UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Proxy Statement Pursuant to Section 14(a) of
the Securities Exchange Act of 1934 (Amendment No. )
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| Preliminary Proxy Statement
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| Definitive Proxy Statement
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| Soliciting Material under §240.14a-12
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Filed by the Registrant ☒ Filed by a Party other than the Registrant ☐ Check the appropriate box: ☐
Preliminary Proxy Statement ☐
Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2)) ☒
Definitive Proxy Statement ☐
Definitive Additional Materials ☐
Soliciting Material under §240.14a-12 AMC ENTERTAINMENT HOLDINGS, INC. |
(Name of Registrant as Specified In Its Charter)
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NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON APRIL 26, 2017
NOVEMBER 8, 2023
We cordially invite you to attend the Annual Meeting of Stockholders of AMC Entertainment Holdings, Inc., (the “Company”) which will be held on April 26, 2017November 8, 2023, at 4:1:00 p.m. (Central Time) at the AMC Theatre Support Center, located at One AMC Way, 11500 Ash Street, Leawood, Kansas 66211 (the “Annual Meeting”), for the following purposes: | 1.
| | To elect to our Board of Directors the following three nominees for terms expiring at the 2020 Annual Meeting: Mr. Anthony J. Saich, Mr. Gary F. Locke, and Ms. Kathleen M. Pawlus.
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| | To ratify the appointment of KPMG LLP as our independent registered public accounting firm for 2017.
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| | To conduct a non-binding advisory vote to approve the compensation of named executive officers.
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To approve an amendment to our Third Amended and Restated Certificate of Incorporation (our “Certificate of Incorporation”) to declassify our Board of Directors, shorten all existing terms to expire at the Annual Meeting, and make certain other immaterial changes to the Certificate of Incorporation (“Proposal 1”).
2(a).
If Proposal 1 is approved, to elect to our Board of Directors the following nominees for terms expiring at the 2024 Annual Meeting: Mr. Adam M. Aron, Ms. Denise M. Clark, Mr. Howard W. “Hawk” Koch, Mr. Philip Lader, Mr. Gary F. Locke, Ms. Kathleen M. Pawlus, Ms. Keri S. Putnam, Dr. Anthony J. Saich, and Mr. Adam J. Sussman (“Proposal 2a”).
2(b).
If Proposal 1 is not approved, to elect to our Board of Directors the following nominees for terms expiring at the 2026 Annual Meeting: Ms. Denise M. Clark and Ms. Keri S. Putnam (“Proposal 2b”).
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To approve an amendment to our Certificate of Incorporation to eliminate the prohibition against stockholders acting by written consent (“Proposal 3”).
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To approve an amendment to our Certificate of Incorporation to remove the limitation on stockholders’ ability to call special meetings (“Proposal 4”).
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To approve an amendment to our Certificate of Incorporation to expand the exculpation provision to limit the liability of certain officers (“Proposal 5”).
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To ratify the appointment of Ernst & Young LLP as our independent registered public accounting firm for 2023 (“Proposal 6”).
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To conduct a non-binding advisory vote to approve the compensation of named executive officers (“Proposal 7”).
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To approve one or more adjournments of the Annual Meeting, if necessary, to permit further solicitation of proxies if there are insufficient votes to adopt the foregoing proposals (“Proposal 8”).
These items of business (collectively, the “Proposals”) are more fully described in the Proxy Statement accompanying this notice. Our Board has fixed the close of business on February 28, 2017September 25, 2023, as the record date for determining the stockholders entitled to notice of and to vote at the Annual Meeting of Stockholders or at any adjournment or postponement thereof. A list of these stockholders will be available at the time and place of the meeting and, during the ten days prior to the meeting, at the office of the Secretary of AMC Entertainment Holdings, Inc. at One AMC Way, 11500 Ash Street, Leawood, Kansas 66211. Only registered stockholders and persons holding proxies from registered stockholders may attend the meeting. If your shares are registered in your name, you should bring your proxy card and a proper form of identification such as your driver'sdriver’s license to the meeting. If your shares are held in the name of a broker, trust, bank or other nominee, you will need to bring a proxy or letter from that broker, trust, bank or other nominee that confirms you are the beneficial owner of those shares.In ordershares and a proper form of identification.
Although we currently intend to hold the Annual Meeting in person, we may impose additional procedures or limitations on meeting attendees or may decide to hold the Annual Meeting in a different location or solely by means of remote communication (i.e., a virtual-only meeting). We plan to announce any such updates regarding the Annual Meeting by
issuing a press release and filing the press release as definitive additional soliciting material with the Securities and Exchange Commission (the “SEC”). We encourage you to regularly check these resources prior to the Annual Meeting if you plan to attend. While we value your participation, stockholders are strongly encouraged to vote by proxy as the preferred means of fully and safely exercising their rights. Further, we request that your shares mayindividuals who are experiencing a fever, cough, difficulty breathing, or cold/flu-like symptoms refrain from attending the Annual Meeting in person.
We plan to provide a listen-only webcast of the Annual Meeting for those who are unable to attend in person. The webcast will be representedaccessible through the Investor Relations section of our website at www.investor.amctheatres.com. Stockholders and interested parties should go to the website at least 15 minutes before the Annual Meeting time to register and/or download any necessary audio software. While the webcast will provide an opportunity to listen to the proceedings, it will not be considered attendance at the meeting ifand you arewill not personally present, you are urgedbe able to vote your shares by telephone or Internet, or by completing, signing and datingvia the enclosed proxy card and returning it promptly in the accompanying postage prepaid (if mailed in the United States) return envelope.ALL STOCKHOLDERS ARE EXTENDED A CORDIAL INVITATION
TO ATTEND THE ANNUAL MEETING OF STOCKHOLDERS
webcast. | |
| By Order of the Board of Directors,
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One AMC Way
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11500 Ash Street, Leawood, KS 66211
| Senior Vice President, General Counsel and Secretary
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March 24, 2017
Important Notice Regarding the Availability of Proxy Materials
for Stockholder Meeting to be held on November 8, 2023. Pursuant to rules promulgated by the SEC, we have elected to provide access to our proxy materials by notifying you of the availability of our proxy materials on the Internet. Instead of mailing paper copies of our proxy materials, we sent stockholders the Important Notice Regarding the Availability of Proxy Materials for the Annual Meeting, with instructions for accessing the proxy materials and voting via the Internet (the “Notice”). In accordance with the SEC notice and access rule, the Notice allows us to provide our stockholders with the information they need to vote through various means, while reducing the costs and environmental impact of Stockholdersprinting and delivering proxy materials. The Notice is not a proxy and cannot be used to be Heldauthorize a proxy to vote your shares. The Notice, which was mailed on April 26, 2017:
or around September 29, 2023, also provides information on how stockholders may obtain paper copies of our proxy materials if they so choose. If you receive a Notice this year, you will not receive paper copies of the Proxy Materials unless you request the materials by following the instructions on the Notice. The Proxy Statement and 2016our 2022 Annual Report may be accessed at www.envisionreports.com/amc and www.investor.amctheatres.com. As discussed in the Proxy Statement, certain stockholders were sent a full set of printed proxy materials or an email with instructions on how to Stockholders
are availableaccess the proxy materials electronically, based on their previously indicated delivery preferences.
Whether or not you plan to attend the Annual Meeting in person and regardless of the number of shares you may own, we urge you to vote your shares over the Internet, as provided in the Notice and the Proxy Statement. If you already received or if you request proxy materials by mail, you may vote over the Internet or sign, date and mail the proxy card you receive in the envelope provided or vote via the toll-free telephone number set forth on the proxy card. Please also indicate when voting your shares over the Internet or via the toll-free number or on your proxy card whether you plan to attend the Annual Meeting. You may revoke your proxy and vote your shares in person in accordance with the procedures described in the Proxy Statement.
If you have any questions regarding the accompanying proxy statement or how to vote your shares, you may contact D.F. King & Co., Inc., our proxy solicitor, toll-free at
http://www.envisionreports.com/amc(800) 859-8511 or collect at (212) 269-5550 or email at AMC@dfking.com. ALL STOCKHOLDERS ARE EXTENDED A CORDIAL INVITATION TO
ATTEND THE ANNUAL MEETING OF STOCKHOLDERS | | One AMC Way
11500 Ash Street, Leawood, KS 66211 | | | By Order of the Board of Directors, Senior Vice President, General Counsel and Secretary | |
September 29, 2023
AMC ENTERTAINMENT HOLDINGS, INC.
INDEX
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PROXY SUMMARY
PROXY STATEMENT
PROXY SUMMARY
This summary highlights selected information and does not contain all of the information that you should consider in deciding how to vote. You should read the entire proxy statement carefully before voting.
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20172023 ANNUAL MEETING OF STOCKHOLDERS
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Time and Date: | 4:
| | 1:00 p.m. (Central Time), Wednesday, April 26, 2017November 8, 2023 | | |
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Place:
| Place: | | | AMC Theatre Support Center, located at One AMC Way, 11500 Ash Street, Leawood, KSKansas 66211 | | |
| | | Record Date: | | | September 25, 2023 | | |
Record Date:
| February 28, 2017
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Voting: | | | As of the record date, holders of our Class A common stock are entitled to one vote per share and holdersshare. | | |
Voting Recommendations
| | Agenda Item | | | Board Vote
Recommendation | |
| | Proposal 1:
Amendment of our Class B common stock are entitledThird Amended and Restated Certificate of Incorporation (our “Certificate of Incorporation”) to three votes per share. |
declassify our Board of Directors, shorten all existing terms to expire at the Annual Meeting, and make certain other immaterial changes to the Certificate of IncorporationVoting Recommendations
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Agenda Item
| | Recommendation
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Proposal No. 1:2(a):
ElectionIf Proposal 1 is approved, to elect to our Board of Directors the following three nominees for terms expiring at the 20202024 Annual Meeting:
| | | | | | FOR Each Director
Nominee | |
| | Mr. Anthony J. Saich, Adam M. Aron
Mr. Philip Lader
Ms. Keri S. Putnam | | | Ms. Denise M. Clark
Mr. Gary F. Locke and
Dr. Anthony J. Saich | | | Mr. Howard W. “Hawk” Koch
Ms. Kathleen M. Pawlus.Pawlus
Mr. Adam J. Sussman | | FOR each Director Nominee
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| Proposal No. 2:2(b):
If Proposal 1 is not approved, to elect to our Board of Directors the following nominees for terms expiring at the 2026 Annual Meeting: | | | | | | FOR Each Director
Nominee | |
| | Ms. Denise M. Clark | | | | | | Ms. Keri S. Putnam | |
| | Proposal 3:
Amendment of our Certificate of Incorporation to eliminate the prohibition against stockholders acting by written consent | | | | | | FOR | |
| | Proposal 4:
Amendment of our Certificate of Incorporation to remove the limitation on stockholders’ ability to call special meetings | | | | | | FOR | |
| | Proposal 5:
Amendment of our Certificate of Incorporation to expand the exculpation provision to limit the liability of certain officers | | | | | | FOR | |
| | Proposal 6:
Ratification of the appointment of KPMGErnst & Young LLP as our independent registered public accounting firm for 2017.2023 | | | | | | FOR | |
| | Agenda Item | | | Board Vote
Recommendation | |
| Proposal No. 3:7:
Non-binding advisory vote to approve the compensation of named executive officers (the “say-on-pay vote”(“Say-On-Pay”). | | | | | | FOR | |
| | Proposal 8:
Adjournment of the Annual Meeting, if necessary, to permit further solicitation of proxies | | | | | | FOR | |
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GENERAL INFORMATION
GENERAL INFORMATION
This proxy statement is provided in connection with the solicitation of proxies by the Board of Directors (the “Board”) of AMC Entertainment Holdings, Inc., a Delaware corporation (“we,” “us,” the “Company” or “AMC”), for use at the 20172023 Annual Meeting of Stockholders of the Company, to be held on April 26, 2017November 8, 2023, at 4:1:00 p.m. (Central Time), or any adjournment or postponement thereof, at the AMC Theatre Support Center located at One AMC Way, 11500 Ash Street, Leawood, Kansas 66211 (the “Annual Meeting”).
Although we currently intend to hold the Annual Meeting in person, we may impose additional procedures or limitations on meeting attendees or may decide to hold the Annual Meeting in a different location or solely by means of remote communication (i.e., a virtual-only meeting). We plan to announce any such updates regarding the Annual Meeting by issuing a press release and filing the press release as definitive additional soliciting material with the Securities and Exchange Commission (the “SEC”). We encourage you to regularly check these resources prior to the Annual Meeting if you plan to attend.
We plan to provide a listen-only webcast of the Annual Meeting. The webcast will be accessible through the Investor Relations section of our website at www.investor.amctheatres.com. Stockholders and interested parties should go to the website at least 15 minutes before the Annual Meeting time to register and/or download any necessary audio software. While the webcast will provide an opportunity to listen to the proceedings, it will not be considered attendance at the meeting and you will not be able to vote via the webcast.
Important Notice Regarding the Availability of Proxy Materials
for the Stockholder Meeting To Be Heldto be held on April 26, 2017:
November 8, 2023.
Pursuant to rules promulgated by the rules and regulations of the Securities and Exchange Commission (the “SEC”),SEC, we are providinghave elected to provide access to our proxy materials which includeby notifying you of the availability of our noticeproxy materials on the Internet. Instead of annual meeting,mailing paper copies of our proxy statementmaterials, we sent stockholders the Important Notice Regarding the Availability of Proxy Materials for the Stockholder Meeting to be held on November 8, 2023, with instructions for accessing the proxy materials and annual report to stockholders overvoting via the Internet at www.envisionreports.com/amc(the “Notice”). TheseIn accordance with the SEC notice and access rule, the Notice allows us to provide our stockholders with the information they need to vote through various means, while reducing the costs and environmental impact of printing and delivering proxy materials. The Notice is not a proxy and cannot be used to authorize a proxy to vote your shares. The Notice, which was mailed on or around September 29, 2023, also provides information on how stockholders may obtain paper copies of our proxy materials are available without charge.if they so choose. If you receive a Notice this year, you will not receive paper copies of the Proxy Materials unless you request the materials by following the instructions on the Notice. The Proxy Statement and our 2022 Annual Report may be accessed at www.envisionreports.com/amc and www.investor.amctheatres.com. As discussed in the Proxy Statement, certain stockholders were sent a full set of printed proxy materials or an email with instructions on how access the proxy materials electronically, based on their previously indicated delivery preferences.
This proxy statement and the accompanying proxy are first being sent or givenmade available to stockholders beginning on or about March 24, 2017.September 29, 2023. The costs of this proxy solicitation will be borne by the Company, which maintains its principal executive offices at One AMC Way, 11500 Ash Street, Leawood, KS 66211. 2
If you have any questions regarding the proxy statement, you may contact D.F. King & Co., Inc., our proxy solicitor, toll-free at (800) 859-8511 or collect at (212) 269-5550 or email at AMC@dfking.com.
VOTING AT THE ANNUAL MEETING
The only outstanding voting securities of the Company are its shares of Class A and Class B common stock (collectively, the(the “Common Stock”). Only stockholders of record of our Common Stock at the close of business on February 28, 2017,September 25, 2023 (the “Record Date”), the date selected as the record date by our Board, are entitled to vote at the Annual Meeting. On the record date, there were 55,026,640 198,356,898 shares of Class A common stock and 75,826,927 shares of Class B common stockCommon Stock outstanding. The holders of our Class A common stockCommon Stock are entitled to one vote per share.
The Proxy and Voting
Pursuant to rules promulgated by the SEC, we are making this Proxy Statement and 2022 Annual Report available to stockholders electronically via the Internet. On or around September 29, 2023, we sent our stockholders of record on the Record Date the Notice, which provides information regarding accessing the proxy materials for the Annual Meeting and voting via the Internet. Some stockholders have previously requested to receive either a full set of printed proxy materials or an email with instructions on how to access the proxy materials electronically. Stockholders that have not submitted a specific delivery preference were sent the Notice. If you would like to change the way you receive materials in the future, please follow the instructions on the Notice you received. The Proxy Statement and our 2022 Annual Report may be accessed at www.envisionreports.com/amc and www.investor.amctheatres.com.
Registered holders are stockholders who hold their shares directly with the Company and have their names and addresses recorded in the Company’s share registry, which is maintained by our transfer agent, Computershare. Registered stockholders can vote by proxy in any of the following three ways, each of which is valid under Delaware law. If you are a registered holder and holderswould like to receive a full printed set of proxy materials, please follow the instructions on the Notice.
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By Internet: Access our Class B commonInternet voting site at www.envisionreports.com/amc or scan the QR code on the Notice or your proxy card and follow the instructions on the screen prior to 11:59 p.m., Eastern Time, on November 7, 2023.
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By Telephone: After receiving the full set of printed proxy materials, using a touch-tone telephone, call toll-free at 1-800-652-8683 and follow the voice instructions, prior to 11:59 p.m., Eastern Time, on November 7, 2023.
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By Mail: After receiving the full set of printed proxy materials, mark, sign, date, and return the proxy or voting instruction form in the enclosed envelope so it is received before the Annual Meeting.
Beneficial owners are stockholders who hold their shares through a brokerage account, bank, or other record holder. You also may have heard the term “held in street name” when describing stock ownership. When you buy securities through a brokerage firm, most firms will automatically put your securities into “street name.” This means your brokerage firm will hold your securities in its name or another nominee and not in your name, but your brokerage firm will keep records showing you as the real or “beneficial owner.” Under the rules of the New York Stock Exchange (“NYSE”), member stockbrokers who hold shares of Common Stock in their name for customers are required to obtain directions from their customers on how to vote the shares. NYSE rules permit brokers to vote shares on certain proposals when they have not received any directions. The staff of the NYSE, prior to the Annual Meeting, informs brokers of those proposals on which they are entitled to three votes per share, and such holders generally vote together as a single class on all matters. All of our Class B common stock is held by a subsidiarythe undirected shares.
Under rules of the Dalian Wanda Group Co., LTD (together with its affiliates, “Wanda”). BecauseNYSE, brokers may not vote on “non-routine” proposals unless they have received voting instructions from the beneficial owner, and to the extent that they have not received voting instructions, brokers report such number of the three-to-one voting ratio between our Class B and Class A common stock, Wanda controls a majority of the combined voting power of our Common Stock at the record date and therefore will be able to control all matters submitted to our stockholders for approval at the Annual Meeting.The Proxy
If your Common Stock is held through ashares as “non-votes.” Your bank, broker bank or other nominee (heldmay vote your shares in street name)its discretion on “routine” matters. Proposals 1, 2(a) or 2(b), as applicable, 3, 4, 5, and 7 are considered “non-routine,” which means that brokerage firms may not vote in their discretion regarding these items on behalf of beneficial owners who have not furnished voting instructions. Proposals 6 and 8, however, are considered “routine” items, which means that brokerage firms may vote in their discretion on behalf of beneficial owners who have not furnished voting instructions.
If you will receiveare the beneficial owner of your shares, you should have received a Notice, a full set of printed proxy materials with a voting instruction form, or an email copy of the proxy materials with instructions on how to vote from such entity that you mustyour broker or
other nominee holding your shares. You should follow the instructions in the Notice or voting instruction form provided by your broker or other nominee in order to haveinstruct your broker on how to vote your shares; in most instances you may vote by Internet, telephone or by mail.
Beneficial stockholders who wish to attend the Annual Meeting must obtain a legal proxy by contacting their account representative at the bank, broker, or other record holder that holds their shares voted.and e-mail a copy (a legible photograph is sufficient) of their legal proxy to our proxy solicitor at AMCattend@dfking.com. If you want to vote in person, you must obtain a legal proxy from your broker, bank or other nominee and bring it to the meeting. If you hold your shares in your own name as a holder of record with our transfer agent, you may instruct the proxies how to vote following the instructions listed on the proxy card to vote over the Internet, or by signing, dating and mailing the proxy card. Of course, you can always come to the meeting and vote your shares in person. Proxies provided by telephone or over the Internet or by mailed proxy card by stockholders of record, unless revoked, will be voted at the Annual Meeting as directed by you, or, in the absence of such direction, as the Board recommends for the Proposals 1, 2 and 3 at the Annual Meeting. A stockholder submitting a proxy by telephone or over the Internet or by mailed proxy card may revoke such proxy at any time before it is used by giving written notice of revocation to the Secretary of the Company, by delivering to the Secretary of the Company a duly executed proxy bearing a later date or by voting in person at the Annual Meeting. Attendance at the Annual Meeting will not, in and of itself, revoke a proxy. The Proxy Statement
If you have any questions about how to vote your shares, you may contact our proxy solicitor at:
D.F. King & Co, Inc.
48 Wall Street, 22nd Floor
New York, NY 10005
Call Toll-Free: (800) 859-8511
Banks and 2016 Annual Report to Stockholders are available at http://www.envisionreports.com/amc or by calling 1-800-652-8683.Brokers Call: (212) 269-5550
AMC@dfking.com
Other Matters
As of the printingdate of this proxy statement, we do not know of any other matter to be raised at the meeting. If any matters not described in this proxy statement are properly presented at the Annual Meeting, the proxies will use their own judgment to determine how to vote your shares. If the Annual Meeting is adjourned or postponed, the proxies can vote your shares at the adjournment or postponement as well. Voting Requirement to Approve each of the Proposals
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Proposal 1: Amendment of our Third Amended and Restated Certificate of Incorporation (our “Certificate of Incorporation”) to declassify our Board of Directors, shorten all existing terms to expire at the Annual Meeting, and make certain other immaterial changes to the Certificate of Incorporation requires approval of a majority of the outstanding shares. Our Board recommends a vote “for” this proposal.
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Proposal 2(a): Election of directors requires a plurality of the votes cast, which means that the nine nominees for director receiving the highest number of votes FOR election will be elected as directors. Our Board recommends a vote “for” the election of each nominee.
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Proposal 2(b): Election of directors requires a plurality of the votes cast, which means that the two nominees for director receiving the highest number of votes FOR election will be elected as directors. Our Board recommends a vote “for” the election of each nominee.
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Proposal 3: Amendment of our Certificate of Incorporation to eliminate the prohibition against stockholders acting by written consent requires approval of a majority of the outstanding shares. Our Board recommends a vote “for” this proposal.
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Proposal 4: Amendment of our Certificate of Incorporation to remove the limitation on stockholders’ ability to call special meetings requires approval of a majority of the outstanding shares. Our Board recommends a vote “for” this proposal.
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| | Proposal No. 1: Election of directors requires a plurality of the votes cast, which means that the three nominees for director receiving the highest number of votes FOR election will be elected as directors. Our Board recommends a vote “for” the election of each nominee.
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| | Proposal No. 2: Ratification of the appointment of KPMG LLP as our independent registered public accounting firm requires approval by the holders of a majority of the shares (by voting power) present in person or represented by proxy and entitled to vote with respect to this matter. Our Board recommends a vote “for” this proposal.
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| | Proposal No. 3: Non-binding advisory vote on compensation of named executive officers (the “say-on-pay vote”) requires approval by the holders of a majority of the shares (by voting power) present in person or represented by proxy and entitled to vote with respect to this matter. Our Board recommends a vote “for” this proposal. The vote on Proposal No. 3 is advisory.
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Proposal 5: Amendment of Contents
our Certificate of Incorporation to expand the exculpation provision to limit the liability of certain officers requires approval of a majority of the outstanding shares. Our Board recommends a vote “for” this proposal.•
Proposal 6: Ratification of the appointment of Ernst & Young LLP as our independent registered public accounting firm requires approval by the holders of a majority of the shares present in person or represented by proxy and entitled to vote with respect to this matter. Our Board recommends a vote “for” this proposal.
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Proposal 7: Non-binding advisory vote on compensation of named executive officers (the “Say-On-Pay Vote”) requires approval by the holders of a majority of the shares present in person or represented by proxy and entitled to vote with respect to this matter. Our Board recommends a vote “for” this proposal. The vote on Proposal 7 is a non-binding advisory vote.
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Proposal 8: Adjournment of the Annual Meeting, if necessary, to permit further solicitation of proxies requires approval by the holders of a majority of the shares present in person or represented by proxy and entitled to vote with respect to this matter. Our Board recommends a vote “for” this proposal.
A quorum is required to transact business at our Annual Meeting. Stockholders of record holding shares of Common Stock constituting a majorityone-third of the shares issued and outstanding and entitled to vote at the Annual Meeting shall constitute a quorum. If you have returned valid proxy instructions or attend the meeting in person, your shares will be counted for the purpose of determining whether there is a quorum, even if you abstain from voting on some or all matters introduced at the meeting. As of the close of business on September 25, 2023, the record date for the Annual Meeting, there were
198,356,898 shares of Common Stock issued and outstanding, held by 15,124 registered holders. Thus, the holders of at least 66,118,966 shares of Common Stock must be present in person or represented by proxy at the Annual Meeting to constitute a quorum. Abstentions will be treated as shares present and entitled to vote for purposes of any matter requiring the affirmative vote of a majority or other proportion of the shares present and entitled to vote. Accordingly, abstentions will be considered as represented for purposes of determining a quorum. Abstentions with respect to the ratification of the appointment of KPMG LLP as our independent registered public accounting firmProposals 1, 3, 4, 5, 6, 7 and the say-on-pay vote8 will have the same effect as a vote against such proposals. Because a plurality of the votes cast is required to elect directors,for Proposal 2(a) or 2(b), as applicable, abstentions and withheld votes will have no effect on the election of directors.such proposals. Broker non-votes will be considered as represented for purposes of determining a quorum but will not otherwise affect voting results. Under the rules of the New York Stock Exchange (“NYSE”),NYSE, brokers may not vote on “non-routine” proposals unless they have received voting instructions from the beneficial owner, and to the extent that they have not received voting instructions, brokers report such number of shares as “non-votes.” The proposals to elect directorsYour bank, broker or other nominee may vote your shares in its discretion on “routine” matters. Proposals 1, 2(a) or 2(b), as applicable, 3, 4, 5 and the say-on-pay vote7 are considered “non-routine,” which means that brokerage firms may not vote in their discretion regarding these items on behalf of beneficial owners who have not furnished voting instructions. The proposal to ratify the appointment of KPMG LLP as our independent registered public accounting firm,Proposals 6 and 8, however, isare considered a “routine” item,items, which means that brokerage firms may vote in their discretion on behalf of beneficial owners who have not furnished voting instructions.
Although Proposal No. 37 is a non-binding advisory vote, our Board will review the results and will take them into account in making a determinationdeterminations concerning executive compensation. 4
The Company is soliciting proxies for use at the Annual Meeting by means of the proxy materials. When stockholders vote over the Internet, by telephone, or when proxies are properly dated, executed, and returned, the shares represented by such proxies will be voted at the Annual Meeting in accordance with the instruction of the stockholder. If no specific instructions are given, however, the shares will be voted in accordance with the recommendation of our Board as described above and, if any other matters are properly brought before the Annual Meeting, the shares will be voted in accordance with the proxies’ judgment.
The Company will pay for the Annual Meeting, including the cost of Contentsmailing the Notice, paper copies of our proxy materials as requested by stockholders, and any supplemental materials. Directors, officers, and employees of the Company may, either in person, by telephone or otherwise, solicit proxies. They have not been specifically engaged for that purpose, however, nor will they be compensated for their efforts. The Company has engaged D.F. King & Co., Inc., to assist in the solicitation of proxies for the Annual Meeting. We will bear the entire cost of proxy solicitation, including the preparation, assembly, printing, mailing and distribution of the proxy materials. AMC will pay D.F. King & Co., Inc., a fee of $15,000. AMC will also reimburse D.F. King & Co., Inc., for reasonable out-of-pocket costs and other agreed-upon expenses and will indemnify D.F. King & Co., Inc., and its affiliates against certain claims, liabilities, losses, damages, and expenses. In addition, we will reimburse brokerage firms and other persons representing beneficial owners of our shares for their reasonable expenses in forwarding the Notice, paper copies of our proxy materials as requested by beneficial owners, and other soliciting materials to the beneficial owners.
If you receive more than one set of printed materials, your shares may be registered in more than one name and/or are registered in different accounts. Please follow the voting instructions on each set of printed materials to ensure that all of your shares are voted.
INTERNET AVAILABILITY OF PROXY MATERIALS
The Proxy Statement and Annual Report are available at
www.envisionreports.com/amc and www.investor.amctheatres.com.
If you choose to access the proxy materials and/or vote over the Internet, you are responsible for any Internet access charges you may incur.
Our business and affairs are managed by our Board, which currently consists of the following nine members: Lin (Lincoln) Zhang, Adam M. Aron, Jack Q. Gao, Anthony J. Saich,Denise M. Clark, Howard W. “Hawk” Koch, Philip Lader, Gary F. Locke, Kathleen M. Pawlus, Lloyd Hill, Maojun (John) Zeng,Keri S. Putnam, Anthony J. Saich, and Howard W. Koch, Jr. Mr. Zhang is our non-executive Chairman andAdam J. Sussman. Mr. Aron isserves as our Chairman and Chief Executive Officer (“CEO”). Mr. Lader serves as our Lead Independent Director. Mr. Lee E. Wittlinger served as a director until his resignation in December 2022.
Pursuant to our amended and restated certificateCertificate of incorporation,Incorporation, our Board is currently divided into three classes. The members of each class serve for a staggered, three-year term. Upon the expiration of the term of a class of directors, directors in that class will be elected for three-year terms at the annual meeting of stockholders in the year in which their term expires. The classes are composed as follows: | ·
| | Mr. Saich, Mr. Locke, and Ms. Pawlus are Class I directors, whose terms will expire at the 2017 annual meeting of stockholders;
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| | Mr. Hill, Mr. Zeng, and Mr. Koch are Class II directors, whose terms will expire at the 2018 annual meeting of stockholders; and
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| | Mr. Zhang, Mr. Aron, and Mr. Gao are Class III directors, whose terms will expire at the 2019 annual meeting of stockholders.
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Mr. Lader, Mr. Locke, and Mr. Sussman are Class I directors, whose terms will expire at the 2024 annual meeting of stockholders;
Mr. Aron, Mr. Koch, Ms. Pawlus and Dr. Saich are Class II directors, whose terms will expire at the 2025 annual meeting of Contents
stockholders; andPROPOSAL 1:
ELECTION OF DIRECTORS
At
•
Ms. Clark and Ms. Putnam are Class III directors, whose terms will expire at the 2023 annual meeting of stockholders.
The Board has proposed an amendment to the Certificate of Incorporation to be voted on at the Annual Meeting that would declassify the Board such that all directors would serve in a single class serving a one-year term. In addition, the proposed amendment would shorten the terms of all currently serving directors to expire at the Annual Meeting.
PROPOSAL 1
APPROVAL OF AN AMENDMENT TO THE CERTIFICATE OF INCORPORATION TO DECLASSIFY THE BOARD AND MAKE CERTAIN OTHER IMMATERIAL CHANGES
Proposed Amendment
We are submitting for stockholder approval an amendment to our Certificate of Incorporation to immediately declassify the Board and make certain other immaterial changes. Our Board has unanimously approved, and recommends that all stockholders approve, the proposed amendments to (i) Article V of the Certificate of Incorporation to immediately declassify the Board, (ii) Article IV to remove references to the previously eliminated Class B Common Stock and other unnecessary sections affected by the same, (iii) Section C of Article VI to remove the corporate book and stockholder meeting locations, (iv) remove Article VIII in its entirety as unnecessary because Dalian Wanda Group Co., Ltd. (“Wanda”) is no longer a significant stockholder of the Company, (v) remove Article X in its entirety as unnecessary because all defined terms are located in provisions which are being removed from the Certificate of Incorporation, and (vi) other such conforming changes, such as updating cross-references, which are necessary in connection with the other changes reflected in the Amendment (amendments (ii) through (vi) above, the “Immaterial Changes” and together with the amendment (i) above, the “Proposal 1 Amendments”)).
The discussion regarding this proposal is qualified in its entirety by reference to the complete text of the Proposal 1 Amendments which are attached to this Proxy Statement as Appendix B and incorporated into this Proxy Statement by reference. We urge you to carefully read the Proposal 1 Amendments set forth in Appendix B because this summary may not contain all the information about the amendments that are important to you. If this proposal is approved, the Proposal 1 Amendments will become effective upon filing with the Secretary of State of Delaware, which is expected to occur promptly following the stockholder vote.
Background and Reason for the Recommendation
Declassification
The Board is currently divided into three classes, with the members of each class serving for a staggered, three-year term. If the Proposal 1 Amendments are adopted, all directors will stand for election on an annual basis, beginning immediately at the 2023 Annual Meeting. Each elected director will serve a one-year term expiring at the following annual meeting of stockholders and until his or her respective successor is duly elected and qualified, or until his or her earlier death, resignation, disqualification, or removal.
The Board considered factors that favor continuing with a classified board structure, as well as factors that favor adopting a declassified board structure. After weighing the various factors, the Board determined that it would be in the best interests of the Company and our stockholders to amend the Certificate of Incorporation to declassify the Board.
A classified board structure has a number of advantages. It allows a majority of the board to remain in place from year to year, which promotes continuity and stability and encourages the board to plan for long-term goals. Further, at any one time, approximately two-thirds of the elected board has experience with the business and operations of the company it manages.
The Board also recognizes that a classified board structure can be viewed as diminishing a board’s accountability to stockholders, because such structure does not enable stockholders to express a view on each director’s performance by means of an annual vote. Annual voting allows stockholders to express their views on the individual performance of each director and on the entire board of directors more frequently than with a classified board structure, which provides stockholders with a more active role in shaping and implementing corporate governance policies. Moreover, many institutional investors believe that the election of directors is the primary means for stockholders to influence corporate governance policies and to hold management accountable for implementing those policies. Public companies with classified boards also face increased scrutiny from proxy advisory firms.
Immaterial Changes
As all shares of Class B Common Stock have been converted into Common Stock and eliminated and as Wanda is no longer a significant stockholder of the Company, the Immaterial Changes set forth in the provisions related to those matters are no longer relevant or have any purpose.
Accordingly, the Board has unanimously approved, subject to stockholder approval, the Proposal 1 Amendments attached as Appendix B hereto to immediately declassify the Board and make the Immaterial Changes described above. Conforming changes will also be necessary to our Bylaws and have been approved by the Board, subject to stockholder approval of the Proposal 1 Amendments. We plan to file with the SEC our Fourth Amended and Restated Bylaws, reflecting changes that will become effective if Proposals No. 1, 3, 4 and 5 of this Proxy Statement are approved by our stockholders. Such Fourth Amended and Restated Bylaws will only reflect those Proposals which are approved by the stockholders at the Annual Meeting. In addition, such Fourth Amended and Restated Bylaws are expected to include certain other revisions approved by the Board to become effective after the Annual Meeting. These revisions do not require approval by the stockholders and will be described in a Form 8-K to be filed with the SEC after the Annual Meeting.
The affirmative vote of the holders of a majority of our outstanding shares of Common Stock is required to approve the Proposal 1 Amendments. If this proposal is approved, the Board will immediately be declassified and stockholders will vote to elect nine directors to hold office for a one-year term expiring at the Company’s 2024 annual meeting, as described in Proposal 2(a). If this proposal is not approved, the Board will remain classified and stockholders will vote to elect two individuals are to be elected as Class IIII directors to hold three-year terms expiring at the Company’s 2026 annual meeting, as described in Proposal 2(b) and the Immaterial Changes will not be made.
Approval of this proposal is not contingent on the approval of any other proposals in this Proxy Statement.
The Board recommends a vote “FOR” approval of an amendment to our Certificate of Incorporation to immediately declassify the Board and make certain other immaterial changes.
PROPOSAL 2(a) OR 2(b)
ELECTION OF DIRECTORS
At the Annual Meeting, depending upon the outcome of the vote on Proposal 1, stockholders will either (i) vote to elect nine unclassified directors to hold a one-year term of office from the date of their election until the Company’s 2024 annual meeting and until their successors are duly elected and qualified or (ii) vote to elect two individuals to be elected as Class III directors to hold a three-year term of office from the date of their election until the Company's 2020Company’s 2026 annual meeting and until their successors are duly elected and qualified. The three
If Proposal 1 is approved, stockholders will vote on Proposal 2(a) at the Annual Meeting. Pursuant to Proposal 2(a), nine individuals are to be elected as unclassified directors to hold a one-year term of office from the date of their election until the Company’s 2024 annual meeting and until their successors are duly elected and qualified. Under Proposal 2(a), the nine nominees for election as directors are: Adam M. Aron, Denise M. Clark, Howard W. “Hawk” Koch, Philip Lader, Gary F. Locke, Kathleen M. Pawlus, Keri S. Putnam, Anthony J. Saich, and Adam J. Sussman.
If Proposal 1 is not approved, stockholders will vote on Proposal 2(b) at the Annual Meeting. Pursuant to Proposal 2(b), two individuals are to be elected as Class III directors to hold a three-year term of office from the date of their election until the Company’s 2026 annual meeting and until their successors are duly elected and qualified. Under Proposal 2(b), the two nominees for election as Class IIII directors are: Mr. Saich, Mr. Locke,Denise M. Clark and Ms. Pawlus.Keri S. Putnam.
The Nominating and Corporate Governance Committee and the Board believe that the nominees under either Proposal 2(a) or Proposal 2(b) have the requisite qualifications to oversee our business. Set forth below, you will find certain information for each of the directors, including the nominees, which we believe evidencesdemonstrates the directors'directors’ qualifications to serve on the Board.The
Regardless of whether voting on Proposal 2(a) or Proposal 2(b), the Board recommends a vote “FOR”each of the nominees. Each of the biographies of the nominees for election as directors below contains information regarding the person'sperson’s service as a director, business experience, director positions held currently or at any time during the past five years, and the experience, qualifications, attributes, and skills that caused the Board to determine that the person should be nominated for election as a director at the Annual Meeting. The following information is as of February 12, 2017.September 25, 2023.
Nominees for Election as Class I Directors
Mr. Adam M. Aron
Mr. Aron, 68, has served as Chief Executive Officer, President, and a director of the Company since January 2016, and as Chairman of the Board since July 2021. From February 2015 to December 2015, Mr. Aron was Chief Executive Officer of Starwood Hotels and Resorts Worldwide, Inc. and served on the board from 2006 to 2015. Since 2006, Mr. Aron has served as Chairperson and Chief Executive Officer of World Leisure Partners, Inc., which he founded and which serves as a personal consultancy for
matters related to travel and tourism, high-end real estate development, and professional sports. Mr. Aron served as Chief Executive Officer and Co-Owner of the Philadelphia 76ers from 2011 to 2013 and remained an investor through 2022. From 2006 to 2015, Mr. Aron served as Senior Operating Partner of Apollo Management L.P. Mr. Aron currently serves on the board of directors of Norwegian Cruise Line Holdings, Ltd. Mr. Aron served on the board of directors of Centricus Acquisitions Corp. in 2021, the board of directors of Prestige Cruise Holdings, Inc. from 2007 to 2014, as well as HBSE, a
Term Ending 2020Class I Directors—Term Expiring 2017
private company that owns the NHL’s New Jersey Devils and the NBA’s Philadelphia 76ers. Mr. Anthony J. Saich, 63,Aron received a Master of Business Administration degree with distinction from the Harvard Business School and a Bachelor of Arts degree cum laude from Harvard College. Mr. Aron brings to the Board significant business and executive leadership experience, including valuable insight into consumer services. He has almost 30 years of experience as a Chief Executive Officer, almost 35 years of experience as a corporate director, and more than 40 years of consumer-engagement experience.
Ms. Denise M. Clark
Ms. Clark, 65, has served as a director of the Company since August 2012. Since July, 2008, Mr. Saich hasJanuary 2023. Ms. Clark is a global information technology executive with experience leading technical groups for multiple companies. Ms. Clark served as Senior Vice President and Global Chief Information Officer for The Estée Lauder Companies Inc. from November 2012 until her retirement in March 2017. Prior to that role, Ms. Clark served as Senior Vice President and Chief Information Officer for Hasbro Inc. from October 2007 to November 2012. Ms. Clark also served at Mattel, Inc., where she was Global Chief Technology Officer and later Chief Information Officer for the DirectorFisher Price brand between January 2000 and February 2007. Ms. Clark’s previous experience also includes positions at Warner Music Group and Apple Inc. Ms. Clark has been a member of the Ash Center for Democratic Governance and Innovation and Daewoo Professorboard of International Affairs at Harvard University. In his capacity as Ash Center Director, Mr. Saich also serves asdirectors of United Natural Foods, Inc. (UNFI) since 2013, where she is currently the director of the Rajawali Foundation Institute for Asia and the faculty chair of the China Public Policy Program, the Asia Energy Leaders Programnominating and the Leadership Transformation in Indonesia Program. Mr. Saichgovernance committee. She previously served as a director of Six Flags Entertainment Corporation from March 2021 to August 2022 and Caesars Entertainment Corporation, including as chair of its compensation committee from October 2018 to May 2020. Ms. Clark also serves as the Chairman of the Board of Trustees of the China Medical Board and International Bridges to Justice and is the U.S. Secretary-General of the China United States Strategic Philanthropy. Mr. Saich sits on the executive committeesboard of the John King Fairbank Center for Chinese Studies and the Asia Center, both at Harvard University, and serves as the Harvard representativedirectors of the Kennedy Memorial Trust. Mr. SaichBest Friends Animal Society, a national non-profit organization. Ms. Clark holds a bachelor's degreeB.S. in politics and geographySociology from the University of Newcastle,Missouri and an MBA from San Jose State University. Ms. Clark is a veteran of the United Kingdom,States Navy. Ms. Clark brings extensive public company executive experience to the Board, with particular expertise in information technology, strategic planning, and transformative business initiatives.
Mr. Howard W. “Hawk” Koch
Mr. Koch, 77, has served as a master's degree in politicsdirector of the Company since October 2014. Mr. Koch is a veteran movie producer and principal at The Koch Company, the former president of the Academy of Motion Picture Arts and Sciences (“AMPAS”), and Recording Secretary and former President of the Producers Guild of America. Mr. Koch serves on the Board of Directors of the Motion Picture & Television Fund from 2005 continuing through 2022 and the National Film Preservation Foundation. Mr. Koch previously served on the Board of Governors of AMPAS from 2004 to 2013 and the Board of Directors of the Producers Guild of America from 1999 to 2020. Mr. Koch has been intimately involved with special referencethe making of over 60 major motion pictures, among them such films as “Source Code”, “Fracture”, “Primal Fear”, “Marathon Man,” “Chinatown,” “Wayne’s World,” “Peggy Sue Got Married,” “The Idolmaker,” “Heaven Can Wait,” “The Way We Were” and “Rosemary’s Baby.” Mr. Koch continues to China from the School of Orientaldevelop and African Studies, London University, and has a Ph.D. from the Faculty of Letters, University of Leiden, the Netherlands.produce movies. Mr. SaichKoch has over 3550 years of experience in international affairsthe motion picture industry and will provide valuable international insightsprovides our Board with a unique insight into the production of movies that are exhibited on our screens.
Mr. Philip Lader
Mr. Lader, 77, has served as a director of the Company since June 2019 and as Lead Independent Director since July 2021. Mr. Lader is a Senior Advisor to Morgan Stanley Institutional Securities as well as a partner emeritus with the law firm of Nelson Mullins Riley & Scarborough LLP. He is also the former U.S. Ambassador to the
Company.Court of St. James’s and Chairperson of WPP plc. Mr. Lader served in President Clinton’s Cabinet as Administrator of the US Small Business Administration, White House Deputy Chief of Staff, Assistant to the President, and Deputy Director of the Office of Management & Budget. Previously, he was Executive Vice President of Sir James Goldsmith’s US holdings and President of Sea Pines Company, universities in South Carolina and Australia, and Business Executives for National Security. Also, he is currently a trustee and Investment Committee Chairperson of RAND Corporation and several foundations, as well as a member of the boards of several privately-held companies, the investment committees of Morgan Stanley’s Global Infrastructure and Real Estate Funds, and the Council on Foreign Relations. He currently or has previously served on the boards of Lloyds of London, Marathon Oil, AES, WPP plc, Songbird (Canary Wharf), Rusal Corporations, the British Museum, American Red Cross, Smithsonian Museum of American History, St. Paul’s Cathedral Foundation, Atlantic Council, and several banks and universities. He is the founder and co-host of Renaissance Weekends. Mr. Lader’s education includes Duke, Michigan, Oxford and Harvard Law School, and he has been awarded honorary doctorates by 14 universities. He is an Honorary Fellow of Oxford University’s Pembroke College and London Business School and Honorary Bencher of Middle Temple (British Inns of Court). He was awarded the Benjamin Franklin Medal by The Royal Society for Arts, Manufactures & Commerce for his contributions to trans-Atlantic relations. Mr. Lader brings vast experience in business, government and law to the Board.
Mr. Gary F. Locke 67,
Mr. Locke, 73, has served as a director of the Company since February 2016. Mr. Locke is currently a trade consultant and owner ofhas owned Locke Global Strategies, LLC since 2014. Mr. Locke has also served as the interim President of Bellevue College since June of 2020. Mr. Locke was the first Chinese American to be elected as a U.S. Governor when the voters of Washington elected him in 1996 and re-elected him in 2000. During his administration, he strengthened economic ties between China and Washington State. Mr. Locke then served as U.S. Commerce Secretary from 2009-2011, where he led the effort to implement President Obama'sObama’s National Export Initiative to double American exports in five years. He then became America'sserved as America’s 10th Ambassador to China serving from 2011-2014, and during2011-2014. During his service he opened markets for made-in-USA goods and services and reduced wait times for visa interviews of Chinese applicants from 100 days to three days. Mr. Locke ishas served as a member of the board of directors of nLight, Inc. since August 2017. Mr. Locke served on the boards of directors of Fortinet, Inc. from September 2015 until June 2020, and Port Blakely Tree Farms from August 2019 until June 2022. He attended Yale University, graduating with a Bachelorbachelor’s degree in political science and received his law degree from Boston University. Mr. Locke brings to the Board a global and valuable business perspective due to his extensive role in politics and experience as an Ambassador to China. Ms. Kathleen M. Pawlus 56,
Ms. Pawlus, 63, has served as a director of the Company since December 2014. Ms. Pawlus, a retired partner of Ernst and Young, LLP (“EY”), served as the Global Assurance Chief Financial Officer and Chief Operating Officer from 2012 to 2014. EY'sEY’s Assurance practice is the largest of EY'sEY’s four service lines and includes its Audit Practice, Fraud, Investigation and Dispute Services Practice, Climate Change and Sustainability Services
Practice and its Financial Accounting Advisory Services Practice. Prior to this, fromFrom 2006 to 2012, Ms. Pawlus served as EY'sEY’s Americas Vice Chairperson and Chief Financial Officer, Global PBFA Function Leader and US Firm Vice Chairperson and Chief Financial Officer responsible for finance, IT operations, treasury, purchasing and facilities. Ms. Pawlus served on EY'sEY’s U.S. Executive Board from 2006 to 2012. Ms. Pawlus earned her bachelorBachelor of scienceScience degree from Indiana University and iswas a Certified Public Accountant.Accountant from 1982 through 2021. Ms. Pawlus brings to the Board extensive financial, accounting, operational and management experience in various capacities with more than 30 years of experience.
