<PAGE> 1
As Filed With the Securities and Exchange Commission
on May 18, 1998
Registration No. [ ]
- --------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM S-8
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
- --------------------------------------------------------------------------------
REGAL CINEMAS, INC.
(Exact name of registrant as specified in its charter)
TENNESSEE 62-1412720
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
7132 COMMERCIAL PARK DRIVE
KNOXVILLE, TENNESSEE 37918
(Address of Principal Executive Offices) (Zip Code)
REGAL CINEMAS, INC. PARTICIPANT STOCK OPTION PLAN
REGAL CINEMAS, INC. EMPLOYEE STOCK OPTION PLAN
1993 EMPLOYEE STOCK INCENTIVE PLAN
1998 STOCK PURCHASE AND OPTION PLAN FOR KEY EMPLOYEES
OF REGAL CINEMAS, INC.
(Full title of the plans)
MICHAEL L. CAMPBELL
PRESIDENT AND CHIEF EXECUTIVE OFFICER
7132 COMMERCIAL PARK DRIVE
KNOXVILLE, TENNESSEE 37918
(615) 525-4600
(Name, Address, including Zip Code, and Telephone Number,
including Area Code, of Registrant's Agent for Service)
WITH COPIES TO:
F. MITCHELL WALKER, JR., ESQ. DAVID J. SORKIN, ESQ.
BASS, BERRY & SIMS PLC SIMPSON THACHER & BARTLETT
2700 FIRST AMERICAN CENTER 425 LEXINGTON AVENUE
NASHVILLE, TENNESSEE 37238 NEW YORK, NEW YORK 10017-3954
(615) 742-6200 (212) 455-2000
---------------
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC:
FROM TIME TO TIME AFTER THE EFFECTIVE DATE OF THIS REGISTRATION STATEMENT
<TABLE>
<CAPTION>
CALCULATION OF REGISTRATION FEE
======================================================================================================================
Proposed maximum Proposed maximum
Title of securities to Amount to be offering price per aggregate offering Amount of
be registered registered share(a)(b) price(a) registration fee(a)
- ----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Common Stock, no
par value 30,000,000 shares $5.00 $150,000,000.00 $44,250.00
======================================================================================================================
</TABLE>
(a) Pursuant to Rule 457(h) under the Securities Act of 1933, the proposed
maximum offering price per share, the proposed maximum aggregate
offering price and the amount of registration fee have been computed on
the basis of the price at which common stock under the Plans will be
sold, and the price at which options under the Plans may be exercised.
(b) Following consummation of the Registrant's proposed merger with
affiliates of Kohlberg Kravis Roberts & Co. and Hicks, Muse, Tate &
Furst Incorporated, it is anticipated that the Registrant will split
its shares of common stock. The number of shares and offering price per
share are computed on a post-split basis.
<PAGE> 2
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
Item 3. Incorporation of Documents by Reference.
The following documents filed by Regal Cinemas, Inc. (the "Registrant"
or the "Company") with the Securities and Exchange Commission (the "Commission")
are hereby incorporated by reference in this Registration Statement:
(1) The Registrant's Prospectus dated July 1, 1993, filed pursuant to
Rule 424(b) under the Securities Act of 1933, as amended.
(2) The description of the Registrant's Common Stock contained in
the Registration Statement, filed by the Registrant to register
such securities under the Exchange Act, including all amendments
and reports filed for the purpose of updating such description
prior to the termination of the offering of Common Stock offered
hereby.
(3) The Company's Annual Report on Form 10-K for the fiscal year
ended January 1, 1998.
(4) The Company's Quarterly Report on Form 10-Q for the fiscal
quarter ended April 2, 1998.
All documents filed by the Registrant pursuant to Sections 13(a),
13(c), 14 or 15(d) of the Exchange Act after the date hereof and prior to the
filing of a post-effective amendment which indicates that all securities offered
have been sold or which deregisters all securities then remaining unsold, shall
be deemed to be incorporated by reference herein and to be a part hereof from
the date of filing of such documents. Any statement contained in a document
incorporated by reference herein shall be deemed to be modified or superseded
for purposes hereof to the extent that a statement contained herein (or in any
other subsequently filed document which also is incorporated by reference
herein) modifies or supersedes such statement. Any statement so modified or
superseded shall not be deemed to constitute a part hereof except as so modified
or superseded.
Item 4. Description of Securities.
Not Applicable.
Item 5. Interests of Named Experts and Counsel.
Not Applicable.
II-1
<PAGE> 3
Item 6. Indemnification of Directors and Officers.
The Tennessee Business Corporation Act ("TBCA") provides that a
corporation may indemnify any of its directors and officers against liability
incurred in connection with a proceeding if (i) such person acted in good faith;
(ii) in the case of conduct in an official capacity with the corporation, he
reasonably believed such conduct was in the corporation's best interests; (iii)
in all other cases, he reasonably believed that his conduct was at least not
opposed to the best interests of the corporation; and (iv) in connection with
any criminal proceeding, such person had no reasonable cause to believe his
conduct was unlawful. In actions brought by or in the right of the corporation,
however, the TBCA provides that no indemnification may be made if the director
or officer was adjudged to be liable to the corporation. The TBCA also provides
that in connection with any proceeding charging improper personal benefit to an
officer or director, no indemnification may be made if such officer or director
is adjudged liable on the basis that such personal benefit was improperly
received. Notwithstanding the foregoing, the TBCA provides that a court of
competent jurisdiction, unless the corporation's charter provides otherwise,
upon application, may order that an officer or director be indemnified for
reasonable expenses if, in consideration of all relevant circumstances, the
court determines that such individual is fairly and reasonably entitled to
indemnification, notwithstanding the fact that (i) such officer or director was
adjudged liable to the corporation in a proceeding by or in right of the
corporation; (ii) such officer or director was adjudged liable on the basis that
personal benefit was improperly received by him; or (iii) such officer or
director breached his duty of care to the corporation. The TBCA also provides
that a corporation may purchase and maintain on behalf of officers and directors
insurance against any liability which may be asserted against such persons,
whether or not the corporation would be able to indemnify such persons under the
TBCA.
The Registrant's Restated Charter provides that to the fullest extent
permitted by law no director shall be personally liable to the Registrant or its
shareholders for monetary damages for breach of any fiduciary duty as a
director. Under the TBCA, this charter provision relieves the Registrant's
directors from personal liability to the Registrant or its shareholders for
monetary damages for breach of fiduciary duty as a director, except for
liability arising from (i) any breach of the director's duty of loyalty, (ii)
acts or omission not in good faith or which involve intentional misconduct or a
knowing violation of law, or (iii) any unlawful distributions. In addition, the
Registrant's Bylaws provide that each director and officer of the Registrant
shall be indemnified by the Registrant to the fullest extent allowed by
Tennessee law, and the Registrant has entered into indemnification agreements
with each of the Registrant's directors and executive officers. The Registrant's
Bylaws also provide that the Registrant may purchase and maintain on behalf of
officers and directors insurance against any liability which may be asserted
against such persons, whether or not the Registrant would be able to indemnify
such persons under the TBCA of its Restated Charter and Bylaws. The Registrant
maintains officers and directors liability insurance.
Item 7. Exemption From Registration Claimed.
Not Applicable.
II-2
<PAGE> 4
Item 8. Exhibits
<TABLE>
<CAPTION>
Exhibit Number Description
- -------------- -----------
<S> <C>
4.1 Restated Charter of the Registrant (incorporated by
reference to Exhibit 3.1 of the Registrant's Registration
Statement on Form S-1, Registration No. 33-62868)
4.2 Amended and Restated Bylaws of the Registrant (incorporated
by reference to Exhibit 3.2 of the Registrant's Registration
Statement on Form S-l, Registration No. 33-62868)
4.3 Regal Cinemas, Inc. Participant Stock Option Plan
(incorporated by reference to Exhibit 10.3 of the
Registrant's Registration Statement on Form S-1,
Registration No. 33-62868)
4.4 Regal Cinemas, Inc. Employee Stock Option Plan (incorporated
by reference to Exhibit 10.4 of the Registrant's
Registration Statement on Form S-1, Registration No.
33-62868)
4.5 1993 Employee Stock Incentive Plan (incorporated by
reference to Exhibit 10.1 of the Registrant's Registration
Statement on Form S-1, Registration No. 33-62868)
4.6 1998 Stock Purchase and Option Plan for Key Employees of
Regal Cinemas, Inc.
4.7 Form of Management Stockholder's Agreement
4.8 Form of Non-Qualified Stock Option Agreement
4.9 Form of Sale Participation Agreement
4.10 Form of Registration Rights Agreement
5 Opinion of Bass, Berry & Sims
23.1 Consent of Coopers & Lybrand
23.2 Consent of Ernst & Young LLP
23.3 Consent of Bass, Berry & Sims (included in Exhibit 5)
</TABLE>
II-3
<PAGE> 5
Item 9. Undertakings.
A. The Registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being
made, a post effective amendment to this Registration Statement; (i) to include
any prospectus required by Section 10(a)(3) of the Securities Act; (ii) to
reflect in the prospectus any facts or events arising after the effective date
of the Registration Statement (or the most recent post-effective amendment
thereof) which, individually or in the aggregate, represent a fundamental change
in the information set forth in the Registration Statement; (iii) to include any
material information with respect to the plan of distribution not previously
disclosed in the Registration Statement or any material change to such
information in the Registration Statement; provided, however, that paragraphs
(A)(l)(i) and (A)(l)(ii) do not apply if the information required to be included
in a post-effective amendment by those paragraphs is contained in periodic
reports filed by the Registrant pursuant to Section 13 or 15(d) of the Exchange
Act that are incorporated by reference in the Registration Statement.
(2) That, for the purpose of determining any liability under the
Securities Act, each such post-effective amendment shall be deemed to be a new
registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof.
(3) To remove from registration by means of a post-effective
amendment any of the securities being registered which remain unsold at the
termination of the offering.
B. The Registrant hereby undertakes that, for purposes of determining
any liability under the Securities Act, each filing of the Registrant's annual
report pursuant to Section 13(a) or Section 15(d) of the Exchange Act that is
incorporated by reference in the Registration Statement shall be deemed to be a
new registration statement relating to the securities offered herein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof.
C. Insofar as indemnification for liabilities arising under the
Securities Act may be permitted to directors, officers and controlling persons
of the Registrant pursuant to the foregoing provisions, or otherwise, the
Registrant has been advised that in the opinion of the Commission such
indemnification is against public policy as expressed in the Securities Act and
is, therefore, unenforceable. In the event that a claim for indemnification
against such liabilities (other than the payment by the Registrant of expenses
incurred or paid by a director, officer or controlling person of the Registrant
in the successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered, the Registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public
policy as expressed in the Securities Act and will be governed by the final
adjudication of such issue.
II-4
<PAGE> 6
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
Registrant certifies that it has reasonable grounds to believe that it meets all
of the requirements for filing on Form S-8 and has duly caused this registration
statement to be signed on its behalf by the undersigned, "thereunto duly
authorized, in the City of Knoxville, State of Tennessee, on this 18th day of
May 1998.
REGAL CINEMAS, INC.
By: /s/ Michael L. Campbell
-------------------------------------
Michael L. Campbell
Chairman of the Board, President and
Chief Executive Officer
KNOW ALL MEN BY THESE PRESENTS, each person whose signature appears
below hereby constitutes and appoints Michael L. Campbell and Lewis Frazer III,
and each of them, his true and lawful attorneys-in-fact and agents, with full
power of substitution and resubstitution, for him and in his name, place, and
stead, in any and all capacities, to sign any and all amendments to this
Registration Statement, and to file the same, with the Securities and Exchange
Commission, granting unto said attorney-in-fact and agents full power and
authority to do and perform each and every act and thing requisite and necessary
to be done in and about the premises, as fully to all intents and purposes as he
might or could do in person, hereby ratifying and confirming all that said
attorneys-in-fact and agents, or their substitute or substitutes, may lawfully
do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities and on the dates indicated.
<TABLE>
<CAPTION>
Signature Title Date
- --------- ----- ----
<S> <C> <C>
/s/ Michael L. Campbell Chairman of the Board, May 18, 1998
- -------------------------------- President, Chief Executive
Michael L. Campbell Officer and Director
(Principal Executive
Officer)
/s/ Lewis Frazer III Chief Financial Officer and May 18, 1998
- -------------------------------- Treasurer (Principal
Lewis Frazer III Financial and Accounting
Officer)
</TABLE>
II-5
<PAGE> 7
<TABLE>
<S> <C> <C>
/s/ R. Neal Melton Vice President Construction- May 18, 1998
- -------------------------------- Equipment, Secretary and
R. Neal Melton Director
/s/ Philip D. Borack Director May 18, 1998
- --------------------------------
Philip D. Borack
/s/ Michael E. Gellert Director May 18, 1998
- --------------------------------
Michael E. Gellert
/s/ J. David Grissom Director May 18, 1998
- --------------------------------
J. David Grissom
/s/ William H. Lomicka Director May 18, 1998
- --------------------------------
William H. Lomicka
/s/ Herbert S. Sanger, Jr. Director May 18, 1998
- --------------------------------
Herbert S. Sanger, Jr.
/s/ Jack Tyrrell Director May 18, 1998
- --------------------------------
Jack Tyrrell
</TABLE>
II-6
<PAGE> 8
EXHIBIT INDEX
<TABLE>
<CAPTION>
Exhibit
Number Description
- ---------------- --------------------------------------------------------------
<S> <C>
4.1 Restated Charter of the Registrant (incorporated by reference
to Exhibit 3.1 of the Registrant's Registration Statement on
Form S-1, Registration No. 33-64930)
4.2 Amended and Restated Bylaws of the Registrant (incorporated by
reference to Exhibit 3.2 of the Registrant's Registration
Statement on Form S-1, Registration No. 33-64930)
4.3 Regal Cinemas, Inc. Participant Stock Option Plan (incorporated
by reference to Exhibit 10.3 of the Registrant's Registration
Statement on Form S-1, Registration No. 33-62868)
4.4 Regal Cinemas, Inc. Employee Stock Option Plan (incorporated
by reference to Exhibit 10.4 of the Registrant's Registration
Statement on Form S-l, Registration No. 33-62868)
4.5 1993 Employee Stock Incentive Plan (incorporated by reference
to Exhibit 10.1 of the Registrant's Registration Statement on
Form S-1, Registration No. 33-62868)
4.6 1998 Stock Purchase and Option Plan for Key Employees of Regal
Cinemas, Inc.
4.7 Form of Management Stockholder's Agreement
4.8 Form of Non-Qualified Stock Option Agreement
4.9 Form of Sale Participation Agreement
4.10 Form of Registration Rights Agreement
5 Opinion of Bass, Berry & Sims
23.1 Consent of Coopers & Lybrand
23.2 Consent of Ernst & Young LLP
23.3 Consent of Bass, Berry & Sims (included in Exhibit 5)
</TABLE>
<PAGE> 1
EXHIBIT 4.6
PLAN DOCUMENT
1998 STOCK PURCHASE AND OPTION PLAN
FOR KEY EMPLOYEES OF
REGAL CINEMAS, INC.
1. Purpose of Plan
The 1998 Stock Purchase and Option Plan for Key Employees of Regal
Cinemas, Inc. (the "Plan") is designed:
(a) to promote the long term financial interests and growth of Regal
Cinemas, Inc. (the "Company") and its subsidiaries by attracting and retaining
management personnel with the training, experience and ability to enable them
to make a substantial contribution to the success of the Company's business;
(b) to motivate management personnel by means of growth-related
incentives to achieve long range goals; and
(c) to further the alignment of interests of participants with those
of the stockholders of the Company through opportunities for increased stock,
or stock-based ownership in the Company.
2. Definitions
As used in the Plan, the following words shall have the following
meanings:
(a) "Affiliate" means with respect to any Person, any entity
directly or indirectly controlling, controlled by or under common control with
such Person.
(b) "Board of Directors" means the Board of Directors of the
Company.
(c) "Change of Control" means (i) a sale of all or substantially
all of the assets of the Company to a Person or Group who is not an Affiliate
of Kohlberg Kravis Roberts & Co., L.P. ("KKR") or Hicks, Muse, Tate & Furst
Incorporated ("Hicks Muse"), (ii) a sale by the Company, KKR or Hicks Muse or
any of their respective Affiliates resulting in more than 50% of the voting
stock of the Company being held by a Person or Group that does not include KKR
or Hicks Muse or any of their respective Affiliates or (iii) a merger or
consolidation of the Company into another Person which is not an Affiliate of
KKR or Hicks Muse; if and only if any such event listed in (i) through (iii)
above results in the inability of KKR and/or Hicks Muse to elect a majority of
the Board of Directors of the Company or the resulting entity.
<PAGE> 2
2
(d) "Committee" means the Compensation Committee of the Board of
Directors.
(e) "Common Stock" or "Share" means common stock of the Company
which may be authorized but unissued, or issued and reacquired.
(f) "Employee" means a person, including an officer, in the
regular employment of the Company or one of its Subsidiaries who, in the
opinion of the Committee, is, or is expected to be, primarily responsible for
the management, growth or protection of some part or all of the business of the
Company.
(g) "Exchange Act" means the Securities Exchange Act of 1934, as
amended.
(h) "Fair Market Value" means such value of a Share as reported
for stock exchange transactions if listed on an exchange, or if not so listed,
as determined in accordance with any applicable resolutions or regulations of
the Committee in effect at the relevant time; provided that if a Participant is
a party to a management stockholder's agreement with the Company, the
applicable provisions of such management stockholder's agreement will apply.
(i) "Grant" means an award made to a Participant pursuant to the
Plan and described in Paragraph 5, including, without limitation, an award of
an Incentive Stock Option, Stock Option, Stock Appreciation Right, Dividend
Equivalent Right, Restricted Stock, Purchase Stock, Performance Units,
Performance Shares or Other Stock-Based Grant or any combination of the
foregoing.
(j) "Grant Agreement" means an agreement between the Company and a
Participant that sets forth the terms, conditions and limitations applicable to
a Grant.
(k) "Group" means two or more Persons acting together as a
partnership, limited partnership, syndicate or other group for the purpose of
acquiring, holding or disposing of securities of the Company.
(l) "Stock-Based Grants" means the collective reference to the
grant of Stock Appreciation Rights, Dividend Equivalent Rights, Restricted
Stocks, Performance Units, Performance Shares and Other Stock Based-Grants.
(m) "Participant" means an Employee, or other person having a
relationship with the Company or one of its Subsidiaries, to whom one or more
Grants have been made and such Grants have not all been forfeited or terminated
under the Plan; provided, however, a non-employee director of the Company or
one of its Subsidiaries may not be a Participant.
(n) "Person" means an individual, partnership, corporation,
business trust, joint stock company, trust, unincorporated association, joint
venture, governmental authority or other entity of whatever nature.
<PAGE> 3
3
(o) "Stock Options" means the collective reference to "Incentive
Stock Options" and "Non-Qualified Stock Options".
(p) "Subsidiary" means any corporation in an unbroken chain of
corporations beginning with the Company if each of the corporations, or group
of commonly controlled corporations, other than the last corporation in the
unbroken chain then owns stock possessing 50% or more of the total combined
voting power of all classes of stock in one of the other corporations in such
chain.
3. Administration of Plan
(a) The Plan shall be administered by the Committee; provided,
however, that the members of the Committee shall qualify to administer the Plan
for purposes of Rule 16b-3 (and any other applicable rule) promulgated under
Section 16(b) of the Exchange Act to the extent that the Company is subject to
such rule. The Committee may adopt its own rules of procedure, and action of a
majority of the members of the Committee taken at a meeting, or action taken
without a meeting by unanimous written consent, shall constitute action by the
Committee. The Committee shall have the power and authority to administer,
construe and interpret the Plan, to make rules for carrying it out and to make
changes in such rules. Any such interpretations, rules, and administration
shall be consistent with the basic purposes of the Plan.
(b) The Committee may delegate to the Chief Executive Officer and
to other senior officers of the Company its duties under the Plan subject to
such conditions and limitations as the Committee shall prescribe except that
only the Committee may designate and make Grants to Participants who are
subject to Section 16 of the Exchange Act.
(c) The Committee may employ attorneys, consultants, accountants,
appraisers, brokers or other persons. The Committee, the Company, and the
officers and directors of the Company shall be entitled to rely upon the
advice, opinions or valuations of any such persons. All actions taken and all
interpretations and determinations made by the Committee in good faith shall be
final and binding upon all Participants, the Company and all other interested
persons. No member of the Committee shall be personally liable for any action,
determination or interpretation made in good faith with respect to the Plan or
the Grants, and all members of the Committee shall be fully protected by the
Company with respect to any such action, determination or interpretation.
4. Eligibility
The Committee may from time to time make Grants under the Plan to such
Employees, or other persons having a relationship with Company or any of its
Subsidiaries, and in such form and having such terms, conditions and
limitations as the Committee may determine. No Grants may be made under this
Plan to non-employee directors of Company or any of its Subsidiaries. The
terms, conditions and limitations of each Grant under the Plan shall be set
forth in a Grant Agreement, in a form approved by the Committee, consistent,
however, with the terms of the Plan; provided, however, that such Grant
Agreement shall
<PAGE> 4
4
contain provisions dealing with the treatment of Grants in the event of the
termination, death or disability of a Participant, and may also include
provisions concerning the treatment of Grants in the event of a Change of
Control of the Company.
5. Grants
From time to time, the Committee will determine the forms and amounts
of Grants for Participants. Such Grants may take the following forms in the
Committee's sole discretion:
(a) Incentive Stock Options - These are stock options within the
meaning of Section 422 of the Internal Revenue Code of 1986, as amended
("Code"), to purchase Common Stock. In addition to other restrictions
contained in the Plan, an option granted under this Paragraph 5(a), (i) may not
be exercised more than 10 years after the date it is granted, (ii) may not have
an option price less than the Fair Market Value of Common Stock on the date the
option is granted, (iii) must otherwise comply with Code Section 422, and (iv)
must be designated as an "Incentive Stock Option" by the Committee. The
maximum aggregate Fair Market Value of Common Stock (determined at the time of
Grant) with respect to which any Participant may first exercise Incentive Stock
Options under this Plan and any Incentive Stock Options granted to the
Participant for such year under any plans of the Company or any Subsidiary in
any calendar year is $100,000. Payment of the option price shall be made in
cash or in Shares, or a combination thereof, in accordance with the terms of
the Plan, the Grant Agreement, and of any applicable guidelines of the
Committee in effect at the time.
(b) Non-Qualified Stock Options - These are options to purchase
Common Stock which are not designated by the Committee as "Incentive Stock
Options". At the time of Grant the Committee shall determine, and shall
include in the Grant Agreement or other Plan rules, the option exercise period,
the option price, and such other conditions or restrictions on the grant or
exercise of the option as the Committee deems appropriate. In addition to
other restrictions contained in the Plan, an option granted under this
Paragraph 5(b), (i) may not be exercised more than 10 years after the date it
is granted and (ii) may not have an option exercise price less than 50% of the
Fair Market Value of Common Stock on the date the option is granted. Payment
of the option price shall be made in cash or in Shares, or a combination
thereof, in accordance with the terms of the Plan, the Grant Agreement and of
any applicable guidelines of the Committee in effect at the time.
