Holders of Holdings’ Common Stock and AMC Preferred Equity Units are entitled to one vote per each share and holders of AMC Preferred Equity Units are entitled to one vote per unit. Holders of Common Stock and AMC Preferred Equity Units share ratably (based on the number of shares of Common Stock and/or AMC Preferred Equity Units held) in any dividend declared by its board of directors. AMC Preferred Equity Units are convertible into shares of Common Stock upon stockholder approval to authorize sufficient additional Common Stock to do so, otherwise the Common Stock and AMC Preferred Equity Units are not convertible into any other shares of Holdings’ capital stock.

During the years ended December 31, 2022, December 31, 2021 and December 31, 2020, the Company entered into various equity distribution agreement with sales agents to sell shares of the Company’s Common Stock and AMC Preferred Equity Units, from time to time, through “at-the-market” offering programs. Subject to the terms and conditions of the equity distribution agreements, the sales agents will use reasonable efforts consistent with their normal trading and sales practices, applicable law and regulations, and the rules of the NYSE to sell the Common Stock and AMC Preferred Equity Units from time to time based upon the Company’s instructions for the sales, including any price, time or size limits specified by the Company. The Company intends to use the net proceeds, from the sale of Common Stock and AMC Preferred Equity Units pursuant to the equity distribution agreements to repay, refinance, redeem or repurchase the Company’s existing indebtedness (including expenses, accrued interest and premium, if any), capital expenditures and otherwise for general corporate purposes.

On December 22, 2022, the Company entered into a forward purchase agreement (the “Forward Purchase Agreement”) with Antara pursuant to which the Company will (i) sell Antara 106,595,106 APEs for an aggregate purchase price of $75.1 million and (ii) simultaneously purchase from Antara $100 million aggregate principal amount of the Company's 10%/12% Cash/PIK Toggle Second Lien Notes due 2026 in exchange for 91,026,191 APEs. Immediately prior to entry into the Forward Purchase Agreement, Antara purchased 60,000,000 APEs (the “Initial APEs”) under the Company’s at-the-market program for $34.9 million. The Forward Purchase Agreement and Initial APEs were determined to be equity investments and the related $34.9 million is recorded into Additional Paid-in Capital at December 31, 2022.

During the years ended December 31, 2022, December 31, 2021 and December 31, 2020, the Company paid fees to the sales agents of approximately $5.7 million, $40.3 million, $8.1 million, respectively. During the year ended December 31, 2021, the Company paid other fees of $0.8 million.

The gross proceeds raised from the “at-the-market” sale of Common Stock and AMC Preferred Equity Units during the years ended December 31, 2022, December 31, 2021 and December 31, 2020, are summarized in the table below:

(1)

On December 11, 2020, the Company entered into an equity distribution agreement with Goldman Sachs & Co. LLC and B. Riley Securities, Inc., as sales agents to sell up to 178.0 million shares of the Company’s Common Stock and 178.0 million AMC Preferred Equity Units, of which approximately 40.93 million shares of Common Stock and 40.93 million shares of AMC Preferred Equity Units were sold and settled during December 2020 and approximately 137.07 million shares of Common Stock and 137.0 million shares of AMC Preferred Equity Units were sold and settled during the year ended December 31, 2021.

(2)

Included in the Common Stock shares and AMC Preferred Equity Unit shares sold of 43.0 million each was the reissuance of treasury stock shares of approximately 3.7 million shares. Upon the sales of treasury stock, the Company reclassified amounts recorded in treasury stock to additional paid-in capital of $37.1 million and loss of $19.3 million to retained earnings during the year ended December 31, 2021.

Transaction Related to Exchange Offers

Certain backstop purchasers of the First Lien Notes due 2026 that participated in the Exchange Offer received five million common shares and five million AMC Preferred Equity Units. See Note 8—Corporate Borrowings and Finance Lease Liabilities for further information.

