<PAGE> 1
SCHEDULE 14A
(RULE 14A-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE SECURITIES
EXCHANGE ACT OF 1934 (AMENDMENT NO. )
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
<TABLE>
<S> <C>
[ ] Preliminary Proxy Statement [ ] Confidential, for Use of the Commission
Only (as permitted by Rule 14a-6(e)(2))
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12
</TABLE>
Carmike Cinemas, Inc.
- --------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
(1) Title of each class of securities to which transaction applies:
(2) Aggregate number of securities to which transaction applies:
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which the
filing fee is calculated and state how it was determined):
(4) Proposed maximum aggregate value of transaction:
(5) Total fee paid:
[ ] Fee paid previously with preliminary materials:
[ ] Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number,
or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
(2) Form, Schedule or Registration Statement No.:
(3) Filing Party:
(4) Date Filed:
<PAGE> 2
CARMIKE CINEMAS, INC.
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD MAY 13, 1999
The Annual Meeting of Stockholders of Carmike Cinemas, Inc. will be
held at the offices of Troutman Sanders LLP, NationsBank Plaza, 600 Peachtree
Street, N.E., 52nd Floor, Atlanta, Georgia on Thursday, May 13, 1999, commencing
at 11:00 a.m., E.D.T.
At the meeting the stockholders will be asked to:
1. Elect nine (9) directors to serve for the ensuing
year or until their successors are duly elected and have
qualified; and
2. Transact any other business which may properly be
brought before the meeting.
The Board of Directors has fixed the close of business on March 22,
1999 as the record date for the determination of stockholders entitled to notice
of, and to vote at, the annual meeting or any adjournment thereof. Please mark,
sign and date the enclosed proxy card and mail it promptly in the accompanying
envelope.
By Order of the Board of Directors,
F. LEE CHAMPION, III
Secretary
Columbus, Georgia
March 26, 1999
IMPORTANT
WHETHER OR NOT YOU EXPECT TO ATTEND THE MEETING, PLEASE COMPLETE, DATE
AND SIGN THE ENCLOSED PROXY CARD AND RETURN IT IN THE ENVELOPE WHICH HAS BEEN
PROVIDED. IN THE EVENT YOU ATTEND THE ANNUAL MEETING, YOU MAY REVOKE YOUR PROXY
AND VOTE YOUR SHARES IN PERSON.
<PAGE> 3
CARMIKE CINEMAS, INC.
PROXY STATEMENT FOR THE
ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD MAY 13, 1999
This proxy statement and the accompanying proxy card are furnished to
the stockholders of Carmike Cinemas, Inc. ("Carmike") in connection with the
solicitation of proxies by the Board of Directors of Carmike for use at the
Annual Meeting of Stockholders of Carmike to be held on May 13, 1999, at the
offices of Troutman Sanders LLP, NationsBank Plaza, 600 Peachtree Street, N.E.,
52nd Floor, Atlanta, Georgia at 11:00 a.m., E.D.T and any adjournments thereof.
All stockholders are encouraged to attend the meeting. Your proxy is requested,
however, whether or not you attend in order to assure maximum participation.
At the Annual Meeting, stockholders will be requested to act upon the
matters set forth in this proxy statement. If you are not present at the
meeting, your shares can be voted only when represented by proxy. You may cancel
your proxy before balloting begins by notifying the Secretary of Carmike in
writing at Carmike's principal executive offices. In addition, any proxy signed
and returned by you may be revoked at any time before it is voted by delivering
a new duly executed proxy card bearing a later date or by appearing and voting
in person at the meeting. It is anticipated that this proxy statement and
accompanying proxy card will first be mailed to Carmike's stockholders on or
about March 26, 1999. Carmike's 1998 Annual Report to Stockholders, which should
be read in conjunction with the matters discussed in this proxy statement, is
also enclosed. The expenses incidental to the preparation and mailing of this
proxy material are being paid by Carmike. No solicitation is planned beyond the
mailing of this proxy material to stockholders.
The principal executive offices of Carmike are located at 1301 First
Avenue, Columbus, Georgia 31901-2109. The telephone number is (706) 576-3400.
The close of business on March 22, 1999 has been fixed as the record
date for the determination of stockholders of Carmike entitled to notice of and
to vote at the Annual Meeting. On that date Carmike had outstanding 9,942,487
shares of its Class A Common Stock, $.03 par value (the "Class A Common Stock"),
1,420,700 shares of its Class B Common Stock, $.03 par value (the "Class B
Common Stock" and, together with the Class A Common Stock, the "Common Stock"),
and 550,000 shares of its 5.5% Series A Senior Cumulative Convertible
Exchangeable Preferred Stock, $1.00 par value (the "Series A Preferred Stock").
Each share of Class A Common Stock entitles the holder thereof to one vote per
share on all matters properly coming before the meeting. Each share of Class B
Common Stock entitles the holder thereof to ten votes per share on all matters
properly coming before the meeting. Each share of Series A Preferred Stock
entitles the holder thereof to vote as though he held the four shares of Class A
Common Stock currently underlying each share of the Series A Preferred Stock
(i.e., four votes per share of Series A Preferred Stock).
At the Annual Meeting, the holders of stock representing a majority of
the voting power of all classes of stock issued and outstanding and entitled to
vote at the meeting, present in
2
<PAGE> 4
person or represented by proxy, constitutes a quorum. Abstentions will be
treated as present for purposes of determining a quorum. Shares held by a broker
as nominee (i.e., in "street name") that the broker, as a result of incomplete
instructions from the beneficial owner of shares, cannot vote ("broker
non-votes"), will also be treated as present for quorum purposes. Directors are
elected by a plurality of the votes cast by the holders of Carmike's Class A
Common Stock, Class B Common Stock and Series A Preferred Stock voting together
as a single class at a meeting at which a quorum is present. Votes may be cast
in favor of or withheld from each nominee; votes that are withheld will be
excluded entirely from the vote and will have no effect. Under applicable
Delaware law, a broker non-vote will have no effect on the outcome of the
election of directors.