(c) Stock Appreciation Rights - These are rights that on exercise
entitle the holder to receive the excess of (i) the Fair Market Value of a
share of Common Stock on the date of exercise over (ii) the Fair Market Value
on the date of Grant (the "base value") multiplied by (iii) the number of
rights exercised as determined by the Committee. Stock Appreciation Rights
granted under the Plan may, but need not be, granted in conjunction with an
Option under Paragraph 5(a) or 5(b). The Committee, in the Grant Agreement or
by other Plan rules, may impose such conditions or restrictions on the exercise
of Stock Appreciation Rights as it deems appropriate, and may terminate, amend,
or suspend such Stock Appreciation Rights at any time. No Stock Appreciation
Right granted under this Plan may be exercised less than 6 months or more than
10 years after the date it is granted except in the event of death or
disability of a Participant. To the extent that any Stock Appreciation Right
that shall have
<PAGE> 5
5
become exercisable, but shall not have been exercised or cancelled or, by
reason of any termination of employment, shall have become non-exercisable, it
shall be deemed to have been exercised automatically, without any notice of
exercise, on the last day of which it is exercisable, provided that any
conditions or limitations on its exercise are satisfied (other than (i) notice
of exercise and (ii) exercise or election to exercise during the period
prescribed) and the Stock Appreciation Right shall then have value. Such
exercise shall be deemed to specify that the holder elects to receive cash and
that such exercise of a Stock Appreciation Right shall be effective as of the
time of automatic exercise.
(d) Restricted Stock - Restricted Stock is Common Stock delivered to
a Participant with or without payment of consideration with restrictions or
conditions on the Participant's right to transfer or sell such stock; provided
that the price of any Restricted Stock delivered for consideration and not as
bonus stock may not be less than 50% of the Fair Market Value of Common Stock
on the date such Restricted Stock is granted or the price of such Restricted
Stock may be the par value. If a Participant irrevocably elects in writing in
the calendar year preceding a Grant of Restricted Stock, dividends paid on the
Restricted Stock granted may be paid in shares of Restricted Stock equal to the
cash dividend paid on Common Stock. The number of shares of Restricted Stock
and the restrictions or conditions on such shares shall be as the Committee
determines, in the Grant Agreement or by other Plan rules, and the certificate
for the Restricted Stock shall bear evidence of the restrictions or conditions.
No Restricted Stock may have a restriction period of less than 6 months, other
than in the case of death or disability.
(e) Purchase Stock - Purchase Stock are shares of Common Stock
offered to a Participant at such price as determined by the Committee, the
acquisition of which will make him eligible to receive under the Plan,
including, but not limited to, Non-Qualified Stock Options; provided, however,
that the price of such Purchase Shares may not be less than 50% of the Fair
Market Value of the Common Stock on the date such shares of Purchase Stock are
offered.
(f) Dividend Equivalent Rights - These are rights to receive cash
payments from the Corporation at the same time and in the same amount as any
cash dividends paid on an equal number of shares of Common Stock to
shareholders of record during the period such rights are effective. The
Committee, in the Grant Agreement or by other Plan rules, may impose such
restrictions and conditions on the Dividend Equivalent Rights, including the
date such rights will terminate, as it deems appropriate, and may terminate,
amend, or suspend such Dividend Equivalent Rights at any time.
(g) Performance Units - These are rights to receive at a specified
future date, payment in cash of an amount equal to all or a portion of the
value of a unit granted by the Committee. At the time of the Grant, in the
Grant Agreement or by other Plan rules, the Committee must determine the base
value of the unit, the performance factors applicable to the determination of
the ultimate payment value of the unit and the period over which Corporation
performance will be measured. These factors must include a minimum performance
standard for the Corporation below which no payment will be made and a
<PAGE> 6
6
maximum performance level above which no increased payment will be made. The
term over which Corporation performance will be measured shall be not less than
six months.
(h) Performance Shares - These are rights to receive at a specified
future date, payment in cash or Common Stock, as determined by the Committee,
of an amount equal to all or a portion of the Fair Market Value for all days
that the Common Stock is traded during the last forty-five (45) days of the
specified period of performance of a specified number of shares of Common Stock
at the end of a specified period based on Corporation performance during the
period. At the time of the Grant, the Committee, in the Grant Agreement or by
Plan rules, will determine the factors which will govern the portion of the
rights so payable and the period over which Corporation performance will be
measured. The factors will be based on Corporation performance and must
include a minimum performance standard for the Corporation below which no
payment will be made and a maximum performance level above which no increased
payment will be made. The term over which Corporation performance will be
measured shall be not less than six months. Performance Shares will be granted
for no consideration.
(i) Other Stock-Based Grants - The Committee may make other Grants
under the Plan pursuant to which shares of Common Stock (which may, but need
not, be shares of Restricted Stock pursuant to Paragraph 5(d)), are or may in
the future be acquired, or Grants denominated in stock units, including ones
valued using measures other than market value. Other Stock-Based Grants may be
granted with or without consideration; provided, however, that the price of any
such Grant made for consideration that provides for the acquisition of shares
of Common Stock or other equity securities of the Corporation may not be less
than 50% of the Fair Market Value of the Common Stock or such other equity
securities on the date of grant of such Grant. Such Other Stock-Based Grants
may be made alone, in addition to or in tandem with any Grant of any type made
under the Plan and must be consistent with the purposes of the Plan.
6. Limitations and Conditions
(a) The number of Shares available for Grants under this Plan
shall be 30 million. Unless restricted by applicable law, Shares related to
Grants that are forfeited, terminated, cancelled or expire unexercised, shall
immediately become available for Grants.
(b) No Grants shall be made under the Plan beyond ten years after
the effective date of the Plan, but the terms of Grants made on or before the
expiration of the Plan may extend beyond such expiration. At the time a Grant
is made or amended or the terms or conditions of a Grant are changed, the
Committee may provide for limitations or conditions on such Grant.
(c) Nothing contained herein shall affect the right of the Company
to terminate any Participant's employment at any time or for any reason.
(d) Deferrals of Grant payouts may be provided for, at the sole
discretion of the Committee, in the Grant Agreements.
<PAGE> 7
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(e) Except as otherwise prescribed by the Committee, the amount of
the Grants for any employee of a Subsidiary, along with interest, dividend, and
other expenses accrued on deferred Grants, shall be charged to the
Participant's employer during the period for which the Grant is made. If the
Participant is employed by more than one Subsidiary or by both the Company and
a Subsidiary during the period for which the Grant is made, the Participant's
Grant and related expenses will be allocated between the companies employing
the Participant in a manner prescribed by the Committee.
(f) Other than as specifically provided in the Form of Management
Stockholder's Agreement attached hereto as Exhibit A, no benefit under the Plan
shall be subject in any manner to anticipation, alienation, sale, transfer,
assignment, pledge, encumbrance, or charge, and any attempt to do so shall be
void. No such benefit shall, prior to receipt thereof by the Participant, be
in any manner liable for or subject to the debts, contracts, liabilities,
engagements, or torts of the Participant.
(g) Participants shall not be, and shall not have any of the
rights or privileges of, stockholders of the Company in respect of any Shares
purchasable in connection with any Grant unless and until certificates
representing any such Shares have been issued by the Company to such
Participants.
(h) No election as to benefits or exercise of any Grant may be
made during a Participant's lifetime by anyone other than the Participant
except by a legal representative appointed for or by the Participant.
(i) Absent express provisions to the contrary, any Grant under
this Plan shall not be deemed compensation for purposes of computing benefits
or contributions under any retirement plan of the Company or its Subsidiaries
and shall not affect any benefits under any other benefit plan of any kind now
or subsequently in effect under which the availability or amount of benefits is
related to level of compensation. This Plan is not a "Retirement Plan" or
"Welfare Plan" under the Employee Retirement Income Security Act of 1974, as
amended.
(j) Unless the Committee determines otherwise, no benefit or
promise under the Plan shall be secured by any specific assets of the Company
or any of its Subsidiaries, nor shall any assets of the Company or any of its
Subsidiaries be designated as attributable or allocated to the satisfaction of
the Co mpany's obligations under the Plan.
7. Transfers and Leaves of Absence
For purposes of the Plan, unless the Committee determines otherwise:
(a) a transfer of a Participant's employment without an intervening period of
separation among the Company and any Subsidiary shall not be deemed a
termination of employment, and (b) a Participant who is granted in writing a
leave of absence shall be deemed to have remained in the employ of the Company
during such leave of absence.
<PAGE> 8
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8. Adjustments
In the event of any change in the outstanding Common Stock by reason
of a stock split, spin-off, stock dividend, stock combination or
reclassification, recapitalization or merger, Change of Control, or similar
event, the Committee may adjust appropriately the number of Shares subject to
the Plan and available for or covered by Grants and Share prices related to
outstanding Grants and make such other revisions to outstanding Grants as it
deems are equitably required.
9. Merger, Consolidation, Exchange,
Acquisition, Liquidation or Dissolution
In its absolute discretion, and on such terms and conditions as it
deems appropriate, coincident with or after the grant of any Stock Option or
any Stock-Based Grant, the Committee may provide that such Stock Option or
Stock-Based Grant cannot be exercised after the merger or consolidation of the
Company into another corporation, the exchange of all or substantially all of
the assets of the Company for the securities of another corporation, the
acquisition by another corporation of 80% or more of the Company's then
outstanding shares of voting stock or the recapitalization, reclassification,
liquidation or dissolution of the Company, and if the Committee so provides, it
may, in its absolute discretion and on such terms and conditions as it deems
appropriate also provide, either by the terms of such Stock Option or
Stock-Based Grant or by a resolution adopted prior to the occurrence of such
merger, consolidation, exchange, acquisition, recapitalization,
reclassification, liquidation or dissolution, that, for some period of time
prior to such event, such Stock Option or Stock-Based Grant shall be
exercisable as to all Shares subject thereto, notwithstanding anything to the
contrary herein (but subject to the provisions of Paragraph 6(b)) and that,
upon the occurrence of such event, such Stock Option or Stock-Based Grant shall
terminate and be of no further force or effect; provided, however, that the
Committee may also provide, in its absolute discretion, that even if the Stock
Option or Stock-Based Grant shall remain exercisable after any such event, from
and after such event, any such Stock Option or Stock-Based Grant shall be
exercisable only for the kind and amount of securities and/or other property, or
the cash equivalent thereof (as determined by the Committee in good faith),
receivable as a result of such event by the holder of a number of shares of
stock for which such Stock Option or Stock- Based Grant could have been
exercised immediately prior to such event.
10. Amendment and Termination
The Committee shall have the authority to make such amendments to any
terms and conditions applicable to outstanding Grants as are consistent with
this Plan provided that no such action shall modify any Grant in a manner
adverse to the Participant without the Participant's consent except as such
modification is provided for or contemplated in the terms of the Grant or this
Plan (except that any adjustment that is made pursuant to Paragraph 8 or 9
hereof shall be made by the Committee in good faith).
The Board of Directors may amend, suspend or terminate the Plan except
that no such action, other than an action under Paragraph 8 or 9 hereof, may be
taken which would,
<PAGE> 9
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without shareholder approval, increase the aggregate number of Shares available
for Grants under the Plan, decrease the price of outstanding Grants, change the
requirements relating to the Committee or extend the term of the Plan.
11. Foreign Options and Rights
The Committee may make Grants to Employees who are subject to the laws
of nations other than the United States, which Grants may have terms and
conditions that differ from the terms thereof as provided elsewhere in the Plan
for the purpose of complying with foreign laws.
12. Withholding Taxes
The Company shall have the right to deduct from any cash payment made
under the Plan any federal, state or local income or other taxes required by
law to be withheld with respect to such payment. It shall be a condition to
the obligation of the Company to deliver Shares upon the exercise of a Stock
Option or Stock Appreciation Right upon payment of performance units or shares,
upon delivery of Restricted Stock or upon exercise, settlement or payment of
any Other Stock-Based Grant that the Participant pay to the Company such amount
as may be requested by the Company for the purpose of satisfying any liability
for such withholding taxes. Any Grant Agreement may provide that the
Participant may elect, in accordance with any conditions set forth in such
Grant Agreement, to pay a portion or all of such withholding taxes in Shares.
13. Effective Date and Termination Dates
The Plan shall be effective on and as of the date of its approval by
the stockholders of the Company and shall terminate ten years later, subject to
earlier termination by the Board of Directors pursuant to Paragraph 10.
<PAGE> 1
EXHIBIT 4.7
FORM OF MANAGEMENT STOCKHOLDER'S AGREEMENT
This Management Stockholder's Agreement (this "Agreement") is
entered into as of the date set forth on the signature page hereof between
Regal Cinemas, Inc., a Tennessee corporation (the "Company"), and the key
employee of the Company whose name and address are set forth on the signature
page hereof (the "Management Stockholder") (the Company and the Management
Stockholder being hereinafter collectively referred to as the "Parties").
On January 19, 1998, Screen Acquisition Corp., a Delaware
corporation ("Holdco I"), Monarch Acquisition Corp., a Delaware corporation
("Holdco II" and, together with Holdco I, the "Holdcos"), and the Company
entered into an Agreement and Plan of Merger (as amended, supplemented or
otherwise modified from time to time, the "Merger Agreement") pursuant to which
the Holdcos are to be merged with and into the Company (the "Merger").
Pursuant to the Merger Agreement, each share of the Company's Common Stock, no
par value (the "Common Stock"), will be converted into the right to receive
$31.00 in cash, as further specified in the Merger Agreement, and holders of
options to purchase shares of Common Stock will either retain such options or
receive cash upon the cancellation of such options, as further specified in the
Merger Agreement.
In addition to this Agreement, there are several other agreements
("Other Management Stockholders' Agreements") which have been, or which in the
future will be, entered into between the Company and other individuals who are
or will be key employees of the Company (collectively, the "Other Management
Stockholders").
The Company has agreed to sell to the Management Stockholder the
number of shares of Common Stock set forth on the signature page hereof (the
"Purchase Stock"). In addition, the Company will grant to the Management
Stockholder as of the effective time of the Merger the number of time options
(the "New Time Options") set forth on the signature page hereof and the number
of performance options (the "New Performance Options" and, together with the
New Time Options, the "New Options") set forth on the signature page hereof to
purchase shares of Common Stock at the exercise price per share of Common Stock
set forth on the signature page hereof pursuant to the terms of the 1998 Stock
Purchase and Option Plan for Key Employees of Regal Cinemas, Inc. (the "New
Plan") and the form of Non-Qualified Stock Option Agreement attached hereto as
Exhibit A.
In accordance with Section 5.06 of the Merger Agreement, after
the Merger, the Management Stockholder has agreed to retain the number of
options (the "Old Options" and, together with the New Options, the "Options")
set forth on the signature page hereof to purchase shares of Common Stock at
the exercise prices set forth on the signature page hereof.
<PAGE> 2
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Within five days of the Merger, the Company shall effect a stock
split (the "Stock Split") resulting in a Base Price (as defined below) of $5.00
per share, which $5.00 per share Base Price is equivalent to the $31.00 per
share consideration payable in the Merger.
Unless otherwise agreed in writing by the parties hereto,
notwithstanding the foregoing, the number of shares of Common Stock subject to
the Old Options and the per share exercise price of each Old Option shall be
adjusted to take into account the Stock Split, so that after the Stock Split
(i) the aggregate spread for the Old Options before the Merger and the Stock
Split shall be equal to the aggregate spread for the Old Options after the
Stock Split and (ii) the ratio of each Old Option's per share exercise price to
the fair market value of a share of Common Stock shall be the same before the
Merger and the Stock Split as after the Stock Split. For purposes of this
paragraph, the fair market value of a share of Common Stock before the Merger
and the Stock Split shall be deemed to be $31.00 and the fair market value of a
share of Common Stock after the Stock Split shall be deemed to be $5.00.
NOW THEREFORE, to implement the foregoing and in consideration of
the grant of New Options and of the mutual agreements contained herein, the
Parties agree as follows:
1. Retention of Old Options; Purchase of Stock; Issuance of
New Options.
(a) The Management Stockholder hereby agrees to retain the Old
Options (which shall hereafter be subject to the terms and conditions of this
Agreement) and not to receive in connection with the Merger the amount that
would otherwise be payable to the Management Stockholder in respect of such Old
Options by operation of the provisions of Section 5.06 of the Merger Agreement.
(b) The Management Stockholder hereby subscribes for and shall
purchase as of the date set forth on the signature page hereof opposite the
caption "Base Date" (the "Base Date"), and the Company shall sell to the
Management Stockholder as of the Base Date, the Purchase Stock at a purchase
price per share of $5.00 (the "Base Price"), which number of shares of Purchase
Stock and which Base Price are calculated after giving effect to the Stock
Split. The Company shall have no obligation to sell any Purchase Stock to any
person who (i) is a resident or citizen of a state or other jurisdiction in
which the sale of the Purchase Stock to him or her would constitute a violation
of the securities or "blue sky" laws of such jurisdiction or (ii) is not an
employee of the Company or any of its subsidiaries on the date hereof.
(c) The aggregate price for the Purchase Stock, if any, shall
be the amount set forth on the signature page hereof (such amount hereinafter
sometimes referred to as the "Aggregate Purchase Price"). The Aggregate
Purchase Price, if any, shall be paid in the following manner: the Management
Stockholder shall promptly (and in any event within five business days after
the date hereof) deliver to the Company cash or a certified bank check or
checks payable to the order of the Company in the amount of the Aggregate
Purchase Price. If applicable, as of the Base Date, in consideration of
receipt of the Aggregate Purchase Price,
<PAGE> 3
3
the Company will deliver to the Management Stockholder a certificate,
registered in the Management Stockholder's name, for the Purchase Stock, which
shall be subject to the terms and conditions hereinafter set forth. The
Company shall have no obligation to sell any Purchase Stock unless and until
(i) it shall have received the Aggregate Purchase Price, (ii) the Merger shall
have been consummated and (iii) the Stock Split shall have occurred.
(d) Subject to the terms and conditions hereinafter set forth
and as of the Base Date (the "Option Grant Date"), the Company shall issue to
the Management Stockholder the New Options and the Parties shall execute and
deliver to each other copies of the Non-Qualified Stock Option Agreement
concurrently with the issuance of the New Options.
2. Management Stockholder's Representations, Warranties and
Agreements.
(a) The Management Stockholder agrees and acknowledges that he
will not, directly or indirectly, offer, transfer, sell, assign, pledge,
hypothecate or otherwise dispose of (any such act being referred to herein as a
"transfer") any shares of the Purchase Stock or Common Stock issuable upon
exercise of Old Options (the "Old Option Stock") or New Options (the "New
Option Stock"; the Purchase Stock, the Old Option Stock and the New Option
Stock, collectively, the "Stock") unless such transfer complies with Section 3
of this Agreement.
If the Management Stockholder is an "affiliate" (as defined under
Rule 405 of the rules and regulations promulgated under the Act (as defined
below) and as interpreted in good faith by the Board of Directors of the
Company) of the Company (an "Affiliate"), the Management Stockholder also
agrees and acknowledges that he will not transfer any shares of the Stock
unless (i) the transfer is pursuant to an effective registration statement
under the Securities Act of 1933, as amended, and the rules and regulations in
effect thereunder (collectively, the "Act"), and in compliance with applicable
provisions of state securities laws or (ii) counsel for the Management
Stockholder (which counsel shall be reasonably acceptable to the Company) shall
have furnished the Company with an opinion, reasonably satisfactory in form and
substance to the Company, that no such registration is required because of the
availability of an exemption from registration under the Act or (iii) such
transfer is effected as set forth in the immediately following paragraph.
Notwithstanding the foregoing provisions of this Section 2(a),
the Company acknowledges and agrees that any of the following transfers are
deemed to be in compliance with the Act and this Agreement and no opinion of
counsel is required in connection therewith: (x) a transfer made pursuant to
Section 4, 5 or 6 hereof, (y) a transfer upon the death of the Management
Stockholder to his executors, administrators, testamentary trustees, legatees
or beneficiaries (the "Management Stockholder's Estate") or a transfer to the
executors, administrators, testamentary trustees, legatees or beneficiaries of
a person who has become a holder of Stock in accordance with the terms of this
Agreement, provided that it is expressly understood that any such transferee
shall be bound by the provisions of this Agreement and (z) a transfer made
after the Base Date in compliance with the federal
<PAGE> 4
4
securities laws to a trust or custodianship the beneficiaries of which may
include only the Management Stockholder, his spouse or his lineal descendants
(a "Management Stockholder's Trust") or a transfer made to such a trust by a
person who has become a holder of Stock in accordance with the terms of this
Agreement, provided that, in the case of any transfer under this clause (z),
such transfer is made expressly subject to this Agreement and the transferee
agrees in writing to be bound by the terms and conditions hereof.
(b) The certificate (or certificates) representing the Stock
shall bear the following legend:
"THE SHARES REPRESENTED BY THIS CERTIFICATE MAY NOT BE
TRANSFERRED, SOLD, ASSIGNED, PLEDGED, HYPOTHECATED OR OTHERWISE
DISPOSED OF UNLESS SUCH TRANSFER, SALE, ASSIGNMENT, PLEDGE,
HYPOTHECATION OR OTHER DISPOSITION COMPLIES WITH THE PROVISIONS
OF THE MANAGEMENT STOCKHOLDER'S AGREEMENT DATED AS OF MAY __,
1998, BETWEEN REGAL CINEMAS, INC. (THE "COMPANY") AND THE
MANAGEMENT STOCKHOLDER NAMED ON THE FACE HEREOF (A COPY OF WHICH
IS ON FILE WITH THE SECRETARY OF THE COMPANY)."
(c) The Management Stockholder acknowledges that he has been
advised that (i) the Stock has been registered on Form S-8 under the Act and
the Company shall maintain the effectiveness of such Form S-8, or if such Form
S-8 ceases to be effective, shall cause the Stock to be registered on a new
Form S-8 or other Form of the Securities and Exchange Commission ("SEC")
available to the Company for such purpose, in each case to the extent necessary
to permit the Options to be exercised, subject to the terms and conditions
hereof and of such Options, (ii) it is not anticipated that there will be any
market on an exchange or a quotation service for the Stock, (iii) a restrictive
legend in the form heretofore set forth shall be placed on the certificates
representing the Stock and (iv) a notation shall be made in the appropriate
records of the Company indicating that the Stock is subject to restrictions on
transfer and appropriate stop transfer restrictions will be issued to the
Company's transfer agent with respect to the Stock.
