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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
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TABLE OF CONTENTS
CINEMARK
HOLDINGS, INC.
3900 Dallas Parkway, Suite 500
Plano, Texas 75093
NOTICE OF
ANNUAL MEETING OF STOCKHOLDERS
To Be Held on May 13, 2010
Dear Stockholder:
Notice is hereby given that the Annual Meeting of Cinemark
Holdings, Inc. will be held on May 13, 2010, at 9 a.m.
at our West Plano Theatre located at 3800 Dallas Parkway, Plano,
TX 75093, for the following purposes:
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1.
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To elect three Class III directors to serve for three years
on our Board of Directors;
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2.
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To approve and ratify the appointment of Deloitte &
Touche, LLP as our independent registered public accountant for
the fiscal year ending December 31, 2010; and
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3.
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To transact such other business as may properly come before the
Annual Meeting or any adjournment thereof.
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Accompanying this notice is the proxy statement, which provides
information on our Board of Directors and management team, and
further describes the business we will conduct at the Annual
Meeting.
The proxy statement is also available on the internet at
http://www.cinemark.com/proxy.
Only stockholders of record as of the close of business on
March 25, 2010 will be entitled to receive notice of, and
to vote at, the Annual Meeting.
Vote
Required
NOTICE: This is the first year that brokers are not permitted
to vote on the election of directors without instructions from
the beneficial owner, as discussed in more detail in the
accompanying proxy statement. Therefore, if your shares are held
through a broker, bank or nominee, they will not be voted in the
election of directors unless you affirmatively vote your shares
in one of the ways described in the accompanying proxy
statement.
We sincerely hope you will be able to attend the Annual Meeting.
Whether or not you attend the Annual Meeting, it is important
that your shares be represented. Therefore, we urge you to
promptly vote. If you decide to attend the Annual Meeting, you
will be able to vote in person, even if you previously submitted
your proxy.
On behalf of Cinemarks Board of Directors and management
team, we look forward to greeting you at the Annual Meeting.
Sincerely,
Michael D. Cavalier
Secretary
Plano, Texas
March 31, 2010
CINEMARK
HOLDINGS, INC.
3900 Dallas Parkway, Suite 500
Plano, Texas 75093
ANNUAL
MEETING OF STOCKHOLDERS
May 13, 2010
GENERAL
INFORMATION
Solicitation
and Revocability of Proxies
The Board of Directors (the Board) of
Cinemark Holdings, Inc. (the Company,
we, our or
us) is soliciting proxies in connection with
the 2010 annual meeting of stockholders and any adjournment
thereof (the Annual Meeting) to be held on
May 13, 2010, at 9 a.m. at the Companys West
Plano Theatre located at 3800 Dallas Parkway, Plano, TX 75093.
The approximate date on which this proxy statement and the
enclosed proxy are first being sent to stockholders is
March 31, 2010.
Shares Outstanding
and Voting Rights
As of March 25, 2010, 111,534,694 shares of the
Companys common stock, par value $0.001 per share (the
Common Stock), were outstanding. The
Common Stock constitutes the only class of voting securities of
the Company. Only stockholders of record as of the close of
business on March 25, 2010 (the Record
Date) are entitled to receive notice of, and to
vote at the Annual Meeting. Holders of Common Stock are entitled
to one vote for each share so held. Holders of Common Stock of
the Company do not have cumulative voting rights with respect to
the election of directors.
Quorum
and Required Vote
Quorum. Unless a quorum is present at the Annual
Meeting, no action may be taken at the Annual Meeting except the
adjournment thereof until a later time. The holders of a
majority of the outstanding shares of Common Stock on the Record
Date, present in person or represented by proxy, are necessary
to constitute a quorum at the Annual Meeting. Shares that are
represented at the Annual Meeting but abstain from voting on any
or all matters and broker non-votes (shares held by
brokers, banks or nominees for which they have no discretionary
power to vote on a particular matter and have received no
instructions from the beneficial owners or persons entitled to
vote) will be counted as shares present and entitled to vote in
determining the presence or absence of a quorum. The inspector
of election appointed for the Annual Meeting will determine the
number of shares of our Common Stock present at the Annual
Meeting, determine the validity of proxies and ballots,
determine whether or not a quorum is present, and count all
proxies and ballots.
Required
Vote.
Director Election: If a quorum is
obtained, directors are elected by a plurality of all of the
votes cast, in person or by proxy. This means that the three
director nominees will be elected if they receive more
affirmative votes than any other director nominee. Votes marked
For Item 1 will be counted in favor of all
director nominees, except to the extent the proxy withholds
authority to vote for a specified director nominee. Votes
Withheld from a director nominee have no effect on
the vote since a plurality of the shares cast at the Annual
Meeting is required for the election of each director nominee.
Stockholders may not abstain from voting with respect to the
election of directors. The election of the directors is
considered a non-routine matter under the broker
voting rules of the New York Stock Exchange (the
NYSE), revised effective July 1,
2009, and applicable to stockholder meetings on or after
January 1, 2010. As a consequence, brokers will not be able
to vote on Item 1 without receiving instructions from the
beneficial owners. As a result, broker non-votes
could arise in the context of these proposals.
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Ratification of the appointment of
Deloitte & Touche, LLP: If a quorum is
obtained, ratification of the appointment of
Deloitte & Touche, LLP as our independent registered
public accountant requires the majority of all the votes cast on
the matter at the Annual Meeting. Abstentions from voting on the
ratification of the independent registered public accountant
will be counted as present for purposes of establishing a
quorum, and the abstention will have the same effect as a vote
against that proposal. The ratification of the
appointment of auditors is a routine matter for
which specific instructions from beneficial owners will not be
required. Therefore, broker non-votes will not arise
in the context of this proposal.
QUESTIONS
AND ANSWERS ABOUT
THE MEETING AND VOTING
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1.
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What
is the purpose of holding this Annual Meeting?
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We are holding the Annual Meeting to elect directors and to
ratify the selection of Deloitte & Touche, LLP as our
independent registered public accountant. Our Nominating and
Corporate Governance Committee has recommended the director
nominees to our Board and our Board has nominated the director
nominees. Our Audit Committee has approved the appointment of
our independent registered public accountant and our Board has
ratified such appointment. If any other matters requiring a
stockholder vote properly come before the Annual Meeting, those
stockholders present at the Annual Meeting and the proxies who
have been appointed by our stockholders will vote as they think
appropriate.
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2.
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What
is the record date and what does it mean?
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The Record Date for the Annual Meeting is March 25, 2010.
The Record Date is established by the Board as required by
Delaware law. Owners of record of Common Stock at the close of
business on the Record Date are entitled to:
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(a)
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receive notice of the Annual Meeting, and
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(b)
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vote at the Annual Meeting and any adjournments or postponements
of the Annual Meeting.
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3.
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What
is the difference between a stockholder of record and a
stockholder who holds stock in street name?
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(a) Stockholder of record: If your shares are
registered in your name with our transfer agent, Wells Fargo
Shareowner Services, you are a stockholder of record with
respect to those shares. As a stockholder of record, you have
the right to grant your voting proxy directly to us or to a
third party, or to vote in person at the Annual Meeting.
(b) Stockholder who holds stock in street
name: If your shares are held in a brokerage account,
by a bank or another nominee, you are considered to be a
beneficial owner of shares held in street name. As
the beneficial owner, you have the right to direct your broker,
bank or nominee how to vote and you are also invited to attend
the Annual Meeting. Your broker, bank or nominee, as the record
holder of your shares, is required to vote those shares in
accordance with your instructions. These proxy materials are
being forwarded to you on behalf of your broker, bank or
nominee. Your broker, bank or nominee has enclosed or provided
voting instructions for you to use in directing the broker, bank
or nominee how to vote your shares. Since a beneficial owner in
street name is not the stockholder of record, you may not vote
these shares in person at the Annual Meeting unless you obtain a
legal proxy from the broker, bank or nominee that
holds your shares, giving you the right to vote the shares at
the Annual Meeting.
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4.
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How
many shares must be present to hold the Annual
Meeting?
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A majority of our outstanding shares as of the Record Date must
be present at the Annual Meeting in order to hold the Annual
Meeting and conduct business. This is called a
quorum. Shares are counted as present at the Annual
Meeting if you are present and vote in person at the Annual
Meeting or if you vote via
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the Internet, by telephone, or if you are represented by proxy.
Abstentions and broker non-votes are counted as
present for the purpose of determining the presence of a quorum.
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5.
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What
is a proxy and how does the proxy process operate?
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A proxy is your legal designation of another person to vote the
stock you own. The person(s) that you designate to vote your
shares are called proxies. Alan W. Stock, Robert D. Copple and
Michael D. Cavalier of the Company have been designated as
proxies for the Annual Meeting. The term proxy also
refers to the written document or proxy card that
you sign to authorize those persons to vote your shares.
If you are a stockholder of record, by executing the proxy card,
you authorize the above-named individuals to act as your proxies
to vote your shares in the manner that you specify. The proxy
voting mechanism is vitally important to us. In order for us to
obtain the necessary stockholder approval of proposals, a
quorum of stockholders (a majority of the
outstanding shares of Common Stock as of the Record Date) must
be represented at the Annual Meeting in person or by proxy.
Since few stockholders can spend the time or money to attend
stockholder meetings in person, voting by proxy is necessary to
obtain a quorum and complete the stockholder vote. It is
important that you attend the Annual Meeting in person or grant
a proxy to vote your shares to assure a quorum is obtained so
corporate business can be transacted. If a quorum is not
obtained, we must postpone the Annual Meeting and solicit
additional proxies, which is an expensive and time-consuming
process.
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6.
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What
different methods can I use to vote?
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If you are a stockholder of record, you may vote:
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Via the Internet or by telephone In order to
vote via the Internet or by telephone, please follow the
instructions shown on your proxy card. Votes submitted via the
Internet or by telephone must be received by 12 p.m.,
Central Standard Time, on May 12, 2010. The Internet and
telephone voting procedures have been designed to verify
stockholders identities and allow stockholders to confirm
that their voting instructions have been properly recorded;
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By mail In order to vote by mail, simply
complete, sign, date, and return the proxy card in the postage
paid envelope provided so that it is received before the Annual
Meeting. If the accompanying proxy card is duly executed and
returned, the shares of Common Stock represented thereby will be
voted in accordance with the Boards recommendations set
forth herein and if you make a specification, the shares of
Common Stock will be voted in accordance with such specification.
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In person We will pass out written ballots at
the Annual Meeting and you may deliver your completed and signed
proxy card in person. Submitting your proxy or voting
instructions, whether via the Internet, by telephone, or by mail
will not affect your right to vote in person should you decide
to attend the Annual Meeting.
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If you are a beneficial holder, you may vote:
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By Instructing Your Bank or Broker You
should receive a voting instruction card from your bank or
broker, which you must return with your voting instructions to
have your shares voted. If you have not received a voting
instruction card from your bank or broker, you may contact it
directly to provide it with instructions on how you wish to
vote. Voting instructions submitted by beneficial owners to
brokers or banks via the Internet or by telephone must be
received by 12 p.m., Central Time, on May 12, 2010. If
your shares are held for you by other nominees you should follow
the instructions provided by such nominees;
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In person If you wish to vote in person at
the Annual Meeting, you will need to obtain a legal
proxy form from your broker or bank that holds your shares
of record and you must bring that document to the Annual Meeting.
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7.
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What
are broker non-votes?
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If you are the beneficial owner of shares and hold stock in
street name, then the broker, as the stockholder of record of
the shares, is required to vote those shares in accordance with
your instructions. If you do not give instructions to the
broker, then the broker will have discretion to vote the shares
with respect to routine matters but will not be
permitted to vote the shares with respect to
non-routine matters. Accordingly, if you do not
instruct your broker on how to vote your shares with respect to
the non-routine matter, your shares will be
broker non-votes with respect to that proposal.
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8.
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What
is the effect of not voting?
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It depends on how ownership of your shares is registered. If you
are a stockholder of record, your unvoted shares will not be
represented at the Annual Meeting and will not count toward the
quorum requirement. Assuming a quorum is obtained, your unvoted
shares will not affect whether a proposal is approved or
rejected.
If you own shares through a broker or a bank and do not provide
voting instructions, your broker or bank may represent your
shares at the Annual Meeting for purposes of obtaining a quorum.
The answer to the following question describes how your broker
may or may not vote your shares if you do not provide your
broker with voting instructions.
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9.
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If I
do not vote, will my broker vote for me and how will broker
non-votes be counted?
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If you own your shares through a broker and you do not vote,
your broker may vote your shares in its discretion on some
routine matters. However, with respect to
non-routine matters, your broker may not vote your
shares for you. With respect to these non-routine
matters, the aggregate number of unvoted shares is
reported as broker non-votes. The proposal with
respect to the ratification of independent registered public
accountant set forth in this proxy statement is a routine
matter on which brokers will be permitted to vote
broker non-votes. However, the proposal with respect
to the election of directors is a non-routine matter
and hence brokers will not be permitted to vote broker
non-votes.
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10.
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How
can I revoke or change my proxy?
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You may revoke your proxy and change your vote at any time
before the proxy has been exercised at the Annual Meeting. If
you are a stockholder of record, your proxy can be revoked in
several ways: (1) by timely delivery of a written
revocation to the Company Secretary; (2) by submitting
another valid proxy bearing a later date; or (3) by
attending the Annual Meeting in person and giving the inspector
of election notice that you intend to vote your shares in
person. If your shares are held in street name by a broker, bank
or nominee, you must contact your broker, bank or nominee in
order to revoke your proxy. Generally, you may change your vote
by submitting new voting instructions to your broker, bank or
nominee, or, if you have obtained a legal proxy from
your broker, bank or nominee giving you the right to vote your
shares, by attending the Annual Meeting and voting in person.
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11.
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Who
counts the votes?
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The Company has retained a representative of Wells Fargo
Shareowner Services to serve as an independent tabulator to
receive and tabulate the ballots and proxies and as an
independent inspector of election to certify the results.
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Who
pays for this proxy solicitation?
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The Company pays for this proxy solicitation. We use our
transfer agent, its agents, and brokers to distribute all proxy
materials to our stockholders. We will pay them a fee and
reimburse any expenses they incur in making the distribution.
Proxies will be solicited on behalf of the Board by mail,
telephone, other electronic means or in person. We have retained
D.F. King & Co., Inc., 48 Wall Street, 22nd Floor, New
York, NY 10005, to assist with the solicitation for a fee of
$6,000 plus reasonable
out-of-pocket
expenses.
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13.
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What
are my voting choices when voting for director nominees, and
what vote is needed to elect the director
nominees?
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With regard to the election of directors, you may cast your vote
in favor of or withhold your vote for each director nominee.
Votes that are withheld will be excluded entirely from the vote
and will have no effect. In accordance with the Companys
bylaws and Delaware law, the director nominees who receive a
plurality of the votes cast by stockholders present or
represented by proxy at the Annual Meeting, up to the number of
directors to be elected, will be elected as directors of the
Company.
The Board
recommends a vote FOR each of the director
nominees.
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14.
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How
can I obtain copies of the Companys annual report and
other available information about the Company?
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Stockholders may receive a copy of the Companys 2009
Annual Report on
Form 10-K
at no charge by sending a written request to Michael D.
Cavalier, Company Secretary at Cinemark Holdings, Inc., 3900
Dallas Parkway, Suite 500, Plano, Texas 75093.
You can also visit our Web site at www.cinemark.com for
free access to our filings with the Securities and Exchange
Commission (the SEC), including our
registration statement on
Form S-1,
annual reports on
Form 10-K,
quarterly reports on
Form 10-Q,
current reports on
Form 8-K,
and all amendments to these reports as soon as reasonably
practicable after the reports are electronically filed with or
furnished to the SEC. The SEC maintains a Web site that contains
reports, proxy and information statements and other information
regarding registrants that file electronically with the SEC. The
address of the Web site is www.sec.gov. The
Companys SEC filings and corporate governance documents
can also be accessed free of charge at the Companys Web
site at www.cinemark.com.
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15.
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What
is the deadline to propose actions for consideration at next
years annual meeting of stockholders?
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Stockholder Proxy
Proposal Deadline: Stockholder proposals requested
to be included in our proxy statement and form of proxy for our
2011 annual meeting must be in writing and received by us by the
end of business on December 1, 2010, provided that
proposals are submitted by eligible stockholders who have
complied with the relevant regulations of the SEC regarding
stockholder proposals and our bylaws. A copy of our bylaws is
available from the Company Secretary upon written request.
Proposals should be directed to Michael Cavalier, Company
Secretary at Cinemark Holdings, Inc., 3900 Dallas Parkway,
Suite 500, Plano, Texas 75093.
Stockholder Business Annual Meeting
Deadline: Stockholders who wish to introduce an item of
business at the 2011 annual meeting of stockholders may do so in
accordance with our bylaws. These procedures provide, generally,
that stockholders desiring to bring a proper subject of business
before an annual meeting, must do so by a written notice, timely
received (between 90 and 120 days in advance of such annual
meeting) by the Company Secretary. Any notice of intent to
introduce an item of business at an annual meeting of
stockholders must contain the name and address of the
stockholder and the name and address of the beneficial owner on
whose behalf the proposal is made, a representation that the
stockholder is a holder of record, the number of shares of
Common Stock owned of record or beneficially by the stockholder
and the beneficial owner on whose behalf the proposal is made, a
description of all arrangements and understandings between the
stockholder and the beneficial owners, if any, and that the
stockholder intends to appear in person or by proxy at the
annual meeting. Notice of an item of business must also include
a brief description of the proposed business and any material
interest of the stockholder in such business.
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ITEM 1
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ELECTION
OF DIRECTORS
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Our Board is currently comprised of ten members. The size of our
Board may be fixed from time to time exclusively by our Board as
provided in our Second Amended and Restated Certificate of
Incorporation. Our Second Amended and Restated Certificate of
Incorporation also provides that our Board consists of three
classes of directors, designated as Class I, Class II
and Class III, and 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. On April 9, 2007, immediately
prior to our initial public offering, we entered into a director
nomination agreement with certain of our then current
stockholders permitting those certain stockholders to designate
persons for appointment or nomination for election to the Board
(the Director Nomination Agreement).
Pursuant to the Director Nomination Agreement, Madison Dearborn
Capital Partners IV, L.P. (MDCP), has
the right to designate five nominees to the Board, the Mitchell
Investors (as defined in the Director Nomination Agreement) have
the right to designate two nominees to the Board, Syufy Investor
(as defined in the Director Nomination Agreement) has the right
to designate one nominee to the Board and the Quadrangle
Investors (as defined in the Director Nomination Agreement) had
the right to designate one nominee to the Board. Effective
December 9, 2009, Quadrangle Investors no longer have a
right to designate a nominee to the Board as they have sold
their beneficial ownership in the Companys Common Stock.
However, Peter Ezersky, a current Board member and an employee
and former nominee of the Quadrangle Investors has decided to
continue as a Class II director.
The terms of the current Class III directors, Mr. Lee
Roy Mitchell, Mr. Benjamin D. Chereskin and
Mr. Raymond W. Syufy, expire at this Annual Meeting.
