INFORMATION REQUIRED IN THE PROXY STATEMENT
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☐ | Preliminary Proxy Statement |
☐ | Confidential, for Use of the Commission Only (as permitted by Rule14a-6(e)(2)) |
Definitive Proxy Statement |
☐ | Definitive Additional Materials |
☐ | Soliciting Material Pursuant to |
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Fee computed on table below per Exchange ActRules 14a-6(i)(4) and0-11.
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| Dear Fellow Stockholders: | | |  | |
We welcome you to join us at our
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The theatrical exhibition industry made significant strides in its recovery from COVID-19 throughout the course of 2021, culminating in a fourth quarter box office that surpassed the $2 billion mark for the first time since the onset of the pandemic. Ongoing improvements in theatrical moviegoing have continued in 2022, with multiple new film releases outperforming expectations and achieving results comparable to pre-pandemic levels. Fourth quarter 2021, and 2022 film results to-date, demonstrate that consumer enthusiasm for the shared, immersive, theatrical moviegoing experience remains strong and provide indicators of further improvement to come as the impact of | |
With that aside, we believe that our key strength
In the spirit of long-term success, in 2019, we achieved our fifth consecutive year of record worldwideglobal teams. Our U.S. admissions revenues and our domestic box office again outperformed thesurpassed North American industry box office forrecovery by more than 700 basis points during the fifth year in a row, exceeding the domestic industryquarter when comparing fourth quarter 2021 box office for 10 outresults against fourth quarter 2019. Similarly, our Latin American admissions out-performed their corresponding industry results by a comparable degree. Importantly, our significant attendance and box office results flowed through to our bottom-line, delivering positive fourth quarter Adjusted EBITDA of $140 million and full-year Adjusted EBITDA of $80 million. Furthermore, we generated positive cash flow from operations in both the U.S. and Latin America during the fourth quarter, which represented another meaningful milestone in our company’s emergence from the pandemic.
Our Board provides active oversight of our long-term strategic goals. The Board has an ongoing commitment to create a balanced and effective Board with diverse viewpoints and deep industry related experience that can guide management as we navigate and respond to industry changes and challenges that we face in the wake of the COVID-19 pandemic.
employees.
Sincerely,
Mark Zoradi
Chief Executive Officer
| | | Sincerely, | |
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| | | Sean Gamble President and Chief Executive Officer |
| * | Cinemark has presented supplemental non-GAAP financial measures as part of this Proxy Statement. Definitions of each non-GAAP measure and a reconciliation of each non-GAAP financial measure with the most comparable GAAP measure are set forth in Annex A. The non-GAAP financial measures presented in this Proxy Statement should not be considered as alternative measures for the most directly-comparable GAAP financial measures. The non-GAAP financial measures presented in this Proxy Statement are used by management to monitor the financial performance of the business, inform business decision-making and forecast future results. |
6, 2022
| | | Time and Date: | | | 9:00 am (Central Daylight Time) on Thursday, May 19, 2022 | |
| | | Physical Location: | | | 3800 Dallas Parkway, Plano, Texas 75093 | |
| | | Virtual Meeting Site: | | | www.virtualshareholdermeeting.com/CNK2022 |
| 1. | To elect |
| 2. | To ratify the appointment of Deloitte |
| 3. | To hold the annual,non-binding, advisory vote on our executive compensation program; and |
| 4. | To transact such other business as may properly come before the Annual Meeting or any adjournment thereof. |
Only stockholders
We intend
BY ORDER OF THE BOARD OF
DIRECTORS,
Michael Cavalier
Executive Vice President — General Counsel and Secretary
one question.
| | | BY ORDER OF THE BOARD OF DIRECTORS, | |
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| | | Michael Cavalier Executive Vice President-General Counsel & Business Affairs |
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2019 (20192021 (2021 Form10-K) as filed with the Securities and Exchange Commission (SEC) on February 21, 202025, 2022 for Cinemark Holdings, Inc. (Company, Cinemark, we or us). You should read the proxy statement and the 20192021 Form10-K before voting.ANNUAL MEETING INFORMATION
WHENThursday,May 21, 2020 at9:00 a.m. CDTWHERECinemark West PlanoTheatre3800 Dallas ParkwayPlano, TX 75093RECORD DATEMarch 26, 2020PROXY MAIL DATEOn or aboutApril 10, 2020
HOW TO VOTE
applicable number. telephone number on your voting instruction form. proxy card or voting instruction form. question pertaining to the business of the Annual Meeting, you must submit it in advance of the Annual Meeting by visiting proxy card or voting instruction form Meeting Even if you plan to the Annual Meeting in person, please cast your vote as soon as possible by following the instructions on your proxy card or voting instruction form. You can vote by one of the following methods. Please refer to the section ‘Questions and Answers About the Annual Meeting and Voting’ beginning on page 59 for detailed voting instructions.
INTERNET VIACOMPUTERTELEPHONEMAILIN PERSONVia the InternetAnnual Meeting online to vote atwww.proxyvote.com. www.virtualshareholdermeeting.com/CNK2022Youwill need16-digit numberincluded in your notice,proxy card or votinginstruction form.Dial toll-free or Youincluded in on your notice, receivedhave a paper copyproxy materials, sendyour completed and signedusingin hand when you access theenclosed postage-paidenvelope.By attending website and follow the instructions. To allow us to respond at the Annualand completing aballot to cast your vote. Seeinstructionsthe maximum number of stockholders, each stockholder will be limited to one question. page 60 under What different methods can I use to vote?https://ir.cinemark.com as soon as practical after the conclusion of the Annual Meeting. VOTING MATTERS AND BOARD RECOMMENDATIONS FOR ANNUAL MEETING
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| Elect Four Class III Director Nominees | |||
See page 8 | |
| The Board recommends a vote FOR each nominee |
Name | |
| Independent |
| | Director Since | | | Board Committees |
Benjamin Chereskin President of Profile Capital Management LLC Former Managing Director and Member of Madison Dearborn Partners LLC | |
| ✔ | | | 2004 | | | • Compensation • Strategic Planning |
Lee Roy Mitchell Executive Chairman of the | | | X | | | Founder | | | • None |
Ray Syufy Chief Executive Officer Syufy Enterprises, Inc. | | | X | | | 2006 | | | • Strategic Planning |
Sean Gamble Chief Executive Officer | | | X | | | 2022 | | | • None |
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 | | | Ratify Deloitte |
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See page 29 | |
| The Board recommends a vote | |||||||
| | | ❖ | | | Independent firm with reasonable fees and significant financial reporting expertise | |||||
| | | ❖ | | | Deloitte & Touche LLP, or Deloitte & Touche, has audited our consolidated financial statements annually since 1987 | |||||
| | | ❖ | | | Audit Committee evaluates the independence of Deloitte & Touche annually and has determined that its appointment continues to be in the best interests of our stockholders | |||||
Item | | |||||||||
 | | | Non-binding, annual advisory vote on our executive compensation program |
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 See page 29 | | | |||||
The following information highlights some of our corporate governance, financial and compensation information.
Corporate Governance Highlights
Our Board oversees the development and execution of our strategy to achieve long-term stockholder value. We have robust governance practices and procedures that are critical for the Board to exercise independent oversight. Also, our Board believes good governance and an appropriate skill matrix among Board members enable the Board to effectively communicate and support our culture of compliance and comprehensive risk management. The following table highlights some of our key governance practices, policies and board skills:
Independence - 7 out of 10 directors are independent; all standing committees are fully independent Regular executive sessions of non-management and independent directors led by Lead Independent director Regular Board meeting attendance by directors; all directors attended at least 75% of all Board and committee meetings in 2019 Annual Board and committee evaluations and assessments Annual equity grant to non-employee directors Robust stock ownership requirements for non-employee and executive directors Pledging or hedging in Company stock prohibited Oversight of risk and risk management Separated Chairman and CEO positions No overboarding Plurality-plus voting standard for director elections Wide range of skill sets appropriate to lead a public Company in the theatrical industry. Some of the pertinent skils and experiences are in: filmed entertainment industry leadership - CEO and non-CEO executive positions strategic planning financial literacy and managment enterprise risk management corporate governance real estate and retail business cybersecurity
Director Nominees
Our director nominees present a mix of skills, experience, diversity and perspectives.
Senior Leadership |
Financial Expertise |  Public Company Board |  Strategic Planning |  Enterprise Risk
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| Name | Age | Director Since | Principal Occupation | Independent | Committee Memberships | |||||
Nancy Loewe | 53 | 2017 | SVP – Visa, Inc. | ✓ | Audit; Governance | |||||
Steven Rosenberg | 61 | 2008 | Manager – SPR Ventures, Inc. | ✓ | Audit; Governance (Chair) | |||||
Enrique Senior | 76 | 2004 | Managing Director – Allen & Company LLC | ✓ | New Ventures; Strategic Planning | |||||
Nina Vaca | 49 | 2014 | Chairman and CEO – Pinnacle Group | ✓ | Governance; Compensation (Chair) | |||||
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Financial Performance Highlights of 2019
| | | Annual say-on-pay vote | ||||
| | | ❖ | | | The key elements of our executive compensation program remain unchanged | |
| | | ❖ | | | Our compensation principles and |
| | | ❖ | | | Our 2021 executive compensation was reasonable, balanced and appropriate in light of the |
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| – | Served 48 million worldwide guests, an increase of 57% quarter-over-quarter, demonstrating that consumer enthusiasm for the |
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| Our | ||||||
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| – | Domestic concessions revenues reached 90% of 4Q19 levels and generated an all-time high per cap of $6.66 |
| – | Generated positive Adjusted EBITDA and Adjusted Margins above 20% in both our domestic and international segments for the first time since the onset of the pandemic |
| – | Reported positive cash flow from operations for the fourth quarter and full-year 2021 |
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| – | Luxury Lounger recliner seats |
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| – | Nearly 300 premium large format XD and |
| – | Immersive DBOX motion seating across 250 of our theaters |
| – | The best sight and sound technology in the industry |
| – | Enhanced food & beverage offerings throughout 75% of our global circuit |
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| | • Independent Board The majority of our Board is independent with 7 out of 11 members deemed to • Separate Chairman and CEO The positions of the Chairman and the CEO are separated • Plurality Voting with Resignation In • Annual Assessments The Governance Committee conducts in person annual Board and committee assessments to ensure that our • No Term Limits or Mandatory Retirement Age The Board does not have • Executive Sessions The Lead Director holds regular executive sessions of non-management and independent directors | | | • Board Meeting Attendance All directors regularly attend all Board and committee meetings and attended more than 75% of all meetings in 2021 • Equity Grants To align with stockholder interests, all non-employee directors receive annual restricted stock grants with a fair market value of $115,000 • No Pledging or Hedging in Company Stock Our Insider Trading Policy prohibits directors, executive officers and certain employees from pledging or hedging Company stock • Stock Ownership Guidelines Our directors and certain executive officers are required to hold our Common Stock as | |||
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| | 5x value of
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| | CEO | | | 5x annual base salary | |
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| All Executive Vice Presidents | |
Despite an approximate 4% North American industry attendance decline for 2019, we delivered yet another year of business growth and improvement. Some highlights of our 2019 performance are as follows:
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Executive Compensation Highlights of 2019
The Board monitors emerging best practices in executive compensation to incorporate them into our compensation program and enhance value for our stockholders. Through its commitment to strong governance, the Board has implemented the following compensation “best practices.”
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2019 Compensation Decisions for the Chief Executive Officer (CEO)
SeeCompensation Discussion and Analysis (CD&A) for detailed discussions on how the Compensation Committee sets the compensation of our Named Executive Officers (NEOs), the various compensation components, target values and payouts. The Compensation Committee designed the following compensation package for our CEO for 2019.
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2019 Compensation Decisions forNon-CEO NEOs
Mr. Mitchell does not receive long-term equity incentive awards due to his substantial ownership in the Company. Therefore, this presentation does not include Mr. Mitchell’s compensation, which was split approximately 49%-49% between his base salary and target bonus and 2% as benefits.
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Continuing Metrics In Our Executive Compensation Program
In 2019, the Compensation Committee continued to use the following metrics from 2018 to evaluate performance and set executive compensation.
Company financial and operational performance and execution of stratergic goals, for CEO performance evaluation Percentage of base salary as individual bonus target Formula-driven, Adjusted EBITDA goal, at 110%, for NEOs for maximum bonus payout, compared to 108% for non-NEWs Individual composite Annual Business Objective (ABO) rating (ranging from 'Unsatisfactory' to ' Exceeds Expectation') for performance evaluation and merit increases of Messrs. Gamble, Oavalier and Fernandes and non-NEO employees, bonus adjustment of up to +/-15% for Messrs. Gamble, Cavalier and Fernandes and non-NEO bonus eligible employees Formula-driven, IRR for determining vest amounts of perofrmance-based equity Peer ddata and market survey data for competitive total target compensation and compesnation miz
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Change in IRR Hurdle Rates for the 2019 Performance Awards
Performance-based awards vest based on the Company’s performance over atwo-year period with hurdle rates set at threshold, target and maximum, and a further two-year holding period. The measurement metric for the performance awards is an implied equity value concept based on a valuation model utilizing a multiple of Adjusted EBITDA (subject to certain specified adjustments) and other factors that produce a fundamental valuation of Cinemark equity. Internal Rate of Return (IRR) represents the growth in this implied equity value over thetwo-year performance period. In February 2019, the Compensation Committee reviewed the IRR formula and hurdle rates used to determine the amount of performance-based shares that should vest, against the backdrop of industry trends andnon-controllable market factors, such as increasing pressures of operating in an environment inhabited by both live entertainment andat-home services, quality and timing ofin-theatre film content, challenging political and economic landscape in Latin America, significant currency fluctuations and rise in construction costs. Based on such review, the Compensation Committee set the hurdle rates for the 2019 awards which result in a wider payout range than prior years. A comparison is shown below of the 2019 goals and the 2018 goals.
| Grant Year | Goals | |||||
| Threshold | Target | Maximum | ||||
2019 | 6.0% | 8.0% | 14.0% | |||
Percentage of Individual Target Payout | 25% | 100% | 175% | |||
2018 | 7.0% | 9.5% | 13.0% | |||
Percentage of Individual Target Payout | 50% | 100% | 150% | |||
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6, 2022.
