APE AMC Entertainment Hldg Pref Equity

 

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C.  20549

 

FORM 8-K

 

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

 

Date of Report (Date of earliest event reported): June 5, 2024

 

AMC ENTERTAINMENT HOLDINGS, INC.

(Exact Name of Registrant as Specified in Charter)

 

Delaware		001-33892		26-0303916
(State or Other Jurisdiction of		(Commission File Number)		(I.R.S. Employer Identification
Incorporation)				Number)

 

One AMC Way

11500 Ash Street, Leawood, KS 66211

(Address of Principal Executive Offices, including Zip Code)

 

(913) 213-2000

(Registrant’s Telephone Number, including Area Code)

 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

 

¨ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

 

¨ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

 

¨ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

 

¨ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

 

Title of each class		Trading Symbol		Name of each exchange on which registered
Class A common stock		AMC		New York Stock Exchange

 

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

 

Emerging growth company  ¨

 

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.  ¨

 

 

 

Item 5.02.

Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.

 

At the AMC Entertainment Holdings, Inc. (the “Company”) 2024 Annual Meeting of Stockholders (the “Annual Meeting”) held on June 5, 2024, the Company’s stockholders approved the AMC Entertainment Holdings, Inc. 2024 Equity Incentive Plan (the “2024 Equity Incentive Plan”), including reservation of 25,000,000 shares of the Company’s Class A common stock for awards under the plan.

 

A description of the material terms of the 2024 Equity Incentive Plan is set forth under the heading “Proposal 8: Approval of the 2024 Equity Incentive Plan” in the Company’s proxy statement on Schedule 14A filed with the Securities and Exchange Commission on April 24, 2024, which is hereby incorporated by reference. The description of the material terms is qualified in its entirety by reference to the terms and provisions of the 2024 Equity Incentive Plan, which is included with this Form 8-K as Exhibit 10.1 and is incorporated herein by reference.

 

Item 5.07.

Submission of Matters to a Vote of Security Holders.

 

On June 5, 2024, the Company held its Annual Meeting. A total of 138,578,492 out of 276,388,250 eligible shares of the Company’s common stock were present in person or represented by proxy at the Annual Meeting. For non-routine matters, 50,999,691 shares participated after excluding broker non-votes. For the non-routine matters of amending the Company’s Third Amended and Restated Certificate of Incorporation (the “Certificate of Incorporation”), which required approval of a majority of the Company’s outstanding shares, broker non-votes and abstentions had the same effect as a vote against the proposal. For the routine matter of ratifying appointment of the Company’s independent registered public accounting firm, and the non-routine matters of electing directors, approving executive compensation on an advisory basis, and approving the 2024 Equity Incentive Plan, broker non-votes and abstentions had no effect on the outcome as they were not considered votes cast pursuant to the Company’s bylaws.

 

For purposes of this report, all share counts are rounded to the nearest whole number and all percentages are rounded to the nearest tenth of a percent. Reported percentages of votes cast exclude abstentions and broker non-votes.

 

The matters submitted to stockholders at the Annual Meeting and the voting results were as follows:

 

Proposal 1: Amendment of the Company’s Certificate of Incorporation to declassify the Board of Directors, shorten all existing terms to expire at the Annual Meeting, and make certain other immaterial changes to the Certificate of Incorporation

 

Stockholders failed to approve the amendment of the Company’s Certificate of Incorporation to declassify the board of directors of the Company, shorten all existing terms to expire at the Annual Meeting, and make certain other immaterial changes to the Certificate of Incorporation. The proposal required a majority of the shares outstanding for approval.

 

		Shares				% Votes Cast				% Shares Outstanding
For			43,724,141				86.5	%			15.8	%
Against			6,838,829				13.5	%			2.5	%
Abstain			436,721								0.2	%
Broker Non-Votes			87,578,801								31.7	%

 

 

Proposal 2(b): Election of Directors

 

Because Stockholders failed to approve Proposal 1, Proposal 2(a) was not presented to the Stockholders.

 

Stockholders elected all Class I director nominees to hold office for terms expiring at the Company’s 2027 annual meeting of stockholders. Nominees required a plurality of the votes cast for election.

 

Philip Lader

 

		Shares				% Votes Cast				% Shares Outstanding
For			32,873,457				64.5	%			11.9	%
Withheld			18,126,234				35.5	%			6.6	%
Broker Non-Votes			87,578,801								31.7	%

 

Gary Locke

 

		Shares				% Votes Cast				% Shares Outstanding
For			33,655,458				66.0	%			12.2	%
Withheld			17,344,234				34.0	%			6.3	%
Broker Non-Votes			87,578,801								31.7	%

 

Adam Sussman

 

		Shares				% Votes Cast				% Shares Outstanding
For			33,755,478				66.2	%			12.2	%
Withheld			17,244,214				33.8	%			6.2	%
Broker Non-Votes			87,578,801								31.7	%

 

Proposal 3: Amendment of the Company’s Certificate of Incorporation to eliminate the prohibition against Stockholders acting by written consent

 

Stockholders failed to approve the amendment of the Company’s Certificate of Incorporation to eliminate the prohibition against stockholders acting by written consent. The proposal required a majority of the shares outstanding for approval.

 

		Shares				% Votes Cast				% Shares Outstanding
For			41,163,302				81.4	%			14.9	%
Against			9,385,096				18.6	%			3.4	%
Abstain			451,293								0.2	%
Broker Non-Votes			87,578,801								31.7	%

 

Proposal 4: Amendment of the Company’s Certificate of Incorporation to remove the limitation on Stockholders’ ability to call special meetings

 

Stockholders failed to approve the amendment of the Company’s Certificate of Incorporation to remove the limitation on stockholders’ ability to call special meetings. The proposal required a majority of the shares outstanding for approval.

 

		Shares				% Votes Cast				% Shares Outstanding
For			41,341,490				81.6	%			15.0	%
Against			9,340,832				18.4	%			3.4	%
Abstain			317,370								0.1	%
Broker Non-Votes			87,578,801								31.7	%

 

 

Proposal 5: Amendment of the Company’s Certificate of Incorporation to expand the exculpation provision to limit the liability of certain officers

 

Stockholders failed to approve the amendment of the Company’s Certificate of Incorporation to expand the exculpation provision to limit the liability of certain officers. The proposal required a majority of the shares outstanding for approval.

 

		Shares				% Votes Cast				% Shares Outstanding
For			36,649,601				72.9	%			13.3	%
Against			13,622,754				27.1	%			4.9	%
Abstain			727,336								0.3	%
Broker Non-Votes			87,578,801								31.7	%

 

Proposal 6: Ratification of the Appointment of the Independent Registered Public Accounting Firm

 

Stockholders ratified the appointment of Ernst & Young, LLP as our independent registered public accounting firm for the fiscal year ended December 31, 2024. The proposal required a majority of the votes cast for approval.

 

		Shares				% Votes Cast				% Shares Outstanding
For			113,964,944				83.5	%			41.2	%
Against			22,497,372				16.5	%			8.1	%
Abstain			2,116,177								0.8	%
Broker Non-Votes			0								0.0	%

 

Proposal 7: Non-Binding Advisory Vote on Executive Compensation

 

Stockholders failed to approve, on a non-binding advisory basis, the compensation paid to our named executive officers. The proposal required a majority of the votes cast for approval.

 

		Shares				% Votes Cast				% Shares Outstanding
For			19,321,593				38.9	%			7.0	%
Against			30,370,851				61.1	%			11.0	%
Abstain			1,307,248								0.5	%
Broker Non-Votes			87,578,801								31.7	%

 

Proposal 8: Approval of the Company’s 2024 Equity Incentive Plan

 

Stockholders approved the 2024 Equity Incentive Plan. The proposal required a majority of the votes cast for approval.

 

		Shares				% Votes Cast				% Shares Outstanding
For			31,691,517				63.7	%			11.5	%
Against			18,036,101				36.3	%			6.5	%
Abstain			1,272,073								0.5	%
Broker Non-Votes			87,578,801								31.7	%

 

Item 8.01.

Over Events.

 

In connection with the approval of Proposal 8 as described in Items 5.02 and 5.07 above, the Company plans to file a registration statement on Form S-8 registering 25,000,000 shares of Class A common stock for potential future issuances under the 2024 Equity Incentive Plan. Consistent with long standing past practice, shares registered for the 2024 Equity Incentive Plan will be used for compensatory grants to the Company’s employees, directors, and consultants subject to such vesting conditions as may be established by the compensation committee of the board of directors and are not available for other purposes, including equity offerings outside the plan.

 

 

Item 9.01. Financial Statements and Exhibits.

 

(d) Exhibits

 

Exhibit No.		Exhibit Description
10.1		AMC Entertainment Holdings, Inc. 2024 Equity Incentive Plan
104		Cover Page Interactive Data File (embedded within the Inline XBRL document)

 

 

SIGNATURES

 

Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

 

	AMC ENTERTAINMENT HOLDINGS, INC.
Date: June 7, 2024	By:	/s/ Kevin M. Connor
		Name: Kevin M. Connor
		Title: Senior Vice President, General Counsel and Secretary

 

 

Exhibit 10.1

 

AMC ENTERTAINMENT HOLDINGS, INC.

