SCHEDULE
14A INFORMATION
PROXY
STATEMENT PURSUANT TO SECTION 14(a) OF THE
SECURITIES
EXCHANGE ACT OF 1934
(AMENDMENT
NO.___)
Filed
by
the Registrant þ
Filed
by
a Party other than the Registrant o
Check
the
appropriate box:
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Preliminary
Proxy Statement
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Definitive
Proxy Statement
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Confidential,
for Use of the Commission Only (as permitted by
Rule 14a-6(e)(2))
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Definitive
Additional Materials
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Soliciting
Material Pursuant to §240.14a-12
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READING
INTERNATIONAL, 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):
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Fee
not required.
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Fee
computed on table below per Exchange Act Rules 14a-6(i)(4) and
0-11.
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(1)
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Title
of each class of securities to which transaction applies:
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(2)
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Aggregate
number of securities to which transaction applies:
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(3)
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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):
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(4)
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Proposed
maximum aggregate value of transaction:
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(5)
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Total
fee paid:
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Fee
paid previously with preliminary materials.
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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.
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(1)
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Amount
Previously Paid:
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(2)
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Form,
Schedule or Registration Statement No.:
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(3)
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Filing
Party:
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(4)
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Date
Filed:
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READING
INTERNATIONAL, INC.
500
Citadel Drive, Suite 300
Commerce,
California 90040
NOTICE
OF ANNUAL MEETING OF STOCKHOLDERS
TO
BE HELD ON THURSDAY, MAY 10, 2007
TO
THE
STOCKHOLDERS:
The
2007
Annual Meeting of Stockholders (the “Annual Meeting”) of Reading International,
Inc., a Nevada corporation, will be held at the Four Seasons Hotel Los Angeles
at Beverly Hills, 300 South Doheny Drive, Los Angeles, California 90048, on
Thursday, May 10, 2007, at 11:00 a.m., local time for the following
purposes:
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To
elect eight directors to the Board of Directors to serve until the
2008
Annual Meeting of Stockholders; and
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To
transact such other business as may properly come before the meeting,
or
any adjournment or postponement
thereof.
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A
copy of
our Annual Report on Form 10-K for the fiscal year ended December 31, 2006
is
enclosed. Only stockholders of record of our Class B Voting common stock, at
the
close of business on March 16, 2007 (the “Record Date”) will be entitled to
notice of and to vote at the meeting and any adjournment or postponement
thereof.
Holders
of record as of March 16, 2007 of our Class A Nonvoting Common
Stock
are being sent this Notice of the Annual Meeting and the enclosed Proxy
Statement and a copy of our Annual Report, and are invited to attend our Annual
Meeting, but will
have no voting rights.
We
will
make available a list of the stockholders entitled to vote at the Annual Meeting
for examination at our principal executive offices located at 500 Citadel Dr.,
Suite 300, Commerce, California 90040, at least ten days prior to the date
of
the Annual Meeting.
If
you are a holder of record of our Class B Voting Common Stock you will have
received a proxy card enclosed with this notice. Whether
or not you expect to attend the Annual Meeting in person, please fill in, sign,
date and complete the enclosed proxy card and return it promptly in the
accompanying postage prepaid, pre-addressed envelope, to assure that your shares
will be represented.
By
Order
of the Board of Directors
James
J.
Cotter
Chairman
This
Proxy Statement is first being mailed to stockholders on or about April 24,
2007.
PLEASE
SIGN AND DATE THE ENCLOSED PROXY CARD AND MAIL IT PROMPTLY IN THE ENCLOSED
RETURN ENVELOPE TO ENSURE THAT YOUR VOTES ARE COUNTED.
READING
INTERNATIONAL, INC.
500
Citadel Drive, Suite 300
Commerce,
California 90040
(2l3)
235-2240
PROXY
STATEMENT
Annual
Meeting of Stockholders
Thursday,
May 10, 2007
INTRODUCTION
This
Proxy Statement is furnished in connection with the solicitation by the Board
of
Directors of Reading International, Inc. (“RDI” and collectively with its
consolidated subsidiaries and corporate predecessors, the “Company,” “Reading,”
and “we,” “us,” or “our”), of proxies for use at our upcoming Annual Meeting of
Stockholders (the “Annual Meeting”) to be held on Thursday, May 10, 2007, at
11:00 a.m., local time, at the Four Seasons Hotel Los Angeles at Beverly Hills,
300 South Doheny Drive, Los Angeles, California, 90048, and at any adjournment
or postponement thereof. Please sign, date and return the enclosed proxy card
in
order to ensure that your shares are represented at our meeting.
At
our
Annual Meeting, you will be asked to elect eight directors to the Board of
Directors to serve until the 2008 Annual Meeting of Stockholders.
As
of the
Record Date, Mr. James J. Cotter, our Chairman and Chief Executive Officer,
owned directly or indirectly, 1,161,388 shares of our Class B Voting Common
Stock. Mr. Cotter’s holdings represent more than 71.1% of the outstanding voting
rights of our company. Accordingly, Mr. Cotter has the power, acting alone
and
without the support or approval of any of our other stockholders, to elect
the
individuals currently nominated for election to our Board of Directors at our
upcoming Annual Meeting and to defeat the election of any other individuals
who
might be nominated. Mr. Cotter has advised us that he intends to vote in favor
of each of our Board’s nominees for election at that meeting.
-1-
VOTING
AND PROXIES
Am
I eligible to vote?
If
you
owned shares of record of Class B Voting Common Stock on March 16, 2007, you
are
eligible to vote, and you should have received a proxy card enclosed with this
notice. If you did not receive a proxy card, please contact our Assistant
Secretary, Kathryn Smith, at (213) 235-2236.
What
if I have the Class A stock?
Holders
of record of our Class A Nonvoting Common Stock are being sent this Proxy
Statement for their information and are invited to attend our Annual Meeting,
but will have no voting rights.
How
many votes do I have?
With
respect to each matter to be considered at the Annual Meeting, you will have
one
vote for each share of Class B Voting Common Stock you owned on March 16, 2007.
On that date, there were a total of 1,495,490 shares of Class B Voting Common
Stock outstanding.
How
do I vote in person?
You
may
vote your shares in person by attending the 2007 Annual Meeting. If you are
not
the record holder of your shares, please refer to the discussion following
the
questions “What if I am not the record holder of my shares?”
How
do I vote by proxy?
To
vote
by proxy, you should complete, sign and date the enclosed proxy card and return
it promptly in the enclosed postage-paid envelope.
To
be
able to vote your shares in accordance with your instructions at the Annual
Meeting, we must receive your proxy as soon as possible, but in any event,
prior
to the shares being voted at the meeting. Shares represented by properly
executed proxies received by us will be voted at the Annual Meeting in the
manner specified therein or, if no instructions are marked on the enclosed
proxy
card, will be voted “FOR” each of the nominees for director. Although we do not
know of any other matter to be acted upon at the Annual Meeting, shares
represented by valid proxies will be voted in accordance with the judgment
of
the individuals indicated on the proxy card with respect to any other matters
that may properly come before the Annual Meeting.
If
I plan to attend the Annual Meeting, should I still submit a
proxy?
Whether
or not you plan to attend the Annual Meeting, we urge you to submit a proxy.
Execution of a proxy will not in any way affect your right to attend the Annual
Meeting and vote in person.
-2-
What
if I want to revoke my proxy?
You
have
the right to revoke your proxy at any time before it is voted on your behalf
by:
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filing
with our Corporate Secretary at our address at 500 Citadel Drive,
Suite
300, Commerce, California 90040, prior to the commencement of the
Annual
Meeting, a duly executed instrument dated subsequent to such proxy
revoking the same;
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submitting
a duly executed proxy bearing a later date;
or
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attending
the Annual Meeting and voting in
person.
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What
if I am not the record holder of my shares?
If
your
shares are held in the name of a brokerage firm, bank nominee, or other
institution, only it can give a proxy with respect to your shares. You should
receive a proxy card from your bank or broker, which you must return in the
envelope provided in order to have your shares voted.
If
you do
not have record ownership of your shares and want to vote in person at the
2007
Annual Meeting, you may obtain a document called a “legal proxy” from the record
holder of your shares and bring it to the Annual Meeting in order to vote in
person.
Proxy
Solicitation and Expenses
In
addition to the solicitation by mail, our employees may solicit proxies in
person or by telephone but no additional compensation will be paid to them
for
such services. We will bear all costs of soliciting proxies on behalf of our
Board of Directors and will reimburse persons holding shares in their own names
or in the names of their nominees, but not owning such shares beneficially,
for
the expenses of forwarding solicitation materials to the beneficial owners.
The
presence, in person or by proxy, of the holders of shares of stock entitling
them to cast a majority of the votes entitled to be cast at our Annual Meeting
will constitute a quorum. Abstentions will be counted for purposes of
determining the presence of a quorum, as will broker non-votes, provided
authority is given to attend the meeting or to vote on any matter to come before
the meeting. Directors are elected by a plurality vote, so abstentions and
broker non-votes will not affect the outcome of the election of
directors.