Directors Continuing in Office
Class II Directors—Term Expiring 2018
Mr. Lloyd Hill, 73,
Ms. Keri S. Putnam
Ms. Putnam, 58, has served as a director of the Company since December 2013. PriorJanuary 2023. Ms. Putnam is a creative producer, strategic advisor, and senior media executive who has supported, developed, and produced bold original content throughout her career. In 2022, Ms. Putnam founded Putnam Pictures to his retirement in 2006, Mr. Hillproduce film and television content from creators with distinct and adventurous vision. Ms. Putnam served as CEO of the ChiefSundance Institute from April 2010 until September 2021. Ms. Putnam’s previous experience includes serving as President of Production at Miramax Films, a division of the Walt Disney Company, and Executive OfficerVice President at HBO, where she helped launch the Picturehouse theatrical label in partnership with Fine Line Features. Ms. Putnam serves as a non-voting independent director of the privately held independent production company PICTURESTART. She is also on the advisory board of Topic Media and Chairman of Applebee's International, Inc. Mr. HillBrooklyn College’s Feirstein School. Ms. Putnam co-founded and serves on the boardleadership council of directors and as chairman of the compensation committee andReFrame, a leading organization advocating for diversity in media. Ms. Putnam is a member of the audit committeeAcademy of Red Robin Gourmet Burgers, Inc.Motion Pictures Arts and onSciences, an A.D. White Professor-at-Large at Cornell University, a mentor at USC’s Stark Producing Program, and is a 2023 Walter Shorenstein Media and Democracy Fellow at the board of directors of E.E. Newcomer Enterprises, Inc. Mr. Hill also serves on the board of directors of Saint Luke's South Hospital, the audit committee for the Saint Luke's Health System and the development board for the University of Texas Medical Branch. Mr. HillShorenstein Center at Harvard’s Kennedy School. Ms. Putnam holds a master's degreeB.A. in business administrationTheatre History and Literature from Rockhurst UniversityHarvard College. Ms. Putnam brings extensive media company executive experience to the Board, with particular expertise in Kansas City, Missouri. Mr. Hill has extensive experienceleadership, independent film production, and knowledge of public company operations, as well as experience serving on the boards of other public companies.Mr. Maojun (John) Zeng, 45,content creation.
Dr. Anthony J. Saich
Dr. Saich, 70, has served as a director of the Company since February 2016. Mr. Zeng has been PresidentAugust 2012. Dr. Saich is the Director of Wanda Cinema Line Co., Ltd,the Rajawali Foundation Institute for Asia and the Daewoo Professor of International Affairs at Harvard University. In this capacity, he directs training and research programs throughout Asia, including Bangladesh, China, Indonesia, Taiwan, and Vietnam. Dr. Saich also serves as a subsidiaryboard member of Wanda group since March 27, 2014,International Bridges to Justice and as the U.S. Secretary-General of the China United States Strategic Philanthropy Network. Dr. Saich sits on the executive committees of the John King Fairbank Center for Chinese Studies and the Asia Center, both at Harvard University. His executive teaching focuses on creating public value, leadership, and innovation. Dr. Saich holds a bachelor’s degree in politics and geography from the University of Newcastle, United Kingdom, a master’s degree in politics with special reference to China from the School of Oriental and African Studies, London University, and has served as a memberPh.D. from the Faculty of its BoardLetters, University of Directors since July 30, 2013. Mr. Zeng previously served asLeiden, the AssistantNetherlands. Dr. Saich has over 45 years of experience in international affairs and will provide valuable international insights to the President of Wanda Cultural Industries Group and Vice President of Wanda Cinema Line Corporation since February 28, 2012. Company.
Mr. Zeng holds an undergraduate degree and a master's degree in business administration from Renmin University of China. Adam J. Sussman
Mr.
Zeng has experience serving in an executive leadership role at a major theatrical exhibition company in China and brings to the Board valuable theatrical exhibition knowledge.Mr. Howard W. “Hawk” Koch, Jr., 71,Sussman, 52, has served as a director of the Company since October 2014.May 2019. Mr. Koch is a veteran movie producer and principal at The Koch Company, the former president of the Academy of Motion Picture Arts and Sciences (“AMPAS”), and President Emeritus of the Producers Guild of America. Mr. Koch currently serves on the Board of Directors of the Motion Picture & Television Fund and the National Film Preservation Foundation. Mr. Koch previously served on the Board of Governors of AMPAS from 2004 to 2013 and the Board of Directors of the Producers Guild of America from 1999 to 2012. Mr. Koch has been intimately involved with the making of over 60 major motion pictures, among them such films as “Source Code”, “Fracture”, “Primal Fear”, “Marathon Man,” “Chinatown,” “Wayne's World,” “Peggy Sue Got Married,” “The Idolmaker,” “Heaven Can Wait,” “The Way We Were” and “Rosemary's Baby.” Mr. Koch continues to develop and produce movies. Mr. Koch has over 51 years of experience in the motion picture industry and provides our Board with a unique insight into the production of movies that are exhibited on our screens.
Class III Directors—Term Expiring 2019
Mr. Lin (Lincoln) Zhang, 44, has served as Chairman and a director of the Company since August 2012. Mr. ZhangSussman has served as President of Wanda Cultural Industry GroupEpic Games, Inc. since 2012.January 2020. From 2017 until 2020, Mr. Zhang hasSussman served onas Nike, Inc.’s first-ever Chief Digital Officer, was previously head of Nike’s Global Strategy and Corporate Development and served as the boardVP/GM Direct Digital and Geographies. He built Nike’s portfolio of directorsworld-class digital consumer experiences and innovations and transforming retail for the world’s leading sports brand. He managed Nike’s digital teams globally and Nike’s direct-to-consumer GMs across the four key operating geographies of Wanda Cinemaline Corporation since November 2006, Dalian Wanda Commercial Properties Co., Limited since December 2009, and Dalian Wanda Group Co., Limited since February 2011.the company. Prior to Nike, Mr. Zhang also currently serves on the board of directors of Infront Sports & Media AG, Atletico De Madrid, and World Triathlon Corporation since 2015. Prior thereto, Mr. Zhang served asSussman was Senior Vice President of Dalian Wanda Group Co., Limited from December 2009 to December 2012.Global Publishing at Zynga responsible for marketing, sales, growth and digital products. He also served as Senior Vice President of Publishing at Disney, building the global team that managed gaming properties across all media platforms around the world. At Electronic Arts, he was Vice President of Worldwide Publishing, leading the team that established EA Mobile as the #1 publisher on the Apple App store. Mr. Zhang received an M.B.A. from Beijing University andSussman started his career as a bachelor's degree in accounting from Dongbei University of Finance and Economics. Mr. Zhang iscreative executive at Hearst Entertainment, a non-practicing memberdivision of the Chinese InstituteHearst Corporation. He holds a BA from Harvard College and an MBA from Harvard University Graduate School of Certified Public AccountantsBusiness Administration. Mr. Sussman brings valuable experience as president of large company and in marketing, information technology and digital platforms to the Board.
PROPOSALS 3, 4, AND 5 EXPLANATORY NOTE
Proposals 3, 4, and 5 relate to the amendment of our Certificate of Incorporation. There are a non-practicing membernumber of provisions in our current Certificate of Incorporation that should be updated as part of our periodic review of our key governance mechanisms to assist in assuring fair and equitable treatment for all of our stockholders that are not reflected in our Certificate of Incorporation.
Each of the China Certified Tax Agents Association. Mr. Zhang has over 16 years of experience in financial management and operation management of large companies, especially in corporate strategy and investment, which makes him well-positioned to serve as a director forproposed amendments discussed below are being voted on separately by the Company. Mr. Adam Aron, 62, has served as Chief Executive Officer, President and a directorstockholders of the Company, since January 2016. From February 2015 to December 2015, Mr. Aron was appointed Chief Executive Officer of Starwood Hotels and Resorts Worldwide, Inc. Since 2006, Mr. Aron has served as Chairman and Chief Executive Officer of World Leisure Partners, Inc., a personal consultancy for matters related to travel and tourism, high-end real estate development, and professional sports, that he founded. Mr. Aron served as Chief Executive Officer and Co-Ownereach of the Philadelphia 76ers from 2011proposed amendments approved by the stockholders will be incorporated in an amended and restated certificate of incorporation that will be filed with the Delaware Secretary of State. If the stockholders approve some, but not all, of Proposals 3, 4, and 5, the Certificate of Incorporation will be amended and restated to 2013,reflect only those amendments approved by the stockholders.
The Board has considered each of the changes discussed in Proposals 3, 4, and remains5 and has approved the Fourth Amended and Restated Certificate of Incorporation which incorporates all of these changes as well as the amendment proposed to be approved by the stockholders in Proposal 1 (which, if Proposal 1 is approved by the stockholders, such amendment will be effected by the filing of a co-owner currently. From 2006certificate of amendment with the Delaware Secretary of State prior to 2015, Mr. Aron servedthe filing of the Fourth Amended and Restated Certificate of Incorporation), and the form of the proposed Fourth Amended and Restated Certificate of Incorporation is attached to this proxy statement as Senior Operating PartnerAppendix D.
PROPOSAL 3
APPROVAL OF AN AMENDMENT TO THE CERTIFICATE OF INCORPORATION TO ELIMINATE THE PROHIBITION AGAINST STOCKHOLDERS ACTING BY WRITTEN CONSENT
Proposed Amendment
We are submitting for stockholder approval an amendment to the Certificate of Apollo Management L.P. Mr. Aron currently serves onIncorporation to remove the boardprohibition against stockholders taking action by written consent without holding a meeting. Our Board has unanimously approved, and recommends that all stockholders approve, the proposed amendment to Section A of Article VI of the Certificate of Incorporation to remove this prohibition by deleting Section A of Article VI in its entirety. The discussion regarding this proposal is qualified in its entirety by reference to the complete text of Section A of Article VI of the Certificate of Incorporation, which is set forth below:
A. Any action required or permitted to be taken at any annual or special meeting of stockholders of the Corporation may be taken without a meeting, without prior notice and without a vote, if a consent or consents in writing, setting forth the action so taken, shall be signed by the holders of outstanding stock of the Corporation having not less than the minimum number of votes that would be necessary to authorize or take such action at a meeting at which all shares entitled to vote thereon were present and voted and shall be delivered to the Corporation by delivery to its registered office in Delaware, its principal place of business, or to an officer or agent of the Corporation having custody of the book in which proceedings of meetings of stockholders are recorded; provided, however, that if at any time Wanda or its affiliates no longer beneficial owns, in the aggregate, more than 50.0% of the voting power of all the then outstanding shares of stock of the Corporation entitled to vote generally in the election of directors, then any action required or permitted to be taken at any annual or special meeting of Norwegian Cruise Line Holdings, Ltd.stockholders of the Corporation must be effected at a duly called annual or special meeting of such stockholders and may no longer be effected by any consent in writing.
If you approve Proposal 3, the above section will be deleted from our Certificate of Incorporation. We urge you to carefully read the section in its entirety and consider the implications of its deletion from our Certificate of Incorporation because this summary may not contain all the information about this amendment that is important to you.
Background and Reason for the Recommendation
As part of the Board’s review of our corporate governance policies, the Nominating and Corporate Governance Committee and the Philadelphia 76ers. Mr. Aron served onBoard considered the boardadvantages and disadvantages of directorsprohibiting stockholder action by written consent similar to that currently found in Section A of Prestige Cruise Holdings, Inc. from 2007Article VI of our Certificate of Incorporation. This type of prohibition generally is intended to 2014. Mr. Aron receivedfacilitate corporate stability by requiring stockholder action to occur at a Master’sduly called and convened stockholder meeting. These voting limitations prohibiting stockholder action by written consent may also have the effect of Business Administration degree with distinction from the Harvard Business School and a bachelor of arts degree cum laude from Harvard College. Mr. Aron bringsproviding anti-takeover protection to the Company. However, many investors and others view prohibitions against stockholder action by written consent as conflicting with principles of good corporate governance by preventing stockholders from fully exercising their voting rights as stockholders due to the need to convene at an annual or special meeting to effect change. Section 228 of the Delaware General Corporation Law (the “DGCL”) allows stockholders to act by written consent unless otherwise provided in the corporation’s certificate of incorporation. If the proposal is approved, the related provisions set forth in Article II, Section 10 of our proposed Fourth Amended and Restated Bylaws previously approved by our Board significant business and executive leadership experience, including valuable insight into consumer services. Heattached to this Proxy Statement as Appendix C, allowing stockholder action by written consent and providing for certain procedures in connection with such action, will become effective.
After considering the advantages and disadvantages of the prohibition on stockholder action by written consent set forth in Section A of Article VI of our Certificate of Incorporation, the Board has more than 20 yearsunanimously voted to propose to the stockholders that Section A of experienceArticle VI be amended to remove the prohibition, and instead allow stockholders to take actions as provided by law and our proposed Fourth Amended and Restated Bylaws. In reaching this determination to propose this amendment to our Certificate of Incorporation, the Board concluded that the benefits of prohibiting stockholder action by written consent were outweighed by the Board’s belief that removing the prohibition is a Chief Executive Officer, more than 26 yearsmeaningful step towards achieving
our goal of experience as aensuring that our corporate director,governance policies conform to current best practices and more than 36 yearsmaximizing the ability of consumer-engagement experience.Mr. Jack Q. Gao, 58, has served as a directorour stockholders to appropriately participate in the affairs of the Company.
For the reasons described above, our Board believes that this proposal to amend our Certificate of Incorporation by deleting Section A of Article VI is advisable and in the best interests of the Company since September 2015. Mr. Gao servesand its stockholders.
Text of the Amendment
The proposed amendment to our Certificate of Incorporation would delete Section A of Article VI of our Certificate of Incorporation, the text of which is set forth above. Certain conforming changes, such as moving and modifying defined terms and updating cross-references, will also be necessary in connection with the Group Vice Presidentforegoing amendment and such conforming changes will be reflected in our proposed Fourth Amended and Restated Certificate of Wanda Cultural Industry GroupIncorporation, a copy of which is set forth in Appendix D and incorporates changes that will be made to our Certificate of Incorporation, assuming Proposals 1, 3, 4 and 5 are approved by our stockholders at the Annual Meeting. If this proposal is approved by our stockholders, we will amend and restate our Certificate of Incorporation to reflect the revisions contemplated by this proposal (as well as any other revisions contemplated by Proposals 4 and 5, if such proposals are also approved by our stockholders) and the resulting Fourth Amended and Restated Certificate of Incorporation will become effective upon its filing with the Secretary of State of the State of Delaware, which is anticipated to occur promptly after the Annual Meeting.
The affirmative vote of the holders of a majority of our outstanding shares of Common Stock is required to approve this Proposal 3. Approval of this proposal is not contingent on the approval of any other proposals in this Proxy Statement.
The Board recommends a vote “FOR” approval of an amendment to our Certificate of Incorporation to eliminate the prohibition against stockholders acting by written consent.
PROPOSAL 4
APPROVAL OF AN AMENDMENT TO THE CERTIFICATE OF INCORPORATION TO REMOVE THE LIMITATION ON STOCKHOLDERS’ ABILITY TO CALL SPECIAL MEETINGS
Proposed Amendment
We are submitting for stockholder approval an amendment to the Certificate of Incorporation to remove the prohibition against stockholders calling a special meeting of stockholders. Our Board has unanimously approved, and recommends that all stockholders approve, the proposed amendment to Section B of Article VI of the Certificate of Incorporation to remove this prohibition by deleting Section B of Article VI in its entirety. The discussion regarding this proposal is qualified in its entirety by reference to the complete text of Section B of Article VI of the Certificate of Incorporation, which is set forth below:
B. Except as otherwise required by law and subject to the rights, if any, of the holders of any series of Preferred Stock, special meetings of the stockholders of the Corporation for any purpose or purposes may be called at any time pursuant to a resolution of the Board of Directors (and the Chairman of the Board of Directors, the Chief Executive Officer or Secretary of Wanda Film Holdingsthe Corporation shall call the meeting pursuant to such resolution), and special meetings of stockholders of the Corporation may not be called by any other person or persons.
If you approve Proposal 4, the above section will be deleted from our Certificate of Incorporation. We urge you to carefully read the section in its entirety and consider the implications of its deletion from our Certificate of Incorporation because this summary may not contain all the information about this amendment that is important to you.
Background and Reason for the Recommendation
Section B of Article VI of the Certificate of Incorporation does not permit our stockholders to call a special meeting of stockholders, limiting that right to the Board. As part of its continuing review of the elements of our corporate governance standards and practices, the Nominating and Corporate Governance Committee recommended to the Board the removal of the limitation and a corresponding amendment to our Bylaws to permit stockholders to call a special meeting of stockholders, as described below.
If the proposal is approved, the related provisions set forth in Article II, Section 2 of our proposed Fourth Amended and Restated Bylaws previously approved by our Board and attached to this Proxy Statement as Appendix E, allowing stockholders to call a special meeting and providing for certain procedures in connection with such action, will become effective. If a requesting stockholder does not comply with these requirements and conditions in the proposed Fourth Amended and Restated Bylaws, a special meeting request by that stockholder will be deemed invalid. The Board believes these requirements and limitations are important to, among other things, avoid inappropriate, duplicative, and/or unnecessary special meetings. Special meetings involve significant management time and attention that could disrupt focus on other corporate priorities and impose new legal, administration, and distribution costs on the Company. As such, the Board believes that special meetings should only be convened in special or extraordinary circumstances, compelled by fiduciary, strategic, material, or similar considerations that should be addressed immediately, not delayed until the next annual meeting, and are of interest to a broad base of stockholders. Accordingly, the Secretary of the Company is not required to call a special meeting if the purpose of the meeting relates to matters recently presented at a meeting of stockholders.
Removing the restriction on stockholder-called special meetings from our Certificate of Incorporation, together with the Bylaw changes implementing a mechanism for such action, represents a meaningful increase in the voting rights of our stockholders and is consistent with investor feedback as well as our and the Board’s continuing commitment to corporate governance excellence. The Board supports a special meeting right for stockholders, so long as the request is made by stockholders owning at least twenty percent (20%) of the voting power. In accordance with the procedures set forth in our proposed Fourth Amended and Restated Bylaws, Stockholders owning at least twenty percent (20%) of the voting power may request that the Secretary of the Company call a special meeting of stockholders.
The Board believes that establishing a twenty percent (20%) ownership threshold to request that the Secretary of the Company call a special meeting strikes a reasonable and acceptable balance between enhancing stockholder rights and protecting against the risk that a small minority of stockholders, including stockholders with special interests that are not shared generally by all the Company’s stockholders, could request that the Company call one or more special meetings that could result in unnecessary financial expense and disruption to our business operations. Additionally, the Board recognizes that the power to call a special meeting of stockholders has historically been used by acquirors in the hostile merger and acquisition context. Potential acquirors seeking to take over the Company for an inadequate price could threaten to call a special meeting of stockholders to replace members of the Board, thereby increasing their negotiating leverage or creating a way to avoid negotiating with the Board at all, frustrating the Board’s exercise of its legal duty to protect the interests of all stockholders. Likewise, the Board believes that only stockholders with a true economic interest in the Company should be entitled to employ the special meeting mechanism and, after reviewing multiple factors, determined that a threshold of twenty percent (20%) is appropriate.
After considering the advantages and disadvantages of removing the restriction on stockholder-called special meetings from our Certificate of Incorporation, the Board has unanimously voted to propose to the stockholders that Section B of Article VI be removed to allow stockholders to call special meetings in the manner provided in Article II, Section 2 of the proposed Fourth Amended and Restated Bylaws.
For the reasons described above, our Board believes that this proposal to amend our Certificate of Incorporation by amending Section B of Article VI is advisable and in the best interests of the Company and its stockholders.
Text of the Amendment
The proposed amendment to our Certificate of Incorporation would delete Section B of Article VI of our Certificate of Incorporation, the text of which is set forth above. Certain conforming changes, such as moving and modifying defined terms and updating cross-references, will also be necessary in connection with the foregoing amendment and such conforming changes will be reflected in our proposed Fourth Amended and Restated Certificate of Incorporation, a copy of which is set forth in Appendix D and incorporates changes that will be made to our Certificate of Incorporation, assuming Proposals 1, 3, 4 and 5 are approved by our stockholders at the Annual Meeting. If this proposal is approved by our stockholders, we will amend and restate our Certificate of Incorporation to reflect the revisions contemplated by this proposal (as well as any other revisions contemplated by Proposals 3 and 5, if such proposals are also approved by our stockholders) and the resulting Fourth Amended and Restated Certificate of Incorporation will become effective upon its filing with the Secretary of State of the State of Delaware, which is anticipated to occur promptly after the Annual Meeting.
The affirmative vote of the holders of a majority of our outstanding shares of Common Stock is required to approve this Proposal 4. Approval of this proposal is not contingent on the approval of any other proposals in this Proxy Statement.
The Board recommends a vote “FOR” approval of an amendment to our Certificate of Incorporation to remove the limitation on stockholders’ ability to call special meetings.
PROPOSAL 5
APPROVAL OF AN AMENDMENT TO THE CERTIFICATE OF INCORPORATION TO EXPAND THE EXCULPATION PROVISION TO LIMIT LIABILITY OF CERTAIN OFFICERS
Proposed Amendment
We are submitting for stockholder approval an amendment to the Certificate of Incorporation to expand the exculpation provision to exculpate certain of the Company’s officers from liability in specific circumstances, as permitted by Delaware law. Our Board has heldunanimously approved, and recommends that all stockholders approve, the proposed amendment to Section A of Article IX of the Certificate of Incorporation to expand the exculpation provision. The discussion regarding this proposal is qualified in its entirety by reference to the complete text of the proposed amendment to Section A of Article IX of the Certificate of Incorporation, which is set forth below (with additions to existing language indicated by underlined text):
A. The personal liability of the directors and officers for monetary damages for breach of fiduciary duty as a director and/or officer of the Corporation is hereby eliminated to the fullest extent permitted by the DGCL. Any repeal or modification of this Article IX shall not adversely affect any right or protection of a director or officer of the Corporation existing hereunder with respect to any act or omission occurring prior to such positions since joining Wanda Grouprepeal or modification.
If you approve Proposal 5, the underlined text above will be added to Section A of Article IX of our Certificate of Incorporation. We urge you to carefully read the section in June 2015. Priorits entirety and consider the implications of the added language because this summary may not contain all the information about this amendment that is important to joining Wanda, Mr. Gao servedyou.
Background and Reason for the Recommendation
Effective August 1, 2022, Section 102(b)(7) of the DGCL was amended to enable a corporation to include in its certificate of incorporation a provision exculpating certain officers from liability for breach of the duty of care in certain actions. Previously, exculpation was only available for directors. Such a provision would not exculpate such officers from liability for breach of the duty of loyalty, acts or omissions not in good faith or that involve intentional misconduct or a knowing violation of law, or any transaction in which the officer derived an improper personal benefit. Nor would such a provision exculpate such officers from liability for claims brought by or in the right of the corporation, such as Founderderivative claims. Under the amendment, the officers who may be exculpated by a Section 102(b)(7) provision include a person who (i) is the president, chief executive officer, chief operating officer, chief financial officer, chief legal officer, controller, treasurer or chief accounting officer of GAO Entertainment, LLC from Januarythe corporation at any time during the course of conduct alleged in the action or proceeding to May 2015. Mr. Gao served as Senior Corporate Vice Presidentbe wrongful, (ii) is or was identified in the corporation’s public filings with the SEC because such person is or was one of the most highly compensated executive officers of the corporation, or (iii) has consented to services of process in Delaware by written agreement.
The Board believes it is appropriate for News Corporation from 2006public companies in states that allow exculpation of officers to 2014. His roles at News Corporation includedhave exculpation clauses in their company charter. The nature of the role of directors and officers often requires them to make decisions on crucial matters. Frequently, directors and officers must make decisions in response to time-sensitive opportunities and challenges, which can create substantial risk of investigations, claims, actions, suits or proceedings seeking to impose liability on the basis of hindsight, especially in the current litigious environment and regardless of merit. Limiting concern about personal risk would empower both directors and officers to best exercise their business judgment in furtherance of stockholder interests while minimizing the potential distraction posed by frivolous lawsuits and costs which are often borne by the Company either directly, through indemnification, or indirectly through higher insurance premiums. The Company expects its peers to adopt exculpation clauses that limit the personal liability of officers in their Certificate of Incorporation and failing to adopt the amendment could impact our recruitment and retention of exceptional officer candidates that conclude that the potential exposure to liabilities, costs of defense and other risks of proceedings exceeds the benefits of serving as Chief Executive Officeran officer of News Corporation China Investments; Chief Executive Officerthe Company. Failure could also present barriers to our ability to accomplish our business objectives due to the diversion of Star TV China Company; Chairmanmanagement attention and result in a waste of MySpace China;corporate resources. This amendment will also more generally align the protections available to our directors with those available to our officers.
After considering the advantages and Chief Representativedisadvantages of News Corporation Beijing Representative Office. Mr. Gao directed News Corporation strategy, government relations,exculpating certain officers set forth in Section A of Article IX of our Certificate of Incorporation, the Board has unanimously voted to propose to the stockholders that Section A of Article IX be amended to expand the exculpation provision to limit liability of certain officers. In reaching this determination to propose this amendment to our Certificate of Incorporation, the Board concluded that the proposed amendment would better position the Company to attract top officer candidates and retain our current officers and enable the officers to exercise their business development, strategic investmentsjudgment in furtherance of the interests of the stockholders without the potential for distraction posed by the risk of personal liability. Additionally, it will align the protections for the officers with those protections afforded to the directors.
The proposed amendment is not being proposed in response to any specific resignation, threat of resignation or refusal to serve by any director or officer.
For the reasons described above, our Board believes that this proposal to amend our Certificate of Incorporation by amending Section A of Article IX is advisable and Star TV's overall sales, distributionin the best interests of the Company and production operationsits stockholders.
Text of the Amendment
The proposed amendment to our Certificate of Incorporation, which is set forth above, shows the proposed revisions to Section A of Article IX of our Certificate of Incorporation, with additions indicated by underlining. Certain conforming changes, such as moving and modifying defined terms and updating cross-references, will also be necessary in China. Mr. Gao servesconnection with the foregoing amendment and such conforming changes will be reflected in our proposed Fourth Amended and Restated Certificate of Incorporation, a copy of which is set forth in Appendix D and incorporates changes that will be made to our Certificate of Incorporation, assuming Proposals 1, 3, 4 and 5 are approved by our stockholders at the Annual Meeting. If this proposal is approved by our stockholders, we will amend and restate our Certificate of Incorporation to reflect the revisions contemplated by this proposal (as well as any other revisions contemplated by Proposals 3 and 4, if such proposals are also approved by our stockholders) and the resulting Fourth Amended and Restated Certificate of Incorporation will become effective upon its filing with the Secretary of State of the State of Delaware, which is anticipated to occur promptly after the Annual Meeting.
The affirmative vote of the holders of a majority of our outstanding shares of Common Stock is required to approve this Proposal 5. Approval of this proposal is not contingent on the boardapproval of directorsany other proposals in this Proxy Statement.
The Board recommends a vote “FOR” approval of Infront Sports and Media AG, Beijing Vantone Industrial Co. Ltd., AGTech Holding Ltd. and Mr. Gao servedan amendment to our Certificate of Incorporation to remove the limitation on the board of directors of AirMedia Group Inc. from 2014stockholders’ ability to 2015 and Bona Film Group Ltd. from 2012 to 2014. Mr. Gao has served as an Adjunct Professor for the Business School at the Chinese University of Hong Kong. Mr. Gao graduated from the Harbin Institute of Technology and the University of California, Los Angeles with a bachelor's degree, masters degree, and a Ph.D. degree in Engineering. Mr. Gao brings to the board valuable insight into business strategies and development, many years of experience as a senior executive, and experience serving on the boards of other companies.
CORPORATE GOVERNANCE
CORPORATE GOVERNANCE
Corporate Governance Guidelines
Our Corporate Governance Guidelines and Principles reflect the principles by which the Board operates and sets forth director qualification standards, responsibilities, compensation, evaluation, orientation and continuing education, board committee structure, chief executive officer performance review, management succession planning and other policies for the governance of the Company. A copy of the Corporate Governance Guidelines and Principles is available on our website at www.amctheatres.com under “Investor Relations”-”—“Governance”-”—“Governance Documents”. The Board executes its oversight responsibility for risk management directly and through its committees, as follows:
The Audit Committee has primary oversight responsibility with respect to the Company’s annual enterprise risk management analysis, including financial and accounting risks. The Audit Committee discusses with management the Company's majorCompany’s significant financial and non-financial risk exposures and the Company'sCompany’s risk assessment and risk management policies. Management provides to the Audit Committee periodic assessments of the Company'sCompany’s risk management processes and systems of internal control. The ChairmanChairperson of the Audit Committee reports to the full Board regarding material risks as deemed appropriate. The Board'sBoard’s other committees oversee risks associated with their respective areas of responsibility. For example, the Compensation Committee considers the risks associated with our compensation policies and practices, with respect to both executive compensation and employee compensation generally. The Board is kept abreast of its committees'committees’ risk oversight and other activities via reports of the committee chairmenchairpersons to the full Board. These reports are presented at every regular Board meeting and include discussions of committee agenda topics, including matters involving risk oversight. The Board, together with its committees, considers specific risk topics, covering the range of material risks to the Company, including risks associated with our annual operating plan, our capital structure, our strategic initiatives, compliance, human capital management, the environment and climate change, information systems and technology, privacy, and other cyber security.security risks. The Board and its committees regularly review our risk managment policies, processes, and controls. In addition, the Board receives reports from the members of our senior leadership team that include discussions of the risks and exposures involved in their respective areas of responsibility. Further, the Board is informed of developments that could affect our risk profile or other aspects of our business. Cybersecurity Risk
The Audit Committee’s charter provides that it will have oversight responsibility for information systems, privacy and data security risk exposure, otherwise known as cybersecurity. Management has formed a cross-functional information security committee (the “InfoSec Committee”) to develop and implement cybersecurity policies, procedures and training to mitigate cybersecurity risks. Further, the InfoSec Committee is charged with response preparedness for cybersecurity incidents. Management regularly reports to the Audit Committee on cybersecurity risks and initiatives undertaken to address such risks. The Audit Committee and/or InfoSec Committee also engage independent consultants to review, test and make recommendations regarding cybersecurity preparedness.
Compensation Policies and Practices as They Relate to Risk Management
We do
The Compensation Committee has reviewed and discussed the concept of risk as it relates to the Company’s compensation policies, and it does not believe that any risks arising from ourthe Company’s compensation policies or practices create or encourage the taking of excessive risks that are reasonably likely to have a material adverse effect on the Company. Below are some of the highlights of the Company’s compensation programs that mitigate risks associated with compensation: •
Compensation is comprised of a combination of base salary, annual cash incentive, and long-term equity incentive awards;
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22 | | Performance metrics and targets are established by the Compensation Committee within the first 90 days of the relevant performance period;
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| | Compensation is comprised of a combination of base salary, annual cash incentive, and long-term equity incentive awards;
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| | Equity compensation vesting is multi-year service based and performance based with overlapping performance periods; and
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| | Maximum payout for cash incentives is 200% of the value at target and maximum payout for equity incentives is 150% of the value at target.
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While annual cash incentives are available for all full-time employees, only senior officers receive equity awards;
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Equity compensation vesting is multi-year service based and performance based with overlapping performance periods; and
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Maximum payout for cash and equity incentives is 200% of Contents
the value at target.The Compensation Committee has identified no material risks in the compensation programs for 2022.
Business Conduct and Ethics
We have a Code of Business Conduct and Ethics that applies to all of our associates, including our principal executive officer, principal financial officer and principal accounting officer, or persons performing similar functions. These standards are designed to deter wrongdoing and to promote honest and ethical conduct. The Code of Business Conduct and Ethics, which addressaddresses the subject areas covered by the SEC'sSEC’s rules, may be obtained free of charge through our website: www.amctheatres.com under “Investor Relations”-—”Governance”-—”Governance Documents”. Any amendment to, or waiver from, any provision of the Code of Business Conduct and Ethics required to be disclosed with respect to any senior executive or financial officer shall be posted on this website. Board and Committee
InformationMeeting Attendance
The Board held eight6 meetings during the year ended December 31, 2016.2022. Each then-serving director attended at least 75% of the total combined meetings held by the Board plus the meetings held by the committees of the Board on which such director served, except for former director, Mr. Zhang and Mr. Zeng.Wittlinger.
Communications with the Board
Our stockholders and other interested parties may communicate to our Board, its committees or our non-managementnon- management directors as a group, by writing to the Secretary of AMC Entertainment Holdings, Inc. at One AMC Way, 11500 Ash Street, Leawood, KS 66211. Stockholders and other interested parties should indicate that their correspondence is intended to be communicated to the Board. Director Independence
We avail ourselves
Currently, eight of our directors are independent: Ms. Clark, Mr. Koch, Mr. Lader, Mr. Locke, Ms. Pawlus, Ms. Putnam, Dr. Saich, and Mr. Sussman, as determined by our Board in accordance with NYSE rules. The remaining member of the “controlled company” exceptionBoard, Mr. Aron, is not independent under the NYSE rules or within the meaning of the NYSE, which permits a listed companySecurities Exchange Act of which more than 50% of the voting power for election of directors is held by an individual, a group or another company to not comply with certain of the NYSE's governance requirements. Because more than 50% of our voting power is held by Wanda, we are not required to have a majority of independent directors on our Board. We currently have three independent directors, Mr. Hill, Mr. Saich, and Ms. Pawlus. In addition, while we are not required to have a Compensation Committee or a nominating and corporate governance committee, we have established such committees, each of which is composed of three directors, one of whom is independent.1934 (the “Exchange Act”).
Our Board has determined that Ms. Clark, Mr. Hill, Mr. Saich, andLader, Ms. Pawlus, Ms. Putnam, and Dr. Saich are independent in accordance with NYSE rules and within the meaning of the Securities Exchange Act of 1934 (the “Exchange Act”) for purposes of serving on our Audit Committee. The remaining membersCompensation Committee is currently composed of six directors: Mr. Koch, Mr. Lader, Mr. Locke, Ms. Pawlus, Dr. Saich, and Mr. Sussman, all of whom are independent. The Nominating and Corporate Governance Committee is composed of five directors: Ms. Clark, Mr. Koch, Mr. Locke, Ms. Putnam, and Mr. Sussman, all of whom are independent.
Board Leadership Structure
Pursuant to the Company’s Corporate Governance Guidelines, the Board does not have a fixed policy regarding the separation of the offices of Chairperson of the Board Mr. Locke, Mr. Zeng, Mr. Gao, Mr. Aron, Mr. Zhang, and Mr. Koch, are not independent under the NYSE rules or within the meaning of the Exchange Act.Board Leadership Structure
CEO. Under our current leadership structure, both of those roles are held by Mr. Aron. Because the roles of Chairman ofChairperson and CEO are combined, the Board and Chief Executive Officer are held by different individuals.has appointed Mr. Zhang servesLader to serve as ourthe non-executive Chairman of the Board and Mr. Aron serves as our Chief Executive Officer.Lead Independent Director. At this time, our Board believes that this structure is best for the Company as it allows our ChairmanChairperson and CEO to oversee board mattersthe operational leadership and assist the Chief Executive Officer with strategic initiatives, while enabling our Chief Executive Officer to develop and implement the strategic direction of the Company.Company, while enabling the Lead Independent Director to facilitate the Board’s independent oversight of management, including evaluation of the CEO’s performance. Our ChairmanChairperson is not considered independent under the NYSE rules.
The responsibilities of the Lead Independent Director include:
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Convening, chairing, and determining agendas for executive sessions of the non-management and independent directors;
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Serving as a liaison between the Board and management;
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Determining, in consultation with the Chairman, the schedule and agendas for meetings of the Board;
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Discussing with the other directors any concerns they may have about the Company and its performance and relaying such concerns, when appropriate, to the full Board;
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Consulting with the Chief Executive Officer of the Company regarding concerns of the directors;
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Being available for consultation with any of the senior executives of the Company as to any concerns they might have; and
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Being available for communications with the Company’s stockholders.
Our non-management directors meet in an executive session, without members of management present, no less than once per year in accordance with the NYSE rules. Our
Board Chairman or his designeeLead Independent Director presides over these executive sessions.
Attendance at Annual Meetings
We encourage our directors to attend our Annual Meeting of Stockholders, absent unusual circumstances. SixAll of our directors attended the 20162022 Annual Meeting of Stockholders. Mr. Zhang, Mr. Zeng,
Board and Mr. Locke did not attendCommittee Evaluations; Director Education
Our Board engages in ongoing self-evaluation and assessment. Annually, the 2016 Annual Meetingdirectors review and complete evaluations on Board effectiveness, committee performance and peer assessment. Each of Stockholders.the committees and the full Board discuss their self-assessments at least annually. The Nominating and Corporate Governance Committee periodically reviews the form and process for Board and committee self-evaluations. The Board also receives periodic briefings and education on core concepts and trends that impact our businesses and society.
Our Board has established three standing committees. The standing committees consist of an Audit Committee, a Compensation Committee, and a Nominating and Corporate Governance Committee. The standing committees are comprised of directors as provided in the table below: | | | | | | |
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Board Member | | Audit(1) | | Compensation | | Nominating
and Corporate
Governance |
Lincoln Zhang | | | | | | |
Adam M. Aron | | | | | | |
Jack Q. Gao | | | | Chair | | |
Anthony J. Saich | | Member | | | | Chair |
Gary F. Locke | | | | | | Member |
Kathleen M. Pawlus | | Chair | | | | |
Lloyd Hill | | Member | | Member | | |
John Zeng | | | | | | |
Howard W. Koch, Jr. | | | | Member | | Member |
Meetings Held in 2016 | | 6 | | 4 | | 4 |
| Board Member | | | Audit(1) | | | Compensation | | | Nominating and
Corporate
Governance | |
| Adam M. Aron | | | | | | | | | | |
| Denise M. Clark | | | Member | | | | | | Member | |
| Howard W. “Hawk” Koch, Jr. | | | | | | Member | | | Member | |
| Philip Lader | | | Member | | | Member | | | | |
| Gary F. Locke | | | | | | Member | | | Chairperson | |
| Kathleen M. Pawlus | | | Chairperson | | | Member | | | | |
| Keri S. Putnam | | | Member | | | | | | Member | |
| Adam J. Sussman | | | | | | Member | | | Member | |
| Anthony J. Saich | | | Member | | | Chairperson | | | | |
| Meetings Held in 2022 | | | 6 | | | 4 | | | 4 | |
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24 | | Our Audit Committee is comprised of three independent members, all of whom are financially literate as defined in the NYSE rules.
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(1)
Our Audit Committee is comprised of five independent members, all of whom are financially literate as defined in the NYSE rules.
Each of our standing committees, the Audit Committee, Compensation Committee and Nominating and Corporate Governance Committee, operates under a charter, which is available on our website at www.amctheatres.com under “Investor Relations”-”—“Governance”-”—“Governance Documents”. The functions performed by each of the standing committees of the Board are briefly described below. Our Audit Committee consists of Ms. Clark, Mr. Hill, Mr. SaichLader, Ms. Pawlus, Ms. Putnam, and Dr. Saich. Ms. Pawlus.Pawlus serves as the chairperson of the Audit Committee. The Board has determined that Mr. Hill and Ms. Pawlus qualifyqualifies as an Audit Committee financial expertsexpert as defined in Item 407(d)(5) of Regulation S-K and that each member of our Audit Committee is financially literate as defined in the NYSE rules and each member is independent within the meaning of Rule 10A-3 of the Exchange Act and the NYSE rules. Mr. Wittlinger served on the Audit Committee until his resignation from the Board in December 2022. Ms. Clark, Mr. Lader and Ms. Putnam were appointed to the Audit Committee in January 2023.
The principal duties and responsibilities of our Audit Committee are as follows: | ·
| | to oversee our financial reporting process and internal control system;
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| | to appoint and replace our independent registered public accounting firm from time to time, determine their compensation and other terms of engagement, oversee their work and perform an annual evaluation;
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to oversee our financial reporting process and internal control system; | ·
| | to oversee the performance of our internal audit function; and
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| ·
| | to oversee our compliance with legal, ethical and regulatory matters.
|
•
to appoint and replace our independent registered public accounting firm from time to time, determine their compensation and other terms of engagement, oversee their work and perform an annual evaluation;
•
to oversee the performance of our internal audit function;
•
to oversee the Company’s information systems, privacy and data security risks; and
•
to oversee our compliance with legal, ethical and regulatory matters.
The Audit Committee has the power to investigate any matter brought to its attention within the scope of its duties. It also has the authority to retain counsel and advisors to fulfill its responsibilities and duties. Our Compensation Committee consists of Mr. Gao,Koch, Mr. Hill,Lader, Mr. Locke, Ms. Pawlus, Dr. Saich, and Mr. Koch. DespiteSussman, all of whom are independent in accordance with the exceptionNSYE rules. Dr. Saich serves as the chairperson of the Compensation Committee. Mr. Wittlinger served as a “controlled company” undermember and the NYSE rules, our Compensation Committee charter provides that one memberchairperson of the Compensation Committee will be independentuntil his resignation from the Board in accordance with NYSE rules,December 2022. Mr. Koch, Mr. Locke, Ms. Pawlus, and Mr. Hill is that member. Dr. Saich were appointed to the Compensation Committee in January 2023.
The principal duties and responsibilities of our Compensation Committee are as follows: | ·
| | to provide oversight on the development and implementation of the compensation policies, strategies, plans and programs for our key employees and non-employee directors and disclosure relating to these matters;
|
•
| ·
| | to review and approve the compensation of our CEO and our other executive officers; and
|
to provide oversight on the development and implementation of the compensation policies, strategies, plans and programs for our key employees and non-employee directors and disclosure relating to these matters; | ·
| | to provide oversight concerning the compensation of our CEO, succession planning, performance of our CEO and related matters.
|
•
to review and approve the compensation of our CEO and our other executive officers; and
•
to provide oversight concerning the compensation of our CEO, succession planning, performance of our CEO and compensation related matters.
The Compensation Committee may delegate to management administration of incentive compensation plans for non-executive officers. The Compensation Committee engaged and retained Pay Governance, LLC,Aon, as an independent executive compensation consultant, to provide advice on 20162022 compensation matters. During 2016, Pay Governance2022, Aon provided advice on executive and director
compensation programs, executive and director market pay analysis, compensation peer group, CEO pay recommendations and drafting of the Compensation Discussion and Analysis disclosures contained in the Company’s Proxy Statement. The Compensation Committee reviewed the nature of its relationship with Pay GovernanceAon and determined that there were no conflicts of interest with respect to Pay Governance’sAon’s independence. Nominating and Corporate Governance Committee
Our Nominating and Corporate Governance Committee consists of Ms. Clark, Mr. Saich,Koch, Mr. Locke, Ms. Putnam, and Mr. Koch. DespiteSussman, all of whom are independent in accordance with the exceptionNSYE rules. Mr. Locke serves as a “controlled company” under the NYSE rules, our Nominating and Corporate Governance Committee charter provides that one memberchairperson of the Nominating and Corporate Governance Committee. Mr. Wittlinger served on the Nominating and Corporate Governance Committee will be independentuntil his resignation from the Board in accordance with NYSE rules,December 2022. Mr. Lader and Dr. Saich (as Chairperson) also served on the Nominating and Corporate Governance Committee until January 2023. Ms. Clark, Mr. Koch, Mr. Locke, Ms. Putnam, and Mr. Saich is that member. Sussman were appointed to the Nominating and Corporate Governance Committee in January 2023.
The principal duties and responsibilities of the Nominating and Corporate Governance Committee are as follows: | ·
| | to establish criteria for board and committee membership and recommend to our Board proposed nominees for election to the Board and for membership on committees of the Board; and
|
•
| ·
| | to make recommendations to our Board regarding board governance matters and practices.
|
to establish criteria for board and committee membership and recommend to our Board proposed nominees for election to the Board and for membership on committees of the Board; and
•
to make recommendations to our Board regarding board governance matters and practices.
Director Nomination Process
The Nominating and Corporate Governance Committee is responsible for reviewing with the Board, on an annual basis, the appropriate criteria that directors are required to fulfill (including experience, qualifications, attributes, skills and other characteristics) in the context of the current make-up of the Board and the needs of the Board given the circumstances of the Company. In identifying and screening director candidates, the Nominating and Corporate Governance Committee considers whether the candidates fulfill the criteria for directors approved by the Board, including integrity, objectivity, independence, sound judgment, leadership, courage and diversity of experience (for example, in relation to finance and accounting, strategy, risk, cybersecurity, technical expertise, policy-making,policymaking, etc.). The Board has not adopted a formal diversity policy butand pursuant to the Company’s Corporate Governance Guidelines and Principles, the Board broadly construes diversity to mean diverse background, education, skills, age, expertise with a proven record of accomplishment and the ability to work well with others. The Nominating and Corporate Governance Committee does not assign specific weight to any particular factor but in selecting members for open Board positions, the Board takes into account such factors as it deems appropriate, which may include the current composition of the Board, the range of talents, experiences and skills that would best complement those already represented on the Board and the need for financial or other specialized expertise. The Board seeks to achieve a mix of members whose experience and backgrounds are relevant to the Company’s strategic priorities and the scope and
complexity of the Company’s business. Overall, each of our Board members is committed to the growth of the Company for the benefit of the stockholders, contributes new ideas in a productive and congenial manner and regularly attends board meetings.
In recognition of the importance of having a Board composed of diverse racial, ethnic and gender identities, and in order to improve the Company’s ability to achieve that outcome, the Nominating and Corporate Governance Committee has adopted the following policy:
Policy on Director Candidate Diversity
Because diversity, equity and inclusion are fundamental to the AMC culture and critical to the company’s success, we are committed to having a Board of Directors reflective of those values. In furtherance of this commitment, the Nominating and Corporate Governance Committee will ensure that the list of candidates to be considered for nomination to open Board seats includes candidates with diversity of race, ethnicity, and gender. Further, consultants engaged to assist in searches will be instructed to include such candidates in their submissions.
Board Diversity Self-Disclosure
The chart below sets forth certain diverse characteristics that members of our Board have voluntarily self-disclosed to the Company and consented to have publicly disclosed to our stockholders.
| Board Member | | | Gender Identity | | | Race/Ethnicity | | | Other Disclosed
Characteristics | |
| Adam M. Aron | | | Male | | | White | | | Jewish | |
| Denise M. Clark | | | Female | | | White | | | LGBTQ+ / Veteran | |
| Howard W. “Hawk” Koch, Jr. | | | Male | | | White | | | Jewish | |
| Philip Lader | | | Male | | | White | | | Episcopalian | |
| Gary F. Locke | | | Male | | | Asian | | | | |
| Kathleen M. Pawlus | | | Female | | | White | | | | |
| Keri S. Putnam | | | Female | | | White | | | | |
| Anthony J. Saich | | | Male | | | White | | | Dual UK Nationality | |
The Nominating and Corporate Governance Committee considers recommendations for Board candidates submitted by stockholders using substantially the same criteria it applies to recommendations from the Nominating and Corporate Governance Committee, directors and members of management. Stockholders may submit recommendations by providing the person'sperson’s name and appropriate background and biographical information in writing to the Nominating and Corporate Governance Committee at: Company Secretary, One AMC Way, 11500 Ash Street, Leawood, Kansas 66211 or by emailing: KConnor@amctheatres.com. Invitations to serve as a nominee are extended by the Board itself via the ChairmanChairperson and the ChairmanChairperson of the Nominating and Corporate Governance Committee. Compensation Committee Interlocks and Insider Participation
During 2022, our Compensation Committee consisted of Mr.
Gao,Lader, Mr.
HillSussman and Mr.
Koch were members of the Compensation Committee for all actions taken during the year ended December 31, 2016. Mr. Ning Ye was a member ofWittlinger, who served on the Compensation Committee until his resignation
on February 8, 2016.from the Board in December 2022. During the period January 1,
20162022, through December 31,
2016,2022, no member of the Compensation Committee had a relationship required to be described under the SEC rules relating to disclosure of related person transactions
(other than as described below in “Related Person Transactions” with respect to agreements with Wanda) and none of our executive officers served on the board of directors or compensation committee of any entity that had one or more of its executive officers serving on the Board or the Compensation Committee of the Company.