The Mitchell Investors have designated Mr. Mitchell, MDCP
has designated Mr. Chereskin and the Syufy Investor has
designated Mr. Syufy for election to the Board as
Class III directors at the Annual Meeting. The Nomination
and Corporate Governance Committee has recommended to the Board,
and the Board has approved, the nomination of Messers. Mitchell,
Chereskin and Syufy for election to the Board at the Annual
Meeting as Class III directors. Each of the Class III
directors, if elected, will serve on the Board for a three-year
term expiring on the date of our annual meeting of stockholders
to be held in 2013.
Each nominee has consented to be named herein and to serve on
the Board if elected. We have no reason to believe that any of
the director nominees will be unable or unwilling to serve if
elected. However, if any director nominee becomes unavailable or
unwilling to serve before the election, your proxy card
authorizes us to vote for a replacement nominee if the Board
names one.
Information on each of our director nominees and continuing
directors is given below. Overall, each of our Board members is
committed to the growth of the Company for the benefit of the
stockholders, contribute new ideas in a productive and congenial
manner and regularly attend board meetings.
6
Nominees
for Class III Directors
For a Three Year Term Expiring 2013
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Name
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Business Experience
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Benjamin D. Chereskin
51
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Mr. Chereskin has served as a director since April 2004 and is the chairperson of the Nominating and Corporate Governance Committee and the Compensation Committee. Mr. Chereskin is President of Profile Management LLC which he founded in October 2009. Prior to founding Profile Management, Mr. Chereskin was a Managing Director and Member of Madison Dearborn Partners, LLC (MDP) from 1993 until October 2009 and also co-founded the firm in 1993. Prior to co-founding MDP, Mr. Chereskin was with First Chicago Venture Capital for nine years. Mr. Chereskin currently serves on the board of directors of Tuesday Morning Corporation. Mr. Chereskins other affiliations include service on the board of directors of BF Bolthouse Holdco LLC, CDW Corporation and board of trustees of The University of Chicago Medical Center and The University of Chicago Laboratory Schools. Mr. Chereskin is nominated by MDCP pursuant to the Director Nomination Agreement.
Mr. Chereskins background in private equity and investment banking is a valuable resource to us in our efforts to attract investment to implement our business strategy and identify growth opportunities. His knowledge and experience in business operations contributes to the Boards expertise on strategic planning.
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Lee Roy Mitchell
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Mr. Mitchell has served as Chairman of the Board since March 1996 and as a director since our inception in 1987. Mr. Mitchell served as our Chief Executive Officer from our inception until December 2006. Mr. Mitchell was Vice Chairman of the Board from March 1993 until March 1996 and was President from our inception in 1987 until March 1993. From 1985 until 1987, Mr. Mitchell served as President and Chief Executive Officer of a predecessor company. Mr. Mitchell currently serves on the board of directors of Texas Capital Bancshares, Inc. and National CineMedia, Inc. Mr. Mitchells other affiliations include service on the board of directors of the National Association of Theatre Owners, Champions for Life and Dallas County Community College. Mr. Mitchell is the brother-in-law of Walter Hebert, III, a Senior Vice-President of the Company. Mr. Mitchell is nominated by the Mitchell Investors pursuant to the Director Nomination Agreement.
Mr. Mitchell is the founder of the Company and has been engaged in the motion picture exhibition business for over 50 years. His depth of experience of the motion picture industry has been invaluable to the Board. Additionally, Mr. Mitchell brings a long-term historic perspective and leadership to the Board.
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Raymond W. Syufy
47
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Mr. Syufy has served as a director since October 2006. Mr. Syufy began working for Century Theatres, Inc. (Century Theatres) 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 chief executive officer 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. Mr. Syufy is nominated by the Syufy Investor pursuant to the Director Nomination Agreement.
Mr. Syufys experience in managing a successful, family-owned movie theatre business brings to the Board industry insight and knowledge and experience in industry and Company operations. Mr. Syufys background brings key strategic planning expertise to the Board particularly with respect to competition from other forms of entertainment.
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Our Board unanimously recommends that the stockholders vote
FOR each of the above director nominees.
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Unless marked to the contrary, proxies received will be voted
FOR the election of each of the director nominees.
Continuing
Class I Directors
Term Expiring 2011
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Name
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Business Experience
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Steven P. Rosenberg
51
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Mr. Rosenberg has served as a director since April 2008 and is a member of the Audit Committee. Mr. Rosenberg is the President of SPR Ventures Inc., a private investment firm he founded in 1997, and President of SPR Packaging LLC, a manufacturer of flexible packaging. From 1992 until 1997, Mr. Rosenberg was the President of the Arrow division of ConAgra, Inc., a leading manufacturer of grocery products. Mr. Rosenberg was also a founding investor of Packaged Ice, a leading manufacturer of industrial and consumer ice, in 1992. Mr. Rosenberg currently serves on the board of directors of Texas Capital Bancshares, Inc. and PRG Schultz International, Inc. Mr. Rosenberg was nominated by our Board.
Mr. Rosenbergs background in corporate leadership and private entrepreneurial investment brings to the Board strategic planning and risk management skills that are important to the implementation of our growth strategies and oversight of our enterprise and operational risk management. His accounting and financial management experience, having served in corporate leadership positions and audit committees of other public companies, is valuable to the Board with respect to exercising control and oversight of our financial reporting.
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Enrique F. Senior
66
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Mr. Senior has served as a director since April 2004. Mr. Senior is a Managing Director of Allen & Company LLC, formerly Allen & Company Incorporated, and has been employed by the firm since 1972. Mr. Senior serves on the board of directors of Grupo Televisa S.A. de C.V. and Coca Cola FEMSA S.A. de C.V. He has served as a financial advisor to several corporations including Coca-Cola Company, General Electric, CapCities/ABC, Columbia Pictures and QVC Networks. Mr. Senior was nominated by MDCP pursuant to the Director Nomination Agreement.
Mr. Seniors experience in financial advisory services has given him extensive knowledge of the film and entertainment and beverage industries. Mr. Seniors experience has brought key insight into these two critical components of the Companys business.
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Donald G. Soderquist
76
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Mr. Soderquist has served as a director since June 2007. Since 2001, he has been a speaker and business counselor for OnCourse, LLC, a financial planning and investment advisory firm. Mr. Soderquist was Senior Vice Chairman of Wal-Mart Stores, Inc., the worlds largest retailer, from January 1999 to August 2000. Prior to 1999, Mr. Soderquist was Vice Chairman and Chief Operating Officer of Wal-Mart Stores, Inc. Mr. Soderquists other affiliations include service on the board of directors of ARVEST Bank, John Brown University, NWA Community Foundation and the Salvation Army-National. Mr. Soderquist was nominated by MDCP pursuant to the Director Nomination Agreement.
As the lead independent director, Mr. Soderquist brings corporate governance expertise to the Board garnered through his leadership positions and board service with other entities. His experience and qualifications provide sound governance leadership to the Board.
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8
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Name
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Business Experience
|
Roger T. Staubach
68
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Mr. Staubach has served as a director since June 2007. Mr. Staubach is the Executive Chairman, Americas, of Jones Lang LaSalle, a financial and professional services firm specializing in real estate services and investment management. Prior to joining Jones Lang La Salle, Mr. Staubach was the Executive Chairman of The Staubach Company, a global commercial real estate strategy and services firm founded by him in 1982. Before establishing The Staubach Company, Mr. Staubach played professional football from 1969 to 1979 with the Dallas Cowboys and has been named Chairman of the Host Committee for Super Bowl XLV. Mr. Staubach currently serves on the board of directors of AMR Corporation. He is also involved with The Childrens Cancer Fund, the United States Naval Academy Foundation and numerous other civic, charitable and professional organizations. Mr. Staubach was nominated by MDCP pursuant to the Director Nomination Agreement.
Mr. Staubach brings significant experience to the Board as the founder of a successful, global, commercial real estate company. His leadership skills and extensive real estate knowledge provide expertise to the Board in this key component of the Companys operations.
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Continuing
Class II Directors
Term Expiring 2012
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Name
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Business Experience
|
Vahe A. Dombalagian
36
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Mr. Dombalagian has served as a director since April 2004 and is a member of the Nominating and Corporate Governance Committee and the Compensation Committee. Mr. Dombalagian is a Managing Director of MDP and has been employed by the firm since July 2001. Prior to joining MDP, Mr. Dombalagian was with Texas Pacific Group, a private equity firm and Bear, Stearns & Co., Inc. Mr. Dombalagian currently serves on the board of directors of L.A. Fitness International, LLC and Nuveen Investments, Inc. Mr. Dombalagian was nominated by MDCP pursuant to the Director Nomination Agreement.
Mr. Dombalagians experience in investment banking and private equity has provided significant contributions to the Board on investment and strategic planning in a volatile economic environment. As a Board member since 2004 and affiliate of the Companys largest stockholder, Mr. Dombalagian also advises the Board on stockholder relations.
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Peter R. Ezersky
49
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Mr. Ezersky has served as a director since December 2004 and is a member of the Audit Committee. Since 2000, Mr. Ezersky has been the Managing Principal of Quadrangle Group LLC (the Quadrangle Group), focused on the firms media and communications private equity business. Prior to the formation of the Quadrangle Group in March 2000, Mr. Ezersky was a Managing Director of Lazard Frères & Co. LLC and headed the firms worldwide Media and Communications Group. Mr. Ezersky currently serves on the board of directors of Dice Holdings, Inc. (compensation and nominating and corporate governance committees) and Protection One, Inc. (compensation and audit committees). Mr. Ezersky is a former nominee of the Quadrangle Investors pursuant to the Director Nomination Agreement.
Mr. Ezerskys career in private equity has given him knowledge of finance and the filmed entertainment creation and distribution business. His position as an affiliate of the Quadrangle Investors, a former stockholder of the Company, has also been valuable to the Board in the area of stockholder relations.
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9
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Name
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Business Experience
|
Carlos M. Sepulveda
52
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|
Mr. Sepulveda has served as a director since June 2007. Mr. Sepulveda has been the President and Chief Executive Officer of Interstate Battery System International, Inc. (Interstate Battery), a seller of automotive and commercial batteries, since March 2004 and was its Executive Vice President from 1995 until 2004. Prior to joining Interstate Battery, he was with the accounting firm of KPMG Peat Marwick in Austin, New York and San Francisco for 11 years. Mr. Sepulveda serves as chairman of our Audit Committee and is designated as the Audit Committee financial expert. Mr. Sepulveda was nominated by the Mitchell Investors.
Mr. Sepulvedas extensive public accounting background provides the Board invaluable financial and accounting expertise. As a certified public accountant with proven management skills, having served as the chief executive officer of a major corporation, Mr. Sepulveda brings to the Board strong accounting and financial oversight required for our financial reporting and enterprise and operational risk management.
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CORPORATE
GOVERNANCE
General
We are governed by our directors who, in turn, appoint executive
officers to manage our business operations. The Board oversees
our executive management on your behalf. The Board reviews our
long-term strategic plans and exercises oversight over all major
decisions, such as acquisitions, the declaration of dividends,
major capital expenditures and the establishment of Company
policies.
Board
Leadership Structure
Since December 2006, we have split the roles of Chairman of the
Board and Chief Executive Officer. Mr. Mitchell, the
founder of the Company, had been Chairman and Chief Executive
Officer since the Companys inception until December 2006,
when the Board deemed it to be in the best interest of the
Company to separate the two positions. Mr. Mitchell is
currently the executive Chairman of the Board and Mr. Alan
Stock is the Chief Executive Officer. The Board believes that
this structure is appropriate for the Company. As the founder of
the Company with more than 50 years of experience in the
movie exhibition industry, Mr. Mitchell is uniquely
positioned to lead the Board as well as to guide the
Companys management in its strategic planning
efforts. Mr. Stocks knowledge of the industry coupled
with his experience in managing the Company at various levels
for more than 20 years, makes him best suited to conduct
the
day-to-day
management and implement the strategic vision of the Board. In
addition to the separation of the two positions, the Board has a
lead independent director which role adequately addresses the
need for leadership of and an organizational structure for the
non-management directors. Our lead independent director presides
over executive sessions of the Board, serves as a liaison
between the non-management directors and the Chief Executive
Officer, plays a key role in overseeing performance evaluations
of the Board and is available for communication with our
stockholders.
Boards
Role in Risk Oversight
The Board discusses with management major risk factors relating
to the Company and its performance, and reviews measures to
address and mitigate such risks. The Board has oversight
responsibility of the processes established to identify, report
and mitigate material risks applicable to the Company. The Board
has delegated its oversight responsibility to the Audit
Committee with respect to financial and accounting risks. The
Audit Committee discusses with management the Companys
major financial risk exposures and the Companys risk
assessment and risk management policies. Management and the
independent registered public accounting firm provide to the
Audit Committee periodic assessments of the Companys risk
management
10
processes and system of internal control. The Audit Committee
Chair reports to the full Board regarding material risks as
deemed appropriate.
Director
Qualifications and Board Diversity
Our Corporate Governance Guidelines contain Board membership
criteria that apply to nominees for a position on our Board.
Pursuant to the Companys Corporate Governance Guidelines,
the Board seeks candidates of diverse background, education,
skills, age and expertise with a proven record of accomplishment
and the ability to work well with others. In addition, each
director must be able to direct the Company in the best
interests of the stockholders.
Nine of the ten Board members are nominated by our stockholders
pursuant to the Director Nomination Agreement. The Board
nominates the tenth member. The Nominating and Corporate
Governance Committee receives nominations from the stockholders
and the Board and evaluates nominees against the standards and
qualifications and diversity criteria set forth in the
Companys Corporate Governance Guidelines. The Nominating
and Corporate Governance Committee annually evaluates the
criteria for the selection of new directors and recommends any
proposed changes to the Board.
Candidates nominated for election or re-election to the Board
should possess the following qualifications:
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high personal and professional ethics, integrity, practical
wisdom, and mature judgment;
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broad training and experience at the policy-making level in
business, government, education, or technology;
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expertise that is useful to the Company and complementary to the
background and experience of other Board members;
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willingness to devote the required amount of time to carrying
out duties and responsibilities of Board membership;
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commitment to serve on the Board over a period of several years
to develop knowledge about the Companys principal
operations; and
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willingness to represent the best interests of all stockholders
and objectively appraise management performance.
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Director
Independence
Our Board has established an Audit Committee, a Compensation
Committee and a Nominating and Corporate Governance Committee
each of which is further described below. Based upon the review
of the Nominating and Corporate Governance Committee, the Board
has determined, in its business judgment, that (a) the
majority of the Board is independent, (b) each of
Messrs. Chereskin, Dombalagian, Ezersky, Rosenberg, Senior,
Sepulveda, Soderquist, and Staubach is independent within the
meaning of the rules of the NYSE director independence
standards, as currently in effect, (c) each of
Messrs. Ezersky, Rosenberg and Sepulveda meets all
applicable requirements of the SEC and NYSE for membership in
the Audit Committee and (d) Mr. Sepulveda is an
audit committee financial expert as such term is
defined in Item 407(d)(5)(ii) of
Regulation S-K
promulgated by the SEC and satisfies the NYSEs financial
experience requirements. For purposes of Board membership, the
Board affirmatively determined the independence of each member
of the Board based on the independence standards of the NYSE.
The bright-line tests for independence are whether the person:
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1.
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is or has been within the last 3 years an employee of the
Company or an immediate family member is, or has been within the
last three years, an executive officer of the Company;
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2.
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has received, or has an immediate family member who has
received, during any 12 month period within the last
3 years, more than $100,000 in direct compensation from the
Company (other than
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11
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director and committee fees and pension or other forms of
deferred compensation for prior service, provided such
compensation is not contingent in any way on continued service);
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3.
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(a) is or an immediate family member is a current partner
of a firm that is the Companys internal or external
auditor; (b) is a current employee of such firm;
(c) has an immediate family member who is a current
employee of such firm and who participates in the firms
audit, assurance or tax compliance (but not tax planning)
practice; or (d) is or an immediate family member was
within the last 3 years (but is no longer) a partner or
employee of such a firm and personally worked on the
Companys audit within that time;
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4.
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is or an immediate family member is, or has been within the last
3 years, employed as an executive officer of another
company where any of the Companys present executive
officers at the same time serves or has served on that
companys compensation committee; or
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5.
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is a current employee, or an immediate family member is a
current executive officer, of a company that has made payments
to, or received payments from, the Company for property or
services in an amount which, in any of the last 3 fiscal years,
exceeds the greater of $1 million, or 2% of such other
companys consolidated gross revenues.
|
Meetings
The Board held seven meetings and took action by written consent
on three occasions during the fiscal year ended
December 31, 2009. Each director attended at least
seventy-five percent (75%) of all meetings held by the Board and
all meetings held by committees of the Board on which such
director served.
All directors are strongly encouraged to attend the Annual
Meeting, but we do not have a formal attendance requirement. All
ten directors attended the 2009 annual meeting of stockholders
held in May 2009.
Executive
Sessions
Our non-management directors meet in executive sessions with no
Company employees present as a part of each regularly scheduled
Board meeting. Our independent directors meet at least once in
an executive session. The presiding director of the executive
sessions of non-management and independent directors is
currently Mr. Donald Soderquist.
Communications
with the Board
Any Company stockholder or other interested party who wishes to
communicate with the non-management directors as a group may
direct such communications by writing to the:
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.
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 items of
the following nature:
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advertising;
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promotions of a product or service;
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patently offensive material; and
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matters completely unrelated to the Boards functions,
Company performance, Company policies or that could not
reasonably be expected to affect the Companys public
perception.
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12
The Company Secretary will prepare a periodic summary report of
all such communications for the Board. Correspondence not
forwarded to the Board will be retained by the Company and will
be made available to any director upon request.
Corporate
Governance Policies and Charters
The following documents make up our corporate governance
framework:
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Third Amended and Restated Corporate Governance Guidelines
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Audit Committee Charter
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Amended and Restated Compensation Committee Charter
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Nominating and Corporate Governance Committee Charter
|
Current copies of the above policies and guidelines are
available publicly on the Companys Web site at
www.cinemark.com. You may also obtain copies of
the charters by written request to the Companys Secretary.
The Company has also adopted a Code of Business Conduct and
Ethics, which applies to directors, executive officers and
employees. The Code of Business Conduct and Ethics sets forth
the Companys policies on critical issues such as conflicts
of interest, insider trading, protection of our property,
business opportunities and proprietary information. Prompt
disclosure to stockholders will be made regarding any waiver of
the Code of Business Conduct and Ethics for executive officers
and directors approved by our Board or any committee thereof. A
copy of the Code of Business Conduct and Ethics is available on
our Web site at www.cinemark.com. We will post on our Web
site any amendments or waivers to the Code of Business Conduct
and Ethics.
13
BOARD
COMMITTEES
The Board has three principal standing committees, namely, a
Nominating and Corporate Governance Committee, an Audit
Committee and a Compensation Committee. The chart below
identifies the members of each of these committees as of the
date of this Proxy Statement:
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Nominating &
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Name of Director
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Audit
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Corporate Governance
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Compensation
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Benjamin D. Chereskin
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x*
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x*
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Vahe A. Dombalagian
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x
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x
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Peter R. Ezersky
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x
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Steven P. Rosenberg
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x
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Carlos M. Sepulveda
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x**
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* = Committee chairperson
**= Committee chairperson and financial expert
Nominating
and Corporate Governance Committee
The Nominating and Corporate Governance Committee is governed by
the Nominating and Corporate Governance Committee Charter
setting forth the purpose and responsibilities of this
committee. The Nominating and Corporate Governance Charter is
available on our Web site at www.cinemark.com.
Subject to the rights of certain stockholders to nominate
directors pursuant to the Director Nomination Agreement, the
principal responsibilities of the Nominating and Corporate
Governance Committee is to assist the Board in identifying
individuals qualified to serve as members of the Board, make
recommendations to the Board concerning committee appointments,
develop and recommend to the Board a set of corporate governance
principles for the Company and oversee the Boards annual
self-evaluation process and the Boards evaluation of
management.
Although the Board retains ultimate responsibility for approving
candidates for election, the Nominating and Corporate Governance
Committee conducts the initial screening and evaluation process.
In doing so, the Nominating and Corporate Governance Committee
considers candidates recommended by the directors, the Chief
Executive Officer and the Companys stockholders. This
Committee also has the authority, to the extent it deems
appropriate, to retain one or more search firms to be used to
identify director candidates.
To recommend a candidate for election to the Board for the 2011
annual meeting, a stockholder must submit the following
information to the Company Secretary no later than 90 and no
earlier than 120 days in advance of the anniversary date of
this Annual Meeting:
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the name and address of the stockholder of record and the
beneficial owner, if any, on whose behalf the proposal is made;
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a representation that the stockholder intends to appear in
person or by proxy at the annual meeting;
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the number of shares of capital stock of the Company that are
owned beneficially and of record by such stockholder and the
beneficial owner, if any, on whose behalf the nomination is made;
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a description of any arrangements or understandings between the
stockholder, the beneficial owner and the director nominee or
any other person (including their names);
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the name, age, business and residential addresses of the
stockholders nominee for director;
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the biographical and other information about the nominee
(including the number of shares of capital stock of the Company
owned beneficially or of record by the nominee) that would be
required to be included in a proxy statement filed pursuant to
the proxy rules of the SEC; and
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14
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the nominees consent to be named as a nominee and to serve
on the Board.
|
Candidates recommended by stockholders will be evaluated under
the same process as candidates recommended by existing directors
and the Chief Executive Officer.
As provided in the Companys Third Amended and Restated
Corporate Governance Guidelines, director nominees will be
selected based on, among other things, consideration of the
following factors:
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wisdom and integrity;
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experience;
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skills in understanding finance and marketing;
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educational and professional background; and
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sufficient time to devote to the affairs of the Company.
|
In considering whether to nominate directors who are eligible to
stand for election or re-election, the Nominating and Corporate
Governance Committee considers the directors personal and
professional ethics, integrity, practical wisdom, judgment,
training and expertise that will be useful to the Company and
complementary to the background and experience of other Board
members, willingness to devote required amount of time to carry
out Board responsibilities, commitment to serve on the Board for
several years to develop knowledge about the Company,
willingness to represent the interest of all stockholders and
objectively appraise management performance.
The Nominating and Corporate Governance Committee took action by
written consent on one occasion during 2009.
Audit
Committee
Each of the Audit Committee members satisfies the standards for
independence of the NYSE and the SEC as they relate to audit
committees. 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
Regulation S-K
promulgated by the SEC.
The Audit Committee is governed by the Audit Committee Charter
setting forth the purpose and responsibilities of this
committee. The Audit Committee Charter is available on our Web
site at www.cinemark.com.
The functions of the Audit Committee include the following:
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assist 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 system of internal controls regarding
finance and accounting and (4) our accounting, auditing and
financial reporting processes generally, including the
qualifications, independence and performance of the independent
registered public accountants;
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prepare the report required by the SEC for inclusion in our
annual proxy or information statement;
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appoint, retain, compensate, evaluate and replace our
independent registered public accountants;
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approve audit and non-audit services to be performed by the
independent registered public accountants;
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establish procedures for the receipt, retention and treatment of
complaints received by our Company regarding accounting,
internal accounting controls or auditing matters, and the
confidential, anonymous submission by employees of concerns
regarding questionable accounting or auditing matters; and
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perform such other functions as the Board may from time to time
assign to the Audit Committee.
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15
The Audit Committee held four meetings and took action by
written consent on one occasion during 2009.
Approval
of Audit and Non-Audit Services
The Audit Committee approves all audit and permissible non-audit
services (including the fees and terms of the services)
performed for the Company by its independent registered public
accountants prior to the time that those services are commenced.
The Audit Committee may, when it deems appropriate, form and
delegate this authority to a subcommittee consisting of one or
more Audit Committee members, including the authority to grant
pre-approvals of audit and permitted non-audit services. The
decisions of such subcommittee is presented to the full Audit
Committee at its next meeting.
The Audit Committee pre-approved all fees for 2009 noted in the
table below:
Fees Paid
to Independent Registered Public Accounting Firm
We expensed the following fees to Deloitte & Touche,
LLP for professional and other services rendered by them during
fiscal years ended 2009 and 2008, respectively:
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Fees
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2009
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2008
|
Audit
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$
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2,317,500
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$
|
2,002,000
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Audit Related
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$
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62,000(2)
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$
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46,000(1)
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Tax
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$
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269,000(3)
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$
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222,000(3)
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Other
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-
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$
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10,000(4)
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Total
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$
|
2,648,500
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$
|
2,280,000
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(1) |
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Fees primarily include review of
Form S-8
and review of responses to SEC comment letter.
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(2) |
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Fees primarily related to review of
accounting for Digital Cinema Implementation Partners.
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(3) |
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Fees primarily include transfer
pricing studies and tax compliance services.
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(4) |
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Fees primarily include subscription
to technical accounting library.
|
Audit
Committee Report
During its February 23, 2010 meeting, the Audit Committee
reviewed with Company management, Deloitte & Touche,
LLP and the Companys disclosure committee the results of
the 2009 audit. The Audit Committee reviewed the requirements of
the Audit Committee Charter previously adopted and the reports
required to be disclosed to the Audit Committee. The Audit
Committee discussed with Deloitte & Touche, LLP the
matters required to be discussed by Statement on Auditing
Standards No. 61, as amended (AICPA, Professional
Standards, Vol. 1. AU section 380), as adopted by the
Public Company Accounting Oversight Board
(PCAOB) in Rule 3200T . The
Deloitte & Touche, LLP representatives reviewed the
written disclosures required by the applicable requirements of
the PCAOB regarding the independent accountants
communications with the Audit Committee regarding independence
and presented their Report on Auditor Independence to the Audit
Committee. The Audit Committee has considered the level of
non-audit services provided by Deloitte & Touche, LLP
during 2009 in consideration of auditor independence. As part of
its deliberations, the Audit Committee determined that
Deloitte & Touche, LLP was independent of the Company.
During its February 23, 2010 meeting, the Audit Committee
also reviewed and discussed with management and
Deloitte & Touche, LLP, a draft of the
Form 10-K
and the audited financial statements for the year ended
December 31, 2009 which had been provided to the Audit
Committee in advance of the meeting. Management has the
responsibility for the preparation of the financial statements
and the reporting process, including the systems of internal
control over financial reporting and disclosure controls and
procedures. The external auditor is responsible for examining
the financial statements and expressing an opinion on the
conformity of the audited financial statements with accounting
principles generally accepted in the United States of America.
Based on its review of all of the above and on discussions with
management
16
and the external auditor, the Audit Committee recommended to the
Board that the Companys audited financial statements be
included in the Annual Report on
Form 10-K
for the year ended December 31, 2009 for filing with the
SEC.
Respectfully submitted,
Carlos M. Sepulveda (Chairman)
Steven P. Rosenberg
Peter R. Ezersky
Compensation
Committee
Each of the Compensation Committee members qualify as
outside directors within the meaning of
Section 162(m) of the Internal Revenue Code of 1986, as
amended (the Code), and
non-employee directors within the meaning of
Rule 16b-3
promulgated under Section 16 of the Securities Exchange Act
of 1934, as amended (the Exchange
Act). The Compensation Committee is governed by
the Amended and Restated Compensation Committee Charter setting
forth the purpose and responsibilities of this committee. The
Amended and Restated Compensation Committee Charter is available
on our Web site at www.cinemark.com.
The functions of the Compensation Committee are primarily to
establish the Companys compensation policy, set base
salaries of our executive officers and review, approve and
administer (to the extent such authority is delegated to the
Compensation Committee by the Board) the Companys bonus
and long term equity incentive compensation plans for all
eligible employees. In determining the compensation of our
executive officers, the Compensation Committee has the authority
under the Amended and Restated Compensation Committee Charter,
to the extent it deems appropriate, to retain one or more
consultants to assist in the evaluation of the Chief Executive
Officer and executive compensation. The Compensation Committee
also has the right to receive information it deems pertinent
from management, employees, outside counsel and other advisers
as the Compensation Committee may request. However, none of our
executives are involved in the Compensation Committees
determination of their own compensation. In 2009, the Company
engaged an outside compensation consultant,
Longnecker & Associates, to review and make
recommendations to our executive compensation program. Certain
elements of our executive compensation for fiscal year 2009 have
been developed, based in part, on such recommendations. The
Compensation Committee has the authority to delegate any of its
responsibilities to one or more
sub-committees
as the Compensation Committee may from time to time deem
appropriate. The Compensation Committee reviewed and discussed
the Compensation Discussion and Analysis contained in this proxy
statement with our management and upon such review and
discussion recommended to the Board that the Compensation
Discussion and Analysis be included in this proxy statement.
The Compensation Committee took action by written consent on six
occasions during 2009.
17
EXECUTIVE
OFFICERS
Executive
Officers
Set forth below is the name, age, position and a brief account
of the business experience of our executive officers and certain
other officers:
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Name
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Age
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Position
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Lee Roy Mitchell
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73
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Chairman of the Board; Director
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Alan W. Stock
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49
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Chief Executive Officer
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Timothy Warner
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65
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President; Chief Operating Officer
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Robert Copple
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51
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Executive Vice President; Treasurer; Chief Financial Officer;
Assistant Secretary
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Robert Carmony
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52
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Senior Vice President-New Technology and Training
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Michael Cavalier
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43
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Senior Vice President-General Counsel and Secretary;
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Walter Hebert, III
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64
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Senior Vice President-Purchasing
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Tom Owens
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53
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Senior Vice President-Real Estate
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Steve Bunnell
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50
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Senior Vice President-Film Licensing
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Don Harton
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52
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Vice President-Construction
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James Meredith
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41
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Vice President-Marketing and Communications
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Steve Zuehlke
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51
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Vice President-Director of Theatre Operations
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Valmir Fernandes
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49
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President-Cinemark International L.L.C.
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Lee Roy Mitchell has served as Chairman of the Board
since March 1996 and as a director since our inception in 1987.
Mr. Mitchell served as our Chief Executive Officer from our
inception until December 2006. Mr. Mitchell was Vice
Chairman of the Board from March 1993 until March 1996 and was
President from our inception in 1987 until March 1993. From 1985
until 1987, Mr. Mitchell served as President and Chief
Executive Officer of a predecessor corporation.
Mr. Mitchell currently serves on the board of directors of
Texas Capital Bancshares, Inc. and National CineMedia, Inc.
Mr. Mitchell is also on the board of directors of the
National Association of Theatre Owners, Champions for Life and
Dallas County Community College. Mr. Mitchell has been
engaged in the motion picture exhibition business for over
50 years. Mr. Mitchell is the
brother-in-law
of Walter Hebert, III.
Alan W. Stock has served as Chief Executive Officer since
December 2006. Mr. Stock served as President from March
1993 until December 2006 and as Chief Operating Officer from
March 1992 until December 2006. Mr. Stock also served as a
director from April 1992 until April 2004. Mr. Stock was
Senior Vice President from June 1989 until March 1993.
Timothy Warner has served as President and Chief
Operating Officer since December 2006. Mr. Warner served as
Senior Vice President from May 2002 until December 2006 and
President of Cinemark International, L.L.C. from August 1996
until December 2006.
Robert Copple has served as Executive Vice President
since January 2007 and as Senior Vice President, Treasurer,
Chief Financial Officer and Assistant Secretary since August
2000 and also served as a director from September 2001 until
April 2004. Mr. Copple was acting Chief Financial Officer
from March 2000 until August 2000. From August 1997 until March
2000, Mr. Copple was President of PBA Development, Inc., an
investment management and venture capital company controlled by
Mr. Mitchell. From June 1993 until July 1997,
Mr. Copple was Director of Finance of our company. Prior to
joining our Company, Mr. Copple was a Senior Manager with
Deloitte & Touche, LLP where he was employed from 1982
until 1993.
Robert Carmony has served as Senior Vice President-New
Technology and Training since May 2007, Senior Vice
President-Operations from July 1997 to May 2007, Vice
President-Operations from March 1996 until July 1997 and as
Director of Operations from June 1988 until March 1996.
18
Michael Cavalier has served as Senior Vice
President-General Counsel since January 2006, as Vice
President-General Counsel since August 1999, as Assistant
Secretary from May 2001 until December 2003 and as Secretary
since December 2003. From July 1997 until July 1999,
Mr. Cavalier was General Counsel of our Company and from
July 1993 until July 1997 was Associate General Counsel.
Walter Hebert, III has served as Senior Vice
President-Purchasing since January 2007 and as Vice
President-Purchasing and Special Projects since July 1997 and
was the Director of Purchasing from October 1996 until July
1997. From December 1995 until October 1996, Mr. Hebert was
the President of 2 Day Video, Inc., a 21-store video chain that
was our subsidiary. Mr. Hebert is the
brother-in-law
of Lee Roy Mitchell.
Tom Owens has served as Senior Vice President-Real Estate
since January 2007 and as Vice President-Development since
December 2003 and as Director of Real Estate since April 2002.
From 1998 until April 2001, Mr. Owens was President of NRE,
a company he founded that specialized in the development and
financing of motion picture theatres. From 1996 until 1998,
Mr. Owens served as President of Silver Cinemas
International, Inc., a motion picture exhibitor. From 1993 until
1996, Mr. Owens served as our Vice President-Development.
Steve Bunnell has served as Senior Vice President-Film
Licensing since May 2009. From March 2006 until May 2009,
Mr. Bunnell was the Chairman of Distribution of The
Weinstein Company, an independent film studio. From May 1993
until February 2006, Mr. Bunnell was the Senior Vice
President and Head Film Buyer of Loews Cineplex Entertainment,
the oldest theatre chain in North America until its merger with
AMC Entertainment in 2006.
Don Harton has served as Vice President-Construction
since July 1997. From August 1996 until July 1997,
Mr. Harton was Director of Construction.
James Meredith has served as Vice President-Marketing and
Communications since January 2008. From 1997 to January 2008,
Mr. Meredith served as Director of Marketing and
Communications for our international operations.
Steve Zuehlke has served as Vice
President-Director
of Theatre Operations since February 2007. From September 1992
to February 2007, Mr. Zuehlke was Director of Operations
for our international operations and was a Regional Manager from
1988 to September 1992.
Valmir Fernandes has served as President of Cinemark
International since March 2007. From 1996 until March 2007,
Mr. Fernandes was the general manager of Cinemark Brasil
S.A.
EXECUTIVE
COMPENSATION
COMPENSATION
DISCUSSION AND ANALYSIS
Goals and
Objectives of Our Executive Compensation Program
The Compensation Committee is responsible for establishing the
Companys compensation policy, setting base salaries for
executive officers and reviewing and approving the
Companys bonus plan and long term equity incentive
compensation for all eligible employees. In so doing, the
Compensation Committee has the responsibility to develop,
implement, and manage compensation policies and programs that
have the following goals:
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enhance our long term competitive advantage and sustainable
profitability, thereby contributing to the value of our
stockholders investment;
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align the executives and stockholders interest;
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attract, motivate, reward and retain high performance
executives; and
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support the Companys business strategy by defining
specific business criteria and performance targets for
executives and appropriately rewarding achievement of these
targets.
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19
Components
of Compensation
Our executive compensation program currently consists primarily
of:
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annual base salaries;
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annual performance-based cash incentive payments; and
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long term equity incentive compensation.
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These elements of compensation promote the objectives of our
compensation philosophy. Base salary provides minimum levels of
compensation that help attract and retain qualified executives.
Performance based bonuses reward achievements of specified
business criteria and performance targets important to
fulfilling the Companys strategic goals. Long term equity
incentive compensation aligns an executives compensation
with the creation of long term stockholder value and assists in
retaining qualified executives.
The Compensation Committee is responsible for:
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determining the compensation for each of the named executive
officers, and reviews, evaluates and oversees the Companys
compensation program;
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determining the compensation for the other executive officers
and other senior officers it deems appropriate;
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establishing certain business criteria and performance targets
relevant to compensation for the Chief Executive Officer and
other executive officers and evaluating their performance
against such business criteria and performance targets; and
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approving the grant of all equity based compensation.
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In fulfilling these responsibilities, the Compensation Committee
establishes the compensation of the Chief Executive Officer
without management input, but may be assisted in this
determination by outside compensation consultants. In
establishing the compensation for the other executive officers,
the Compensation Committee may consider the recommendations of
the Chief Executive Officer and input received from a
compensation consultant. The Compensation Committee advises the
Board of its determination prior to implementation of annual
bonus and equity based awards for the named executive officers
and other executive officers it deems appropriate. While the
Compensation Committee may consider input provided by the Board,
the decisions regarding performance-based cash incentive
compensation and long term equity incentive compensation are
made solely by the Compensation Committee.
The Chief Executive Officer conducts an annual review of the
aggregate level of our executive compensation as part of our
annual budget review and annual performance review. The review
considers financial and non-financial criteria to measure our
performance against internal goals and the performance of
comparable companies in the theatrical exhibition industry.
Annually, the Chief Executive Officer provides recommendations
to the Compensation Committee for specific levels of base
salary, target levels for annual performance-based cash
incentive payments and long-term equity based compensation for
the executive officers (other than for the Chief Executive
Officer). Management also provides data with respect to the
competitive market for executives and compensation levels
provided by comparable companies, the compensation practices of
companies in the theatrical exhibition industry and companies of
comparable size and financial performance with whom we may
compete for talent. In 2007, the Companys management, with
the approval of the Compensation Committee, engaged an outside
compensation consultant, Longnecker & Associates,
which reviewed and made recommendations to our executive
compensation program. Certain elements of our executive
compensation program for 2009 were based in part on such
recommendations. The consultant is independent of management and
provides data (including data provided by management) to the
Compensation Committee for review and determination of
compensation of individual executive officers. The consultant
was re-engaged by the Company to make recommendations regarding
the 2009 compensation levels of the executive officers. For the
2009 fiscal year, as in previous years, management provided
comparable compensation data from SEC filings for a peer group
of companies, namely, AMC Entertainment, Inc., Regal
Entertainment Group, Inc., Carmike Cinemas, Inc. and IMAX
Corporation. The Compensation Committee
20
believes, based upon its experience and knowledge, that the
executive compensation program discussed herein provides the
best method to achieve our goal of attracting, retaining and
motivating key executive personnel.