Transactions with Mudrick

On June 1, 2021, the Company issued to Mudrick 8.5 million shares of the Company’s Common Stock, 8.5 million of AMC Preferred Equity Units and raised gross proceeds of $230.5 million and paid fees of approximately $0.1 million related to this transaction. The Company issued the shares in reliance on an exemption from registration provided by section 4(a)(2) of the Securities Act of 1933. The Company intends to use the proceeds from the share sale primarily for the pursuit of value creating acquisitions of theatre assets and leases, as well as investments to enhance the consumer

appeal of its theatres. In addition, with these funds, the Company intends to continue exploring deleveraging opportunities.

On December 14, 2020, Mudrick received a total of 21,978,022 shares of the Company’s Common Stock and 21,978,022 of AMC Preferred Equity Units; of which 16,483,516 shares and units relates to consideration received for a commitment fee and 27,472,528 shares and units as consideration received for (i) the commitment provided with respect to the First Lien Toggle Notes due 2026 and (ii) the Second Lien Exchange. See Note 8—Corporate Borrowings and Finance Lease Liabilities for further information.

Class B Common Stock

On January 27, 2021, pursuant to the Stock Repurchase and Cancellation Agreement with Wanda dated as of September 14, 2018, and in connection with the Conversion of the Convertible Notes due 2026 into shares of the Company’s Common Stock by Silver Lake and certain co-investors, 5,666,000 shares of the Company’s Class B common stock and 5,666,000 AMC Preferred Equity Units held by Wanda were forfeited and cancelled.

On February 1, 2021, Wanda exercised their right to convert all outstanding Class B common stock of 46,103,784 and 46,103,784 of AMC Preferred Equity Units to Common Stock thereby reducing the number of outstanding Class B common stock to zero, which resulted in the retirement of Class B common stock. The Third Amended and Restated Certificate of Incorporation of the Corporation provides that Class B common stock may not be reissued by the Company.

Dividends

Since April 24, 2020, the Company has been prohibited from making dividend payments in accordance with the covenant suspension conditions in its Credit Agreement (for further information see Note 8—Corporate Borrowings and Finance Lease Liabilities to the Consolidated Financial Statements included in Part II, Item 8 on this Annual Report on Form 10-K). The following is a summary of dividends and dividend equivalents declared to stockholders during the year ended December 31, 2020:

Amount per

Total Amount

Share of

Share of AMC

Declared

Declaration Date

Record Date

Date Paid

Common Stock

Preferred Equity Units

(In millions)

February 26, 2020

March 9, 2020

March 23, 2020

0.015

3.2

During the year ended December 31, 2020, the Company paid dividends and dividend equivalents of $6.5 million and accrued $0.4 million for the remaining unpaid dividends at December 31, 2020. The aggregate dividends paid for Common Stock, AMC Preferred Equity Units, Class B common stock, and dividend equivalents were approximately $0.8 million, $0.8 million, $1.6 million, and $3.3 million, respectively.

Related Party Transactions

On September 14, 2018, the Company entered into the Investment Agreement with Silver Lake, relating to the issuance to Silver Lake (or its designated affiliates) of $600.0 million principal amount of the Convertible Notes due 2024 and entered into an amended and restated investment agreement with Silver Lake, relating to the issuance of the Convertible Notes due 2026 on August 31, 2020. See Note 8—Corporate Borrowings and Finance Lease Liabilities for information regarding the conversion of the $600.0 million principal amount of the Company’s Convertible Notes due 2026 into shares of the Company’s Common Stock in January 2021. As a result of the conversion, Silver Lake was no longer a related party of the Company.

During the year ended December 31, 2022, the Company repurchased $15.0 million aggregate principal of the Second Lien Notes due 2026 from Antara, which subsequently became a related party on February 7, 2023, for $5.9 million and recorded a gain on extinguishment of $12.0 million. See Note 16—Subsequent Events for more information on transactions with Antara.

Treasury Stock

On February 27, 2020, the Company announced that its Board of Directors authorized a share repurchase program for an aggregate purchase of up to $200.0 million shares of Common Stock and up to $200.0 million shares of

AMC Preferred Equity Units. As of April 24, 2020, the Company is prohibited from making purchases under its authorized stock repurchase program in accordance with the covenant suspension conditions in its Credit Agreement. As of December 31, 2022, $200.0 million remained available for repurchase under this plan. A three-year time limit had been set for the completion of this program, expiring February 26, 2023.