Director
HUMAN CAPITAL RESOURCES
Talent Acquisition, Development, and Retention
AMC associates are core to our commitment to delivering the best theatrical experience in the world. Hiring, developing and retaining employees who support the guest-focused mission in our theatres is essential to our operations. Acquiring the right talent efficiently is a core capability that we regularly monitor and manage, given the need to rapidly staff our frontline operations. Once hired, we focus on the development of our associates, creating experiences and programs that promote performance, growth and career opportunities for those who are passionate about our business. We sponsor numerous training, education and leadership development programs for associates at all levels, from hourly associates to executive officers. These programs are designed to enhance leadership and managerial capability, ensure quality execution of our programs, drive guest satisfaction and increase return on investment.
Diversity, Equity, and Inclusion
Our goal is to create a workforce as diverse as the guests we serve and the movies we show on our screens. As such, diversity, equity and inclusion (“DEI”) are fundamental to our culture and critical to our success. In support of this goal, AMC has established five councils in support of Women, Latinx, African American, Asian American and Pacific Islander, and LGBTQ+ associates. The purpose of these councils is to strengthen our culture by defining opportunities to embrace our diversity, lead with fairness and impartiality and create a more inclusive work environment by leveraging associate experiences. These councils are supported by the DEI function under the guidance of the Chief Human Resources Officer. This DEI focus ensures that all communities are represented in our long-term systemic approach. Our work has been recognized externally: AMC has received a perfect score for 14 consecutive years on the Human Rights Campaign Foundation’s Corporate Equality Index as one of the “Best Places to Work for LGBTQ Equality”; named for eight years running as one of the “Best Places to Work” for people with disabilities on the Disability Equality Index; and recognized for five consecutive years as one of Forbes “Best Employers for Diversity.”
Compensation, Benefits, Safety, and Wellness
In addition to offering market competitive salaries and wages, we offer comprehensive health and retirement benefits to eligible employees. Our health and welfare benefits are supplemented with specific programs to manage or improve common health conditions, a variety of voluntary benefits and paid time away from work programs. We also provide a number of innovative programs designed to promote physical, emotional and financial well-being. Our commitment to the safety and health of our associates continues to be a top priority.
Management regularly updates the Compensation Committee with regard to each of the above topics.
DIRECTOR COMPENSATION
The following section presents information regarding the compensation paid during the year ended December 31, 20162022, to members of our Board who were not employees of Wanda or the Company (“non-employee directors”). The otherEmployee members of our Board do not receive any compensation from the Company.Company for service as a director. We reimburse all directors for any out-of-pocket expenses incurred by them in connection with their services provided in such capacity. Non-Employee Director Compensation
In order to attract and retain qualified non-employee directors, the Company adopted aamended and restated its Non-Employee Director Compensation Plan, effective January 1, 2014,Program on July 29, 2021, pursuant to which non-employee directors arewere compensated for their service to the Company.Company in 2022. Each non-employee director receivesis eligible for the following annual compensation for services as a Board member: •
an annual cash retainer of $150,000;
•
an annual stock award with a calculation value of $105,000, subject to a one-year holding requirement;
•
an annual cash retainer of $50,000 for the Lead Independent Director; and
•
an annual cash retainer for non-employee directors who serve on a committee as follows:
| Committee | | | Chairperson | | | Member | |
| Audit | | | | $ | 35,000 | | | | | $ | 17,500 | | |
| Compensation | | | | | 25,000 | | | | | | 15,000 | | |
| Nominating and Corporate Governance | | | | | 20,000 | | | | | | 10,000 | | |
Cash retainers are paid in quarterly installments and are pro-rated for partial years of service.
Stock awards are made pursuant to the Company’s 2013 Equity Incentive Plan (“EIP”), are fully vested at the date of grant, and are issued on the later of (i) the date annual grants are made to senior management and (ii) the date the director is elected to the Board. Stock awards are pro-rated for the director’s first partial year of service, but not for the last partial year of service. Directors may elect to receive all or a portion of their cash retainer in stock. Stock awards must be retained until the earlier to occur of the first anniversary of the grant date or the director’s departure from the Board.
Unless otherwise specified by the Board, the number of shares awarded to each non-employee director is determined by dividing the value of the award by the average closing price of the stock for the five trading days prior to the date of the stock award. Stock Award values reflected in the director compensation table below are based upon the closing price for our Common Stock on the date of grant. Since the stock prices used to calculate the grants and determine the compensation value are different, in times of high volatility the reflected compensation may ultimately be higher or lower than that targeted by the Board. For the 2022 stock awards, the price used to calculate the shares awarded was $17.65 and the price used to calculate the compensation included in the table was $19.67.
The Compensation Committee, in consultation with its independent executive compensation consultant, annually reviews the Non-Employee Director Compensation Program and recommends updates, if any, to the full Board for approval.
| | a)
| | an annual cash retainer of $50,000 for non-employee directors who serve as a Board member;
| | | | 29 | |
| b)
| | annual stock award with a value of $100,000 for non-employee directors who serve as a Board member. Stock awards are made pursuant to the Company's 2013 Equity Incentive Plan and are fully vested at the date of grant. The number of shares awarded to each non-employee director is determined by dividing $100,000 by the average closing price of the stock for the five trading days prior to the date of the stock award; and
|
| c)
| | an annual cash retainer for non-employee directors who serve on a committee as follows:
|
| | | | | | |
| | | | | | |
Committee | | Chairperson | | Member |
Audit | | $ | 15,000 | | $ | 5,000 |
Compensation | | | 10,000 | | | 5,000 |
Nominating and Corporate Governance | | | 10,000 | | | 5,000 |
Director Compensation Table
The following table presents information regarding the compensation of our non-employee directors during the year ended December 31, 2016. The amounts reflect partial-year2022.
| Name | | | Fees Earned or
Paid in Cash(1) | | | Stock
Awards(2) | | | Total | |
| Denise M. Clark(3) | | | | $ | — | | | | | $ | — | | | | | $ | — | | |
Howard W. “Hawk” Koch, Jr. | | | | | 150,000 | | | | | | 117,037 | | | | | | 267,037 | | |
| Philip Lader(4) | | | | | 260,000 | | | | | | 117,037 | | | | | | 377,037 | | |
| Gary F. Locke | | | | | 150,000 | | | | | | 117,037 | | | | | | 267,037 | | |
| Kathleen M. Pawlus | | | | | 185,000 | | | | | | 117,037 | | | | | | 302,037 | | |
| Keri S. Putnam(3) | | | | | — | | | | | | — | | | | | | — | | |
| Anthony J. Saich | | | | | 187,500 | | | | | | 117,037 | | | | | | 304,537 | | |
| Adam J. Sussman(4) | | | | | 200,000 | | | | | | 117,037 | | | | | | 317,037 | | |
| Lee E. Wittlinger(5) | | | | | 202,500 | | | | | | 117,037 | | | | | | 319,537 | | |
(1)
Includes the annual cash retainer for services as a board member, the annual cash retainer for services as the Lead Independent Director, the annual cash retainer for services as a member of a committee, and the annual cash retainer for services as a chairperson of a committee.
(2)
Represents the aggregate grant date fair values, as computed in accordance with Financial Accounting Standards Board’s Accounting Standard Codification (“ASC”) Topic 718, Compensation—Stock Compensation, calculated based upon the closing price of the Common Stock on February 16, 2022, of $19.67 per share. As discussed above, the number of shares granted was calculated using a price of $17.65 (representing a five-day average closing price) resulting in the variance between the award calculation value and the ultimate compensation value included in the table.
(3)
Ms. Clark and Ms. Putnam were not elected to the Board serviceuntil January 2023 and, thus received no fees in 2022.
(4)
Members of the special litigation committee established to investigate and evaluate certain derivative claims received a $35,000 cash fee for their service.
(5)
Mr.
Locke, who joinedWittlinger resigned from the Board in
February 2016. | | | | | | | | | |
| | Fees Earned or | | Stock | | | |
Name | | Paid in Cash(1) | | Awards(2) | | Total |
Anthony J. Saich | | $ | 65,000 | | $ | 98,704 | | $ | 163,704 |
Lloyd Hill | | | 70,000 | | | 98,704 | | | 168,704 |
Howard W. Koch | | | 60,000 | | | 98,704 | | | 158,704 |
Gary F. Locke | | | 48,715 | | | 97,010 | | | 145,725 |
Kathleen M. Pawlus | | | 65,000 | | | 98,704 | | | 163,704 |
| | (1)
30 | | Includes the annual cash retainer for services as a board member, the annual cash retainer for services as a member of a committee, and the annual cash retainer for services as a chairman of a committee.
| | | | | |
| (2)
| | Represents the aggregate grant date fair values, as computed in accordance with Financial Accounting Standards Board's Accounting Standard Codification Topic 718, Compensation—Stock Compensation, calculated based upon the closing price of the Company's Class A common stock on January 4, 2016 of $23.17 per share for Mr. Saich, Mr. Hill, Mr. Koch and Ms. Pawlus and upon the closing price of the Company's Class A common stock on February 24, 2016 of $22.55 per share for Mr. Locke.
|
In December 2016, Wanda agreed to make a capital contribution of $10,000,000 to AMC (without any increase in Wanda’s economic interest or voting rights in the Company) for payment to certain officers, directors, and other personnel for extraordinary services rendered in connection with merger and acquisition activity in 2016. This contribution was received during February 2017. As a result of these activities Mr. Jack Q. Gao received a bonus in the amount of $1,500,000 related to his service as a director.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
AND RELATED STOCKHOLDER MATTERS
The following table sets forth certain information regarding beneficial ownership of our Class A and Class B common stockCommon Stock outstanding as of February 28, 2017,September 25, 2023 with respect to: | ·
| | each person or group of affiliated persons known by us to own beneficially more than 5% of any class of the outstanding shares of Class A and Class B common stock, together with their addresses;
|
•
| ·
| | each of our directors, director nominees and our Named Executive Officers; and
|
each person or group of affiliated persons known by us to own beneficially more than 5% of the outstanding shares of Common Stock, together with their addresses; | ·
| | all directors and executive officers as a group.
|
•
each of our directors, director nominees and our Named Executive Officers (“NEOs”); and
•
all directors and executive officers as a group.
The address for each of our directors, director nominees and Named Executive OfficersNEOs is c/o AMC Entertainment Holdings, Inc., One AMC Way, 11500 Ash Street, Leawood, Kansas 66211. Each person has sole voting and dispositive power over shares held by them, except as described below. | NAME | | | Common Stock
Number | | | % | |
| 5% Beneficial Owners: None | | | | | | | | | | | | | |
| Directors, Director Nominees and Named Executive Officers: | | | | | | | | | | | | | |
| Adam M. Aron | | | | | 366,336 | | | | | | * | | |
| Sean D. Goodman | | | | | 28,285 | | | | | | * | | |
| Daniel E. Ellis | | | | | 18,305 | | | | | | * | | |
| Elizabeth F. Frank | | | | | 22,018 | | | | | | * | | |
| Kevin M. Connor | | | | | 17,314 | | | | | | * | | |
| Denise M. Clark | | | | | 2,990 | | | | | | * | | |
| Howard W. “Hawk” Koch., Jr. | | | | | 4,180 | | | | | | * | | |
| Philip Lader | | | | | 7,724 | | | | | | * | | |
| Gary F. Locke | | | | | 7,725 | | | | | | * | | |
| Kathleen M. Pawlus | | | | | 7,725 | | | | | | * | | |
| Keri S. Putnam | | | | | 2,990 | | | | | | * | | |
| Anthony J. Saich | | | | | 7,725 | | | | | | * | | |
| Adam J. Sussman | | | | | 7,725 | | | | | | * | | |
| All directors and executive officers as a group (16 persons)(1) | | | | | 557,483 | | | | | | * | | |
| | | | | | | | | |
| | | | | | | | | |
| | Class A | | | | Class B | | | |
| | Common Stock | | | | Common Stock | | | |
NAME | | Number | | % | | Number | | % | |
5% Beneficial Owners: | | | | | | | | | |
Wanda America Investment Holding Co. Ltd., a wholly-owned indirect subsidiary of Dalian Wanda Group Co., Ltd.(1) | | — | | — | | 75,826,927 | | 100 | % |
Driehaus Capital Management, LLC(2) | | 2,965,625 | | 5.4% | | | | | |
The Vanguard Group Inc.(3) | | 3,028,764 | | 5.5% | | — | | — | |
Monterey Capital III S.à r.l.(4) | | 4,536,466 | | 8.2% | | — | | — | |
Directors, Director Nominees and | | | | | | — | | — | |
Named Executive Officers: | | | | | | — | | — | |
Adam M. Aron(5) | | 51,747 | | * | | — | | — | |
Craig R. Ramsey(5) | | 84,418 | | * | | — | | — | |
John D. McDonald(5) | | 50,056 | | * | | — | | — | |
Elizabeth Frank(5) | | 52,115 | | * | | — | | — | |
Mark A. McDonald(5) | | 45,718 | | * | | — | | — | |
Lincoln Zhang(6) | | — | | * | | — | | — | |
Anthony J. Saich | | 4,090 | | * | | — | | — | |
Lloyd Hill | | 13,090 | | * | | — | | — | |
Gary F. Locke | | 4,302 | | * | | — | | — | |
John Zeng(6) | | — | | * | | — | | — | |
Howard W. Koch. Jr. | | 6,952 | | * | | — | | — | |
Kathleen M. Pawlus | | 8,255 | | * | | — | | — | |
Jack Q. Gao(6) | | — | | * | | — | | — | |
All directors and executive officers as a group (18 persons)(5)(7) | | 451,394 | | 0.8% | | — | | — | |
*
Less than 1%
(1)
Includes 56,441 shares of Common Stock beneficially held by executive officers not named in the table.
| | (1)
| | Based on a schedule 13G filed March 5, 2014 by Wanda America Investment Holding Co. Ltd. In such filing, Wanda America Investment Holding Co. Ltd. lists its address as One AMC Way, 11500 Ash Street, Leawood, Kansas 66211. The rights of the holders of Class A common stock and Class B common stock are identical, except with respect to voting and conversion applicable to the Class B common stock. Each share of Class A common stock is entitled to one vote. Each share of Class B common stock is entitled to three votes and is convertible at any time into one share of Class A common stock.
| | | | 31 | |
| (2)
| | Based on a Schedule 13G filed February 14, 2017 by Driehaus Capital Management, LLC. In such filing, Driehaus Capital Management, LLC. lists its address as 25 East Erie Street, Chicago, IL 60611. The Schedule 13G indicates shared voting power and sole dispositive power on 2,965,625 shares and Driehaus Active Income Fund has shared voting and dispositive power over 2,018,443 shares.
|
| (3)
| | Based on a Schedule 13G/A #3 filed February 9, 2017 by The Vanguard Group Inc. In such filing, The Vanguard Group Inc. lists its address as 100 Vanguard Blvd., Malvern, PA 19355. The Schedule 13G/A indicates sole voting power on 41,048 shares and sole dispositive power on 2,986,306 shares and shared voting power over 3,120 shares and shared and dispositive power over 42,458 shares.
|
| (4)
| | Based on a Schedule 13G filed on December 7, 2016 by Monterey Capital III S.à r.l. (“Monterey”). In such filing, Monterey Capital III S.à r.l. lists their address as 1-3 Boulevard de la Foire, L-1528 Luxembourg. The Schedule 13G indicates Monterey has shared voting and dispositive power with Terra Firma Holdings Limited and Mr. Guy Hands over 4,536,466 shares.
|
| (5)
| | Does not include vested restricted stock units and vested performance stock units that will not be settled, and will be non-transferable, until the third anniversary of the grant date.
|
| (6)
| | Does not include shares of Class B common stock held by Wanda. Mr. Zhang, Mr. Gao, and Mr. Zeng are employees of Dalian Wanda Group Co., Ltd., an affiliate of Wanda American Investment Holding Co. Ltd. None of them have the power to dispose or vote any of our capital stock held by Wanda American Investment Holding Co. Ltd. Wanda American Investment Holding Co. Ltd's ownership of our Class B common stock is set forth in the table.
|
| (7)
| | Includes 130,651 shares of Class A common stock beneficially held by executive officers not named in the table.
|
DELINQUENT SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
REPORTS
Section 16(a) of the Exchange Act requires our directors and executive officers, and persons who own more than 10% of a registered class of our equity securities, to file with the SEC initial reports of ownership and reports of changes in ownership of our Common Stock and other equity securities. Officers, directors and holders of greater than 10% of our Common Stock are required by regulations of the SEC to furnish us with copies of all Section 16(a) reports they file. To our knowledge, based solely upon a review of the copies of such reports
furnished to usfiled electronically with the SEC and/or written representations that no other reports were required to be filed during
2016,2022, all filing requirements under Section 16(a) applicable to our officers, directors and 10% stockholders were satisfied
timely.17
timely, except for one late Form 4 for Director Howard W. “Hawk” Koch Jr. with respect to one transaction and one late Form 4 for Mr. Sean D. Goodman, Executive Vice President, Chief Financial Officer and Treasurer, with respect to one transaction, in each case due to administrative errors.
CERTAIN RELATIONSHIPS AND RELATED
PERSON TRANSACTIONS
Policies and Procedures with Respect to Related
Person Transactions
The Board has adopted the AMC Entertainment Holdings, Inc. Policy on Transactions with Related Persons as our policy for the review, approval or ratification of any transaction, arrangement or relationship (or any series of similar transactions, arrangements or relationships) in which the Company (including any of its subsidiaries) was, is, or will be a participant, and one of the Company'sCompany’s executive officers, directors, director nominees, 5% stockholders (or the immediate family or household members of any of the foregoing) or any firm, corporation or other entity in which any of the foregoing persons controls, is employed by, or has a material ownership interest (each, a “Related Person”) has a direct or indirect material interest. This policy is administered by the Audit Committee. As appropriate for the circumstances, the Audit Committee will review and consider relevant facts and circumstances in determining whether or not to approve or ratify such transaction. Our policy includes certain factors that the Audit Committee takes into consideration when determining whether to approve a related person transaction as follows: | ·
| | the position within or relationship of the related person with the Company;
|
•
| ·
| | the materiality of the transaction to the related person and the Company, including the dollar value of the transaction, without regard to profit or loss;
|
the position within or relationship of the related person with the Company; | ·
| | the business purpose for and reasonableness of the transaction (including the anticipated profit or loss from the transaction), taken in the context of the alternatives available to the Company for attaining the purposes of the transaction;
|
| ·
| | whether the transaction is comparable to a transaction that could be available on an arms-length basis or is on terms that the Company offers generally to persons who are not related persons;
|
•
| ·
| | whether the transaction is in the ordinary course of the Company's business and was proposed and considered in the ordinary course of business; and
|
the materiality of the transaction to the related person and the Company, including the dollar value of the transaction, without regard to profit or loss; | ·
| | the effect of the transaction on the Company's business and operations, including on the Company's internal control over financial reporting and system of disclosure controls and procedures, and any additional conditions or controls (including reporting and review requirements) that should be applied to such transaction.
|
•
the business purpose for and reasonableness of the transaction (including the anticipated profit or loss from the transaction), taken in the context of the alternatives available to the Company for attaining the purposes of the transaction;
•
whether the transaction is comparable to a transaction that could be available on an arms-length basis or is on terms that the Company offers generally to persons who are not related persons;
•
whether the transaction is in the ordinary course of the Company’s business and was proposed and considered in the ordinary course of business; and
•
the effect of the transaction on the Company’s business and operations, including on the Company’s internal control over financial reporting and system of disclosure controls and procedures, and any additional conditions or controls (including reporting and review requirements) that should be applied to such transaction.
Related Person Transactions
Management Stockholders Agreement
Antara Transaction
On December 22, 2022, the Company entered into a forward purchase agreement (the “Forward Purchase Agreement”) with Antara Capital, LP (“Antara”), pursuant to which the Company agreed, subject to the satisfaction of certain closing conditions, to (i) sell to Antara 106,595,106 AMC Preferred Equity Units (“APEs”) for an aggregate purchase price of $75.1 million (the “Forward Purchase APEs”) and (ii) simultaneously purchase from Antara, on a private basis, $100 million aggregate principal amount of the mergerCompany’s 10%/12% Cash/PIK Toggle Second Lien Notes due 2026 (the “Exchange Notes”) in exchange for 91,026,191 APEs (together with Wandathe Forward Purchase APEs, the “Private Placement APEs”). Each APE was a depositary share representing an interest in one one-hundredth (1/100th) of a share of the Company’s Series A Convertible Participating Preferred Stock and was designed to have the same economic and voting rights as a share of the Company’s Common Stock. Each APE was automatically convertible into Common Stock upon an approval by the Company’s stockholders to authorize sufficient additional shares of Common Stock to permit the conversion of the then-outstanding APEs. Such conversion occurred on August 30, 201225, 2023.
Immediately prior to entry into the Forward Purchase Agreement, on December 22, 2022, Antara purchased 60,000,000 APEs (the “ATM APEs”) for approximately $34.9 million under the Company’s at-the-market program (“Merger”ATM
program”),. The sale of the ATM APEs was made pursuant to the Equity Distribution Agreement, dated September 26, 2022, as amended, and the Company’s shelf registration statement on Form S-3 (File No. 333-266536). Following the purchase of the ATM APEs, Antara beneficially owned approximately 8.8% of the issued and outstanding APEs and approximately 5.0% of the APEs and Class A common stock on a combined basis, each as of December 22, 2022. Pursuant to the Company’s Policy on Transactions with Related Persons, any 5% stockholder of the Company is considered a Related Person. Also, on December 22, 2022, the Company repurchased from Antara $15.0 million aggregate principal amount of the Company’s 10%/12% Cash/PIK Toggle Second Lien Notes due 2026.
On February 7, 2023, the Company consummated the transactions contemplated by the Forward Purchase Agreement and issued to Antara 106,595,106 Forward Purchase APEs for an aggregate purchase price of $75.1 million and simultaneously purchased from Antara, on a private basis, the Exchange Notes in exchange for 91,026,191 APEs and cash equal to the accrued and unpaid interest on the Exchange Notes.
In addition to the Exchange Notes purchased pursuant to the Forward Purchase Agreement, on February 7, 2023, the Company repurchased from Antara $41.9 million aggregate principal amount of the Company’s 10%/12% Cash/PIK Toggle Second Lien Notes due 2026 and $4.1 million aggregate principal amount of the Company’s 5.875% Senior Subordinated Notes due 2026.
On February 9, 2023, the Company and Wanda entered intoAntara agreed to a management stockholders agreement (the “Management Stockholders Agreement”) with members of management, including certain of our Named Executive Officers. The Management Stockholders Agreement was amended in connection with our initial public offering (the “IPO”), and it continued in effect following the completionmutual waiver of the IPO, althoughlock-up restrictions in the occurrenceForward Purchase Agreement restricting the sale, transfer or other disposition of Forward Purchase APEs. In accordance with the IPO caused certain provisionsmutual waiver, the lock-up restrictions were waived with respect to (i) sales of the agreement to cease to beForward Purchase APEs by Antara in effect.Transfer Restrictions. Under the Management Stockholders Agreement, each management member agreed, subject to customary exceptions,an amount not to transfer any sharesexceed an aggregate of the Company acquired in connection with the Merger without the written consent26,000,000 Forward Purchase APEs, and (ii) sales of Wanda prior to January 1, 2016 (the “Release Date”). Until the second anniversary following the Release Date, each management member agreed to restrictions on the number of such shares of the Company's Common Stock they may transfer.
Put Rights. Beginning on January 1, 2016 (or upon the termination of a management member's employmentAPEs by the Company without cause, by the management member for good reason, or duein an amount not to the management member's death or disability) the management members will have the right to require the Company to purchase shares of the Company acquired in connection with the Merger if and only if such shares are not fully and freely tradeable at a price equal to the price per share paid by such management member with appropriate adjustments for any subsequent events such as dividend, splits, combinations and the like. Such put rights expire on January 1, 2019.
Piggyback Registration Rights. Subject to specified limitations, all management members have unlimited piggyback registration rights.exceed $140 million. The Company hasalso agreed that prior to pay all registration expenses relating to these registrations.
Registration Rights Agreements
Wanda
In connection with the IPO, we entered into a registration rights agreement with Wanda (the “Registration Rights Agreement”). Pursuant to the Registration Rights Agreement, the Company has agreed to use its best efforts to effect registered offerings upon request from Wanda and to grant incidentalMarch 31, 2023, it would not issue or “piggyback” registration rights with respect toexchange, without Antara’s prior written consent, any Class A common stock held by Wanda. The Class B common stock converts to Class A common stock in certain circumstances.
The obligation to effect any demandreturn for registration by Wanda is subject to certain conditions, including limitations on the number of demand registrations and limitations on the minimum value of securities to be registered. In connection with any registration effected pursuant to the termscancellation of the Registration Rights Agreement, we will be required to pay for allCompany’s outstanding indebtedness.
On April 4, 2023, the Company repurchased from Antara $9.0 million aggregate principal amount of the fees and expenses incurred in connection with such registration, including registration fees,Company’s 10%/12% Cash/PIK Toggle Second Lien Notes due 2026.
Based upon its most recent Schedule 13D filing
fees and printing fees. However, the underwriting discounts and selling commissions payable in respect of registrable securities included in any registration are to be paid by Wanda. We have also agreed to indemnify the holders of registrable securities against all claims, losses, damages and liabilities with respect to each registration effected pursuant to the Registration Rights Agreement.Monterey
In connection with our acquisition of Odeon, on November 30, 2016 we agreed to certain registration rights with Monterey Capital III S.à r.l. (“Monterey”) in connection with the shares of our Class A Common Stock it received in the transaction. We agreed to fileSEC, Antara is no longer a registration statement to allow Monterey to sell its shares and granted certain piggyback registration rights. Monterey currently holds 8.2% of our Class A Common Stock, and subject to certain exceptions, may not sell any shares for six months from the closing of the acquisition and may not sell in excess of 50% for a period of twelve months after closing.
Tax Sharing Agreement
In connection with the IPO, we entered into a tax agreement with a U.S. subsidiary of Wanda. Pursuant to the tax agreement, for any period that we were members of any consolidated or other tax group of which the Wanda subsidiary was the common parent, we will pay the group's tax liabilities attributable to our activities up to the amount that would be payable by us if the Company was the common parent of the consolidated or other tax group and, in addition, we will have the right to control the filing of tax returns, audits and other tax matters of any such consolidated or other tax group.
Wanda Receivables and Capital Contribution
As of December 31, 2016, the Company recorded a receivable due from Wanda of $10,594,000 for reimbursement of general administrative and other expense incurred on behalf of Wanda and a pledged capital contribution. In December 2016, Wanda agreed to make a capital contribution of $10,000,000 to AMC (without any
increase in Wanda’s economic interest or voting rights in the Company) for payments to certain officer, directors, and other personnel for extraordinary services rendered in connection with merger and acquisition activity in 2016. This contribution was received during February 2017.
Participation in Public Offering
On February 13, 2017, in connection with the additional public offering of Class A common stock, Mr. Aron purchased 31,747 shares of our Class A common stock at the public offering price of $31.50 per share and on the same terms as the other purchasers in the offering.
PROPOSAL 2:
6:
RATIFICATION OF THE APPOINTMENT OF INDEPENDENT REGISTERED
PUBLIC ACCOUNTING FIRM
The Audit Committee of the Board has selected KPMGErnst & Young, LLP (“KPMG”EY”) as the independent registered public accounting firm to perform the audit of our consolidated financial statements and our internal control over financial reporting for 2017. KPMG2023. EY served as our independent registered public accounting firm for 2016. KPMG representatives are expected2022.
The Audit Committee is responsible for overseeing the qualifications, engagement, compensation, independence, and performance of the independent registered public accounting firm retained to attendaudit the 2017 Annual Meeting. TheyCompany’s consolidated financial statements and its internal control over financial reporting. The Audit Committee requires and, with its chairperson, oversees the selection process for new lead audit engagement and concurring partners every five years. Throughout this process, the Audit Committee and management will have an opportunityprovide input to makeEY about AMC priorities, discuss candidate qualifications and interview potential candidates put forth by the firm. The Audit Committee will also require other key EY partners assigned to our audit to be rotated as required by the PCAOB. To help ensure continuing auditor independence, the Audit Committee will continue to periodically consider whether there should be a statement if they desire to do so and will be available to respond to appropriate stockholder questions. regular rotation of the independent auditor.
We are asking our stockholders to ratify the selection of KPMGEY as our independent registered public accounting firm for 2017.2023. Even if the selection is ratified, the Audit Committee in its discretion may select a different independent registered public accounting firm at any time during the year if it determines that a change would be in the best interests of the Company and itsour stockholders.The Audit Committee oversees the selection of a new lead audit engagement partner every five years. The Audit Committee requires key KPMG partners assigned to our audit to be rotated at least every five years. The Audit Committee and its chair oversee the selection process for each new lead engagement partner. Throughout this process, the Audit Committee and management provide input to KPMG about AMC priorities, discuss candidate qualifications and interview potential candidates put forth by the firm. To help ensure continuing auditor independence, the Audit Committee also periodically considers whether there should be a regular rotation of the independent auditor.
If the stockholders fail to ratify the selection of this firm, the Audit Committee may appoint another independent registered public accounting firm or may decide to maintain its appointment of KPMG.
EY.
Representatives from EY are expected to attend the 2023 Annual Meeting. They will have an opportunity to make a statement if they desire to do so and will be available to respond to appropriate stockholder questions.
The Board recommends a vote “FOR”ratification of the selection of KPMGEY as our independent registered public accounting firm for 2017.
Our Audit Committee reviews our financial reporting process on behalf of our Board. In fulfilling its responsibilities, the Audit Committee has reviewed and discussed the audited financial statements contained in the 20162022 Annual Report on Form 10-K with our management and our independent registered public accounting firm KPMG.for 2022, EY. Our management is responsible for the financial statements and the reporting process, including the system of internal controls. KPMGEY is responsible for expressing an opinion on the conformity of those audited financial statements with U.S. generally accepted accounting principles and expressing an opinion on the effectiveness of the Company'sCompany’s internal control over financial reporting. The Audit Committee has discussed with KPMGEY the matters requiring discussion by Statement on Auditing Standard No. 1301, Communication with Audit Committees (as amended), and all other matters required to be discussed with the auditors. In addition, the Audit Committee has received the written disclosures and the letterletters from KPMGEY required by applicable requirements of the Public Company Accounting Oversight Board regarding the independent auditor'sauditor’s communications with the Audit Committee concerning independence and has discussed with the independent auditors their independence. The Audit Committee has concluded that the independent auditors currently meet applicable independence standards. Based on the reviews and discussions to which we refer above, the Audit Committee recommended to our Board (and our Board has approved) that the audited financial statements be included in our 20162022 Annual Report on Form 10-K, for filing with the SEC. Audit Committee of the Board of DirectorsDirectors:
Kathleen M. Pawlus (Chairperson)
Lloyd Hill
Denise M. Clark
Philip Lader
Keri S. Putnam
Anthony J. Saich
PRINCIPAL
ACCOUNTINGACCOUNTANT FEES AND SERVICES
The following table shows the fees that the Company was billed for the audit and other services provided by KPMGEY for the years ended December 31, 20162022, and December 31, 2015.2021. The Audit Committee has considered whether the provision of such services is compatible with maintaining the independence of KPMGEY and determined they were compatible. The Audit Committee has the sole right to engage and terminate the Company'sCompany’s independent registered public accounting firm, to pre-approve their performance of audit services and permitted non-audit services, and to approve all audit and non-audit fees. | Type of Fee | | | Year Ended
December 31,
2022 | | | Year Ended
December 31,
2021 | |
| Audit Fees(1) | | | | $ | 4,118,290 | | | | | $ | 4,040,351 | | |
| Audit-Related Fees(2) | | | | | 851,946 | | | | | | 484,688 | | |
| Tax Fees(3) | | | | | 433,339 | | | | | | 634,974 | | |
| Total | | | | | 5,403,575 | | | | | | 5,160,013 | | |
| | | | | | |
| | Year Ended | | Year Ended |
Type of Fee | | December 31, 2016 | | December 31, 2015 |
Audit Fees(a) | | $ | 3,452,222 | | $ | 1,353,184 |
Audit-Related Fees(b) | | | 998,902 | | | 527,656 |
Tax Fees(c) | | | 45,244 | | | 170,414 |
All Other Fees(d) | | | — | | | 3,950 |
Total | | $ | 4,496,368 | | $ | 2,055,204 |
(1)
| (a)
| | Audit Fees include the audit of our annual financial statements and our internal control over financial reporting, review of financial statements included in our Quarterly Reports on Form 10-Q and services that are normally provided by the independent registered public accounting firm in connection with statutory and regulatory filings or engagements for the years ended December 31, 2016 and December 31, 2015.
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Audit Fees include the audit of our annual financial statements and our internal control over financial reporting, review of financial statements included in our Quarterly Reports on Form 10-Q and services that are normally provided by the independent registered public accounting firm in connection with statutory and regulatory filings or engagements for the years ended December 31, 2022, and December 31, 2021. | (b)
| | Audit-Related Fees includes assurance and related services by KPMG that are reasonably related to the performance of the audit or review of our financial statements and are not reported under “Audit Fees.” The services for the fees disclosed under this category include other accounting related work and work related to acquisitions.
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| (c)
| | Tax Fees include professional services rendered by KPMG for tax return preparation and tax compliance.
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(2)
| (d)
| | All Other Fees relate to translation fees for Wanda.
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Audit-Related Fees includes assurance and related services by EY that are reasonably related to the performance of the audit or review of our financial statements and are not reported under “Audit Fees.”
(3)
Tax Fees include professional services rendered by EY for U.S. and international tax return preparation and tax compliance.
Audit Committee Pre-Approval Policy
The Audit Committee has adopted policies and procedures for the pre-approval of audit services and permitted non-audit services to be performed by our independent registered public accounting firm in order to assure that the provision of such services does not impair the independent registered public accounting firm'sfirm’s independence. The policies provide general pre-approval for certain types of services, as well as approved costs for those services. The term of any general pre-approval is twelve months from the date of pre-approval unless the Audit Committee specifies otherwise. Any costs or services that are not given general pre-approval require specific pre-approval by the Audit Committee. The policy directs that, if management must make a judgment as to whether a proposed service is a pre-approved service, management should seek approval of the Audit Committee before such service is performed. Requests to provide services that require specific approval by the Audit Committee must be submitted to the Audit Committee (or the chairperson of the Audit Committee as provided below) by both the independent auditor and management, and must include a joint statement as to whether, in their view, the request or application is consistent with the SEC'sSEC’s rules on auditor independence. Under the Audit Committee'sCommittee’s pre-approval policy, the chairmanchairperson of the Audit Committee has the authority to address any requests made for pre-approval of services between Audit Committee meetings, and the chairmanchairperson must report any pre-approval decisions made between Audit Committee meetings to the Audit Committee at its next scheduled meeting. The policy prohibits the Audit Committee from delegating its responsibility to pre-approve any permitted services to management. 23
The Audit Committee pre-approved all services provided by EY for 2022.
COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
The Compensation Committee has reviewed and discussed with management the disclosures contained in the following section entitled “Compensation Discussion and Analysis.” Based on this review and discussion, the Compensation Committee recommended to the Board that the section entitled “Compensation Discussion and Analysis” be included in this Proxy Statement for the 2023 Annual Meeting.Members
Compensation Committee of the Compensation Committee:Jack Q. Gao (Chairman)
Lloyd Hill
Board of Directors:
Anthony J. Saich (Chairperson)
Howard W.
“Hawk” Koch, Jr.
24
Philip Lader
Gary F. Locke
Kathleen M. Pawlus
Adam J. Sussman
STOCKHOLDER OUTREACH
In response to the low participation rates and significant unfavorable votes cast at the 2022 annual meeting of Contents
stockholders, the Company undertook meaningful efforts following last year’s annual meeting to conduct outreach to substantial stockholders in order to solicit feedback on a number of topics, including executive compensation and corporate governance. During the past year, members of senior management and independent members of the Board held meetings with the Company’s largest stockholders on a broad range of corporate governance topics. During 2022, institutional investors held only 25-30% of our outstanding stock with the balance held by retail investors. Meetings were requested with all institutional investors holding more than 1% of our outstanding stock and held with institutional investors holding approximately 12% of our stock in the aggregate. These meetings yielded a highly constructive, thoughtful, and productive dialogue on all sides. As a result, the Company has undertaken a number of actions to specifically address concerns raised by stockholders.EXECUTIVE COMPENSATION
While the failure of the 2022 “say-on-pay” vote was a major factor leading to the additional stockholder outreach, once the conversations started, we learned that our largest stockholders, while certainly holding opinions on executive compensation, were much more focused on corporate governance improvements they believed the Company should pursue. See “Compensation Discussion and Analysis
Business HighlightsAnalysis—Consideration of Say on Pay Results” for 2016
2016 was a transformative year for AMC on many fronts. We acquired Odeon in November, and then acquired Carmike in December. This makes AMC the largest movie theatre operator in the United States, the largest movie theatre operator in Europe and the largest movie theatre operator in the world with over 900 theatres and over 10,000 screens. We continue to executeadditional information on our strategyspecific responses to last year’s “say-on-pay” vote.
Although our large and diverse stockholder base with limited institutional participation can make it difficult to ascertain a consensus among our stockholders, as a result of being the customer experience leader. Based on record industry box office performance in 2016,meetings with large stockholders, certain common concerns were identified. In response, the acquisition of Starplex Cinemas in December 2015,Company has undertaken the acquisition of Odeon in November 2016,following actions:
| | What We Heard From Stockholders | | | | Actions Taken | |
| | Concern Regarding the Lack of Diversity on the Board of Directors. | | | | •
The Board appointed two new female directors to fill open seats, bringing female representation to one-third of the Board. •
The Nominating and Corporate Governance Committee of the Board adopted a Policy on Director Candidate Diversity to ensure consideration of diverse candidates for open Board seats. •
Additional disclosure was included in this Proxy Statement regarding Directors’ self-identification of diverse characteristics. | |
| | Concern with the classified structure of the Board. | | | | •
The Board has proposed and recommended an amendment to our Certificate of Incorporation to declassify the Board and elect all directors on an annual basis. | |
| | Concerns with restrictions on stockholders’ ability to take certain actions. | | | | •
The Board has proposed and recommended an amendment to our Certificate of Incorporation to remove the prohibition on stockholders acting by written consent. •
The Board has approved Bylaws setting forth the procedures for stockholders to act by written consent subject to stockholder approval to remove the prohibition from the Certificate of Incorporation. •
The Board has proposed and recommended an amendment to our Certificate of Incorporation to remove the prohibition on stockholders’ ability to call special meetings. •
The Board has approved Bylaws setting forth the procedures for stockholders representing twenty percent of the Company’s voting power to call a special meeting subject to stockholder approval to remove the prohibition from the Certificate of Incorporation. | |
| | Concerns Regarding Executive Compensation | | | | •
The Compensation Committee froze CEO base salary and bonus opportunity in 2022 and all components of CEO compensation in 2023. •
The Compensation Committee froze the base salary and bonus opportunity of all NEOs in 2023. •
The Compensation Committee shifted the executive compensation pay mix back toward equity components to align with stockholders. •
The Compensation Committee returned to historical methodology for calculating equity grants. •
The Compensation Committee adjusted the compensation peer group for 2023 to include additional peers utilized by proxy advisory firms. | |
COMPENSATION DISCUSSION AND ANALYSIS
| | | Explanatory Note: Effective August 24, 2023, the Company implemented a one-for-ten reverse stock split on the Common Stock (the “Reverse Split”) and effective August 25, 2023, the Company’s outstanding APE securities were converted into shares of Common Stock with each APE being converted into one-tenth of a share of Common Stock (the “APE Conversion”). Each APE was a depositary share representing an interest in one one-hundredth (1/100th) of a share of the Company’s Series A Convertible Participating Preferred Stock and was designed to have the same economic and voting rights as a share of the Company’s Common Stock. Each APE was automatically convertible into Common Stock upon an approval by the Company’s stockholders to authorize sufficient additional shares of Common Stock to permit the conversion of the then-outstanding APEs. | | |
| | | Since neither the Reverse Split nor the APE Conversion had occurred prior to the end of our 2022 fiscal year, which is the period covered by this CD&A and the tables that follow, references to the number of shares of Common Stock and APEs included in our executive compensation disclosures have not been adjusted to reflect the impact of these events. | | |
The following Compensation Discussion & Analysis (“CD&A”) describes the acquisition of Carmike in December 2016philosophy, objectives, and the successstructure of our strategic initiatives, we increased total revenues approximately 9.8%fiscal year 2022 executive compensation program. This CD&A is intended to $3,235.8 millionbe read in 2016, compared to total revenues of $2,946.9 million for 2015. Consistentconjunction with our plans to augment shareholder returns through return of capital, we paid dividends to our stockholders of approximately $79.6 millionthe tables below, which provide further detail and $78.6 million during 2016 and 2015, respectively.Highlighted below are some of our key accomplishments:
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| | AMC set records for the year ended December 31, 2016 for all revenue categories: admissions, food and beverage and other.
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| | Total revenues exceeded $3.0 billion for the first time, increasing 9.8% to $3.2 billion compared to total revenues of $2.9 billion for the year ended December 31, 2015.
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| | Admissions revenues exceeded $2.0 billion for the first time, increasing 8.3% to $2.0 billion compared to $1.9 billion for the year ended December 31, 2015.
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| | Food and beverage revenues exceeded $1.0 billion for the first time, increasing 12.0% to $1.0 billion, compared to $910.1 million for the year ended December 31, 2015.
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| | Net earnings increased 7.5% to $111.7 million and diluted EPS increased 6.6% to $1.13 compared to $103.9 million and $1.06, respectively, for the year ended December 31, 2015.
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| | Adjusted EBITDA(1) grew 12.2% to $602.0 million compared to $536.5 million for the year ended December 31, 2015. Adjusted EBITDA for 2015 benefited from an $18.1 million gain related to the termination of a post-retirement health benefit plan. Excluding this gain in the prior year period, Adjusted EBITDA growth for 2016, compared to 2015 was approximately 16.1%.
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Compensation Highlights for 2016
Our Compensation Committee and the Board approved the followinghistorical compensation based on our performance during 2016:
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| | Bonus amounts awarded under the company component of the annual incentive plan (“AIP”) were 92.0% of target.
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| ·
| | Bonus amounts awarded under the individual component of the AIP attained by certain Named Executive Officers were 150.0% of target.
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| | Equity awards were granted based upon a three year vesting schedule with performance conditions, including net earnings, cash flows from operating activities and adjusted free cash flow targets.
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| (1)
| | This item is a non-GAAP financial measure. Reconciliations and definitions of non-GAAP financial measures are provided in Appendix A to this proxy statement.
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| ·
| | Transition Performance Stock Units were granted to bridge the gap between the previous one year grants and the new three year grants. The PSU Transition Awards did not meet the fiscal year 2016 net earnings threshold or the minimum adjusted free cash flow target. The PSU Transition Awards were cancelled and units were returned to the 2013 Employee Incentive Plan pool.
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Base salariesinformation for our Named Executive Officers increased between 2.0% and 2.5% from 2015 to 2016.
Compensation Highlights for 2017
We continue to enhance our executive compensation program to make it more performance based and also to better align management's compensation with the long-term interests of our stockholders. Changes to our incentive plan design for 2017 include:
NEOs as identified below.
| Name | ·
| | Increasing thePosition
| |
| Adam M. Aron | | | Chairman, Chief Executive Officer’s target incentive under the AIP to 200% of base salary; |
| Officer, President, and Director | ·
| | Changing the performance metrics for Performance Stock Units (“PSUs”) from adjusted free cash flow to adjusted EBITDA and diluted earnings per share, but retaining the net earnings threshold;
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| ·
| | Increasing the maximum achievable units under PSU grants from 150% to 200%; and
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| ·
| | Changing the forfeiture rules for PSU grants to allow for continued vesting on a pro-rata basis for participants whose service terminates (other than for Cause) during the performance period, subject to actual achievement of the performance targets.
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Compensation Practices
The Compensation Committee regularly reviews best practices in executive compensation and uses the following guidelines to design our compensation programs:
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What we do:
Sean D. Goodman | | | Executive Vice President, Chief Financial Officer, and Treasurer | |
Daniel E. Ellis | Majority of pay is performance-based
| | Executive Vice President, Chief Operations and not guaranteedDevelopment Officer | |
Elizabeth F. Frank | Compensation mix of base salary, short-term
| | Executive Vice President, Worldwide Programming and long-term incentives provides a variety of time horizons to balance our near-term and long-term strategic goalsChief Content Officer | |
Kevin M. Connor | Equity incentive programs
| | Senior Vice President, General Counsel and stock ownership guidelines align management and shareholder interests and provide a method for executive officers to accumulate and maintain an ownership position in the Company |
Secretary | Provide modest perquisites
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| Provide reasonable post-employment and change of control provisions in employment agreements
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| Prohibit hedging by executive officers
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| Include clawback provisions in compensation programs
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Advisory VoteConsideration of Say on
Executive CompensationPay Results
The Board and the Compensation Committee continually evaluate our compensation policies and practices. As part of that process, the Board and the Compensation Committee consider the results of our stockholderannual advisory vote on executive compensation, commonly known as the “say-on-pay” vote. At the 2016our 2022 Annual Meeting, we were disappointed that only approximately 97.5%36% of the votes cast in connection with the stockholders advisory vote on compensation of the Named Executive Officers were cast in support of the say-on-pay proposal. We were further frustrated that stockholders representing less than 30% of the eligible votes on the say-on-pay proposal participated in the vote, regardless of their support or opposition.
The Company continues to maintain that the compensation decisions on which the 2022 say-on-pay vote was based were necessary to retain our talented executive team and reward them for their outstanding efforts in ensuring the Company’s survival during the COVID-19 pandemic and its significant continuing impacts on our industry. However, we have also undertaken efforts to engage with stockholders to understand and address their concerns with our compensation programs. During the last year, the Company, including participation by independent members of the Board, initiated stockholder outreach dialogue with our largest stockholders to solicit feedback on corporate governance and executive compensation. We would note that through these discussions, we learned that our largest institutional stockholder had voted in favor of our say-on-pay proposal in 2022. Further, we have continued to emphasize the proposal. The Company has considered this voting result, and in lightAMC Investor Connect initiative focused on our large base of our stockholders' substantial support, ourretail investors.
Our compensation policies and decisions as explained in this Compensation Discussion and Analysis, continue to be focused on financial performance and aligning the interests of executives with the interests of stockholders. However, we have considered last year’s say-on-pay voting result and the feedback received through our stockholder engagement in compensation decisions, including: 26
Freezing CEO base salary and bonus opportunity in 2022 and all components of CEO compensation in 2023;
•
Freezing the base salary and bonus opportunity of all NEOs in 2023;
Certain Background Information
This section discusses
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Shifting the material elements ofexecutive compensation awardedpay mix back toward equity components to earnedalign with stockholders;
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Returning to historical methodology for calculating equity grants; and
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Adjusting the compensation peer group for 2023 to include additional peers utilized by or paidproxy advisory firms.
EXECUTIVE SUMMARY
2022 Business Review; Industry Headwinds
As 2022 began, the Company was optimistic about prospects for significant continuing industry recovery. However, that optimism waned as the year progressed and movie release schedules were delayed. Further, consumers were slow to return to our principal executive officertheatres without a full and principal financial officer,compelling slate of movies to draw them. Ultimately, 2022 industry performance still remained at only about 65% of pre-pandemic levels. With depressed attendance, we continued to bear the weight of a high fixed cost structure, which was exacerbated by inflationary pressures on both labor and supply costs.