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In December 2021 the Board expanded the size of the Board by one member effective as of January 1, 2022. The vacancy was filled by appointing Sean Gamble as a Class III director.1011 members. The size of the Board may be fixed from time to time exclusively by our Board as provided in our Certificate of Incorporation. Our Certificate of Incorporation also provides that our Board consists of three classes of directors, designated as Class I, Class II and Class III. The members of each class are elected to serve a three-year term, with the terms of office of each class ending in successive years.IIII directors, Mmes. LoeweMessrs. Chereskin, Mitchell, Syufy and Vaca and Messrs. Rosenberg and SeniorGamble expire at the Annual Meeting. All nominees have been recommended by the Nominating and Corporate Governance Committee (Governance Committee) and nominated by the Board for election at the Annual Meeting.Mmes. LoeweMessrs. Chereskin, Mitchell, Syufy and Vaca and Messrs. Rosenberg and SeniorGamble has consented to be nominated for election or re-election, as applicable, to the Board as a Class IIII director. If elected, they will serve on the Board for a three-year term expiring on the date of our 20232025 annual meeting of stockholders. At this time, we have no reason to believe that any nominee will be unable or unwilling to serve if elected. However, should any of them become unavailableunable or unwilling to serve before the Annual Meeting, your proxy card authorizes us to vote for a replacement nominee if the Board names one.Set forth below are each nominee’s name, age as of our Annual Meeting date, principal occupation, business experience, and director positions held during the past five years. We also discuss the qualifications, attributes, and skills that led our Board to nominate each for election as a Cinemark director. The Governance Committee and the Board believe that the qualifications, skills, experience and attributes of the nominees support the conclusion that these individuals are qualified to continue to serve on the Board and they collectively possess a variety of skills, professional experience, and diversity of backgrounds allowing them to effectively oversee the Company’s business.
| | CLASS III DIRECTOR NOMINEES TERM EXPIRING 2025 | |
| | Benjamin Chereskin | | ||||||
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Nominees for Class I Directors
Term Expiring 2023
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Since: Committees: | | | Skills and Qualifications • Strategic planning and finance growth opportunities • Extensive knowledge and experience in corporate finance, mergers and acquisitions • Executive compensation experience Other Current Board Experience • CDW Corporation Previous Board Experience • Boulder Brands, Inc. | | | Professional Highlights Mr. Chereskin is President of Profile Capital Management LLC (Profile Management), an investment management firm, which he founded in October 2009. Prior to founding Profile Management, Mr. Chereskin was a Managing Director and Member of Madison Dearborn Partners, LLC, a private equity firm, from 1993 until October 2009, having co-founded the firm in 1993. | |
| | Lee Roy Mitchell | | ||||||
| |  Founder Nominee of: Mitchell Investors Board Committees: None Age: 85 Other Public Company Boards: 0 | | | Skills and Qualifications • Depth of experience in the theatrical exhibition industry • Long-term industry perspective • Leadership experience, including past memberships on public company boards Other Current Board Experience • Not Applicable Previous Board Experience • National CineMedia, Inc. | | | Professional Highlights Mr. Mitchell is the founder of the Company. He has served as Executive Chairman of the Board since March 1996 and as a director since our inception in 1987. Mr. Mitchell has been engaged in the theatrical exhibition business for over 50 years. His depth of experience in the theatrical exhibition industry has been invaluable to the Board. Additionally, Mr. Mitchell brings a long-term industry perspective and leadership experience to the Board. | |
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| | Ray Syufy | | ||||||
| |  Director Since: 2006 Nominee of: Board Board Committees: Strategic Planning Committee Age: 59 Other Public Company Boards: None | | | Skills and Qualifications • Deep knowledge of the theatrical exhibition industry • Strategic planning expertise, particularly with respect to competition from other forms of entertainment • Operational expertise • Real estate expertise Other Current Board Experience • Not Applicable Previous Board Experience • Not Applicable | | | Professional Highlights Mr. Syufy began working for Century Theatres, Inc. (Century Theatres), a regional movie exhibitor, in 1977, and held positions in each of the major departments within Century Theatres. In 1994, Mr. Syufy was named President of Century Theatres and was later appointed CEO and Chairman of the board of directors of Century Theatres. Mr. Syufy resigned as an officer and director of Century Theatres upon the consummation of our acquisition of Century Theatres in 2006. Since then, Mr. Syufy has presided as CEO of Syufy Enterprises, Inc. (Syufy Enterprises) a retail and real estate holding company with operations in California, Nevada, Arizona, Colorado, and Texas. Mr. Syufy is currently the Chairman of NATO CA/NV. | |
| | Sean Gamble | | ||||||
| |  Director Since: 2022 Nominee of: Board Board Committees: None Age: 47 Other Public Company Boards: None | | | Skills and Qualifications • Veteran theatrical exhibition industry executive with distribution experience • Management and executive experience • Strategic planning experience Other Current Board Experience • Not Applicable Previous Board Experience • Not Applicable | | | Professional Highlights Mr. Gamble has served as our President and Chief Executive Officer since January 2022. Mr. Gamble has been our President since July 28, 2021 and our Chief Operating Officer since January 2018. Mr. Gamble was our Executive Vice President and Chief Financial Officer from August 2014 until he became our CEO in 2022. Prior to joining Cinemark, Mr. Gamble worked for the Comcast Corporation as Executive Vice President and Chief Financial Officer of Universal Pictures within NBCUniversal from February 2009 to April 2014. He joined Comcast after 15 years at the General Electric Company where he held multiple senior leadership positions, including CFO of GE Oil & Gas’ equipment business based in Florence, Italy from May 2007 to January 2009. | |
| | OUR BOARD UNANIMOUSLY RECOMMENDS THAT STOCKHOLDERS VOTE FOR ELECTION OF EACH CLASS III NOMINEE | |
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| | CLASS I DIRECTORS TERM EXPIRING 2023 | |
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| |  Director Since: 2017 Nominee of: Board Board Committees: Audit Committee (Chair and Financial Expert); Governance Committee Age: 54 Other Public Company Boards: 0 | | | Skills and Qualifications • Accounting and financial management expertise • Risk oversight experience • Previous management and oversight experience at large public companies • Management and executive experience Other Current Board Experience • Not Applicable Previous Board Experience • Not Applicable | | | Professional Highlights Ms. Loewe has been the Chief Financial Officer (CFO) of Weyerhaueser Company, one of the world’s largest private owners of timberlands, since February 2021. Prior to that, Ms. Loewe was a Senior
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| | Steven Rosenberg | | ||||||
| |  Director Since: 2008 Nominee of: Board Board Committees: Governance Committee (Chair); Audit Committee Age: 63 Other Public Company Boards: 1 | | | Skills and Qualifications • Risk management, board governance and general management expertise • Accounting and financial management expertise • Management experience | ||||
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• Texas Capital Bancshares, Inc. Previous Board Experience • PRGX Global, Inc. | ||
| | Professional Highlights Mr. Rosenberg is the Manager of SPR Ventures Inc., a private investment firm he founded in 1997. He was the President of SPR Packaging LLC, a manufacturer of flexible packaging, from 2006 to 2018.
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| | Enrique Senior | | ||||||
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Planning Committee | | | Skills and Qualifications • Extensive knowledge of film, media and entertainment, and beverage industries • Strong strategic planning and management expertise • Executive experience Other Current Board Experience • Group Televisa S.A.B. • Coca-Cola FEMSA, • Femsa S.A. de C.V. • Univision Communications Previous Board Experience • Not Applicable | |
| | Professional Highlights Mr. Senior is a Managing Director of Allen & Company LLC, a boutique investment bank, and has been employed by the firm since 1972. He has served as a financial advisor to several corporations including Coca-Cola Company, General Electric, CapCities/ABC, Columbia Pictures Tri-Star Pictures and
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; | | | Skills and Qualifications • Wealth of leadership and business experience particularly with regards to information technology and e-commerce • Governance and executive compensation knowledge • Management and executive experience Other Current Board Experience • Comerica, Inc. Previous Board Experience • Kohls, Corp. | |
| | Professional Highlights Ms. Vaca is the founder, Chairman and CEO of the Pinnacle Group of companies, including Pinnacle Technical Resources, Inc. (together, Pinnacle) and Vaca Industries, Inc. Founded in 1996, Pinnacle is an information technology services and solutions provider.
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| | CLASS II DIRECTORS TERM EXPIRING 2024 | |
| | Darcy Antonellis | | ||||||
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| | Skills and Qualifications • Previous CEO and executive experience • Critical technology and cybersecurity experience • Accounting and financial management expertise • Veteran theatrical exhibition industry executive with a background in production and distribution Other Current Board Experience • Xperi Previous Board Experience • Not Applicable | | | Professional Highlights Since
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64 | | | Skills and Qualifications • Extensive public accounting experience; certified public accountant • CEO and executive experience • Strong accounting and financial oversight experience, strategic planning and management expertise Other Current Board Experience • Triumph Bancorp, Inc. Previous Board Experience • Matador Resources Company | |
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| | Skills and Qualifications • Veteran theatrical exhibition industry executive with a background in distribution • Wealth of knowledge regarding strategic partnerships within the exhibition industry and exhibitor relationships with movie studios • Management and oversight experience at large public companies within the industry Other Current Board Experience • National CineMedia, Inc. Previous Board Experience • Not Applicable | | | Professional Highlights Mr. Zoradi
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Term Expiring 2022
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same criteria. Stockholders who wish to recommend a candidate to the Governance Committee or submit nominees for election at the 2023 annual meeting should follow the instructions on page 63.
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We believe that
In addition to the separation of the positions of the Chairman of the Board role and the CEO, the Board has a Lead Independent director, which role provides leadership and an organizational structure to thenon-management directors. The positionresponsibilities of the Lead Independent directorDirector described above, ensure a full and free discussion of issues that are important to Cinemark’s stockholders. At the same time, the Board is able to take advantage of the unique blend of leadership, experience and knowledge of our industry and business that Mr. Mitchell and Mr. Gamble separately bring to the table.
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We comply withindependence of 7 directors taking into consideration the independence requirements of the New York Stock Exchange (NYSE) listing standards. In early 2019, ourThe test for independence under the NYSE listing standards is whether the director:
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immediate family members and affiliates).factors to determine the independence of the Board members. On the basis of this review, the Board has affirmatively determined, in its business judgment, that (a) the majority of the Board was, and continues to be, independent, (b) each of Mmes. Antonellis, Loewe and Vaca and Messrs. Chereskin, Rosenberg, Senior and Sepulveda are independent, (c) Messrs. Mitchell and Syufy are not independent due to their transactions with the Company exceeding $120,000 annually, (d) Messrs. Mitchell, Zoradi and ZoradiGamble are not independent because they
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DIRECTOR QUALIFICATIONS AND BOARD DIVERSITY
Our Corporate Governance Guidelines contain Board membership criteria principally as broad tenets, rather than as specific weighted criteria. To carry outthe Operator for the use of the aircraft was approximately $23,000.
Our Board does not have a formal diversity policy. It broadly construes diversity to mean diversityall other compensation of backgrounds, experience, qualifications, skills, age and expertise, among other factors, which when taken
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together best serve our Company and our stockholders. In selecting board members, the Board takes into account, in addition to the core attributes, the range of talents, experience and expertise that are needed and would complement those that are currently represented on the Board. The Board seeks to achieve a mix of members whose experience and backgrounds are relevant to the Company’s strategic priorities$25,412. Mr. Hebert and the scope and complexityCompany entered into a one-year Consultant Agreement commencing August 1, 2021 to ensure an orderly transition. Under the Consulting Agreement, Mr. Hebert received an additional $122,081 during 2021.
The following chart summarizes the core competencies of each director.
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NOMINATIONS FOR ELECTION TO THE BOARD
Our Governance Committee is responsible for identifying and recommending director candidates to our Board for nomination. This is an ongoing process through whichofficer of the Boardgeneral partner of Syufy Enterprises, Inc. All of the leases except one have fixed minimum annual rent. The remaining lease has added three new directors – Mmes. Vaca, Antonellis and Loewe - since 2014. These directors have not only added to the Board’s portfoliorent based upon a specified percentage of skills in finance, accounting and leadership experience but have also supplemented the experiencegross sales as defined in the information technology and cybersecurity areas.
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Although the Board retains ultimate responsibilitylease with no minimum annual rent. For 2021, we paid approximately $23.3 million in rent for approving candidates for election, the Governance Committee conducts the initial screening and evaluation. The Governance Committee has not established any minimum qualifications that must be metthese leases. Since 2019, we began providing digital equipment support to drive-in theatres owned by a director candidate or identified any setSyufy Enterprises, Inc. We recorded $0.1 million of specific qualities or skills that it deemsfees related to be mandatory. Based on the director qualifications discussed previously, the Governance Committee ensures to maintain a mix of different viewpoints such that the Company benefits from the fresh perspectives brought by new directors and the institutional knowledge and industry insights of directors having longer experience on our Board. The Governance Committee’s policy regarding consideration of potential director nominees acknowledges that choosing a director is dependent upon a number of subjective and objective criteria many of which are difficult to categorize.
The Governance Committee considers candidates recommended by current directors, management, third party search firms engaged by the Governance Committee, and stockholders. these services during 2021.
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its leadership structure, and the character, integrity, and qualifications of its members. The following matrix provides information regarding the members of our Board, including certain types of skills, experience and attributes possessed by our directors which our Board believes are relevant to our business. The matrix does not encompass all of the skills or experience of our directors.
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The Board exercises this oversight both directlyreviews and indirectly through its three standing committees – Audit, Governance and Compensation committees, as well as through two additional committees – Strategic Long-Range Planning and New Ventures committees. Each committee is delegated responsibility for specific risks. See Section onBoard Committees below for detailed discussion on each of the standing committees. As regards the additional committees, the Strategic Long- Range Planning Committee assists management in the analysis of alternative strategic options and reviews with management key industry and market issues and external developments impacting the Company and the New Ventures Committee monitors the strategic direction of the Company. It evaluates new development programs or business growth and diversification opportunities within establishedconsiders Cinemark’s long-term strategic plan targets and applicable regulatory boundaries.
its annual financial and operating plan. The risk oversight responsibility of the Board and its committees is supported by ouralso receive regular reports from members of senior management reporting processes, which are designed to provide visibilityon areas of material risk to the Company, including strategic, operational, financial, legal and regulatory risks. While the Board has an oversight role, management is principally tasked with direct responsibility for assessing and managing the risks and implementing processes and controls to management’s identification, assessmentmitigate their effects on the Company.
| | BOARD OF DIRECTORS Oversight of risk management program | | |||||||||||
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| | AUDIT COMMITTEE Oversees risks related to financial reporting, internal controls, technology and cybersecurity, ethics and compliance | | | COMPENSATION COMMITTEE Oversees risks related to compensation policies, practices and incentive plans | | | GOVERNANCE COMMITTEE Oversees risks associated with governance structures, policies and processes; succession planning | | |||||
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| | STRATEGIC PLANNING COMMITTEE Oversees and advises on risks related to marco-business risks and external developments | | | MANAGEMENT Responsible for identification, assessment and mitigation of enterprise-wide risks | | ||||||||
our virtual 2021 Annual Meeting.
