any provision of this Agreement is held to be
invalid, illegal or unenforceable in any respect under any applicable law or rule in
any jurisdiction, such invalidity, illegality or unenforceability will not
affect any other provision or any other jurisdiction, but this Agreement will
be reformed, construed and enforced in such jurisdiction as if such invalid,
illegal or unenforceable provision had never been contained herein.

 

14.   No Representations.  Each Party represents that it has had the
opportunity to consult with an attorney, and has carefully read and understands
the scope and effect of the provisions of this Agreement.  Neither Party has relied upon any
representations or statements made by any other Party hereto which are not
specifically set forth in this Agreement. 
By entering into this Agreement, the Company is not acknowledging or
admitting any fault, wrongdoing, or liability on its part in any way.

 

15.   Authority.  The Company represents and warrants that the
undersigned has the authority to act on behalf of the Company and to bind the
Company and all who may claim through it to the terms and conditions of this
Agreement.  Executive represents and
warrants that he has the capacity to act on his own behalf and on behalf of all
who might claim through Executive to bind them to the terms and conditions of
this Agreement.  Each Party warrants and 

 

6

 

represents that there are
no liens or claims of lien or assignments in law or equity or otherwise of or
against any of the claims or causes of action released herein.

 

16.   Voluntary Execution of
Agreement.  This Agreement
is executed voluntarily and without any duress or undue influence on the part
or behalf of the Parties hereto, with the full intent of releasing all
claims.  The Parties acknowledge that:

 

(a)          They have read this
Agreement;

 

(b)         They have been
represented in the preparation, negotiation, and execution of this Agreement by
legal counsel of their own choice or that they have voluntarily declined to
seek such counsel;

 

(c)          They understand the
terms and consequences of this Agreement and of the releases it contains; and

 

(d)         They are fully aware of
the legal and binding effect of this Agreement.

 

17.   Execution in Multiple
Counterparts.  This
Agreement may be executed in multiple counterparts, each of which when together
shall be deemed to constitute the executed original, and each counterpart shall
have the same force and effect as an original and shall constitute an
effective, binding agreement on the part of the undersigned.

 

IN WITNESS
WHEREOF, the Parties hereto have executed this Agreement as of the dates shown
below.

 

	
  [EXECUTIVE]

  	
   

  	
  REALD INC.

  
	
   

  	
   

  	
   

  
	
  By:

  	
   

  	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
   

  	
  [NAME/TITLE]

  
	
   

  	
   

  	
   

  
	
  Dated:

  	
   

  	
   

  	
  Dated:

  	
   

  

 

7

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