DEF 14A of Cineverse Corp., Nov 20, 2024

DEF 14A of Cineverse Corp.

Filed Nov 20, 2024 · FY20240000950170-24-129241

Open on EDGAR

  1. PROPOSAL ONE ELECTION OF DIRECTORS

    PROPOSAL ONE ELECTION OF DIRECTORS The Board currently consists of four (4) directors. All of the current members of the Board have been nominated for election. The size of the Board is currently set at four (4) members. Stockholders and their proxies cannot vote for more than four (4) nominees at the Annual Meeting. Each nominee has consented to being named as a nominee for election as a director and has agreed to serve if elected; however, if a nominee should withdraw his or her name from consideration for any reason or otherwise become unable to serve before the Annual Meeting, the Board reserves the right to substitute another person as nominee, and the persons named on your proxy card as proxies will vote for any substitute nominated by the Board. At the Annual Meeting, directors will be elected to serve one-year terms expiring at the next annual meeting of stockholders or until their successors are elected or until their earlier resignation or removal. This Proposal One relates to the election of directors to take effect immediately upon the Annual Meeting. The directors shall be elected by a plurality of the Votes Cast at the Annual Meeting in accordance with our by-laws. If any nominee is not available for election at the time of the Annual Meeting (which is not anticipated), the proxy holders named in the proxy, unless specifically instructed otherwise in the proxy, will vote for the election of such other person as the existing Board may recommend, unless the Board decides to reduce the number of directors of the Company. Certain information about the nominees to the Board is set forth below. Christopher J. McGurk, 67, has been the Company’s Chief Executive Officer and Chairman of the Board since January 2011. Mr. McGurk was the founder and Chief Executive Officer of Overture Films from 2006 until 2010, and also the Chief Executive Officer of Anchor Bay Entertainment, which distributed Overture Films’ products to the home entertainment industry. From 1999 to 2005, Mr. McGurk was Vice Chairman of the Board and Chief Operating Officer of Metro-Goldwyn-Mayer Inc. (“MGM”), acting as the company’s lead operating executive until MGM was sold for approximately $5 billion to a consortium of investors. Mr. McGurk joined MGM from Universal Pictures, where he served in various executive capacities, including President and Chief Operating Officer, from 1996 to 1999. From 1988 to 1996, Mr. McGurk served in several senior executive roles at The Walt Disney Studios, including Studios Chief Financial Officer and President of The Walt Disney Motion Picture Group. Mr. McGurk has previously served on the boards of IDW Media Holdings, Inc., BRE Properties, Inc., DivX Inc., DIC Entertainment, Pricegrabber.com, LLC and MGM Studios, Inc. Mr. McGurk has had a long and transformative executive career in film, TV and streaming content industries. Mr. McGurk’s extensive career in various sectors of the theatrical production and exhibition industry will provide the Board with the benefits of his knowledge of and experience in this field, as well as his wide-spread contacts within the industry. Peter C. Brown, 66, has been a member of the Board since September 2010. He is Chairman of Grassmere Partners, LLC, a private investment firm he founded in 2009. He served as Chairman of the Board, Chief Executive Officer, and President of AMC Entertainment Inc. (“AMC”), one of the world’s leading theatrical exhibition companies, from 1999 to 2009, and Chief Financial Officer from 1991 to 1999. In 1997, he founded EPR Properties, (NYSE: EPR) a real estate investment trust and served as Chairman of the Board until 2003. He currently serves on the board of EPR Properties. Mr. Brown also serves as a director of Lumen Technologies, Inc. (NYSE: LUMN), a facilities-based technology and communications company. Past additional public company boards include National CineMedia, Inc., Midway Games, Inc., LabOne, Inc., and Protection One, Inc. Mr. Brown’s extensive experience in the entertainment industry and other public company boards provides the Board with valuable knowledge and insight relevant to the Company’s business. Mary Ann Halford, 66, has been a member of the Board since December 2023. Ms. Halford is an internationally recognized media and entertainment operator, advisor, and entrepreneur. She is the Founder and Managing Principal of Halford Media Advisory, working with clients in the US and internationally on transformation strategies. Prior to setting up her own firm, she was a Partner at Altman Solon, a Telecommunications, Media, and Technology (“TMT”) strategy consultancy focusing on the media industry. Ms. Halford has previously served as a Senior Managing Director at FTI Consulting and EVP of Fox International Entertainment Channels, a division of Fox Entertainment Group. In 2002, she co-founded El Camino Entertainment Group which consolidated operating businesses in the live family entertainment industry, which currently operates as North American Midway Entertainment. Ms. Halford also serves on the board of EightCo Holdings (NASDAQ: OCTO). Past board positions include director of Verve Group SE (f/k/a Media and Games Invest) (OMX: M8G), Vinco Ventures (NASDAQ: BBIG) and Triton Digital (private). Ms. Halford’s extensive experience in the media and entertainment industry as an operator, a consultant and board director provides the Board with valuable insights on the changing dynamics in the industry, particularly in the areas of technology and content monetization and distribution. Patrick W. O’Brien, 78, has been a member of the Board since July 2015. He currently serves as the Managing Director & Principal of Granville Wolcott Advisors, a company he formed in 2009, which provides business consulting, due diligence and asset management services for public and private clients. Mr. O’Brien has previously served as Chairman of the Board and CEO of Livevol, Inc., a private company that was a leader in equity and index options technology, which was successfully sold to CBOE Holdings. During the past five years, Mr. O’Brien has also served on the boards of Creative Realities, Inc., ICPW Liquidation Trust, and Merriman Holdings, Inc. Mr. O’Brien brings to the Board his seasoned executive and business expertise in private and public companies with an emphasis on financial analysis and business development. THE BOARD UNANIMOUSLY RECOMMENDS A VOTE “FOR” THE ELECTION OF THE NOMINEES NAMED ABOVE.

