<PAGE> 1
SCHEDULE 14A
(RULE 14A-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE SECURITIES
EXCHANGE ACT OF 1934 (AMENDMENT NO. )
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
<TABLE>
<S> <C>
[ ] Preliminary Proxy Statement [ ] Confidential, for Use of the Commission
Only (as permitted by Rule 14a-6(e)(2))
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12
</TABLE>
Carmike Cinemas, Inc.
- - --------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
- - --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
(1) Title of each class of securities to which transaction applies:
(2) Aggregate number of securities to which transaction applies:
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which the
filing fee is calculated and state how it was determined):
(4) Proposed maximum aggregate value of transaction:
(5) Total fee paid:
[ ] Fee paid previously with preliminary materials:
[ ] Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number,
or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
(2) Form, Schedule or Registration Statement No.:
(3) Filing Party:
(4) Date Filed:
<PAGE> 2
CARMIKE CINEMAS, INC.
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD MAY 11, 1998
The Annual Meeting of Shareholders of Carmike Cinemas, Inc. will be
held at the offices of Troutman Sanders LLP, NationsBank Plaza, 600 Peachtree
Street, N.E., 52nd Floor, Atlanta, Georgia on Monday, May 11, 1998, commencing
at 11:00 a.m., E.D.T.
At the meeting the shareholders will be asked to:
1. Elect six (6) directors to serve for the ensuing year or until
their successors are duly elected and have qualified;
2. Approve the Carmike Cinemas, Inc. 1998 Class A Stock Option
Plan; and
3. Transact any other business which may properly be brought
before the meeting.
The Board of Directors has fixed the close of business on March 19,
1998 as the record date for the determination of shareholders entitled to
notice of, and to vote at, the annual meeting or any adjournment thereof.
Please mark, sign and date the enclosed proxy card and mail it promptly in the
accompanying envelope.
By Order of the Board of Directors,
FORREST LEE CHAMPION, III
Secretary
Columbus, Georgia
March 31, 1998
IMPORTANT
WHETHER OR NOT YOU EXPECT TO ATTEND THE MEETING, PLEASE COMPLETE, DATE
AND SIGN THE ENCLOSED PROXY CARD AND RETURN IT IN THE ENVELOPE WHICH HAS BEEN
PROVIDED. IN THE EVENT YOU ATTEND THE ANNUAL MEETING, YOU MAY REVOKE YOUR
PROXY AND VOTE YOUR SHARES IN PERSON.
<PAGE> 3
CARMIKE CINEMAS, INC.
PROXY STATEMENT FOR THE
ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD MAY 11, 1998
This proxy statement and the accompanying proxy card are furnished to
the shareholders of Carmike Cinemas, Inc. (the "Company") in connection with
the solicitation of proxies by the Board of Directors of the Company for use at
the Annual Meeting of Shareholders of the Company to be held on May 11, 1998,
at the offices of Troutman Sanders LLP, NationsBank Plaza, 600 Peachtree
Street, N.E., 52nd Floor, Atlanta, Georgia at 11:00 a.m., E.D.T and any
adjournments thereof. All shareholders are encouraged to attend the meeting.
Your proxy is requested, however, whether or not you attend in order to assure
maximum participation.
At the Annual Meeting, shareholders will be requested to act upon the
matters set forth in this proxy statement. If you are not present at the
meeting, your shares can be voted only when represented by proxy. You may
cancel your proxy before balloting begins by notifying the Secretary of the
Company in writing at the Company's principal executive offices. In addition,
any proxy signed and returned by you may be revoked at any time before it is
voted by delivering a new duly executed proxy card bearing a later date or by
appearing and voting in person at the meeting. It is anticipated that this
proxy statement and accompanying proxy card will first be mailed to the
Company's shareholders on or about March 31, 1998. The Company's 1997 Annual
Report to Shareholders, which should be read in conjunction with the matters
discussed in this proxy statement, is also enclosed. The expenses incidental
to the preparation and mailing of this proxy material are being paid by the
Company. No solicitation is planned beyond the mailing of this proxy material
to shareholders.
The principal executive offices of the Company are located at 1301
First Avenue, Columbus, Georgia 31901-2109. The telephone number is (706)
576-3400.
The close of business on March 19, 1998 has been fixed as the record
date for the determination of shareholders of the Company entitled to notice of
and to vote at the Annual Meeting. On that date the Company had outstanding
9,926,087 shares of its Class A Common Stock, $.03 par value (the "Class A
Common Stock"), and 1,420,700 shares of its Class B Common Stock, $.03 par
value (the "Class B Common Stock" and, together with the Class A Common Stock,
the "Common Stock"). Each share of Class A Common Stock entitles the holder
thereof to one vote per share on all matters properly coming before the
meeting. Each share of Class B Common Stock entitles the holder thereof to ten
votes per share on all matters properly coming before the meeting.
Directors are elected by a plurality of the votes cast by the holders
of the Company's Class A Common Stock and Class B Common Stock voting together
as a single class at a meeting at which a quorum is present. Votes may be cast
in favor of or withheld from each nominee; votes that are withheld will be
excluded entirely from the vote and will have no effect. Under applicable
Delaware law, a broker non-vote will have no effect on the outcome of the
election of directors.
<PAGE> 4
Approval of the Carmike Cinemas, Inc. 1998 Class A Stock Option Plan
requires the affirmative vote of a majority of the votes of Class A Common
Stock and Class B Common Stock represented at the meeting and entitled to vote
thereon, voting together as a single class. Abstentions will be included in
the number of votes present and entitled to vote and accordingly will be
treated as "no" votes. Broker non-votes, however, will be excluded from the
number of votes present and entitled to vote and will have no effect on the
outcome of the vote on this proposal.
I. ELECTION OF DIRECTORS
The Board of Directors has nominated the six individuals named below
for election as directors of the Company, each to serve until the next annual
meeting of shareholders and until his respective successor shall be duly
elected and shall qualify. All of the individuals nominated by the Board of
Directors for election are presently directors of the Company. It is the
present intention of the persons named in the accompanying form of proxy to
vote such proxy (unless authority to so vote is withheld) for the election of
the six nominees named below as directors of the Company.
The Board of Directors expects that each of the nominees will be
available to stand for election and to serve as director. However, in the
event a vacancy among the original nominees occurs prior to the meeting, the
proxies will be voted for a substitute nominee or nominees named by the Board
and for the remaining nominees.
The following is a brief description of the business experience of
each nominee for at least the past five years. For purposes of this
description, references to the Company include the Company's predecessor,
Martin Theatres, Inc.
C.L. PATRICK, age 79, who has served as Chairman of the Board of
Directors of the Company since April 1982, joined the Company in 1945, became
its General Manager in 1948 and served as President of the Company from 1969 to
1970. He served as President of Fuqua Industries, Inc. from 1970 to 1978 and
as Vice Chairman of the Board of Directors of Fuqua Industries, Inc. from 1978
to 1982. Mr. Patrick is a director emeritus of Columbus Bank & Trust Company.
MICHAEL W. PATRICK, age 47, has served as President of the Company
since October 1981, as a director of the Company since April 1982 and as Chief
Executive Officer since March 29, 1989. He joined the Company in 1970 and
served in a number of operational and film booking and buying capacities prior
to becoming President. Mr. Patrick serves as a director of Columbus Bank &
Trust Company and the Will Rogers Institute, and he is a member of the Board of
Trustees of Columbus State University Foundation, Inc.
CARL L. PATRICK, JR., age 51, has served as a director of the Company
since April 1982. He was the Director of Taxes for the Atlanta, Georgia office
of Arthur Young & Co. from October 1984 to September 1986, and is currently
self-employed. Previously, he was a certified public accountant with Arthur
Andersen & Co. from 1976 to October 1984. Mr. Patrick served two terms
-2-
<PAGE> 5
as Chairman of the Board of Summit Bank Corporation and currently serves as a
director of that company. Mr. Patrick is Co-Chairman of PGL Entertainment
Corp.
JOHN W. JORDAN, II, age 49, has been a director of the Company since
April 1982. He is a co-founder and managing partner of The Jordan Company,
which was founded in 1982. Mr. Jordan is a managing partner of
Jordan/Zalaznick Capital Company and Chairman of the Board and Chief Executive
Officer of Jordan Industries, Inc. From 1973 until 1982, he was a Vice
President of Carl Marks & Company, a New York investment banking company. Mr.
Jordan is a director of American Safety Razor Company, Apparel Ventures, Inc.,
Ameriking, Inc., Jordan Telecommunication Products, Inc., Motors & Gears
Holdings, Inc., Fannie May Holdings, Inc., GEAR For Sports, Inc. and Rockshox,
Inc., as well as most of the companies in which The Jordan Company holds
investments.
CARL E. SANDERS, age 72, has been a director of the Company since
April 1982. He is engaged in the private practice of law as Chairman of
Troutman Sanders LLP, an Atlanta, Georgia law firm. Mr. Sanders is a director
of Matria Healthcare, Inc., Healthdyne Information Enterprises, Inc.,
Metromedia International Group, Inc. and Norrell Corporation.
DAVID W. ZALAZNICK, age 43, has served as a director of the Company
since April 1982. He is a co-founder and general partner of The Jordan
Company, a managing partner of Jordan/Zalaznick Capital Company and a director
of Jordan Industries, Inc. From 1978 to 1980, he worked as an investment
banker with Merrill Lynch White Weld Capital Markets Group and, from 1980 until
the formation of The Jordan Company in 1982, Mr. Zalaznick was a Vice President
of Carl Marks & Company. Mr. Zalaznick is a director of American Safety Razor
Company, Apparel Ventures, Inc., Marisa Christina, Inc., Cookies USA, Inc.,
Ameriking, Inc., Jordan Telecommunication Products, Inc., Motors & Gears
Holdings, Inc. and GEAR For Sports, Inc., as well as most of the companies in
which The Jordan Company holds investments.