2024 EQUITY INCENTIVE PLAN

 

1.             Introduction.

 

1.1            General Purpose. The name of this plan is the AMC Entertainment Holdings, Inc. 2024 Equity Incentive Plan (the “Plan”). The purposes of the Plan are to: (a) enable AMC Entertainment Holdings, Inc., a Delaware corporation (the “Company”), and any Affiliate to attract and retain the types of Employees, Consultants and Directors who will contribute to the Company’s long-range success; (b) provide incentives that align the interests of Employees, Consultants and Directors with those of the shareholders of the Company; and (c) promote the success of the Company’s business.

 

1.2            Eligible Award Recipients. The persons eligible to receive Awards are the Employees, Consultants and Directors of the Company and its Affiliates.

 

1.3            Available Awards. Awards that may be granted under the Plan include: (a) Options; (b) Stock Appreciation Rights; (c) Restricted Stock Awards; (d) Restricted Stock Units; (e) Cash Awards; and (f) Other Equity-Based Awards (including but not limited to phantom awards and fully vested Stock awards).

 

1.4            Effective Date of Plan. The Plan shall become effective as of the Effective Date, but no Award shall be settled in shares of Common Stock unless and until the Plan has been approved by the shareholders of the Company.

 

1.5            Termination or Suspension of the Plan. The Plan will be unlimited in duration and, in the event of Plan termination, will remain in effect as long as any shares of Awards awarded under it are outstanding and not fully vested. The Committee may suspend or terminate the Plan at any earlier date pursuant to Section 13.1. No Awards may be granted under the Plan while the Plan is suspended or after it is terminated.

 

1.6            Capitalized Words. Capitalized terms used throughout this document shall have the meaning set forth in Section 16 unless the context clearly requires a different meaning.

 

2.            Shares Subject to the Plan.

 

2.1            Subject to adjustment in accordance with Section 11, no more than 25,000,000 shares of Common Stock shall be available for the grant of Awards under the Plan (the “Total Share Reserve”).

 

2.2            Shares of Common Stock available for distribution under the Plan may consist, in whole or in part, of authorized and unissued shares, treasury shares or shares reacquired by the Company in any manner.

 

2.3            The aggregate Grant Date value of all Awards granted to a Non-Employee Director during any calendar year shall not exceed $500,000.

 

2.4            Any shares of Common Stock subject to an Award that expire or are canceled, forfeited, terminated or settled in cash, in each case without issuance of the full number of shares of Common Stock to which the Award related, will again be available for issuance under the Plan. Notwithstanding anything to the contrary contained in this Plan: shares subject to an Award under the Plan shall not again be made available for issuance or delivery under the Plan if such shares are (a) shares tendered in payment of a Stock Option, (b) shares delivered or withheld by the Company to satisfy any tax withholding obligation, or (c) shares covered by a stock-settled Stock Appreciation Right or other Awards that were not issued upon the settlement of the Award.

 

 

2.5            Awards may, in the sole discretion of the Committee, be granted under the Plan in assumption of, or in substitution for, outstanding awards previously granted by an entity acquired by the Company or with which the Company combines (“Substitute Awards”). Substitute Awards shall not be counted against the Total Share Reserve.

 

3.             Stock Option. Each Option granted under the Plan shall be evidenced by an Award Agreement. Each Option so granted shall be subject to the conditions set forth in this Section 3, and to such other conditions not inconsistent with the Plan as may be reflected in the applicable Award Agreement. Notwithstanding the foregoing, the Company shall have no liability to any Participant or any other person if a Stock Option is determined to be subject to Code Section 409A and the terms of such Option fail to satisfy the requirements of Code Section 409A. The provisions of separate Options need not be identical, but each Option shall include (through incorporation in the Option Award Agreement or otherwise) the substance of each of the following provisions:

 

3.1            Term. The Committee will determine the term of a Stock Option granted under the Plan; provided, however, no Option shall be exercisable after the expiration of ten years from the Grant Date unless an earlier or later expiration date is set forth in the Award Agreement.

 

3.2            Exercise Price. The Exercise Price of each Option may never be less than 100% of the Fair Market Value of the Common Stock subject to the Option on the Grant Date. Notwithstanding the foregoing, a Stock Option may be granted with an Exercise Price lower than that set forth in the preceding sentence if such Option is granted pursuant to an assumption or substitution for another option in a manner satisfying the provisions of Code Section 409A or Code Section 424(a), as applicable.

 

3.3            Consideration. The Exercise Price of Common Stock acquired pursuant to a Stock Option shall be paid, to the extent permitted by Applicable Laws, either (a) in cash or by certified or bank check at the time the Option is exercised or (b) in the discretion of the Committee, upon such terms as the Committee shall approve, the Exercise Price may be paid: (i) by delivery to the Company of other Common Stock, duly endorsed for transfer to the Company, with a Fair Market Value on the date of delivery equal to the Exercise Price (or portion thereof) due for the number of shares being acquired, or by means of attestation whereby the Participant identifies for delivery specific shares of Common Stock that have an aggregate Fair Market Value on the date of attestation equal to the Exercise Price (or portion thereof) and receives a number of shares of Common Stock equal to the difference between the number of shares purchased and the number of identified attestation shares of Common Stock (a “Stock for Stock Exchange”); (ii) a “cashless” exercise program established with a broker; (iii) by reduction in the number of shares of Common Stock otherwise deliverable upon exercise of such Option with a Fair Market Value equal to the aggregate Exercise Price at the time of exercise; (iv) by any combination of the foregoing methods; or (v) in any other form of legal consideration that may be acceptable to the Committee. Unless otherwise specifically provided in the Option, the exercise price of Common Stock acquired pursuant to a Stock Option that is paid by delivery (or attestation) to the Company of other Common Stock acquired, directly or indirectly from the Company, shall be paid only by shares of the Common Stock of the Company that have been held for more than six months (or such longer or shorter period of time required to avoid a charge to earnings for financial accounting purposes). Notwithstanding the foregoing, during any period for which the Common Stock is publicly traded (i.e., the Common Stock is listed on any established stock exchange or a national market system) an exercise by a Director or Officer that involves or may involve a direct or indirect extension of credit or arrangement of an extension of credit by the Company, directly or indirectly, in violation of Section 402(a) of the Sarbanes-Oxley Act of 2002 shall be prohibited with respect to any Award under this Plan.

 

 

3.4            Transferability of a Stock Option. An Option may, in the sole discretion of the Committee, be transferable to a Permitted Transferee, upon written approval by the Committee to the extent provided in the Award Agreement. If the Option does not provide for transferability, then the Option shall not be transferable except by will or by the laws of descent and distribution and shall be exercisable during the lifetime of the Optionee only by the Optionee. Notwithstanding the foregoing, the Optionee may, by delivering written notice to the Company, in a manner satisfactory to the Company, designate a third party who, in the event of the death of the Optionee, shall be entitled to exercise the Option.

 

3.5            Vesting of Options. Each Option may, but need not, vest and become exercisable in periodic installments that may, but need not, be equal. The Option may be subject to such other terms and conditions on the time or times when it may be exercised (which may be based on performance or other criteria) as the Committee may deem appropriate. The vesting provisions of individual Options may vary. The Committee may, but shall not be required to, provide for an acceleration of vesting and exercisability in the terms of any Award Agreement upon the occurrence of a specified event.

 

3.6            Termination of Continuous Service. Unless otherwise provided in an Award Agreement or in an employment agreement, in the event a Stock Optionee’s Continuous Service terminates (other than upon the Optionee’s death or Disability), the Optionee may exercise the Optionee’s Option (to the extent that the Optionee was entitled to exercise such Option as of the date of termination) but only within such period of time ending on the earlier of (a) the date 90 days following the termination of the Optionee’s Continuous Service or (b) the expiration of the term of the Option as set forth in the Award Agreement; provided that, if the termination of Continuous Service is by the Company for Cause, all outstanding Options (whether or not vested) shall immediately terminate and cease to be exercisable. If, after termination, the Optionee does not exercise the Optionee’s Option within the time specified in the Award Agreement or this Section 3.6, the Option shall terminate.

 

3.7            Extension of Termination Date. An Optionee’s Award Agreement may also provide that if the exercise of the Option following the termination of the Optionee’s Continuous Service for any reason would be prohibited at any time because the issuance of shares of Common Stock would violate the registration requirements under the Securities Act or any other state or federal securities law or the rules of any securities exchange or interdealer quotation system, then the Option shall terminate on the earlier of (a) the expiration of the term of the Option in accordance with Section 3.1 or (b) the expiration of a period after termination of the Participant’s Continuous Service that is 90 days after the end of the period during which the exercise of the Option would be in violation of such registration or other securities law requirements.

