Management Information Circular
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Management Information Circular Annual Meeting of Shareholders of CINEPLEX INC. To be held on May 11, 2016 CONTENTS NOTICE NOTICE OF OF ANNUAL ANNUAL GENERAL MEETING MEETING MANAGEMENT INFORMATION CIRCULAR .................... 1 The annual meeting of shareholders of Cineplex Inc. (the “Corporation”) will THE CORPORATION ...................................................... 1 be held on May, 11, 2016 at the Cineplex Cinemas Yonge-Dundas and VIP, 10 Dundas St. East, 4th floor, Toronto, Ontario at 10:30am Eastern Daylight Time. PROXY SOLICITATION AND VOTING ............................. 2 AT THE MEETING YOU WILL BE ASKED TO: QUORUM ..................................................................... 4 • receive the consolidated financial statement of the Corporation for the COMMON SHARES AND PRINCIPAL HOLDERS year ended December 31, 2015, together with the auditor’s report THEREOF ................................................................. 4 thereon; MATTERS TO BE CONSIDERED AT THE MEETING ......... 4 • elect directors of the Corporation to hold office until the close of the DIRECTOR NOMINEES .................................................. 7 next annual meeting; • to appoint PricewaterhouseCoopers LLP as auditors of the Corporation DIRECTOR COMPENSATION ........................................ 17 for the coming year and to authorize the directors to fix the DIRECTOR COMPENSATION PHILOSOPHY ................. 17 remuneration to be paid to the auditors; COMPENSATION OF THE DIRECTORS ......................... 17 • vote on an advisory resolution on our approach to executive DIRECTOR SHARE OWNERSHIP GUIDELINES .............. 17 compensation; and DIRECTORS’ DEFERRED SHARE UNIT PLAN ................ 18 • transact such other business as may property be brought before the meeting or any continuation of the meeting after any postponement. DIRECTOR COMPENSATION TABLE ............................ 18 The accompanying Management Information Circular provides detailed COMMITTEE MEMBERSHIP ........................................ 19 information relating to the matters to be addressed at the meeting and forms COMPENSATION DISCUSSION & ANALYSIS ................. 19 part of this notice. NAMED EXECUTIVE OFFICERS .................................... 19 Shareholders are encouraged to express their vote in advance by utilizing the “notice-and-access” process for distribution of the Meeting materials to OBJECTIVES & PHILOSOPHY ....................................... 19 Shareholders that came into effect on February 11, 2013, under National GOVERNANCE ............................................................ 20 Instrument 54-101 - Communication with Beneficial Owners of Securities of a COMPENSATION PRACTICES & POLICIES ................... 22 Reporting Issuer and National Instrument 51-102 - Continuous Disclosure Obligations COMPETITIVE BENCHMARKING ................................. 24 . Notice-and-access is a set of rules that allows issuers to post electronic ELEMENTS OF COMPENSATION OVERVIEW .............. 26 versions of meeting materials, including circulars and annual financial BASE SALARY .............................................................. 26 statements, online via SEDAR at www.sedar.com and one other website, MID AND LONG-TERM INCENTIVE COMPENSATION . 30 rather than mailing paper copies of such meeting materials to shareholders. BENEFITS AND PERQUISITES ...................................... 32 Electronic copies of the Management Information Circular and the Corporation’s consolidated financial statements and management’s RETIREMENT SAVINGS AND PENSION AGREEMENTS 33 discussion and analysis for the year ended December 31, 2015 may be found EXECUTIVE SUCCESSION PLANNING .......................... 34 on SEDAR at www.sedar.com and also on the Corporation’s investor relations PERFORMANCE GRAPH .............................................. 35 website at http://ir.cineplex.com/. Utilizing the notice-and-access process directly benefits the Corporation through a reduction in both postage and SUMMARY COMPENSATION TABLE ........................... 36 printing costs, and also promotes environmental responsibility by decreasing INCENTIVE PLAN AWARDS ......................................... 37 the large volume of paper documents generated by printing proxy-related SUMMARY OF LONG-TERM INCENTIVE PLANS .......... 38 materials. It also provides Shareholders with faster access to information about the Corporation. PENSION ARRANGEMENTS ........................................ 39 Shareholders may contact the Corporation’s Chief Legal Officer (telephone: TERMINATION AND CHANGE OF CONTROL (416) 323-7274 or e-mail: [email protected]) with questions BENEFITS .............................................................. 