Messrs. Michael W. Patrick and Carl L. Patrick, Jr. are the sons of
Mr. C.L. Patrick.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE NOMINEES SET FORTH ABOVE.
ADDITIONAL INFORMATION
BOARD MEETINGS
The business of the Company is managed by or under the direction of
the Board of Directors. The Board of Directors met once during the year ended
December 31, 1997, and took action by unanimous written consent in lieu of a
meeting on eleven occasions. Each of the directors attended all of the
aggregate of (1) the total meetings of the Board of Directors and (2) the total
number of meetings held by all committees of the Board on which he served,
during the periods that he served. Each non-salaried director of the Company
receives a $6,000 fee per annum for his services as a director plus $500 for
each meeting of the Board at which he participates in person.
-3-
<PAGE> 6
COMMITTEES OF THE BOARD OF DIRECTORS
The Stock Option Committee, which consists of Messrs. John W. Jordan,
II and David W. Zalaznick, has the authority to determine to whom options are
to be granted under the Carmike Cinemas, Inc. 1998 Class A Stock Option Plan
(the "Stock Option Plan") as well as the type of option and the number of
shares subject thereto. The Stock Option Committee did not meet during the
year ended December 31, 1997. The Audit Committee, which consists of Messrs.
John W. Jordan, II and David W. Zalaznick, recommends the engagement of
independent auditors of the Company and reviews with the independent auditors
the scope and results of the Company's audits, the Company's internal
accounting controls and the professional services furnished by the independent
auditors to the Company. The Audit Committee met once during the year ended
December 31, 1997. The Real Estate Committee, which consists of Mr. Michael W.
Patrick, has the authority to determine and designate those real properties
owned or leased by the Company which are no longer necessary for the conduct of
its business and operations and arrange for their disposition.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL HOLDERS
The following table sets forth certain information as to the Class A
Common Stock and the Class B Common Stock of the Company beneficially owned as
of January 31, 1998 by each person, other than persons whose ownership is
reflected under the caption "Security Ownership of Management," who is known to
the Company to own, directly or indirectly, more than 5% of the outstanding
shares of either class of the Company's Common Stock, and reflects information
presented in each such person's Schedule 13D or Schedule 13G (and amendments,
if any, thereto) as filed with the Securities and Exchange Commission and
provided to the Company.
<TABLE>
<CAPTION>
AMOUNT AND NATURE
TITLE OF OF BENEFICIAL PERCENT OF TOTAL VOTING
NAME AND ADDRESS OF BENEFICIAL OWNER CLASS OWNERSHIP CLASS(1) INTEREST(2)
------------------------------------ ------- --------- ---------- ------------
<S> <C> <C> <C> <C>
Robert M. Raiff (3) . . . . . . . . . . . . . . Class A 681,900 6.9% 2.8%
152 West 57th Street
New York, New York 10019
T. Rowe Price Associates, Inc. (4) . . . . . . Class A 670,700 6.8% 2.8%
100 East Pratt Street
Baltimore, Maryland 21202
Leucadia Investors, Inc. (5)(6) . . . . . . . Class A 589,475 5.9% 2.4%
315 Park Avenue South
New York, New York 10010
Luther King Capital Management Corporation (7). Class A 570,200 5.7% 2.4%
301 Commerce, Suite 1600
Fort Worth, Texas 76102
</TABLE>
- - --------------------------
(1) Percent of Class is with respect to outstanding shares of Class A
Common Stock as of January 31, 1998 (9,918,587 shares outstanding on
that date).
-4-
<PAGE> 7
(2) Total Voting Interest reflects ten votes afforded each share of
outstanding Class B Common Stock (14,207,000 votes) and one vote
afforded each share of outstanding Class A Common Stock (9,918,587
votes) for a total of 24,125,587 votes.
(3) Based on information provided to the Company by Centurion Investment
Group, L.P. ("Centurion"). Mr. Raiff is President and Chief Executive
Officer of Centurion, which is the sole general partner of various
investment partnerships. Mr. Raiff is also the President of the sole
general partner of Centurion Advisors, L.P., which manages advisory
accounts on a discretionary basis, and serves as Investment Manager of
Centurion Overseas Fund, Ltd.
(4) These securities are owned by various individual and institutional
investors, including T. Rowe Price New Horizons Fund, Inc. (which owns
500,000 shares, representing approximately 5% of the shares
outstanding), for which T. Rowe Price Associates, Inc. ("Price
Associates") serves as investment adviser with power to direct
investments and/or power to vote the securities. For purposes of the
reporting requirements of the Securities Exchange Act of 1934, Price
Associates is deemed to be a beneficial owner of such securities;
however, Price Associates expressly disclaims that it is, in fact, the
beneficial owner of such securities.
(5) Leucadia Investors, Inc. is an indirect wholly-owned subsidiary of
Leucadia National Corporation; both entities are New York
corporations. While Leucadia Investors, Inc. is the record owner of
Class A Common Stock, Leucadia National Corporation may be deemed to
be beneficial owner of such shares by virtue of its shared powers to
direct the voting and disposition by Leucadia Investors, Inc. of such
shares.
(6) John W. Jordan, II, David W. Zalaznick and Leucadia Investors, Inc.
are each a general partner in The Jordan Company, a New York general
partnership organized in 1982, which was one of the three original
investors in the leveraged buyout of the Company in April 1982.
(7) Based on Amendment No. 1 dated February 11, 1998 to the Schedule 13G
filed by Luther King Capital Management Corporation, an investment
advisor, and other information furnished to the Company by Luther King
Capital Management Corporation.
-5-
<PAGE> 8
SECURITY OWNERSHIP OF MANAGEMENT
The following table sets forth certain information as to the Class A
Common Stock and the Class B Common Stock beneficially owned as of January 31,
1998 by each of the Company's directors, nominees for director, each executive
officer named in the Summary Compensation Table set forth under the caption
"Executive Compensation and Other Information" and all directors and executive
officers as a group.
<TABLE>
<CAPTION>
AMOUNT AND NATURE TOTAL
TITLE OF OF BENEFICIAL PERCENT OF VOTING
NAME OF BENEFICIAL OWNER CLASS OWNERSHIP CLASS (1) INTEREST (2)
------------------------ ------- --------- --------- -----------
<S> <C> <C> <C> <C>
C.L. Patrick (3) . . . . . . . . . . . . . . . Class B 290,251 20.4% 12.0%
Michael W. Patrick (4) . . . . . . . . . . . . Class B 620,849 43.7% 25.7%
Class A 115,000 * *
Carl L. Patrick, Jr. (5) . . . . . . . . . . . Class B 509,600 35.9% 21.1%
Class A 39,791 * *
Carl E. Sanders (6) . . . . . . . . . . . . . . Class A 52,228 * *
John W. Jordan, II (7)(8) . . . . . . . . . . . Class A 298,205 3.0% 1.2%
David W. Zalaznick (8)(9) . . . . . . . . . . . Class A 238,840 2.4% 1.0%
John O. Barwick, III (10) . . . . . . . . . . . Class A 22,020 * *
Larry M. Adams (11) . . . . . . . . . . . . . . Class A 15,300 * *
Anthony J. Rhead (12) . . . . . . . . . . . . . Class A 7,500 * *
All Directors and Executive Officers . . . . . Class B 1,420,700 100% 58.9%
as a Group (14 persons) (13)
Class A 837,884 8.4% 3.5%
</TABLE>
- - --------------------------
* Indicates less than 1%.
(1) Percent of Class is with respect to outstanding shares of each class
of Common Stock as of January 31, 1998 (1,420,700 outstanding shares
of Class B Common Stock and 9,918,587 outstanding shares of Class A
Common Stock), plus such additional shares as are subject to purchase
upon exercise of vested options held by the particular person or group
of persons.
(2) Total Voting Interest reflects ten votes afforded each share of
outstanding Class B Common Stock (14,207,000 votes) and one vote
afforded each share of outstanding Class A Common Stock (9,918,587
votes) for a total of 24,125,587 votes, plus one vote per share for
such additional shares of the Class A Common Stock as are subject to
purchase upon exercise of vested options held by the particular person
or group of persons.
-6-
<PAGE> 9
(3) C.L. Patrick and Frances E. Patrick are husband and wife. Includes
45,963 shares of Class B Common Stock owned by Frances E. Patrick as
to which shares C.L. Patrick disclaims beneficial ownership. Includes
34,044 shares and 11,064 shares of Class B Common Stock held in trusts
for Carl L. Patrick, Jr. and Michael W. Patrick's minor son,
respectively, by C.L. Patrick or Frances E. Patrick, as trustees,
which trusts are scheduled to terminate between 1998 and 1999 and as
to which shares C.L. Patrick and Frances E. Patrick each disclaim
beneficial ownership. Includes 59,576 shares of Class B Common Stock
held in trust for Michael W. Patrick by C.L. Patrick, as trustee, and
59,576 shares held in trust for Carl L. Patrick, Jr. by Frances E.
Patrick, as trustee; pursuant to these trusts, C.L. Patrick and
Frances E. Patrick each sold the remainder interest in the shares held
by these trusts in return for an annuity based on their joint lives.
(4) Includes 28,414 shares of Class B Common Stock held by Michael W.
Patrick as custodian for his minor son; Michael W. Patrick has voting
and investment power with respect to such shares but disclaims
beneficial ownership thereof. Excludes 11,064 shares of Class B
Common Stock held in trust for Michael W. Patrick's minor son by
Frances E. Patrick, as trustee, which trust is scheduled to terminate
in October 1999. Excludes 59,576 shares of Class B Common Stock held
in trust for Michael W. Patrick by C.L. Patrick, as trustee, the
remainder interest of which Michael W. Patrick has purchased.