 

 

3.8            Disability of Optionee. Unless otherwise provided in an Award Agreement, in the event that a Stock Optionee’s Continuous Service terminates as a result of the Optionee’s Disability, the Optionee may exercise his or her Option (to the extent that the Optionee was entitled to exercise such Option as of the date of termination), but only within such period of time ending on the earlier of (a) the date 12 months following such termination or (b) the expiration of the term of the Option as set forth in the Award Agreement. If, after termination, the Optionee does not exercise his or her Option within the time specified in this Plan or in the Award Agreement, the Option shall terminate.

 

3.9            Death of Optionee. Unless otherwise provided in an Award Agreement, in the event a Stock Optionee’s Continuous Service terminates as a result of the Optionee’s death, then the Option may be exercised (to the extent the Optionee was entitled to exercise such Option as of the date of death) by the Optionee’s estate, by a person who acquired the right to exercise the Option by bequest or inheritance or by a person designated to exercise the Option upon the Optionee’s death, but only within the period ending on the earlier of (a) the date 12 months following the date of death or (b) the expiration of the term of such Option as set forth in the Award Agreement. If, after the Optionee’s death, the Option is not exercised within the time specified in this Plan or in the Award Agreement, the Option shall terminate.

 

4.             Stock Appreciation Rights. Each Stock Appreciation Right granted under the Plan shall be evidenced by an Award Agreement. Each Stock Appreciation Right so granted shall be subject to the conditions set forth in this Section 4, and to such other conditions not inconsistent with the Plan as may be reflected in the applicable Award Agreement. Stock Appreciation Rights may be granted alone (“Free Standing Rights”) or in tandem with a Stock Option granted under the Plan (“Related Rights”).

 

4.1            Grant Requirements for Related Rights.  Any Related Right that relates to a Stock Option may be granted at the same time the Option is granted or at any time thereafter but before the exercise or expiration of the Option.

 

4.2            Term. The term of a Stock Appreciation Right granted under the Plan shall be determined by the Committee; provided, however, no Stock Appreciation Right shall be exercisable later than the tenth anniversary of the Grant Date unless an earlier or later expiration date is set forth in the Award Agreement.

 

4.3            Vesting. Each Stock Appreciation Right may, but need not, vest and become exercisable in periodic installments that may, but need not, be equal. The Stock Appreciation Right may be subject to such other terms and conditions on the time or times when it may be exercised as the Committee may deem appropriate. The vesting provisions of individual Stock Appreciation Rights may vary. The Committee may, but shall not be required to, provide for an acceleration of vesting and exercisability in the terms of any Stock Appreciation Right upon the occurrence of a specified event.

 

4.4            Exercise and Payment. Upon exercise of a Stock Appreciation Right, the holder shall be entitled to receive from the Company an amount equal to the number of shares of Common Stock subject to the Stock Appreciation Right that is being exercised multiplied by the excess of (i) the Fair Market Value of a share of Common Stock on the date the Award is exercised, over (ii) the exercise price specified in the Stock Appreciation Right or related Option. Payment with respect to the exercise of a Stock Appreciation Right shall be made on the date of exercise. Payment shall be made in the form of shares of Common Stock (with or without restrictions as to substantial risk of forfeiture and transferability, as determined by the Committee in its sole discretion), cash or a combination thereof, as determined by the Committee.

 

 

4.5            Exercise Price. The Committee will determine the exercise price of a Free Standing Right; provided, however, the exercise price of a Free Standing Right intended to be exempt from Code Section 409A may never be less than 100% of the Fair Market Value of one share of Common Stock on the Grant Date of such Free Standing Right. A Related Right granted simultaneously with or in conjunction with a Stock Option shall have the same exercise price as the related Option, shall be transferable only upon the same terms and conditions as the related Option, and shall be exercisable only to the same extent as the related Option. Notwithstanding the foregoing, a Stock Appreciation Right, by its terms, shall be exercisable only when the Fair Market Value per share of Common Stock subject to the Stock Appreciation Right exceeds the exercise price of the Stock Appreciation Right and no Related Rights may be granted in tandem with a Stock Option unless the Committee determines that the requirements of Section 4.1 are satisfied.

 

4.6            Reduction in the Underlying Option Shares. Upon any exercise of a Related Right, the number of shares of Common Stock for which any related Option shall be exercisable shall be reduced by the number of shares for which the Stock Appreciation Right has been exercised. The number of shares of Common Stock for which a Related Right shall be exercisable shall be reduced upon any exercise of any related Option by the number of shares of Common Stock for which such Option has been exercised.

 

5.             Restricted Awards. A Restricted Award may, but need not, provide that it may not be sold, assigned, transferred or otherwise disposed of, pledged or hypothecated as collateral for a loan or as security for the performance of any obligation or for any other purpose for such period (the “Restricted Period”) as the Committee shall determine. Each Restricted Award so granted shall be subject to the conditions set forth in this Section 5, and to such other conditions not inconsistent with the Plan as may be reflected in the applicable Award Agreement.

 

5.1            Restricted Stock and Restricted Stock Units.

 

(a)            Each Participant granted Restricted Stock shall acknowledge receipt of the Participant’s Award Agreement, in the manner acceptable to the Committee. If the Committee determines that the Restricted Stock shall be held by the Company or in escrow rather than delivered to the Participant pending the release of the applicable restrictions, the Committee may require the Participant to additionally deliver to the Company (A) an escrow agreement satisfactory to the Committee, if applicable and (B) the appropriate blank stock power with respect to the Restricted Stock covered by such agreement. If a Participant fails to acknowledge receipt of an Award Agreement in the manner acceptable to the Committee and, if applicable, to deliver an escrow agreement and stock power, the Award shall be null and void. Subject to the restrictions set forth in the Award Agreement, the Participant generally has the rights and privileges of a shareholder as to such Restricted Stock, including the right to vote such Restricted Stock and the right to receive dividends; provided that, any cash dividends and stock dividends with respect to the Restricted Stock shall be withheld by the Company for the Participant’s account, and interest may be credited on the amount of the cash dividends withheld at a rate and subject to such terms as determined by the Committee. The cash dividends or stock dividends so withheld by the Committee and attributable to any particular share of Restricted Stock (and applicable earnings, if any) shall be distributed to the Participant in cash or, at the discretion of the Committee, in shares of Common Stock having a Fair Market Value equal to the amount of such dividends, if applicable, upon the release of restrictions on such share and, if such share is forfeited, the Participant has no right to such dividends.

 

 

(b)            The terms and conditions of a grant of Restricted Stock Units shall be reflected in an Award Agreement. No shares of Common Stock shall be issued at the time a Restricted Stock Unit is granted, and the Company will not be required to set aside funds for the payment of any such Award. A Participant has no voting rights with respect to any Restricted Stock Units granted hereunder. The Committee may also grant Restricted Stock Units with a deferral feature, whereby settlement is deferred beyond the vesting date until the occurrence of a future payment date or event set forth in an Award Agreement (“Deferred Stock Units”). At the discretion of the Committee, each Restricted Stock Unit or Deferred Stock Unit (representing one share of Common Stock) may be credited with an amount equal to the cash and stock dividends paid by the Company in respect of one share of Common Stock (“Dividend Equivalents”). Dividend Equivalents shall be withheld by the Company and credited to the Participant’s account, and interest may be credited on the amount of cash Dividend Equivalents credited to the Participant’s account at a rate and subject to such terms as determined by the Committee. Dividend Equivalents credited to a Participant’s account and attributable to any particular Restricted Stock Unit or Deferred Stock Unit (and applicable earnings, if any) shall be distributed in cash or, at the discretion of the Committee, in shares of Common Stock having a Fair Market Value equal to the amount of such Dividend Equivalents and earnings, if applicable, to the Participant upon settlement of such Restricted Stock Unit or Deferred Stock Unit and, if such Restricted Stock Unit or Deferred Stock Unit is forfeited, the Participant has no right to such Dividend Equivalents.

 

5.2            Restrictions

 

(a)            Restricted Stock awarded to a Participant shall be subject to the following restrictions until the expiration of the Restricted Period, and to such other terms and conditions as may be set forth in the applicable Award Agreement: (A) if an escrow arrangement is used, the Participant shall not be entitled to delivery of the stock; (B) the shares shall be subject to the restrictions on transferability set forth in the Award Agreement; (C) the shares shall be subject to forfeiture to the extent provided in the applicable Award Agreement; and (D) to the extent such shares are forfeited, all rights of the Participant to such shares and as a shareholder with respect to such shares shall terminate without further obligation on the part of the Company.

 

(b)            Restricted Stock Units and Deferred Stock Units awarded to any Participant shall be subject to (A) forfeiture until the expiration of the Restricted Period, and satisfaction of any applicable Performance Goals during such period, to the extent provided in the applicable Award Agreement, and to the extent such Restricted Stock Units or Deferred Stock Units are forfeited, all rights of the Participant to such Restricted Stock Units or Deferred Stock Units shall terminate without further obligation on the part of the Company and (B) such other terms and conditions as may be set forth in the applicable Award Agreement.

