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Item 9A. Controls and Procedures

2024-02-28 compared with 2023-02-28 · 81 added, 48 removed, 254 unchanged (34% of the section changed)

11 unchanged sentences

Other Information .

Trading Arrangements

In the fourth quarter of 2023, no director or officer (as defined in Exchange Act Rule 16a-1(f)) of AMC adopted or terminated a Rule 10b5-1 trading arrangement or non-Rule 10b5-1 trading arrangement for the purchase or sale of securities of the Company, within the meaning of Item 408 of Regulation S-K.

Additionally, AMC Entertainment Holdings, Inc.

did not adopt or terminate any Rule 10b5-1 trading arrangement during the fourth quarter of 2023.

Amendments to Bylaws

On February 22, 2024, the Company’s board of directors adopted the Fourth Amended and Restated Bylaws of the Company (the “Bylaws”).

The Bylaws were amended to reflect, among other things, the following changes (capitalized terms used but not defined herein have the meanings ascribed to them in the Bylaws):

● Article II was revised to:

o reflect several changes to the meetings of the stockholders, including that (i) the Company may now postpone, reschedule, or cancel any annual meeting of stockholders previously scheduled by the Board;

(ii) the advance notice provision for stockholder proposals (including nominations) was updated;

and (iii) the time period for nominations/proposals to require a stockholder’s notice was amended;

o clarify the ability of the Company to hold virtual meetings;

o update access to stockholder lists consistent with current provisions of the General Corporation Law of the State of Delaware (“DGCL”);

o revise the default vote for stockholder action to a majority of votes cast;

o allow stockholders to file proxies electronically.

● Article III was revised to:

o remove the requirement that the Board meet at least four times per year in the United States;

o allow the Board to delegate full power and authority to committees;

o clarify that the CEO may only preside over a meeting of the Board if the CEO is also a member of the Board.

● Article IV was revised to clarify that the Board appoints officers, but the CEO also can appoint Vice Presidents.

● Article V was revised to remove unnecessary sections.

● Article VII was revised to:

o update the general requirements for delivering notice to stockholders or directors to conform to current provisions of the DGCL;

o conform the waiver of notice provisions to current provisions of the DGCL.

● Article IX was revised to update the Delaware forum selection provisions.

The foregoing description of the amendments to the Company’s Bylaws does not purport to be complete and is qualified in its entirety by the full text of the Fourth Amended and Restated Bylaws, which is attached hereto as Exhibit 3.2 in unmarked form, and as Exhibit 3.2(a) in redline form marked to show the changes described above, and are incorporated herein by reference.

Annual Meeting of Stockholders

On February 22, 2024, the Company’s board of directors scheduled the Company’s 2024 annual meeting of stockholders (the “2024 Annual Meeting”) for June 5, 2024, at 1:00 p.m.

Central Time at the Company’s Theatre Support Center located at One AMC Way, 11500 Ash Street, Leawood, Kansas 66211.

The record date for the 2024 Annual Meeting will be April 11, 2024.

The Company’s 2023 Annual Meeting was postponed until November 8, 2023, in order to allow for the resolution of pending litigation.

As disclosed in the proxy statement for the 2023 Annual Meeting, the Company is returning to a more normalized annual meeting schedule.

In the proxy statement for the 2023 Annual Meeting, the Company stated that, because the date of the 2024 Annual Meeting was expected to change by more than 30 days from the anniversary date of the 2023 Annual Meeting, it was 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 informed stockholders that to be considered for inclusion in the 2024 Proxy, stockholder proposals submitted under Rule 14a-8 must be 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 5:00 pm Central Time on December 31, 2023, which the Company determined to be a reasonable time before it expects to begin to print and send the 2024 Proxy.

Further, because the date of the 2024 Annual Meeting is more than 30 days before the anniversary date of the 2023 Annual Meeting, 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 be considered timely, it must be received no earlier than 120 days prior to such annual meeting and not later than the close of business on the later of the 90 th day prior to such annual meeting or the 10 th day following the public announcement of the meeting date.

Accordingly, in order for a stockholder proposal to be submitted outside of Rule 14a-8 of the Exchange Act or a director nomination submitted by a stockholder to be considered timely for the 2024 Annual Meeting, it must be received by the Corporate Secretary not later than March 9, 2024.