  2. PROPOSAL TWO NON-BINDING ADVISORY VOTE ON EXECUTIVE COMPENSATION

    PROPOSAL TWO NON-BINDING ADVISORY VOTE ON EXECUTIVE COMPENSATION SEC rules adopted pursuant to the Dodd-Frank Wall Street Reform and Consumer Protection Act, enacted in July 2010 (the “Dodd-Frank Act”), enable our stockholders to vote to approve, on a non-binding, advisory basis, the compensation of our named executive officers as disclosed in this proxy statement. As described in detail in the discussion of executive compensation below, we believe that executive compensation should be focused on promoting Company performance and stockholder value. To achieve these goals our executive compensation program emphasizes pay for performance and aligning the interests of our executives with those of our stockholders through the use of long-term incentives and the encouragement of equity ownership. In addition, our executive compensation program is designed to allow us to recruit, retain and motivate employees who play a significant role in our current and future success. Please read the 2024 Summary Compensation Table and the other related tables and accompanying narrative for a detailed description of the fiscal year 2024 compensation of our named executive officers. We believe that the 2024 compensation of each of our named executive officers was reasonable and appropriate and aligned with the Company’s 2024 results and the achievement of the objectives of our executive compensation program. The vote on this resolution is not intended to address any specific element of compensation; rather, the vote relates to the overall compensation of our named executive officers. This vote is advisory only and is not binding on the Company or the Board. Although the vote is non-binding, our Board values the opinions of our stockholders and the Board and the Compensation Committee will consider the outcome of the vote when making future compensation decisions for our named executive officers. This non-binding proposal requires approval by a majority of the Votes Cast on this Proposal Two at the Annual Meeting. Accordingly, we ask our stockholders to vote in favor of the following resolution: “RESOLVED, that the Company’s stockholders approve, on an advisory basis, the compensation of the named executive officers, as disclosed in the Company’s Proxy Statement for the 2024 Annual Meeting of Stockholders pursuant to the compensation disclosure rules of the Securities and Exchange Commission.” THE BOARD RECOMMENDS A VOTE “FOR” APPROVING THE COMPENSATION OF OUR NAMED EXECUTIVE OFFICERS. PROPOSAL THREE AMENDMENT TO 2017 EQUITY INCENTIVE PLAN TO INCREASE THE TOTAL NUMBER OF SHARES OF CLASS A COMMON STOCK AVAILABLE FOR ISSUANCE THEREUNDER Our Board adopted the Company’s 2017 Equity Incentive Plan (the “2017 Plan”), on August 7, 2017 and, in on August 31, 2017, our stockholders approved the 2017 Plan at an annual meeting of stockholders. Under the 2017 Plan, we may grant incentive and nonqualified stock options, stock, restricted stock, restricted stock units (“RSUs”), stock appreciation rights (“SARs”), performance awards including performance stock units (“PSUs”) and other equity-based awards. The 2017 Plan is administered by the Compensation Committee and currently has an expiration date of August 31, 2027. The 2017 Plan originally authorized up to 105,413 shares of the Company’s Class A Common Stock for issuance pursuant to awards made under the 2017 Plan. After several amendments to increase the number of shares authorized for issuance under the 2017 Plan, the current number of shares authorized for issuance thereunder is 2,054,913. The Company believes that the availability of an additional 450,000 shares of the Company’s Class A Common Stock under the 2017 Plan is in the best interests of the Company and its stockholders because the availability of an adequate equity incentive program is an important factor in attracting and retaining qualified officers, directors and employees essential to the success of the Company (whether through acquisitions or otherwise) and in aligning their long-term interests with those of the stockholders. The increase in the number of shares of Class A Common Stock available for issuance under the 2017 Plan will permit the Company to continue the operation of the 2017 Plan for the benefit of new participants (either new hires to current operations, employees of acquired companies, or new directors who will receive an initial grant of shares of restricted stock upon joining the Board), as well as to allow additional awards to current participants. Participants under the 2017 Plan may include officers, directors and employees of the Company, as well as consultants to the Company under certain circumstances. Pursuant to this proposal, in the form of the amendment attached hereto as Appendix A, the Board proposes to amend the 2017 Plan to increase the number of shares of Class A Common Stock authorized for issuance under the 2017 Plan from 2,054,913 shares to 2,504,913 shares. If approved by stockholders, the proposed amendment to the 2017 Plan would become effective promptly after such approval. If the proposed amendment to the 2017 Plan is not approved, the 2017 Plan will continue as currently in effect unless and until otherwise amended in accordance with its terms.

  3. Administration

    Administration The Compensation Committee administers the 2017 Plan. The Compensation Committee has the authority to select the individuals who will participate in the 2017 Plan (“Participants”) and to grant options, SARs, restricted stock and restricted stock units, performance shares and performance units and cash-based and other stock-based awards upon such terms (not inconsistent with the terms of the 2017 Plan) as the Compensation Committee considers appropriate. In addition, the Compensation Committee has complete authority to interpret all provisions of the 2017 Plan, to prescribe the form of notices or agreements evidencing awards under the 2017 Plan (each, an “Award Agreement”), to adopt, amend and rescind rules and regulations pertaining to the administration of the 2017 Plan and to make all other determinations necessary or advisable for the administration of the 2017 Plan, including revising the terms of the 2017 Plan as they apply to non-U.S. employees, to comply with local law. The Compensation Committee may delegate its authority to administer the 2017 Plan to one of the Company’s officers. The Compensation Committee, however, may not delegate its authority with respect to individuals who are subject to Section 16 of the Exchange Act. As used in this summary, the term “Administrator” means the Compensation Committee and any delegate, as appropriate.