 

 

(c)            The Committee has the authority to remove any or all of the restrictions on the Restricted Stock, Restricted Stock Units and Deferred Stock Units whenever it may determine that, by reason of changes in Applicable Laws or other changes in circumstances arising after the date the Restricted Stock or Restricted Stock Units or Deferred Stock Units are granted, such action is appropriate.

 

5.3            Restricted Period. With respect to Restricted Awards, the Restricted Period shall commence on the Grant Date and end at the time or times set forth on a schedule established by the Committee in the applicable Award Agreement.

 

5.4            Section 83(b) Election. If a Participant makes an election pursuant to Section 83(b) of the Code with respect to a Restricted Stock Award, the Participant shall file, within thirty (30) days following the Date of Grant, a copy of such election with the Company and with the Internal Revenue Service, in accordance with the regulations under Section 83(b) of the Code. The Committee may provide in an Award Agreement that the Restricted Stock Award is conditioned upon the Participant’s making or refraining from making an election with respect to the Award under Section 83(b) of the Code.

 

5.5            Delivery of Restricted Stock and Settlement of Restricted Stock Units.

 

(a)            Upon the expiration of the Restricted Period with respect to any shares of Restricted Stock, the restrictions set forth in Section 5.2 and the applicable Award Agreement shall be of no further force or effect with respect to such shares, except as set forth in the applicable Award Agreement.

 

(b)            Within 30 days following the expiration of the Restricted Period with respect to any outstanding Restricted Stock Units, or at the expiration of the deferral period with respect to any outstanding Deferred Stock Units, the Company shall deliver to the Participant, or the Participant’s beneficiary, without charge, one share of Common Stock for each such outstanding vested Restricted Stock Unit or Deferred Stock Unit (“Vested Unit”) and cash equal to any Dividend Equivalents credited with respect to each such Vested Unit in accordance with Section 5.1(b) and the applicable interest, if any, or, at the discretion of the Committee, in shares of Common Stock having a Fair Market Value equal to such Dividend Equivalents and the applicable interest, if any; provided, however, that, if explicitly provided in the applicable Award Agreement, the Committee may, in its sole discretion, elect to pay cash or part cash and part Common Stock in lieu of delivering only shares of Common Stock for Vested Units. If a cash payment is made in lieu of delivering shares of Common Stock, the amount of such payment shall be equal to the Fair Market Value of the Common Stock as of the date on which the Restricted Period lapsed in the case of Restricted Stock Units, or the delivery date in the case of Deferred Stock Units, with respect to each Vested Unit.

 

5.6            Stock Restrictions. Each book-entry representing Restricted Stock awarded under the Plan shall bear a legend in such form as the Company deems appropriate.

 

5.7            Performance Goals. Any Restricted Award granted under the Plan may be conditioned upon satisfaction of one or more Performance Goals as determined by the Committee in its discretion and set forth in the Participant’s Award Agreement.

 

6.            Other Equity-Based Awards and Cash Awards. The Committee may grant Other Equity-Based Awards, either alone or in tandem with other Awards, in such amounts and subject to such conditions as the Committee shall determine in its sole discretion. Each Equity-Based Award shall be evidenced by an Award Agreement and shall be subject to such conditions, not inconsistent with the Plan, as may be reflected in the applicable Award Agreement. The Committee may grant Cash Awards in such amounts and subject to such Performance Goals, other vesting conditions, and such other terms as the Committee determines in its discretion. Cash Awards shall be evidenced in such form as the Committee may determine.

 

 

7.            Securities Law Compliance. Each Award Agreement shall provide that no shares of Common Stock shall be purchased or sold unless and until (a) any then applicable requirements of state or federal laws and regulatory agencies have been fully complied with to the satisfaction of the Company and its counsel and (b) if required to do so by the Company, the Participant has delivered to the Company a letter of investment intent in such manner and containing such provisions as the Committee may require. The Company shall use reasonable efforts to seek to obtain from each regulatory commission or agency having jurisdiction over the Plan such authority as may be required to grant Awards and to issue and sell shares of Common Stock upon exercise of the Awards; provided, however, that this undertaking shall not require the Company to register under the Securities Act the Plan, any Award or any Common Stock issued or issuable pursuant to any such Award. If, after reasonable efforts, the Company is unable to obtain from any such regulatory commission or agency the authority which counsel for the Company deems necessary for the lawful issuance and sale of Common Stock under the Plan, the Company shall be relieved from any liability for failure to issue and sell Common Stock upon exercise of such Awards unless and until such authority is obtained.

 

8.            Use of Proceeds from Common Stock. Proceeds from the sale of Common Stock pursuant to Awards, or upon exercise of Options, shall constitute general funds of the Company.

 

9.            Administration.

 

9.1            Authority of Committee. The Plan shall be administered by the Committee. Subject to the terms of the Plan, the Committee’s charter and Applicable Laws, and in addition to other express powers and authorization conferred by the Plan, the Committee has the authority:

 

(a)            to construe and interpret the Plan and apply its provisions;

 

(b)            to promulgate, amend, and rescind rules and regulations relating to the administration of the Plan;

 

(c)            to authorize any person to execute, on behalf of the Company, any instrument required to carry out the purposes of the Plan;

 

(d)            in accordance with Applicable Laws, to delegate its authority to one or more Officers of the Company with respect to Awards that do not involve “insiders” within the meaning of Section 16 of the Exchange Act;

 

(e)            to determine when Awards are to be granted under the Plan and the applicable Grant Date;

 

(f)             from time to time to select, subject to the limitations set forth in this Plan, those eligible Award recipients to whom Awards shall be granted;

 

(g)            to determine the number of shares of Common Stock to be made subject to each Award;

 

(h)            to prescribe the terms and conditions of each Award, including, without limitation, the exercise price and medium of payment and vesting provisions, and to specify the provisions of the Award Agreement relating to such grant;

 

 

(i)             to determine the target number of Performance Shares to be granted pursuant to a Performance Share Award, the performance measures that will be used to establish the Performance Goals, the Performance Period and the number of Performance Shares earned by a Participant;

 

(j)             to amend any outstanding Awards, including for the purpose of modifying the time or manner of vesting, or the term of any outstanding Award; provided, however, that if any such amendment impairs a Participant’s rights or increases a Participant’s obligations under the Participant’s Award or creates or increases a Participant’s federal income tax liability with respect to an Award, such amendment shall also be subject to the Participant’s consent;

 

(k)            to accelerate the time at which an Award may first be exercised or the time during which an Award or any part of an Award vests in accordance with the Plan, notwithstanding the provisions in the Award stating the time at which it may first be exercised or the time during which it will vest, and only if such acceleration complies with all Applicable Laws;

 

(l)             to determine the duration and purpose of leaves of absences which may be granted to a Participant without constituting termination of the Participant’s employment for purposes of the Plan, which periods shall be no shorter than the periods generally applicable to Employees under the Company’s employment policies;

 

(m)           to make decisions with respect to outstanding Awards that may become necessary upon a change in corporate control or an event that triggers anti-dilution adjustments;

 

(n)            to interpret, administer, reconcile any inconsistency in, correct any defect in or supply any omission in the Plan and any instrument or agreement relating to, or Award granted under, the Plan; and

 

(o)            to exercise discretion to make any and all other determinations which it determines to be necessary or advisable for the administration of the Plan.

 

9.2            Committee Decisions Final. All decisions made by the Committee pursuant to the provisions of the Plan shall be final and binding on the Company and the Participants, unless such decisions are determined by a court having jurisdiction to be arbitrary and capricious.

 

9.3            Delegation. The Committee or, if no Committee has been appointed, the Board may delegate administration of the Plan to a committee or committees of one or more members of the Board, and the term “Committee” shall apply to any person or persons to whom such authority has been delegated. The Committee has the power to delegate to a subcommittee any of the administrative powers the Committee is authorized to exercise (and references in this Plan to the Board or the Committee shall be to the committee or subcommittee), subject, however, to such resolutions, not inconsistent with the provisions of the Plan, as may be adopted from time to time by the Board. The Board may abolish the Committee at any time and revest in the Board the administration of the Plan. The members of the Committee shall be appointed by and serve at the pleasure of the Board. From time to time, the Board may increase or decrease the size of the Committee, add additional members to, remove members (with or without cause) from, appoint new members in substitution, and fill vacancies, however caused, in the Committee. The Committee shall act pursuant to a vote of the majority of its members or, in the case of a Committee comprised of only two members, the unanimous consent of its members, whether present or not, or by the written consent of the majority of its members and minutes shall be kept of all of its meetings and copies of the minutes shall be provided to the Board. Subject to the limitations prescribed by the Plan and the Board, the Committee may establish and follow such rules and regulations for the conduct of its business as it may determine to be advisable.

