PROPOSAL 1
:
ELECTION OF DIRECTORS
At the Annual Meeting, three individuals are to be elected as Class I directors to hold a three-year term of office from the date of their election until the Company's 2020 annual meeting and until their successors are duly elected and qualified. The three nominees for election as Class I directors are: Mr. Saich, Mr. Locke, and Ms. Pawlus.
The Nominating and Corporate Governance Committee and the Board believe that the nominees have the requisite qualifications to oversee our business. Set forth below you will find certain information for each of the directors, including the nominees, which we believe evidences the directors' qualifications to serve on the Board.
The Board recommends a vote
“FOR”
each of the nominees.
Each of the biographies of the nominees for election as directors below contains information regarding the person's service as a director, business experience, director positions held currently or at any time during the past five years, and the experience, qualifications, attributes and skills that caused the Board to determine that the person should be nominated for election as a director at the Annual Meeting. The following information is as of February 12, 2017.
Nominees for Election as Class I Directors for a Term Ending 2020
Class I Directors—Term Expiring 2017
Mr. Anthony J. Saich
,
63
, has served as a director of the Company since August 2012. Since July, 2008, Mr. Saich has served as the Director of the Ash Center for Democratic Governance and Innovation and Daewoo Professor of International Affairs at Harvard University. In his capacity as Ash Center Director, Mr. Saich also serves as the director of the Rajawali Foundation Institute for Asia and the faculty chair of the China Public Policy Program, the Asia Energy Leaders Program and the Leadership Transformation in Indonesia Program. Mr. Saich also serves as the Chairman of the Board of Trustees of the China Medical Board and International Bridges to Justice and is the U.S. Secretary-General of the China United States Strategic Philanthropy. Mr. Saich sits on the executive committees of the John King Fairbank Center for Chinese Studies and the Asia Center, both at Harvard University, and serves as the Harvard representative of the Kennedy Memorial Trust. Mr. Saich holds a bachelor's degree in politics and geography from the University of Newcastle, United Kingdom, a master's degree in politics with special reference to China from the School of Oriental and African Studies, London University, and has a Ph.D. from the Faculty of Letters, University of Leiden, the Netherlands. Mr. Saich has over 35 years of experience in international affairs and will provide valuable international insights to the Company.
Mr. Gary F. Locke, 67
, has served as a director of the Company since February 2016. Mr. Locke is currently a trade consultant and owner of Locke Global Strategies, LLC since 2014. Mr. Locke was the first Chinese American to be elected as a U.S. Governor when the voters of Washington elected him in 1996 and re-elected him in 2000. During his administration he strengthened economic ties between China and Washington State. Mr. Locke then served as U.S. Commerce Secretary from 2009-2011, where he led the effort to implement President Obama's National Export Initiative to double American exports in five years. He then became America's 10th Ambassador to China, serving from 2011-2014, and during his service he opened markets for made-in-USA goods and services and reduced wait times for visa interviews of Chinese applicants from 100 days to three days. Mr. Locke is a member of the board of directors of Fortinet, Inc. He attended Yale University, graduating with a Bachelor degree in political science and received his law degree from Boston University. Mr. Locke brings to the Board a global and valuable business perspective due to his extensive role in politics and experience as an Ambassador to China.
Ms. Kathleen M. Pawlus, 56
, has served as a director of the Company since December 2014. Ms. Pawlus, retired partner of Ernst and Young, LLP (“EY”), served as the Global Assurance Chief Financial Officer and Chief Operating Officer from 2012 to 2014. EY's Assurance practice is the largest of EY's four service lines and includes its Audit Practice, Fraud, Investigation and Dispute Services Practice, Climate Change and Sustainability Services
Practice and its Financial Accounting Advisory Services Practice. Prior to this, from 2006 to 2012, Ms. Pawlus served as EY's Americas Chief Financial Officer, Global PBFA Function Leader and US Firm Chief Financial Officer responsible for finance, IT operations, treasury, purchasing and facilities. Ms. Pawlus served on EY's U.S. Executive Board from 2006 to 2012. Ms. Pawlus earned her bachelor of science degree from Indiana University and is a Certified Public Accountant. Ms. Pawlus brings to the Board extensive financial, accounting, operational and management experience in various capacities with more than 30 years of experience.
Directors Continuing in Office
Class II Directors—Term Expiring 2018
Mr. Lloyd Hill, 73
, has served as a director of the Company since December 2013. Prior to his retirement in 2006, Mr. Hill served as the Chief Executive Officer and Chairman of Applebee's International, Inc. Mr. Hill serves on the board of directors and as chairman of the compensation committee and member of the audit committee of Red Robin Gourmet Burgers, Inc. and on the board of directors of E.E. Newcomer Enterprises, Inc. Mr. Hill also serves on the board of directors of Saint Luke's South Hospital, the audit committee for the Saint Luke's Health System and the development board for the University of Texas Medical Branch. Mr. Hill holds a master's degree in business administration from Rockhurst University in Kansas City, Missouri. Mr. Hill has extensive experience and knowledge of public company operations, as well as experience serving on the boards of other public companies.
Mr. Maojun (John) Zeng, 45
, has served as a director of the Company since February 2016. Mr. Zeng has been President of Wanda Cinema Line Co., Ltd, a subsidiary of Wanda group since March 27, 2014, and has served as a member of its Board of Directors since July 30, 2013. Mr. Zeng previously served as the Assistant to the President of Wanda Cultural Industries Group and Vice President of Wanda Cinema Line Corporation since February 28, 2012. Mr. Zeng holds an undergraduate degree and a master's degree in business administration from Renmin University of China. Mr. Zeng has experience serving in an executive leadership role at a major theatrical exhibition company in China and brings to the Board valuable theatrical exhibition knowledge.
Mr. Howard W. “Hawk” Koch, Jr., 71
, has served as a director of the Company since October 2014. Mr. Koch is a veteran movie producer and principal at The Koch Company, the former president of the Academy of Motion Picture Arts and Sciences (“AMPAS”), and President Emeritus of the Producers Guild of America. Mr. Koch currently serves on the Board of Directors of the Motion Picture & Television Fund and the National Film Preservation Foundation. Mr. Koch previously served on the Board of Governors of AMPAS from 2004 to 2013 and the Board of Directors of the Producers Guild of America from 1999 to 2012. Mr. Koch has been intimately involved with the making of over 60 major motion pictures, among them such films as “Source Code”, “Fracture”, “Primal Fear”, “Marathon Man,” “Chinatown,” “Wayne's World,” “Peggy Sue Got Married,” “The Idolmaker,” “Heaven Can Wait,” “The Way We Were” and “Rosemary's Baby.” Mr. Koch continues to develop and produce movies. Mr. Koch has over 51 years of experience in the motion picture industry and provides our Board with a unique insight into the production of movies that are exhibited on our screens.
Class III Directors—Term Expiring 2019
Mr. Lin (Lincoln) Zhang, 44
, has served as Chairman and a director of the Company since August 2012. Mr. Zhang has served as President of Wanda Cultural Industry Group since 2012. Mr. Zhang has served on the board of directors of Wanda Cinemaline Corporation since November 2006, Dalian Wanda Commercial Properties Co., Limited since December 2009, and Dalian Wanda Group Co., Limited since February 2011. Mr. Zhang also currently serves on the board of directors of Infront Sports & Media AG, Atletico De Madrid, and World Triathlon Corporation since 2015. Prior thereto, Mr. Zhang served as Vice President of Dalian Wanda Group Co., Limited from December 2009 to December 2012. Mr. Zhang received an M.B.A. from Beijing University and a bachelor's degree in accounting from Dongbei University of Finance and Economics. Mr. Zhang is a non-practicing member of the Chinese Institute of Certified Public Accountants and a non-practicing member of the China Certified Tax Agents Association. Mr. Zhang has over 16 years of experience in financial management and operation management of large companies, especially in corporate strategy and investment, which makes him well-positioned to serve as a director for the Company.
Business Conduct and Ethics
We have a Code of Business Conduct and Ethics that applies to all of our associates, including our principal executive officer, principal financial officer and principal accounting officer, or persons performing similar functions. These standards are designed to deter wrongdoing and to promote honest and ethical conduct. The Code of Business Conduct and Ethics, which address the subject areas covered by the SEC's rules, may be obtained free of charge through our website: www.amctheatres.com under “Investor Relations”-”Governance”-”Governance Documents”. Any amendment to, or waiver from, any provision of the Code of Business Conduct and Ethics required to be disclosed with respect to any senior executive or financial officer shall be posted on this website.
Board and Committee Information
The Board held eight meetings during the year ended December 31, 2016. Each director attended at least 75% of the total combined meetings held by the Board plus the meetings held by the committees of the Board on which such director served, except for Mr. Zhang and Mr. Zeng.
Communications with the Board
Our stockholders and other interested parties may communicate to our Board, its committees or our non-management directors as a group, by writing to the Secretary of AMC Entertainment Holdings, Inc. at One AMC Way, 11500 Ash Street, Leawood, KS 66211. Stockholders and other interested parties should indicate that their correspondence is intended to be communicated to the Board.
Director Independence
We avail ourselves of the “controlled company” exception under the rules of the NYSE, which permits a listed company of which more than 50% of the voting power for election of directors is held by an individual, a group or another company to not comply with certain of the NYSE's governance requirements. Because more than 50% of our voting power is held by Wanda, we are not required to have a majority of independent directors on our Board. We currently have three independent directors, Mr. Hill, Mr. Saich, and Ms. Pawlus. In addition, while we are not required to have a Compensation Committee or a nominating and corporate governance committee, we have established such committees, each of which is composed of three directors, one of whom is independent.
Our Board has determined that Mr. Hill, Mr. Saich, and Ms. Pawlus are independent in accordance with NYSE rules and within the meaning of the Securities Exchange Act of 1934 (the “Exchange Act”) for purposes of serving on our Audit Committee. The remaining members of the Board, Mr. Locke, Mr. Zeng, Mr. Gao, Mr. Aron, Mr. Zhang, and Mr. Koch, are not independent under the NYSE rules or within the meaning of the Exchange Act.
Board Leadership Structure
Under our current leadership structure, the roles of Chairman of the Board and Chief Executive Officer are held by different individuals. Mr. Zhang serves as our non-executive Chairman of the Board and Mr. Aron serves as our Chief Executive Officer. At this time, our Board believes that this structure is best for the Company as it allows our Chairman to oversee board matters and assist the Chief Executive Officer with strategic initiatives, while enabling our Chief Executive Officer to develop and implement the strategic direction of the Company. Our Chairman is not considered independent under the NYSE rules.
Executive Sessions
Our non-management directors meet in an executive session, without members of management present, no less than once per year in accordance with the NYSE rules. Our Board Chairman or his designee presides over these executive sessions.
EXECUTIVE COMPENSATION
Compensation Discussion and Analysis
Business Highlights for 2016
2016 was a transformative year for AMC on many fronts. We acquired Odeon in November, and then acquired Carmike in December. This makes AMC the largest movie theatre operator in the United States, the largest movie theatre operator in Europe and the largest movie theatre operator in the world with over 900 theatres and over 10,000 screens. We continue to execute on our strategy of being the customer experience leader. Based on record industry box office performance in 2016, the acquisition of Starplex Cinemas in December 2015, the acquisition of Odeon in November 2016, the acquisition of Carmike in December 2016 and the success of our strategic initiatives, we increased total revenues approximately 9.8% to $3,235.8 million in 2016, compared to total revenues of $2,946.9 million for 2015. Consistent with our plans to augment shareholder returns through return of capital, we paid dividends to our stockholders of approximately $79.6 million and $78.6 million during 2016 and 2015, respectively.