Includes 110,000 shares of Class A Common Stock which are subject to
purchase upon exercise of vested options held by Michael W. Patrick.
The combined voting power represented by the shares of Class A Common
Stock and Class B Common Stock beneficially owned by Michael W.
Patrick is 26.1% of the total combined voting power represented by the
outstanding shares of these two classes.
(5) Includes 200 shares of Class A Common Stock owned by Carl Patrick's
wife, as to which shares Mr. Patrick disclaims beneficial ownership.
Excludes 34,044 shares of Class B Common Stock held in trust for Carl
L. Patrick, Jr. by Frances E. Patrick, as trustee, which trust is
scheduled to terminate in 1999. Excludes 59,576 shares of Class B
Common Stock held in trust for Carl L. Patrick, Jr. by Frances E.
Patrick, as trustee, the remainder interest of which Carl L. Patrick,
Jr. has purchased. The combined voting power represented by the
shares of Class A Common Stock and Class B Common Stock beneficially
owned by Carl L. Patrick, Jr. is 21.3% of the total combined voting
power represented by the outstanding shares of these two classes.
(6) Includes 14,000 shares of Class A Common Stock owned by Carl E.
Sanders' wife, as to which shares Mr. Sanders disclaims beneficial
ownership.
(7) Consists of 298,205 shares of Class A Common Stock owned by the John
W. Jordan, II Revocable Trust, of which John W. Jordan, II is the sole
trustee and sole beneficiary. Until May 26, 1995, Mr. Jordan was a
director of Leucadia National Corporation.
(8) Does not include 589,475 shares of Class A Common Stock owned by
Leucadia Investors, Inc. John W. Jordan, II, David W. Zalaznick and
Leucadia Investors, Inc. are each a general partner in The Jordan
Company, a New York general partnership organized in 1982, which was
one of the three original investors in the leveraged buyout of the
Company in 1982.
-7-
<PAGE> 10
(9) Includes an aggregate of 12,000 shares held by three irrevocable
trusts for the benefit of Mr. Zalaznick's minor children (Mr.
Zalaznick's wife is the trustee of these trusts), and 50 shares held
by Mr. Zalaznick as custodian for his minor son. Mr. Zalaznick
disclaims beneficial ownership of such 12,050 shares.
(10) Includes 20 shares of Class A Common Stock held by John O. Barwick,
III on behalf of his children, as to which shares he disclaims
beneficial ownership, and 20,000 shares of Class A Common Stock which
are subject to purchase upon exercise of vested options held by Mr.
Barwick.
(11) Includes 15,000 shares of Class A Common Stock which are subject to
purchase upon exercise of vested options held by Mr. Adams.
(12) Represents 7,500 shares of Class A Common Stock which are subject to
purchase upon exercise of vested options held by Anthony J. Rhead.
(13) Includes 500 shares of Class A Common Stock held by the unnamed
executive officers of the Company, and also includes an aggregate of
48,500 shares of Class A Common Stock which are subject to purchase
upon exercise of vested options held by such unnamed executive
officers.
-8-
<PAGE> 11
EXECUTIVE COMPENSATION AND OTHER INFORMATION
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
The Company has no Compensation Committee. The following officers and
employees of the Company participated in deliberations of the Board of
Directors concerning executive officer compensation: C.L. Patrick and Michael
W. Patrick.
SUMMARY OF CASH AND CERTAIN OTHER COMPENSATION
The following table sets forth certain information concerning the
compensation of the Company's Chief Executive Officer and each of the other
four most highly compensated executive officers of the Company serving as of
December 31, 1997 (these five individuals, collectively, the "named executive
officers") for the fiscal years ended December 31, 1997, 1996 and 1995.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
ANNUAL COMPENSATION
-------------------------
NAME AND SALARY BONUS ALL OTHER
PRINCIPAL POSITION YEAR ($) ($) COMPENSATION ($)(1)
- - ------------------ ---- ---------- ----------- -------------------
<S> <C> <C> <C> <C>
Michael W. Patrick . . . . . . . . . . . 1997 $566,058 $64,800 $63,018
President, Chief Executive Officer 1996 542,202 46,400 56,864
and Director 1995 527,138 80,000 61,188
C.L. Patrick . . . . . . . . . . . . . . 1997 307,687 0 5,866
Chairman of the Board of Directors 1996 269,000 0 5,866
1995 269,000 0 5,866
John O. Barwick, III . . . . . . . . . . 1997 102,500 81,000 19,568
Vice President-Finance, 1996 102,500 58,000 17,268
Treasurer and Chief Financial Officer 1995 102,500 100,000 21,468
Anthony J. Rhead . . . . . . . . . . . . 1997 75,000 81,000 18,750
Vice President-Film 1996 75,000 58,000 16,450
1995 75,000 100,000 19,516
Larry M. Adams . . . . . . . . . . . . . 1997 75,000 64,800 15,996
Vice President-Informational Systems 1996 75,000 46,400 14,156
1995 75,000 80,000 17,516
</TABLE>
- - --------------------------
(1) The amounts shown in this column for 1997 represent amounts paid by
the Company under a deferred compensation plan and the incremental cost of life
insurance premiums for death benefits in excess of $50,000, respectively, as
follows: Michael W. Patrick - $61,800 and $1,218; C. L. Patrick - $-0- and
$5,866; John O. Barwick, III - $18,350 and $1,218; Anthony J. Rhead - $15,600
and $3,150; and Larry M. Adams - $13,980 and $2,016.
-9-
<PAGE> 12
EMPLOYMENT CONTRACTS
In April 1982, C.L. Patrick entered into an employment agreement with
the Company with respect to his services as Chairman of the Board. This
agreement, as restated and amended on January 1, 1990, provides a base annual
salary of $200,000 for C.L. Patrick with annual cost of living adjustments.
Such cost of living adjustments have resulted in a base annual salary effective
as of August 1, 1997 of $290,492 for C.L. Patrick. Effective as of January 1,
1993, Michael W. Patrick entered into an employment agreement with the Company
with respect to his services as Chief Executive Officer. This agreement
provides a base annual salary of $500,000, with annual cost of living
adjustments. Such cost of living adjustments have resulted in a base annual
salary effective as of January 1, 1998 of $557,651 for Michael W. Patrick.
Each agreement provides for a three-year term which is automatically extended
each year after the first year for an additional year unless either party gives
written notice of termination within 30 days prior to the anniversary date of
such agreement. These agreements also provide during their terms for a death
benefit equal to one year's salary, as well as for reimbursement of
business-related expenses.
OPTION EXERCISES AND HOLDINGS
The following table sets forth information with respect to the named
executive officers concerning the exercise of options during the last fiscal
year and unexercised options held as of the end of the fiscal year. No options
were granted to the named executive officers during 1997.
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR AND FY-END OPTION VALUES
<TABLE>
<CAPTION>
VALUE OF UNEXERCISED
NUMBER OF SECURITIES UNDERLYING IN-THE-MONEY
UNEXERCISED OPTIONS AT OPTIONS
FY-END (#) AT FY-END ($)(2)
------------------------------ ----------------------------
SHARES ACQUIRED VALUE
NAME ON EXERCISE(#) REALIZED ($)(1) EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
---- -------------- --------------- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
Michael W. Patrick -0- $ -0- 110,000 -0- $2,138,750 -0-
C. L. Patrick -0- -0- -0- -0- -0- -0-
John O. Barwick, III 5,000 118,345 20,000 -0- 300,000 -0-
Anthony J. Rhead 7,500 120,066 7,500 -0- 94,688 -0-
Larry M. Adams -0- -0- 15,000 -0- 189,375 -0-
</TABLE>
- - ---------------------------
(1) These amounts represent the excess of the fair market value of the
Class A Common Stock at the time of exercise above the exercise price
of the options.
(2) These amounts represent the excess of the fair market value of the
Class A Common Stock of $30.625 per share as of December 31, 1997
above the exercise price of the options.
-10-
<PAGE> 13
REPORT ON EXECUTIVE COMPENSATION
The Board of Directors does not have a Compensation Committee. The
full Board of Directors oversees and reviews the administration of the
Company's employee benefit plans and compensation of employees, except for
decisions about awards under the Company's stock option plan, which must be
made solely by the Stock Option Committee in order for the grants or awards
under such plan to satisfy Rule 16b-3 promulgated under the Securities Exchange
Act of 1934, as amended.
The following is a report submitted by the Board of Directors
addressing the Company's compensation policy as it related to the Chief
Executive Officer and the other named executive officers for fiscal year 1997.
Base Salary and Bonuses
The Company does not have a formalized program regarding compensation
of executive officers. The base salaries for the Chairman of the Board and the
Chief Executive Officer are set in accordance with their employment contracts.
See "Employment Contracts." The terms of these contracts were proposed by
the Chairman of the Board and the Company's Chief Executive Officer. Factors
considered by the Chairman of the Board and Chief Executive Officer are
subjective and could include their perceptions of the individual's performance,
needs and potential and the Columbus, Georgia economy. The Chairman of the
Board and the Chief Executive Officer inform the Board of Directors as to the
proposed remuneration of the other named executive officers. Again, the
factors considered are usually subjective and could include their perceptions
of each individual's performance, needs and potential and the Columbus, Georgia
economy.
An individual's bonus is based on earnings per share for the Company's
Class A Common Stock. For each $1.00 in earnings per share (as defined), an
individual receives a bonus of $5,000 multiplied by the number of bonus points
awarded to such individual. The Chairman of the Board informs the Board of
Directors of the proposed number of "bonus points" to be awarded to the Chief
Executive Officer. Factors considered by the Chairman of the Board are
subjective and could include his perception of the individual's contribution to
the Company's performance. The Chairman of the Board and the Chief Executive
Officer decide the number of "bonus points" to be awarded to the other named
executive officers. Factors considered by the Chairman of the Board and the
Chief Executive Officer are subjective and could include their perceptions of
an individual's contributions to the Company's performance. The Chairman of
the Board does not participate in the bonus program.