40 about notice-and-access or to obtain, free of charge, paper copies of the EMPLOYMENT AGREEMENTS .................................... 44 Management Information Circular and the Corporation’s 2015 financial OTHER INFORMATION .............................................. 45 statements. DATED at Toronto, Ontario this 28th day of March, 2016. DIRECTORS’ AND OFFICERS’ INSURANCE ................... 45 By order of the Directors INTERESTS OF INFORMED PERSONS IN MATERIAL “Ellis Jacob” TRANSACTIONS .................................................... 45 President and Chief Executive Officer CORPORATE GOVERNANCE ....................................... 45 Note: If you are a Shareholder and you are not able to be present at the Meeting, please OTHER BUSINESS........................................................ 52 exercise your right to vote by signing and returning the enclosed form of proxy to CST Trust Company so as to arrive not less than 48 hours before the time set for the holding ADDITIONAL INFORMATION ...................................... 52 of the Meeting or any reconvened meeting after an adjournment or postponement APPROVAL OF DIRECTORS ......................................... 52 thereof (excluding Saturdays, Sundays and holidays). The enclosed form of proxy may be returned by facsimile to (416) 368-2502 or toll-free at (866) 781-3111, or by mail: (a) in the enclosed envelope; or (b) in an envelope addressed to Cineplex Inc., c/o Proxy SCHEDULE A – MANDATE OF THE BOARD OF DIRECTORS Department, CST Trust Company, P.O. Box 721, Agincourt, Ontario, M1S 0A1. The SCHEDULE B – COMPENSATION, NOMINATING AND CORPORATE Directors of the Corporation have fixed the record date for the Meeting as of March 24, GOVERNANCE COMMITTEE TERMS OF REFERENCE 2016 (the “Record Date”). Only Shareholders of record at the close of business on the Record Date will be entitled to notice of the Meeting. Phyllis Yaffe, Chair of the Board of Directors WELCOME TO THE CINEPLEX INC. ANNUAL SHAREHOLDER MEETING Dear Fellow Shareholders, I am so pleased to begin this letter by stating that 2015 was the best year on record for Cineplex and we are optimistic about the outlook for 2016. Please join us at the company’s Annual Meeting, which will be held on May 11, 2016 at 10:30 AM Eastern Daylight Time at Cineplex Cinemas Yonge-Dundas and VIP, 10 Dundas Street East, Toronto, Ontario. The Cineplex board of directors and management have worked hard this past year as Cineplex continues to diversify the business to extract greater value from our core competencies. The Annual Meeting is your opportunity to learn about the performance of the company and our plans for the future. Please read the accompanying Annual Report which provides a great deal of information on how the company operates its various business units. In advance of the meeting, I encourage you to read the Management Information Circular, which describes the business to be conducted at the meeting and describes Cineplex’s approach to executive compensation and corporate governance practices. Another important document is the Annual Information Form (available on SEDAR), which provides details on the company’s history and structure, describes the business strategy, and includes a range of other information that can be helpful to shareholders. Now, it is my pleasure to provide an overview of the board’s approach to strategy and governance. Strategic Focus: The board is fully engaged in the affairs of the company. We work diligently with management throughout the year on the company’s strategic direction. The primary focus being diversifying the business beyond exhibition to lessen the dependency on Hollywood film product. As you review the annual report, you will see how this strategy contributed meaningfully to the company’s record success in 2015. Here are Cineplex’s key strategic areas of focus: • Continue to enhance and expand existing exhibition infrastructure and service offerings to attract new customers, increase the frequency of existing customers and maximize revenue per guest; • Capitalize on core media strengths and infrastructure to provide continued growth of Cineplex’s media businesses; • Develop and scale gaming related amusement and leisure concepts, including The Rec Room, by extending existing capabilities and infrastructure; • Continue to expand Cineplex’s presence as an entertainment destination for Canadians, providing in- theatre, at-home and on-the-go experiences - Cineplex Anywhere; and • Pursue selective acquisitions and opportunities that are strategic, accretive and capitalize on Cineplex’s core strengths. We address the corporate strategy at every regular board meeting and hold a board strategy meeting annually. Members of both the executive and senior management