Base Salary
The Compensation Committee seeks to keep base salary competitive
and to establish the minimum levels of compensation that helps
attract and retain qualified executives. Base salaries for the
Chief Executive Officer and the other executive officers are
determined by the Compensation Committee based on a variety of
factors including:
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nature and responsibility of the position;
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expertise of the individual executive;
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competitiveness of the market for the executives services;
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potential for driving the Companys success in the future;
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peer data;
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the performance reviews and recommendations of the Chief
Executive Officer (except in the case of his own
compensation); and
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other judgmental factors deemed relevant by the Compensation
Committee such as recommendations of the compensation consultant.
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The Compensation Committee has not adopted any formula with
specific weightings assigned to any of the factors above. For
the 2009 fiscal year, annual base salaries were reviewed during
the fourth quarter of 2008. Following this review, for 2009,
base salaries for our named executive officers increased 1% over
their respective 2008 base salaries.
Annual Performance-Based Cash Incentive Compensation
In setting compensation, the Compensation Committee considers
annual cash incentives based on Company performance to be an
important tool in motivating and rewarding the performance of
our executive officers. Performance-based cash incentive
compensation is paid to our executive officers pursuant to our
Cinemark Holdings, Inc. Performance Bonus Plan (the
Bonus Plan) to align executive pay
with the financial performance of the Company. Under the Bonus
Plan, during the first quarter of the fiscal year, the
Compensation Committee establishes objective business criteria
and performance factors for the Company for the fiscal year and
based upon the performance of the Company during the fiscal
year, the Compensation Committee awards cash bonuses to the
Bonus Plan participants prior to the end of the first quarter of
the following fiscal year. The objective of the Bonus Plan is to
make cash bonus payments annually to individuals based on the
achievement of specific objective annual performance factors or
business criteria that contributes to the growth, profitability
and increased value of the Company.
The bonus process for the named executive officers under the
Bonus Plan involves the following steps:
(1) Setting a Target Bonus. During the
first quarter of the fiscal year, the Compensation Committee
approves the target bonus amount for each named executive
officer. The target bonus amount may take into account all
factors deemed relevant by the Compensation Committee, including
recommendations from the chief executive officer (except for
target bonus amounts for the Chief Executive Officer). The
Compensation Committee also approves the maximum bonus that a
named executive officer is entitled to receive. The maximum
bonus amount will not exceed 200% of such named executive
officers annual base salary at the time the target bonus
is determined.
(2) Setting the Performance
Factors. During the first quarter of each fiscal year,
the Compensation Committee establishes the performance factors
for the Company and the executive officers. Performance factors
may include by way of example but not limitation, any or all of
the following: revenue; net sales; operating income; earnings
before all or any of interest, taxes, depreciation
and/or
amortization (EBIT, EBITA, or
EBITDA); Adjusted EBITDA; Adjusted EBITDA Margin;
cash flow; working capital and
21
components thereof; return on equity or average
stockholders equity; return on assets; market share; sales
(net or gross) measured by product line, territory, customer(s),
or other category; stock price; earnings per share; earnings
from continuing operations; net worth; credit rating; levels of
expense, cost or liability by category, operating unit or any
other delineation; any increase or decrease of one or more of
the foregoing over a specified period; or implementation or
completion of critical projects. With respect to certain
participants who are not named executive officers, these targets
may also include such objective or subjective performance goals
as the Compensation Committee may, from time to time, establish.
(3) Measuring Performance. Prior to
making any payments under the Bonus Plan, the Compensation
Committee will certify whether the applicable performance
factors were attained. In reaching its conclusions, the
Compensation Committee will make certain adjustments as
specified in the Bonus Plan. Such adjustments include but are
not limited to issues such as changes in accounting principles,
extraordinary, unusual or non-recurring events that were not
included in the operating budget for the performance period
(such as the disposition of a theatre or theatres or the
cessation of operation of a theatre as a result of a natural
disaster).
In March 2009, the Compensation Committee established
performance criteria, performance targets and awards for our
named executive officers for the 2009 fiscal year under the
terms of the Bonus Plan. The 2009 awards provide for the payment
of bonus compensation based on the achievement of Adjusted
EBITDA financial metrics, which we believe reflect the effective
implementation of the Companys business plan and
objectives in a manner that will be beneficial to stockholders
and to the long-term financial health and development of our
business. Each performance target under the 2009 awards had a
threshold, target and maximum level of payment opportunity.
Messers. Mitchell and Stock had a target opportunity of 100% of
their individual 2009 base salary and Messers. Warner, Copple
and Cavalier had a target opportunity of 75% of their individual
2009 base salary. The threshold opportunity for each of Messers.
Mitchell, Stock, Warner, Copple and Cavalier was 33.3%, with the
maximum payment opportunity equal to 133.3%, of the
individuals target opportunity. Each named executive
officer was entitled to receive a ratable portion of his target
bonus if we achieved Adjusted EBITDA within the specified
parameters. The actual amount of bonuses paid, if any, may
result in a bonus that is greater or less than the stated target
(and could be zero) depending on whether, and to what extent,
the applicable performance and other conditions are satisfied.
In February 2010, based on the Adjusted EBITDA target achieved
by the Company, the Compensation Committee determined the cash
incentive bonus for each of the named executive officers. The
percentage at which the bonus was awarded was 133.3% of the
target bonus for each named executive officer. The Adjusted
EBITDA target for purposes of the Bonus Plan for 2009, before
payment of bonuses, was set by the Compensation Committee at
$365.7 million. The Adjusted EBITDA target achieved by the
Company for purposes of the Bonus Plan in 2009 was
$452.7 million. The reported Adjusted EBITDA was
$445.5 million after adjustment for payment of bonuses of
$7.2 million. The amount of the cash bonus paid on
February 25, 2010, to each of Messers. Mitchell, Stock,
Warner, Copple and Cavalier under the Bonus Plan for the 2009
fiscal year are as follows:
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Name
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Bonus Amount
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Lee Roy Mitchell
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$
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1,069,948
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Alan W. Stock
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$
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812,309
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Tim Warner
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$
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446,420
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Robert Copple
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$
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420,160
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Michael Cavalier
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$
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341,380
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Long Term Equity Incentive Compensation
We believe that long-term performance is achieved through an
ownership culture that encourages such performance by our
executive officers through the use of stock and stock-based
awards and aligns the employees interests with the
interests of our stockholders. In addition, we believe we must
be able to attract and retain highly qualified executive
officers as leaders to ensure our success and that long term
equity incentive compensation is a key factor to attract and
retain such officers.
22
Our long term equity incentive compensation under the Amended
and Restated Cinemark Holdings, Inc. 2006 Long Term Incentive
Plan (the Restated Plan), permits the
Compensation Committee to grant stock options, restricted stock,
restricted stock units, performance awards in the form of
restricted stock or restricted stock units or a mix of any such
type of award. Stock options, restricted stock awards and
restricted stock unit reward participants in slightly different
ways as measured against increases in stockholder value. Stock
options are issued with an exercise price equal to the fair
market value of the Companys Common Stock on the date of
grant. Accordingly, a recipient of stock options is rewarded
only if the stock price increases after the dates of grant.
Restricted stock and restricted stock units are impacted by
increases or decreases of stock price from the market price at
the date of grant.
No stock options were granted to any employee in 2009. Pursuant
to the Restated Plan, restricted stock and performance awards in
the form of restricted stock units were granted to eligible
employees, including named executive officers, before the end of
the first quarter of 2009. The grants of restricted stock and
restricted stock units based performance awards were at a higher
percentage of total compensation for the named executive
officers compared to the other executive officers.
Restricted Stock. Restricted stock granted under the
Restated Plan is subject to a time based vesting condition.
Annual grants of restricted stock to the executive officers may
be based upon a percentage of such executives annual base
salary. Recipients of restricted stock are permitted to
(i) receive dividends on the restricted stock 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. Periodic grants of restricted stock can be made to
eligible employees at the discretion of the Compensation
Committee.
The restricted stock granted to the executive officers in 2009
generally vest 50% on each of the second and fourth anniversary
of the grant date provided, the executive is continuously
employed with the Company through the vest dates.
Performance Awards. Performance awards can be
granted in the form of restricted stock or restricted stock
units. Performance awards entitle recipients to vest in or
acquire shares of Common Stock upon the attainment of specified
performance goals established by the Compensation Committee. The
performance awards and performance goals are based on one or
more pre-established objective criteria that specify the number
of shares of Common Stock under the performance award that will
be granted (if performance award is in the form of restricted
stock unit) or will vest (if performance award is in the form of
restricted stock) if the performance goal is attained. During
the first quarter of a fiscal year, the Compensation Committee
approves the performance goal for each performance award. Common
stock received upon attainment of the performance goals under a
restricted stock unit based performance award may be subject to
additional time based vesting conditions. Any dividends that are
attributable to the underlying Common Stock relating to a
restricted stock unit based performance award will be payable to
the recipient when the established vesting conditions are
satisfied.
In 2009, as in 2008, the performance awards were awarded in the
form of restricted stock units. The total number of shares of
Common Stock that may be awarded pursuant to the performance
share agreement is based on an implied equity value concept that
determines an internal rate of return during a three fiscal year
period (the Performance Period) based
on a formula utilizing a multiple of Adjusted EBITDA (subject to
certain specified adjustments). Each performance target
underlying the performance awards has a threshold, target and
maximum level of payment opportunity, with the maximum payment
opportunity equal to 150% of the individuals target
opportunity based upon an internal rate of return during such
three year period (IRR). The targets
were established in writing by the Compensation Committee. The
number of shares of Common Stock an executive may receive on the
attainment of a performance goal cannot be determined at the
date of grant because the payment of such compensation is
contingent upon attainment of pre-established goals and the
actual compensation to be paid to an executive officer may
reflect the Compensation Committees discretion to reduce
the incentive compensation.
23
The following table sets forth the various IRR percentages and
the number of corresponding restricted stock units underlying
the performance awards that would be earned by eligible
participants:
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IRR
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Performance Shares
Issuable
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IRR equal to 8.5% but less than 10.5%
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331/3%
of the maximum performance shares issuable
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IRR equal to 10.5% but less than 12.5%
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662/3%
of the maximum performance shares issuable
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IRR equal to or greater than 12.5%
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100% of the maximum performance shares issuable
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The shares of Common Stock each executive officer receives upon
attainment of the specified performance targets are subject to
further service based vesting for a period of one year beyond
the calculation date. Based on the above performance share plan,
restricted stock units were granted to each of the named
executive officers in the first quarter of 2009. See Grants
of Plan-Based Awards table.
Perquisites
With limited exceptions, the Compensation Committees
policy is to provide benefits and perquisites to our named
executive officers that are substantially the same as those
offered to our other employees at or above the level of vice
president. The benefits and perquisites that may be available in
addition to those available to our other employees include life
insurance premiums and long term disability insurance.
401(k)
Plan
We sponsor a defined contribution savings plan, or 401(k) Plan,
whereby certain employees may elect to contribute, in whole
percentages between 1% and 50% of such employees
compensation, provided no employees elective contribution
shall exceed the amount permitted under Section 402(g) of
the Code ($16,500 for 2009, $15,500 for 2008 and $15,500 for
2007). We may make an annual discretionary matching contribution
up to a maximum of 6% of the employees annual contribution
to the 401(k) Plan. In 2009, our annual discretionary matching
contribution was 100% up to 3% and 75% for the remaining 3% of
the employees contribution. For plan years beginning in
2002, our discretionary matching contributions immediately vest.
Compensation
Committee Report
The Compensation Committee has reviewed and discussed the
Compensation Discussion and Analysis required by
Item 402(b) of
Regulation S-K
with management and, based on such review and discussion, the
Compensation Committee recommended to the Board that the
Compensation Discussion and Analysis be included in this proxy
statement and incorporated by reference in our annual report on
Form 10-K
for the 2009 fiscal year, and the Board has approved the
recommendation.
Respectfully submitted,
Benjamin D. Chereskin (Chairman)
Vahe A. Dombalagian
Summary
of Compensation and Employment Agreements for our Named
Executive Officers
In 2008, we entered into new employment agreements (the
New Employment Agreements) with Lee
Roy Mitchell, Alan W. Stock, Timothy Warner, Robert Copple and
Michael Cavalier. Each of Messers. Mitchell, Stock, Warner,
Copple and Cavalier had an employment agreement with our
principal subsidiary, Cinemark, Inc. which became effective as
of March 12, 2004 (the Original Employment
Agreements). The Old Employment Agreements were
negotiated directly between the executives and MDP, and the
forms of employment agreements were agreed upon in connection
with the acquisition of 83% of our capital stock by MDP. In line
with our compensation philosophy, the Company entered into the
New Employment Agreements to more closely align our executives
with market competitive compensation standards and agreements.
In approving the New Employment Agreements, the Compensation
Committee compared the employment
24
agreements for similarly situated executives at Regal
Entertainment Group, Inc., AMC Entertainment, Inc. and National
CineMedia, Inc. The New Employment Agreements replace the
Original Employment Agreements. A summary of each New Employment
Agreement is below:
Lee
Roy Mitchell
The initial term of the employment agreement is three years,
ending on December 14, 2011, subject to an automatic
extension for a one-year period, unless the employment agreement
is terminated. Mr. Mitchell received a base salary of
$802,461 during 2009, which is subject to annual review for
increase (but not decrease) each year by our Compensation
Committee. In addition, Mr. Mitchell is eligible to receive
an annual cash incentive bonus upon our meeting certain
performance targets established by our Compensation Committee
for the fiscal year. Mr. Mitchell qualifies for our 401(k)
matching program and is also entitled to certain additional
benefits including life insurance benefits of not less than
$5 million, disability benefits of not less than 66% of
base salary, a luxury automobile and a membership at a country
club. In 2009, Mr. Mitchell did not use a luxury automobile
or have a country club membership paid for by the Company.
The employment agreement provides for severance payments upon
termination of his employment, the amount and nature of which
depends upon the reason for the termination of employment. If
Mr. Mitchell resigns for good reason (as defined in the
agreement) or is terminated by us without cause,
Mr. Mitchell will receive, in a lump sum, subject to
applicable Section 409A requirements: accrued compensation
(which includes base salary and a pro rata bonus) through the
date of termination; vacation pay and any vested equity awards
and benefits such as retirement benefits, in accordance with the
terms of the plan or agreement pursuant to which such equity
awards or benefits were granted to Mr. Mitchell; an amount
equal to Mr. Mitchells annual base salary in effect
as of the date of such termination and an amount equal to the
most recent annual bonus he received prior to the date of
termination payable within 30 days of the end of the
current fiscal year. Mr. Mitchell and his dependants will
also be entitled to continue to participate in the
Companys welfare benefit plans and insurance programs for
twelve (12) months from the termination date.
In the event Mr. Mitchells employment is terminated
due to his death or disability, Mr. Mitchell or his estate
will receive, in a lump sum: accrued compensation (which
includes base salary and a pro rata bonus) through the date of
termination; vacation pay and any vested equity awards and
benefits such as retirement benefits, in accordance with the
terms of the plan or agreement pursuant to which such equity
awards or benefits were granted to Mr. Mitchell; an amount
equal to Mr. Mitchells annual base salary in effect
at the time of termination, provided, in the case of disability,
such amount shall be offset by the amount of base salary paid by
the Company to Mr. Mitchell or his representative following
the date he was first unable to substantially perform his duties
under his employment agreement through the date of termination
and any benefits payable to Mr. Mitchell
and/or his
beneficiaries in accordance with the terms of any applicable
benefit plan. Mr. Mitchell
and/or his
dependants will be entitled to continue to participate in the
Companys welfare benefit plans and insurance programs for
twelve (12) months from the termination date.
In the event Mr. Mitchells employment is terminated
by us for cause or under a voluntary termination (as defined in
the agreement), Mr. Mitchell will receive accrued base
salary through the date of termination and any previously vested
rights under a stock option or similar incentive compensation
plan in accordance with the terms of such plan.
Unless Mr. Mitchells employment is terminated by us
for cause or under a voluntary termination, Mr. Mitchell
will also be entitled, for a period of five years, to tax
preparation assistance upon termination of his employment. The
employment agreement contains various covenants, including
covenants related to confidentiality, non-competition (other
than certain permitted activities as defined therein) and
non-solicitation. Additional information on amounts payable had
a termination for good reason, a change of control, death or
disability occurred on December 31, 2009 may be found
under the heading Potential Payments Upon
Termination by us Without Cause or by Executive for Good
Reason, Potential Payments Upon Termination
due to Change of Control and Potential
Payments Upon Death or Disability.
25
Alan
Stock
The initial term of the employment agreement is three years,
ending on June 16, 2011, subject to an automatic extension
for a one-year period, unless the employment agreement is
terminated. Mr. Stock received a base salary of $609,232
during 2009, which is subject to review during the term of the
employment agreement for increase (but not decrease) each year
by our Compensation Committee. In addition, Mr. Stock is
eligible to receive an annual cash incentive bonus upon our
meeting certain performance targets established by our
Compensation Committee for the fiscal year. Mr. Stock
qualifies for our 401(k) matching program and is also entitled
to certain additional benefits including life insurance and
disability insurance. Mr. Stocks employment agreement
provides for severance payments upon termination of his
employment, the amount and nature of which depends upon the
reason for the termination of employment.
If Mr. Stock resigns for good reason (as defined in the
agreement) or without cause, Mr. Stock will receive:
accrued compensation (which includes base salary and a pro rata
bonus) through the date of termination, vacation pay and any
vested equity awards and benefits such as retirement benefits,
in accordance with the terms of the plan or agreement pursuant
to which such equity awards or benefits were granted to
Mr. Stock; two times his annual base salary as in effect at
the time of termination for a period of twenty-four
(24) months following such termination, subject to
applicable Section 409A requirements; Mr. Stocks
outstanding stock options will become fully vested and
exercisable upon such termination or resignation; equity awards
other than stock options with time vesting provisions shall
become vested on a pro rata basis and equity awards other than
stock options with performance based vesting provisions shall
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 shall become vested without any regard to any
continued employment requirement on a pro rata basis.
In the event Mr. Stocks employment is terminated due
to his death or disability, Mr. Stock or his estate will
receive: accrued compensation (which includes base salary and a
pro rata bonus) through the date of termination; any previously
vested stock options and accrued benefits, such as retirement
benefits, in accordance with the terms of the plan or agreement
pursuant to which such options or benefits were granted; a lump
sum payment equal to twelve (12) months of his annual base
salary as in effect at the time of termination except that in
the case of disability, such payment shall be offset by the
amount of base salary paid by the Company to Mr. Stock from
the date Mr. Stock was first unable to substantially
perform his duties through the date of termination; any benefits
payable to Mr. Stock
and/or his
beneficiaries in accordance with the terms of any applicable
benefit plan; and at the Companys expense, Mr. Stock
and/or his
dependants shall be entitled to participate in the
Companys welfare benefit plans and programs as similarly
situated active employees for a period of twelve
(12) months from the date of termination.
In the event Mr. Stocks employment is terminated by
us for cause or under a voluntary termination (as defined in the
agreement), Mr. Stock will receive accrued base salary
through the date of termination and any previously vested rights
under a stock option or similar incentive compensation plan in
accordance with the terms of such plan.