Highlighted below are some of our key accomplishments:
|
·
|
|
AMC set records for the year ended December 31, 2016 for all revenue categories: admissions, food and beverage and other.
|
|
·
|
|
Total revenues exceeded $3.0 billion for the first time, increasing 9.8% to $3.2 billion compared to total revenues of $2.9 billion for the year ended December 31, 2015.
|
|
·
|
|
Admissions revenues exceeded $2.0 billion for the first time, increasing 8.3% to $2.0 billion compared to $1.9 billion for the year ended December 31, 2015.
|
|
·
|
|
Food and beverage revenues exceeded $1.0 billion for the first time, increasing 12.0% to $1.0 billion, compared to $910.1 million for the year ended December 31, 2015.
|
|
·
|
|
Net earnings increased 7.5% to $111.7 million and diluted EPS increased 6.6% to $1.13 compared to $103.9 million and $1.06, respectively, for the year ended December 31, 2015.
|
|
·
|
|
Adjusted EBITDA
(1)
grew 12.2% to $602.0 million compared to $536.5 million for the year ended December 31, 2015. Adjusted EBITDA for 2015 benefited from an $18.1 million gain related to the termination of a post-retirement health benefit plan. Excluding this gain in the prior year period, Adjusted EBITDA growth for 2016, compared to 2015 was approximately 16.1%.
|
Compensation Highlights for 2016
Our Compensation Committee and the Board approved the following compensation based on our performance during 2016:
|
·
|
|
Bonus amounts awarded under the company component of the annual incentive plan (“AIP”) were 92.0% of target.
|
|
·
|
|
Bonus amounts awarded under the individual component of the AIP attained by certain Named Executive Officers were 150.0% of target.
|
|
·
|
|
Equity awards were granted based upon a three year vesting schedule with performance conditions, including net earnings, cash flows from operating activities and adjusted free cash flow targets.
|
|
(1)
|
|
This item is a non-GAAP financial measure. Reconciliations and definitions of non-GAAP financial measures are provided in Appendix A to this proxy statement.
|
|
·
|
|
Transition Performance Stock Units were granted to bridge the gap between the previous one year grants and the new three year grants. The PSU Transition Awards did not meet the fiscal year 2016 net earnings threshold or the minimum adjusted free cash flow target. The PSU Transition Awards were cancelled and units were returned to the 2013 Employee Incentive Plan pool.
|
Base salaries for our Named Executive Officers increased between 2.0% and 2.5% from 2015 to 2016.
Compensation Highlights for 2017
We continue to enhance our executive compensation program to make it more performance based and also to better align management's compensation with the long-term interests of our stockholders. Changes to our incentive plan design for 2017 include:
|
·
|
|
Increasing the Chief Executive Officer’s target incentive under the AIP to 200% of base salary;
|
|
·
|
|
Changing the performance metrics for Performance Stock Units (“PSUs”) from adjusted free cash flow to adjusted EBITDA and diluted earnings per share, but retaining the net earnings threshold;
|
|
·
|
|
Increasing the maximum achievable units under PSU grants from 150% to 200%; and
|
|
·
|
|
Changing the forfeiture rules for PSU grants to allow for continued vesting on a pro-rata basis for participants whose service terminates (other than for Cause) during the performance period, subject to actual achievement of the performance targets.
|
Compensation Practices
The Compensation Committee regularly reviews best practices in executive compensation and uses the following guidelines to design our compensation programs:
|
|
What we do:
|
|
|
Majority of pay is performance-based and not guaranteed
|
|
Compensation mix of base salary, short-term and long-term incentives provides a variety of time horizons to balance our near-term and long-term strategic goals
|
|
Equity incentive programs and stock ownership guidelines align management and shareholder interests and provide a method for executive officers to accumulate and maintain an ownership position in the Company
|
|
Provide modest perquisites
|
|
Provide reasonable post-employment and change of control provisions in employment agreements
|
|
Prohibit hedging by executive officers
|
|
Include clawback provisions in compensation programs
|
Advisory Vote on Executive Compensation
The Board and the Compensation Committee continually evaluate our compensation policies and practices. As part of that process, the Board and the Compensation Committee consider the results of our stockholder advisory vote on executive compensation, commonly known as the “say-on-pay” vote. At the 2016 Annual Meeting, approximately 97.5% of the votes cast in connection with the stockholders advisory vote on compensation of the Named Executive Officers were cast in favor of the proposal. The Company has considered this voting result, and in light of our stockholders' substantial support, our compensation policies and decisions, as explained in this Compensation Discussion and Analysis, continue to be focused on financial performance and aligning the interests of executives with the interests of stockholders.
Certain Background Information
This section discusses the material elements of compensation awarded to, earned by or paid to our principal executive officer and principal financial officer, and our three other most highly compensated executive officers. These individuals are referred to as the “Named Executive Officers.” On July 19, 2015, the Board appointed Mr. Ramsey to serve in the additional capacities of Interim Chief Executive Officer and President, effective August 7, 2015, which he did until January 4, 2016. The Board hired Mr. Adam M. Aron as the Chief Executive Officer, President, and Director of the Company, effective as of January 4, 2016. Mr. Ramsey continues to serve as the Company's Executive Vice President and Chief Financial Officer.
Our executive compensation programs are determined and approved by our Compensation Committee or, in some cases, by the entire Board based upon the recommendation of the Compensation Committee. None of the Named Executive Officers are members of the Compensation Committee or had any role, other than the CEO as described below, in determining the compensation of other Named Executive Officers. Our CEO works together with the Compensation Committee in setting compensation levels and bonuses for our executive officers other than the CEO. Certain elements of compensation are governed by the employment agreement for each Named Executive Officer, discussed below under “Description of Employment Agreements.”
Executive Compensation Philosophy, Program Objectives and Overview
The goals of the Compensation Committee with respect to executive compensation are:
|
·
|
|
to attract, retain, motivate and reward talented executives;
|
|
·
|
|
to tie annual compensation incentives to the achievement of specified performance objectives; and
|
|
·
|
|
to achieve long-term creation of value for our stockholders by aligning the interests of these executives with those of our stockholders.
|
To achieve these goals, we endeavor to maintain compensation plans that are intended to tie a substantial portion of executives' overall compensation to key strategic, operational and financial goals and other non-financial goals that the Compensation Committee deems important. The Compensation Committee evaluates our compensation programs to ensure they are supportive of these goals and our business strategy and align the interests of our executives with those of our stockholders.
Total compensation opportunity must serve to attract and retain top performing executives. One factor in establishing our executive compensation target pay levels is relative competitiveness in relation to relevant market data. The Committee reviews data ranging from the 25th to the 75th market percentile and generally sets target pay opportunity with reference to market median.
Executive Compensation Program Elements
Our executive compensation program consists of the elements described below. The Compensation Committee determines the portion of compensation allocated to each element for each individual Named Executive Officer.
The Compensation Committee believes that the use of the combination of base salary, annual incentive compensation, and equity participation offers the best approach to achieving our compensation goals, including attracting and retaining talented and capable executives and motivating our executives and other officers to expend maximum effort to improve the business results, earnings and overall value of our business. To achieve these goals, we endeavor to maintain compensation plans that are intended to tie a substantial portion of executives' overall compensation to key strategic, operational and financial goals such as achievement of target levels of adjusted EBITDA for AIP, adjusted free cash flow, operating cash flows, net earnings and other non-financial goals that the Compensation Committee deems important.
Base Salaries
Base salaries for our Named Executive Officers are established based on the scope of their responsibilities, taking into account competitive market compensation for similar positions, as well as seniority of the individual, our ability to replace the individual and other primarily judgmental factors deemed relevant by the Compensation Committee. Base salaries for our Named Executive Officers are reviewed from time to time by the Compensation Committee and may be increased pursuant to such review and/or in accordance with guidelines contained in the various employment agreements in order to realign salaries with market levels after taking into account individual responsibilities, performance and experience. The table below shows the annual base salaries for our Named Executive Officers for 2016, compared to 2015:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2016 Annual
|
|
2015 Annual
|
|
% Increase
|
|
|
Base Salary
|
|
Base Salary
|
|
2016 vs 2015
|
Adam M. Aron
|
|
$
|
995,000
|
|
$
|
—
|
|
NA
|
Craig R. Ramsey
|
|
|
563,800
|
|
|
550,000
|
|
2.5%
|
John D. McDonald
|
|
|
517,700
|
|
|
505,000
|
|
2.5%
|
Elizabeth Frank
|
|
|
511,500
|
|
|
499,000
|
|
2.5%
|
Mark A. McDonald
|
|
|
453,500
|
|
|
444,600
|
|
2.0%
|
Management Transaction Bonus
In December 2016, Wanda agreed to make a capital contribution of $10,000,000 to AMC (without any increase in Wanda’s economic interest or voting rights in the Company) for payment to certain officers, directors, and other personnel for extraordinary services rendered in connection with merger and acquisition activity in 2016. This contribution was received during February 2017. The table below shows the amount of cash management transaction bonus for our Named Executive Officers in 2016:
|
|
|
|
|
|
Management
|
|
|
Transaction
|
|
|
Bonus
|
Adam M. Aron
|
|
$
|
4,500,000
|
Craig R. Ramsey
|
|
|
700,000
|
John D. McDonald
|
|
|
350,000
|
Elizabeth Frank
|
|
|
250,000
|
Mark A. McDonald
|
|
|
350,000
|
Annual Incentive Compensation Program
The Compensation Committee has the authority to award annual incentive bonuses to our Named Executive Officers pursuant to our annual incentive compensation program (“AIP”), which historically have been paid in cash and traditionally have been paid in a single installment in the first quarter of the subsequent year upon certification of performance by the Compensation Committee. Under employment agreements with our Named Executive Officers, each Named Executive Officer is eligible for an annual bonus, as it may be determined by the Compensation Committee from time to time. We believe that annual bonuses based on performance serve to align the interests of management and stockholders. Individual bonuses are performance based and, as such, can be highly variable from year to year. The annual incentive bonuses for our Named Executive Officers are determined by our Compensation Committee, taking into account the recommendation of our CEO (except with respect to his own bonus).
The aggregate bonus under our AIP for each Named Executive Officer, except for Mr. Aron and Mr. Ramsey, was apportioned to a company component and an individual component. In the case of Mr. Aron and Mr. Ramsey, their aggregate bonus is entirely based on company performance with no individual component. The company component was based on attainment of 2016 adjusted EBITDA for AIP (adjusted EBITDA, as calculated on Appendix A further decreased by cash distributions from non-consolidated entities). Under the AIP, the company component payout was on a scale ranging from 0% to 200% of target based on 2016 adjusted EBITDA for AIP
ranging from a threshold of $479,920,000 to a maximum of $719,880,000. The following table presents the AIP payout scale for the company component:
For Mr. Aron and Mr. Ramsey, the Compensation Committee reserved discretion to reduce the company component payout in the event the Company failed to achieve 2016 net earnings (exclusive of certain items) of at least $120.6 million.
The individual component of the bonus is based on achievement of individual key performance objectives and overall individual performance and contribution to our strategic and financial goals. Under the AIP, our Compensation Committee and, except with respect to his own bonus, CEO, retain certain discretion to decrease or increase individual component bonuses relative to the targets based on qualitative or other subjective factors deemed relevant by the Compensation Committee.
