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Item 9A. Controls and Procedures

2023-04-13 compared with 2022-03-03 · 944 added, 57 removed, 198 unchanged (83% of the section changed)

10 unchanged sentences

Due to the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that misstatements due to error or fraud will not occur or that all control issues and instances of fraud, if any, within the Company have been detected.

Attestation Report of the Registered Public Accounting Firm.

The effectiveness of our internal control over financial reporting as of December 30, 2021 has been attested by the Company’s registered independent public accounting firm, Deloitte & Touche LLP, as stated in its report, which appears herein.

Changes in Internal Control over Financial Reporting.

There were no changes in our internal control over financial reporting that occurred during the quarter ended December 29, 2022 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Stockholders and the Board of Directors of

National CineMedia, Inc.

Opinion on Internal Control over Financial Reporting

We have audited the internal control over financial reporting of National CineMedia, Inc.

and subsidiary (the “Company”) as of December 30, 2021, based on criteria established in Internal Control — Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).

In our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of December 30, 2021, based on criteria established in Internal Control — Integrated Framework (2013) issued by COSO.

We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the consolidated financial statements as of and for the year ended December 30, 2021, of the Company and our report dated March 3, 2022, expressed an unqualified opinion on those financial statements.

Basis for Opinion

The Company’s management is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting, included in the accompanying Management’s Annual Report on Internal Control over Financial Reporting .

Our responsibility is to express an opinion on the Company’s internal control over financial reporting based on our audit.

We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S.

federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audit in accordance with the standards of the PCAOB.

Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects.

Our audit included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, testing and evaluating the design and operating effectiveness of internal control based on the assessed risk, and performing such other procedures as we considered necessary in the circumstances.

We believe that our audit provides a reasonable basis for our opinion.

Definition and Limitations of Internal Control over Financial Reporting

A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles.

A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company;

(2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company;

and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements.

Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

/s/ Deloitte & Touche LLP

Denver, Colorado

March 3, 2022

Other Information

On April 11, 2023 (the “Petition Date”), NCM LLC filed a voluntary petition for reorganization with a prearranged Chapter 11 plan under Chapter 11 of the U.S.

Bankruptcy Code in the U.S.

Bankruptcy Court for the So uthern District of Texas.

NCM LLC’s case will be administered under the captions I n re:

National CineMedia, LLC , Case No.

expects to continue to manage NCM LLC, the “debtor in possession”, under the jurisdiction of the Bankruptcy Code and in accordance with the applicable provisions of the Bankruptcy Code and orders of the Bankruptcy Court.

As a result of this filing and in accordance with applicable GAAP, the Company concluded that NCM, Inc.

will no longer control NCM LLC for accounting purposes as of the Petition Date, and therefore, NCM LLC will be deconsolidated from the Company’s consolidated financial statements prospectively.

In connection with the deconsolidation of NCM LLC and in accordance with Regulation S-X Article 11, the following unaudited pro forma financial statements of the Company are included herein:

• Unaudited Pro Forma Balance Sheet as of December 29, 2022;

• Unaudited Pro Forma Statement of Operations for the year ended December 29, 2022;

• Notes to unaudited pro forma financial statements.

The following unaudited pro forma financial statements (“pro forma financial statements”) are based upon the historical consolidated financial statements of the Company, adjusted to reflect the deconsolidation of NCM LLC as a result of NCM LLC voluntarily initiating its financial restructuring plan under Chapter 11 of the United States Bankruptcy Code on the Petition Date.

Subsequent to the deconsolidation, the Company will account for the investment in NCM LLC in accordance with ASC 321-Investments-Equity Securities , which is reflected as a pro forma adjustment in the unaudited Pro Forma Balance Sheet (“Pro Forma Balance Sheet”).

See “Notes to unaudited Pro Forma Financial Statements” for explanation of other adjustments.

The pro forma financial statements of the Company should be read in conjunction with the historical consolidated financial statements of the Company and the related notes included in Item 8 - Financial Statements and Supplementary Data.

The Company prepared the unaudited pro forma financial statements included herein on the same basis as the annual audited consolidated financial statements.

The Pro Forma Balance Sheet reflects the deconsolidation of NCM LLC assuming the Chapter 11 filing had occurred on December 29, 2022, while the unaudited Pro Forma Statement of Operations (“Pro Forma Statement of Operations”) gives effect to the deconsolidation assuming the Chapter 11 filing had occurred on December 31, 2021.

The pro forma adjustments are based on the best available information including certain assumptions that the Company believes are reasonable.

The Company believes that such adjustments are appropriate and directly attributable to the deconsolidation of NCM LLC.

The pro forma adjustments assume that NCM LLC continues to operate its business in the ordinary course throughout the restructuring.

is a separate entity and has not filed for bankruptcy relief.

In addition, the pro forma adjustments do not include any adjustments to reflect any resolution of the Chapter 11 Case entered into by NCM LLC and certain creditors of NCM LLC, including the restructuring of NCM LLC’s capital structure.

For tax purposes, the Company has not made any assumptions regarding the ultimate form of the restructuring and the impact, if any, of a continuing equity investment in NCM LLC.

As such, the pro forma adjustments do not include the deferred tax impacts of any outside basis difference in NCM LLC.

Accordingly, actual results could differ materially from the pro forma presentation included herein depending on these factors, among others.

The pro forma financial statements are provided for illustrative purposes only and are not indicative of the operating results or financial position that would have occurred had the deconsolidation of NCM LLC occurred on December 29, 2022 for the Pro Forma Balance Sheet, or on December 31, 2021 for the Pro Forma Statement of Operations for the year ended December 29, 2022.

Readers should not rely on the Pro Forma Financial Statements as being indicative of the historical operating results that the Company would have achieved if the deconsolidation had occurred on such dates or any future operating results or financial position that it will experience after the effective date of the Chapter 11 filing including the final result and effect of any potential outcome resulting from the planned restructuring of NCM LLC.

NATIONAL CINEMEDIA, INC.

Unaudited Pro Forma Balance Sheet

(In millions, except share and per share data)

Historical NCM, Inc.

Consolidated Pro Forma Adjustments Pro Forma NCM, Inc.

CURRENT ASSETS:

Cash and cash equivalents $ 61.7 $ (59.4) (a) $ 2.3

Restricted cash 2.1 (2.1) (a) —

Short-term marketable securities 0.7 — 0.7

Receivables, net 92.0 (82.9) (a) 9.1

Amounts due from NCM LLC, net — 18.9 (b) 18.9

Prepaid expenses and other current assets 7.9 (7.0) (a) 0.9

Total current assets 164.4 (132.5) 31.9

NON-CURRENT ASSETS:

Property and equipment, net 13.0 (13.0) (a) —

Intangible assets, net 586.7 (586.7) (a) —

Investment in NCM LLC — 70.7 (d) 70.7

Other investments 0.9 (0.9) (a) —

Long-term marketable securities 0.3 5.9 (a) 6.2

Debt issuance costs, net 3.3 (3.3) (a) —

Other assets 23.8 (23.8) (a) —

Total non-current assets 628.0 (551.1) 76.9

TOTAL ASSETS $ 792.4 $ (683.6) $ 108.8

LIABILITIES AND EQUITY/(DEFICIT)

CURRENT LIABILITIES:

Amounts due to founding members $ 18.2 $ (18.2) (b) $ —

Payable to founding members under the TRA 0.3 — 0.3

Accrued expenses 17.8 (17.0) (a) 0.8

Accrued payroll and related expenses 8.3 (7.7) (a) 0.6

Accounts payable 25.0 (23.3) (a) 1.7

Deferred revenue 10.2 (10.2) (a) —

Short-term debt, net 1,121.1 (1,121.1) (a) —

Other current liabilities 2.2 (2.1) (a) 0.1

Total current liabilities 1,203.1 (1,199.6) 3.5

NON-CURRENT LIABILITIES:

Payable to founding members under the TRA 35.3 — 35.3

Other liabilities 18.0 (18.0) (b) —

Total non-current liabilities 53.3 (18.0) 35.3

Total liabilities 1,256.4 (1,217.6) 38.8

EQUITY/(DEFICIT):

Stockholders’ Equity/(Deficit):

Preferred stock, $0.01 par value;

10,000,000 shares authorized, none issued and outstanding, respectively

Common stock, $0.01 par value;

260,000,000 shares authorized, 128,402,636 issued and outstanding, respectively

Additional paid in capital (deficit) (146.2) — (146.2)

Retained earnings (distributions in excess of earnings) (370.4) 585.3 (d) 214.9

Total NCM, Inc.

stockholders’ equity/(deficit) (515.3) 585.3 70.0

Noncontrolling interests 51.3 (51.3) (a) —

Total equity/(deficit) (464.0) 534.0 70.0

TOTAL LIABILITIES AND EQUITY/DEFICIT $ 792.4 $ (683.6) $ 108.8

See accompanying Notes to unaudited Pro Forma Financial Statements.

NATIONAL CINEMEDIA, INC.

Unaudited Pro Forma Statement of Operations

Year Ended December 29, 2022

(In millions)

Historical NCM, Inc.

Consolidated Pro Forma Adjustments Pro Forma NCM, Inc.

Revenue $ 249.2 $ (238.2) (c) $ 11.0

OPERATING EXPENSES:

Advertising operating costs 27.2 (27.2) (c) —

Network costs 8.4 (8.4) (c) —

Theater access fees and revenue share to founding members 82.3 (82.3) (c) —

Selling and marketing costs 42.8 (42.8) (c) —

Administrative and other costs 44.3 (32.8) (c) 11.5

Impairment of long-lived assets 5.8 (5.8) (c) —

Depreciation expense 6.5 (6.5) (c) —

Amortization of intangibles recorded for network theater screen leases 25.0 (25.0) (c) —

Total 242.3 (230.8) 11.5

OPERATING INCOME (LOSS) 6.9 (7.4) (0.5)

NON-OPERATING EXPENSES:

Interest on borrowings 79.7 (79.7) (c) —

(Gain) loss on early retirement of debt, net (5.9) 5.9 (c) —

Loss on re-measurement of the payable to founding members under the TRA 2.2 — 2.2

Gain on sale of asset (2.2) 2.2 (c) —

Gain on deconsolidation — (622.4) (d) (622.4)

Other non-operating income, net (0.7) 13.5 (c) 12.8

Total 73.1 (680.5) (607.4)

(LOSS) INCOME BEFORE INCOME TAXES (66.2) 673.1 606.9

Income tax expense — — —

CONSOLIDATED NET (LOSS) INCOME (66.2) 673.1 606.9

Net (loss) income attributable to noncontrolling interests (37.5) 37.5 (c) —

NET (LOSS) INCOME ATTRIBUTABLE TO NCM, INC.

(28.7) 635.6 606.9

COMPREHENSIVE (LOSS) INCOME ATTRIBUTABLE TO NCM, INC.

$ (28.7) $ 635.6 $ 606.9

NET LOSS PER NCM, INC.

COMMON SHARE:

Basic $ (0.35) $ 7.40

Diluted $ (0.35) $ 7.40

WEIGHTED AVERAGE SHARES OUTSTANDING:

Basic 81,968,007 81,968,007

Diluted 81,968,007 82,015,111

See accompanying Notes to unaudited Pro Forma Financial Statements.

NATIONAL CINEMEDIA, INC.

Notes to unaudited Pro Forma Financial Statements

(a) Reflects the deconsolidation of NCM LLC’s assets and liabilities at their carrying amounts included in the Company's historical consolidated financial statements as of December 29, 2022.

(b) Represents adjustments to reverse the removal of NCM LLC’s intercompany balances with NCM, Inc.

in order to reflect intercompany amounts and transactions that were previously eliminated from the Company's historical consolidated financial statements as of December 29, 2022.

(c) Reflects the deconsolidation of NCM LLC’s statement of operations included in the Company's historical consolidated financial statements for the year ended December 29, 2022.

(d) Represents the adjustments made to reflect the estimated gain on deconsolidation, which represents the de-recognition of the carrying amounts of NCM LLC’s assets and liabilities compared to the non-controlling interest previously consolidated in the Company’s historical consolidated financial statements and the remaining estimated fair value of the investment in NCM LLC in accordance with ASC 321-Investments-Equity Securities as of December 29, 2022 for the Pro Forma Balance Sheet and as of December 31, 2021 for the Pro Forma Statement of Operations.