-3-
ELECTION
OF DIRECTORS
Beneficial
Ownership of Securities
The
following table sets forth the shares of common stock beneficially owned as
of
the Record Date by:
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each
of our incumbent directors and each director
nominee;
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each
of our named executive officers set forth in the Summary Compensation
table of this Proxy Statement;
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each
person known to us to be the beneficial owner of more than 5% of
our
voting stock; and
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all
of our directors and executive officers as a group.
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Except
as
noted, the indicated beneficial owner of the shares has sole voting power and
sole investment power.
-4-
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Amount
and Nature of Beneficial Ownership (1)
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Class
A Nonvoting
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Class
B Voting
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Name
and Address of
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Number
of
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Percentage
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Number
of
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Percentage
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Beneficial
Owner
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Shares
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of
Stock
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Shares
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of
Stock
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James
J. Cotter (2)(3)
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4,072,745
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19.4
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%
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1,161,388
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71.1
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%
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Eric
Barr (2)
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30,000
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(4)
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*
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--
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--
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James
J. Cotter, Jr. (2)
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554,569
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(4)
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2.6
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%
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--
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--
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Margaret
Cotter (2)
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559,207
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(4)
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2.7
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%
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35,100
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(5)
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2.3
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%
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William
D. Gould
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67,340
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(4)
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*
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--
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--
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Edward
L. Kane
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30,500
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(4)
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*
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100
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*
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Gerard
P. Laheney (2)
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30,000
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(4)
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*
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--
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--
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Alfred
Villaseñor, Jr. (2)
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30,000
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(4)
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*
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--
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--
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Andrzej
Matyczynski (2)
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100,100
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(5)
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*
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--
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--
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Robert
F. Smerling (2)
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50,000
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(5)
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*
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--
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--
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Wayne
Smith (2)
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--
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*
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--
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--
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S.
Craig Tompkins (2)
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112,430
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(5)
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*
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--
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--
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Pacific
Assets Management LLC/
JMG
Triton Offshore Fund Ltd (6)
1999
Avenue of the Stars, #2530
Los
Angeles, CA 90067
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N/A
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N/A
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133,043
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8.9
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%
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Lawndale
Capital Management/
Diamond
A Partners LP/
Andrew
E. Shapiro (7)
591
Redwood Highway #2435
Mill
Valley, CA 94941
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N/A
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N/A
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146,480
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9.8
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%
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Dimensional
Fund Advisors (8)
1299
Ocean Avenue, 11th
Floor
Santa
Monica, CA 90401
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N/A
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N/A
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59,740
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4.0
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%
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All
Directors and Executive Officers as a Group (14 persons)
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6,254,300
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29.1
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%
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1,209,088
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71.9
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%
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*
Less
than 1%.
| (1) |
Percentage
ownership is determined on 20,992,453 shares of Class A Nonvoting
Common
Stock and 1,495,490 shares of Class B Voting Common Stock outstanding.
Beneficial ownership is determined in accordance with the Securities
and
Exchange Commission (“SEC”) rules. Shares of common stock subject to any
stock options that are presently exercisable, or exercisable within
60
days of the Record Date (which are indicated by footnote) are deemed
outstanding for the purpose of computing the percentage ownership
of the
person holding the stock options, but are not treated as outstanding
for
the purpose of computing the percentage ownership of any other person.
Disclosure as to Class A Nonvoting Common Stock ownership is made
only
with respect to Directors and Executive
Officers.
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| (2) |
The
address for beneficial owners is 500 Citadel Drive, Suite 300, Commerce,
California 90040.
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-5-
| (3) |
Mr.
Cotter owns directly or indirectly through wholly owned entities,
2,506,963 shares of Class A Nonvoting Common Stock (inclusive of
29,730
shares held in Mr. Cotter’s profit sharing plan account) and 1,023,888
shares of Class B Voting Common Stock. Mr. Cotter has currently
exercisable stock options to acquire 137,500 shares of Class B Voting
Common Stock. Mr. Cotter is also considered the beneficial owner
of
1,565,782 shares of Class A Nonvoting Common Stock owned by Hecco
Ventures, a general partnership (“HV”). Mr. Cotter has sole voting and
investment power with respect to these shares and is the general
partner
of James J. Cotter Ltd., the general partner of HV. Mr. James J.
Cotter,
Jr., Ms. Margaret Cotter, and Ms. Ellen Cotter are Mr. Cotter’s children
and limited partners of James J. Cotter Ltd. and the beneficiaries
of
Cotter 2005 Children’s Trust, an irrevocable trust. The trust owns a 99%
non-voting interest in Cotter Enterprises LLC which owns 1,000,000
Class A
Nonvoting Common Shares (which shares are included in the 2,506,963
Class
A shares beneficially owned by Mr. James J. Cotter) in Reading
International, Inc.
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| (4) |
Includes
30,000 shares subject to exercisable stock
options.
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| (5) |
Consists
primarily of shares subject to currently exercisable stock
options.
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| (6) |
Based
on Schedule 13-G filed March 24, 2005 for Class B Voting Common Stock.
Pacific Asset Management LLC serves as the investment manager to
the
direct beneficial owner, JMG Triton Offshore Fund, Ltd., and has
the power
to determine whether or when the shares will be sold.
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| (7) |
Based
on Schedule 13-G filed January 25, 2007 for Class B Voting Common
Stock,
which includes shares which are owned of record by Diamond A Partners,
L.P
(“DAP”) and by Diamond A Investors L.P (“DAI”) over which Lawndale Capital
Management, Inc. (“LCM”) and Mr. Andrew E. Shapiro have shared voting and
dispositive power. According to filings with the SEC, Lawndale Capital
Management, Inc. is the investment advisor to DAP and DAI, which
are
investment limited partnerships and Mr. Shapiro is the sole manager
of
LCM.
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| (8) |
Based
on Schedule 13-G filed February 6, 2004 for Class B Voting Common
Stock.
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Nominees
for Election
Eight
directors are to be elected at our Annual Meeting to serve until the next annual
meeting of stockholders to be held in 2008 or until their successors are elected
and qualified. Unless otherwise instructed, the proxy holders will vote the
proxies received by us for the election of the nominees below, all of whom
are
currently our directors. The eight nominees for election to the Board of
Directors who receive the greatest number of votes cast for the election of
directors by the shares present and entitled to vote will be elected directors.
If any nominee becomes unavailable for any reason, it is intended that the
proxies will be voted for a substitute nominee designated by the Board of
Directors. We have no reason to believe the nominees named will be unable to
serve if elected.
-6-
The
names
of the nominees for director, together with certain information regarding them,
are as follows:
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Name
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Age
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Position
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James
J. Cotter
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69
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Chairman
of the Board and Chief Executive Officer (1)
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Eric
Barr
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60
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Director
(2)
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James
J. Cotter, Jr.
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37
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Director
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Margaret
Cotter
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39
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Director
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William
D. Gould
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68
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Director
(3)
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Edward
L. Kane
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69
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Director
(2)
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Gerard
P. Laheney
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69
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Director
(1)(2)(3)
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Alfred
Villaseñor, Jr.
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77
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Director
(1)(3)
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(1) Member
of
the Executive Committee.
(2) Member
of
the Audit and Conflicts Committee.
(3) Member
of
the Compensation and Stock Option Committee.
Mr.
James
J. Cotter has been our Chairman of the Board and Chief Executive Officer for
more than the past five years. Mr. Cotter is the General Partner of James J.
Cotter, Ltd., a general partner of Hecco Ventures, a private investment
partnership and a major stockholder in our company. He is a 50% owner of Sutton
Hill Associates, a general partnership engaged in cinema-related activities,
primarily with our company; the sole voting shareholder of Cotter Enterprises
LLC; and the general partner of James J. Cotter Ltd. who is the general partner
of Hecco Ventures.
Mr.
Eric
Barr has been a director of our company since March 21, 2002. Mr. Barr is a
resident of Brighton, Victoria in Australia, with extensive knowledge of the
Australian business community. In June 2001, Mr. Barr retired from his position
as audit partner with PricewaterhouseCoopers LLC in Australia, after having
been
with that firm for 36 years. He serves as the Chairman of our Audit and
Conflicts Committee.
Mr.
James
J. Cotter, Jr. has been a director of our company since March 21, 2002. He
has
been Chief Executive Officer of Cecelia Packing Corporation (citrus packing
and
marketing) since July 2004. Mr. Cotter, Jr. served as a director to Cecelia
Packing Corporation from February 1996 to September 1997 and as a director
of
Gish Biomedical from September 1999 to March 2002. He was an attorney in the
law
firm of Winston & Strawn, specializing in corporate law, from September 1997
to May 2004. Mr. Cotter, Jr. is the son of James J. Cotter and the brother
of
Margaret Cotter and Ellen Cotter. Mr. Cotter, Jr. is a limited partner of James
J. Cotter Ltd. and a beneficiary of Cotter 2005 Children’s Trust, an irrevocable
trust. The trust owns a 99% non-voting interest in Cotter Enterprises
LLC.
Ms.
Margaret Cotter has been a director of our company since September 27, 2002.
Ms.
Cotter is also the owner and President of Off Broadway Investments, LLC, a
company that provides live theatre management services to our live theaters.
Pursuant to that management arrangement, Ms. Cotter also serves as the President
of Liberty Theaters, the subsidiary through which we own our live theaters.