2016 AIP Payout.
Our Compensation Committee and the Board have approved bonus amounts to be paid in 2017 for the performance during 2016. The Company attained adjusted EBITDA for AIP of $561,978,000 for the year ended December 31, 2016, which was determined by our Compensation Committee to be a 92% payout of the company component. The Company attained net earnings of $111,667,000 for the year ended December 31, 2016, which exceeded the net earnings threshold applicable to Mr. Aron and Mr. Ramsey when certain pre-determined items were excluded. For the remaining Named Executive Officer's the individual component of the bonus, which was subject to the approval by the Compensation Committee, was approved following a review of each Named Executive Officer's individual performance and contribution to our strategic and financial goals. Bonus amounts awarded under the individual component bonuses of the AIP attained by certain Named Executive Officers were 150.0% of target.
The following table summarizes the AIP bonus for our Named Executive Officers for 2016:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Target
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
AIP
|
|
|
|
|
%
|
|
%
|
|
Company
|
|
Individual
|
|
|
|
|
|
|
|
|
Bonus
|
|
|
|
|
Allocated
|
|
Allocated
|
|
Component
|
|
Component
|
|
|
|
|
|
|
|
|
as % of
|
|
Target
|
|
to
|
|
to
|
|
Achievement
|
|
Achievement
|
|
Total AIP
|
|
|
2016 Base
|
|
Base
|
|
Bonus
|
|
Company
|
|
Individual
|
|
(92.0% of
|
|
(150%)
|
|
Bonus
|
|
|
Salary
|
|
Salary
|
|
Amount
|
|
Component
|
|
Component
|
|
Target)
|
|
Target)
|
|
Amount
|
Adam M. Aron
|
|
$
|
995,000
|
|
125%
|
|
$
|
1,243,750
|
|
100%
|
|
—
|
|
$
|
1,144,250
|
|
$
|
—
|
|
$
|
1,144,250
|
Craig R. Ramsey
|
|
|
563,800
|
|
70%
|
|
|
394,660
|
|
100%
|
|
—
|
|
|
363,078
|
|
|
—
|
|
|
363,078
|
John D. McDonald
|
|
|
517,700
|
|
70%
|
|
|
362,390
|
|
80%
|
|
20%
|
|
|
266,708
|
|
|
108,675
|
|
|
375,383
|
Elizabeth Frank
|
|
|
511,500
|
|
65%
|
|
|
332,475
|
|
80%
|
|
20%
|
|
|
244,720
|
|
|
99,750
|
|
|
344,470
|
Mark A. McDonald
|
|
|
453,500
|
|
65%
|
|
|
294,775
|
|
80%
|
|
20%
|
|
|
216,982
|
|
|
88,425
|
|
|
305,407
|
Among the factors considered in determining the individual component payouts for Named Executive Officers were:
|
·
|
|
Completion of both the Carmike and Odeon acquisitions;
|
|
·
|
|
Attainment of record results in revenues, food and beverage spend per guest, and adjusted EBITDA margin;
|
|
·
|
|
Renovation of 43 theatres during 2016;
|
|
·
|
|
Successful launch of a new website and mobile app;
|
|
·
|
|
Reduction in film exhibition costs from 54% to 53.2%; and
|
|
·
|
|
Redesign and implementation of improved AMC Stubs loyalty program.
|
Equity-Based Incentive Compensation Program
In December 2013, in conjunction with the IPO, the Board adopted and the Company's then-sole stockholder approved the 2013 Equity Incentive Plan. The 2013 Equity Incentive Plan provides for grants of non-qualified stock options, incentive stock options, stock appreciation rights, restricted stock awards, restricted stock units (“RSU”), performance stock units (“PSU”), stock awards, and cash performance awards. We believe that the equity-based incentive compensation program furthers our goal to attract, retain and motivate talented executives by enabling such executives to participate in the Company's long-term growth and financial success and aligns the interests of management and stockholders. The maximum number of shares of Class A common stock available for delivery pursuant to awards granted under the 2013 Equity Incentive Plan is 9,474,000 shares. As of December 31, 2016, there were 7,739,524 shares remaining available for issuance.
The 2013 Equity Incentive Plan is administered by the Compensation Committee. Subject to the limitations set forth in the 2013 Equity Incentive Plan, the Compensation Committee has the authority to determine the persons to whom awards are to be granted, prescribe the restrictions, terms and conditions of all awards, interpret the 2013 Equity Incentive Plan and adopt rules for the administration, interpretation and application of the 2013 Equity Incentive Plan.
Equity Awards Granted in 2016
On March 1, 2016, the Board approved grants of Restricted Stock Units (“RSU”) and Performance Stock Units (“PSUs”) to certain of the Company's employees under the 2013 Equity Incentive Plan. Each RSU and PSU represented the right to receive one share of Class A common stock on a future settlement date. Settlement of the RSUs and PSUs may be accelerated under certain circumstances. See “Potential Payments Upon Termination or Change of Control.” See the “Summary Compensation Table” and “Grants of Plan-Based Awards” for information on the individual grants made to our Named Executive Officers.
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity Awards Granted in 2016
|
|
|
RSUs
|
|
RSUs (162(m))
|
|
PSUs
|
|
PSU Transition
|
|
Total
|
Adam M. Aron
|
|
—
|
|
86,037
|
|
86,037
|
|
—
|
|
172,074
|
Craig R. Ramsey
|
|
16,648
|
|
—
|
|
16,648
|
|
5,407
|
|
38,703
|
John D. McDonald
|
|
—
|
|
16,648
|
|
16,648
|
|
5,407
|
|
38,703
|
Elizabeth Frank
|
|
—
|
|
16,648
|
|
16,648
|
|
5,407
|
|
38,703
|
Mark A. McDonald
|
|
—
|
|
16,648
|
|
16,648
|
|
5,407
|
|
38,703
|
Restricted Stock Units.
With respect to our Named Executive Officers, 50% of the grant consisted of RSUs. The RSUs for certain Named Executive Officers covered by IRS Code 162(m), would vest over 3 years with 1/3 vesting, on the date the Compensation Committee certifies that the Company has achieved cash flow from operating activities of at least $100,000,000 for the fiscal year prior to a vesting date, if the executive remains employed on such date. This applies to all Named Executive Officers except Mr. Ramsey (our principal financial officer). The RSUs granted to Mr. Ramsey vest 1/3 per year over three years on January 2, 2017, January 2, 2018 and January 2, 2019 based upon a service condition only. A dividend equivalent equal to the amount paid in respect of one share of Class A common stock underlying the RSUs began to accrue with respect to the RSUs on the date of grant. Such accrued dividend equivalents are paid to the holder upon settlement of the RSU’s.
Performance Stock Units.
With respect to our Named Executive Officers, 50% of the grant consisted of PSUs with both a three year cumulative adjusted free cash flow performance target, a cumulative net earnings performance threshold and a service condition, covering a performance period beginning January 1, 2016 and ending on December 31, 2018. The PSUs vest on the date the Compensation Committee certifies achievement of the performance threshold and target based on a scale ranging from 80% to 120% of the performance target with the vested amount ranging from 30% to 150%. No PSUs will vest if the Company does not achieve the adjusted free cash flow target and net earnings threshold or the participant’s service does not continue through the last day of the performance period. The vested PSUs will be settled within 30 days of vesting. A dividend equivalent equal to the amount paid in respect of one share of Class A common stock underlying the PSUs began to accrue with respect to the PSUs on the date of grant. Such accrued dividend equivalents are paid to the holder, based on the number of PSUs that vested.
The PSU awards vest based on (1) attainment of a cumulative fiscal years 2016-2018 net earnings threshold of $373,200,000 and (2) attainment of a cumulative fiscal years 2016-2018 adjusted free cash flow minimum of $433,280,000, target of $541,600,000, and maximum of $649,920,000, with the vested amount of PSUs ranging from 30% to 150% of the award.
These performance targets should not be viewed as predictive or estimates of future performance and the actual achievement of these targets is subject to numerous known and unknown risks and uncertainties, including, without limitation, those described under “forward looking statements”, “risk factors”, or similar headings in our quarterly and annual reports filed with the SEC. The Compensation Committee establishes these targets solely to help align its pay with performance. The targets are not intended to provide investors or any other party with guidance about our financial performance or operating results.
Adjusted free cash flow is a non-GAAP financial measure and should not be construed as an alternative to net earnings as an indicator of operating performance or as an alternative to cash flow provided by operating activities as a measure of liquidity (as determined in accordance with U.S. GAAP). The Company defines adjusted free cash flow as Adjusted EBITDA minus the sum of cash distributions from non-consolidated entities, cash taxes, cash interest, capital expenditures (excluding change in construction payables) net of landlord contributions, mandatory payments of principal under any credit facility and payments under capital lease obligations and financing lease obligations. As shown on Appendix A, the Company makes adjustments to Adjusted EBITDA for certain cash requirements to determine amounts available for general capital purposes from our operations. Adjusted free cash flow may not be comparable to similarly titled measures reported by other companies or other similar measures of cash flow.
The following table presents the PSU performance and payout scale:
2016 Performance Stock Unit Transition Awards.
In recognition of the shift from one year to three year performance periods for annual equity awards, on March 1, 2016, PSU transition awards were granted to certain members of management and executive officers, with both a 2016 adjusted free cash flow (as defined above) performance target and net earnings performance threshold and a service condition, covering a performance period beginning January 1, 2016 and ending on December 31, 2016. The PSUs were to vest based on a scale ranging from 80% to 120% of the performance target with the vested amount ranging from 30% to 150%. No PSUs were to vest if the Company does not achieve the adjusted free cash flow target or net earnings threshold or the participant’s
service does not continue through the last day of the performance period. The vested PSUs were to be settled within 30 days of vesting. A dividend equivalent equal to the amount paid in respect of one share of Class A common stock underlying the PSUs began to accrue with respect to the PSUs on the date of grant. Such accrued dividend equivalents were to be paid to the holder upon vesting of the PSUs. Mr. Aron was not eligible for the PSU Transition Awards. No PSU Transition Awards vested as the Company did not achieve the adjusted free cash flow or net earnings target.
The PSU Transition Awards were to vest on the date the Compensation Committee certified achievement of the following: 1) a fiscal year 2016 net earnings threshold of $120,600,000 and 2) fiscal year 2016 adjusted free cash flow target of $189,100,000, minimum of $151,280,000, and maximum of $226,920,000, with the vested amount of PSUs ranging from 30% to 150% of the award.
The PSU Transition Awards granted on March 1, 2016 did not meet the fiscal year 2016 net earnings threshold or minimum adjusted free cash flow threshold. The PSU Transition Awards were cancelled and units were returned to the 2013 Employee Incentive Plan pool.
Retirement Benefits
We provide retirement benefits to the Named Executive Officers under both qualified and non-qualified defined benefit and defined contribution retirement plans. The Defined Benefit Retirement Income Plan for Certain Employees of American Multi Cinema, Inc. (“AMC Defined Benefit Retirement Income Plan”) and the AMC 401(k) Savings Plan are both tax-qualified retirement plans in which the Named Executive Officers participate on substantially the same terms as our other participating employees. Due to limitations on benefits imposed by the Employee Retirement Income Security Act of 1974 (“ERISA”), we established a non-qualified supplemental defined benefit plan (the “AMC Supplemental Executive Retirement Plan”). On November 7, 2006, our Board approved a proposal to freeze the AMC Defined Benefit Retirement Income Plan and the AMC Supplemental Executive Retirement Plan, effective as of December 31, 2006. Benefits no longer accrue under the AMC Defined Benefit Retirement Income Plan or the AMC Supplemental Executive Retirement Plan for our Named Executive Officers or for other participants.
The “Pension Benefits” table and related narrative section “Pension and Other Retirement Plans” below describes our qualified and non-qualified defined benefit plans in which our Named Executive Officers participate.