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Company Secretary
Cinemark Holdings, Inc.
3900 Dallas Parkway, Suite 500
Plano, TX 75093
The communication must be clearly addressed to the Board or to a specific director. If a response is desired, the individual should also provide contact information such as name, address and telephone number.
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All such communications will be reviewed initially by the Company Secretary. The Company Secretary will forward to the appropriate director(s) all correspondence, except for itemsresult of the following nature:
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The Company Secretary will prepare a periodic summary reportmeetings conducted including:
in 2021 and 2022.
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threefour standing committees – Audit Committee, Compensation Committee, and the Governance Committee. As discussed earlier, the Board has created two additional committees, the Strategic Long-Range Planning Committee and the New Ventures Committee, which meet on an as needed basis.Strategic Planning Committee. The current composition of each of the committees is set forth below:Name of DirectorAuditCompensationGovernanceStrategicPlanningNew VenturesDarcy AntonellisMemberBenjamin ChereskinMemberChairNancy LoeweMemberMemberLee Roy MitchellChairSteven RosenbergMemberChairEnrique SeniorMemberMemberCarlos SepulvedaChairMemberMemberRaymond SyufyMemberMemberNina VacaChairMemberMark Zoradi-----20 Audit Committee NUMBER OF MEETINGS HELD DURING2019:4 NUMBER OF DECISIONS BY CONSENTDURING 2019:2 Our Board has determined that each member of the Audit Committee is financially literate and that Mr. Sepulveda, a licensed certified public accountant with extensive public company accounting experience, qualifies as an “audit committee financial expert” within the meaning of Item 407(d)(5)(ii) of RegulationS-K promulgated by the SEC. See Mr. Sepulveda’s biography on page 12 for further information regarding his qualifications to be an “audit committee financial expert”.●assisting the Board in its oversight responsibilities regarding (1) the integrity of our financial statements, (2) our risk management compliance with legal and regulatory requirements, (3) our systems of internal control and (4) our accounting, auditing and financial reporting processes generally, including the qualifications, independence and performance of the independent registered public accountants;●approving the report required by the SEC for inclusion in our annual proxy or information statement;●appointing, retaining, compensating, evaluating and replacing our independent registered public accountants;●approving audit andnon-audit services to be performed by the independent registered public accountants;●establishing procedures for the receipt, retention and resolution of complaints regarding accounting, internal control or auditing matters submitted confidentially and anonymously by employees through the whistleblower hotline; and●performing such other functions as the Board may from time to time assign to the Audit Committee.
As part of the Board’s duty of risk oversight, themanagement present.
years.
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approves based upon the determination whethersuch related party transaction if it determines that the transaction is fair and in the best interest of the Company. See Certain Relationships and Related Party Transactions on page 5716 for further details on the approval of related party transactions.
Approval of Audit andNon-Audit Services:
Fees Paid to Independent Registered Public Accounting Firm:
Fees
| 2019
| 2018
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Audit
| $
| 2,056.9
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| $
| 1,837.2
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Audit Related
| $
| 154.0
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| $
| 10.4
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Tax(1)
| $
| 60.8
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| $
| 66.4
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Other
| $
| -
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| $
| -
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Total
| $
| 2,271.7
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| $
| 1,914.0
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| | Fees | | | 2021 | | | 2020 | |
| | Audit | | | $ 2160.3 | | | $ 2,158.5 | |
| | Audit Related | | | $ - | | | $179.7 | |
| | Tax(1) | | | $81.6 | | | $86.8 | |
| | Other | | | $3.3 | | | $- | |
| | Total | | | $2,245.2 | | | $2,425.0 | |
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Steven Rosenberg
Darcy Antonellis
Nancy Loewe
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The functions of the Compensation Committee include, among other things, the following:
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making recommendations to the Board on the Company’s general compensation philosophy and objectives and strategy and on all matters of policy and procedures relating to executive compensation;
Functions
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theour non-employee directors for 2019 was governed byis subject to our Third Amended and RestatedNon-Employee Director Compensation Policy (Director Compensation Policy). AUnder the Director Compensation Policy, a non-employee director is one who is not (i) an employee of the Company or any of our subsidiaries, or (ii) an employee of any of the Company’s stockholders which has contractual rights to nominate directors. Therefore, as Company employees, Messrs. Mitchell Zoradi and Zoradi doGamble did not receive any compensation for their services on the Board or any of its committees. Seecommittees for 2021.
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Eachnon-employee director received the following annual cash retainers,our Non-Employee Director Compensation Policy is as applicable, for services as a Board and a committee member during 2019:
| (a) | a base director retainer of $60,000; |
| (b) | additional retainer of $35,000 for thenon-employee director who serves as the lead independent director; |
| (c) | additional cash retainer for services on the committees as follows: |
| Committee | Chairperson | Member | ||||||
Audit | $ | 20,000 | $ | 10,000 | ||||
Compensation | $ | 15,000 | $ | 10,000 | ||||
Governance | $ | 10,000 | $ | 7,500 | ||||
Strategic Long-Range Planning | $ | 10,000 | $ | 5,000 | ||||
New Ventures | $ | 10,000 | $ | 5,000 | ||||
Our Amended and Restated 2017 Omnibus Incentive Plan (the “2017 Plan”) imposes a $1,000,000 limit on the compensation that can be awarded to a non-employee director in any given fiscal year, including the sum of (i) cash compensation and (ii) the grant date fair value of equity compensation under the 2017 Plan.
| Name | Fees Earned or Paid in Cash(1) | Stock Awards(2) | All Other Compensation(3) | Total | ||||||||||||
Darcy Antonellis | $ | 70,000 | $ | 114,992 | $ | 4,234 | $ | 189,226 | ||||||||
Benjamin Chereskin | $ | 80,000 | $ | 114,992 | $ | 4,234 | $ | 199,226 | ||||||||
Nancy Loewe | $ | 77,500 | $ | 114,992 | $ | 4,234 | $ | 196,726 | ||||||||
Steven Rosenberg | $ | 80,000 | $ | 114,992 | $ | 4,234 | $ | 199,226 | ||||||||
Enrique Senior | $ | 70,000 | $ | 114,992 | $ | 4,234 | $ | 189,226 | ||||||||
Carlos Sepulveda | $ | 130,000 | $ | 114,992 | $ | 4,234 | $ | 249,226 | ||||||||
Raymond Syufy | $ | 70,000 | $ | 114,992 | $ | 4,234 | $ | 189,226 | ||||||||
Nina Vaca | $ | 82,500 | $ | 114,992 | $ | 4,234 | $ | 201,726 | ||||||||
| | Name | | | Fees Earned or Paid in Cash | | | Stock Awards(1) | | | Total Compensation Actually Received | |
| | Darcy Antonellis | | | $ 75,000 | | | $ 114,986 | | | $ 189,986 | |
| | Benjamin Chereskin | | | $80,000 | | | $114,986 | | | $194,986 | |
| | Nancy Loewe | | | $87,500 | | | $114,986 | | | $202,486 | |
| | Steven Rosenberg | | | $80,000 | | | $114,986 | | | $194,986 | |
| | Enrique Senior | | | $65,000 | | | $114,986 | | | $179,986 | |
| | Carlos Sepulveda | | | $120,000 | | | $114,986 | | | $234,986 | |
| | Raymond Syufy | | | $65,000 | | | $114,986 | | | $179,986 | |
| | Nina Vaca | | | $82,500 | | | $114,986 | | | $197,486 | |
(1) |
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The grant date fair values were calculated based upon the closing price of Common Stock on June |
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See Note 1617 to the Company’s 20192021 Annual Report on Form10-K, for discussion of the assumptions used in determining the grant date fair values of these share based awards, including forfeiture assumptions and the period over which the Company will recognize compensation expense for such awards.
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2022
2020.
OUR BOARD UNANIMOUSLY RECOMMENDS THAT STOCKHOLDERS VOTEFOR RATIFICATION OF THE APPOINTMENT OF DELOITTE AS OUR INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM FOR 2020.
2022.
| | OUR BOARD UNANIMOUSLY RECOMMENDS THAT STOCKHOLDERS VOTE FOR RATIFICATION OF THE APPOINTMENT OF DELOITTE & TOUCHE AS OUR INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM FOR 2022 | |
| | OUR BOARD UNANIMOUSLY RECOMMENDS THAT STOCKHOLDERS VOTE FOR THE ADVISORY VOTE ON OUR NAMED EXECUTIVE OFFICER COMPENSATION FOR 2021 | |
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SectionPage Reference 262626 27 28 31 38 39 40 40 41 25&A&A”) provides a description of the material elements of our executive compensation program, as well as perspective and context for decisions made regarding the compensation of our CEO, CFO and our threefour other most highly compensated executive officers for the year ended December 31, 2019.2021. These executive officers and their current positions are as follows:listed below: NameAgePosition 83 66 45 Officer; Chief Financial Officer 53 SecretaryBusiness Affairs 59 Mr. Zoradi retired effective December 31, 2021. Mr. Gamble was Executive Vice President--Chief Financial Officer until November 8, 2021. Effective January 1, 2022, Mr. Gamble serves as the President and Chief Executive Officer. Ms. Thomas was appointed Executive Vice President--Chief Financial Officer effective November 8, 2021.
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National CineMedia, Inc. from 2007 until 2021.
Mr. Zoradi currently serves on the board of directors of National CineMedia, Inc.
We request an annual stockholdersay-on-pay vote on our executive compensation program. At our 20192021 Annual Meeting, approximately 95%82% of the stockholder votes cast on say-on-pay were voted in favor of the proposal. Although the percentage of favorable votes is down from the 96% favorable votes received at the 2020 Annual Meeting the Compensation Committee believes that this substantial majority of votes in favor affirms stockholders’ support for our approach to executive compensation during the COVID-19 pandemic. Every year we endeavor to have discussions with some of our stockholders present (in person or via proxy) and voting,
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approvedinstitutional investors in order to better understand their views on our executive compensation programs and policies for 2018.practices. The Compensation Committee reviewedcarefully considers this feedback in designing the results of the 2019say-on-pay. Due to the high approval rate, the Compensation Committee did not make any changes to its overall approach or the structurekey components of our executive compensation program but calibratedprogram.
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vision, asexecutive compensation program is structured to attract, motivate, reward, and retain high caliber talent who will lead the Company to increase our competitive advantage and deliver sustainable profitability. This includes building a leader in the motion picture exhibition industry,solid foundation for long-term growth while consistently achieving near-term results. The Compensation Committee takes a holistic view of pay and performance and ensures that there is to shape the future of the industry by being recognized as the most influential,out-of-home entertainment network in the world.appropriate alignment with Company performance, overall business strategy and culture. We hire high caliber individuals who can determine our strategy to execute our long-term vision while continuing to deliver our mission of making the movie-going experience memorable by engaging with our customers and providing world class facilities and services. To ensure that our key executives are incentivized appropriately to deliver our mission and vision, the Compensation Committee has designed an executive compensation program that strongly aligns with the interests of stockholders in creating sustainable long-term stockholder value by directly linking pay to Company and individual performance. Each of the measures in our performance-based plan is designed to align with, and support, our business strategy – create an extraordinary guest experience, deepen customer loyalty, and pursue growth opportunities.While a significant portion of each NEO’s compensation is based on performance and therefore “at risk”, the Compensation Committee believes that a competitive compensation program is necessary for us to attract and retain these key executives. We typically seek to establish target total compensation opportunities for our NEOs within a competitive range of the median of compensation opportunities at our peer companies. Actual earned compensation may vary based on the Company and individual performance. In certain circumstances we may target pay above or below the competitive median to recognize the individual’s unique qualifications or performance. See page 40 for a discussion of how we determine compensation relative to our peers.Our compensation program is designed withto achieve the following principles in mind:●pay our employees relative to industry peers based on their roles and responsibilities, capabilities, their performance and market conditions; ●motivate key personnel to perform with the highest integrity for the benefit of our stockholders;●continue our focus on sound governance practices by implementing executive compensation best practices and policies.27
| | Characteristics | | | Description | |
Competitive Base Salary | | | Base salary is market competitive to attract and retain valued employees | | |
| Balanced Mix of Pay Components | | | Target compensation mix is weighted towards long-term | |
| Balanced Approach to Performance-based Awards | | | Performance targets are tied to multiple financial metrics of the Company; performance periods for long-term equity incentive awards overlap and, therefore, reduce the motivation to maximize performance in any one | |
| Individual Performance Modifies Bonus Payout | | | Non-CEO NEO bonus payout | |
| Stock Ownership Guidelines | | | CEO required to own, directly or indirectly, Company equity five times base salary; other executive officers required to own two times their base salary | |
| Hedge or | | | Directors and executives (including NEOs) who are subject to the Supplemental Insider Trading Policy, are prohibited | |
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Surpassed North American box office results by 200 basis points
Increased dividends 6.25% to $1.36 per annum
Outperformed North American industry box office results in 10 out of past 11 years
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Grew domestic F&B per cap 52 consecutive quarters with an all time domestic per cap of $5.31
Increased Luxury Lounger footprint to 60% of domestic circuit and 80% of XD auditoriums
Opened a new design concept, Cut! By Cinemark - a full dine-in experience
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Grew total Movie Club membership to 930,000
Generated 14% box office revenue from Movie Club
Redesigned and successfully relaunched Movie Fan, our free, domestic, loyalty program
Expanded our global reach with over 12 million addressable consumers with whom we have direct, on-going communications
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The results of our financial performance over the past years demonstrates our consistent performance even during challenging industry circumstances such as economic and political conditions in Latin America, weakening foreign currencies, rise in construction costs and quality and timing of in-theatre film content. Our experienced management team has successfully navigated us through demanding industry environments with a disciplined operating philosophy and implementation of strategic initiatives. The charts below outline our performance over the past five years with regards to certain key financial metrics:
Net income for 2019 decreased from 2018 primarily due to increased facility lease expenses for new theatres and
Adjusted EBITDA is anon-GAAP financial measure. Thisnon-GAAP financial measure should be considered in addition to, but not as a substitute for,launched by major studios. The Compensation Committee found that the information provided in accordance with U.S. generally accepted accounting principles (GAAP). A reconciliation of Net Income to Adjusted EBITDA is provided in footnote 20modifications to the Company’s 2019 Form10-K.
