Exhibit 10.48
READING INTERNATIONAL, INC.
NON-QUALIFIED STOCK OPTION AGREEMENT
THIS NON-QUALIFIED STOCK OPTION AGREEMENT ("this Agreement") is made and entered
into as of this 11th day of July 2002, by and between READING INTERNATIONAL,
INC., a Nevada corporation (the "Company"), and XXXXX X. XXXXXX ("Xx. Xxxxxx"),
W I T N E S S E T H
NOW, THEREFORE, in consideration of the mutual promises and covenants made
herein and the mutual benefits to be derived herefrom, the parties hereto agree
as follows:
1. Grant of Option. The Company grants to Xx. Xxxxxx the right and option
to purchase, on the terms and conditions hereinafter set forth, all or any part
of an aggregate of 975,000 shares (the "Shares") of the Class A Non-Voting
Common Stock (the "Class A Common Stock") of the Company at an exercise price
(the "Exercise Price") of $3.80 per Share (the "Option"), such option to have a
term of three (3) years, exercisable from time to time subject to the provisions
of this Agreement prior to the close of business on July 11, 2005 (the
"Expiration Date"). The Option is intended to be a nonqualified stock option.
The parties acknowledge that, at the present time, the Company has two classes
of common stock outstanding: The Class A Common Stock and the Class B Voting
Common Stock, which two classes of common stock are referred to here generally
and without distinction as "Common Stock."
2. Exercisability of Option. Except as otherwise provided in this
Agreement, 575,000 shares shall vest immediately, 200,000 shares shall vest at
July 11, 2003, and 200,000 shares shall vest on July 11, 2004.
3. Method of Exercise of Option and Payment of Exercise Price. The Option
shall be exercisable by the delivery to the Secretary of the Company of a
written notice stating the number of shares to be purchased pursuant to the
Option and accompanied by payment of the Exercise Price in full (i) in cash,
(ii) by check made payable to the order of the Company, (iii) by delivery by Xx.
Xxxxxx or a Permitted Transferee (as hereinafter defined) of shares of Common
Stock already owned by Xx. Xxxxxx or such Permitted Transferee with a fair
market value on the date of exercise equal to the aggregate Exercise Price of
the Shares as to which the Option is being exercised, (iv) by means of so-called
cashless exercises as permitted under applicable rules and regulations of the
Securities and Exchange Commission and the Federal Reserve Board, or (v) by a
combination of the foregoing means of payment. Fractional Share interests shall
be cashed out at that price equal to the fair market value of a single share
multiplied by the fraction representing the fractional Share which, but for this
sentence, would otherwise have been issuable.
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4. Continuance of Consulting Agreement. Nothing contained in this
Agreement shall confer upon Xx. Xxxxxx any right with respect to the
continuation of his status as an officer, director or consultant of the Company
and/or any one or more of its subsidiaries.
5. Non-Assignability of Option. During Xx. Xxxxxx'x lifetime, the Option
and any other rights hereunder may be exercised only by Xx. Xxxxxx or by a
Permitted Transferee. The term "Permitted Transferee" shall mean (i) any trust
or any corporation, limited liability company or partnership for the benefit of
or owned directly or indirectly by Xx. Xxxxxx and/or anyone or more of his
children or other heirs and (ii) any foundation, trust or not-for-profit
corporation established by Xx. Xxxxxx for charitable purposes. In the event of
the death of Xx. Xxxxxx, the Option in addition may be exercised in whole or in
part by the person or persons (including individuals and trusts, corporations,
partnership and other entities) to whom Xx. Xxxxxx'x rights under this Option
shall pass by will or by the applicable laws of descent at any time on or prior
to the Expiration Date. The Option and such rights shall not be offered, sold,
transferred, assigned, pledged, hypothecated or otherwise disposed of in any way
(whether by operation of law or otherwise) except by will or the laws of descent
and distribution or to a Permitted Transferee, and shall not be subject to
execution, attachment or similar process. In the event of the death of Xx.
Xxxxxx, each recipient of all or any portion of this Option, and/or each
Permitted Transferee, will have and succeed to the rights and obligations of Xx.