If the Management Stockholder is an Affiliate, the Management
Stockholder also acknowledges that (1) the Stock must be held indefinitely and
the Management Stockholder must continue to bear the economic risk of the
investment in the Stock unless it is subsequently registered under the Act or
an exemption from such registration is available, (2) when and if shares of the
Stock may be disposed of without registration in reliance on Rule 144 of the
rules and regulations promulgated under the Act, such disposition can be made
only in limited amounts in accordance with the terms and conditions of such
Rule and (3) if the Rule 144 exemption is not available, public sale without
registration will require compliance with Regulation A or some other exemption
under the Act.
(d) If any shares of the Stock are to be disposed of in
accordance with Rule 144 under the Act or otherwise, the Management Stockholder
shall promptly notify the
<PAGE> 5
5
Company of such intended disposition and shall deliver to the Company at or
prior to the time of such disposition such documentation as the Company may
reasonably request in connection with such sale and, in the case of a
disposition pursuant to Rule 144, shall deliver to the Company an executed copy
of any notice on Form 144 required to be filed with the SEC.
(e) The Management Stockholder agrees that, if any shares of
the capital stock of the Company are offered to the public pursuant to an
effective registration statement under the Act (other than registration of
securities issued under an employee plan), the Management Stockholder will not
effect any public sale or distribution of any shares of the Stock not covered
by such registration statement within 7 days prior to, or within 180 days (or
such shorter period as the Company and the Controlling Shareholders (as defined
below) shall agree) after, the effective date of such registration statement,
unless otherwise agreed to in writing by the Company.
(f) The Management Stockholder represents and warrants that
(i) he has received and reviewed the document(s) comprising the Prospectus (the
"Prospectus") relating to the Stock and the documents referred to therein,
certain of which documents set forth the rights, preferences and restrictions
relating to the Stock and (ii) he has been given the opportunity to obtain any
additional information or documents and to ask questions and receive answers
about such documents, the Company and the business and prospects of the Company
which he deems necessary to evaluate the merits and risks related to his
investment in the Stock and to verify the information contained in the
Prospectus and the information received as indicated in this Section 2(f)(ii),
and he has relied solely on such information.
(g) The Management Stockholder further represents and warrants
that (i) his financial condition is such that he can afford to bear the
economic risk of holding the Stock for an indefinite period of time and has
adequate means for providing for his current needs and personal contingencies,
(ii) he can afford to suffer a complete loss of his investment in the Stock,
(iii) he understands and has taken cognizance of all risk factors related to
the purchase of the Stock, including those set forth in the Prospectus referred
to above, and (iv) his knowledge and experience in financial and business
matters are such that he is capable of evaluating the merits and risks of his
purchase of the Stock as contemplated by this Agreement.
3. Restriction on Transfer.
Except for transfers permitted by clauses (x), (y) and (z) of
Section 2(a) or a sale of shares of Stock pursuant to an effective registration
statement under the Act filed by the Company (as described herein but excluding
the Form S-8 filed in connection with this Agreement and the Other Management
Stockholders' Agreements and the transactions contemplated hereby and thereby)
or pursuant to the Sale Participation Agreement (as defined below), the
Management Stockholder agrees that he will not transfer any shares of the Stock
at any time prior to the fifth anniversary of the Base Date. No transfer of
any such shares in violation hereof shall be made or recorded on the books of
the Company and any such transfer shall be void and of no effect. Subject to
Section 4 below, the Management
<PAGE> 6
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Stockholder shall not be restricted from transferring Stock after the fifth
anniversary of the Base Date in compliance with applicable securities laws.
4. Right of First Refusal.
If at any time after the fifth anniversary of the Base Date and
prior to a Public Offering (as hereinafter defined), the Management Stockholder
receives a bona fide offer to purchase any or all of his shares of Stock (the
"Offer") from a third party (the "Offeror") which the Management Stockholder
wishes to accept, the Management Stockholder shall cause the Offer to be
reduced to writing and shall notify the Company in writing of his wish to
accept the Offer. The Management Stockholder's notice shall contain an
irrevocable offer to sell such shares of Stock to the Company (in the manner
set forth below) at a purchase price equal to the price contained in, and on
the same terms and conditions of, the Offer, and shall be accompanied by a true
copy of the Offer (which shall identify the Offeror). At any time within 15
days after the date of the receipt by the Company of the Management
Stockholder's notice, the Company shall have the right and option to purchase,
or to arrange for a third party to purchase, all of the shares of Stock covered
by the Offer either (i) at the same price and on the same terms and conditions
as the Offer or (ii) if the Offer includes any consideration other than cash,
then at the sole option of the Company, at the equivalent all cash price,
determined in good faith by the Company's Board of Directors, by delivering a
certified bank check or checks in the appropriate amount (and any such non-cash
consideration to be paid) to the Management Stockholder at the principal office
of the Company against delivery of certificates or other instruments
representing the shares of Stock so purchased, appropriately endorsed by the
Management Stockholder. If at the end of such 30-day period, the Company has
not tendered the purchase price for such shares in the manner set forth above,
the Management Stockholder may during the succeeding 60-day period sell not
less than all of the shares of Stock covered by the Offer to the Offeror at a
price and on terms no less favorable to the Management Stockholder than those
contained in the Offer. Promptly after such sale, the Management Stockholder
shall notify the Company of the consummation thereof and shall furnish such
evidence of the completion and time of completion of such sale and of the terms
thereof as may reasonably be requested by the Company. If, at the end of 60
days following the expiration of the 30-day period for the Company to purchase
the Stock, the Management Stockholder has not completed the sale of such shares
of the Stock as aforesaid, the provisions of this Section 4 shall again be in
effect with respect to such shares of the Stock.
5. Management Stockholder's Resale of Stock and Options to
the Company Upon The Management Stockholder's Death or
Disability.
(a) Except as otherwise provided herein, if, prior to the
fifth anniversary of the Base Date, (i) the Management Stockholder is still in
the employ of the Company or any subsidiary of the Company, or has retired from
the Company and its subsidiaries at age 65 or over (or such other age as may be
approved by the Board of Directors of the Company) after having been employed
by the Company or any subsidiary for at least three years after the Base Date,
and (ii) the Management Stockholder either dies or becomes permanently
disabled, then the Management Stockholder, the Management Stockholder's Estate
or a Management
<PAGE> 7
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Stockholder's Trust, as the case may be, shall have the right, for one year
following the date of death or permanent disability, (A) to sell to the
Company, and the Company shall be required to purchase, on one occasion, all or
any portion of the shares of Stock then held by the Management Stockholder, the
Management Stockholder's Estate and/or the Management Stockholder's Trust, as
the case may be, at the Section 5 Repurchase Price, as determined in accordance
with Section 7, (B) to require the Company to pay to the Management
Stockholder, the Management Stockholder's Estate and/or the Management
Stockholder's Trust, as the case may be, an additional amount equal to the
Option Excess Price determined on the basis of the Section 5 Repurchase Price
as provided in Section 8 with respect to the termination of outstanding Old
Options held by the Management Stockholder and (C) to require the Company to
pay to the Management Stockholder, the Management Stockholder's Estate and/or
the Management Stockholder's Trust, as the case may be, an additional amount
equal to Option Excess Price determined on the basis of a Section 5 Repurchase
Price as provided in Section 8 with respect to the termination of outstanding
New Time Options held by the Management Stockholder.
(b) The Management Stockholder, the Management Stockholder's
Estate and/or the Management Stockholder's Trust, as the case may be, shall
send written notice to the Company of its intention to sell shares of Stock in
exchange for the payment referred in Section 5(a) above and to terminate such
Options (in exchange for the payment referred to in Section 5(a)) (the
"Redemption Notice"). The completion of the purchase shall take place at the
principal office of the Company on the tenth business day after the giving of
the Redemption Notice. The Section 5 Repurchase Price and the payment with
respect to the Options as described above shall be paid by delivery to the
Management Stockholder, the Management Stockholder's Estate and/or the
Management Stockholder's Trust, as the case may be, of a certified bank check
or checks in the appropriate amount payable to the order of the Management
Stockholder, the Management Stockholder's Estate and/or the Management
Stockholder's Trust, as the case may be, against delivery of certificates or
other instruments representing the Stock so purchased and appropriate documents
cancelling the Options so terminated appropriately endorsed or executed by the
Management Stockholder, the Management Stockholder's Estate and/or the
Management Stockholder's Trust, or his, her or its duly authorized
representative; provided, however, that the Company shall reduce the amount to
be paid by any amounts owed by the Management Stockholder to the Company. For
purposes of this Agreement, the Management Stockholder shall be deemed to have
a "permanent disability" if the Management Stockholder is unable to engage in
the activities required by the Management Stockholder's job by reason of any
medically determined physical or mental impairment which can be expected to
result in death or which has lasted or can be expected to last for a continuous
period of not less than 12 months.
(c) Notwithstanding anything in Section 5(a) to the contrary
and subject to Section 11, if there exists and is continuing a default or an
event of default on the part of the Company or any subsidiary of the Company
under any loan, guarantee or other agreement under which the Company or any
subsidiary of the Company has borrowed money or if a repurchase or payment
referred to in Section 5(a) would result in a default or an event of default on
the part of the Company or any subsidiary of the Company under any such
agreement or if such repurchase or payment would not be permitted under any
applicable
<PAGE> 8
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statutes of the State of Tennessee or would otherwise violate any such statutes
(or if the Company reincorporates in another state, any applicable statutes of
such state) (each such occurrence being an "Event"), the Company shall not be
obligated to repurchase any of the Stock from, or make payment in respect of
any Options to, the Management Stockholder, the Management Stockholder's Estate
and/or a Management Stockholder's Trust, as the case may be, until the first
business day which is 10 calendar days after all of the foregoing Events have
ceased to exist (the "Repurchase Eligibility Date"); provided, however, that
the number of shares of Stock subject to repurchase under this Section 5(c)
shall be that number of shares of Stock and the number of Exercisable Option
Shares (as defined in Section 8) for purposes of calculating the Option Excess
Price payable under this Section 5(c) shall be the number of Exercisable Option
Shares, held by the Management Stockholder, the Management Stockholder's Estate
and/or a Management Stockholder's Trust, as the case may be, at the time of
delivery of a Redemption Notice in accordance with Section 5(b) hereof (as
adjusted below for option exercises); provided, further, that the Repurchase
Calculation Date (as defined below) shall be determined as of the Repurchase
Eligibility Date (unless the Section 5 Repurchase Price would be greater if the
Repurchase Calculation Date had been determined as if no Event had occurred, in
which case, solely for purposes of this proviso, the Repurchase Calculation
Date shall be determined as if no Event had occurred). All Options shall
continue to be exercisable until the repurchase pursuant to the Redemption
Notice, provided that to the extent any Options are exercised after the date of
such Redemption Notice, the number of Exercisable Option Shares for purposes of
calculating the Option Excess Price shall be reduced and the number of shares
of Stock shall be increased accordingly.
(d) Notwithstanding any other provision of this Section 5 to
the contrary and subject to Section 11, the Management Stockholder, the
Management Stockholder's Estate and/or a Management Stockholder's Trust, as the
case may be, shall have the right to withdraw any Redemption Notice which has
been pending for 60 or more days and which has remained unsatisfied because of
the provisions of Section 5(c). In the event any Redemption Notice is so
withdrawn, it shall be deemed not to be a Redemption Notice for purposes of
this Section 5.
6. The Company's Option to Repurchase Stock
and Options of Management Stockholder.
(a) If, on or prior to the fifth anniversary of the Base Date,
(i) the Management Stockholder's active employment with the Company (and/or, if
applicable, its subsidiaries) is terminated by the Company or the Management
Stockholder for any reason, (ii) the beneficiaries of a Management
Stockholder's Trust shall include any person or entity other than the
Management Stockholder, his spouse or his or his spouse's lineal descendants,
or (iii) the Management Stockholder shall effect a transfer of any of the Stock
other than as permitted in this Agreement (each, a "Section 6(a) Call Event"),
then the Company shall have the right to (A) purchase all, but not less than
all, of the shares of Purchase Stock and Old Option Stock then held by the
Management Stockholder or a Management Stockholder's Trust at the Section 5
Repurchase Price, as determined in accordance with Section 7, and (B) terminate
all, but not less than all, of the Old Options then held by the Management
<PAGE> 9
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Stockholder or a Management Stockholder's Trust upon payment of the Option
Excess Price determined on the basis of the Section 5 Repurchase Price.
(b) If, on or prior to the fifth anniversary of the Base Date,
the Management Stockholder's employment is terminated as a result of the death
or permanent disability of the Management Stockholder or if the Management
Stockholder dies or becomes permanently disabled after the retirement of the
Management Stockholder from the Company or any of its subsidiaries at age 65 or
over (or such other age as may be approved by the Board of Directors of the
Company) after having been employed by the Company or any subsidiary for at
least three years after the Base Date (each a "Section 6(b) Call Event"), then
the Company shall have the right to (A) purchase all, but not less than all, of
the shares of New Option Stock then held by the Management Stockholder, the
Management Stockholder's Estate or a Management Stockholder's Trust at the
Section 5 Repurchase Price, as determined in accordance with Section 7, and (B)
terminate all, but not less than all, of the New Options then held by the
Management Stockholder or a Management Stockholder's Trust upon payment of the
Option Excess Price determined on the basis of a Section 5 Repurchase Price.
(c) If, on or prior to the fifth anniversary of the Base Date,
(i) the Management Stockholder's employment is terminated by the Company
without Cause or (ii) the Management Stockholder voluntarily terminates with
Good Reason (a "Section 6(c) Call Event"), then the Company shall have the
right to (A) purchase all, but not less than all, of the shares of New Option
Stock then held by the Management Stockholder, the Management Stockholder's
Estate or a Management Stockholder's Trust at the Section 5 Repurchase Price,
as determined in accordance with Section 7, and (B) terminate all, but not less
than all, of the New Options then held by the Management Stockholder or a
Management Stockholder's Trust that were exercisable immediately prior to such
Section 6(c) Call Event upon payment of the Option Excess Price with respect
thereto determined on the basis of a Section 5 Repurchase Price. If any
Section 6(c) Call Event has occurred, then, whether or not the Company
exercises the call rights granted under this Section 6(c), all New Options held
by the Management Stockholder or the Management Stockholder's Trust, as the
case may be, that were not exercisable immediately prior to the occurrence of
such Section 6(c) Call Event will terminate immediately without payment
therefor.
(d) If, on or prior to the fifth anniversary of the Base Date,
(i) the Management Stockholder voluntarily terminates his employment, (ii) the
beneficiaries of a Management Stockholder's Trust shall include any person or
entity other than the Management Stockholder, his spouse or his or his or
spouse's lineal descendants, or (iii) the Management Stockholder shall effect a
transfer of any of the Stock other than as permitted in this Agreement (a
"Section 6(d) Call Event"), then the Company shall have the right to (i)
purchase all, but not less than all, of the shares of New Option Stock then
held by the Management Stockholder, the Management Stockholder's Estate or a
Management Stockholder's Trust at the Section 6(d) Repurchase Price, as
determined in accordance with Section 7, and (ii) terminate all, but not less
than all, of the New Options then held by the Management Stockholder or a
Management Stockholder's Trust that were exercisable immediately prior to such
Section 6(d) Call Event upon payment of the Option Excess Price with respect
thereto determined on the basis of a Section 6(d) Repurchase Price. If any
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Section 6(d) Call Event has occurred, then, whether or not the Company
exercises the call rights granted under this Section 6(d), all New Options held
by the Management Stockholder or the Management Stockholder's Trust, as the
case may be, that were not exercisable immediately prior to the occurrence of
such Section 6(d) Call Event will terminate immediately without payment
therefor.
(e) If, on or prior to the fifth anniversary of the Base Date,
the Company terminates the employment of the Management Stockholder for Cause
(a "Section 6(e) Call Event" and collectively with any Section 6(a) Call Event,
Section 6(b) Call Event, Section 6(c) Call Event or Section 6(d) Call Event, a
"Call Event"), then the Company shall have the right to purchase all, but not
less than all, of the shares of New Option Stock then held by the Management
Stockholder, the Management Stockholder's Estate or a Management Stockholder's
Trust at the Section 6(e) Repurchase Price. If any Section 6(e) Call Event has
occurred, then, whether or not the Company exercises the call rights granted
under this Section 6(e), all New Options held by the Management Stockholder or
the Management Stockholder's Trust, as the case may be, whether or not
exercisable prior to such Section 6(e) Call Event, will terminate immediately
without payment therefor.
(f) The Company shall have a period of 90 days from the date
of a Call Event in which to give notice in writing to the Management
Stockholder of the exercise of such election ("Call Notice"). The completion
of the purchases pursuant to the foregoing shall take place at the principal
office of the Company on the tenth business day after the giving of notice of
the exercise of the option to purchase. The applicable Repurchase Price and
any payment with respect to the Options shall be paid by delivery to the
Management Stockholder, the Management Stockholder's Estate or a Management
Stockholder's Trust, as the case may be, of a certified bank check or checks in
the appropriate amount payable to the order of the Management Stockholder, the
Management Stockholder's Estate or a Management Stockholder's Trust, as the
case may be, against delivery of certificates or other instruments representing
the Stock so purchased and appropriate documents cancelling the Options so
terminated, appropriately endorsed or executed by the Management Stockholder,
the Management Stockholder's Estate or a Management Stockholders Trust or his,
her or its authorized representative.
(g) Notwithstanding any other provision of this Section 6 to
the contrary and subject to Section 11, if there exists and is continuing any
Event, the Company shall delay the repurchase of any of the Stock or the
Options pursuant to a Call Notice timely given in accordance with Section 6(f)
hereof from the Management Stockholder, the Management Stockholder's Estate or
a Management Stockholder's Trust, as the case may be, until the Repurchase
Eligibility Date; provided, however, that (i) the number of shares of Stock
subject to repurchase under this Section 6(g) and (ii) in the case of a
repurchase pursuant to Section 6(a), (b), (c) or (d), the number of Exercisable
Option Shares for purposes of calculating the Option Excess Price payable under
this Section 6(g) shall be the number of shares of Stock or Exercisable Option
Shares, as the case may be, held by the Management Stockholder, the Management
Stockholder's Estate or a Management Stockholder's Trust, as the case may be,
at the time of delivery of a Call Notice in accordance with Section 6(d) hereof
(as adjusted below for option exercises); and provided, further, that the
Repurchase
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Calculation Date shall be determined in accordance with Section 7 based on the
Repurchase Eligibility Date (unless (x) in the case of a Section 6(a) Call
Event, a Section 6(b) Call Event or a Section 6(c) Call Event, the applicable
Repurchase Price would be greater if the Repurchase Calculation Date had been
determined as if no Event had occurred, in which case the Repurchase
Calculation Date shall be determined as if no Event had occurred, and (y) in
the case of a Section 6(d) Call Event or a Section 6(e) Call Event, the
applicable Repurchase Price would be less if the Repurchase Calculation Date
had been determined as if no Event had occurred, in which case the Repurchase
Calculation Date shall be determined as if no Event had occurred). All Options
exercisable as of the date of a Call Notice, in the case of a repurchase
pursuant to Sections 6(a), (b), (c) and (d), shall continue to be exercisable
until the repurchase pursuant to such Call Notice, provided that to the extent
that any Options are exercised after the date of such Call Notice, the number
of Exercisable Option Shares for purposes of calculating the Option Excess
Price shall be reduced and the number of shares of Stock shall be increased
accordingly.
7. Determination of Repurchase Price.
(a) The Section 5 Repurchase Price, the Section 6(d)
Repurchase Price and the Section 6(e) Repurchase Price are hereinafter
collectively referred to as the "Repurchase Price." The Repurchase Price shall
be calculated as of the date (the "Repurchase Calculation Date") that is: (i)
in the case of a repurchase at the Section 5 Repurchase Price, the date of the
event giving rise to such repurchase and (ii) in the case of a repurchase at
the Section 6(d) Repurchase Price or the Section 6(e) Repurchase Price, the
last day of the month preceding the date of the event giving rise to such
repurchase. The event giving rise to the repurchase shall be the death,
permanent disability, retirement or termination of employment, as the case may
be, of the Management Stockholder, and not the giving of any notice required
pursuant to Section 5 or 6.
(b) The Section 5 Repurchase Price shall be a per share
Repurchase Price equal to (i) prior to a Public Offering, the fair market value
per share of the Common Stock, as determined in good faith by the Board of
Directors of the Company after consultation with an independent investment
banking or valuation firm and (ii) after a Public Offering, the Market Price
Per Share.
(c) The Section 6(d) Repurchase Price shall be a per share
Repurchase Price equal to the lesser of the Section 5 Repurchase Price and the
Book Value Per Share.
(d) The Section 6(e) Repurchase Price shall be a per share
Repurchase Price equal to the lesser of the Base Price and the Section 5
Repurchase Price.
(e) For purposes of this Agreement the following definitions
shall apply: "Cause" shall mean (i) the Management Stockholder's willful
refusal to perform in any material respect his duties or responsibilities for
the Company or willful disregard in any material respect of any financial or
other budgetary limitations established in good faith by the chief executive
officer or Board of Directors of the Company, (ii) the engaging by the
Management Stockholder in conduct that causes material and demonstrable injury,
monetarily
<PAGE> 12
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or otherwise, to the Company, including, but not limited to, misappropriation
or conversion of assets of the Company (other than nonmaterial assets), (iii)
conviction of or entry of a plea of nolo contendere to a felony or (iv) a
material breach of any written employment agreement to which the Management
Stockholder is a party, including, without limitation, engaging in action in
violation of the restrictive covenants contained in such employment agreement.
For purposes hereof, no act or failure to act by the Management Stockholder
shall be deemed to be "willful" if done, or omitted to be done, by the
Management Stockholder in good faith and with the reasonable belief that such
action or omission was in the best interest of the Company. "Good Reason"
shall mean (i) a reduction in the Management Stockholder's base salary or an
amendment to the Company's annual cash bonus plan which would materially impair
the ability of the Management Stockholder to receive a bonus (other than the
establishment in good faith of the "EBITDA" or other performance targets by the
Company's Board of Directors) or (ii) other than as approved by the current
chief executive officer of the Company, a substantial reduction in the
Management Stockholder's duties and responsibilities or a transfer of the
Management Stockholder's primary workplace by more than fifty (50) miles from
the current workplace; provided, however, that in the event the Management
Stockholder is party to a written employment agreement, the definitions of
"Good Reason" and "Cause" therein shall supersede the preceding definitions.