Disclosure Regarding Foreign Jurisdictions that Prevent Inspections

Directors, Executive Officers and Corporate Governance

The information required by this item with respect to our directors is incorporated herein by reference from the Company's 2022 Proxy Statement under the heading “Proposal 1- Election of Directors.”

The information required by this item regarding our executive officers is set forth in Part I of this Annual Report on Form 10-K under the heading “Information about our Executive Officers” and is incorporated herein by this reference.

Our Board of Directors currently consists of eight directors with one vacancy.

Under the director designation agreement dated as of February 13, 2007 (the “Director Designation Agreement”), two of our founding members – Cinemark and Regal – are each permitted to appoint or designate up to two persons for nomination to election on our Board of Directors under the terms set forth in the Director Designation Agreement, one of whom must qualify as “independent” as required by the rules promulgated by the SEC under the Exchange Act, and by Nasdaq.

See “Certain Relationships and Related Party Transactions – Transactions with Founding Members – Director Designation Agreement.” The designees pursuant to the Director Designation Agreement for Cinemark are Donna Reisman and Mark Zoradi and for Regal is Mark B.

Our Certificate of Incorporation provides that all directors are included within one class and that the number of total directors will not be more than eleven.

The number of currently authorized director positions is nine pursuant to our Bylaws.

Each member serves a one-year term until the next Annual Meeting and until his or her successor is duly elected and qualified.

The following table provides information regarding our directors as of April 10, 2023.

Name Age Director Since Independent Occupation Current Committee Membership*

Glazek 45 2019 Yes Executive Chairman of Turning Point Brands, Inc.

Goodman 69 2007 Yes Former President of Sales and Marketing of CNN l Chair

Hall 64 2007-2016;

2019 Yes Former President and CEO of NCM, Inc.

and Former Chairman of the NCM, Inc.

Hill 54 2020 Yes Former Senior Vice President of Liquidity and Asset Management of iHeartMedia, Inc.

Lesinski 63 2014 No CEO of NCM, Inc.

Donna Reisman 60 2019 Yes President of Ad Sales and Marketing for Univision l l

Segall 60 2018 Yes Founder and Managing Director of Kidron Corporate Advisors LLC

Mark Zoradi 69 2021 No Member of the Board of Directors and Former CEO of Cinemark Holdings, Inc.

* A = Audit Committee, C = Compensation Committee, NG = Nominating and Governance Committee

Independent Director

Director Since:

Nominating and Governance - Chair

Glazek has over 15 years of experience investing in distressed, special situations and private credit strategies, including as a Partner and Portfolio Manager of Standard General, LP.

from 2008-2023.

He also serves as Executive Chairman of Turning Point Brands, Inc., a Director of Workers Benefit Consortium, Inc., and an Adjunct Professor at Columbia Business School.

He previously worked at Lazard Freres & Co, where he focused on mergers and acquisitions and corporate debt restructuring.

He has also worked at the Blackstone Group.

Throughout his career he has served on numerous public and private company boards of directors.

Glazek holds a Bachelor of Arts from the University of Michigan and a J.D.

from Columbia Law School.

Qualifications:

Glazek’s extensive experience overseeing the operations of public and private companies, as well as his deep capital markets, legal, governance, transactional, and restructuring expertise qualifies him to serve on our Board of Directors.

Independent Director

Director Since:

Compensation - Chair

Goodman has been a media and advertising consultant since 2015, including founding and serving as CEO of Newfound Frontier, LLC, a provider of media and advertising consulting and advisory services, since its inception in 2019.

Goodman also founded White Mountain Media, a media consulting company, in July 2004 and served as its president since inception until 2015.

From July 2003 to July 2004, Mr.

Goodman was retired.

From March 1995 to July 2003, Mr.

Goodman was the President of Sales and Marketing for CNN, a division of Turner Broadcasting System, Inc.

Goodman also serves on three private company boards.

Qualifications:

Goodman’s extensive background in the media industry allows him to provide media sales and marketing advice to our management and Board.

Goodman brings significant business experience to provide strategies and solutions to resolve the issues addressed by our Board.

Independent Director

Director Since:

Hall previously served as the Company's President, Chief Executive Officer and Chairman from 2007 until his retirement in January 2016, and he held the same positions at NCM LLC from March 2005 until 2007.

Prior to this, from May 2002 to May 2005, Mr.

Hall served as Co-Chairman and Co-Chief Executive Officer of Regal Entertainment Group and President and Chief Executive Officer of its media subsidiary and NCM predecessor, Regal CineMedia Corporation.

Hall also serves on the board of two private companies.

Previously, Mr.

Hall has held various executive positions with United Artist Theatre Company, and its predecessor companies, including Chief Financial Officer and then Chief Executive Officer when it became part of Regal Entertainment Group in 2002.

Qualifications:

Hall's extensive background with the Company and our business allows him to provide sales and management advice to our management and Board.

Independent Director

Director Since:

Audit - Chair

Hill is the owner of JFH Consulting, which she founded in 2013 to provide financial and strategic advisory services.

From 2013 to 2019, Ms.

Hill worked at iHeartMedia, Inc., formerly Clear Channel Communications, Inc., as the Senior Vice President of Liquidity and Asset Management, and also led a steering committee for the separation of iHeartMedia's subsidiary, Clear Channel Outdoor Holdings.

Prior to this, from 2000 to 2010, she worked as iHeartMedia’s Senior Vice President of Finance.

Hill also serves on the board of one public company.

Previously, Ms.

Hill was an associate in US West Communications, Inc.’s executive development program and an audit manager at Ernst & Young LLP.

Qualifications:

Hill's experience as a financial executive in a media company qualifies her to serve on our Board of Directors and as chairperson of our Audit Committee and to provide guidance to our internal audit function and financial advice to our Board.

Chief Executive Officer and Director

Director Since:

Lesinski was appointed the Chief Executive Officer of NCM effective August 2, 2019.

Previously, he served as the Chief Executive Officer of Sonar Entertainment, an independent entertainment studio from January 2016 to August 2019 and a member of its Board until February 2020.

Lesinski served as the founder and CEO of Energi Entertainment, a multi-media content production company, from August 2014 until December 2015.

From 2013 to 2014, Mr.

Lesinski was President of Digital Content and Distribution at Legendary Entertainment, a leading media company dedicated to owning, producing and delivering content to mainstream audiences with a targeted focus on the fandom demographic.

Prior to that role, from 2006 to 2013, Mr.

Lesinski served as President, Digital Entertainment at Paramount Pictures, a global producer and distributor of filmed entertainment.

Lesinski also served as President of Worldwide Home Entertainment at Paramount Pictures for three years, prior to which, he spent ten years in various leadership positions at Warner Bros.

Entertainment and was a Managing Director for an advertising agency.

Lesinski served as Non-Employee Chairman from August 1, 2018 to August 1, 2019.

Qualifications:

Lesinski’s experience in home entertainment and digital media gives him the experience to critically review the various business considerations necessary to run a business such as ours and offers a valuable perspective as the media marketplace becomes more competitive, particularly with the growth of online and mobile advertising platforms.

Lesinski's previous experience as a Chief Executive Officer and current role as the Company's Chief Executive Officer provides valuable perspective as a director.

Donna Reisman

Independent Director

Director Since:

Nominating and Governance

Reisman, also known as Ms.

Speciale, is currently the President of Ad Sales and Marketing for Univision.

Reisman was the president of WarnerMedia from 2014 to 2019, where she oversaw advertising revenue for Turner Broadcasting’s domestic television and digital entertainment, news, kids and young adult brands.

She previously served as the president of Turner Entertainment and Young Adult Ad Sales from 2012 to 2014.

Prior to that role, she was President, Investment & Activation and Agency Operations at MediaVest Worldwide from 2003 to 2012.

Reisman also serves on a number of private company boards.

Qualifications:

Reisman’s extensive experience in the media and advertising industry allows her to provide media strategy, sales and marketing advice to the Company's management and Board.

Director Since:

Segall is the owner and Managing Director of Kidron Corporate Advisors LLC, a New York based mergers and acquisitions corporate advisory boutique founded in 2003, and has been the CEO of Kidron Capital Advisors LLC since 2009.

Previously, he served as the Co-Chief Executive Officer of Investec, Inc., an asset management company, from 2001 to 2003, following his role as Investec Inc.’s head of investment banking and general counsel.

Prior to that, he was a partner at the law firm of Kramer, Levin, Naftalis & Frankel LLP, specializing in cross-border mergers and acquisitions and capital markets activities.

Segall serves as a director of Bel Fuse, Inc.

(2011 to present).

In the past five years he has served on other public company boards including:

Ronson Europe N.V.

(2008 to 2017) and Temco Service Industries, Inc.

(2011 to 2016).

Segall also serves on a number of private company boards.

Qualifications:

Segall’s two decades of board leadership experience at both public and private companies, gives him the ability to offer guidance to the Company and its operations.

Director Since:

Zoradi served as CEO of Cinemark Holdings, Inc.

from August 2015 to December 2021 and a director on the Board of Cinemark Holdings, Inc.

from August 2015 to the present.

Zoradi spent 30 years at The Walt Disney Company, a major motion picture studio, including serving as the President of Walt Disney Studios Motion Picture Group.

Prior to that, Mr.

Zoradi served in a variety of positions of increasing responsibility with The Walt Disney Company, including as the General Manager of Buena Vista Television and President of Buena Vista International with responsibility for the international theatrical and home entertainment marketing and distribution of Disney, Touchstone and Pixar films.

Zoradi also served as the President and Chief Operating Officer (COO) of Dick Cook Studios from January 2011 until July 2014 and the COO of DreamWorks Animation SKG, Inc.

from August 2014 until January 2015.

Qualifications:

Zoradi has extensive experience in the cinema and film industries and will bring important insights to our Board regarding our industry.

Zoradi is a Board designee for one of our founding members, he brings to our Board the perspective of a major stakeholder.

Audit Committee Key Responsibilities:

Our Audit Committee is primarily concerned with overseeing management’s processes and activities relating to the following:

Committee Members u maintaining the reliability and integrity of our accounting policies, financial reporting practices and financial statements;

Goodman u review all “Related Party Transactions” as such term is defined under Nasdaq rules and the Statement of Policy with Respect to Related Party Transactions;

u the performance of our internal audit function and independent auditor;

u confirming compliance with laws and regulations, and the requirements of any stock exchange or quotation system on which our securities may be listed.

Number of meetings in 2022:

Our Audit Committee also is responsible for establishing procedures for the receipt of complaints regarding our accounting, internal accounting controls or audit matters, and the confidential, anonymous submission of concerns regarding questionable accounting or auditing matters, and overseeing the Company's compliance with applicable laws and regulations, the Company’s Code of Business Conduct and Ethics and insider trading policy and other general risk assessment and management.

Our Audit Committee’s responsibilities are set forth in its charter, the current version of which was most recently reviewed by the Committee and approved by our Board in January 2022 in conjunction with the charter's annual review.

The current version of the charter is available on our website at www.

ncm.com at the Investor Relations link .

Independence and Financial Literacy

Each of the committee members was determined to be “independent” as required by the rules promulgated by the SEC under the Exchange Act and by Nasdaq.

Each of them also meets the financial literacy requirements of Nasdaq.

Our Board of Directors has determined that Ms.

Hill qualifies as an “audit committee financial expert” as defined in the federal securities laws and regulations.

As the need to fill vacancies arises in the future, our Nominating and Governance Committee will seek individuals qualified to become Board members for recommendation to our Board.

Our Nominating and Governance Committee would

consider potential director candidates recommended by stockholders and use the same criteria for screening all candidates, regardless of who proposed such candidates.

Our Nominating and Governance Committee and Board of Directors consider whether candidates for nomination to our Board of Directors possess the following qualifications, among others:

(a) the highest level of personal and professional ethics, integrity, and values;

(b) expertise that is useful to us and is complementary to the background and expertise of the other members of our Board of Directors;

(c) a willingness and ability to devote the time necessary to carry out the duties and responsibilities of membership on our Board of Directors;

(d) a desire to ensure that our operations and financial reporting are conducted in a transparent manner and in compliance with applicable laws, rules, and regulations;

(e) a dedication to the representation of the best interests of all our stockholders.