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2015
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$0.25
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2016
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$0.27
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2017
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$0.29
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2018
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$0.32
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2019
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$0.34
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Performance Relativeexecutive compensation structure were necessary to Peers
Cinemark has a distinguishedproperly compensate, reward and consistent track recordretain our executives during these unprecedented times. See Executive Compensation Components – Cash Bonus and Impact of performance and outperformance relative to its industry peers.
We compare our financial performance against our direct competitors in the movie exhibition industry (theatre peers). In 2019, our theatre peers were the two publicly-held companies in our industry, namely, AMC Entertainment Holdings, Inc. (AMC) and IMAX Corporation (IMAX). We believe that this peer group is an appropriate benchmark for evaluating our financial performance since we directly compete with them for investor capital.
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Our financial performance relative to our theatre peer group has been very strong over the past five years. Our Total Stockholder Return (TSR) (with dividends reinvested) for theone-year, three-year and five-year periods, as compared to our theatre peers, are as follows:
1 YR TSR | 3YR TSR | 5YR TSR | ||||
CNK | (1.6%) | (1.9)% | 11.7% | |||
AMC | (34.5%) | (67.3%) | (51.9%) | |||
IMAX | 8.6% | (34.9%) | (33.9%) | |||
S&P 500 | 31.5% | 53.2% | 73.9% | |||
Group | (8.4%) | (51.7%) | (42.2%) |
SOURCE: Yahoo! Finance
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The Compensation Committee designs
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Total pay Fixed Variable Base Salary Annual Cash Incentive Long-term Incentive Market; Individual role and responsibility Company Performance Individual Performance Restricted Stock Restrited Stock Units Reviewed Annually or at Hiring or Promotionl Targeted between 25th and 75th percentile of peer group Adjusted EBITDA Goal @Threshold, Target, Maximum Ratable Payments Based on Performance Threshold 90% Adj. EBITDA Target 100% Adj. EBITDA Maximum 110% Adj. EBITDA 50% Target Payout 100% Target Payout 150% Target Payout ABO Rating Based on Achievement of Individual Goals Set to Achieve Company's Strategic Objective; +/-15% Adjustment to Bonus 4-year Vesting; 50% Every 2 Years IRR + Service Ratable Vest; IRR Over 2-Year Performance Period+2-Year Service Threshold 6% IRR Target 8% IRR Maximum 14% IRR 25% Target Payout 100% Target Payout 175% Target Payout
Base Salary
Base salary provides competitiveexecutive’s annual compensation to retain high-performing, valued employees.cash compensation. In determining base salary, the Compensation Committee takes into consideration the scope and nature of job responsibilities of the NEO, market competitiveness relative to executives in similar positions at comparatorcomparable group companies, merit increase recommendations of the CEO based on performance reviews (except in the case of his own compensation), and other judgmentalobjective factors deemed relevant by the Compensation Committee. The Compensation Committee has not adopted any formula with specific weightings assigned to any of the factors above.
Accordingly, in
| Name | Base Salary Percentage Increase in 2019 | 2019 Base Salary | ||
Lee Roy Mitchell
| 2.6%
| $ 1,000,001
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Mark Zoradi
| 10.0%
| $ 1,100,000
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Sean Gamble
| 4.2%
| $ 625,000
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Michael Cavalier
| 2.9%
| $ 540,000
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Valmir Fernandes
| 2.9%
| $ 540,000
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following general categories:
34 | | | |
What is the Company’s annual performance metric?
The Compensation Committee sets the Company’s bonus target for the year in terms of Adjusted EBITDA, regarded as a key performance metric in our industry. The Adjusted EBITDA target for the bonus is set by the Compensation Committee for each of domestic, international and worldwide, based on the annual operating budget approved by the Board (budgeted Adjusted EBITDA). The budgeted Adjusted EBITDA may be adjusted, upward or downward, at the end of the performance year, to eliminate any variance between the actual North American industry box office for the fiscal year and the industry forecast used to set the bonus target for the year.
During the first quarter after the performance year, the Compensation Committee calculates the Adjusted EBITDA for the bonus payment. This is determined by adjusting the domestic, international and worldwide Adjusted EBITDA for the year for certainadd-backs and adjustments such as
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The bonus payout for the NEOs,payouts, except for Mr. Fernandes, is based on the worldwide Adjusted EBITDA while that of all other domestic bonus eligible employees is based 100% on domestic EBITDA. Mr. Fernandes’s payout is based 50% on worldwideMessrs. Mitchell and 50% on international Adjusted EBITDA. The worldwide Adjusted EBITDA targets for 2019 were as follows:
Company achieves 90% of Bonus Adjusted EBITDA $633.1 Million (Threshold) Plan Participant Receives 50% of Target Payout Company achieves 100% of Bonus Adjusted EBITDA $703.4 Million (Target) Plan Particiapnt Receives 100% of Target Payout Company achieves 110%* of Bonus Adjusted EBITDA $773.7 Million (Maximum) Plan Particiapnt Receives 150% of Target Payout
*The maximum goal fornon-NEOs was $759.7 million or 108% of Bonus Adjusted EBITDA. The Adjusted EBITDA target for international was $127 million.
How is bonus adjusted for individual performance?
Individual bonus payouts fornon-CEOs (except Mr. Mitchell) areZoradi, may be adjusted to a maximum of+/ +/-15% based on the individual’s ABOAnnual Business Objective (ABO) rating. The ABO rating indicates the achievement level for the goals the individual sets at the beginning of the year. These individual goals are defined through personal business objectives and are set to achievesupport the Company’s strategic objectives for the year and are defined through individual management goals and personal business objectives.
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year. As part of theyear-end performance review process, the individual’s manager evaluates the individual’s performance against his/her ABO goals and assigns a composite score. The ratings range from ‘Significantly Below Expectations’ to ‘Exceeds Expectations’. Based on thetheir composite rating, a discretionaryscores for their individual performance, Mr. Gamble’s ABO modifier of a maximum of+/-15% is applied to adjust the individual’s bonus payout calculation. We do not have a minimum level of guaranteed bonuswas 15%, and maximum bonus payout (Adjusted EBITDA based + ABO modifier) cannot exceed 165% of the individual’s target bonus opportunity.
The annual bonus process is as follows:
Annual Process Set Company Adjusted EBITDA Target for the Year (Q1 Performance Year) Set NEO Target Bonus (Q1 Performance Year) Assess Company Performance Against Set Adjusted EBITDA Goal (Q1 Payout Year) Determine Payout Percentage Based on Adjusted EBITDA Performance Modify Individual Payout Based on Individual ABO Rating (Except the CEO) No ABO Modifier for the CEO Determine Payout
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Messrs. Cavalier’s and Fernandes’ were 7.5%. The Compensation Committee may, in its discretion, at any time, establish (and, onceevaluates the CEO’s performance against the Company’s goals and objectives, and the overall strategic plan, set for the year by the Board.
What were the changes to the NEO bonus payouts for 2019?
The Compensation Committee raised the target bonus opportunity for Mr. Zoradi to 125% of his base salary. This was deemed appropriate in light of several factors, but primarily for his contribution and continued leadership as our CEO in focusing on new strategies for profitable growth and his relative positioning versus our compensation peers. Mr. Fernandes’s target bonus was raised to 90% of his base salary also due to his relative positioning versus market and to align with Messrs. Gamble and Cavalier.
How wasactual cash bonus calculated for 2019?
In February 2020, the Compensation Committee certified the worldwide Bonus Adjusted EBITDA, as adjusted, for 2019 at $696.9 million and international Adjusted EBITDA, as adjusted, at $130.0 million. This yielded a payout at 141.4% of the individual target opportunity for each of Messrs. Mitchell, Zoradi, Gamble and Cavalier and 126.7% for Mr. Fernandes. Each of Messrs. Gamble and Cavalier also received an ABO adjustment of +7.5%. The individual cash bonus payouts for 2019earned, for each of the NEOs waswere as follows:
| Name | 2019 Base Salary | Individual Target (Percentage of | Payout Percentage of Individual Target | ABO Modifier | Cash Bonus Payout | |||||||||
Lee Roy Mitchell | $ | 1,000,001 | 100% | 141.4% | - | $ | 1,414,002 | |||||||
Mark Zoradi | $ | 1,100,000 | 125% | 141.4% | - | $ | 1,944,250 | |||||||
Sean Gamble | $ | 625,000 | 90% | 141.4% | 7.5% | $ | 837,562 | |||||||
Michael Cavalier | $ | 540,000 | 90% | 141.4% | 7.5% | $ | 723,654 | |||||||
Valmir Fernandes | $ | 540,000 | 90% | 126.7% | - | $ | 615,762 | |||||||
| | Name | | | Target Cash Bonus (% of Base Salary) | | | Expected Target Cash Bonus | | | Payout % of Target | | | ABO Modifier | | | Cash Bonus Payout | |
| | Lee Roy Mitchell | | | 100% | | | $1,020,001 | | | 125% | | | 0% | | | $1,275,001 | |
| | Mark Zoradi | | | 125% | | | $1,375,000 | | | 125% | | | 0% | | | $1,718,750 | |
| | Sean Gamble | | | 100% | | | $687,857 | | | 125% | | | 15% | | | $963,000 | |
| | Michael Cavalier | | | 90% | | | $507,221 | | | 125% | | | 7.5% | | | $672,067 | |
| | Valmir Fernandes | | | 90% | | | $499,511 | | | 125% | | | 7.5% | | | $661,852 | |
| | Melissa Thomas(1) | | | N/A | | | N/A | | | N/A | | | N/A | | | $500,000(1) | |
(1) | The Company agreed to pay Ms. Thomas a $500,000 signing bonus in connection with her Employment Agreement dated October 7, 2021 to be paid at the same time bonuses were paid to similarly situated executives in 2022. |
| | | 35 |
The
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How is the long-term incentive program structured?
The target value of long-term equity awards granted to a NEO is based on a percentage of the executive’s base salary. The target value percentage and the split between time-based and performance-based grants isare determined by the Compensation Committee by taking into account factors such as the individual’s leadership, NEO’s contribution to Company operations, projected state of the economy over the performance period, overall business environment and relative positioning versus peer group comparable.
| (i) | receive dividends on the restricted stock (prior to vest) to the extent dividends are paid by the Company on shares of its Common Stock, and |
| (ii) | to vote such Common Stock during the restriction period. |
As of the Record Date, the Company’s dividend rate is $0.36 per common share per quarter.
The performance
The measurement metric for Prior to the COVID-19 pandemic, the performance awards isgoal was based on an implied equity value concept that measures the change in an IRR overduring atwo-year performance period beginning on January 1 of the grant year and ending on December 31 of the following year.period. The implied equity value iswas based on a valuation model utilizing a multiple of Adjusted EBITDA (subject to certain specified adjustments) and other factors that produce a fundamental valuation of Cinemarkour equity. IRR represents the growth in this implied equity value during the performance period. The structure of the performance award program is similar to that of the bonus program. Each performance target underlying the performance awards hashad a threshold, target and maximum level and vestvested on a pro rata basis according to the IRR achieved during the performance period.period, with the maximum level equal to 175% of the individual’s target. The target IRR goal for the performance-based award isawards was set by the Compensation Committee based on projected value creation with a substantial degree of difficulty of attainingto attain the performance level. An adjustment of +/-7.5%
The certification of the 2017 and 2018 performance-based awards reflect the above process. After the completion of the performance periods for each of the 2017 and 2018 grants, in February 2019 and February 2020, respectively, the Compensation Committee certified the vest percentages of the
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performance-based awards. The restricted stock units granted to the NEOs in February 2017 will vest at 96% and restricted stock units granted in 2018 will vest at 105% of the respective target opportunities. To the extent they vest subject to the service requirement, the Common Stock underlying the restricted stock units that vested shall be issued in February 2021 and February 2022 respectively. The table below provides the number of performance-based restricted stock units that were granted and that will vest for each of the NEOs for the 2017 and 2018 grant years:
| Name | 2017 Grant | 2018 Grant | ||||||
| RSU Granted @Maximum | RSU to Vest in February 2021 | RSU Granted @Maximum | RSU to Vest in February 2022 | |||||
Lee Roy Mitchell | N/A | N/A | N/A | N/A | ||||
Mark Zoradi | 56,144 | 35,931 | 72,058 | 50,439 | ||||
Sean Gamble | 13,790 | 8,825 | 24,211 | 16,947 | ||||
Michael Cavalier | 11,819 | 7,563 | 18,159 | 12,711 | ||||
Valmir Fernandes | 11,120 | 7,116 | 15,132 | 10,592 | ||||
What were the changes to the long-term incentive program in 2019?