Ms.
Cotter is also a theatrical producer who has produced shows in Chicago and
New
York. Ms. Cotter is an officer of the League of Off-Broadway Theaters and
Producers and is a member of the New York State Bar. From February 1994 until
September 1997, Ms. Cotter was an Assistant District Attorney for King’s County
in Brooklyn, New York. Ms. Cotter graduated from Georgetown University Law
Center in 1993. She is the daughter of Mr. James J. Cotter and the sister of
Mr.
James J. Cotter, Jr. and Ms. Ellen Cotter.
-7-
Ms.
Cotter is a limited partner of James J. Cotter Ltd. and a beneficiary of Cotter
2005 Children’s Trust, an irrevocable trust. The trust owns a 99% non-voting
interest in Cotter Enterprises LLC.
Mr.
William D. Gould has been a director of our company since October 15, 2004
and
has been a member of the law firm of Troy & Gould since 1986. Previously, he
was a partner of the law firm of O’Melveny & Myers. We have from time to
time retained Troy & Gould for legal advice.
Mr.
Edward L. Kane has been a director of our company since October 15, 2004. Mr.
Kane has been President of High Avenue Consulting, a healthcare consulting
firm,
since May 2000. Mr. Kane is also Chairman of Kane/Miller Book Publishers, Inc.,
a publisher of children’s picture books, a position he has held since January
2001. From 1985 to 1991, Mr. Kane served as a Director of our Company, also
serving as President from 1987 to 1988.
Mr.
Gerard P. Laheney has been a director of our company since September 27, 2002.
Mr. Laheney has been President of Aegis Investment Management Company, an
investment advisory firm specializing in global investment portfolio management,
since August 1993. Mr. Laheney was a Vice President of Dean Witter Reynolds
from
April 1990 to December 1993.
Mr.
Alfred Villaseñor, Jr. has been a director of our company since 1987. He has
also served as a director for Fidelity Federal Savings and Loan. Mr. Villaseñor
is the President and owner of Unisure Insurance Services, Incorporated, a
corporation that has specialized in life, business and group health insurance
for over 35 years. Mr. Villaseñor is a director of the John Gogian Family
Foundation and a director of Richstone Centers, a non-profit organization.
Attendance
at Board and Committee Meetings
During
the year ended December 31, 2006, the Board of Directors held four Board
meetings. Each director attended at least 75% of the aggregate of the
meetings of the Board of Directors and the meetings of all committees on which
he or she served, during the period such individual served. The Audit and
Conflicts Committee held six meetings in 2006. The Stock Options and
Compensation Committee did not hold any meetings during 2006, but acted by
unanimous written consent twice. We do not have a standing
nominating committee. Our Board Committees are discussed in greater detail
under the caption “Board
Committees,”
below.
Section
16(a) Beneficial Ownership Reporting Compliance
Section
16(a) of the Exchange Act requires our officers and directors and persons who
own more than 10% of our Common Stock to file reports of ownership and changes
in ownership with the SEC. The SEC rules also require such reporting persons
to
furnish us with a copy of all Section 16(a) forms they file.
Based
solely on a review of the copies of the forms which we have received and written
representations from certain reporting persons, during 2006, the following
Section 16(a) filings were filed late due to administrative
oversight:
|
Filer
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Form
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Date
of Earliest Transaction
|
Date
Filed
|
|
James
J. Cotter
|
4
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9/8/2006
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9/14/2006
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James
J. Cotter
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4
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12/15/2006
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1/19/2007
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-8-
Code
of Ethics
We
have
adopted a Code of Ethics applicable to our principal executive officer,
principal financial officer, principal accounting officer or controller and
company employees (a copy of which is available on our website at
www.readingrdi.com). We will furnish, without charge, a copy of our Code of
Ethics upon request. Such requests should be directed to us at 500 Citadel
Drive, Suite 300, Commerce, California 90040, or by telephone at 213-235-2240,
Attention: Corporate Secretary.
Indemnity
Agreements
In
1990,
our Board authorized us to enter into indemnity agreements with our then current
directors and officers. Since that time, we have typically entered into
indemnity agreements with our directors and senior officers. In 2001, our
stockholders approved a new form of indemnity agreement, which has been used
since that date to memorialize our indemnity obligations. Under these
agreements, we, generally speaking, have agreed to indemnify our directors
and
various of our senior officers against all expenses, liabilities and losses
incurred in connection with any threatened, pending or contemplated action, suit
or proceeding, whether civil or criminal, administrative or investigative,
to
which any such director or officer is a party or is threatened to be made a
party, in any manner, based upon, arising from, relating to or by reason of
the
fact that such individual is, was, shall be or has been a director, officer
employee, agent or fiduciary of our company. Each of our current directors
and
senior officers, as well as certain of the directors and senior officers of
our
subsidiaries, currently has the benefit of such indemnity
agreements.
Compensation
of Directors
During
2006, our non-employee directors received an annual fee of $25,000 for their
services, including attendance at meetings and service on Board committees.
The
Chairman of our Audit and Conflicts Committee receives an additional $2,000
of
compensation for his services. In addition, upon joining the Board, non-employee
directors receive 20,000 immediately vested options to purchase shares of our
Class A Nonvoting Common Stock at an exercise price equal to the market price
of
the stock at the date of grant. Ms. Margaret Cotter has agreed to serve as
one
of our directors without any additional consideration other than her stock
options.
On
January 19, 2007, the Board of Directors of Reading also (i) granted to each
of
the seven members of the Board of Directors an option to purchase 10,000 shares
of Reading’s Class A Nonvoting Common Stock, and (ii) increased the annual cash
director fee by $10,000 to $35,000. The foregoing stock options have an exercise
price of $8.35 (the closing trading price on January 19, 2007), have a 10-year
term, and vest immediately upon grant. Also, on January 19, 2007, the Board
of
Directors also established a Tax Oversight Committee. Mr. Edward L. Kane was
appointed as the Chairman of the new committee. As compensation for his services
as the Chairman of the new committee, the Board agreed to pay Mr. Kane a fee
of
$25,000 for the year 2007.
-9-
The
following table summarizes the director compensation for the year ending
December 31, 2006:
|
DIRECTOR
COMPENSATION FOR FISCAL YEAR ENDING 2006(1)
|
||||
|
Name
|
Fees
Earned or
Paid
in Cash
($)
|
|||
|
Eric
Barr
|
$
|
27,000
|
||
|
James
J. Cotter, Jr.
|
$
|
25,000
|
||
|
Margaret
Cotter
|
$
|
--
|
||
|
William
D. Gould
|
$
|
25,000
|
||
|
Edward
L. Kane
|
$
|
25,000
|
||
|
Gerard
P. Laheney
|
$
|
25,000
|
||
|
Alfred
Villaseñor, Jr.
|
$
|
25,000
|
||
|
(1)
|
Other
than the above annual fees, there were no other forms of compensation
to
our directors during 2006.
|
Board
Committees and Corporate Governance
Our
Board
of Directors has standing Executive, Audit and Conflicts, and Compensation
and
Stock Options Committees. These committees are discussed in greater detail
below. Our Board of Directors does not have a nominating committee. Typically,
nominations are suggested to our Board of Directors by our Chairman and Chief
Executive Officer and controlling stockholder, Mr. James J. Cotter.
Since
Mr.
Cotter owns a majority of our Class B Voting Common Stock, our Board of
Directors has determined that our company satisfies the criteria for a
“Controlled Company” under Section 801 of Part 8 of the American Stock Exchange
Company Guide. After reviewing the benefits and detriments of taking advantage
of the exceptions to the Corporate Governance Rules set forth in Part 8, the
Board of Directors in 2004 unanimously determined to take advantage of all
of
the exceptions from Part 8 afforded to us as a Controlled Company under Section
801.
Among
the
exceptions afforded to Controlled Companies is an exception from the requirement
that we have an independent nominating committee or independent nominating
process. It was noted by our Directors that the use of an independent nominating
committee or independent nominating process would be of limited utility, in
light of the fact that any nominee would need to be acceptable to Mr. James
J.
Cotter as our controlling stockholder and in light of the fact that under our
governing documents and applicable Nevada Law, Mr. Cotter, acting in his
capacity as a stockholder, can unilaterally nominate and elect candidates to
our
Board of Directors at our annual meeting or any other meeting where our
directors are to be elected. Mr. Cotter has advised our directors that he
prefers to be actively involved in the identification and selection of Board
nominees, and the he believes that it would be in the best interests of our
company and stockholders if we continued to treat the nomination process in
the
same way as in prior periods.
Our
Board
of Directors does not have a formal written policy with respect to the
consideration of director candidates recommended by our stockholders since,
in
the view of our Board, there has been no compelling reason to put any formal
policy in place. No stockholder has, in more than the past ten years, made
any
proposal or recommendation to the Board as to potential nominees, nor has Mr.
Cotter ever proposed, in the time he has been our principal or controlling
stockholder, any nominee that our
-10-
remaining
directors have found to be unacceptable. Furthermore, neither our governing
documents nor applicable Nevada law place any restriction on the nomination
of
candidates for election to our Board of Directors directly by our stockholders.