Deferred Compensation Plan
The Company maintains a Deferred Compensation Plan for certain
executive officers, including the named executive officers, pursuant to which
the Company pays additional compensation on a pre-tax basis equal to 10% of an
employee's taxable compensation. Distributions from the plan are made upon or
shortly after normal retirement, disability, death or termination of employment
of a participant.
-11-
<PAGE> 14
Stock Option Plan
The Stock Option Plan is the Company's long-term incentive plan for
executive officers and key employees. The objective of the Stock Option Plan
is to align executive pay with shareholder long-term interest by creating a
direct link between executive pay and shareholder return, and to enable
executives to develop and maintain a significant long-term ownership position
in the Company's Class A Common Stock.
The Stock Option Plan authorizes the Stock Option Committee to award
stock options to key employees of the Company. The Stock Option Committee has
the power to determine the individuals to whom stock options are awarded, the
terms at which option grants shall be made and the terms of the options and the
number of shares subject to each option. The size of option grants may be
based, in part, upon position level.
Chief Executive Officer Pay
Amounts earned during 1997 by the Chief Executive Officer, Michael W.
Patrick, are shown in the Summary Compensation Table. His base salary was set
pursuant to the terms of his employment agreement with the Company. That
agreement provides for a base annual salary of $500,000, with annual cost of
living adjustments. See "Employment Contracts." Michael W. Patrick received a
bonus of $64,800 in 1997. The amount of his bonus was based on earnings per
share as described above.
The Board believes that the current subjective process has been
effective in rewarding executives appropriately, and in attracting and
retaining good performers. While the Board is pleased with the current
compensation system, it reserves the right to make such changes to the program
as it deems desirable or necessary in future years.
MEMBERS OF THE BOARD OF DIRECTORS
C.L. Patrick
Michael W. Patrick
Carl L. Patrick, Jr.
John W. Jordan, II
Carl E. Sanders
David W. Zalaznick
-12-
<PAGE> 15
PERFORMANCE GRAPH
The following graph compares the five-year cumulative total
shareholder return on the Company's Class A Common Stock with the comparable
cumulative total returns of the New York Stock Exchange Market Index and a peer
group index comprised of the companies listed below. The graph assumes that
the value of the investment in the Class A Common Stock and each index was $100
on December 31, 1993, and that all dividends were reinvested.
COMPARE 5-YEAR CUMULATIVE TOTAL RETURN
AMOUNT CARMIKE CINEMAS, INC.
NYSE MARKET INDEX AND PEER GROUP INDEX
<TABLE>
<CAPTION>
COMPANY 1992 1993 1994 1995 1996 1997
- - ------- ---- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C>
Carmike C/A 100 126.32 161.40 157.89 178.07 201.32
Peer Group 100 149.58 157.23 141.70 130.45 136.15
Broad 100 113.54 111.33 144.36 173.90 228.78
</TABLE>
Companies in the peer group are as follows: AMC Entertainment, Inc., Carmike
Cinemas, Inc., Cineplex Odeon Corporation and Showscan Entertainment Inc.
These companies were chosen on the basis of being publicly held companies which
are primarily in the movie exhibition business (non drive-in).
-13-
<PAGE> 16
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
The Company leases equipment for six of its theatres pursuant to five
equipment lease agreements with Michael W. Patrick and one such agreement with
C.L. Patrick. During the year ended December 31, 1997, the Company paid
$95,270 to Michael W. Patrick and $102,821 to C.L. Patrick under these
equipment leases. The Company also has an aircraft lease agreement dated July
1, 1983, with C.L.P. Equipment, a sole proprietorship of which C.L. Patrick is
the owner, pursuant to which the Company paid $194,080 in the year ended
December 31, 1997. The Company believes that these transactions are on terms
no less favorable to the Company than terms available from unaffiliated parties
in arm's-length transactions. Any future transactions between the Company and
any officer, director, 5% shareholder or any affiliate thereof will be on terms
no less favorable to the Company than could be obtained from an unaffiliated
third party.
The law firm of Troutman Sanders LLP, Atlanta, Georgia, of which Carl
E. Sanders is the Chairman, provides legal services to the Company.
II. PROPOSAL TO APPROVE THE CARMIKE CINEMAS, INC.
1998 CLASS A STOCK OPTION PLAN
On January 23, 1998, the Board of Directors of the Company approved
the Carmike Cinemas, Inc. 1998 Class A Stock Option Plan (the "Plan"), and
directed that the Plan be submitted to the Company's shareholders for approval
at the 1998 Annual Meeting.
The purposes of the Plan are to maximize the long-term success of the
Company, to ensure a balanced emphasis on both current and long-term
performance, to enhance participants' identification with stockholder interests
and to facilitate the attraction and retention of key individuals with
outstanding ability. The following is a summary of the material features of
the Plan.
PRINCIPAL FEATURES OF THE PLAN
The Plan provides for the grant of options to purchase up to an
aggregate of 750,000 shares of the Company's Class A Common Stock. The Plan is
administered by the Board of Directors of the Company (the "Board"), which has
authority to delegate to a committee of its members or to any officer any of
the Board's authority under the Plan.
The Board may grant Incentive Stock Options and Nonqualified Stock
Options under the Plan. Incentive Stock Options are intended to be treated as
such within the meaning of Section 422 of the Internal Revenue Code of 1986, as
amended. Nonqualified Stock Options are, in general, options which do not have
the special income tax advantages associated with Incentive Stock Options. See
"Federal Income Tax Consequences" below.
-14-
<PAGE> 17
Under the Plan, directors, officers and key employees of the Company
and its subsidiaries, as well as consultants or other advisors to the Company
or its subsidiaries, are eligible for selection to participate in the Plan. As
of January 15, 1998, approximately 15 persons would be eligible to participate
in the Plan. The Board has the authority to determine which persons will be
granted options, the number of shares of Class A Common Stock subject to an
option, whether the option is an Incentive Stock Option or Nonqualified Stock
Option, the price of the option and the other terms and conditions governing
the option.
Options granted under the Plan are not transferable by the optionee
other than by will or the laws of descent and distribution, and each option is
exercisable, during the lifetime of the optionee, only by the optionee. An
optionee may designate a beneficiary to receive his option in the event of the
optionee's death prior to exercise of the option.
Upon the death of an optionee, all unexercised options held by the
optionee will become immediately exercisable for a period of one year from the
date of death or upon the expiration of the option, if earlier. Upon an
optionee's termination of employment or other engagement due to disability, all
unexercised options became immediately exercisable for a period of one year
after the termination date or upon the expiration of the option, if earlier.
In the event of an optionee's termination of employment or engagement for any
reason other than death or disability, the option, to the extent then
exercisable, may be exercised within three months after such termination or
upon the expiration of the option, if earlier. The Board, at its discretion
and to the extent permitted by applicable federal and state law, may establish
different terms and conditions pertaining to the effect on an option of the
death, disability or other termination of employment of an optionee.
The exercise price of all Incentive Stock Options granted under the
Plan must be at least equal to the greater of the fair market value of the
Class A Common Stock subject to the option on the date of grant and the par
value per share of the Class A Common Stock. With respect to any Incentive
Stock Option granted to an optionee who owns stock possessing more than 10% of
the voting rights of the Company's outstanding capital stock on the date of
grant, the option exercise price of an Incentive Stock Option must be at least
equal to the greater of 110% of the fair market value of the Class A Common
Stock subject to the option on the date of grant or the par value of the Class
A Common Stock, and the option may not be exercisable more than five years
after the date of grant. The exercise price of all Nonqualified Stock Options
shall be determined by the Board at the time of grant but shall not be less
than the aggregate par value of the shares of Class A Common Stock subject to
the option. The term of each option will be as determined by the Board but,
with respect to an Incentive Stock Option, will in no event be greater than ten
years from the date of grant.
The Plan permits the exercise of options either by a cash payment, by
the surrender of shares of Class A Common Stock already owned by the optionee,
through a "cashless exercise" procedure involving a broker or, in the Board's
discretion, any other method approved by the Board and set forth in a
particular stock option agreement.
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<PAGE> 18
In the event of a Change in Control (as defined in the Plan) of the
Company, all outstanding options granted under the Plan will become fully
exercisable and remain exercisable for their remaining terms.
FEDERAL INCOME TAX CONSEQUENCES
Options granted under the Plan may be either Incentive Stock Options
which satisfy the requirements of Section 422 of the Code or Nonqualified Stock
Options which are not intended to meet such requirements. The federal income
tax treatment for the two types of options differs as follows:
Incentive Stock Options. No taxable income is recognized by the
optionee at the time of the option grant, and no taxable income is generally
recognized at the time the option is exercised. No federal income tax
deduction will be allowable to the Company upon the grant or exercise of such
Incentive Stock Option. The optionee will, however, recognize taxable income
in the year in which the purchased shares are sold or otherwise made the
subject of a taxable disposition. For federal tax purposes, dispositions are
divided into two categories: qualifying dispositions and disqualifying
dispositions. A qualifying disposition occurs if the sale or other disposition
is made after the optionee has held the shares for more than two years after
the option grant date and more than one year after the exercise date. Upon a
qualifying disposition, the optionee will normally recognize a long-term
capital gain or loss equal to the difference between the sale price and the
exercise price of the shares. If either of these two holding periods is not
satisfied, then a disqualifying disposition will result. If the optionee makes
a disqualifying disposition of the purchased shares, the optionee will
recognize ordinary compensation income and possibly capital gain or loss in
such amounts as are prescribed by the Code and the regulations thereunder, and
the Company will be entitled to an income tax deduction in the amount of such
ordinary compensation income, for the taxable year in which such disposition
occurs. In no other instances will the Company be allowed a deduction with
respect to the optionee's disposition of the purchased shares.