 

 

9.4            Committee Composition. Except as otherwise determined by the Board, the Committee shall consist solely of two or more Non-Employee Directors. The Board has discretion to determine whether or not it intends to comply with the exemption requirements of Rule 16b-3. However, if the Board intends to satisfy such exemption requirements, with respect to any insider subject to Section 16 of the Exchange Act, the Committee shall be a compensation committee of the Board that at all times consists solely of two or more Non-Employee Directors. Within the scope of such authority, the Board or the Committee may delegate to a committee of one or more members of the Board who are not Non-Employee Directors the authority to grant Awards to eligible persons who are not then subject to Section 16 of the Exchange Act. Nothing in this Plan shall create an inference that an Award is not validly granted under the Plan in the event Awards are granted under the Plan by a compensation committee of the Board that does not at all times consist solely of two or more Non-Employee Directors.

 

9.5            Indemnification. In addition to such other rights of indemnification as they may have as Directors or members of the Committee, and to the extent allowed by Applicable Laws, the Company shall indemnify the Committee against the reasonable expenses, including attorney’s fees, actually incurred in connection with any action, suit or proceeding or in connection with any appeal, to which the Committee may be party by reason of any action taken or failure to act under or in connection with the Plan or any Award granted under the Plan, and against all amounts paid by the Committee in settlement of any such action, suit or proceeding (provided, however, that the settlement has been approved by the Company, which approval shall not be unreasonably withheld) or paid by the Committee in satisfaction of a judgment in any such action, suit or proceeding, except in relation to matters as to which it is adjudged in such action, suit or proceeding that such Committee did not act in good faith and in a manner which such person reasonably believed to be in the best interests of the Company, or in the case of a criminal proceeding, had no reason to believe that the conduct complained of was unlawful; provided, however, that within 60 days after the institution of any such action, suit or proceeding, such Committee shall, in writing, offer the Company the opportunity at its own expense to handle and defend such action, suit or proceeding.

 

10.            Miscellaneous.

 

10.1          Repricing Prohibited; Dividend Equivalent Rights. Subject to the adjustment provisions contained in Section 11 hereof, without the prior approval of the Company’s shareholders, neither the Committee nor the Board shall cancel a Stock Option or Stock Appreciation Right when the exercise price per share exceeds the Fair Market Value of one share of Common Stock in exchange for cash or another Award (other than in connection with a Change in Control) or cause the cancellation, substitution or amendment of a Stock Option or Stock Appreciation Right that would have the effect of reducing the exercise price of such a Stock Option or Stock Appreciation Right previously granted under the Plan or otherwise approve any modification to such a Stock Option or Stock Appreciation Right, that would be treated as a “repricing” under the applicable rules, regulations or listing requirements adopted by the New York Stock Exchange or other principal exchange on which the Common Stock is then listed. Dividends may not be paid with respect to Stock Options or Stock Appreciation Rights and dividend equivalent rights may not be granted with respect to the shares of Common Stock subject to Stock Options or Stock Appreciation Rights.

 

 

10.2          Shareholder Rights. Except as provided in the Plan or an Award Agreement, no Participant shall be deemed to be the holder of, or to have any of the rights of a holder with respect to, any shares of Common Stock subject to such Award unless and until such Participant satisfies all requirements for exercise of the Award pursuant to its terms and no adjustment shall be made for dividends (ordinary or extraordinary, whether in cash, securities or other property) or distributions of other rights for which the record date is prior to the date such Common Stock is issued, except as provided in Section 11.

 

10.3          No Employment or Other Service Rights. Nothing in the Plan, any Award Agreement or any other instrument granted pursuant to the Plan shall confer upon any Participant any right to continue to serve the Company or an Affiliate in the capacity in effect at the time the Award was granted or shall affect the right of the Company or an Affiliate to terminate (a) the employment of an Employee or Consultant with or without notice and with or without Cause or (b) the service of a Director pursuant to the by-laws of the Company or an Affiliate, and any applicable provisions of the corporate law of the state in which the Company or the Affiliate is incorporated, as the case may be.

 

10.4          Transfer; Approved Leave of Absence. For purposes of the Plan, no termination of employment by an Employee shall be deemed to result from either (a) a transfer of employment to the Company from an Affiliate or from the Company to an Affiliate, or from one Affiliate to another, or (b) an approved leave of absence for military service or sickness, or for any other purpose approved by the Company, if the Employee’s right to reemployment is guaranteed either by a statute or by contract or under the policy pursuant to which the leave of absence was granted or if the Committee otherwise so provides in writing, in either case, except to the extent inconsistent with Code Section 409A if the applicable Award is subject Code Section 409A.

 

10.5          Withholding Obligations. Each Participant shall, no later than the date as of which the value of an Award first becomes includible in the gross income of such Participant for federal, state or local income tax purposes, pay to the Company, or make arrangements satisfactory to the Committee regarding payment of, any federal, state, or local taxes of any kind, domestic or foreign, required by Applicable Laws to be withheld with respect to the Award. The obligations of the Company under the Plan are conditional on the making of such payments or arrangements, and the Company shall, to the extent permitted by Applicable Laws, have the right to deduct any such taxes from any payment of any kind otherwise due to such Participant. Whenever cash is paid pursuant to an Award, the Company has the right to deduct from the cash payment an amount sufficient to satisfy any applicable federal, state and local withholding tax requirements. Subject to the discretion of the Committee, the Participant may satisfy any federal, state or local tax withholding obligation relating to the exercise or acquisition of Common Stock under an Award by any of the following means (in addition to the Company’s right to withhold from any compensation paid to the Participant by the Company) or by a combination of such means: (a) tendering a cash payment; (b) authorizing the Company to withhold shares of Common Stock from the shares of Common Stock otherwise issuable to the Participant as a result of the exercise or acquisition of Common Stock under the Award; provided, however, that no shares of Common Stock are withheld with a value exceeding the maximum amount of tax required to be withheld by law; (c) delivering to the Company previously owned and unencumbered shares of Common Stock of the Company; (d) permitting a Participant to irrevocably authorize a third party to sell shares of Common Stock (or a sufficient portion of the shares) acquired upon the settlement of the Award and to remit to the Company a sufficient portion of the sale proceeds to pay the withholding taxes resulting from such settlement; or (e) any other method of payment approved by the Committee.

 

 

11.           Adjustments Upon Changes in Common Stock. In the event of changes in the outstanding Common Stock or in the capital structure of the Company by reason of any stock or extraordinary cash dividend, stock split, reverse stock split, an extraordinary corporate transaction such as any recapitalization, reorganization, merger, consolidation, combination, exchange, or other relevant change in capitalization occurring after the Grant Date of any Award, the outstanding Awards granted under the Plan (including the exercise price of Options and Stock Appreciation Rights and the Performance Goals to which Awards are subject) will be equitably adjusted or substituted, as to the number, price or kind of a share of Common Stock or other consideration subject to such Awards to the extent necessary to preserve the economic intent of such Awards. In the case of adjustments made pursuant to this Section 11, unless the Committee specifically determines that such adjustment is in the best interests of the Company or its Affiliates, the Committee shall ensure that any adjustments under this Section 11 will not constitute a modification of such Options within the meaning of Code Section 409A. Any adjustments made under this Section 11 shall be made in a manner which does not adversely affect the exemption provided pursuant to Rule 16b-3 under the Exchange Act. The Company shall give each Participant notice of an adjustment hereunder and, upon notice, such adjustment shall be conclusive and binding for all purposes.

 

12.           Effect of Change in Control.

 

12.1          Upon the occurrence of a Change in Control, the vesting of all outstanding Awards may be accelerated (together with all performance-based vesting conditions deemed satisfied at the greater of 100% of target or actual performance) to the extent provided under (i) the Participant’s Award Agreement, (ii) the terms of any employment agreement or other contract between the Company and a Participant, or (iii) any change in control policy adopted by the Committee and in effect at the time of such Change in Control.

 

12.2          In addition, in the event of a Change in Control, the Committee may in its discretion and upon at least ten days’ advance notice to the affected persons, cancel any outstanding Awards and pay to the holders such Awards, in cash or stock, or any combination cash or stock, the value of such Awards based upon the price per share of Common Stock received or to be received by other shareholders of the Company in the event. In the case of any Option or Stock Appreciation Right with an exercise price that equals or exceeds the price paid for a share of Common Stock in connection with the Change in Control, the Committee may cancel the Option or Stock Appreciation Right without the payment of consideration.

 

12.3          If the Company is a party to an agreement that is reasonably likely to result in a Change in Control, such agreement may provide for: (i) the continuation of any Award by the Company, if the Company is the surviving corporation; (ii) the assumption of any Award by the surviving corporation or its Affiliate; or (iii) the substitution by the surviving corporation or its Affiliate of equivalent awards for any Award, provided, however, that any such substitution with respect to Options and Stock Appreciation Rights shall occur in accordance with the requirements of Code Section 409A. The obligations of the Company under the Plan shall be binding upon any successor corporation or organization resulting from the merger, consolidation or other reorganization of the Company, or upon any successor corporation or organization succeeding to all or substantially all of the assets and business of the Company and its Affiliates, taken as a whole.

 

 

13.            Amendment of the Plan and Awards.

 

13.1          Amendment of Plan. The Committee at any time, and from time to time, may amend or terminate the Plan; provided, the Committee shall obtain shareholder approval of any amendment to the extent required by Applicable Law.