Xxxxxx under the Option. No sale, transfer, assignment, pledge, hypothecation or
other disposition of all or any portion of the Option by Xx. Xxxxxx to a
Permitted Transferee or by a Permitted Transferee to another Permitted
Transferee shall be effective unless and until the Company shall have received
an agreement in writing executed by the Permitted Transferee agreeing to be
bound by all the terms and conditions of this Agreement.
6. Adjustment and Other Rights. If the outstanding shares of Class A
Common Stock are increased, decreased or changed into, or exchanged for, a
different number or kind of shares or securities of the Company through
reorganization, merger, combination, recapitalization, reclassification,
stock/split, reverse stock split, stock dividend, stock consolidation or
otherwise, or a dividend or other distribution is made with respect to the Class
A Common Stock either in Class B Common Stock or Class A Common Stock or any
other security of which the Company or any affiliate of the Company is the
issuer, or otherwise, an appropriate and proportionate adjustment shall be made
in the unexercised portion of the Option or portions thereof that Xx. Xxxxxx or
a Permitted Transferee shall be entitled to receive the number and kind of
securities which he or such Permitted Transferee owned or would have been
entitled to receive immediately after the happening of any of the events
described above, had the Option been exercised immediately prior to the
happening of such event or any record date with respect thereto.
In the event of an extraordinary dividend of cash or other property (other
than securities), the Board of Directors will consider the extent to which it
would be equitable under the circumstances to reduce the Exercise Price to
reflect the extraordinary nature of
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such dividend. If the Board determines that such an adjustment would be
equitable under the circumstances, an appropriate reduction in the Exercise
Price will be made, the amount of such adjustment to be in the discretion of the
Board.
If the Company proposes to dissolve, or to liquidate or proposes in one or
more transactions to combine, merge or consolidate with or into any other
corporation, or to sell, all or substantially all of its assets whether for
cash, securities, notes or any other property or consideration, the Option shall
be adjusted effective as of the closing of such transaction so as to apply to
the cash, securities, notes or other property or consideration to which a holder
of the number of shares of Class A Common Stock subject to the unexercised
portion of the Option would have been entitled by reason of such transaction. In
the event the consideration to be received by holders of Common Stock in any
such transaction is other than exclusively cash and/or publicly traded common
stock listed on the New York stock Exchange, the American Stock Exchange or the
NASDAQ Stock Market and having voting rights no less than those granted to any
other class or series of the voting securities of such surviving corporation,
and in the further even that, upon consummation, the holders of Class B Common
Stock hold a minority of the outstanding voting equity of the surviving entity,
then the Option may be exercised a the option of Xx. Xxxxxx without the payment
of any exercise price, by the netting of the exercise price against the cash,
securities, notes or other property or consideration to be received in
connection with or as a result of such transaction.
The Company and Xx. Xxxxxx or a Permitted Transferee will meet and confer
in good faith to determine any appropriate adjustments which may be required in
order to carry out the intent of the immediately preceding paragraphs; provided,
however, that if the parties are unable to agree as to such adjustments within a
period of five (5) days or such longer period as they may mutually agree, the
matter shall be resolved by binding arbitration conducted in Los Angeles,
California under the rules of the American Arbitration Association (the "AAA").
The arbitration will be chosen from one or more panels proposed by the AAA as
follows: the Company and Xx. Xxxxxx or a Permitted Transferee will each select
one arbitrator and those two arbitrators will then select a third arbitrator
from the panel. The parties shall use their good faith efforts to resolve such
arbitration within a period of forty-five (45) days following selection of the
arbitration panel. All costs of arbitration will be paid for by the Company,
unless the arbitration panel determines that the last adjustment proposed by the
Company was the correct adjustment, in which case the cost of arbitration will
be borne by Xx. Xxxxxx or such Permitted Transferee. Until such determination is
made, all such costs will be advanced by the Company. The determination of the
arbitrators will be final and non-appealable, but may be enforced in any court
of competent jurisdiction. If the arbitration results in a delay in the receipt
by Xx. Xxxxxx or Permitted Transferee of any cash, securities, notes, property
or other consideration due to exercise of all or any portion of this Option
prior to the completion of such arbitration, the arbitrator will also award to
Xx. Xxxxxx or such Permitted Transferee, in the event he is the prevailing
party, such amount in cash as will fairly compensate Xx. Xxxxxx or such
Permitted Transferee for such delay.