Nonqualified Stock Options. No taxable income is recognized by an
optionee upon the grant of a Nonqualified Stock Option. The optionee will, in
general, recognize ordinary income, in the year in which the option is
exercised, equal to the excess of the fair market value of the purchased shares
on the exercise date over the exercise price paid for the shares, and the
optionee will be required to satisfy the tax withholding requirements
applicable to such income. The Company will be entitled to an income tax
deduction equal to the amount of ordinary income recognized by the optionee
with respect to the exercised Nonqualified Stock Option. The deduction will in
general be allowed for the taxable year of the Company in which such ordinary
income is recognized by the optionee.
-16-
<PAGE> 19
NEW PLAN BENEFITS
Set forth below are the number of options granted under the Plan as of
January 15, 1998, to certain specified groups of individuals:
<TABLE>
<CAPTION>
Named executive officers:
<S> <C>
Michael W. Patrick . . . . . . . . . . . . . . . . . . . . . . . . . . . . 75,000
C.L. Patrick . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -0-
John O. Barwick, III . . . . . . . . . . . . . . . . . . . . . . . . . . . 30,000
Anthony J. Rhead . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30,000
Larry M. Adams . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30,000
All current executive officers as a group: . . . . . . . . . . . . . . . . . . . . 335,000
All current directors who are not executive officers as a group: . . . . . . . . . -0-
Each nominee for election as a director:
Michael W. Patrick . . . . . . . . . . . . . . . . . . . . . . . . . . . . 75,000
(No other nominees for director have been granted options under the Plan)
Each associate of any of such directors, executive officers or nominee: . . . . . . -0-
Each other person who received 5% of such options: . . . . . . . . . . . . . . . . -0-
All employees, including all current officers who are not executive . . . . . . . . 335,000
officers, as a group:
</TABLE>
Future option grants under the Plan are not determinable at this time.
The closing price of the Class A Common Stock on the New York Stock
Exchange on March 16, 1998 was $30.5625.
VOTE REQUIRED FOR APPROVAL
The affirmative vote of the holders of a majority of the votes of the
shares of Class A Common Stock and Class B Common Stock represented at the
Annual Meeting, voting together as a single class, is required for approval of
the Plan.
THE BOARD OF DIRECTORS OF THE COMPANY RECOMMENDS A VOTE FOR APPROVAL OF THE
CARMIKE CINEMAS, INC. 1998 CLASS A STOCK OPTION PLAN.
-17-
<PAGE> 20
OTHER MATTERS
The Board of Directors does not know of any other matters to be
presented for action at the meeting. If any other business should properly
come before the meeting, the persons named in the accompanying form of proxy
intend to vote thereon in accordance with their best judgment.
Section 16(a) of the Securities Exchange Act of 1934, as amended (the
"Act"), requires the Company's directors and executive officers and persons who
own more than ten percent of a registered class of the Company's equity
securities to file reports with the Securities and Exchange Commission
regarding beneficial ownership of Common Stock and other equity securities of
the Company. To the Company's knowledge, based solely on a review of copies of
such reports furnished to the Company and written representations that no other
reports were required, during the fiscal year ended December 31, 1997, all
officers, directors and greater than ten percent beneficial owners complied
with the Section 16(a) filing requirements of the Act.
INDEPENDENT AUDITORS
Management has selected Ernst & Young LLP as its independent auditors
for the current year. Representatives of Ernst & Young LLP are expected to be
present at the meeting and will have the opportunity to make a statement if
they so desire and to respond to appropriate questions from shareholders.
SHAREHOLDER PROPOSALS
Any shareholder of the Company who wishes to present a proposal at the
1999 Annual Meeting of Shareholders of the Company and who wishes to have such
proposal included in the Company's proxy statement for that meeting must
deliver a copy of such proposal to the Company at 1301 First Avenue, Columbus,
Georgia 31901-2109, Attention: Corporate Secretary, for receipt not later than
November 26, 1998. The Company reserves the right to decline to include in the
Company's proxy statement any shareholder's proposal which does not comply with
the rules of the Securities and Exchange Commission for inclusion therein.
FORM 10-K
The Company's Annual Report to the Securities and Exchange Commission
on Form 10-K for the year ended December 31, 1997 (including the consolidated
financial statements and schedules thereto but excluding exhibits) will be
provided without charge to each shareholder so requesting in writing. Each
request must set forth a good faith representation that, as of March 19, 1998,
the record date for the 1998 Annual Meeting, the person making the request
beneficially owned share(s) of the Class A Common Stock or the Class B Common
Stock of the Company. The written request should be directed to: Carmike
Cinemas, Inc., 1301 First Avenue, Columbus, Georgia 31901-2109, Attention: John
O. Barwick, III, Vice President-Finance.
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<PAGE> 21
YOUR VOTE IS IMPORTANT
You are encouraged to let us know your preference by marking the
appropriate boxes on the enclosed proxy card.
-19-
<PAGE> 22
APPENDIX A
CARMIKE CINEMAS, INC.
1998 CLASS A STOCK OPTION PLAN
Effective as of the 15th day of January, 1998.
<PAGE> 23
CARMIKE CINEMAS, INC.
1998 CLASS A STOCK OPTION PLAN
ARTICLE I
1.1 Name and Purpose. The name of this Plan is the "Carmike
Cinemas, Inc. 1998 Class A Stock Option Plan" (the "Plan"). Its purposes are (a)
to maximize the long-term success of Carmike Cinemas, Inc. (the "Company"), (b)
to ensure a balanced emphasis on both current and long-term performance, (c) to
enhance Participants' identification with stockholders' interests, and (d) to
facilitate the attraction and retention of key individuals with outstanding
ability.
1.2 Definitions. Whenever used in the Plan, the following terms
shall have the meaning set forth below:
(a) "Board of Directors" or "Board" shall mean the Board
of Directors of Carmike Cinemas, Inc. as constituted from time to time.
(b) "Change in Control" shall have the meaning ascribed
by Section 5.5 hereof.
(c) "Code" shall mean the Internal Revenue Code of 1986,
as amended from time to time.
(d) "Class A Common Stock" shall mean the Company's Class
A Common Stock, par value $.03 per share.
(e) "Committee" shall mean a committee of the Board's
members or an officer of the Company as designated by the Board as set forth in
Section 2.1(a).
(f) "Company" shall mean Carmike Cinemas, Inc. or any
successor thereto.
(g) "Disability" shall mean total and permanent
disability as defined in Code Section 22(e).
(h) "Employee" shall mean any person who is currently a
common law employee of the Company or any of its Subsidiaries.
(i) "Effective Date" shall mean the 15th date of January,
1998, subject, in the case of Incentive Stock Options, to approval by the
stockholders of the Company at a meeting held within twelve (12) months
following the date of adoption by the Board.
(j) "Fair Market Value" or "FMV" shall mean the fair
market value of the Class A Common Stock, which shall be determined as follows:
<PAGE> 24
(i) if the Class A Common Stock is listed on any
established stock exchange or a national market system,
including, without limitation, the NASDAQ National Market, its
fair market value shall be the closing sale price of the Class
A Common Stock, as quoted on such exchange (or the exchange
with the greatest volume of trading) on the trading day
preceding the date of such determination, as reported in The
Wall Street Journal or such other source as the Board deems
reliable; or
(ii) if the Class A Common Stock is not traded on an
exchange or a national market system, its Fair Market Value
shall be determined in good faith by the Board.
In no event shall the Fair Market Value equal less than the par value
of the Class A Common Stock.
(k) "Incentive Stock Option" shall mean a stock option
within the meaning of Section 422 of the Code granted pursuant to Section 4.1
hereof.
(l) "Nonqualified Stock Option" shall mean an Option,
other than an Incentive Stock Option, granted pursuant to Section 4.1 hereof.
(m) "Option" shall mean, individually and collectively,
an Incentive Stock Option or a Nonqualified Stock Option to purchase Class A
Common Stock.
(n) "Option Price" shall mean the price per share of
Class A Common Stock set by the Board upon the grant of an Option.
(o) "Parent" shall mean any corporation which qualifies
as a parent of the Company under the definition of "parent corporation" under
Code Section 424(e).
(p) "Participant" shall mean any person who satisfies the
criteria set forth in Article III hereof.
(q) "Person" shall mean any individual, partnership,
association, corporation, trust or other legal entity.
(r) "Separation Date" shall mean, as determined by the
Board, the date of a Participant's Termination.
(s) "Subsidiary" shall mean a subsidiary corporation of
the Company as defined in Code Section 424(f).
(t) "Termination" shall mean the termination of a
Participant's employment by the Company, the termination of a Participant's
service as a director (including service as a honorary director or director
emeritus) of the Company and the
-2-
<PAGE> 25
termination of a Participant's engagement as a consultant to the Company, as
applicable. Transfer of employment, service as a director or engagement as a
consultant to a Parent or Subsidiary shall not constitute a Termination. Whether
any leave of absence shall constitute Termination for purposes of this Plan
shall be determined in each case by the Board at its sole discretion.
Where the context requires, words in the masculine gender shall include
the feminine and neuter genders, words in the singular shall include the plural,
and words in the plural shall include the singular.
1.3 Plan Duration. The Plan shall remain in effect for ten (10)
years from the Effective Date or until terminated by the Board, whichever comes
first.