As an illustration of the ongoing impacts to our three other most highly compensated executive officers. These individuals are referredindustry, the North American industry box office in 2022 was $7.45 billion compared to AMC internal projections of $9.0 billion at the beginning of the year and a 2019 pre-pandemic level of $11.4 billion.
Despite challenging industry and economic conditions, as has been the “Named Executive Officers.” On July 19, 2015,case since the Board appointed Mr. Ramseyonset of the COVID-19 pandemic, the Company remained vigilant, flexible, and focused on maximizing results. The extraordinary efforts and creativity of our management team has allowed AMC to serveweather the storm while some of our competitors were forced to permanently close or seek bankruptcy protection. While there is still much work to be done, industry trends were improving as 2022 ended with an attractive movie slate for 2023. Our initiatives to conserve resources, manage costs, and raise capital have preserved AMC’s ability to fully participate in the additional capacitiesindustry recovery.
Despite the formidable headwinds facing the Company in 2022, the management team secured some impressive accomplishments:
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Total revenues grew by approximately $1.4 billion to $3.9 billion, and we returned to generating positive Adjusted EBITDA.
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In the fourth quarter of Interim Chief Executive Officer2022, revenue per patron reached $19.98, exceeding pre-pandemic levels, driven by strategic ticket pricing initiatives and President, effective Auguststrong food and beverage sales.
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We raised nearly $229 million in gross proceeds through “at-the-market” offerings of our newly created APE securities to further bolster our balance sheet.
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At December 31, 2022, we had available liquidity of $842.7 million, including $211.2 million of undrawn capacity under the Company’s revolving credit facility.
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Our total aggregate principal amount of debt was reduced by approximately $220 million.
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We began the upgrade of 3,500 auditoriums in the U.S. to laser projection technology in partnership with Cinionic.
•
In collaboration with Zoom Video Communications, Inc., we announced Zoom Rooms at AMC to enable dispersed groups to conduct cohesive virtual and in-person events and meeting experiences at our theatres.
•
We acquired 15 theatres with 157 screens and built and opened 7 2015, which he did until January 4, 2016. The Board hired Mr. Adam M. Aronnew theatres with 51 screens.
•
We developed a line of pre-packaged and ready-to-pop microwaveable AMC Theatres Perfectly Popcorn products for sale at retail outlets outside of our theatres, with a launch in Wal-Mart stores in early 2023.
•
As of December 31, 2022, we had approximately 28 million member households enrolled in our AMC Stubs loyalty program.
•
In partnership with Deserve, Inc., we announced the launch of an AMC co-branded credit card that will allow our loyal guests to earn AMC Stubs rewards on their everyday spending.
Compensation Decisions
Our compensation program is grounded in a pay-for-performance philosophy and is designed with equity as
a significant component of compensation. Performance goals in both our short- and long-term incentive plans are set at challenging levels, with the
Chief Executive Officer, President,ultimate goal that the achievement of operating, financial and
Directorother goals will drive long-term, sustainable stockholder value growth. In addition, a key goal of executive compensation is to attract, retain, motivate, and reward talented executives. However, the severe and continuing effects of the
Company, effective asCOVID-19 pandemic on our industry have dramatically impacted the Company’s financial performance and the price of
January 4, 2016. Mr. Ramsey continuesthe Company’s equity securities for reasons unrelated to
serve as the
Company's Executive Vice Presidentperformance by our officers and
Chief Financial Officer.Our executiveemployees in managing the Company’s business and preserving stockholder value during the pandemic. While our response to, and ongoing recovery from, the COVID-19 pandemic warranted uncommon actions with respect to compensation programs, are determined and approved by our Compensation Committeeunderlying philosophy has not been permanently altered or in some cases, byabandoned.
In the entire Board based upon the recommendation of the Compensation Committee. None of the Named Executive Officers are membersview of the Compensation Committee, or had any role,management successfully undertook major initiatives to reduce and control costs, raise additional capital, restructure a substantial portion of the Company’s debt, renegotiate arrangements with studios and landlords, operate theatres safely, promote attendance, and lay the groundwork to seek opportunities to diversify the business. These initiatives were essential to preserving the Company’s business and stockholder value at a critical time for the Company. The unprecedented challenges facing our industry and the recognition that retention of the Company’s leadership was one of the most critical issues facing the Company required that the Compensation Committee remain flexible in its approach to executive compensation. Consequently, the Compensation Committee made a number of strategic decisions during 2022 that it believes were reasonable and necessary in light the circumstances, and in response to stockholder feedback. Further, the Compensation Committee believes that its actions will enable the Company to return to a normalized compensation structure and approach as the industry stabilizes. Each of the decisions outlined below is more fully described in the subsequent sections of this CD&A and the tables that follow.
2022 Key Compensation Determinations
•
Generally, base salary increases were consistent with market conditions at approximately 3.5%. However, CEO and CFO base salaries (and by extension annual incentive plan bonuses) remained at the same level as in 2021 due to the significant increases granted in the prior year and in order to shift the pay mix for these officers toward equity incentives. A larger increase was also awarded to the Executive Vice President, Chief Operations and Development Officer in recognition of the expanded responsibilities for that position.
•
In continued recognition of the high level of uncertainty regarding the industry recovery and in order to maintain an incentive in the event of industry underperformance and to limit compensation expense exposure in the event of industry overperformance, 2022 performance goals for the annual incentive plan remained indexed to industry results. However, to more accurately reflect the diversity of the markets in which the Company operates, the North American box office factor was supplemented with an international market attendance factor for purposes of indexing targets to industry performance.
•
The incentive at target as a percentage of base salary for the NEOs under the annual incentive plan remained the same as prior years.
•
To improve transparency for stockholders, the Adjusted EBITDA definition used for compensation purposes was changed to align with the definition used in the Company’s public financial reporting.
•
For purposes of calculating 2022 equity grants, the Company returned to its historical practice of using the five-day average closing price of the Company’s Common Stock at the time of grant instead of the longer-term volume weighted average for a significantly longer period used in 2021 to smooth the impact of the COVID-19 pandemic.
•
Following termination in 2021, accounts in the Company’s non-qualified deferred compensation plan were liquidated and distributed to participants in May 2022.
•
To more closely align with the peer groups used by proxy advisory firms, Roku, Inc. and Formula One Group were added to the compensation peer group for 2023.
•
In conjunction with the special APE dividend to stockholders, an equitable adjustment of outstanding equity awards was approved, and a reserve of APEs was established for future equity grants.
•
Despite significant industry underperformance compared to both pre-pandemic levels and forecasts for 2022, Company performance achieved levels permitting for annual incentive plan pay out at 200% of the industry-adjusted target, the maximum permitted under the compensation programs.
•
Due to industry underperformance and lack of an industry adjustment mechanism, equity grants based upon fiscal year 2022 Adjusted EBITDA and Free Cash Flow vested at only 0% and 79%, respectively.
2023 Actions
•
No compensation components were increased for the CEO.
•
For NEOs other than the CEO, base salaries and annual bonus opportunities also remain at 2022 levels, but modest increases to annual equity grants were made to shift pay mix toward equity-based components.
•
Performance goals for the annual incentive plan continue to be indexed to North American industry box office and international industry attendance results.
•
For 2023 annual equity grants, aggregate award values were allocated between the Company’s Common Stock and APEs based upon the relative market capitalization of each security in order to align management incentives with the interests of our overall equity ownership base.
•
As disclosed in Item 9B of the Company’s Annual Report on Form 10-K filed with the SEC on February 28, 2023, the Compensation Committee determined that the failure to attain the 2022 performance goals applicable to equity grants was primarily due to changes in studio movie release schedules, which was outside the control of the Company and was not known at the time the performance targets were established. In recognition of the ongoing extraordinary efforts of the Company’s management team as described below, in determining the compensation of other Named Executive Officers. Our CEO works together withtheatrical exhibition industry continues to lag its pre-pandemic performance, encourage continued engagement, and incentivize executives during continued difficult business conditions, the Compensation Committee, in settingconsultation with the Company’s independent compensation levelsconsultant, approved one-time immediately vested awards of the Company’s Common Stock and bonuses forAPEs. The awards were calculated based upon the difference between the vesting level of the equity grants allocated to the 2022 tranche year and the maximum vesting level of such grants, which the Compensation Committee believed would have been achieved had the performance goals been set based upon the ultimate industry box office level. For accounting purposes, the special awards were treated as modifications of outstanding equity grants and the value will be reflected in the Company’s 2023 compensation tables.
How Our Compensation Program Works
The Compensation Committee regularly reviews best practices in executive compensation and uses the following guidelines to design our compensation programs during ordinary business cycles, with exceptions made only under extraordinary circumstances:
Components of Our Pay
Our Compensation Committee oversees our executive officers other thancompensation program, which includes three primary compensation elements: base salary, annual cash incentives, and long-term equity awards. The Compensation Committee has tailored our program to incentivize and reward specific aspects of Company performance that it believes are central to delivering long-term stockholder value.
Pay Mix
The Compensation Committee utilizes the CEO. Certainabove-mentioned compensation elements to promote a performance-based culture that aligns the interests of compensation are governed by the employment agreement for each Named Executive Officer, discussed below under “Descriptionmanagement and stockholders. The Compensation Committee chooses an appropriate balance of Employment Agreements.”Executive Compensation Philosophy, Program Objectivesfixed and Overview
variable pay as well as long-term versus short-term incentives and opportunities. In 2022, our target pay mix was as follows:
| | CEO Target Pay Mix | | | Average Other NEO Target Pay Mix | |
| | | | | | |
EXECUTIVE COMPENSATION PHILOSOPHY AND PROGRAM OBJECTIVES
The goals of the Compensation Committee with respect to executive compensation are: | ·
| | to attract, retain, motivate and reward talented executives;
|
•
| ·
| | to tie annual compensation incentives to the achievement of specified performance objectives; and
|
to attract, retain, motivate and reward talented executives; | ·
| | to achieve long-term creation of value for our stockholders by aligning the interests of these executives with those of our stockholders.
|
•
to tie annual compensation incentives to the achievement of specified performance objectives; and
•
to achieve long-term creation of value for our stockholders by aligning the interests of these executives with those of our stockholders.
To achieve these goals, we endeavor to maintain compensation plans that are intended to tie a substantial portion of executives'executives’ overall compensation to key strategic, operational and financial goals and other non-financial goals that the Compensation Committee deems important. The Compensation Committee evaluates our compensation programs to ensure they are supportive of these goals and our business strategy and align the interests of our executives with those of our stockholders.Total compensation opportunity must serve to attract and retain top performing executives. One factor in establishing our executive compensation target pay levels is relative competitiveness in relation to relevant market data. The Committee reviews data ranging from the 25th to the 75th market percentile and generally sets target pay opportunity with reference to market median.
Executive Compensation Program Elements
EXECUTIVE COMPENSATION PROGRAM ELEMENTS
Our executive compensation program primarily consists of the elements described below. The Compensation Committee determines the portion of compensation allocated to each element for each individual Named Executive Officer.The Compensation Committee believes that the use of thea combination of base salary, annual incentive compensation,cash incentives, and long-term equity participationincentives. Our Compensation Committee believes that a combination of these elements offers the best approach to achieving our compensation goals, including attracting and retaining talented and capable executives and motivating our executives and other officers to expend maximum effort to improve the business results and earnings and overall valuecreate long-term, sustainable growth of our business. To achieve these goals, we endeavor to maintain compensation plans that are intended to tie a substantial portion of executives' overall compensation to key strategic, operational and financial goals such as achievement of target levels of adjusted EBITDA for AIP, adjusted free cash flow, operating cash flows, net earnings and other non-financial goals that the Compensation Committee deems important.
stockholder value. Base salaries for our Named Executive Officers are established based on the scope of their responsibilities, taking into account competitive market compensation for similar positions, as well as seniority of the individual, our ability to replace the individual and other primarily judgmental factors deemed relevant by the Compensation Committee. Base salaries for our Named Executive OfficersNEOs are reviewed from time to time by the Compensation Committee and may be increased pursuant to such review and/orand in accordance with guidelines contained in the various employment agreements in order to realign salaries with market levels after taking into account individual responsibilities, performance and experience. Base salaries for our NEOs are established based on several considerations, including:
•
the scope of their responsibilities
•
current competitive practices of peer group companies
•
individual performance and achievements
•
current compensation
•
recommendations from the CEO for executives (other than the CEO)
The table below shows the annual base salaries for our Named Executive OfficersNEOs for 2016,2022, compared to 2015:2021: | Executive | | | 2022 Base
Salary | | | 2021 Base
Salary | | | % Increase /
(Decrease) | |
| Adam M. Aron | | | | $ | 1,500,000 | | | | | $ | 1,500,000 | | | | | | 0% | | |
| Sean D. Goodman | | | | | 800,000 | | | | | | 800,000 | | | | | | 0% | | |
| Daniel E. Ellis(1) | | | | | 595,000 | | | | | | 545,000 | | | | | | 9.2% | | |
| Elizabeth F. Frank | | | | | 595,000 | | | | | | 575,000 | | | | | | 3.5% | | |
| Kevin M. Connor(1) | | | | | 561,350 | | | | | | 545,000 | | | | | | 3.0% | | |
| | | | | | | | |
| | | | | | | | |
| | 2016 Annual | | 2015 Annual | | % Increase |
| | Base Salary | | Base Salary | | 2016 vs 2015 |
Adam M. Aron | | $ | 995,000 | | $ | — | | NA |
Craig R. Ramsey | | | 563,800 | | | 550,000 | | 2.5% |
John D. McDonald | | | 517,700 | | | 505,000 | | 2.5% |
Elizabeth Frank | | | 511,500 | | | 499,000 | | 2.5% |
Mark A. McDonald | | | 453,500 | | | 444,600 | | 2.0% |
Management Transaction Bonus
In December 2016, Wanda agreed to make a capital contribution
(1)
Mr. Ellis and Mr. Connor were not NEOs in 2021 but were officers of $10,000,000 to AMC (without any increasethe Company, so their 2021 salaries are provided for context.
Mr. Aron’s and Mr. Goodman’s base salaries remained unchanged for 2022 in Wanda’s economic interest or voting rightslight of the significant salary increases provided in the Company) for paymentprior year and to certain officers, directors, and other personnel for extraordinary services rendered in connection with merger and acquisition activity in 2016. This contribution was received during February 2017. The table below showsshift their pay mix toward equity-based compensation. Mr. Ellis’ salary increase reflects his additional responsibilities assigned upon the amountretirement of cash management transaction bonus for our Named Executive Officers in 2016:a former executive officer. | | | |
| | Management
|
| | Transaction
|
| | Bonus
|
Adam M. Aron
| | $
| 4,500,000 |
Craig R. Ramsey
| | | 700,000 |
John D. McDonald
| | | 350,000 |
Elizabeth Frank
| | | 250,000 |
Mark A. McDonald
| | | 350,000 |
Annual Incentive Compensation Program
The Compensation Committee has the authority to award annual incentive bonuses to our Named Executive OfficersNEOs pursuant to our annual incentive compensation program (“AIP”), which historically have been paid in cash and traditionally have been paid in a single installment in the first quarter of the subsequent year upon certification of performance by the Compensation Committee.
Under employment agreements with our Named Executive Officers,NEOs, each Named Executive OfficerNEO is eligible for an annual bonus, as it may be determined by the Compensation Committee from time to time. We believe that annual bonuses based on performance serve to align the interests of management and stockholders. Individual bonuses are performance basedperformance-based and, as such, can be highly variable from year to year. The annual incentive bonusesbonus opportunities for our Named Executive OfficersNEOs are determined by our Compensation Committee, taking into account the recommendation of our CEO (except with respect to his own bonus).The
Payout Opportunities
Consistent with the prior year, the aggregate bonus under our AIP for each Named Executive Officer,NEO was set as a percentage of base salary ranging from 65% to 200% and, except for Mr. Aron and Mr. Ramsey,Goodman, was apportioned to a companyCompany component (80%) and an individual component.component (20%). In the case of Mr. Aron and Mr. Ramsey,Goodman, their aggregate bonus is entirely based on companyCompany performance with no individual component. The companyThere were no changes in AIP payout opportunities as a percentage of base salary for any NEOs between the 2021 and 2022 fiscal years.
2022 Performance Goals
Company Performance: Consistent with past years, for 2022, the Company component was based on attainment of 2016 adjustedan Adjusted EBITDA forgoal. For purposes of the AIP, (adjustedAdjusted EBITDA is determined in the same manner as calculateddescribed and defined in the Company’s Annual Report on Form 10-K (see Appendix A further decreased by cash distributions from non-consolidated entities)for the calculation of Adjusted EBITDA). UnderPayouts under the AIP the company component payout was on a scale rangingcan range from 0% to 200% of target based on 2016 adjusteddepending upon actual performance measured against the Adjusted EBITDA goal. There is no payout for AIP
28
attainment below 80% of the goal, at the 80% threshold payout is 50% of target, at 100% attainment
payout is 100% of Contents
ranging from a thresholdtarget, and at the maximum attainment of $479,920,000 to a maximum120% payout is 200% of $719,880,000.target. The following table presentschart represents the AIP payout scale for the companyCompany component:
For Mr. Aron
![[MISSING IMAGE: lc_goals-pn.jpg]](/files/DEF 14A/0001104659-23-105006/lc_goals-pn.jpg)
Company performance is highly dependent upon the timing and
Mr. Ramsey,popularity of the films released by distributors in the markets in which we operate, leading to the potential for volatility and requiring a significant number of assumptions and projections involved in setting performance goals. Box office volatility and the difficulty of making assumptions continued to be amplified for 2022 because of the continuing uncertainty surrounding the recovery from the COVID-19 pandemic and shifting studio release schedules. Based on an estimated domestic industry box office of $9.0 billion and international market industry attendance of 438.8 million for 2022 at the beginning of the year, the projected Adjusted EBITDA performance levels narrowly ranged from a threshold of $150.6 million (50% payout) to a target of $188.2 million (100% payout) to a maximum of $225.8 million (200% payout). In recognition of the box office volatility, the narrow range of outcomes, and the high level of uncertainty around planning assumptions, the Compensation Committee
reserved discretiondetermined that, in order to
reduce the company component payoutmaintain an incentive for management in the event
of industry underperformance and to limit compensation expense exposure in the event of industry overperformance, that the AIP performance goal should be indexed to domestic industry box office and international market industry attendance levels (due to lack of visibility into industry box office in certain international markets where we operate). Therefore, the Adjusted EBITDA goal was made adjustable dependent upon actual North American industry box office results and industry attendance in the international markets in which the Company
failed to achieve 2016 net earnings (exclusive of certain items) of at least $120.6 million.operates using the following scale:
2022 AIP Industry Indexed Consolidated Adjusted EBITDA Target
| | | Domestic Component | | |
| | | Industry Box Office* | | | | $7.0 billion | | | | $9.0 billion | | | | $11.0 billion | | |
| | | Adj EBITDA Component | | | | ($186.8 million) | | | | $129.6 million | | | | $419.6 million | | |
| | | International Component | | |
| | | Industry Attendance* | | | | 341.3 million | | | | 438.8 million | | | | 536.3 million | | |
| | | Adj EBITDA Component | | | | ($93.9 million) | | | | $58.6 million | | | | $211.0 million | | |
| | | Consolidated Adjusted EBITDA Target | | | | ($280.8 million) | | | | $188.2 million | | | | $630.6 million | | |
*
If actual industry domestic box office and/or international attendance performance falls between two stated levels, the target components shall be determined by linear interpolation
Individual Performance:The individual component of the bonus is based on achievement of individual key performance objectives and overall individual performance and contribution to our strategic and financial goals. Under the AIP, ourOur Compensation Committee and, except with respect to his own bonus, our CEO, retain certain discretion to decrease or increase individual component bonuses relative to the targets based on qualitative or other subjective factors deemed relevant by the Compensation Committee.2016 AIP Payout. Our Compensation Committee and the Board have approved bonus amounts to be paid in 2017 for the performance during 2016. The Company attained adjusted EBITDA for AIP of $561,978,000 for the year ended December 31, 2016, which was determined by our Compensation Committee to be a 92% payout of the company component. The Company attained net earnings of $111,667,000 for the year ended December 31, 2016, which exceeded the net earnings threshold applicable to Mr. Aron and Mr. Ramsey when certain pre-determined items were excluded. For the remaining Named Executive Officer's the individual component of the bonus, which was subject to the approval by the Compensation Committee, was approved following a review of each Named Executive Officer's individual performance and contribution to our strategic and financial goals. Bonus amounts awarded under the individual component bonuses of the AIP attained by certain Named Executive Officers were 150.0% of target.
2022 Payouts
The following table summarizes the AIP bonus for our Named Executive OfficersNEOs for 2016:2022: | Opportunity | | | Actual | |
| Executive | | | 2022 Base
Salary | | | Target
(as % of base
salary) | | | Target
($) | | | Allocation | | | Achievement | | |
| | 2022
Earned
AIP | |
| | Company | | | Individual | | | Company | | | Individual | |
| Adam M. Aron | | | | $ | 1,500,000 | | | | | | 200% | | | | | $ | 3,000,000 | | | | | | 100% | | | | | | —% | | | | | | 200% | | | | | | —% | | | | | $ | 6,000,000 | | |
| Sean D. Goodman | | | | | 800,000 | | | | | | 100% | | | | | | 800,000 | | | | | | 100% | | | | | | —% | | | | | | 200% | | | | | | —% | | | | | | 1,600,000 | | |
| Daniel E. Ellis | | | | | 595,000 | | | | | | 65% | | | | | | 386,750 | | | | | | 80% | | | | | | 20% | | | | | | 200% | | | | | | 100% | | | | | | 696,150 | | |
| Elizabeth F. Frank | | | | | 595,000 | | | | | | 65% | | | | | | 386,750 | | | | | | 80% | | | | | | 20% | | | | | | 200% | | | | | | 100% | | | | | | 696,150 | | |
| Kevin M. Connor | | | | | 561,350 | | | | | | 65% | | | | | | 364,900 | | | | | | 80% | | | | | | 20% | | | | | | 200% | | | | | | 100% | | | | | | 656,800 | | |
| | | | | | | | | | | | | | | | | | | | | |
| | | | | Target | | | | | | | | | | | | | | | | |
| | | | | AIP | | | | | % | | % | | Company | | Individual | | | |
| | | | | Bonus | | | | | Allocated | | Allocated | | Component | | Component | | | |
| | | | | as % of | | Target | | to | | to | | Achievement | | Achievement | | Total AIP |
| | 2016 Base | | Base | | Bonus | | Company | | Individual | | (92.0% of | | (150%) | | Bonus |
| | Salary | | Salary | | Amount | | Component | | Component | | Target) | | Target) | | Amount |
Adam M. Aron | | $ | 995,000 | | 125% | | $ | 1,243,750 | | 100% | | — | | $ | 1,144,250 | | $ | — | | $ | 1,144,250 |
Craig R. Ramsey | | | 563,800 | | 70% | | | 394,660 | | 100% | | — | | | 363,078 | | | — | | | 363,078 |
John D. McDonald | | | 517,700 | | 70% | | | 362,390 | | 80% | | 20% | | | 266,708 | | | 108,675 | | | 375,383 |
Elizabeth Frank | | | 511,500 | | 65% | | | 332,475 | | 80% | | 20% | | | 244,720 | | | 99,750 | | | 344,470 |
Mark A. McDonald | | | 453,500 | | 65% | | | 294,775 | | 80% | | 20% | | | 216,982 | | | 88,425 | | | 305,407 |
AmongOur Compensation Committee approved bonus amounts to be paid for the factors consideredperformance during 2022. The Company attained Adjusted EBITDA of $46.6 million (calculated as set forth on Appendix A) for the year ended December 31, 2022. Actual North American industry box office was $7.45 billion for 2022 and industry attendance in determiningthe international markets in which the Company operates was 348.7 million in 2022, which resulted in an industry-adjusted Adjusted EBITDA goal of ($185.8 million). As a result, the Compensation Committee determined performance attainment to be 225% of target, equating to a 200% payout of the Company component, the maximum permitted under the AIP. Payouts would have been significantly higher without the caps established by the Compensation Committee.
For the NEOs other than the CEO and CFO, the individual component payoutswas approved at 100% of target by the Compensation Committee following a review of each such NEO’s individual performance.
Retention Bonus for
Named Executive Officers were:Mr. Goodman In order to secure retention of his services as the Company’s CFO and to preempt recruitment attempts, in March 2021, the Compensation Committee approved a special cash retention bonus for Mr. Goodman. The committee determined that it was essential to provide stability in the role of CFO during the Company’s recovery from the COVID-19 pandemic. The retention bonus is payable as set forth below, subject to Mr. Goodman’s continued employment as of each date. The right to receive the retention bonus payments will be forfeited if Mr. Goodman’s employment is terminated for any reason prior to an applicable payment date.
| Vesting Date | ·
| | Completion of both the Carmike and Odeon acquisitions;
Retention Bonus Payable | |
| March 17, 2022 | | | | $ | 450,000 | | |
| March 17, 2023 | | | | | 450,000 | | |
| March 17, 2024 | | | | | 900,000 | | |
| ·
| | Attainment of record results in revenues, food and beverage spend per guest, and adjusted EBITDA margin;
|
| ·
| | Renovation of 43 theatres during 2016;
|
| ·
| | Successful launch of a new website and mobile app;
|
| ·
| | Reduction in film exhibition costs from 54% to 53.2%; and
|
| ·
| | Redesign and implementation of improved AMC Stubs loyalty program.
|
Equity-Based Incentive Compensation Program
In December 2013, in conjunction with the IPO, the Board adopted and the Company's then-sole stockholder approved the 2013 Equity Incentive Plan. The 2013 Equity Incentive Plan provides for grants of non-qualified stock options, incentive stock options, stock appreciation rights, restricted stock awards, restricted stock units (“RSU”), performance stock units (“PSU”), stock awards, and cash performance awards. We believe
Our Compensation Committee believes that the equity-based incentive compensation program furthers our goal to attract, retain and motivate talented executives by enabling such executives to participate in the Company'sCompany’s long-term growth and financial success and aligns the interests of management and stockholders. The maximum number of shares of Class A common stock available for delivery pursuant to awards granted under the 2013 Equity Incentive Plan is 9,474,000 shares. As of December 31, 2016, there were 7,739,524 shares remaining available for issuance.The 2013 Equity Incentive Plan is administered by the Compensation Committee. Subject to the limitations set forth in the 2013 Equity Incentive Plan, the Compensation Committee has the authority to determine the persons to whom awards
Our annual grants are to be granted, prescribe the restrictions, terms and conditions of all awards, interpret the 2013 Equity Incentive Plan and adopt rules for the administration, interpretation and application of the 2013 Equity Incentive Plan.Equity Awards Granted in 2016
On March 1, 2016, the Board approved grants ofequally split between:
•
Time-vesting Restricted Stock Units (“RSU”RSUs”); and
•
Performance-vesting Performance Stock Units (“PSUs”) to certain of the Company's employees under the 2013 Equity Incentive Plan. .
Each RSU and PSU representedrepresents the right to receive one share of Class A common stockCommon Stock or one APE, as applicable, on a future settlement date. SettlementTo determine the size of grants, our Compensation Committee considers prior executive performance, level
of responsibility, the executive’s ability to influence the Company’s long-term growth and business performance, among other factors. The Compensation Committee does not apply a strict methodology to these factors and does not benchmark executive pay to a particular reference point of the peer group. Company performance is highly dependent upon the timing and popularity of the films released by distributors in the markets in which we operate leading to the potential for volatility and requiring a significant number of assumptions and projections involved in setting performance goals.
In making grants of RSUs and PSUs, may be accelerated under certain circumstances. See “Potential Payments Upon Termination or Changethe Compensation Committee approves a target award value for each participant. That award value is then divided by a stock price measurement to determine the number of Control.” SeeRSUs and PSUs granted. The default stock price measurement used in the “Summary Compensation Table”calculation is the average closing price for the underlying security over the five days preceding the date of grant. Because the APEs had not yet been created at the time equity grants were made in 2022, only the price of our Common Stock was utilized to determine the number of RSUs and “GrantsPSUs granted to each participant. Equity-based compensation components reflected in the executive compensation tables represent the aggregate grant date fair value of Plan-Based Awards”the award and are based upon the closing price for informationour Common Stock on the individualdate of grant. Since the stock prices used to calculate the grants madeand determine the compensation value are different, in times of high volatility, the reflected compensation may ultimately be higher or lower than that targeted by the Compensation Committee. For the 2022 equity grants, this difference was significant given the $17.65 price used to our Named Executive Officers. | | | | | | | | | | |
| | Equity Awards Granted in 2016 |
| | RSUs | | RSUs (162(m)) | | PSUs | | PSU Transition | | Total |
Adam M. Aron | | — | | 86,037 | | 86,037 | | — | | 172,074 |
Craig R. Ramsey | | 16,648 | | — | | 16,648 | | 5,407 | | 38,703 |
John D. McDonald | | — | | 16,648 | | 16,648 | | 5,407 | | 38,703 |
Elizabeth Frank | | — | | 16,648 | | 16,648 | | 5,407 | | 38,703 |
Mark A. McDonald | | — | | 16,648 | | 16,648 | | 5,407 | | 38,703 |
2022 Annual Equity GrantsOn February 16, 2022, the Compensation Committee approved grants of RSUs, and PSUs (the “2022 RSUs” and “2022 PSUs”), to certain of the Company’s employees under the EIP. Our NEOs received the following grants (in units): | Executive | | | 2022 RSUs | | | 2022 PSUs | | | Total | |
| Adam M. Aron | | | | | 269,122 | | | | | | 269,122 | | | | | | 538,244 | | |
| Sean D. Goodman | | | | | 56,658 | | | | | | 56,658 | | | | | | 113,316 | | |
| Daniel E. Ellis | | | | | 25,496 | | | | | | 25,496 | | | | | | 50,992 | | |
| Elizabeth F. Frank | | | | | 25,496 | | | | | | 25,496 | | | | | | 50,992 | | |
| Kevin M. Connor | | | | | 19,831 | | | | | | 19,831 | | | | | | 39,662 | | |
Restricted Stock Units. With respect to our Named Executive Officers, 50% ofUnits
The 2022 RSUs vest ratably over a three-year period, with the grant consisted of RSUs. The RSUs for certain Named Executive Officers covered by IRS Code 162(m), would vest over 3 years with 1/3first tranche vesting on the date the Compensation Committee certifies that the Company has achieved cash flow from operating activitiesfirst business day of at least $100,000,000 for the fiscal year starting after the grant date. The executive must remain employed by the Company through the last day of the fiscal year immediately prior to athe vesting date, if the executive remains employed on such date. This applies to all Named Executive Officers except Mr. Ramsey (our principal financial officer). The RSUs granted to Mr. Ramsey vest 1/3 per year over three years on January 2, 2017, January 2, 2018 and January 2, 2019 based upon a service condition only. A dividend equivalent equal to the amount paid, if any, in respect of one share of Class A common stockthe securities underlying the RSUs began to accruebegins accruing with respect to the RSUs on the date of grant. Such accrued dividend equivalents are paid to the holder upon settlementvesting of the RSU’s.RSUs. Performance Stock Units. With respectUnits
The 2022 PSUs are subject to our Named Executive Officers, 50% of the grant consisted of PSUs with both a three year cumulative adjustedAdjusted EBITDA and free cash flow (“FCF”) performance target,goal conditions and service conditions over a cumulativethree-year performance period. For purposes of the EIP, Adjusted EBITDA is determined in the same manner as described and defined in the Company’s Annual Report on Form 10-K. For purposes of the EIP, FCF is defined as cash flow from operations less gross capital expenditures and changes in construction payables. Of the 2022 PSUs, 60% were allocated to Adjusted EBITDA targets with the remaining 40% allocated to FCF targets. See Appendix A for the calculation of these numbers. Adjusted EBITDA and FCF are non-GAAP financial measures and should not be construed as an alternative to net earnings performance threshold and cash flow from operations (each as determined in accordance with U.S. GAAP) as indicators of operating performance.
The 2022 PSUs are divided into three tranches with each tranche allocated to a service condition, covering afiscal year within the three-year performance period beginning January 1, 2016 and ending on December 31, 2018. The PSUs vest oncovered by the dategrant (each a “Tranche Year”). Each tranche is subject to a separate performance goal applicable to its corresponding Tranche Year. At the time of grant, the Compensation Committee certifies achievementestablished the performance goals for the first Tranche Year covered by the 2022 PSUs. The subsequent tranches remain subject to substantive performance goals established and approved by the Compensation Committee in conjunction with the budgeting process for their applicable
Tranche Year. Tranches are not valued and included in the compensation tables of the proxy statement until the year in which the performance threshold and target based on a scale ranging from 80% to 120%goals for their applicable Tranche Year are established. The PSUs will be forfeited upon termination of the performance target withholder’s employment for any reason prior to the vested amount ranging from 30% to 150%. Noend of the applicable Tranche Year. PSUs will vest ifbased upon certification of performance for the Company does not achieveapplicable Tranche Year by the adjusted free cash flow target and net earnings threshold or the participant’s service does not continue through the last day of the performance period. The vested PSUs will be settled within 30 days of vesting.Compensation Committee. A dividend equivalent equal to the amount paid, if any, in respect of one share of Class A common stockthe securities underlying the PSUs began to accruebegins accruing with respect to the PSUs on the date of grant. Such accrued dividend equivalents are paid to the holder based onupon, and only to the extent of, vesting of the PSUs.
2022 Tranche Year Performance Goals
For purposes of reporting executive compensation and accounting for stock compensation expense, PSU tranches are not considered granted until such time as the performance goals are established. As a result, only the PSU tranches allocated to the 2022 Tranche Year are included in the summary compensation tables. Subsequent tranches will be included in the summary compensation tables for the years in which performance goals for such tranches are established. The 2022 Tranche Year was applicable to the following PSU awards: (i) tranche I of the 2022 PSUs, (ii) tranche II of the 2021 PSUs, and (iii) tranche III of the 2020 PSUs. The table below summarizes the number of PSUs that vested.The PSU awards vest based on (1) attainment of a cumulative fiscal years 2016-2018 net earnings threshold of $373,200,000at target allocated to the 2022 Tranche Year for each NEO:
| | | | 2022 PSUs Tranche I | | | 2021 PSUs Tranche II | | | 2020 PSUs Tranche III | |
| | | | Adj EBITDA | | | FCF | | | Adj EBITDA | | | FCF | | | Adj EBITDA | | | FCF | |
| Adam M. Aron | | | | | 53,824 | | | | | | 35,882 | | | | | | 189,873 | | | | | | 126,582 | | | | | | 88,802 | | | | | | 59,202 | | |
| Sean D. Goodman | | | | | 11,331 | | | | | | 7,554 | | | | | | 40,506 | | | | | | 27,003 | | | | | | 18,140 | | | | | | 12,094 | | |
| Daniel E. Ellis | | | | | 5,099 | | | | | | 3,399 | | | | | | 16,455 | | | | | | 10,970 | | | | | | 8,580 | | | | | | 5,719 | | |
| Elizabeth F. Frank | | | | | 5,099 | | | | | | 3,399 | | | | | | 20,886 | | | | | | 13,923 | | | | | | 11,085 | | | | | | 7,390 | | |
| Kevin M. Connor | | | | | 3,966 | | | | | | 2,643 | | | | | | 16,455 | | | | | | 10,970 | | | | | | 8,517 | | | | | | 5,678 | | |
Company performance is highly dependent upon the timing and (2) attainment of a cumulative fiscal years 2016-2018 adjusted free cash flow minimum of $433,280,000, target of $541,600,000, and maximum of $649,920,000, with the vested amount of PSUs ranging from 30% to 150%popularity of the award.Thesefilms released by distributors in the markets in which we operate leading to the potential for volatility and requiring a significant number of assumptions and projections involved in setting performance targets should not be viewed as predictive or estimates of future performancegoals. Box office volatility and the actual achievementdifficulty of these targets is subjectmaking assumptions were amplified for 2022 as a result of continuing uncertainty surrounding the recovery from the COVID-19 pandemic and shifting studio release schedules. Due to numerous knownexpectations that box office performance would continue to be depressed in 2021, the Company projected modestly positive Adjusted EBITDA and unknown risks and uncertainties, including, without limitation, those described under “forward looking statements”, “risk factors”, or similar headings in our quarterly and annual reports filed withsignificantly negative FCF for 2022. On February 16, 2022, the SEC. The Compensation Committee establishes these targets solelyestablished the following performance goals for vesting of the PSU tranches allocated to help align its pay with performance. The targetsthe 2022 Tranche Year:
| Metric | | | 2022 Tranche Year Performance Goals | |
| | | | Threshold | | | Target | | | Maximum | |
| Adjusted EBITDA(1) | | | | $ | 150,560,000 | | | | | $ | 188,200,000 | | | | | $ | 225,840,000 | | |
| FCF(1) | | | | | (884,640,000) | | | | | | (737,200,000) | | | | | | (589,760,000) | | |
| Potential Vesting Level | | | | | 50% | | | | | | 100% | | | | | | 200% | | |
(1)
Adjusted EBITDA and FCF are not intended to provide investors or any other party with guidance about our financial performance or operating results.Adjusted free cash flow is a non-GAAP financial measuremeasures and should not be construed as an alternative to net earnings as an indicator of operating performance or as an alternative toand cash flow provided by operating activitiesfrom operations (each as a measure of liquidity (as determined in accordance with U.S. GAAP). as indicators of operating performance.
The Company defines adjusted free cash flow asCompensation Committee reviewed the Company’s financial results and certified achievement of $46.6 million Adjusted EBITDA minus the sum of cash distributions from non-consolidated entities, cash taxes, cash interest, capital expenditures (excluding change in construction payables) net of landlord contributions, mandatory payments of principal under any credit facility and payments under capital lease obligations and financing lease obligations. As shown($830.5 million) FCF (each calculated as set forth on Appendix A,A) for the year ended December 31, 2022. As a result, all outstanding PSU tranches allocated to the 2022 Tranche Year with an Adjusted EBITDA target did not vest and those with an FCF target vested at the 79% level.
Award Modifications for APE Dividend
On August 19, 2022, the Company
makes adjustments to Adjusted EBITDApaid a special dividend of one APE for
certain cash requirements to determine amounts available for general capital purposes from our operations. Adjusted free cash flow may not be comparable to similarly titled measures reported by other companies or other similar measureseach share of
cash flow.The following table presentsCommon Stock outstanding as of August 15, 2022. In connection with the PSU performance and payout scale:
2016 Performance Stock Unit Transition Awards. special dividend, the Compensation Committee approved an equitable adjustment of awards outstanding under the EIP. In recognitionaccordance with the terms of the shift from one year to three year performance periods for annual equity awards, on March 1, 2016, PSU transition awards were granted to certain members of managementPlan and executive officers, with both a 2016 adjusted free cash flow (as defined above) performance target and net earnings performance threshold and a service condition, covering a performance period beginning January 1, 2016 and ending on December 31, 2016. The PSUs were to vest based on a scale ranging from 80% to 120%effective upon payment of the performance target withdividend,
each RSU/PSU outstanding under the vested amount ranging from 30%EIP was equitably adjusted to 150%. No PSUs were to vest if the Company does not achieve the adjusted free cash flow target or net earnings threshold or the participant’s
service does not continue through the last day of the performance period. The vested PSUs were to be settled within 30 days of vesting. A dividend equivalent equal to the amount paid in respect ofan RSU/PSU convertible into one share of Class A common stock underlying theCommon Stock and one APE upon vesting. All other terms and conditions of outstanding RSUs and PSUs began to accrue(including vesting, forfeiture and acceleration provisions, and with respect to PSUs, performance goals) that were applicable to the PSUsawards prior to the equitable adjustment continued to apply. Because the special dividend was paid on all outstanding Common Stock with treatment similar to a stock split, the modification did not change the performance goals applicable to the outstanding awards, and due to the lack of impact on the dateprobability of grant. Such accrued dividend equivalents were to be paid to the holder upon vesting, of the PSUs. Mr. Aronno additional stock-based compensation was not eligiblerecognized in accordance with ASC 718, Compensation—Stock Compensation.
COMPENSATION SETTING PROCESS
Independent Compensation Consultant
For compensation related decisions effective for the PSU Transition Awards. No PSU Transition Awards vested as the Company did not achieve the adjusted free cash flow or net earnings target.The PSU Transition Awards were to vest on the date2022, the Compensation Committee certified achievementretained the services of Aon as independent executive compensation consultant to advise the Compensation Committee on compensation matters related to the executive and director compensation programs. In 2022, Aon assisted the Compensation Committee with, among other things:
•
executive and director market pay analysis;
•
reviewing and making changes to the compensation peer group;
•
development of executive and director pay programs;
•
CEO pay recommendations;
•
decisions in response to the industry’s recovery from the COVID-19 pandemic; and
•
Assisting with the Compensation, Discussion and Analysis disclosures.
Aon reported to the Compensation Committee and had direct access to the chairperson and the other members of the following: 1)Compensation Committee.
The Compensation Committee conducted a fiscal year 2016 net earnings thresholdspecific review of $120,600,000its relationship with Aon in 2022 and 2) fiscal year 2016 adjusted free cash flow targetdetermined that Aon’s work for the Compensation Committee did not raise any conflicts of $189,100,000, minimuminterest. Aon’s work has conformed to the independence factors and guidance provided by the Dodd-Frank Act, the SEC and the NYSE.
2022 Peer Group
The Company has adopted a peer group of $151,280,000,companies as a reference group to provide a broad perspective on competitive pay levels and maximumpractices. Peer companies were selected based on industry classification, company size in terms of $226,920,000, withrevenue and market capitalization, and similarity in business operations. The Compensation Committee periodically reviews and updates the vested amountpeer group, as necessary, upon recommendation of PSUs ranging from 30% to 150%its independent executive compensation consultant.
For 2022, the Company’s peer group consisted of the award.The PSU Transition Awards grantedfollowing 18 companies:
| | AMC Networks Inc.
Bloomin’ Brands, Inc.
Brinker International, Inc.
Carnival Corporation
Cinemark Holdings Inc.
Darden Restaurants, Inc | | | Discovery, Inc.
Hilton Worldwide Holdings, Inc.
Hyatt Hotels Corporation
IMAX Corporation
Lions Gate Entertainment Corp
Live Nation Entertainment, Inc. | | | Marriott International, Inc.
Norwegian Cruise Line Holdings, Ltd.
Royal Caribbean Cruises, Ltd.
Sinclair Broadcast Group, Inc.
TEGNA, Inc
Wyndham Hotels & Resorts, Inc. | |
Based on March 1, 2016 did not meet the fiscal year 2016 net earnings threshold or minimum adjusted free cash flow threshold. The PSU Transition Awards were cancelledselection factors mentioned above, the Compensation Committee reviewed the 2021 peer group composition and units were returnedmade no changes for 2022.
OTHER COMPENSATION PRACTICES
Compensation Clawback Policy
Pursuant to the 2013 Employee Incentive Plan pool.terms of the EIP, for a period of one year following the date on which the value of an award under the EIP is realized, such value must be repaid in the event (i) the NEO is terminated for “Cause” (as defined in the NEO’s respective employment agreement), or (ii) after termination for any other reason it is determined that such NEO (a) engaged in an act during his or her employment that would have warranted termination for “Cause”, or (b) engaged in conduct that violated a continuing obligation to the Company. Mr. Aron’s, Mr. Goodman’s, Mr. Ellis’, and Ms. Frank’s employment agreements require repayment of any bonus compensation based on materially inaccurate financial statements or performance metrics.
The Company is monitoring the adoption of new listing standards by the New York Stock Exchange (“NYSE”) requiring the development and implementation of policies providing for the recovery of incentive compensation in the event of a required accounting restatement. When the listing standard becomes effective, the Company plans to adopt a policy compliant with such standard.
Executive Stock Ownership Guidelines
On November 2, 2021, the Compensation Committee adopted stock ownership guidelines for our executives, as follows:
| Position | | | Ownership Guideline | |
| CEO | | | 8x base salary | |
| CFO | | | 6x base salary | |
| Executive Vice Presidents | | | 4x base salary | |
| Senior Vice Presidents | | | 2x base salary | |
Each covered officer is required to achieve the applicable ownership guideline within five years after adoption of the guidelines, becoming a covered officer, or being promoted into a position with a higher ownership guideline. Outstanding Common Stock and APEs, unvested RSUs and unvested PSUs at target count for measurement of ownership using a 30-day volume weighted average price for the Company’s Common Stock and APEs. Covered officers who fall below their applicable ownership guideline have a five-year cure period, after which the Compensation Committee may require that compensation otherwise payable in cash be paid in Common Stock or APEs to achieve the applicable ownership guideline. As of December 31, 2022, all NEOs were still within the five-year grace period for initial compliance.
Anti-Hedging Policy
Under our Insider Trading Policy, directors and officers (Vice President and above) are prohibited from engaging in short sales or investing in other kinds of hedging transactions or financial instruments (including puts, calls, prepaid variable forward contracts, equity swaps, collars and exchange funds) that are designed to offset any decrease in the market value of the Company’s securities.
Anti-Pledging Policy
Under our Insider Trading Policy, directors and officers (Vice President and above) are prohibited from utilizing the Company’s securities in a margin account or pledging the Company’s securities as collateral for a loan or other obligation.
We provide retirement benefits to the Named Executive OfficersNEOs under both qualified and non-qualified defined benefit and defined contribution retirement plans. The Defined Benefit Retirement Income Plan for Certain Employees of American Multi Cinema,Multi-Cinema, Inc. (“AMC Defined Benefit Retirement Income Plan”) and the AMC 401(k) Savings Plan are both tax-qualified retirement plans in which the Named Executive OfficersNEOs participate on substantially the same terms as our other participating employees. Due to limitations on benefits imposed by the Employee Retirement Income Security Act of 1974 (“ERISA”), we established a non-qualified
supplemental defined benefit plan (the “AMC Supplemental Executive Retirement Plan”). On November 7, 2006, our Board approved a proposal to freeze the AMC Defined Benefit Retirement Income Plan and the AMC Supplemental Executive Retirement Plan, effective as of December 31, 2006. Benefits no longer accrue under the AMC Defined Benefit Retirement Income Plan or the AMC Supplemental Executive Retirement Plan for our Named Executive OfficersNEOs or for other participants. The “Pension Benefits” table and related narrative section “Pension and Other Retirement Plans” below describes our qualified and non-qualified defined benefit plans in which our Named Executive OfficersNEOs participate. Non-Qualified Deferred Compensation Program
Named Executive Officers are
The Company sponsored the AMC Non-Qualified Deferred Compensation Plan (the “NQDC Plan”), pursuant to which NEOs were permitted to elect to defer base salaries and their cash bonuses under the AMC Non-Qualified Deferred Compensation Plan.bonuses. Amounts deferred under the plans areNQDC Plan were credited with an investment return determined as if the participant'sparticipant’s account werewas invested in one or more investment funds made available by the CommitteeCompany and selected by the participant. The Company may,could, but need not, credit the deferred compensation account of any participant with a discretionary or profit sharingprofit-sharing credit as determined by the Company. We believe that providing the Named Executive Officers with deferred compensation opportunities is a cost-effective way to permit officers to receive the tax benefits associated with delaying the income tax event on the compensation deferred, even though the related deduction forOn May 3, 2021, the Company is also deferred.terminated the NQDC Plan and account balances were distributed to participants in May 2022.
