Exhibit 10.10
DIRECTOR DESIGNATION
AGREEMENT
THIS DIRECTOR DESIGNATION AGREEMENT
dated as of February 13, 2007 (this “ Agreement
”), is among National CineMedia, Inc., a Delaware corporation
(“ NCM Inc. ”), American Multi-Cinema, Inc., a
Missouri corporation (“ AMC ”), Cinemark Media,
Inc., a Delaware corporation (“ Cinemark Media
”), and Regal CineMedia Holdings, LLC, a Delaware limited
liability company (“ Regal ,” and together with
AMC and Cinemark Media, including any Affiliate or Permitted
Transferee thereof, so long as any Permitted Transferee continues
to qualify as a Permitted Transferee, the “ Founding
Members ”). Certain terms used in this Agreement are
defined in Section 1.1.
RECITALS
A. The Founding Members own all of
the outstanding common membership units (the “ Membership
Units ”) of National CineMedia, LLC, a Delaware limited
liability company (“ NCM LLC ”).
B. NCM Inc. is contemplating an
offer and sale of its Common Stock to the public in an underwritten
initial public offering (the “ IPO
”).
C. Pursuant to the terms of a Common
Unit Subscription Agreement dated as of February 13, 2007 (the
“ Subscription Agreement ”), between NCM LLC and
NCM Inc., it is contemplated that NCM Inc. will use the proceeds of
the IPO to purchase from NCM LLC a number of Membership Units equal
to the number of shares of Common Stock sold in the IPO.
D. Upon consummation of the
transactions contemplated by the Subscription Agreement, it is
contemplated that NCM Inc. will be admitted as a member, and
appointed as the manager, of NCM LLC.
E. In order to induce the Founding
Members to approve the sale and issuance of Membership Units by NCM
LLC to NCM Inc. and the appointment of NCM Inc. as the manager of
NCM LLC, NCM Inc. has agreed to permit each of the Founding Members
to designate up to two persons for nomination for election to the
board of directors of NCM Inc. (the “ Board ”)
on the terms and conditions set forth herein.
F. The Amended and Restated
Certificate of Incorporation of NCM Inc. (the “
Charter ”) provides that NCM Inc. shall have a
staggered Board that consists of three classes of directors and
that the term of one class of directors will expire at each annual
meeting of the stockholders of NCM Inc.
G. Under the terms of the NCM LLC
Operating Agreement and the Charter, each Founding Member will have
the right to cause NCM LLC to redeem the Membership Units held by
such Founding Members in exchange for shares of Common Stock or
cash.
AGREEMENT
In consideration of the covenants
and agreements contained herein and other good and valuable
consideration, the receipt and sufficiency of which are hereby
acknowledged, NCM Inc. and the Founding Members agree as
follows:
1. Definitions
1.1 Certain Definitions. For
purposes of this Agreement, the following terms shall have the
meanings specified in this Section 1.1:
“ Affiliate ” has
the meaning set forth in the NCM LLC Operating
Agreement.
“ Change of Control
” with respect to any Person that is not individual, means
(i) any merger or consolidation with or into any other entity
or any other similar transaction, whether in a single transaction
or series of related transactions, where (A) the members or
stockholders of such Person immediately prior to such transaction
in the aggregate cease to own at least 50 percent of the general
voting power of the entity surviving or resulting from such
transaction (or its stockholders or the ultimate parent thereof) or
(B) any Person or Group becomes the beneficial owner of more
than 50 percent of the general voting power of the entity surviving
or resulting from such transaction (or its stockholders or the
ultimate parent thereof), (ii) any transaction or series of
related transactions in which in excess of 50 percent of such
Person’s general voting power is Transferred to any other
Person or Group or (iii) the sale or Transfer by such Person
of all or substantially all of its assets.
“ Cinemark ”
means Cinemark Holdings, Inc. or its successor or any Person that
wholly-owns Cinemark Holdings, Inc., directly or indirectly, in the
future.
“ Cinemark USA ”
means Cinemark USA, Inc., a Texas corporation.
“ Common Stock ”
means the common stock, par value $0.01 per share, of NCM
Inc.
“ Director ”
means a member of the Board.
“ ESA Party ”
means (i) AMC in the case of AMC, (ii) Cinemark USA in
the case of Cinemark Media, and (iii) Regal Cinemas in the
case of Regal.
“ Group ” has the
meaning set forth in Section 13(d)(3) and Rule 13d-5 of the
Securities Exchange Act of 1934, as amended.