Diversity of Directors.

In considering whether to recommend any candidate for inclusion in the slate of director nominees, our Nominating and Governance Committee complies with the Company’s Corporate Governance Guidelines and Corporate Code of Business Conduct and Ethics.

In addition to considering the qualifications listed above, the Committee seeks nominees that will complement the existing members and provide diversity of background, professional expertise, gender and ethnicity and that will be in compliance with applicable law and stock exchange requirements and taking into account proxy advisory firm guidelines.

Our Nominating and Governance Committee periodically reviews and assesses its evaluation process for considering nominee directors.

Board Diversity Matrix

The following matrix summarizes self-identified diversity characteristics and is provided in accordance with applicable Nasdaq listing Requirements:

BOARD DIVERSITY MATRIX AS OF DECEMBER 29, 2022

Total Number of Directors 8

Female Male Non-Binary Did Not Disclose Gender

Gender Identity

Directors 2 6 — —

Demographic Background

African American or Black — — — —

Alaskan Native or Native American — — — —

Asian — — — —

Hispanic or Latinx — — — —

Native Hawaiian or Pacific Islander — — — —

White 2 6 — —

Two or More Races or Ethnicities — — — —

Did Not Disclose Demographic Background —

Our Board adopted a Code of Business Conduct and Ethics that applies to all of our employees, including our Board of Directors, Chief Executive Officer and principal financial officer.

1 unchanged sentence

Our Code of Business Conduct and Ethics is available free of charge on our website at ncm.com under the tab “Investor Relations– Corporate Governance.” We intend to post on our website any amendments to, or waivers from our Code of Business Conduct and Ethics applicable to senior financial executives.

Delinquent Section 16(a) Reports

Section 16(a) of the Exchange Act requires our officers and directors, and persons who own more than ten percent of our common stock, to file reports of ownership and changes in ownership on Forms 3, 4 and 5 with the SEC.

As a matter of practice, we assist many of our directors and all of our executive officers by preparing initial ownership reports and reporting

ownership changes, and typically file these reports on their behalf.

To our knowledge, based solely on our review of the copies of such reports filed electronically with the SEC and on written information given to us by the reporting persons, we believe that all Section 16(a) filing requirements applicable to our officers, directors and greater than ten percent beneficial owners were complied with on a timely basis during the fiscal year ended December 29, 2021, except that one Form 4 for Maria Woods was filed on February 27, 2023 for a September 1, 2022 time-based restricted stock unit (“TBRSU”) vesting.

Executive Compensation

The information required by this item regarding compensation of executive officers and directors is incorporated herein by reference from the Proxy Statement under the headings “Compensation of Executive Officers,” “Compensation Committee Report”.

EXECUTIVE COMPENSATION TABLES

FISCAL 2022 SUMMARY COMPENSATION TABLE

The following table shows the amount of compensation earned by our NEOs during the years indicated.

For additional information regarding the material terms of each NEOs’ employment agreement, see “Employment Agreements” and “Potential Payments Upon Termination or Change in Control” below.

Name and Principal Position Year Salary (1) Stock

Awards (2) Option

Awards Non-Equity

Incentive Plan

Compensation (3) All Other

Compensation (4) Total

Chief Executive

Officer 2022 $ 844,027 $ 499,999 $ 428,771 $ 771,702 $ 27,158 $ 2,571,657

2021 $ 759,808 $ 1,125,000 $ 250,000 $ 524,080 $ 7,158 $ 2,666,046

Chief Financial

Officer 2022 $

2021 $ 102,115 $ 126,244 $ 150,000 $ 48,098 $ 10,340 $ 436,797

President 2022 $ 669,500 $ 497,697 $ — $ 516,720 $ 2,948 $ 1,686,865

2021 $ 585,361 $ 509,834 $ — $ 334,803 $ 2,749 $ 1,432,747

(1) The amounts represent the prorated total salaries paid to the NEO's inclusive of the annual merit increase in February 2022 and other increases, as applicable.

(2) The amounts represent the aggregate grant date fair value of the target level of stock awards computed in accordance with ASC Topic 718.

For a discussion of the assumptions and methodologies used in calculating the grant date fair value of these awards, refer to Note 11—Share-based Compensation within the notes to the Company’s consolidated financial statements .

Certain of the stock awards granted in 2022 and 2021 are scheduled to vest based upon the achievement of performance conditions relating to cumulative “Free Cash Flow” at the end of a two or three-year measuring period, respectively.

Free Cash Flow is a non-GAAP measure used by management to measure the Company’s operating cash flow in determining whether PBRSU targets have been achieved.

The amounts for these awards are presented based on 100% of the fair market value on the date of grant.

When there is a stock award, but no performance metric set for portions of the award, the portion is considered granted upon approval of the performance metric.

As the 2022 performance metric for portions of the 2021 performance-based restricted stock units (“PBRSU”) award and the 2022 PBRSU award were set in January and February 2022, the amounts include, and only include, those portions of the awards.

Actual results could materially differ from this estimate.

The maximum amounts payable for awards granted during fiscal 2022 assuming the highest level of performance cannot exceed the total amount granted.

(3) The bonus amounts were calculated off of the prorated total salary for Mr.

Lesinski, to reflect his amended employment agreement, effective August 1, 2022.

Prior to the amended employment agreement, his salary was increased from his 2021 base salary to $795,675 in February 2022.

(4) The following table provides details about each component of the “All Other Compensation” column from the Fiscal 2022 Summary Compensation Table above for fiscal 2022.

Name Year 401(k)

Contribution (a) Term Life

Insurance (b) Disability

(d) Total All

Lesinski 2022 $ — $ 5,118 $ 720 $ 21,320 $ 27,158

Ng 2022 $ — $ 443 $ 720 $ 660 $ 1,823

Felenstein 2022 $ — $ 1,568 $ 720 $ 660 $ 2,948

(a) Represents matching contributions made pursuant to NCM LLC’s defined contribution 401(k) plan.

Eligible employees, including the NEOs, are eligible for a discretionary contribution under the 401(k) plan on base pay up to IRS limits.

Note that the 401(k) match has been suspended since April 2020.

(b) Represents imputed income for term life insurance coverage.

(d) Represents taxable fringe benefits and allowances for Messrs.

Ng and Felenstein and contractual compensation outlined within Mr.

Lesinski’s amended employment agreement as discussed further within section “Employment Agreements”.

OUTSTANDING EQUITY AWARDS AT DECEMBER 29, 2022

Stock Option Awards Restricted Stock Awards and RSUs

Name Number of

Exercisable Number of

Unexercisable Option

Date (1) Number of Shares

That Have Not Vested Market

of Shares of Stock

That Have Not Vested

Vested Equity

Market or Payout Value

of Unearned Shares That

Lesinski 650,198 — $ 8.00 8/2/2029 — $ — — $ —

333,737 166,689 (3) $ 2.71 7/29/2030 92,251 (7) $ 22,140 — $ —

— — $ — — 39,725 (8) $ 9,534 — $ —

73,329 146,658 (4) $ 3.09 8/4/2031 161,812 (9) $ 38,835 — $ —

— 370,930 (5) $ 1.58 8/1/2032 237,341 (10) $ 56,962 79,114 (17) $ 5,696

— 250,000 (5) $ 3.50 8/1/2032 — $ — — $ —

Ng 35,365 70,732 (6) $ 3.80 9/27/2031 14,815 (11) $ 3,556 11,167 (18) $ 1,206

— — $ — — 11,000 (12) $ 2,640 — $ —

— — $ — — 121,212 (13) $ 29,091 15,152 (19) $ 1,636

Felenstein — — $ — — 11,000 (14) $ 2,640 49,500 (18) $ 5,346

— — $ — — 15,890 (8) $ 3,814 — $ —

— — $ — — 40,764 (15) $ 9,783 30,574 (18) $ 3,302

— — $ — — 30,573 (12) $ 7,338 — $ —

— — $ — — 1,680 (16) $ 403 1,266 (18) $ 137

— — $ — — 1,247 (12) $ 299 — $ —

— — $ — — 161,616 (13) $ 38,788 20,202 (19) $ 2,182

(1) Options generally expire 90 days from the term date if the NEO terminates employment.

In the event of termination without cause, Mr.

Lesinski’s options expire 180 days from the term date.

(2) Amounts are based on the closing stock price, $0.24 per share, on December 29, 2022 based on the target level of performance.

The amounts for these awards are presented based on 100% of the fair market value on the date of grant.

When there is a stock award, but no performance metric set for portions of the award, the portion is considered granted upon approval of the performance metric.

As the 2022 performance metric for portions of the 2021 PBRSU award and the 2022 PBRSU award were set in January and February 2022, the amounts include, and only include, those portions of the awards.

(3) The stock options vest 33.33% per year commencing on July 29, 2020, subject to continuous service.

(4) The stock options vest 33.33% per year commencing on August 4, 2021, subject to continuous service.

(5) The stock options vest 33.33% per year commencing on August 1, 2022, subject to continuous service.

(6) The stock options vest 33.33% per year commencing on September 27, 2021, subject to continuous service.

(7) The restricted stock units vest 33.33% per year commencing on July 29, 2020, subject to continuous service.

(8) The restricted stock units vest 50.0% per year commencing on February 28, 2021, subject to continuous service.

(9) The restricted stock units vests 33.33% per year commencing on August 4, 2021, subject to continuous service.

(10) The restricted stock units vests 33.33% per year commencing on August 1, 2022, subject to continuous service.

(11) The restricted stock units vests 33.33% per year commencing on September 27, 2021, subject to continuous service.

(12) The restricted stock units vest February 26, 2024, subject to continuous service.

(13) The restricted stock units vests 33.33% per year commencing on February 23, 2022, subject to continuous service.

(14) The restricted stock vests 33.33% per year commencing on January 22, 2020, subject to continuous service.

(15) The restricted stock units vests 33.33% per year commencing on January 20, 2021, subject to continuous service.

(16) The restricted stock units vests 33.33% per year commencing on July 2, 2021, subject to continuous service.

(17) The restricted stock unit awards are scheduled to vest based on achievement of the actual cumulative “Free Cash Flow” target at the end of the three-year measuring period.

These figures assume 100% vesting of PBRS prior to any modification.

The performance metrics for the 2023 and 2024 performance years have not yet been set.

(18) The restricted stock awards are scheduled to vest based on achievement of the actual cumulative “Free Cash Flow” target at the end of the three-year measuring period for the 2020 and 2021 grants.

These figures assume 100% vesting of PBRS prior to any modification.

(19) The restricted stock unit awards are scheduled to vest based on achievement of the actual cumulative “Free Cash Flow” target at the end of the two-year measuring period the 2022 grants.

These figures assume 90% vesting of PBRS prior to any modification.

The performance metric for the 2023 performance year has not yet been set.

POTENTIAL PAYMENTS UPON TERMINATION OR CHANGE IN CONTROL

The following summaries set forth potential payments payable to our NEOs upon termination of their employment or a change in control of NCM, Inc.

under their employment agreements, as amended, and under the Equity Incentive Plan.

The following discussion is based on the assumption that the actual bonus amount would be the target amount reported as a non-equity incentive plan award in the Grants of Plan Based Awards table.

Actual payments may be more or less than the amounts described below.

In addition, the Company may enter into new arrangements or modify these arrangements, from time to time.

Each employment agreement provides additional detail and definitions for the termination reasons, such as disability, cause and change in control, among others.