  4. Non-employee Director Awards

    Non-employee Director Awards If the 2017 Plan is approved by stockholders, it is anticipated that each non-employee director will receive, following the date of each annual meeting of stockholders, a restricted stock award valued at $90,000, based on the trailing 20-day volume weighted average price (“VWAP”) of the Class A Common Stock as of the date of such annual meeting. These restricted stock awards will vest on a quarterly basis, so long as the director remains continuously in service. In addition, new non-employee directors will receive a grant of restricted stock valued at $180,000 based on the trailing 20-day VWAP of the Class A Common Stock as of the grant date (the date the director begins Board service), and such shares will vest in three equal installments on the first three anniversaries of the date of grant. Non-employee directors will also be eligible to receive other types of awards under the 2017 Plan, but such awards are discretionary.

  5. Awards

    Awards Options. Options granted under the 2017 Plan may be incentive stock options (“ISOs”) or nonqualified stock options. An option entitles the Participant to purchase shares of Class A Common Stock from the Company at the option price. The option price will be fixed by the Administrator at the time the option is granted, but the price cannot be less than the per share fair market value on the date of grant (or, with respect to ISOs, in the case of a holder of more than 10 percent of outstanding voting securities, 110 percent of the per share fair market value). The option price may be paid in cash, a cash equivalent acceptable to the Administrator, with shares of Class A Common Stock, by a cashless broker-assisted exercise, or a combination thereof, or any other method accepted by the Compensation Committee. Options may be exercised in whole or in part at such times and subject to such conditions as may be prescribed by the Administrator, provided that an option shall be exercisable after a period of time specified by the Administrator which may not be less than one year, except as the Administrator may provide in an Award Agreement. The maximum period in which an option may be exercised will be fixed by the Administrator at the time the option is granted but cannot exceed 10 years (five years for ISOs granted to a holder of more than 10 percent of the Company’s outstanding voting securities). The Award Agreement will set forth the extent to which a Participant may exercise the option following termination of employment (which for non-employee directors and other third-party service providers shall mean a termination of the performance of services to the Company; references in this description of the new Plan to a “termination of employment” shall mean a termination of the performance of services where the award holder is a non-employee director or other third-party service provider to the Company). No employee may be granted ISOs that are first exercisable in a calendar year for Common Stock having an aggregate fair market value (determined as of the date the option is granted) exceeding $100,000. SARs. Under the 2017 Plan, a stock appreciation right (“SAR”) generally entitles the Participant to receive with respect to each share of Class A Common Stock encompassed by the exercise of the SAR, the excess of the fair market value of a share of Common Stock on the date of exercise over the initial value of the SAR. The initial value of the SAR is the fair market value of a share of Class A Common Stock on the date of grant. SARs may be exercised at such times and subject to such conditions as may be prescribed by the Administrator, provided that an SAR shall be exercisable after a period of time specified by the Administrator which may not be less than one year, except as the Administrator may provide in an Award Agreement. The maximum period in which an SAR may be exercised will be fixed by the Administrator at the time the SAR is granted, but cannot exceed 10 years for awardees within the U.S. The Award Agreement shall set forth the extent to which a Participant may exercise the SAR following termination of employment. The amount payable upon the exercise of an SAR may, in the Administrator’s discretion, be settled in cash, Class A Common Stock, or a combination thereof, or any other manner approved by the Administrator. The form in which the SAR will be paid out to a Participant after exercise, as well as any conditions on any shares of Class A Common Stock received upon exercise of an SAR, will be set forth in the Award Agreement pertaining to the SAR grant. Restricted Stock and Restricted Stock Units. The 2017 Plan permits the grant of restricted stock and restricted stock units. Restricted stock units are similar to restricted stock except that no shares of Class A Common Stock are actually granted on the grant date of the award. An award of restricted stock or restricted stock units will be forfeitable, or otherwise restricted, until conditions established at the time of the grant are satisfied. These conditions may include, for example, a requirement that the Participant complete a specified period of service or the attainment of certain performance objectives. Any restrictions imposed on an award of restricted stock or restricted stock units will be prescribed by the Administrator. Restricted stock and restricted stock units shall vest over a period of at least one year, except as the Administrator may provide in an Award Agreement. The Award Agreement shall set forth the extent to which a Participant may retain restricted stock or restricted stock units following termination of employment. Restricted stock will become freely transferrable by the Participant after all conditions and restrictions have been satisfied. Vested restricted stock units may, in the Administrator’s discretion, be settled in cash, Class A Common Stock, or a combination of cash and Class A Common Stock or any other manner approved by the Administrator. Performance Units and Performance Shares. The 2017 Plan provides for the award of performance units and performance shares. A performance share award entitles a Participant to receive a payment equal to the fair market value of a specific number of shares of Class A Common Stock. A performance unit award is similar to a performance share award except that a performance unit award is not necessarily tied to the value of Class A Common Stock. The Administrator will prescribe the conditions that must be satisfied before an award of performance units or performance shares is earned. These conditions may include, for example, a requirement that the Participant complete a specified period of service or the attainment of certain performance objectives which, under the terms of the 2017 Plan, must be for a period of at least one year, except as the Administrator may provide in an Award Agreement. The Award Agreement shall set forth the extent to which a Participant may retain performance units and performance shares following termination of employment. To the extent that performance units or performance shares are earned and vested, the obligation may be settled in cash, Class A Common Stock or a combination of cash and Class A Common Stock. If the award is settled in shares of Class A Common Stock, the shares may be subject to additional restrictions deemed appropriate by the Administrator. Cash-Based and Other Stock-Based Awards. The 2017 Plan also allows the Administrator to make cash-based and other stock and equity-based awards to Participants on such terms and conditions as the Administrator prescribes. The Award Agreement shall set forth the extent to which a Participant may retain cash-based and other stock and equity-based awards following termination of employment. To the extent that any cash-based and other stock and equity-based awards are granted, they may, in the Administrator’s discretion, be settled in cash or Class A Common Stock.