 

13.2          Contemplated Amendments. It is expressly contemplated that the Committee may amend the Plan in any respect the Committee deems necessary or advisable to provide eligible Employees, Consultants and Directors with the maximum benefits provided or to be provided under the provisions of the Code relating to the nonqualified deferred compensation provisions of Code Section 409A and to bring the Plan and Awards granted under it into compliance with the applicable provisions of the Code.

 

13.3          No Impairment of Rights. Rights under any Award granted before amendment of the Plan shall not be impaired by any amendment of the Plan unless (a) the Company requests the consent of the Participant and (b) the Participant consents in writing.

 

13.4          Amendment of Awards. The Committee at any time, and from time to time, may amend the terms of any one or more Awards; provided, however, that the Committee may not affect any amendment which would otherwise constitute an impairment of the rights under any Award unless (a) the Company requests the consent of the Participant and (b) the Participant consents in writing.

 

14.            General Provisions.

 

14.1          Forfeiture Events. The Committee may specify in an Award Agreement that the Participant’s rights, payments and benefits with respect to an Award shall be subject to reduction, cancellation, forfeiture or recoupment upon the occurrence of certain events, in addition to applicable vesting conditions of an Award. Such events may include, without limitation, breach of non-competition, non-solicitation, confidentiality, or other restrictive covenants that are contained in the Award Agreement or otherwise applicable to the Participant, a termination of the Participant’s Continuous Service for Cause, or other conduct by the Participant that is detrimental to the business or reputation of the Company or its Affiliates.

 

14.2          Clawback. Notwithstanding any other provisions in this Plan, the Company may cancel any Award, require reimbursement of any Award by a Participant, and effect any other right of recoupment of equity or other compensation provided under the Plan in accordance with any Company policies to comply with Applicable Laws, including the Company’s Executive Compensation Clawback Policy (the “Clawback Policy”), or to comport with good corporate governance practices, as such policies may be amended from time to time. In addition, a Participant may be required to repay to the Company previously paid compensation, whether provided pursuant to the Plan or an Award Agreement, in accordance with the Clawback Policy. By accepting an Award, the Participant is agreeing to be bound by the Clawback Policy, as in effect or as may be adopted or modified from time to time by the Company in its discretion (including, without limitation, to comply with Applicable Laws or stock exchange listing requirements). No recovery of compensation under such Clawback Policy will be an event giving rise to a right to resign for “good reason” or “constructive termination” (or similar term) under any agreement with the Company or an Affiliate.

 

 

14.3          Other Compensation Arrangements. Nothing contained in this Plan shall prevent the Committee from adopting other or additional compensation arrangements, subject to shareholder approval if such approval is required; and such arrangements may be either generally applicable or applicable only in specific cases.

 

14.4          Sub-Plans. The Committee may from time to time establish sub-plans under the Plan for purposes of satisfying securities, tax or other laws of various jurisdictions in which the Company intends to grant Awards. Any sub-plans shall contain such limitations and other terms and conditions as the Committee determines are necessary or desirable. All sub-plans shall be deemed a part of the Plan, but each sub-plan shall apply only to the Participants in the jurisdiction for which the sub-plan was designed.

 

14.5          Deferral of Awards. The Committee may establish one or more programs under the Plan to permit selected Participants the opportunity to elect to defer receipt of consideration upon exercise of an Award, satisfaction of performance criteria, or other event that absent the election would entitle the Participant to payment or receipt of shares of Common Stock or other consideration under an Award. The Committee may establish the election procedures, the timing of such elections, the mechanisms for payments of, and accrual of interest or other earnings, if any, on amounts, shares or other consideration so deferred, and such other terms, conditions, rules and procedures that the Committee deems advisable for the administration of any such deferral program.

 

14.6          Unfunded Plan. The Plan shall be unfunded. Neither the Company, the Board nor the Committee is required to establish any special or separate fund or to segregate any assets to assure the performance of its obligations under the Plan.

 

14.7          Other Compensation and Benefit Plans. The adoption of the Plan shall not affect any other share incentive or other compensation plans in effect for the Company or any Affiliate, nor shall the Plan preclude the Company from establishing any other forms of share incentive or other compensation or benefit program for employees of the Company or any Affiliate. The amount of any compensation deemed to be received by a Participant pursuant to an Award shall not constitute includable compensation for purposes of determining the amount of benefits to which a Participant is entitled under any other compensation or benefit plan or program or the Company or an Affiliate, including, without limitation, under any pension or severance benefits plan, except to the extent specifically provided by the terms of any such plan.

 

14.8          Plan Binding on Transferees. The Plan shall be binding upon the Company, its transferees and assigns, and the Participant, the Participant’s executor, administrator and permitted transferees and beneficiaries.

 

14.9          Delivery. Upon exercise of a right granted under this Plan, the Company shall issue Common Stock or pay any amounts due within a reasonable period of time after exercise of the right. Subject to any obligations the Company may otherwise have pursuant to Applicable Laws, for purposes of this Plan, 60 days is considered a reasonable period of time.

 

 

14.10        No Fractional Shares. No fractional shares of Common Stock shall be issued or delivered pursuant to the Plan. The Committee shall determine whether cash, additional Awards or other securities or property shall be issued or paid in lieu of fractional shares of Common Stock or whether any fractional shares should be rounded, forfeited or otherwise eliminated.

 

14.11        Other Provisions. The Award Agreements authorized under the Plan may contain such other provisions not inconsistent with this Plan, including, without limitation, restrictions upon the exercise of Awards, as the Committee may deem advisable.

 

14.12        Code Section 409A. The Plan is intended to either be exempt from Code Section 409A or comply with Code Section 409A to the extent the Plan is subject Code Section 409A, and, accordingly, to the maximum extent permitted, the Plan shall be interpreted and administered consistent with such intent. Any payments described in the Plan that are due within the “short-term deferral period” as defined in Code Section 409A shall not be treated as deferred compensation unless Applicable Laws require otherwise. Notwithstanding anything to the contrary in the Plan, to the extent required to avoid accelerated taxation and tax penalties under Code Section 409A, amounts that would otherwise be payable and benefits that would otherwise be provided pursuant to the Plan upon a “separation from service” to a Participant who is a “specified employee” shall be paid on the first payroll date after the six-month anniversary of the Participant’s separation from service (or the Participant’s death, if earlier). Notwithstanding the foregoing, neither the Company nor the Committee guarantees that any Awards provided under the Plan will be exempt from or in compliance with the provisions of Code Section 409A, and in no event does either the Company or the Committee have any obligation to take any action to prevent the assessment of any additional tax or penalty on any Participant under Code Section 409A and neither the Company nor the Committee will have any liability to any Participant for such tax or penalty.

 

14.13        Securities Law Compliance. No shares of Common Stock will be issued or transferred pursuant to an Award unless and until all then applicable requirements imposed by Federal and state securities and other laws, rules and regulations and by any regulatory agencies having jurisdiction, and by any exchanges upon which the shares of Common Stock may be listed, have been fully met. As a condition precedent to the issuance of shares pursuant to the grant or exercise of an Award, the Company may require the Participant to take any reasonable action to meet such requirements. The Committee may impose such conditions on any shares of Common Stock issuable under the Plan as it may deem advisable, including, without limitation, restrictions under the Securities Act of 1933, as amended, under the requirements of any exchange upon which such shares of the same class are then listed, and under any blue sky or other securities laws applicable to such shares. The Committee may also require the Participant to represent and warrant at the time of issuance or transfer that the shares of Common Stock are being acquired only for investment purposes and without any current intention to sell or distribute such shares.

 

14.14        Section 16. It is the intent of the Company that the Plan satisfy, and be interpreted in a manner that satisfies, the applicable requirements of Rule 16b-3 as promulgated under Section 16 of the Exchange Act so that Participants will be entitled to the benefit of Rule 16b-3, or any other rule promulgated under Section 16 of the Exchange Act and will not be subject to short-swing liability under Section 16 of the Exchange Act. Accordingly, if the operation of any provision of the Plan would conflict with the intent expressed in this Section 14.14, such provision to the extent possible shall be interpreted or deemed amended so as to avoid such conflict.

 

 

14.15        Beneficiary Designation. Each Participant under the Plan may from time-to-time name any beneficiary or beneficiaries by whom any right under the Plan is to be exercised in case of such Participant’s death. Each designation will revoke all prior designations by the same Participant, shall be in a form reasonably prescribed by the Committee and shall be effective only when filed by the Participant in writing with the Company during the Participant’s lifetime.

 

14.16        Data Protection.

 

(a)    To the satisfaction and on the direction of the Committee, all operations of the Plan shall include or be supported by appropriate agreements, notifications and arrangements in respect of Personal Data and its use and processing under the Plan, in order to secure: (a) the reasonable freedom of the Company and its Affiliates to operate the Plan and for connected purposes; and (b) compliance with the data protection requirements applicable from time to time, including under the Data Protection Legislation and the policies and practices of the Company and its Affiliates. A Participant shall be made aware of applicable provisions in respect of Personal Data made and any related information or disclosure, as may be required or appropriate. As necessary, this shall be accomplished by way of data privacy notice or an alternative form approved by the Committee, or by such other communications and measures as may be decided, if necessary with the agreement of any independent joint data controller that will be party to those communications and measures.