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7. Limitation of Xx. Xxxxxx'x Rights. In no event shall Xx. Xxxxxx or a
Permitted Transferee have any of the rights or privileges of a shareholder of
the Company in respect of any Shares issuable upon exercise of this Option
unless and until such Option shall have been exercised by Xx. Xxxxxx or such
Permitted Transferee.
8. Effect of Agreement. This Agreement shall be assumed by binding upon
and inure to the benefits of any successor corporation to the Company.
9. Representations of Xx. Xxxxxx. Xx. Xxxxxx represents, agrees and
certificates that:
a. If Xx. Xxxxxx or a Permitted Transferee exercised the Option in
whole or in xxx at a time when there is not in effect under the Securities
Act of 1933, as amended (the "Act"), a registration statement relating to
the Shares issuable upon exercise hereof and available for delivery to him
a prospectus meeting the requirements of Section 10(a) (3) of the Act, Xx.
Xxxxxx or such Permitted Transferee will acquire the Shares issuable upon
such exercise for the purposes of investment and not with a view to their
resale or distribution and, upon each exercise of this Option, Xx. Xxxxxx
or such Permitted Transferee will furnish to the Company a written
statement to such effect, reasonably satisfactory in form and substance to
the Company and its counsel;
b. If and when Xx. Xxxxxx or a Permitted Transferee proposes to
offer to sell Shares which are issued to Xx. Xxxxxx or such Permitted
Transferee upon exercise of this Option at a time when there is not in
effect under the Act a registration statement relating to the resale of
such Shares and available for delivery a prospectus meeting the
requirements of Section 10(a) (3) of the Act, Xx. Xxxxxx or such Permitted
Transferee will notify the company prior to and such offering or sale and
will not offer or sell such Shares without first delivering to the Company
an opinion of counsel reasonably acceptable to the Company to the effect
that such offering and sale should not constitute a violation of such laws
for which the Company would be liable; and
c. No Shares may be acquired hereunder pursuant to exercise of the
Option granted hereby unless and until any then applicable requirements of
the Securities and Exchange Commission, the California Department of
Corporations, other regulatory agencies, including any other state
securities law commissioners, having jurisdiction over the company or such
issuance, and any exchanges upon which Common Stock of the Company may be
listed shall have been fully satisfied. The Company undertakes, at its own
cost, to promptly satisfy all such then applicable requirements and to
promptly reimburse Xx. Xxxxxx or a Permitted Transferee for any costs
which he may incur (including, without limitation, reasonable attorneys
fees and expenses) in satisfying all such then applicable requirements.
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Xx. Xxxxxx and each Permitted Transferee understands that the certificate
or certificates representing any Shares acquired upon the exercise, in whole or
in part, of the Option may bear a legend referring to the foregoing matters and
any limitations under the Act and state securities laws with respect to the
transfer of such Shares, and the Company may impose stop transfer instructions
to implement such limitations, if applicable.
10. Notices. Any notice to be given under the terms of this Agreement
shall be in writing and addressed to the Secretary of the Company at its
principal office and to Xx. Xxxxxx'x signature hereto, or at such other address
as either party or any Permitted Transferee, if any, may hereinafter designate
in writing to the other.
11. Laws Applicable to Construction. The interpretation, performance and
enforcement of this Agreement and all rights and obligations of the parties
hereunder shall be governed by the laws of the State of California.
IN WITNESS WHEREOF, the Company has caused this Agreement to be executed on its
behalf by a duly authorized officer and Xx. Xxxxxx has hereunto set his hand.
READING INTERNATIONAL, INC.
By: ___________________________________
Xxxxxxx X. Xxxxx
By: ___________________________________
Xxxxx X. Xxxxxx
000 Xxxxx Xxxxxxxxx Xxxxxxxxx
Xxx Xxxxxxx, XX 00000
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