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, stockholders 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.

Accordingly, to comply with the universal proxy rules, stockholders 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 April 6, 2024.

Compensatory Arrangements of Certain Officers

In order to recognize the ongoing extraordinary efforts of the Company’s management team as the theatrical exhibition industry continues to lag its pre-pandemic performance, encourage continued engagement, and incentivize executives during continued difficult business conditions, on February 23, 2023, the Compensation Committee of the Company’s Board of Directors (the “Committee”), in consultation with the Company’s independent compensation consultant, approved immediately vested awards of the Company’s Common Stock and AMC Preferred Equity Units under the 2013 Equity Incentive Plan (“EIP”), to certain officers, including the named executive officers (“NEOs”) as described below:

AMC Preferred Equity Units

Elizabeth Frank

As described in the Company’s definitive proxy statement on Schedule 14A in connection with its 2022 Annual Meeting of Stockholders, filed on April 29, 2022, each year the Committee approves annual grants under the EIP, half of which are designated as performance stock units (“PSUs”).

In order to recognize the ongoing extraordinary efforts of the Company’s management team as the theatrical exhibition industry continues to lag its pre-pandemic performance, encourage continued engagement, and incentivize executives during continued difficult business conditions, on February 22, 2024, the Compensation Committee of the Company’s Board of Directors (the “Committee”), in consultation with the Company’s independent compensation consultant, approved modification of the performance goals for the fiscal year ended December 31, 2023, applicable to certain Performance Stock Units (“PSUs”) granted under the 2013 Equity Incentive Plan (“EIP”) to certain officers, including the named executive officers (“NEOs”) and certified achievement measured against such modified performance goals.

As described in the Company’s definitive proxy statement on Schedule 14A in connection with its 2023 Annual Meeting of Stockholders, filed on September 29, 2023, each year the Committee approves annual grants under the EIP, half of which are designated as PSUs.

The PSUs are divided into three equal tranches with each tranche allocated to a fiscal year during the three-year period covered by the grant (each a “Tranche Year”).

is eligible to vest based upon attainment of certain financial performance goals during its applicable Tranche Year.

Each tranche is eligible to vest based upon attainment of certain financial performance goals during its applicable Tranche Year.

The performance goals are established at the beginning of the applicable Tranche Year based upon the Company’s financial plan, which in turn is highly dependent upon forecasts of overall industry box office.

For the 2022 Tranche Year, primarily due to changes to studio movie release schedules which is outside the control of the Company, industry box office was significantly lower than the forecasts upon which the performance goals were predicated.

As a result, PSUs allocated to the 2022 Tranche Year with Adjusted EBITDA performance goals vested at 0% and those with Free Cash Flow performance goals vested at only 79%.

The awards reflected in the table were calculated based upon the difference between the vesting level of the PSUs allocated to the 2022 Tranche Year and the maximum vesting level of such PSUs, which the Committee believes would have been achieved had the performance goals been set based upon the ultimate industry box office level.

Given the management team’s continued focus on maximizing results despite industry factors outside its control, the Committee felt that the awards were justified and consistent with the goals of the Company’s executive compensation programs, namely to attract, retain, motivate and reward talented executives.

As a result of the awards to the NEOs and other officers, in the first quarter of 2023 the Company estimates it will issue approximately 1.3 million shares of Common Stock and 1.3 million AMC Preferred Equity Units each net of tax withholding, incur approximately $20.2 of stock compensation expense, and make estimated cash payments of approximately $9.1 million to cover tax withholding.

For the 2023 Tranche Year, primarily due to changes to studio movie release schedules in response to lengthy strikes by the Writers Guild of America and the Screen Actors Guild–American Federation of Television and Radio Artists which were outside the control of the Company, industry box office was significantly lower than the forecasts upon which the performance goals were predicated.

As a result, PSUs allocated to the 2023 Tranche Year with unmodified Adjusted EBITDA performance goals would have vested at only 86% and those with unmodified Free Cash Flow performance goals vested at 0%.

The Committee determined that it was equitable to modify the 2023 Tranche Year performance goals to reflect actual industry conditions during the 2023 Tranche Year.

After modification of the performance goals, the PSUs allocated to the 2023 tranche year with both adjusted EBITDA and Free Cash Flow performance goals will vest at the maximum permitted level of 200%.