  6. Performance Objectives

    Performance Objectives The Compensation Committee may prescribe that (1) an option or SAR is exercisable, (2) an award of restricted stock or restricted stock units is vested or transferable or both, (3) performance units or performance shares are earned, or (4) payment under a cash-based or other stock-based award is earned, only upon the attainment of certain performance objectives. Such performance objectives may be used to measure the performance of any Participant, the Company, an affiliate, a subsidiary, as a whole or any business unit or line of business, or any combination thereof. The performance objectives may be measured on an absolute, gross, total, net per share, average, adjusted or relative basis (or measure based on changes therein), including as compared to the performance of a group of comparator companies or index. The performance objectives will be based on one or more of (a) net earnings or net income (before or after taxes); (b) earnings per share (basic or diluted); (c) net sales or revenue growth; (d) net operating profit; (e) return measures (including, but not limited to, return on assets, capital, invested capital, equity, sales, or revenue); (f) cash flow (including, but not limited to, throughput, operating cash flow, free cash flow, cash flow return on equity, and cash flow return on investment); (g) earnings before or after taxes, interest, depreciation, and/or amortization; (h) earnings before taxes; (i) gross or operating margins; (j) corporate value measures; (k) capital expenditures; (l) unit volumes; (m) productivity ratios; (n) share price (including, but not limited to, growth measures and total shareholder return); (o) cost or expense; (p) margins (including, but not limited to, debt or profit); (q) operating efficiency; (r) market share; (s) customer satisfaction; (t) working capital targets or any element thereof; (u) economic value added or EVA® (net operating profit after tax minus the sum of capital multiplied by the cost of capital); (v) health, safety and environmental performance; (w) corporate advocacy metrics; (x) strategic milestones (including, but not limited to, debt reduction, improvement of cost of debt, equity or capital, completion of projects, achievement of synergies or integration objectives, or improvements to credit rating, inventory turnover, weighted average cost of capital, implementation of significant new processes, productivity or production, product quality, and any combination of the foregoing); (y) strategic sustainability metrics (including, but not limited to, corporate governance, enterprise risk management, employee development, and portfolio restructuring); and (z) stockholder equity or net worth.

  7. Change in Control

    Change in Control Unless otherwise provided in an Award Agreement, upon a Change in Control of the Company the following shall occur: • Unearned performance awards shall be (i) earned on a pro-rata basis at the higher of actual or target performance and (ii) measured as of the end of the calendar quarter before the change in control date or, if the award is stock-price based, as of the effective date of the change in control; • Earned but unvested performance awards shall be immediately vested and payable as of the change in control; • For awards other than performance awards, a Replacement Award (that is, a comparable award from the surviving entity after the change in control) may be issued. • If a Replacement Award is not issued, awards shall be immediately payable or exercisable. • Other than with respect to outstanding performance awards, the Compensation Committee may cancel outstanding awards and award holders will receive shares or cash equal to the difference between the payments shareholders receive in connection with the change in control and the purchase price per share, if any. To the extent the Class A Common Stock continues to be publicly traded after a qualifying change in control, awards that are not performance awards shall continue under their applicable terms. Except as may be provided in a severance compensation agreement between the Company and the Participant, if, in connection with a change in control, a Participant’s payment of any awards will cause the Participant to be liable for federal excise tax levied on certain “excess parachute payments,” then either (i) all payments otherwise due; or (ii) the reduced payment amount to avoid an excess parachute payment, whichever will provide the Participant with the greater after-tax economic benefit taking into account any applicable excise tax, shall be paid to the Participant, and in no event will any Participant be entitled to receive any kind of gross-up payment or reimbursement for any excise taxes payable in connection with change in control payments.

  8. Board of Directors

    Board of Directors The Board oversees the Company’s risk management including understanding the risks the Company faces and what steps management is taking to manage those risks, as well as understanding what level of risk is appropriate for the Company. The Board’s role in the Company’s risk oversight process includes receiving regular updates from members of senior management on areas of material risk to the Company, including operational, financial, legal and regulatory, human resources, employment, and strategic risks. The Company’s leadership structure currently consists of the combined role of Chairman of the Board and Chief Executive Officer and a separate Lead Independent Director. Mr. O’Brien serves as our Lead Independent Director. The Lead Independent Director’s responsibilities include presiding at all meetings of the Board at which the Chairman is not present, including executive sessions of the independent directors, serving as a liaison between the Chairman and the independent directors, reviewing information sent to the Board, consulting with the Nominating Committee with regard to the membership and performance evaluations of the Board and Board committee members, calling meetings of and setting agendas for the independent directors, and serving as liaison for communications with stockholders. The Board intends to meet at least quarterly and the independent directors serving on the Board intend to meet in executive session (i.e., without the presence of any non-independent directors and management) immediately following regularly scheduled Board meetings. During the fiscal year ended March 31, 2024 (the “Last Fiscal Year”), the Board held nine (9) meetings. Each current member of the Board, who was then serving, attended at least 75 percent of the total number of meetings of the Board, and of the committees of the Board on which they served in the Last Fiscal Year. Messrs. Brown and O’Brien and Ms. Halford are considered “independent” under the rules of the SEC and Nasdaq. The Company does not currently have a policy in place regarding attendance by Board members at the Company’s annual meetings of stockholders. All of the current directors attended last year's annual meeting. The Board has three standing committees, consisting of an Audit Committee, a Compensation Committee and a Nominating Committee. Membership in each committee is shown in the following table.