If Mr. Stock is terminated (other than for disability,
death or cause) or resigns for good reason within one year after
a change of control (as defined in the agreement),
Mr. Stock will receive accrued compensation (which includes
base salary and a pro rata bonus) through the date of
termination, vacation pay and any vested equity awards and
benefits such as retirement benefits, in accordance with the
terms of the plan or agreement pursuant to which such equity
awards or benefits were granted to Mr. Stock; a lump sum
payment equal to two times his annual base salary as in effect
at the time of termination plus an amount equal to one and a
half times the most recent bonus received by Mr. Stock for
the fiscal year ended prior to the date of termination;
Mr. Stock and his dependants shall be entitled to continue
to participate in the Companys welfare benefit plans and
insurance programs on the same terms as similarly situated
active employees for a period of thirty (30) months and any
outstanding equity awards shall be fully vested
and/or
exercisable as of the date of termination and shall remain
exercisable in accordance with the terms of the plan or
arrangement pursuant to which such compensation awards were
granted.
26
Unless Mr. Stocks employment is terminated by us for
cause Mr. Stock will also be entitled to office space and
support services for a period of not more than three months
(3) following the date of any termination. The employment
agreement contains various covenants, including covenants
related to confidentiality, non-competition (other than certain
permitted activities as defined therein) and non-solicitation.
Additional information on amounts payable had a termination for
good reason, a change of control, death or disability occurred
on December 31, 2009 may be found under the
heading Potential Payments Upon Termination
by us Without Cause or by Executive for Good Reason,
Potential Payments Upon Termination due to Change of
Control and Potential Payments Upon Death or
Disability.
Timothy
Warner
The initial term of the employment agreement is three years,
ending on June 16, 2011, subject to an automatic extension
for a one-year period, unless the employment agreement is
terminated. Mr. Warner received a base salary of $446,420
during 2009, which is subject to review during the term of the
employment agreement for increase (but not decrease) each year
by our Compensation Committee. In addition, Mr. Warner is
eligible to receive an annual cash incentive bonus upon our
meeting certain performance targets established by our
Compensation Committee for the fiscal year. Mr. Warner
qualifies for our 401(k) matching program and is also entitled
to certain additional benefits including life insurance and
disability insurance. Mr. Warners employment
agreement provides for severance payments upon termination of
his employment, the amount and nature of which depends upon the
reason for the termination of employment.
If Mr. Warner resigns for good reason (as defined in the
agreement) or without cause, Mr. Warner will receive:
accrued compensation (which includes base salary and a pro rata
bonus) through the date of termination, vacation pay and any
vested equity awards and benefits such as retirement benefits,
in accordance with the terms of the plan or agreement pursuant
to which such equity awards or benefits were granted to
Mr. Warner; two times his annual base salary as in effect
at the time of termination for a period of twenty-four
(24) months following such termination, subject to
applicable Section 409A requirements;
Mr. Warners outstanding stock options will become
fully vested and exercisable upon such termination or
resignation; equity awards other than stock options with time
vesting provisions shall become vested on a pro rata basis and
equity awards other than stock options with performance based
vesting provisions shall 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 shall become vested
without any regard to any continued employment requirement on a
pro rata basis.
In the event Mr. Warners employment is terminated due
to his death or disability, Mr. Warner or his estate will
receive: accrued compensation (which includes base salary and a
pro rata bonus) through the date of termination; any previously
vested stock options and accrued benefits, such as retirement
benefits, in accordance with the terms of the plan or agreement
pursuant to which such options or benefits were granted; a lump
sum payment equal to twelve (12) months of his annual base
salary as in effect at the time of termination except that in
the case of disability, such payment shall be offset by the
amount of base salary paid by the Company to Mr. Warner
from the date Mr. Warner was first unable to substantially
perform his duties through the date of termination; any benefits
payable to Mr. Warner
and/or his
beneficiaries in accordance with the terms of any applicable
benefit plan; and at the Companys expense, Mr. Warner
and/or his
dependants shall be entitled to participate in the
Companys welfare benefit plans and programs as similarly
situated active employees for a period of twelve
(12) months from the date of termination.
In the event Mr. Warners employment is terminated by
us for cause or under a voluntary termination (as defined in the
agreement), Mr. Warner will receive accrued base salary
through the date of termination and any previously vested rights
under a stock option or similar incentive compensation plan in
accordance with the terms of such plan.
If Mr. Warner is terminated (other than for disability,
death or cause) or resigns for good reason within one year after
a change of control (as defined in the agreement),
Mr. Warner will receive accrued compensation (which
includes base salary and a pro rata bonus) through the date of
termination, vacation pay and any vested equity awards and
benefits such as retirement benefits, in accordance with the
terms of the
27
plan or agreement pursuant to which such equity awards or
benefits were granted to Mr. Warner; a lump sum payment
equal to two times his annual base salary as in effect at the
time of termination plus an amount equal to one and a half times
the most recent bonus received by Mr. Warner for the fiscal
year ended prior to the date of termination; Mr. Warner and
his dependants shall be entitled to continue to participate in
the Companys welfare benefit plans and insurance programs
on the same terms as similarly situated active employees for a
period of thirty (30) months and any outstanding equity
awards shall be fully vested
and/or
exercisable as of the date of termination and shall remain
exercisable in accordance with the terms of the plan or
arrangement pursuant to which such compensation awards were
granted.
Unless Mr. Warners employment is terminated by us for
cause Mr. Warner will also be entitled to office space and
support services for a period of not more than three months
(3) following the date of any termination. The employment
agreement contains various covenants, including covenants
related to confidentiality, non-competition (other than certain
permitted activities as defined therein) and non-solicitation.
Additional information on amounts payable had a termination for
good reason, a change of control, death or disability occurred
on December 31, 2009 may be found under the
heading Potential Payments Upon Termination
by us Without Cause or by Executive for Good Reason,
Potential Payments Upon Termination due to Change of
Control and Potential Payments Upon Death or
Disability.
Robert
Copple
The initial term of the employment agreement is three years,
ending on June 16, 2011, subject to an automatic extension
for a one-year period, unless the employment agreement is
terminated. Mr. Copple received a base salary of $420,160
during 2009, which is subject to review during the term of the
employment agreement for increase (but not decrease) each year
by our Compensation Committee. In addition, Mr. Copple is
eligible to receive an annual cash incentive bonus upon our
meeting certain performance targets established by our
Compensation Committee for the fiscal year. Mr. Copple
qualifies for our 401(k) matching program and is also entitled
to certain additional benefits including life insurance and
disability insurance. Mr. Copples employment
agreement provides for severance payments upon termination of
his employment, the amount and nature of which depends upon the
reason for the termination of employment.
If Mr. Copple resigns for good reason (as defined in the
agreement) or without cause, Mr. Copple will receive:
accrued compensation (which includes base salary and a pro rata
bonus) through the date of termination, vacation pay and any
vested equity awards and benefits such as retirement benefits,
in accordance with the terms of the plan or agreement pursuant
to which such equity awards or benefits were granted to
Mr. Copple; two times his annual base salary as in effect
at the time of termination for a period of twenty-four
(24) months following such termination, subject to
applicable Section 409A requirements;
Mr. Copples outstanding stock options will become
fully vested and exercisable upon such termination or
resignation; equity awards other than stock options with time
vesting provisions shall become vested on a pro rata basis and
equity awards other than stock options with performance based
vesting provisions shall 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 shall become vested
without any regard to any continued employment requirement on a
pro rata basis.
In the event Mr. Copples employment is terminated due
to his death or disability, Mr. Copple or his estate will
receive: accrued compensation (which includes base salary and a
pro rata bonus) through the date of termination; any previously
vested stock options and accrued benefits, such as retirement
benefits, in accordance with the terms of the plan or agreement
pursuant to which such options or benefits were granted; a lump
sum payment equal to twelve (12) months of his annual base
salary as in effect at the time of termination except that in
the case of disability, such payment shall be offset by the
amount of base salary paid by the Company to Mr. Copple
from the date Mr. Copple was first unable to substantially
perform his duties through the date of termination; any benefits
payable to Mr. Copple
and/or his
beneficiaries in accordance with the terms of any applicable
benefit plan; and at the Companys expense, Mr. Copple
and/or his
dependants shall be entitled to participate in the
Companys welfare benefit plans and programs as similarly
situated active employees for a period of twelve
(12) months from the date of termination.
28
In the event Mr. Copples employment is terminated by
us for cause or under a voluntary termination (as defined in the
agreement), Mr. Copple will receive accrued base salary
through the date of termination and any previously vested rights
under a stock option or similar incentive compensation plan in
accordance with the terms of such plan.
If Mr. Copple is terminated (other than for disability,
death or cause) or resigns for good reason within one year after
a change of control (as defined in the agreement),
Mr. Copple will receive accrued compensation (which
includes base salary and a pro rata bonus) through the date of
termination, vacation pay and any vested equity awards and
benefits such as retirement benefits, in accordance with the
terms of the plan or agreement pursuant to which such equity
awards or benefits were granted to Mr. Copple; a lump sum
payment equal to two times his annual base salary as in effect
at the time of termination plus an amount equal to one and a
half times the most recent bonus received by Mr. Copple for
the fiscal year ended prior to the date of termination;
Mr. Copple and his dependants shall be entitled to continue
to participate in the Companys welfare benefit plans and
insurance programs on the same terms as similarly situated
active employees for a period of thirty (30) months and any
outstanding equity awards shall be fully vested
and/or
exercisable as of the date of termination and shall remain
exercisable in accordance with the terms of the plan or
arrangement pursuant to which such compensation awards were
granted.
Unless Mr. Copples employment is terminated by us for
cause Mr. Copple will also be entitled to office space and
support services for a period of not more than three months
(3) following the date of any termination. The employment
agreement contains various covenants, including covenants
related to confidentiality, non-competition (other than certain
permitted activities as defined therein) and non-solicitation.
Additional information on amounts payable had a termination for
good reason, a change of control, death or disability occurred
on December 31, 2009 may be found under the
heading Potential Payments Upon Termination
by us Without Cause or by Executive for Good Reason,
Potential Payments Upon Termination due to Change of
Control and Potential Payments Upon Death or
Disability.
Michael
Cavalier
The initial term of the employment agreement is three years,
ending on June 16, 2011, subject to an automatic extension
for a one-year period, unless the employment agreement is
terminated. Mr. Cavalier received a base salary of $341,380
during 2009, which is subject to review during the term of the
employment agreement for increase (but not decrease) each year
by our Compensation Committee. In addition, Mr. Cavalier is
eligible to receive an annual cash incentive bonus upon our
meeting certain performance targets established by our
Compensation Committee for the fiscal year. Mr. Cavalier
qualifies for our 401(k) matching program and is also entitled
to certain additional benefits including life insurance and
disability. Mr. Cavaliers employment agreement
provides for severance payments upon termination of his
employment, the amount and nature of which depends upon the
reason for the termination of employment.
If Mr. Cavalier resigns for good reason (as defined in the
agreement) or without cause, Mr. Cavalier will receive:
accrued compensation (which includes base salary and a pro rata
bonus) through the date of termination, vacation pay and any
vested equity awards and benefits such as retirement benefits,
in accordance with the terms of the plan or agreement pursuant
to which such equity awards or benefits were granted to
Mr. Cavalier; two times his annual base salary as in effect
at the time of termination for a period of twenty-four
(24) months following such termination, subject to
applicable Section 409A requirements;
Mr. Cavaliers outstanding stock options will become
fully vested and exercisable upon such termination or
resignation; equity awards other than stock options with time
vesting provisions shall become vested on a pro rata basis and
equity awards other than stock options with performance based
vesting provisions shall 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 shall become vested
without any regard to any continued employment requirement on a
pro rata basis.
In the event Mr. Cavaliers employment is terminated
due to his death or disability, Mr. Cavalier or his estate
will receive: accrued compensation (which includes base salary
and a pro rata bonus) through the date of termination; any
previously vested stock options and accrued benefits, such as
retirement benefits, in
29
accordance with the terms of the plan or agreement pursuant to
which such options or benefits were granted; a lump sum payment
equal to twelve (12) months of his annual base salary as in
effect at the time of termination except that in the case of
disability, such payment shall be offset by the amount of base
salary paid by the Company to Mr. Cavalier from the date
Mr. Cavalier was first unable to substantially perform his
duties through the date of termination; any benefits payable to
Mr. Cavalier
and/or his
beneficiaries in accordance with the terms of any applicable
benefit plan; and at the Companys expense,
Mr. Cavalier
and/or his
dependants shall be entitled to participate in the
Companys welfare benefit plans and programs as similarly
situated active employees for a period of twelve
(12) months from the date of termination.
In the event Mr. Cavaliers employment is terminated
by us for cause or under a voluntary termination (as defined in
the agreement), Mr. Cavalier will receive accrued base
salary through the date of termination and any previously vested
rights under a stock option or similar incentive compensation
plan in accordance with the terms of such plan.
If Mr. Cavalier is terminated (other than for disability,
death or cause) or resigns for good reason within one year after
a change of control (as defined in the agreement),
Mr. Cavalier will receive accrued compensation (which
includes base salary and a pro rata bonus) through the date of
termination, vacation pay and any vested equity awards and
benefits such as retirement benefits, in accordance with the
terms of the plan or agreement pursuant to which such equity
awards or benefits were granted to Mr. Cavalier; a lump sum
payment equal to two times his annual base salary as in effect
at the time of termination plus an amount equal to one and a
half times the most recent bonus received by Mr. Cavalier
for the fiscal year ended prior to the date of termination;
Mr. Cavalier and his dependants shall be entitled to
continue to participate in the Companys welfare benefit
plans and insurance programs on the same terms as similarly
situated active employees for a period of thirty
(30) months and any outstanding equity awards shall be
fully vested
and/or
exercisable as of the date of termination and shall remain
exercisable in accordance with the terms of the plan or
arrangement pursuant to which such compensation awards were
granted.
Unless Mr. Cavaliers employment is terminated by us
for cause Mr. Cavalier will also be entitled to office
space and support services for a period of not more than three
months (3) following the date of any termination. The
employment agreement contains various covenants, including
covenants related to confidentiality, non-competition (other
than certain permitted activities as defined therein) and
non-solicitation. Additional information on amounts payable had
a termination for good reason, a change of control, death or
disability occurred on December 31, 2009 may be found
under the heading Potential Payments Upon
Termination by us Without Cause or by Executive for Good
Reason, Potential Payments Upon Termination
due to Change of Control and Potential
Payments Upon Death or Disability.
30
Summary
Compensation Table
The following table contains summary information concerning the
total compensation earned during 2009, 2008 and 2007 by our
Chief Executive Officer, Chief Financial Officer and our three
other most highly compensated executive officers serving in this
capacity as of December 31, 2009, whose total compensation
exceeded $100,000 for the fiscal year ended December 31,
2009.
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Non-Equity
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Stock
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Option
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Incentive Plan
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All Other
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Name and Principal
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Salary
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Bonus
|
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Awards
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Awards
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Compensation
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Compensation
|
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Position
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Year
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($)
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($) (1)
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($) (2)
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($) (3)
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($) (4)
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($)
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Total ($)
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Lee Roy Mitchell
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2009
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802,461
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-
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-
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|
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|
|
-
|
|
|
|
|
1,069,948
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|
|
|
|
113,008
|
(5)
|
|
|
$
|
1,985,417
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Executive Chairman
of the Board
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2008
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794,516
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|
-
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|
|
|
|
-
|
|
|
|
|
-
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|
|
|
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855,241
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|
|
|
|
130,637
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(5)
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|
|
$
|
1,780,394
|
|
|
|
|
|
|
|
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|
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|
|
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2007
|
|
|
|
|
763,958
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|
|
|
|
58,000
|
|
|
|
|
-
|
|
|
|
|
-
|
|
|
|
|
-
|
|
|
|
|
123,806
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(5)
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|
|
$
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945,764
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|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Alan W. Stock
|
|
|
|
2009
|
|
|
|
|
609,232
|
|
|
|
|
-
|
|
|
|
|
761,539
|
|
|
|
|
-
|
|
|
|
|
812,309
|
|
|
|
|
59,260
|
(6)
|
|
|
$
|
2,242,340
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Chief Executive
Officer
|
|
|
|
2008
|
|
|
|
|
603,200
|
|
|
|
|
-
|
|
|
|
|
753,988
|
|
|
|
|
-
|
|
|
|
|
649,303
|
|
|
|
|
31,563
|
(6)
|
|
|
$
|
2,038,054
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2007
|
|
|
|
|
580,000
|
|
|
|
|
58,000
|
|
|
|
|
-
|
|
|
|
|
-
|
|
|
|
|
-
|
|
|
|
|
6,982,568
|
(6)
|
|
|
$
|
7,620,568
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Timothy Warner
|
|
|
|
2009
|
|
|
|
|
446,420
|
|
|
|
|
-
|
|
|
|
|
446,405
|
|
|
|
|
-
|
|
|
|
|
446,420
|
|
|
|
|
41,193
|
(7)
|
|
|
$
|
1,380,438
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
President & Chief
Operating Officer
|
|
|
|
2008
|
|
|
|
|
442,000
|
|
|
|
|
-
|
|
|
|
|
441,998
|
|
|
|
|
-
|
|
|
|
|
356,837
|
|
|
|
|
24,445
|
(7)
|
|
|
$
|
1,265,280
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2007
|
|
|
|
|
425,000
|
|
|
|
|
50,000
|
|
|
|
|
-
|
|
|
|
|
-
|
|
|
|
|
-
|
|
|
|
|
14,925
|
(7)
|
|
|
$
|
489,925
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Robert Copple
|
|
|
|
2009
|
|
|
|
|
420,160
|
|
|
|
|
-
|
|
|
|
|
420,147
|
|
|
|
|
-
|
|
|
|
|
420,160
|
|
|
|
|
41,281
|
(8)
|
|
|
$
|
1,301,748
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Chief Financial
Officer, Treasurer &
Executive VP
|
|
|
|
2008
|
|
|
|
|
416,000
|
|
|
|
|
-
|
|
|
|
|
415,986
|
|
|
|
|
-
|
|
|
|
|
335,846
|
|
|
|
|
25,648
|
(8)
|
|
|
$
|
1,193,480
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2007
|
|
|
|
|
400,000
|
|
|
|
|
45,000
|
|
|
|
|
-
|
|
|
|
|
-
|
|
|
|
|
-
|
|
|
|
|
16,673
|
(8)
|
|
|
$
|
461,673
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Michael Cavalier
|
|
|
|
2009
|
|
|
|
|
341,380
|
|
|
|
|
-
|
|
|
|
|
341,373
|
|
|
|
|
-
|
|
|
|
|
341,380
|
|
|
|
|
36,826
|
(9)
|
|
|
$
|
1,060,959
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Sr. VP- General
Counsel and
Secretary
|
|
|
|
2008
|
|
|
|
|
338,000
|
|
|
|
|
-
|
|
|
|
|
337,976
|
|
|
|
|
-
|
|
|
|
|
272,875
|
|
|
|
|
23,976
|
(9)
|
|
|
$
|
972,827
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2007
|
|
|
|
|
325,000
|
|
|
|
|
40,000
|
|
|
|
|
-
|
|
|
|
|
-
|
|
|
|
|
-
|
|
|
|
|
16,634
|
(9)
|
|
|
$
|
381,634
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) |
|
In 2008, the Compensation Committee
recommended and the Board approved a discretionary bonus outside
of the incentive bonus program for the 2007 fiscal year. The
decision of the Compensation Committee and the Board was based
in large part on the efforts made during 2007 to integrate
Century Theatres into the Company, consummate the initial public
offering of National CineMedia, Inc. and complete our initial
public offering.
|
|
(2) |
|
The amounts reflect the aggregate
grant date fair value of restricted stock and restricted stock
units (performance awards) granted to the named executive
officers in 2009 and 2008, computed in accordance with FASB ASC
Topic 718 Share Based Payment
(Topic 718). No restricted stock
or restricted stock units were awarded to any of the named
executive officers in 2007.
|
|
|
|
Pursuant to SEC rules, the amounts
shown exclude the impact of estimated forfeitures. The grant
date fair values of the restricted stock units were determined
based upon the target level of payment as the most probable
outcome. The grant date fair values of the restricted stock
units for the 2009 and 2008 awards, assuming that the highest
level of IRR is achieved, are as follows:
|
|
|
|
|
|
|
|
|
|
|
|
2009 Grant
|
|
|
2008 Grant
|
|
|
Alan Stock
|
|
$
|
571,150
|
|
|
$
|
565,484
|
|
Timothy Warner
|
|
$
|
334,799
|
|
|
$
|
331,492
|
|
Robert Copple
|
|
$
|
315,106
|
|
|
$
|
311,990
|
|
Michael Cavalier
|
|
$
|
256,025
|
|
|
$
|
253,482
|
|
31
|
|
|
|
|
The specific terms of the
restricted stock and restricted stock units are discussed in
more detail above under Compensation Discussion and
Analysis. Also see Grants of Plan-Based Awards
table for the maximum number of restricted stock units that
may be earned pursuant to the 2009 grant.
|
|
|
|
The values of restricted stock and
restricted stock units for 2008, as presented in the table, have
been revised to reflect the grant date fair values of such
awards in accordance with Topic 718. See Outstanding Equity
Awards at Fiscal Year-End table for additional information
on restricted stock and restricted stock units awarded to the
named executive officers in 2008.
|
|
|
|
See Note 19 to the
Companys 2009 Annual Report on
Form 10-K
filed March 10, 2010, for discussion of the assumptions
used in determining the fair values of these share based awards,
including forfeiture assumptions, and the period over which the
Company will recognize compensation expense for such awards.
|
|
|
|
The grant date fair values for the
equity awards do not necessarily correspond to the actual values
that will be realized by the named executive officers. The
actual values realized will depend on the market value of the
Common Stock on the vesting date of the restricted stock and the
restricted stock units.
|
|
(3) |
|
The values of the option awards for
2007 and 2008, as presented in the table, have been revised to
reflect the grant date fair values in accordance with Topic 718.