Non-Qualified Deferred Compensation Program
Named Executive Officers are permitted to elect to defer base salaries and their cash bonuses under the AMC Non-Qualified Deferred Compensation Plan. Amounts deferred under the plans are credited with an investment return determined as if the participant's account were invested in one or more investment funds made available by the Committee and selected by the participant. The Company may, but need not, credit the deferred compensation account of any participant with a discretionary or profit sharing credit as determined by the Company. We believe that providing the Named Executive Officers with deferred compensation opportunities is a cost-effective way to permit officers to receive the tax benefits associated with delaying the income tax event on the compensation deferred, even though the related deduction for the Company is also deferred.
The “Non-Qualified Deferred Compensation” table and related narrative section below describe the non-qualified deferred compensation plan and the benefits thereunder.
Severance and Other Benefits Upon Termination of Employment
We believe that the occurrence, or potential occurrence, of a change of control transaction will create uncertainty regarding the continued employment of our executive officers. This uncertainty results from the fact that many change of control transactions result in significant organizational changes, particularly at the senior executive level. In order to encourage certain of our executive officers to remain employed with us during an important time when their prospects for continued employment following the transaction are often uncertain, we provide the
executives with severance benefits if they terminate their employment within a certain number of days following specified changes in their compensation, responsibilities or benefits following a change of control. Accordingly, we provide such protections for each of the Named Executive Officers and for other of our senior officers in their respective employment agreements. The Compensation Committee evaluates the level of severance benefits provided to our executive officers on a case-by-case basis. We consider these severance protections consistent with competitive practices.
As described in more detail below under “Compensation Discussion and Analysis—Potential Payments Upon Termination or Change of Control,” pursuant to their employment agreements, each of the Named Executive Officers is entitled to severance benefits in the event of termination of employment without cause and certain Named Executive Officers are entitled to severance benefits upon death or disability. In the case of Mr. Aron and Ms. Frank, resignation for good reason also entitles her to severance benefits.
All Other Compensation
The other compensation provided to each Named Executive Officer is reported in the All Other Compensation column of the “Summary Compensation Table” below, and is further described in footnote (5) to that table. All other compensation during the year ended December 31, 2016 consists of Company matching contributions under our 401(k) savings plan, which is a qualified defined contribution plan and life insurance premiums. On occasion, our Named Executive Officers receive event tickets from the Company, amusement park passes, event tickets and gifts from vendors for personal use and there is no incremental cost associated with these items.
Independent Compensation Consultant
For compensation related decisions effective for 2016, the Compensation Committee retained the services of Pay Governance LLC as independent executive compensation consultant to advise the Compensation Committee on compensation matters related to the executive and director compensation programs. In 2016, Pay Governance assisted the Compensation Committee with, among other things:
|
·
|
|
executive and director market pay analysis;
|
|
·
|
|
reviewing and making changes to the compensation peer group;
|
|
·
|
|
development of executive and director pay programs;
|
|
·
|
|
CEO Pay Recommendations; and
|
|
·
|
|
drafting the Proxy Statement and Compensation, Discussion and Analysis disclosures.
|
Pay Governance reported to the Compensation Committee and had direct access to the Chairman and the other members of the Compensation Committee. Beyond advice related to the executive and director compensation programs, Pay Governance did provide other services to the Company in 2016, but the amount paid to Pay Governance was immaterial. The Compensation Committee reviewed the nature of its relationship with Pay Governance and has concluded that Pay Governance’s work for the Compensation Committee does not raise any conflicts of interest with respect to Pay Governance’s independence.
In July 2016, the Compensation determined that it was in the best interests of the Company to retain the services of AON Hewitt (“AON”) as independent executive compensation consultant to replace Pay Governance and advise the Compensation Committee on compensation matters related to the executive and director compensation programs for 2017.
Adoption of a Peer Group
The Company has adopted a peer group of companies as a reference group to provide a broad perspective on competitive pay levels and practices. Peer companies were selected based on industry classification, company size in terms of revenue and market capitalization, and similarity in business operations. The Compensation Committee periodically reviews and updates the Peer Group, as necessary, upon recommendation of its independent executive compensation consultant. The Compensation Committee reviewed the peer group composition for 2016 and made no changes.
For 2016, the Company's peer group consisted of the following 13 companies:
|
|
|
|
|
|
|
|
|
|
|
|
|
2015 Revenue
|
|
|
|
Peer
|
|
Industry
|
|
(in thousands)
|
|
Market Capitalization
|
Brinker International, Inc.
|
|
Restaurants
|
|
$
|
3,257,489
|
|
$
|
2.06 Billion
|
Carmike Cinemas, Inc.
|
|
Movie Production, Theatres
|
|
|
804,368
|
|
|
N/A
|
The Cheesecake Factory Incorporated
|
|
Restaurants
|
|
|
2,100,609
|
|
|
2.74 Billion
|
Bloomin' Brands, Inc.
|
|
Restaurants
|
|
|
4,377,676
|
|
|
1.88 Billion
|
Cinemark Holdings Inc.
|
|
Movie Production, Theatres
|
|
|
2,852,609
|
|
|
5.04 Billion
|
DreamWorks Animation SKG Inc.
|
|
Entertainment Production
|
|
|
915,863
|
|
|
N/A
|
IMAX Corporation
|
|
Entertainment
|
|
|
373,805
|
|
|
2.05 Billion
|
Lions Gate Entertainment Corp.
|
|
Entertainment Production
|
|
|
2,399,640
|
|
|
N/A
|
Netflix, Inc.
|
|
CATV Systems
|
|
|
6,779,511
|
|
|
61.92 Billion
|
Panera Bread Co.
|
|
Specialty Eateries
|
|
|
2,681,580
|
|
|
5.35 Billion
|
Regal Entertainment Group
|
|
Movie Production, Theatres
|
|
|
3,127,300
|
|
|
3.36 Billion
|
Buffalo Wild Wings, Inc.
|
|
Restaurants
|
|
|
1,812,722
|
|
|
2.73 Billion
|
Madison Square Garden Co.
|
|
Entertainment-Diversified
|
|
$
|
1,071,511
|
|
$
|
4.30 Billion
|
|
(1)
|
|
The Company included restaurants in its peer group as a portion of its revenues comes from dine-in-theatre locations.
|
Compensation Claw-back Under Certain Circumstances
Pursuant to the terms of the 2013 Equity Incentive Plan, for a period of one year following the date on which the value of an award under the 2013 Equity Incentive Plan is realized, such value must be repaid in the event (i) the Named Executive Officer is terminated for “Cause” (as defined in the Named Executive Officer's respective employment agreement), or (ii) after termination for any other reason it is determined that such Named Executive Officer (a) engaged in an act during his or her employments that would have warranted termination for “Cause”, or (b) engaged in conduct that violated a continuing obligation to the Company. Mr. Aron's and Ms. Frank's employment agreements require repayment of any bonus compensation based on materially inaccurate financial statements or performance metrics.
Executive Stock Ownership Guidelines and Anti-Hedging Policy
The Company has adopted stock ownership guidelines for our executives, including our Named Executive Officers. Our CEO is required to acquire and hold shares of our Class A common stock with a fair value at least equal to three times his base salary, and the other Named Executive Officers are required to acquire and hold shares of our Class A common stock with a fair value at least equal to two times their respective base salaries. Each Named Executive Officer is required to achieve the applicable guideline ownership amount within later of, (1) three years following the IPO or (2) three years after becoming a Named Executive Officer. All Named Executive Officers, with the exception of Mr. Aron have achieved the Class A common stock ownership guideline. As of February 24, 2017, Mr. Aron held 51,747 of Class A common stock valued at approximately $1.6 million. Mr. Aron has two years remaining to meet his ownership guideline. Further, our Insider Trading Policy prohibits the Named Executive Officers from entering into hedging positions with respect to their stock ownership. Pursuant to the Management Stockholders Agreement, our Named Executive Officers may not transfer shares of the Company acquired in connection with the Merger without the written consent of Wanda prior to January 1, 2016, after which certain limitations on transfer continue for a period of two years.
IRS Code Section 162(m)
Section 162(m) of the Internal Revenue Code generally disallows publicly held companies a tax deduction for compensation in excess of $1,000,000 paid to their chief executive officer and the three other most highly compensated executive officers (other than the principal financial officer) unless such compensation qualifies for an exemption for certain compensation that is based on performance. Our intent generally is to design and administer executive compensation programs in a manner that will preserve the deductibility of compensation paid to our executive officers, and we believe that a substantial portion of our current executive compensation program satisfies the requirements for exemption from the $1,000,000 deduction limitation, to the extent applicable, taking into account the special rules that apply to compensation provided pursuant to agreements in effect. However, we reserve the right to design programs that recognize a full range of performance criteria important to our success, even where the compensation paid under such programs may not be deductible. The Compensation Committee will continue to monitor the tax and other consequences of our executive compensation program as part of its primary objective of ensuring that compensation paid to our executive officers is reasonable, performance based and consistent with the goals of the Company and its stockholders.
Summary Compensation Table
The following table presents information regarding compensation of our principal executive officer and our principal financial officer, and our three other most highly compensated executive officers for services rendered during the year ended December 31, 2016. These individuals are referred to as “Named Executive Officers.”