  9. Board of Directors

    | | Audit Committee | Compensation Committee | Nominating Committee | | Christopher J. McGurk* | | | | | Peter C. Brown | ▲ | ● | ● | | Mary Ann Halford | ● | ▲ | ● | | Patrick W. O’Brien** | ● | ● | ▲ |

  10. Board of Directors

    ▲ Committee Chair ● Committee Member * Chairperson of the Board ** Lead Independent Director The Board periodically evaluates its and the committees’ performance, including composition and efficiency of functioning.

  11. Compensation Committee

    Compensation Committee The Compensation Committee consists of Messrs. Brown and O’Brien and Ms. Halford. Ms. Halford is the Chair of the Compensation Committee. The Compensation Committee met two (2) times during the Last Fiscal Year and acted three (3) times by unanimous written consent in lieu of holding a meeting. The Compensation Committee approves the compensation package of the Company’s Chief Executive Officer and, based on recommendations by the Company’s Chief Executive Officer, approves the levels of compensation and benefits payable to the Company’s other executive officers, reviews general policy matters relating to employee compensation and benefits and recommends to the entire Board, for its approval, stock option and other equity-based award grants to its executive officers, employees and consultants and discretionary bonuses to its executive officers and employees. The Compensation Committee has the authority to appoint and delegate to a sub-committee the authority to make grants and administer bonus and compensation plans and programs. Messrs. Brown and O’Brien and Ms. Halford are considered “independent” under the rules of the SEC and the Nasdaq. The Compensation Committee has adopted a formal written charter (the “Compensation Charter”). The Compensation Charter sets forth the duties, authorities and responsibilities of the Compensation Committee. The Compensation Committee periodically evaluates its charter to make appropriate changes and to ensure compliance with SEC regulations and Nasdaq listing standards. The Compensation Charter is available on the Company’s Internet website at www.investor.cineverse.com. The Compensation Committee, when determining executive compensation (including under the executive compensation program, as discussed below under the heading Executive Officer and Director Compensation), evaluates the potential risks associated with the compensation policies and practices. The Compensation Committee believes that the Company’s compensation programs are designed with an appropriate balance of risk and reward in relation to the Company’s overall compensation philosophy and do not encourage excessive or unnecessary risk-taking behavior. In general, the Company compensates its executives in a combination of cash and equity awards. The equity awards contain either or both performance targets and vesting provisions, both of which encourage the executives, on a long-term basis, to strive to enhance the value of such compensation as measured by the trading price of the Class A common stock or other performance metrics. The Compensation Committee does not believe that this type of compensation encourages excessive or unnecessary risk-taking behavior. As a result, we do not believe that risks relating to our compensation policies and practices for our employees are reasonably likely to have a material adverse effect on the Company. The Company intends to recapture compensation if and as required under the Sarbanes-Oxley Act. However, there have been no instances where it needed to recapture any compensation. The Compensation Committee has engaged Aon, a compensation consulting firm to provide guidance for cash and equity compensation to executive officers and directors, as requested, which the Compensation Committee considered in reaching its determinations of such compensation. In addition, Aon was available to respond to specific inquiries throughout the year.