The “Non-Qualified Deferred Compensation” table and related narrative section below describe the non-qualified deferred compensation planNQDC Plan and the benefits thereunder. Severance and Other Benefits Upon Termination of Employment
We believe that the occurrence, or potential occurrence, of a change of control transaction will create uncertainty regarding the continued employment of our executive officers. This uncertainty results from the fact that many change of control transactions result in significant organizational changes, particularly at the senior executive level. In order to encourage certain of our executive officers to remain employed with us during an important time when their prospects for continued employment following the transaction are often uncertain, we provide the
executives with severance benefits if they terminate their employment within a certain number of days following specified changes in their compensation, responsibilities or benefits following a change of control. Accordingly, we provide such protections for each of the Named Executive OfficersNEOs and for other of our senior officers in their respective employment agreements. The Compensation Committee evaluates the level of severance benefits provided to our executive officers on a case-by-case basis. We consider these severance protections consistentare set at a conservative level when compared with competitive practices.
As described in more detail below under “Compensation Discussion and Analysis—Potential Payments Upon Termination or Change of Control,” pursuant to their employment agreements, each of the Named Executive OfficersNEOs is entitled to severance benefits in the event of termination of employment without cause and certain Named Executive OfficersNEOs are entitled to severance benefits upon death or disability. In the case of Mr. Aron, Mr. Goodman, Mr. Ellis, and Ms. Frank, resignation for good reason (as defined in their respective employment agreements) also entitles herthem to severance benefits.All Other Compensation
The other compensation provided
Tax and Accounting
Prior to
each Named Executive Officer is reported in the All Other Compensation column of the “Summary Compensation Table” below, and is further described in footnote (5) to that table. All other compensation during the year ended December 31, 2016 consists of Company matching contributions under our 401(k) savings plan, which is a qualified defined contribution plan and life insurance premiums. On occasion, our Named Executive Officers receive event tickets from the Company, amusement park passes, event tickets and gifts from vendors for personal use and there is no incremental cost associated with these items.Independent Compensation Consultant
For compensation related decisions effective for 2016, the Compensation Committee retained the services of Pay Governance LLC as independent executive compensation consultant to advise the Compensation Committee on compensation matters related to the executive and director compensation programs. In 2016, Pay Governance assisted the Compensation Committee with, among other things:
| ·
| | executive and director market pay analysis;
|
| ·
| | reviewing and making changes to the compensation peer group;
|
| ·
| | development of executive and director pay programs;
|
| ·
| | CEO Pay Recommendations; and
|
| ·
| | drafting the Proxy Statement and Compensation, Discussion and Analysis disclosures.
|
Pay Governance reported to the Compensation Committee and had direct access to the Chairman and the other members of the Compensation Committee. Beyond advice related to the executive and director compensation programs, Pay Governance did provide other services to the Company in 2016, but the amount paid to Pay Governance was immaterial. The Compensation Committee reviewed the nature of its relationship with Pay Governance and has concluded that Pay Governance’s work for the Compensation Committee does not raise any conflicts of interest with respect to Pay Governance’s independence.
In July 2016, the Compensation determined that it was in the best interests of the Company to retain the services of AON Hewitt (“AON”) as independent executive compensation consultant to replace Pay Governance and advise the Compensation Committee on compensation matters related to the executive and director compensation programs for 2017.
Adoption of a Peer Group
The Company has adopted a peer group of companies as a reference group to provide a broad perspective on competitive pay levels and practices. Peer companies were selected based on industry classification, company size in terms of revenue and market capitalization, and similarity in business operations. The Compensation Committee periodically reviews and updates the Peer Group, as necessary, upon recommendation of its independent executive compensation consultant. The Compensation Committee reviewed the peer group composition for 2016 and made no changes.
For 2016, the Company's peer group consisted of the following 13 companies:
| | | | | | | | |
| | | | 2015 Revenue
| | | |
Peer
| | Industry
| | (in thousands)
| | Market Capitalization
|
Brinker International, Inc.
| | Restaurants
| | $
| 3,257,489 | | $
| 2.06 Billion
|
Carmike Cinemas, Inc.
| | Movie Production, Theatres
| | | 804,368 | | | N/A
|
The Cheesecake Factory Incorporated
| | Restaurants
| | | 2,100,609 | | | 2.74 Billion
|
Bloomin' Brands, Inc.
| | Restaurants
| | | 4,377,676 | | | 1.88 Billion
|
Cinemark Holdings Inc.
| | Movie Production, Theatres
| | | 2,852,609 | | | 5.04 Billion
|
DreamWorks Animation SKG Inc.
| | Entertainment Production
| | | 915,863 | | | N/A
|
IMAX Corporation
| | Entertainment
| | | 373,805 | | | 2.05 Billion
|
Lions Gate Entertainment Corp.
| | Entertainment Production
| | | 2,399,640 | | | N/A
|
Netflix, Inc.
| | CATV Systems
| | | 6,779,511 | | | 61.92 Billion
|
Panera Bread Co.
| | Specialty Eateries
| | | 2,681,580 | | | 5.35 Billion
|
Regal Entertainment Group
| | Movie Production, Theatres
| | | 3,127,300 | | | 3.36 Billion
|
Buffalo Wild Wings, Inc.
| | Restaurants
| | | 1,812,722 | | | 2.73 Billion
|
Madison Square Garden Co.
| | Entertainment-Diversified
| | $
| 1,071,511 | | $
| 4.30 Billion
|
| (1)
| | The Company included restaurants in its peer group as a portion of its revenues comes from dine-in-theatre locations.
|
Compensation Claw-back Under Certain Circumstances
Pursuant to the terms of the 2013 Equity Incentive Plan, for a period of one year following the date on which the value of an award under the 2013 Equity Incentive Plan is realized, such value must be repaid in the event (i) the Named Executive Officer is terminated for “Cause” (as defined in the Named Executive Officer's respective employment agreement), or (ii) after termination for any other reason it is determined that such Named Executive Officer (a) engaged in an act during his or her employments that would have warranted termination for “Cause”, or (b) engaged in conduct that violated a continuing obligation to the Company. Mr. Aron's and Ms. Frank's employment agreements require repayment of any bonus compensation based on materially inaccurate financial statements or performance metrics.
Executive Stock Ownership Guidelines and Anti-Hedging Policy
The Company has adopted stock ownership guidelines for our executives, including our Named Executive Officers. Our CEO is required to acquire and hold shares of our Class A common stock with a fair value at least equal to three times his base salary, and the other Named Executive Officers are required to acquire and hold shares of our Class A common stock with a fair value at least equal to two times their respective base salaries. Each Named Executive Officer is required to achieve the applicable guideline ownership amount within later of, (1) three years following the IPO or (2) three years after becoming a Named Executive Officer. All Named Executive Officers, with the exception of Mr. Aron have achieved the Class A common stock ownership guideline. As of February 24, 2017, Mr. Aron held 51,747 of Class A common stock valued at approximately $1.6 million. Mr. Aron has two years remaining to meet his ownership guideline. Further, our Insider Trading Policy prohibits the Named Executive Officers from entering into hedging positions with respect to their stock ownership. Pursuant to the Management Stockholders Agreement, our Named Executive Officers may not transfer shares of the Company acquired in connection with the Merger without the written consent of Wanda prior to January 1, 2016, after which certain limitations on transfer continue for a period of two years.
IRS Code Section 162(m)
2018, Section 162(m) of the Internal Revenue Code generally disallowsdisallowed publicly held companies a tax deduction for compensation in excess of $1,000,000 paid to their chief executive officer and the three other most highly compensated executive officers (other than the principal financial officer) unless such compensation qualifiesqualified for an exemption for certain compensation that iswas based on performance. Our intent generallyPursuant to the 2017 Tax Cuts and Jobs Act, signed into law on December 22, 2017 (the “Tax Act”), for fiscal years beginning after December 31, 2017, subject to certain transition rules, the performance-based compensation exception to the deduction limitations under Section 162(m) is to design and administer executiveno longer be available. As a result, for fiscal years beginning after December 31, 2017, all compensation programs in a manner that will preserve the deductibilityexcess of compensation$1,000,000 paid to our executive officers, and we believe that a substantial portion of our current executive compensation program satisfies the requirements for exemption from the $1,000,000 deduction limitation, to the extent applicable, taking into account the special rules that apply to compensation provided pursuant to agreements in effect. However, we reserve the right to design programs that recognize a full range of performance criteria important to our success, even where the compensation paid under such programs mayspecified executives is not be deductible. The Compensation Committee will continue to monitor the tax and other consequences of our executive compensation program as part of its primary objective of ensuring that compensation paid to our executive officers is reasonable, performance basedperformance-based and consistent with the goals of the Company and its stockholders.
EXECUTIVE COMPENSATION
Summary Compensation Table
The following table presents information regarding compensation of our principal executive officer and our principal financial officer, and our three other most highly compensated executive officers for services rendered during the year ended December 31, 2016.2022. These individuals are referred to as “Named Executive Officers.“NEOs.” | Name and Principal Position | | | Year | | | Salary | | | Bonus | | | Stock
Awards(1) | | | Non-Equity
Incentive
Plan
Compensation(2) | | | Change in
Pension
Value and
Nonqualified
Deferred
Compensation
Earnings(3)(4) | | | All Other
Compensation(5) | | | Total | |
| Adam M. Aron | | | | | 2022 | | | | | $ | 1,500,000 | | | | | $ | — | | | | | $ | 16,194,055 | | | | | $ | 6,000,000 | | | | | $ | — | | | | | $ | 22,106 | | | | | $ | 23,716,161 | | |
| Chairman, Chief Executive | | | | | 2021 | | | | | | 1,451,923 | | | | | | — | | | | | | 11,436,117 | | | | | | 6,000,000 | | | | | | — | | | | | | 21,506 | | | | | | 18,909,546 | | |
| Officer, President and | | | | | 2020 | | | | | | 1,106,491 | | | | | | 5,000,000 | | | | | | 14,798,988 | | | | | | — | | | | | | — | | | | | | 21,306 | | | | | | 20,926,785 | | |
| Director | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Sean D. Goodman(6) | | | | | 2022 | | | | | | 800,000 | | | | | | 450,000 | | | | | | 3,408,536 | | | | | | 1,600,000 | | | | | | — | | | | | | 15,554 | | | | | | 6,274,090 | | |
| Executive Vice President, | | | | | 2021 | | | | | | 785,577 | | | | | | — | | | | | | 2,312,071 | | | | | | 1,600,000 | | | | | | — | | | | | | 14,954 | | | | | | 4,712,602 | | |
| Chief Financial Officer, and | | | | | 2020 | | | | | | 622,981 | | | | | | 761,250 | | | | | | 2,861,150 | | | | | | — | | | | | | — | | | | | | 3,225 | | | | | | 4,248,606 | | |
| Treasurer | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Daniel E. Ellis(7) | | | | | 2022 | | | | | | 585,385 | | | | | | — | | | | | | 1,489,373 | | | | | | 696,150 | | | | | | — | | | | | | 13,569 | | | | | | 2,784,477 | | |
| Executive Vice President | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Chief Operations and | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Development Officer | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Elizabeth F. Frank | | | | | 2022 | | | | | | 591,154 | | | | | | — | | | | | | 1,716,758 | | | | | | 696,150 | | | | | | — | | | | | | 13,652 | | | | | | 3,017,714 | | |
| Executive Vice President, | | | | | 2021 | | | | | | 571,323 | | | | | | — | | | | | | 1,286,963 | | | | | | 672,750 | | | | | | 408,473 | | | | | | 12,922 | | | | | | 2,952,430 | | |
| Worldwide Programming | | | | | 2020 | | | | | | 492,061 | | | | | | 361,300 | | | | | | 1,984,724 | | | | | | — | | | | | | 238,992 | | | | | | 12,797 | | | | | | 3,089,874 | | |
| and Chief Content Officer | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Kevin M. Connor(7) | | | | | 2022 | | | | | | 558,206 | | | | | | — | | | | | | 1,338,740 | | | | | | 656,800 | | | | | | — | | | | | | 16,128 | | | | | | 2,569,874 | | |
| Senior Vice President, | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| General Counsel and | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Secretary | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | |
Name and Principal Position | | Year | | Salary | | Bonus | | Stock Awards(1) | | Non-Equity
Incentive Plan
Compensation(2) | | Change in Pension Value and Nonqualified Deferred Compensation Earnings(3)(4) | | All Other
Compensation(5) | | Total |
Adam M. Aron | | 2016 | | $ | 991,200 | | $ | 4,500,000 | | $ | 4,281,202 | | $ | 1,144,250 | | $ | — | | $ | 15,352 | | $ | 10,932,004 |
Chief Executive Officer, | | | | | | | | | | | | | | | | | | | | | | | |
President and Director | | | | | | | | | | | | | | | | | | | | | | | |
Craig R. Ramsey | | 2016 | | | 563,800 | | | 700,000 | | | 962,930 | | | 363,078 | | | 48,906 | | | 20,506 | | | 2,659,220 |
Executive Vice President and | | 2015 | | | 550,000 | | | — | | | 1,365,735 | | | 668,250 | | | — | | | 40,748 | | | 2,624,733 |
Chief Financial Officer | | 2014 | | | 510,985 | | | — | | | 875,628 | | | 377,338 | | | 103,441 | | | 15,548 | | | 1,882,940 |
John D. McDonald | | 2016 | | | 517,700 | | | 350,000 | | | 962,930 | | | 375,383 | | | 100,309 | | | 13,925 | | | 2,320,247 |
Executive Vice President North | | 2015 | | | 505,000 | | | — | | | 796,838 | | | 428,442 | | | — | | | 20,454 | | | 1,750,734 |
American Operations | | 2014 | | | 493,074 | | | — | | | 875,628 | | | 371,070 | | | 248,446 | | | 6,774 | | | 1,994,992 |
Elizabeth Frank | | 2016 | | | 511,500 | | | 250,000 | | | 962,930 | | | 344,470 | | | 34,118 | | | 11,770 | | | 2,114,788 |
Executive Vice President and | | 2015 | | | 499,000 | | | — | | | 796,838 | | | 392,139 | | | — | | | 11,770 | | | 1,699,747 |
Chief Content and | | 2014 | | | 500,449 | | | — | | | 875,628 | | | 343,800 | | | — | | | 11,570 | | | 1,731,447 |
Programming Officer | | | | | | | | | | | | | | | | | | | | | | | |
Mark A. McDonald | | 2016 | | | 453,500 | | | 350,000 | | | 962,930 | | | 305,407 | | | 94,347 | | | 13,925 | | | 2,180,109 |
Executive Vice President, | | 2015 | | | 444,600 | | | — | | | 796,838 | | | 326,281 | | | — | | | 18,954 | | | 1,586,673 |
Global Development | | 2014 | | | 444,167 | | | — | | | 875,628 | | | 317,453 | | | 217,612 | | | 6,003 | | | 1,860,863 |
(1)
As required by SEC Rules, amounts shown in this column, “Stock Awards,” presents the aggregate grant or modification date fair value of RSUs, PSUs and stock awards granted or modified in each year in accordance with ASC 718, Compensation—Stock Compensation and represents the value based on the probable outcome of performance conditions. See also Note 9—Stockholders’ Equity to our audited financial statements for the year ended December 31, 2022, included in our 2022 Annual Report on Form 10-K. These awards and modifications were made under the provisions of the equity-based incentive compensation program. No modifications during 2022 resulted in an incremental increase in fair value. See “Compensation Discussion and Analysis—Equity-Based Compensation Program” above for information regarding the awards, modifications and the performance criteria.
In 2022, the Company granted 2022 RSUs and 2022 PSUs to officers and established performance goals for the 2022 Tranche Year which were applicable to tranche I of the 2022 PSUs, tranche II of the 2021 PSUs and tranche III of the 2020 PSUs. For compensation purposes, PSU tranches are not considered granted until such time as the performance goals are established. As a result, only the fair value of PSU tranches allocated to the 2022 Tranche Year are included in the summary compensation tables. The fair value for subsequent tranches will not be determined until performance goals for such tranches are established and will be included in the summary compensation tables for such years as applicable.
| | (1)
56 | | As required by SEC Rules, amounts shown in this column, “Stock Awards,” presents the aggregate grant date fair value of RSUs, PSUs, PSUTs and stock awards granted in each year in accordance with ASC 718, Compensation—Stock Compensation and represents the value based on the probable outcome of performance conditions. See also Note 8—Stockholders' Equity to our audited financial statements for year ended December 31, 2016, included in our 2016 Annual Report on Form 10-K. These awards were made under the provisions of the equity-based incentive compensation program. See “Compensation Discussion and Analysis—Equity Awards Granted in 2016” above for information regarding the awards and the performance criteria. For 2016, the fair value of the RSUs, PSUs and PSUTs granted on March 1, 2016 was based on the closing price of the Company's common stock on March 1, 2016 of $24.88. No PSUTs vested as the Company did not achieve the adjusted cash flow or net earnings target. For PSU’s and PSUTs in 2016, the amount reflects the probable outcome. The maximum value of RSUs is included above. The value of the PSU and PSUT awards, assuming the highest level of performance achieved is detailed below:
| | | | | |
| | | | | | |
| | Probable | | Maximum |
Adam M. Aron | | | | | | |
EIP-PSU | | $ | 2,140,601 | | $ | 3,210,901 |
Craig R. Ramsey | | | | | | |
EIP-PSU | | | 414,202 | | | 621,303 |
EIP-PSUT | | | 134,526 | | | 201,789 |
John D. McDonald | | | | | | |
EIP-PSU | | | 414,202 | | | 621,303 |
EIP-PSUT | | | 134,526 | | | 201,789 |
Elizabeth Frank | | | | | | |
EIP-PSU | | | 414,202 | | | 621,303 |
EIP-PSUT | | | 134,526 | | | 201,789 |
Mark A. McDonald | | | | | | |
EIP-PSU | | | 414,202 | | | 621,303 |
EIP-PSUT | | | 134,526 | | | 201,789 |
The fair value at grant of the 2022 RSUs and the tranches of the 2022 PSUs, 2021 PSUs and 2020 PSUs allocated to the 2022 Tranche Year was based on the closing price of the Company’s common stock on the grant approval date of February 16, 2022, of $19.67. For the PSUs, the amount above includes the probable outcome at the time of grant and for the RSU’s the target/maximum value is included. The probable and maximum value of the PSUs at grant is detailed below:
| | | | Probable | | | Maximum | |
| Adam M. Aron | | | | | | | | | | | | | |
| EIP—2022 PSU | | | | $ | 1,764,517 | | | | | $ | 3,529,034 | | |
| EIP—2021 PSU | | | | | 6,224,670 | | | | | | 12,449,340 | | |
| EIP—2020 PSU | | | | | 2,911,239 | | | | | | 5,822,477 | | |
| Sean D. Goodman | | | | | | | | | | | | | |
| EIP—2022 PSU | | | | | 371,468 | | | | | | 742,936 | | |
| EIP—2021 PSU | | | | | 1,327,902 | | | | | | 2,655,804 | | |
| EIP—2020 PSU | | | | | 594,703 | | | | | | 1,189,406 | | |
| Daniel E. Ellis | | | | | | | | | | | | | |
| EIP—2022 PSU | | | | | 167,156 | | | | | | 334,311 | | |
| EIP—2021 PSU | | | | | 539,450 | | | | | | 1,078,900 | | |
| EIP—2020 PSU | | | | | 281,261 | | | | | | 562,523 | | |
| Elizabeth F. Frank | | | | | | | | | | | | | |
| EIP—2022 PSU | | | | | 167,156 | | | | | | 334,311 | | |
| EIP—2021 PSU | | | | | 684,693 | | | | | | 1,369,386 | | |
| EIP—2020 PSU | | | | | 363,403 | | | | | | 726,807 | | |
| Kevin M. Connor | | | | | | | | | | | | | |
| EIP—2022 PSU | | | | | 129,999 | | | | | | 259,998 | | |
| EIP—2021 PSU | | | | | 539,450 | | | | | | 1,078,900 | | |
| EIP—2020 PSU | | | | | 279,216 | | | | | | 558,431 | | |
(2)
See “Compensation Discussion and Analysis—Annual Incentive Program” above for a discussion of the terms of our AIP.
(3)
This column includes the aggregate increases and decreases in actuarial present value of each NEO’s accumulated benefit amounts. The amount of aggregate decreases in actuarial present value in 2022 has been omitted from the Summary Compensation Table.
| | | | | | | | | | Defined
Benefit Plan | | | Supplemental Executive
Retirement Plan | |
| Kevin M. Connor | | | | | 2022 | | | | | $ | (26,776) | | | | | $ | (11,848) | | |
(4)
This column also includes the nonqualified deferred compensation above market earnings for the difference between market interest rates determined pursuant to SEC rules and the interest contingently credited by the Company on salary deferred by the NEOs. For 2022, there were no above market earnings. For 2021, the above market earnings of 24.7% for Ms. Frank were $408,473. For 2020, the above market earnings of 19.3% for Ms. Frank were $238,992.
(5)
All Other Compensation is comprised of Company matching contributions under our 401(k) savings plan which is a qualified defined contribution plan and life insurance premiums. The following table summarizes “All Other Compensation” provided to the NEOs for the year ended December 31, 2022:
| | | | Company Matching
Contributions to
401(k) Plan | | | Life
Insurance
Premiums | | | Total | |
| Adam M. Aron | | | | $ | 12,200 | | | | | $ | 9,906 | | | | | $ | 22,106 | | |
| Sean D. Goodman | | | | | 12,200 | | | | | | 3,354 | | | | | | 15,554 | | |
| Daniel E. Ellis | | | | | 12,200 | | | | | | 1,369 | | | | | | 13,569 | | |
| Elizabeth F. Frank | | | | | 12,200 | | | | | | 1,452 | | | | | | 13,652 | | |
| Kevin M. Connor | | | | | 12,200 | | | | | | 3,928 | | | | | | 16,128 | | |
(6)
Mr. Goodman received the first installment of a special cash retention bonus in 2022. See “Compensation Discussion and Analysis—Retention Bonus for Mr. Goodman” above for additional information on the bonus.
(7)
Neither Mr. Ellis nor Mr. Connor were NEOs in 2021 or 2020.
| | (2)
| | See “Compensation Discussion and Analysis—Annual Incentive Compensation Program” above for a discussion of the terms of our AIP.
| | | | 57 | |
| (3)
| | This column includes the aggregate increases and decreases in actuarial present value of each Named Executive Officer's accumulated benefit amounts. The amount of aggregate decreases in actuarial present value in 2015 have been omitted from the Summary Compensation Table:
|
| | | | | | | |
| | | | | | Supplemental |
| | | Defined Benefit | | Executive |
| | | Plan | | Retirement Plan |
Craig R. Ramsey | 2016 | | $ | 12,943 | | $ | 6,710 |
| 2015 | | | (2,925) | | | (1,516) |
| 2014 | | | 54,746 | | | 28,385 |
John D. McDonald | 2016 | | | 33,379 | | | 17,307 |
| 2015 | | | (16,180) | | | (8,389) |
| 2014 | | | 149,880 | | | 77,711 |
Mark A. McDonald | 2016 | | | 28,498 | | | 13,822 |
| 2015 | | | (15,949) | | | (7,736) |
| 2014 | | | 129,158 | | | 62,643 |
| (4)
| | This column also includes the nonqualified deferred compensation above market earnings for the difference between market interest rates determined pursuant to SEC rules and the interest contingently credited by the Company on salary deferred by the Named Executive Officers. For 2016, the above market earnings of 6.1% to 9.6% for Mr. Craig Ramsey, Mr. John McDonald, Ms. Elizabeth Frank and Mr. Mark McDonald were $29,253, $49,623, $34,118 and $52,027, respectively. For 2015, there were no above market earnings under the nonqualified deferred compensation plans. For 2014, the above market earnings of 6.0% to 9.5% for, Mr. Craig Ramsey, Mr. John McDonald, and Mr. Mark McDonald were $20,310, $20,855, and $25,811 respectively. Further discussion on the nonqualified deferred compensation for the Named Executive Officers can be found in the “Compensation Discussion and Analysis—Nonqualified Deferred Compensation” section.
|
| (5)
| | All Other Compensation is comprised of Company matching contributions under our 401(k) savings plan which is a qualified defined contribution plan, life insurance premiums, payments for termination of postretirement medical benefits, gift award, and other perquisites. The following table summarizes “All Other Compensation” provided to the Named Executive Officers for the year ended December 31, 2016:
|
| | | | | | | | | | | | | | | |
| | Company | | | | | | | | | | | | |
| | Matching | | Life | | | | | | | | | |
| | Contributions | | Insurance | | Gift | | | | | | |
| | to 401(k) Plan | | Premiums | | Award | | Other Perquisites | | Total |
Adam M. Aron | | $ | 10,600 | | $ | 4,752 | | $ | — | | $ | — | | $ | 15,352 |
Craig R. Ramsey | | | 10,600 | | | 9,906 | | | — | | | — | | | 20,506 |
John D. McDonald | | | 10,600 | | | 3,325 | | | — | | | — | | | 13,925 |
Elizabeth Frank | | | 10,600 | | | 1,170 | | | — | | | — | | | 11,770 |
Mark A. McDonald | | | 10,600 | | | 3,325 | | | — | | | — | | | 13,925 |
Description of Employment Agreements—Salary and Bonus Amounts
We have entered into employment agreements with each of our Named Executive Officers.NEOs. Change of control, severance arrangements and restrictive covenants in each of the Named Executive Officer'sNEO’s employment agreements are discussed in detail below in the narrative section “Potential Payments Upon Termination or Change of Control.” Pursuant to each Named Executive Officer'sNEO’s employment agreement, the executive has agreed not to disclose any confidential information about the Company at any time during or after his/her employment with the Company. Adam M. Aron.We entered into an employment agreement with Mr. Aron that became effective on January 4, 2016. Mr. Aron'sAron’s employment agreement includes a three-year initial term, with automatic one-year extensions each year unless the Company or Mr. Aron provides notice not to extend. The agreement provides that
Mr. Aron will receive an annual base salary of no less than $995,000, and a target incentive bonus opportunity for each year will be at least 125% of his base salary under the terms of the annual incentive plan in effect for the applicable year. The Board or Compensation Committee, based on its review, has discretion to increase (but not reduce) the base salary each year. EachUnder the agreement, each year, the Company will award Mr. Aron at least $4,000,000 of value in long-term incentive equity compensation, 50% of which will be RSUs vesting in equal annual installments over 3three years, subject to the achievement of certain financial targets, and 50% of which will be PSUs which will vest after 3three years based on the achievement of reasonable performance criteria.
Craig R. Ramsey.
Sean D. Goodman.We entered into an employment agreement with Mr. RamseyGoodman on July 1, 2001.December 2, 2019. The term of the agreement is for two years, with automatic one-year extensions each year. The agreement provides that Mr. RamseyGoodman will receive an annual base salary that is subject to annual review by the Compensation Committee and can be increased but not decreased, and annual bonuses based ondecreased. The employment agreement provides that Mr. Goodman’s target incentive bonus shall be determined by the applicableBoard (or a committee thereof). See “Executive Compensation Program Elements—Annual Performance Bonus” above for information regarding the target incentive program ofbonus under the Company.AIP. In making its determination with respect to salary and bonus payout levels, under the agreement, the Compensation Committee considers the factors discussed in the “Current Executive Compensation Program Elements” of the Compensation Discussion and Analysis above.John D. McDonald. Mr. Goodman’s employment agreement was amended on March 19, 2021, to provide for certain retention bonus payments in the amounts of $450,000, $450,000, and $900,000 on March 17 in each of 2022, 2023 and 2024, respectively, subject to Mr. Goodman’s continued employment on such dates.
Daniel E. Ellis.We entered into an employment agreement with Mr. McDonaldEllis on July 1, 2001.December 20, 2016. The term of the agreement is for two years, with automatic one-year extensions each year. The agreement provides that Mr. McDonaldEllis will receive an annual base salary that is subject to annual review by the Compensation Committee and can be increased but not decreased. The employment agreement provides that Mr. Ellis’ target incentive bonus shall be determined by the Board (or a committee thereof). See “Executive Compensation Program Elements—Annual Performance Bonus” above for information regarding the target incentive bonus under the AIP. In making its determination with respect to salary and bonus payout levels, the Compensation Committee considers the factors discussed in the “Current Executive Compensation Program Elements” of the Compensation Discussion and Analysis above.
Elizabeth F. Frank. We entered into an employment agreement with Ms. Frank on August 18, 2010. The term of the agreement is for two years, with automatic one-year extensions each year. The agreement provides that Ms. Frank will receive an annual base salary that is subject to annual review by the Compensation Committee and can be increased but not decreased. The employment agreement provides that Ms. Frank’s target incentive bonus shall be determined by the Board (or a committee thereof). See “Executive Compensation Program Elements—Annual Performance Bonus” above for information regarding the target incentive bonus under the AIP. In making its determination with respect to salary and bonus payout levels, the Compensation Committee considers the factors discussed in the “Current Executive Compensation Program Elements” of the Compensation Discussion and Analysis above.
Kevin M. Connor. We entered into an employment agreement with Mr. Connor on November 6, 2002. The term of the agreement is for two years, with automatic one-year extensions each year. The agreement provides that Mr. Connor will receive an annual base salary that is subject to annual review by the Compensation Committee, and can be increased but not decreased, and annual bonuses based on the applicable incentive program of the Company. In making its determination with respect to salary and bonus payout levels, the Compensation Committee considers the factors discussed in the “Current Executive Compensation Program Elements” of the Compensation Discussion and Analysis above.Elizabeth Frank. We entered into an employment agreement with Ms. Frank on August 18, 2010. The term of the agreement is for two years, with automatic one-year extensions each year. The agreement provides that Ms. Frank will receive an annual base salary that is subject to annual review by the Compensation Committee and can be increased but not decreased. The employment agreement provides that Ms. Frank's target incentive bonus shall be determined by the Board (or a committee thereof). See “Executive Compensation Program Elements”—”Annual Performance Bonus” above for information regarding the target incentive bonus under the AIP. In making its determination with respect to salary and bonus payout levels, the Committee considers the factors discussed in the “Current Executive Compensation Program Elements” of the Compensation Discussion and Analysis above.
Mark A. McDonald. We entered into an employment agreement with Mr. McDonald on July 1, 2001. The term of the agreement is for two years, with automatic one-year extensions each year. The agreement provides that Mr. McDonald will receive an annual base salary that is subject to annual review by the Compensation Committee, and can be increased but not decreased, and annual bonuses based on the applicable incentive program of the Company. In making its determination with respect to salary and bonus payout levels, the Committee considers the factors discussed in the “Current Executive Compensation Program Elements” of the Compensation Discussion and Analysis above.
Limitation of Liability and Indemnification of Directors and Officers
We have entered into indemnification agreements with each of our directors and officers. These indemnification agreements may require us, among other things, to indemnify our directors and officers against liabilities that may arise by reason of their status or service as directors or officers, other than liabilities arising from willful misconduct. These indemnification agreements may also require us to advance any expenses incurred by the directors or officers as a result of any proceeding against them as to which they could be indemnified and to obtain
directors'directors’ and
officers'officers’ insurance, if available on reasonable terms.
Grants
and Modifications of Plan-Based Awards
The following table summarizes plan-based awards granted to Named Executive OfficersNEOs during the year ended December 31, 2016:2022: | | | | | | | | | | | | | | | | Estimated Future Payouts
Under Non-Equity
Incentive Plan Awards | | | Estimated Future Payouts
Under
Equity Incentive Plan Awards | | | All Other
Stock Awards:
Number of
Shares of
Stock or Units
(#) | | | Grant Date
Fair Value of
Stock and
Option
Awards | |
| Name | | | Approval
Date | | | Grant
Date | | | Threshold | | | Target
100% | | | Maximum | | | Threshold
(#) | | | Target
(#) | | | Maximum
(#) | |
| Adam M. Aron | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| AIP—Company(1) | | | | | N/A | | | | | | N/A | | | | | $ | 1,500,000 | | | | | $ | 3,000,000 | | | | | $ | 6,000,000 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| EIP—2022 RSU(3) | | | | | 2/16/22 | | | | | | 3/2/22 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 269,122 | | | | | $ | 5,293,630 | | |
| EIP—2022 PSU(4) | | | | | 2/16/22 | | | | | | 3/2/22 | | | | | | | | | | | | | | | | | | | | | | | | 44,853 | | | | | | 89,706 | | | | | | 179,412 | | | | | | | | | | | | 1,764,517 | | |
| EIP—2021 PSU(5) | | | | | 2/16/22 | | | | | | 3/2/22 | | | | | | | | | | | | | | | | | | | | | | | | 158,228 | | | | | | 316,455 | | | | | | 632,910 | | | | | | | | | | | | 6,224,670 | | |
| EIP—2020 PSU(6) | | | | | 2/16/22 | | | | | | 3/2/22 | | | | | | | | | | | | | | | | | | | | | | | | 74,002 | | | | | | 148,004 | | | | | | 296,008 | | | | | | | | | | | | 2,911,239 | | |
| Sean D. Goodman | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| AIP—Company(1) | | | | | N/A | | | | | | N/A | | | | | | 400,000 | | | | | | 800,000 | | | | | | 1,600,000 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| EIP—2022 RSU(3) | | | | | 2/16/22 | | | | | | 3/2/22 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 56,658 | | | | | | 1,114,463 | | |
| EIP—2022 PSU(4) | | | | | 2/16/22 | | | | | | 3/2/22 | | | | | | | | | | | | | | | | | | | | | | | | 9,443 | | | | | | 18,885 | | | | | | 37,770 | | | | | | | | | | | | 371,468 | | |
| EIP—2021 PSU(5) | | | | | 2/16/22 | | | | | | 3/2/22 | | | | | | | | | | | | | | | | | | | | | | | | 33,755 | | | | | | 67,509 | | | | | | 135,018 | | | | | | | | | | | | 1,327,902 | | |
| EIP—2020 PSU(6) | | | | | 2/16/22 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 15,117 | | | | | | 30,234 | | | | | | 60,468 | | | | | | | | | | | | 594,703 | | |
| Daniel E. Ellis | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| AIP—Company(1) | | | | | N/A | | | | | | N/A | | | | | | 154,700 | | | | | | 309,400 | | | | | | 618,800 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| AIP—Individual(2) | | | | | N/A | | | | | | N/A | | | | | | N/A | | | | | | 77,350 | | | | | | N/A | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| EIP—2022 RSU(3) | | | | | 2/16/22 | | | | | | 3/2/22 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 25,496 | | | | | | 501,506 | | |
| EIP—2022 PSU(4) | | | | | 2/16/22 | | | | | | 3/2/22 | | | | | | | | | | | | | | | | | | | | | | | | 4,249 | | | | | | 8,498 | | | | | | 16,996 | | | | | | | | | | | | 167,156 | | |
| EIP—2021 PSU(5) | | | | | 2/16/22 | | | | | | 3/2/22 | | | | | | | | | | | | | | | | | | | | | | | | 13,713 | | | | | | 27,425 | | | | | | 54,850 | | | | | | | | | | | | 539,450 | | |
| EIP—2020 PSU(6) | | | | | 2/16/22 | | | | | | 3/2/22 | | | | | | | | | | | | | | | | | | | | | | | | 7,150 | | | | | | 14,299 | | | | | | 28,598 | | | | | | | | | | | | 281,261 | | |
| Elizabeth F. Frank | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| AIP—Company(1) | | | | | N/A | | | | | | N/A | | | | | | 154,700 | | | | | | 309,400 | | | | | | 618,800 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| AIP—Individual(2) | | | | | N/A | | | | | | N/A | | | | | | N/A | | | | | | 77,350 | | | | | | N/A | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| EIP—2022 RSU(3) | | | | | 2/16/22 | | | | | | 3/2/22 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 25,496 | | | | | | 501,506 | | |
| EIP—2022 PSU(4) | | | | | 2/16/22 | | | | | | 3/2/22 | | | | | | | | | | | | | | | | | | | | | | | | 4,249 | | | | | | 8,498 | | | | | | 16,996 | | | | | | | | | | | | 167,156 | | |
| EIP—2021 PSU(5) | | | | | 2/16/22 | | | | | | 3/2/22 | | | | | | | | | | | | | | | | | | | | | | | | 17,405 | | | | | | 34,809 | | | | | | 69,618 | | | | | | | | | | | | 684,693 | | |
| EIP—2020 PSU(6) | | | | | 2/16/22 | | | | | | 3/2/22 | | | | | | | | | | | | | | | | | | | | | | | | 9,238 | | | | | | 18,475 | | | | | | 36,950 | | | | | | | | | | | | 363,403 | | |
| Kevin M. Connor | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| AIP—Company(1) | | | | | N/A | | | | | | N/A | | | | | | 145,950 | | | | | | 291,900 | | | | | | 583,800 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| AIP—Individual(2) | | | | | N/A | | | | | | N/A | | | | | | N/A | | | | | | 73,000 | | | | | | N/A | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| EIP—2022 RSU(3) | | | | | 2/16/22 | | | | | | 3/2/22 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 19,831 | | | | | | 390,076 | | |
| EIP—2022 PSU(4) | | | | | 2/16/22 | | | | | | 3/2/22 | | | | | | | | | | | | | | | | | | | | | | | | 3,305 | | | | | | 6,609 | | | | | | 13,218 | | | | | | | | | | | | 129,999 | | |
| EIP—2021 PSU(5) | | | | | 2/16/22 | | | | | | 3/2/22 | | | | | | | | | | | | | | | | | | | | | | | | 13,713 | | | | | | 27,425 | | | | | | 54,850 | | | | | | | | | | | | 539,450 | | |
| EIP—2020 PSU(6) | | | | | 2/16/22 | | | | | | 3/2/22 | | | | | | | | | | | | | | | | | | | | | | | | 7,098 | | | | | | 14,195 | | | | | | 28,390 | | | | | | | | | | | | 279,216 | | |
| | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | Grant Date |
| | | | | | | | | | | | | | | | | | | Fair Value |
| | | | Estimated Possible Future Payouts | | | | | | | | | | | of Stock |
| | | | Under Non-Equity Incentive Plan Awards | | Estimated Possible Future Payouts | | and |
| | Grant | | Target | | Maximum | | Under Equity Incentive Plan Awards | | Option |
Name | | Date | | 100% | | | | Threshold (#) | | Target (#) | | Maximum (#) | | Awards |
Adam M. Aron | | | | | | | | | | | | | | | | | | | | |
AIP—Company (1) | | N/A | | $ | 1,243,750 | | $ | 2,487,500 | | | — | | | — | | | — | | $ | — |
EIP-RSU (4) | | 3/1/2016 | | | — | | | — | | | — | | | 86,037 | | | — | | | 2,140,601 |
EIP-PSU (5) | | 3/1/2016 | | | — | | | — | | | 25,811 | | | 86,037 | | | 129,056 | | | 2,140,601 |
Craig R. Ramsey | | | | | | | | | | | | | | | | | | | | |
AIP—Company (1) | | N/A | | | 394,660 | | | 789,320 | | | — | | | — | | | — | | | — |
EIP-RSU (3) | | 3/1/2016 | | | — | | | — | | | — | | | 16,648 | | | — | | | 414,202 |
EIP-PSU (5) | | 3/1/2016 | | | — | | | — | | | 4,994 | | | 16,648 | | | 24,972 | | | 414,202 |
EIP-PSUT (6) | | 3/1/2016 | | | — | | | — | | | 1,622 | | | 5,407 | | | 8,111 | | | 134,526 |
John D. McDonald | | | | | | | | | | | | | | | | | | | | |
AIP—Company (1) | | N/A | | | 289,912 | | | 579,824 | | | — | | | — | | | — | | | — |
AIP-Individual (2) | | N/A | | | 72,478 | | | 108,717 | | | — | | | — | | | — | | | — |
EIP-RSU (4) | | 3/1/2016 | | | — | | | — | | | — | | | 16,648 | | | — | | | 414,202 |
EIP-PSU (5) | | 3/1/2016 | | | — | | | — | | | 4,994 | | | 16,648 | | | 24,972 | | | 414,202 |
EIP-PSUT (6) | | 3/1/2016 | | | — | | | — | | | 1,622 | | | 5,407 | | | 8,111 | | | 134,526 |
Elizabeth Frank | | | | | | | | | | | | | | | | | | | | |
AIP—Company (1) | | N/A | | | 265,980 | | | 531,960 | | | — | | | — | | | — | | | — |
AIP-Individual (2) | | N/A | | | 66,495 | | | 99,743 | | | — | | | — | | | — | | | — |
EIP-RSU (4) | | 3/1/2016 | | | — | | | — | | | — | | | 16,648 | | | — | | | 414,202 |
EIP-PSU (5) | | 3/1/2016 | | | — | | | — | | | 4,994 | | | 16,648 | | | 24,972 | | | 414,202 |
EIP-PSUT (6) | | 3/1/2016 | | | — | | | — | | | 1,622 | | | 5,407 | | | 8,111 | | | 134,526 |
Mark A. McDonald | | | | | | | | | | | | | | | | | | | | |
AIP—Company (1) | | N/A | | | 235,820 | | | 471,640 | | | — | | | — | | | — | | | — |
AIP-Individual (2) | | N/A | | | 58,955 | | | 88,433 | | | — | | | — | | | — | | | — |
EIP-RSU (4) | | 3/1/2016 | | | — | | | — | | | — | | | 16,648 | | | — | | | 414,202 |
EIP-PSU (5) | | 3/1/2016 | | | — | | | — | | | 4,994 | | | 16,648 | | | 24,972 | | | 414,202 |
EIP-PSUT(6) | | 3/1/2016 | | | — | | | — | | | 1,622 | | | 5,407 | | | 8,111 | | | 134,526 |
(1)
Awards were made under the provisions of the AIP with a payout based upon Company financial performance during the 2022 fiscal year. See “Compensation Discussion and Analysis—Annual Incentive Program” for a discussion of the AIP and the Summary Compensation Table for the actual amounts paid.
(2)
The individual component bonus of the AIP was granted subject to a review of each NEO’s individual performance and contribution to the Company’s strategic and financial goals during the 2022 fiscal year. See “Compensation Discussion and Analysis—Annual Incentive Program” for a discussion of the AIP and the Summary Compensation Table for the actual amounts paid.
(3)
Amounts shown in this row represent the number and aggregate grant date fair value of 2022 RSU awards granted by the Board and the Compensation Committee, in accordance with accounting rules ASC 718, Compensation—Stock Compensation. The grant date fair value of the 2022 RSUs was based on the closing price of the Company’s common stock on February 16, 2022, of $19.67 per share. No modifications during 2022 (including adjustments to reflect the special APE dividend on outstanding Common Stock) resulted in an incremental increase in fair value. See “Compensation Discussion and Analysis—Equity-Based Compensation Program” for information regarding the awards, modifications, and the performance criteria.
(4)
Amounts shown in this row represent the number and aggregate grant date fair value of tranche I of the 2022 PSU awards in accordance with accounting rules ASC 718, Compensation—Stock Compensation. The fair value of tranche I of the 2022 PSUs at the grant date was $19.67 per share, was based on the closing price of the Company’s common stock on February 16, 2022, and represents the probable outcome at grant date of the performance goals
| | (1)
60 | | These awards were made under the provisions of the AIP. The company component payout was on a scale ranging from 0% to 200% of target based on adjusted EBITDA for AIP ranging from a threshold of $479,920,000 to a maximum of $719,880,000. No company performance component of the AIP would be paid below attainment of $479,920,000 of threshold adjusted EBITDA; upon attainment of $599,900,000 of targeted adjusted EBITDA for AIP, the Company would pay 100% of target payout; and upon attainment of $719,880,000 of maximum adjusted EBITDA for AIP, each Named Executive Officer would receive the maximum potential bonus of 200% of target payout. See “Compensation Discussion and Analysis—Annual Incentive Compensation Program” above for a discussion of the AIP and the Summary Compensation Table for the actual amounts paid.
| | | | | |
at the target amount. The grant date and fair value for tranches II and III of the 2022 PSUs will not be determined until targets for such tranches are established in 2023 and 2024, respectively and will be included in the grants of plan-based awards tables for such years, as applicable. No modifications during 2022 (including adjustments to reflect the special APE dividend on outstanding Common Stock) resulted in an incremental increase in fair value. See “Compensation Discussion and Analysis—Equity-Based Compensation Program” for additional information regarding the awards, modifications, and the performance criteria.
(5)
Amounts shown in this row represent the number and aggregate grant date fair value of tranche II of the 2021 PSU awards in accordance with accounting rules ASC 718, Compensation—Stock Compensation. Tranche II of the 2021 PSUs was not considered granted until the performance goals for the 2022 Tranche year were established by the Compensation Committee, which occurred on February 16, 2022. The fair value of tranche II of the 2021 PSUs at the grant date was $19.67 per share, was based on the closing price of the Company’s common stock on 16, 2022, and represents the probable outcome at grant date of the performance goals at the target amount. The grant date and fair value for tranche III of the 2021 PSUs will not be determined until targets for such tranche is established in 2023 and will be included in the grants of plan-based awards table for such year. No modifications during 2022 (including adjustments to reflect the special APE dividend on outstanding Common Stock) resulted in an incremental increase in fair value. See “Compensation Discussion and Analysis—Equity-Based Compensation Program” for additional information regarding the awards, modifications, and the performance criteria.