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Name and Principal Position
|
|
Year
|
|
Salary
|
|
Bonus
|
|
Stock Awards(1)
|
|
Non-Equity
Incentive Plan
Compensation(2)
|
|
Change in
Pension
Value and
Nonqualified
Deferred
Compensation
Earnings(3)(4)
|
|
All Other
Compensation(5)
|
|
Total
|
Adam M. Aron
|
|
2016
|
|
$
|
991,200
|
|
$
|
4,500,000
|
|
$
|
4,281,202
|
|
$
|
1,144,250
|
|
$
|
—
|
|
$
|
15,352
|
|
$
|
10,932,004
|
Chief Executive Officer,
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
President and Director
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Craig R. Ramsey
|
|
2016
|
|
|
563,800
|
|
|
700,000
|
|
|
962,930
|
|
|
363,078
|
|
|
48,906
|
|
|
20,506
|
|
|
2,659,220
|
Executive Vice President and
|
|
2015
|
|
|
550,000
|
|
|
—
|
|
|
1,365,735
|
|
|
668,250
|
|
|
—
|
|
|
40,748
|
|
|
2,624,733
|
Chief Financial Officer
|
|
2014
|
|
|
510,985
|
|
|
—
|
|
|
875,628
|
|
|
377,338
|
|
|
103,441
|
|
|
15,548
|
|
|
1,882,940
|
John D. McDonald
|
|
2016
|
|
|
517,700
|
|
|
350,000
|
|
|
962,930
|
|
|
375,383
|
|
|
100,309
|
|
|
13,925
|
|
|
2,320,247
|
Executive Vice President North
|
|
2015
|
|
|
505,000
|
|
|
—
|
|
|
796,838
|
|
|
428,442
|
|
|
—
|
|
|
20,454
|
|
|
1,750,734
|
American Operations
|
|
2014
|
|
|
493,074
|
|
|
—
|
|
|
875,628
|
|
|
371,070
|
|
|
248,446
|
|
|
6,774
|
|
|
1,994,992
|
Elizabeth Frank
|
|
2016
|
|
|
511,500
|
|
|
250,000
|
|
|
962,930
|
|
|
344,470
|
|
|
34,118
|
|
|
11,770
|
|
|
2,114,788
|
Executive Vice President and
|
|
2015
|
|
|
499,000
|
|
|
—
|
|
|
796,838
|
|
|
392,139
|
|
|
—
|
|
|
11,770
|
|
|
1,699,747
|
Chief Content and
|
|
2014
|
|
|
500,449
|
|
|
—
|
|
|
875,628
|
|
|
343,800
|
|
|
—
|
|
|
11,570
|
|
|
1,731,447
|
Programming Officer
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Mark A. McDonald
|
|
2016
|
|
|
453,500
|
|
|
350,000
|
|
|
962,930
|
|
|
305,407
|
|
|
94,347
|
|
|
13,925
|
|
|
2,180,109
|
Executive Vice President,
|
|
2015
|
|
|
444,600
|
|
|
—
|
|
|
796,838
|
|
|
326,281
|
|
|
—
|
|
|
18,954
|
|
|
1,586,673
|
Global Development
|
|
2014
|
|
|
444,167
|
|
|
—
|
|
|
875,628
|
|
|
317,453
|
|
|
217,612
|
|
|
6,003
|
|
|
1,860,863
|
|
(1)
|
|
As required by SEC Rules, amounts shown in this column, “Stock Awards,” presents the aggregate grant date fair value of RSUs, PSUs, PSUTs and stock awards granted in each year in accordance with ASC 718,
Compensation
—
Stock Compensation
and represents the value based on the probable outcome of performance conditions. See also Note 8—Stockholders' Equity to our audited financial statements for year ended December 31, 2016, included in our 2016 Annual Report on Form 10-K. These awards were made under the provisions of the equity-based incentive compensation program. See “Compensation Discussion and Analysis—Equity Awards Granted in 2016” above for information regarding the awards and the performance criteria. For 2016, the fair value of the RSUs, PSUs and PSUTs granted on March 1, 2016 was based on the closing price of the Company's common stock on March 1, 2016 of $24.88. No PSUTs vested as the Company did not achieve the adjusted cash flow or net earnings target. For PSU’s and PSUTs in 2016, the amount reflects the probable outcome. The maximum value of RSUs is included above. The value of the PSU and PSUT awards, assuming the highest level of performance achieved is detailed below:
|
|
|
|
|
|
|
|
|
|
Probable
|
|
Maximum
|
Adam M. Aron
|
|
|
|
|
|
|
EIP-PSU
|
|
$
|
2,140,601
|
|
$
|
3,210,901
|
Craig R. Ramsey
|
|
|
|
|
|
|
EIP-PSU
|
|
|
414,202
|
|
|
621,303
|
EIP-PSUT
|
|
|
134,526
|
|
|
201,789
|
John D. McDonald
|
|
|
|
|
|
|
EIP-PSU
|
|
|
414,202
|
|
|
621,303
|
EIP-PSUT
|
|
|
134,526
|
|
|
201,789
|
Elizabeth Frank
|
|
|
|
|
|
|
EIP-PSU
|
|
|
414,202
|
|
|
621,303
|
EIP-PSUT
|
|
|
134,526
|
|
|
201,789
|
Mark A. McDonald
|
|
|
|
|
|
|
EIP-PSU
|
|
|
414,202
|
|
|
621,303
|
EIP-PSUT
|
|
|
134,526
|
|
|
201,789
|
|
(2)
|
|
See “Compensation Discussion and Analysis—Annual Incentive Compensation Program” above for a discussion of the terms of our AIP.
|
|
(3)
|
|
This column includes the aggregate increases and decreases in actuarial present value of each Named Executive Officer's accumulated benefit amounts. The amount of aggregate decreases in actuarial present value in 2015 have been omitted from the Summary Compensation Table:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Supplemental
|
|
|
|
Defined Benefit
|
|
Executive
|
|
|
|
Plan
|
|
Retirement Plan
|
Craig R. Ramsey
|
2016
|
|
$
|
12,943
|
|
$
|
6,710
|
|
2015
|
|
|
(2,925)
|
|
|
(1,516)
|
|
2014
|
|
|
54,746
|
|
|
28,385
|
John D. McDonald
|
2016
|
|
|
33,379
|
|
|
17,307
|
|
2015
|
|
|
(16,180)
|
|
|
(8,389)
|
|
2014
|
|
|
149,880
|
|
|
77,711
|
Mark A. McDonald
|
2016
|
|
|
28,498
|
|
|
13,822
|
|
2015
|
|
|
(15,949)
|
|
|
(7,736)
|
|
2014
|
|
|
129,158
|
|
|
62,643
|
|
(4)
|
|
This column also includes the nonqualified deferred compensation above market earnings for the difference between market interest rates determined pursuant to SEC rules and the interest contingently credited by the Company on salary deferred by the Named Executive Officers. For 2016, the above market earnings of 6.1% to 9.6% for Mr. Craig Ramsey, Mr. John McDonald, Ms. Elizabeth Frank and Mr. Mark McDonald were $29,253, $49,623, $34,118 and $52,027, respectively. For 2015, there were no above market earnings under the nonqualified deferred compensation plans. For 2014, the above market earnings of 6.0% to 9.5% for, Mr. Craig Ramsey, Mr. John McDonald, and Mr. Mark McDonald were $20,310, $20,855, and $25,811 respectively. Further discussion on the nonqualified deferred compensation for the Named Executive Officers can be found in the “Compensation Discussion and Analysis—Nonqualified Deferred Compensation” section.
|
|
(5)
|
|
All Other Compensation is comprised of Company matching contributions under our 401(k) savings plan which is a qualified defined contribution plan, life insurance premiums, payments for termination of postretirement medical benefits, gift award, and other perquisites. The following table summarizes “All Other Compensation” provided to the Named Executive Officers for the year ended December 31, 2016:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Company
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Matching
|
|
Life
|
|
|
|
|
|
|
|
|
|
|
|
Contributions
|
|
Insurance
|
|
Gift
|
|
|
|
|
|
|
|
|
to 401(k) Plan
|
|
Premiums
|
|
Award
|
|
Other Perquisites
|
|
Total
|
Adam M. Aron
|
|
$
|
10,600
|
|
$
|
4,752
|
|
$
|
—
|
|
$
|
—
|
|
$
|
15,352
|
Craig R. Ramsey
|
|
|
10,600
|
|
|
9,906
|
|
|
—
|
|
|
—
|
|
|
20,506
|
John D. McDonald
|
|
|
10,600
|
|
|
3,325
|
|
|
—
|
|
|
—
|
|
|
13,925
|
Elizabeth Frank
|
|
|
10,600
|
|
|
1,170
|
|
|
—
|
|
|
—
|
|
|
11,770
|
Mark A. McDonald
|
|
|
10,600
|
|
|
3,325
|
|
|
—
|
|
|
—
|
|
|
13,925
|
Description of Employment Agreements—Salary and Bonus Amounts
We have entered into employment agreements with each of our Named Executive Officers. Change of control, severance arrangements and restrictive covenants in each of the Named Executive Officer's employment agreements are discussed in detail below in the narrative section “Potential Payments Upon Termination or Change of Control.”
Pursuant to each Named Executive Officer's employment agreement, the executive has agreed not to disclose any confidential information about the Company at any time during or after his/her employment with the Company.
Adam M. Aron.
We entered into an employment agreement with Mr. Aron that became effective on January 4, 2016. Mr. Aron's employment agreement includes a three-year initial term, with automatic one-year extensions each year unless the Company or Mr. Aron provides notice not to extend. The agreement provides that
Mr. Aron will receive an annual base salary of no less than $995,000, and a target incentive bonus opportunity for each year will be 125% of his base salary under the terms of the annual incentive plan in effect for the applicable year. The Board or Compensation Committee, based on its review, has discretion to increase (but not reduce) the base salary each year. Each year, the Company will award Mr. Aron $4,000,000 of value in long-term incentive equity compensation, 50% of which will be RSUs vesting in equal annual installments over 3 years subject to the achievement of certain financial targets, and 50% of which will be PSUs which will vest after 3 years based on the achievement of reasonable performance criteria.
Craig R. Ramsey.
We entered into an employment agreement with Mr. Ramsey on July 1, 2001. The term of the agreement is for two years, with automatic one-year extensions each year. The agreement provides that Mr. Ramsey will receive an annual base salary that is subject to annual review by the Compensation Committee, and can be increased but not decreased, and annual bonuses based on the applicable incentive program of the Company. In making its determination with respect to salary and bonus payout levels under the agreement, the Compensation Committee considers the factors discussed in the “Current Executive Compensation Program Elements” of the Compensation Discussion and Analysis above.
John D. McDonald.
We entered into an employment agreement with Mr. McDonald on July 1, 2001. The term of the agreement is for two years, with automatic one-year extensions each year. The agreement provides that Mr. McDonald will receive an annual base salary that is subject to annual review by the Compensation Committee, and can be increased but not decreased, and annual bonuses based on the applicable incentive program of the Company. In making its determination with respect to salary and bonus payout levels, the Compensation Committee considers the factors discussed in the “Current Executive Compensation Program Elements” of the Compensation Discussion and Analysis above.
Elizabeth Frank.
We entered into an employment agreement with Ms. Frank on August 18, 2010. The term of the agreement is for two years, with automatic one-year extensions each year. The agreement provides that Ms. Frank will receive an annual base salary that is subject to annual review by the Compensation Committee and can be increased but not decreased. The employment agreement provides that Ms. Frank's target incentive bonus shall be determined by the Board (or a committee thereof). See “Executive Compensation Program Elements”—”Annual Performance Bonus” above for information regarding the target incentive bonus under the AIP. In making its determination with respect to salary and bonus payout levels, the Committee considers the factors discussed in the “Current Executive Compensation Program Elements” of the Compensation Discussion and Analysis above.
Mark A. McDonald.
We entered into an employment agreement with Mr. McDonald on July 1, 2001. The term of the agreement is for two years, with automatic one-year extensions each year. The agreement provides that Mr. McDonald will receive an annual base salary that is subject to annual review by the Compensation Committee, and can be increased but not decreased, and annual bonuses based on the applicable incentive program of the Company. In making its determination with respect to salary and bonus payout levels, the Committee considers the factors discussed in the “Current Executive Compensation Program Elements” of the Compensation Discussion and Analysis above.
Limitation of Liability and Indemnification of Directors and Officers
We have entered into indemnification agreements with each of our directors and officers. These indemnification agreements may require us, among other things, to indemnify our directors and officers against liabilities that may arise by reason of their status or service as directors or officers, other than liabilities arising from willful misconduct. These indemnification agreements may also require us to advance any expenses incurred by the directors or officers as a result of any proceeding against them as to which they could be indemnified and to obtain directors' and officers' insurance, if available on reasonable terms.