ARTICLE II
2.1 Plan Administration.
(a) The Plan shall be administered by the Board. The
Board is authorized to establish such rules and to appoint such agents as it
deems appropriate for the proper administration of the Plan, and to make such
determinations (which shall be sufficiently evidenced if set forth in any
written action of the Board or in any written stock option agreement) and to
take such steps in connection with the Plan or the benefits provided hereunder
as it deems necessary or advisable. The Board also is authorized to delegate to
a Committee of its members or to any officer of the Company any or all of its
authority under this Plan, including any or all of its rights or obligations
hereunder.
(b) The Board shall have the authority, in its sole
discretion and from time to time to take the following actions:
(i) select those individuals who meet the
participation requirements of the Plan;
(ii) grant Options provided by the Plan in such
form and amount as the Board shall determine;
(iii) impose such limitations, restrictions and
conditions upon any such Options as the Board shall deem
appropriate; and
(iv) interpret the Plan, adopt, amend and rescind
rules and regulations related to the Plan, and make all other
determinations and take all other actions necessary or
advisable for the implementation and administration of the
Plan.
(c) The decision of the Board with respect to any
question arising as to the grant of an Option to a Participant in the Plan, the
term, form and amount of Options
-3-
<PAGE> 26
under the Plan, or any other matter concerning the Plan shall be final,
conclusive, and binding on both the Company and the Participants.
ARTICLE III
3.1 Eligibility. The Participants in the Plan shall be selected by
the Board from the directors, officers and key Employees of the Company, or a
consultant, advisor or other person providing services to the Company or its
Subsidiaries who occupy responsible managerial, professional or advisory
positions and who have the capability of making a substantial contribution to
the success of the Company. In making this selection and in determining the form
and amount of Options, the Board shall consider any factors deemed relevant,
including the individual's functions, responsibilities, value of services to the
Company or its Subsidiaries and past and potential contributions to the
Company's profitability and sound growth. The Board may also grant "Substitute
Awards" under the Plan in substitution for stock and stock based awards held by
persons who are or were directors, officers or employees of another corporation
which merges or consolidates with, or the stock or property of which other
corporation is acquired by the Company or a Subsidiary. The Board may direct
that the Substitute Awards be granted on such terms and conditions as the Board
considers appropriate in the circumstances. Participants who are not otherwise
Employees may receive Nonqualified Stock Options but may not receive Incentive
Stock Options under the Plan.
ARTICLE IV
4.1 Options. The Board shall determine the forms and amounts of
Options for Participants. All Options shall be subject to the terms and
conditions of the Plan and to such other terms and conditions consistent with
the Plan as the Board deems appropriate. Options under the Plan need not be
uniform and Incentive Stock Options and Nonqualified Stock Options may be
granted together in one agreement. Options may take the following forms, in the
Board's sole discretion:
(a) Incentive Stock Options.
(i) The Board may grant Incentive Stock Options
within the meaning of Code Section 422 to purchase Class A
Common Stock. In addition to other restrictions contained in
the Plan, an Incentive Stock Option (1) shall not be exercised
more than ten (10) years following the date of grant, (2)
shall not have an Option Price less than the FMV of Class A
Common Stock on the date the Incentive Stock Option is
granted, (3) shall otherwise comply with Code Section 422, and
(4) shall be designated in writing as an "Incentive Stock
Option" by the Board. The date an Incentive Stock Option is
granted shall mean the date selected by the Board as of which
the Board allots a specific number of shares to a Participant
pursuant to the Plan. Notwithstanding the foregoing, the
Option Price of an Incentive
-4-
<PAGE> 27
Stock Option granted to any owner of 10% or more of the total
combined voting power of the Company, its Parent or
Subsidiaries shall be no less than 110% of FMV on the date of
grant and such Option shall not be exercisable after the
expiration of five years from the date of its grant. No
Incentive Stock Option shall be granted to any Participant who
is not otherwise an Employee.
(ii) The grant of an Incentive Stock Option shall
be evidenced by a written Incentive Stock Option Agreement,
executed by the Company and the holder of an Incentive Stock
Option, stating the number of shares of Class A Common Stock
subject to the Incentive Stock Option evidenced thereby and
conditions and restrictions on the exercise of the Option
imposed by the Plan or the Board and in such form as the Board
may from time to time determine.
(b) Nonqualified Stock Options.
(i) The Board may grant Nonqualified Stock
Options to purchase Class A Common Stock which are not
intended to qualify as Incentive Stock Options under Code
Section 422 and which are designated in writing by the Board
as "Nonqualified Stock Options." At the time of the grant, the
Board shall determine the Option exercise period, the Option
Price, and such other conditions or restrictions on the
exercise of the Nonqualified Stock Option as the Board deems
appropriate.
(ii) The Board shall cause the Company to enter
into a written Nonqualified Stock Option Agreement with the
Participant stating that the Options are Nonqualified Stock
Options, the number of shares of Class A Common Stock subject
to the Nonqualified Stock Option, any conditions and
restrictions on the exercise of the Option imposed by the Plan
or the Board, and in such form as the Board shall from time to
time determine.
4.2 Option Exercise. Except as otherwise provided in Article V
hereof, an Incentive Stock Option may not be exercised at any time unless the
holder thereof is then an Employee of the Company, its Parent or Subsidiary.
Options may be exercised in whole at any time, or in part from time to time,
with respect to whole shares only, within the period permitted for the exercise
thereof, and shall be exercised by written notice of intent to exercise the
Option with respect to a specified number of shares delivered to the Company's
Secretary at the Company's principal office, along with payment in full to the
Company at said office of the amount of the Option Price for the number of
shares of Class A Common Stock with respect to which the Option is then being
exercised. In addition to and at the time of payment of the Option Price, the
Participant shall pay to the Company in cash or in Class A Common Stock, the
full amount, if any, that the Company is required to withhold or pay under
federal or state law with respect to the exercise of the Option. Alternatively,
the number of shares delivered by the Company upon exercise of the Option shall
be appropriately reduced to reimburse the Company for such payment.
-5-
<PAGE> 28
4.3 Payment.
(a) Except as otherwise provided below in Section 4.3(b),
payment of the purchase price upon exercise of any Option granted under this
Plan shall be made
(i) in cash or by optionee's personal check,
certified check or bank draft, payable to the order of the
Company in lawful money of the United States;
(ii) with shares of Class A Common Stock already
owned by the optionee (only to the extent that such an
exercise of the Option would not result in an accounting
compensation charge with respect to the shares used to pay the
Option Price); or
(iii) through a "cashless exercise" procedure
involving a broker or dealer approved by the Board, provided
that the Participant has delivered an irrevocable notice of
exercise (the "Notice") to the broker or dealer and such
broker or dealer agrees: (x) to sell immediately the number of
shares of Common Stock specified in the Notice to be acquired
upon exercise of the Option in the ordinary course of its
business, (y) to pay promptly to the Company the aggregate
exercise price (plus the amount necessary to satisfy any
applicable tax liability) and (z) to pay to the Participant
the balance of the proceeds of the sale of such shares over
the amount determined under clause (y) of this sentence, less
applicable commissions and fees; provided, however, that the
Board may modify the provisions of this sentence to the extent
necessary to conform the exercise of the Option to Regulation
T of the Securities Exchange Act of 1934, as amended.
(b) In its discretion, the Board may also permit a
Participant to exercise an Option through any alternative method, provided that
such alternative method of exercise be specifically set forth in the stock
option agreement relating to such Option.
(c) In the event the Option Price is paid in whole or in
part with shares of Class A Common Stock such shares shall be valued at their
FMV as of the date of exercise of the Option. Such shares shall be delivered
along with any portion to be paid in cash or by promissory note within five (5)
days after the date of exercise. If the Participant fails to pay the Option
Price within such five (5) day period, the Board shall have the right to take
whatever action it deems appropriate, including terminating the Option or
voiding the exercise of the Option. The Company shall not issue or transfer
Class A Common Stock upon the exercise of an Option until the Option Price is
paid in full.
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<PAGE> 29
ARTICLE V
5.1 Termination. Except as provided in this Article V or except as
otherwise determined by the Board, all Options under the Plan shall terminate
upon the Termination of the Participant as of the Participant's Separation Date.
5.2 Death of a Participant. In the event of the death of a
Participant prior to the exercise of all Options granted to such Participant,
all unexercised Options shall become immediately exercisable and the
administrator of the deceased Participant's estate, the executor under his or
her will, or the person(s) to whom the Options shall have been validly
transferred by such executor or administrator pursuant to the will or laws of
intestate succession shall have the right, within one year from the date of such
Participant's death, but not beyond the expiration date of the Options, to
exercise such Options.
5.3 Retirement or Termination. In the event of the Termination of
a Participant prior to the exercise of Options granted to the Participant
pursuant to this Plan, such Participant shall have the right, within three (3)
months of his Separation Date (or such longer period as determined by the Board
and set forth in such Participant's Option Agreement), but not beyond the
expiration date of such Options, to exercise such Nonqualified Stock Options, to
the extent exercisable on his Separation Date; provided, however, if the Option
is an Incentive Stock Option, such Option shall only continue to be exercisable
as an Incentive Stock Option for a period of three months following the date
that the Participant ceases to be an employee of the Company. At the end of such
three month period the Option, if not then exercised, shall be treated as a
nonqualified stock option.
5.4 Disability.
(a) In the event of the Termination of a Participant by
Disability prior to the exercise of all Incentive Stock Options granted to the
Participant, all unexercised Incentive Stock Options shall become immediately
exercisable and such Participant or his legal representative shall have the
right, within twelve (12) months of his Separation Date, but not beyond the
expiration date of such Incentive Stock Options, to exercise such Incentive
Stock Options.