(6)
Amounts shown in this row represent the number and aggregate grant date fair value of tranche III of the 2020 PSU awards in accordance with accounting rules ASC 718, Compensation—Stock Compensation. Tranche III of the 2020 PSUs was not considered granted until the performance goals for the 2022 Tranche year were established by the Compensation Committee, which occurred on February 16, 2022. The fair value of tranche III of the 2020 PSUs at the grant date was $19.67 per share, was based on the closing price of the Company’s common stock on February 16, 2022, and represents the probable outcome at grant date of the performance goals at the target amount. No modifications during 2022 (including adjustments to reflect the special APE dividend on outstanding Common Stock) resulted in an incremental increase in fair value. See “Compensation Discussion and Analysis—Equity-Based Compensation Program” for additional information regarding the awards, modifications, and the performance criteria.
| | (2)
| | The individual component bonus of the AIP for the year ended December 31, 2016 was approved during the first quarter of 2017 following a review of each Named Executive Officer's individual performance and contribution to the Company's strategic and financial goals. Individual component bonuses of the AIP attained by the Named Executive Officers were150.0% of target. See “Compensation Discussion and Analysis—Annual Incentive Compensation Program” above for the amounts achieved by each Named Executive Officer.
| | | | 61 | |
| (3)
| | Amounts shown in this row represent the number and aggregate grant date fair value of RSU awards granted by the Board and the Compensation Committee, in accordance with accounting rules ASC 718, Compensation—Stock Compensation. The grant date fair value of the RSUs was based on the closing price of the Company's
|
common stock on March 1, 2016 of $24.88 per share. See “Compensation Discussion and Analysis—Equity Awards Granted in 2016” above.
|
| (4)
| | Amounts shown in this row represent the number and aggregate grant date fair value of RSU awards granted to Named Executive Officers covered by IRS code section 162(m) by the Board and the Compensation Committee, in accordance with accounting rules ASC 718, Compensation—Stock Compensation. The grant date fair value of the RSU was based on the closing price of the Company's common stock on March 1, 2016 of $24.88 per share. The RSU vest over 3 years with 1/3 vesting on the date the Compensation Committee certifies achievement of the performance goal for the fiscal year containing the date of grant. Vesting shall be conditioned upon the Company having achieved cash flow from operating activities of at least $100,000,000 for the fiscal year prior to a vesting date, as reported in the Company’s audited financial statements for such fiscal year. See “Compensation Discussion and Analysis—Equity Awards Granted in 2016” above.
|
| (5)
| | Amounts shown in this row represents the number and aggregate grant date fair value of the PSU awards granted in accordance with accounting rules ASC 718, Compensation—Stock Compensation. The fair value of the PSUs at the grant date was $24.88 per share and was based on the closing price of the Company's common stock on March 1, 2016, and represents the probable outcome at grant date of the performance goals. The grant consisted of PSUs with both a three year cumulative adjusted free cash flow and net earnings performance target condition and a service condition, covering a performance period beginning January 1, 2016 and ending on December 31, 2018, upon certification of achievement of the performance targets. The PSUs would vest cumulatively over a three year performance period based on a scale ranging from 80% to 120% of the performance targets with the vested amount ranging from 30% to 150%. No PSUs will vest if the Company does not achieve the three year cumulative adjusted free cash flow and net earnings minimum performance target or the participant’s service does not continue through the last day of the performance period. See “Compensation Discussion and Analysis—Equity Awards Granted in 2016” above for information regarding the grant of the PSU performance target.
|
| (6)
| | Amounts shown in this row represent the number and aggregate grant date fair value of the PSU Transition awards granted in accordance with accounting rules ASC 718, Compensation—Stock Compensation. The fair value of the PSUs at the grant date was $24.88 per share and was based on the closing price of the Company's common stock on March 1, 2016, and represents the probable outcome at grant date of the performance goals. The grant consisted of PSU transition awards granted in recognition of the shift from one year to three year performance periods for annual equity awards. The awards vest upon achieving both a 2016 adjusted free cash flow and net earnings performance target condition and a service condition, covering a performance period beginning January 1, 2016 and ending on December 31, 2016. The PSUs will vest based on a scale ranging from 80% to 120% of the performance target with the vested amount ranging from 30% to 150%. No PSUs will vest if the Company does not achieve the adjusted free cash flow or net earnings minimum performance target or the participant’s service does not continue through the last day of the performance period. The vested PSUs will be settled within 30 days of vesting. See “Compensation Discussion and Analysis—Equity Awards Granted in 2016” above for information regarding the grant of the PSU transition awards. The performance targets were not met and these awards were forfeited.
|
Outstanding Equity Awards as of December 31, 2016
2022
The following table presents information regarding the outstanding equity awardawards held by our Named Executive OfficersNEOs as of December 31, 2016: | | | | | | | | | | | | | | |
| | | | | | Stock Awards |
| | | | | | | | | | | Equity Incentive Plan Awards: |
| | | | | | | | Market | | | | Market |
| | | | | | Number | | Value of | | Number | | Value of |
| | | | | | of Shares | | Shares or | | of Shares | | Shares or |
| | | | | | or Units | | Units of | | or Units | | Units of |
| | | | | | of Stock | | Stock | | of Stock | | Stock |
| | | | | | That Have | | That Have | | That Have | | That Have |
| | | | Award | | Not Vested | | Not Vested | | Not Vested | | Not Vested |
Name | | Grant Date | | Type | | (#)(1) | | ($)(2) | | (#)(1) | | ($)(2) |
Adam M. Aron | | | | | | | | | | | | | | |
EIP-RSU (4) | | 3/1/2016 | | RSU | | 28,679 | | $ | 965,048 | | — | | $ | — |
EIP-RSU (5) | | 3/1/2016 | | RSU | | — | | | — | | 57,358 | | | 1,930,097 |
EIP-PSU (6) | | 3/1/2016 | | PSU | | — | | | — | | 86,037 | | | 2,895,145 |
Craig R. Ramsey | | | | | | | | | | | | | | |
EIP-RSU (3) | | 3/1/2016 | | RSU | | 16,648 | | | 560,205 | | — | | | — |
EIP-PSU (6) | | 3/1/2016 | | PSU | | — | | | — | | 16,648 | | | 560,205 |
EIP-PSU Transition (7) | | 3/1/2016 | | PSUT | | — | | | — | | 5,407 | | | 181,946 |
John D. McDonald | | | | | | | | | | | | | | |
EIP-RSU (4) | | 3/1/2016 | | RSU | | 5,549 | | | 186,724 | | — | | | — |
EIP-RSU (5) | | 3/1/2016 | | RSU | | | | | | | 11,099 | | | 373,481 |
EIP-PSU (6) | | 3/1/2016 | | PSU | | — | | | — | | 16,648 | | | 560,205 |
EIP-PSU Transition (7) | | 3/1/2016 | | PSUT | | — | | | — | | 5,407 | | | 181,946 |
Elizabeth Frank | | | | | | | | | | | | | | |
EIP-RSU (4) | | 3/1/2016 | | RSU | | 5,549 | | | 186,724 | | — | | | — |
EIP-RSU (5) | | 3/1/2016 | | RSU | | | | | | | 11,099 | | | 373,481 |
EIP-PSU (6) | | 3/1/2016 | | PSU | | — | | | — | | 16,648 | | | 560,205 |
EIP-PSU Transition (7) | | 3/1/2016 | | PSUT | | — | | | — | | 5,407 | | | 181,946 |
Mark A. McDonald | | | | | | | | | | | | | | |
EIP-RSU (4) | | 3/1/2016 | | RSU | | 5,549 | | | 186,724 | | — | | | — |
EIP-RSU (5) | | 3/1/2016 | | RSU | | | | | | | 11,099 | | | 373,481 |
EIP-PSU (6) | | 3/1/2016 | | PSU | | — | | | — | | 16,648 | | | 560,205 |
EIP-PSU Transition (7) | | 3/1/2016 | | PSUT | | — | | | — | | 5,407 | | | 181,946 |
| | | | | | | | | | | | | | | | Stock Awards | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | Equity Incentive Plan
Awards: | |
| Name | | | Grant Date | | | Award
Type | | | Number of
Shares or
Units of
Stock That
Have Not
Vested
(#)(1) | | | Market
Value of
Shares or
Units of
Stock That
Have Not
Vested
($)(2) | | | Number of
Unearned
Shares,
Units, or
Other Rights
That Have
Not Vested
(#)(1) | | | Market or
Payout Value
of Shares,
Units, or
Other Rights
That Have
Not Vested
($)(2) | |
| Adam M. Aron | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| EIP—2020 RSU—AMC(3) | | | | | 2/28/20 | | | | | | RSU | | | | | | 148,002 | | | | | $ | 602,368 | | | | | | — | | | | | $ | — | | |
| EIP—2020 RSU—APE(4) | | | | | 8/19/22 | | | | | | RSU | | | | | | 148,002 | | | | | | 208,683 | | | | | | — | | | | | | — | | |
| EIP—2020 PSU—Adj. EBITDA—Tranche III—AMC(5) | | | | | 2/28/20 | | | | | | PSU | | | | | | — | | | | | | — | | | | | | 44,401 | | | | | | 180,712 | | |
| EIP—2020 PSU—Adj. EBITDA—Tranche III—APE(6) | | | | | 8/19/22 | | | | | | PSU | | | | | | — | | | | | | — | | | | | | 44,401 | | | | | | 62,605 | | |
| EIP—2020 PSU—FCF—Tranche III—AMC(7) | | | | | 2/28/20 | | | | | | PSU | | | | | | — | | | | | | — | | | | | | 59,202 | | | | | | 240,952 | | |
| EIP—2020 PSU—FCF—Tranche III—APE(8) | | | | | 8/19/22 | | | | | | PSU | | | | | | — | | | | | | — | | | | | | 59,202 | | | | | | 83,475 | | |
| EIP—2021 RSU—AMC(9) | | | | | 2/23/21 | | | | | | RSU | | | | | | 632,913 | | | | | | 2,575,956 | | | | | | — | | | | | | — | | |
| EIP—2021 RSU—APE(10) | | | | | 8/19/22 | | | | | | RSU | | | | | | 632,913 | | | | | | 892,407 | | | | | | — | | | | | | — | | |
| EIP—2021 PSU—Adj. EBITDA—Tranche II—AMC(11) | | | | | 2/23/21 | | | | | | PSU | | | | | | — | | | | | | — | | | | | | 94,937 | | | | | | 386,394 | | |
| EIP—2021 PSU—Adj. EBITDA—Tranche II—APE(12) | | | | | 8/19/22 | | | | | | PSU | | | | | | — | | | | | | — | | | | | | 94,937 | | | | | | 133,861 | | |
| EIP—2021 PSU—FCF—Tranche II—AMC(13) | | | | | 2/23/21 | | | | | | PSU | | | | | | — | | | | | | — | | | | | | 126,582 | | | | | | 515,189 | | |
| EIP—2021 PSU—FCF—Tranche II—APE(14) | | | | | 8/19/22 | | | | | | PSU | | | | | | — | | | | | | — | | | | | | 126,582 | | | | | | 178,481 | | |
| EIP—2022 RSU—AMC(15) | | | | | 3/2/22 | | | | | | RSU | | | | | | 269,122 | | | | | | 1,095,327 | | | | | | — | | | | | | — | | |
| EIP—2022 RSU—APE(16) | | | | | 8/19/22 | | | | | | RSU | | | | | | 269,122 | | | | | | 379,462 | | | | | | — | | | | | | — | | |
| EIP—2022 PSU—Adj. EBITDA—Tranche I—AMC(17) | | | | | 3/2/22 | | | | | | PSU | | | | | | — | | | | | | — | | | | | | 26,912 | | | | | | 109,532 | | |
| EIP—2022 PSU—Adj. EBITDA—Tranche I—APE(18) | | | | | 8/19/22 | | | | | | PSU | | | | | | — | | | | | | — | | | | | | 26,912 | | | | | | 37,946 | | |
| EIP—2022 PSU—FCF—Tranche I—AMC(19) | | | | | 3/2/22 | | | | | | PSU | | | | | | — | | | | | | — | | | | | | 35,882 | | | | | | 146,040 | | |
| EIP—2022 PSU—FCF—Tranche I—APE(20) | | | | | 8/19/22 | | | | | | PSU | | | | | | — | | | | | | — | | | | | | 35,882 | | | | | | 50,594 | | |
| Sean D. Goodman | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| EIP—2020 RSU—AMC(3) | | | | | 2/28/20 | | | | | | RSU | | | | | | 30,232 | | | | | | 123,044 | | | | | | — | | | | | | — | | |
| EIP—2020 RSU—APE(4) | | | | | 8/19/22 | | | | | | RSU | | | | | | 30,232 | | | | | | 42,627 | | | | | | — | | | | | | — | | |
| EIP—2020 PSU—Adj. EBITDA—Tranche III—AMC(5) | | | | | 2/28/20 | | | | | | PSU | | | | | | — | | | | | | — | | | | | | 9,070 | | | | | | 36,915 | | |
| EIP—2020 PSU—Adj. EBITDA—Tranche III—APE(6) | | | | | 8/19/22 | | | | | | PSU | | | | | | — | | | | | | — | | | | | | 9,070 | | | | | | 12,789 | | |
| EIP—2020 PSU—FCF—Tranche III—AMC(7) | | | | | 2/28/20 | | | | | | PSU | | | | | | — | | | | | | — | | | | | | 12,094 | | | | | | 49,223 | | |
| EIP—2020 PSU—FCF—Tranche III—APE(8) | | | | | 8/19/22 | | | | | | PSU | | | | | | — | | | | | | — | | | | | | 12,094 | | | | | | 17,053 | | |
| EIP—2021 RSU—AMC(9) | | | | | 2/23/21 | | | | | | RSU | | | | | | 135,022 | | | | | | 549,540 | | | | | | — | | | | | | — | | |
| EIP—2021 RSU—APE(10) | | | | | 8/19/22 | | | | | | RSU | | | | | | 135,022 | | | | | | 190,381 | | | | | | — | | | | | | — | | |
| EIP—2021 PSU—Adj. EBITDA—Tranche II—AMC(11) | | | | | 2/23/21 | | | | | | PSU | | | | | | — | | | | | | — | | | | | | 20,253 | | | | | | 82,430 | | |
| EIP—2021 PSU—Adj. EBITDA—Tranche II—APE(12) | | | | | 8/19/22 | | | | | | PSU | | | | | | — | | | | | | — | | | | | | 20,253 | | | | | | 28,557 | | |
| EIP—2021 PSU—FCF—Tranche II—AMC(13) | | | | | 2/23/21 | | | | | | PSU | | | | | | — | | | | | | — | | | | | | 27,003 | | | | | | 109,902 | | |
| EIP—2021 PSU—FCF—Tranche II—APE(14) | | | | | 8/19/22 | | | | | | PSU | | | | | | — | | | | | | — | | | | | | 27,003 | | | | | | 38,074 | | |
| EIP—2022 RSU—AMC(15) | | | | | 3/2/22 | | | | | | RSU | | | | | | 56,658 | | | | | | 230,598 | | | | | | — | | | | | | — | | |
| EIP—2022 RSU—APE(16) | | | | | 8/19/22 | | | | | | RSU | | | | | | 56,658 | | | | | | 79,888 | | | | | | — | | | | | | — | | |
| EIP—2022 PSU—Adj. EBITDA—Tranche I—AMC(17) | | | | | 3/2/22 | | | | | | PSU | | | | | | — | | | | | | — | | | | | | 5,666 | | | | | | 23,061 | | |
| EIP—2022 PSU—Adj. EBITDA—Tranche I—APE(18) | | | | | 8/19/22 | | | | | | PSU | | | | | | — | | | | | | — | | | | | | 5,666 | | | | | | 7,989 | | |
| EIP—2022 PSU—FCF—Tranche I—AMC(19) | | | | | 3/2/22 | | | | | | PSU | | | | | | — | | | | | | — | | | | | | 7,554 | | | | | | 30,745 | | |
| EIP—2022 PSU—FCF—Tranche I—APE(20) | | | | | 8/19/22 | | | | | | PSU | | | | | | — | | | | | | — | | | | | | 7,554 | | | | | | 10,651 | | |
| | (1)
62 | | Amount shown in this column represents the number of unvested units. Each unit will convert into one share of Class A common stock immediately upon vesting. See “Compensation Discussion and Analysis—Equity Awards Granted in 2016” above.
| | | | | |
| | | | | | | | | | | | | | | | Stock Awards | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | Equity Incentive Plan
Awards: | |
| Name | | | Grant Date | | | Award
Type | | | Number of
Shares or
Units of
Stock That
Have Not
Vested
(#)(1) | | | Market
Value of
Shares or
Units of
Stock That
Have Not
Vested
($)(2) | | | Number of
Unearned
Shares,
Units, or
Other Rights
That Have
Not Vested
(#)(1) | | | Market or
Payout Value
of Shares,
Units, or
Other Rights
That Have
Not Vested
($)(2) | |
| Daniel E. Ellis | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| EIP—2020 RSU—AMC(3) | | | | | 2/28/20 | | | | | | RSU | | | | | | 14,297 | | | | | $ | 58,189 | | | | | | — | | | | | $ | — | | |
| EIP—2020 RSU—APE(4) | | | | | 8/19/22 | | | | | | RSU | | | | | | 14,297 | | | | | | 20,159 | | | | | | — | | | | | | — | | |
| EIP—2020 PSU—Adj. EBITDA—Tranche III—AMC(5) | | | | | 2/28/20 | | | | | | PSU | | | | | | — | | | | | | — | | | | | | 4,290 | | | | | | 17,460 | | |
| EIP—2020 PSU—Adj. EBITDA—Tranche III—APE(6) | | | | | 8/19/22 | | | | | | PSU | | | | | | — | | | | | | — | | | | | | 4,290 | | | | | | 6,049 | | |
| EIP—2020 PSU—FCF—Tranche III—AMC(7) | | | | | 2/28/20 | | | | | | PSU | | | | | | — | | | | | | — | | | | | | 5,719 | | | | | | 23,276 | | |
| EIP—2020 PSU—FCF—Tranche III—APE(8) | | | | | 8/19/22 | | | | | | PSU | | | | | | — | | | | | | — | | | | | | 5,719 | | | | | | 8,064 | | |
| EIP—2021 RSU—AMC(9) | | | | | 2/23/21 | | | | | | RSU | | | | | | 54,853 | | | | | | 223,252 | | | | | | — | | | | | | — | | |
| EIP—2021 RSU—APE(10) | | | | | 8/19/22 | | | | | | RSU | | | | | | 54,853 | | | | | | 77,343 | | | | | | — | | | | | | — | | |
| EIP—2021 PSU—Adj. EBITDA—Tranche II—AMC(11) | | | | | 2/23/21 | | | | | | PSU | | | | | | — | | | | | | — | | | | | | 8,228 | | | | | | 33,488 | | |
| EIP—2021 PSU—Adj. EBITDA—Tranche II—APE(12) | | | | | 8/19/22 | | | | | | PSU | | | | | | — | | | | | | — | | | | | | 8,228 | | | | | | 11,601 | | |
| EIP—2021 PSU—FCF—Tranche II—AMC(13) | | | | | 2/23/21 | | | | | | PSU | | | | | | — | | | | | | — | | | | | | 10,970 | | | | | | 44,648 | | |
| EIP—2021 PSU—FCF—Tranche II—APE(14) | | | | | 8/19/22 | | | | | | PSU | | | | | | — | | | | | | — | | | | | | 10,970 | | | | | | 15,468 | | |
| EIP—2022 RSU—AMC(15) | | | | | 3/2/22 | | | | | | RSU | | | | | | 25,496 | | | | | | 103,769 | | | | | | — | | | | | | — | | |
| EIP—2022 RSU—APE(16) | | | | | 8/19/22 | | | | | | RSU | | | | | | 25,496 | | | | | | 35,949 | | | | | | — | | | | | | — | | |
| EIP—2022 PSU—Adj. EBITDA—Tranche I—AMC(17) | | | | | 3/2/22 | | | | | | PSU | | | | | | — | | | | | | — | | | | | | 2,550 | | | | | | 10,379 | | |
| EIP—2022 PSU—Adj. EBITDA—Tranche I—APE(18) | | | | | 8/19/22 | | | | | | PSU | | | | | | — | | | | | | — | | | | | | 2,550 | | | | | | 3,596 | | |
| EIP—2022 PSU—FCF—Tranche I—AMC(19) | | | | | 3/2/22 | | | | | | PSU | | | | | | — | | | | | | — | | | | | | 3,399 | | | | | | 13,834 | | |
| EIP—2022 PSU—FCF—Tranche I—APE(20) | | | | | 8/19/22 | | | | | | PSU | | | | | | — | | | | | | — | | | | | | 3,399 | | | | | | 4,793 | | |
| Elizabeth F. Frank | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| EIP—2020 RSU—AMC(3) | | | | | 2/28/20 | | | | | | RSU | | | | | | 18,475 | | | | | | 75,193 | | | | | | — | | | | | | — | | |
| EIP—2020 RSU—APE(4) | | | | | 8/19/22 | | | | | | RSU | | | | | | 18,475 | | | | | | 26,050 | | | | | | — | | | | | | — | | |
| EIP—2020 PSU—Adj. EBITDA—Tranche III—AMC(5) | | | | | 2/28/20 | | | | | | PSU | | | | | | — | | | | | | — | | | | | | 5,543 | | | | | | 22,560 | | |
| EIP—2020 PSU—Adj. EBITDA—Tranche III—APE(6) | | | | | 8/19/22 | | | | | | PSU | | | | | | — | | | | | | — | | | | | | 5,543 | | | | | | 7,816 | | |
| EIP—2020 PSU—FCF—Tranche III—AMC(7) | | | | | 2/28/20 | | | | | | PSU | | | | | | — | | | | | | — | | | | | | 7,390 | | | | | | 30,077 | | |
| EIP—2020 PSU—FCF—Tranche III—APE(8) | | | | | 8/19/22 | | | | | | PSU | | | | | | — | | | | | | — | | | | | | 7,390 | | | | | | 10,420 | | |
| EIP—2021 RSU—AMC(9) | | | | | 2/23/21 | | | | | | RSU | | | | | | 69,621 | | | | | | 283,357 | | | | | | — | | | | | | — | | |
| EIP—2021 RSU—APE(10) | | | | | 8/19/22 | | | | | | RSU | | | | | | 69,621 | | | | | | 98,166 | | | | | | — | | | | | | — | | |
| EIP—2021 PSU—Adj. EBITDA—Tranche II—AMC(11) | | | | | 2/23/21 | | | | | | PSU | | | | | | — | | | | | | — | | | | | | 10,443 | | | | | | 42,503 | | |
| EIP—2021 PSU—Adj. EBITDA—Tranche II—APE(12) | | | | | 8/19/22 | | | | | | PSU | | | | | | — | | | | | | — | | | | | | 10,443 | | | | | | 14,725 | | |
| EIP—2021 PSU—FCF—Tranche II—AMC(13) | | | | | 2/23/21 | | | | | | PSU | | | | | | — | | | | | | — | | | | | | 13,923 | | | | | | 56,667 | | |
| EIP—2021 PSU—FCF—Tranche II—APE(14) | | | | | 8/19/22 | | | | | | PSU | | | | | | — | | | | | | — | | | | | | 13,923 | | | | | | 19,631 | | |
| EIP—2022 RSU—AMC(15) | | | | | 3/2/22 | | | | | | RSU | | | | | | 25,496 | | | | | | 103,769 | | | | | | — | | | | | | — | | |
| EIP—2022 RSU—APE(16) | | | | | 8/19/22 | | | | | | RSU | | | | | | 25,496 | | | | | | 35,949 | | | | | | — | | | | | | — | | |
| EIP—2022 PSU—Adj. EBITDA—Tranche I—AMC(17) | | | | | 3/2/22 | | | | | | PSU | | | | | | — | | | | | | — | | | | | | 2,550 | | | | | | 10,379 | | |
| EIP—2022 PSU—Adj. EBITDA—Tranche I—APE(18) | | | | | 8/19/22 | | | | | | PSU | | | | | | — | | | | | | — | | | | | | 2,550 | | | | | | 3,596 | | |
| EIP—2022 PSU—FCF—Tranche I—AMC(19) | | | | | 3/2/22 | | | | | | PSU | | | | | | — | | | | | | — | | | | | | 3,399 | | | | | | 13,834 | | |
| EIP—2022 PSU—FCF—Tranche I—APE(20) | | | | | 8/19/22 | | | | | | PSU | | | | | | — | | | | | | — | | | | | | 3,399 | | | | | | 4,793 | | |
| | (2)
| | The fair market value was calculated based on the closing price of the Company's common stock on December 30, 2016 of $33.65 per share.
| | | | 63 | |
| | | | | | | | | | | | | | | | Stock Awards | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | Equity Incentive Plan
Awards: | |
| Name | | | Grant Date | | | Award
Type | | | Number of
Shares or
Units of
Stock That
Have Not
Vested
(#)(1) | | | Market
Value of
Shares or
Units of
Stock That
Have Not
Vested
($)(2) | | | Number of
Unearned
Shares,
Units, or
Other Rights
That Have
Not Vested
(#)(1) | | | Market or
Payout Value
of Shares,
Units, or
Other Rights
That Have
Not Vested
($)(2) | |
| Kevin M. Connor | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| EIP—2020 RSU—AMC(3) | | | | | 2/28/20 | | | | | | RSU | | | | | | 14,193 | | | | | $ | 57,766 | | | | | | — | | | | | $ | — | | |
| EIP—2020 RSU—APE(4) | | | | | 8/19/22 | | | | | | RSU | | | | | | 14,193 | | | | | | 20,012 | | | | | | — | | | | | | — | | |
| EIP—2020 PSU—Adj. EBITDA—Tranche III—AMC(5) | | | | | 2/28/20 | | | | | | PSU | | | | | | — | | | | | | — | | | | | | 4,259 | | | | | | 17,334 | | |
| EIP—2020 PSU—Adj. EBITDA—Tranche III—APE(6) | | | | | 8/19/22 | | | | | | PSU | | | | | | — | | | | | | — | | | | | | 4,259 | | | | | | 6,005 | | |
| EIP—2020 PSU—FCF—Tranche III—AMC(7) | | | | | 2/28/20 | | | | | | PSU | | | | | | — | | | | | | — | | | | | | 5,678 | | | | | | 23,109 | | |
| EIP—2020 PSU—FCF—Tranche III—APE(8) | | | | | 8/19/22 | | | | | | PSU | | | | | | — | | | | | | — | | | | | | 5,678 | | | | | | 8,006 | | |
| EIP—2021 RSU—AMC(9) | | | | | 2/23/21 | | | | | | RSU | | | | | | 54,853 | | | | | | 223,252 | | | | | | — | | | | | | — | | |
| EIP—2021 RSU—APE(10) | | | | | 8/19/22 | | | | | | RSU | | | | | | 54,853 | | | | | | 77,343 | | | | | | — | | | | | | — | | |
| EIP—2021 PSU—Adj. EBITDA—Tranche II—AMC(11) | | | | | 2/23/21 | | | | | | PSU | | | | | | — | | | | | | — | | | | | | 8,228 | | | | | | 33,488 | | |
| EIP—2021 PSU—Adj. EBITDA—Tranche II—APE(12) | | | | | 8/19/22 | | | | | | PSU | | | | | | — | | | | | | — | | | | | | 8,228 | | | | | | 11,601 | | |
| EIP—2021 PSU—FCF—Tranche II—AMC(13) | | | | | 2/23/21 | | | | | | PSU | | | | | | — | | | | | | — | | | | | | 10,970 | | | | | | 44,648 | | |
| EIP—2021 PSU—FCF—Tranche II—APE(14) | | | | | 8/19/22 | | | | | | PSU | | | | | | — | | | | | | — | | | | | | 10,970 | | | | | | 15,468 | | |
| EIP—2022 RSU—AMC(15) | | | | | 3/2/22 | | | | | | RSU | | | | | | 19,831 | | | | | | 80,712 | | | | | | — | | | | | | — | | |
| EIP—2022 RSU—APE(16) | | | | | 8/19/22 | | | | | | RSU | | | | | | 19,831 | | | | | | 27,962 | | | | | | — | | | | | | — | | |
| EIP—2022 PSU—Adj. EBITDA—Tranche I—AMC(17) | | | | | 3/2/22 | | | | | | PSU | | | | | | — | | | | | | — | | | | | | 1,983 | | | | | | 8,071 | | |
| EIP—2022 PSU—Adj. EBITDA—Tranche I—APE(18) | | | | | 8/19/22 | | | | | | PSU | | | | | | — | | | | | | — | | | | | | 1,983 | | | | | | 2,796 | | |
| EIP—2022 PSU—FCF—Tranche I—AMC(19) | | | | | 3/2/22 | | | | | | PSU | | | | | | — | | | | | | — | | | | | | 2,643 | | | | | | 10,757 | | |
| EIP—2022 PSU—FCF—Tranche I—APE(20) | | | | | 8/19/22 | | | | | | PSU | | | | | | — | | | | | | — | | | | | | 2,643 | | | | | | 3,727 | | |
(1)
Amount shown in this column represents the number of unvested units. Each unit will convert into one share of Common Stock or one APE, as applicable, immediately upon vesting. See “Compensation Discussion and Analysis—Equity-Based Incentive Compensation Program” above.
(2)
The fair market value was calculated based on the closing price of the Company’s Common Stock on December 31, 2022, of $4.07 per share or the closing price of the Company’s APEs on December 31, 2022, of $1.41 per unit.
(3)
Amounts shown in this row represent the remaining number of unvested and the year-end market value of the Common Stock-based 2020 RSU award. This award vested on January 3, 2023.
(4)
Amounts shown in this row represent the remaining number of unvested and the year-end market value of the APE-based 2020 RSU award. The APE-based 2020 RSUs were created via an adjustment to outstanding Common Stock-based awards to reflect the special APE dividend on August 19, 2022, and were subject to the same vesting conditions applicable to the Common Stock-based 2020 RSU awards. This award vested on January 3, 2023.
(5)
Amounts shown in this row represent the number of unvested and the year-end market value of tranche III of the Common Stock-based 2020 PSU award with an Adjusted EBITDA performance goal. The 2020 PSU awards were originally granted on February 28, 2020, and modified on October 30, 2020, and November 2, 2021, with the performance goal applicable to Tranche III established on February 16, 2022. Tranche III consists of PSUs with a one-year performance goal covering a performance period beginning January 1, 2022, and ending on December 31, 2022. The PSUs vest upon certification of achievement of the performance goals and based upon the executive’s employment through December 31, 2022. Subsequent to year-end, the Compensation Committee certified performance attainment and approved vesting at 0% of target, so the values reflected represent the threshold level of potential vesting. This tranche was forfeited on February 23, 2023.
(6)
Amounts shown in this row represent the number of unvested and the year-end market value of tranche III of the APE-based 2020 PSU award with an Adjusted EBITDA performance goal. The APE-based 2020 PSUs were created via an adjustment to outstanding Common Stock-based awards to reflect the special APE dividend on August 19, 2022, and were subject to the same performance goal, performance period, and vesting conditions applicable to Tranche III of the Common Stock-based 2020 PSU awards. Subsequent to year-end, the Compensation Committee certified performance attainment and approved vesting at 0% of target, so the values reflected represent the threshold level of potential vesting. This tranche was forfeited on February 23, 2023.
(7)
Amounts shown in this row represent the number of unvested and the year-end market value of tranche III of the Common Stock-based 2020 PSU award with an FCF performance goal. The 2020 PSU awards were originally granted on February 28, 2020, and modified on October 30, 2020, and November 2, 2021, with the performance goal applicable to Tranche III established on February 16, 2022. Tranche III consists of PSUs with a one-year performance goal covering a performance period beginning January 1, 2022, and ending on December 31, 2022. The PSUs vest upon certification of achievement of the performance goals and based upon the executive’s employment through December 31, 2022. Subsequent to year-end, the Compensation Committee certified performance attainment and approved vesting at 79% of target, so the values reflected represent the target level of potential vesting. This tranche vested on February 23, 2023.
| | (3)
64 | | Amounts shown in this row represent the number of unvested and the year-end market value of the RSU award granted by the Board and the Compensation Committee.
| | | | | |
(8)
Amounts shown in this row represent the number of unvested and the year-end market value of tranche III of the APE-based 2020 PSU award with an FCF performance goal. The APE-based 2020 PSUs were created via an adjustment to outstanding Common Stock-based awards to reflect the special APE dividend on August 19, 2022, and were subject to the same performance goal, performance period, and vesting conditions applicable to Tranche III of the Common Stock-based 2020 PSU awards. Subsequent to year-end, the Compensation Committee certified performance attainment and approved vesting at 79% of target, so the values reflected represent the target level of potential vesting. This tranche vested on February 23, 2023.
(9)
Amounts shown in this row represent the number of unvested and year-end market value of the Common Stock-based 2021 RSU award. One-half of this award vested on of January 3, 2023, and the remainder will vest on January 2, 2024, subject to continued employment.
(10)
Amounts shown in this row represent the number of unvested and year-end market value of the APE-based 2021 RSU award. The APE-based 2021 RSUs were created via an adjustment to outstanding Common Stock-based awards to reflect the special APE dividend on August 19, 2022, and were subject to the same vesting conditions applicable to the Common Stock-based 2021 RSU awards. One-half of this award vested on of January 3, 2023, and the remainder will vest on January 2, 2024, subject to continued employment.
(11)
Amounts shown in this row represent the number of unvested and the year-end market value of tranche II of the Common Stock-based 2021 PSU awards with an Adjusted EBITDA performance goal. The 2021 PSU awards were originally granted on February 23, 2021, and modified on November 2, 2021, with the performance goals covering Tranche II established on February 16, 2022. Tranche II consists of PSUs with a one-year performance goal covering a performance period beginning January 1, 2022, and ending on December 31, 2022. The PSUs vest upon certification of achievement of the performance goals and based upon the executive’s employment through December 31, 2022. Performance goals for tranche III of the 2021 PSUs have not been set and amounts for such awards are not included in this table. Subsequent to year-end, the Compensation Committee certified performance attainment and approved vesting at 0% of target, so the values reflected represent the threshold level of potential vesting. This tranche was forfeited on February 23, 2023.
(12)
Amounts shown in this row represent the number of unvested and the year-end market value of tranche II of the APE-based 2021 PSU awards with an Adjusted EBITDA performance goal. The APE-based 2021 PSUs were created via an adjustment to outstanding Common Stock-based awards to reflect the special APE dividend on August 19, 2022, and were subject to the same performance goal, performance period, and vesting conditions applicable to Tranche II of the Common Stock-based 2021 PSU awards. Performance goals for tranche III of the 2021 PSUs have not been set and amounts for such awards are not included in this table. Subsequent to year-end, the Compensation Committee certified performance attainment and approved vesting at 0% of target, so the values reflected represent the threshold level of potential vesting. This tranche was forfeited on February 23, 2023.
(13)
Amounts shown in this row represent the number of unvested and the year-end market value of tranche II of the Common Stock-based 2021 PSU awards with an FCF performance goal. The 2021 PSU awards were originally granted on February 23, 2021, and modified on November 2, 2021, with the performance goals covering Tranche II established on February 16, 2022. Tranche II consists of PSUs with a one-year performance goal covering a performance period beginning January 1, 2022, and ending on December 31, 2022. The PSUs vest upon certification of achievement of the performance goals and based upon the executive’s employment through December 31, 2022. Performance goals for tranche III of the 2021 PSUs have not been set and amounts for such awards are not included in this table. Subsequent to year-end, the Compensation Committee certified performance attainment and approved vesting at 79% of target, so the values reflected represent the target level of potential vesting. This tranche vested on February 23, 2023.
(14)
Amounts shown in this row represent the number of unvested and the year-end market value of tranche II of the APE-based 2021 PSU awards with an FCF performance goal. The APE-based 2021 PSUs were created via an adjustment to outstanding Common Stock-based awards to reflect the special APE dividend on August 19, 2022, and were subject to the same performance goal, performance period, and vesting conditions applicable to Tranche II of the Common Stock-based 2021 PSU awards. Performance goals for tranche III of the 2021 PSUs have not been set and amounts for such awards are not included in this table. Subsequent to year-end, the Compensation Committee certified performance attainment and approved vesting at 79% of target, so the values reflected represent the target level of potential vesting. This tranche vested on February 23, 2023.
(15)
Amounts shown in this row represent the number of unvested and year-end market value of the Common Stock-based 2022 RSU award. One-third of this amount vested on January 3, 2023, and an additional one-third will vest on each of January 2, 2024, and January 2, 2025, subject to continued employment.
(16)
Amounts shown in this row represent the number of unvested and year-end market value of the APE-based 2022 RSU award. The APE-based 2022 RSUs were created via an adjustment to outstanding Common Stock-based awards to reflect the special APE dividend on August 19, 2022, and were subject to the same vesting conditions applicable to the Common Stock-based 2022 RSU award. One-third of this amount vested on January 3, 2023, and an additional one-third will vest on each of January 2, 2024, and January 2, 2025, subject to continued employment.
(17)
Amounts shown in this row represent the number of unvested and the year-end market value of tranche I of the Common Stock-based 2022 PSU award with an Adjusted EBITDA performance goal. The 2022 PSU awards were originally granted on March 2, 2022, with performance goals established for tranche I on February 16, 2022. Tranche I consists of PSUs with a one-year performance goal covering a performance period beginning January 1, 2022, and ending on December 31, 2022. The PSUs vest upon certification of achievement of the performance goals and based upon the executive’s employment through December 31, 2022. Performance goals for tranches II and III of the 2022 PSUs have not been set and amounts for such awards are not included in this table. Subsequent to year-end, the Compensation Committee certified performance attainment and approved vesting at 0% of target, so the values reflected represent the threshold level of potential vesting. This tranche was forfeited on February 23, 2023.
(18)
Amounts shown in this row represent the number of unvested and the year-end market value of tranche I of the APE-based 2022 PSU award with an Adjusted EBITDA performance goal. The APE-based 2022 PSUs were created via an adjustment to outstanding Common Stock-based awards to reflect
| | (4)
| | Amounts shown in this row represent the first 1/3 of the number of unvested and the year-end market value of RSU Named Executive Officer awards granted by the Board and the Compensation Committee, in accordance with accounting rules ASC 718, Compensation—Stock Compensation. The RSU 162(m) awards vest over 3 years with 1/3 vesting on the date the Compensation Committee certifies achievement of the performance goal for the fiscal year containing the date of grant. For 2016, the first 1/3 of this award has been earned, and vested upon certification by the Compensation Committee in 2017. See “Compensation Discussion and Analysis—Equity Awards Granted in 2016” above.
| | | | 65 | |
the special APE dividend on August 19, 2022, and were subject to the same performance goal, performance period, and vesting conditions applicable to Tranche I of the Common Stock-based 2022 PSU awards. Performance goals for tranches II and III of the 2022 PSUs have not been set and amounts for such awards are not included in this table. Subsequent to year-end, the Compensation Committee certified performance attainment and approved vesting at 0% of target, so the values reflected represent the threshold level of potential vesting. This tranche was forfeited on February 23, 2023.
(19)
Amounts shown in this row represent the number of unvested and the year-end market value of tranche I of the Common Stock-based 2022 PSU award with an FCF performance goal. The 2022 PSU awards were originally granted on March 2, 2022, with performance goals established for tranche I on February 16, 2022. Tranche I consists of PSUs with a one-year performance goal covering a performance period beginning January 1, 2022, and ending on December 31, 2022. The PSUs vest upon certification of achievement of the performance goals and based upon the executive’s employment through December 31, 2022. Performance goals for tranches II and III of the 2022 PSUs have not been set and amounts for such awards are not included in this table. Subsequent to year-end, the Compensation Committee certified performance attainment and approved vesting at 79% of target, so the values reflected represent the target level of potential vesting. This tranche vested on February 23, 2023.
(20)
Amounts shown in this row represent the number of unvested and the year-end market value of tranche I of the APE-based 2022 PSU award with an FCF performance goal. The APE-based 2022 PSUs were created via an adjustment to outstanding Common Stock-based awards to reflect the special APE dividend on August 19, 2022, and were subject to the same performance goal, performance period, and vesting conditions applicable to Tranche I of the Common Stock-based 2022 PSU awards. Performance goals for tranches II and III of the 2022 PSUs have not been set and amounts for such awards are not included in this table. Subsequent to year-end, the Compensation Committee certified performance attainment and approved vesting at 79% of target, so the values reflected represent the target level of potential vesting. This tranche vested on February 23, 2023.
| | (5)
66 | | Amounts shown in this row represent the remaining 2/3 number of unvested and year-end market value of the RSU award. This amount will vest 1/3 in 2018 and 1/3 in 2019 upon certification by the Compensation Committee of achievement of the performance goal for the prior year.
| | | | | |
| (6)
| | Amounts shown in this row represents the target number of unvested and the year-end market value of the PSU awards granted in accordance with accounting rules of ASC 718, Compensation—Stock Compensation. The grant consisted of PSUs with both a three year cumulative adjusted free cash flow and net earnings performance target condition, covering a performance period beginning January 1, 2016 and ending on December 31, 2018 and vest upon certification of achievement of these performance goals, and if the executive remains employed on such date. The PSUs would vest cumulatively over a three year performance period based on a scale ranging from 80% to 120% of the performance target with the vested amount ranging from 30% to 150%. See “Compensation Discussion and Analysis—Equity Awards Granted in 2016” above for information regarding the grant of the PSU performance target. The Company achieved the target level of performance in 2016.
|
| (7)
| | Amounts shown in this row represent the target number of unvested and the year-end market value of the PSU Transition awards granted to the Named Executive Officers. The awards would vest upon certification of the achievement of the performance goals. The performance goals for these awards were not met and these awards were forfeited. See “Compensation Discussion and Analysis – Equity Awards Granted in 2016” above.
|
Option Exercises and Stock Vested During the Year Ended December 31, 2016
There were no options issued by the Company or exercised during the year ended December 31, 2016.2022. The following table sets forth information on the vesting of the RSUs and PSUs for each Named Executive OfficerNEO during the year ended December 31, 2016.2022. | Name | | | Number of
Shares Acquired
on Vesting (#)(1) | | | Value
Realized on
Vesting ($) | |
| Adam M. Aron | | | | | | | | | | | | | |
| EIP—RSU & PSU(2) | | | | | 767,518 | | | | | $ | 20,354,577 | | |
| EIP—PSU(3) | | | | | 1,071,684 | | | | | | 20,297,695 | | |
| Sean D. Goodman | | | | | | | | | | | | | |
| EIP—RSU & PSU(2) | | | | | 124,945 | | | | | | 3,313,541 | | |
| EIP—PSU(3) | | | | | 195,474 | | | | | | 3,702,278 | | |
| EIP—RSU—AMC(4) | | | | | 33,334 | | | | | | 272,339 | | |
| EIP—RSU—APE(5) | | | | | 33,334 | | | | | | 32,667 | | |
| Daniel E. Ellis | | | | | | | | | | | | | |
| EIP—RSU & PSU(2) | | | | | 70,897 | | | | | | 1,880,188 | | |
| EIP—PSU(3) | | | | | 97,152 | | | | | | 1,840,059 | | |
| Elizabeth F. Frank | | | | | | | | | | | | | |
| EIP—RSU & PSU(2) | | | | | 92,333 | | | | | | 2,448,671 | | |
| EIP—PSU(3) | | | | | 125,414 | | | | | | 2,375,341 | | |
| Kevin M. Connor | | | | | | | | | | | | | |
| EIP—RSU & PSU(2) | | | | | 72,058 | | | | | | 1,910,978 | | |
| EIP—PSU(3) | | | | | 98,086 | | | | | | 1,857,749 | | |
| | | | | |
Name | | Number of Shares
Acquired on Vesting (#)(1) | | Value Realized on
Vesting ($)(2) |
Adam M. Aron | | | | | |
EIP-RSU | | — | | $ | — |
EIP-PSU | | — | | | — |
Craig R. Ramsey | | | | | |
EIP-RSU | | — | | | — |
EIP-PSU | | — | | | — |
EIP-Interim CEO RSU(3) | | 19,226 | | | 646,955 |
John D. McDonald | | | | | |
EIP-RSU | | — | | | — |
EIP-PSU | | — | | | — |
Elizabeth Frank | | | | | |
EIP-RSU | | — | | | — |
EIP-PSU | | — | | | — |
Mark A. McDonald | | | | | |
EIP-RSU | | — | | | — |
EIP-PSU | | — | | | — |
(1)
| (1)
| | The amount in this column reflects the number of shares of Common Stock or APEs underlying the RSUs and PSUs that vested during the year ended December 31, 2016. |
| (2)
| | The aggregate value upon vesting was calculated by multiplying the closing price of the Company's common stock of $33.65 on the vesting date of December 30, 2016 by the number of shares acquired on vesting.
|
| (3)
| | Amounts shown in this row represent the number vested and the year-end market value of the Special Interim CEO RSU Award.In recognition of Mr. Ramsey's appointment as Interim Chief Executive Officer and President effective August 7, 2015, the Company awarded Mr. Ramsey 19,226 RSUs, with a grant date fair value of approximately $569,000. Each RSU was convertible into one share of Class A common stock immediately upon vesting which would occur upon the earliest of; (1) the first day of employment of a replacement Chief Executive Officer, (2) March 15, 2016, or (3) the Company's termination of the participant without cause. With the employment of Mr. Aron as Chief Executive Officer and President on January 4, 2016, Mr. Ramsey's RSUs vested and converted into shares of Class A common stock. A dividend equivalent equal to the amount paid in respect of one share of Class A common stock underlying the RSUs began to accrue with respect to the RSUs on the date of grant. Such accrued dividend equivalents were paid to Mr. Ramsey upon vesting of the RSUs.
|
Pension Benefits as of December 31, 2016
2022.
(2)
The aggregate value upon vesting was calculated by multiplying the closing price of the Company’s Common Stock of $26.52 on January 3, 2022 (the vesting date) by the number of shares acquired on vesting. Amounts shown are gross amounts prior to withholding to cover tax obligations upon vesting.
(3)
The aggregate value upon vesting was calculated by multiplying the closing price of the Company’s Common Stock of $18.94 on February 17, 2022 (the vesting date) by the number of shares acquired on vesting. Amounts shown are gross amounts prior to withholding to cover tax obligations upon vesting.
(4)
The aggregate value upon vesting was calculated by multiplying the closing price of the Company’s Common Stock of $8.17 on December 2, 2022 (the vesting date) by the number of shares acquired on vesting. Amounts shown are gross amounts prior to withholding to cover tax obligations upon vesting.
(5)
The aggregate value upon vesting was calculated by multiplying the closing price of the Company’s APEs of $0.98 on December 2, 2022 (the vesting date) by the number of units acquired on vesting. Amounts shown are gross amounts prior to withholding to cover tax obligations upon vesting.
Pension Benefits
The following table presents information regarding the present value of accumulated benefits that may become payable to the Named Executive OfficersNEOs under our qualified and nonqualified defined-benefit pension plans.plans as of December 31, 2022. | Name | | | Plan Name | | | Number of
Years Credited
Service(#)(1) | | | Present Value
of Accumulated
Benefit($)(2) | |
| Adam M. Aron | | | — | | | | | — | | | | | $ | — | | |
| Sean D. Goodman | | | — | | | | | — | | | | | | — | | |
| Daniel E. Ellis | | | — | | | | | — | | | | | | — | | |
| Elizabeth F. Frank | | | — | | | | | — | | | | | | — | | |
| Kevin M. Connor | | | Defined Benefit Retirement Income Plan | | | | | 4 | | | | | | 74,886 | | |
| | | | Supplemental Executive Retirement Plan | | | | | 4 | | | | | | 32,241 | | |
| | | | | | | |
Name | | Plan Name | | Number of Years
Credited
Service(#)(1) | | Present Value of
Accumulated
Benefit($)(2) |
Adam M. Aron | | — | | — | | $ | — |
Craig R. Ramsey | | Defined Benefit Retirement Income Plan | | 12.00 | | | 317,397 |
| | Supplemental Executive Retirement Plan | | 12.00 | | | 164,567 |
John D. McDonald | | Defined Benefit Retirement Income Plan | | 31.05 | | | 685,900 |
| | Supplemental Executive Retirement Plan | | 31.05 | | | 355,634 |
Elizabeth Frank | | — | | — | | | — |
Mark A. McDonald | | Defined Benefit Retirement Income Plan | | 26.60 | | | 546,932 |
| | Supplemental Executive Retirement Plan | | 26.60 | | | 265,268 |
(1)
The number of years credited service represents the number of years of service through December 31, 2006, the date the plans were frozen.
(2)
The accumulated benefit was based on service and earnings considered by the plans for the period through December 31, 2022. The present value has been calculated assuming the NEOs will remain in service until age 65, the age at which retirement may occur without any reduction in benefits, and that the benefit is payable under the available forms of annuity consistent with the plans. The discount rate assumption was 4.97%. The post-retirement mortality assumption was based on the PRI-2012 White Collar Employees Tables with the Retiree and Contingent Survivor Tables for annuitants projected forward with scale MP-2021.
| | (1)
| | The number of years credited service represents the numbers of years of service through December 31, 2006, the date the plans were frozen.
| | | | 67 | |
| (2)
| | The accumulated benefit was based on service and earnings considered by the plans for the period through December 31, 2016. The present value has been calculated assuming the Named Executive Officers will remain in service until age 65, the age at which retirement may occur without any reduction in benefits, and that the benefit is payable under the available forms of annuity consistent with the plans. The interest assumption was 3.9%. The post-retirement mortality assumption was based on the RP-2016 Mortality Table.
|
Pension and Other Retirement Plans
We provide retirement benefits to the Named Executive OfficersNEOs under the terms of qualified and non-qualified defined-benefit plans. The AMC Defined Benefit Retirement Income Plan is a tax-qualified retirement plan in which certain of the Named Executive OfficersNEOs participate on substantially the same terms as our other participating employees. However, due to maximum limitations imposed by ERISA and the Internal Revenue Code on the annual amount of a pension which may be paid under a qualified defined-benefit plan, the benefits that would otherwise be payable to the Named Executive OfficersNEOs under the Defined Benefit Retirement Income Plan are limited. Because we did not believe that it was appropriate for the Named Executive Officers'NEOs’ retirement benefits to be reduced because of limits under ERISA and the Internal Revenue Code, we have a non-qualified supplemental defined-benefit plan that permits the Named Executive OfficersNEOs to receive the same benefit that would be paid under our qualified defined-benefit plan up to the old IRS limit, as indexed, as if the Omnibus Budget Reconciliation Act of 1993 had not been in effect. On November 7, 2006, our Board approved a proposal to freeze the AMC Defined Benefit Retirement Income Plan and the AMC Supplemental Executive Retirement Plan, effective as of December 31, 2006. The material terms of the AMC Defined Benefit Retirement Income Plan and the AMC Supplemental Executive Retirement Plan are described below. For additional information on the material assumptions with respect to these plans, see Note 1 to our Consolidated Financial Statements included in our Annual Report on Form 10-K for the year ended December 31, 2022.
