AMC (Notes to self)
From January 1, 2020 through November 2, 2021, we have issued 461,880,707 shares of our Class A common stock in a combination of at-the-market sales, conversion of Class B common stock, conversion of notes, exchanges of notes, transaction fee payments, and equity grant vesting. As of November 2, 2021, there were 513,960,784 shares of Class A common stock issued and outstanding.
The dilutive effect of these issuances was partially offset by the cancellation of 51,769,784 shares of our Class B common stock. If, in the future, we obtain shareholder approval to increase our authorized shares, we may issue additional shares of Class A common stock to raise cash to bolster our liquidity, to refinance indebtedness, for working capital, to finance strategic initiatives and future acquisitions or for other purposes. We may also issue securities convertible into, or exchangeable for, or that represent the right to receive, shares of Class A common stock. We may also acquire interests in other companies or other assets by using a combination of cash and shares of Class A common stock or just shares of Class A common stock. Additionally, vesting under our equity compensation programs results in the issuance of new shares and shares withheld to cover tax withholding obligations upon vesting remain available for future grants. Any of these events may dilute the ownership interests of current stockholders, reduce our earnings per share or have an adverse effect on the price of our shares of Class A common stock.
The market prices and trading volume of our shares of Class A common stock have recently experienced, and may continue to experience, extreme volatility, which could cause purchasers of our Class A common stock to incur substantial losses. For example, during 2021 to date, the market price of our Class A common stock has fluctuated from an intra-day low of $1.91 per share on January 5, 2021 to an intra-day high on the NYSE of $72.62 on June 2, 2021. Since June 2, 2021, the trading price has reached an intra-day low on the NYSE of $28.91 per share on August 5, 2021 and the last reported sale price of our Class A common stock on the NYSE on November 5, 2021 was $41.70 per share. During 2021 to date, daily trading volume ranged from approximately 23,598,200 to 1,222,342,500 shares. (page 73)
depending on the trading prices of our Class A common stock, the Company could have a significant cash tax liability to cover withholding obligations upon vesting of awards under our Equity Incentive Plan with approximately 4,881,000 shares expected to vest over the next six months and an estimated blended tax withholding rate of 45%. The Company expects to withhold shares based on historical elections by participants under the terms of the plan, equivalent to the cash tax requirements for federal, state and local withholdings, pay the required tax obligation and return the withheld shares to the Equity Incentive Plan.
page 74
Compensatory Arrangements of Certain Officers
page 75
On November 3, 2021, the Board of Directors (the “Board”) of AMC Entertainment Holdings, Inc. (the “Company”), upon the recommendation of the Compensation Committee of the Board of Directors (the “Committee”) and in consultation with the Company’s independent compensation consultant, approved modifications to certain equity awards under its 2013 Employee Incentive Plan (“EIP”) granted to named executive officers (“NEOs”) and other senior officers as described below.
2020 Performance Stock Units (“PSUs”)
The 2020 PSUs were awarded to the following NEOs: Mr. Adam Aron, Mr. Sean Goodman, Mr. John McDonald, Ms. Elizabeth Frank, and Mr. Stephen Colanero. The PSUs are divided into three equal tranches with each tranche allocated to a fiscal year during the three-year period covered by the grant (each a “Tranche Year”). Each tranche is eligible to vest based upon attainment of certain financial performance goals during its applicable Tranche Year, as described in the Company’s definitive proxy statement on Schedule 14A in connection with its 2021 Annual Meeting of Stockholders, filed on June 16, 2021. Further, all tranches were subject to a service requirement through the end of the final Tranche Year covered by the grant. On November 3, 2021, the Board modified the 2020 PSUs to provide that the service period applicable to each tranche shall end on the last day of the applicable Tranche Year and that such tranche shall vest upon certification of performance for the applicable Tranche Year by the Committee. The tranche allocated to the 2020 Tranche Year, for which performance has already been certified, will vest on January 3, 2022. The modification did not change the performance goals applicable to the 2020 PSUs and will not result in additional stock compensation expense. However certain stock compensation expense that would not have been recognized until 2022 will be accelerated into the fourth quarter of 2021. The amount of accelerated expense cannot be fully determined at this time.
2021 PSUs
The 2021 PSUs were awarded to the following NEOs: Mr. Adam Aron, Mr. Sean Goodman, Mr. John McDonald, Ms. Elizabeth Frank, and Mr. Stephen Colanero in March of 2021 and were structured similarly to the 2020 PSUs. On November 3, 2021, the Board modified the 2021 PSUs to provide that the service period applicable to each tranche shall end on the last day of the applicable Tranche Year and that such tranche shall vest upon certification of performance for the applicable Tranche Year by the Committee. The modification did not change the performance goals applicable to the 2021 PSUs and will not result in additional stock compensation expense. However, certain stock compensation expense that would not have been recognized until 2022 and 2023 will be accelerated into the fourth quarter of 2021. The amount of accelerated expense cannot be fully determined at this time.
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