Grants of Plan-Based Awards
The following table summarizes plan-based awards granted to Named Executive Officers during the year ended December 31, 2016:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Grant Date
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fair Value
|
|
|
|
|
Estimated Possible Future Payouts
|
|
|
|
|
|
|
|
|
|
|
of Stock
|
|
|
|
|
Under Non-Equity Incentive Plan Awards
|
|
Estimated Possible Future Payouts
|
|
and
|
|
|
Grant
|
|
Target
|
|
Maximum
|
|
Under Equity Incentive Plan Awards
|
|
Option
|
Name
|
|
Date
|
|
100%
|
|
|
|
Threshold (#)
|
|
Target (#)
|
|
Maximum (#)
|
|
Awards
|
Adam M. Aron
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
AIP—Company (1)
|
|
N/A
|
|
$
|
1,243,750
|
|
$
|
2,487,500
|
|
|
—
|
|
|
—
|
|
|
—
|
|
$
|
—
|
EIP-RSU (4)
|
|
3/1/2016
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
86,037
|
|
|
—
|
|
|
2,140,601
|
EIP-PSU (5)
|
|
3/1/2016
|
|
|
—
|
|
|
—
|
|
|
25,811
|
|
|
86,037
|
|
|
129,056
|
|
|
2,140,601
|
Craig R. Ramsey
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
AIP—Company (1)
|
|
N/A
|
|
|
394,660
|
|
|
789,320
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
EIP-RSU (3)
|
|
3/1/2016
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
16,648
|
|
|
—
|
|
|
414,202
|
EIP-PSU (5)
|
|
3/1/2016
|
|
|
—
|
|
|
—
|
|
|
4,994
|
|
|
16,648
|
|
|
24,972
|
|
|
414,202
|
EIP-PSUT (6)
|
|
3/1/2016
|
|
|
—
|
|
|
—
|
|
|
1,622
|
|
|
5,407
|
|
|
8,111
|
|
|
134,526
|
John D. McDonald
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
AIP—Company (1)
|
|
N/A
|
|
|
289,912
|
|
|
579,824
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
AIP-Individual (2)
|
|
N/A
|
|
|
72,478
|
|
|
108,717
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
EIP-RSU (4)
|
|
3/1/2016
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
16,648
|
|
|
—
|
|
|
414,202
|
EIP-PSU (5)
|
|
3/1/2016
|
|
|
—
|
|
|
—
|
|
|
4,994
|
|
|
16,648
|
|
|
24,972
|
|
|
414,202
|
EIP-PSUT (6)
|
|
3/1/2016
|
|
|
—
|
|
|
—
|
|
|
1,622
|
|
|
5,407
|
|
|
8,111
|
|
|
134,526
|
Elizabeth Frank
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
AIP—Company (1)
|
|
N/A
|
|
|
265,980
|
|
|
531,960
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
AIP-Individual (2)
|
|
N/A
|
|
|
66,495
|
|
|
99,743
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
EIP-RSU (4)
|
|
3/1/2016
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
16,648
|
|
|
—
|
|
|
414,202
|
EIP-PSU (5)
|
|
3/1/2016
|
|
|
—
|
|
|
—
|
|
|
4,994
|
|
|
16,648
|
|
|
24,972
|
|
|
414,202
|
EIP-PSUT (6)
|
|
3/1/2016
|
|
|
—
|
|
|
—
|
|
|
1,622
|
|
|
5,407
|
|
|
8,111
|
|
|
134,526
|
Mark A. McDonald
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
AIP—Company (1)
|
|
N/A
|
|
|
235,820
|
|
|
471,640
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
AIP-Individual (2)
|
|
N/A
|
|
|
58,955
|
|
|
88,433
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
EIP-RSU (4)
|
|
3/1/2016
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
16,648
|
|
|
—
|
|
|
414,202
|
EIP-PSU (5)
|
|
3/1/2016
|
|
|
—
|
|
|
—
|
|
|
4,994
|
|
|
16,648
|
|
|
24,972
|
|
|
414,202
|
EIP-PSUT(6)
|
|
3/1/2016
|
|
|
—
|
|
|
—
|
|
|
1,622
|
|
|
5,407
|
|
|
8,111
|
|
|
134,526
|
|
(1)
|
|
These awards were made under the provisions of the AIP. The company component payout was on a scale ranging from 0% to 200% of target based on adjusted EBITDA for AIP ranging from a threshold of $479,920,000 to a maximum of $719,880,000. No company performance component of the AIP would be paid below attainment of $479,920,000 of threshold adjusted EBITDA; upon attainment of $599,900,000 of targeted adjusted EBITDA for AIP, the Company would pay 100% of target payout; and upon attainment of $719,880,000 of maximum adjusted EBITDA for AIP, each Named Executive Officer would receive the maximum potential bonus of 200% of target payout. See “Compensation Discussion and Analysis—Annual Incentive Compensation Program” above for a discussion of the AIP and the Summary Compensation Table for the actual amounts paid.
|
|
(2)
|
|
The individual component bonus of the AIP for the year ended December 31, 2016 was approved during the first quarter of 2017 following a review of each Named Executive Officer's individual performance and contribution to the Company's strategic and financial goals. Individual component bonuses of the AIP attained by the Named Executive Officers were150.0% of target. See “Compensation Discussion and Analysis—Annual Incentive Compensation Program” above for the amounts achieved by each Named Executive Officer.
|
|
(3)
|
|
Amounts shown in this row represent the number and aggregate grant date fair value of RSU awards granted by the Board and the Compensation Committee, in accordance with accounting rules ASC 718,
Compensation—Stock Compensation
. The grant date fair value of the RSUs was based on the closing price of the Company's
|
common stock on March 1, 2016 of $24.88 per share. See “Compensation Discussion and Analysis—Equity Awards Granted in 2016” above.
|
|
(4)
|
|
Amounts shown in this row represent the number and aggregate grant date fair value of RSU awards granted to Named Executive Officers covered by IRS code section 162(m) by the Board and the Compensation Committee, in accordance with accounting rules ASC 718,
Compensation—Stock Compensation
. The grant date fair value of the RSU was based on the closing price of the Company's common stock on March 1, 2016 of $24.88 per share. The RSU vest over 3 years with 1/3 vesting on the date the Compensation Committee certifies achievement of the performance goal for the fiscal year containing the date of grant. Vesting shall be conditioned upon the Company having achieved cash flow from operating activities of at least $100,000,000 for the fiscal year prior to a vesting date, as reported in the Company’s audited financial statements for such fiscal year. See “Compensation Discussion and Analysis—Equity Awards Granted in 2016” above.
|
|
(5)
|
|
Amounts shown in this row represents the number and aggregate grant date fair value of the PSU awards granted in accordance with accounting rules ASC 718,
Compensation—Stock Compensation
. The fair value of the PSUs at the grant date was $24.88 per share and was based on the closing price of the Company's common stock on March 1, 2016, and represents the probable outcome at grant date of the performance goals. The grant consisted of PSUs with both a three year cumulative adjusted free cash flow and net earnings performance target condition and a service condition, covering a performance period beginning January 1, 2016 and ending on December 31, 2018, upon certification of achievement of the performance targets. The PSUs would vest cumulatively over a three year performance period based on a scale ranging from 80% to 120% of the performance targets with the vested amount ranging from 30% to 150%. No PSUs will vest if the Company does not achieve the three year cumulative adjusted free cash flow and net earnings minimum performance target or the participant’s service does not continue through the last day of the performance period. See “Compensation Discussion and Analysis—Equity Awards Granted in 2016” above for information regarding the grant of the PSU performance target.
|
|
(6)
|
|
Amounts shown in this row represent the number and aggregate grant date fair value of the PSU Transition awards granted in accordance with accounting rules ASC 718,
Compensation—Stock Compensation
. The fair value of the PSUs at the grant date was $24.88 per share and was based on the closing price of the Company's common stock on March 1, 2016, and represents the probable outcome at grant date of the performance goals. The grant consisted of PSU transition awards granted in recognition of the shift from one year to three year performance periods for annual equity awards. The awards vest upon achieving both a 2016 adjusted free cash flow and net earnings performance target condition and a service condition, covering a performance period beginning January 1, 2016 and ending on December 31, 2016. The PSUs will vest based on a scale ranging from 80% to 120% of the performance target with the vested amount ranging from 30% to 150%. No PSUs will vest if the Company does not achieve the adjusted free cash flow or net earnings minimum performance target or the participant’s service does not continue through the last day of the performance period. The vested PSUs will be settled within 30 days of vesting. See “Compensation Discussion and Analysis—Equity Awards Granted in 2016” above for information regarding the grant of the PSU transition awards. The performance targets were not met and these awards were forfeited.
|
Outstanding Equity Awards as of December 31, 2016
The following table presents information regarding the outstanding equity award held by our Named Executive Officers as of December 31, 2016:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stock Awards
|
|
|
|
|
|
|
|
|
|
|
|
Equity Incentive Plan Awards:
|
|
|
|
|
|
|
|
|
Market
|
|
|
|
Market
|
|
|
|
|
|
|
Number
|
|
Value of
|
|
Number
|
|
Value of
|
|
|
|
|
|
|
of Shares
|
|
Shares or
|
|
of Shares
|
|
Shares or
|
|
|
|
|
|
|
or Units
|
|
Units of
|
|
or Units
|
|
Units of
|
|
|
|
|
|
|
of Stock
|
|
Stock
|
|
of Stock
|
|
Stock
|
|
|
|
|
|
|
That Have
|
|
That Have
|
|
That Have
|
|
That Have
|
|
|
|
|
Award
|
|
Not Vested
|
|
Not Vested
|
|
Not Vested
|
|
Not Vested
|
Name
|
|
Grant Date
|
|
Type
|
|
(#)(1)
|
|
($)(2)
|
|
(#)(1)
|
|
($)(2)
|
Adam M. Aron
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
EIP-RSU (4)
|
|
3/1/2016
|
|
RSU
|
|
28,679
|
|
$
|
965,048
|
|
—
|
|
$
|
—
|
EIP-RSU (5)
|
|
3/1/2016
|
|
RSU
|
|
—
|
|
|
—
|
|
57,358
|
|
|
1,930,097
|
EIP-PSU (6)
|
|
3/1/2016
|
|
PSU
|
|
—
|
|
|
—
|
|
86,037
|
|
|
2,895,145
|
Craig R. Ramsey
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
EIP-RSU (3)
|
|
3/1/2016
|
|
RSU
|
|
16,648
|
|
|
560,205
|
|
—
|
|
|
—
|
EIP-PSU (6)
|
|
3/1/2016
|
|
PSU
|
|
—
|
|
|
—
|
|
16,648
|
|
|
560,205
|
EIP-PSU Transition (7)
|
|
3/1/2016
|
|
PSUT
|
|
—
|
|
|
—
|
|
5,407
|
|
|
181,946
|
John D. McDonald
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
EIP-RSU (4)
|
|
3/1/2016
|
|
RSU
|
|
5,549
|
|
|
186,724
|
|
—
|
|
|
—
|
EIP-RSU (5)
|
|
3/1/2016
|
|
RSU
|
|
|
|
|
|
|
11,099
|
|
|
373,481
|
EIP-PSU (6)
|
|
3/1/2016
|
|
PSU
|
|
—
|
|
|
—
|
|
16,648
|
|
|
560,205
|
EIP-PSU Transition (7)
|
|
3/1/2016
|
|
PSUT
|
|
—
|
|
|
—
|
|
5,407
|
|
|
181,946
|
Elizabeth Frank
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
EIP-RSU (4)
|
|
3/1/2016
|
|
RSU
|
|
5,549
|
|
|
186,724
|
|
—
|
|
|
—
|
EIP-RSU (5)
|
|
3/1/2016
|
|
RSU
|
|
|
|
|
|
|
11,099
|
|
|
373,481
|
EIP-PSU (6)
|
|
3/1/2016
|
|
PSU
|
|
—
|
|
|
—
|
|
16,648
|
|
|
560,205
|
EIP-PSU Transition (7)
|
|
3/1/2016
|
|
PSUT
|
|
—
|
|
|
—
|
|
5,407
|
|
|
181,946
|
Mark A. McDonald
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
EIP-RSU (4)
|
|
3/1/2016
|
|
RSU
|
|
5,549
|
|
|
186,724
|
|
—
|
|
|
—
|
EIP-RSU (5)
|
|
3/1/2016
|
|
RSU
|
|
|
|
|
|
|
11,099
|
|
|
373,481
|
EIP-PSU (6)
|
|
3/1/2016
|
|
PSU
|
|
—
|
|
|
—
|
|
16,648
|
|
|
560,205
|
EIP-PSU Transition (7)
|
|
3/1/2016
|
|
PSUT
|
|
—
|
|
|
—
|
|
5,407
|
|
|
181,946
|
|
(1)
|
|
Amount shown in this column represents the number of unvested units. Each unit will convert into one share of Class A common stock immediately upon vesting. See “Compensation Discussion and Analysis—Equity Awards Granted in 2016” above.