I. ELECTION OF DIRECTORS
The Board of Directors has nominated the nine individuals named below
for election as directors of Carmike, each to serve until the next annual
meeting of stockholders and until his or her respective successor shall be duly
elected and shall qualify. All of the individuals nominated by the Board of
Directors for election are presently directors of Carmike. It is the present
intention of the persons named in the accompanying form of proxy to vote such
proxy (unless authority to so vote is withheld) for the election of the nine
nominees named below as directors of Carmike.
The Board of Directors expects that each of the nominees will be
available to stand for election and to serve as director. However, in the event
a vacancy among the original nominees occurs prior to the meeting, the proxies
will be voted for a substitute nominee or nominees named by the Board and for
the remaining nominees.
The following is a brief description of the business experience of each
nominee for at least the past five years. For purposes of this description,
references to Carmike include Carmike's predecessor, Martin Theatres, Inc., and
ages are presented as of January 31, 1999.
C.L. Patrick, age 80, has served as Chairman of the Board of Directors
of Carmike since April 1982. Mr. Patrick joined Carmike in 1945, became its
General Manager in 1948 and served as President of Carmike from 1969 to 1970. He
served as President of Fuqua Industries, Inc. from 1970 to 1978 and as Vice
Chairman of the Board of Directors of Fuqua Industries, Inc. from 1978 to 1982.
Mr. Patrick is a director emeritus of Columbus Bank & Trust Company. Messrs.
Michael W. Patrick and Carl L. Patrick, Jr. are the sons of Mr. C.L. Patrick.
Michael W. Patrick, age 48, has served as President of Carmike since
October 1981, as a director of Carmike since April 1982 and as Chief Executive
Officer since March 1989. He joined Carmike in 1970 and served in a number of
operational and film booking and buying capacities prior to becoming President.
Mr. Patrick serves as a director of Columbus Bank & Trust Company and the Will
Rogers Institute, and he is a member of the Board of Trustees of Columbus State
University Foundation, Inc.
F. Lee Champion, III, age 48, joined Carmike in January 1998 as Senior
Vice President, General Counsel and Secretary. In December 1998, he was elected
a director of Carmike. Prior to joining Carmike, Mr. Champion practiced law with
the firm of Champion and Champion.
3
<PAGE> 5
Elizabeth C. Fascitelli, age 40, has been a director of Carmike since
December 1998. She is a managing director in the Principal Investment Area of
Goldman, Sachs & Co. She joined Goldman, Sachs & Co. in 1984 and became a
managing director in 1997. Ms. Fascitelli serves on the Board of Directors of
Neuromedical Systems, Inc.
Richard A. Friedman, age 41, has been a director of Carmike since
December 1998. He is a managing director and head of the Principal Investment
Area of Goldman, Sachs & Co. He joined Goldman, Sachs & Co. in 1981 and became a
partner in 1990. Mr. Friedman is Chairman of AMF Bowling, Inc. and serves on the
Advisory Committees or the Boards of Directors of Diamond Cable Communications
plc and Polo Ralph Lauren Corporation.
John W. Jordan, II, age 51, has been a director of Carmike since April
1982. He is a co-founder and managing partner of The Jordan Company, which was
founded in 1982. Mr. Jordan is a managing partner of Jordan/Zalaznick Capital
Company and Chairman of the Board and Chief Executive Officer of Jordan
Industries, Inc. From 1973 until 1982, he was a Vice President of Carl Marks &
Company, a New York investment banking company. Mr. Jordan is a director of
American Safety Razor Company, Apparel Ventures, Inc., Ameriking, Inc., Jordan
Telecommunication Products, Inc., Motors & Gears Holdings, Inc., Fannie May
Holdings, Inc., GEAR For Sports, Inc. and Rockshox, Inc., as well as most of the
companies in which The Jordan Company holds investments.
Carl L. Patrick, Jr., age 52, has served as a director of Carmike since
April 1982. He was the Director of Taxes for the Atlanta, Georgia office of
Arthur Young & Co. from October 1984 to September 1986, and is currently
self-employed. Previously, he was a certified public accountant with Arthur
Andersen & Co. from 1976 to October 1984. Mr. Patrick served two terms as
Chairman of the Board of Summit Bank Corporation and currently serves as a
director of that company. Mr. Patrick is Co-Chairman of PGL Entertainment Corp.
Carl E. Sanders, age 73, has been a director of Carmike since April
1982. He is engaged in the private practice of law as Chairman of Troutman
Sanders LLP, an Atlanta, Georgia law firm. Mr. Sanders is a director of First
Union Corporation of Georgia, Learning Technologies, Ltd., World Access, Inc.,
Matria Healthcare, Inc., HIE, Inc., Metromedia International Group, Inc. and
Norrell Corporation.
David W. Zalaznick, age 44, has served as a director of Carmike since
April 1982. He is a co-founder and general partner of The Jordan Company, a
managing partner of Jordan/Zalaznick Capital Company and a director of Jordan
Industries, Inc. From 1978 to 1980, he worked as an investment banker with
Merrill Lynch White Weld Capital Markets Group and, from 1980 until the
formation of The Jordan Company in 1982, Mr. Zalaznick was a Vice President of
Carl Marks & Company. Mr. Zalaznick is a director of American Safety Razor
Company, Apparel Ventures, Inc., Marisa Christina, Inc., Ameriking, Inc., Jordan
Telecommunication Products, Inc., Motors & Gears Holdings, Inc., GEAR For
Sports, Inc. and Jackson Products, Inc., as well as most of the companies in
which The Jordan Company holds investments.
The Board of Directors recommends a vote FOR the nominees set forth above.
4
<PAGE> 6
ADDITIONAL INFORMATION
Board Meetings
The business of Carmike is managed by or under the direction of the
Board of Directors. The Board of Directors met five times during the year ended
December 31, 1998, and took action by unanimous written consent in lieu of a
meeting on seven occasions. Each of the directors attended all of the aggregate
of (1) the total meetings of the Board of Directors and (2) the total number of
meetings held by all committees of the Board on which he or she served, during
the periods that he or she served. Each non-salaried director of Carmike
receives a $6,000 fee per annum for services as a director plus $500 for each
meeting of the Board at which he or she participates in person.