  12. Stockholder Engagement

    Stockholder Engagement Outreach Our Say-on Pay-Vote at the 2023 annual meeting of stockholders received 62% support from our stockholders, a decrease from 81% at the 2022 annual meeting of stockholders. Our Board of Directors viewed the decrease in support as an indication that engagement was needed to ensure we have a clear understanding of, and opportunity to respond to, our stockholders’ views on our compensation program. Accordingly, following the 2023 annual meeting of stockholders, we contacted 21 of our stockholders, including our single largest holder, and met with 12 of them (including the largest holder) to discuss their views on our executive compensation practices in 2024. Stockholder Feedback During such meetings, we sought feedback from such stockholders and provided an open forum for them to discuss and comments on any aspects of our executive compensation program. Overall, we received constructive feedback from the stockholders who engaged with us regarding our executive compensation program. These meetings provided the Compensation Committee and the Board of Directors with valuable insights into our stockholders’ perspectives on our compensation program and potential improvements to the program. The following paragraphs reflect the feedback and our responses. Investors were generally supportive of our regular executive compensation program designs. We do not plan to make specific changes to our regular executive compensation program design at this time, based on this consistent feedback. Investors said they were comfortable with, and appreciative of, the longevity and commitment of our management team. The members of our most senior management team, consisting of Chris McGurk, Erick Opeka and Gary Loffredo (our NEOs), have been with the Company since 2011, 2012 and 2000, respectively. Their long tenures demonstrate their faith in, and dedication to, the growth and success of the Company. Investors said they appreciate the visibility into our compensation program and suggest we commit to providing more transparent disclosure in the future around the goal-setting process, including goals, targets and related payout. As described in our proxy statement, we have not changed our approach to executive compensation in the last several years and will continue to consider the performance of the Company overall and of the part of our business with which each executive is involved, as appropriate, when determining bonuses and equity compensation. We believe that our use of annual cash bonuses (short-term awards), together with restricted stock and SARs that vest over time and PSUs that are earned and vest based on performance metrics (long-term awards), provide appropriate incentives to our executives while aligning their interests with interests of our stockholders. In addition, most of the awards made to executives in recent years may be settled in cash or in shares of our Class A common stock, at the Company’s discretion. At the time each such award is settled (upon vesting, exercise or other circumstance), the Compensation Committee determines whether to settle such award in cash or in stock based on then-current conditions relating to our cash position and the number of shares available in the plan pursuant to which the award was made. In light of the investors’ comments, we intend to increase and improve the transparency of our disclosure, including about the goal-setting process for our incentive compensation, in the future. Investors said they would like to be sure that executive compensation will align management with stockholders. As described above, we believe that the array of compensation components aligns management with our stockholders’ interests by tying compensation to Company performance but still providing appropriate incentives to executives for years when performance is affected by circumstances outside of management’s control (for example, during the COVID-19 pandemic, when our business was affected by the downturn in the economy generally and the closure of movie theatres specifically). During such times, the Compensation Committee believes it is necessary to balance performance with the need to retain our valuable management team. As an example of how our executive compensation aligns management with stockholders’ interests, our three NEOs received less short-term compensation (consisting of bonuses under our MAIP, as defined below) in 2024 than in 2023, reflecting alignment with the Company’s overall results (pay for performance). In addition, the metrics selected for PSU awards (which are typically made as multi-year grants and are not made annually) are generally based on financial performance of the Company and, accordingly, the amounts earned thereunder depend on the Company’s performance. We intend to continue engaging with our stockholders and reviewing our compensation and governance practices in the future.

  13. EXECUTIVE OFFICER AND DIRECTOR COMPENSATION

    EXECUTIVE OFFICER AND DIRECTOR COMPENSATION

  14. SUMMARY COMPENSATION TABLE

    SUMMARY COMPENSATION TABLE

  15. SUMMARY COMPENSATION TABLE

    | Name and Principal Position(s) | Year | Salary ($) | Bonus ($) (1) | Stock Awards ($)(2) | Option Awards ($)(3) | All Other Compensation ($)(4) | Total ($) | | Christopher J. McGurk | 2024 | 650,000 | 325,000 | — | — | 39,286 | 1,014,286 | | Chief Executive Officer | 2023 | 650,000 | 707,969 | 26,250 | 1,200,000 | 39,431 | 2,623,650 | | and Chairman | 2022 | 650,000 | 650,000 | 90,146 | — | 33,500 | 1,423,646 | | Gary S. Loffredo | 2024 | 460,000 | 161,000 | — | 196,323 | 55,521 | 872,844 | | Chief Legal Officer, | 2023 | 460,000 | 350,717 | 15,750 | — | 58,785 | 885,252 | | Secretary and Senior Adviser | 2022 | 460,000 | 322,000 | 54,088 | — | 33,810 | 869,898 | | Erick Opeka | 2024 | 475,000 | 120,000 | — | 368,106 | 55,536 | 1,018,642 | | President and | 2023 | 400,000 | 261,404 | 15,750 | — | 49,571 | 726,725 | | Chief Strategy Officer and | 2022 | 400,000 | 240,000 | 54,088 | — | 20,327 | 714,415 | | President of Digital Networks | | | | | | | |

  16. SUMMARY COMPENSATION TABLE

    (1) The Company's bonus program, the Management Annual Incentive Plan (“MAIP”), is described below. For fiscal years 2023 and 2024, the MAIP bonuses were settled in the Company's Class A Common Stock. (2) Includes PSUs earned during the respective fiscal year. See above for a description of the material terms of the PSUs. (3) The amounts in this column reflect the grant date fair value for all fiscal years presented in accordance with FASB ASC Topic 718. Assumptions used in the calculation of these amounts are included in footnote 2 to the Company’s audited financial statements for the fiscal years ended March 31, 2024 and 2023, included in the Annual Report on Form 10-K for the fiscal year ended March 31, 2024 (the “Form 10-K”). (4) Includes life insurance premiums, disability insurance premiums and certain medical expenses paid by the Company for each NEO.

  17. OUTSTANDING EQUITY AWARDS AS OF MARCH 31, 2024

    OUTSTANDING EQUITY AWARDS AS OF MARCH 31, 2024

  18. OUTSTANDING EQUITY AWARDS AS OF MARCH 31, 2024

    | EQUITY AWARDS (1) | | | | | STOCK AWARDS | | | Name | Number of Securities Underlying Unexercised Options Exercisable (#) | Number of Securities Underlying Unexercised Options Unexercisable (#) | Option Exercise Price ($) | Option Expiration Date | Number of Shares or Units of Stock That Have Not Vested (#) | Market Value of Shares or Units of Stock That Have Not Vested ($) | | Christopher J. McGurk | 35,000(2) | — | 29.40 | 6/7/2028 | — | — | | | 125,000(3) | — | 10.80 | 11/19/2030 | — | — | | | 41,666(4) | 83,334(5) | 9.60 | 10/17/2032 | | | | | | | | | — | — | | Gary S. Loffredo | 30,000(5) | — | 29.40 | 9/13/2031 | — | — | | | 60,000(6) | — | 12.80 | 12/3/2030 | — | — | | | — | 40,000(7) | 5.80 | 5/16/2033 | — | — | | Erick Opeka | 400(8) | — | 362.00 | 9/2/2024 | — | — | | | 17,750(9) | — | 23.20 | 9/28/2028 | — | — | | | 60,000(10) | — | 12.80 | 12/20/2030 | — | — | | | — | 75,000(11) | 5.80 | 5/16/2033 | | |