(f) As used herein, "Book Value Per Share" shall be the
quotient of (a) (i) the Base Price plus (ii) the aggregate net income of the
Company from and after the Base Date (as decreased by any net losses from and
after the Base Date) excluding any one time costs and expenses charged to
income associated with the Merger and any related transactions plus (iii) the
aggregate dollar amount contributed to (or credited to common stockholders'
equity of) the Company after the Base Date as equity of the Company (including
consideration that would be received upon the exercise of all outstanding stock
options and other rights to acquire Common Stock and the conversion of all
securities convertible into Common Stock and other stock equivalents) plus (iv)
to the extent reflected as deductions to Book Value Per Share in clause (ii)
above, unusual or other items recognized by the Company (including, without
limitation, extraordinary charges, and one time or accelerated write-offs of
good will), in each case, if and to the extent determined in good faith by the
Board of Directors of the Company, minus (v) to the extent reflected as
additions to Book Value Per Share in clause (ii) above, unusual or other items
recognized by the Company, in each case, if and to the extent determined in
good faith by the Board of Directors of the Company, minus (vi) the aggregate
dollar amount of any dividends paid by the Company after the Base Date, divided
by (b) the sum of the number of shares of Common Stock then outstanding and the
number of shares of Common Stock issuable upon the exercise of all outstanding
stock options and other rights to acquire Common Stock and the conversion of
all securities convertible into shares of Common Stock. The items referred to
in the calculations set forth in clauses (a)(ii) through (vi) of the
immediately preceding sentence shall be determined in good faith, and to the
extent possible, in accordance with generally accepted accounting principles
applied on a basis consistent with any prior periods as reflected in the
consolidated financial statements of the Company.
(g) As used herein the term "Public Offering" shall mean the
sale of shares of Common Stock to the public subsequent to the date hereof
pursuant to a registration
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statement under the Act which has been declared effective by the SEC (other
than a registration statement on Form S-8 or any other similar form) which
results in an active trading market in 20% or more of the Common Stock or as
otherwise results in an active trading market as determined in good faith by
the Board of Directors. A "Qualified Public Offering" shall mean a Public
Offering pursuant to an effective registration statement relating to the sale
of any shares of the Common Stock held by KKR 1996 Fund L.P., a Delaware
limited partnership, KKR Partners II, L.P., a Delaware limited partnership,
Regal Equity Partners, L.P., a Delaware limited partnership and an affiliate of
Hicks, Muse Tate & Furst Incorporated, or their respective affiliates
(collectively, the "Controlling Shareholders"); provided, however, that a
"Qualified Public Offering" shall be deemed to have occurred if there has been
any Public Offering and there exists an active trading market in 40% or more of
the Common Stock.
(h) As used herein, the term "Market Price Per Share" shall
mean the price per share equal to the average of the last sale price of the
Common Stock on the Repurchase Calculation Date on each exchange on which the
Common Stock may at the time be listed or, if there shall have been no sales on
any of such exchanges on the Repurchase Calculation Date, the average of the
closing bid and asked prices on each such exchange at the end of the Repurchase
Calculation Date (or if there is no such bid and asked price on the Repurchase
Calculation Date, then on the next preceding date when such bid and asked price
occurred) or, if the Common Stock shall not be so listed, the average of the
closing sales prices as reported by NASDAQ at the end of the Repurchase
Calculation Date in the over-the-counter market. If the Common Stock is not so
listed or reported by NASDAQ, then the Market Price Per Shares shall be the
Section 5 Repurchase Price.
(i) In determining the Repurchase Price, appropriate
adjustments shall be made for any stock dividends, splits, combinations,
recapitalizations or any other adjustment in the number of outstanding shares
of Common Stock in order to maintain, as nearly as practicable, the intended
operation of the provisions of this Section 7.
8. Stock Issued to Management Stockholder Upon Exercise of
Stock Options; Termination of Options.
(a) The Company may from time to time grant to the Management
Stockholder, in addition to the New Options, options under the New Plan to
purchase shares of Common Stock at the Base Price or at a different option
exercise price.
(b) All outstanding Options granted to the Management
Stockholder, whether or not then exercisable, will be automatically terminated
(i) with respect to New Options, in the case of an occurrence of a Section 6(e)
Call Event, without any payment therefor, (ii) with respect to New Options
which were not exercisable immediately prior to a Section 6(d) Call Event, in
the case of a Section 6(d) Call Event, without any payment therefor, and (iii)
in the case of any other event giving rise to a put or call right pursuant to
Section 5 or 6 (other than the occurrence of a Section 6(c) Call Event), upon
payment of the Option Excess Price with respect thereto. The Option Excess
Price with respect to any Old Option is the excess, if any, of the Section 5
Repurchase Price over the exercise price with
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respect to such Old Option, multiplied by the number of Exercisable Option
Shares thereunder. The Option Excess Price with respect to any New Option is
the excess, if any, of the Section 5 Repurchase Price or the Section 6(d)
Repurchase Price, depending on which Repurchase Price is being used to
repurchase the remainder of the New Option Stock, over the exercise price with
respect to such New Option, multiplied by the number of Exercisable Option
Shares thereunder. For purposes hereof, "Exercisable Option Shares" with
respect to any Option shall mean the shares of Common Stock which, at the time
of determination of the Option Excess Price, could be purchased by the
Management Stockholder upon exercise of such Option (after giving effect to any
required accelerated vesting of such Option). If the Option Excess Price with
respect to any Option is zero or a negative number, such Option, whether or not
then exercisable, shall be automatically terminated without payment of any
amount upon the exercise of any put or call right pursuant to Section 5 or 6
with respect to any Stock arising from an event which also gives rise to a put
or call right with respect to such Option; provided, however, that, upon the
occurrence of any Section 6(c) Call Event, any exercisable Old Option not
repurchased pursuant to Section 6 shall remain exercisable until the expiration
or termination of such Old Option pursuant to the terms thereof.
9. The Company's Representations and Warranties.
(a) The Company represents and warrants to the Management
Stockholder that (i) this Agreement has been duly authorized, executed and
delivered by the Company and (ii) the Purchase Stock, the Old Option Stock and
the New Option Stock, when issued and delivered in accordance with the terms
hereof, will be duly and validly issued, fully paid and nonassessable.
(b) If the Company shall have consummated a Public Offering,
the Company (i) will use reasonable efforts to register the Stock on a Form S-8
Registration Statement or any successor to Form S-8 to the extent such
registration is then available with respect to such Stock and (ii) will file
the reports required to be filed by it under the Act and the Securities
Exchange Act of 1934, as amended, and the rules and regulations adopted by the
SEC thereunder (collectively, the "Exchange Act"), to the extent required from
time to time to enable the Management Stockholder to sell shares of Stock
without registration under the Act within the limitations of the exemptions
provided by (A) Rule 144 under the Act, as such Rule may be amended from time
to time, or (B) any similar rule or regulation hereafter adopted by the SEC.
Notwithstanding anything contained in this Section 9(b), the Company may de-
register under Section 12 of the Exchange Act if it is then permitted to do so
pursuant to the Exchange Act and, in such circumstances, shall not be required
hereby to file any reports which may be necessary in order for Rule 144 or any
similar rule or regulation under the Act to be available. Nothing in this
Section 9(b) shall be deemed to limit in any manner the restrictions on sales
of Stock contained in this Agreement.
10. "Piggyback" Registration Rights.
(a) Effective upon the date of this Agreement until the later
of (i) the first occurrence of a Qualified Public Offering (as defined in
Section 7(g) above) or (ii) the fifth anniversary of the Base Date, the
Management Stockholder hereby agrees to be bound by all
<PAGE> 15
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of the terms, conditions and obligations of the Registration Rights Agreement
dated as of May __, 1998 (the "Registration Rights Agreement") among the Company
and one or more of the Controlling Shareholders and, in the case of a Qualified
Public Offering and subject to the limitations set forth in this Section 10,
shall have all of the rights and privileges of the Registration Rights
Agreement, in each case as if the Management Stockholder were an original party
(other than the Company) thereto; provided, however, that the Management
Stockholder shall not have any rights to request or demand registration under
Section 3 of the Registration Rights Agreement; and provided, further, that the
Management Stockholder shall not be bound by any amendments to the Registration
Rights Agreement unless the Management Stockholder consents in writing thereto.
Notwithstanding anything to the contrary contained in the Registration Rights
Agreement, the Management Stockholder's rights and obligations under the
Registration Rights Agreement shall be subject to the limitations and
additional obligations set forth in this Section 10. All Stock purchased or
held by the Management Stockholder, the Management Stockholder's Estate or the
Management Stockholder's Trust which is subject to this Agreement shall be
deemed to be Registrable Securities as defined in the Registration Rights
Agreement.
(b) The Company will promptly notify the Management
Stockholder in writing (a "Notice") of any proposed registration (a "Proposed
Registration") in connection with a Qualified Public Offering. If within 15
days of the receipt by the Management Stockholder of such Notice, the Company
receives from the Management Stockholder, the Management Stockholder's Estate
or the Management Stockholder's Trust a written request (a "Request") to
register shares of Stock held by the Management Stockholder, the Management
Stockholder's Estate or the Management Stockholder's Trust (which Request will,
subject to the terms of the Custody Agreement and Power of Attorney (as defined
below), be irrevocable unless otherwise mutually agreed to in writing by the
Management Stockholder and the Company), shares of Stock will be so registered
as provided in this Section 10; provided, however, that for each such
registration statement only one Request, which shall be executed by the
Management Stockholder, the Management Stockholder's Estate or the Management
Stockholder's Trust, as the case may be, may be submitted for all Registrable
Securities held by the Management Stockholder, the Management Stockholder's
Estate and the Management Stockholder's Trust.
(c) The maximum number of shares of Stock which will be
registered pursuant to a Request will be the lowest of (i) the number of shares
of Stock then held by the Management Stockholder (which for purposes of this
Section 10(c) shall include shares held by the Management Stockholder's Estate
or a Management Stockholder's Trust), including all shares of Stock which the
Management Stockholder is then entitled to acquire under an unexercised Option
to the extent then exercisable, (ii) the maximum number of shares of Stock
which the Company can register in the Proposed Registration, after giving
effect to the provisions of any written agreement (other than the Registration
Rights Agreement) to which the Company and any holder of shares of Common Stock
are parties (other than the Management Stockholder or any Other Management
Stockholder) that provides for the registration of shares of Common Stock of
such holder by the Company (any such other written agreement, an "Other
Registration Rights Agreement"), without adverse effect on the offering in the
view of the managing underwriters (reduced pro rata with all Other
<PAGE> 16
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Management Stockholders) as more fully described in Section 10(d) and (iii) the
maximum number of shares of Stock which the Management Stockholder (pro rata
based upon the aggregate number of shares of Common Stock the Management
Stockholder and all Other Management Stockholders have requested be registered)
and all Other Management Stockholders are permitted to register under the
Registration Rights Agreement.
(d) If a Proposed Registration involves an underwritten
offering and the managing underwriter advises the Company in writing that, in
its opinion, the number of shares of Common Stock and Stock of the Management
Stockholder requested to be included in the Proposed Registration, after giving
effect to the provisions of any Other Registration Rights Agreement, exceeds the
number which can be sold in such offering, so as to be likely to have an adverse
effect on the price, timing or distribution of the shares of Common Stock
offered in such Qualified Public Offering as contemplated by the Proposed
Registration, then the Company will include in the Proposed Registration (i)
first, 100% of the shares of Common Stock the Company proposes to sell (after
giving effect to the priority, pro ration or cutback provisions contained in any
Other Registration Rights Agreement); provided that the registration of shares
of Common Stock was initiated by the Company with respect to shares intended to
be registered for sale for its own account, (ii) second, the number of shares of
Common Stock that the Company is required (after giving effect to the priority,
pro ration or cutback provisions contained in any Other Registration Rights
Agreement and any withdrawal from the proposed registration of shares of Common
Stock by a holder of shares of Common Stock that is a party to such Other
Registration Rights Agreement) to include in such registration pursuant to an
Other Registration Rights Agreement and (iii) third, to the extent of the number
of shares of Common Stock requested to be included in such registration which,
in the opinion of such managing underwriter, can be sold without having the
adverse effect referred to above, the number of shares of Common Stock which the
Holders (as defined in the Registration Rights Agreement (which term shall
include for purposes hereof the Management Stockholder, the Management
Stockholder's Estate, the Management Stockholder's Trust and Other Management
Stockholders)), have requested to be included in the Proposed Registration, such
amount to be allocated pro rata among all requesting Holders on the basis of the
relative number of shares of Common Stock then held by each such Holder (except
to the extent that two or more requesting Holders shall have agreed to a
different allocation among such requesting Holders); provided that any shares
thereby allocated to any such Holder that exceed such Holder's request will be
reallocated among the remaining requesting Holders in like manner.
(e) Upon delivering a Request the Management Stockholder will,
if requested by the Company, execute and deliver a custody agreement and power
of attorney in form and substance reasonably satisfactory to the Company with
respect to the shares of Stock to be registered pursuant to this Section 10 (a
"Custody Agreement and Power of Attorney"). The Custody Agreement and Power of
Attorney will provide, among other things, that the Management Stockholder will
deliver to and deposit in custody with the custodian and attorney-in-fact named
therein a certificate or certificates representing such shares of Stock (duly
endorsed in blank by the registered owner or owners thereof or accompanied by
duly executed stock powers in blank) and irrevocably appoint said custodian and
attorney-in-fact as the Management Stockholder's agent and attorney-in-fact
with full power and authority to act under the Custody Agreement and Power of
Attorney on the Management Stockholder's behalf with respect to the matters
specified therein.
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(f) The Management Stockholder agrees that he or she will
execute such other agreements as the Company may reasonably request to further
evidence the provisions of this Section 10.
11. Pro Rata Repurchases.
Notwithstanding anything to the contrary contained in Sections 5,
6 or 7, if at any time consummation of all purchases and payments to be made by
the Company pursuant to this Agreement and the Other Management Stockholders'
Agreements would result in an Event, then the Company shall make purchases
from, and payments to, the Management Stockholder and Other Management
Stockholders pro rata (on the basis of the proportion of the number of shares
of Stock and the number of Options each such Management Stockholder and all
Other Management Stockholders have elected or are required to sell to the
Company) for the maximum number of shares of Stock and shall pay the Option
Excess Price for the maximum number of Options permitted without resulting in
an Event (the "Maximum Repurchase Amount"). The provisions of Sections 5(c)
and 6(g) shall apply in their entirety to payments and repurchases with respect
to Options and shares of Stock which may not be made due to the limits imposed
by the Maximum Repurchase Amount under this Section 11. Until all of such
Stock and Options are purchased and paid for by the Company, the Management
Stockholder and the Other Management Stockholders whose Stock and Options are
not purchased in accordance with this Section 11 shall have priority, on a pro
rata basis, over other purchases of Common Stock and Options by the Company
pursuant to this Agreement and Other Management Stockholders' Agreements.
12. Rights to Negotiate Repurchase Price.
Nothing in this Agreement shall be deemed to restrict or prohibit
the Company from purchasing shares of Stock or Options from the Management
Stockholder, at any time, upon such terms and conditions, and for such price,
as may be mutually agreed upon between the Parties, whether or not at the time
of such purchase circumstances exist which specifically grant the Company the
right to purchase, or the Management Stockholder the right to sell, shares of
Stock or the Company has the right to pay, or the Management Stockholder has
the right to receive, the Option Excess Price under the terms of this
Agreement.
13. Covenant Regarding 83(b) Election.
Except as the Company may otherwise agree in writing, the
Management Stockholder hereby covenants and agrees that he will make an
election provided pursuant to Treasury Regulation 1.83-2 with respect to the
Stock acquired upon each exercise of the New Options (the "Election"); and the
Management Stockholder further covenants and agrees that he will furnish the
Company with copies of the forms of Election the Management Stockholder files
within 30 days after each exercise of such New Options and with evidence that
each such Election has been filed in a timely manner.
<PAGE> 18
18
14. Notice of Change of Beneficiary.
Immediately prior to any transfer of Stock to a Management
Stockholder's Trust, the Management Stockholder shall provide the Company with
a copy of the instruments creating the Management Stockholder's Trust and with
the identity of the beneficiaries of the Management Stockholder's Trust. The
Management Stockholder shall notify the Company immediately prior to any change
in the identity of any beneficiary of the Management Stockholder's Trust.
15. Expiration of Certain Provisions.
The provisions contained in Sections 4, 5 and 6 of this Agreement
and the portion of any other provision of this Agreement which incorporates the
provisions of such Sections, shall terminate and be of no further force or
effect with respect to any shares of Stock sold by the Management Stockholder
(i) pursuant to an effective registration statement filed by the Company
pursuant to Section 10 hereof or (ii) pursuant to the terms of the Sale
Participation Agreement of even date herewith (the "Sale Participation
Agreement") among the Management Stockholder and one or more of the Controlling
Shareholders.
The provisions contained in Sections 2(e), 3, 4, 5, 6 and 13 of
this Agreement, and the portion of any other provisions of this Agreement which
incorporates the provisions of such Sections, shall terminate and be of no
further force or effect upon the consummation of a merger, reorganization,
business combination or liquidation of the Company, but only if such merger,
reorganization, business combination or liquidation results in the Controlling
Shareholders, together, no longer having the power, directly or indirectly, (A)
to elect a majority of the Board of Directors of the Company or such other
corporation which succeeds to the Company's rights and obligations pursuant to
such merger, reorganization, business combination or liquidation, or (B) if the
resulting entity of such merger, reorganization, business combination or
liquidation is not a corporation, to select the general partner(s) or other
persons or entities controlling the operations and business of the resulting
entity.
16. Recapitalizations, etc.
The provisions of this Agreement shall apply, to the full extent
set forth herein with respect to the Stock or the Options, to any and all
shares of capital stock of the Company or any capital stock, partnership units
or any other security evidencing ownership interests in any successor or assign
of the Company (whether by merger, consolidation, sale of assets or otherwise)
which may be issued in respect of, in exchange for or in substitution for the
Stock or the Options, by reason of any stock dividend, split, reverse split,
combination, recapitalization, liquidation, reclassification, merger,
consolidation or otherwise.
17. Management Stockholder's Employment by the Company.
Nothing contained in this Agreement or in any other agreement
entered into by the Company and the Management Stockholder contemporaneously
with the execution of this Agreement (i) obligates the Company or any
subsidiary of the Company to employ the
<PAGE> 19
19
Management Stockholder in any capacity whatsoever or (ii) prohibits or
restricts the Company (or any such subsidiary) from terminating the employment,
if any, of the Management Stockholder at any time or for any reason whatsoever,
with or without Cause, subject to any rights to payments or benefits to which
the Management Stockholder may be entitled under any employment agreement with
the Company, and the Management Stockholder hereby acknowledges and agrees that
neither the Company nor any other person has made any representations or
promises whatsoever to the Management Stockholder concerning the Management
Stockholder's employment or continued employment by the Company or any
subsidiary of the Company.
18. State Securities Laws.
The Company hereby agrees to use its best efforts to comply with
all state securities or "blue sky" laws which might be applicable to the sale
of the Stock and the issuance of the Options to the Management Stockholder.
19. Binding Effect.
The provisions of this Agreement shall be binding upon and accrue
to the benefit of the parties hereto and their respective heirs, legal
representatives, successors and assigns. In the case of a transferee permitted
under Section 2(a) hereof, such transferee shall be deemed the Management
Stockholder hereunder; provided, however, that no transferee (including without
limitation, transferees referred to in Section 2(a) hereof) shall derive any
rights under this Agreement unless and until such transferee has delivered to
the Company a valid undertaking and becomes bound by the terms of this
Agreement.
20. Amendment.
This Agreement may be amended only by a written instrument signed
by the Parties hereto.
21. Closing.
Except as otherwise provided herein, the closing of each purchase
and sale of shares of Stock and the payment of the Option Excess Price, if any,
pursuant to this Agreement shall take place at the principal office of the
Company on the tenth business day following delivery of the notice by either
Party to the other of its exercise of the right to purchase or sell such Stock
hereunder or to cause the payment of the Option Excess Price, if any.
22. Applicable Law.
The laws of the state of New York shall govern the
interpretation, validity and performance of the terms of this Agreement,
regardless of the law that might be applied under principles of conflicts of
law. Any suit, action or proceeding against the Management Stockholder with
respect to this Agreement, or any judgment entered by any court in respect
<PAGE> 20
20
of any thereof, may be brought in any court of competent jurisdiction in the
State of New York and the Management Stockholder hereby submits to the non-
exclusive jurisdiction of such courts for the purpose of any such suit, action,
proceeding or judgment. By the execution and delivery of this Agreement, the
Management Stockholder appoints The Corporation Trust Company, at its office in
New York, New York as his agent upon which process may be served in any such
suit, action or proceeding. Service of process upon such agent, together with
notice of such service given to the Management Stockholder in the manner
provided in Section 25 hereof, shall be deemed in every respect effective
service of process upon him in any suit, action or proceeding. Nothing herein
shall in any way be deemed to limit the ability of the Company to serve any
such writs, process or summonses in any other manner permitted by applicable
law or to obtain jurisdiction over the Management Stockholder, in such other
jurisdictions and in such manner, as may be permitted by applicable law. The
Management Stockholder hereby irrevocably waives any objections which he may
now or hereafter have to the laying of the venue of any suit, action or
proceeding arising out of or relating to this Agreement brought in any court of
competent jurisdiction in the State of New York, and hereby further irrevocably
waives any claim that any such suit, action or proceeding brought in any such
court has been brought in any inconvenient forum. No suit, action or
proceeding against the Company with respect to this Agreement may be brought in
any court, domestic or foreign, or before any similar domestic or foreign
authority other than in a court of competent jurisdiction in the State of New
York, and the Management Stockholder hereby irrevocably waives any right which
he may otherwise have had to bring such an action in any other court, domestic
or foreign, or before any similar domestic or foreign authority. The Company
hereby submits to the jurisdiction of such courts for the purpose of any such
suit, action or proceeding. Each Party hereto hereby irrevocably and
unconditionally waives trial by jury in any legal action or proceeding in
relation to this Agreement and for any counterclaim therein.
23. Assignability of Certain Rights by the Company.
The Company shall have the right to assign any or all of its
rights or obligations to purchase shares of Stock pursuant to Sections 4, 5 and
6 hereof; provided, however, that the Company shall remain obligated to perform
its obligations notwithstanding such assignment in the event that such assignee
fails to perform the obligations so assigned to it.
24. Miscellaneous.
In this Agreement (i) all references to "dollars" or "$" are to
United States dollars and (ii) the word "or" is not exclusive. If any
provision of this Agreement shall be declared illegal, void or unenforceable by
any court of competent jurisdiction, the other provisions shall not be
affected, but shall remain in full force and effect.
25. Notices.
All notices and other communications provided for herein shall be
in writing and shall be deemed to have been duly given if delivered by hand
(whether by overnight
<PAGE> 21
21
courier or otherwise) or sent by registered or certified mail, return receipt
requested, postage prepaid, or by overnight delivery or telecopy, to the Party
to whom it is directed:
(a) If to the Company, to it at the following addresses:
Regal Cinemas, Inc.
7132 Commercial Park Drive
Knoxville, Tennessee 37918
Attn: Lewis Frazer III
c/o Kohlberg Kravis Roberts & Co.
9 West 57th Street
New York, New York 10019
Attn: Clifton S. Robbins
- and -
c/o Hicks, Muse, Tate & Furst Incorporated
200 Crescent Court
Suite 1600
Dallas, Texas 75201
Attn: Lawrence D. Stuart, Jr.
with a copies to:
Bass, Berry & Sims
2700 First American Center
Nashville, TN 37238
Attn: F. Mitchell Walker, Esq.