Special Dividend

On August 4, 2022 the Company announced that its Board of Directors declared a special dividend for one AMC Preferred Equity Unit for each share of Class A common stock outstanding at the close of business August 15, 2022, the record date. The dividend was paid at the close of business August 19, 2022 to investors who held Class A common shares as of August 22, 2022, the ex-dividend date.

Each AMC Preferred Equity Unit is a depositary share and represents an interest in one one-hundredth (1/100th) of a share of Series A Convertible Participating Preferred Stock evidenced by a depositary receipt pursuant to a deposit agreement. The Company has 50,000,000 Preferred Stock shares authorized, 10,000,000 of which have currently have been allocated and 7,245,872 have been issued under the depositary agreement as a Series A Convertible Participating Preferred Stock, leaving 40,000,000 unallocated Preferred Stock shares. Each AMC Preferred Equity Unit is designed to have the same economic and voting rights as a share of Class A common stock. Trading of the AMC Preferred Equity Units on the NYSE began on August 22, 2022 under the ticker symbol “APE”. Due to the characteristics of the AMC Preferred Equity Units, the special dividend had the effect of a stock split pursuant to ASC 505-20-25-4. Accordingly, all references made to share, per share, or common share amounts in the accompanying consolidated financial statements and applicable disclosures include Class A common stock and AMC Preferred Equity Units and have been retroactively adjusted to reflect the effects of the special stock dividend as a stock split.

Stock-Based Compensation

2013 Equity Incentive Plan

The 2013 Equity Incentive Plan, as amended (“EIP”), provides for grants of non-qualified stock options, incentive stock options, stock appreciation rights, restricted stock awards, restricted stock units (“RSUs”), performance stock units (“PSUs), stock awards, and cash performance awards. The maximum number of equity interests in Holdings available for delivery pursuant to awards granted under the EIP is 15 million shares of Common Stock and 7,306,354 AMC Preferred Equity Units. At December 31, 2022, the aggregate number of equity interests in Holdings available for grant was 4,293,562 shares and 4,293,562 units, respectively.

The following table presents the stock-based compensation expense recorded within general and administrative: other:


	Year Ended
	December 31,		December 31,		December 31,
(In millions)	2022		2021		2020
Board of director stock award expense	$	0.8	$	0.9	$	0.5
Restricted stock unit expense		13.3		12.6		9.7
Performance stock unit expense		8.4		24.5		1.2
Special performance stock unit expense		—		5.1		14.0
Total stock-based compensation expense	$	22.5	$	43.1	$	25.4

As of December 31, 2022, the estimated remaining unrecognized compensation cost related to stock-based compensation arrangements was approximately $15.1 million. The weighted average period over which this remaining compensation expense will be recognized is approximately 1.3 years. The Company accounts for forfeitures when they occur.

Plan Amendment due to stock split

The 2013 Plan contemplates equitable adjustments for certain transactions such as a stock split. On August 19, 2022, the Compensation Committee approved an adjustment to the 2013 Equity Incentive Plan to entitle each participant one AMC Preferred Equity Unit and one share of Common Stock for each RSU or PSU that vests. The Company determined that this modification was a Type 1 (probable-to-probable) modification that did not increase the fair value of the award and therefore did not require additional stock-based compensation expense to be recognized. References made to share, per share, or common share amounts have been retroactively adjusted to reflect the effects of the stock split.

Awards Granted in 2022, 2021, and 2020 and Other Activity

AMC’s Board of Directors approved awards of stock, RSUs, and PSUs to certain of the Company’s employees and directors under the 2013 Equity Incentive Plan. During years 2022, 2021, and 2020, the grant date fair value of these awards was based on the closing price of AMC’s stock on the date of grant, which ranged from $1.18 to $9.84 per share.