Committees of the Board of Directors
The Stock Option Committee, which consists of Messrs. John W. Jordan,
II and David W. Zalaznick, has the authority to determine to whom options are to
be granted under the Carmike Cinemas, Inc. 1998 Class A Stock Option Plan as
well as the type of option and the number of shares subject thereto. The Stock
Option Committee met once during the year ended December 31, 1998.
The Audit Committee, which consists of Messrs. John W. Jordan, II and
David W. Zalaznick, recommends the engagement of independent auditors of Carmike
and reviews with the independent auditors the scope and results of Carmike's
audits, Carmike's internal accounting controls and the professional services
furnished by the independent auditors to Carmike. The Audit Committee met once
during the year ended December 31, 1998.
The Real Estate Committee, which consists of Mr. Michael W. Patrick,
has the authority to determine and designate those real properties owned or
leased by Carmike which are no longer necessary for the conduct of its business
and operations and arrange for their disposition. The Real Estate Committee met
four times during the year ended December 31, 1998.
5
<PAGE> 7
Security Ownership of Certain Beneficial Holders
The following table sets forth certain information as to the Class A
Common Stock and the Class B Common Stock of Carmike beneficially owned as of
January 31, 1999 by each person, other than persons whose ownership is reflected
under the caption "Security Ownership of Management," who is known to Carmike to
own, directly or indirectly, more than 5% of the outstanding shares of either
class of Carmike's Common Stock, and reflects information presented in each such
person's Schedule 13D or Schedule 13G (and amendments, if any, thereto) as filed
with the Securities and Exchange Commission and provided to Carmike.
<TABLE>
<CAPTION>
Total
Title Percent Voting
of Beneficial of Interest
Name and Address of Beneficial Owner Class Ownership Class (1) (2)
- --------------------------------------------------------------- ----------- ---------------- ----------- ------------
<S> <C> <C> <C> <C>
Southeastern Asset Management, Inc. (3)
6410 Poplar Avenue, Suite 900
Memphis, Tennessee 38119.......................... Class A 1,940,000 19.5% 7.4%
Lazard Freres & Co. LLC (4)
30 Rockefeller Plaza
New York, New York 10020......................... Class A 622,500 6.3% 2.4%
Leucadia Investors, Inc. (5)
315 Park Avenue South, 20th Floor
New York, New York 10010.......................... Class A 589,475 5.9% 2.2%
</TABLE>
- --------------
(1) Percent of Class is with respect to outstanding shares of Class A
Common Stock as of January 31, 1999 (9,918,587 shares outstanding on
that date).
(2) Total Voting Interest reflects ten votes afforded each share of
outstanding Class B Common Stock (14,207,000 votes), one vote afforded
each share of outstanding Class A Common Stock (9,918,587 votes), and
four votes afforded each share of outstanding Series A Preferred Stock
(2,200,000 votes) for a total of 26,325,587 votes.
(3) Based on Amendment No. 1 to the Schedule 13G filed on February 8, 1999
by Southeastern Asset Management, Inc. ("Southeastern"), an investment
advisor, Longleaf Partners Small-Cap Fund, an investment company, and
Mr. O. Mason Hawkins, the Chairman of the Board and Chief Executive
Officer of Southeastern.
(4) Based on the Schedule 13G filed on February 10, 1999 by Lazard Freres &
Co. LLC, an investment advisor.
(5) Leucadia Investors, Inc. is an indirect wholly-owned subsidiary of
Leucadia National Corporation; both entities are New York corporations.
Leucadia National Corporation may be deemed to be the beneficial owner
of the Class A Common Stock shares by virtue of its shared powers to
direct the voting and disposition by Leucadia Investors, Inc. of such
shares. John W. Jordan, II, David W. Zalaznick and Leucadia Investors,
Inc. are each a general partner in The Jordan Company, a New York
general partnership organized in 1982, which was one of the three
original investors in the leveraged buyout of Carmike in April 1982.
6
<PAGE> 8
Security Ownership of Management
The following table sets forth certain information as to the Class A
Common Stock and the Class B Common Stock beneficially owned as of January 31,
1999 by each of Carmike's directors, nominees for director, each executive
officer named in the Summary Compensation Table set forth under the caption
"Executive Compensation and Other Information" and all directors and executive
officers as a group.
<TABLE>
<CAPTION>
Total
Title Percent Voting
of Beneficial of Interest
Name and Address of Beneficial Owner Class Ownership Class (1) (2)
- ------------------------------------------------------------ --------- ------------ --------- ----------
<S> <C> <C> <C> <C>
C.L. Patrick (3)........................................... Class B 290,251 20.4 % 11.0%
Michael W. Patrick (4)..................................... Class A 110,000 1.1 *
Class B 620,849 43.7 24.0
Carl L. Patrick, Jr. (5)................................... Class A 39,791 * *
Class B 509,600 35.9 19.5
F. Lee Champion, III....................................... Class A 200 * *
Elizabeth C. Fascitelli (6)................................ Class A -- -- --
Richard A. Friedman (6).................................... Class A -- -- --
John W. Jordan, II (7)(8).................................. Class A 298,205 3.0 1.1
Carl E. Sanders (9)........................................ Class A 52,228 * *
David W. Zalaznick (7)(10)................................. Class A 238,840 2.4 *
Anthony J. Rhead........................................... Class A 7,500 * *
John O. Barwick, III (11).................................. Class A 22,000 * *
All directors and executive officers as a group (17 persons) Class A 788,464 7.9 3.0
(7)(12)........................................... Class B 1,420,700 100.0 54.0
</TABLE>
- --------------
* Indicates less than 1%.
(1) Percent of Class is with respect to outstanding shares of Class A
Common Stock as of January 31, 1999 (9,918,587 shares outstanding on
that date).
(2) Total Voting Interest reflects ten votes afforded each share of
outstanding Class B Common Stock (14,207,000 votes), one vote afforded
each share of outstanding Class A Common Stock (9,918,587 votes), and
four votes afforded each share of outstanding Series A Preferred Stock
(2,200,000 votes) for a total of 26,325,587 votes.