Accordingly, our Directors are currently of the view that in light of (i) the
fact that we are a “Controlled Company” under applicable American Stock Exchange
criteria and exempted from the American Stock Exchange requirements for an
independent nominating process, and (ii) the fact that neither our governing
documents nor Nevada law place any limitation upon the direct nomination of
director candidates by our stockholders, that the current system suitably
addresses the needs of our company and our stockholders and that little if
anything would be gained by adopting a formal policy with respect to such
matters at this time.
Our
Board
of Directors will, as it has traditionally advised our stockholders in our
proxy
materials each year, consider nominations from our stockholders, provided
written notice is delivered to our Secretary at our principal executive offices
not less than 120 days prior to the first anniversary of the immediately
preceding annual meeting of our stockholders at which directors are elected,
or
such earlier date as may be reasonable in the event that our annual stockholders
meeting is moved forward. Such written notice must set forth the name, age,
address and principal occupation or employment of such nominee, the number
of
shares of our common stock beneficially owned by such nominee and such other
information as is required by the proxy rules of the SEC with respect to a
nominee of our Board of Directors.
Alternatively,
under our governing documents and applicable Nevada Law, nominations may be
made
directly by stockholders from the floor of any meeting at which directors are
to
be elected. See also, the material set forth below under the caption “Stockholder
Proposals and Director Nominations.”
Our
directors have not adopted any formal criteria with respect to the
qualifications required to be a director or the particular skills that should
be
represented on our Board of Directors, other than the need to have at least
one
director and member of our Audit and Compensation Committee who qualifies as
an
“audit committee financial expert,” and has not historically retained any third
party to identify or evaluate or to assist in identifying or evaluating
potential nominees.
All
of
the current nominees were recommended to the Board by Mr. Cotter. No other
recommendations were received by us with respect to possible nominees to our
Board of Directors.
Executive
Committee
We
have a
standing Executive Committee comprised of Messrs. Cotter, Laheney and Villaseñor
that is authorized, to the fullest extent permitted by Nevada law, to take
action on matters between meetings of the full Board of Directors. In recent
years, this committee has not been used, and with the exception of matters
delegated to the Audit and Conflicts Committee or the Compensation and Stock
Options Committee, all matters requiring Board approval have been considered
by
the entire Board of Directors.
Audit
and Conflicts Committee; Audit Committee Report
Our
Board
of Directors maintains a standing Audit and Conflicts Committee, which we refer
to as the Audit Committee. The Audit Committee operates under a Charter adopted
by the Board of Directors, a copy of which is on file with the SEC. Our Board
of
Directors has determined that the Audit Committee is comprised entirely of
independent directors, (as independence is defined in Sections 121(A) and 803
of
the American Stock Exchange Company Guide), and that Mr. Barr, the Chairman
of
our Audit
-11-
Committee,
is qualified as an Audit Committee Financial Expert. With respect to our fiscal
year ended December 31, 2006, our Audit and Conflicts Committee comprised of
Messrs. Barr, Kane and Laheney.
Set
forth
below is the Audit Committee Report.
|
The
following is the report of the Reading International, Inc. (the
“Company,” “Reading,” and “we,” “us,” or “our”)
Audit Committee with respect to our audited financial statements
for the
fiscal year ended December 31, 2006.
The
purpose of the Audit Committee is to assist the Board in its general
oversight of our financial reporting, internal controls and audit
functions. The Audit Committee Charter describes in greater detail
the
full responsibilities of the Committee. The Audit Committee is
comprised
solely of independent directors as defined by the listing standards
of
National Association of Securities Dealers, Inc.
The
Audit Committee has reviewed and discussed the consolidated financial
statements with management and Deloitte & Touche, LLP, our independent
auditors. Management is responsible for the preparation, presentation
and
integrity of our financial statements; accounting and financial
reporting
principles; establishing and maintaining disclosure controls and
procedures (as defined in Exchange Act Rule 13a-15(e)); establishing
and maintaining internal control over financial reporting (as defined
in
Exchange Act Rule 13a-15(f)); evaluating the effectiveness of
disclosure controls and procedures; evaluating the effectiveness
of
internal control over financial reporting; and evaluating any change
in
internal control over financial reporting that has materially affected,
or
is reasonably likely to materially affect, internal control over
financial
reporting. Deloitte & Touche, LLP is responsible for performing an
independent audit of the consolidated financial statements and
expressing
an opinion on the conformity of those financial statements with
accounting
principles generally accepted in the United States of America,
as well as
expressing an opinion on (i) management’s assessment of the
effectiveness of internal control over financial reporting and
(ii) the effectiveness of internal control over financial reporting.
During
the course of fiscal 2006, we continued our compliance work to
document,
test and evaluate our system of internal control over financial
reporting
in accordance with Section 404 of the Sarbanes-Oxley Act of 2002 and
related regulations. At the conclusion of the process, management
provided
the Committee with and the Committee reviewed a report on the
effectiveness of our internal controls over financial reporting.
The
Committee also reviewed the report of management contained in our
Annual
Report on Form 10-K for the fiscal year ended December 31, 2006 filed
with the SEC, as well as Deloitte & Touche, LLP’s Report of
Independent Registered Public Accounting Firm included in our Annual
Report on Form 10-K related to its audit of (i) the consolidated
financial statements and financial statement schedule,
(ii) management’s assessment of the effectiveness of internal control
over financial reporting and (iii) the effectiveness of internal
control over financial reporting. The Committee continues to oversee
our
efforts related to our internal control over financial reporting
and
preparations for the evaluation in fiscal 2006.
The
Audit Committee has discussed with Deloitte & Touche, LLP the matters
required to be discussed by Statement on Auditing Standards No. 61,
as amended, “Communication with Audit Committees” and PCAOB Auditing
Standard No. 2, “An Audit of Internal Control Over Financial
Reporting Performed in Conjunction with an Audit of Financial Statements.”
In addition, Deloitte & Touche, LLP has provided the Audit Committee
with the written disclosures and the letter required by the Independence
Standards Board Standard No. 1, as amended, “Independence Discussions
with Audit Committees,” and the Audit Committee has discussed with
Deloitte & Touche, LLP their firm’s independence.
|
-12-
|
Based
on their review of the consolidated financial statements and discussions
with and representations from management and Deloitte & Touche, LLP
referred to above, the Audit Committee recommended to the Board
of
Directors that the audited financial statements be included in
our Annual
Report on Form 10-K for fiscal year 2006, for filing with the SEC.
Eric
Barr, Chairman
Edward
L. Kane
Gerard
P. Laheney
|
Compensation
and Stock Options Committee
Our
Board
of Directors has a standing Compensation and Stock Options Committee, which
we
refer to as our Compensation Committee, comprised of two or more of our
independent directors. The current Compensation Committee members are Alfred
Villaseñor, Jr., William D. Gould and Gerard P. Laheney.
Mr.
Villaseñor serves as Chairman of the Compensation Committee.
The
Compensation Committee evaluates and makes recommendations to the full Board
of
Directors regarding the compensation of our Chief Executive Officer, James
J.
Cotter, and that of any Cotter family members and generally oversees our
executive compensation programs. Set forth below is the Compensation Committee’s
Report on Executive Compensation for 2006. The
following Report does not constitute soliciting material and should not be
considered or deemed filed, or incorporated by reference into any filing, by
the
Company with the SEC, except to the extent the Company specifically incorporates
the Report by reference.
|
COMPENSATION
COMMITTEE REPORT
Our
Compensation Committee has reviewed and discussed the Compensation
Discussion and Analysis required by Item 402(b) of Regulation S-K
with
management and, based on such review and discussions, the Compensation
Committee recommended to our Board of Directors that the Compensation
Discussion and Analysis be included in this proxy statement.
Alfred
Villaseñor, Jr.
William
D. Gould
Gerard
P. Laheney
|
Vote
Required; Recommendation of the Board
The
eight
nominees receiving the greatest number of votes cast at the Annual Meeting
will
be elected to the Board of Directors. Mr. Cotter has advised us that he intends
to vote the 1,023,888 shares of Class B Voting Common Stock under his direct
or
indirect ownership in favor of each of our nominees. Since this represents
more
than 68% of the outstanding Class B Voting Common Stock, if Mr. Cotter votes
these shares as he has advised, then the nominees will be elected whether or
not
they receive the votes of any other holders of our voting stock.
THE
BOARD RECOMMENDS A VOTE FOR EACH OF THE NOMINEES.
-13-
EXECUTIVE
OFFICERS AND EXECUTIVE COMPENSATION
Management
of Our Company
Executive
Officers
The
following table sets forth information regarding our executive officers other
than Mr. Cotter, whose information is set forth in the Nominees for Election
section of this Proxy Statement:
|
Name
|
Age
|
Title
|
|
Ellen
M. Cotter
|
41
|
Chief
Operating Officer - Domestic Cinemas
|
|
John
Hunter
|
48
|
Chief
Operating Officer
|
|
Brett
Marsh
|
59
|
Vice
President - Real Estate
|
|
Andrzej
Matyczynski
|
54
|
Chief
Financial Officer and Treasurer
|
|
Wayne
Smith
|
49
|
Executive
Director - Australia and New Zealand
|
|
Robert
F. Smerling
|
72
|
President
- Domestic Cinemas
|
|
S.