(b) In the event of the Termination of a Participant by
Disability prior to the exercise of all Nonqualified Stock Options granted to
the Participant, all unexercised Nonqualified Stock Options shall become
immediately exercisable and such Participant or his legal representative shall
have the right, within twelve (12) months of his Separation Date (or such longer
period as determined by the Board and set forth in such Participant's Option
Agreement), but not beyond the expiration date of such Nonqualified Stock
Options, to exercise such Nonqualified Stock Options.
5.5 Change in Control.
(a) In the event of a Change in Control of the Company,
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<PAGE> 30
(i) all outstanding Options granted hereunder
shall become fully exercisable as of the date of the Change in
Control, whether or not then exercisable, and
(ii) such outstanding Options shall remain
exercisable for their remaining terms, notwithstanding any
other provision of this Plan or the applicable option
agreements.
(b) A "Change in Control" shall be deemed to have
occurred when
(i) any Person (other than
(x) the Company, any Subsidiary of the
Company, any employee benefit plan of the
Company or of any Subsidiary of the Company,
or any person or entity organized, appointed
or established by the Company or any
Subsidiary of the Company for or pursuant to
the terms of any such plan or
(y) a Class B Holder or a Permitted
Transferee thereof (in each case, as defined
in the Company's Restated Certificate of
Incorporation),
alone or together with its Affiliates and Associates
(collectively, an "Acquiring Person"), shall become the
Beneficial Owner of securities of the Company representing
fifty percent (50%) or more of the combined voting power of
the Company's then outstanding voting securities,
(ii) individuals who, as of the date hereof,
constitute the Board, and any new director (other than a
director who is a representative or nominee of an Acquiring
Person) whose election by the Board or nomination for election
by the Company's stockholders was approved by a vote of at
least a majority of the directors then in office
(collectively, the "Continuing Directors"), cease for any
reason to constitute a majority of the Board,
(iii) the stockholders of the Company approve a
merger, reorganization or consolidation of the Company with
any other corporation, in each case, with respect to which,
persons who were the stockholders of the Company immediately
prior to such merger, reorganization or consolidation do not,
immediately thereafter, own more than fifty percent (50%) of
the combined voting power of the reorganized, merged or
consolidated company's then outstanding voting securities, or
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<PAGE> 31
(iv) the stockholders of the Company approve a
plan of reorganization (other than a reorganization under the
United States Bankruptcy Code) or complete liquidation of the
Company or an agreement for the sale or disposition by the
Company of all or substantially all of the Company's assets;
provided, however, that a Change in Control shall not be
deemed to have occurred in the event of (i) a sale or
conveyance in which the Company continues as a holding company
of an entity or entities that conduct all or substantially all
of the business or businesses formerly conducted by the
Company or (ii) any transaction undertaken for the purpose of
incorporating the Company under the laws of another
jurisdiction, if such transaction does not materially affect
the beneficial ownership of the Company's capital stock.
ARTICLE VI
6.1 Limitation of Shares of Class A Common Stock Available under
the Plan.
(a) Shares of stock which may be issued under the Plan
shall be authorized and unissued or treasury shares of Class A Common Stock. The
total number of shares of Class A Common Stock available to be granted by the
Board as Options to the Participants under the Plan, and the maximum number of
shares of Class A Common Stock with respect to which Options may be granted to
any Participant during any calendar year, shall not exceed 750,000 shares (which
number may be increased by the Board, without stockholder approval, to reflect
adjustments pursuant to Section 7.1 below).
(b) The grant of Incentive Stock Options and Nonqualified
Stock Options shall reduce the available shares by the number of shares subject
to such Options.
(c) The lapse or cancellation of an Incentive Stock
Option or Nonqualified Stock Option shall increase the available shares by the
number of shares released from such Option.
ARTICLE VII
7.1 Adjustment Upon Changes in Capitalization. In the event of any
change in the outstanding Class A Common Stock by reason of a stock dividend or
distribution, recapitalization, merger, consolidation, split-up, combination,
exchange of shares or the like, appropriate adjustments shall be made in the
number and kind of shares which may be issued under the Plan, the number and
kind of shares subject to Options theretofore granted under the Plan, the Option
Price of Options theretofore granted under the Plan, and any and all other
matters deemed appropriate by the Board.
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<PAGE> 32
ARTICLE VIII
8.1 Employment. The establishment of the Plan and Options
hereunder shall not be construed as conferring on any Participant any right to
continued employment, and the employment of any Participant may be terminated
without regard to the effect which such action might have upon him as a
Participant.
8.2 Rights as a Stockholder. The recipient of any Option under the
Plan shall have no rights as a stockholder with respect thereto unless and until
certificates for shares of Class A Common Stock are issued to him.
8.3 Non-Assignability. During the life of the Participant, Options
awarded under this Plan shall be exercisable only by such person or by such
person's guardian or legal representative.
8.4 Stockholder Approval. Continuance of the Plan for purposes of
granting Incentive Stock Options shall be subject to approval by the
stockholders of the Company within twelve (12) months after the date the Plan is
adopted by the Board. Any Incentive Stock Options granted hereunder shall become
effective only upon such stockholder approval. The Board may grant Incentive
Stock Options or Nonqualified Stock Options under the Plan prior to such
stockholder approval, but until stockholder approval is obtained, no such Option
shall be exercisable. In the event that such stockholder approval is not
obtained within the period provided above, all Options previously granted
pursuant to the Plan shall terminate. If such stockholder approval is obtained
at a meeting of stockholders, the Plan must be approved by a majority of the
votes cast at such meeting at which a quorum representing a majority of all
outstanding voting stock of the Company is, either in person or by proxy,
present and voting on the Plan. If such stockholder approval is obtained by
written consent, it must be obtained by the written consent of the holders of a
majority of all outstanding voting stock of the Company.
8.5 Amendment, Modification, and Termination of the Plan. The
Board may from time to time amend, suspend or discontinue this Plan; provided,
however, that subject to the provisions of Section 7.1 hereof, no action of the
Board may amend this Plan if such approval would adversely affect the treatment
of any Option intended to qualify as an incentive stock option under the Code if
obtained without approval by a majority vote of the stockholders having a right
to vote thereon being secured.
8.6 Indemnification. Each person who is or shall have been a
member of the Board shall be indemnified and held harmless by the Company
against and from any loss, cost, liability, or expense that may be imposed upon
or reasonably incurred by him in connection with or resulting from any claim,
action, suit, or proceeding to which he may be a party or in which he may be
involved by reason of any action or failure to act under the Plan and against
and from any and all amounts paid by him in satisfaction of judgment in any such
action, suit, or proceeding against him. Such person shall give the Company an
opportunity, at its own expense, to handle and defend the same before he
undertakes to handle and defend it on his own behalf. The foregoing right of
indemnification shall not be
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<PAGE> 33
exclusive of any other rights of indemnification to which such persons may be
entitled under the Company's Articles of Incorporation or Bylaws, as a matter of
law, or otherwise, or any power that the Company may have to indemnify them or
hold them harmless.
8.7 Reliance on Reports. Each member of the Board shall be fully
justified in relying or acting in good faith upon any report made by the
independent public accountants of the Company and upon any other information
furnished in connection with the Plan by any person or persons other than
himself. In no event shall any person who is or shall have been a member of the
Board be liable for any determination made or other action taken or any omission
to act in reliance upon any such report or information or for any action taken,
including the furnishing of information, or failure to act, if in good faith.
8.8 Governing Law. To the extent that federal law shall not be
held to have preempted local law, this Plan shall be governed by the laws of the
State of Delaware. If any provision of the Plan shall be held invalid or
unenforceable, the remaining provisions hereof shall continue in full force and
effect.
(SIGNATURES ON NEXT PAGE)
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<PAGE> 34
IN WITNESS WHEREOF, the Company has caused the Carmike Cinemas, Inc.
1998 Class A Stock Option Plan to be executed by its duly authorized officer
pursuant to resolutions of the Board to be effective as of the 15th day of
January, 1998.
CARMIKE CINEMAS, INC.
By:
---------------------------------
John O. Barwick, III
Vice President -- Finance
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<PAGE> 35
CARMIKE CINEMAS, INC.
1998 CLASS A STOCK OPTION PLAN
GRANT OF EMPLOYEE NONQUALIFIED STOCK OPTION
DATE OF GRANT: JANUARY 15, 1998
THIS GRANT, dated as of the date of grant first stated above (the "Date
of Grant"), is delivered by Carmike Cinemas, Inc. (the "Company") to
_____________________ (the "Grantee"), who is an Employee of the Company or a
Subsidiary.
WHEREAS, the Board of Directors of the Company (the "Board") on January
21, 1998, adopted the Carmike Cinemas, Inc. 1998 Class A Stock Option Plan (the
"Plan") effective as of January 15, 1998;
WHEREAS, the Plan provides for the granting of Nonqualified Stock
Options by the Board or the Committee to directors, officers and key employees
of the Company and its Subsidiaries and consultants and advisers to the Company
to purchase shares of the Class A Common Stock of the Company (the "Stock"), in
accordance with the terms and provisions thereof; and
WHEREAS, the Board considers Grantee to be a person who is eligible for
a grant of Nonqualified Stock Options under the Plan, and has determined that it
would be in the best interest of the Company to grant the Nonqualified Stock
Options documented herein.
NOW THEREFORE, the parties hereto, intending to be legally bound
hereby, agree as follows (capitalized terms not otherwise defined herein shall
have the meanings set forth in the Plan):
1. Grant of Option.
Subject to the terms and conditions hereinafter set forth, the
Company, with the approval and at the direction of the Board, hereby grants to
Grantee, as of the Date of Grant, an option to purchase up to __________ shares
of Stock at a price of $27.125 per share. The shares of stock purchasable upon
exercise of the Option are hereinafter sometimes referred to as the "Option
Shares." The Option is intended by the parties hereto to be, and shall be
treated as, a Nonqualified Stock Option which is not subject to the provisions
of Code Section 422.