(3) C.L. Patrick and Frances E. Patrick are husband and wife. Includes
45,963 shares of Class B Common Stock owned by Frances E. Patrick as to
which shares C.L. Patrick disclaims beneficial ownership. Includes
34,044 shares and 11,064 shares of Class B Common
7
<PAGE> 9
Stock held in trusts for Carl L. Patrick, Jr. and Michael W. Patrick's
minor son, respectively, by C.L. Patrick or Frances E. Patrick, as
trustees, which trusts are scheduled to terminate in 1999 and as to
which shares C.L. Patrick and Frances E. Patrick each disclaim
beneficial ownership. Includes 59,576 shares of Class B Common Stock
held in trust for Michael W. Patrick by C.L. Patrick, as trustee, and
59,576 shares held in trust for Carl L. Patrick, Jr. by Frances E.
Patrick, as trustee; pursuant to these trusts, C.L. Patrick and Frances
E. Patrick each sold the remainder interest in the shares held by these
trusts in return for an annuity based on their joint lives.
(4) Includes 28,414 shares of Class B Common Stock held by Michael W.
Patrick as custodian for his minor son; Michael W. Patrick has voting
and investment power with respect to such shares but disclaims
beneficial ownership thereof. Excludes 11,064 shares of Class B Common
Stock held in trust for Michael W. Patrick's minor son by Frances E.
Patrick, as trustee, which trust is scheduled to terminate in October
1999. Excludes 59,576 shares of Class B Common Stock held in trust for
Michael W. Patrick by C.L. Patrick, as trustee, the remainder interest
of which Michael W. Patrick has purchased. Includes 110,000 shares of
Class A Common Stock which are subject to purchase upon exercise of
vested options held by Michael W. Patrick. The combined voting power
represented by the shares of Class A Common Stock and Class B Common
Stock beneficially owned by Michael W. Patrick is approximately 24.0%
of the total combined voting power represented by the outstanding
shares of these two classes.
(5) Includes 200 shares of Class A Common Stock owned by Carl Patrick's
wife, as to which shares Mr. Patrick disclaims beneficial ownership.
Excludes 34,044 shares of Class B Common Stock held in trust for Carl
L. Patrick, Jr. by Frances E. Patrick, as trustee, which trust is
scheduled to terminate in 1999. Excludes 59,576 shares of Class B
Common Stock held in trust for Carl L. Patrick, Jr. by Frances E.
Patrick, as trustee, the remainder interest of which Carl L. Patrick,
Jr. has purchased. The combined voting power represented by the shares
of Class A Common Stock and Class B Common Stock beneficially owned by
Carl L. Patrick, Jr. is approximately 19.5% of the total combined
voting power represented by the outstanding shares of these two
classes.
(6) Does not include 550,000 shares of the Series A Preferred Stock held by
GS Capital Partners III, L.P. and certain other affiliates of Goldman,
Sachs & Co. The Series A Preferred Stock currently represents 8.4% of
the total voting interest of the Company's voting securities. See
"Certain Relationships and Related Transactions." Also does not include
shares of Class A Common Stock which may be deemed to be beneficially
owned by Goldman, Sachs & Co. as a result of ordinary course trading
activities from time to time or shares of Class A Common Stock held in
client accounts ("Managed Accounts") with respect to which Goldman,
Sachs & Co. or its employees have voting or investment discretion or
both. Goldman, Sachs & Co., Ms. Fascitelli and Mr. Friedman disclaim
beneficial ownership of the Class A Common Stock held in Managed
Accounts, except to the extent of their pecuniary interest therein.
(7) John W. Jordan, II, David W. Zalaznick and Leucadia Investors, Inc. are
each a general partner in The Jordan Company, a New York general
partnership organized in 1982, which was one of the three original
investors in the leveraged buyout of Carmike in April
8
<PAGE> 10
1982. Does not include 589,475 shares of Class A Common Stock owned by
Leucadia Investors, Inc.
(8) Consists of 298,205 shares of Class A Common Stock owned by The Jordan
Trust, a charitable remainder trust. Until May 26, 1995, Mr. Jordan was
a director of Leucadia National Corporation.
(9) Includes 14,000 shares of Class A Common Stock owned by Mr. Sanders'
wife, as to which shares Mr. Sanders disclaims beneficial ownership.
(10) Includes an aggregate of 12,000 shares held by three irrevocable trusts
for the benefit of Mr. Zalaznick's minor children (Mr. Zalaznick's wife
is the trustee of these trusts), and 50 shares held by Mr. Zalaznick as
custodian for his minor son. Mr. Zalaznick disclaims beneficial
ownership of such 12,050 shares.
(11) Includes 20 shares of Class A Common Stock held by Mr. Barwick on
behalf of his children, as to which shares he disclaims beneficial
ownership, and 20,000 shares of Class A Common Stock which are subject
to purchase upon exercise of vested options held by Mr. Barwick.
(12) Includes 400 shares of Class A Common Stock held by one of the unnamed
executive officers of Carmike, and also includes an aggregate of 48,500
shares of Class A Common Stock which are subject to purchase upon
exercise of vested options held by such unnamed executive officers.
9
<PAGE> 11
EXECUTIVE COMPENSATION AND OTHER INFORMATION
Summary of Cash and Certain Other Compensation
The following table sets forth certain information concerning the
compensation of Carmike's Chief Executive Officer and each of the other four
most highly compensated executive officers of Carmike serving as of December 31,
1998 (these five individuals, collectively, the "named executive officers") for
the fiscal years ended December 31, 1998, 1997 and 1996.