  19. OUTSTANDING EQUITY AWARDS AS OF MARCH 31, 2024

    (1) Reflects stock appreciation rights granted under the 2000 Plan and SARs granted under the 2017 Plan. (2) Consists of stock appreciation rights, of which 1/3 vested on March 31 of each 2019, 2020 and 2021. (3) Consists of stock appreciation rights, of which 62,500 vested on each of November 19, 2020 and March 31, 2023. (4) Consists of stock appreciation rights, of which 41,666 vested on April 1, 2023, and 41,667 subsequently vested on April 1, 2024, and 41,667 will vest on April 1, 2025. (5) Consists of stock appreciation rights, of which 1/3 of which vested on December 10 of each 2019, 2020 and 2021. (6) Consists of stock appreciation rights, of which 25,000 vested on March 31 of each 2023 and 2022; and 10,000 vested on June 30, 2023. (7) Of such stock appreciation rights, 13,333 vest on May 16, 2024, 13,333 vest on May 1, 2025 and 13,334 vest on May 1, 2026. (8) Consists of options, of which 100 vested on September of each of 2015, 2016, 2017, and 2018. (9) Consists of stock appreciation rights, of which 1/3 vested on March 31 of each 2019, 2020, and 2021. (10) Of such stock appreciation rights, 25,000 vested on March 31, 2022, 25,000 vested on March 31, 2023 and 10,000 vest on December 31, 2023. (11) Of such stock appreciation rights, 25,000 vest on May 16, 2024, 25,000 vest on May 1, 2025 and 25,000 vest on May 1, 2026.

  20. PAY VERSUS PERFORMANCE

    PAY VERSUS PERFORMANCE The following table shows the relationship between executive compensation actually paid (“CAP”) to our Principal Executive Officer (“PEO”) and other named executive officers, including the President, Chief Operating Officer, General Counsel and Secretary and Chief Strategy Officer and President of Cineverse Corp. (“Non-PEO NEOs”), and certain financial performance of the Company during the last two fiscal years ended March 31, 2024 and 2023. The data included in the CAP columns does not reflect the actual amount of compensation earned or paid to our executive officers during the applicable fiscal year on a cash or under US Generally Accepted Accounting Principles ("US GAAP"), and it is reported solely pursuant to SEC rules. The CAP amount also does not represent amounts that have actually been earned or realized under US GAAP, including with respect to PSUs and SARs. Performance conditions for these equity awards have not yet been satisfied. To this end, information in the following table may not reflect whether compensation actually realized is aligned with performance. For a more fulsome discussion of our pay-for-performance compensation philosophy and performance measures, see “Executive Officer and Director Compensation.”

  21. PAY VERSUS PERFORMANCE

    | Pay Versus Performance | | | | | | | | Year | Summary Compensation Table Total for PEO (1) | Compensation Actually Paid to PEO (2) | Average Summary Compensation Table Total for Non-PEO NEOs (3) | Average Compensation Actually Paid to Non-PEO NEOs (2) | Value of Initial Fixed $100 Investment Based On Total Shareholder Return (4) | Net (Loss) Income (5)($ in Thousands) | | 2024 | 1,014,286 | 466,757 | 945,743 | 647,680 | 4.16 | (21,265) | | 2023 | 2,623,650 | 1,810,953 | 805,988 | 534,804 | 25.15 | (9,694) | | 2022 | 1,423,646 | 409,200 | 792,157 | (252,832) | 48.50 | 2,271 |

  22. PAY VERSUS PERFORMANCE

    Footnotes: (1) The dollar amounts reported in column (1) are the amounts of total compensation reported for Christopher J. McGurk, Chairman of the Board and Chief Executive Officer (our Principal Executive Officer, or PEO), for each corresponding year in the “Total” column of the Summary Compensation Table. (2) The dollar amounts reported in column (2) represent the amount of CAP to our PEO have been computed following relevant SEC rules, as outlined below. The dollar amounts do not reflect the actual amount of compensation earned or paid during the applicable year.

  23. PAY VERSUS PERFORMANCE

    | PEO Equity Adjustments | | | | | | | | | Year | Reported Summary Compensation Table Total for PEO (1) | Reported Value of Equity Awards (1) | The year-end fair value of awards granted during the respective fiscal year that are outstanding and unvested as of year end (ii) | Change in fair value of outstanding and unvested awards granted in prior years as of the end of the current fiscal year (iii) | Change in the fair value of prior year awards from the end of the prior fiscal year to current year vesting date (iv) | Total Equity Award Adjustments (i) | Compensation Actually Paid to PEO (2) | | 2024 | 1,014,286 | - | - | (534,538) | (12,992) | (547,529) | 466,757 | | 2023 | 2,623,650 | (1,226,250) | 899,808 | - | (486,255) | 413,553 | 1,810,953 | | 2022 | 1,423,646 | (90,146) | 101,250 | (1,027,045) | 1,495 | (924,300) | 409,200 |