AMC Defined Benefit Retirement Income Plan.The AMC Defined Benefit Retirement Income Plan is a non-contributorynon- contributory defined-benefit pension plan subject to the provisions of ERISA. As mentioned above, the plan was frozen effective December 31, 2006. The plan provides benefits to certain of our employees based upon years of credited service and the highest consecutive five-year average annual remuneration for each participant. For purposes of calculating benefits, average annual compensation is limited by Section 401(a)(17) of the Internal Revenue Code, and is based upon wages, salaries and other amounts paid to the employee for personal services, excluding certain special compensation. Under the Defined Benefit Retirement Income Plan, a participant earns a vested right to an accrued benefit upon completion of five years of vesting service.
AMC Supplemental Executive Retirement Plan.AMC also sponsors a Supplemental Executive Retirement Plan to provide the same level of retirement benefits that would have been provided under the retirement plan had the federal tax law not been changed in the Omnibus Budget Reconciliation Act of 1993 to reduce the amount of compensation which can be taken into account in a qualified retirement plan. The plan was frozen, effective December 31, 2006, and no new participants can enter the plan and no additional benefits can accrue thereafter.
Subject to the forgoing, any individual who is eligible to receive a benefit from the AMC Defined Benefit Retirement Income Plan after qualifying for early, normal or late retirement benefits thereunder, the amount of which is reduced by application of the maximum limitations imposed by the Internal Revenue Code, is eligible to participate in the Supplemental Executive Retirement Plan.
The benefit payable to a participant equals the monthly amount the participant would receive under the AMC Defined Benefit Retirement Income Plan without giving effect to the maximum recognizable compensation for qualified retirement plan purposes imposed by the Internal Revenue Code, as amended by Omnibus Budget Reconciliation Act of 1993, less the monthly amount of the retirement benefit actually payable to the participant under the AMC Defined Benefit Retirement Income Plan, each as calculated as of December 31, 2006. The benefit is an amount equal to the actuarial equivalent of his/her benefit, computed by the formula above, payable in either a lump sum (in certain limited circumstances, specified in the plan) or equal semi-annual installments over a period of two to ten years, with such form, and, if applicable, period, having been irrevocably elected by the participant. If a
participant'sparticipant’s employment with AMC terminates for any reason before the earliest date
that he/she qualifies for early, normal or late retirement benefits under the AMC Defined Benefit Retirement Income Plan, no benefit is payable under the Supplemental Executive Retirement Plan.
Nonqualified Deferred Compensation
Prior to May 3, 2021, AMC permitspermitted the Named Executive OfficersNEOs and other key employees to elect to receive a portion of their compensation reported in the Summary Compensation Table on a deferred basis. Deferrals of compensation during the year ended December 31, 2016 and in recent years have beenwere made under the AMC Non-Qualified Deferred Compensation Plan (“NQDC”). Participants of the plan arewere able to defer annual salary and bonus (excluding commissions, expense reimbursement or allowances, cash and non-cash fringe benefits and any stock-based incentive compensation). Amounts deferred under the plans areplan was credited with an investment return determined as if the participant'sparticipant’s account were invested in one or more investment funds made available by the CommitteeCompany and selected by the participant. AMC may,could, but need not, credit the deferred compensation account of any participant with a discretionary or profit sharingprofit-sharing credit as determined by AMC. The deferred compensation account willwas to be distributed either in a lump sum payment or in equal annual installments over a term not to exceed 10 years as elected by the participant and maycould be distributed pursuant to in-service withdrawals under certain circumstances. Any such payment shallwas to commence upon the date of a “Qualifying Distribution Event” (as(as such term is defined in the Non-Qualified Deferred Compensation Plan). The Qualifying Distribution Events are designed to be compliant with Section 409A of the Internal Revenue Code. On May 3, 2021, the Company terminated the NQDC Plan and no deferrals were made during the year ended December 31, 2022. Accounts in the NQDC Plan were liquidated in May 2022.
The following table presents information regarding the contributions to and earnings on the Named Executive Officers'NEOs’ deferred compensation balances during the year ended December 31, 2016:2022: | Name | | | Executive
Contributions
in last FY(1) | | | Aggregate
Earnings in
Last FY(2) | | | Aggregate
Withdrawals/
Distributions | | | Aggregate
Balance at
Last FYE | |
| Adam M. Aron | | | | | | | | | | | | | | | | | | | | | | | | | |
| NQDC(3) | | | | $ | — | | | | | $ | — | | | | | $ | — | | | | | $ | — | | |
| Sean D. Goodman | | | | | | | | | | | | | | | | | | | | | | | | | |
| NQDC(3) | | | | | — | | | | | | — | | | | | | — | | | | | | — | | |
| Daniel E. Ellis | | | | | | | | | | | | | | | | | | | | | | | | | |
| NQDC(3) | | | | | — | | | | | | — | | | | | | — | | | | | | — | | |
| Elizabeth F. Frank | | | | | | | | | | | | | | | | | | | | | | | | | |
| NQDC(3) | | | | | — | | | | | | (119,305) | | | | | | (2,150,145) | | | | | | — | | |
| Kevin M. Connor | | | | | | | | | | | | | | | | | | | | | | | | | |
| NQDC(3) | | | | | — | | | | | | (69,388) | | | | | | (945,814) | | | | | | — | | |
| | | | | | | | | |
Name | | Executive
Contributions
in last FY (1) | | Aggregate Earnings
in Last FY | | Aggregate
Balance at Last
FYE (4) |
Adam M. Aron | | | | | | | | | |
NQDC (3) | | $ | — | | $ | — | | $ | — |
Craig R. Ramsey | | | | | | | | | |
NQDC (3) | | | 22,550 | | | 40,821 | | | 465,261 |
EIP - 2015 (2) | | | — | | | 121,538 | | | 789,563 |
EIP - 2014 (2) | | | — | | | 292,137 | | | 1,315,984 |
John D. McDonald | | | | | | | | | |
NQDC (3) | | | 132,993 | | | 81,295 | | | 1,148,850 |
EIP - 2015 (2) | | | — | | | 211,420 | | | 774,556 |
EIP - 2014 (2) | | | — | | | 292,137 | | | 1,315,984 |
Elizabeth Frank | | | | | | | | | |
NQDC (3) | | | 378,587 | | | 61,233 | | | 727,763 |
EIP - 2015 (2) | | | — | | | 210,915 | | | 774,051 |
EIP - 2014 (2) | | | — | | | 292,137 | | | 1,315,984 |
Mark A. McDonald | | | | | | | | | |
NQDC (3) | | | 92,466 | | | 82,294 | | | 1,162,256 |
EIP - 2015 (2) | | | — | | | 208,492 | | | 771,628 |
EIP - 2014 (2) | | | — | | | 292,137 | | | 1,315,984 |
(1)
The plan was terminated on May 3, 2021, and no contributions were made in 2022.
(2)
Aggregate earnings reflect earnings from January 1, 2022, to May 4, 2022, the date on which plan accounts were liquidated.
(3)
The above market earnings on deferred compensation are reflected in the “Change in Pension Value and Nonqualified Deferred Compensation Earnings” column of the Summary Compensation Table during the year ended December 31, 2022: Mr. Aron—$0, Mr. Goodman—$0, Mr. Ellis—$0, Ms. Frank—$0, and Mr. Connor—$0.
| | (1)
| | These amounts represent payroll deductions for the applicable executive and are therefore included in the Summary Compensation Table.
| | | | 69 | |
| (2)
| | These amounts represent the change in fair value of RSUs and PSUs which vested in previous years and remain unsettled as of December 31, 2016.
|
| (3)
| | The above market earnings on deferred compensation are reflected in the “Change in Pension Value and Nonqualified Deferred Compensation Earnings” column of the Summary Compensation Table during the year ended December 31, 2016: Mr. Craig Ramsey-$29,253, Mr. John McDonald-$49,623, Ms. Elizabeth Frank-$34,118 and Mr. Mark McDonald-$52,028.
|
| (4)
| | The amounts reported include amounts included in Summary Compensation Table for current and prior years.
|
Potential Payments Upon Termination or Change of Control
The following tables describetable describes potential payments and other benefits that would have been received or receivable by each Named Executive OfficerNEO or his or her estate under the officer'sofficer’s employment agreement or related plans and agreements if employment had been terminated under various circumstances on December 31, 2016:2022: | Name | | | Termination
Following a
Change of
Control | | | Death or
Disability | | | Termination With
Good Reason by
Employee | | | Termination
Without Cause
by Company | | | Retirement | |
| Adam M Aron | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Base Salary | | | | $ | 2,250,000 | | | | | $ | — | | | | | $ | 2,250,000 | | | | | $ | 2,250,000 | | | | | $ | — | | |
| AIP | | | | | 4,500,000 | | | | | | — | | | | | | 4,500,000 | | | | | | 4,500,000 | | | | | | — | | |
| Unvested Equity Awards | | | | | 11,508,416 | | | | | | — | | | | | | 6,000,000 | | | | | | 6,000,000 | | | | | | — | | |
| Total | | | | | 18,258,416 | | | | | | — | | | | | | 12,750,000 | | | | | | 12,750,000 | | | | | | — | | |
| Sean D. Goodman | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Base Salary | | | | | 800,000 | | | | | | — | | | | | | 800,000 | | | | | | 800,000 | | | | | | — | | |
| AIP | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | |
| Unvested Equity Awards | | | | | 2,432,172 | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | |
| Total | | | | | 3,232,172 | | | | | | — | | | | | | 800,000 | | | | | | 800,000 | | | | | | — | | |
| Daniel E. Ellis | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Base Salary | | | | | 595,000 | | | | | | — | | | | | | 595,000 | | | | | | 595,000 | | | | | | — | | |
| AIP | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | |
| Unvested Equity Awards | | | | | 1,037,337 | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | |
| Total | | | | | 1,632,337 | | | | | | — | | | | | | 595,000 | | | | | | 595,000 | | | | | | — | | |
| Elizabeth F. Frank | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Base Salary | | | | | 1,190,000 | | | | | | — | | | | | | 1,190,000 | | | | | | 1,190,000 | | | | | | — | | |
| AIP | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | |
| Unvested Equity Awards | | | | | 1,244,974 | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | |
| Total | | | | | 2,434,974 | | | | | | — | | | | | | 1,190,000 | | | | | | 1,190,000 | | | | | | — | | |
| Kevin M. Connor | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Base Salary | | | | | 1,122,700 | | | | | | 1,122,700 | | | | | | — | | | | | | 1,122,700 | | | | | | — | | |
| AIP | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | 364,900 | | |
| Unvested Equity Awards | | | | | 974,108 | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | |
| Total | | | | | 2,096,808 | | | | | | 1,122,700 | | | | | | — | | | | | | 1,122,700 | | | | | | 364,900 | | |
| | | | | | | | | | | | | | | |
| | Termination
Following a Change
of Control | | Death or
Disability | | Termination with
Good Reason by
Employee | | Termination
Without Cause by
Company | | Retirement |
Adam M. Aron | | | | | | | | | | | | | | | |
Base Salary | | $ | 1,492,500 | | $ | — | | $ | 1,492,500 | | $ | 1,492,500 | | $ | — |
AIP | | | 3,009,875 | | | 1,144,250 | | | 3,009,875 | | | 3,009,875 | | | — |
Unvested Equity Awards | | | 11,790,290 | | | — | | | 6,000,000 | | | 6,000,000 | | | — |
Total | | | 16,292,665 | | | 1,144,250 | | | 10,502,375 | | | 10,502,375 | | | — |
Craig R. Ramsey | | | | | | | | | | | | | | | |
Base Salary | | | 1,127,600 | | | 1,127,600 | | | — | | | 1,127,600 | | | — |
AIP | | | — | | | — | | | — | | | — | | | 394,660 |
Unvested Equity Awards | | | 1,302,356 | | | — | | | — | | | — | | | — |
Total | | | 2,429,956 | | | 1,127,600 | | | — | | | 1,127,600 | | | 394,660 |
John D. McDonald | | | | | | | | | | | | | | | |
Base Salary | | | 1,035,400 | | | 1,035,400 | | | — | | | 1,035,400 | | | — |
AIP | | | — | | | — | | | — | | | — | | | 362,390 |
Unvested Equity Awards | | | 1,302,356 | | | — | | | — | | | — | | | — |
Total | | | 2,337,756 | | | 1,035,400 | | | — | | | 1,035,400 | | | 362,390 |
Elizabeth Frank | | | | | | | | | | | | | | | |
Base Salary | | | — | | | — | | | 1,023,000 | | | 1,023,000 | | | — |
AIP | | | — | | | — | | | — | | | — | | | — |
Unvested Equity Awards | | | 1,302,356 | | | — | | | — | | | — | | | — |
Total | | | 1,302,356 | | | — | | | 1,023,000 | | | 1,023,000 | | | — |
Mark A. McDonald | | | | | | | | | | | | | | | |
Base Salary | | | 907,000 | | | 907,000 | | | — | | | 907,000 | | | — |
AIP | | | — | | | — | | | — | | | — | | | 294,775 |
Unvested Equity Awards | | | 1,302,356 | | | — | | | — | | | — | | | — |
Total | | $ | 2,209,356 | | $ | 907,000 | | $ | — | | $ | 907,000 | | $ | 294,775 |
Employment Agreements
In the event Mr. Aron’s employment is terminated, pursuant to his employment agreement, if Mr. Aron is terminated as a result of his death or disability or without cause or for good reason (each as defined below and in the employment agreement), he will receive a pro rata portion of any incentive bonus for the year in which he was terminated if the applicable targets are met. In addition, upon his termination without cause or for good reason or as a result of the Company not renewing his contract, or not renewing it on comparable terms (each an “Involuntary Termination”), Mr. Aron will be entitled to an amount equal to 1.5 times his Base Salary plus one of the following amounts, as applicable: (1) 1.875 times his Base Salary if he is terminated on or before December 31, 2016; (2) 1.5 times the Incentive Bonus paid to Mr. Aron for the fiscal year ending in December 31, 2016 if he is terminated during the period from January 1, 2017 to December 31, 2017; or (3) 1.5 times the average of the Incentive Bonuses paid to Mr. Aron during the 24 months preceding the date of Mr. Aron'sAron’s termination if the termination occurs on or after January 1, 2018 (the “Severance Benefit”). The Severance Benefit will be paid equally over a 24-month period. In addition, upon an Involuntary Termination, Mr. Aron will be paid $6,000,000 of value, through a combination of RSUs vesting and cash payments, over a 3-year period following termination. Upon an Involuntary Termination, the Company will also pay Mr. Aron an amount equal to the full cost of his medical insurance for a period of 18 months.
“Cause” is defined as committing a felony, engaging in material misconduct injurious to the Company, willfully failing to perform his duties or material breach of certain agreement covenants. “Good reason” is defined as material diminution in compensation or duties, material change in location or material breach of the agreement by the Company.
Each of Mr. Goodman and Mr. Ellis are entitled to receive cash severance payments equal to one year of his base salary in the event of termination by the Company without “Cause” or by Mr. Goodman or Mr. Ellis for “Good Reason” (as such term is defined below and in his employment agreement).
Ms. Frank is entitled to receive cash severance payments equal to two years of her base salary in the event of termination by the Company without “Cause” or by Ms. Frank for “Good Reason” (as such term is defined below and in her employment agreement).
Per Mr. Goodman’s, Mr. Ellis’ and Ms. Frank’s employment agreements, Cause shall mean, as reasonably determined by the Board based on information that one or more of the following has occurred, the executive has; (i) committed a felony or similar crime; (ii) engaged in acts of fraud, dishonesty, gross negligence or other misconduct; (iii) willfully failed to perform her duties under the agreement; or (iv) breached any provision, materially breached any contract or breached any material written Company policy. Good Reason shall mean a termination of the executive’s employment by means of resignation by the executive after the occurrence of any one of the following conditions; (i) a material diminution in the executive’s rate of base salary; (ii) a material diminution in the executive’s authority, duties, or responsibilities; (iii) a material change in the geographic location of the executive’s principal office with the Company; or (iv) a material breach of the employment agreement by the Company.
In the event Mr. Ramsey's, Mr. John McDonald's, or Mr. Mark McDonald'sConnor’s employment is terminated as a result of the executive'shis death, “Disability”, or by the Company without “Cause” (as(as those terms are defined in the
paragraph below and in the applicable employment agreement) the executive, he is entitled to a lump cash severance payment equal to two years of his base salary then in effect. Following a Change in Control (as defined in the paragraph below and in the applicable employment agreement), if the executiveMr. Connor resigns in response to a substantial adverse alteration in responsibilities, reduction in base salary, or a material reduction in benefits, the executivehe is entitled to a lump sum cash severance payment equal to two years of his base salary then in effect. If the executiveMr. Connor retires, he is entitled to a payment equal to a pro rata share of his AIP at target for the year in which he retires.
The employment agreementsagreement for Mr. Ramsey, Mr. John McDonald and Mr. Mark McDonald defineConnor defines Disability as the executive'sexecutive’s incapacity due to physical or mental illness and the executive has not been regularly performing his duties and obligations for a period of 120 consecutive days. Cause is defined as a willful and continued failure by the executive to perform substantially his duties with the Company or the willful engaging by the executive in misconduct which is materially and demonstrably injurious to the Company. Change of Control is defined as a merger or similar transaction, provided the executive terminates his employment subsequent to a Change of Control within 60 days of the occurrence of any such event; (i) a substantial adverse alteration in executive'sexecutive’s responsibilities from those in effect immediately prior to the Change of Control; (ii) a reduction in base salary below the rate that is in effect immediately prior to the Change of Control; or (iii) a material reduction in the benefits provided to the Executive by the Company prior to the Change of Control.Ms. Frank is entitled to receive cash severance payments equal to two years of her base salary in the event of termination by the Company without “Cause” or by Ms. Frank for “Good Reason” (as such term is defined in the her employment agreement).
Per Ms. Frank's employment agreement, Cause shall mean, as reasonably determined by the Board based on information that one or more of the following has occurred, the executive has; (i) committed a felony or similar crime; (ii) engaged in acts of fraud, dishonesty, gross negligence or other misconduct; (iii) willfully failed to perform her duties under the agreement; or (iv) breached any provision, materially breached any contract or breached any material written Company policy. Good Reason shall mean a termination of the executive's employment by means of resignation by the executive after the occurrence of any one of the following conditions; (i) a material diminution in the executive's rate of base salary; (ii) a material diminution in the executive's authority, duties, or responsibilities; (iii) a material change in the geographic location of the executive's principal office with the Company; or (iv) a material beach of the employment agreement by the Company.
Acceleration of RSU and PSU Awards.Unvested RSU and PSU awards do not vest upon a termination by the Company, or due to death, disability or retirement,retirement. Under the 2013 Equity Incentive Plan,EIP, upon a Change in Control of the Company, the Compensation Committee can, in its discretion, determine to accelerate the vesting of outstanding awards. The tables above show the value (based on the market price of the Company’s Class A common stockCommon Stock at year-end) of any unvested equity awards plusat target, and the cash value of certain payments guaranteed to Mr. Aron. Change in Control is generally defined as (1) any person other than Wanda becoming the owner of more than 35% of the combined voting power of outstanding securities of the Company, (2) over a period of two years, incumbent directors ceasing to be a majority of the board, or (3) a merger or consolidation of or the disposition of substantially all of the assets of the Company, subject to exceptions.Nonqualified Deferred Compensation Plan and
Pension Benefits.Upon termination for any reason, executives would receive all deferred compensation balances, subject to the terms of the Nonqualified Compensation Plan. See “Nonqualified Deferred Compensation” above for plan balances. See Pension Benefits as of December 31, 2016”“Pension Benefits” above for a discussion of benefits upon termination under the Company’s pension plans.
EQUITY COMPENSATION PLAN INFORMATION
Equity Compensation Plan Information
The following table summarizes the 2013 Equity Incentive PlanEIP as of December 31, 2016. See “Compensation Discussion and Analysis-2013 Equity Incentive Plan” for more information.2022.
| Plan Category | | | (a) Total Number of
Securities to be Issued
Upon Exercise of
Outstanding Options,
Warrants and Rights | | | |
(b) Weighted-average
Exercise Price of
Outstanding Options,
Warrants and Rights($) | | | | | | (c) Number of Securities |
| | | | | |
Remaining Available for
|
| | (a) Total Number of
| | | |
Future Issuance Under
Equity Compensation
Plans (Excluding Securities
Reflected in Column (a)) | |
| | Securities to be Issued
| | (b) Weighted-average
| | Equity Compensation
|
| | Upon Exercise of
| | Exercise Price of
| | Plans (Excluding
|
| | Outstanding Options,
| | Outstanding Options,
| | Securities Reflected in
|
Plan Category
| | Warrants and Rights
| | Warrants and Rights($)
| | Column (a))
|
Equity compensation plans approved by security holders holders—AMC | | —
| | —
| — | 7,739,524 | | | | | — | | | | | | 4,293,562 | | |
Equity compensation plans approved by security holders—APE | | | | | — | | | | | | — | | | | | | 4,293,562 | | |
| Equity compensation plans not approved by security holders | | —
| | —
| — | | | | | | — | | | | | | — | | |
Pay Ratio Disclosure
As required by Section 953(b) of the Dodd-Frank Wall Street Reform and Consumer Protection Act, and Item 402(u) of Regulation S-K, we are providing the following information about the relationship between the annual total compensation of our CEO, Mr. Adam M. Aron, and the annual total compensation of our employees. This pay ratio is a reasonable estimate calculated in good faith, in a manner consistent with Item 402(u) of Regulation S-K, based on our payroll and employment records and the methodology described below. The SEC rules for identifying the “median employee” and calculating the pay ratio based on that employee’s annual total compensation allow companies to adopt a variety of methodologies, to apply certain exclusions, and to make reasonable estimates and assumptions that reflect their compensation practices. As such, the pay ratios reported by other companies may not be comparable to the pay ratio set forth below, as other companies may have different employment and compensation practices and may utilize different methodologies, exclusions, estimates and assumptions in calculating their own pay ratios.
For the year ended December 31, 2022:
•
The median of the annual total compensation of all employees of the Company (other than our CEO) was $9,797.
•
The annual total compensation of our CEO, as reported in the Summary Compensation Table presented elsewhere in this Proxy Statement, was $23,716,161.
•
Based on this information, for 2022 the ratio of the annual total compensation of our CEO to the median of the annual total compensation of all employees was 2,421 to 1.
The COVID-19 pandemic continued to have significant impacts on our industry, guests and associates in 2022 that affected the pay ratio disclosure. Due to the lingering pandemic impact along with limited new film releases and reluctance of consumers to return to public venues, many employees experienced reduced hours in 2022.
Given the ongoing impact of the COVID-19 pandemic in the prior year, for 2022 we determined that the identification of a new median employee would provide the best data for the pay ratio disclosure. Following are the methodology and material assumptions we applied to identify the median of the annual total compensation of all employees, as well as to determine the annual total compensation of the “median employee”:
•
We selected December 31, 2022, the last day of our fiscal year, as the date upon which to identify the median employee.
•
We prepared a list of all active employees as of December 31, 2022, resulting in a list of approximately 33,694 employees in 10 countries with approximately 23,850 employees based in the U.S. and 9,844 based internationally. No countries were omitted from our determination process.
49
•
We determined to use total earnings for the twelve months ended December 31, 2022, as our compensation measure. Total earnings include regular pay and additional pay elements such as overtime and tips. We used this measurement as this pay data was readily available in all of our locations and representative of our compensation structure.
•
We did not make any cost-of-living adjustment in identifying the median employee and we annualized the compensation of all permanent employees included in the sample who were hired in 2022 but did not work for the entire year.
•
We determined the median amount of compensation from the compiled list and the related employee was selected as our median employee. Our median employee is a part-time theatre-level film crew employee in the U.S.
•
For the median employee, we combined all elements of the respective employee’s compensation for 2022 in accordance with the requirements of Item 402(c)(2)(x) of Regulation S-K and consistent with the determination of the total compensation of our CEO, as reported in the Summary Compensation Table presented elsewhere in this Proxy Statement.
Pay versus Performance
As required by Section 953(a) of the Dodd-Frank Wall Street Reform and Consumer Protection Act and Item 402(v) of Regulation S-K, we are providing the following information about the relationship between Company’s financial performance and the “Compensation Actually Paid” to (i) our principal executive officer (“PEO”) and (ii) our NEOs other than the PEO, on an average basis (“Non-PEO NEOs”) for each of the fiscal years ending December 31, 2020, 2021, and 2022. The amounts shown for “Compensation Actually Paid” have been calculated in accordance with Item 402(v) of Regulation S-K and do not reflect compensation actually earned, realized, or received by the Company’s NEOs. For detail on our executive compensation programs, see the CD&A and the compensation tables above.
| | | | | | | | | | | | | | | | | | | | | | Average
Compensation
Actually Paid
to Non-PEO
NEOs(2) | | | Value of Initial Fixed $100
Investment Based On: | | | | | | | | | | | | | |
| Year(1) | | | Summary
Compensation
Table for PEO | | | Compensation
Actually Paid
to PEO(2) | | | Average Summary
Compensation
Table Total for
Non-PEO NEOs | | | Total
Shareholder
Return(3) | | | Peer Group
Total
Shareholder
Return(3) | | | Net
Loss(4)
(millions) | | | Adjusted
EBITDA(5)
(millions) | |
| 2022 | | | | $ | 23,716,161 | | | | | $ | (16,102,151) | | | | | $ | 3,661,539 | | | | | $ | (1,410,136) | | | | | $ | 92.50 | | | | | $ | 36.78 | | | | | $ | (973.6) | | | | | $ | 46.6 | | |
| 2021 | | | | | 18,909,546 | | | | | | 94,110,594 | | | | | | 3,294,830 | | | | | | 14,147,248 | | | | | | 379.74 | | | | | | 57.67 | | | | | | (1,269.8) | | | | | | (291.7) | | |
| 2020 | | | | | 20,926,785 | | | | | | 11,598,195 | | | | | | 2,757,888 | | | | | | 1,133,986 | | | | | | 29.60 | | | | | | 60.85 | | | | | | (4,589.4) | | | | | | (999.2) | | |
For each of 2020, 2021, and 2022, Adam M. Aron served as the Company’s PEO. For 2020, the Company’s Non-PEO NEOs were Craig R. Ramsey, Sean D. Goodman, John D. McDonald, Elizabeth F. Frank, and Stephen A. Colanero. For 2021, the Company’s Non-PEO NEOs were Sean D. Goodman, John D. McDonald, Elizabeth F. Frank, and Stephen A. Colanero. For 2022, the Company’s Non-PEO NEOs were Sean D. Goodman, Daniel E. Ellis, Elizabeth F. Frank, and Kevin M. Connor.
(2)
The table below sets forth the adjustments to Total Compensation as reported in the Summary Compensation Tables used in calculating the Compensation Actually Paid for each applicable fiscal year. Fair Value, FMV, or change in Fair Value, as applicable, of Contentsequity awards was determined by reference to (i) for RSU awards, closing prices on applicable year-end dates or the actual vesting dates, and (ii) for PSU awards, the same valuation methodology as RSU awards except year-end and vesting date values are multiplied by the probability of achievement as of each such date.
| | | | 2022 | | | 2021 | | | 2020 | |
| | | | PEO | | | Average
Non-PEO
NEOs | | | PEO | | | Average
Non-PEO
NEOs | | | PEO | | | Average
Non-PEO
NEOs | |
| Total Reported in Summary Compensation Table (“SCT”) | | | | $ | 23,716,161 | | | | | $ | 3,661,539 | | | | | $ | 18,909,546 | | | | | $ | 3,294,830 | | | | | $ | 20,926,785 | | | | | $ | 2,757,888 | | |
| Less, Value of Stock Awards Reported in SCT | | | | | (16,194,055) | | | | | | (1,988,352) | | | | | | (11,436,117) | | | | | | (1,543,267) | | | | | | (14,798,988) | | | | | | (1,763,186) | | |
| Less, Change in Pension Value in SCT | | | | | — | | | | | | — | | | | | | — | | | | | | (4,021) | | | | | | — | | | | | | (35,390) | | |
| Plus, Pension Service Cost and Impact of Pension Plan Amendments | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | |
Plus, Year-End Value of Current Year Awards
that are Unvested and Outstanding | | | | | 3,535,520 | | | | | | 432,536 | | | | | | 54,972,614 | | | | | | 7,395,469 | | | | | | 1,969,906 | | | | | | 236,776 | | |
| Plus, Change in Fair Value of Prior Year Awards that are Unvested and Outstanding | | | | | (18,062,564) | | | | | | (2,264,115) | | | | | | 15,024,550 | | | | | | 2,188,456 | | | | | | (156,730) | | | | | | (80,678) | | |
Plus, FMV at Vesting of Current Year Awards
that Vested this Year | | | | | — | | | | | | 8,167 | | | | | | — | | | | | | — | | | | | | 2,713,718 | | | | | | 333,587 | | |
Plus, Change in Fair Value at Vesting of Prior
Year Awards that Vested this Year | | | | | (9,374,022) | | | | | | (1,285,626) | | | | | | 16,625,000 | | | | | | 2,811,539 | | | | | | (207,496) | | | | | | (91,330) | | |
| Less, Prior Year Fair Value of Prior Year Awards that Forfeited this Year | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | (348,976) | | |
Plus, Value of Accrued Dividend Equivalents
Paid Upon Vesting of Awards this Year | | | | | 276,809 | | | | | | 25,716 | | | | | | 15,000 | | | | | | 4,242 | | | | | | 1,151,000 | | | | | | 125,296 | | |
| Compensation Actually Paid | | | | | (16,102,151) | | | | | | (1,410,136) | | | | | | 94,110,594 | | | | | | 14,147,248 | | | | | | 11,598,195 | | | | | | 1,133,986 | | |
(3)
The Total Shareholder Return (“TSR”) for each year reflects what the cumulative value of $100 would be, including reinvestment of dividends, if such amount were invested on December 31, 2019. The Peer Group TSR reflects the Company’s peer group consisting of Cinemark Holdings, Inc. (CNK) and IMAX Corporation (IMAX) as reflected in our Annual Report on the Form 10-K pursuant to Item 201(e) of Regulation S-K for the fiscal year ended December 31, 2022. Historical stock performance is not necessarily indicative of future stock performance.
(4)
Reflects the Company’s Net Loss prepared in accordance with U.S. GAAP and reported in its Annual Report on Form 10-K for the applicable fiscal year.
(5)
The Company chose Adjusted EBITDA as its Company Selected Measure for the most recent fiscal year because it is a key performance metric utilized in both the AIP and PSU grants under the EIP. Adjusted EBITDA is a non-GAAP financial measure and is determined in the same manner as described and defined in the Company’s Annual Report on Form 10-K (see Appendix A of this Proxy Statement for the calculation of Adjusted EBITDA for the fiscal year ended December 31, 2022). This performance measure may not have been the most important financial performance measure for prior fiscal years and we may determine a different performance measure to be the most important financial performance measure in future years.
Graphical Representation of Compensation Actually Paid and Financial Performance Measures
Tabular List of Performance Measures
The table below lists all of the financial performance measures the Company used to link compensation actually paid for our NEOs to company performance, over the fiscal year ending December 31, 2022. Adjusted EBITDA is used to determine the AIP payouts for each of the NEOs. Both Adjusted EBITDA and Free Cash Flow are used to determine vesting levels of PSU grants under the EIP to each of the NEOs. Each of Adjusted EBITDA and Free Cash Flow are non-GAAP financial measures and should not be construed as an alternative to net earnings and cash flow from operations (each as determined in accordance with U.S. GAAP) as indicators of operating performance. See Appendix A for the calculation of Adjusted EBITDA and Free Cash Flow for the fiscal year ended December 31, 2022.
| | Most Important Financial Performance Measures | |
| | Adjusted EBITDA | |
| | Free Cash Flow | |
PROPOSAL
3:7:
NON-BINDING ADVISORY VOTE TO APPROVE THE COMPENSATION OF
NAMED EXECUTIVE OFFICERS
As we discussed in the “Compensation Discussion and Analysis” above, the Company'sCompany’s compensation program for executive officers is designed to attract and retain high quality people and to motivate them to achieve both our long-term and short-term goals. As required by Section 14A of the Securities Exchange Act, of 1934, this proposal, commonly referred to as the “say-on-pay” resolution, seeks a stockholder advisory vote on the compensation of our Named Executive Officers as disclosed pursuant to Item 402 of Regulation S-K through the following resolution: “RESOLVED, that the Company'sCompany’s stockholders approve, on an advisory basis, the compensation paid to the Company'sCompany’s named executive officers, as disclosed in the Company'sCompany’s Proxy Statement for the 20172023 Annual Meeting of Stockholders pursuant to Item 402 of Regulation S-K, including Compensation Discussion and Analysis, compensation tables and narratives.” This vote is advisory and non-binding, but our Board and the Compensation Committee will consider stockholders'stockholders’ concerns and evaluate whether actions are necessary to address those concerns. The Board recommends a vote “FOR”approval of the compensation of our Named Executive Officers, as disclosed in this proxy statement on an advisory basis.
PROPOSAL 8:
ADJOURNMENT OF ANNUAL MEETING
If at the Annual Meeting, the number of Contentsshares of Common Stock present or represented and voting in favor of the Proposals is insufficient to approve the Proposals, our management may move to adjourn the Annual Meeting to a later date or dates, if necessary or appropriate, in order to enable our Board to solicit additional proxies in favor of the Proposals. In that event, you will be asked to vote only upon the adjournment, postponement, or continuation proposal and not on any other proposals.
In this proposal, we are asking you to authorize the holder of any proxy solicited by our Board to vote in favor of adjourning, postponing, or continuing the Annual Meeting and any later adjournments. If our stockholders approve the adjournment, postponement, or continuation proposal, we could adjourn, postpone, or continue the Annual Meeting, and any adjourned session of the Annual Meeting, to use the additional time to solicit additional proxies in favor of the Proposals, including the solicitation of proxies from stockholders that have previously voted against a proposal. Among other things, approval of the adjournment, postponement, or continuation proposal could mean that, even if proxies representing a sufficient number of votes against the Proposals have been received, we could adjourn, postpone, or continue the Annual Meeting without a vote on the Proposals and seek to convince the holders of those shares to change their votes to votes in favor of the approval of the Proposals.
The Board recommends a vote “FOR” the adjournment of the Annual Meeting to a later date or dates, if necessary or appropriate, to solicit additional proxies if there are insufficient votes to adopt the Proposals.
The Company'sCompany’s audited consolidated financial statements are included in the Annual Report on Form 10-K for 20162022 filed with the SEC, 100 F Street N.E., Washington, D.C. 20549. Complimentary copies of the Form 10-K as filed with the SEC may be obtained by following the instructions provided below under the heading “Availability of Report on Form 10-K.”
The Company bears the cost of preparing, assembling, and mailing this proxy statement and any other proxy materials transmitted on behalf of our Board. We will, upon request, reimburse brokerage firms and others for their reasonable expenses in forwarding proxy materials to the beneficial owners of our Common Stock.
Delivery of Stockholder Documents
The SEC has adopted rules that permit companies and intermediaries (e.g., brokers) to satisfy the delivery requirements for proxy statements and annual reports with respect to two or more stockholders sharing the same address by delivering a proxy statement addressed to those stockholders. This process, which is commonly referred to as “householding,” potentially means extra convenience for stockholders and cost savings for companies. A number of brokers with accounts will be householding our proxy materials to the extent stockholders have given their prior express or implied consent in accordance with SEC rules. Once you have received notice from your broker that it will be householding communications to your address, householding will continue until you are notified otherwise or until you revoke your consent, which is deemed to be given unless you inform the broker otherwise when you receive the original notice of householding. If, at any time, you no longer wish to participate in householding and would prefer to receive separate proxy materials, please notify your broker to discontinue householding and direct your written request to receive a separate notice of internet availability of proxy materials or proxy statement and annual report to the Company at: AMC Entertainment Holdings, Inc., Attention: Investor Relations, One AMC Way, 11500 Ash Street, Leawood, KS 66211, or by calling (913) 213-4000. Stockholders who currently receive multiple copies of the proxy materials at their address and would like to request householding of their communications should contact their broker. STOCKHOLDER PROPOSALS
In order to include a stockholder proposal inIf you have any questions regarding the proxy statement, you may contact D.F. King & Co., Inc., our proxy statement and form of proxy relatingsolicitor, toll-free at (800) 859-8511 or collect at (212) 269-5550 or email at AMC@dfking.com.
For registered stockholders with questions about their AMC shares or a need to change a mailing address, please contact our nexttransfer agent by writing to Computershare Trust Company, N.A., Computershare Investor Services, 462 South 4th Street, Suite 1600, Louisville, KY 40202. You may also contact our transfer agent via email at web.queries@computershare.com or by telephone at 800-962-4284.
STOCKHOLDER PROPOSALS
The 2023 Annual Meeting was delayed due to pending litigation that could have impacted stockholder voting rights. We plan to return to a normalized schedule for our 2024 annual meeting of stockholders following(the “2024 Annual Meeting”). Therefore, the enddate of 2017, we2024 Annual Meeting will change by more than 30 days from the anniversary date of the 2023 Annual Meeting. As a result, the Company is disclosing a deadline for submission of stockholder proposals for inclusion in the proxy materials for the 2024 Annual Meeting (the “2024 Proxy”) pursuant to Rule 14a-8 under the Exchange Act (“Rule 14a-8”). The Company is hereby informing stockholders that to be considered for inclusion in the 2024 Proxy, stockholder proposals submitted under Rule 14a-8 must receive itbe in writing and received by the Corporate Secretary at the Company’s principal offices at One AMC Way, 11500 Ash Street, Leawood, Kansas 66211, no later than November 24, 2017.5:00 pm Central Time on December 31, 2023, which the Company has determined to be a reasonable time before it expects to begin to print and send the 2024 Proxy. Such proposals must also comply with the remaining requirements of Rule 14a-8. Any proposal submitted after the foregoing deadline will not be considered timely and will be excluded from the 2024 Proxy. In accordance with Rule 14a-5(f) of the Exchange Act, if the stockholder proposal deadline changes, the Company will announce the new date in a quarterly report on Form 10-Q or on a current report on Form 8-K.
Furthermore, in accordance with the advance notice provisions set forth in the Company’s Bylaws, in order for a stockholder proposal submitted outside of Rule 14a-8 or a director nomination submitted by a stockholder to us for consideration at next year'sbe considered timely when an annual meeting but which is not intended to be included inchanged by more than 30 days from the related proxy statement and formanniversary of proxythe prior annual meeting, it must be received between February 25, 2018no earlier than 60 days prior to such annual meeting and March 27, 2018; otherwise,not later than the proposalclose of business on the later of the 30thday prior to such annual meeting or the 10th day following the public announcement of the meeting date. When the 2024 Annual Meeting date is determined, we will announce the deadlines for such proposals in a quarterly report on Form 10-Q or in a current report on Form 8-K.
In addition to satisfying the foregoing requirements under the Company’s Bylaws when an annual meeting is changed by more than 30 days from the anniversary of the prior annual meeting, to comply with the universal proxy rules, shareholders who intend to solicit proxies in support of director nominees other than the Company’s nominees must provide notice that sets forth the information required by Rule 14a-19 under the Exchange Act no later than the close of business on the later of the 60th day prior to such annual meeting or the 10th day following the public announcement of the meeting date. When the 2024 Annual Meeting date is determined, we will announce the deadlines for such notices in a quarterly report on Form 10-Q or in a current report on Form 8-K.
Please note that the Company plans to adopt the Fourth Amended and Restated Bylaws, reflecting changes that will become effective if and to the extent Proposals No. 1, 3, 4 and 5 of this Proxy Statement are approved. In addition, such Fourth Amended and Restated Bylaws are expected to include certain other revisions approved by the Board to become effective after the Annual Meeting, some of which will impact the deadlines outlined above. These revisions do not require approval by the stockholders and will be
considered by usdescribed in a Form 8-K to be
untimely and not properly brought beforefiled with the
meeting. 52
SEC after the Annual Meeting.
AVAILABILITY OF REPORT ON FORM 10-K
Upon your written request, we will provide to you a complimentary copy of our
20162022 Annual Report on Form 10-K (without
exhibits and separate financial statements of non-consolidated subsidiaries)exhibits) as filed with the SEC. We will provide you a copy of the exhibits
and separate financial statements of non-consolidated subsidiaries to our
20162022 Annual Report on Form 10-K upon payment of our reasonable duplicating and shipping expenses. Your request should be mailed to
AMC'sAMC’s offices, addressed as follows: AMC Entertainment Holdings, Inc., Attention: Investor Relations, One AMC Way, 11500 Ash Street, Leawood, KS 66211. A free copy of the Form 10-K may also be obtained at the Internet web site maintained by the SEC at www.sec.gov and by visiting our Internet web site at www.amctheatres.com and clicking on “Investor Relations,” then on “Financial Performance.”
By Order of the Board of Directors,
One AMC Way11500Way,11500 Ash Street
Leawood, KS 66211
Senior Vice President, General Counsel and Secretary
September 29, 2023
| | |
| | 
|
| | Senior Vice President, General Counsel and Secretary
| | | | 81 | |
March 24, 2017
53
APPENDIX A
ADJUSTED EBITDA AND FREE CASH FLOW CALCULATIONS
Reconciliation of Adjusted EBITDA(1):
(dollars in millions)
(unaudited) | | | Year Ended
December 31, 2022 | |
| Net loss | | | | $ | (973.6) | | |
| Plus: | | | | | | | |
| Income tax provision(2) | | | | | 2.5 | | |
| Interest expense | | | | | 378.7 | | |
| Depreciation and amortization | | | | | 396.0 | | |
| Impairment of long-lived assets(3) | | | | | 133.1 | | |
| Certain operating expense(4) | | | | | 8.0 | | |
| Equity in loss of non-consolidated entities | | | | | 1.6 | | |
| Cash distributions from non-consolidated entities(5) | | | | | 6.6 | | |
| Attributable EBITDA(6) | | | | | 0.4 | | |
| Investment expense(7) | | | | | 14.9 | | |
| Other expense(8) | | | | | 80.4 | | |
| Other non-cash rent benefit(9) | | | | | (26.6) | | |
| General and administrative expense—unallocated: | | | | | | | |
| Merger, acquisition and other costs(10) | | | | | 2.1 | | |
| Stock-based compensation expense(11) | | | | | 22.5 | | |
| Adjusted EBITDA(1) | | | | $ | 46.6 | | |
APPENDIX A
The following table sets forth our reconciliationperformance. We define Adjusted EBITDA as net earnings (loss) plus (i) income tax provision (benefit), (ii) interest expense and (iii) depreciation and amortization, as further adjusted to eliminate the impact of certain items that we do not consider indicative of our ongoing operating performance and to include attributable EBITDA from equity investments in theatre operations in international markets and any cash distributions of earnings from other equity method investees. These further adjustments are itemized above. You are encouraged to evaluate these adjustments and the reasons we consider them appropriate for supplemental analysis. In evaluating Adjusted EBITDA, you should be aware that in the future we may incur expenses that are the same as or similar to some of the adjustments in this presentation. Our presentation of Adjusted EBITDA andshould not be construed as an inference that our future results will be unaffected by unusual or non-recurring items. Adjusted EBITDA for AIP:
Reconciliationis a non-U.S. GAAP financial measures commonly used in our industry and should not be construed as an alternative to net earnings (loss) as an indicator of operating performance (as determined in accordance with U.S. GAAP). Adjusted EBITDA may not be comparable to similarly titled measures reported by other companies. We have included Adjusted EBITDA because we believe it provides management and investors with additional information to measure our performance and estimate our value. The preceding definition of Adjusted EBITDA andis broadly consistent with how Adjusted EBITDA for AIP (unaudited)
| | | | | | | | | |
| | Year | | Year | | Year |
| | Ended | | Ended | | Ended |
| | December 31, | | December 31, | | December 31, |
(In thousands) | | 2016 | | 2015 | | 2014 |
Net Earnings | | $ | 111,667 | | $ | 103,856 | | $ | 63,767 |
Plus: | | | | | | | | | |
Income tax provision | | | 37,972 | | | 59,675 | | | 33,470 |
Interest expense | | | 121,537 | | | 106,088 | | | 120,939 |
Depreciation and amortization | | | 268,243 | | | 232,961 | | | 216,321 |
Impairment of long-lived assets | | | 5,544 | | | 1,702 | | | 3,149 |
Certain operating expenses (2) | | | 20,117 | | | 16,773 | | | 21,686 |
Equity in earnings of non-consolidated entities | | | (47,718) | | | (37,131) | | | (26,615) |
Cash distributions from non-consolidated entities | | | 40,052 | | | 34,083 | | | 35,243 |
Investment (income) loss | | | (10,154) | | | (6,115) | | | (8,145) |
Other expense (income) (3) | | | 32 | | | 10,684 | | | (8,344) |
General and administrative expense-unallocated: | | | | | | | | | |
Merger, acquisition and transaction costs (4) | | | 47,895 | | | 3,398 | | | 1,161 |
Stock-based compensation expense (5) | | | 6,843 | | | 10,480 | | | 11,293 |
Adjusted EBITDA (1) | | $ | 602,030 | | $ | 536,454 | | $ | 463,925 |
Less: cash distributions from non-consolidated entities | | | (40,052) | | | (34,083) | | | (35,243) |
Adjusted EBITDA for AIP | | $ | 561,978 | | $ | 502,371 | | $ | 428,682 |
| (1)
| | We present Adjusted EBITDA as a supplemental measure of our performance. We define Adjusted EBITDA as net earnings plus (i) income tax provision, (ii) interest expense and (iii) depreciation and amortization, as further adjusted to eliminate the impact of certain items that we do not consider indicative of our ongoing operating performance and to include any cash distributions of earnings from our equity method investees. These further adjustments are itemized above. You are encouraged to evaluate these adjustments and the reasons we consider them appropriate for supplemental analysis. In evaluating Adjusted EBITDA, you should be aware that in the future we may incur expenses that are the same as or similar to some of the adjustments in this presentation. Our presentation of Adjusted EBITDA should not be construed as an inference that our future results will be unaffected by unusual or non-recurring items. Adjusted EBITDA is a non-GAAP financial measure and should not be construed as an alternative to net earnings as an indicator of operating performance or as an alternative to cash flow provided by operating activities as a measure of liquidity (as determined in accordance with U.S. GAAP). Adjusted EBITDA may not be comparable to similarly titled measures reported by other companies. We have included Adjusted EBITDA because we believe it provides management and investors with additional information to measure our performance and estimate our value.
|
Adjusted EBITDA has important limitations as an analytical tool, and you should not consider it in isolation, or as a substitute for analysis of our results as reported under U.S. GAAP. For example,
•
does not reflect our capital expenditures, future requirements for capital expenditures or contractual commitments;
•
does not reflect changes in, or cash requirements for, our working capital needs;
•
does not reflect the significant interest expenses, or the cash requirements necessary to service interest or principal payments, on our debt;
| | ·
| | does not reflect our capital expenditures, future requirements for capital expenditures or contractual commitments;
| | | | A-1 | |
•
excludes income tax payments that represent a reduction in cash available to us; and
•
does not reflect any cash requirements for the assets being depreciated and amortized that may have to be replaced in the future.