-and-
Simpson Thacher & Bartlett
425 Lexington Avenue
New York, New York 10017
Attn: Charles I. Cogut, Esq.
<PAGE> 22
22
-and-
Weil, Gotshal & Manges LLP
100 Crescent Court
Suite 1300
Dallas, Texas 75201
Attn: Jeremy W. Dickens, Esq.
(b) If to the Management Stockholder, to him at the address
set forth on the signature page hereof;
or at such other address as either party shall have
specified by notice in writing to the other.
26. Covenant Not to Compete; Confidential Information.
(a) In consideration of the Company entering into this
Agreement with the Management Stockholder, the Management Stockholder hereby
agrees that, effective as of the Base Date and for so long as the Management
Stockholder is employed by the Company or one of its subsidiaries and for a
period of one year (or such longer period provided in any employment agreement
with the Management Stockholder) thereafter (the "Noncompete Period"), the
Management Stockholder shall not directly or indirectly, either as principal,
manager, agent consultant, officer, stockholder, partner, investor, lender,
employee or in any other capacity, engage in or have any financial interest in
any business in Competition (as defined below) with the business of the
Company, its subsidiaries, its theater affiliates, or any affiliate of either
Kohlberg Kravis & Roberts & Co. L.P. or Hicks, Muse, Tate & Furst Incorporated
principally engaged in the theater business in existence as of the date of
Management Stockholder's termination of employment (the "Restricted Group"),
other than through the Management Stockholder's employment with the Company or
any of its subsidiaries. For purposes of this Section 26(a), a business shall
be deemed to be in "Competition" with the Restricted Group if it is principally
engaged in the theater business within the same geographic area in which any
member of the Restricted Group conducts such business. Nothing in this Section
26 shall be construed so as to preclude the Management Stockholder from
investing in any publicly or privately held company, provided that the
Management Stockholder's beneficial ownership of any class of such company's
securities does not exceed 1% of the outstanding securities of such class.
Notwithstanding the foregoing, in the event that the Management Stockholder has
an employment agreement with the Company, any covenant not to compete therein
will supersede this Section 26(a).
(b) The Management Stockholder will not disclose or use at any
time any Confidential Information (as defined below) of which the Management
Stockholder is or becomes aware, whether or not such information is developed
by him, except to the extent that such disclosure or use is (i) directly
related to and required by the Management Stockholder's performance of duties,
if any, assigned to the Management Stockholder by the Company or (ii) required
by law. As used in this Agreement, the term "Confidential Information" means,
unless otherwise defined in the Management Stockholder's employment
<PAGE> 23
23
agreement, if any, with the Company, information that is not generally known to
the public and that is used, developed or obtained by the Company or its
subsidiaries in connection with its business, including but not limited to (i)
products or services, (ii) fees, costs and pricing structures, (iii) designs,
(iv) computer software, including operating systems, applications and program
listings, (v) flow charts, manuals and documentation, (vi) data bases, (vii)
accounting and business methods, (viii) inventions, devices, new developments,
methods and processes, whether patentable or unpatentable and whether or not
reduced to practice, (ix) customers and clients and customer or client lists,
(x) other copyrightable works, (xi) all technology and trade secrets, and (xii)
all similar and related information in whatever form. Confidential Information
will not include any information that has been published in a form generally
available to the public prior to the date the Management Stockholder proposes
to disclose or use such information. The Management Stockholder acknowledges
and agrees that all copyrights, works, inventions, innovations, improvements,
developments, patents, trademarks and all similar or related information which
relate to the actual or anticipated business of the Company and its
subsidiaries (including its predecessors) and conceived, developed or made by
the Management Stockholder while employed by the Company or its subsidiaries
belong to the Company. The Management Stockholder will perform all actions
reasonably requested by the Company (whether during or after the Noncompete
Period) to establish and confirm such ownership at the Company's expense
(including without limitation assignments, consents, powers of attorney and
other instruments). If the Management Stockholder is bound by any other
agreement with the Company regarding the use or disclosure of confidential
information, the provisions of this Agreement shall be read in such a way as
not to permit any more extensive use or disclosure of confidential information.
(c) The Management Stockholder agrees, during the Noncompete
Period, not to solicit for employment or employ, for the benefit of any person
or entity other than the Company or any of its subsidiaries, any person who is,
or was during the six months preceding any such solicitation for employment or
employment, employed by the Company or any of its theater affiliates (other
than secretarial or other administrative employees who worked directly for the
Management Stockholder prior to such termination).
(d) Notwithstanding clauses (a), (b) and (c) above, if at any
time a court holds that the restrictions stated in such Sections 26(a), (b) and
(c) are unreasonable or otherwise unenforceable under circumstances then
existing, the parties agree that the maximum period, scope or geographic area
determined to be reasonable under such circumstances by such court will be
substituted for the stated period, scope or area. Because the Management
Stockholder's services are unique and because the Management Stockholder has
had access to Confidential Information, the parties hereto agree that money
damages will be an inadequate remedy for any breach of this Agreement. In the
event of a breach or threatened breach of this Agreement, the Company or its
successors or assigns may, in addition to other rights and remedies existing in
their favor, apply to any court of competent jurisdiction for specific
performance and/or injunctive relief in order to enforce, or prevent any
violations of, the provisions hereof (without the posting of a bond or other
security).
(e) Notwithstanding anything to the contrary in this Section
26, the provisions of Sections 26(a) and (c) shall not be applicable to or
binding upon any
<PAGE> 24
24
Management Stockholder who is not a Vice President or higher level employee of
the Company or its subsidiaries.
[The signature page follows this page.]
<PAGE> 25
SIGNATURE PAGE TO MANAGEMENT STOCKHOLDER'S AGREEMENT
By their signatures below, the undersigned hereby agree to the
foregoing Management Stockholder's Agreement, and the provisions set forth
below constitute part of such agreement.
REGAL CINEMAS, INC.
By:
------------------------------------
Name:
Title:
NAME OF MANAGEMENT STOCKHOLDER:
------------------------------------
ADDRESS OF MANAGEMENT STOCKHOLDER:
------------------------------------
SIGNATURE OF MANAGEMENT STOCKHOLDER:
------------------------------------
NUMBER OF SHARES OF PURCHASE STOCK:
------------------------------------
AGGREGATE PURCHASE PRICE FOR PURCHASE
STOCK:
------------------------------------
NUMBER OF OLD OPTIONS:
------------------------------------
EXERCISE PRICE(S) OF OLD OPTIONS:
------------------------------------
NUMBER OF NEW TIME OPTIONS:
------------------------------------
NUMBER OF NEW PERFORMANCE OPTIONS:
------------------------------------
EXERCISE PRICE OF NEW OPTIONS:
------------------------------------
BASE DATE: , 199
------------ --
AGREEMENT DATE: , 199
------------ --
------------------------------------
<PAGE> 1
EXHIBIT 4.8
FORM OF NON-QUALIFIED STOCK OPTION AGREEMENT
THIS AGREEMENT, dated as of __________, 1998, is made by and
between Regal Cinemas, Inc., a Tennessee corporation hereinafter referred to as
the "Company", and the undersigned employee of the Company or a Subsidiary (as
defined below) or Affiliate (as defined below) of the Company, hereinafter
referred to as "Optionee".
WHEREAS, the Company wishes to afford the Optionee the
opportunity to purchase shares of its common stock (the "Common Stock");
WHEREAS, the Company wishes to carry out the Plan (as
hereinafter defined), the terms of which are hereby incorporated by reference
and made a part of this Agreement; and
WHEREAS, the Committee (as hereinafter defined), appointed to
administer the Plan, has determined that it would be to the advantage and best
interest of the Company and its stockholders to grant the Options (as
hereinafter defined) provided for herein to the Optionee as an incentive for
increased efforts during his term of office with the Company or its
Subsidiaries or Affiliates, and has advised the Company thereof and instructed
the undersigned officers to issue said Options;
NOW, THEREFORE, in consideration of the mutual covenants
herein contained and other good and valuable consideration, receipt of which is
hereby acknowledged, the parties hereto do hereby agree as follows:
ARTICLE I
DEFINITIONS
Whenever the following terms are used in this Agreement, they
shall have the meaning specified in the Plan or below unless the context
clearly indicates to the contrary.
Section 1.1 - Affiliate
"Affiliate" shall mean, with respect to the Company, any
corporation directly or indirectly controlling, controlled by, or under common
control with, the Company.
Section 1.2 - Cause
"Cause" shall mean (i) the Optionee's willful refusal to
perform in any material respect his duties or responsibilities for the Company
or willful disregard in any material respect of any financial or other
budgetary limitations established by the Company's Chief
<PAGE> 2
2
Executive Officer or Board of Directors; or (ii) the engaging by the Optionee
in conduct that causes material and demonstrable injury, monetarily or
otherwise, to the Company, including, but not limited to, misappropriation or
conversion of assets of the Company (other than nonmaterial assets); or (iii)
conviction of or entry of a plea of nolo contendere to a felony; or (iv) a
material breach of the Optionee's employment agreement, if any, including,
without limitation, engaging in action in violation of the restrictive
covenants therein.
No act or failure to act by an Optionee shall be deemed "willful" if done, or
omitted to be done, by Optionee in good faith and with the reasonable belief
that his action or omission was in the best interest of the Company.
Section 1.3 - Code
"Code" shall mean the Internal Revenue Code of 1986, as
amended.
Section 1.4 - Committee
"Committee" shall mean the Compensation Committee of the
Company.
Section 1.5 - Cumulative EBITDA Target
"Cumulative EBITDA Target" shall mean the Cumulative EBITDA
Targets as set forth in Schedule A attached hereto.
Section 1.6 - EBITDA
"EBITDA" shall mean, with respect to the Company and its
Subsidiaries on a consolidated basis for any period, the audited consolidated
net income (excluding without duplication, (x) extraordinary gains and losses
in accordance with GAAP (including any FAS 121 writedowns) and (y) gains or
losses on discontinued operations) for such quarter, plus (i) consolidated
interest expense for such period, determined in accordance with GAAP, plus (ii)
any minority interests share of income and losses plus (iii) to the extent
deducted in computing such consolidated net income, the sum of all income
taxes, depreciation, depletion and amortization of property, plant, equipment
and intangibles for such quarter.
Section 1.7 - EBITDA Target
"EBITDA Target" shall mean the EBITDA Targets established by
the Board of Directors and set forth in Schedule A attached hereto.
Section 1.8 - Fiscal Year
"Fiscal Year" shall mean the most recently completed fiscal
year of the Company.
<PAGE> 3
3
Section 1.9 - Grant Date
"Grant Date" shall mean the date as of which the Options
provided for in this Agreement were granted, which shall be ________, 1998.
Section 1.10 - Management Stockholder's Agreement
"Management Stockholder's Agreement" shall mean that certain
Management Stockholder's Agreement dated as of ________ __, 199_ between the
Optionee and the Company.
Section 1.11 - Missed Year
"Missed Year" shall mean a Fiscal Year in which the Company's
EBITDA is less than 100% of the EBITDA Target for such Fiscal Year.
Section 1.12 - Options
"Options" shall mean the non-qualified options to purchase
Common Stock granted under this Agreement.
Section 1.13 - Performance Option
"Performance Option" shall mean an Option with respect to
which the commencement of exercisability is governed by Section 3.1(b) hereof.
Section 1.14 - Permanent Disability
The Optionee shall be deemed to have a "Permanent Disability"
if the Optionee is unable to engage in the activities required by the
Optionee's job by reason of any medically determined physical or mental
impairment which can be expected to result in death or which has lasted or can
be expected to last for a continuous period of not less than 12 months.
Section 1.15 - Plan
"Plan" shall mean the 1998 Stock Purchase and Option Plan for
Key Employees of Regal Cinemas, Inc., as amended from time to time.
Section 1.16 - Pronouns
The masculine pronoun shall include the feminine and neuter,
and the singular the plural, where the context so indicates.
Section 1.17 - Secretary
"Secretary" shall mean the Secretary of the Company.
<PAGE> 4
4
Section 1.18 - Subsidiary
"Subsidiary" shall mean any corporation in an unbroken chain
of corporations beginning with the Company if each of the corporations, or
group of commonly controlled corporations (other than the last corporation in
the unbroken chain), then owns stock possessing 50% or more of the total
combined voting power of all classes of stock in one of the other corporations
in such chain.
Section 1.19 - Time Option
"Time Option" shall mean an Option with respect to which the
commencement of exercisability is governed by Section 3.1(a) hereof.
ARTICLE II
GRANT OF OPTIONS
Section 2.1 - Grant of Options
For good and valuable consideration, on and as of the date
hereof the Company irrevocably grants to the Optionee a Time Option to purchase
any part or all of an aggregate of the number of shares of its Common Stock set
forth with respect to such Time Option on the signature page hereof and a
Performance Option to purchase any part or all of an aggregate of the number of
shares of its Common Stock set forth with respect to such Performance Option on
the signature page hereof, in each case upon the terms and conditions set forth
in this Agreement.
Section 2.2 - Exercise Price
Subject to Section 2.4, the exercise price of the shares of
stock covered by the Options shall be equal to $5.00.
Section 2.3 - Consideration to the Company
In consideration of the granting of these Options by the
Company, the Optionee agrees to render faithful and efficient services to the
Company or a Subsidiary or Affiliate, with such duties and responsibilities as
the Company shall from time to time prescribe, consistent with Optionee's
position. Nothing in this Agreement or in the Plan shall confer upon the
Optionee any right to continue in the employ of the Company or any Subsidiary
or Affiliate or shall interfere with or restrict in any way the rights of the
Company and its Subsidiaries or Affiliates, which are hereby expressly
reserved, to terminate the employment of the Optionee at any time for any
reason whatsoever, with or without cause, subject to any rights to which the
Optionee is entitled under the terms of the employment agreement, if any,
between Optionee and the Company.
<PAGE> 5
5
Section 2.4 - Adjustments in Options Pursuant to Merger, Consolidation, etc.
Subject to Section 9 of the Plan, in the event that the
outstanding shares of the stock subject to an Option are, from time to time,
changed into or exchanged for a different number or kind of shares of the
Company or other securities of the Company by reason of a merger,
consolidation, recapitalization, reclassification, stock split, stock dividend,
combination of shares, or otherwise, the Committee shall make an appropriate
and equitable adjustment in the number and kind of shares and/or the amount of
consideration as to which or for which, as the case may be, such Option, or
portions thereof then unexercised, shall be exercisable. Any such adjustment
made by the Committee shall be final and binding upon the Optionee, the Company
and all other interested persons.
ARTICLE III
PERIOD OF EXERCISABILITY
Section 3.1 - Commencement of Exercisability
(a) Time Options shall become exercisable as follows:
<TABLE>
<CAPTION>
Percentage of Option
Date Option Shares Granted As to Which
Becomes Exercisable Option Is Exercisable
- ------------------- ----------------------
<S> <C>
On or after the first anniversary
of the Grant Date 20%
On or after the second anniversary
of the Grant Date 40%
On or after the third anniversary
of the Grant Date 60%
On or after the fourth anniversary
of the Grant Date 80%
On or after the fifth anniversary
of the Grant Date 100%
</TABLE>
(b) Performance Options shall become exercisable as
follows:
(i) Unless otherwise provided in this Agreement, the
Performance Options shall become exercisable with respect to one-third of the
shares of Common Stock subject to such Performance Option on each of the first
three anniversaries of the Grant Date to the extent that the Company's EBITDA
for the Fiscal Year equals or exceeds the EBITDA Target.
<PAGE> 6
6
(ii) If the Optionee's Performance Options do not become
exercisable in the first or second year following the Grant Date pursuant to
the above, the Optionee may "catch-up" in the second or third year based on the
Cumulative EBITDA Target with respect to such year.
(iii) Notwithstanding the foregoing, the Performance Option
shall become exercisable as to 100% of the shares of Common Stock subject to
the Performance Option on the ninth anniversary of the Grant Date (but only to
the extent such Performance Option has not otherwise terminated or become
exercisable) at an exercise price of $5.00 per share, as adjusted pursuant to
Section 2.4 herein, whether or not the EBITDA Targets are achieved.
(c) Notwithstanding the foregoing, all Options shall
become immediately exercisable as to 100% of the shares of Common Stock subject
to such Options immediately prior to a Change of Control (as defined in the
Plan) (but only to the extent such Option has not otherwise terminated or
become unexercisable).
(d) In the event of Optionee's termination of employment
because of death or Permanent Disability, the Time Options shall immediately
become exercisable as to all shares of Common Stock subject thereto.
(e) In the event of a termination of Optionee's
employment for Cause, all Options (whether or not exercisable) shall
immediately terminate without any payment.
(f) In the event of a termination of Optionee's
employment without Cause or Optionee's resignation, all unexercisable Options
shall terminate without any payment.
Section 3.2 - Expiration of Options
Except as otherwise provided in Section 5 or 6 of the
Management Stockholder's Agreement, the Options may not be exercised to any
extent by the Optionee after the first to occur of the following events:
(a) The tenth anniversary of the Grant Date; or
(b) The first anniversary of the date of the Optionee's
termination of employment by reason of death, Permanent Disability,
termination without Cause or resignation for Good Reason; or
(c) 90 days after resignation by the Optionee without Good
Reason; or
(d) The date the Option is terminated pursuant to the
Management Stockholder's Agreement; or
(e) The date of termination of Optionee's employment by the
Company for Cause; or
<PAGE> 7
7
(f) If the Committee so determines pursuant to Section 9 of
the Plan, the effective date of a merger, consolidation or other
transaction or capital change of the Company as provided in the Plan,
so long as the Optionee has a reasonable opportunity to exercise prior
to such effective date.
For purposes of this Agreement, the term "Good Reason" shall
mean (i) a reduction in the Optionee's base salary or an amendment to the
Company's annual cash bonus plan which would materially impair the ability of
the Optionee to receive a bonus (other than the establishment in good faith of
the "EBITDA" or other performance targets by the Company's Board of Directors)
or (ii) other than as approved by the current chief executive officer of the
Company, a substantial reduction in the Optionee's duties and responsibilities
or a transfer of the Optionee's primary workplace by more than fifty (50) miles
from the current workplace; provided, however, that in the event the Optionee
is party to a written employment agreement, the definition of "Good Reason"
therein shall supersede the preceding definition.
ARTICLE IV
EXERCISE OF OPTION
Section 4.1 - Person Eligible to Exercise
During the lifetime of the Optionee, only he may exercise an
Option or any portion thereof. After the death of the Optionee, any
exercisable portion of an Option may, prior to the time when an Option becomes
unexercisable under Section 3.2, be exercised by his personal representative or
by any person empowered to do so under the Optionee's will or under the then
applicable laws of descent and distribution.
Section 4.2 - Partial Exercise
Any exercisable portion of an Option or the entire Option, if
then wholly exercisable, may be exercised in whole or in part at any time prior
to the time when the Option or portion thereof becomes unexercisable under
Section 3.2; provided, however, that any partial exercise shall be for whole
shares of Common Stock only.
Section 4.3 - Manner of Exercise
An Option, or any exercisable portion thereof, may be
exercised solely by delivering to the Secretary or his office all of the
following prior to the time when the Option or such portion becomes
unexercisable under Section 3.2:
(a) Notice in writing signed by the Optionee or the other
person then entitled to exercise the Option or portion thereof,
stating that the Option or portion thereof is thereby exercised, such
notice complying with all applicable rules established by the
Committee;
<PAGE> 8
8
(b) Full payment (in cash, by check or by a combination
thereof) for the shares with respect to which such Option or portion
thereof is exercised;
(c) A bona fide written representation and agreement, in a
form satisfactory to the Committee, signed by the Optionee or other
person then entitled to exercise such Option or portion thereof,
stating that the shares of stock are being acquired for his own
account, for investment and without any present intention of
distributing or reselling said shares or any of them except as may be
permitted under the Securities Act of 1933, as amended (the "Act"),
and then applicable rules and regulations thereunder, and that the
Optionee or other person then entitled to exercise such Option or
portion thereof will indemnify the Company against and hold it free
and harmless from any loss, damage, expense or liability resulting to
the Company if any sale or distribution of the shares by such person
is contrary to the representation and agreement referred to above;
provided, however, that the Committee may, in its absolute discretion,
take whatever additional actions it deems appropriate to ensure the
observance and performance of such representation and agreement and to
effect compliance with the Act and any other federal or state
securities laws or regulations;
(d) Full payment to the Company of all amounts which, under
federal, state or local law, it is required to withhold upon exercise
of the Option; and
(e) In the event the Option or portion thereof shall be
exercised pursuant to Section 4.1 by any person or persons other than
the Optionee, appropriate proof of the right of such person or persons
to exercise the option.
Without limiting the generality of the foregoing, the Committee may require an
opinion of counsel reasonably acceptable to it to the effect that any
subsequent transfer of shares acquired on exercise of an Option does not
violate the Act, and may issue stop-transfer orders covering such shares.
Share certificates evidencing stock issued on exercise of this Option shall
bear an appropriate legend referring to the provisions of subsection (c) above
and the agreements herein. The written representation and agreement referred
to in subsection (c) above shall, however, not be required if the shares to be
issued pursuant to such exercise have been registered under the Act, and such
registration is then effective in respect of such shares.
Section 4.4 - Conditions to Issuance of Stock Certificates
The shares of stock deliverable upon the exercise of an
Option, or any portion thereof, may be either previously authorized but
unissued shares or issued shares which have then been reacquired by the
Company. Such shares shall be fully paid and nonassessable. The Company shall
not be required to issue or deliver any certificate or certificates for shares
of stock purchased upon the exercise of an Option or portion thereof prior to
fulfillment of all of the following conditions:
(a) The obtaining of approval or other clearance from any
state or federal governmental agency which the Committee shall, in its
absolute discretion, determine to be necessary or advisable; and
<PAGE> 9
9
(b) The lapse of such reasonable period of time following the
exercise of the Option as the Committee may from time to time
establish for reasons of administrative convenience.
(c) The execution of a Management Stockholder's Agreement by
and between the Company and the Executive (unless such an agreement
already exists) that covers the shares purchased upon exercise of an
Option.
Section 4.5 - Rights as Stockholder
The holder of an Option shall not be, nor have any of the
rights or privileges of, a stockholder of the Company in respect of any shares
purchasable upon the exercise of the Option or any portion thereof unless and
until certificates representing such shares shall have been issued by the
Company to such holder.
ARTICLE V
MISCELLANEOUS
Section 5.1 - Administration
The Committee shall have the power to interpret the Plan and
this Agreement and to adopt such rules for the administration, interpretation
and application of the Plan as are consistent therewith and to interpret or
revoke any such rules. All actions taken and all interpretations and
determinations made by the Committee shall be final and binding upon the
Optionee, the Company and all other interested persons. No member of the
Committee shall be personally liable for any action, determination or
interpretation made in good faith with respect to the Plan or the Options. In
its absolute discretion, the Board of Directors may at any time and from time
to time exercise any and all rights and duties of the Committee under the Plan
and this Agreement.