Craig Tompkins
|
56
|
Executive
Vice President, Director - Business Affairs, Chief Legal Officer
and
Secretary
|
Ms.
Ellen
Cotter joined us in March 1998 and is the Chief Operating Officer of our
domestic cinema operations. Ms. Cotter is a graduate of Smith College and holds
a Juris Doctorate from Georgetown Law School. Prior to joining us, Ms. Cotter
spent four years in private practice as a corporate attorney with the law firm
of White & Case in Manhattan. Ms. Cotter is the daughter of James J. Cotter
and the sister of James J. Cotter, Jr. and Margaret Cotter, each of whom are
directors of our company. Ms. Cotter is a limited partner of James J. Cotter
Ltd. and a beneficiary of Cotter 2005 Children’s Trust, an irrevocable trust.
The trust owns a 99% non-voting interest in Cotter Enterprises LLC.
Mr.
John
Hunter joined the company in February 2007 as our Chief Operating Officer.
He is also President of our Australia and New Zealand based subsidiaries.
Mr. Hunter has spent the last dozen years in senior management positions in
cinema operations and real estate development working with Landmark Theatres,
Loews Theatres and Pacific Theatres. Immediately prior to joining the
company he was the Chief Operating Officer for Hollywood Theatres. Mr.
Hunter has served on the board of directors for the National Association of
Theatre Owners. Prior to becoming involved in the cinema business Mr.
Hunter spent several years in senior management positions in the home video,
magazine and book publishing industries.
Mr.
Marsh
has been with our company since 1993 and is responsible for our real estate
activities. Prior to joining us, Mr. Marsh was the Senior Vice President of
Burton Property Trust, Inc., the U.S. real estate subsidiary of the Burton
Group
PLC. In this position, Mr. Marsh was responsible for the real estate portfolio
of that company.
Mr.
Matyczynski was
named
Chief Financial Officer and Treasurer of our company and CRG and the Chief
Administrative Officer of REI on November 18, 1999. Mr. Matyczynski was named
the Chief Financial Officer and Treasurer of REI effective June 2, 2000. Prior
to joining us, Mr. Matyczynski held various positions over a twenty-year period
with Beckman Coulter in the U.S. and Europe. Beckman
-14-
Coulter
is a leading provider of instrument systems and related products that automate
laboratory processes. He last served as Beckman Coulter’s Worldwide Director of
Financial Reporting and Accounting, and as a director for certain Beckman
Coulter subsidiaries.
Mr.
Smith
joined us in April 2004 as Executive Director of Australia and New Zealand.
He
is the on-site, senior executive officer in that geographic area. Mr. Smith
brings to us 20 years of experience in cinema operations and property management
gained at Hoyts Cinema Limited, his last position there being Head of
Property.
Mr.
Smerling was
appointed President of Citadel Cinemas, Inc. effective September 1, 2000
following our acquisition of the City Cinemas. Mr. Smerling also served as
the
President and a director of REI. Mr. Smerling has served as the senior executive
officer responsible for various domestic subsidiaries since 1994. Prior to
joining us, Mr. Smerling was the President of Loews Theater Management
Corporation from May 1990 until November 1993. Mr. Smerling also served as
President and Chief Executive Officer of City Cinemas Corporation, a motion
picture exhibitor located in New York City, from November 1993 to September
2000.
Mr.
Tompkins is our Executive Vice President, Director - Business Affairs, Chief
Legal Officer and Corporate Secretary. He has been an executive officer of
our
company for more than the past five years. Mr. Tompkins was a member of our
Board of Directors from 1993 to September 26, 2002, resigning immediately prior
to the election of Mr. Gerard P. Laheney and Ms. Margaret Cotter in order to
allow for a board comprised of a majority of independent directors. Up until
the
time it went private in June 2006, Mr. Tompkins was also a Director and the
Chairman of the Strategic Planning Committee for G&L Realty Corp., a New
York Stock Exchange listed real estate investment trust, specializing in the
development and ownership of healthcare properties. Following that going private
transaction, Mr. Tompkins has continued as a Managing Member of G&L Realty
Corp LLC, and is also a Managing Director of G&L Senior Care Properties LLC
(a related company specializing in the development, ownership and operation
of
skilled nursing facilities). Mr. Tompkins was a director of Fidelity Federal
Bank, FSB, where he served on the Audit and Compensation Committees, from April
2000 until the sale of that institution effective December 31, 2001. In March
of
2007, Mr. Tompkins was elected Vice Chairman of Marshall & Stevens,
Incorporated, a valuation and financial advisory firm. Prior to joining our
Company, Mr. Tompkins was a partner in the law firm of Gibson Dunn &
Crutcher.
-15-
COMPENSATION
DISCUSSION AND ANALYSIS
Overview
of Compensation Program
The
Board
of Directors of our company has a standing Compensation and Stock Options
Committee, which we sometimes refer to in this section as our Compensation
Committee, comprised of two or more of our non-employee directors. As a
“controlled company” within the meaning of the AMEX Company Guide, we are exempt
from the AMEX listing standards regarding the determination of executive
compensation. The Compensation Committee has no formal charter, and acts
pursuant to the authority delegated by the Board of Directors from time to
time.
Throughout
this proxy statement, the individuals who served as our Chief Executive Officer
and Chief Financial Officer during fiscal 2006, as well as the other individuals
included in the Summary Compensation Table are referred to as the “named
executive officers.”
CompensationPhilosophy
and Objectives
Our
Company’s executive compensation policies and programs are designed to attract
and retain talented executives, reward them appropriately for their individual
efforts and job performance, and give them appropriate incentives to achieve
the
Company’s business objectives established by management and our Board of
Directors. We
believe that the total compensation paid to our named executive officers should
be fair to us and to the named executive officers, reasonable in nature and
amount, and competitive. The types of compensation and benefits provided to
named executive officers are similar to those provided to our other
officers.
In
general, we measure annual cash compensation, including salaries and bonuses,
against our peer group of companies. We believe that the executive compensation
packages provided by us to our named executive officers should consist primarily
of cash and, in some circumstances, share-based compensation.
With
certain exceptions, our company’s compensation policies are not related
specifically to our company’s performance. As described below, our company’s
performance is just one of the factors considered by us and our Compensation
Committee in awarding discretionary compensation.
Role
of Executive Officers in Compensation Decisions
The
Compensation Committee recommends to the full Board of Directors for its
determination all compensation decisions relating to Mr. Cotter, our Chief
Executive Officer, and his family members who serve as officers of our
company. Decisions regarding the compensation of other named executive officers
are made by our Chief Executive Officer, in consultation with our Compensation
Committee and subject to the supervision of the full Board of
Directors.
The
Compensation Committee and the Chief Executive Officer periodically review
at
least annually the
performance of each named executive officer (other than the Chief Executive
Officer, whose performance is reviewed periodically, and only by the
Compensation Committee). The conclusions reached and recommendations based
on
these reviews, including with respect to salary adjustments and annual
discretionary cash bonuses and other awards, are presented to the Committee.
The
Committee can recommend modifying any adjustments or awards to executives
proposed by the Chief Executive Officer, and the Chief Executive Officer’s
decisions regarding the compensation of our other named executive officers
is
subject to the oversight authority of our Board of Directors.
-16-
Our
Chief
Executive Officer and our Compensation Committee are responsible for
administering our executive compensation program under the supervision of our
full board of directors.
Setting
Executive Compensation
Mr.
Cotter and Mr. Matyczynski, the Company’s Chief Executive Officer and Chief
Financial Officer, respectively, Mr. Wayne Smith, and more recently, John W.
Hunter, our newly hired Chief Operating Office, have written employment
agreements with the Company. Except for Mr. Cotter, each of the executive
officers receives a base annual salary that was originally established by
negotiation between the Company and the particular executive when he or she
joined the Company. These base salaries may
be
adjusted periodically, based primarily upon the recommendations of
Mr. Cotter and other senior management and other factors, including market
and competitive factors.
From
time
to time we and the Compensation Committee have relied upon outside compensation
consultants. As discussed below, Mr. Cotter’s compensation for 2005 and 2006 was
determined by our Compensation Committee based upon the recommendations of
an
outside compensation consultant that was selected and employed by the Company
at
the direction of Mr. Matyczynski.
There
is
no pre-established policy or target for the allocation between base and
discretionary or incentive compensation, or between cash and non-cash incentive
compensation. Historically, and in 2006, we provided a majority of total
compensation to our named executive officers in the form of current cash
compensation.
2006
Executive Compensation Components
For
2006,
the principal components of compensation for our named executive officers
were:
|
·
|
base
salary;
|
|
·
|
discretionary
cash bonuses;
|
|
·
|
discretionary
restricted stock awards; and
|
|
·
|
perquisites
and other personal benefits.
|
Base
Salary
The
Company provides named executive officers and other employees with base salary
to compensate them for services rendered during the fiscal year in the ordinary
course of performing their job responsibilities. We determine base salaries
for
named executive officers primarily based on:
|
·
|
the
negotiated terms of each executive’s employment agreement or original
terms of employment;
|
|
·
|
the
individual’s position and level of responsibility with the
Company;
|
|
·
|
periodic
review of the executive’s compensation, both individually and relative to
other named executive officers; and
|
|
·
|
individual
job performance of the executive.
|
-17-
Salary
levels are typically considered periodically, as part of our performance
review
process, as well as upon any change in job responsibility. Merit-based increases
to salaries also are determined at the time, based on the Committee’s assessment
of the individual’s performance in the case of our Chief Executive Officer, or
based on the assessment of our Chief Executive Officer, in consultation with
the
Compensation Committee, in the case of our other named executive
officers.