In February 2019, the Compensation Committee reviewed the IRR formula and hurdle rates used to determine the amount of performance-based shares that should vest, against the backdrop of industry trends andnon-controllable market factors, such as increasing pressures of operating in an environment inhabited by both live entertainment andat-home services, quality and timing ofin-theatre film content, challenging political and economic landscape in Latin America, significant currency fluctuations and rise in construction costs. Based on such review, the Compensation Committee set the hurdle rates for the 2019 awards which result in a wider payout range than prior years. A comparison is shown below of the 2019 goals and the 2018 goals.
| Grant Year | Goals | |||||
| Threshold | Target | Maximum | ||||
2019 | 6.0% | 8.0% | 14.0% | |||
Percentage of Individual Target Payout | 25% | 100% | 175% | |||
2018 | 7.0% | 9.5% | 13.0% | |||
Percentage of Individual Target Payout | 50% | 100% | 150% | |||
Also, based on Mr. Zoradi’s relative market positioning, the Compensation Committee raised the target percentage of his base salary awarded as long-term equity incentive, retaining the75%-25% split in favor ofissuable under performance-based awards. The Compensation Committee determined that this increaseconsidered the pandemic’s effect on the Company and the movie exhibition industry, the projected continuation of Mr. Zoradi’s targetthe macro-economic conditions through 2021 and beyond and the continued uncertainty regarding the timing of the industry recovery. Such adverse consequences are due to completely unforeseen, external circumstances beyond the control of management, and, for long-term equity incentive iscompensation, a combination of time-based and performance-based awards were no longer an appropriate alignment with stockholder objective of long-term return and the CEO’s role in setting and executing the long-term strategic goals. There was no change to the targets of the other NEOs. Mr. Mitchell is not granted any equity due to his substantial ownership in the Company. The long-term equity award targets as percentages of respective base salaries for 2019 were as follows, compared to that in 2018:
| NEO | Percentage of Base Salary in 2018 | Percentage of Base Salary in 2019 | ||
Lee Roy Mitchell | N/A | N/A | ||
Mark Zoradi | 250% | 275% | ||
Sean Gamble | 175% | 175% | ||
Michael Cavalier | 150% | 150% | ||
Valmir Fernandes | 125% | 125% |
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Consistent with our compensation philosophy of pay for performance, in 2019,retention tool. Because the Compensation Committee awardeddetermined it was not advisable to attempt to establish performance goals in such an unstable environment that had the NEOs (except Mr. Mitchell) supplementalpotential to be unattainable in the future due to circumstances outside of management’s control, the Compensation Committee determined that for 2021 only the traditional grants in additionof time based awards and performance based awards should be replaced with all time-based restricted awards to drive retention of the annual equity grants, to reward and incentivize them for the Company’s sustained achievement over industry benchmarks. Mr. Zoradi was awarded both time-based and performance-based shares while Messrs. Gamble, Cavalier and Fernandescompensation
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The total number of time-basedperformance-based awards. This structure will properly incentivize and performance-based shares (at maximum), inclusive of the supplemental grants discussed above, granted to each of the NEOs in 2019 is as follows:
| Name | Time-based Restricted Stock | Performance-based Restricted Stock Units | ||
Lee Roy Mitchell | N/A | N/A | ||
Mark Zoradi | 21,818 | 109,311 | ||
Sean Gamble | 12,851 | 30,780 | ||
Michael Cavalier | 9,648 | 22,795 | ||
Valmir Fernandes | 8,147 | 18,996 |
The presentations below show the mix of the variablereward management for matters within their control and fixed components of compensationserve as a percentageretention tool. Several potential performance metrics were considered by the Compensation Committee and management. The Compensation Committee chose a combination of target compensation. Mr. Zoradi is presented individually while Messrs. Gamble, Cavalierrevenue and Fernandescash flow metrics as the performance metric for 2022 as both are presented asrelevant for achieving the Company’s strategic goals of re-igniting movie-going and rebuilding the Company’s balance sheet. The Compensation Committee also determined it appropriate to grant time-based awards and that the establishment of a group. Since Mr. Mitchell does not receive anythree-year ratable vesting schedule was appropriate for those awards. In 2023 the Compensation Committee will again evaluate the appropriate performance metric, performance period and vesting for future performance-based equity grant on an annual basis due to his substantial ownership in the Company, he has not been included in thenon-CEO NEO group. His target compensation was approximately 49% each of base salary and bonus and 2% benefits.
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Each year, the Compensation Committee reviews our executive compensation program to ensure it continues to reflect our commitment to align the objectives and rewards of our executive officers with the creation of value for our stockholders. Our compensation programs, for both executives as well asnon-executives, have been designed to reinforce ourpay-for-performance philosophy by delivering total compensation that motivates and rewards performance tied to individual goals that are linked to Company’s strategic plan.
The Committee has the authority, in its sole discretion, to retain compensation consultants to assist the Committee in evaluating the compensation of executive officers. In February 2019,
The Compensation Committee determined the independence of Pearl Meyer using the NYSE listing standards regarding independence of compensation consultants. Pearl Meyer evaluates the competitiveness of the design offramework for 2021 that would align with the Company’s executive compensation program, including that for directors and recommends appropriate changes; reviewsphilosophy taking into consideration the competitiveness of the compensation of individual NEOs and certain other executive officers; evaluates market pay data and competitive-positioning; provides analyses and inputs on program structure, performance measures, and goals; provides updates on market trendson-going COVID-19 pandemic and the regulatory environment as it relates to executive compensation; reviews various management proposals presented to the Compensation Committee related to executive compensation and provides objective analysis and recommendations; and works with the Compensation Committee to validate and strengthen thepay-for-performance relationship and alignment with stockholder interests. Pearl Meyer does not perform other services for Cinemark, and will not do so without the prior consent of the Compensation Committee. Pearl Meyer meets with the Compensation Committee, outside the presence of management,Company’s performance in executive sessions. The Committee relies on its collective experience and judgment along with the recommendations prepared by Pearl Meyer to set executive compensation.
an exceptionally difficult business environment.
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ourthe Compensation Committee used the peer group set forth below for 2019 remained unchanged from 2018, and was as follows:purposes of setting executive compensation in February 2021: Corp.Corp Discovery, AMC Networks Cineworld Dave & Buster’s Entertainment, Inc. E.W. Scripps Company Ausingfrom the most recent proxy data andsize-appropriate survey information provided by Pearl Meyer was used by the Compensation Committee to determine 20192021 compensation for each of the NEOs. The market data that our Compensation Committee reviews showprovides percentile compensation levels for various executive positions with comparable job responsibilities as our NEOs. The Compensation Committee also analyzes market data regarding compensation mix amongbetween base salary and annual and long-term incentives awards. The Compensation Committee reviews this mix analysis when evaluating the separate compensation components for each executive. The Committee does not endeavor to set executive compensation at or near any particular percentile, and it considers target compensation to be competitive if it is generally within a reasonable range of the market median. Market data is one of many factors that theThe Compensation Committee also considers in the determination of executive compensation levels. Otherother factors includeincluding level of responsibility, the individual’s performance, expectations regarding the individual’s future potential contributions, ability to drive the Company’s strategy, retention strategies, budget considerations, and the Company’s performance.provides strategic directionparticularly our annual and long-term incentive compensation plans, are designed to provide incentives for the participant and engages them in the Company’s success, which contributesexecutives to stockholder value. We believe our approach to goal setting, establishing targets with payouts at multiple levels ofachieve performance evaluation of performance results and negative discretion in the payout of incentives help to mitigateobjectives without encouraging excessive risk-taking that could harm Company value or reward poor judgment by our executives. risk-taking.some additionalthe highlights of the Company’s compensation program which mitigate risks associated with compensation:
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Number of Securities to be Issued upon Exercise of Outstanding Options, Warrants and Weighted Average Exercise Price of Outstanding Options, Warrants and Rights Number of Securities Remaining Available for Future Issuance Under Equity Compensation Plans (Excluding Reflected in the First Column) TotalPlan Category
Rights (1)
SecuritiesEquity compensation plans approved by security holders 749,895 N/A 7,384,464 Equity compensation plans not approved by security holders - - - 749,895 N/A 7,384,464 (1)Represents unearned shares underlying restricted stock units, assuming the achievement of maximum performance goals. 41
Name and Principal Position Salary ($)(1) Stock Awards ($)(2) Non-Equity Incentive Plan Compensation ($)(3) All Other Compensation ($)(4) 2019 24,089 2018 975,000 23,900 2017 958,645 21,586 2019 2018 2017 950,000 Sean Gamble Chief Operating Officer & Chief FinancialOfficer 2019 625,000 837,562 2018 600,000 617,072 61,796 2017 525,000 779,015 664,020 47,280 2019 540,000 833,712 723,654 2018 525,000 918,064 539,938 2017 500,000 667,666 632,400 96,969 Valmir Fernandes President – Cinemark International 2019 540,000 698,698 615,762 2018 525,000 795,705 357,000 Year Total ($) Lee Roy Mitchell 1,000,001 1,414,002 2,438,092 Chairman of the Board - 1,036,426 2,035,326 - 1,426,464 2,406,695 Mark Zoradi 1,100,000 3,099,012 1,944,250 165,517 6,308,779 Chief Executive Officer 1,000,000 3,049,518 1,063,000 132,738 5,245,256 2,114,475 1,320,500 104,845 4,489,820 1,119,263 107,773 2,689,598 1,186,109 2,464,977 2,015,315 Michael Cavalier 108,139 2,205,505 Executive Vice President – General Counsel & Secretary 123,311 2,106,313 1,897,035 109,796 1,964,256 128,448 1,806,153 2017 508,000 628,178 538,455 103,858 1,778,491 a discussion ofdiscussions on how base salary is determined. See 2019 Compensation Mix forMs. Thomas was employed as of November 8, 2021. The amount shown reflects the percentagepro-rata amount paid during 2021 based upon an annual salary of 2019 target compensation$575,000.Ms. Thomas was entitled to a $500,000 sign-on bonus paid on the same date as base salary.the 2021 bonuses are paid.(2)restricted stock units at targetspecial grants to Messrs. Gamble and Cavalier on July 28, 2021 as part of the most probable outcome, computedreorganization of the executive leadership team announced in accordanceconnection with FASB ASC Topic 718. The amounts shown excludeMr. Zoradi’s retirement. Ms. Thomas was granted 163,816 shares of Restricted Stock as part of her Employment Agreement which will vest over 4 years. For more information on the impactvesting of estimated forfeitures. See Note 16Ms. Thomas’s grant refer to the Company’s 2019current report on Form 8-K filed with the SEC on October 13, 2021. See 10-KExecutive Compensation Components-Long-term Incentive Compensation Prior to the COVID-19 Pandemic and Changes to Long-Term Incentive Compensation Due to COVID-19 Pandemic for a discussion of the assumptions used in determining the grant date fair values of thesediscussions on how long-term equity incentive awards, including forfeiture assumptionscompensation is set and the period over which the Company will recognize compensation expense for such awards.annual grant awarded in February.
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Company and he did not receive any retention equity grant in 2020. The reported number for Mr. Mitchell reflects the value of his bonus equity grant date fair values were calculated based upon the closing price of Common Stock on February 19, 2019 of $36.77, February 19, 2018 of $39.03 and February 14, 2017 of $42.37 per share.
As required by the rules of the SEC, the table below provides the grant date fair values of the restricted stock units at the maximum level of payment. However, as certified by the Compensation Committee, only 96% and 105% of the target opportunity of the restricted stock units awarded in 2017 and 2018 respectively, shall vest.
| Name | 2019 | 2018 | 2017 | |||||||||||||||||
Lee Roy Mitchell | - | - | - | |||||||||||||||||
Mark Zoradi | $ 4,019,365 | $ 2,812,424 | $ 2,378,800 | |||||||||||||||||
Sean Gamble | $ 1,131,781 | $ 944,955 | $ 584,261 | |||||||||||||||||
Mike Cavalier | $ 838,172 | $ 708,746 | $ 500,750 | |||||||||||||||||
Valmir Fernandes | $ 698,483 | $ 590,602 | $ 471,133 | |||||||||||||||||
The terms of the restricted stock and restricted stock units are discussed under Executive Compensation Components-Long-term Equity Incentive Compensation and the footnote disclosures to the Grants of Plan-Based Awards in 2019 table. See also Compensation Mix for the percentage of target total compensation for 2019 granted as long-term equity incentive awards.
(4) | The reported amounts are the cash bonuses earned for the respective fiscal years. The cash bonuses earned for a fiscal year are paid in the first quarter of the following year subject to the attainment of performance targets set |
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| by the Compensation Committee at the beginning of the covered fiscal year. The cash bonus payouts for 2020 was paid as a discretionary bonus equal to 75% of target using restricted stock with a one year vesting period. See footnote 2 of this table. The cash bonuses for 2021 were paid on March |
(5) | The compensation reported in this column include the following: |
| Name | Fiscal Year | Annual ($) | Life, Group and Disability Insurance Premiums Paid by Company ($) | Dividends Paid on ($) | Other ($) | |||||
Lee Roy Mitchell | 2019 | 16,800 | 7,289 | |||||||
| 2018 | 16,500 | 7,400 | ||||||||
| 2017 | 14,175 | 7,411 | - | - | ||||||
Mark Zoradi | 2019 | 16,800 | 20,733 | 97,984 | 30,000(ii) | |||||
| 2018 | 16,500 | 13,960 | 72,278 | 30,000(ii) | ||||||
| 2017 | 14,175 | 13,959 | 46,711 | 30,000(ii) | ||||||
Sean Gamble | 2019 | 16,800 | 5,684 | 85,289 | ||||||
| 2018 | 16,500 | 5,296 | 40,000 | - | ||||||
| 2017 | 14,175 | 5,294 | 27,810 | - | ||||||
Michael Cavalier | 2019 | 16,800 | 7,616 | 83,723 | ||||||
| 2018 | 16,500 | 7,798 | 99,013 | |||||||
| 2017 | 14,175 | 7,796 | 74,997 | - | ||||||
Valmir Fernandes | 2019 | 16,800 | 9,760 | 83,235 | ||||||
| 2018 | 16,500 | 9,891 | 102,057 | - | ||||||
| 2017 | 14,175 | 9,898 | 79,786 | - |
| | Name | | | Fiscal Year | | | Annual Matching Contributions to 401(K) Savings Plan and HSA ($) | | | Life, Group and Disability Insurance Premiums Paid by Company ($) | | | Dividends Paid on Restricted Stock and Vested RSU(i) ($) | | | Other ($) | |
| | Lee Roy Mitchell | | | 2021 | | | — | | | 13,532 | | | — | | | | |
| | 2020 | | | 17,100 | | | 8,588 | | | — | | | — | | |||
| | 2019 | | | 16,800 | | | 7,289 | | | — | | | — | | |||
| | Mark Zoradi | | | 2021 | | | 17,400 | | | 20,906 | | | 296,218 | | | 30,000 (ii) | |
| | 2020 | | | 17,100 | | | 17,582 | | | 348,755 | | | 30,000 (ii) | | |||
| | 2019 | | | 16,800 | | | 20,733 | | | 97,984 | | | 30,000 (ii) | | |||
| | Sean Gamble | | | 2021 | | | 18,025 | | | 6,497 | | | — | | | | |
| | 2020 | | | 17,100 | | | 5,675 | | | 93,231 | | | — | | |||
| | 2019 | | | 16,800 | | | 5,684 | | | 85,289 | | | — | | |||
| | Michael Cavalier | | | 2021 | | | 18,650 | | | 13,215 | | | — | | | | |
| | 2020 | | | 17,100 | | | 7,611 | | | 82,881 | | | — | | |||
| | 2019 | | | 16,800 | | | 7,616 | | | 83,723 | | | — | | |||
| | Valmir Fernandes | | | 2021 | | | 17,400 | | | 10,436 | | | — | | | | |
| | 2020 | | | 17,100 | | | 15,374 | | | 82,336 | | | — | | |||
| | 2019 | | | 16,800 | | | 9,760 | | | 83,235 | | | — | | |||
| | Melissa Thomas | | | 2021 | | | — | | | — | | | — | | | — | |
(i) | Dividends paid on all outstanding restricted stock, and dividends paid on |
(ii) |
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(6) | Effective January 1, 2022, Mr. Gamble was promoted to Chief Executive Officer and received a salary increase as a result. |
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total cash compensation.required to annually discloseproviding the ratiofollowing information about the relationship of the annual total compensation of our median-compensated employee and the annual total compensation of our CEO.employee.There have been no changes inemployee, as well as to determine the annual total compensation of the “median employee” for this purpose, the methodology and the material assumptions, adjustments, and estimates that we used were as follows:compensation arrangements in 2019 that would impact the methodology thatfrom our employee population, we used to identifytotal compensation including wages, bonuses and benefits reflected in our payroll records, which we believe is a reasonable method of identifying the median employee. The 2019 median employee is an Usher in the U.S. who worked approximately 1,422 hours during 2019 and earned a compensation of $20,313. Mr. Zoradi’s 2019 compensation was $6,308,779. The resulting ratiosubstantial majority of our CEO’semployees do not participate in a long-term incentive program, therefore we believe that excluding that program from consideration does not meaningfully impact the identification of the median employee.the pay of our median employee for 2019 is approximately 310 to 1.