<TABLE>
<CAPTION>
Long-Term
Annual Compensation
Compensation Awards
---------------------- ---------------
Securities All Other
Salary Bonus Underlying Compensation
Name and Principal Position Year ($) ($) Options/SARs(#) ($) (1)
- ------------------------------------------- ---- ---------- ---------- ---------------- ------------
<S> <C> <C> <C> <C> <C>
Michael W. Patrick.......................... 1998 $ 566,058 $ 62,800 75,000 $ 63,894
President, Chief Executive 1997 566,058 64,800 0 63,018
Officer and Director 1996 542,202 46,400 0 56,864
C.L. Patrick................................ 1998 290,492 0 0 5,866
Chairman of the Board of 1997 307,687 0 0 5,866
Directors 1996 269,000 0 0 5,866
Anthony J. Rhead............................ 1998 75,000 78,500 30,000 18,500
Senior Vice President-- Film 1997 75,000 81,000 0 18,750
1996 75,000 58,000 0 16,450
F. Lee Champion, III........................ 1998 144,000 27,500 30,000 12,018
Senior Vice President,
General Counsel
John O. Barwick, III (2).................... 1998 102,500 78,500 30,000 19,319
Senior Vice President-- 1997 102,500 81,000 0 9,568
Finance 1996 102,500 58,000 0 17,268
</TABLE>
(1) The amounts shown in this column for 1998 represent amounts paid by Carmike
under a deferred compensation plan and the incremental cost of life insurance
premiums for death benefits in excess of $50,000, respectively, as follows:
Michael W. Patrick - $62,676 and $1,218; C. L. Patrick - $0 and $5,866; Anthony
J. Rhead - $15,350 and $3,150; F. Lee Champion, III - $10,800 and $1,218; and
John O. Barwick, III - $18,101 and $1,218.
(2) In March 1999, Mr. Barwick resigned as Carmike's Senior Vice President --
Finance, Treasurer and Chief Financial Officer.
Employment Contracts
In April 1982, C.L. Patrick entered into an employment agreement with
Carmike with respect to his services as Chairman of the Board. This agreement,
as restated and amended on August 10, 1998, provides a base annual salary of
approximately $290,492 for C.L. Patrick with annual cost of living adjustments.
Such cost of living adjustments have resulted in a base annual
10
<PAGE> 12
salary effective as of January 1, 1999 of $302,756 for C.L. Patrick. Effective
as of January 1, 1993, Michael W. Patrick entered into an employment agreement
with Carmike with respect to his services as Chief Executive Officer. This
agreement, as restated and amended on August 10, 1998, provides a base annual
salary of approximately $557,650, with annual cost of living adjustments. Such
cost of living adjustments have resulted in a base annual salary effective as of
January 1, 1999 of $589,719 for Michael W. Patrick. Each agreement provides for
a five-year term which is automatically extended each year after the first year
for an additional year unless either party gives written notice of termination
within thirty days prior to the anniversary date of such agreement. These
agreements also provide during their terms for a death benefit equal to one
year's salary, as well as for reimbursement of business-related expenses.
Option Grants, Exercises and Holdings
The following table sets forth information with respect to the named
executive officers concerning the grant of options during the fiscal year ended
December 31, 1998.
Option Grants during Fiscal Year 1998
<TABLE>
<CAPTION>
Individual Grants Potential Realizable
- ------------------------------------------------------------------------------------------ Value At Assumed
Number of Percent of Annual Rates of Stock
Securities Total Options Price Appreciation for
Underlying Granted to Exercise Option Term
Options Employees in Price Expiration ------------------------
Name Granted (#) Fiscal Year ($/Sh) Date 5% ($) 10% ($)
- ---------------------------- ---------------- ---------------- ------------ ---------- ---------- -----------
<S> <C> <C> <C> <C> <C> <C>
Michael W. Patrick....... 75,000 22.4 $ 27.125 1/21/08 $1,279,408 $ 3,242,270
C.L. Patrick............. -- -- -- -- -- --
Anthony J. Rhead......... 30,000 9.0 27.125 1/21/08 511,763 1,296,908
F. Lee Champion.......... 30,000 9.0 27.125 1/21/08 511,763 1,296,908
John O. Barwick, III..... 30,000 9.0 27.125 1/21/08 511,763 1,296,908
</TABLE>
- ------------
11
<PAGE> 13
The following table sets forth information with respect to the named
executive officers concerning the exercise of options during the last fiscal
year and unexercised options held as of the end of the fiscal year ended
December 31, 1998.
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR AND FY-END OPTION VALUES
<TABLE>
<CAPTION>
Number of Securities Value of Unexercised
Underlying Unexercised Options In-the-Money Options
at FY-End (#) at FY-End ($) (1)
---------------------------------- ------------------------------
Name Exercisable Unexercisable Exercisable Unexercisable
- ----------------------------------- --------------- ------------- ----------- -------------
<S> <C> <C> <C> <C>
Michael W. Patrick.............. 110,000 75,000 $1,004,430 -0-
C.L. Patrick.................... -0- -0- -0- -0-
Anthony J. Rhead................ 7,500 30,000 17,348 -0-
F. Lee Champion, III............ -0- 30,000 -0- -0-
John O. Barwick, III............ 20,000 30,000 93,760 -0-
</TABLE>
- -----------------
(1) These amounts represent the excess of the fair market value of the
Class A Common Stock of $20.3125 per share as of December 31, 1998
above the exercise price of the options.
Report on Executive Compensation
The Board of Directors does not have a Compensation Committee. The full
Board of Directors oversees and reviews the administration of Carmike's employee
benefit plans and compensation of employees, except for decisions about awards
under the Carmike Cinemas, Inc. 1998 Class A Stock Option Plan, which must be
made solely by the Stock Option Committee in order for the grants or awards
under such plan to satisfy Rule 16b-3 promulgated under the Securities Exchange
Act of 1934, as amended (the "Exchange Act").
The following is a report submitted by the Board of Directors
addressing Carmike's compensation policy as it related to the Chief Executive
Officer and the other named executive officers for the fiscal year ended
December 31, 1998.
Base Salary and Bonuses
Carmike does not have a formalized program regarding compensation of
executive officers. The base salaries for the Chairman of the Board and the
Chief Executive Officer are set in accordance with their employment contracts.