The following table assumes the executive’s employment was terminated under each of these circumstances on December 29, 2022 and such payments and benefits have an estimated value of:

(1) (2) Medical

(3) Term Life

(4) Disability

Contribution (4) Value of

Awards (5) Total

Without Cause or For Good Reason or Non-renewal by Company $ 1,769,027 $ 19,605 $ — $ — $ — $ 65,918 $ 1,854,550

Without Cause or For Good Reason in connection with a Change of Control** $ 3,538,054 $ 19,605 $ — $ — $ — $ 257,664 $ 3,815,323

Death $ — $ 19,605 $ — $ — $ — $ 65,918 $ 85,523

Disability* $ 462,500 $ 19,605 $ 5,118 $ 720 $ — $ 65,918 $ 553,861

Without Cause or For Good Reason or Non-renewal by Company $ 787,500 $ 17,202 $ — $ — $ — $ 25,869 $ 830,571

Without Cause or For Good Reason in connection with a Change of Control** $ 787,500 $ 17,202 $ — $ — $ — $ 49,697 $ 854,399

Death $ — $ 17,202 $ — $ — $ — $ 25,869 $ 43,071

Disability* $ 225,000 $ 17,202 $ 443 $ 720 $ — $ 25,869 $ 269,234

Felenstein (c)

Without Cause or For Good Reason or Non-renewal by Company $ 1,238,575 $ — $ — $ — $ — $ 68,986 $ 1,307,561

Without Cause or For Good Reason in connection with a Change of Control** $ 1,238,575 $ — $ — $ — $ — 114,111 $ 1,352,686

Death $ — $ — $ — $ — $ — $ 68,986 $ 68,986

Disability* $ 334,750 $ — $ 1,568 $ 720 $ — $ 68,986 $ 406,024

* Net of amounts offset by disability insurance payments

** A change of control is defined as 12 months following the change of control within the respective employee agreements and 3 months prior to or one year following a change of control within the respective equity agreements.

(1) If the employment of the NEO is terminated by NCM, Inc.

for reasons other than disability, death or cause, or the executive resigns for good reason, as defined in the NEO's employment agreement, or the agreement is not renewed on substantially equal terms, the NEO will be entitled to severance for the period specified in the respective employment agreement.

If the NEO’s employment terminates due to death, the NEO’s beneficiaries will receive the base salary paid through the end of the month of death.

Lesinski terminates his employment on account of his disability, in exchange for a release of claims against the Company, and if, and only if he is not eligible to receive benefits following the termination date under the Company’s long-term disability plan, he will be entitled to 50% of his base salary.

Felenstein terminates employment on account of his disability, in exchange for a release of claims against the Company, he will be entitled to 50% of his then base salary, offset by any disability benefits provided under a company sponsored benefit arrangement.

Lesinski's severance represents 100% of his base salary, plus 100% of his target bonus based on his salary in effect on December 29, 2022 paid over 12 months.

Ng’s severance represents 100% of his base salary, plus 100% of his target bonus based on his salary in effect on December 29, 2022 paid over 12 months.

Felenstein severance represents an amount equal to 100% of his base salary, plus 100% of his target bonus based on his base salary in effect on December 29, 2022 paid over 12 months.

(2) If the employment of Messrs.

Lesinski, Ng or Felenstein is terminated by NCM, Inc.

for any reason, the respective NEO is entitled to any annual, long-term or other incentive award that relates to a completed fiscal year or performance period, as applicable, and is payable (but not yet paid) on or before the date of termination or resignation.

(3) If the employment of Messrs.

Lesinski, Ng or Felenstein is terminated by NCM, Inc.

for reasons other than death or cause, or he resigns for good reason, as defined in the respective NEO's employment agreement, the applicable NEO is entitled to one year of continued coverage under the NCM, Inc.

medical and health insurance plan pursuant to COBRA.

The amount for Messrs.

Lesinski, Ng and Felenstein represents an amount equal to 100% of the premium costs for a 12-month period.

(4) If the employment of Mr.

Felenstein or Mr.

Ng is terminated by NCM, Inc.

on account of disability, they are entitled to receive an amount equal to the cost that would be incurred by the NEO in obtaining individual benefits equivalent to the NCM, Inc.

employee benefit plan or program that the NEO was participating in on the effective date of the termination for a period of up to one year.

(5) Under the Equity Incentive Plan, if within three months prior to or one year after the consummation of a change of control, as defined in the Equity Incentive Plan and each NEO’s employment agreement, the NEO’s employment is terminated by NCM, Inc., its affiliate or a successor in interest without cause or by the NEO for good reason, both as defined in the Equity Incentive Plan and each NEO’s employment agreement, then all outstanding options and stock appreciation rights shall become immediately exercisable and all other awards shall become vested and any restrictions will lapse.

Pursuant to the restricted stock agreements, in the case of involuntary terminations without cause, death and disability, each NEO would retain a prorated amount of shares of TBRS and PBRS equivalent to time employed during the vesting period.

The retained shares would vest upon termination in the case of TBRS and upon the achievement of performance conditions in the case of PBRS.

Amounts are based on the closing stock price, $0.24 per share, on December 29, 2022.

Pursuant to the stock option agreements, in the case of involuntary terminations without cause, Mr.

Ng’s vested stock options would expire after 90 days and Mr.

Lesinski’s vested stock options would expire after 180 days.

Vested stock options would expire after twelve months in the case of death or disability for either NEO.

Lesinski’s and Mr.

Ng’s unvested options would be forfeited on the termination date in the case of death or disability but will vest equal to the portion of the vesting period they served in their respective roles in the case of termination without cause.

EMPLOYMENT AGREEMENTS

The following provides a discussion of the material terms of the employment agreements between NCM, Inc.

and each of our NEOs.

Our Compensation Committee believes these employment agreements are consistent with the standard in our industry for senior executives.

The agreements provide for payments and benefits if each executive’s employment with the Company and its affiliates is terminated (i) without cause (as defined in the agreements), (ii) for good reason (as defined in the agreements), (iii) without cause or good reason three months prior to or within one year following a change of control (as defined in the agreements), (iv) in the event of death, and (v) in the event of disability.

See “Potential Payments Upon Termination or Change in Control” for additional information about such payments and benefits.

Lesinski’s employment agreement was amended on July 20, 2022 and provides that he will serve as Chief Executive Officer of NCM, Inc.

The amended employment agreement became effective August 1, 2022 and shall expire on the earlier of (i) December 31, 2025 or (ii) the termination of Mr.

Lesinski's employment under the agreement.

Prior to this amendment, Mr.

Lesinski’s original employment agreement was effective August 1, 2019, and would have expired on August 2, 2022.

The amended employment agreement provides for an annual base salary of $925,000.

In addition to base salary, Mr.

Lesinski is eligible to receive an annual cash bonus pursuant to the Company’s annual non-equity incentive plan based upon attainment of performance goals determined by our Compensation Committee at a target of 100% of base salary.

Lesinski shall also have the opportunity to receive long-term incentive awards with a grant date fair value of at least $1,000,000 plus $250,000 of premium priced options each year during the term, in such amounts and pursuant to such terms as may be determined in the sole discretion of the Board, subject to limitations in the Amended Employment Agreement related to the mix of equity awards.

Lesinski's employment is involuntarily terminated by the Company, he will receive an amount equal to 100% of his annual base salary plus 100% of the target bonus.

Lesinski's employment is involuntarily terminated during the 12-month period following a change of control (as defined in the agreement), on the first payroll that occurs after the 55th day following the effective date of such termination he will receive a lump sum cash payment in an amount equal to 200% of his annual base salary plus 200% of the target bonus, payable in equal installments over a 12-month period.

For up to 12 months following any such termination of employment, the Company will pay Mr.

Lesinski an amount equal to 100% of the monthly premium paid by Mr.

Lesinski for COBRA coverage under the Company’s group health and dental plans.

Under the agreement, during his employment and for a one-year period following employment, Mr.

Lesinski has agreed not to compete with NCM, Inc.

or any of its affiliates or subsidiaries, or solicit any of the employees, officers or agents of these entities.

Under the agreement, Mr.

Lesinski has also agreed not to divulge or disclose customer lists or trade secrets of NCM, Inc.

or its affiliates or subsidiaries except in the course of carrying out his duties under the agreement or as required by law.

Ng’s employment agreement provides that he will serve as Chief Financial Officer of NCM, Inc.

The employment agreement was effective September 15, 2021, and expires on September 15, 2024.

The employment agreement provides for an annual base salary, subject to annual increases at the discretion of our Compensation Committee based on previous year performance, market conditions and other factors deemed relevant by our Compensation Committee.

Our Compensation

Committee set Mr.

Ng’s base salary at $450,000 for 2022.

In addition to base salary, Mr.

Ng is eligible to receive an annual cash bonus pursuant to the Company’s annual non-equity incentive plan based upon attainment of performance goals determined by our Compensation Committee at a target of 75% of base salary.

Ng shall also have the opportunity to receive long-term incentive awards of at least $300,000 annually as determined by our Board.

Ng’s employment is involuntarily terminated by the Company, on the first payroll that occurs after the 55th day following the effective date of such termination he will receive an amount equal to 100% of his annual base salary plus 100% of the target bonus, payable in equal installments over a 12-month period.

Ng’s employment is involuntarily terminated during the 12-month period following a change of control (as defined in the agreement), on the first payroll that occurs after the 55th day following the effective date of such termination he will receive an amount equal to 100% of his annual base salary plus 100% of the target bonus, payable in equal installments over a 12-month period.

For up to 12 months following any such termination of employment, the Company will pay Mr.

Ng an amount equal to 100% of the monthly premium paid by Mr.

Ng for COBRA coverage under the Company’s group health and dental plans.

Under the agreement, during his employment and for a one-year period following employment, Mr.

Ng has agreed not to compete with NCM, Inc.

or any of its affiliates or subsidiaries, or solicit any of the employees, officers or agents of these entities.

Under the agreement, Mr.

Ng has also agreed not to divulge or disclose customer lists or trade secrets of NCM, Inc.

or its affiliates or subsidiaries except in the course of carrying out his duties under the agreement or as required by law.

Felenstein was promoted to President – Sales, Marketing & Partnerships on July 2, 2021.

Prior to this promotion, Mr.

Felenstein served as Chief Revenue Officer of NCM, Inc.

Felenstein’s original employment agreement was effective April 24, 2017 and his amended and restated employment agreement is effective July 2, 2021 and expires on June 30, 2024.

The original and new employment agreements provide for an annual base salary, subject to annual increases at the discretion of our Compensation Committee based on previous year performance, market conditions and other factors deemed relevant by our Compensation Committee.

Our Compensation Committee set Mr.

Felenstein’s base salary at $669,500 for 2022.

In addition to base salary, Mr.

Felenstein is eligible to receive an annual cash bonus pursuant to the Company’s annual non-equity incentive plan based upon attainment of performance goals determined by our Compensation Committee at a target of base salary of 75% before his promotion and 85% upon his promotion of base salary and long-term incentive awards as determined by the Board.

Felenstein shall also have the opportunity to receive long-term incentive awards of at least $600,000 annually as determined by our Board.

In his employee agreements, if Mr.

Felenstein’s employment is involuntarily terminated by the Company, on the first payroll that occurs after the 55th day following the effective date of such termination he will receive an amount equal to 100% of his annual base salary plus 100% of the target bonus, payable in equal installments over a 12-month period.

Felenstein’s employment is involuntarily terminated during the 12-month period following a change of control (as defined in the employment agreement), on the first payroll that occurs after the 55th day following the effective date of such termination he will receive an amount equal to 100% of his annual base salary plus 100% of the target bonus, payable in equal installments over a 12-month period, and Mr.

Felenstein will vest in full in any unvested shares of his initial sign-on equity grant.

For up to 12 months following any such termination of employment, the Company will pay Mr.

Felenstein an amount equal to 100% of the monthly premium paid by Mr.

Felenstein for COBRA coverage under the Company’s group health and dental plans.

Under the agreement, during his employment and for a one-year period following employment, Mr.

Felenstein has agreed not to compete with NCM, Inc.

or any of its affiliates or subsidiaries, or solicit any of the employees, officers or agents of these entities.

Under the agreement, Mr.

Felenstein has also agreed not to divulge or disclose customer lists or trade secrets of NCM, Inc.

or its affiliates or subsidiaries except in the course of carrying out his duties under the agreement or as required by law.

NON-EMPLOYEE DIRECTOR COMPENSATION

Non-Employee Directors

For our 2022 fiscal year, the base retainers and meeting fees for our directors who were not our employees, employees of our founding members, or employees of Standard General ( “non-employee directors”) are as follows.

In accordance with one of the Company’s cash preservation measures implemented in response to the COVID-19 pandemic, the non-employee directors were paid 80% of the 2021 retainer balances through the 2022 annual meeting date upon which the following retainers were approved by the Nominating and Governance Committee.