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“ Independent Director
” means any Director that if the Common Stock is traded on
the NASDAQ Stock Market, satisfies the definition of an
“independent director” set forth in the applicable
rules in the Marketplace Rules of the NASDAQ Stock Market, Inc., as
such rules may be amended from time to time, or, if the Common
Stock is then traded on a different exchange, such term shall mean
any director of NCM Inc. that satisfies the definition of
independent director according to the rules of such
exchange..
“ Marquee Holdings
” means Marquee Holdings Inc. or its successor or any Person
that wholly-owns Marquee Holdings Inc., directly or indirectly, in
the future.
“ NCM LLC Operating
Agreement ” means the Third Amended and Restated Limited
Liability Company Operating Agreement of NCM LLC to be entered into
among the Founding Members and NCM Inc., as it may be amended,
supplemented or otherwise modified from time to time.
“ Nominating Committee
” means the nominating/governance committee of the Board or
any committee of the Board authorized to perform the function of
nominating directors for the Board.
“ Permitted Transferee
” means, in the case of any Founding Member and any Permitted
Transferee of any Founding Member (i) an Affiliate of such
Founding Member or Permitted Transferee, or (ii) a
non-Affiliate of such Founding Member or Permitted Transferee that
is owned more than 50 percent directly or indirectly through one or
more entities that are the same entities that own 50 percent or
more of the general voting power of the Ultimate Parent of such
Founding Member.
“ Person ” means
any individual, corporation, limited liability company,
partnership, trust, joint stock company, business trust,
unincorporated association, joint venture, governmental authority
or other entity or organization of any nature whatsoever or any
Group of two or more of the foregoing.
“ REG ” means
Regal Entertainment Group or its successor or any Person that
wholly-owns Regal Entertainment Group, directly or indirectly, in
the future.
“ Regal Cinemas ”
means Regal Cinemas, Inc., a Tennessee corporation.
“ Retiring Director
” means any Director whose term expires at the next annual
meeting of stockholders of NCM Inc. pursuant to the terms of the
Charter.
“ Securities Laws
” means the Securities Act of 1933, as amended, and the
Securities Exchange Act of 1934, as amended, and the rules
promulgated thereunder.
“ Transfer ” or
“ Transferred ” means, directly or indirectly,
to sell, transfer, give, exchange, bequest, assign, pledge,
encumber, hypothecate or otherwise dispose of, either
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voluntarily or involuntarily, any of the rights
granted under Section 2 (including through a Change of Control
of a Person holding units directly or indirectly), provided,
however , a Change of Control of an ESA Party or its
stockholders shall not be a Transfer.
“ Ultimate Parent
” means (i) Marquee Holdings in the case of AMC,
(ii) Cinemark in the case of Cinemark Media, and
(iii) REG in the case of Regal.
1.2 Additional Terms . In
addition to defined terms identified in Section 1.1, the
following terms have the meanings assigned in the Sections referred
to in the table below:
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Section
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Term
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Section
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AMC
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Preamble
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IPO
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Recitals
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Board
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Recitals
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Manager
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Preamble
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Cinemark Media
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Preamble
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NCM
Inc.
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Preamble
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Designee
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§2.1
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NCM
LLC.
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Recitals
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Founding Members
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Preamble
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Subscription
Agreement
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Recitals
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Regal
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Preamble
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2. Nominee
Designation
2.1 Nomination Right .
Subject to the conditions set forth in this Section 2, each
Founding Member shall have the right to designate two persons to be
appointed or nominated, as the case may be, for election to the
Board as follows (each, a “ Designee
”):
(a) each Founding Member may
designate two persons for appointment or nomination to the Board,
as the case may be, who initially shall be:
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Designees
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Director Class
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AMC
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Edward H.
Meyer
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Class
II
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Peter C.
Brown
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Class
III
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Cinemark
Media
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James R.
Holland, Jr.
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Class
II
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Lee Roy
Mitchell
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Class
III
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Regal
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Stephen L.
Lanning
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Class
II
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Michael L.
Campbell
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Class
III
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(b) at every meeting of the Board,
or a committee thereof, for which Directors are appointed or are
nominated to stand for election by stockholders of NCM Inc., each
Founding Member will have the right to designate those persons to
be appointed or nominated for election to the Board for each
Retiring Director that was a prior Designee of such Founding Member
in accordance with this Section 2.1;
(c) if a vacancy occurs because of
the death, disability, disqualification, resignation or