(2)
For information regarding the income tax provision (benefit), see Note 10 to our Consolidated Financial Statements included in our Annual Report on Form 10-K for the year ended December 31, 2022.
(3)
During the year ended December 31, 2022, the Company recorded non-cash impairment charges related to its long-lived assets of $73.4 million on 68 theatres in the U.S. markets with 817 screens which were related to property, net and operating lease right-of-use assets, net and $59.7 million on 53 theatres in the International markets with 456 screens which were related to property, net and operating lease right-of-use assets, net.
(4)
Amounts represent preopening expense related to temporarily closed screens under renovation, theatre and other closure expense for the permanent closure of screens, including the related accretion of interest, disposition of assets and other non-operating gains or losses included in operating expenses. The Company has excluded these items as they are non-cash in nature or are non-operating in nature.
(5)
Includes U.S. non-theatre distributions from equity method investments and International non-theatre distributions from equity method investments to the extent received. The Company believes including cash distributions is an appropriate reflection of the contribution of these investments to the Company’s operations.
(6)
Attributable EBITDA includes the EBITDA from equity investments in theatre operators in certain international markets. See below for a reconciliation of the Company’s equity in loss of non-consolidated entities to attributable EBITDA. Because these equity investments are in theatre operators in regions where the Company holds a significant market share, the Company believes attributable EBITDA is more indicative of the performance of these equity investments and management uses this measure to monitor and evaluate these equity investments. The Company also provides services to these theatre operators including information technology systems, certain on-screen advertising services and the Company’s gift card and package ticket program.
Reconciliation of Attributable EBITDA
(dollars in millions)
(unaudited) | | | Year Ended
December 31, 2022 | |
| Equity in loss of non-consolidated entities | | | | $ | 1.6 | | |
| Less: | | | | | | | |
Equity in (earnings) of non-consolidated entities excluding international theatre joint
ventures | | | | | (5.4) | | |
| Equity in (loss) of international theatre joint ventures | | | | | (7.0) | | |
| Income tax expense | | | | | 0.1 | | |
| Investment expense | | | | | 0.2 | | |
| Interest expense | | | | | 0.1 | | |
| Impairment of long-lived assets | | | | | 4.2 | | |
| Depreciation and amortization | | | | | 2.8 | | |
| Attributable EBITDA | | | | $ | 0.4 | | |
(7)
Investment expense during the year ended December 31, 2022 includes a decline in estimated fair value of the Company’s investment in common shares of Hycroft Mining Holding Corporation of $12.5 million and a $13.5 million loss on sale of our investment in NCM common units, partially offset by $(6.2) million of appreciation in estimated fair value of the Company’s investment in warrants to purchase common shares of Hycroft Mining Holding Corporation and interest income of $(5.8) million.
(8)
Other expense during the year ended December 31, 2022, included loss on debt extinguishment of $92.8 million, $(25.8) million in government assistance related to COVID-19 and foreign currency transaction gains of $(12.3) million.
| | ·
A-2 | | does not reflect changes in, or cash requirements for, our working capital needs;
| | | | | |
(9)
Reflects amortization of certain intangible assets reclassified from depreciation and amortization to rent expense due to the adoption of ASC 842, Leases and deferred rent benefit related to the impairment of right-of-use operating lease assets.
(10)
Merger, acquisition and other costs are excluded as they are non-operating in nature.
(11)
Non-cash or non-recurring expense included in general and administrative: other.
Reconciliation of Free Cash Flow(1)
(dollars in millions)
(unaudited) | | | Year Ended
December 31, 2022 | |
| Net cash used in operating activities | | | | $ | (628.5) | | |
| Plus: total capital expenditures | | | | | (202.0) | | |
| Free cash flow(1) | | | | $ | (830.5) | | |
| Reconciliation of Capital Expenditures: | | | | | | | |
| Capital expenditures | | | | | | | |
| Growth capital expenditures(3) | | | | $ | 97.4 | | |
| Maintenance capital expenditures(2) | | | | | 102.2 | | |
| Change in construction payables(4) | | | | | 2.4 | | |
| Total capital expenditures | | | | $ | 202.0 | | |
(1)
“Free Cash Flow” is used herein solely as a performance measure for our EIP. See Compensation, Discussion and Analysis-Equity-Based Compensation Program. The term Free Cash Flow may differ from similar measures reported by other companies.
(2)
Maintenance capital expenditures are amounts required to keep our existing theatres in compliance with regulatory requirements and in a sustainable good operating condition, including expenditures for repair of HVAC, sight and sound systems, compliance with ADA requirements and technology upgrades of existing systems.
(3)
Growth capital expenditures are investments that enhance the guest experience and grow revenues and profits and include initiatives such as theatre remodels, acquisitions, newly built theatres, premium large formats, enhanced food and beverage offerings and service models and technology that enable efficiencies and additional revenue opportunities.
(4)
Change in construction payables are changes in amounts accrued for capital expenditures that fluctuate significantly from period to period based on the timing of actual payments.
| | ·
| | does not reflect the significant interest expenses, or the cash requirements necessary to service interest or principal payments, on our debt;
| | | | A-3 | |
APPENDIX B
PROPOSAL 1 AMENDMENTS
Certificate of Amendment to the Third
Amended and Restated Certificate of Incorporation
of
AMC Entertainment Holdings, Inc.
AMC Entertainment Holdings, Inc., a corporation organized and existing under and by virtue of the General Corporation Law of the State of Delaware (the “Corporation”), does hereby certify:
1.
That Article IV (Capital Stock) of the Third Amended and Restated Certificate of Incorporation of the corporation is hereby deleted in its entirety and replaced with the following language:
ARTICLE IV
CAPITAL STOCK
A. The total number of shares of capital stock that the Corporation has authority to issue is 600,000,000 shares, consisting of (i) 550,000,000 shares of Class A Common Stock, par value $0.01 per share (the “Common Stock”), and (iii) 50,000,000 shares of Preferred Stock, par value $0.01 per share (the “Preferred Stock”).
B. The Board of Directors is hereby expressly authorized, by resolution or resolutions, to establish, out of the unissued shares of Preferred Stock, one or more series of Preferred Stock and to determine, with respect to each such series, the number of shares constituting such series and the designation of such series, the voting powers (if any) of the shares of such series, and the preferences and relative, participating, optional or other special rights, if any, and any qualifications, limitations or restrictions thereof, of the shares of such series. The powers, preferences and relative, participating, optional and other special rights of each series of Preferred Stock, and the qualifications, limitations or restrictions thereof, if any, may differ from those of any and all other series at any time outstanding.
C. Subject to the rights of the holders of any outstanding series of Preferred Stock, the number of authorized shares of any of the Common Stock or the Preferred Stock may be increased or decreased (but not below the number of shares thereof then outstanding) by the affirmative vote of the holders of a majority in voting power of the stock of the Corporation entitled to vote thereon irrespective of the provisions of Section 242(b)(2) of the DGCL (or any successor provision thereto), and no vote of the holders of any of the Common Stock or the Preferred Stock voting separately as a class shall be required therefor.
D. Each holder of record of Common Stock shall have one vote for each share of Common Stock that is outstanding in his, her or its name on the books of the Corporation and which is entitled to vote.
E. In the election of directors, stockholders shall be entitled to cast for any one candidate no greater number of votes than the number of shares held by such stockholder; no stockholder shall be entitled to cumulate votes on behalf of any candidate. Except as otherwise required by law, holders of record of Common Stock shall not be entitled to vote on any amendment to this Third Amended and Restated Certificate of Incorporation (including any certificate of designations relating to any series of Preferred Stock) that relates solely to the terms of one or more outstanding series of Preferred Stock if the holders of such affected series are entitled, either separately or together with the holders of one or more other such series, to vote thereon pursuant to this Third Amended and Restated Certificate of Incorporation (including any certificate of designations relating to any series of Preferred Stock) or pursuant to the DGCL.
F. Subject to applicable law and rights, if any, of the holders of any outstanding shares of Preferred Stock or any class or series of stock having a preference over or the right to participate with the Common Stock with respect to the payment of dividends, dividends may be declared and paid on the Common Stock at such times and in such amounts as the Board of Directors in its discretion shall determine.
G. Upon the liquidation, dissolution, distribution of assets or winding up of the Corporation, subject to the rights, if any, of the holders of any outstanding series of Preferred Stock or any class or series of stock having a preference over or the
| | ·
| | excludes income tax payments that represent a reduction in cash available to us; and
| | | | B-1 | |
right to participate with the Common Stock with respect to the distribution of assets of the Corporation upon such dissolution, liquidation or winding up of the Corporation, the holders of Common Stock shall be entitled to receive the assets of the Corporation available for distribution to its stockholders in proportion to the number of shares held by them.
2.
That Article V (Board of Directors) of the Third Amended and Restated Certificate of Incorporation of the corporation is hereby deleted in its entirety and replaced with the following language:
ARTICLE V
BOARD OF DIRECTORS
The following provisions are inserted for the management of the business and for the conduct of the affairs of the Corporation and for the purpose of creating, defining, limiting, and regulating the powers of the Corporation and its directors and stockholders.
A. Subject to the rights of the holders of any class or series of Preferred Stock to elect directors, at each annual meeting of stockholders of the Corporation commencing with the annual meeting of stockholders to be held in 2023, all directors shall be elected for a one-year term, expiring at the next succeeding annual meeting of stockholders, by such stockholders having the right to vote on such election. The term of each director serving as of the date of the 2023 annual meeting of stockholders shall expire at such annual meeting of stockholders, notwithstanding that such director may have been elected for a term that extended beyond the date of such annual meeting. Each director shall serve until the director’s term expires in accordance with the foregoing provisions or until the director’s prior death, resignation, disqualification or removal from office; provided that each director shall serve notwithstanding the expiration of the director’s term until the director’s successor shall be duly elected and qualified.
B. Subject to any special rights of any holders of any class or series of Preferred Stock to elect directors, the numbers of directors shall be the number of directors as fixed from time to time in accordance with the bylaws of the Corporation.
C. Subject to this Article V, the election of directors may be conducted in any manner approved by the officer of the Corporation presiding at a meeting of the stockholders or the directors, as the case may be, at the time when the election is held and need not be by written ballot.
D. Any or all directors of the Corporation (other than the directors, if any, elected by the holders of any series of Preferred Stock, voting separately as one or more series, as the case may be) may be removed at any time either with or without cause by the affirmative vote of holders of at least a majority of the voting power of all the then outstanding shares of stock of the Corporation entitled to vote generally in the election of directors, voting as a single class.
E. Subject to any rights of the holders of shares of any class or series of Preferred Stock, if any, to elect additional directors under specified circumstances, any vacancy in the Board of Directors that results from an increase in the number of directors, from the death, disability, resignation, disqualification, removal of any director or from any other cause shall be filled solely by a majority of the total number of directors then in office, even if less than a quorum, or by a sole remaining director.
F. All corporate powers and authority of the Corporation (except as at the time otherwise provided by law, by this Third Amended and Restated Certificate of Incorporation or by the bylaws of the Corporation) shall be vested in and exercised by the Board of Directors.
3.
That Section C, Article VI (Action by Stockholder) of the Third Amended and Restated Certificate of Incorporation of the Corporation be deleted in its entirety and replaced with the following language:
C. Intentionally Omitted.
4.
That Article VIII (Corporate Opportunity) of the Third Amended and Restated Certificate of Incorporation of the Corporation be deleted in its entirety and replaced with the following language:
| | ·
B-2 | | does not reflect any cash requirements for the assets being depreciated and amortized that may have to be replaced in the future.
| | | | | |
ARTICLE VIII
Intentionally Omitted.
5.
That Article X (Definitions) of the Third Amended and Restated Certificate of Incorporation of the Corporation be deleted in its entirety and replaced with the following language:
ARTICLE X
Intentionally Omitted.
6.
The remaining provisions of the Third Amended and Restated Certification of Incorporation shall remain the same and in full force and effect.
7.
The foregoing amendment to the Third Amended and Restated Certificate of Incorporation of the Corporation was duly adopted in accordance with the provisions of Section 242 of General Corporation Law of the State of Delaware.
IN WITNESS WHEREOF, the Corporation has caused this Certificate of Amendment to the Third Amended and Restated Certificate of Incorporation to be executed by the undersigned officer, duly authorized, as of the 8th day of November, 2023.
AMC ENTERTAINMENT HOLDINGS, INC.
By:
Name:
Kevin M. Connor
Title:
Senior Vice President, General Counsel and Secretary
| | (2)
| | Amounts represent preopening expense related to temporarily closed screens under renovation, theatre and other closure expense for the permanent closure of screens including the related accretion of interest, non-cash deferred digital equipment rent expense, and disposition of assets and other non-operating gains or losses included in operating expenses. We have excluded these items as they are non-cash in nature, include components of interest cost for the time value of money or are non-operating in nature.
| | | | B-3 | |
APPENDIX C
PROPOSED STOCKHOLDER WRITTEN CONSENT BYLAWS
Section 10. Action by Consent.
(a) Unless otherwise restricted by the Certificate of Incorporation, any action required or permitted to be taken at any annual or special meeting of the stockholders may be taken without a meeting, without prior notice and without a vote, if a consent or consents, setting forth the action so taken, shall be signed by the holders of outstanding stock having not less than the minimum number of votes that would be necessary to authorize or take such action at a meeting at which all shares entitled to vote thereon were present and voted and shall be delivered to the Corporation by delivery (i) to its registered office in Delaware, its principal place of business, (ii) to an officer or agent of the Corporation having custody of the book in which proceedings of meetings of stockholders are recorded or (iii) to an information processing system, if any, designated by the Corporation for receiving such consents. Delivery of consents shall be by hand or by certified or registered mail, return receipt requested. Any such consent delivered to an information processing system designated by the Corporation for receiving consents must set forth or be delivered with information that enables the Corporation to determine the date of delivery of such consent and the identity of the person giving such consent, and if such consent is given by a person authorized to act for a stockholder as a proxy, such consent must comply with the applicable provisions of Section 212 of the DGCL. Any such consent given by electronic transmission shall be deemed delivered as provided by the DGCL. Any action taken pursuant to such consent or consents of the stockholders shall have the same force and effect as if taken by the stockholders at a meeting thereof.
(b) In order that the Corporation may determine the stockholders entitled to consent to corporate action in writing without a meeting, the Board of Directors may fix a record date, which record date shall not precede the date upon which the resolution fixing the record date is adopted by the Board of Directors, and which date shall not be more than ten (10) days after the date upon which the resolution fixing the record date is adopted by the Board of Directors. Any stockholder of record seeking to have the stockholders authorize or take corporate action by written consent shall, by written notice to the Secretary, request that the Board of Directors fix a record date. The Board of Directors shall promptly, but in all events within ten (10) days after the date on which such written notice is received, adopt a resolution fixing the record date (unless a record date has previously been fixed by the Board of Directors pursuant to the first sentence of this Section 10(b)). If no record date has been fixed by the Board of Directors pursuant to the first sentence of this Section 10(b) or otherwise within ten (10) days after the date on which such written notice is received, the record date for determining stockholders entitled to consent to corporate action in writing without a meeting, when no prior action by the Board of Directors is required by applicable law, shall be the first date after the expiration of such ten (10) day time period on which a signed written consent setting forth the action taken or proposed to be taken is delivered to the Corporation by delivery to its registered office in Delaware, its principal place of business, or to any officer or agent of the Corporation having custody of the book in which proceedings of meetings of stockholders are recorded. If no record date has been fixed by the Board of Directors pursuant to the first sentence of this Section 10(b), the record date for determining stockholders entitled to consent to corporate action in writing without a meeting if prior action by the Board of Directors is required by applicable law shall be at the close of business on the date on which the Board of Directors adopts the resolution taking such prior action.
(c) In the event of the delivery, in the manner provided by this Section 10 and applicable law, to the Corporation of written consent or consents to take corporate action and/or any related revocation or revocations, the Corporation shall engage independent inspectors of elections for the purpose of performing promptly a ministerial review of the validity of the consents and revocations. For the purpose of permitting the inspectors to perform such review, no action by written consent and without a meeting shall be effective until such inspectors have completed their review, determined that the requisite number of valid and unrevoked consents delivered to the Corporation in accordance with this Section 10 and applicable law have been obtained to authorize or take the action specified in the consents, and certified such determination for entry in the records of the Corporation kept for the purpose of recording the proceedings of meetings of stockholders. Nothing contained in this Section 10(c) shall in any way be construed to suggest or imply that the Board of Directors or any stockholder shall not be entitled to contest the validity of any consent or revocation thereof, whether before or after such certification by the independent inspectors, or to take any other action (including, without limitation, the commencement, prosecution or defense of any litigation with respect thereto, and the seeking of injunctive relief in such litigation).
(d) No written consent shall be effective to take the corporate action referred to therein unless, within sixty (60) days after the first date a written consent is received in accordance with this Section 10, a valid written consent or valid written consents signed by a sufficient number of stockholders to take such action are delivered to the Corporation in the manner prescribed in this Section 10 and applicable law, and not revoked.
| | (3)
| | Other expense for the prior year quarter and prior year related to the cash tender offer and redemption of the 9.75% Senior Subordinated Notes due 2020 and Term Loan due 2022. We exclude other expense and income related to financing activities as the amounts are similar to interest expense or income and are non-operating in nature.
| | | | C-1 | |
APPENDIX D
FOURTH AMENDED AND RESTATED CERTIFICATE OF INCORPORATION
FOURTH AMENDED AND RESTATED
CERTIFICATE OF INCORPORATION
OF
AMC ENTERTAINMENT HOLDINGS, INC.
AMC Entertainment Holdings, Inc., a corporation organized and existing under the laws of the State of Delaware (hereinafter, the “Corporation”), hereby certifies as follows:
FIRST: The original Certificate of Incorporation of the Corporation was filed with the Secretary of State of the State of Delaware (the “Secretary of State”) on June 6, 2007.
SECOND: This Fourth Amended and Restated Certificate of Incorporation has been duly adopted by the board of directors of the Corporation (the “Board of Directors”) and by the stockholders in accordance with Sections 242 and 245 of the General Corporation Law of the State of Delaware and amends and restates the provisions of the existing Amended and Restated Certificate of Incorporation of the Corporation, as amended and/or restated.
THIRD: The text of the Third Amended and Restated Certificate of Incorporation of the Corporation, as amended and/or restated, is hereby amended and restated in its entirety to read as follows:
ARTICLE I
NAME
The name of the Corporation is AMC Entertainment Holdings, Inc. (the “Corporation”).
ARTICLE II
REGISTERED OFFICE
The address of the Corporation’s registered office in the State of Delaware is to be located at 1209 Orange Street, Wilmington, New Castle County, Delaware 19801 and the name of its registered agent at such address is The Corporation Trust Company.
ARTICLE III
PURPOSE
The purpose or purposes of the Corporation is to engage in any lawful act or activity for which corporations may be organized under the General Corporation Law of the State of Delaware as the same exists or may hereafter be amended (the “DGCL”).
ARTICLE IV
CAPITAL STOCK
A. The total number of shares of capital stock that the Corporation has authority to issue is 600,000,000 shares, consisting of (i) 550,000,000 shares of Class A Common Stock, par value $0.01 per share (the “Common Stock”), and (iii) 50,000,000 shares of Preferred Stock, par value $0.01 per share (The “Preferred Stock”).
B. The Board of Directors is hereby expressly authorized, by resolution or resolutions, to establish, out of the unissued shares of Preferred Stock, one or more series of Preferred Stock and to determine, with respect to each such series, the number of shares constituting such series and the designation of such series, the voting powers (if any) of the shares of such series, and the preferences and relative, participating, optional or other special rights, if any, and any qualifications, limitations or restrictions thereof, of the shares of such series. The powers, preferences and relative, participating, optional
| | (4)
| | Merger, acquisition and transaction costs are excluded as it is non-operating in nature.
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and other special rights of each series of Preferred Stock, and the qualifications, limitations, or restrictions thereof, if any, may differ from those of any and all other series at any time outstanding.
C. Subject to the rights of the holders of any outstanding series of Preferred Stock, the number of authorized shares of any of the Common Stock or the Preferred Stock may be increased or decreased (but not below the number of shares thereof then outstanding) by the affirmative vote of the holders of a majority in voting power of the stock of the Corporation entitled to vote thereon irrespective of the provisions of Section 242(b)(2) of the DGCL (or any successor provision thereto), and no vote of the holders of any of the Common Stock or the Preferred Stock voting separately as a class shall be required therefor.
D. Each holder of record of Common Stock shall have one vote for each share of Common Stock that is outstanding in his, her or its name on the books of the Corporation and which is entitled to vote.
E. In the election of directors, stockholders shall be entitled to cast for any one candidate no greater number of votes than the number of shares held by such stockholder; no stockholder shall be entitled to cumulate votes on behalf of any candidate. Except as otherwise required by law, holders of record of Common Stock shall not be entitled to vote on any amendment to this Fourth Amended and Restated Certificate of Incorporation (including any certificate of designations relating to any series of Preferred Stock) that relates solely to the terms of one or more outstanding series of Preferred Stock if the holders of such affected series are entitled, either separately or together with the holders of one or more other such series, to vote thereon pursuant to this Fourth Amended and Restated Certificate of Incorporation (including any certificate of designations relating to any series of Preferred Stock) or pursuant to the DGCL.
F. Subject to applicable law and rights, if any, of the holders of any outstanding shares of Preferred Stock or any class or series of stock having a preference over or the right to participate with the Common Stock with respect to the payment of dividends, dividends may be declared and paid on the Common Stock at such times and in such amounts as the Board of Directors in its discretion shall determine.
G. Upon the liquidation, dissolution, distribution of assets or winding up of the Corporation, subject to the rights, if any, of the holders of any outstanding series of Preferred Stock or any class or series of stock having a preference over or the right to participate with the Common Stock with respect to the distribution of assets of the Corporation upon such dissolution, liquidation or winding up of the Corporation, the holders of Common Stock shall be entitled to receive the assets of the Corporation available for distribution to its stockholders in proportion to the number of shares held by them.
ARTICLE V
BOARD OF DIRECTORS
The following provisions are inserted for the management of the business and for the conduct of the affairs of the Corporation and for the purpose of creating, defining, limiting, and regulating the powers of the Corporation and its directors and stockholders:
A. Subject to the rights of the holders of any class or series of Preferred Stock to elect directors, at each annual meeting of stockholders of the Corporation commencing with the annual meeting of stockholders to be held in 2023, all directors shall be elected for a one-year term, expiring at the next succeeding annual meeting of stockholders, by such stockholders having the right to vote on such election. The term of each director serving as of the date of the 2023 annual meeting of stockholders shall expire at such annual meeting of stockholders, notwithstanding that such director may have been elected for a term that extended beyond the date of such annual meeting. Each director shall serve until the director’s term expires in accordance with the foregoing provisions or until the director’s prior death, resignation, disqualification, or removal from office; provided that each director shall serve notwithstanding the expiration of the director’s term until the director’s successor shall be duly elected and qualified.
B. Subject to any special rights of any holders of any class or series of Preferred Stock to elect directors, the numbers of directors shall be the number of directors as fixed from time to time in accordance with the bylaws of the Corporation.
C. Subject to this Article V, the election of directors may be conducted in any manner approved by the officer of the Corporation presiding at a meeting of the stockholders or the directors, as the case may be, at the time when the election is held and need not be by written ballot.
| | (5)
D-2 | | Non-cash or non-recurring expense included in General and Administrative: Other
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D. Any or all directors of Contentsthe Corporation (other than the directors, if any, elected by the holders of any series of Preferred Stock, voting separately as one or more series, as the case may be) may be removed at any time either with or without cause by the affirmative vote of holders of at least a majority of the voting power of all the then outstanding shares of stock of the Corporation entitled to vote generally in the election of directors, voting as a single class.
E. Subject to any rights of the holders of shares of any class or series of Preferred Stock, if any, to elect additional directors under specified circumstances, any vacancy in the Board of Directors that results from an increase in the number of directors, from the death, disability, resignation, disqualification, removal of any director or from any other cause shall be filled solely by a majority of the total number of directors then in office, even if less than a quorum, or by a sole remaining director.
F. All corporate powers and authority of the Corporation (except as at the time otherwise provided by law, by this Fourth Amended and Restated Certificate of Incorporation or by the bylaws of the Corporation) shall be vested in and exercised by the Board of Directors.
ARTICLE VI
DGCL SECTION 203
The Corporation shall not be governed by Section 203 of the DGCL (“Section 203”), and the restrictions contained in Section 203 shall not apply to the Corporation.
ARTICLE VII
INDEMNIFICATION; LIMITATION OF LIABILITY
A. The personal liability of the directors and officers for monetary damages for breach of fiduciary duty as a director and/or officer of the Corporation is hereby eliminated to the fullest extent permitted by the DGCL. Any repeal or modification of this Article VII shall not adversely affect any right or protection of a director or officer of the Corporation existing hereunder with respect to any act or omission occurring prior to such repeal or modification.
B. Each person who was or is a party or is made a party, threatened to be made a party to or is involved in any action, suit or proceeding, whether civil, criminal, administrative or investigative (a “Proceeding”), by reason of the fact that he or she, or a person of whom he or she is the legal representative, is or was a director or officer of the Corporation or is or was serving at the request of the Corporation as a director or officer of another corporation, or as its representative in a partnership, joint venture, trust or other enterprise, including service with respect to employee benefit plans (any such person, an “Indemnitee”), whether the basis of such Proceeding is alleged action in an official capacity as a director, officer or representative or in any other capacity while serving as a director, officer or representative, shall be indemnified and held harmless by the Corporation to the fullest extent permitted by the DGCL, as the same exists or may hereafter be amended (but, in the case of any such amendment to the fullest extent permitted by law, only to the extent that such amendment permits the Corporation to provide broader indemnification rights than said law permitted the Corporation to provide prior to such amendment), against all expenses, liability and loss (including attorneys’ fees, judgments, fines, Employee Retirement Income Security Act of 1974, as amended, excise taxes or penalties and amounts paid or to be paid in settlement) reasonably incurred or suffered by him or her in connection therewith and such indemnification shall continue as to an Indemnitee who has ceased to be a director, officer, employee or agent and shall inure to the benefit of his or her heirs, executors, and administrators. Such right shall be a contract right and shall include the right to be paid by the Corporation expenses incurred in defending any such Proceeding in advance of its final disposition; provided, however, if the DGCL requires, the payment of such expenses shall be made only upon delivery to the Corporation of an undertaking, by or on behalf of such person to repay all amounts so advanced if it should be determined ultimately by final judicial decision from which there is no further right to appeal that such person is not entitled to be indemnified under this Article VII or otherwise. Unless otherwise required by law, the burden of proving that the Indemnitee is not entitled to be indemnified or to such advancement of expenses under this Article VII shall be on the Corporation. The Corporation may, by action of the Board, provide indemnification to employees and/or agents with the same scope and effect as the foregoing indemnification of directors and officers. Notwithstanding anything to the contrary in this Article VII and except as provided in paragraph (C) of this Article VII with respect to Proceedings to enforce rights to indemnification, the Corporation shall not be required to indemnify any Indemnitee against expenses incurred in connection with a Proceeding (or part thereof) initiated by such Indemnitee unless the initiation of the Proceeding (or part thereof) was approved by the Board of Directors.
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| MMMMMMMMMMMM . Admission Ticket MMMMMMMMMMMMMMM C123456789 000004 000000000.000000 ext 000000000.000000 ext 000000000.000000 ext 000000000.000000 ext 000000000.000000 ext 000000000.000000 ext ENDORSEMENT_LINE______________ SACKPACK_____________ Electronic Voting Instructions Available 24 hours a day, 7 days a week! Instead of mailing your proxy, you may choose one of the voting methods outlined below to vote your proxy. VALIDATION DETAILS ARE LOCATED BELOW IN THE TITLE BAR. Proxies submitted by the Internet or telephone must be received by 1:00 a.m., Central Time, on April 26, 2017 MR A SAMPLE DESIGNATION (IF ANY) ADD 1 ADD 2 ADD 3 ADD 4 ADD 5 ADD 6 Vote by Internet • Go to www.envisionreports.com/AMC • Or scan the QR code with your smartphone • Follow the steps outlined on the secure website Vote by telephone • Call toll free 1-800-652-VOTE (8683) within the USA, US territories & Canada on a touch tone telephone • Follow the instructions provided by the recorded message Using a black ink pen, mark your votes with an X as shown in this example. Please do not write outside the designated areas. q IF YOU HAVE NOT VOTED VIA THE INTERNET OR TELEPHONE, FOLD ALONG THE PERFORATION, DETACH AND RETURN THE BOTTOM PORTION IN THE ENCLOSED ENVELOPE. q Proposals — The Board recommends a vote FOR all the nominees in Proposal 1 and FOR Proposals 2 and 3. + 1. Election of Directors for terms expiring at the 2020 Annual Meeting. For Withhold For Withhold For Withhold 01 - Mr. Anthony J. Saich 02 - Mr. Gary F. Locke 03 - Ms. Kathleen M. Pawlus For Against Abstain ForAgainst Abstain 2. Proposal to ratify the appointment of KPMG LLP as the Company’s independent registered public accounting firm for 2017. 3. Say on Pay - An advisory vote to approve the compensation of named executive officers. Non-Voting Items Change of Address — Please print your new address below. Comments — Please print your comments below. Meeting Attendance Mark the box to the right if you plan to attend the Annual Meeting. Authorized Signatures — This section must be completed for your vote to be counted. — Date and Sign Below Please sign exactly as name(s) appears hereon. Joint owners should each sign. When signing as attorney, executor, administrator, corporate officer, trustee, guardian, or custodian, please give full title. Date (mm/dd/yyyy) — Please print date below. Signature 1 — Please keep signature within the box. Signature 2 — Please keep signature within the box. MMMMMMMC 1234567890 J N T MR A SAMPLE (THIS AREA IS SET UP TO ACCOMMODATE 140 CHARACTERS) MR A SAMPLE AND MR A SAMPLE AND MR A SAMPLE AND MR A SAMPLE AND MR A SAMPLE AND MR A SAMPLE AND MR A SAMPLE AND MR A SAMPLE AND + 1 U P X3 1 5 1 2 9 1 02JKPE MMMMMMMMM C B A Annual Meeting Proxy Card1234 5678 9012 345 X IMPORTANT ANNUAL MEETING INFORMATION
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C. If a claim under this Article VII is not paid in full by the Corporation within thirty days after a written claim has been received by the Corporation, the Indemnitee may at any time thereafter bring suit against the Corporation to recover the unpaid amount of the claim and if successful, in whole or in part, the Indemnitee shall be entitled to be paid also the expense of prosecuting such claim. It shall be a defense to any such action (other than an action brought to enforce a claim for expenses incurred in defending any Proceeding in advance of its final disposition where the undertaking, if any is required, has been tendered to the Corporation) that the Indemnitee has not met the standards of conduct which make it permissible under the DGCL for the Corporation to indemnify the Indemnitee for the amount claimed, but the burden of proving such defense shall be on the Corporation. Neither the failure of the Corporation (including its Board of Directors, independent legal counsel, or its stockholders) to have made a determination prior to the commencement of such action that indemnification of the Indemnitee is proper in the circumstances because he has met the applicable standard of conduct set forth in the DGCL, nor an actual determination by the Corporation (including its Board of Directors, independent legal counsel, or its stockholders) that the Indemnitee had not met such applicable standard of conduct, shall be a defense to the action or create a presumption that the Indemnitee had not met the applicable standard of conduct.
D. Any amendment, alteration, or repeal of this Article VII that adversely affects any right of an Indemnitee or his or her successors shall be prospective only and shall not limit or eliminate any such right with respect to any proceeding involving any occurrence or alleged occurrence of any action or omission to act that took place prior to such amendment or repeal.
E. The rights conferred by this Article VII shall not be exclusive of any other right which such Indemnitees may have or hereafter acquire under any statute, provision, bylaw, agreement, vote of stockholders or disinterested directors or otherwise.
F. The Corporation may maintain insurance, at its expense, to protect itself and any director, officer, or representative against any such expense, liability, or loss, whether or not the Corporation would have the power to indemnify him against such expense, liability or loss under the DGCL.
ARTICLE VIII
AMENDMENT
A. The Corporation reserves the right to amend, alter, change, or repeal any provision contained in this Fourth Amended and Restated Certificate of Incorporation in the manner now or hereafter prescribed by the DGCL, and all rights conferred upon stockholders herein are granted subject to this reservation.
B. In furtherance and not in limitation of the power conferred upon the Board of Directors by law, the Board of Directors shall have the power without the assent or vote of the stockholders to adopt, amend, alter, or repeal the bylaws of the Corporation.
IN WITNESS WHEREOF, the undersigned has caused this Fourth Amended and Restated Certificate of Incorporation to be executed by a duly authorized officer of the Corporation, this day of November, 2023.
AMC ENTERTAINMENT HOLDINGS, INC.
By:
Title:
Senior Vice President, General Counsel and Secretary
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D-4 | . 2017 Annual Meeting Admission Ticket 2017 Annual Meeting of AMC Entertainment Holdings, Inc. Stockholders Wednesday, April 26, 2017, 4:00 p.m. Central Time AMC Theatre Support Center One AMC Way, 11500 Ash Street, Leawood, Kansas 66211 Upon arrival, please present this admission ticket and photo identification at the registration desk. Important notice regarding the Availability of Proxy Materials for the Stockholder Meeting To Be Held on April 26, 2017: You can view the 2016 Annual Report to Stockholders and the Proxy Statement on the Internet at: www.envisionreports.com/amc without charge. q IF YOU HAVE NOT VOTED VIA THE INTERNET OR TELEPHONE, FOLD ALONG THE PERFORATION, DETACH AND RETURN THE BOTTOM PORTION IN THE ENCLOSED ENVELOPE. q Proxy — AMC Entertainment Holdings, Inc. 2017 Annual Meeting of Stockholders AMC Theatre Support Center One AMC Way, 11500 Ash Street, Leawood, Kansas 66211 Proxy Solicited by Board of Directors for Annual Meeting — April 26, 2017 Kevin Connor, Craig Ramsey, Michael Zwonitzer, or any of them, each with full power of substitution, are hereby authorized to represent and vote the shares of the undersigned, with all the powers which the undersigned would possess if personally present, at the Annual Meeting of Stockholders of AMC Entertainment Holdings, Inc. to be held on April 26, 2017 or at any postponement or adjournment thereof. Shares represented by this proxy will be voted as directed by the stockholder. If no such directions are indicated, the Proxies will vote FOR all nominees in Proposal 1 and FOR Proposals 2 and 3. In their discretion, the Proxies are authorized to vote upon such other business as may properly come before the meeting. (Items to be voted appear on reverse side.)
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APPENDIX E
PROPOSED STOCKHOLDER SPECIAL MEETING BYLAWS
Section 2. Special Meetings.(a) Special meetings of stockholders may be called at any time but only by the Board of Directors or, in accordance with Section 2(b), by the Secretary of the Corporation. Unless otherwise provided by law, notice of all special meetings of the stockholders, stating the time, date, place, if any, and the purposes thereof shall be given to each stockholder entitled to vote thereat not more than sixty days or less than ten days before the date of the meeting. Business transacted at any special meeting of stockholders shall be limited to the purposes stated in the notice for such meeting. Whenever the directors shall fail to fix such place, the meeting shall be held at the principal executive office of the Corporation. The Corporation may postpone, reschedule or cancel any special meeting of stockholders previously scheduled by the Board of Directors.
(b) A special meeting of stockholders shall be called by the Secretary upon written request (a “Special Meeting Request”) of one or more record holders of shares of stock of the Corporation representing not less than twenty percent (20%) of the voting power of all outstanding shares of stock of the Corporation (the “Requisite Percentage”) who have complied in full with the requirements set forth in this Section 2(b).
(i) A Special Meeting Request must be delivered by hand or by registered U.S. mail, postage prepaid, return receipt requested, or courier service, postage prepaid, to the attention of the Secretary at the principal executive offices of the Corporation. A Special Meeting Request shall be valid only if it is signed and dated by each stockholder or such stockholder’s duly authorized agent of record submitting the Special Meeting Request, (each, a “Requesting Stockholder”) collectively representing the Requisite Percentage, and includes (A) a statement of the specific purpose(s) of the special meeting and the reasons for conducting such business at the special meeting; (B) as to any director nominations proposed to be presented at the special meeting and any matter (other than a director nomination) proposed to be conducted at the special meeting and as to each Requesting Stockholder, the information, statements, representations, agreements and other documents that would be required to be set forth in or included with a stockholder’s notice of a nomination pursuant to Section 1 (including any nominee’s written consent to being named in the Corporation’s proxy statement as a nominee and to serving as a director if elected and a completed and signed representation and agreement as required by Section 1 of these Bylaws) and/or a stockholder’s notice of business proposed to be brought before a meeting pursuant to Section 1, as applicable; (C) a representation that each Requesting Stockholder, or one or more qualified representatives as defined in Section 1, of each such stockholder, intends to appear in person or by proxy at the special meeting to present the nomination(s) or business to be brought before the special meeting; (D) an agreement by the Requesting Stockholders to notify the Corporation promptly in the event of any disposition prior to the record date for the special meeting of shares of the Corporation owned beneficially or of record and an acknowledgement that any such disposition shall be deemed to be a revocation of such Special Meeting Request with respect to such disposed shares; and (E) documentary evidence that the Requesting Stockholders own the Requisite Percentage as of the date on which the Special Meeting Request is delivered to the Secretary. In addition, the Requesting Stockholders shall (x) further update and supplement the information provided in the Special Meeting Request, if necessary, so that the information provided or required to be provided therein shall be true and correct as of the record date for the special meeting and a date that is fifteen (15) days prior to the special meeting or any adjournment or postponement thereof, and such update and supplement shall be delivered to, or mailed and received by, the Secretary at the principal executive offices of the Corporation not later than five business days following the later of the record date for the meeting or the date notice of the record date is first publicly disclosed in the case of the update and supplement required to be made as of the record date and not later than fifteen (15) days prior to the date of the special meeting or any adjournment or postponement thereof in the case of the update and supplement required to be made as of fifteen (15) days prior to the special meeting or any adjournment or postponement thereof and (y) promptly provide any other information reasonably requested by the Corporation.
(ii) A Special Meeting Request shall not be valid, and a special meeting requested by stockholders shall not be held, if (A) the Special Meeting Request does not comply with this Section 2(b); (B) the Special Meeting Request relates to an item of business that is not a proper subject for stockholder action under applicable law (as determined in good faith by the Board of Directors); (C) the Special Meeting Request is delivered during the period commencing
one-hundred and twenty (120) days prior to the first anniversary of the date of the immediately preceding annual meeting of stockholders and ending on the earlier of (x) the date of the next annual meeting and (y) thirty (30) days after the first anniversary of the date of the previous annual meeting; (D) an identical or substantially similar item (as determined in good faith by the Board of Directors, a “Similar Item”), other than the election of directors, was presented at an annual or special meeting of stockholders held not more than twelve (12) months before the Special Meeting Request is delivered; (E) a Similar Item was presented at an annual or special meeting of stockholders held not more than one-hundred and twenty (120) days before the Special Meeting Request is delivered (and, for purposes of this clause (E), the election of directors shall be deemed to be a “Similar Item” with respect to all items of business involving the election or removal of directors, changing the size of the Board of Directors and the filling of vacancies and/or newly created directorships resulting from any increase in the authorized number of directors); (F) a Similar Item is included in the Corporation’s notice of meeting as an item of business to be brought before an annual or special meeting of stockholders that has been called but not yet held or that is called for a date within one-hundred and twenty (120) days of the receipt by the Corporation of a Special Meeting Request; or (G) the Special Meeting Request was made in a manner that involved a violation of Regulation 14A under the Exchange Act or other applicable law.
(iii) Special meetings of stockholders called pursuant to this Section 2(b) shall be held at such place, if any, on such date, and at such time as the Board of Directors shall fix; provided, however, that the special meeting shall not be held more than one-hundred and twenty (120) days after receipt by the Corporation of a valid Special Meeting Request.
(iv) The Requesting Stockholders may revoke a Special Meeting Request by written revocation delivered to the Secretary at the principal executive offices of the Corporation at any time prior to the special meeting. If, at any point after sixty (60) days following the date the first Special Meeting Request is delivered to the Corporation, the unrevoked requests from Requesting Stockholders (whether by specific written revocation or deemed revocation pursuant to clause (D) of Section 2(b)(i)), represent in the aggregate less than the Requisite Percentage, the Board of Directors, in its discretion, may cancel the special meeting.
(v) In determining whether a special meeting of stockholders has been requested by the Requesting Stockholders representing in the aggregate at the least the Requisite Percentage, multiple Special Meeting Requests delivered to the Secretary of the Corporation will be considered together only if (A) each Special Meeting Request identifies substantially the same purpose or purposes of the special meeting and substantially the same matters proposed to be acted on at the special meeting, in each case as determined by the Board of Directors (which, if such purpose is the election or removal of directors, changing the size of the Board of Directors and/or the filling of vacancies and/or newly created directorships resulting from any increase in the authorized number of directors, will mean that the exact same person or persons are proposed for election or removal in each relevant Stockholder Meeting Request), and (B) such Special Meeting Requests have been dated and delivered to the Secretary of the Corporation within sixty (60) days of the earliest dated Special Meeting Request.
(vi) If none of the Requesting Stockholders appear or send a qualified representative to present the nomination or the business to be presented for consideration specified in the Special Meeting Request, the Corporation need not present such nomination or business for a vote at the special meeting, notwithstanding that proxies in respect of such matter may have been received by the Corporation.
(vii) Business transacted at any special meeting called pursuant to this Section 2(b) shall be limited to (A) the purpose(s) stated in the valid Special Meeting Request received from the Requisite Percentage of record holders and (B) any additional matters that the Board of Directors determines to include in the Corporation’s notice of the special meeting.
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000004ENDORSEMENT_LINE______________ SACKPACK_____________ 000000000.000000 ext000000000.000000 ext000000000.000000 ext 000000000.000000 ext000000000.000000 ext000000000.000000 ext MR A SAMPLE DESIGNATION (IF ANY) ADD 1ADD 2ADD 3ADD 4ADD 5ADD 6Using a black ink pen, mark your votes with an X as shown in this example. Please do not write outside the designated areas. Your vote matters – here’s how to vote!You may vote online or by phone instead of mailing this card.Votes submitted electronically must be received by 11:59 p.m., Eastern Time, on November 7, 2023OnlineGo to www.envisionreports.com/AMC or scan the QR code — login details are located in the shaded bar below.PhoneCall toll free 1-800-652-VOTE (8683) within the USA, US territories and CanadaSave paper, time and money! Sign up for electronic delivery at www.envisionreports.com/AMC T IF VOTING BY MAIL, SIGN, DETACH AND RETURN THE BOTTOM PORTION IN THE ENCLOSED ENVELOPE. T1.Proposal to amend the Company’s Third Amended and Restated Certificate of Incorporation to declassify the Board of Directors, shorten all existing terms to expire at the Annual Meeting, and make certain other immaterial changes to the Certificate of Incorporation.2(a). If Proposal No. 1 is approved, Election of Directors for terms expiring at the 2024 Annual Meeting.ForWithholdForWithhold ForAgainst Abstain+ForWithhold 01– Mr. Adam M. Aron 02– Ms. Denise M. Clark 03– Mr. Howard W. “Hawk” Koch, Jr. 04– Mr. Philip Lader 05– Mr. Gary F. Locke 06– Ms. Kathleen M. Pawlus 07– Ms. Keri S. Putnam 08– Dr. Anthony J. Saich 09– Mr. Adam J. Sussman 2(b). If Proposal No. 1 is not approved, Election of Directors for terms expiring at the 2026 Annual Meeting.ForWithholdForWithhold01 – Ms. Denise M. Clark02 – Ms. Keri S. Putnam 3.Proposal to amend the Company’s Third Amended and Restated Certificate of Incorporation to eliminate the prohibition against stockholders acting by written consent. ForAgainst AbstainForAgainst Abstain4.Proposal to amend the Company’s Third Amended and RestatedCertificate of Incorporation to remove the limitation on stockholders’ ability to call special meetings. 5.Proposal to amend the Company’s Third Amended and Restated Certificate of Incorporation to expand the exculpation provision to limit the liability of certain officers.7. Say on Pay – An advisory vote to approve the compensation of named executive officers. ForAgainst Abstain ForAgainst Abstain 6. Proposal to ratify the appointment of Ernst & Young LLP as the Company’s independent registered public accounting firm for 2023.8. Proposal to approve one or more adjournments of the Annual Meeting, if necessary, to permit further solicitation of proxies if there are insufficient votes to adopt the foregoing proposals. ForAgainst Abstain ForAgainst Abstain C 1234567890J N T1 U P X5 8 7 8 9 7 MR A SAMPLE (THIS AREA IS SET UP TO ACCOMMODATE 140 CHARACTERS) MR A SAMPLE AND MR A SAMPLE AND MR A SAMPLE AND MR A SAMPLE AND MR A SAMPLE AND MR A SAMPLE AND MR A SAMPLE AND MR A SAMPLE AND
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2023 Annual Meeting Admission Ticket2023 Annual Meeting ofAMC Entertainment Holdings, Inc. Stockholders Wednesday, November 8, 2023, 1:00 p.m. Central Time AMC Theatre Support Center, located atOne AMC Way, 11500 Ash Street, Leawood, Kansas 66211Upon arrival, please present this admission ticket and photo identification at the registration desk.Important notice regarding the Availability of Proxy Materials for the Stockholder Meeting To Be Held on November 8, 2023:You can view the 2022 Annual Report to Stockholders and the 2023 Proxy Statement on the Internet at: www.envisionreports.com/amc without charge.T IF VOTING BY MAIL, SIGN, DETACH AND RETURN THE BOTTOM PORTION IN THE ENCLOSED ENVELOPE. T2023 Annual Meeting of Stockholders AMC Theatre Support Center, located atOne AMC Way, 11500 Ash Street, Leawood, Kansas 66211Proxy Solicited by Board of Directors for Annual Meeting — November 8, 2023Kevin Connor, Sean Goodman, or any of them, each with full power of substitution, are hereby authorized to represent and vote the shares of the undersigned, with all the powers which the undersigned would possess if personally present, at the Annual Meeting of Stockholders of AMC Entertainment Holdings, Inc. to be held on November 8, 2023 or at any postponement or adjournment thereof.Shares represented by this proxy will be voted as directed by the stockholder. If no such directions are indicated, the Proxies will vote FOR Proposal 1, FOR each Director Nominee in Proposal 2(a) or 2(b), and FOR Proposals 3, 4, 5, 6, 7, and 8.In their discretion, the Proxies are authorized to vote upon such other business as may properly come before the meeting. (Items to be voted appear on reverse side.)Please sign exactly as name(s) appears hereon. Joint owners should each sign. When signing as attorney, executor, administrator, corporate officer, trustee, guardian, or custodian, please give full title.Date (mm/dd/yyyy) — Please print date below.Signature 1 — Please keep signature within the box.Signature 2 — Please keep signature within the box. Change of Address — Please print new address below.Comments — Please print your comments below.Meeting AttendanceMark box to the right if you plan to attend the Annual Meeting.+
0001411579 2 2022-01-01 2022-12-31
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