|
|
(2)
|
|
The fair market value was calculated based on the closing price of the Company's common stock on December 30, 2016 of $33.65 per share.
|
|
(3)
|
|
Amounts shown in this row represent the number of unvested and the year-end market value of the RSU award granted by the Board and the Compensation Committee.
|
|
(4)
|
|
Amounts shown in this row represent the first 1/3 of the number of unvested and the year-end market value of RSU Named Executive Officer awards granted by the Board and the Compensation Committee, in accordance with accounting rules ASC 718,
Compensation—
Stock
Compensation
. The RSU 162(m) awards vest over 3 years with 1/3 vesting on the date the Compensation Committee certifies achievement of the performance goal for the fiscal year containing the date of grant. For 2016, the first 1/3 of this award has been earned, and vested upon certification by the Compensation Committee in 2017. See “Compensation Discussion and Analysis—Equity Awards Granted in 2016” above.
|
|
(5)
|
|
Amounts shown in this row represent the remaining 2/3 number of unvested and year-end market value of the RSU award. This amount will vest 1/3 in 2018 and 1/3 in 2019 upon certification by the Compensation Committee of achievement of the performance goal for the prior year.
|
|
(6)
|
|
Amounts shown in this row represents the target number of unvested and the year-end market value of the PSU awards granted in accordance with accounting rules of ASC 718,
Compensation—Stock Compensation
. The grant consisted of PSUs with both a three year cumulative adjusted free cash flow and net earnings performance target condition, covering a performance period beginning January 1, 2016 and ending on December 31, 2018 and vest upon certification of achievement of these performance goals, and if the executive remains employed on such date. The PSUs would vest cumulatively over a three year performance period based on a scale ranging from 80% to 120% of the performance target with the vested amount ranging from 30% to 150%. See “Compensation Discussion and Analysis—Equity Awards Granted in 2016” above for information regarding the grant of the PSU performance target. The Company achieved the target level of performance in 2016.
|
|
(7)
|
|
Amounts shown in this row represent the target number of unvested and the year-end market value of the PSU Transition awards granted to the Named Executive Officers. The awards would vest upon certification of the achievement of the performance goals. The performance goals for these awards were not met and these awards were forfeited. See “Compensation Discussion and Analysis – Equity Awards Granted in 2016” above.
|
Option Exercises and Stock Vested During the Year Ended December 31, 2016
There were no options issued by the Company or exercised during the year ended December 31, 2016. The following table sets forth information on the vesting of the RSUs and PSUs for each Named Executive Officer during the year ended December 31, 2016.
|
|
|
|
|
|
Name
|
|
Number of Shares
Acquired on Vesting (#)(1)
|
|
Value Realized on
Vesting ($)(2)
|
Adam M. Aron
|
|
|
|
|
|
EIP-RSU
|
|
—
|
|
$
|
—
|
EIP-PSU
|
|
—
|
|
|
—
|
Craig R. Ramsey
|
|
|
|
|
|
EIP-RSU
|
|
—
|
|
|
—
|
EIP-PSU
|
|
—
|
|
|
—
|
EIP-Interim CEO RSU(3)
|
|
19,226
|
|
|
646,955
|
John D. McDonald
|
|
|
|
|
|
EIP-RSU
|
|
—
|
|
|
—
|
EIP-PSU
|
|
—
|
|
|
—
|
Elizabeth Frank
|
|
|
|
|
|
EIP-RSU
|
|
—
|
|
|
—
|
EIP-PSU
|
|
—
|
|
|
—
|
Mark A. McDonald
|
|
|
|
|
|
EIP-RSU
|
|
—
|
|
|
—
|
EIP-PSU
|
|
—
|
|
|
—
|
|
(1)
|
|
The amount in this column reflects the number of shares underlying the RSUs that vested during the year ended December 31, 2016.
|
|
(2)
|
|
The aggregate value upon vesting was calculated by multiplying the closing price of the Company's common stock of $33.65 on the vesting date of December 30, 2016 by the number of shares acquired on vesting.
|
|
(3)
|
|
Amounts shown in this row represent the number vested and the year-end market value of the Special Interim CEO RSU Award.
In recognition of Mr. Ramsey's appointment as Interim Chief Executive Officer and President effective August 7, 2015, the Company awarded Mr. Ramsey 19,226 RSUs, with a grant date fair value of approximately $569,000. Each RSU was convertible into one share of Class A common stock immediately upon vesting which would occur upon the earliest of; (1) the first day of employment of a replacement Chief Executive Officer, (2) March 15, 2016, or (3) the Company's termination of the participant without cause. With the employment of Mr. Aron as Chief Executive Officer and President on January 4, 2016, Mr. Ramsey's RSUs vested and converted into shares of Class A common stock. A dividend equivalent equal to the amount paid in respect of one share of Class A common stock underlying the RSUs began to accrue with respect to the RSUs on the date of grant. Such accrued dividend equivalents were paid to Mr. Ramsey upon vesting of the RSUs.
|
Pension Benefits as of December 31, 2016
The following table presents information regarding the present value of accumulated benefits that may become payable to the Named Executive Officers under our qualified and nonqualified defined-benefit pension plans.
|
|
|
|
|
|
|
|
Name
|
|
Plan Name
|
|
Number of Years
Credited
Service(#)(1)
|
|
Present Value of
Accumulated
Benefit($)(2)
|
Adam M. Aron
|
|
—
|
|
—
|
|
$
|
—
|
Craig R. Ramsey
|
|
Defined Benefit Retirement Income Plan
|
|
12.00
|
|
|
317,397
|
|
|
Supplemental Executive Retirement Plan
|
|
12.00
|
|
|
164,567
|
John D. McDonald
|
|
Defined Benefit Retirement Income Plan
|
|
31.05
|
|
|
685,900
|
|
|
Supplemental Executive Retirement Plan
|
|
31.05
|
|
|
355,634
|
Elizabeth Frank
|
|
—
|
|
—
|
|
|
—
|
Mark A. McDonald
|
|
Defined Benefit Retirement Income Plan
|
|
26.60
|
|
|
546,932
|
|
|
Supplemental Executive Retirement Plan
|
|
26.60
|
|
|
265,268
|
|
(1)
|
|
The number of years credited service represents the numbers of years of service through December 31, 2006, the date the plans were frozen.
|
|
(2)
|
|
The accumulated benefit was based on service and earnings considered by the plans for the period through December 31, 2016. The present value has been calculated assuming the Named Executive Officers will remain in service until age 65, the age at which retirement may occur without any reduction in benefits, and that the benefit is payable under the available forms of annuity consistent with the plans. The interest assumption was 3.9%. The post-retirement mortality assumption was based on the RP-2016 Mortality Table.
|
Pension and Other Retirement Plans
We provide retirement benefits to the Named Executive Officers under the terms of qualified and non-qualified defined-benefit plans. The AMC Defined Benefit Retirement Income Plan is a tax-qualified retirement plan in which certain of the Named Executive Officers participate on substantially the same terms as our other participating employees. However, due to maximum limitations imposed by ERISA and the Internal Revenue Code on the annual amount of a pension which may be paid under a qualified defined-benefit plan, the benefits that would otherwise be payable to the Named Executive Officers under the Defined Benefit Retirement Income Plan are limited. Because we did not believe that it was appropriate for the Named Executive Officers' retirement benefits to be reduced because of limits under ERISA and the Internal Revenue Code, we have a non-qualified supplemental defined-benefit plan that permits the Named Executive Officers to receive the same benefit that would be paid under our qualified defined-benefit plan up to the old IRS limit, as indexed, as if the Omnibus Budget Reconciliation Act of 1993 had not been in effect. On November 7, 2006, our Board approved a proposal to freeze the AMC Defined Benefit Retirement Income Plan and the AMC Supplemental Executive Retirement Plan, effective as of December 31, 2006. The material terms of the AMC Defined Benefit Retirement Income Plan and the AMC Supplemental Executive Retirement Plan are described below.
AMC Defined Benefit Retirement Income Plan.
The AMC Defined Benefit Retirement Income Plan is a non-contributory defined-benefit pension plan subject to the provisions of ERISA. As mentioned above, the plan was frozen effective December 31, 2006.
The plan provides benefits to certain of our employees based upon years of credited service and the highest consecutive five-year average annual remuneration for each participant. For purposes of calculating benefits, average annual compensation is limited by Section 401(a) (17) of the Internal Revenue Code, and is based upon wages, salaries and other amounts paid to the employee for personal services, excluding certain special compensation. Under the Defined Benefit Retirement Income Plan, a participant earns a vested right to an accrued benefit upon completion of five years of vesting service.
AMC Supplemental Executive Retirement Plan.
AMC also sponsors a Supplemental Executive Retirement Plan to provide the same level of retirement benefits that would have been provided under the retirement plan had the federal tax law not been changed in the Omnibus Budget Reconciliation Act of 1993 to reduce the amount of compensation which can be taken into account in a qualified retirement plan. The plan was frozen, effective December 31, 2006, and no new participants can enter the plan and no additional benefits can accrue thereafter.
Subject to the forgoing, any individual who is eligible to receive a benefit from the AMC Defined Benefit Retirement Income Plan after qualifying for early, normal or late retirement benefits thereunder, the amount of which is reduced by application of the maximum limitations imposed by the Internal Revenue Code, is eligible to participate in the Supplemental Executive Retirement Plan.
The benefit payable to a participant equals the monthly amount the participant would receive under the AMC Defined Benefit Retirement Income Plan without giving effect to the maximum recognizable compensation for qualified retirement plan purposes imposed by the Internal Revenue Code, as amended by Omnibus Budget Reconciliation Act of 1993, less the monthly amount of the retirement benefit actually payable to the participant under the AMC Defined Benefit Retirement Income Plan, each as calculated as of December 31, 2006. The benefit is an amount equal to the actuarial equivalent of his/her benefit, computed by the formula above, payable in either a lump sum (in certain limited circumstances, specified in the plan) or equal semi-annual installments over a period of two to ten years, with such form, and, if applicable, period, having been irrevocably elected by the participant.
If a participant's employment with AMC terminates for any reason before the earliest date he/she qualifies for early, normal or late retirement benefits under the AMC Defined Benefit Retirement Income Plan, no benefit is payable under the Supplemental Executive Retirement Plan.
Nonqualified Deferred Compensation
AMC permits the Named Executive Officers and other key employees to elect to receive a portion of their compensation reported in the Summary Compensation Table on a deferred basis. Deferrals of compensation during the year ended December 31, 2016 and in recent years have been made under the AMC Non-Qualified Deferred Compensation Plan (“NQDC”). Participants of the plan are able to defer annual salary and bonus (excluding commissions, expense reimbursement or allowances, cash and non-cash fringe benefits and any stock-based incentive compensation). Amounts deferred under the plans are credited with an investment return determined as if the participant's account were invested in one or more investment funds made available by the Committee and selected by the participant. AMC may, but need not, credit the deferred compensation account of any participant with a discretionary or profit sharing credit as determined by AMC. The deferred compensation account will be distributed either in a lump sum payment or in equal annual installments over a term not to exceed 10 years as elected by the participant and may be distributed pursuant to in-service withdrawals under certain circumstances. Any such payment shall commence upon the date of a “Qualifying Distribution Event” (as such term is defined in the Non-Qualified Deferred Compensation Plan). The Qualifying Distribution Events are designed to be compliant with Section 409A of the Internal Revenue Code.