Given the management team’s continued focus on maximizing results despite industry factors outside its control, the Committee felt that the modifications were justified and consistent with the goals of the Company’s executive compensation programs, namely to attract, retain, motivate and reward talented executives.

The table below reflects the incremental number of shares issuable to NEOs as a result of the modification of the performance goals

Elizabeth Frank

As a result of the modification of the performance goals, in the first quarter of 2024 the Company estimates it will issue approximately 260,000 additional shares of Common Stock net of tax withholding, incur approximately $2.1 million of incremental stock compensation expense, and make estimated incremental cash payments of approximately $1.0 million to cover tax withholding.

Disclosure Regarding Foreign Jurisdictions that Prevent Inspections.

4 unchanged sentences

Executive Compensation.

The information called for by this item is set forth under the headings “Executive Compensation”, “Compensation Committee Report on Executive Compensation”, “Compensation Committee Interlocks and Insider Participation”, “Compensation Policies and Practices as They Relate to Risk Management”, “Director Compensation” and “Compensation Discussion and Analysis” in the Company’s 2023 Proxy Statement to be filed with the SEC within 120 days after December 31, 2022 and is incorporated herein by reference.

The information called for by this item is set forth under the headings “Executive Compensation”, “Compensation Committee Report on Executive Compensation”, “Compensation Committee Interlocks and Insider Participation”, “Compensation Policies and Practices as They Relate to Risk Management”, “Director Compensation” and “Compensation Discussion and Analysis” in the Company’s 2024 Proxy Statement to be filed with the Securities and Exchange Commission within 120 days after December 31, 2023 and is incorporated herein by reference.

Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters.

The information called for by this item is set forth under the headings “Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters” and “Equity Compensation Plan Information” in the Company’s 2023 Proxy Statement to be filed with the SEC within 120 days after December 31, 2022 and is incorporated herein by reference.

The information called for by this item is set forth under the headings “Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters” and “Equity Compensation Plan Information” in the Company’s 2024 Proxy Statement to be filed with the Securities and Exchange Commission within 120 days after December 31, 2023 and is incorporated herein by reference.

Certain Relationships and Related Transactions, and Director Independence.

The information called for by this item is set forth under the headings “Certain Relationships and Related Transactions” and “Director Independence” in the Company’s 2023 Proxy Statement to be filed with the SEC within 120 days after December 31, 2022 and is incorporated herein by reference.

The information called for by this item is set forth under the headings “Certain Relationships and Related Transactions” and “Director Independence” in the Company’s 2024 Proxy Statement to be filed with the Securities and Exchange Commission within 120 days after December 31, 2023 and is incorporated herein by reference.

Principal Accountant Fees and Services .

The information called for by this item is set forth under the headings “Principal Accountant Fees and Services” and “Audit Committee Pre-Approval Policy” in the Company’s 2023 Proxy Statement to be filed with the SEC within 120 days after December 31, 2022 and is incorporated herein by reference.

The information called for by this item is set forth under the headings “Principal Accountant Fees and Services” and “Audit Committee Pre-Approval Policy” in the Company’s 2024 Proxy Statement to be filed with the Securities and Exchange Commission within 120 days after December 31, 2023 and is incorporated herein by reference.

Exhibits and Financial Statement Schedules .

5 unchanged sentences

Consolidated Statements of Cash Flows—Years ended December 31, 2023, December 31, 2022, and December 31, 2021

Consolidated Statements of Stockholders’ Equity (Deficit)—Years ended December 31, 2022, December 31, 2021, and December 31, 2020

Consolidated Statements of Stockholders’ Deficit—Years ended December 31, 2023, December 31, 2022, and December 31, 2021

Notes to Consolidated Financial Statements—Years ended December 31, 2023, December 31, 2022, and December 31, 2021

6 unchanged sentences

1-33892) filed on September 26, 2022).

Equity Distribution Agreement, dated as of September 6, 2023, by and among AMC Entertainment Holdings, Inc., Citigroup Global Markets Inc., Barclays Capital Inc., B.

Riley Securities, Inc., and Goldman Sachs & Co.

(incorporated by reference from Exhibit 1.1 to the Company’s Current Report on Form 8-K (File 1-33892) filed on September 6, 2023).