In
2004,
our company retained Towers Perrin, executive compensation consultants, to
perform an analysis of chief executive compensation among a peer group of
companies. In consultation with our management, including Mr. Cotter, Towers
Perrin identified a peer group of companies in the real estate investment trust
and cinema exhibition industries, the two principal lines of business of our
company. The Compensation Committee’s review of Mr. Cotter’s compensation in
light of this peer group indicated that Mr. Cotter was under-compensated in
relation to his peers during at least the four years 2000 through 2004, based
upon the Compensation Committee’s judgment that Mr. Cotter’s total annual
compensation should fall within the 66th
percentile among the peer group. Based upon this finding, in March 2005, the
Compensation Committee recommended to the full Board of Directors that the
Company award Mr. Cotter a one-time bonus of $1.1 million to be paid, in Mr.
Cotter’s discretion, in the form of cash or restricted stock. The Board of
Directors authorized this award to Mr. Cotter in August 2005, subject to the
mutual agreement of Mr. Cotter and the Compensation Committee on the form of
the
award. The bonus was subsequently paid in cash to Mr. Cotter in January 2007.
The
Company entered into an employment contract with Mr. Cotter for 2005 and 2006
under which we agreed to employ him as Chairman of the Board and Chief
Executive Officer for a base salary of $500,000 for each of 2005 and 2006,
and
to award him an annual cash bonus of $250,000 for each of 2005 and 2006 if
specific goals were achieved with respect to Company projects in which Mr.
Cotter was involved on a hands-on basis. The specific projects were agreed
upon
between the Compensation Committee and Mr. Cotter in consultation with other
senior management of the Company and Towers Perrin and related to the successful
completion of acquisitions and real estate development projects. In
April
2006, the Compensation Committee authorized a cash bonus to Mr. Cotter of
$230,000 relating to the achievement of 2005 goals. This bonus was paid in
January 2007. In January 2007, the Compensation Committee authorized a
cash bonus to Mr. Cotter of $280,000 relating to the achievement of the 2006
goals, which was paid in March 2007.
We
also
agreed to award Mr. Cotter $250,000 of restricted shares of our Class A
common stock as of the end of each of 2005 and 2006, so long as he was then
still serving as Chief Executive Officer. Each annual award of restricted shares
is to vest in two annual installments of 50% each on the first and second
anniversaries of the award date and will be subject to forfeiture by Mr. Cotter
unless he remains employed as Chief Executive Officer of the Company through
such dates. Such restricted shares were to be subject to forfeiture if Mr.
Cotter was no longer serving as Chief Executive Officer on the first and second
anniversaries of the award date. On December 31, 2005, we awarded Mr.
Cotter 32,094 of restricted shares for 2005 valued at $7.79 per share and on
December 31, 2006, we awarded 30,266 of restricted shares for 2006 valued at
$8.26 per share. These shares were valued for this purpose at the market value
as of December 31 of each of 2005 and 2006.
Discretionary
Cash Bonuses
We
supplement the base salaries of Mr. Cotter and the Company’s other named
executive officers with periodic discretionary cash bonuses in recognition
of
individual performance and predicated on, among other things, the overall
financial performance of the Company. These bonuses are made in recognition
of
individual contributions, and are determined based upon such factors as the
level of the executive’s responsibilities, the efficiency and effectiveness with
which he or she oversees the matters under his or her
-18-
supervision,
and the degree to which the officer has contributed to the accomplishment of
major tasks that advance the Company’s goals. We assign no particular weighting
to individual performance versus the achievement of the Company’s objectives. In
January 2007, we paid Mr. Matyczynski and Ellen Cotter discretionary cash
bonuses of $50,000 and $30,000, respectively, for 2006.
Additional
compensation in excess of base salary, whether in the form of cash bonuses
or
stock-based awards, is awarded entirely on a discretionary basis when an
individual named executive officer is deemed to have contributed to the Company
beyond the level reflected in the individual’s base salary.
Stock-Based
Awards
Historically,
we have relied upon periodic awards of stock-based compensation to link the
executives’ long-term compensation to appreciation in stockholder value over
time. Most stock-based awards are made at the time of hire of named executive
officers
or
thereafter. In connection with the change in financial accounting rules
requiring the expensing of stock options, for 2006 we determined to utilize
awards of restricted stock in lieu of stock options where appropriate, because
of the relative advantages to the recipient of restricted stock as compared
to
stock options and the elimination of the prior beneficial accounting treatment
accorded to stock options. We may nonetheless continue to grant stock options
from time to time.
For
2006,
we awarded Mr. Cotter restricted stock as described above. We awarded no other
stock-based compensation to our named executive officers for 2006.
Ownership
Guidelines
We
have
no requirement that each named executive officer maintain any specific ownership
interest in our company.
Awards
of
stock-based compensation are determined based primarily on negotiations with
our
named executive officers at the time of their hire or thereafter, and vary
among
the named executive officers based on their positions within our company. Newly
hired executive officers who are to receive stock options or restricted stock
are awarded such options or restricted stock at their hire date.
It
is our
policy to award stock options and restricted stock at the AMEX’s closing price
of our common stock on the date the award is approved by our Chief Executive
Officer or our Board of Directors in the case of incumbent named executive
officers, or on the date of hire, in the case of new hires. In limited
circumstances, we may grant options to a named executive officer at an exercise
price in excess of the closing price of our common stock on the award date.
We
have never granted options with an exercise price that is less than the fair
market value of our common stock on the award or hire date, nor have we awarded
stock options or restricted stock which is priced on a date prior to the award
or hire date.
Any
stock
options granted by us generally are subject to vesting at a rate of 25% to
50%
per year over the typical ten-year option term. Vesting and exercise rights
generally cease upon termination of employment, except in the case of fully
vested options, which may be exercised within 90 days of the termination date
(or any such other period as may be prescribed by the Compensation Committee).
Prior to the exercise of an option, the holder has no rights as a
stockholder with respect to the shares subject to such option, including voting
rights and the right to receive dividends or dividend equivalents.
Unvested
restricted stock awarded by us is subject to forfeiture unless the recipient
remains in our employ for a specified period of time, typically one to two
years. The holder of the restricted stock is entitled to all rights of a
stockholder immediately upon issuance of the restricted stock and so long
as the
restricted stock has not been forfeited.
-19-
Other
Policies
We
have
no program, practice or plan to grant stock-based compensation to our
named executive
officers, including new executive officers, in coordination with the release
of
material nonpublic information. We also have not timed the release of material
nonpublic information for the purpose of affecting the value of stock-based
compensation to our named executive officers, and we have no plan to do
so.
In
light
of recent changes to the SEC’s rules regarding executive compensation
disclosure, during 2007 we intend to consider adopting formal policies and
procedures regarding the grant of stock-based options.
Termination
and Change
of Control Arrangements
We
have
entered into termination
change of control arrangements with our named executive officers. The change
of
control arrangements are designed to promote stability and continuity of senior
management. Information regarding applicable payments under such agreements
for
the named executive officers is provided under the heading “Payments Upon
Termination or Change-in-Control.”
Retirement
and Other Benefits
Reading
International, Inc. 401(k) Plan. The
Company provides employees a retirement savings plan qualified under Internal
Revenue Code section 401(k). Employees eligible to participate are ones who
have
completed one year of employment, are over 21, and have worked at least 1,000
hours in the 12 consecutive months before their date of entry into the plan.
Employees choosing to participate can make contributions to their plan account
on a pre-tax basis up to the maximum annual amount permitted by IRS rulings.
The
Company matches employee contributions dollar-for-dollar up to 3% of employee
wages, then 50 cents per dollar between 3% and 5% of employee
wages.
Supplemental
Executive Retirement Plan.
During
March 2007, the Board of Directors of Reading International, Inc. (“Reading”)
approved a Supplemental Executive Retirement Plan (“SERP”) pursuant to which
Reading has agreed to provide James J. Cotter, its Chief Executive Officer
and
Chairman of the Board of Directors, supplemental retirement benefits effective
March 1, 2007, to reward him for his more than 15 years of service to Reading
and its predecessors. Under the SERP, Mr. Cotter will receive a monthly payment
of the greater of (i) 40% of the average monthly earnings over the highest
consecutive 36-month period of earnings prior to Mr. Cotter’s separation from
service with Reading or (ii) $25,000 for the remainder of his life, with a
guarantee of 180 monthly payments following his death or separation from service
with Reading. The beneficiaries under the SERP may be designated by Mr. Cotter
or by his beneficiary following his or his beneficiary’s death. The benefits
under SERP are fully vested as of March 1, 2007.
The
SERP
initially will be unfunded, but Reading may choose to establish one or more
grantor trusts from which to pay the SERP benefits. As such, the SERP benefits
are unsecured, general obligations of Reading. The SERP is administered by
the
Compensation Committee of the Board of Directors of Reading.