No option awards were granted during the years ended
December 31, 2009, 2008 or 2007. No modifications were made
to option awards held by the named executive officers during the
years ended December 31, 2009, 2008 or 2007.
|
|
(4) |
|
Bonuses earned in a fiscal year are
paid in February or March of the following year. The bonuses for
2009 and 2008 bonuses were earned under the Bonus Plan approved
by the stockholders at the 2008 annual meeting. The 2009 bonuses
were paid on February 25, 2010 and the 2008 bonuses were
paid on March 2, 2009. No bonuses were earned in 2007 under
the incentive bonus program since the Company did not meet the
minimum Adjusted EBITDA threshold established by our Board for
fiscal 2007.
|
|
(5) |
|
Represents an annual matching
contribution to Mr. Mitchells 401(k) savings plan
($12,863 in 2009, $12,075 in 2008 and $11,813 in 2007), value of
the use of a Company vehicle for one year ($0 in 2009, $18,417
in 2008 and $10,250 in 2007) and the dollar value of life
insurance premiums and disability insurance paid by us for the
benefit of Mr. Mitchell ($100,145 in 2009, $100,145 in 2008
and $101,743 in 2007).
|
|
(6) |
|
Represents an annual matching
contribution to Mr. Stocks 401(k) savings plan
($12,863 in 2009, $12,075 in 2008 and $11,813 in 2007), dollar
value of life insurance premiums and disability insurance paid
by us for the benefit of Mr. Stock ($3,696 in 2009, $3,695
in 2008 and $3,695 in 2007), dividends paid on restricted stock
($42,702 in 2009 and $15,793 in 2008) and payments under
Mr. Stocks Profit Participation Agreement for certain
of our theatres ($6,853,060 upon termination of the Profit
Participation Agreement, and as payment under the Profit
Participation Agreement, $114,000 in 2007).
|
|
(7) |
|
Represents an annual matching
contribution to Mr. Warners 401(k) savings plan
($12,863 in 2009, $12,075 in 2008 and $11,813 in 2007), dollar
value of life insurance premiums and disability insurance paid
by us for the benefit of Mr. Warner ($3,299 in 2009, $3,112
in 2008 and $3,112 in 2007) and dividends paid on
restricted stock ($25,032 in 2009 and $9,258 in 2008).
|
|
(8) |
|
Represents an annual matching
contribution to Mr. Copples 401(k) savings plan
($12,863 in 2009, $12,075 in 2008 and $11,813 in 2007), dollar
value of life insurance premiums and disability insurance paid
by us for the benefit of Mr. Copple ($4,860 in 2009, $4,860
in 2008 and $4,860 in 2007) and dividends paid on
restricted stock ($23,559 in 2009 and $8,713 in 2008).
|
|
(9) |
|
Represents an annual matching
contribution to Mr. Cavaliers 401(k) savings plan
($12,863 in 2009, $12,075 in 2008 and $11,813 in 2007), dollar
value of life insurance premiums and disability insurance paid
by us for the benefit of Mr. Cavalier ($4,822 in 2009,
$4,822 for 2008 and 2007) and dividends paid on restricted
stock ($19,141 in 2009 and $7,079 in 2008).
|
32
Grants
of Plan-Based Awards
The following table specifies the grants of awards made to the
named executive officers during the fiscal year ended
December 31, 2009 under the Restated Plan and Bonus Plan,
both of which were approved by the stockholders at the 2008
annual meeting.
Grants of
Plan-Based Awards
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
All
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stock
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Awards:
|
|
|
Grant
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Number
|
|
|
Date
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
of
|
|
|
Fair
|
|
|
|
|
|
|
Estimated Future Payouts Under
|
|
|
|
|
|
|
|
|
|
|
|
Shares
|
|
|
Value of
|
|
|
|
2009
|
|
|
Non-Equity Incentive Plan
|
|
|
Estimated Future Payouts Under
|
|
|
of Stock
|
|
|
Stock
|
|
|
|
Grant
|
|
|
Awards
|
|
|
Equity Incentive Plan Awards
|
|
|
or Units
|
|
|
Awards
|
Name
|
|
|
Dates
|
|
|
(1)
|
|
|
(2)
|
|
|
(3)
|
|
|
(4)
|
|
|
|
|
|
|
Threshold
|
|
|
Target
|
|
|
Maximum
|
|
|
Threshold
|
|
|
Target
|
|
|
Maximum
|
|
|
|
|
|
|
|
|
|
|
|
|
($)
|
|
|
($)
|
|
|
($)
|
|
|
(#)
|
|
|
(#)
|
|
|
(#)
|
|
|
(#)
|
|
|
($)
|
Lee Roy Mitchell
|
|
|
|
-
|
|
|
|
|
267,487
|
|
|
|
|
802,461
|
|
|
|
|
1,069,948
|
|
|
|
|
-
|
|
|
|
|
-
|
|
|
|
|
-
|
|
|
|
|
-
|
|
|
|
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Alan W. Stock
|
|
|
|
|
|
|
|
|
203,077
|
|
|
|
|
609,232
|
|
|
|
|
812,309
|
|
|
|
|
-
|
|
|
|
|
-
|
|
|
|
|
-
|
|
|
|
|
-
|
|
|
|
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
3/27
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
20,040
|
|
|
|
|
40,081
|
|
|
|
|
60,121
|
|
|
|
|
|
|
|
|
|
380,770
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
3/27
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
40,081
|
|
|
|
|
380,770
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Timothy Warner
|
|
|
|
|
|
|
|
|
111,605
|
|
|
|
|
334,815
|
|
|
|
|
446,420
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
3/27
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
11,747
|
|
|
|
|
23,495
|
|
|
|
|
35,242
|
|
|
|
|
|
|
|
|
|
223,203
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
3/27
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
23,495
|
|
|
|
|
223,203
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Robert Copple
|
|
|
|
|
|
|
|
|
105,040
|
|
|
|
|
315,120
|
|
|
|
|
420,160
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
3/27
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
11,056
|
|
|
|
|
22,113
|
|
|
|
|
33,169
|
|
|
|
|
|
|
|
|
|
210,074
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
3/27
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
22,113
|
|
|
|
|
210,074
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Michael Cavalier
|
|
|
|
|
|
|
|
|
85,345
|
|
|
|
|
256,035
|
|
|
|
|
341,380
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
3/27
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
8,983
|
|
|
|
|
17,967
|
|
|
|
|
26,950
|
|
|
|
|
|
|
|
|
|
170,687
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
3/27
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
17,967
|
|
|
|
|
170,687
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) |
|
In March 2009, the Compensation
Committee established performance targets for our named
executive officers for the 2009 fiscal year under the terms of
the Bonus Plan. The Compensation Committee approved the 2009
bonuses for the named executive officers on February 23, 2010
and the bonuses were paid on February 25, 2010. See
page 21 of the Compensation Discussion and Analysis
for a description of the bonus process under the Bonus Plan
for each named executive officer and the Summary Compensation
Table for the actual bonus amounts paid to each named
executive officer for the 2009 fiscal year.
|
|
(2) |
|
In March 2009, the Compensation
Committee approved performance awards in the form of restricted
stock units for an aggregate maximum of 155,482 hypothetical
shares of restricted stock to our named executive officers,
except Mr. Mitchell, who, the Compensation Committee
determined, had sufficient equity ownership to align his
interests with the interests of the stockholders. The number of
shares subject to each performance award was determined in part
by reference to the closing price of the Common Stock on
March 27, 2009 of $9.50 per share. Such awards vest based
on a combination of financial performance factors and continued
service. The Performance Period for the 2009 restricted stock
unit awards ends December 31, 2011. See page 23 of the
Compensation Discussion and Analysis for a description of
the grant of the performance awards. All payouts of restricted
stock units upon attainment of performance goal will be in the
form of restricted stock that will vest if the participant
continues to provide services through March 27, 2013 (the
fourth anniversary of the grant date). Restricted stock unit
awards are eligible to receive dividend equivalent payments to
the extent declared with respect to our Common Stock if and at
the time the restricted stock unit awards vest.
|
|
(3) |
|
In March 2009, the Compensation
Committee approved restricted stock awards for an aggregate of
103,656 shares of restricted stock to our named executive
officers, except Mr. Mitchell, under our Restated Plan. The
number of shares subject to each award was determined by
reference to the closing price of the Common Stock on
March 27, 2009 at $9.50 per share. Such shares vest as
follows subject to continued service: 50% on March 27, 2011
and the remaining 50% on March 27, 2013. Holders of
restricted stock receive dividends to the extent declared by our
Board, at the same rate paid to other stockholders of the
Company, currently at $0.18 per share.
|
|
(4) |
|
The grant date fair values of
restricted stock and restricted stock units were determined
using the closing price of the Common Stock on the grant date of
$9.50 per share. The grant date fair values of the restricted
stock units were determined based upon the target level of IRR
as the most probable outcome. The grant date fair values were
computed in accordance with Topic 718 and reflect the
|
33
|
|
|
|
|
amounts that we would expect to
recognize in our financial statements as compensation cost over
the service period determined as of the grant date, excluding
the effect of estimated forfeitures.
|
Outstanding
Equity Awards
There were no unexercised options for each named executive
officer as of December 31, 2009.
Outstanding
Equity Awards at Fiscal Year-End
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stock Awards
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity Incentive Plan
|
|
|
|
Equity Incentive Plan
|
|
|
|
|
|
|
|
|
|
|
|
|
Awards: Number of
|
|
|
|
Awards: Market or
|
|
|
|
|
Number of Shares
|
|
|
|
Market Value of
|
|
|
|
Unearned Shares,
|
|
|
|
Payout Value of
|
|
|
|
|
or Units of Stock
|
|
|
|
Shares or Units of
|
|
|
|
Units or Other
|
|
|
|
Unearned Shares, Units
|
|
|
|
|
that have not
|
|
|
|
Stock that have not
|
|
|
|
Rights that have not
|
|
|
|
or Other Rights that
|
|
|
|
|
vested
|
|
|
|
vested
|
|
|
|
vested
|
|
|
|
have not vested
|
|
|
|
|
(#)
|
|
|
|
($)
|
|
|
|
(#)
|
|
|
|
($)
|
|
Name
|
|
|
(1)
|
|
|
|
(2)
|
|
|
|
(3)
|
|
|
|
(4)
|
|
Lee Roy Mitchell
|
|
|
|
-
|
|
|
|
|
-
|
|
|
|
|
-
|
|
|
|
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Alan W. Stock
|
|
|
|
29,247
|
|
|
|
$
|
420,279
|
|
|
|
|
14,623
|
|
|
|
$
|
210,133
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
40,081
|
|
|
|
$
|
575,964
|
|
|
|
|
20,040
|
|
|
|
$
|
287,975
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Timothy Warner
|
|
|
|
17,145
|
|
|
|
$
|
246,374
|
|
|
|
|
8,572
|
|
|
|
$
|
123,180
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
23,495
|
|
|
|
$
|
337,623
|
|
|
|
|
11,747
|
|
|
|
$
|
168,804
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Robert Copple
|
|
|
|
16,136
|
|
|
|
$
|
231,874
|
|
|
|
|
8,068
|
|
|
|
$
|
115,937
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
22,113
|
|
|
|
$
|
317,764
|
|
|
|
|
11,056
|
|
|
|
$
|
158,875
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Michael Cavalier
|
|
|
|
13,110
|
|
|
|
$
|
188,391
|
|
|
|
|
6,555
|
|
|
|
$
|
94,195
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
17,967
|
|
|
|
$
|
258,186
|
|
|
|
|
8,983
|
|
|
|
$
|
129,086
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) |
|
The reported numbers represent the
number of unvested restricted stock for each of the named
executive officers as of the year ended December 31, 2009.
The restricted stocks were awarded in March 2008 and 2009.
|
|
(2) |
|
The market value of the restricted
stock was determined using the closing price of the Common Stock
on December 31, 2009 of $14.37 per share.
|
|
(3) |
|
The reported numbers represent the
threshold number of unearned performance shares in the form of
restricted stock units for each of the named executive officers.
The performance awards were granted in March 2008 and 2009
subject to an IRR over a three fiscal year period.
|
|
(4) |
|
The market value of the unearned
performance awards in the form of restricted stock units was
valued based on the achievement of threshold performance goals
using the closing price of the Common Stock on December 31,
2009 of $14.37 per share.
|
34
Option
Exercises and Stock Vested
|
|
|
|
|
|
|
|
|
Name
|
|
|
Option Awards
|
|
|
|
Number
|
|
|
Value
|
|
|
|
of Shares
|
|
|
Realized on
|
|
|
|
Acquired on
|
|
|
Exercise
|
|
|
|
Exercise (#)
|
|
|
(1)
|
Alan W. Stock
|
|
|
|
909,735
|
|
|
$
|
5,249,171
|
|
|
|
|
|
|
|
|
|
Timothy Warner
|
|
|
|
909,735
|
|
|
$
|
5,249,171
|
|
|
|
|
|
|
|
|
|
Robert Copple
|
|
|
|
909,735
|
|
|
$
|
5,249,171
|
|
|
|
|
|
|
|
|
|
Michael Cavalier
|
|
|
|
591,327
|
|
|
$
|
3,411,957
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) |
|
The options were exercised at an
exercise price of $7.63. The dollar amount realized upon
exercise was computed by determining the difference between the
market price of the underlying securities at exercise and the
exercise price. The options were exercised prior to the opening
of the NYSE on December 12, 2009 utilizing the closing
price of the Common Stock on December 11, 2009 of $13.40
per share.
|
The exercise price and minimum tax
withholdings were paid by each executive officer by means of
stock withholding. The following table specifies the number of
shares withheld by the Company for the payment of the exercise
price, minimum tax withholdings for each named executive officer
and the net shares of Common Stock issued to each named
executive officer:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Shares Withheld
|
|
|
Shares Withheld
|
|
|
|
|
|
|
|
|
|
by the Company
|
|
|
by the Company
|
|
|
|
|
|
|
Options
|
|
|
for Payment of
|
|
|
for Payment of
|
|
|
|
|
|
|
Exercised
|
|
|
Exercise Price
|
|
|
Tax Withholding
|
|
|
Net Shares Issued
|
Name
|
|
|
(#)
|
|
|
(#)
|
|
|
(#)
|
|
|
(#)
|
Alan W. Stock
|
|
|
|
909,735
|
|
|
|
|
518,005
|
|
|
|
|
140,486
|
|
|
|
|
251,244
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Timothy Warner
|
|
|
|
909,735
|
|
|
|
|
518,005
|
|
|
|
|
138,172
|
|
|
|
|
253,558
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Robert Copple
|
|
|
|
909,735
|
|
|
|
|
518,005
|
|
|
|
|
138,004
|
|
|
|
|
253,726
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Michael Cavalier
|
|
|
|
591,327
|
|
|
|
|
336,703
|
|
|
|
|
87,526
|
|
|
|
|
167,098
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Potential
Payments upon Termination by us Without Cause or by Executive
for Good Reason
The employment agreements with the named executive officers will
require us to provide compensation to named executive officers
in the event of a termination of employment by us without cause
or by the named executive officer for good reason. The amount of
compensation payable to each named executive officer upon such
termination is listed in the table below assuming such
triggering event occurred on December 31, 2009.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Life and
|
|
|
|
|
|
Value of
|
|
|
|
|
|
|
Salary
|
|
|
|
|
|
Health
|
|
|
Disability
|
|
|
|
|
|
Equity
|
|
|
|
|
|
|
2009
|
|
|
Bonus
|
|
|
Insurance
|
|
|
Insurance
|
|
|
Assistance
|
|
|
Awards
|
|
|
|
|
|
|
(1)
|
|
|
(2)
|
|
|
(3)
|
|
|
(3)
|
|
|
(4)
|
|
|
(5)
|
|
|
Total
|
Lee Roy Mitchell
|
|
|
$
|
1,604,922
|
|
|
|
$
|
1,925,189
|
|
|
|
$
|
5,235
|
|
|
|
$
|
100,145
|
|
|
|
$
|
86,500
|
|
|
|
$
|
|
|
|
|
$
|
3,721,991
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Alan W. Stock
|
|
|
$
|
1,218,464
|
|
|
|
$
|
1,461,612
|
|
|
|
$
|
20,936
|
|
|
|
$
|
7,392
|
|
|
|
$
|
792
|
|
|
|
$
|
1,396,347
|
|
|
|
$
|
4,105,543
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Timothy Warner
|
|
|
$
|
892,840
|
|
|
|
$
|
803,257
|
|
|
|
$
|
17,654
|
|
|
|
$
|
6,598
|
|
|
|
$
|
792
|
|
|
|
$
|
818,528
|
|
|
|
$
|
2,539,669
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Robert Copple
|
|
|
$
|
840,320
|
|
|
|
$
|
756,006
|
|
|
|
$
|
20,936
|
|
|
|
$
|
9,720
|
|
|
|
$
|
792
|
|
|
|
$
|
770,347
|
|
|
|
$
|
2,398,121
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Michael Cavalier
|
|
|
$
|
682,760
|
|
|
|
$
|
614,255
|
|
|
|
$
|
20,936
|
|
|
|
$
|
9,644
|
|
|
|
$
|
792
|
|
|
|
$
|
584,399
|
|
|
|
$
|
1,912,786
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) |
|
The amounts reported are calculated
as follows: two times the annual base salary in effect as of
December 31, 2009.
|
35
|
|
|
(2) |
|
The amounts reported are calculated
as follows: the sum of the annual bonus the executive would have
received for the fiscal year ended December 31, 2009 and
the annual bonus received by the executive for the fiscal year
ended December 31, 2008. See Footnote 4 to Summary
Compensation Table.
|
|
(3) |
|
The amounts reported are calculated
as follows: welfare benefit plans and insurance programs for a
period of 12 months for Mr. Lee Roy Mitchell and
24 months for Messers. Stock, Warner, Copple and Cavalier.