The 2022 compensation was altered to include a larger mix of equity to retainer.

$80,000 per annum Retainer for non-employee director

$280,000 per annum Retainer for serving as Non-Employee Chairman

$25,000 per annum Additional retainer for serving as Chairman of the Audit Committee

$19,000 per annum Additional retainer for serving as Chairman of the Compensation Committee

$15,000 per annum Additional retainer for serving as Chairman of the Nominating and Governance Committee

$13,000 per annum Additional retainer for serving as a member of the Audit Committee

$12,500 per annum Additional retainer for serving as a member of the Compensation Committee

$10,000 per annum Additional retainer for serving as a member of the Nominating and Governance Committee

Non-Employee Chairman Cash Retainers.

The compensation for the non-employee chairman is inclusive of all committee chair and member fees and was reviewed by the Nominating and Governance Committee, with the assistance of FW Cook, and approved by the Board.

Restricted Stock Units.

Non-employee directors serving on the Board as of the annual meeting date of May 4, 2022, received a grant of equal to $120,000.

Each of the RSUs vested on February 23, 2023 and had a value of $12,852 based on the closing price of the Company’s common stock on the vesting date.

The RSUs were settled in shares of the Company’s common stock.

The RSU awards include the right to receive dividend equivalents, subject to vesting.

We reimburse all of our directors for reasonable travel, lodging and other expenses related to their service on our Board of Directors.

Stock in Lieu of Cash Compensation.

Beginning with the first quarter of 2021 and in an effort to further preserve cash, non-employee directors may elect to receive shares of the Company’s common stock in lieu of all or a portion of their cash compensation (i.e.

base retainers and additional retainers for serving as a Chair or member of a Committee) on a quarterly basis.

A director can make the election to receive stock for each quarter of 2022 during the seven calendar day period immediately prior to the start of the respective quarter-end blackout period.

The portion of his or her quarterly cash compensation designated by the director will then be converted into a number of shares of the Company’s common stock utilizing the fair market value of the common stock on the seventh calendar day of the respective election period.

Once an election is made with respect to a particular calendar quarter, it may not be withdrawn or substituted.

Employee Directors

Our employees, employees of our founding members and employees of Standard General who also serve as directors receive compensation for their services as employees from their respective employers, but they do not receive any additional compensation from us for their service as our directors or members or chairs of committees.

FISCAL 2022 NON-EMPLOYEE DIRECTOR COMPENSATION

Name Fees Earned or

Paid in Cash (1) Stock Awards

(2) All Other

Compensation Total

Goodman $ 103,678 (3) $ 119,999 $ — $ 223,677

Hall $ 101,024 (4) $ 119,999 $ — $ 221,023

Hill $ 100,558 $ 119,999 $ — $ 220,557

Donna Reisman $ 101,631 (3) $ 119,999 $ — $ 221,630

Segall $ 245,000 (5) $ 119,999 $ — $ 364,999

Mark Zoradi $ 77,267 $ 66,428 $ — $ 143,695

(1) The following table provides details about each component of the “Fees Earned or Paid in Cash” column from the Fiscal 2022 Director Compensation Table above.

All of the Fees Earned or Paid in Cash shown above were reduced by 20% beginning in April 2020 and were returned to 100% on May 4, 2022 and reflect the prorated amounts paid for this increase or any prorated amounts due to change in positions.

Retainer Committee

Retainer Total Fees

Earned or Paid

Goodman $ 77,267 $ 5,779 $ 20,633 (3) $ 103,678

Hall $ 77,267 $ — $ 23,758 $ 101,024

Hill $ 77,267 $ 23,292 $ — $ 100,558

Donna Reisman $ 77,267 $ 12,952 $ 11,413 (3) $ 101,631

Segall $ 245,000 (5) $ — $ — $ 245,000

Mark Zoradi $ 77,267 $ — $ — $ 77,267

(2) The amounts represent the aggregate grant date fair value of the restricted stock unit awards as computed under ASC 718 and do not represent cash payments made to the individuals or amounts realized.

For a discussion of the assumptions and methodologies used in calculating the grant date fair value of these awards, please see Note 11 to the Company’s consolidated financial statements .

Goodman’s compensation was prorated for his time served in each position, as he was appointed to be chair of the Compensation Committee effective August 3, 2022.

Reisman’s compensation was prorated for her time served as committee chair until Mr.

Goodman’s appointment.

(4) This fee includes 17,861 shares received in lieu of cash payments in accordance with our stock in lieu of cash program.

Segall temporarily recused himself from all board activities due to his conflict of interest as the Regal designee during the Cineworld Proceeding.

Following his recusal, Mr.

Segall received the non-employee director retainer in the fourth quarter of 2022.

The RSUs are also subject to the terms and provisions of the Equity Incentive Plan.

The following table provides details about the “Stock Awards” column from the Fiscal 2022 Director Compensation Table above and outstanding stock awards at December 29, 2022.

Fiscal 2022 Grants Outstanding Equity Awards at

December 29, 2022

Date Number of

RSUs Grant Date

Fair Value of

(a) Number of

RSUs That Have

Not Vested Market Value of Shares of Stock That

Have Not Vested (b)

Goodman 5/4/2022 53,571 $ 119,999 53,571 $ 12,857

Hall 5/4/2022 53,571 $ 119,999 53,571 $ 12,857

Hill 5/4/2022 53,571 $ 119,999 53,571 $ 12,857

Donna Reisman 5/4/2022 53,571 $ 119,999 53,571 $ 12,857

Segall 5/4/2022 53,571 $ 119,999 53,571 $ 12,857

Mark Zoradi 8/24/2022 53,571 $ 66,428 53,571 $ 12,857

(a) Calculated in accordance with ASC Topic 718 as described in footnote (1) to the Fiscal 2022 Director Compensation Table above and based on a stock price of $2.24.

(b) Amounts are based on the closing stock price, $0.24 per share, on December 29, 2022.

The shares vested on February 23, 2023.

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

For information with respect to the security ownership of directors, executive officers and holders of more than 5% of a class of our voting securities, refer to the Proxy Statement under the heading “Beneficial Ownership,” which information is incorporated herein by reference.

For Equity Incentive Plan information, refer to the Proxy Statement under the heading “Equity Compensation Plan”, which information is incorporated herein by reference.

Beneficial Ownership

Beneficial ownership is determined under the rules of the SEC and generally includes voting or investment power over securities.

Except in cases where community property laws apply or as indicated in the footnotes to this table, we believe that each stockholder identified in the table possesses sole voting and investment power over all shares of common stock shown as beneficially owned by the stockholder.

As of April 10, 2023, the percentage of beneficial ownership for NCM, Inc.

is based on 174,076,268 shares of common stock outstanding (including unvested restricted stock).

Unless indicated below, the address of each individual listed below is 6300 South Syracuse Way, Suite 300, Centennial, Colorado 80111.

The following table sets forth information regarding the beneficial ownership of our common stock as of April 10, 2023, by:

• each person (or group of affiliated persons) who is known by us to own beneficially more than 5% of our common stock;

• each of our NEOs;

• each of our directors and nominees for director;

• all current directors and executive officers as a group.

Name of Beneficial Owner Shares of

Stock NCM LLC

Units (1) Percent of

Five Percent Stockholders

Cinemark Holdings, Inc.

and Affiliates (“Cinemark”) (2) 43,690,797 — 25.1 %

Regal Entertainment Group and Affiliates (“Regal”) (3) 40,683,797 — 23.4 %

Standard General L.P.

(4) 12,932,382 7.4 %

Directors and Executive Officers

Lesinski (5) 1,388,387 0.8 %

Felenstein 220,315 *

Ng (6) 72,992 *

Woods 35,959 *

Goodman 181,397 *

Hall 808,712 *

Hill 102,271 *

Donna Reisman 108,626 *

Segall 85,530 *

Mark Zoradi 53,571 *

All current directors and executive officers as a group (11 persons) (5)(6) 3,057,760 1.8 %

* Less than one percent

(1) NCM LLC common membership units are redeemable at any time at the option of the holder.

Upon any redemption, we may choose whether to redeem the units for shares of our common stock on a one-for-one basis or for a cash payment equal to the market price of shares of NCM, Inc.

common stock.

NCM LLC provided written notices effective as of March 29, 2023 setting forth the determination of 21,431,174 common membership units to two founding members.

The common membership units have not been issued as of April 10, 2023.

(2) Includes Cinemark Holdings, Inc., Cinemark USA Inc.

and Cinemark Media, Inc.

The address of these stockholders is 3900 Dallas Parkway, Suite 500, Plano, Texas 75093.

Represents beneficial ownership as of March 29, 2023 based on the Schedule 13D/A filed on April 3, 2023.

(3) Includes Regal Entertainment Group, Regal Entertainment Holdings, Inc., Regal Cinemas Corporation, Regal Cinemas, Inc., Regal CineMedia Holdings, LLC and Regal CineMedia Corporation at 101 East Blount Avenue, Knoxville, Tennessee 37920 and Cineworld Group plc at 8th Floor, Vantage London, Great West Road, Brentford, United Kingdom TW8 9AG.

Represents beneficial ownership as of December 28, 2022 based on the Schedule 13D/A filed on December 30, 2022.

(4) The address of this stockholder is 767 Fifth Avenue, 12th Floor, New York, New York 10153.

Represents beneficial ownership as of September 7, 2022 based on the Schedule 13D/A filed on September 9, 2022.

(5) Includes 1,057,264 stock options that were vested and exercisable within 60 days of April 10, 2023.

(6) Includes 35,365 stock options that were vested and exercisable within 60 days of April 10, 2023 .

EQUITY COMPENSATION PLAN INFORMATION

The following table sets forth, as of December 29, 2022, information for all equity compensation plans under which our equity securities were authorized for issuance.

Plan Category Number of securities to be

issued upon exercise of

rights Weighted-average

exercise price of

outstanding options,

warrants and rights Number of securities

remaining available for

future issuance under

equity compensation

plans (excluding

securities reflected in

the first column)

Equity compensation plans approved by security holders 7,273,378 (1) $ 4.34 (2) 8,868,249 (3)

Equity compensation plans not approved by security holders — — —

Total 7,273,378 $ 4.34 8,868,249

(1) Includes 2,097,818 stock option grants and 5,175,560 restricted stock and restricted stock units;

0 additional shares for the 2022, 2021 and 2020 PBRS grants, respectively, that may be issued as the highest level of performance possible is 100%.

Actual results could vary from estimates, especially in the later years included in the two or three-year projections.

(2) Restricted stock awards and restricted stock units are excluded as there is no exercise price for these awards.

(3) Represents remaining shares of our common stock available for issuance under the Equity Incentive Plan.

The Equity Incentive Plan was approved by our stockholders on April 28, 2020, with additional shares authorized for issuance under the Equity Incentive Plan approved on May 4, 2022.

Certain Relationships and Related Transactions, and Director Independence

For information with respect to certain relationships and related transactions, refer to the Proxy Statement under the heading “Certain Relationships and Related Party Transactions,” which information is incorporated herein by reference.

For information with respect to director independence, refer to the Proxy Statement under the heading “Proposal 1- Election of Directors,” which information is incorporated herein by reference.

Before the completion of our IPO in February 2007, NCM LLC was wholly owned by the founding members.

After the IPO, NCM LLC was owned by us and the founding members.

In connection with the IPO, we entered into several agreements to define and regulate the relationships among us, NCM LLC and the founding members.

As of December 29, 2022, NCM, Inc.

owned approximately 74.6 % of the outstanding common membership units in NCM LLC.

NCM LLC’s other member is Cinemark, one of the largest motion picture exhibition companies in the U.S., which held the remaining 25.4% of NCM LLC’s common membership units as of December 29, 2022.

In December 2022, AMC and Regal each redeemed all of their outstanding membership units, 5,954,646 and 40,683,797, respectively, in exchange for shares of NCM, Inc.

common stock, reducing AMC’s and Regal’s ownership to 0.0% as of December 29, 2022.

In February and March of 2023, Cinemark redeemed a total of 43,690,797 of its outstanding common membership units, in exchange for shares of NCM, Inc.

common stock, reducing Cinemark’s ownership interest to 0.0% as of March 23, 2023.