See "Executive Compensation and Other Information -- Employment Contracts." The
terms of these contracts were proposed by Carmike's Chairman of the Board and
Chief Executive Officer. Factors considered by the Chairman of the Board and
Chief Executive Officer are subjective and could include their perceptions of
the individual's performance, needs and potential and the Columbus, Georgia
economy. The Chairman of the Board and the Chief Executive Officer inform the
Board of Directors as to the proposed
12
<PAGE> 14
remuneration of the other named executive officers. Again, the factors
considered are usually subjective and could include their perceptions of each
individual's performance, needs and potential and the Columbus, Georgia economy.
An individual's bonus is based on earnings per share for Carmike's
Class A Common Stock. For each $1.00 in earnings per share (as defined), an
individual receives a bonus of $5,000 multiplied by the number of bonus points
awarded to such individual. The Chairman of the Board informs the Board of
Directors of the proposed number of "bonus points" to be awarded to the Chief
Executive Officer. Factors considered by the Chairman of the Board are
subjective and could include his perception of the individual's contribution to
Carmike's performance. The Chairman of the Board and the Chief Executive Officer
decide the number of "bonus points" to be awarded to the other named executive
officers, as well as certain discretionary bonuses. Factors considered by the
Chairman of the Board and the Chief Executive Officer are subjective and could
include their perceptions of an individual's contributions to Carmike's
performance. The Chairman of the Board does not participate in the bonus
program.
Deferred Compensation Plan
Carmike maintains a Deferred Compensation Plan for certain executive
officers, including the named executive officers, pursuant to which Carmike pays
additional compensation on a pre-tax basis equal to 10% of an employee's taxable
compensation. Distributions from the plan are made upon or shortly after normal
retirement, disability, death or termination of employment of a participant.
Carmike Cinemas, Inc. 1998 Class A Stock Option Plan
The Carmike Cinemas, Inc. 1998 Class A Stock Option Plan is Carmike's
long-term incentive plan for executive officers and key employees. The objective
of the Carmike Cinemas, Inc. 1998 Class A Stock Option Plan is to align
executive pay with stockholder long-term interest by creating a direct link
between executive pay and stockholder return, and to enable executives to
develop and maintain a significant long-term ownership position in Carmike's
Class A Common Stock.
The Carmike Cinemas, Inc. 1998 Class A Stock Option Plan authorizes the
Stock Option Committee to award stock options to key employees of Carmike. The
Stock Option Committee has the power to determine the individuals to whom stock
options are awarded, the terms at which option grants shall be made and the
terms of the options and the number of shares subject to each option. The size
of option grants may be based, in part, upon position level.
Chief Executive Officer Pay
Amounts earned during 1998 by the Chief Executive Officer, Michael W.
Patrick, are shown in the Summary Compensation Table. His base salary was set
pursuant to the terms of his employment agreement with Carmike. That agreement
provides for a base annual salary with annual cost of living adjustments. See
"Executive Compensation and Other Information -- Employment Contracts." Michael
W. Patrick received a bonus of $62,800 related to performance in 1998. The
amount of his bonus was based on earnings per share as described above.
13
<PAGE> 15
The Board believes that the current subjective process has been
effective in rewarding executives appropriately, and in attracting and retaining
good performers. While the Board is pleased with the current compensation
system, it reserves the right to make such changes to the program as it deems
desirable or necessary in future years.
MEMBERS OF THE BOARD OF DIRECTORS
C.L. Patrick
Michael W. Patrick
Carl L. Patrick, Jr.
F. Lee Champion, III
Elizabeth C. Fascitelli
Richard A. Friedman
John W. Jordan, II
Carl E. Sanders
David W. Zalaznick
Compensation Committee Interlocks and Insider Participation
Carmike has no Compensation Committee. The following officers and
employees of Carmike participated in deliberations of the Board of Directors
concerning executive officer compensation: C.L. Patrick, Michael W. Patrick and
F. Lee Champion, III.
14
<PAGE> 16
Performance Graph
The following graph compares the five-year cumulative total stockholder
return on Carmike's Class A Common Stock with the comparable cumulative total
returns of the New York Stock Exchange Market Index and a peer group index
comprised of the companies listed below. The graph assumes that the value of the
investment in the Class A Common Stock and each index was $100 on December 31,
1994, and that all dividends were reinvested.
[GRAPHIC]
COMPARISON OF CUMULATIVE TOTAL RETURN OF
COMPANY, PEER GROUP AND BROAD MARKET
FISCAL YEAR ENDING
<TABLE>
<CAPTION>
COMPANY/INDEX/MARKET 1993 1994 1995 1996 1997 1998
<S> <C> <C> <C> <C> <C> <C>
Carmike Cinemas A 100.00 127.78 125.00 140.97 159.38 112.85
Peer Group Index 100.00 89.43 114.86 111.63 146.65 119.77
NYSE Market Index 100.00 98.06 127.15 153.16 201.50 239.14
</TABLE>
The Customer Selected Stock List is made up of the following securities:
AMC ENTERTAINMENT INC
CARMIKE CINEMAS CL A
GC COMPANIES INC
LOEWS CINEPLEX ENTNMT CP
Companies in the peer group are as follows: AMC Entertainment, Inc.,
Carmike Cinemas, Inc., GC Companies, Inc. and Loews Cineplex Entertainment
Corporation. These companies were chosen on the basis of being publicly-held
companies which are primarily in the movie exhibition business (non drive-in).
There have been a number of recent consolidations in the movie theatre industry,
and GC Companies, Inc. has been added to Carmike's peer group in order to make
the group more representative of the industry. Cineplex Odeon Corporation,
previously included in the peer group, was replaced in the peer group by Loews
Cineplex Entertainment Corporation, which completed the business combination of
the Loews Theatres exhibition business of Sony Pictures Entertainment Inc. and
Cineplex Odeon Corporation on May 14, 1998. On September 16, 1998, the common
stock of Showscan Entertainment Inc., which was previously part of the peer
group for purposes of the index, was delisted from trading on the Nasdaq
National Market.
Certain Relationships and Related Transactions
Carmike leases equipment for six of its theatres pursuant to five
equipment lease agreements with Michael W. Patrick, President, Chief Executive
Officer and director of Carmike, and one such agreement with C.L. Patrick,
Chairman of the Board of Directors of Carmike.