Section 5.2 - Options Not Transferable
Except as provided in the Management Stockholder's Agreement,
neither the Options nor any interest or right therein or part thereof shall be
liable for the debts, contracts or engagements of the Optionee or his
successors in interest or shall be subject to disposition by transfer,
alienation, anticipation, pledge, encumbrance, assignment or any other means
whether such disposition be voluntary or involuntary or by operation of law by
judgment, levy, attachment, garnishment or any other legal or equitable
proceedings (including bankruptcy), and any attempted disposition thereof shall
be null and void and of no effect; provided, however, that this Section 5.2
shall not prevent transfers made solely for estate planning purposes or by will
or by the applicable laws of descent and distribution.
<PAGE> 10
10
Section 5.3 - Shares to Be Reserved
The Company shall at all times during the term of the Options
reserve and keep available such number of shares of stock as will be sufficient
to satisfy the requirements of this Agreement.
Section 5.4 - Notices
Any notice to be given under the terms of this Agreement to
the Company shall be addressed to the Company in care of its Secretary, and any
notice to be given to the Optionee shall be addressed to him at the address
given beneath his signature hereto. By a notice given pursuant to this Section
5.4, either party may hereafter designate a different address for notices to be
given to him. Any notice which is required to be given to the Optionee shall,
if the Optionee is then deceased, be given to the Optionee's personal
representative if such representative has previously informed the Company of
his status and address by written notice under this Section 5.4. Any notice
shall have been deemed duly given when enclosed in a properly sealed envelope
or wrapper addressed as aforesaid, deposited (with postage prepaid) in a post
office or branch post office regularly maintained by the United States Postal
Service.
Section 5.5 - Titles
Titles are provided herein for convenience only and are not to
serve as a basis for interpretation or construction of this Agreement.
Section 5.6 - Applicability of Plan and Management Stockholder's Agreement
The Options and the shares of Common Stock issued to the
Optionee upon exercise of the Options shall be subject to all of the terms and
provisions of the Plan and the Management Stockholder's Agreement, to the
extent applicable to the Options and such shares. In the event of any conflict
between this Agreement and the Plan, the terms of the Plan shall control. In
the event of any conflict between this Agreement or the Plan and the Management
Stockholder's Agreement, the terms of the Management Stockholder's Agreement
shall control.
Section 5.7 - Amendment
This Agreement may be amended only by a writing executed by
the parties hereto which specifically states that it is amending this
Agreement.
Section 5.8 - Governing Law
The laws of the State of New York shall govern the
interpretation, validity and performance of the terms of this Agreement
regardless of the law that might be applied under principles of conflicts of
laws.
<PAGE> 11
11
Section 5.9 - Jurisdiction
Any suit, action or proceeding against the Optionee with
respect to this Agreement, or any judgment entered by any court in respect of
any thereof, may be brought in any court of competent jurisdiction in the State
of New York, and the Optionee hereby submits to the non-exclusive jurisdiction
of such courts for the purpose of any such suit, action, proceeding or
judgment. The Optionee hereby irrevocably waives any objections which he may
now or hereafter have to the laying of the venue of any suit, action or
proceeding arising out of or relating to this Agreement brought in any court of
competent jurisdiction in the State of New York, and hereby further irrevocably
waives any claim that any such suit, action or proceeding brought in any such
court has been brought in any inconvenient forum. No suit, action or
proceeding against the Company with respect to this Agreement may be brought in
any court, domestic or foreign, or before any similar domestic or foreign
authority other than in a court of competent jurisdiction in the State of New
York, and the Optionee hereby irrevocably waives any right which he may
otherwise have had to bring such an action in any other court, domestic or
foreign, or before any similar domestic or foreign authority. The Company
hereby submits to the jurisdiction of such courts for the purpose of any such
suit, action or proceeding.
<PAGE> 12
12
IN WITNESS WHEREOF, this Agreement has been executed and
delivered by the parties hereto.
REGAL CINEMAS, INC.
By
-----------------------------
Name:
Title:
Aggregate number of shares of
Common Stock for which the Time
Option granted hereunder is
exercisable:
Aggregate number of shares of
- ------------------------- Common Stock for which the
Performance Option granted
- ------------------------- hereunder is exercisable:
Optionee
- -------------------------
- -------------------------
Address
Optionee's Taxpayer
Identification Number:
- -------------------------
<PAGE> 1
EXHIBIT 4.9
FORM OF SALE PARTICIPATION AGREEMENT
, 199
--------- --- -
To: The Person whose name
is set forth on the
signature page hereof
Dear Sir or Madam:
You have entered into a Management Stockholder's Agreement,
dated as of _________ __, 199_ (the "Stockholder's Agreement"), with Regal
Cinemas, Inc., a Tennessee corporation (the "Company"), relating to your
purchase and ownership of shares of the common stock, no par value, of the
Company (the "Common Stock"). The undersigned Controlling Shareholders (as
defined in the Stockholder's Agreement) also own shares of Common Stock and
hereby agree with you as follows, effective upon the Base Date (as defined in
the Stockholder's Agreement):
1. In the event that at any time any of the Controlling
Shareholders (each a "Selling Partnership" and, collectively, together with
their respective affiliates to the extent set forth in numbered paragraph 11
hereto, the "Selling Partnerships") proposes to sell for cash or any other
consideration any shares of Common Stock of the Company owned by it in any
transaction other than a Public Offering (as defined in the Stockholder's
Agreement) or a sale to another Selling Partnership, an affiliate of a Selling
Partnership or DLJ Merchant Banking Partners, II, L.P. or any affiliate
thereof, the Selling Partnership will notify you or your Management
Stockholder's Estate or Management Stockholder's Trust (as such terms are
defined in Section 2 of the Stockholder's Agreement; and collectively with you,
the "Management Stockholder Entities"), as the case may be, in writing (a
"Notice") of such proposed sale (a "Proposed Sale") and the material terms of
the Proposed Sale as of the date of the Notice (the "Material Terms") promptly,
and in any event not more than 10 days after the execution of the definitive
agreement relating to the Proposed Sale, if any (the "Sale Agreement"). If
within 10 days of the Management Stockholder Entities' receipt of such Notice
the Selling Partnership receives from a Management Stockholder Entity a written
request (a "Management Stockholder Request") to include Common Stock held by a
Management Stockholder Entity in the Proposed Sale (which Management
Stockholder Request shall be irrevocable unless (a) there shall be a material
adverse change in the Material Terms or (b) otherwise mutually agreed to in
writing by the Management Stockholder Entity and the Selling Partnership), the
Common Stock held by you will be so
<PAGE> 2
2
included as provided herein; provided that only one Management Stockholder
Request, which shall be executed by such Management Stockholder Entity, may be
delivered with respect to any Proposed Sale for all Common Stock held by a
Management Stockholder Entity. Promptly after the consummation of the
transactions contemplated thereby, the Selling Partnership will furnish the
Management Stockholder Entities with a copy of the Sale Agreement, if any.
2. The number of shares of Common Stock which the
Management Stockholder Entities will be permitted to include in a Proposed Sale
pursuant to a Management Stockholder Request will be the lesser of (a) the sum
of the number of shares of Common Stock then owned by the Management
Stockholder Entities plus all shares of Common Stock which you are then
entitled to acquire under an unexercised option to purchase shares of Common
Stock, to the extent such option is then exercisable or would become
exercisable as a result of the consummation of the Proposed Sale and (b) the
sum of the shares of Common Stock then owned by the Management Stockholder
Entities plus all shares of Common Stock which you are entitled to acquire
under an unexercised option to purchase shares of Common Stock, whether or not
fully exercisable, multiplied by a percentage calculated by dividing the
aggregate number of shares of Common Stock which a Selling Partnership or the
Selling Partnerships propose to sell in the Proposed Sale (after giving effect
to the applicable provisions of any written agreement between the Selling
Partnerships and any holder of shares of Common Stock that gives the right to
such holder to participate in a sale of Common Stock by the Selling
Partnerships) by the total number of shares of Common Stock owned by the
Selling Partnerships. If one or more holders of shares of Common Stock who
have been granted the same rights granted to the Management Stockholder
Entities hereunder elect not to include the maximum number of shares of Common
Stock which such holders would have been permitted to include in a Proposed
Sale (the "Eligible Shares"), then the Selling Partnerships, or such remaining
holders of shares of Common Stock, or any of them, may sell in the Proposed
Sale a number of additional shares of Common Stock owned by any of them equal
to their pro rata portion of the number of Eligible Shares not included in the
Proposed Sale, based on the relative number of shares of Common Stock then held
by each such holder, and such additional shares of Common Stock which any such
holder or holders propose to sell shall not be included in any calculation made
pursuant to this Paragraph 2 for the purpose of determining the number of
shares of Common Stock which the Management Stockholder Entities will be
permitted to include in a Proposed Sale. The Selling Partnerships, or any of
them, may sell in the Proposed Sale additional shares of Common Stock owned by
them equal to any remaining Eligible Shares which will not be included in the
Proposed Sale pursuant to the foregoing.
3. If the Selling Partnerships receive an offer from a
person to purchase in a Proposed Sale (a) at least a majority of the shares of
Common Stock then outstanding or (b) all or substantially all of the shares of
Common Stock owned collectively by the Selling Partnerships, and such offer is
accepted by the Selling Partnerships, then each Management Stockholder Entity
hereby agrees that, if requested by the Selling Partnerships ("Selling
Partnership Request"), each Management Stockholder Entity will sell in such
Proposed Sale on the same terms and conditions (including, without limitation,
time of payment and form of consideration) as to be paid and given to the
Selling Partnerships, the number of shares of
<PAGE> 3
3
Common Stock equal to the number of shares of Common Stock owned by the
Management Stockholder Entities (plus all shares of Common Stock which you are
then entitled to acquire under an unexercised option to purchase shares of
Common Stock, to the extent such option is then exercisable or would become
exercisable as a result of the consummation of the Proposed Sale) multiplied by
(x) in the case of a Proposed Sale described in clause (a) above, the
percentage of the then outstanding shares of Common Stock to which the Proposed
Sale is applicable or (y) in the case of a Proposed Sale described in clause
(b) above, the percentage of the shares of Common Stock owned by the Selling
Partnerships to which the Proposed Sale is applicable.
4. (a) Except as may otherwise be provided herein,
shares of Common Stock subject to a Management Stockholder Request or a Selling
Partnership Request will be included in a Proposed Sale pursuant hereto and in
any agreements with purchasers relating thereto on the same terms and subject
to the same conditions applicable to the shares of Common Stock which the
Selling Partnership proposes to sell in the Proposed Sale. Such terms and
conditions shall include, without limitation: the sales price; the payment of
fees, commissions, adjustment to purchase price and expenses; and the provision
of, and representation and warranty as to, information requested by the Selling
Partnership; and the provision of requisite indemnifications; provided that any
fees, commissions, adjustments to purchase price, expenses or indemnification
provided by the Management Stockholder Entities shall be on a pro rata basis.
(b) In the event of a transaction (such as a merger
or consolidation) involving the Company which results in a Change of Control
(as defined in Section 15 of the Stockholder's Agreement) but is not a Proposed
Sale (a "Proposed Transaction"), you agree on behalf of the Management
Stockholder Entities, to bear your pro rata share of any fees, commissions,
adjustments to purchase price, expenses or indemnities borne by the Selling
Partnership.
(c) Your pro rata share of any amount pursuant to
Paragraphs 4(a) or (b) shall be based upon the number of shares of Common Stock
owned by the Management Stockholder Entities plus the number of shares of
Common Stock you would have the right to acquire under unexercised options
which are then vested or would become vested as a result of the Proposed Sale
or Proposed Transaction.
(d) The Selling Partnerships shall be entitled to
estimate the amount of fees, commissions, adjustments to purchase price,
expenses or indemnities in connection with any Proposed Sale or Proposed
Transaction and to withhold such amounts from payments to be made to the
Management Stockholder Entities at the time of closing of such Proposed Sale or
Proposed Transaction; provided that (i) such estimate shall not preclude the
Selling Partnerships from recovering additional amounts from the Management
Stockholder Entities in respect of such fees, commissions, adjustments to
purchase price, expenses or indemnities and (ii) the Selling Partnerships shall
reimburse the Management Stockholder Entities to the extent actual amounts are
ultimately less than the estimated amounts.
<PAGE> 4
4
5. Upon delivering a Management Stockholder Request or
receiving a Selling Partnership Request, the Management Stockholder Entities
will, if requested by a Selling Partnership, execute and deliver a custody
agreement and power of attorney in form and substance satisfactory to the
Selling Partnership with respect to the shares of Common Stock which are to be
sold by the Management Stockholder Entities pursuant hereto (a "Custody
Agreement and Power of Attorney"). The Custody Agreement and Power of Attorney
will provide, among other things, that the Management Stockholder Entities will
deliver to and deposit in custody with the custodian and attorney-in-fact named
therein a certificate or certificates representing such shares of Common Stock
(duly endorsed in blank by the registered owner or owners thereof) and
irrevocably appoint said custodian and attorney-in-fact as the Management
Stockholder Entities' agent and attorney-in-fact with full power and authority
to act under the Custody Agreement and Power of Attorney ont he Management
Stockholder Entities' behalf with respect to the matters specified therein.
6. The Management Stockholder Entities' right pursuant
hereto to participate in a Proposed Sale shall be contingent on the Management
Stockholder Entities' strict compliance with each of the applicable provisions
hereof and the Management Stockholder Entities' willingness to executed such
documents in connection therewith as may be reasonably requested by a Selling
Partnership. The Controlling Shareholders right pursuant hereto to require the
participation of the Management Stockholder Entities in a Proposed Sale shall
be contingent on the Controlling Shareholders' strict compliance with each of
the applicable provisions hereof
7. The obligations of the Selling Partnerships hereunder
shall extend only to the Management Stockholder Entities and no other of the
Management Stockholder Entities' successors or assigns shall have any rights
pursuant hereto.
8. This Agreement shall terminate and be of no further
force and effect on the fifth anniversary of the first occurrence of a Public
Offering (as defined in the Stockholder's Agreement).
9. All notices and other communications provided for
herein shall be in writing and shall be deemed to have been duly given when
delivered to the party to whom it is directed:
(a) If to the Selling Partnerships, to them at
the following addresses:
Kohlberg Kravis Roberts & Co.
9 West 57th Street
New York, New York 10019
Attn: Clifton S. Robbins
-and-
<PAGE> 5
5
Hicks, Muse, Tate & Furst Incorporated
200 Crescent Court
Suite 1600
Dallas, Texas 75201
Attn: Lawrence D. Stuart, Jr.
with copies to:
Simpson Thacher & Bartlett
425 Lexington Avenue
New York, New York 10017
Attn: Charles I. Cogut, Esq.
-and-
Weil, Gotshal & Manges LLP
100 Crescent Court
Suite 1300
Dallas, Texas 75201
Attn: Jeremy W. Dickens, Esq.
(b) If to you, to you at your address set forth
in the Stockholder's Agreement;
(c) If to your Management Stockholder's Estate or
Management Stockholder's Trust, at the
address provided to the Selling Partnerships
by such entity;
or at such other address as any of the above shall have specified by notice in
writing delivered to the others by certified mail.
10. The laws of the state of New York shall govern the
interpretation, validity and performance of the terms of this Agreement,
regardless of the law that might be applied under principles of conflicts of
law. l Any suit, actio or proceeding against you with respect to this
Agreement, or any judgment entered by any court in respect of any thereof, may
be brought in any court of competent jurisdiction int he State of New York, as
the Selling Partnerships may elect in their sole discretion, and you hereby
submit to the non exclusive jurisdiction of such courts for the propose of any
such suit, action, proceeding or judgment. You hereby irrevocably waive any
objections which you may now or hereafter have to the laying of the venue of
any suit, action or proceeding arising out of or relating to this Agreement
brought in any court of competent jurisdiction in the State of New York, and
hereby further irrevocably waive any claim that any such suit, action or
proceeding brought in any such court has been brought in any inconvenient for
us. No suit, action or proceeding against the Selling Partnerships with
respect to this Agreement may be brought in any court, domestic or foreign, or
before any similar domestic authority other than in a court of competent
jurisdiction in the State of New York, and you hereby irrevocably waive any
right
<PAGE> 6
6
which you may otherwise have had to bring such an action in any other court,
domestic or foreign, or before any similar domestic or foreign authority. The
Selling Partnerships hereby submit to the jurisdiction of such courts for the
purpose of any such suit, action or proceeding.
11. If a Selling Partnership transfers its interest in
the Company to an affiliate of such Selling Partnership, such affiliate shall
succeed to all of such Selling Partnership's rights and obligations hereunder.
It is the understanding of the undersigned that you are aware
that no Proposed Sale or Proposed Transaction presently is contemplated and
that such a transaction may never occur.
<PAGE> 7
7
If the foregoing accurately sets forth our agreement, please
acknowledge your acceptance thereof in the space provided below for that
purpose.
Very truly yours,
KKR 1996 FUND L.P.
By: KKR Associates 1996 L.P., its
general partner
By: KKR 1996 GP LLC, its general
partner
By:
---------------------------
Authorized Signatory
KKR PARTNERS II, L.P.
By: KKR Associates, L.P. its
general partner
By:
---------------------------
Authorized Signatory
REGAL EQUITY PARTNERS, L.P.
By: TOH/RANGER, LLC, its general
partner
By:
---------------------------
Authorized Signatory
Accepted and Agreed to:
--------------------------
(Print Your Name)
--------------------------
(Signature)
<PAGE> 1
EXHIBIT 4.10
FORM OF REGISTRATION RIGHTS AGREEMENT
REGISTRATION RIGHTS AGREEMENT, dated as of _________ ___, 199_
(this "Agreement"), by and among Regal Cinemas, Inc. (the "Company"), KKR 1996
Fund L.P. (the "KKR Fund"), KKR Partners II, L.P. ("KKR Partners II" and,
together with the KKR Fund, the "KKR Partnerships") and Regal Equity Partners,
L.P. (the "HMTF Partnership" and, together with the KKR Partnerships, the
"Common Stock Partnerships").
RECITALS
WHEREAS, pursuant to, and subject to the terms and conditions
set forth in, an Agreement and Plan of Merger dated as of January 19, 1998, as
amended by the Amendment Agreement dated as of May 8, 1998 (as so amended, the
"Merger Agreement") among Screen Acquisition Corp. ("Holdco I"), Monarch
Acquisition Corp. ("Holdco II" and, together with Holdco I, the "Holdcos"), and
the Company, (i) the Holdcos will merge with and into the Company (the
"Merger"), (ii) each outstanding share of common stock, no par value ("Company
Common Stock"), of the Company outstanding immediately prior to the Merger
(other than shares of Company Common Stock owned by the Company, any of its
subsidiaries or the Holdcos) will be converted into the right to receive $31.00
per share in cash, (iii) each outstanding share of common stock, par value $.01
per share, of Holdco I will be converted into one share of Company Common Stock
and ___ shares of Series A Convertible Preferred Stock, $.01 par value
("Company Convertible Preferred Stock"), of Regal and (iv) each outstanding
share of common stock, par value $.01 per share, of Holdco II will be converted
into one share of Company Common Stock and ___ shares of Company Convertible
Preferred Stock;
WHEREAS, Holdco I and Holdco II are subsidiaries of the KKR
Fund and the HMTF Partnership, respectively; and
WHEREAS, after the consummation of the Merger and the
conversion of the Convertible Preferred Stock, the Common Stock Partnerships
will own approximately 93.2% of the Company Common Stock;
NOW, THEREFORE, in consideration of the foregoing and the
representations, warranties and agreements contained in this Agreement, the
parties agree as follows:
1. Definitions. As used in this Agreement, the following
capitalized terms shall have the following respective meanings:
"Closing Date": Has the meaning assigned to such term in the
Merger Agreement.
<PAGE> 2
"Common or Common Equivalent Registrable Securities":
Registrable Securities which are (i) Common Stock or (ii) Convertible
Securities.
"Convertible Securities": securities that are convertible
into or exchangeable or exercisable for Common Stock, including the
Company Convertible Preferred Stock.
"Demand Party": (a) Each Common Stock Partnership or (b) any
other Holder or Holders, including, without limitation, any present or
future general or limited partner of any Common Stock Partnership, or
(c) any general or limited partner or member of any general or limited
partner thereof, that may become an assignee of such Common Stock
Partnership's rights hereunder; provided that to be a Demand Party
under this clause (c), a Holder or Holders must either individually or
in aggregate with all other Holders with whom it is acting together to
demand registration beneficially own (within the meaning of such term
under Rule 13d-3 under the Exchange Act) at least 1% of the total
number of Registrable Securities.
"Early Demand Event": The occurrence of the seventh
anniversary of the Closing Date or, if the provisions of Section ____
of the Stockholders' Agreement dated as of ________ __, 1998 among the
Company and the Common Stock Partnerships permit a KKR Demand Party or
an HMTF Demand Party, as the case may be, to cause a registration of
Registrable Securities after the occurrence of the fifth anniversary
of the Closing Date, then the occurrence of the fifth anniversary of
the Closing Date; provided that an Early Demand Event shall not occur
if a QPO shall have been effected prior to the applicable anniversary
of the Closing Date set forth above.
"Exchange Act": The Securities Exchange Act of 1934, as
amended, or any successor federal statute then in effect, and a
reference to a particular section thereof shall be deemed to include a
reference to the comparable section, if any, of any such successor
federal statute.
"HMTF Demand Party": HMTF Partnership and any other Holder
that is affiliated with HMTF Partnership, provided that such other
Holder is a Demand Party.
"Holder": Each Common Stock Partnership and any other holder
of Registrable Securities (including any direct or indirect
transferees of the Common Stock Partnership) who agrees in writing to
be bound by the provisions of this Agreement.
"KKR Demand Party": The KKR Partnerships and any other Holder
that is affiliated with the KKR Partnerships, provided that such other
Holder is a Demand Party.
"Other Registration Rights Agreement": Any written agreement
(other than this Agreement) to which the Company and any holder of
shares of Common Stock are parties that provides for the registration
of shares of Common Stock of such holder by the Company.
-2-
<PAGE> 3
"Person": Any individual, partnership, joint venture,
corporation, trust, unincorporated organization or government or any
department or agency thereof.
"QPO": An underwritten public offering of Common Stock after
which (i) Persons who are not affiliates of the Company shall
beneficially own (as defined in Rule 13d-3 under the Exchange Act) at
least 25% of the then outstanding shares of Common Stock and (ii) at
least 20% of the then outstanding shares of Common Stock shall have
been sold by the Company for cash after the Closing Date in one or
more public offerings pursuant to effective registration statements
under the Securities Act.