NCM, Inc.’s primary source of cash flow from operations is distributions from NCM LLC pursuant to the NCM LLC Operating Agreement.

also receives

management fees pursuant to a management services agreement with NCM LLC in exchange for providing specified management services to NCM LLC.

Further transactions between NCM, Inc.

and our founding members, if any, have been and will continue to be approved by our Audit Committee, which is composed of independent members of our Board of Directors, or another committee comprised entirely of independent members of our Board.

Our Audit Committee charter authorizes our Audit Committee to hire financial advisors and other professionals to assist the committee in evaluating and approving any transaction between us and any related party, including our founding members.

On July 5, 2018, AMC sold 100.0% of its remaining NCM LLC membership units to Regal and Cinemark.

Following the sale, AMC remains a party to the ESA, Common Unit Adjustment Agreement, TRA and certain other original agreements which are discussed further below.

As such, AMC will continue to participate in the annual common unit adjustment, receive TRA payments, receive theater access fee payments, and make payments under the beverage concessionaire agreements, among other things.

Further, the sale does not impact future integration payments and other encumbered theater payments owed to NCM LLC by AMC.

As of December 29, 2022, AMC did not have any NCM LLC membership units.

Transactions with Founding Members

Exhibitor Services Agreements

In connection with the IPO, NCM LLC and each of AMC, Cinemark and Regal executed an amended and restated ESA, effective as of February 13, 2007, which replaced the exhibitor services agreements previously in effect.

In connection with the sale of the Fathom Events business, on December 26, 2013, NCM LLC and each of AMC, Cinemark and Regal amended and restated the ESAs to remove those provisions addressing the rights and obligations related to the digital programming services of the Fathom Events business.

In November 2019, NCM LLC and each of Cinemark and Regal amended the ESAs to extend the terms of the ESAs and modify the program distributed by NCM LLC through its Digital Content Network for exhibition in Cinemark and Regal theaters.

Certain basic terms of the ESAs are discussed below:

Advertising Services.

Under the ESAs, NCM LLC is the exclusive provider within the United States of advertising services in the founding members’ theaters (subject to pre-existing contractual obligations and other limited exceptions for the benefit of the founding members).

Following the 2019 ESA Amendments, the ESAs with Regal and Cinemark have a term of 34 years from the completion of the IPO, and the ESA with AMC has a term of 30 years from the completion of the IPO, in each case with a five-year right of first refusal to enter into a services agreement for the services provided under the ESA with the applicable founding member on terms equivalent to those offered by a third-party.

The advertising services include the on-screen advertising of the Noovie pre-show, use of the lobby entertainment network or LEN and lobby promotions.

The pre-show is generally 20 to 30 minutes long.

Beginning on November 1, 2019 in accordance with the 2019 ESA Amendments, NCM LLC is entitled to display up to five minutes of the Noovie pre-show after the advertised showtime of a feature film and the Platinum Spot in Cinemark and Regal theaters.

The “attached” trailers are those provided by studios to Cinemark and Regal that are with the feature film, which is at least one trailer, but sometimes two trailers.

The amount of time included in the Noovie pre-show displayed prior to showtime will be reduced by the sum of five minutes plus the aggregate length of time of any Platinum Spot.

The Noovie pre-show includes up to two minutes for the founding members to be used to promote various activities associated with operation of the theaters, including concessions, ticketing partners, gift card and loyalty programs, founding member special events and vendors of non-film related services provided to theaters, only if the promotion is incidental to the vendor’s service (called theater advertising).

Under the ESAs, up to 90 seconds of the Noovie program can be sold to NCM LLC’s founding members to satisfy their on-screen advertising commitments under their beverage concessionaire agreements.

During 2022, we sold 60 seconds to Regal and Cinemark to satisfy their on-screen advertising commitments under their beverage concessionaire agreements.

In accordance with the 2019 ESA Amendments beginning in 2020, the annual cost per thousand (“CPM”) charged to Regal and Cinemark increases at a fixed rate of 2.0%.

Prior to the 2019 ESA Amendments in 2019, the CPM was priced equal to the greater of (1) the advertising CPM charged by NCM LLC in the previous year for the time sold to the founding member beverage supplier and (2) the advertising CPM for the previous year charged by NCM LLC to unaffiliated third parties during segment one (closest to showtime) of the Noovie pre-show in the founding member’s theaters, limited to the highest advertising CPM being then-charged by NCM LLC pursuant to the ESAs.

In the lobby, the founding members are required to provide a specified number of LEN screens according to the number of auditoriums in the theater.

The founding members have the right to install additional screens in their theater lobbies, but these screens can only be used for limited strategic programs, described below, concessions and theater advertising.

NCM LLC’s founding members may conduct a limited number of lobby promotions at no charge in connection with the promotion of motion pictures and their strategic programs;

however, such activities do not reduce the lobby promotions inventory available to us.

In consideration for access to the founding members’ theater attendees for on-screen advertising and use of the founding members’ theaters for the LEN and lobby promotions, the founding members receive a monthly theater access fee.

The theater access fee is composed of a fixed payment per patron and a fixed payment per digital screen, which may be adjusted for any advertising exhibited by some, but not all, theaters or founding members because of content objections or technical capacity.

The theater access fee paid to founding members included an additional fee for digital cinema systems connected to our advertising network.

The payment per digital screen and for the digital cinema systems increases annually by 5%.

The payment per theater patron increased increase by 8 % every five years with the next occurrence in 2027.

Pursuant to the 2019 ESA Amendments, Cinemark and Regal each received an additional monthly theater access fee beginning November 1, 2019 in consideration for NCM LLC’s access to certain on-screen advertising inventory after the advertised showtime of a feature film.

These fees are also based upon a fixed payment per patron beginning at $0.0375 per patron beginning on November 1, 2020, (ii) $0.05 per patron beginning on November 1, 2021, (iii) $0.052 per patron beginning on November 1, 2022 and (iv) increasing 8% every five years beginning November 1, 2027.

The theater access fee and revenue share aggregate payments to related parties totaled $ 59.4 million for the year ended December 29, 2022 as compared to $34.3 million for the year ended December, 30, 2021, when theater access fees were not incurred when theaters were temporarily closed in response to the COVID-19 pandemic and attendance-based fees were reduced for the period of the year that attendance was lower than historical levels.

Also, in 2022, total revenue from related parties related to beverage concessionaire agreements totaled $ 14.4 million as compared to $8.8 million in 2021.

Net Payments to Related Parties.

In 2022 the net payments to each related party for theater access fees and revenue share and payments for use of their screens, less the purchase from NCM LLC of advertising under the founding member’s beverage concessionaire agreements were $18.6 million to Regal and Cinemark as compared to $11.1 million in 2021.

As of December 29, 2022 and December, 30, 2021, amounts payable to Regal and Cinemark were $ 15.2 million and $11.4 million, respectively.

Refer to the ‘Common Unit Adjustment Agreement’ section for further discussion of the nature and magnitude of these payments in 2022 and 2021.

NCM LLC Operating Agreement

NCM, Inc., AMC, Cinemark and Regal executed the NCM LLC third amended and restated limited liability company operating agreement, effective as of February 13, 2007, which was amended on March 16, 2009 (to permit NCM LLC to provide advertising to a variety of out-of-home advertising venues), on August 6, 2010 and September 3, 2013 (in each case, to modify the timing of written notice should a founding member desire to exercise its option to redeem common membership units), and on January 23, 2019 (to update the member’s rights following changes within the tax partnership rules).

Certain basic terms of the restated operating agreement are as follows:

Manager of NCM LLC.

is a member and the sole manager of NCM LLC.

As the sole manager, NCM, Inc.

controls all of the day to day business affairs and decision-making of NCM LLC through our officers and directors without the approval of any other member.

Furthermore, we cannot be removed as manager of NCM LLC.

As long as we are the manager of NCM LLC, unless the founding members approve, our business will be limited to owning and managing the common units, managing the business of NCM LLC, fulfilling our obligations under the Exchange Act and activities incidental to the foregoing.

We are not entitled to compensation for our services as manager except as provided in the Management Services Agreement described under “– Transactions with NCM LLC – Management Services Agreement” below or as otherwise approved by the members under the restated operating agreement.

Issuance of Units upon Exercise or Vesting of Equity Compensation.

Upon the exercise of options we have issued or the vesting of shares for other types of equity compensation, we will have the right to acquire from NCM LLC a number of common units equal to the number of our shares being issued in connection with the exercise of options or vesting of shares for other types of equity compensation.

In consideration for such units, we will contribute to NCM LLC the consideration we received for the exercise of options or vesting of shares for other types of equity compensation.

In 2022 and 2021, we acquired 1,137,304 and 1,195,504 units, respectively, due to vesting of restricted stock and restricted stock units.

Founding Member Approval Rights.

If any director designee to our Board of Directors designated by Regal and Cinemark, under the Director Designation Agreement, described below, is not appointed to our Board, nominated by us or elected by our stockholders, as applicable, then each of the other members (so long as such other member continues to own 5% of NCM LLC’s issued and outstanding common membership units) will be entitled to approve certain actions of NCM LLC as identified in the restated operating agreement.

AMC is currently a member under the terms of the NCM LLC Operating Agreement and no longer a founding member for purposes of this agreement, and thus, no longer has such approval rights.

Distributions.

We are required to make mandatory distributions to members of all “Available Cash,” as defined in the restated operating agreement.

Available Cash does not include amounts drawn or paid under NCM LLC’s working capital line of credit.

The mandatory distributions must occur quarterly.

Following the third amendment to NCM LLC’s credit agreement, NCM LLC may not make any available cash distributions to its members (Cinemark, Regal and NCM, Inc.) until after NCM

LLC delivers its compliance certificate to the lenders for the fourth quarter of 2023.

After the delivery of the compliance certificate for the fourth quarter of 2023, NCM LLC may make available cash distributions to its members so long as NCM LLC’s consolidated net senior secured leverage ratio is equal to or less than 4.00 to 1.00, outstanding loans under the revolving credit facility are equal to or less than $39.0 million and no default or event of default under the Credit Agreement has occurred and is continuing.

In 2022 and 2021, positive available cash distributions to related parties totaled $19.3 million and $0.0 million, respectively.

Of that amount in 2022, particularly the fourth quarter of 2022, the portion payable to NCM, Inc., Regal and Cinemark totaled $14.4 million, $0.0 million and $4.9 million, respectively.

Due to the adverse impacts of the COVID-19 Pandemic on the Company’s operations, the Company generated negative available cash by NCM LLC to its related party founding members and NCM, Inc.

for the nine months ended September 29, 2022 of $39.4 million (including negative $ 10.5 million for Cinemark, negative $ 9.3 million for Regal and negative $ 19.6 million for NCM, Inc.) and $93.7 million (including negative $24.3 million for Cinemark, negative $24.2 million for Regal and negative $45.2 million for NCM, Inc.) for the year ended December, 30, 2021.

Under the terms of the NCM LLC Operating Agreement, these negative amounts will be netted against future positive available cash distributions in the second quarter of each fiscal year, contingent upon the Company's compliance with the covenants defined within Note 10 — Borrowings and in accordance with the NCM LLC Operating Agreement.

Common Unit Redemption Right.

Members have a redemption right to exchange common membership units of NCM LLC for newly issued shares of our common stock on a one-for-one basis (as adjusted for certain events), or at our option, a cash payment equal to the market price of one share of our common stock.

Under our amended and restated certificate of incorporation, upon the surrender of the NCM LLC common units, we will then contribute cash or issue new shares of our common stock to NCM LLC in exchange for an amount of newly issued common units equal to the number of units surrendered by the redeeming member.

NCM LLC will then distribute the cash or shares of common stock to the redeeming member to complete the redemption.

AMC exercised the redemption right of an aggregate 200,000 common membership units in 2015, 15,600,000 common membership units in 2017, 197,118 common membership units in 2019, 1,390,567 common membership units in 2021 and 5,954,646 common membership units in 2022, whereby AMC surrendered 200,000, 15,600,000, 197,118, 1,390,567 and 5,954,646 common membership units, respectively, to NCM LLC for cancellation.

The Company contributed an aggregate of 200,000, 15,600,000, 197,118 and 1,390,567 shares of its common stock to NCM LLC in exchange for a like number of newly issued common membership units.

