For each executive officer, the SPSU grant is divided into 6 equal tranches with each tranche vesting upon attainment of target prices for AMC’s Class A common stock as set forth below:
| |
Tranche | Target Price (20-day VWAP) |
I | $12 |
II | $16 |
III | $20 |
IV | $24 |
V | $28 |
VI | $32 |
Modification of 2018 and 2019 PSU Awards
On February 26, 2020, based upon the recommendation of the Compensation Committee, the Board of Directors of the Company approved a modification to PSUs that were awarded under the EIP in 2018 and 2019 (the “2018 and 2019 PSUs”) to eliminate the net profit performance target threshold. The 2018 and 2019 PSUs were awarded to the following named executive officers: Mr. Adam Aron, Mr. Craig Ramsey, Mr. John McDonald, Ms. Elizabeth Frank, and Mr. Mark McDonald, as well as other senior officers. These PSUs vest subject to the attainment of certain financial performance goals over a three-year performance period, as described in the Company’s definitive proxy statement on Schedule 14A in connection with its 2019 Annual Meeting of Stockholders, filed on April 2, 2019 (for the 2018 PSUs), and as will be described in the Company’s definitive proxy statement on Schedule 14A in connection with its 2020 Annual Meeting of Stockholders, to be filed within 120 days after December 31, 2019 (for the 2019 PSUs).
The Board of Directors of the Company determined that the net profit threshold included in the performance goals for the 2018 and 2019 PSUs is not an appropriate condition for the vesting of such PSUs, which are otherwise subject to the attainment of an adjusted EBITDA target and a diluted earnings per share target in order to vest. The Company is currently evaluating the impact on its consolidated financial statements for the three months ended March 31, 2020.
Release Agreement
On February 28, 2020, the Company entered into a cooperation & release agreement with Mr. Mark McDonald (the “Release”). The departure of Mr. McDonald, the Company’s now former Executive Vice President, Development, was previously announced in the Form 8-K filed on January 8, 2020. Mr. McDonald left the Company effective February 28, 2020.
Pursuant to the Release, in exchange for Mr. McDonald’s execution and compliance with the Release and in lieu of any severance benefits under his employment agreement with the Company, Mr. McDonald will receive $800,000.00, less applicable withholding taxes, as severance, and subject to his compliance with the terms of the Release, a special RSU award representing 75,000 shares of stock of the Company, which will be settled in January 2021, subject to applicable tax and other withholdings. Mr. McDonald is required to provide the Company assistance with respect to pending litigation and investigatory matters arising out of his employment and is bound by a limited two-year non-compete, as described in the Release. Each of the Company and Mr. McDonald provide mutual releases, subject to certain exceptions described in the Release. The Release is filed as Exhibit 10.2 hereto and is incorporated herein by reference.