2. Term of Option.
Subject to the further limitations contained herein, this
Option shall become 100% exercisable on and after the third anniversary of the
Date of Grant.
<PAGE> 36
3. Termination of Option.
(a) The Option and all rights hereunder with respect
thereto, to the extent such rights shall not have been exercised, shall
terminate and become null and void after the expiration of ten (10) years from
the Date of Grant (the "Option Term").
(b) Upon the Termination (as defined in Section 1.2(t) of
the Plan) of Grantee, the Option, to the extent not previously exercised, shall
terminate and become null and void upon the terms set forth below. Upon a
Termination of Grantee by reason of Disability or death, all unexercised
portions of the Option shall become immediately exercisable and the Option may
be exercised during the period beginning upon such Termination and ending one
year after such date. Upon Termination of Grantee for any other reason, the
Option may be exercised during the period beginning upon the date of Termination
and ending three months after such date, but only to the extent that the Option
was outstanding and exercisable on the date of such Termination. In no event,
however, shall any such period extend beyond the Option Term.
(c) In the event of Grantee's death, the Option may be
exercised by Grantee's legal representative(s) as and to the extent that the
Option would otherwise have been exercisable by Grantee, subject to the
provisions of Section 3(b) hereof.
4. Change in Control.
In the event of a Change in Control of the Company (as defined
in Section 5.5 of the Plan) and notwithstanding anything to the contrary set
forth in this Agreement,
(a) the Option shall become fully exercisable as of the
date of the Change in Control, whether or not then exercisable by its terms; and
(b) the Option shall remain exercisable for its then
remaining term.
5. Exercise of Options.
(a) Grantee may exercise the Option with respect to all
or any part of the number of Option Shares that are exercisable hereunder by
giving the Secretary of the Company written notice of intent to exercise. The
notice of exercise shall specify the number of Option Shares as to which the
Option is to be exercised and date of exercise thereof, which date shall be at
least five (5) days after the signing of such notice unless an earlier time
shall have been mutually agreed upon.
(b) Full payment (in U.S. dollars) by Grantee of the
Option Price for Option Shares purchased shall be made on or before the exercise
date specified in the notice of exercise (i) in cash, (ii) in shares of Class A
Common Stock already owned by Grantee (but only to the extent that such exercise
of the Option would not result in an accounting compensation change with respect
to the shares used to pay the exercise price) having an aggregate Fair Market
Value on the date of exercise equal to the aggregate exercise price, (iii)
through a "cashless exercise" procedure involving a broker or dealer approved by
the Board, provided that Grantee has
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<PAGE> 37
delivered an irrevocable notice of exercise (the "Notice") to the broker or
dealer and such broker or dealer agrees: (x) to sell immediately the number of
shares of Class A Common Stock specified in the Notice to be acquired upon
exercise of the Option in the ordinary course of its business, (y) to pay
promptly to the Company the aggregate exercise price (plus the amount necessary
to satisfy any applicable tax liability) and (z) to pay to Grantee the balance
of the proceeds of the sale of such shares over the amount determined under
clause (y) of this sentence, less applicable commissions and fees; provided,
however, that the Board may modify the provisions of this sentence to the extent
necessary to conform the exercise of the Option to Regulation T of the
Securities Exchange Act of 1934, as amended; or (iv) in any combination of the
methods set forth above.
(c) If Grantee fails to pay for any of the Option Shares
specified in such notice or fails to accept delivery thereof, Grantee's right to
purchase such Option Shares may be terminated by the Company or the exercise of
the Option may be ignored, as the Committee in its sole discretion may
determine. The date specified in Grantee's notice as the date of exercise shall
be deemed the date of exercise of the Option, provided that payment in full for
the Option Shares to be purchased upon such exercise shall have been received by
such date.
6. Adjustment of and Changes in Stock.
(a) In the event of any change in the outstanding Class A
Common Stock by reason of a reorganization, recapitalization, change of shares,
stock split, spin-off, stock dividend, reclassification, subdivision, or
combination of shares, merger, consolidation, rights offering, or any other
change in the corporate structure of shares of capital stock of the Company, the
appropriate adjustments shall be made in the number and kind of shares of Stock
subject to the Option or in the option price; provided, however, that no such
adjustment shall give Grantee any additional benefits under the Option.
(b) In the case of a merger of, or a consolidation
involving, the Company in which the Company is
(i) not the surviving corporation (the
"Surviving Entity") or
(ii) becomes a wholly owned subsidiary of the
Surviving Entity or parent thereof,
the Option (if not exercised before such date) shall after such merger or
consolidation, be exercisable upon the terms and conditions specified in this
Agreement, for the number of shares of stock or other securities or other assets
to which a holder of the number of Option Shares purchasable (at the time of
such merger or consolidation) upon exercise of such Option, would have been
entitled upon such merger or consolidation, and in any such case, if necessary,
the provisions set forth in this Agreement with respect to the rights thereafter
of the Grantee shall be appropriately adjusted so as to be applicable, as nearly
as may reasonably be, to any shares of stock or other securities or assets
thereafter deliverable on the exercise of the Option.
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<PAGE> 38
7. No Rights as Shareholders.
Grantee shall have no rights as a shareholder with respect
thereto unless and until certificates for shares of Common Stock are issued to
him or her.
8. Non-Transferability of Option.
During Grantee's lifetime, this Option shall be exercisable
only by Grantee or his or her guardian or legal representative.
9. Employment Not Affected.
The grant of the Option hereunder shall not be construed as
conferring on Grantee any right to continued employment, and Grantee's
employment may be terminated without regard to the effect which such action
might have upon him as a holder of this Option.
10. Amendment of Option.
The Option may be amended by the Committee at any time (i) if
the Committee determines, in its sole discretion, that amendment is necessary or
advisable in light of any addition to or change in the Code or in the
regulations issued thereunder, or any federal or state securities law or other
law of regulation, which change occurs after the Date of Grant and by its terms
applies to the Option; or (ii) other than in the circumstances described in
clause (i), with the consent of Grantee.
11. Notice.
Any notice to the Company provided for in this instrument
shall be addressed to it in care of its Secretary at its executive offices and
any notice to Grantee shall be addressed to Grantee at the current address shown
on the payroll records of the Employer. Any notice shall be deemed to be duly
given if and when properly addressed and posted by registered or certified mail,
postage prepaid.
12. Incorporation of Plan by Reference.
The Option is granted pursuant to the Plan, the terms and
definitions of which are incorporated herein by reference, and the Option shall
in all respects be interpreted in accordance with the Plan.
13. Governing Law.
To the extent that federal law shall not be held to have
preempted local law, this Option shall be governed by the laws of the State of
Delaware. If any provision of the Option shall be held invalid or unenforceable,
the remaining provisions hereof shall continue in full force and effect.
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<PAGE> 39
IN WITNESS WHEREOF, the Company has caused its duly authorized officer
to execute this Grant of Nonqualified Stock Option, and Grantee has placed his
or her signature hereon, effective as of the Date of Grant.
CARMIKE CINEMAS, INC.
By:
--------------------------------------
John O. Barwick, III
Vice President -- Finance
GRANTEE
Signature:
----------------------------------
Name:
----------------------------------
(Print)
Address:
----------------------------------
----------------------------------
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<PAGE> 40
ANNEX
CARMIKE CINEMAS, INC.
1301 FIRST AVENUE
COLUMBUS, GEORGIA 31901-2109
CLASS A COMMON STOCK PROXY
SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
FOR ANNUAL MEETING OF SHAREHOLDERS, MAY 11, 1998
The undersigned hereby appoints MICHAEL W. PATRICK, JOHN O. BARWICK,
III, and LARRY M. ADAMS, and each of them, proxies with full power of
substitution, to represent and to vote as set forth herein all the shares of
Class A Common Stock of Carmike Cinemas, Inc. held of record by the undersigned
on March 19, 1998, at the Annual Meeting of Shareholders of Carmike Cinemas,
Inc. to be held at the offices of Troutman Sanders, NationsBank Plaza, 600
Peachtree Street, N.E., 52nd Floor, Atlanta, Georgia 30308, at 11:00 a.m. local
time, on Monday, May 11, 1998, and any adjournments thereof.
1. Election of Directors:
[ ] FOR all nominees, except as marked below.
[ ] WITHHOLD vote from all nominees.
C.L. Patrick, Michael W. Patrick, John W. Jordan, II, Carl L.
Patrick, Jr., Carl E. Sanders and David W. Zalaznick.
(INSTRUCTIONS: To withhold authority to vote for any
individual nominee, write the nominee's name on the space
provided below.)
---------------------------------------------------------------
2. Proposal to adopt the Carmike Cinemas, Inc. 1998 Class A Stock
Option Plan.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
Management recommends a vote FOR Items 1 and 2.
3. In their discretion, the proxies are authorized to vote as
described in the proxy statement and upon such other business
as may properly come before the meeting.
THIS PROXY WHEN PROPERLY EXECUTED WILL BE VOTED IN THE MANNER
DIRECTED BY THE UNDERSIGNED SHAREHOLDER. IF NO DIRECTION IS
MADE, THIS PROXY WILL BE VOTED "FOR" ITEMS 1 AND 2.
Dated: , 1998
--------------------- ----------------------------------------
Signature
----------------------------------------
Signature if Held Jointly
Please sign exactly as name appears on
Stock Certificate. If stock is held in
the name of two or more persons, all
must sign. When signing as attorney,
executor, administrator, trustee, or
guardian, please give full title as
such. If a corporation, please sign in
full corporate name by President or
other authorized officer. If a
partnership, please sign in partnership
name by authorized person.
PLEASE MARK, SIGN, DATE AND RETURN THIS
PROXY CARD PROMPTLY USING THE ENCLOSED
ENVELOPE.