A dividend equivalent for restricted stock units and performance stock units equal to the amount paid in respect of one share of Common Stock and one AMC Preferred Equity Unit underlying the unit began to accrue with respect to the unit on the date of grant. Such accrued dividend equivalents are paid to the holder upon vesting of the units. Each unit represents the right to receive one share of Common Stock and one AMC Preferred Equity Unit at a future date.

The award agreements generally had the following features:

●

Board of Director Stock Award Agreement: The Company granted fully vested shares of Common Stock and AMC Preferred Equity Units to its independent members of AMC’s Board of Directors during the years ended December 31, 2022, Decembers 31, 2021, and December 31, 2020 as follows:


	Year Ended
	December 31, 2022	December 31, 2021	December 31, 2020
Common Stock	41,650	124,054	77,090
AMC Preferred Equity Units	41,650	124,054	77,090

●

Restricted Stock Unit Award Agreement: The Company granted RSU awards of 1,394,270, 5,375,626, 3,022,594 to certain members of management during the years ended December 31, 2022, December 31, 2021, and December 31, 2020, respectively. The Company records stock-based compensation expense on a straight-line recognition method over the requisite vesting period. The RSUs granted during 2022, 2021, and 2020 vest over three years with 1/3 vesting in each year. These RSUs will be settled within 30 days of vesting.

●

Restricted Stock Unit Award Executive Agreement: During the year ended December 31, 2019, the Company granted RSU awards of 400,000 to an executive officer (“2019 RSU executive”) of the Company with one-half vesting on the first anniversary of employment on December 2, 2020 and the remaining one-half vesting ratably over a three year period ending on December 2, 2022. All unvested RSUs shall be forfeited upon termination of services. These RSUs will be settled within 30 days of vesting.

●

Performance Stock Unit Award Agreement: 2022 PSU Awards. During 2022, 1,394,270 total PSUs were awarded (“2022 PSU award”) to certain members of management and executive officers, with the total PSUs divided into three separate year tranches, with each tranche allocated to a fiscal year within the performance period (“Tranche Year”). The PSUs within each Tranche Year are further divided between two performance targets; the Adjusted EBITDA performance target and free cash flow performance target. The 2022 PSU awards will vest based on achieving 80% to 120% of the performance targets, with the corresponding vested unit amount ranging from 50% to 200%. If the performance targets are met at 100%, the 2022 PSU awards will vest at 1,394,270 units in the aggregate. No PSUs will vest for each Tranche Year if the Company does not achieve 80% of the Tranche Year’s Adjusted EBITDA and free cash flow targets.

The Compensation Committee establishes the annual performance targets at the beginning of each year.

Therefore, the grant date (and fair value measurement date) for each Tranche Year is the date at the beginning of each year when a mutual understanding of the key terms and conditions are reached per ASC 718, Compensation - Stock Compensation. The 2022 PSU award grant date fair value for the 2022 Tranche Year award was approximately $4.5 million and the 2021 PSU award grant date fair value for the 2022 Tranche Year award of 1,757,080 units was approximately $17.3 million, measured using performance targets at 100%. The 2020 PSU Award for the 2022 Tranche Year was previously granted in 2020, and was subsequently modified on October 30, 2020 where the grant date fair value was not determined until February 16, 2022 when the performance targets were established. As a result, the 2020 PSU award grant date for the 2022 Tranche Year award of 859,366 units was approximately $8.5 million, measured using performance targets at 100%. At December 31, 2022, the 2022 Tranche Year target performance conditions for both the annual Adjusted EBITDA and free cash flow were achieved at 0% and 79%, respectively.

2021 PSU Awards. On February 23, 2021, 5,375,626 total PSUs were awarded (“2021 PSU award”) to certain members of management and executive officers, with the total PSUs divided into three separate year tranches, with each tranche allocated to a fiscal year within the performance period (“Tranche Year”). The PSUs within each Tranche Year are further divided between two performance targets; the Adjusted EBITDA performance target and free cash flow performance target. The 2021 PSU awards will vest based on achieving 80% to 120% of the performance targets, with the corresponding vested unit amount ranging from 50% to 200% (or 30% to 200% for PSU awards granted prior to year 2020). If the performance targets are met at 100%, the 2021 PSU awards will vest at 5,375,626 units in the aggregate. No PSUs will vest for each Tranche Year if the Company does not achieve 80% of the Tranche Year’s Adjusted EBITDA and free cash flow targets.