NCM LLC then distributed the shares of common stock to AMC to complete the redemptions.

Regal exercised the redemption right of 40,683,797 common membership units in December 2022, where by Regal surrendered 40,683,797 common membership units to NCM LLC for cancellation.

The Company contributed 40,683,797 shares of its common stock to NCM LLC in exchange for a like number of newly issued common membership units.

NCM LLC then distributed the shares of common stock to Regal to complete the redemptions.

Cinemark exercised the redemption right of 43,690,797 common membership units in February and March of 2023, where by Cinemark surrendered 43,690,797 common membership units to NCM LLC for cancellation.

The Company contributed 43,690,797 shares of its common stock to NCM LLC in exchange for a like number of newly issued common membership units.

NCM LLC then distributed the shares of common stock to Cinemark to complete the redemptions.

Common Unit Adjustment Agreement

NCM, Inc., NCM LLC, AMC, Cinemark and Regal executed the common unit adjustment agreement, effective as of February 13, 2007.

The common unit adjustment agreement provides a mechanism for adjusting membership units held by the founding members based on increases or decreases in the number of screens operated by each founding member.

Increases in the number of screens are included in the unit adjustment if arising from acquisition of a theater or opening of a newly constructed theater (subject to certain exceptions).

Decreases in the number of screens are included in the unit adjustment if arising from disposition of a theater (subject to certain exceptions).

NCM LLC adjusts its membership units annually, except that an earlier adjustment will occur for a founding member if it acquires or disposes of theaters, in a single transaction or cumulatively that will result in a change of two percent or more in the total annual attendance of all founding members (called an extraordinary attendance increase or decrease).

The changes in annual attendance are calculated based on attendance at the relevant theaters during the prior twelve fiscal months;

however, if an acquired theater has not been operating during the twelve prior fiscal months, the change in annual attendance will be calculated based on 75% of the projected annual attendance for such theater, with a subsequent adjustment for the actual attendance.

During the first quarter of 2022 and the first quarter of 2021, NCM LLC issued 4,140,896, net of 2,342,997 returned common membership units, and 3,047,582 common membership units to its founding members for the rights to exclusive access to the theater screens and attendees added, net of dispositions by the founding members to NCM LLC’s network during

the 2020 fiscal year and 2019 fiscal year, respectively.

During the first quarter of 2021, NCM LLC also calculated a negative common membership unit adjustment for AMC for which NCM LLC received $9.3 million in cash.

If an existing on-screen advertising agreement with an alternative provider is in place with respect to any acquired theaters, the founding members may elect to receive common membership units related to those encumbered theaters in connection with the common unit adjustment.

If the founding members make this election, then they are required to make integration payments.

Founding members may also elect to delay receipt of the common unit membership units until such time as the acquired theaters are no longer encumbered and the theaters then join NCM LLC’s network.

Because the AMC Carmike and Cinemark Paragon theaters were subject to an existing on-screen advertising agreement with an alternative provider during 2022 and 2021, and AMC and Cinemark elected to receive common membership units, AMC and Cinemark will make integration payments to NCM LLC.

The integration payments will continue until the earlier of (i) the date the theaters are transferred to NCM LLC’s network or (ii) the expiration of the ESA.

Integration payments are calculated based upon the advertising cash flow that the Company would have generated if it had exclusive access to sell advertising in the theaters with pre-existing advertising agreements.

The ESA additionally entitles NCM LLC to payments related to the founding members’ on-screen advertising commitments under their beverage concessionaire agreements for encumbered theaters (“encumbered theater payments”).

These payments are also accounted for as a reduction to the intangible asset.

If common membership units are issued to a founding member for newly acquired theaters that are subject to an existing on-screen advertising agreement with an alternative provider, the amortization of the intangible asset commences after the existing agreement expires and NCM LLC can utilize the theaters for all of its services.

During the years ended December 29, 2022 and December, 30, 2021, the Company recorded a reduction to net intangible assets of $ 5.4 million and $1.6 million related to these Carmike and Paragon integration and encumbered theater payments, respectively.

During the years ended December 29, 2022 and December, 30, 2021, AMC and Cinemark paid a total of $ 2.8 million and $0.5 million, respectively, related to the integration and other encumbered theater payments (as payments are made one quarter and one month in arrears, respectively).

Tax Receivable Agreement

NCM, Inc., NCM LLC, AMC, Cinemark, and Regal executed the tax receivable agreement, effective as of February 13, 2007, as amended on April 29, 2008 to permit NCM, Inc.

to make estimated payments to each of the founding members or ESA parties.

The tax receivable agreement provides for the effective payment by us to the founding members of 90% of the amount of cash savings, if any, in U.S.

federal, state, and local income tax or franchise tax that we actually realized as a result of certain increases in our proportionate share of tax basis in NCM LLC’s tangible and intangible assets resulting from our IPO and related transactions, including increases attributable to payments made under the tax receivable agreement.

These tax benefit payments are not conditioned upon one or more of the founding members maintaining a continued ownership interest in either NCM LLC or NCM, Inc.

We expect to benefit from the remaining 10% of cash savings, if any, that we may actually realize.

Under the tax receivable agreement, cash savings in income and franchise tax are computed by comparing our actual income and franchise tax liability to the amount of such taxes that we would have been required to pay had there been no increase in our proportionate share of tax basis in NCM LLC’s tangible and intangible assets and had the tax receivable agreement not been entered into.

The tax receivable agreement generally applies to our taxable years up to and including the 30th anniversary date of our IPO and will continue until any utilized benefits are no longer subject to potential audit or examination by a taxing authority.

The term of the tax receivable agreement may, however, be terminated at an earlier date in the event that we exercise our right to terminate the agreement pursuant to an early termination procedure that requires us to pay the founding members an agreed upon amount equal to the present value of the estimated remaining payments to be made under the revenue sharing agreement.

Although the actual timing and amount of any payments that may be made under the tax receivable agreement varies depending upon a number of factors (including the timing of any redemptions of common membership units in NCM LLC by our founding members, the extent to which such redemptions are taxable, the trading price of shares of our common stock at the time of any such redemptions, and the amount and timing of our income), we expect the payments that we may effectively make to the founding members could be substantial.

If the Internal Revenue Service or other taxing authority were to subsequently challenge any of our cash savings covered by the tax receivable agreement, and if such challenge were ultimately upheld, the terms of the tax receivable agreement require the founding members to repay to us an amount equal to the prior payments effectively made by us in respect of such disallowed cash savings, plus a proportionate share of any applicable interest and penalties.

In such an event, and if a founding member is unable to make a timely repayment to us under the terms of the tax receivable agreement, we will have the ability to cause NCM LLC to offset against payments owed to the founding member.

The repayment obligation is a several liability of each founding member and not a joint liability among the founding members.

As of December 29, 2022 we had a balance recorded for the payable to our related parties under the tax receivable agreement of approximately $25.7 million.

The Company does expect to owe a payment for the 2022 taxable year in 2023.

of December, 30, 2021 we had a balance recorded for the payable to our related parties under the tax receivable agreement of approximately $11.9 million.

In 2022, the Company did not make a payment for the 2021 taxable year as the net operating loss generated during the year ended December, 30, 2021 exceeded the gross deductions related to the tax receivable agreement for the year ended December, 30, 2021.

Software License Agreement

NCM LLC, AMC, Cinemark, Regal CineMedia Corporation (“RCM”) and Digital Cinema Implementation Partners, LLC, a company jointly owned by the founding members (“DCIP”), executed the Second Amended and Restated Software License Agreement effective as of February 13, 2007 (the “license agreement”).

Certain basic terms of the license agreement are discussed below:

AMC and RCM granted to NCM LLC an exclusive license (subject to certain exceptions) to identified technology for use in the United States with respect to the services provided under the ESAs.

The founding members and DCIP each granted to NCM LLC a license, subject to certain limitations, to any existing and future developments of such party based on the licensed technology that has application to the services provided under the ESAs.

NCM LLC granted to the founding members a license, subject to certain limitations, to any NCM LLC developments that existed at the IPO date based on licensed technology, solely for the founding members’ internal business purposes that are outside of the services that are defined in the ESAs (but not including digital cinema applications).

NCM LLC granted DCIP a license, subject to certain exceptions, to any existing and future NCM LLC developments that may have digital cinema applications.

Director Designation Agreement

NCM, Inc., AMC, Cinemark and Regal executed the Director Designation Agreement effective as of February 13, 2007.

AMC no longer has rights under this agreement.

So long as Regal or Cinemark, respectively, owns at least 5% of NCM LLC’s issued and outstanding common membership units, on an as-converted basis, such founding member has the right to designate two nominees to our Board of Directors who are voted upon by our stockholders.

At least one of the designees of such founding member must qualify as an “independent director” at the time of designation so that a majority of the members of our Board are “independent directors” under the Nasdaq rules.

We have agreed to include each director designee in our Board’s slate of nominees submitted to our stockholders for election of directors and in the proxy statement prepared by management for every meeting of our stockholders called with respect to the election of members of our Board, subject to certain exceptions.

If a vacancy occurs because of the death, disability, resignation or removal of a director designee, then our Board, or any Board committee, will not vote, fill the vacancy or take any action subject to the veto rights of the directors designated by Cinemark and Regal under our amended and restated certificate of incorporation until (i) the founding member has designated a successor director designee and our Board has appointed such successor director designee, (ii) the founding member fails to designate a successor director designee within 10 business days of such vacancy, or (iii) the founding member has waived its rights to designate a successor director designee and has consented to our Board, or any Board committee, taking a vote on the specified actions prior to our Board filling the vacancy with a successor director designee.

Registration Rights Agreement

NCM, Inc., AMC, Cinemark and Regal executed the registration rights agreement effective as of February 13, 2007.

The registration rights agreement requires us to use our reasonable efforts to file a registration statement on the first business day after the one-year anniversary of the closing of our IPO to register all registrable securities held by the founding members that are not already registered, if necessary, and to file resale registration statements after that time for any additional registrable securities that we issue to any founding member in the future, within 20 days after such issuance.

Additionally, we must maintain effectiveness of these mandatory registration statements until the earlier of the time when the founding members have disposed of all their registrable securities and the time when all registrable securities held by the founding members are eligible for resale under specified securities regulations.

We are responsible for the expenses in connection with the registration of securities pursuant to the registration rights agreement.

Joint Defense Agreements

NCM, Inc., NCM LLC and the founding members from time to time may enter into a joint defense and common interest agreement, under which the parties agree to cooperate and share information in order to advance their shared interests in owning and operating NCM LLC.

Agreements with Founding Members—Services

In 2022 and 2021, NCM LLC incurred fees of approximately $0.1 million and $0.2 million to Cinemark and Regal for payments made to the founding members in the ordinary course of business, including the purchase of movie tickets,

concession products, rental of theater space primarily for marketing to NCM LLC’s advertising clients and other advertising operating costs, respectively.

Other Transactions

Sale of Fathom Events Business to AC JV, LLC

On December 26, 2013, NCM LLC sold the Fathom Events business to AC JV, LLC owned 32% by each of the founding members and 4% by us.

In consideration for the sale, NCM LLC received a total of $25.0 million in promissory notes from our founding members (one-third or approximately $8.3 million from each founding member).

The notes bear interest at a fixed rate of 5.0% per annum, compounded annually.

Interest and principal payments are due annually in six equal installments commencing on December 26, 2014.

Due to the related party nature of the transaction, we formed a committee of independent directors that hired a separate legal counsel and an investment banking firm who advised the committee and rendered an opinion as to the fairness of the transaction.

NCM LLC’s investment in AC JV, LLC was $ 0.8 million as of December 29, 2022 and $0.7 million as of December, 30, 2021.

During the years ended December 29, 2022 and December, 30, 2021, NCM LLC received cash distributions from AC JV, LLC of $ 0.4 million and $0.0 million, respectively.

During the years ended December 29, 2022 and December, 30, 2021, NCM LLC recorded equity in earnings of $ 0.4 million and $0.0 million for AC JV, LLC, respectively.

In connection with the sale, we entered into a transition services agreement and a services agreement.

Services Agreement with AC JV, LLC.

