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This Amendment No. 2 to Schedule 13D (this “Amendment”) relates to Common Stock, par value $0.01 per share (the “Common Stock”), of National CineMedia Inc., a Delaware corporation (the “Issuer”). This Amendment is being filed by each of the Reporting Persons to amend the Schedule 13D (the “Initial Schedule 13D”) that was originally filed on January 26, 2018 and amdended on March 20, 2018 (as amended by this Amendment, the “Schedule 13D”). Unless otherwise indicated, all capitalized terms used therein but not defined herein shall have the same meanings as in the Schedule 13D.

This Amendment is being filed to amend and supplement Items 4, 5 and 6 of the Schedule 13D as set forth below.

 

Item 4 is hereby amended and restated to read in its entirety as follows:

On June 1, 2018, the Reporting Persons entered into a letter agreement (the “Settlement Agreement”) with the Issuer pursuant to which the Issuer agreed, among other things, to (i) appoint Andrew Glaze, a research analyst at Standard General, as a Class II director of the Issuer, with the effective date of Mr. Glaze’s appointment to be within 30 days of June 1, 2018, (ii) include Mr. Glaze in the Issuer’s slate of nominees for election as a Class II director at the 2018 Annual Meeting of Stockholders of the Issuer (the “2018 Annual Meeting”), and (iii) seek stockholder approval at the 2018 Annual Meeting for an amendment to the Issuer’s Amended and Restated Certificate of Incorporation to declassify the Issuer’s Board of Directors, increase the maximum size of the Board to eleven directors, and amend certain Board approval rights (the “Proposed Charter Amendment”). Effective upon his appointment as a director of the Issuer, Mr. Glaze will initially serve on the Compensation Committee and Nominating and Governance Committee of the Board. The Reporting Persons have agreed that neither they nor Mr. Glaze will be compensated for Mr. Glaze’s service as a director. Pursuant to the Settlement Agreement, the Reporting Persons have withdrawn the nomination notice that was previously submitted to the Issuer. Additional terms of the Settlement Agreement are described in further detail in Item 6 below.

Subject to the terms and restrictions set forth in the Settlement Agreement, the Reporting Persons (i) expect to engage in future discussions with management, the Board of Directors of the Issuer, other stockholders of the Issuer and other relevant parties concerning the business, operations, capital structure, governance, management and strategy of the Issuer and other matters concerning the Issuer, and (ii) may propose or consider one or more of the actions described in subsections (a) through (j) of Item 4 of Schedule 13D.

The Reporting Persons intend to review their investment in the Issuer on a continuing basis and may, from time to time and at any time in the future depending on various factors, including, without limitation, the Issuer's financial performance and strategic direction, actions taken by the Board, price levels of the shares of Common Stock, other investment opportunities available to the Reporting Persons, conditions in the securities market and general economic and industry conditions, and subject to the terms and restrictions set forth in the Settlement Agreement, take such actions with respect to their investment in the Issuer as they deem appropriate, including: (i) acquiring additional shares of Common Stock and/or other equity, other securities, or derivative or other instruments that are based upon or relate to the value of the shares of Common Stock (collectively, "Securities") in the open market or otherwise; (ii) disposing of any or all of their Securities in the open market or otherwise; or (iii) engaging in any hedging or similar transactions with respect to the Securities.

Item 6 is hereby amended and restated to read in its entirety as follows:

Under the terms of the Settlement Agreement, the Reporting Persons have agreed to vote, until the end of the Standstill Period (defined below), (i) in favor of each director nominated and recommended by the Board for election at any meeting of the Issuer’s stockholders, (ii) in favor of the Proposed Charter Amendment, (iii) in accordance with the recommendations by the Board with respect to the following routine proposals: the ratification of the Issuer’s accountants and, if recommended by ISS, the adoption of incentive plans, and (iv) against any stockholder nominees not recommended by the Board and against any proposals or resolutions to remove members of the Board. The Reporting Persons have also agreed, subject to certain limitations, to refrain from certain actions during the Standstill Period, including (A) engaging in any “solicitation” or otherwise become a “participant” in any contested solicitation as such terms are used in the proxy rules of the Securities and Exchange Commission; (B) submitting any stockholder proposal or any notice of nomination or other business for consideration to the Board; (C) seeking to acquire the Issuer or any of its material assets, or proposing mergers, acquisitions or other business combinations involving the Issuer; (D) acquiring additional shares of the Issuer’s common stock following which the Reporting Persons would economically own or have a total net long position greater than 30% of the Issuer’s outstanding common stock; and (E) certain other actions specified in the Settlement Agreement.

The term “Standstill Period” is defined in the Settlement Agreement to mean the period of time starting on the date of the Settlement Agreement and ending upon the earlier of (i) the 2018 Annual Meeting, if the Issuer’s stockholders do not approve the Proposed Charter Amendment at the 2018 Annual Meeting, and (ii) 30 days prior to the deadline for stockholder nominations and proposals for the Issuer’s 2022 Annual Meeting of Stockholders, but in any event no later than February 28, 2022. However, under the terms of the Settlement Agreement, the Reporting Persons may terminate the Standstill Period if the Reporting Persons have caused all of their shares of Common Stock to be voted in favor of each director nominated by the Board and any of the Reporting Persons’ designees fail to be elected to the Board, and the Board does not appoint such designees to the Board within the time periods specified in the Settlement Agreement. In addition, under the terms of Settlement Agreement, the Standstill Period will be suspended at any time when the Reporting Persons’ aggregate beneficial ownership of the Issuer’s common stock falls below 7,900,361 shares (the “Minimum Ownership Level”).

In addition, the Settlement Agreement provides that if the Issuer’s stockholders approve the Proposed Charter Amendments at the 2018 Annual Meeting, the Issuer’s Board of Directors will nominate two individuals designated by the Reporting Persons for election at the Issuer’s 2019 Annual Meeting of Stockholders, subject to the designees satisfying certain criteria. If the Issuer’s stockholders do not approve the Proposed Charter Amendment at the 2018 Annual Meeting, the Issuer will not be required to nominate any designees of the Reporting Persons at the 2019 Annual Meeting of Stockholders of the Issuer, although Mr. Glaze will continue to serve as a Class II director with a term ending at the Issuer’s 2021 Annual Meeting of Stockholders of the Issuer. At the Issuer’s request, the Reporting Persons will be required to cause their designees to resign from the Board if the Reporting Persons’ aggregate beneficial ownership of the Issuer’s common stock falls below the Minimum Ownership Level.

Furthermore, under the Settlement Agreement, the Issuer agreed that upon the request of the Reporting Persons, the Board of Directors of the Issuer will appoint a designee of the Reporting Persons to serve as a member of any committee of the Board of Directors of the Issuer requested by the Reporting Persons, other than the Audit Committee, Compensation Committee and the Nominating and Governance Committee.

The description of certain terms of the Settlement Agreement contained in Item 4 is incorporated by reference into this Item 6.

The foregoing description of the terms and conditions of the Settlement Agreement does not purport to be complete and is qualified in its entirety by reference to the full text of the Settlement Agreement, which is attached as Exhibit 99.1 hereto and incorporated herein by reference.

 

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