15
<PAGE> 17
During the year ended December 31, 1998, Carmike paid $95,751 to Michael W.
Patrick and $102,821 to C.L. Patrick under these equipment leases. Carmike also
has an aircraft lease agreement dated July 1, 1983, with C.L.P. Equipment, a
sole proprietorship of which C.L. Patrick is the owner, pursuant to which
Carmike paid $190,522 in the year ended December 31, 1998. Carmike believes that
these transactions are on terms no less favorable to Carmike than terms
available from unaffiliated parties in arm's-length transactions.
F. Lee Champion, III, Senior Vice President, General Counsel, Secretary
and a director of Carmike, owns 20% of Military Services, Inc., a subsidiary of
Carmike. Carl E. Sanders, a director of Carmike, is Chairman of Troutman Sanders
LLP, Atlanta, Georgia, which provided legal services to Carmike during 1998 and
is providing legal services to Carmike during 1999.
Elizabeth C. Fascitelli and Richard B. Friedman are managing directors
of Goldman, Sachs & Co. ("Goldman"). Goldman and its subsidiaries have provided
investment banking and related financial services to Carmike during 1998 and are
expected to provide similar services to Carmike in 1999. Ms. Fascitelli and Mr.
Friedman were elected as directors of Carmike pursuant to a Stock Purchase
Agreement dated November 22, 1998 relating to the sale of the Series A Preferred
Stock, pursuant to which certain affiliates of Goldman purchased an aggregate of
550,000 shares of the Series A Preferred Stock for an aggregate purchase price
of $55.0 million. The Series A Preferred Stock is convertible at any time after
November 30, 1999 into Carmike's Class A Common Stock at $25.00 per share
(subject to anti-dilution adjustments). As of December 31, 1998, the Series A
Preferred Stock represented a 16.2% fully-diluted ownership interest upon
conversion.
On February 3, 1999, Carmike sold $200.0 million in principal amount of
9 3/8% Senior Subordinated Notes due 2009 (the "Notes"), of which $140.0 million
in principal amount was purchased by Goldman. In addition, on February 25, 1999,
Carmike entered into a $75.0 million Term Loan B for which Goldman Sachs Credit
Partners L.P., an affiliate of Goldman, was a lead arranger and syndication
agent.
Under the terms of the Indenture relating to the Notes, any future
transactions between Carmike and any officer, director, 5% stockholder or any
affiliate thereof will be on terms no less favorable to Carmike than could be
obtained from an unaffiliated third party.
OTHER MATTERS
The Board of Directors does not know of any other matters to be
presented for action at the meeting. If any other business should properly come
before the meeting, the persons named in the accompanying form of proxy intend
to vote thereon in accordance with their best judgment.
Section 16(a) Beneficial Ownership Reporting Compliance
Section 16(a) of the Exchange Act requires Carmike's directors and
executive officers, and persons who beneficially own more than 10% of any class
of Carmike's equity securities, to file with the Commission initial reports
("Form 3") of beneficial ownership and reports of changes ("Form 4") in
beneficial ownership of Common Stock and other equity securities of
16
<PAGE> 18
Carmike. Officers, directors and greater than 10% beneficial owners are required
by Commission regulation to furnish Carmike with copies of all Section 16(a)
reports they file. To Carmike's knowledge, based solely on a review of the
copies of such reports furnished to Carmike and written representations that no
other reports were required, all Section 16(a) filing requirements applicable to
its officers, directors and greater than 10% beneficial owners were complied
with for the fiscal year ended December 31, 1998, except for the failure to
timely file Mr. Smitley's Initial Report on Form 3, the failure to timely file
one report by Mr. Adams reflecting three transactions and the failure to timely
file one report by Mr. Fields reflecting one transaction, which reports have
since been filed.
Independent Auditors
Management has selected Ernst & Young LLP as its independent auditors
for the current year. Representatives of Ernst & Young LLP are expected to be
present at the meeting and will have the opportunity to make a statement if they
so desire and to respond to appropriate questions from stockholders.
Stockholder Proposals
Any stockholder of Carmike who wishes to present a proposal at the 2000
Annual Meeting of Stockholders of Carmike and who wishes to have such proposal
included in Carmike's proxy statement for that meeting must deliver a copy of
such proposal to Carmike at 1301 First Avenue, Columbus, Georgia 31901-2109,
Attention: Corporate Secretary, for receipt not later than November 27, 1999.
Carmike reserves the right to decline to include in Carmike's proxy statement
any stockholder's proposal which does not comply with the rules of the
Securities and Exchange Commission for inclusion therein.
Form 10-K
Carmike's Annual Report to the Securities and Exchange Commission on
Form 10-K for the year ended December 31, 1998 (including the consolidated
financial statements and schedules thereto but excluding exhibits) is being
provided to each stockholder as part of Carmike's 1998 Annual Report to
Stockholders.
YOUR VOTE IS IMPORTANT
You are encouraged to let us know your preference by marking the
appropriate boxes on the enclosed proxy card.
17
<PAGE> 19
CARMIKE CINEMAS, INC.
1301 First Avenue
Columbus, Georgia 31901-2109
CLASS A COMMON STOCK PROXY
SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
For Annual Meeting of Stockholders, May 13, 1999
The undersigned hereby appoints MICHAEL W. PATRICK, F. LEE CHAMPION,
III, and LARRY M. ADAMS, and each of them, proxies with full power of
substitution, to represent and to vote as set forth herein all the shares of
Class A Common Stock of Carmike Cinemas, Inc. held of record by the undersigned
on March 22, 1999, at the Annual Meeting of Stockholders of Carmike Cinemas,
Inc. to be held at the offices of Troutman Sanders LLP, NationsBank Plaza, 600
Peachtree Street, N.E., 52nd Floor, Atlanta, Georgia 30308, at 11:00 a.m. local
time, on Thursday, May 13, 1999, and any adjournments thereof.
1. Election of Directors:
[ ] FOR all nominees, except as marked below.
[ ] WITHHOLD vote from all nominees.
C.L. Patrick, Michael W. Patrick, John W. Jordan, II, Carl L.