Equity Distribution Agreement, dated as of November 9, 2023, by and among AMC Entertainment Holdings, Inc., Citigroup Global Markets Inc., Barclays Capital Inc., B.

Riley Securities, Inc., and Goldman Sachs & Co.

(incorporated by reference from Exhibit 1.1 to the Company’s Current Report on Form 8-K (File 1-33892) filed on November 9, 2023).

Third Amended and Restated Certificate of Incorporation of AMC Entertainment Holdings, Inc.

6 unchanged sentences

1-33892) filed on January 25, 2021).

Certificate of Amendment to the Third Amended and Restated Certificate of Incorporation of AMC Entertainment Holdings, Inc.

(incorporated by reference from Exhibit 3.1 to the Company’s Current Report on Form 8-K (File No.

1-33892) filed on August 14, 2023).

Certificate of Retirement of 24,057,143 Shares of Class B Common Stock of AMC Entertainment Holdings, Inc., dated as of November 1, 2018 (incorporated by reference from Exhibit 3.1 to the Company’s Quarterly Report on Form 10-Q (File No.

2 unchanged sentences

1-33892) filed on March 12, 2021).

Third Amended and Restated Bylaws of AMC Entertainment Holdings, Inc.

(incorporated by reference from Exhibit 3.2 to the Company’s Registration Statement on Form S-1 (File No.

333-190904) filed on November 22, 2013, as amended).

Amendment to the Third Amended and Restated Bylaws of AMC Entertainment Holdings, Inc., effective as of July 29, 2020 (incorporated by reference from Exhibit 3.2 to AMC’s Current Report on Form 8-K (File No.

1-33892) filed on July 31, 2020).

Second Amendment to the Third Amended and Restated Bylaws of AMC Entertainment Holdings, Inc.

(incorporated by reference from Exhibit 3.2 to AMC’s Current Report on Form 8-K (File No.

1-33892) filed on January 25, 2021).

Third Amendment to the Third Amended and Restated Bylaws of AMC Entertainment Holdings, Inc.

effective as of May 4, 2021 (incorporated by reference from Exhibit 3.1(d) to the Company’s Quarterly Report on Form 10-Q (File No.

1-33892) filed on May 6, 2021).

Fourth Amended and Restated Bylaws of AMC Entertainment Holdings, Inc.

effective February 22, 2024.

Fourth Amended and Restated Bylaws of AMC Entertainment Holdings, Inc., effective February 22, 2024 (marked to show amendments from prior version).

Certificate of Designations for the Series A Convertible Participating Preferred Stock (incorporated by reference from Exhibit 3.1 to the Company’s Current Report on Form 8-K (File No.

1-33892) filed on August 4, 2022).

Certificate of Elimination of Series A Convertible Participating Preferred Stock (incorporated by reference from Exhibit 3.1 to the Company’s Current Report on Form 8-K (File No.

1-33892) filed on August 25, 2023).

Deposit Agreement among AMC Entertainment Holdings, Inc., Computershare Inc.

36 unchanged sentences

1-33892) filed on January 25, 2023).

Thirteenth Amendment to Credit Agreement, dated as of June 23, 2023, by and among AMC Entertainment Holdings, Inc., as borrower, the other loan parties party thereto, the lenders party thereto and Wilmington Savings Fund Society, FSB, as administrative agent (incorporated by reference from Exhibit 4.1 to AMC’s Quarterly Report on Form 10-Q (File No.

1-33892) filed on August 8, 2023).

Indenture, dated as of June 5, 2015, respecting AMC Entertainment Inc.’s 5.75% Senior Subordinated Notes due 2025, among AMC Entertainment Inc., the Guarantors named therein and U.S.

19 unchanged sentences

1-33892) filed on July 31, 2020).

Description of the registrant’s securities registered pursuant to Section 12 of the Securities Exchange Act of 1934.

Description of the registrant’s securities registered pursuant to Section 12 of the Securities Exchange Act of 1934 (incorporated by reference from Exhibit 4.5 to AMC’s Annual Report on Form 10-K (File No.

1-33892) filed on February 28, 2023).

