IMAX CORP 10-K

Item 5. Market for Registrant’s Common Equity, Related Stoc kholder Matters, and Issuer Purchases of Equity Securities The Company’s common shares are traded on the NYSE under the symbol “IMAX”. As of January 31, 2024, the Company had approximately 231 registered holders of record of its common shares. Over the last few years, the Company has not paid, nor does the Company have any current plans to pay, cash dividends on its common shares. The payment of dividends by the Company is subject to certain restrictions under the terms of the Company’s indebtedness (see Note 14 to Consolidated Financial Statements in Part II, Item 8). The payment of any future dividends will be determined by the Board in light of conditions then existing, including the Company’s financial condition and requirements, future prospects, restrictions in financing agreements, business conditions and other factors deemed relevant by the Board. The Company grants two types of performance stock units (“PSU”), one which vests based on a combination of employee service and the achievement of certain Adjusted EBITDA targets, and one which vests based on a combination of employee service and the achievement of total shareholder return (“TSR”) targets. The achievement of the Adjusted EBITDA and TSR targets in these PSUs is determined over a three-year performance period. At the conclusion of the three-year performance period, the number of PSUs that ultimately vest can range from 0% to a maximum vesting opportunity of 175% of the initial Adjusted EBITDA PSU award or 150% of the initial TSR PSU award depending upon actual performance versus the established Adjusted EBITDA and TSR, respectively. Equity Compensation Plans The following table sets forth information regarding the Company’s Equity Compensation Plan as of December 31, 2023: (A) Number of Securities to be Issued Upon Exercise of Outstanding Options, Warrants and Rights Weighted Average Exercise Price of Outstanding Options, Warrants and Rights (2) Number of Securities Remaining Available for Future Issuance Under Equity Compensation Plans (Excluding Securities Reflected in Column (A)) Plan Category Equity compensation plans approved by security holders 5,538,873 $ 15.77 4,895,941 Equity compensation plans not approved by security holders nil nil nil Total (1) 5,538,873 $ 15.77 4,895,941 (1) The number of securities to be issued upon exercise of outstanding options, warrants, and rights excludes 668,708 common shares that may be issued with respect to PSUs outstanding, assuming full achievement of the Adjusted EBITDA and TSR targets. (2) The weighted average exercise price is calculated based solely on outstanding stock options and does not take into account common shares that are subject to outstanding RSUs and PSUs, which do not have an exercise price. 34 Performance Graph The following graph compares the total cumulative shareholder return for $100 invested on December 31, 2018 (assuming that all dividends were reinvested) in common shares of the Company against the cumulative total return of the NYSE Composite Index, the S&P/TSX Composite Index and the IMAX Peer Group to the end of the most recently completed fiscal year. The IMAX Peer Group consists of Ambarella, Inc., Cinemark Holdings, Inc., Cineplex Inc., Dolby Laboratories, Inc., Harmonic Inc., Knowles Corporation, Lions Gate Entertainment Corp., The Marcus Corporation, and WildBrain Ltd. The performance period includes the COVID-19 pandemic, which significantly impacted the out-of-home entertainment industry. The impact of the pandemic on the Company’s operations are discussed elsewhere herein. 35 Issuer Purchases of Equity Securities On June 12, 2017, the Company announced that the Board approved a $200.0 million share repurchase program for its common shares that would have initially expired on June 30, 2020, which was subsequently extended and increased in the total share repurchase authority to $400.0 million. In 2023, the Company’s Board approved a 36-month extension to its share repurchase program through June 30, 2026. As of December 31, 2023, the Company had $167.0 million authorized for repurchase under its approved share repurchase program. The repurchases may be made either in the open market or through private transactions, including repurchases made pursuant a plan intended to comply with Rule 10b5-1 under the Securities Exchange Act of 1934, as amended, subject to market conditions, applicable legal requirements, and other relevant factors. The Company has no obligation to repurchase shares and the share repurchase program may be suspended or discontinued by the Company at any time. During the three months ended December 31, 2023, the Company repurchased 1,459,948 common shares at an average price of $16.55 per share, for a total of $24.2 million, excluding commissions, of which 108,393 were common shares where settlement occurred subsequent to December 31, 2023, at an average price of $14.98 per share, for a total of $1.6 million, excluding commission. As of December 31, 2023 and December 31, 2022, the IMAX LTIP trustee did not hold any shares. Any shares held with the trustee are recorded at cost and are reported as a reduction against Capital Stock on the Company's Consolidated Balance Sheets. Subsequent to December 31, 2023 and through February 26, 2024, the Company completed repurchases through a 10b5-1 program of 1,158,724 shares at an average of $13.99 per share, for a total cost of $16.2 million, excluding commission. The Company’s common share repurchase program activity for the three months ended December 31, 2023 was as follows: Total number of shares purchased Average price paid per share Total number of shares purchased as part of publicly announced program Maximum value of shares that may yet be purchased under the program October 1 through October 31, 2023 350,058 $ 17.89 350,058 $ 184,936,439 November 1 through November 30, 2023 715,080 16.76 715,080 172,950,160 December 1 through December 31, 2023 394,810 14.96 394,810 167,042,020 Total 1,459,948 $ 16.54 1,459,948 In 2022, IMAX China’s shareholders granted its Board of Directors (the “IMAX China Board”) a general mandate authorizing the IMAX China Board, subject to applicable laws, to repurchase shares of IMAX China not to exceed 10% of the total number of issued shares as of June 23, 2022 (34,063,480 shares). This program expired on the date of the 2023 Annual General Meeting of IMAX China on June 7, 2023. During the 2023 Annual General Meeting, shareholders approved the repurchase of shares of IMAX China not to exceed 10% of the total number of shares as of June 7, 2023 (33,959,314 shares). This program will be valid until the 2024 Annual General Meeting of IMAX China. The repurchases may be made in the open market or through other means permitted by applicable laws. IMAX China has no obligation to repurchase its shares and the share repurchase program may be suspended or discontinued by IMAX China at any time. During the three months ended December 31, 2023, IMAX China repurchased 16,800 common shares at an average price of HKD 7.11 per share ($0.91 per share) for a total of HKD 0.1 million or less than $0.1 million. For the years ended December 31, 2023 and 2022, there were no shares purchases in the administration of employee share-based plans. A summary of the material terms and conditions of the Company’s revolving credit facility, which include a limitation of the amount of permitted share repurchases, is provided in Note 14 to Consolidated Financial Statements in Part II, Item 8. Issuer Sales of Unregistered Securities Refer to Note 17(c) to Consolidated Financial Statements in Part II, Item 8. Item 6. Selecte d Financial Data Reserved. 36