November 3, 2021 modification. On November 3, 2021, based upon the recommendation of the Compensation Committee, the Board of Directors of the Company approved a modification to the PSUs for the awards granted in 2021 and 2020. The service condition modification included separating the vesting period subject to the participant’s continued employment through the end of the three-year cumulative period into three separate year service periods applicable to each tranche year. The Company accounted for the modification in accordance with ASC 718-20, Compensation-Stock Compensation, as a Type I modification (probable-to-probable) with no change to the fair value measurement of the awards.

2020 PSU Awards: During the year ended December 31, 2020, PSU awards of 2,872,594 were granted to certain members of management and executive officers, with three-year cumulative Adjusted EBITDA and free cash flow target conditions and service conditions, covering a performance period beginning January 1, 2020 and ending on December 31, 2022, prior to the service condition and performance condition modifications on November 3, 2021 and October 30, 2020, respectively.

2019 PSU Awards: During the year ended December 31, 2019, PSU awards of 1,460,334 were granted to certain members of management and executive officers, with three-year cumulative Adjusted EBITDA and diluted earnings per share performance target conditions and service conditions, covering a performance period beginning January 1, 2019 and ending on December 31, 2021, prior to the service condition and performance condition modifications on November 3, 2021 and October 30, 2020, respectively.

2018 PSU Awards: During the year ended December 31, 2018, PSU awards of 1,307,338 were granted to certain members of management and executive officers with three-year cumulative net profit, Adjusted EBITDA, and diluted earnings per share performance target conditions and service conditions, covering a performance period beginning January 1, 2018 and ending on December 31, 2020, prior to the performance condition modification on October 30, 2020.

October 30, 2020 modification. On October 30, 2020, based upon the recommendation of the Compensation Committee, the Board of Directors of the Company approved a modification to the PSUs for the awards granted in 2018, 2019, and 2020. The modification included separating the three-year cumulative performance targets into three separate year performance targets applicable to each tranche year. Due to the dramatic impact of the COVID-19 pandemic on the Company’s business, the Board of Directors waived attainment of the 2020 tranche year performance targets and established a vesting level for such PSUs at 90%. In addition, the service conditions were modified, and vesting is now subject to the participant’s continued employment through the end of the three-year cumulative period. The Company accounted for the modification in accordance with ASC 718-20, Compensation-Stock Compensation, as an

exchange of the original award, that was not expected to vest, for a new award. The Company measured the fair value of the new award on the modification date, October 30, 2020, because the Company determined that achieving performance thresholds were probable for certain tranche awards.

●

Special Performance Stock Unit Executive Award Agreement: During the year ended December 31, 2019, a PSU market condition award of 600,000 was granted to an executive officer of the Company that would vest based upon achieving target prices for the Company’s Common Stock. This award was subsequently cancelled and replaced with the PSU market condition award granted on February 26, 2020.

On February 26, 2020 and March 5, 2020, special performance stock unit awards (“SPSUs”), totaling 7,140,000 units were granted to certain executive officers that will vest based upon achieving target prices for the Company’s Class Common Stock. The SPSUs are eligible to vest in tranches contingent upon (i) the attainment of certain 20 trading day volume weighted average closing prices and (ii) fulfillment of the three-year service requirement from the date of grant. The vested SPSUs will be settled within 30 days of vesting. Any unvested SPSUs remaining after 10 years will be forfeited. If service is terminated prior to the three year anniversary from the date of grant, unvested SPSUs shall be forfeited. The target prices and vesting tranches are set forth in the table below:


Tranche	Target Stock Price	SPSUs Vesting
1	$12.00	1,190,006
2	$16.00	1,190,006
3	$20.00	1,190,006
4	$24.00	1,190,006
5	$28.00	1,189,988
6	$32.00	1,189,988