"Registrable Securities": Any Common Stock or Convertible
Security acquired by a Common Stock Partnership from the Company or any
affiliate of the Company, whether by purchase or otherwise (including
without limitation, in the case of a Convertible Security, any Common
Stock acquired or to be acquired upon the conversion of such
Convertible Security) and any Common Stock, Convertible Security or
other security which may be issued or distributed in respect thereof by
way of stock dividend or stock split or other distribution,
recapitalization or reclassification. As to any particular Registrable
Securities, once issued, such Registrable Securities shall cease to be
Registrable Securities when (i) a registration statement with respect
to the sale by the Holder of such securities shall have become
effective under the Securities Act and such securities shall have been
disposed of in accordance with such registration statement, (ii) such
securities shall have been distributed to the public pursuant to Rule
144 (or any successor provision) under the Securities Act, (iii) such
securities shall have been otherwise transferred, new certificates for
such securities not bearing a legend restricting further transfer shall
have been delivered by the Company and subsequent disposition of such
securities shall not require registration or qualification of such
securities under the Securities Act or any state securities or blue sky
law then in force, or (iv) such securities shall have ceased to be
outstanding.
"Registration Expenses": Any and all expenses incident to
performance of or compliance with this Agreement, including, without
limitation, (i) all SEC and stock exchange or National Association of
Securities Dealers, Inc. (the "NASD") registration and filing fees
(including, if applicable, the fees and expenses of any "qualified
independent underwriter," as such term is defined in Rule 2720 of the
NASD, and of its counsel), (ii) all fees and expenses of complying with
securities or blue sky laws (including fees and disbursements of
counsel for the underwriters in connection with blue sky qualifications
of the Registrable Securities), (iii) all printing, messenger and
delivery expenses, (iv) all fees and expenses incurred in connection
with the listing of the Registrable Securities on any securities
exchange pursuant to clause (viii) of Section 4 and all rating agency
fees, (v) the fees and disbursements of counsel for the Company and of
its independent public accountants, including the expenses of any
special audits and/or "cold comfort" letters required by or incident to
such performance and compliance, (vi) the reasonable fees and
disbursements of counsel selected pursuant to Section 7 hereof by the
Holders of the Registrable Securities being registered to represent
such Holders in connection with each such registration, (vii) any fees
and disbursements of underwriters customarily paid by the
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<PAGE> 4
issuers or sellers of securities, including liability insurance if the
Company so desires or if the underwriters so require, and the
reasonable fees and expenses of any special experts retained in
connection with the requested registration, but excluding underwriting
discounts and commissions and transfer taxes, if any, and (viii) other
reasonable out-of-pocket expenses of Holders (provided that such
expenses shall not include expenses of counsel other than those
provided for in clause (vi) above).
"Securities Act": The Securities Act of 1933, as amended, or
any similar federal statute then in effect, and a reference to a
particular section thereof shall be deemed to include a reference to
the comparable section, if any, of any such similar federal statute.
"SEC": The Securities and Exchange Commission or any other
federal agency at the time administering the Securities Act or the
Exchange Act.
2. Incidental Registrations. (a) Right to Include
Registrable Securities. If the Company at any time after the date hereof
proposes to register its Common Stock (or any Convertible Security) under the
Securities Act (other than a registration on Form S-4 or S-8, or any successor
or other forms promulgated for similar purposes), whether or not for sale for
its own account, it will, at each such time, give prompt written notice to all
Holders of its intention to do so and of such Holders' rights under this Section
2. Upon the written request of any such Holder made within 15 days after the
receipt of any such notice (which request shall specify the Common or Common
Equivalent Registrable Securities intended to be disposed of by such Holder),
the Company will use its best efforts to effect the registration under the
Securities Act of all Registrable Securities which the Company has been so
requested to register by the Holders thereof; provided that (i) if, at any time
after giving written notice of its intention to register any securities and
prior to the effective date of the registration statement filed in connection
with such registration, the Company shall determine for any reason not to
proceed with the proposed registration of the securities to be sold by it, the
Company may, at its election, give written notice of such determination to each
Holder and, thereupon, shall be relieved of its obligation to register any
Registrable Securities in connection with such registration (but not from its
obligation to pay the Registration Expenses in connection therewith), and (ii)
if such registration involves an underwritten offering, all Holders requesting
to be included in the registration must sell their Registrable Securities to the
underwriters selected by the Company, if any, on the same terms and conditions
as apply to the Company, with such differences, including any with respect to
indemnification and liability insurance, as may be customary or appropriate in
combined primary and secondary offerings. If a registration requested pursuant
to this Section 2(a) involves an underwritten public offering, any Holder
requesting to be included in such registration may elect, in writing prior to
the effective date of the registration statement filed in connection with such
registration, not to register such securities in connection with such
registration. Nothing in this Section 2(a) shall operate to
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<PAGE> 5
limit the right of a Holder to (i) request the registration of Common Stock
issuable upon conversion, exercise or exchange of Convertible Securities held
by such Holder notwithstanding the fact that at the time of request such Holder
holds only Convertible Securities or (ii) request the registration at one time
of both Common Stock and Convertible Securities.
(b) Expenses. The Company will pay all Registration Expenses
in connection with each registration of Registrable Securities requested
pursuant to this Section 2.
(c) Priority in Incidental Registrations. If a registration
pursuant to this Section 2 involves an underwritten offering and the managing
underwriter advises the Company in writing that, in its opinion, the number of
securities requested to be included in such registration exceeds the number
which can be sold in such offering, so as to be reasonably likely to have an
adverse effect on the price, timing or distribution of the securities offered in
such offering (other than the Registrable Securities), then the Company will
include in such registration (i) first, 100% of the securities, if any, the
Company proposes to sell, after giving effect to the priority, pro ration or
cutback provisions contained in any Other Registration Rights Agreement;
provided that the registration of shares of Common Stock contemplated by this
Section 2 was initiated by the Company with respect to shares intended to
registered for sale for its own account, (ii) second, the number of securities
held by a party to an Other Registration Rights Agreement that the Company is
required (after giving effect to the priority, pro ration or cutback provisions
contained in any Other Registration Rights Agreement and any withdrawal from the
proposed registration of shares of Common Stock by a holder of shares of Common
Stock that is a party to such Other Registration Rights Agreement) to include in
such registration pursuant to an Other Registration Rights Agreement and (iii)
third, to the extent of the number of Registrable Securities requested to be
included in such registration which, in the opinion of such managing
underwriter, can be sold without having the adverse effect referred to above,
the number of Registrable Securities which the Holders have requested to be
included in such registration, such amount to be allocated pro rata among all
requesting Holders on the basis of the relative number of Registrable Securities
then held by each such Holder (except to the extent that two or more requesting
Holders shall have agreed to a different allocation among such requesting
Holders); provided that any shares thereby allocated to any such Holder that
exceed such Holder's request will be reallocated among the remaining requesting
Holders in like manner. In the event that the number of Registrable Securities
requested to be included in such registration and securities which the Company
is so required to include in such registration in accordance with any Other
Registration Rights Agreement is less than the number which, in the opinion of
the managing underwriter, can be sold, the Company may include in such
registration the securities it proposes to sell up to the number of securities
that, in the opinion of the underwriter, can be sold.
3. Registration on Request. (a) Request by Demand Party.
At any time, upon the written request of a Demand Party requesting that the
Company effect the registration under the Securities Act of all or part of such
Demand Party's Registrable Securities and specifying the amount and intended
method of disposition thereof, the Company will promptly give written notice of
such requested registration to all other Holders
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<PAGE> 6
of such Registrable Securities, and thereupon will, as expeditiously as
possible, use its best efforts to effect the registration under the Securities
Act of:
(i) such Registrable Securities (including, if such
request relates to a Convertible Security, the shares of Common Stock
issuable upon conversion, exercise or exchange thereof) which the
Company has been so requested to register by such Demand Party; and
(ii) all other Registrable Securities of the same class or
series as are to be registered at the request of a Demand Party and
which the Company has been requested to register by any other Holder
thereof by written request given to the Company within 15 days after
the giving of such written notice by the Company (which request shall
specify the amount and intended method of disposition of such
Registrable Securities);
all to the extent necessary to permit the disposition (in accordance with the
intended method thereof as aforesaid) of the Registrable Securities so to be
registered; provided that, with respect to any Demand Party other than any
Common Stock Partnership, the Company shall not be obligated to effect any
registration of Registrable Securities under this Section 3(a) unless such
Demand Party requests that the Company register at least 1% of the total number
of Registrable Securities; and provided, further, that the Company shall not be
obligated to file a registration statement relating to any registration request
under this Section 3(a):
(x) within a period of 180 days (or such lesser period as the
managing underwriters in an underwritten offering may permit) after
the effective date of any other registration statement relating to any
registration request under this Section 3(a) which was not effected on
Form S-3 (or any successor or similar short-form registration
statement) or relating to any registration effected under Section 2
(unless Holders of a majority of the shares of Registrable Securities
held by all Holders consent in writing to the filing of such
registration statement);
(y) if with respect thereto the managing underwriter, the SEC,
the Securities Act or the rules and regulations thereunder, or the form
on which the registration statement is to be filed, would require the
conduct of an audit other than the regular audit conducted by the
Company at the end of its fiscal year, in which case the filing may be
delayed until the completion of such audit (and the Company shall, upon
request of the requesting Demand Holder, use its best efforts to cause
such audit to be completed expeditiously and without unreasonable
delay); or
(z) if the Company is in possession of material non-public
information and the Board of Directors of the Company determines in
good faith that disclosure of such information would not be in the
best interests of the Company and its stockholders, in which case the
filing of the registration statement may be delayed until the earlier
of the second business day after such conditions shall have ceased to
exist and the 45th day after receipt by the Company of the written
request from a Demand Holder to register Registrable Securities under
this Section 3(a).
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Nothing in this Section 3 shall operate to limit the right of a Holder to (i)
request the registration of Registrable Securities issuable upon conversion,
exercise or exchange of Convertible Securities held by such Holder
notwithstanding the fact that at the time of request such Holder holds only
Convertible Securities or (ii) request the registration at one time of both
Common Stock or other securities then issuable upon conversion, exercise or
exchange of Convertible Securities and Convertible Securities.
(b) Registration Statement Form. If any registration
requested pursuant to this Section 3 which is proposed by the Company to be
effected by the filing of a registration statement on Form S-3 (or any
successor or similar short-form registration statement) shall be in connection
with an underwritten public offering, and if the managing underwriter shall
advise the Company in writing that, in its opinion, the use of another form of
registration statement is of material importance to the success of such
proposed offering, then such registration shall be effected on such other form.
(c) Expenses. The Company will pay all Registration Expenses
(i) in connection with the first three registrations of Registrable Securities
pursuant to this Section 3 upon the written request of any KKR Demand Party and
(ii) in connection with the first three registrations of Registrable Securities
pursuant to this Section 3 upon the written request of any HMTF Demand Party (in
the case of clause (i) or (ii) above, a "Paid Demand"); provided that the
Company will pay all Registration Expenses in connection with one additional
registration of Registrable Securities pursuant to this Section 3 by either a
KKR Demand Party or an HMTF Demand Party to the extent that an Early Demand
Event has occurred; and provided, further, that, for purposes hereof, a request
to register Common Stock into or for which a Convertible Security is
convertible, exercisable or exchangeable in conjunction with a registration of
such Convertible Security shall be deemed to be one request for registration of
a class or series of Registrable Securities; provided, further, that a Demand
Party will not be deemed to have used a Paid Demand if (x) such Demand Party
shall have withdrawn its request for registration under this Section 3 before
the registration statement filed pursuant to this Section 3 shall have become
effective and (y) such Demand Party shall have paid all Registration Expenses
incurred before such withdrawal in connection with such request. All expenses
for any subsequent registrations of Registrable Securities pursuant to this
Section 3 shall be paid pro rata by the Company and all other Persons (including
the Holders) participating in such registration on the basis of the relative
number of shares of Common Stock of each such Person whose Registrable
Securities are included in such registration.
(d) Effective Registration Statement. A registration
requested pursuant to this Section 3 will not be deemed to have been effected
unless it has become effective and all of the Registrable Securities registered
thereunder have been sold; provided that, if, within 180 days after it has
become effective, the offering of Registrable Securities pursuant to such
registration is interfered with by any stop order, injunction or other order or
requirement of the SEC or other governmental agency or court, then such
registration will be deemed not to have been effected.
(e) Selection of Underwriters. If a requested registration
pursuant to this Section 3 involves an underwritten offering, the Holders of a
majority of the shares of Registrable Securities which are held by Holders and
which the Company has been requested to register shall have the right to select
the investment banker or bankers and managers to administer the offering;
provided, however, that such investment banker or bankers and managers shall be
reasonably satisfactory to the Company.
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<PAGE> 8
(f) Priority in Requested Registrations. If a requested
registration pursuant to this Section 3 involves an underwritten offering and
the managing underwriter advises the Company in writing that, in its opinion,
the number of securities requested to be included in such registration
(including securities of the Company which are not Registrable Securities)
exceeds the number which can be sold in such offering, the Company will include
in such registration only the Registrable Securities requested to be included in
such registration and any securities which the Company is required to include in
such registration in accordance with any Other Registration Rights Agreement. In
the event that the number of Registrable Securities requested to be included in
such registration and securities which the Company is required to include in
such registration in accordance with any Other Registration Rights Agreement
exceeds the number which, in the opinion of such managing underwriter, can be
sold, then the Company will include in such registration (i) first, the number
of shares of Common Stock held by a party to an Other Registration Rights
Agreement that the Company is required (after giving effect to the priority, pro
ration or cutback provisions contained in any Other Registration Rights
Agreement and any withdrawal from the proposed registration of shares of Common
Stock by a holder of shares of Common Stock that is a party to such Other
Registration Rights Agreement) to include in such registration pursuant to an
Other Registration Rights Agreement and (ii) second, to the extent of the number
of Registrable Securities requested to be included in such registration which,
in the opinion of such managing underwriter, can be sold without having the
adverse effect referred to above, the number of Registrable Securities which the
Holders have requested to be included in such registration, such amount to be
allocated pro rata among all requesting Holders on the basis of the relative
number of shares of Registrable Securities then held by each such Holder (except
to the extent that two or more requesting Holders shall have agreed to a
different allocation among such requesting Holders); provided that any shares
thereby allocated to any such Holder that exceed such Holder's request will be
reallocated among the remaining requesting Holders in like manner. In the event
that the number of Registrable Securities requested to be included in such
registration and securities which the Company is required to include in such
registration in accordance with any Other Registration Rights Agreement is less
than the number which, in the opinion of the managing underwriter, can be sold,
the Company may include in such registration the securities it proposes to sell
up to the number of securities that, in the opinion of the underwriter, can be
sold.
(g) Additional Rights. If the Company at any time grants to
any other holders of Common Stock any rights to request the Company to effect
the registration under the Securities Act of any such shares of Common Stock on
terms more favorable to such holders than the terms set forth in this Section
3, the terms of this Section 3 shall be deemed amended or supplemented to the
extent necessary to provide the Holders such more favorable rights and
benefits; provided that the Holders agree that this Section 3(g) shall not be
applicable to any Other Registration Rights Agreement to which the Common Stock
Partnerships are parties.
4. Registration Procedures. If and whenever the Company is
required to use its best efforts to effect or cause the registration of any
Registrable Securities under the Securities Act as provided in this Agreement,
the Company will, as expeditiously as possible:
(i) prepare and, in any event within 120 days after the
end of the period within which a request for registration may be given
to the Company, file with the
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<PAGE> 9
SEC a registration statement on an appropriate form with respect to
such Registrable Securities and use its best efforts to cause such
registration statement to become effective; provided, however, that the
Company may discontinue any registration of its securities which is
being effected pursuant to Section 2 at any time prior to the effective
date of the registration statement relating thereto (and, in such
event, the Company shall pay the Registration Expenses incurred in
connection therewith); provided, further, that before filing a
registration statement or prospectus, or any amendments or supplements
thereto, the Company will furnish to counsel selected pursuant to
Section 7 hereof by the Holders of the Registrable Securities covered
by such registration statement to represent such Holders, copies of
all documents proposed to be filed, which documents will be subject to
the review and approval (which approval will not be unreasonably
withheld or delayed) of such counsel;
(ii) prepare and file with the SEC such amendments and
supplements to such registration statement and the prospectus used in
connection therewith as may be necessary to keep such registration
statement effective for a period not in excess of 270 days and to
comply with the provisions of the Securities Act, the Exchange Act and
the rules and regulations of the SEC thereunder with respect to the
disposition of all securities covered by such registration statement
during such period in accordance with the intended methods of
disposition by the seller or sellers thereof set forth in such
registration statement; provided that before filing a registration
statement or prospectus, or any amendments or supplements thereto, the
Company will furnish to counsel selected pursuant to Section 7 hereof
by the Holders of the Registrable Securities covered by such
registration statement to represent such Holders, copies of all
documents proposed to be filed, which documents will be subject to the
review and approval (which approval will not be unreasonably withheld
or delayed) of such counsel;
(iii) furnish to each seller of such Registrable Securities
such number of copies of such registration statement and of each
amendment and supplement thereto (in each case including all exhibits
filed therewith, including any documents incorporated by reference),
such number of copies of the prospectus included in such registration
statement (including each preliminary prospectus and summary
prospectus), in conformity with the requirements of the Securities
Act, and such other documents as such seller may reasonably request in
order to facilitate the disposition of the Registrable Securities by
such seller;
(iv) use its best efforts to register or qualify such
Registrable Securities covered by such registration in such
jurisdictions as each seller shall reasonably request, and do any and
all other acts and things which may be reasonably necessary or
advisable to enable such seller to consummate the disposition in such
jurisdictions of the Registrable Securities owned by such Seller,
except that the Company shall not for any such purpose be required to
qualify generally to do business as a foreign corporation in any
jurisdiction where, but for the requirements of this clause (iv), it
would not be obligated to be so qualified, to subject itself to
taxation in any such jurisdiction or to consent to general service of
process in any such jurisdiction;
(v) use its best efforts to cause such Registrable
Securities covered by such registration statement to be registered
with or approved by such other governmental agencies or authorities as
may be necessary to enable the seller or sellers thereof to consummate
the disposition of such Registrable Securities;
(vi) notify each seller of any such Registrable Securities
covered by such registration statement, at any time when a prospectus
relating thereto is required to be
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<PAGE> 10
delivered under the Securities Act within the appropriate period
mentioned in clause (ii) of this Section 4, of the Company's becoming
aware that the prospectus included in such registration statement, as
then in effect, includes an untrue statement of a material fact or
omits to state a material fact required to be stated therein or
necessary to make the statements therein not misleading in the light
of the circumstances then existing, and at the request of any such
seller, prepare and furnish to such seller a reasonable number of
copies of an amended or supplemental prospectus as may be necessary so
that, as thereafter delivered to the purchasers of such Registrable
Securities, such prospectus shall not include an untrue statement of a
material fact or omit to state a material fact required to be stated
therein or necessary to make the statements therein not misleading in
the light of the circumstances then existing;
(vii) otherwise use its best efforts to comply with all
applicable rules and regulations of the SEC, and make available to its
security holders, as soon as reasonably practicable (but not more than
eighteen months) after the effective date of the registration
statement, an earnings statement which shall satisfy the provisions of
Section 11(a) of the Securities Act and the rules and regulations
promulgated thereunder;
(viii) (A) if such Registrable Securities are Common Stock
(including Common Stock issuable upon conversion, exercise or exchange
of a Convertible Security), use its best efforts to list such
Registrable Securities on any securities exchange on which the Common
Stock is then listed if such Registrable Securities are not already so
listed and if such listing is then permitted under the rules of such
exchange; (B) if such Registrable Securities are Convertible
Securities, upon the reasonable request of sellers of a majority of
shares of such Registrable Securities, use its best efforts to list
the Convertible Securities and, if requested, the Common Stock
underlying the Convertible Securities, notwithstanding that at the
time of request such sellers hold only Convertible Securities, on any
securities exchange so requested, if such Registrable Securities are
not already so listed, and if such listing is then permitted under the
rules of such exchange; and (C) and use its best efforts to provide a
transfer agent and registrar for such Registrable Securities covered
by such registration statement not later than the effective date of
such registration statement;
(ix) enter into such customary agreements (including an
underwriting agreement in customary form), which may include
indemnification provisions in favor of underwriters, the Holders and
other persons in addition to, or in substitution for the provisions of
Section 5 hereof, and take such other actions as sellers of a majority
of shares of such Registrable Securities or the underwriters, if any,
reasonably request in order to expedite or facilitate the disposition
of such Registrable Securities;
(x) obtain a "cold comfort" letter or letters from the
Company's independent public accounts in customary form and covering
matters of the type customarily covered by "cold comfort" letters as
the seller or sellers of a majority of shares of such Registrable
Securities shall reasonably request;
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<PAGE> 11
(xi) make available for inspection by any seller of such
Registrable Securities covered by such registration statement, by any
underwriter participating in any disposition to be effected pursuant
to such registration statement and by any attorney, accountant or
other agent retained by any such seller or any such underwriter, all
pertinent financial and other records, pertinent corporate documents
and properties of the Company, and cause all of the Company's
officers, directors and employees to supply all information reasonably
requested by any such seller, underwriter, attorney, accountant or
agent in connection with such registration statement;
(xii) notify counsel (selected pursuant to Section 7
hereof) for the Holders of Registrable Securities included in such
registration statement and the managing underwriter or agent,
immediately, and confirm the notice in writing (i) when the
registration statement, or any post-effective amendment to the
registration statement, shall have become effective, or any supplement
to the prospectus or any amendment prospectus shall have been filed,
(ii) of the receipt of any comments from the SEC, (iii) of any request
of the SEC to amend the registration statement or amend or supplement
the prospectus or for additional information, and (iv) of the issuance
by the SEC of any stop order suspending the effectiveness of the
registration statement or of any order preventing or suspending the
use of any preliminary prospectus, or of the suspension of the
qualification of the registration statement for offering or sale in
any jurisdiction, or of the institution or threatening of any
proceedings for any of such purposes;
(xiii) make every reasonable effort to prevent the issuance
of any stop order suspending the effectiveness of the registration
statement or of any order preventing or suspending the use of any
preliminary prospectus and, if any such order is issued, to obtain the
withdrawal of any such order at the earliest possible moment;
(xiv) if requested by the managing underwriter or agent or
any Holder of Registrable Securities covered by the registration
statement, promptly incorporate in a prospectus supplement or
post-effective amendment such information as the managing underwriter
or agent or such Holder reasonably requests to be included therein,
including, without limitation, with respect to the number of
Registrable Securities being sold by such Holder to such underwriter
or agent, the purchase price being paid therefor by such underwriter
or agent and with respect to any other terms of the underwritten
offering of the Registrable Securities to be sold in such offering;
and make all required filings of such prospectus supplement or
post-effective amendment as soon as practicable after being notified
of the matters incorporated in such prospectus supplement or post-
effective amendment;
(xv) cooperate with the Holders of Registrable Securities
covered by the registration statement and the managing underwriter or
agent, if any, to facilitate the
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<PAGE> 12
timely preparation and delivery of certificates (not bearing any
restrictive legends) representing securities to be sold under the
registration statement, and enable such securities to be in such
denominations and registered in such names as the managing underwriter
or agent, if any, or such Holders may request;
(xvi) obtain for delivery to the Holders of Registrable
Securities being registered and to the underwriter or agent an opinion
or opinions from counsel for the Company in customary form and in
form, substance and scope reasonably satisfactory to such Holders,
underwriters or agents and their counsel; and
(xvii) cooperate with each seller of Registrable Securities
and each underwriter or agent participating in the disposition of such
Registrable Securities and their respective counsel in connection with
any filings required to be made with the NASD.