  24. PAY VERSUS PERFORMANCE

    | Non-PEO NEO Equity Adjustments | | | | | | | | | | Year | Reported Summary Compensation Table Total for non-PEO NEOs (1) | Reported Value of Equity Awards (1) | The year-end fair value of awards granted during the respective fiscal year that are outstanding and unvested as of year end (ii) | Change in fair value of outstanding and unvested awards granted in prior years as of the end of the current fiscal year (iii) | Change in the fair value of prior year awards from the end of the prior fiscal year to current year vesting date (iv) | Total Equity Award Adjustments (i) | Average Compensation Actually Paid to Non-PEO NEOs (2)(3) | | | 2024 | 945,743 | (282,215) | 55,095 | (13,144) | (57,800) | (15,849) | | 647,680 | | 2023 | 805,988 | (15,750) | 15,750 | (73,624) | (197,560) | (255,434) | | 534,804 | | 2022 | 792,157 | (54,088) | 60,750 | (571,878) | (479,772) | (990,900) | | (252,832) |

  25. PAY VERSUS PERFORMANCE

    The equity award adjustments outlined by (i) in the table above include the addition (or subtraction, as applicable) of the following: (ii) the year-end fair value of any equity awards granted in the applicable year that are outstanding and unvested as of the end of the year; (iii) the amount of change as of the end of the applicable year (from the end of the prior fiscal year) in fair value of any awards granted in prior years that are outstanding and unvested as of the end of the covered fiscal year; and iv) for awards granted in prior years that vest in the covered fiscal year, the amount equal to the change as of the vesting date (from the end of the prior fiscal year) in fair value. (3) The dollar amounts reported for the Company’s NEOs as a group (excluding the Company’s PEO) in the “Total” column of the Summary Compensation Table in each applicable year. For 2022, 2023 and 2024, the names of each of the NEOs (excluding the Company’s PEO) included for purposes of calculating the average amounts in each applicable year are as follows: Gary S. Loffredo, President, Chief Operating Officer, General Counsel and Secretary (currently Chief Legal Officer, Secretary & Senior Advisor); and Erick Opeka, Chief Strategy Officer and President of Digital Networks (currently President & Chief Strategy Officer). In accordance with the SEC rules, average total compensation for the NEOs was computed as a group (excluding the Company’s PEO) for each year to determine the CAP, using the same methodology described above in Footnote 2 (i). (4) The cumulative total shareholder return (“TSR”) amounts reported in column (4) are calculated in the same manner as required under Item 201(e) of Regulation S-K, measuring the total shareholder return from the market close on the last trading day before the earliest fiscal year in the table, or March 31, 2022, through to and including the end of the fiscal year for which total shareholder return is calculated, or March 31, 2024. (5) The dollar amounts reported in column (5) are the Company’s net income reflected in the Company’s audited financial statements for the applicable year.

  26. Relationship of Compensation Actually Paid to Performance

    Relationship of Compensation Actually Paid to Performance Our executive compensation program has been designed to be competitive to retain top executive talent, establish a link between pay and Company performance and align the interests of executives with those of shareholders. We believe that executive compensation should be focused on promoting Company performance and stockholder value. To achieve these goals our executive compensation program emphasizes pay for performance and aligning the interests of our executives with those of our stockholders through the use of long-term incentives and the encouragement of equity ownership. In addition, our executive compensation program is designed to allow us to recruit, retain and motivate employees who play a significant role in our current and future success. Compensation for executive officers is comprised primarily of three main components: Base salary, annual incentive awards, and long-term incentive awards. These components support the core principles of our executive officer compensation philosophy of pay for performance and alignment of executive officers’ interests with those of Cineverse and its shareholders by emphasizing short- and long-term incentives. For • Base salary: During the fiscal year 2024, there were no changes to NEO or PEO base salary. • Annual incentive awards: The Company's bonus and incentive programs which pertain to a specific fiscal year results are commonly paid out in the subsequent fiscal year. Accordingly, fiscal year 2023 bonuses were paid in fiscal year 2024 and fiscal year 2022 bonuses were paid in fiscal year 2023. • Long-term incentive awards: o The value of the long term incentive awards, as reflected in the Equity Adjustment tables, will increase or decrease in value depending on the Company's share price, which will be influenced by the success of the Company's strategic objectives, among other factors. In fiscal year 2024, the Company granted 155,000 options to the Company's NEO's with an exercise price equivalent to the stock price on the date of grant, which accounted for $79,660 of the $672,245 of the NEO's CAP for fiscal year 2024. The options will vest in three equal traches, the first vesting on May 16, 2024, and the second and third tranches vesting on May 1, 2025 and 2026, respectively and expire ten years from the date of grant. In fiscal year 2023, the Company granted 125,000 options to the Company's PEO with an exercise price equivalent to the stock price on the date of grant, which accounted for $899,808 of the $1,810,953 of the PEO's CAP for fiscal year 2023. The options will vest in three equal traches, the first vesting on April 1, 2023, and the second and third tranches vesting on April 1 2024 and 2025, respectively and expire ten years from the date of grant. The charts below describe the relationship between CAP to our PEO and other non-PEO NEOs (as disclosed in the Pay versus Performance Table above) and our financial and stock performance for the indicated years. The following chart compares CAP versus Company Net (Loss) Income: The following chart compares CAP versus Company TSR:

  27. Non-Employee Directors

    | Name | Cash Fees Earned ($) | Stock Awards ($) (1) | Total ($) | | Peter C. Brown | $91,848 | $90,000 | $181,848 | | Mary Ann Halford (2) | $26,793 | $270,000 | $296,793 | | Patrick W. O’Brien | $105,000 | $90,000 | $195,000 | | Ashok Amritraj (3) | $37,500 | $-- | $37,500 | | Peixin Xu (3) | $30,000 | $-- | $30,000 |