| | Name | | | Grant Date(1) | | | Approval Date(2) | | | Estimated Future Payouts Under Non-Equity Incentive Plan Awards ($)(3) | | | All Other Stock Awards: Number of Shares of Stock or Unites (#)(4) | | | Grant Date FV of Stock Awards(5) | | ||||||
| | | | | | | | Threshold | | | Target | | | Maximum | | | | | | |||||
| | Lee Roy Mitchell | | | | | 2/17/21 | | | 510,001 | | | 1,020,001 | | | 1,530,002 | | | N/A | | | N/A | | |
| | Mark Zoradi | | | — | | | 2/17/21 | | | 687,500 | | | 1,375,000 | | | 2,062,500 | | | | | | ||
| | 2/19/21 | | | 2/17/21 | | | | | | | | | 209,424 | | | $4,399,998 | | ||||||
| | Sean Gamble | | | — | | | 2/17/21 | | | 343,929 | | | 687,857 | | | 1,031,786 | | | | | | ||
| | 2/19/21 | | | 2/17/21 | | | | | | | | | 56,544 | | | $1,187,989 | | ||||||
| | 3/10/21 | | | 2/17/21 | | | | | | | | | 756 | | | $18,129 | | ||||||
| | 7/28/21 | | | 7/28/21 | | | | | | | | | 15,806 | | | $254,160 | | ||||||
| | Michael Cavalier | | | — | | | 2/17/21 | | | 249,756 | | | 507,221 | | | 760,832 | | | | | | ||
| | 2/19/21 | | | 2/17/21 | | | | | | | | | 39,624 | | | $832,500 | | ||||||
| | 3/10/21 | | | 2/17/21 | | | | | | | | | 636 | | | $15,251 | | ||||||
| | 7/28/21 | | | 7/28/21 | | | | | | | | | 4,500 | | | $72,360 | | ||||||
| | Valmir Fernandes | | | — | | | 2/17/21 | | | 249,756 | | | 499,511 | | | 749,267 | | | | | | ||
| | 2/19/21 | | | 2/17/21 | | | | | | | | | 33,020 | | | $693,750 | | ||||||
| | 3/10/21 | | | 2/17/21 | | | | | | | | | 636 | | | $15,251 | | ||||||
| | Melissa Thomas | | | 11/8/21 | | | 10/5/21 | | | | | — | | | | | 163,816 | | | $3,621,972 | | ||
(1) |
The |
| Name | Grant Date(1) | Approval Date(2) | Estimated Future Payouts Under Non-Equity Incentive Plan Awards ($)(3) | Estimated Future Payouts Under Equity Incentive Plan Awards(4) | All Other Stock Awards(5) | Grant Date FV of Stock Awards(6) | ||||||||||||||||||||||||||||||||
| Threshold | Target | Maximum | Threshold | Target | Maximum | |||||||||||||||||||||||||||||||||
Lee Roy Mitchell | 3/5/2020 | 2/12/2020 | 500,001 | 1,000,001 | 1,500,002 | - | - | - | - | - | ||||||||||||||||||||||||||||
Mark Zoradi | 3/5/2020 | 2/12/2020 | 687,500 | 1,375,000 | 2,062,500 | |||||||||||||||||||||||||||||||||
| 2/19/2019 | 2/14/2019 | 15,615 | 62,463 | 109,311 | $ | 2,296,765 | ||||||||||||||||||||||||||||||||
| 2/19/2019 | 21,818 | $ | 802,248 | |||||||||||||||||||||||||||||||||||
Sean Gamble | 3/5/2020 | 2/12/2020 | 281,250 | 562,500 | 843,750 | |||||||||||||||||||||||||||||||||
| 2/19/2019 | 2/14/2019 | 4,397 | 17,589 | 30,780 | $ | 646,732 | ||||||||||||||||||||||||||||||||
| 2/19/2019 | 12,851 | $ | 472,531 | |||||||||||||||||||||||||||||||||||
Michael Cavalier | 3/5/2020 | 2/12/2020 | 243,000 | 486,000 | 729,000 | |||||||||||||||||||||||||||||||||
| 2/19/2019 | 2/14/2019 | 3,256 | 13,026 | 22,795 | $ | 478,956 | ||||||||||||||||||||||||||||||||
| 2/19/2019 | 9,648 | $ | 354,757 | |||||||||||||||||||||||||||||||||||
Valmir Fernandes | 3/5/2020 | 2/12/2020 | 243,000 | 486,000 | 729,000 | |||||||||||||||||||||||||||||||||
| 2/19/2019 | 2/14/2019 | 2,714 | 10,855 | 18,996 | $ | 399,133 | ||||||||||||||||||||||||||||||||
| 2/19/2019 | 8,147 | $ | 299,565 | |||||||||||||||||||||||||||||||||||
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(2) | The dates the Compensation Committee approved the |
(3) | The reported numbers were the estimated future payouts calculated when the Compensation percentages in February. |
(4) | On February 19,
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(5) | The aggregate grant date fair values of restricted stock |
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Number of Shares or Units of Stock That Have Not Vested # Market Value of Shares or Units of Stock That Have Not Vested (8) Equity Incentive Plan Awards: Number of Unearned Shares, Units or Other Rights That Have Not Vested # Equity Incentive Plan Awards: Market or Payout Value of Unearned Shares, Units or Other Rights That Have Not Vested (11) Lee Roy Mitchel Mark Zoradi 16,013 14,082 24,019 (3) (4) (5) $ $ $ 542,040 476,676 813,054 15,616 (7) $ 528,597 Sean Gamble 10,760 3,489 8,070 (3) (4) (5) $ $ $ 364,226 118,103 273,181 4,397 (7) $ 148,843 Michael Cavalier 8,070 3,346 6,053 (3) (4) (5) $ $ $ 273,170 113,262 204,894 Valmir Fernandes 6,725 3,574 5,044 (3) (4) (5) $ $ $ 227,641 120,980 170,739 The number of shares of restricted stock granted on February 19, 2018 The number of shares of Common Stock underlying the The number of shares of restricted stock granted on February 19, 2019 restrictedperformance stock units outstanding for each NEO as of December 31, 2019.2021. There were no stock options outstanding for any NEO as of December 31, 2019. Stock Awards Name - - - - 13,896 (1) $ 470,380 35,617 (9) $ 1,205,635 6,238 (2) $ 211,156 35,931 (10) $ 1,216,264 21,818 (6) $ 738,539 5,131 (1) $ 173,684 8,823 (9) $ 298,659 4,597 (2) $ 155,608 8,825 (10) $ 298,726 12,851 (6) $ 435,006 4,920 (1) $ 166,542 8,462 (9) $ 286,439 3,940 (2) $ 133,369 7,563 (10) $ 256,008 9,648 (6) $ 326,585 - - 3,256 (7) $ 110,216 5,256 (1) $ 177,916 9,038 (9) $ 305,936 3,707 (2) $ 125,482 7,116 (10) $ 240,877 8,147 (6) $ 275,776 2,714 (7) $ 91,869 (1)The number ofAll 509,890 shares of restricted stock granted on February 19, 2016 that remained outstanding asand performance stock units with time-based vesting were accelerated at the end of December 31, 2019 and vested on February 19, 2020.45(2)The numberMr. Zoradi’s term pursuant to the terms of shares ofhis employment agreement. Mr. Zoradi no longer has any unvested restricted stock granted on February 14, 2017 that remained outstanding as of December 31, 2019 and vest on February 14, 2021.(3)whichthat remained outstanding as of December 31, 2021. These shares vested 50% on February 19, 2020 with the remaining 50% to vest on February 19, 2022.(4)The number of shares of restricted stock granted on February 19, 2018 pursuant to the special grant which vested 100% on February 19, 2020.(5)restrictedperformance stock units granted on February 19, 2018. Pursuant to the rules of the SEC, the reported numbers are based on the assumption of achievement of the threshold performance over thetwo-year performance period from January 1, 2018 to December 31, 2019 and satisfaction of an additional two-year service requirement. However, onOn February 12, 2020, the Compensation Committee certified the vest for the NEOsperformance at 105% of the target opportunity. ToThe performance stock units vested, and the extent they vest subject to the service requirement, the vested common stockCommon Stock underlying the restrictedperformance stock units shall bewas issued on February 19, 2022.(6)whichthat remained outstanding as of December 31, 2021. These shares vest equallyon the fourth anniversary of the grant date.
(5) | The number of shares of restricted stock granted on February 19, 2020 as part of the annual grant cycle. These shares vest 50% on the second and fourth anniversary of the grant date. |
(6) | The number of shares of restricted stock awarded under the Retention Equity Grant on August 19, 2020. These shares vest 100% on the second anniversary of the grant date. |
(7) | The number of shares of restricted stock granted on February 19, 2021 as part of the annual grant cycle. Fifty percent (50%) of these shares vest on the second and |
(8) |
(9) | The number of shares of restricted stock granted to Messrs. Gamble and Cavalier as part of the executive realignment and salary increases as a result of increased roles. Fifty percent (50%) of these shares vest on the second and fourth anniversaries of the grant date and fifty percent (50%) of these shares vest on the fourth anniversary of the grand date. |
(10) | The number of shares of restricted stock awarded on November 8, 2021. The 90,999 shares grant shall vest 50% on November 8, 2022 and 50% on November 8, 2023 and the 72,817 shares grant shall vest 50% on November 8, 2024 and 50% on November 8, 2025. |
(11) | The fair market value was calculated based on the closing price of Common Stock on December 31, 2021 of $16.12 per share. |
(12) | The number of shares of Common Stock underlying the |
(13) |
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The number of shares of Common Stock underlying the |
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(14) | The fair market value |
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2021.
| Name | Stock Awards | |||||||
Number of Shares Acquired on Vesting(1) # | Value Realized on Vesting(2) ($) | |||||||
Lee Roy Mitchell | - | - | ||||||
Mark Zoradi | 6,238 | $ | 229,621 | |||||
Sean Gamble | 15,304 | $ | 600,925 | |||||
Michael Cavalier | 17,027 | $ | 672,703 | |||||
Valmir Fernandes | 17,686 | $ | 700,091 | |||||
| | Name | | | Stock Awards | | |||
| | | | Number of Shares Acquired on Vesting(1) # | | | Value Realized on Vesting(2) ($) | | |
| | Lee Roy Mitchell | | | 48,726 | | | $792,284.76 | |
| | Mark Zoradi | | | 575,574 | | | $9,955,404.54 | |
| | Sean Gamble | | | 31,528 | | | $512,645.28 | |
| | Michael Cavalier | | | 23,861 | | | $387,979.86 | |
| | Valmir Fernandes | | | 23,861 | | | $387,979.86 | |
| | Melissa Thomas | | | — | | | $— | |
(1) | The reported numbers include Common Stock from the |
(2) |
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The aggregate dollar amount realized upon vesting was calculated based upon the closing price of Common Stock on December 14, 2021 of $16.26 per share. For Mr. Zoradi the |
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On May 22nd, 2019, the Company elected to extend the term of Mr. Zoradi’s employment agreement to December 31, 2020. Unless extended by the Company and Mr. Zoradi, the employment agreement will terminate on December 31.
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Unless Mr. Mitchell’s employment is terminated by us for cause or under a voluntary termination, Mr. Mitchell will also be entitled to, for a period of five years, tax preparation assistance upon termination of his employment.
Mr. Zoradi is entitled to receive an annual allowance of $30,000 for personal travel and living expenses, reduced by standard withholding and other authorized deductions.
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If Messrs. Gamble, Fernandes or Cavalier or Ms. Thomas is terminated by us without cause, the executive shall receive the Accrued Employment Entitlements; two times the base salary in effect as of the date of such termination, payable in accordance with the Company’s normal payroll practices for a period of twenty-four (24) If Mr. Zoradi resigns for good reason (as defined in the agreement), is terminated by us without cause or upon expiration of the term of the employment agreement, he shall receive, the Accrued Employment Entitlements; an amount equal to his base salary in effect as of the date of such termination payable in accordance with the Company’s normal payroll practices through the end of the term, subject to the requirements of Section 409A of the Code; he and his dependents will be entitled to continue to participate in the Company’s welfare benefit plans and insurance programs for a period of twenty-four (24) months from the termination date; any outstanding long-term equity incentive awards with time-based vesting provisions48shall become immediately vested as of the termination date and any long-term equity incentive awards with performance-based vesting provisions shall remain outstanding through the remainder of the applicable performance period, and if or to the extent the performance provisions are attained, shall become vested without regard to any continued employment requirement.months;months, subject to the requirements of Section 409A of the Code; an amount equal to the most recent cash bonus received by the executive for the year ended prior to the date of such termination, payable in a lump sum within thirty (30) days of termination; outstanding stock options will become fully vested and exercisable upon such termination; long-term equity incentive awards other than stock options with time-based vesting provisions shall become vested on a pro rata basis and long-term equity incentive awards other than stock options with performance-based vesting provisions shall remain outstanding through the remainder of the applicable performance period and if or to the extent the performance provisions are attained shall become vested on a pro rata basis without any regard to any continued employment requirement. The executive and executive’s dependents will also be entitled to continue to participate in the Company’s welfare benefit plans andhealth insurance programs for a period of twenty-four (24) months from the termination date.welfare benefit plans andhealth insurance programs for twelve (12) months from the termination date. All outstanding long-term equity incentive awards shall vest in accordance with the terms of the incentive plan.