Disability insurance includes premiums for long-term disability,
individual disability income protection and short-term
disability.
|
|
(4) |
|
Lee Roy 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 for five years. Messers Stock,
Warner, Copple and Cavalier are entitled to use our office space
for a period of three months following the date of termination.
We estimate the amount to be approximately $792 for the use of a
144 square foot office at a rental rate of approximately
$22 per square foot per annum.
|
|
(5) |
|
The amounts reported have been
determined based on the following provision in the respective
employment agreements.
|
|
|
|
Any outstanding equity award with
time based vesting provisions shall be vested on a prorata
basis. Any equity awards with performance based vesting
provisions shall 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 shall become vested without regard to
any continued employment requirement on a pro rata basis. The
pro rata basis for the equity awards is based on the percentage
determined by dividing (i) the number of days from and
including the grant date of such equity award through the
termination date of the executives employment, by
(ii) the number of days from the grant date to the full
vesting date/end of the applicable performance period, as
applicable, of such equity awards. Based on the above provision,
the total number of equity awards that would have vested in each
named executive officer on December 31, 2009 is as follows:
restricted stock 30,837 for Alan Stock, 18,076 for
Tim Warner, 17,011 for Robert Copple and 10,934 for Michael
Cavalier; and performance shares (in the form of restricted
stock units) 66,334 for Alan Stock, 38,885 for Tim
Warner, 36,597 for Robert Copple and 29,734 for Michael
Cavalier. The number of performance shares (restricted stock
units) that would vest has been determined based on the
assumption that the maximum IRR would be achieved over the
vesting period. There were no outstanding options for any of the
named executive officers as of December 31, 2009. See
Grants of Plan-Based Awards table and Outstanding
Equity Awards at Fiscal Year-End table.
|
|
|
|
The values of the equity awards
have been calculated using the closing price of our Common Stock
on December 31, 2009 of $14.37 per share.
|
Potential
Payments upon Termination for Cause
If a named executive officer terminates his employment
voluntarily, or is terminated for cause, we are only required to
pay such named executive officer any accrued unpaid base salary
through the date of such termination.
Potential
Payments upon Termination due to Change of Control
The employment agreements with the named executive officers will
require us to provide compensation to named executive officers
in the event of a termination of employment within one year of a
change of control by us or by executive for good reason. There
is no change of control provision in Mr. Mitchells
employment agreement. The amount of compensation payable to
Messers. Stock, Warner, Copple and Cavalier upon such
termination is listed in the table below assuming such
triggering event occurred on December 31, 2009.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Life &
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Health
|
|
|
|
Disability
|
|
|
|
|
|
|
|
Value of Equity
|
|
|
|
|
|
|
|
|
Salary
|
|
|
|
Bonus
|
|
|
|
Insurance
|
|
|
|
Insurance
|
|
|
|
Assistance
|
|
|
|
Awards
|
|
|
|
|
|
|
|
|
(1)
|
|
|
|
(2)
|
|
|
|
(3)
|
|
|
|
(3)
|
|
|
|
(4)
|
|
|
|
(5)
|
|
|
|
Total
|
|
Lee Roy Mitchell
|
|
|
|
-
|
|
|
|
|
-
|
|
|
|
|
-
|
|
|
|
|
-
|
|
|
|
|
-
|
|
|
|
|
-
|
|
|
|
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Alan W. Stock
|
|
|
$
|
1,218,464
|
|
|
|
$
|
1,786,264
|
|
|
|
$
|
26,170
|
|
|
|
$
|
9,240
|
|
|
|
$
|
792
|
|
|
|
$
|
2,490,594
|
|
|
|
$
|
5,531,524
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Timothy Warner
|
|
|
$
|
892,840
|
|
|
|
$
|
981,675
|
|
|
|
$
|
22,068
|
|
|
|
$
|
8,248
|
|
|
|
$
|
792
|
|
|
|
$
|
1,459,978
|
|
|
|
$
|
3,365,600
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Robert Copple
|
|
|
$
|
840,320
|
|
|
|
$
|
923,929
|
|
|
|
$
|
26,170
|
|
|
|
$
|
12,150
|
|
|
|
$
|
792
|
|
|
|
$
|
1,374,089
|
|
|
|
$
|
3,177,450
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Michael Cavalier
|
|
|
$
|
682,760
|
|
|
|
$
|
750,692
|
|
|
|
$
|
26,170
|
|
|
|
$
|
12,055
|
|
|
|
$
|
792
|
|
|
|
$
|
1,116,434
|
|
|
|
$
|
2,588,903
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) |
|
The amounts reported are calculated
as follows: two times the annual base salary in effect as of
December 31, 2009.
|
|
(2) |
|
The amounts reported are calculated
as follows: the sum of the annual bonus the executive would have
received for the fiscal year ended December 31, 2009 and
one and a half times the annual bonus received by the executive
for the fiscal year ended December 31, 2008. See Footnote 4
to Summary Compensation Table.
|
36
|
|
|
(3) |
|
The amounts reported are calculated
as follows: welfare benefit plans and insurance programs for
30 months for Messers. Stock, Warner, Copple and Cavalier.
Disability insurance includes premiums for long-term disability,
individual disability income protection and short-term
disability.
|
|
(4) |
|
Messers Stock, Warner, Copple and
Cavalier are entitled to use our office space for three months
following the date of termination. We estimate the amount to be
approximately $792 for the use of a 144 square foot office
at a rental rate of approximately $22 per square foot per annum.
|
|
(5) |
|
The amounts reported have been
determined based on the following provision in the respective
employment agreements. Upon termination due to change of
control, any outstanding equity award granted to the executive
shall be fully vested and exercisable and all restrictions
lapse. Based on the above provision, the total number of equity
awards that would have vested on an accelerated basis in each
named executive officer on December 31, 2009 are as
follows: restricted stock 69,328 for Alan Stock,
40,640 for Tim Warner, 38,249 for Robert Copple and 31,077 for
Michael Cavalier; performance shares (in the form of restricted
stock units) 103,991 for Alan Stock, 60,959 for Tim
Warner, 57,373 for Robert Copple and 46,615 for Michael
Cavalier. The number of performance shares (restricted stock
units) that would vest has been determined based on the
assumption that the maximum IRR would be achieved over the
vesting period. See Grants of Plan-Based Awards table and
Outstanding Equity Awards at Fiscal Year End table.
|
The values of the equity awards have been calculated using the
closing price of our Common Stock on December 31, 2009 of
$14.37 per share.
Potential
Payments upon Termination due to Death or
Disability
The employment agreements with the named executive officers will
require us to provide compensation to named executive officers
in the event of a termination of employment as a result of the
death or disability of such named executive officer. The amount
of compensation payable to each named executive officer upon
such termination is listed in the table below assuming such
triggering event occurred on December 31, 2009.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Life and
|
|
|
|
Value of
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Health
|
|
|
|
Disability
|
|
|
|
Equity
|
|
|
|
|
|
|
|
|
Salary
|
|
|
|
Bonus
|
|
|
|
Insurance
|
|
|
|
Insurance
|
|
|
|
Awards
|
|
|
|
|
|
|
|
|
(1)
|
|
|
|
(2)
|
|
|
|
(3)
|
|
|
|
(3)
|
|
|
|
(4)
|
|
|
|
Total
|
|
Lee Roy Mitchell
|
|
|
$
|
802,461
|
|
|
|
$
|
1,069,948
|
|
|
|
$
|
5,235
|
|
|
|
$
|
100,145
|
|
|
|
$
|
-
|
|
|
|
$
|
1,977,789
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Alan W. Stock
|
|
|
$
|
609,232
|
|
|
|
$
|
812,309
|
|
|
|
$
|
10,468
|
|
|
|
$
|
3,696
|
|
|
|
$
|
199,240
|
|
|
|
$
|
1,634,945
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Timothy Warner
|
|
|
$
|
446,420
|
|
|
|
$
|
446,420
|
|
|
|
$
|
8,827
|
|
|
|
$
|
3,299
|
|
|
|
$
|
116,799
|
|
|
|
$
|
1,021,765
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Robert Copple
|
|
|
$
|
420,160
|
|
|
|
$
|
420,160
|
|
|
|
$
|
10,468
|
|
|
|
$
|
4,860
|
|
|
|
$
|
109,916
|
|
|
|
$
|
965,564
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Michael Cavalier
|
|
|
$
|
341,380
|
|
|
|
$
|
341,380
|
|
|
|
$
|
10,468
|
|
|
|
$
|
4,822
|
|
|
|
$
|
89,315
|
|
|
|
$
|
787,365
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) |
|
The amounts reported are the annual
base salary of each executive in effect as of December 31,
2009.
|
|
(2) |
|
The amounts reported are the annual
bonus each executive would have received for the fiscal year
ended December 31, 2009. See Footnote 4 to Summary
Compensation Table.
|
|
(3) |
|
The amounts reported are calculated
as follows: welfare benefit plans and insurance programs for a
period of 12 months for Messers. Mitchell, Stock, Warner,
Copple and Cavalier. Disability insurance includes premiums for
long-term disability, individual disability income protection
and short-term disability.
|
|
(4) |
|
Pursuant to the respective
employment agreement of each named executive officer, upon
termination due to death or disability, the executive or
executives estate or representative shall be entitled to
receive any previously vested equity awards. Additionally,
pursuant to the Restated Plan, upon death or disability, the
lesser of, (a) an additional twenty percent (20%) of the
shares of Common Stock covered by an individual option or
restricted award and (b) the remaining amount of unvested
shares of Common Stock covered by the option or restricted award
shall become vested and exercisable.
|
Pursuant to the above, the total
number of equity awards that would have vested and be
exercisable upon death or disability of each named executive
officer would be as follows: restricted stock 13,865
for Alan Stock, 8,128 for Tim Warner, 7,649 for Robert Copple
and 6,215 for Michael Cavalier.
As of December 31, 2009, there
were no vested, exercisable options for Messers. Stock, Warner,
Copple and Cavalier.
The values of the equity awards
have been calculated using the closing price of our Common Stock
on December 31, 2009 of $14.37per share.
37
Internal
Revenue Code Section 162(m)
Section 162(m) of the Code, as amended disallows a tax
deduction for any publicly held corporation for individual
compensation exceeding $1 million in any taxable year for
certain senior executive officers, except for compensation that
is performance-based under a plan that is approved by the
stockholders and that meets certain other technical
requirements. Section 162(m) did not prevent us from
receiving a tax deduction in 2007 for any of the compensation
paid to our named executive officers. While we consider the
potential impact of Section 162(m) on our compensation
decisions, we may approve compensation for an executive officer
that does not meet the deductibility requirements of
Section 162(m) in the future in order to maintain
competitive compensation packages and attract talented leaders.
The payment to Mr. Stock under the Profit Participation
Agreement and termination thereof (See Certain
Relationships and Related Party Transactions) is not subject
to Section 162(m) deductibility limits by reason of certain
transition rules applicable to newly public companies. We do not
intend to enter into similar arrangements with any of our
executive officers in the future.
Compensation
of Directors
The following table sets forth certain information regarding the
compensation of our directors for year ended December 31,
2009.
Director
Compensation
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fees
|
|
|
|
|
|
|
|
|
|
|
|
|
Earned or
|
|
|
Stock
|
|
|
Other
|
|
|
|
|
|
|
Paid in Cash
|
|
|
Awards
|
|
|
Compensation
|
|
|
Total
|
Name
|
|
|
($)(1)
|
|
|
($)(2)
|
|
|
($)(3)
|
|
|
($)
|
Benjamin D. Chereskin
|
|
|
|
16,250
|
|
|
|
|
-
|
|
|
|
|
-
|
|
|
|
|
16,250
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Vahe A. Dombalagian
|
|
|
|
-
|
|
|
|
|
-
|
|
|
|
|
-
|
|
|
|
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Peter R. Ezersky
|
|
|
|
-
|
|
|
|
|
-
|
|
|
|
|
-
|
|
|
|
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Enrique F. Senior
|
|
|
|
50,000
|
|
|
|
|
99,990
|
|
|
|
|
5,936
|
|
|
|
|
155,926
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Raymond W. Syufy
|
|
|
|
-
|
|
|
|
|
-
|
|
|
|
|
|
|
|
|
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Carlos M. Sepulveda
|
|
|
|
70,000
|
|
|
|
|
99,990
|
|
|
|
|
5,936
|
|
|
|
|
175,926
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Roger T. Staubach
|
|
|
|
50,000
|
|
|
|
|
99,990
|
|
|
|
|
5,936
|
|
|
|
|
155,926
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Donald G. Soderquist
|
|
|
|
50,000
|
|
|
|
|
99,990
|
|
|
|
|
5,936
|
|
|
|
|
155,926
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Steven P. Rosenberg
|
|
|
|
60,000
|
|
|
|
|
99,995
|
|
|
|
|
6,859
|
|
|
|
|
166,854
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) |
|
Fees earned by our non-employee
directors pursuant to our Non-Employee Director Compensation
Policy.
|
|
(2) |
|
Pursuant to our Non-Employee
Director Compensation Policy, in April 2009, Mr. Rosenberg
received a grant of 10,121 shares of restricted stock and
in June 2009, Messers. Senior, Sepulveda, Staubach and
Soderquist each received a grant of 8,833 shares of
restricted stock. The amounts presented in the table reflect the
grant date fair value of the restricted stock awarded in 2009 in
accordance with Topic 718. Under Topic 718, the grant date fair
value of the restricted stock is recognized ratably over the
one year vesting period. See Note 19 to the
Companys 2009 Annual Report on
Form 10-K
filed March 10, 2009, for details of the assumptions used
in valuation of the restricted stock.
|
|
(3) |
|
The amounts reported are dividends
paid on the shares of restricted stock held by our non-employee
directors during fiscal 2009. See Security Ownership of
Certain Beneficial Owners and Management.
|
In order to attract and retain qualified non-employee directors,
the Company adopted a Non-Employee Director Compensation Policy
in August 2007, by which non-employee directors are compensated
for their service to the Company. Only those members of the
Board who constitute non-employee directors are eligible to
receive compensation under this Policy. Non-employee directors
include any member of the Board who (i) is neither our
employee nor an employee of any of our subsidiaries; and
(ii) is not an employee of any of the Companys
stockholders with contractual rights to nominate directors.
38
Each non-employee director receives the following annual
compensation in connection with the service of such non-employee
director as a member of the Board:
|
|
|
|
(a)
|
A base director retainer of $50,000;
|
|
|
|
|
(b)
|
An additional retainer of $20,000 if such non-employee director
serves as the chairman of the Audit Committee;
|
|
|
|
|
(c)
|
An additional retainer of $10,000 if such non-employee director
serves as a member of the Audit Committee, other than the
chairman of the Audit Committee;
|
|
|
|
|
(d)
|
An additional retainer of $10,000 if such non-employee director
serves as the chairman of the Compensation Committee;
|
|
|
|
|
(e)
|
An additional retainer of $5,000 if such non-employee director
serves as a member of the Compensation Committee, other than the
chairman of the Compensation Committee; and
|
|
|
|
|
(f)
|
An additional retainer of $5,000 if such non-employee director
serves as a member of the Nominating and Corporate Governance
Committee.
|
Annual compensation is paid in four equal quarterly installments
at the beginning of each quarter for services rendered during
the prior quarter. Additionally, on an annual basis the
non-employee directors receive a grant of restricted stock of
the Companys Common Stock valued at $100,000. The number
of restricted stock to be issued is determined by dividing
$100,000 by the fair market value of a share of Common Stock on
the grant date, rounded down to the nearest whole share. The
initial award and each annual award generally vest on the first
anniversary of the date of the grant, subject to the
non-employee directors continued service to the Company
through the vesting dates. An employee director who ceases to be
an employee, but who remains a director, will not receive an
initial award or an annual award for any remaining term or
renewal term of office during which such director does not
qualify as an independent director under applicable SEC rules
and NYSE listing standards. All grants of restricted stock will
be made pursuant to the Companys long term equity
incentive plan in effect at that time.
Members of our Board who are also officers or employees of our
Company or employees of our stockholders with contractual rights
to nominate directors do not receive compensation for their
services as a director. All directors are reimbursed for
expenses incurred for each board meeting which they attend.
Compensation
Committee Interlocks and Insider Participation
None of our executive officers served as a member of the board
of directors or the compensation committee of any entity that
has one or more executive officers serving on our Board or on
the Compensation Committee of our Board. Messers. Chereskin and
Dombalagian served as the members of our Compensation Committee
during the last completed fiscal year.