Indenture respecting AMC Entertainment Holdings, Inc.’s 10%/12% Cash/PIK Toggle Second Lien Subordinated Secured Notes due 2026 by and among AMC Entertainment Holdings, Inc., the guarantors party thereto and GLAS Trust Company LLC, as trustee and collateral agent, dated as of July 31, 2020 (incorporated by reference from Exhibit 4.1 to AMC’s Current Report on Form 8-K (File No.

6 unchanged sentences

1-33892) filed on July 31, 2020).

Term Loan Facility Agreement, dated as of February 15, 2021, by and among Odeon Cinemas Group Limited, the subsidiaries of Odeon Cinemas Group Limited party thereto, the lenders and other loan parties thereto and Lucid Agency Services Limited, as agent and security agent (incorporated by reference from Exhibit 10.1 to AMC’s Current Report on Form 8-K (File No.

1-33892) filed on February 17, 2021).

Indenture, dated as of February 14, 2022, among AMC Entertainment Holdings, Inc., the guarantors therein and U.S.

12 unchanged sentences

1-8747) filed June 18, 2007).

Employment Agreement between AMC Entertainment Inc., American Multi-Cinema, Inc.

McDonald which commenced July 1, 2001 (incorporated by reference from Exhibit 10.29 to Amendment No.

1 to the AMC’s Annual Report on Form 10-K (File No.

1-8747) filed on July 27, 2001).

Amended and Restated Exhibitor Services Agreement dated as of February 13, 2007 and Amended and Restated as of December 26, 2013, by and between National CineMedia, LLC and American Multi-Cinema, Inc.

34 unchanged sentences

1-33892) filed on August 4, 2022).

Fifth Amendment to the AMC Entertainment Holdings, Inc.

2013 Equity Incentive Plan, effective as of August 25, 2023 (incorporated by reference from Exhibit 10.2 to AMC’s Current Report on Form 10-Q (File No.

1-33892) filed on November 8, 2023).

Form of Stock Award Agreement (incorporated by reference from Exhibit 10.29 to the Company’s Registration Statement on Form S-1 (File No.

9 unchanged sentences

1-33892) filed on November 4, 2020).

Restated American Multi-Cinema, Inc.

Non-Qualified Deferred Compensation Plan dated September 29.

2016, by American Multi-Cinema, Inc.

effective January 1, 2016.

(incorporated by reference from Exhibit 10.3 to the Company’s Quarterly Report on Form 10-Q (File No.

1-33892) filed on November 9, 2016).

Amendment No.

1 to the American Multi-Cinema, Inc.

Non-Qualified Deferred Compensation Plan effective May 1, 2018 (incorporated by reference from Exhibit 10.1 to the Company’s Quarterly Report on Form 10-Q (File No.

1-33892) filed on August 7, 2018).

Termination Amendment to the American Multi-Cinema, Inc.

Non-Qualified Deferred Compensation Plan, effective May 3, 2021 (incorporated by reference from Exhibit 10.4 to the Company’s Quarterly Report on Form 10-Q (File No.

2013 Equity Incentive Plan Change in Control Policy (incorporated by reference from Exhibit 10.1 to AMC’s Quarterly Report on Form 10-Q (File No.

1-33892) filed on May 5, 2023).

18 unchanged sentences

1-33892) filed on May 9, 2022).

Employment Agreement, dated as of March 7, 2022, by and between Eliot Hamlisch and AMC Entertainment Holdings, Inc.

(incorporated by reference from Exhibit 10.2 to AMC’s Quarterly Report on Form 10-Q (File No.

1-33892) filed on May 9, 2022).

AMC Entertainment Holding’s, Inc.

4 unchanged sentences

1-33892) filed on December 22, 2022).

Employment Agreement, dated as of August 11, 2023, by and between Ellen Copaken and AMC Entertainment Holdings, Inc.

(incorporated by reference from Exhibit 10.1 to AMC’s Quarterly Report on Form 10-Q (File No.

1-33892) filed on November 8, 2023).

Subsidiaries of AMC Entertainment Holdings, Inc.

5 unchanged sentences

Goodman (Chief Financial Officer) furnished in accordance with Securities Act Release 33-8212.

AMC Entertainment Holdings, Inc.

Executive Compensation Clawback Policy, effective as of October 2, 2023.

Inline XBRL Instance Document

39 unchanged sentences

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 9A. Controls and Procedures