AMC ENTERTAINMENT HOLDINGS, INC.

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(1)

Adjusted EBITDA and FCF are non-GAAP financial measures and should not be construed as an alternative to net earnings and cash flow from operating activities (each as determined in accordance with U.S. GAAP) as indicators of operating performance.

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On February 19, 2025, the Compensation Committee determined that the industry underperformance, primarily due to changes to studio movie release schedules in response to the continuing impacts of industry strikes in the prior year, had a material impact on the Company’s performance in 2024. In light of the fact that these industry impediments were outside the control of the Company and were not known at the time the performance goals were established, the Compensation Committee, in consultation with the Company’s independent compensation consultant, approved a modification to the Adjusted EBITDA performance goal applicable to equity grants allocated to the 2024 Tranche Year. The Compensation Committee did not modify the FCF performance goal applicable to equity grants allocated to the 2024 Tranche Year. The modified Adjusted EBITDA performance goal is set forth below:

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(1)

Adjusted EBITDA is a non-GAAP financial measure and should not be construed as an alternative to net earnings (as determined in accordance with U.S. GAAP) as an indicator of operating performance.

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Because achievement of the performance targets prior to modification was improbable and became probable after modification, in accordance with ASC 718, Compensation—Stock Compensation, additional stock compensation for the PSUs allocated to the 2024 Tranche Year was recognizable on the modification date equal to the incremental fair value. Since the modification occurred after the end of the fiscal year, the additional stock compensation for the PSUs allocated to the 2024 Tranche Years will be included in the 2025 compensation tables.

The Compensation Committee reviewed the Company’s financial results and certified achievement of $343.9 million Adjusted EBITDA and ($296.3 million) FCF (each calculated as set forth in “Reconciliation of Adjusted EBITDA and Free Cash Flow” below) for the year ended December 31, 2024. As a result, all outstanding PSU tranches allocated to the 2024 Tranche Year with an Adjusted EBITDA target vested at the 146% level and those with an FCF target vested at the 200% level. Absent the modifications approved by the Compensation Committee, the PSU tranches allocated to the 2024 Tranche Year with an Adjusted EBITDA target would have vested at the 98% level.

2023 Tranche Year Modification

On February 22, 2024, the Compensation Committee determined that the industry underperformance and prolonged strikes by the WGA and SAG-AFTRA had a material impact on the Company’s performance in 2023. In light of the fact that these industry impediments were outside the control of the Company and were not known at the time the performance goals were established, the Compensation Committee, in consultation with the Company’s independent compensation consultant, approved modifications to the performance goals applicable to equity grants allocated to the 2023 Tranche Year.

Because achievement of the performance targets prior to modification was improbable and became probable after modification, in accordance with ASC 718, Compensation—Stock Compensation, additional stock compensation for the PSUs allocated to the 2023 Tranche Year was recognizable on the modification date equal to the incremental fair value. The additional stock compensation for the PSUs allocated to the 2023 Tranche Years is included in the 2024 compensation tables that follow.

As a result of the modifications, all outstanding PSU tranches allocated to the 2023 Tranche Year with an Adjusted EBITDA target vested at the 200% level and those with an FCF target vested at the 200% level. Absent the modifications approved by the Compensation Committee, the PSU tranches allocated to the 2023 Tranche Year with an Adjusted EBITDA target vested at the 86% level and those with an FCF target would not have vested.

The table below summarizes the incremental number of shares granted to each NEO (the “2023 Tranche Year Modification”) and the corresponding value (based upon the $4.42 closing price for our Common Stock on February 22, 2024) for the 2023 Tranche Year Modification included in the Summary Compensation Table: