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SEC Filings

10-Q
CINEMARK HOLDINGS, INC. filed this Form 10-Q on 05/10/2016
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Table of Contents

CINEMARK HOLDINGS, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

In thousands, except share and per share data

 

Below is a summary of restricted stock activity for the three months ended March 31, 2016:

 

     Shares of      Weighted
Average
 
     Restricted      Grant Date  
     Stock      Fair Value  

Outstanding at January 1, 2016

     757,775       $ 30.73   

Granted

     269,214       $ 29.83   

Vested

     (375,585    $ 24.70   

Forfeited

     (30,170    $ 33.06   
  

 

 

    

Outstanding at March 31, 2016

     621,234       $ 33.86   
  

 

 

    

Unvested restricted stock at March 31, 2016

     621,234       $ 33.86   
  

 

 

    
     Three Months Ended
March 31,
 
     2016      2015  

Compensation expense recognized during the period

   $ 2,901       $ 2,590   

Fair value of restricted shares that vested during the period

   $ 12,742       $ 13,161   

Income tax deduction upon vesting of restricted stock awards

   $ 4,748       $ 3,311   

As of March 31, 2016, the estimated remaining unrecognized compensation expense related to restricted stock awards was $16,277 and the weighted average period over which this remaining compensation expense will be recognized is approximately three years.

Restricted Stock Units – During the three months ended March 31, 2016, the Company granted restricted stock units representing 253,661 hypothetical shares of common stock to employees. The restricted stock units vest based on a combination of financial performance factors and continued service. The financial performance factors are based on an implied equity value concept that determines an internal rate of return (“IRR”) during the two fiscal year periods ending December 31, 2017 based on a formula utilizing a multiple of Adjusted EBITDA subject to certain specified adjustments as specified by the Compensation Committee prior to the grant date. The financial performance factors for the restricted stock units have a threshold, target and maximum level of payment opportunity and vest on a prorata basis according to the IRR achieved by the Company during the performance period. If the IRR for the two-year period is at least 6.0%, which is the threshold, one-third of the maximum restricted stock units vest. If the IRR for the two-year period is at least 8.0%, which is the target, two-thirds of the maximum restricted stock units vest. If the IRR for the two-year period is at least 10.0%, which is the maximum, 100% of the maximum restricted stock units vest. Grantees are eligible to receive a ratable portion of the common stock issuable if the IRR is within the targets previously noted. Further, as an example, if the Company achieves an IRR equal to 9.0%, the number of restricted stock units that shall vest will be greater than the target but less than the maximum number that would have vested had the Company achieved the highest IRR. In accordance with their respective employment agreements, the awards granted to the Company’s former Chief Executive Officer and former President and Chief Operating Officer vest upon the certification of the IRR for the 2016 award by the Compensation Committee. All other restricted stock units granted during 2016 will vest subject to an additional two-year service requirement and will be paid in the form of common stock if the participant continues to provide services through February 2020, which is the fourth anniversary of the grant date. Restricted stock unit award participants are eligible to receive dividend equivalent payments from the grant date if, and at the time that, the restricted stock unit awards vest.

 

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