The following table presents information regarding the contributions to and earnings on the Named Executive Officers' deferred compensation balances during the year ended December 31, 2016:
|
|
|
|
|
|
|
|
|
|
Name
|
|
Executive
Contributions
in last FY (1)
|
|
Aggregate Earnings
in Last FY
|
|
Aggregate
Balance at Last
FYE (4)
|
Adam M. Aron
|
|
|
|
|
|
|
|
|
|
NQDC (3)
|
|
$
|
—
|
|
$
|
—
|
|
$
|
—
|
Craig R. Ramsey
|
|
|
|
|
|
|
|
|
|
NQDC (3)
|
|
|
22,550
|
|
|
40,821
|
|
|
465,261
|
EIP - 2015 (2)
|
|
|
—
|
|
|
121,538
|
|
|
789,563
|
EIP - 2014 (2)
|
|
|
—
|
|
|
292,137
|
|
|
1,315,984
|
John D. McDonald
|
|
|
|
|
|
|
|
|
|
NQDC (3)
|
|
|
132,993
|
|
|
81,295
|
|
|
1,148,850
|
EIP - 2015 (2)
|
|
|
—
|
|
|
211,420
|
|
|
774,556
|
EIP - 2014 (2)
|
|
|
—
|
|
|
292,137
|
|
|
1,315,984
|
Elizabeth Frank
|
|
|
|
|
|
|
|
|
|
NQDC (3)
|
|
|
378,587
|
|
|
61,233
|
|
|
727,763
|
EIP - 2015 (2)
|
|
|
—
|
|
|
210,915
|
|
|
774,051
|
EIP - 2014 (2)
|
|
|
—
|
|
|
292,137
|
|
|
1,315,984
|
Mark A. McDonald
|
|
|
|
|
|
|
|
|
|
NQDC (3)
|
|
|
92,466
|
|
|
82,294
|
|
|
1,162,256
|
EIP - 2015 (2)
|
|
|
—
|
|
|
208,492
|
|
|
771,628
|
EIP - 2014 (2)
|
|
|
—
|
|
|
292,137
|
|
|
1,315,984
|
|
(1)
|
|
These amounts represent payroll deductions for the applicable executive and are therefore included in the Summary Compensation Table.
|
|
(2)
|
|
These amounts represent the change in fair value of RSUs and PSUs which vested in previous years and remain unsettled as of December 31, 2016.
|
|
(3)
|
|
The above market earnings on deferred compensation are reflected in the “Change in Pension Value and Nonqualified Deferred Compensation Earnings” column of the Summary Compensation Table during the year ended December 31, 2016: Mr. Craig Ramsey-$29,253, Mr. John McDonald-$49,623, Ms. Elizabeth Frank-$34,118 and Mr. Mark McDonald-$52,028.
|
|
(4)
|
|
The amounts reported include amounts included in Summary Compensation Table for current and prior years.
|
Potential Payments Upon Termination or Change of Control
The following tables describe potential payments and other benefits that would have been received or receivable by each Named Executive Officer or his or her estate under the officer's employment agreement or related plans and agreements if employment had been terminated under various circumstances on December 31, 2016:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Termination
Following a Change
of Control
|
|
Death or
Disability
|
|
Termination with
Good Reason by
Employee
|
|
Termination
Without Cause by
Company
|
|
Retirement
|
Adam M. Aron
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Base Salary
|
|
$
|
1,492,500
|
|
$
|
—
|
|
$
|
1,492,500
|
|
$
|
1,492,500
|
|
$
|
—
|
AIP
|
|
|
3,009,875
|
|
|
1,144,250
|
|
|
3,009,875
|
|
|
3,009,875
|
|
|
—
|
Unvested Equity Awards
|
|
|
11,790,290
|
|
|
—
|
|
|
6,000,000
|
|
|
6,000,000
|
|
|
—
|
Total
|
|
|
16,292,665
|
|
|
1,144,250
|
|
|
10,502,375
|
|
|
10,502,375
|
|
|
—
|
Craig R. Ramsey
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Base Salary
|
|
|
1,127,600
|
|
|
1,127,600
|
|
|
—
|
|
|
1,127,600
|
|
|
—
|
AIP
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
394,660
|
Unvested Equity Awards
|
|
|
1,302,356
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
Total
|
|
|
2,429,956
|
|
|
1,127,600
|
|
|
—
|
|
|
1,127,600
|
|
|
394,660
|
John D. McDonald
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Base Salary
|
|
|
1,035,400
|
|
|
1,035,400
|
|
|
—
|
|
|
1,035,400
|
|
|
—
|
AIP
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
362,390
|
Unvested Equity Awards
|
|
|
1,302,356
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
Total
|
|
|
2,337,756
|
|
|
1,035,400
|
|
|
—
|
|
|
1,035,400
|
|
|
362,390
|
Elizabeth Frank
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Base Salary
|
|
|
—
|
|
|
—
|
|
|
1,023,000
|
|
|
1,023,000
|
|
|
—
|
AIP
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
Unvested Equity Awards
|
|
|
1,302,356
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
Total
|
|
|
1,302,356
|
|
|
—
|
|
|
1,023,000
|
|
|
1,023,000
|
|
|
—
|
Mark A. McDonald
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Base Salary
|
|
|
907,000
|
|
|
907,000
|
|
|
—
|
|
|
907,000
|
|
|
—
|
AIP
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
294,775
|
Unvested Equity Awards
|
|
|
1,302,356
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
Total
|
|
$
|
2,209,356
|
|
$
|
907,000
|
|
$
|
—
|
|
$
|
907,000
|
|
$
|
294,775
|
Employment Agreements
In the event Mr. Aron’s employment is terminated, pursuant to his employment agreement, if Mr. Aron is terminated as a result of his death or disability or without cause or for good reason, he will receive a pro rata portion of any incentive bonus for the year in which he was terminated if the applicable targets are met. In addition, upon his termination without cause or for good reason or as a result of the Company not renewing his contract, or not renewing it on comparable terms (each an “Involuntary Termination”), Mr. Aron will be entitled to an amount equal to 1.5 times his Base Salary plus one of the following amounts, as applicable:
(1) 1.875 times his Base Salary if he is terminated on or before December 31, 2016;
(2) 1.5 times the Incentive Bonus paid to Mr. Aron for the fiscal year ending in December 31, 2016 if he is terminated during the period from January 1, 2017 to December 31, 2017; or (3) 1.5 times the average of the Incentive Bonuses paid to Mr. Aron during the 24 months preceding the date of Mr. Aron's termination, if the termination occurs on or after January 1, 2018 (the “Severance Benefit”). The Severance Benefit will be paid equally over a 24-month period. In addition, upon an Involuntary Termination, Mr. Aron will be paid $6,000,000 of value, through a combination of RSUs vesting and cash payments, over a 3-year period following termination. Upon an Involuntary Termination, the Company will also pay Mr. Aron an amount equal to the full cost of his medical insurance for a period of 18 months.
In the event Mr. Ramsey's, Mr. John McDonald's, or Mr. Mark McDonald's employment is terminated as a result of the executive's death, “Disability”, or by the Company without “Cause” (as those terms are defined in the
paragraph below and in the applicable employment agreement) the executive is entitled to a lump cash severance payment equal to two years of his base salary then in effect. Following a Change in Control (as defined in the paragraph below and in the applicable employment agreement), if the executive resigns in response to a substantial adverse alteration in responsibilities, reduction in base salary, or a material reduction in benefits, the executive is entitled to a lump cash severance payment equal to two years of his base salary then in effect. If the executive retires, he is entitled to a payment equal to a pro rata share of his AIP at target for the year in which he retires.
The employment agreements for Mr. Ramsey, Mr. John McDonald and Mr. Mark McDonald define Disability as the executive's incapacity due to physical or mental illness and the executive has not been regularly performing his duties and obligations for a period of 120 consecutive days. Cause is defined as a willful and continued failure by the executive to perform substantially his duties with the Company or the willful engaging by the executive in misconduct which is materially and demonstrably injurious to the Company. Change of Control is defined as a merger or similar transaction, provided the executive terminates his employment subsequent to a Change of Control within 60 days of the occurrence of any such event; (i) a substantial adverse alteration in executive's responsibilities from those in effect immediately prior to the Change of Control; (ii) a reduction in base salary below the rate that is in effect immediately prior to the Change of Control; or (iii) a material reduction in the benefits provided to the Executive by the Company prior to the Change of Control.
Ms. Frank is entitled to receive cash severance payments equal to two years of her base salary in the event of termination by the Company without “Cause” or by Ms. Frank for “Good Reason” (as such term is defined in the her employment agreement).
Per Ms. Frank's employment agreement, Cause shall mean, as reasonably determined by the Board based on information that one or more of the following has occurred, the executive has; (i) committed a felony or similar crime; (ii) engaged in acts of fraud, dishonesty, gross negligence or other misconduct; (iii) willfully failed to perform her duties under the agreement; or (iv) breached any provision, materially breached any contract or breached any material written Company policy. Good Reason shall mean a termination of the executive's employment by means of resignation by the executive after the occurrence of any one of the following conditions; (i) a material diminution in the executive's rate of base salary; (ii) a material diminution in the executive's authority, duties, or responsibilities; (iii) a material change in the geographic location of the executive's principal office with the Company; or (iv) a material beach of the employment agreement by the Company.
Acceleration of RSU and PSU Awards.
Unvested RSU and PSU awards do not vest upon a termination by the Company, or due to death, disability or retirement, Under the 2013 Equity Incentive Plan, upon a Change in Control of the Company, the Compensation Committee can, in its discretion, determine to accelerate the vesting of outstanding awards. The tables above show the value (based on the market price of the Company’s Class A common stock at year-end) of any unvested equity awards plus the cash value of certain payments guaranteed to Mr. Aron.
Change in Control is generally defined as (1) any person other than Wanda becoming the owner of more than 35% of the combined voting power of outstanding securities of the Company, (2) over a period of two years, incumbent directors ceasing to be a majority of the board, or (3) a merger or consolidation of or the disposition of substantially all of the assets of the Company, subject to exceptions.
Nonqualified Deferred Compensation Plan and Pension Benefits.
Upon termination for any reason, executives would receive all deferred compensation balances, subject to the terms of the Nonqualified Compensation Plan. See “Nonqualified Deferred Compensation” above for plan balances. See Pension Benefits as of December 31, 2016” above for a discussion of benefits upon termination under the Company’s pension plans.
EQUITY COMPENSATION PLAN INFORMATION
The following table summarizes the 2013 Equity Incentive Plan as of December 31, 2016. See “Compensation Discussion and Analysis-2013 Equity Incentive Plan” for more information.
|
|
|
|
|
|
|
|
|
|
|
|
|
(c) Number of Securities
|
|
|
|
|
|
|
Remaining Available for
|
|
|
(a) Total Number of
|
|
|
|
Future Issuance Under
|
|
|
Securities to be Issued
|
|
(b) Weighted-average
|
|
Equity Compensation
|
|
|
Upon Exercise of
|
|
Exercise Price of
|
|
Plans (Excluding
|
|
|
Outstanding Options,
|
|
Outstanding Options,
|
|
Securities Reflected in
|
Plan Category
|
|
Warrants and Rights
|
|
Warrants and Rights($)
|
|
Column (a))
|
Equity compensation plans approved by security holders
|
|
—
|
|
—
|
|
7,739,524
|
Equity compensation plans not approved by security holders
|
|
—
|
|
—
|
|
—
|