The Company may require each seller of Registrable Securities
as to which any registration is being effected to furnish the Company with such
information regarding such seller and pertinent to the disclosure requirements
relating to the registration and the distribution of such securities as the
Company may from time to time reasonably request in writing.
Each Holder of Registrable Securities agrees that, upon
receipt of any notice from the Company of the happening of any event of the
kind described in clause (vi) of this Section 4, such Holder will forthwith
discontinue disposition of Registrable Securities pursuant to the registration
statement covering such Registrable Securities until such Holder's receipt of
the copies of the supplemented or amended prospectus contemplated by clause
(vi) of this Section 4, and, if so directed by the Company, such Holder will
deliver to the Company (at the Company's expense) all copies, other than
permanent file copies then in such Holder's possession, of the prospectus
covering such Registrable Securities current at the time of receipt of such
notice. In the event the Company shall give any such notice, the period
mentioned in clause (ii) of this Section 4 shall be extended by the number of
days during the period from and including the date of the giving of such notice
pursuant to clause (vi) of this Section 4 and including the date when each
seller of Registrable Securities covered by such registration statement shall
have received the copies of the supplemented or amended prospectus contemplated
by clause (vi) of this Section 4.
5. Indemnification. (a) Indemnification by the Company. In
the event of any registration of any securities of the Company under the
Securities Act pursuant to Section 2 or 3, the Company will, and it hereby
does, indemnify and hold harmless, to the extent permitted by law, the seller
of any Registrable Securities covered by such registration statement, each
affiliate of such seller and their respective directors and officers or general
and limited partners (including any director, officer, affiliate, employee,
agent and controlling Person of any of the foregoing), each other Person who
participates as an underwriter in the offering or sale of such securities and
each other Person, if any, who controls such seller or any such underwriter
within the meaning of the Securities Act (collectively, the "Indemnified
Parties"), against any and all losses, claims, damages or liabilities, joint or
several, and
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<PAGE> 13
expenses (including reasonable attorney's fees and reasonable expenses of
investigation) to which such Indemnified Party may become subject under the
Securities Act, common law or otherwise, insofar as such losses, claims,
damages or liabilities (or actions or proceedings in respect thereof, whether
or not such Indemnified Party is a party thereto) arise out of or are based
upon (a) any untrue statement or alleged untrue statement of any material fact
contained in any registration statement under which such securities were
registered under the Securities Act, any preliminary, final or summary
prospectus contained therein, or any amendment or supplement thereto, or (b)
any omission or alleged omission to state therein a material fact required to
be stated therein or necessary to make the statements therein (in the case of a
prospectus, in light of the circumstances under which they were made) not
misleading, and the Company will reimburse such Indemnified Party for any legal
or any other expenses reasonably incurred by it in connection with
investigating or defending against any such loss, claim, liability, action or
proceeding; provided that the Company shall not be liable to any Indemnified
Party in any such case to the extent that any such loss, claim, damage,
liability (or action or proceeding in respect thereof) or expense arises out of
or is based upon any untrue statement or alleged untrue statement or omission
or alleged omission made in such registration statement or amendment or
supplement thereto or in any such preliminary, final or summary prospectus in
reliance upon and in conformity with written information furnished to the
Company through an instrument duly executed by such seller specifically stating
that it is for use in the preparation thereof. Such indemnity shall remain in
full force and effect regardless of any investigation made by or on behalf of
such seller or any Indemnified Party and shall survive the transfer of such
securities by such seller.
(b) Indemnification by the Seller. The Company may require,
as a condition to including any Registrable Securities in any registration
statement filed in accordance with Section 4 herein, that the Company shall
have received an undertaking reasonably satisfactory to it from the prospective
seller of such Registrable Securities or any underwriter to indemnify and hold
harmless (in the same manner and to the same extent as set forth in this
Section 5) the Company and all other prospective sellers with respect to any
untrue statement or alleged untrue statement in or omission or alleged omission
from such registration statement, any preliminary, final or summary prospectus
contained therein, or any amendment or supplement, if such untrue statement or
alleged untrue statement or omission or alleged omission was made in reliance
upon and in conformity with written information furnished to the Company
through an instrument duly executed by such seller or underwriter specifically
stating that it is for use in the preparation of such registration statement,
preliminary, final or summary prospectus or amendment or supplement, or a
document incorporated by reference into any of the foregoing. Such indemnity
shall remain in full force and effect regardless of any investigation made by
or on behalf of the Company or any of the prospective sellers, or any of their
respective affiliates, directors, officers or controlling Persons and shall
survive the transfer of such securities by such seller. In no event shall the
liability of any selling Holder of Registrable Securities hereunder be greater
in amount than the dollar amount of the proceeds actually received by such
Holder upon the sale of the Registrable Securities giving rise to such
indemnification obligation.
(c) Notices of Claims, Etc. Promptly after receipt by an
indemnified party hereunder of written notice of the commencement of any action
or proceeding with respect to
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<PAGE> 14
which a claim for indemnification may be made pursuant to this Section 5, such
Indemnified Party will, if a claim in respect thereof is to be made against an
indemnifying party, give written notice to the latter of the commencement of
such action; provided that the failure of the Indemnified Party to give notice
as provided herein shall not relieve the indemnifying party of its obligations
under the preceding subdivisions of this Section 5, except to the extent that
the indemnifying party is actually prejudiced by such failure to give notice.
In case any such action is brought against an Indemnified Party, unless in such
Indemnified Party's reasonable judgment a conflict of interest between such
Indemnified Party and indemnifying parties may exist in respect of such claim,
the indemnifying party will be entitled to participate in and to assume the
defense thereof, jointly with any other indemnifying party similarly notified
to the extent that it may wish, with counsel reasonably satisfactory to such
Indemnified Party, and after notice from the indemnifying party to such
Indemnified Party of its election so to assume the defense thereof, the
indemnifying party will not be liable to such Indemnified Party for any legal
or other expenses subsequently incurred by the latter in connection with the
defense thereof other than reasonable costs of investigation. No indemnifying
party will consent to entry of any judgment or enter into any settlement which
does not include as an unconditional term thereof, the giving by the claimant
or plaintiff to such Indemnified Party of a release from all liability in
respect to such claim or litigation.
(d) Contribution. If the indemnification provided for in
this Section 5 from the indemnifying party is unavailable to an Indemnified
Party hereunder in respect of any losses, claims, damages, liabilities or
expenses referred to herein, then the indemnifying party, in lieu of
indemnifying such Indemnified Party, shall contribute to the amount paid or
payable by such Indemnified Party as a result of such losses, claims, damages,
liabilities or expenses in such proportion as is appropriate to reflect the
relative fault of the indemnifying party and Indemnified Parties in connection
with the actions which resulted in such losses, claims, damages, liabilities or
expenses, as well as any other relevant equitable considerations. The relative
fault of such indemnifying party and Indemnified Parties shall be determined by
reference to, among other things, whether any action in question, including any
untrue or alleged untrue statement of a material fact or omission or alleged
omission to state a material fact, has been made by, or relates to information
supplied by, such indemnifying party or Indemnified Parties, and the parties'
relative intent, knowledge, access to information and opportunity to correct or
prevent such action. The amount paid or payable by a party under this Section
5(d) as a result of the losses, claims, damages, liabilities and expenses
referred to above shall be deemed to include any legal or other fees or
expenses reasonably incurred by such party in connection with any investigation
or proceeding.
The parties hereto agree that it would not be just and
equitable if contribution pursuant to this Section 5(d) were determined by pro
rata allocation or by any other method of allocation which does not take
account of the equitable considerations referred to in the immediately
preceding paragraph. No Person guilty of fraudulent misrepresentation (within
the meaning of Section 11(f) of the Securities Act) shall be entitled to
contribution from any Person who was not guilty of such fraudulent
misrepresentation.
(e) Other Indemnification. Indemnification similar to that
specified in this Section 5 (with appropriate modifications) shall be given by
the Company and each seller of
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<PAGE> 15
Registrable Securities with respect to any required registration or other
qualification of securities under any federal or state law or regulation or
governmental authority other than the Securities Act.
(f) Non-Exclusivity. The obligations of the parties under
this Section 5 shall be in addition to any liability which any party may
otherwise have to any other party.
6. Rule 144. The Company covenants that it will file the
reports required to be filed by it under the Securities Act and the Exchange
Act and the rules and regulations adopted by the SEC thereunder (or, if the
Company is not required to file such reports, it will, upon the request of any
Holder of Registrable Securities, make publicly available such information),
and it will take such further action as any Holder of Registrable Securities
may reasonably request, all to the extent required from time to time to enable
such Holder to sell shares of Registrable Securities without registration under
the Securities Act within the limitation of the exemptions provided by (i) Rule
144 under the Securities Act, as such Rule may be amended from time to time, or
(ii) any similar rule or regulation hereafter adopted by the SEC. Upon the
request of any Holder of Registrable Securities, the Company will deliver to
such Holder a written statement as to whether it has complied with such
requirements. Notwithstanding anything contained in this Section 6, the
Company may deregister under Section 12 of the Exchange Act if it then is
permitted to do so pursuant to the Exchange Act and the rules and regulations
thereunder.
7. Selection of Counsel. In connection with any registration
of Registrable securities pursuant to Sections 2 and 3 hereof, the Holders of a
majority of the Registrable Securities covered by any such registration may
select one counsel to represent all Holders of Registrable Securities covered
by such registration; provided, however, that in the event that the counsel
selected as provided above is also acting as counsel to the Company in
connection with such registration, the remaining Holders shall be entitled to
select one additional counsel to represent all such remaining Holders.
8. Miscellaneous. (a) Supplemental Agreements and Other
Registration Rights Agreements. (i) The Company may enter into agreements
with other purchasers of Common Stock who are then employees of the Company (or
its successor) or any of its subsidiaries, making them parties hereto (and
thereby giving them all, or a portion, of the rights, preferences and
privileges of an original party hereto) with respect to additional shares of
Common Stock (the "Supplemental Agreements"); provided, however, that pursuant
to any such Supplemental Agreement, such purchaser expressly agrees to be bound
by all of the terms, conditions and obligations of this Agreement as if such
purchaser were an original party hereto (but subject to any limitations as may
be imposed by the Company). All shares of Common Stock issued or
issuable pursuant to such Supplemental Agreements shall be deemed to be
Registrable Securities.
(ii) The Company may enter into Other Registration Rights
Agreements from time to time; provided, however, that the Company shall not
enter into any such Other Registration Rights Agreements unless the Common
Stock Partnerships are parties thereto.
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<PAGE> 16
(b) Holdback Agreement. If any such registration shall be in
connection with an underwritten public offering, each Holder of Registrable
Securities agrees, subject to such customary exceptions as the managing
underwriters shall permit, not to effect any public sale or distribution,
including any sale pursuant to Rule 144 under the Securities Act, of any equity
securities of the Company, or of any Convertible Security or security
convertible into or exchangeable or exercisable for any equity securities of the
Company (in each case, other than as part of such underwritten public offering),
within 7 days before or such period not to exceed 180 days as the underwriting
agreement may require (or such lesser period as the managing underwriters may
permit) after the effective date of such registration (except as part of such
registration), and the Company hereby also so agrees and agrees to cause each
other holder of any equity security, or of any Convertible Security or security
convertible into or exchangeable or exercisable for any equity securities, of
the Company purchased from the Company (at any time other than in a public
offering) to so agree.
(c) Amendments and Waivers. This Agreement may be amended
and the Company may take any action herein prohibited, or omit to perform any
act herein required to be performed by it, only if the Company shall have
obtained the written consent to such amendment, action or omission to act, of
the Holders of a majority of the Registrable Securities then outstanding;
provided, however, that no amendment, waiver or consent to the departure from
the terms and provisions of this Agreement that is adverse to the Common Stock
Partnerships or any of their successors and assigns shall be effective as
against any such Person for so long as such Person holds any Registrable
Securities unless consented to in writing by such Person. Each Holder of any
Registrable Securities at the time or thereafter outstanding shall be bound by
any consent authorized by this Section 8(c), whether or not such Registrable
Securities shall have been marked to indicate such consent.
(d) Successors, Assigns and Transferees. This Agreement
shall be binding upon and shall inure to the benefit of the parties hereto and
their respective successors and assigns. In addition, and whether or not any
express assignment shall have been made, the provisions of this Agreement which
are for the benefit of the parties hereto other than the Company shall also be
for the benefit of and enforceable by any subsequent Holder of any Registrable
Securities, subject to the provisions contained herein. Without limitation to
the foregoing, in the event that any Common Stock Partnership distributes or
otherwise transfers any shares of the Registrable Securities to any of its
present or future general or limited partners, the Company hereby acknowledges
that the registration rights granted pursuant to this Agreement shall be
transferred to such partner or partners on a pro rata basis, and that at or
after the time of any such distribution or transfer, any such partner or group
of partners may designate a Person to act on its behalf in delivering any
notices or making any requests hereunder.
(e) Business Combinations. Without the prior written
consent of the Common Stock Partnerships or their respective successors or
assigns, the Company shall not consolidate with or enter into any merger,
consolidation or other business combination transaction (for the purposes of
this Section 8(e), a "business combination") with another Person (whether or
not the Company is the surviving entity) or transfer (by lease, assignment,
sale or otherwise) (for the purposes of this Section 8(e), a "transfer") all or
substantially all of its assets or earning power, in a single transaction or
through a series of related transactions,
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<PAGE> 17
to another Person or group of affiliated Persons or permit any of its
subsidiaries to enter into any such transaction or transactions, where the
business combination or transfer involves the payment by any Person of any
securities to, or the exchange by any Person of any securities with, the
Company or any of the holders of Common Stock of the Company, unless (x) such
securities, if any, to be received by the Common Stock Partnerships have been
registered under the Securities Act in a manner which would permit the sale to
the public of such securities under the Securities Act or (y) the issuer of
such securities agrees to be bound by the terms of this registration rights
agreement with the Common Stock Partnerships relating to such securities or
otherwise agrees to enter into a new registration rights agreement which shall
contain terms substantially similar to this Agreement (with appropriate
modifications) and shall otherwise be in a form satisfactory to the Common
Stock Partnerships. Notwithstanding the foregoing, the provisions of this
Section 8(e) shall not apply if at the time of any business combination or
transfer the Common Stock Partnerships own in the aggregate less than 5% of the
outstanding Common Stock, calculated on a fully diluted basis.
(f) Notices. All notices and other communications provided
for hereunder shall be in writing and shall be sent by first class mail, telex,
telecopier or hand delivery:
(i) if to a KKR Partnership:
c/o Kohlberg Kravis Roberts & Co.
9 West 57th Street, Suite 4200
New York, NY 10019
Attention: Clifton S. Robbins
Telecopy: (212) 750-0003
with a copy to:
Simpson Thacher & Bartlett
425 Lexington Avenue
New York, NY 10017
Attention: Charles I. Cogut, Esq.
Telecopy: (212) 455-2502
(ii) if to the HMTF Partnership:
c/o Hicks, Muse, Tate & Furst Incorporated
200 Crescent Court
Suite 1600
Dallas, Texas 75201
Attention: Lawrence D. Stuart, Jr.
Telecopy: (214) 740-7313
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<PAGE> 18
with a copy to:
Weil, Gotshal & Manges LLP
100 Crescent Court
Suite 1300
Dallas, Texas 75201
Attention: Jeremy W. Dickens, Esq.
Telecopy: (214) 746-7777
(iii) if to the Company:
Regal Cinemas, Inc.
7132 Commercial Park Drive
Knoxville, Tennessee 37918
Attention: Michael Campbell
Telecopy: (423) 922-3188
with copies to:
Simpson Thacher & Bartlett
425 Lexington Avenue
New York, NY 10017
Attention: Charles I. Cogut, Esq.
Telecopy: (212) 455-2502
-and-
Weil, Gotshal & Manges LLP
100 Crescent Court
Suite 1300
Dallas, Texas 75201
Attention: Jeremy W. Dickens, Esq.
Telecopy: (214) 746-7777
(iv) if to any other holder of Registrable Securities, to the
address of such other holder as shown in the stock record book of the Company,
or to such other address as any of the above shall have designated in writing
to all of the other above.
All such notices and communications shall be deemed to have
been given or made (1) when delivered by hand, (2) five business days after
being deposited in the mail, postage prepaid, (3) when telexed answer-back
received or (4) when telecopied, receipt acknowledged.
(g) Descriptive Headings. The headings in this Agreement are
for convenience of reference only and shall not limit or otherwise affect the
meaning of terms contained herein.
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<PAGE> 19
(h) Severability. In the event that any one or more of the
provisions, paragraphs, words, clauses, phrases or sentences contained herein,
or the application thereof in any circumstances, is held invalid, illegal or
unenforceable in any respect for any reason, the validity, legality and
enforceability of any such provision, paragraph, word, clause, phrase or
sentence in every other respect and of the remaining provisions, paragraphs,
words, clauses, phrases or sentences hereof shall not be in any way impaired,
it being intended that all rights, powers and privileges of the parties hereto
shall be enforceable to the fullest extent permitted by law.
(i) Counterparts. This Agreement may be executed in
counterparts, and by different parties on separate counterparts, each of which
shall be deemed an original, but all such counterparts shall together
constitute one and the same instrument.
(j) Governing Law; Submission to Jurisdiction. This
Agreement shall be governed by and construed and enforced in accordance with
the laws of the State of New York applicable to contracts made and to be
performed therein. The parties to this Agreement hereby agree to submit to the
jurisdiction of the courts of the State of New York, the courts of the United
States of America for the Southern District of New York, and appellate courts
from any thereof in any action or proceeding arising out of or relating to this
Agreement.
(k) Specific Performance. The parties hereto acknowledge and
agree that irreparable damage would occur in the event that any of the
provisions of this Agreement were not performed in accordance with their
specific terms or were otherwise breached. Accordingly, it is agreed that they
shall be entitled to an injunction or injunctions to prevent breaches of the
provision of this Agreement and to enforce specifically the terms and
provisions hereof in any court of competent jurisdiction in the United States
or any state thereof, in addition to any other remedy to which they may be
entitled at law or in equity.
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<PAGE> 20
IN WITNESS WHEREOF, each of the undersigned has executed this
Agreement or caused this Agreement to be duly executed on its behalf as of the
date first written above.
REGAL CINEMAS, INC.
By:
-----------------------------
Title:
KKR 1996 FUND L.P.
By: KKR Associates 1996 L.P., its general
partner
By: KKR 1996 GP LLC, its general
partner
By:
---------------------
Authorized Signatory
KKR PARTNERS II, L.P.
By: KKR Associates, L.P., its general
partner
By:
---------------------
Authorized Signatory
REGAL EQUITY PARTNERS, L.P.
By: TOH/Ranger, LLC, its general
partner
By:
-------------------------
Authorized Signatory
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<PAGE> 1
Exhibit 5
B A S S, B E R R Y & S I M S P L C
A PROFESSIONAL LIMITED LIABILITY COMPANY
ATTORNEYS AT LAW
2700 FIRST AMERICAN CENTER 1700 RIVERVIEW TOWER
NASHVILLE, TENNESSEE 37238-2700 POST OFFICE BOX 1509
TELEPHONE (615) 742-6200 KNOXVILLE, TENNESSEE 37901-1509
TELECOPIER (615) 742-6293 TELEPHONE (423) 521-6200
TELECOPIER (423) 521-6234
May 18, 1998
Regal Cinemas, Inc.
7132 Commercial Park Drive
Knoxville, TN 37918
Re: REGISTRATION STATEMENT ON FORM S-8
Ladies and Gentlemen:
We have acted as your counsel in the preparation of a Registration
Statement on Form S-8 (the "Registration Statement") relating to the Company's
Participant Stock Option Plan, Employee Stock Option Plan, 1993 Employee Stock
Incentive Plan, and 1998 Stock Purchase and Option Plan for Key Employees (the
"Plans") filed by you with the Securities and Exchange Commission covering
30,000,000 shares (the "Shares") of common stock, no par value, issuable
pursuant to the Plans.
In so acting, we have examined and relied upon such records, documents,
and other instruments as in our judgment are necessary or appropriate in order
to express the opinions hereinafter set forth and have assumed the genuineness
of all signatures, the authenticity of all documents submitted to us as
originals, and the conforming to original documents of all documents submitted
to us as certified or photostatic copies.
Based on the foregoing, we are of the opinion that the Shares, when
issued pursuant to and in accordance with the Plans following consummation of
the forthcoming merger between the Company and affiliates of Kohlberg Kravis
Roberts & Co. and Hicks, Muse, Tate & Furst Incorporated, and shareholders
approval of the 1998 Plan, will be validly issued, fully paid, and
nonassessable.
We hereby consent to the use of this opinion as an exhibit to the
Registration Statement.
Very truly yours,
/s/ Bass, Berry & Sims PLC
<PAGE> 1
Exhibit 23.1
CONSENT OF INDEPENDENT ACCOUNTANTS
We consent to the incorporation by reference in the registration
statement of Regal Cinemas, Inc. (Regal) on Form S-8 of our report dated
February 6, 1998, on our audits of the financial statements of Regal Cinemas,
Inc. as of January 2, 1997 and January 1, 1998, and for each of the three years
in the period ended January 1, 1998, appearing in the Regal's 1998 Annual Report
on Form 10-K, filed with the Securities and Exchange Commission pursuant to the
Securities Exchange Act of 1934.
/s/ Coopers & Lybrand L.L.P.
Knoxville, Tennessee
May 14, 1998
<PAGE> 1
Exhibit 23.2
CONSENT OF ERNST & YOUNG LLP, INDEPENDENT AUDITORS
We consent to the reference to our firm in the Registration Statement
(Form S-8) pertaining to Regal Cinemas, Inc. Participant Stock Option Plan,
Regal Cinemas, Inc. Employee Stock Option Plan, 1993 Employee Stock Incentive
Plan and the 1998 Stock Purchase and Option Plan for Key Employees of Regal
Cinemas, Inc. and to the incorporation by reference therein of our reports dated
July 2, 1997 (with respect to the consolidated financial statements of Cobb
Theatres, L.L.C. for the year ended December 31, 1996) and October 23, 1996
(with respect to the consolidated financial statements of Cobb Theatres, L.L.C.
for the years ended August 31, 1996 and 1995) included in its Annual Report
(Form 10-K) for the fiscal year ended January 1, 1998, filed with the Securities
and Exchange Commission.
/s/ Ernst & Young LLP
Birmingham, Alabama
May 14, 1998