NCM LLC entered into a services agreement with AC JV, LLC upon the closing of the sale of Fathom Events.

The agreement grants AC JV, LLC advertising on-screen and on our LEN and a pre-feature program prior to Fathom events reasonably consistent with what was previously dedicated to Fathom.

In addition, the services agreement provides that we will assist with event sponsorship sales in return for a share of the sponsorship revenue.

NCM LLC has also agreed to provide creative and media production services for a fee.

The term of the agreement coincides with the ESAs, subject to certain exceptions.

Network Advertiser Transactions

NCM LLC earned revenue from an advertiser for which Donna Reisman, director of the Company’s Board of Directors, serves as President, in the amount of $0.3 million during the year ended December 29, 2022 and $0.2 million during the year ended December, 30, 2021.

Transactions with NCM LLC

Management Services Agreement

On February 13, 2007, NCM, Inc.

and NCM LLC executed the management services agreement under which we provide certain management services to NCM LLC, including services typically provided by the individuals serving in the positions of chief executive officer, president, chief financial officer, and general counsel.

In exchange for the services, NCM LLC reimburses us for compensation and other expenses of our officers and employees and for certain out-of-pocket costs.

NCM LLC provides administrative and support services to us, such as office facilities, equipment, supplies, payroll and accounting and financial reporting.

The management services agreement also provides that our employees may participate in NCM LLC’s benefit plans, and that NCM LLC employees may participate in the National CineMedia, Inc.

2007 Equity Incentive Plan, the National CineMedia, Inc.

2016 Equity Incentive Plan and the National CineMedia, Inc.

2020 Omnibus Incentive Plan.

Pursuant to this agreement, NCM LLC incurred approximately $11.0 million during 2022 and $10.2 million in 2021.

Receivables Sales Agreements

On November 3, 2022, NCM LLC and NCM, Inc.

entered into a Receivable Sales Agreement pursuant to which, NCM, Inc.

acquired the right to approximately $5.0 million of NCM LLC’s accounts receivable at a purchase price equal to the book value of the accounts receivable in exchange for a cash payment.

On December 28, 2022, NCM LLC and NCM, Inc.

entered into an additional Receivables Sales Agreement pursuant to which, NCM, Inc.

acquired the right to approximately $5.0 million of NCM LLC’s accounts receivable at a purchase price equal to the book value of the accounts receivable in exchange for a cash payment.

Independence of Our Board of Directors

Our Board of Directors has determined that David E.

Glazek, Lawrence A.

Goodman, Kurt C.

Hall, Juliana F.

Hill, Donna Reisman and Mark B.

Segall, all current directors of the Company, qualify as “independent” directors under the rules promulgated by the SEC under the Exchange Act, and by Nasdaq.

There are no family relationships among any of our executive officers, directors or nominees for director.

Principal Accounting Fees and Services

The information required by this item with respect to principal accounting fees and services is incorporated herein by reference from the Proxy Statement under the heading “Fees Paid to Independent Auditors.”

Fees Paid to Independent Auditors

We paid Deloitte & Touche LLP, the Company’s independent registered public accounting firm for fiscal years 2022 and 2021, the following amounts:

Audit Fees (1) $ 1,208,989 $ 1,015,536

Audit Related Fees — —

Total Audit and Related Fees 1,208,989 1,015,536

All Other Fees — —

Total Fees $ 1,208,989 $ 1,015,536

(1) In 2022 and 2021, audit fees included $182,500 and $20,000, respectively, of fees for the issuance of consents and other procedures in connection with registration statement filings and other finance transactions.

Pre-Approval Policies and Procedures

All auditing services, internal control-related services, and permitted non-audit services (including the fees and terms thereof) to be performed for the Company by our independent auditors must be approved by our Audit Committee in advance, subject to the de minimis exceptions for non-audit services described in Section 10A(i)(l)(B) of the Exchange Act that are approved by our Audit Committee prior to the completion of the audit.

Our Audit Committee may form and delegate authority to subcommittees consisting of one or more of its members or may delegate authority to one or more members, including the authority to grant pre-approvals of audit and permitted non-audit services, provided that all decisions to grant pre-approvals pursuant to such delegated authority will be presented to the entire Audit Committee at its next scheduled meeting.

Effective with the completion of our initial public offering in February 2007, all of our independent auditors’ services were pre-approved by our Audit Committee.

Exhibits, Financial Statement Schedules

6 unchanged sentences

Incorporation by Reference

3.1 Second Amended and Restated Certificate of Incorporation.

8-K 001-33296 3.1 7/6/2018

3.2 The Bylaws, as amended August 1, 2019.

3.1 The Bylaws, as amended May 4, 2022

10-Q 001-33296 3.1 5/9/2022

3.2 Second Amended and Restated Certificate of Incorporation of National CineMedia, Inc.

as amended as of May 4, 2022

10-Q 001-33296 3.2 5/9/2022

4.1 Indenture, dated as of August 19, 2016, by and between National CineMedia, LLC and Wells Fargo Bank, National Association, as trustee.

6 unchanged sentences

8-K 001-33296 4.1 10/8/2019

4.5 Description of the Registrant's Securities

4.5 First Supplemental Indenture, dated as of March 15, 2023, by and between National CineMedia, LLC and Computershare Trust Company, North America, as trustee.

8-K 001-33296 4.1 3/16/2023

4.6 Second Supplemental Indenture, dated as of March 31, 2023, by and between National CineMedia, LLC and Computershare Trust Company, as trustee.

8-K 001-33296 4.1 3/31/2023

4.7 * Description of the Registrant’s Securities

10.1 National CineMedia, LLC Third Amended and Restated Limited Liability Company Operating Agreement dated as of February 13, 2007, by and among American Multi-Cinema, Inc., Cinemark Media, Inc., Regal CineMedia Holdings, LLC and National CineMedia, Inc.

7 unchanged sentences

8-K 001-33296 10.1.3 9/9/2013

Incorporation by Reference

10.1.4 Fourth Amendment to the Third Amended and Restated Limited Liability Company Operating Agreement of National CineMedia, LLC dated January 23, 2019, by and among Cinemark Media, Inc., Cinemark USA, Inc., Regal Cinemedia Holdings, LLC, Regal Cinemas, Inc., and National CineMedia, Inc.

3 unchanged sentences

10-K 001-33296 10.2.4 2/21/2014

Incorporation by Reference

10.2.1 First Amendment to Amended and Restated Exhibitor Services Agreement dated as of March 9, 2017, by and between National CineMedia, LLC and American Multi-Cinema, Inc.

7 unchanged sentences

8-K 001-33296 10.1 9/17/2019

10.3.3 Second Amendment to Amended and Restated Exhibitor Services Agreement dated as of July 29, 2022, by and between National CineMedia, LLC and Cinemark USA, Inc.

10-Q 001-33296 10.4 8/8/2022

10.4 Amended and Restated Exhibitor Services Agreement dated as of December 26, 2013, by and between National CineMedia, LLC and Regal Cinemas, Inc.

5 unchanged sentences

8-K 001-33296 10.2 9/17/2019

10.4.3 Third Amendment to the Amended and Restated Exhibitor Services Agreement dated as of July 29, 2022, by and between National CineMedia, LLC and Regal Cinemas, Inc.

10-Q 001-33296 10.5 8/8/2022

Incorporation by Reference

10.5 Common Unit Adjustment Agreement dated as of February 13, 2007, by and among National CineMedia, Inc., National CineMedia, LLC, Regal CineMedia Holdings, LLC, American Multi-Cinema, Inc., Cinemark Media, Inc., Regal Cinemas, Inc.

8 unchanged sentences

8-K 001-33296 10.1 5/5/2008

Incorporation by Reference

10.7 Second Amended and Restated Software License Agreement dated as of February 13, 2007, by and among American Multi-Cinema, Inc., Regal CineMedia Corporation, Cinemark USA, Inc., Digital Cinema Implementation Partners, LLC and National CineMedia, LLC.

16 unchanged sentences

8-K 001-33296 10.1 3/8/2021

Incorporation by Reference

10.11.3 Amendment No.

1 unchanged sentence

8-K 001-33296 10.1 1/6/2022

10.11.4 Amendment No.4 to the Credit Agreement, dated as of January 17, 2023, by and among National CineMedia, LLC, each lender party thereto, and JPMorgan Chase Bank, N.A., as administrative agent.

8-K 001-33296 10.1 1/19/2023

10.11.5 Amendment No.

5 to the Credit Agreement, dated as of March 31, 2023, by and among National CineMedia, LLC, each lender party thereto, and JPMorgan Chase Bank, N.A., as administrative agent

8-K 001-33296 10.2 3/31/2023

10.12 Revolving Credit Agreement, dated as of January 5, 2022, by and among National CineMedia, LLC, each lender party thereto, and Wilmington Savings Fund Society, FSB, as administrative agent and collateral agent .

8-K 001-33296 10.2 1/6/2022

10.13 Letter agreement, dated June 1, 2018, between National CineMedia, Inc.

and Standard General L.P.

10.12.1 Amendment No.

1 to the Revolving Credit Agreement, dated as of January 17, 2023, by and among National CineMedia, LLC, each lender party thereto, and Wilmington Savings Fund Society, FSB, as administrative agent.

8-K 001-33296 10.2 1/19/2023

10.13 Standard General L.P.

Registration Letter to National CineMedia, Inc., dated as of June 2, 2022.

8-K 001-33296 10.1 6/2/2022

10.14 Restructuring Support Agreement, dated as of April 11, 2023, among the Company, NCM LLC and Consenting Secured Creditors.

8-K 001-33296 10.1 4/12/2023

10.15 Employment Agreement dated as of August 1, 2022, by and between National CineMedia, Inc.

1 unchanged sentence

10-Q 001-33296 10.3 8/8/2022

10.15 Employment Agreement dated as of May 8, 2015, by and among National CineMedia, Inc., National CineMedia LLC and Clifford E.

10-Q 001-33296 10.1 5/12/2015

10.16 Transition, Separation and Release of Claims Agreement, dated June 9, 2021, by and between National CineMedia, Inc.

and Clifford E.

8-K 001-33296 10.1 6/10/2021

Incorporation by Reference

10.16.1 Consulting Agreement, dated June 9 , 2021, by and between National CineMedia, Inc.

and CMarksCo, LLC (included in Exhibit 10.1) .

8-K 001-33296 10.2 6/10/2021

10.16 Amended and Restated Employment Agreement, dated June 9, 2021, by and between National CineMedia, Inc.

4 unchanged sentences

8-K 001-33296 10.1 9/27/2021

10.17.1 * Third Amendment to Employment Agreement

10.18 Form of Indemnification Agreement.

11 unchanged sentences

8-K 001-33296 10.2 5/1/2020

10.23 First Amendment to the National CineMedia, Inc.

2020 Omnibus Incentive Plan effective as of May 4, 2022.

8-K 001-33296 10.1 5/9/2022

Incorporation by Reference

10.24 Form of 2012 Stock Option Agreement.

30 unchanged sentences

8-K 001-33296 10.1 3/4/2021

Incorporation by Reference

10.27.1 First Modification to the National CineMedia, Inc.

4 unchanged sentences

8-K 001-33296 10.3 3/4/2021

10.27.3 First Modification to the National CineMedia, Inc.

2020 Equity Incentive Plan 2020 Restricted Stock Agreement dated May 4, 2022.

8-K 001-33296 10.1 5/9/2022

10.28 Form of Receivables Sales Agreement, dated November 3, 2022, between National CineMedia, LLC and National CineMedia, Inc.

10-Q 001-33296 10.2 11/7/2022

21.1 * List of Subsidiaries.

3 unchanged sentences

31.2 * Rule 13a-14(a) Certification of Chief Financial Officer.

Incorporation by Reference

32.1 ** Certification of Chief Executive Officer and Pursuant to 18 U.S.C.

15 unchanged sentences

NATIONAL CINEMEDIA, INC.

March 3, 2022 /s/ Thomas F.

April 13, 2023 /s/ Thomas F.

Chief Executive Officer and Director

(Principal Executive Officer)

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities indicated on the 3rd day of March, 2022.

Signature Title

5 unchanged sentences

Donna Reisman

Renana Teperberg

/s/ Maria Woods Attorney-in-fact

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