39
EQUITY
COMPENSATION PLAN INFORMATION
The following table sets forth information regarding all of the
Companys equity compensation plans as of December 31,
2009.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Number of Securities
|
|
|
|
|
Number of
|
|
|
|
|
|
|
|
Remaining Available
|
|
|
|
|
Securities to be
|
|
|
|
|
|
|
|
for Future Issuance
|
|
|
|
|
Issued Upon
|
|
|
|
Weighted-Average
|
|
|
|
Under Equity
|
|
|
|
|
Exercise of
|
|
|
|
Exercise Price of
|
|
|
|
Compensation Plan
|
|
|
|
|
Outstanding
|
|
|
|
Outstanding
|
|
|
|
(Excluding
|
|
|
|
|
Options, Warrants
|
|
|
|
Options, Warrants
|
|
|
|
Securities Reflected
|
|
|
|
|
and Rights
|
|
|
|
and Rights
|
|
|
|
in Column(a)
|
|
Plan Category
|
|
|
(a)
|
|
|
|
(b)
|
|
|
|
(c)(1)
|
|
Equity compensation plans approved by security holders:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Amended and Restated Cinemark Holdings, Inc. 2006 Long Term
Incentive Plan
|
|
|
|
2,483,581
|
|
|
|
$
|
7.63
|
|
|
|
|
10,897,498
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity compensation plans not approved by security holders:
|
|
|
|
-
|
|
|
|
|
-
|
|
|
|
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
|
|
2,483,581
|
|
|
|
$
|
7.63
|
|
|
|
|
10,897,498
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) |
|
Takes into account
764,078 shares of restricted stock and 487,611 hypothetical
shares under restricted stock unit awards outstanding as of
December 31, 2009.
|
40
SECURITY
OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
Beneficial ownership has been determined in accordance with the
applicable rules and regulations, promulgated under the Exchange
Act. Unless indicated below, to our knowledge, the persons and
entities named in the table have sole voting and sole investment
power with respect to all shares beneficially owned, subject to
community property laws where applicable. Shares of our Common
Stock subject to options that are currently exercisable or
exercisable within 60 days of Record Date are deemed to be
outstanding and to be beneficially owned by the person holding
the options for the purpose of computing the percentage
ownership of that person but are not treated as outstanding for
the purpose of computing the percentage ownership of any other
person. Percentage ownership is based on 111,534,694 shares
of Common Stock outstanding as of the Record Date. As of the
Record Date, there were 119 holders of record of our Common
Stock.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Beneficial Ownership
|
Names of Beneficial Owner
|
|
|
Number(1)
|
|
|
|
Percentage
|
5% Stockholders
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Madison Dearborn Capital Partners IV, LP(2)(10)
|
|
|
|
35,703,708
|
|
|
|
|
32.01%
|
|
|
|
|
|
|
|
|
|
|
|
|
Syufy Enterprises LP(3)(13)
|
|
|
|
5,849,402
|
|
|
|
|
5.24%
|
|
|
|
|
|
|
|
|
|
|
|
|
Directors and Named Executive Officers
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Lee Roy Mitchell(4)
|
|
|
|
12,122,845
|
|
|
|
|
10.87%
|
|
|
|
|
|
|
|
|
|
|
|
|
Alan W. Stock(5)
|
|
|
|
257,761
|
|
|
|
|
*
|
|
|
|
|
|
|
|
|
|
|
|
|
Timothy Warner(6)
|
|
|
|
230,809
|
|
|
|
|
*
|
|
|
|
|
|
|
|
|
|
|
|
|
Robert Copple(7)
|
|
|
|
228,543
|
|
|
|
|
*
|
|
|
|
|
|
|
|
|
|
|
|
|
Michael Cavalier(8)
|
|
|
|
156,400
|
|
|
|
|
*
|
|
|
|
|
|
|
|
|
|
|
|
|
Benjamin D. Chereskin(9)
|
|
|
|
5,168
|
|
|
|
|
*
|
|
|
|
|
|
|
|
|
|
|
|
|
Vahe A. Dombalagian(10)
|
|
|
|
35,703,708
|
|
|
|
|
32.01%
|
|
|
|
|
|
|
|
|
|
|
|
|
Peter R. Ezersky(11)
|
|
|
|
3,852
|
|
|
|
|
*
|
|
|
|
|
|
|
|
|
|
|
|
|
Steven P. Rosenberg(12)
|
|
|
|
17,866
|
|
|
|
|
*
|
|
|
|
|
|
|
|
|
|
|
|
|
Enrique F. Senior(13)
|
|
|
|
21,959
|
|
|
|
|
*
|
|
|
|
|
|
|
|
|
|
|
|
|
Carlos M. Sepulveda(13)
|
|
|
|
21,959
|
|
|
|
|
*
|
|
|
|
|
|
|
|
|
|
|
|
|
Roger T. Staubach(13)
|
|
|
|
21,959
|
|
|
|
|
*
|
|
|
|
|
|
|
|
|
|
|
|
|
Donald G. Soderquist(13)
|
|
|
|
21,959
|
|
|
|
|
*
|
|
|
|
|
|
|
|
|
|
|
|
|
Raymond W. Syufy(14)
|
|
|
|
5,849,402
|
|
|
|
|
5.24%
|
|
|
|
|
|
|
|
|
|
|
|
|
Executive Officers & Directors as a Group
(22 persons)(15)
|
|
|
|
55,021,861
|
|
|
|
|
49.33%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
* Less than 1%.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) |
|
In computing the number of shares of Common Stock beneficially
owned by a person and the percentage ownership of that person,
the Company deemed outstanding shares of Common Stock subject to
options held by that person that were currently exercisable at,
or were exercisable within 60 days of, the Record Date. The
Company did not deem these shares outstanding, however, for the
purpose of computing the percentage ownership of any other
person. |
41
|
|
|
(2) |
|
The address of MDCP is Three First National Plaza,
Suite 3800, 70 West Madison Street, Chicago, Illinois
60602. |
|
(3) |
|
The address of Syufy Enterprises LP is 150 Pelican Way,
San Rafael, California 94901. |
|
(4) |
|
Includes 5,419,095 shares of Common Stock owned by the
Mitchell Special Trust. Mr. Mitchell is the co-trustee of
the Mitchell Special Trust. Mr. Mitchell expressly
disclaims beneficial ownership of all shares held by the
Mitchell Special Trust. |
|
(5) |
|
Includes 69,328 shares of restricted stock. |
|
(6) |
|
Includes 40,640 shares of restricted stock. |
|
(7) |
|
Includes 38,249 shares of restricted stock. |
|
(8) |
|
Includes 31,077 shares of restricted stock. |
|
(9) |
|
Represents 5,168 shares of restricted stock. |
|
(10) |
|
The shares beneficially owned by MDCP may be deemed to be
beneficially owned by Madison Dearborn Partners IV, LP
(MDP IV), the sole general partner of
MDCP. John A. Canning, Jr., Paul J. Finnegan and Samuel M.
Mencoff are the sole members of a limited partner committee of
MDCP that has the power, acting by majority vote, to vote or
dispose of the shares beneficially held by MDCP.
Mr. Chereskin is a limited partner of MDP IV and a Managing
Director and Member of MDP (the general partner of MDP IV), and
therefore may be deemed to share beneficial ownership of the
shares beneficially owned by MDCP. Mr. Dombalagian is a
limited partner of MDP IV and a Managing Director of MDP, and
therefore may be deemed to share beneficial ownership of the
shares beneficially owned by MDCP. Messrs. Canning,
Finnegan, Mencoff, Chereskin and Dombalagian and MDP IV each
hereby disclaims any beneficial ownership of any shares
beneficially owned by MDCP. |
|
(11) |
|
Represents 3,852 shares of restricted stock. |
|
(12) |
|
Includes 10,121 shares of restricted stock. |
|
(13) |
|
Includes 8,833 shares of restricted stock. |
|
(14) |
|
Raymond Syufy is an executive officer of the general partner of
Syufy Enterprises, LP and may therefore be deemed to share
beneficial ownership of the 5,849,402 shares owned by Syufy
Enterprises, LP. Raymond Syufy expressly disclaims beneficial
ownership of the shares owned by Syufy Enterprises, LP. |
|
(15) |
|
Includes 321,952 shares of restricted stock. There are no
options exercisable within 60 days of the Record Date. |
SECTION 16(a)
BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Exchange Act requires the
Companys directors and executive officers, and persons who
own more than 10% of a registered class of the Companys
equity securities, to file with the SEC initial reports of
ownership and reports of changes in ownership of Common Stock
and other equity securities of the Company.
These insiders are required by SEC regulations to furnish the
Company with copies of all Section 16(a) forms they file,
including Forms 3, 4 and 5. To the Companys
knowledge, based solely on its review of the copies of such
reports, during the calendar year ended December 31, 2009,
all Section 16(a) filing requirements applicable to its
insiders were complied with.
42
CERTAIN
RELATIONSHIPS AND RELATED PARTY TRANSACTIONS
Our Board has adopted a 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. 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. At such Audit Committee meeting,
management shall recommend any related party transactions to be
entered into by the Company. If management becomes aware of a
proposed or existing related party transaction that has not been
pre-approved by the Audit Committee, management shall promptly
notify the Chairman of the Audit Committee who shall submit such
related party transaction to the 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 Chief Executive Officer, Chief Financial
Officer or General Counsel determines that it is not practicable
to wait until the next Audit Committee meeting, the Chairman of
the Audit Committee has been delegated the authority during this
period to review, consider and approve any such transaction. In
such event, the Chairman 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 are 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 meeting of the Audit Committee or
Board, as applicable.
Certain
Agreements
Plitt
Plaza Joint Venture
We lease one theatre from Plitt Plaza Joint Venture, or Plitt
Plaza. Plitt Plaza is indirectly owned by Lee Roy Mitchell.
Annual rent is approximately $120,000 plus certain taxes,
maintenance expenses and insurance. We recorded $118,000 of
facility lease expense payable to Plitt Plaza during the year
ended December 31, 2009.
Laredo
Theatre
We manage one theatre 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. owns the remaining 25% of the
limited partnership interests in Laredo and is 100% owned by
Mr. David Roberts, Lee Roy Mitchells
son-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 $102,000 of management fee revenue and received no
distributions during the year ended December 31, 2009. 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 theatre.
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
(the Aircraft Agreement), with Copper
Beech Capital, LLC, a Texas limited liability company (the
Operator), for the use of an aircraft
and flight crew on a time sharing basis. Lee Roy
Mitchell 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
43
and flight crew. The Company will pay 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 services and expenses such as
in-flight food and beverage services and passenger ground
transportation incurred during a trip. For the twelve months
ended December 31, 2009, the aggregate amounts paid to
Copper Beech LLC for the use of the aircraft was approximately
$64,000.
Century
Theatres
Our subsidiary, Century Theatres, leases 23 theatres and
two parking facilities from Syufy Enterprises or affiliates of
Syufy Enterprises, which owns approximately 5% of our issued and
outstanding shares of Common Stock. Raymond Syufy, a current
director and Joseph Syufy, a former director, are officers of
the general partner of Syufy Enterprises. Of these 23 leases, 20
have fixed minimum annual rent in an aggregate amount of
approximately $22 million. The three leases without minimum
annual rent have rent based upon a specified percentage of gross
sales as defined in the lease with no minimum annual rent. For
the year ended December 31, 2009, we paid approximately
$1.1 million in percentage rent for these leases.
Director
Nomination Agreement
On April 9, 2007, immediately prior to our initial public
offering, we entered into a Director Nomination Agreement with
certain of our then current stockholders permitting those
certain stockholders to designate persons for appointment or
nomination for election to the Board. Pursuant to the Director
Nomination Agreement, MDCP has the right to designate five
nominees to the Board, the Mitchell Investors (as defined in the
Director Nomination Agreement) have the right to designate two
nominees to the Board, Syufy Enterprises, LP has the right to
designate one nominee to the Board and the Quadrangle Investors
(as defined in the Director Nomination Agreement) had the right
to designate one nominee to the Board. Effective
December 9, 2009, as described below, the Quadrangle
Investors no longer have a right to designate a nominee to the
Board.
Certain
Transactions
On December 9, 2009, pursuant to an underwritten public
offering, Quadrangle Capital Partners LP, Quadrangle Select
Partners LP, Quadrangle Capital Partners A LP and Quadrangle
(Cinemark) Capital Partners LP (together, the
Quadrangle Investors) collectively
sold 2,325,545 shares of Common Stock. The Company was a
party to the underwriting agreement. We paid expenses incurred
by the Quadrangle Investors in connection with the offering,
other than the underwriting discounts and commissions, any costs
and expenses incurred by the Quadrangle Investors related to
their performance under the underwriting agreement and any
transfer taxes related to their sale of our Common Stock. The
proceeds to the Quadrangle Investors from this offering prior to
expenses was approximately $29 million. Peter Ezersky, a
current director of the Company, nominated pursuant to the
Director Nomination Agreement, is a Managing Member of
Quadrangle GP Investors LLC, which is the general partner of
Quadrangle GP Investors LP. Quadrangle GP Investors LP is the
general partner of Quadrangle Capital Partners LP, Quadrangle
Select Partners LP, Quadrangle Capital Partners A LP and
Quadrangle (Cinemark) Capital Partners LP. Upon consummation of
the offering, the Quadrangle Investors own no shares of Common
Stock and do not have any rights to nominate a director pursuant
to the Director Nomination Agreement. Peter Ezersky continues to
be a member of the Board as a Class II director, subject to
his re-election upon the expiry of his term at the 2012 annual
meeting.
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ITEM 2
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RATIFICATION
OF THE SELECTION OF THE INDEPENDENT AUDITOR
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Deloitte & Touche, LLP has been selected by the Audit
Committee and ratified by the Board as our independent
registered public accountant for the fiscal year ending
December 31, 2010. If ratification of this selection of
auditors is not approved by a majority of the shares of Common
Stock, the Audit Committee may review its future selection of
auditors. Even if the selection is ratified, the Audit Committee
in its discretion may direct the appointment of a different
independent auditing firm at any time during the year if the
Audit Committee believes that such a change would be in the best
interests of the Company and its stockholders.
44
A representative of Deloitte & Touche, LLP is expected
to be present at the Annual Meeting and will have an opportunity
to make a statement if desired and will be available to answer
appropriate questions.
Unless marked to the contrary, proxies received will be voted
FOR ratification of the appointment of
Deloitte & Touche, LLP as the independent registered
public accountant for the fiscal year ending December 31,
2010.
Recommendation
of the Board
Our Board unanimously recommends that stockholders vote
FOR ratification of the appointment of
Deloitte & Touche, LLP as our independent auditor for
the fiscal year ending December 31, 2010.
ADDITIONAL
INFORMATION
Stockholders
Sharing a Common Address
If you and other residents at your mailing address own Common
Stock in street name, your broker or bank may have sent you a
notice that your household will receive only one proxy statement
for each company in which you hold stock through that broker or
bank. Nevertheless, each stockholder will receive a separate
proxy card. This practice, known as householding, is
designed to reduce the Companys printing and postage
costs. If you did not respond that you did not want to
participate in householding, the broker or bank will assume that
you have consented, and will send one copy of our proxy
statement to your address. You may revoke your consent to
householding by contacting your broker, if you hold Common Stock
in street name, or the Companys Secretary, if you are the
registered holder of the Common Stock. The revocation of your
consent to householding will be effective 30 days following
its receipt. Upon written or oral request to the Companys
Secretary at the address or telephone number provided above, the
Company will deliver promptly a separate copy of this proxy
statement to a stockholder at a shared address to which a single
copy of this proxy statement was delivered. By written or oral
request to the same address (i) a stockholder may direct a
notification to the Company that the stockholder wishes to
receive a separate annual report or proxy statement in the
future or (ii) stockholders who are sharing an address and
who are receiving delivery of multiple copies of the
Companys annual reports or proxy statements can request
delivery of only a single copy of these documents to their
shared address.
Incorporation
by Reference
The material under the headings Compensation Committee
Report, Audit Committee Report and the
disclosure regarding independence of the members of the Audit
Committee shall not be deemed to be filed with the
SEC nor deemed incorporated into any future filing with the SEC,
except to the extent that we specifically incorporate it by
reference into the filing.
45
OTHER
MATTERS
The Board knows of no other business that will be presented at
the Annual Meeting. If any other business is properly brought
before the Annual Meeting, proxies received will be voted in
respect thereof in accordance with the recommendation of the
Board. Discretionary authority with respect to such other
matters is granted by the execution of the enclosed proxy.
AVAILABILITY
OF REPORT ON
FORM 10-K
The Companys audited consolidated financial statements are
included in the annual report on
Form 10-K
for the fiscal year ending December 31, 2009 filed with the
SEC. Upon your written request, we will provide to you a
complimentary copy of our 2009 annual report on
Form 10-K
(without exhibits) as filed with the SEC. Your request should be
mailed to the Companys offices, addressed as follows:
Cinemark Holdings, Inc., Attention: Company Secretary, 3900
Dallas Parkway, Suite 500, Plano, Texas 75093. A free copy
of the
Form 10-K
may also be obtained at the Web site maintained by the SEC at
www.sec.gov, and by visiting our Web site at
www.cinemark.com and clicking on Investor
Relations and then on SEC Filings.
QUESTIONS
If you have questions or need more information about the Annual
Meeting, write to:
Cinemark Holdings, Inc.
3900 Dallas Parkway, Suite 500
Plano, Texas 75093
Attention: Michael D. Cavalier, Secretary
By Order of the Board of Directors,
Michael D. Cavalier
Senior Vice President - General
Counsel and Secretary
March 31, 2010
46
CINEMARK HOLDINGS, INC.
ANNUAL MEETING OF STOCKHOLDERS
Thursday, May 13, 2010
9:00 a.m.
3800 Dallas Parkway
Plano, Texas 75093
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Cinemark Holdings, Inc. 3900 Dallas Parkway, Suite 500 Plano, Texas 75093
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proxy
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This proxy is solicited by the Board of Directors for use at the Annual Meeting on May 13, 2010. |
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The shares of stock you hold in your account will be voted as you specify on the reverse side. |
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If no choice is specified, the proxy will be voted FOR Items 1 and 2. |
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By signing the proxy, you revoke all prior proxies and appoint Alan W. Stock, Robert D. Copple, and
Michael D. 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. |
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See reverse for voting instructions.
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Shareholder ServicesSM P.O. Box 64945 St. Paul, MN 55164-0945 |
COMPANY #
Vote by Internet, Telephone or Mail
24 Hours a Day, 7 Days a Week
Your phone or Internet vote authorizes the named
proxies to vote your shares in the same manner as if
you marked, signed and returned your proxy card.
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INTERNET www.eproxy.com/cnk
Use the Internet to vote your proxy until
12:00 p.m. (CT) on May 12, 2010. |
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PHONE 1-800-560-1965
Use a touch-tone telephone to vote your proxy until
12:00 p.m. (CT) on May 12, 2010. |
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MAIL Mark, sign and date your proxy
card and return it in the postage-paid
envelope provided. |
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If you vote your proxy by Internet or by Telephone, you do NOT need to mail back your Proxy Card. |
TO VOTE BY MAIL AS THE BOARD OF DIRECTORS RECOMMENDS ON ALL ITEMS BELOW,
SIMPLY SIGN, DATE, AND RETURN THIS PROXY CARD.
ò Please detach here ò
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The Board of Directors Recommends a Vote FOR Items 1 and 2. |
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1. Election of directors: |
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01 Benjamin D. Chereskin
02 Lee Roy Mitchell
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03 Raymond W. Syufy |
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Vote FOR
all nominees
(except as marked)
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Vote WITHHELD
from all nominees
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(Instructions: To withhold authority to vote for any
indicated nominee, write the number(s) of the nominee(s)
in the box provided to the right.) |
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2. Approval and Ratification of the appointment of Deloitte & Touche, LLP, as
the independent registered public accountant. |
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o For
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Against
o Abstain |
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THIS PROXY WHEN PROPERLY EXECUTED WILL BE VOTED AS DIRECTED OR, IF NO DIRECTION IS GIVEN, WILL BE VOTED FOR EACH PROPOSAL. |
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Address Change? Mark Box o Indicate changes below: |
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Date
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Signature(s) in Box
Please sign exactly as your name(s) appears
on Proxy. If held in joint tenancy, all
persons should sign. Trustees,
administrators, etc., should include title
and authority. Corporations should provide
full name of corporation and title of
authorized officer signing the Proxy. |
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