-20-
Other
Retirement Plans.
As of
December 31, 2006, Mr. Tompkins has a vested interest in the pension plan
originally established by Craig Corporation prior to its merger with our company
of $181,000, which amount accrues interest at 30 day LIBOR. We currently
maintain no other retirement plan for our named executive officers or other
employees.
Perquisites
and Other Personal Benefits
We
provide our named executive officers with perquisites and other personal
benefits that we believe are reasonable and consistent with its overall
compensation program to enable us to attract and retain qualified employees
for
key positions. We periodically review the levels of perquisites and other
personal benefits provided to our named executive officers. Any perquisites
and
other personal benefits to Mr. Cotter and his family members not shared by
our
other named executive officers are reviewed and approved by our Audit and
Conflicts Committee as related person transactions.
Attributed
costs of the personal benefits described above for the named executive officers
for the fiscal year ended December 31, 2006, are included in column (i) of
the
“Summary Compensation Table.”
Tax
and Accounting Implications
Deductibility
of Executive Compensation
Subject
to an exception for “performance-based compensation,” Section 162(m) of the
Internal Revenue Code generally prohibits corporations from deducting for
federal income tax purposes annual compensation paid to any senior executive
officer to the extent that such annual
compensation exceeds $1 million. The Compensation Committee and the Board of
Directors consider the limits on deductibility under Section 162(m) in
establishing executive compensation, but retain the discretion to authorize
the
payment of compensation that exceeds the limit on deductibility under this
Section.
Nonqualified
Deferred Compensation
On
October 22, 2004, the American Jobs Creation Act of 2004 was signed into law,
changing the tax rules applicable to nonqualified deferred compensation
arrangements. While the final regulations have not become effective yet, we
believe we are operating in good-faith compliance with the statutory provisions,
which were effective January 1, 2005.
Accounting
for Stock-Based Compensation
Beginning
on January 1, 2006, we began accounting for stock-based payments in accordance
with the requirements of Statement of Accounting Standards No. 123(R). Our
decision to award restricted stock to Mr. Cotter in 2006 was based, in part,
upon the change in accounting treatment for stock options. Accounting treatment
otherwise has had no significant effect on our compensation
decisions.
Summary
Compensation Table
The
following table presents summary information concerning all compensation paid
or
accrued by us for services rendered in all capacities during 2006 by James
J.
Cotter and Andrzej Matyczynski, who are the only individuals who served as
our
principal executive and financial officers during the year ended December 31,
2006, and our three other most highly compensated executive officers who were
serving as executive officers as of December 31, 2006:
-21-
|
Year
|
Salary
($)
|
Bonus
($)
|
Stock
Awards ($)
|
Change
in Pension Value and Nonqualified Deferred
Compensation
Earnings ($)
|
All
Other
Compensation
|
Total ($) | |||||||||||||||||||
|
James
J. Cotter (1)
Chairman
of the Board, President and Chief Executive Officer
|
2006
|
$
|
500,000
|
$
|
230,000
|
$
|
125,000
|
--
|
$
|
34,000
|
$ | 889,000 |
|
|
|||||||||||
|
Andrzej
Matyczynski
Chief
Financial Officer and Treasurer
|
2006
|
$
|
240,000
|
$
|
12,000
|
--
|
--
|
$
|
21,000
|
(2) | $ |
273,000
|
|
|
|
||||||||||
|
Robert
F. Smerling
President
- Domestic Cinema Operations
|
2006
|
$
|
350,000
|
--
|
--
|
--
|
$
|
18,000
|
(2) | $ |
368,000
|
|
|
|
|||||||||||
|
Wayne
Smith
Executive
Director - Australia and New Zealand
|
2006
|
$
|
200,000
|
$
|
39,000
|
--
|
$
|
29,000
|
$
|
18,000
|
(2) | $ |
287,000
|
|
|
|
|||||||||
|
S.
Craig Tompkins
Executive
Vice President, Director - Business Affairs, Chief Legal Officer
and
Secretary
|
2006
|
$
|
410,500
|
--
|
--
|
$
|
7,000
|
$
|
27,000
|
(2) | $ |
444,500
|
|
|
|
||||||||||
|
(1)
|
As
of January 1, 2005, Mr. Cotter was hired as one of our employees
with the
title of Chairman and Chief Executive Officer with an annual salary
of
$500,000 per year and an annual performance bonus of approximately
$250,000 in cash and $250,000 of stock based compensation. We own
a
condominium in a high-rise building located in West Hollywood, California,
which is used as an executive office. Included in other compensation
is
the employer’s match of our 401(k) plan and the attributed cost of Mr.
Cotter’s personal use of the aforementioned condominium and company
automobile.
|
|
(2)
|
Other
compensation is comprised of the employer’s match of our 401(k) plan and
car allowances to the executives.
|
-22-
Grants
of Plan-Based Awards
The
following table contains information concerning the stock grants made to each
Named Executive Officer for the year ended December 31, 2006:
|
Estimated
Future Payouts Under Equity Incentive Plan
Awards
|
||||
|
Name
|
Grant
Date
|
Threshold
Number of Shares
|
Target
Number of Shares
|
Maximum
Number of Shares
|
|
James
J. Cotter
|
12/31/2006
|
30,266
|
30,266
|
30,266
|
|
Andrzej
Matyczynski
|
--
|
--
|
--
|
--
|
|
Robert
F. Smerling
|
--
|
--
|
--
|
--
|
|
Wayne
Smith
|
--
|
--
|
--
|
--
|
|
S.
Craig Tompkins
|
--
|
--
|
--
|
--
|
Outstanding
Equity Awards
The
following table contains information concerning the outstanding option and
stock
awards of each Named Executive Officer as of the year ended December 31, 2006:
|
Option
Awards
|
Stock
Awards
|
|||||||||||||||
|
Number
of Shares Underlying Unexercised Options
Exercisable
|
Option
Exercise
Price ($)
|
Option
Expiration
Date
|
Number
of Shares or Units of Stock that Have Not
Vested
|
Total
($)
|
||||||||||||
|
James
J. Cotter
|
137,500
|
$
|
10.24
|
4/18/2007
|
30,266
|
$
|
250,000
|
|||||||||
|
16,047
|
$
|
125,000
|
||||||||||||||
|
Andrzej
Matyczynski
|
35,100
|
$
|
5.13
|
11/18/2009
|
--
|
--
|
||||||||||
|
30,000
|
$
|
2.76
|
4/13/2010
|
--
|
--
|
|||||||||||
|
35,000
|
$
|
3.80
|
7/2/2012
|
--
|
--
|
|||||||||||
|
Robert
F. Smerling
|
43,750
|
$
|
10.24
|
4/18/2007
|
--
|
--
|
||||||||||
|
6,250
|
$
|
4.01
|
4/23/2013
|
--
|
--
|
|||||||||||
|
Wayne
Smith
|
--
|
--
|
--
|
--
|
--
|
|||||||||||
|
S.
Craig Tompkins
|
25,000
|
$
|
10.24
|
4/18/2007
|
--
|
--
|
||||||||||
|
40,000
|
$
|
2.76
|
4/13/2010
|
--
|
--
|
|||||||||||
|
41,000
|
$
|
4.01
|
4/23/2013
|
--
|
--
|
|||||||||||
Option
Exercises and Stock Vested
The
following table contains information concerning the stock awards that vested
during the year ended December 31, 2006 to each of the Named Executive Officers.
No options were exercised by any of the Named Executive Officers during
2006.
-23-
|
Stock
Awards
|
|||||||
|
Name
|
Number
of Shares Acquired on
Vesting
|
Value
Realized
on
Vesting ($)
|
|||||
|
James
J. Cotter (1)
|
16,047
|
$
|
132,548
|
||||
|
Andrzej
Matyczynski
|
--
|
$
|
--
|
||||
|
Robert
F. Smerling
|
--
|
$
|
--
|
||||
|
Wayne
Smith
|
--
|
$
|
--
|
||||
|
S.
Craig Tompkins
|
--
|
$
|
--
|
||||
|
(1)
|
As
part of Mr. James J. Cotter’s compensation, he is entitled to a $250,000
annual restricted stock award for 2005 and 2006 based the market
price on
December 31, 2005 and 2006. Each annual award of restricted shares
is to
vest in two annual installments of 50% each on the first and second
anniversaries of the award date and will be subject to forfeiture
by Mr.
Cotter unless he remains employed as Chief Executive Officer of
the
Company through such dates. These shares represent the vesting
of the 50%
portion of the 2005 award that vested on December 31,
2006.
|
Pension
Benefits
The
following table contains information concerning pension plans for each of the
Named Executive Officers for the year ended December 31, 2006:
|
Name
|
Plan
Name
|
Number
of Years of Credited
Service
|
Aggregate
Balance at Last FY
($)
|
Registrant
Contributions in Last FY
($)
|
|||||||||
|
James
J. Cotter
|
--
|
--
|
$
|
--
|
$
|
--
|
|||||||
|
Andrzej
Matyczynski
|
--
|
--
|
$
|
--
|
$
|
--
|
|||||||
|
Robert
F. Smerling
|
--
|
--
|
$
|
--
|
$
|
--
|
|||||||
|
Wayne
Smith
|
--
|
--
|
$
|
--
|
$
|
--
|
|||||||
|
S.