 

(b)    For purposes of the foregoing: (i) "Data Protection Legislation" means any law, statute, declaration, decree, directive, legislative enactment, order, ordinance, regulation, rule or other binding provision or restriction (as amended, consolidated or re-enacted from time to time) in any jurisdiction which relates to the protection of individuals with regards to the processing of personal data, including but not limited to (as applicable) Regulation EU 2016/679 of the European Parliament and of the Council of 27 April 2016 and any code of practice or guidance published by the UK Information Commissioner's Office (or any successor body) from time to time; and (ii) "Personal Data" has the meaning set out in the applicable Data Protection Legislation.

 

14.17        Expenses. The costs of administering the Plan shall be paid by the Company.

 

14.18        Severability. If any of the provisions of the Plan or any Award Agreement is held to be invalid, illegal or unenforceable, whether in whole or in part, such provision shall be deemed modified to the extent, but only to the extent, of such invalidity, illegality or unenforceability and the remaining provisions shall not be affected thereby.

 

14.19        Plan Headings. The headings in the Plan are for purposes of convenience only and are not intended to define or limit the construction of the provisions of this Plan.

 

14.20        Non-Uniform Treatment. The Committee’s determinations under the Plan need not be uniform and may be made by it selectively among persons who are eligible to receive, or actually receive, Awards. Without limiting the generality of the foregoing, the Committee shall be entitled to make non-uniform and selective determinations, amendments and adjustments, and to enter into non-uniform and selective Award Agreements.

 

 

14.21       Choice of Law. The law of the State of Delaware shall govern all questions concerning the construction, validity and interpretation of this Plan, without regard to such state’s conflict of law rules.

 

15.           Awards to Non-U.S. Employee, Non-Employee Directors or Consultants. To comply with the laws in countries other than the United States in which the Company or any of its subsidiaries or affiliates operates or has employees, Non-Employee Directors or consultants, the Committee, in its sole discretion, shall have the power and authority to:

 

15.1          Determine which subsidiaries or affiliates shall be covered by the Plan;

 

15.2          Determine which employees, Non-Employee Directors or consultants outside the United States are eligible to participate in the Plan;

 

15.3          Modify the terms and conditions of any Award granted to Employees, Non-Employee Directors or consultants outside the United States to comply with applicable foreign laws;

 

15.4          Take any action, before or after an Award is made, that it deems advisable to obtain approval or comply with any necessary local government regulatory exemptions or approvals; and

 

15.5          Establish subplans and modify terms and procedures, to the extent such actions may be necessary or advisable.

 

16.            Definitions.

 

“Affiliate” means any corporation or other entity that, directly or through one or more intermediaries, controls, is controlled by or is under common control with, the Company.

 

“Applicable Laws” means the requirements related to or implicated by the administration of the Plan under applicable state corporate law, United States federal and state securities laws, the Code, any stock exchange or quotation system on which the shares of Common Stock are listed or quoted, and the applicable laws of any foreign country or jurisdiction where Awards are granted under the Plan.

 

“Award” means any right granted under the Plan, including a Stock Option, a Stock Appreciation Right, a Restricted Award, a Performance Share Award, a Cash Award, or an Other Equity-Based Award.

 

“Award Agreement” means a written agreement, contract, certificate or other instrument or document evidencing the terms and conditions of an individual Award granted under the Plan which may, in the discretion of the Company, be transmitted electronically to any Participant. Each Award Agreement shall be subject to the terms and conditions of the Plan.

 

“Board” means the Board of Directors of the Company, as constituted at any time.

 

“Cash Award” means an Award denominated in cash that is granted under Section 7 of the Plan.

 

 

“Cause” means:

 

(a) the definition of “cause” or similar term used in the employment or service agreement between the Company or Affiliate and Participant; or

 

(b) if (a) above does not apply, the definition set forth in the applicable Award Agreement; or

 

(c)  if neither (a) nor (b) above applies, then (i) the commission of, or plea of guilty or no contest to, a felony or a crime involving moral turpitude or the commission of any other act involving willful malfeasance or material fiduciary breach with respect to the Company or an Affiliate; (ii) conduct that brings or is reasonably likely to bring the Company or an Affiliate negative publicity or into public disgrace, embarrassment, or disrepute; (iii) gross negligence or willful misconduct with respect to the Company or an Affiliate; (iv) material violation of state or federal securities laws; or (v) material violation of the Company’s written policies or codes of conduct, including written policies related to discrimination, harassment, performance of illegal or unethical activities, and ethical misconduct.

 

The Committee, in its absolute discretion, shall determine the effect of all matters and questions relating to whether a Participant has been discharged for Cause.

 

“Change in Control” means:

 

(a)            the definition of “change of control” or similar term used in the employment or service agreement between the Company or Affiliate and Participant or any “change in control policy” adopted by the Committee;

 

(b)            if (a) above does not apply, the definition set forth in the applicable Award Agreement; or

 

(c)            if neither (a) nor (b) applies, then:

 

(A)       Any Person becomes the Beneficial Owner, directly or indirectly, of more than thirty-five percent (35%) of the combined voting power of the then outstanding voting securities of the Company entitled to vote generally in the election of its directors (the “Outstanding Company Voting Securities”) including by way of merger, consolidation or otherwise; provided, however, that for purposes of this definition, the following acquisitions shall not constitute a Change in Control: (i) any acquisition of voting securities of the Company directly from the Company, including without limitation, a public offering of securities or (ii) any acquisition by the Company or any of its Subsidiaries of Outstanding Company Voting Securities, including an acquisition by any employee benefit plan or related trust sponsored or maintained by the Company or any of its Subsidiaries.

 

(B)        During any period of two consecutive years, individuals who constitute the Board as of the beginning of such period (the “Incumbent Directors”) cease for any reason to constitute at least a majority of the Board; provided, however, that any individual becoming a director subsequent to the beginning of such period whose election to the Board, or nomination for election by the Company’s stockholders, was approved by a vote of at least a majority of the Incumbent Directors (including directors whose election or nomination was previously so approved), shall be considered as though such individual were a member of the Board as of the beginning of such two-year period, but excluding, for this purpose, any such individual whose initial assumption of office is in connection with an actual or threatened election contest relating to the election or removal of any members of the Board or other actual or threatened solicitation of proxies or consents by or on behalf of a Person other than the Board.

 

 

(C)       Consummation of a reorganization, merger, or consolidation to which the Company is a party or a sale or other disposition of all or substantially all of the assets of the Company (a “Business Combination”), unless, following such Business Combination: (i) any individuals and entities who were the Beneficial Owners of Outstanding Company Voting Securities immediately prior to such Business Combination are the Beneficial Owners, directly or indirectly, of more than fifty percent (50%) of the combined voting power of the outstanding voting securities entitled to vote generally in the election of directors (or election of members of a comparable governing body) of the entity resulting from the Business Combination (including, without limitation, an entity which as a result of such transaction owns all or substantially all of the Company or all or substantially all of the Company’s assets either directly or through one or more Subsidiaries) (the “Successor Entity”) in substantially the same proportions as their ownership immediately prior to such Business Combination; (ii) no Person (excluding any Successor Entity or any employee benefit plan or related trust of the Company, such Successor Entity, or any of their Subsidiaries) is the Beneficial Owner, directly or indirectly, of more than fifty percent (50%) of the combined voting power of the then outstanding voting securities entitled to vote generally in the election of directors (or comparable governing body) of the Successor Entity, except to the extent that such ownership existed prior to the Business Combination; and (iii) at least a majority of the members of the board of directors (or comparable governing body) of the Successor Entity were Incumbent Directors (including persons deemed to be Incumbent Directors) at the time of the execution of the initial agreement or of the action of the Board providing for such Business Combination.

 

Notwithstanding the foregoing, to the extent necessary to comply with Section 409A of the Code with respect to the payment of “nonqualified deferred compensation”, “Change of Control” shall be limited to a “change in control event” as defined under Section 409A of the Code.

 

“Code” means the Internal Revenue Code of 1986, as it may be amended from time to time. Any reference to the Code shall be deemed to include a reference to any applicable regulations promulgated thereunder.

 

“Committee” means the Compensation Committee of the Company, or any other committee of one or more members of the Board appointed by the Board to administer the Plan in accordance with Section 9.

 

“Common Stock” means the Class A Common Stock, par value $0.01, of the Company, or such other substituted securities of the Company as may be designated by the Committee from time to time.

 

“Company” means AMC Entertainment Holdings, Inc., a Delaware corporation, and any successor.

 

 

“Consultant” means any person who performs bona fide services to the Company or an Affiliate, other than as an Employee or Director, and who may be offered securities registerable pursuant to a registration statement on Form S-8 under the Securities Act.