The Company used the Monte Carlo simulation model to estimate the fair value of the SPSUs. This model utilizes multiple input variables to estimate the probability that the market conditions will be achieved. The Company used the following assumptions in determining the fair value of the SPSUs:


		Assumptions
Expected stock price volatility		45.0%
Expected dividend yield		2.02% and 2.44%
Risk-free interest rate		1.33% and 0.92%
Grant-date stock price		$5.93 and $4.92

The expected stock price volatility was based on the historical volatility of the Company’s stock for a period equivalent to the derived service period. The expected dividend yield is based on annual expected dividend payments. The risk-free interest rate was based on the treasury yield rates as of the date of grant for a period equivalent to the performance measurement period. The fair value of each SPSU is amortized over the requisite or derived service period, which is up to 6.4 years. The SPSUs granted on February 26, 2020 and March 5, 2020 have a grant date fair value of approximately $12.2 million.

On October 30, 2020, based upon the recommendation of the Compensation Committee, the Board of Directors of the Company approved a modification to the SPSUs for the awards. Each SPSU award agreement was amended as follows:

●

The stock price thresholds (ranging from $12 to $24) and service requirement for tranches 1 through 4 of the SPSUs were eliminated and such SPSUs vested on October 30, 2020;

●

Participants shall be prohibited from selling the shares of Common Stock issued upon the foregoing vesting until October 30, 2021;

●

The stock price threshold for tranche 5 of the SPSUs was changed to $4 from $28 and the stock price threshold for tranche 6 of the SPSUs was changed to $8 from $32; and

●

The service requirement for tranches 5 and 6 was shortened to end on October 30, 2021.

As a result of the SPSU modification of market conditions, the incremental fair value amount assigned to the grant date fair value was approximately $7.3 million in accordance with ASC 718-20, Compensation-Stock Compensation. In January 2021, the market condition requirement for SPSUs was met as a result of

exceeding the 20-day trailing volume weighted average stock price threshold target for tranche 5 and tranche 6 of $4 and $8, respectively. The stock-based compensation costs for SPSUs were recorded on a straight-line basis through October 30, 2021, which was the end of the service requirement period.

The following table represents the nonvested RSU and PSU activity for the years ended December 31, 2022, December 31, 2021 and December 31, 2020:


		Weighted
		Average
	Shares of RSU	Grant Date
	and PSU	Fair Value
Beginning balance at January 1, 2020	6,540,186	$	7.94
Granted	13,035,188		2.33
Vested	(4,944,750)		4.31
Forfeited	(2,040,244)		8.49
Cancelled (1)	(4,271,858)		3.61
Beginning balance at January 1, 2021 (2)	8,318,522	$	2.76
Granted	10,178,468		3.85
Vested	(1,297,720)		1.41
Forfeited	(433,546)		5.37
Cancelled (1)	(1,082,258)		1.41
Nonvested at January 1, 2022	15,683,466	$	3.96
Granted (3)	1,674,802		9.75
Vested	(5,636,324)		3.59
Forfeited	(716,872)		5.86
Cancelled (1)	(4,746,590)		3.59
Nonvested at December 31, 2022 (4)	6,258,482	$	5.91
Tranche Years 2023 and 2024 awarded under the 2022 PSU award and Tranche Year 2023 awarded under the 2021 PSU award with grant date fair values to be determined in years 2023 and 2024, respectively	2,523,692
Total Nonvested at December 31, 2022	8,782,174

(1)

Represents vested RSUs, PSUs, and SPSUs surrendered in lieu of taxes and cancelled awards returned to the 2013 Equity Incentive Plan.

(2)

Includes awards modified during 2020 where grant date fair value was not determined until 2021.

(3)

The number of PSU shares granted under the Tranche Year 2022 is based on attainment of performance targets at 0% for the Adjusted EBITDA target and 79% for the free cash flow target.

(4)

See Note 16—Subsequent Events for information regarding vesting modifications to the 2022 PSUs.