Control Company’s welfare benefit plans and insurance programs for a period of 30 months from the termination date. Any outstanding equity award granted to the executive shall become fully vested and/or exercisable as of the date of such termination and shall remain exercisable in accordance with the terms of the plan or agreement pursuant to which such long-term equity incentive awards were granted. 2021.control49Information If Mr. Gamble voluntarily terminates his employment after January 1, 2031 (i) any outstanding stock options granted to Mr. Gamble will be vested and/or exercisable for the period through the date of such termination of employment, and will remain exercisable, in accordance with the terms contained in the plan and the agreement pursuant to which such stock options were granted, (ii) any equity incentive award (other than stock options) with time-based vesting provisions granted to Mr. Gamble will be fully vested and (iii) any equity incentive awards with performance-based vesting provisions will remain outstanding through the remainder of the applicable performance period (without regard to any continued employment requirement) and, if or to the extent the performance provisions are attained, such equity incentive awards will become fully vested (without regarding to any continued employment requirement).2019 may be found under the headings –Potential Payments UponTermination by us Without Cause or by Executive for Good Reason,Potential Payments Upon Termination due to Change in Control andPotential Payments Upon Death or Disability.2019.2021. For Mr. Zoradi only the amounts payable as a result of his retirement are shown.
Health Insurance(3) Life and Disability Insurance(3) Value of Equity Awards(5) Lee Roy Mitchell Mark Zoradi Sean Gamble Michael Cavalier Valmir Fernandes Based on the base salaries in effect as of December 31, For Mr. Zoradi, the amount is the cash bonus he would have received for Mr. Zoradi retired at the expiration of the term of his employment agreement on December 31, 2021, therefore no amounts were included. The amounts reported are calculated as follows: Mr. Mitchell is entitled to receive tax preparation assistance for five years following the date of termination. We estimate the cost of such preparation to be approximately $17,300 per year. Mr. Zoradi retired at the expiration of the term of his employment agreement on December 31, 2021, therefore no amounts were included. Messrs. The amounts reported have been determined based on the following provisions in the respective employment agreements. performance-based vesting provisions requirement at the end of his employment agreement. Name Salary (1) Bonus (2) Assistance(4) Total $ 1,000,001 $ 2,450,427 $ 6,124 $ 7,289 $ 86,500 $ - $ 3,550,341 $ 1,100,000 $ 1,944,250 $ 19,284 $ 41,466 $ 828 $ 10,999,998 $ 14,105,826 $ 1,250,000 $ 1,454,634 $ 24,034 $ 11,368 $ 828 $ 2,128,962 $ 4,869,826 $ 1,080,000 $ 1,263,592 $ 24,034 $ 15,232 $ 828 $ 1,738,345 $ 4,122,031 $ 1,080,000 $ 972,762 $ 19,910 $ 19,520 $ 828 $ 1,599,024 $ 3,692,044 2019,2021, the amounts reported are calculated as follows:one-time one-times the base salary for Messrs.Mr. Mitchell and Zoradi and two times the base salary for Messrs. Gamble, Cavalier and Fernandes.Fernandes and Ms. Thomas. Mr. Zoradi retired at the expiration of the term of his employment agreement on December 31, 2021, therefore, no amounts were included. Subject to Treasury Regulations as specified in the respective employment agreements, the amounts would have been payable according to the Company’s normal payroll practices for a period of 24 months to Messrs. Gamble, Cavalier and Fernandes;Fernandes and Ms. Thomas; for a period of 12 months to Mr. Mitchell and through the end of the Term (as defined in the employment agreement) to Mr. Zoradi.20192021 payable according to normal payroll practices. For Messrs. Mitchell, Gamble, Cavalier and Fernandes, the amounts reported are calculated as follows: the sum of the cash bonus the NEO would have received for 20192021 and the cashgrant date fair value for the stock bonus received by the NEO for 2018.2020. The cash bonuses for 2019 would have been payable to the NEOs at the same time as payments are made to other similarly situated executives. The cash bonuses for 2018reported amounts would have been payable to Messrs. Mitchell, Gamble, Cavalier and Fernandes and Ms. Thomas in a lump sum within 30 days of termination.welfare benefit plansgroup health and dental insurance programs for a period of 12 months for Mr. Mitchell and 24 months for Messrs. Zoradi, Gamble, Cavalier and Fernandes.Fernandes and Ms. Thomas. Life and Disability insurance includes premiums for basic life insurance, long-term disability, individual disability income protection and short-term disability. Zoradi, Gamble, Cavalier and Fernandes and Ms. Thomas are entitled to use our office space for a period of three months following the date of termination. The amount reported is based on the use of a 144 square foot office at a rental rate of approximately $23 per square foot per annum.agreements,agreement, any outstanding equity award with time-based vesting provisions would have vested as of the terminationhis retirement date. AnyMr. Zoradi’s long-term equity incentive awards with50would have remained outstanding through the remainder of the applicable performance periodwere certified in December 2020 and if or to the extent the performance provisions are attained shall vestvested without regard to any continued employment requirement.
| | Name | | | ||
Number of Shares | | ||||
| Lee Roy Mitchell | | | — | |
| Mark Zoradi | | | 1,292,920 | |
| Sean Gamble | | | 46,621 | |
| Michael Cavalier | | | 49,951 | |
| Valmir Fernandes | | | 28,989 | |
| | Melissa Thomas | | | 13,211 | |
Restricted
| | Name | | | ||
Number of Shares | | ||||
| Lee Roy Mitchell | | | — | |
| Mark Zoradi | | | 3,216,970 | |
| Sean Gamble | | | 57,428 | |
| Michael Cavalier | | | 41,488 | |
| Valmir Fernandes | | | 34,554 | |
| | Melissa Thomas | | | — | |
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Health Insurance(3) Life and Disability Insurance(3) Value of Equity Awards(5) Lee Roy Mitchell Mark Zoradi Sean Gamble Michael Cavalier Valmir Fernandes There is no change in control provision in Mr. Mitchell’s employment agreement. The amounts reported are calculated as follows: two times the base salary in effect as of December 31, The amounts reported are calculated as follows: the sum of the cash bonus the NEO would have received for The amounts reported are calculated as follows: Messrs. The amounts reported have been determined based on the following provision in the respective employment agreements: upon termination due to change in control, any outstanding equity award granted to the NEO shall be fully vested and all restrictions shall lapse. Name Salary(1) Bonus(2) Assistance(4) Total - - - - - - - $ 2,200,000 $ 3,538,750 $ 24,105 $ 51,833 $ 828 $ 10,999,998 $ 16,815,514 $ 1,250,000 $ 1,763,170 $ 30,043 $ 14,210 $ 828 $ 3,705,492 $ 6,763,743 $ 1,080,000 $ 1,533,561 $ 30,043 $ 19,040 $ 828 $ 2,941,667 $ 5,605,139 $ 1,080,000 $ 1,151,262 $ 24,888 $ 24,400 $ 828 $ 2,629,874 $ 4,911,252 20192021 payable in a lump sum within 30 days of such termination.20192021 and one and a half times the cashgrant date fair value of the stock bonus received by the NEO for 2018,2020, payable in a lump sum within 30 days of such termination.welfare benefit plansgroup health and dental insurance programs for a period of 30 months. Disability insurance includes premiums for long-term disability, individual disability income protection and short-term disability. Zoradi, Gamble, Cavalier and Fernandes and Ms. Thomas are entitled to use our office space for a period of three months following the date of termination. The reported amount is based on the use of a 144 square foot office at a rental rate of approximately $23 per square foot per annum.on for each NEO other than Mr. Zoradi upon termination due to a change in control on December 31, 20192021 are as follows: Name - Mark Zoradi 72,047 Sean Gamble 36,828 Michael Cavalier 29,924 Valmir Fernandes 27,409
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RestrictedTABLE OF CONTENTS
| | Name | | | ||
Number of Shares | | ||||
| Lee Roy Mitchell | | | — | |
| Sean Gamble | | 57,428 | | |
| Michael Cavalier | | 41,488 | | |
| Valmir Fernandes | | 34,554 | | |
| Melissa Thomas | | — | | |
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The values of the long-term equity incentive awards have been calculated using the closing price of our Common Stock on December 31, 20192021 of $33.85$16.12 per share.
| Name | Salary(1) | Bonus(2) | Health Insurance(3) | Life and Disability Insurance(3) | Assistance(4) | Value of Equity Awards(5) | Total | |||||||||||||||||||||
Lee Roy Mitchell | $ | 1,000,001 | $ | 1,414,002 | $ | 6,124 | $ | 7,289 | $ | 86,500 | $ | - | $ | 2,513,916 | ||||||||||||||
Mark Zoradi | $ | 1,100,000 | $ | 1,944,250 | $ | 9,642 | $ | 20,733 | $ | 828 | $ | 8,167,428 | $ | 11,242,881 | ||||||||||||||
Sean Gamble | $ | 625,000 | $ | 837,562 | $ | 12,017 | $ | 5,684 | $ | 828 | $ | 2,130,820 | $ | 3,611,911 | ||||||||||||||
Michael Cavalier | $ | 540,000 | $ | 615,762 | $ | 9,955 | $ | 9,760 | $ | 828 | $ | 1,739,739 | $ | 3,023,854 | ||||||||||||||
Valmir Fernandes | $ | 540,000 | $ | 723,654 | $ | 12,017 | $ | 7,616 | $ | 828 | $ | 1,600,185 | $ | 2,776,491 | ||||||||||||||
| | Name | | | Salary(1) | | | Bonus(2) | | | Health Insurance(3) | | | Life and Disability Insurance(3) | | | Assistance(4) | | | Value of Equity Awards(5) | | | Total | |
| | Lee Roy Mitchell | | | $1,020,001 | | | $1,275,001 | | | $10,295 | | | $13,532 | | | $86,500 | | | — | | | $2,405,329 | |
| | Mark Zoradi | | | $— | | | $— | | | $— | | | $— | | | $— | | | $— | | | $— | |
| | Sean Gamble | | | $725,000 | | | $963,000 | | | $17,820 | | | $6,497 | | | $828 | | | $1,677,268 | | | $3,390,413 | |
| | Michael Cavalier | | | $575,000 | | | $672,067 | | | $15,967 | | | $10,436 | | | $828 | | | $1,468,199 | | | $2,742,496 | |
| | Valmir Fernandes | | | $555,012 | | | $661,852 | | | $16,048 | | | $13,125 | | | $828 | | | $1,024,307 | | | $2,271,172 | |
| | Melissa Thomas | | | $575,000 | | | $500,000 | | | $— | | | $— | | | $828 | | | $212,963 | | | $1,288,791 | |
(1) | The amounts reported are the base salary of each named executive officer in effect as of December 31, |
(2) | The amounts reported are the cash bonus each NEO would have received for |
(3) | The amounts reported are calculated as follows: |
(4) | Mr. Mitchell is entitled to receive tax preparation assistance for five years following the date of termination. We estimate the cost of such preparation to be approximately $17,300 per year. Messrs. |
(5) | The amounts reported have been determined based on the following provision in the respective employment agreements: any outstanding long-term equity incentive awards shall vest on a pro rata basis. Any long-term equity incentive awards with performance-based vesting provisions shall remain outstanding through the remainder of the applicable performance period and, if or to the extent the performance provisions are attained, shall vest without regard to any continued employment requirement on a |
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Mr. Zoradi retired at the expiration of his employment agreement on December 31, 2021, therefore no amounts were included . Pursuant to the above, the total number of shares of Common Stock subject to the long-term equity incentive awards that would have vested upon death or disability of each NEO other than Mr. Zoradi would have been as follows:
| | Name | | | ||
Number of Shares | | ||||
| Sean Gamble | | 46,621 | | |
| Michael Cavalier | | 49,591 | | |
| Valmir Fernandes | | 28,989 | | |
| Melissa Thomas | | |||
13,211 | | ||||
| | Name | | | |
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Restricted stock units based on the assumption that the maximum IRR would be achieved over the relevant performance period:
| Number of Shares | | ||||
| Sean Gamble | | 46,621 | | |
| Michael Cavalier | | 41,488 | | |
| Valmir Fernandes | | 34,554 | | |
| Melissa Thomas | | |||
— | | ||||
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5% Stockholders BlackRock, Inc.(2) The Vanguard Group(3) Wellington Management Group LLP(4) FMR LLC(5) Victory Capital Management Inc.(6) Directors and NEOs Lee Roy Mitchell(7) Mark Zoradi(8) Sean Gamble(9) Michael Cavalier(10) Valmir Fernandes(11) Darcy Antonellis(12) Benjamin Chereskin(13) Nancy Loewe(14) Steven Rosenberg(14) Enrique Senior(14) Carlos Sepulveda(14) Raymond Syufy(14) Nina Vaca(14) Executive Officers & Directors as a Group (14 persons)(15) Less than 1%. Based upon statements in Schedule 13G/A filed by BlackRock, Inc. on 117,526,711121,178,172 shares of Common Stock outstanding as of the Record Date. As of the Record Date, there were 1,270963 holders of record of our Common Stock. Beneficial Ownership Names of Beneficial Owner Number(1) Percentage 13,160,241 11.2% 10,007,272 8.5% 7,667,451 6.5% 7,303,918 6.2% 6,690,246 5.7% 10,127,305 8.6% 274,357 * 85,408 * 162,005 * 84,204 * 14,722 * 75,472 * 9,048 * 54,442 * 60,553 * 41,448 * 21,401 * 21,445 * 11,031,804 9.39% * February 4, 2020.January 27, 2022, Black Rock, Inc. may be deemed to beneficially own the reported shares of Common Stock and has filed Schedule 13G/A as the parent holding company or control person on behalf of its subsidiaries BlackRock Life Limited, BlackRock International Limited, BlackRock Advisors, LLC, Aperio Group, LLC, BlackRock (Netherlands) B.V., BlackRock Fund Advisors (beneficially owns 5% or greater of the reported shares), BlackRock Institutional Trust Company, National Association, BlackRock Asset Management Ireland Limited, BlackRock Financial Management, Inc., BlackRock Japan Co., Ltd., BlackRock Asset Management Schweiz AG, BlackRock Investment Management, LLC, BlackRock Investment Management (UK) Limited, BlackRock Asset Management Canada Limited, BlackRock Asset Management Deutschland AG, BlackRock (Luxembourg) S.A., BlackRock Investment Management (Australia) Limited, and BlackRock Advisors (UK) Limited, BlackRock (Singapore) Ltd. and BlackRock Fund Managers Ltd. BlackRock, Inc. reported (i) sole voting power over 12,258,557 shares, and (ii) sole dispositive power over 13,160,241 shares. The address of Black Rock Inc. is 55 East 52nd Street, New York, NY 10055.55
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(3) | Based upon statements in Schedule 13G/A filed by The Vanguard Group on |
(4) | Based upon statements in Schedule |
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Members of the Johnson family, including Abigail P. Johnson, are the predominant owners, directly or through trusts, of Series B voting common shares of FMR LLC, representing 49% of the voting power of FMR LLC. The Johnson family group and all other Series B shareholders have entered into a shareholders’ voting agreement under which all Series B voting common shares will be voted in accordance with the majority vote of Series B voting common shares. Accordingly, through their ownership of voting common shares and the execution of the shareholders’ voting agreement, members of the Johnson family may be deemed, under the Investment Company Act of 1940, to form a controlling group with respect to FMR LLC. Neither FMR LLC nor Abigail P. Johnson has the sole power to vote or direct the voting of the shares owned directly by the various investment companies registered under the Investment Company Act (Fidelity Funds) advised by Fidelity Management & Research Company (FMR Co), a wholly owned subsidiary of FMR LLC, which power resides with the Fidelity Funds’ Boards of Trustees. Fidelity Management & Research Company carries out the voting of the shares under written guidelines established by the Fidelity Funds’ Boards of Trustees. The address of FMR LLC is 245 Summer Street, Boston, MA 02210.