 

“Continuous Service” means that the Participant’s service with the Company or an Affiliate, whether as an Employee, Consultant or Director, is not interrupted or terminated. The Participant’s Continuous Service shall not be deemed to have terminated merely because of a change in the capacity in which the Participant renders service to the Company or an Affiliate as an Employee, Consultant or Director or a change in the entity for which the Participant renders such service, provided that there is no interruption or termination of the Participant’s Continuous Service; provided further that if any Award is subject to Code Section 409A, this sentence shall only be given effect to the extent consistent with Code Section 409A. The Committee or its delegate, in its sole discretion, may determine whether Continuous Service shall be considered interrupted in the case of any approved leave of absence, including sick leave, military leave or any other personal or family leave of absence. The Committee or its delegate, in its sole discretion, may determine whether a Company transaction, such as a sale or spin-off of a division or Affiliate that employs a Participant, shall be deemed to result in a termination of Continuous Service for purposes of affected Awards, and such decision shall be final, conclusive and binding.

 

“Deferred Stock Units (DSUs)” has the meaning set forth in Section 5.1(b).

 

“Director” means a member of the Board.

 

“Disability” means, unless the applicable Award Agreement says otherwise, that the Participant is unable to engage in any substantial gainful activity by reason of any medically determinable physical or mental impairment. The determination of whether an individual has a Disability shall be determined under procedures established by the Committee. The Committee may rely on any determination that a Participant is disabled for purposes of benefits under any long-term disability plan maintained by the Company or any Affiliate in which a Participant participates.

 

“Effective Date” shall mean the date as of which this Plan is adopted by the Board.

 

“Employee” means any person, including an Officer or Director, employed by the Company or an Affiliate. Mere service as a Director or payment of a director’s fee by the Company or an Affiliate shall not be sufficient to constitute “employment” by the Company or an Affiliate.

 

“Exchange Act” means the Securities Exchange Act of 1934, as amended.

 

“Exercise Price” means the price at which a share of Common Stock may be purchased upon the exercise of a Stock Option.

 

“Fair Market Value” as of any date means: (i) if the Common Stock is listed on any established stock exchange or a national market system, including without limitation, the New York Stock Exchange or the Nasdaq Stock Market, the Fair Market Value shall be the closing price of a share of Common Stock (or if no sales were reported the closing price on the date immediately preceding such date) as quoted on such exchange or system on the day of determination; or (ii) if the Common Stock is not then listed on an established stock exchange or a national market system, the average of the highest reported bid and lowest reported asked prices for a share of Common Stock as reported by the National Association of Securities Dealers, Inc. Automated Quotations System for the last preceding date on which there was a sale of the Common Stock in such market. In the absence of an established market for the Common Stock, the Fair Market Value shall be determined in good faith in a manner consistent with Code Section 409A by the Committee and such determination shall be conclusive and binding on all persons.

 

 

“Fiscal Year” means the Company’s fiscal year.

 

“Free Standing Rights” has the meaning set forth in Section 4.

 

“Good Reason” means:

 

(a)            the definition of “good reason” or similar term used in the employment or service agreement between the Company or Affiliate and Participant or any policy adopted by the Committee;

 

(b)            if (a) above does not apply, the definition set forth in the applicable Award Agreement; or

 

(c)            if neither (a) nor (b) applies, then:

 

(A) If an Employee or Consultant is a party to an employment or service agreement with the Company or its Affiliates and such agreement provides for a definition of Good Reason, the definition contained in such agreement; or

 

(B) If no such agreement exists or if such agreement does not define Good Reason, the occurrence of one or more of the following without the Participant’s express written consent, which circumstances are not remedied by the Company within 30 days of its receipt of a written notice from the Participant describing the applicable circumstances (which notice must be provided by the Participant within 90 days of the Participant’s knowledge of the applicable circumstances): (i) any material, adverse change in the Participant’s duties, responsibilities, authority, title, status or reporting structure; (ii) a material reduction in the Participant’s base salary or bonus opportunity; or (iii) a geographical relocation of the Participant’s principal office location by more than 50 miles.

 

“Grant Date” means the date on which the Committee adopts a resolution, or takes other appropriate action, expressly granting an Award to a Participant that specifies the key terms and conditions of the Award or, if a later date is set forth in such resolution, then such date as is set forth in such resolution.

 

“Non-Employee Director” means a Director who is a “non-employee director” within the meaning of Rule 16b-3.

 

“Officer” means a person who is an officer of the Company within the meaning of Section 16 of the Exchange Act and the rules and regulations promulgated thereunder.

 

“Optionee” means a person to whom a Stock Option is granted pursuant to the Plan or, if applicable, such other person who holds an outstanding Option.

 

 

“Other Equity-Based Award” means an Award that is not a Stock Option, Stock Appreciation Right, Restricted Stock, Restricted Stock Unit, or Performance Share Award that is granted under Section 6 and is payable by delivery of Common Stock and/or which is measured by reference to the value of Common Stock. Other Equity-Based Awards include, but are not limited to, phantom equity and immediately vested bonus shares.

 

“Participant” means an eligible person to whom an Award is granted pursuant to the Plan or, if applicable, such other person who holds an outstanding Award.

 

“Performance Goals” means, with respect to a Restricted Award or Cash Award, the business criteria or other performance measures determined by the Committee in its discretion that must be satisfied as a condition of determining a Participant’s right to payment or settlement of such Award.

 

“Permitted Transferee” means: (a) a member of the Optionee’s immediate family (child, stepchild, grandchild, parent, stepparent, grandparent, spouse, former spouse, sibling, niece, nephew, mother-in-law, father-in-law, son-in-law, daughter-in-law, brother-in-law, or sister-in-law, including adoptive relationships), any person sharing the Optionee’s household (other than a tenant or employee), a trust in which these persons have more than 50% of the beneficial interest, a foundation in which these persons (or the Optionee) control the management of assets, and any other entity in which these persons (or the Optionee) own more than 50% of the voting interests; (b) third parties designated by the Committee in connection with a program established and approved by the Committee pursuant to which Participants may receive a cash payment or other consideration in consideration for the transfer of a Stock Option; and (c) such other transferees as may be permitted by the Committee in its sole discretion.

 

“Person” means a person as defined in Section 13(d)(3) of the Exchange Act.

 

“Plan” means this AMC Entertainment Holdings, Inc. 2024 Equity Incentive Plan, as amended and restated from time to time.

 

“Related Rights” has the meaning set forth in Section 4.

 

“Restricted Award” means an Award of Restricted Stock or Restricted Stock Unit granted pursuant to Section 5.

 

“Restricted Period” has the meaning set forth in Section 5.

 

“Restricted Stock” means Common Stock, subject to certain specified restrictions (including, without limitation, a requirement that the Participant provide Continuous Service for a specified period of time).

 

“Restricted Stock Unit” means an unfunded and unsecured promise to deliver shares of Common Stock, cash, other securities or other property, subject to certain restrictions (including, without limitation, a requirement that the Participant provide Continuous Service for a specified period of time).

 

“Rule 16b-3” means Rule 16b-3 promulgated under the Exchange Act or any successor to Rule 16b-3, as in effect from time to time.

 

“Securities Act” means the Securities Act of 1933, as amended.

 

 

“Stock Appreciation Right” means the right pursuant to an Award granted under Section 4 to receive, upon exercise, an amount payable in cash or shares equal to the number of shares subject to the Stock Appreciation Right that is being exercised multiplied by the excess of (a) the Fair Market Value of a share of Common Stock on the date the Award is exercised, over (b) the exercise price specified in the Stock Appreciation Right Award Agreement.

 

“Stock for Stock Exchange” has the meaning set forth in Section 3.3.

 

“Stock Option” means an option to acquire Common Stock that by its terms does not qualify or is not intended to qualify as an incentive stock option under Code Section 422.

 

“Substitute Award” has the meaning set forth in Section 2.5.

 

“Total Share Reserve” has the meaning set forth in Section 2.1.

 

*******

 

As adopted by the Board of Directors of AMC Entertainment Holdings, Inc. effective February 22, 2024.

 

As approved by the shareholders of AMC Entertainment Holdings, Inc. on June 5, 2024.

 

 

v3.24.1.1.u2

Cover	Jun. 05, 2024
Cover [Abstract]
Document Type	8-K
Amendment Flag	false
Document Period End Date	Jun. 05, 2024
Entity File Number	001-33892
Entity Registrant Name	AMC ENTERTAINMENT HOLDINGS, INC.
Entity Central Index Key	0001411579
Entity Tax Identification Number	26-0303916
Entity Incorporation, State or Country Code	DE
Entity Address, Address Line One	One AMC Way
Entity Address, Address Line Two	11500 Ash Street
Entity Address, City or Town	Leawood
Entity Address, State or Province	KS
Entity Address, Postal Zip Code	66211
City Area Code	913
Local Phone Number	213-2000
Written Communications	false
Soliciting Material	false
Pre-commencement Tender Offer	false
Pre-commencement Issuer Tender Offer	false
Title of 12(b) Security	Class A common stock
Trading Symbol	AMC
Security Exchange Name	NYSE
Entity Emerging Growth Company	false

---