Patrick, Jr., Carl E. Sanders, David W. Zalaznick, Elizabeth
C. Fascitelli, Richard A. Friedman and Forrest Lee Champion,
III.
(INSTRUCTIONS: To withhold authority to vote for any
individual nominee, write the nominee's name on the space
provided below.)
--------------------------------------------------------------
Management recommends a vote FOR Item 1.
2. In their discretion, the proxies are authorized to vote as
described in the proxy statement and upon such other business
as may properly come before the meeting.
This Proxy when properly executed will be voted in the manner
directed by the undersigned stockholder. If no direction is
made, this Proxy will be voted "FOR" Item 1.
Dated: , 1999
-----------------
---------------------------------------------
Signature
---------------------------------------------
Signature if Held Jointly
Please sign exactly as name appears on Stock
Certificate. If stock is held in the name of
two or more persons, all must sign. When
signing as attorney, executor, administrator,
trustee, or guardian, please give full title
as such. If a corporation, please sign in
full corporate name by President or other
authorized officer. If a partnership, please
sign in partnership name by authorized
person.
PLEASE MARK, SIGN, DATE AND RETURN THIS
PROXY CARD PROMPTLY USING THE ENCLOSED
ENVELOPE.
<PAGE> 20
CARMIKE CINEMAS, INC.
1301 First Avenue
Columbus, Georgia 31901-2109
CLASS B COMMON STOCK PROXY
SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
For Annual Meeting of Stockholders, May 13, 1999
The undersigned hereby appoints MICHAEL W. PATRICK, F. LEE CHAMPION,
III, and LARRY M. ADAMS, and each of them, proxies with full power of
substitution, to represent and to vote as set forth herein all the shares of
Class B Common Stock of Carmike Cinemas, Inc. held of record by the undersigned
on March 22, 1999, at the Annual Meeting of Stockholders of Carmike Cinemas,
Inc. to be held at the offices of Troutman Sanders LLP, NationsBank Plaza, 600
Peachtree Street, N.E., 52nd Floor, Atlanta, Georgia 30308, at 11:00 a.m. local
time, on Thursday, May 13, 1999, and any adjournments thereof.
1. Election of Directors:
[ ] FOR all nominees, except as marked below.
[ ] WITHHOLD vote from all nominees.
C.L. Patrick, Michael W. Patrick, John W. Jordan, II, Carl L.
Patrick, Jr., Carl E. Sanders, David W. Zalaznick, Elizabeth
C. Fascitelli, Richard A. Friedman and Forrest Lee Champion,
III.
(INSTRUCTIONS: To withhold authority to vote for any
individual nominee, write the nominee's name on the space
provided below.)
--------------------------------------------------------------
Management recommends a vote FOR Item 1.
2. In their discretion, the proxies are authorized to vote as
described in the proxy statement and upon such other business
as may properly come before the meeting.
This Proxy when properly executed will be voted in the manner
directed by the undersigned stockholder. If no direction is
made, this Proxy will be voted "FOR" Item 1.
Dated: , 1999
---------------
----------------------------------------------
Signature
---------------------------------------------
Signature if Held Jointly
Please sign exactly as name appears on Stock
Certificate. If stock is held in the name of
two or more persons, all must sign. When
signing as attorney, executor, administrator,
trustee, or guardian, please give full title
as such. If a corporation, please sign in
full corporate name by President or other
authorized officer. If a partnership, please
sign in partnership name by authorized
person.
PLEASE MARK, SIGN, DATE AND RETURN THIS
PROXY CARD PROMPTLY USING THE ENCLOSED
ENVELOPE.
<PAGE> 21
CARMIKE CINEMAS, INC.
1301 First Avenue
Columbus, Georgia 31901-2109
5.5% SERIES A SENIOR CUMULATIVE CONVERTIBLE
EXCHANGEABLE PREFERRED STOCK PROXY
SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
For Annual Meeting of Stockholders, May 13, 1999
The undersigned hereby appoints MICHAEL W. PATRICK, F. LEE CHAMPION,
III, and LARRY M. ADAMS, and each of them, proxies with full power of
substitution, to represent and to vote as set forth herein all the shares of the
5.5% Series A Senior Cumulative Convertible Exchangeable Preferred Stock of
Carmike Cinemas, Inc. held of record by the undersigned on March 22, 1999, at
the Annual Meeting of Stockholders of Carmike Cinemas, Inc. to be held at the
offices of Troutman Sanders LLP, NationsBank Plaza, 600 Peachtree Street, N.E.,
52nd Floor, Atlanta, Georgia 30308, at 11:00 a.m. local time, on Thursday, May
13, 1999, and any adjournments thereof.
1. Election of Directors:
[ ] FOR all nominees, except as marked below.
[ ] WITHHOLD vote from all nominees.
C.L. Patrick, Michael W. Patrick, John W. Jordan, II, Carl L.
Patrick, Jr., Carl E. Sanders, David W. Zalaznick, Elizabeth
C. Fascitelli, Richard A. Friedman and Forrest Lee Champion,
III.
(INSTRUCTIONS: To withhold authority to vote for any
individual nominee, write the nominee's name on the space
provided below.)
--------------------------------------------------------------
Management recommends a vote FOR Item 1.
2. In their discretion, the proxies are authorized to vote as
described in the proxy statement and upon such other business
as may properly come before the meeting.
This Proxy when properly executed will be voted in the manner
directed by the undersigned stockholder. If no direction is
made, this Proxy will be voted "FOR" Item 1.
Dated: , 1999
-----------
----------------------------------------------
Signature
----------------------------------------------
Signature if Held Jointly
Please sign exactly as name appears on Stock
Certificate. If stock is held in the name of
two or more persons, all must sign. When
signing as attorney, executor, administrator,
trustee, or guardian, please give full title
as such. If a corporation, please sign in
full corporate name by President or other
authorized officer. If a partnership, please
sign in partnership name by authorized
person.
PLEASE MARK, SIGN, DATE AND RETURN THIS
PROXY CARD PROMPTLY USING THE ENCLOSED
ENVELOPE.