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Includes 4,419,095 shares of Common Stock owned by The Mitchell Special Trust. Mr. Mitchell is theco-trustee of The Mitchell Special Trust. Mr. Mitchell expressly disclaims beneficial ownership of all shares held by The Mitchell Special Trust. |
(6) | Includes |
(7) | Includes |
(8) | Includes |
(9) | Includes |
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(10) | Includes |
(11) | Includes 5,203 shares of restricted stock, 3,568 shares held by LEGATUM Partners, L.P., of which shares Mr. Chereskin is the beneficial owner and 9,736 shares held in a grantor trust of which Mr. Chereskin’s spouse is a trustee. |
(12) | Includes |
(13) | The numbers reported do not include |
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CERTAIN RELATIONSHIPS AND RELATED PARTY TRANSACTIONS
Our Board has adopted a written policy supplementing our Code of Business Conduct and Ethics relating to the review, approval and ratification of transactions between us and “related parties” as generally defined by applicable rules under the Securities Act of 1933, as amended. The policy covers any related party transaction in which the amount involved exceeds $120,000. Our Board has determined that the Audit Committee is best suited to review and approve related party transactions, although in certain circumstances the Board may determine that a particular related party transaction be reviewed and approved by a majority of disinterested directors. In reviewing and approving a related party transaction, the Audit Committee, after satisfying itself that it has received all material information regarding the related party transaction under review, shall approve based upon the determination whether the transaction is fair and in the best interest of the Company.
Management presents any proposed related party transaction at an Audit Committee meeting for review and approval. If management becomes aware of a proposed or existing related party transaction that has not been presented orpre-approved by the Audit Committee, management shall promptly notify the Chair of the Audit Committee who shall submit such related party transaction to the full Audit Committee for approval or ratification, if the Audit Committee determines that such transaction is fair to the Company. If management, in consultation with our CEO, CFO or General Counsel determines that it is not practicable to wait until the next Audit Committee meeting, the Chair of the Audit Committee has been delegated the authority to review, consider and approve any such transaction. In such event, the Chair of the Audit Committee shall report any related party transaction approved by him or her at the next Audit Committee meeting. The Audit Committee may establish guidelines it determines as necessary and appropriate for management to follow in dealings with related parties and related party transactions. The procedures followed in considering a related party transaction are evidenced in the resolutions and minutes of the meetings of the Audit Committee or Board, as applicable.
CERTAIN AGREEMENTS
Laredo Theatre
We manage theatres for Laredo Theatre, Ltd., (Laredo). We are the sole general partner and own 75% of the limited partnership interests of Laredo. Lone Star Theatres, Inc. (Lone Star) owns the remaining 25% of the limited partnership interests in Laredo and is 100% owned by Mr. David Roberts, Lee Roy Mitchell’sson-in- law. Under the agreement, management fees are paid by Laredo to us at a rate of 5% of annual theatre revenues up to $50 million and 3% of annual theatre revenues in excess of $50 million. We recorded approximately $0.69 million of management fee revenue from Laredo during 2019. As the sole general partner and the majority limited partner of Laredo, we control the affairs of the limited partnership and have the rights to dissolve the partnership or sell the theatres. We also have a license agreement with Laredo permitting Laredo to use the “Cinemark” service mark, name and corresponding logos and insignias in Laredo, Texas.
Copper Beech LLC
Effective September 2, 2009, Cinemark USA, Inc. (CUSA), a wholly-owned subsidiary of the Company, entered into an Aircraft Time Sharing Agreement (Aircraft Agreement), with Copper Beech Capital, LLC, a Texas limited liability company (Operator), for the use of an aircraft and flight crew on a time sharing basis. Lee Roy Mitchell, our Chairman of the Board, and his wife, Tandy Mitchell own the membership interests of the Operator. Prior to the execution of the Aircraft Agreement, the Company had an informal agreement with the Operator to use, on occasion, a private aircraft owned by the Operator. The private aircraft is used by Mr. Mitchell and other executives who accompany Mr. Mitchell to business meetings for the Company. The Aircraft Agreement specifies the maximum amount that the Operator can charge the Company under the applicable regulations of the Federal Aviation Administration for the use of the aircraft and flight crew. The Company pays the Operator the direct costs and expenses related to fuel, pilots, landing fees, storage fees, insurance obtained for the specific flight, flight planning, weather contract
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services and expenses such asin-flight food and beverage services and passenger ground transportation incurred during a trip. For 2019, the aggregate amounts paid to Copper Beech LLC for the use of the aircraft was approximately $0.11 million.
Pinstack
We hold events for our employees and their families at Pinstack, an entertainment facility, at various times throughout the year. Pinstack is majority-owned by Mr. Mitchell and his wife, Tandy Mitchell. The Company did not hold any events at Pinstack during 2019.
FE Concepts, LLC
The Company, through its wholly-owned indirect subsidiary CNMK Texas Properties, LLC, formed a joint venture, FE Concepts, LLC (FE Concepts), with AWSR Investments, LLC (AWSR), an entity owned by Lee Roy Mitchell and Tandy Mitchell. FE Concepts operates a family entertainment center that offers bowling, gaming, movies and other amenities. The Company and AWSR each invested approximately $20.0 million and each have a 50% voting interest in FE Concepts. The Company has a theatre services agreement with FE Concepts under which the Company receives management fees for providing film booking and equipment monitoring services for the facility. The Company recorded $0.64 million of management fees during the year ended December 31, 2019. The Company held its 2019 holiday party at the facility owned by FE Concepts for which the Company paid FE Concepts $0.77 million in event fees.
Family Relationships
Tandy Mitchell, wife of Mr. Mitchell, is an employee of the Company. Ms. Mitchell received total compensation of $208,731 for 2019. Such amount included base salary of $135,000, cash bonus of $50,625 and all other compensation of $23,106.
Walter Hebert III,brother-in-law of Mr. Mitchell, is the Executive Vice President – Purchasing of the Company. Mr. Hebert received total compensation of $600,078 for 2019. Such amount included base salary of $281,875, cash bonus of $169,125, grant date fair market value of restricted stock of $102,464 and all other compensation of $46,614.
Century Theatres
Our subsidiary, Century Theatres, currently leases 14 theatres and one parking facility from Syufy Enterprises or affiliates of Syufy Enterprises. Raymond Syufy, one of our directors, is an officer of the general partner of Syufy Enterprises. All of the leases except one have fixed minimum annual rent. The remaining lease has rent based upon a specified percentage of gross sales as defined in the lease with no minimum annual rent. For 2019, we paid approximately $26 million in rent for these leases.
Director Nomination Agreement
Under the Director Nomination Agreement which we entered into on April 9, 2007 with certain of our then current stockholders, the Mitchell Investors (as defined in the Director Nomination Agreement) have a right to designate two nominees to the Board and Messrs. Mitchell (Class III) and Sepulveda (Class II) are its current nominees.
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| (a) | receive notice of the Annual Meeting, and |
| (b) | vote at the Annual Meeting and any adjournments or postponements of the Annual Meeting. |
in person at the Annual Meeting.“non-routine” “non-routine” items without your instructions.in person at the Annual Meeting unless you obtain a “legal proxy”voting instruction form from the broker or bank that holds your shares, giving you the right to vote the shares at the Annual Meeting.
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What is a proxy and how does the proxy process operate?operate?
If you are a stockholder of record, you may vote:
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* We intend to hold our Annual Meeting in person. However, we are actively monitoring the COVID-19 pandemic and may choose to hold a virtual-only Annual Meeting should it be deemed necessary for public health or if recommended by public health officials. Stockholders will be afforded the same rights and opportunities to participate in a virtual-only Annual Meeting as they would at an in-person meeting. In the event we determine to hold a virtual-only Annual Meeting, we will announce the change in advance and provide instructions on how stockholders can participate athttps://ir.cinemark.com/. We encourage you to check this website prior to the meeting if you plan to attend. Please retain the control number set forth on the proxy card or the voting instruction form in order to verify your identity when accessing the virtual-only Annual Meeting.
What happens if I do not give specific voting instructions?instructions?
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Approval of Item 2: The ratification of the appointment of Deloitte & Touche requires the affirmative vote of a majority of the votes cast by stockholders present in personat the Annual Meeting or represented by proxy at the Annual Meeting and entitled to vote thereon. Since this proposalitem is considered a “routine” matter, brokernon-votes do not arise as brokers and banks may exercise discretionary authority to vote your shares. Abstentions will have no effect on this item.
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How can I obtain copies of the Company’s annual reports and other available information about the Company?
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By Order of the Board of Directors, &20192021 Annual Report Form10-K (without exhibits) as filed with the SEC. Your request should be mailed to the Company’s offices, addressed as follows: Cinemark Holdings, Inc., Attention: Company Secretary, 3900 Dallas Parkway, Suite 500, Plano, Texas 75093. A free copy of the 20192021 Annual Report Form10-K may also be obtained at the website maintained by the SEC atwww.sec.govor by visiting our website at https://ir.cinemark.com/and clicking on the “Financials” tab and then on “SEC Filings.” Suite 50064and Secretary10, 20206, 2022
VOTE BY INTERNET - www.proxyvote.com Use the Internet to transmit your voting instructions and for electronic deliveryinformation. Vote by 11:59 P.M. ET on 05/20/2020. Have your proxy cardAdjusted EBITDAhand when you access the web site and follow the instructions to obtain your records and to create an electronic voting instruction form. ELECTRONIC DELIVERYthousands) (a) Includes interest income, foreign currency exchange loss, equity in loss of affiliates and interest expense - NCM and excludes distributions from NCM and distributions from DCIP. (b) Includes cash distributions received from equity investees, other than those from DCIP noted above, that were recorded as a reduction of the respective investment balances. These distributions are reported entirely within the U.S. operating segment. (c) Non-cash expense included in general and administrative expenses.
CINEMARK HOLDINGS, INC. ANNUAL MEETING OF STOCKHOLDERS Thursday, May 21, 2020 9:00 a.m. CDT 3800 Dallas Parkway Plano, Texas 75093 Important Notice Regarding the Availability of Proxy Materials for the Annual Meeting: The Form 10-K and Notice and Proxy Statement are available at www.proxyvote.com CINEMARK HOLDINGS, INC. ANNUAL MEETING OF STOCKHOLDERS Thursday, May 21, 2020 9:00 a.m. CDT Cinemark Holdings, Inc. 3800 Dallas Parkway Plano, Texas 75093 This proxy is solicited by the Board of Directors for use at the Annual Meeting on May 21, 2020 The shares of stock you hold in your account as of the Record Date will be voted as you specify on the reverse side. If no choice is specified, the proxy will be voted FOR all Items. By signing the proxy, you revoke all prior proxies and appoint Sean Gamble and Michael Cavalier, and each of them with full power of substitution, to vote your shares on the matters shown on the reverse side and any other matters which may come before the Annual Meeting and all adjournments. Address change/comments: (If you noted any Address Changes and/or Comments above, please mark corresponding box on the reverse side.) See reverse for voting instructions. 0000444305_2 R1.0.1.18CINEMARK HOLDINGS, INC. ANNUAL MEETING OF STOCKHOLDERS Thursday, May 21, 2020 9:00 a.m. CDT 3800 Dallas Parkway Plano, Texas 75093 Important Notice Regarding the Availability of Proxy Materials for the Annual Meeting: The Form 10-K and Notice and Proxy Statement are available at www.proxyvote.com CINEMARK HOLDINGS, INC. ANNUAL MEETING OF STOCKHOLDERS Thursday, May 21, 2020 9:00 a.m. CDT Cinemark Holdings, Inc. 3800 Dallas Parkway Plano, Texas 75093 This proxy is solicited by the Board of Directors for use at the Annual Meeting on May 21, 2020 The shares of stock you hold in your account as of the Record Date will be voted as you specify on the reverse side. If no choice is specified, the proxy will be voted FOR all Items. By signing the proxy, you revoke all prior proxies and appoint Sean Gamble and Michael Cavalier, and each of them with full power of substitution, to vote your shares on the matters shown on the reverse side and any other matters which may come before the Annual Meeting and all adjournments. Address change/comments: (If you noted any Address Changes and/or Comments above, please mark corresponding box on the reverse side.) See reverse for voting instructions. 0000444305_2 R1.0.1.18