Craig Tompkins
|
CRG
Pension Plan
|
14
|
$
|
181,000
|
$
|
7,000
|
|||||||
Payments
Upon Termination or Change-in-Control
We
have
entered into the following termination or change-in-control arrangements with
our named executive officers:
Andrzej
Matyczynski.
Pursuant to his employment agreement, Mr. Matyczynski is entitled to a severance
payment equal to six months’ salary in the event his employment is involuntarily
terminated.
Robert
F. Smerling.
Under
the terms of his employment, Mr. Smerling is entitled to a severance payment
of
$175,000 in the event his employment is involuntarily terminated.
Wayne
Smith.
Under
the terms of his original three year employment contract, which expired March
31, 2007, Mr. Smith was entitled to severance payment equivalent to six months
of salary in the event his employment was involuntarily terminated. As a result,
he is no longer entitled to any severance payments.
-24-
S.
Craig Tompkins.
While
no formal written agreement exists as to the terms of Mr. Tompkins’ employment,
Mr. Tompkins is entitled to receive his annual base salary for a period of
one
year (less $40,000) in the event that his employment is involuntarily terminated
and no change of control has occurred. Mr. Tompkins is entitled to a severance
payment equal to two years base salary (less $80,000) in the event of a change
of control.
Securities
Authorized for Issuance Under Equity Compensation Plans
The
following table summarizes the security authorized for issuance under our
employee stock option plan for the year ended December 31, 2006:
|
Number
of Shares to be issued upon exercise of outstanding
options,
warrants and rights
|
Weighted-average
exercise price of outstanding options,
warrants and rights
|
Number
of Shares remaining available for future issuance under equity
compensation plans (excluding Shares reflected in
column (a))
|
||||
|
(a)
|
(b)
|
(c)
|
||||
|
Plan
Category
|
Class
A
|
Class
B
|
Class
A
|
Class
B
|
Class
A
|
Class
B
|
|
Equity
compensation plans approved by stockholders
|
514,100
|
185,100
|
$
5.21
|
$9.90
|
650,800(1)
|
650,800(1)
|
|
(1)
|
The
aggregate total number of shares of Class A Nonvoting Common Stock
and
Class B Voting Common Stock authorized for issuance under the our
1999
Stock Option Plan is 1,350,000. The presentation above reflects the
fact
that the options may be issued to acquire either Class A or Class
B
shares, up to an aggregate of 1,350,000 of both classes of stock,
and the
outstanding options cover, in aggregate,
699,200.
|
Compensation
Committee Interlocks and Insider Participation
There
are
no “interlocks,” as defined by the SEC, with respect to any member of the
compensation committee.
Certain
Transactions and Related Party Transactions
Sutton
Hill Capital
In
2001,
we entered into a transaction with Sutton Hill Capital, LLC (“SHC”) regarding
the lease with option to purchase of certain cinemas located in Manhattan.
In
connection with that transaction, we also agreed to lend certain amounts to
SHC,
to provide liquidity in its investment, pending our determination whether or
not
to exercise our option to purchase and to manage the 86th Street Cinema on
a fee
basis. SHC is a limited liability company owned in equal shares by James J.
Cotter and Michael Forman and of which Mr. Cotter is the managing member. During
2006, we paid rent to SHC in the amount of $495,000 and we currently owe SHC
$5.0 million (due September 14, 2007) with respect to the borrowing used
principally to finance the acquisition of our interest in the limited liability
company currently developing the Sutton Cinema site and $9.0 million on the
Purchase Money Promissory Note (due December 31, 2010), for an aggregate
liability of $14.0 million. These two notes had an annual interest rate at
December 31, 2006 of 9.69% and 8.25%, respectively.
-25-
In
2005,
we acquired from a third party the fee interest and from SHC its interest in
the
ground lease estate underlying the Cinemas 1, 2 & 3 in Manhattan. In
connection with that transaction, we agreed to grant to SHC an option to acquire
a 25% interest in the special purpose entity formed to acquire these interests
at cost. Mr. Cotter has paid an advance of $3.0 million against the exercise
price of that option.
OBI
Management Agreement
Pursuant
to a Theater Management Agreement (the “Management Agreement”), our live theater
operations are managed by OBI LLC (“OBI Management”), which is wholly owned by
Ms. Margaret Cotter who is the daughter of James J. Cotter and a member of
our
Board of Directors.
The
Management Agreement generally provides that we will pay OBI Management a
combination of fixed and incentive fees which historically have equated to
approximately 19% of the net cash flow received by us from our live theaters
in
New York. Since the fixed fees are applicable only during such periods as the
New York theaters are booked, OBI Management receives no compensation with
respect to a theater at any time when it is not generating revenues for us.
This
arrangement provides an incentive to OBI Management to keep the theaters booked
with the best available shows, and mitigates the negative cash flow that would
result from having an empty theater. In addition, OBI Management manages our
Royal George live theater complex in Chicago on a fee basis based on theater
cash flow. In 2006, OBI Management earned $470,000 (including $43,000 for
managing the Royal George) which was 23.6% of net live theater cash flows for
the year. In 2005, OBI Management earned $533,000 (including $74,000 for
managing the Royal George) which was 20.7% of net live theater cash flows for
the year. In 2004, OBI Management earned $419,000 (including $35,000 for
managing the Royal George) which was 17.2% of net live theater cash flows for
the year. In each year, we reimbursed travel related expenses for OBI Management
personnel with respect to travel between New York City and Chicago in connection
with the management of the Royal George complex.
OBI
Management conducts its operations from our office facilities on a rent-free
basis, and we share the cost of one administrative employee of OBI Management.
Other
than these expenses and travel-related expenses for OBI Management personnel
to travel to Chicago as referred to above, OBI Management is responsible for
all
of its costs and expenses related to the performance of its management
functions. The Management Agreement renews automatically each year unless either
party gives at least six months’ prior notice of its determination to allow the
Management Agreement to expire. In addition, we may terminate the Management
Agreement at
any
time for cause.
Live
Theater Play Investment
From
time
to time, our officers and directors may invest in plays that lease our live
theaters. During 2004, an affiliate of Mr. James J. Cotter and Michael Forman
made a 25% investment in the play, I
Love You, You’re Perfect, Now Change,
playing
in one of our auditoriums at our Royal George Theatre. We similarly have a
25%
investment in the play. The play has earned for us $27,000, $25,000 and $35,000
during the years ended December 31, 2006, 2005 and 2004, respectively. This
investment received board approval from our Conflicts Committee on August 12,
2002.
The
play
STOMP has been playing in our Orpheum Theatre since prior to the time we
acquired the theater in 2001. Messrs. James J. Cotter and Michael Forman own
an
approximately 5% interest in that play, an interest that they have held since
prior to our acquisition of the theater.
-26-
Certain
Family
Relationships
Mr.
James
J. Cotter, our controlling stockholder, has advised the Board of Directors
that
he considers his holdings in our company to be long-term investments to be
passed onto his heirs. The Directors believe that it is in the best interests
of
our company and our stockholders, for his heirs to become experienced in our
operations and affairs. Accordingly, all of Mr. Cotter’s children are currently
involved with our company.
Certain
Miscellaneous Transactions
We
have
loaned Mr. Smerling $70,000 pursuant to a demand loan. This loan antedates
the
effective date of the Sarbanes-Oxley prohibition on loans to directors and
officers.
-27-
INDEPENDENT
PUBLIC ACCOUNTANTS
Our
independent public accountants, Deloitte & Touche, LLP, have audited our
financial statements for the fiscal year ended December 31, 2006, and are
expected to have a representative present at the Annual Meeting who will
have
the opportunity to make a statement if he or she desires to do so and is
expected to be available to respond to appropriate questions.
Audit
Fees
The
aggregate fees we have incurred for Deloitte & Touche, LLP for professional
services rendered for the audit of our financial statements, audit of internal
controls related to the Sarbanes-Oxley Act of 2002, and the reviews of the
financial statements included in our Forms 10-Q for 2006 were approximately
$810,000 and $836,000 for the years ending December 31, 2006 and 2005,
respectively.
Audit
Related Fees
The
aggregate fees we have incurred in each of 2006 and 2005 for assurance and
related services provided by Deloitte & Touche, LLP that are reasonably
related to the performance of the audit or review of our financial statements
and that are not reported above under the caption “Audit
Fees”
immediately above were approximately $6,000 and $14,000,
respectively.
Tax
Fees
The
aggregate fees
we have
incurred
in each of 2006 and 2005 for products and services for tax compliance, tax
advice, and tax planning provided by Deloitte & Touche, LLP were $115,000
and $155,000, respectively.
Financial
Information Systems Design and Implementation Fees
No
fees
were billed by Deloitte & Touche, LLP for 2006 or 2005 for financial
information systems design and implementation fees.
All
Other Fees
The
aggregate fees we have incurred for 2006 and 2005 for services provided by
Deloitte & Touche, LLP other than as set forth above were $36,000 and
$19,000, respectively.
This
category generally includes advice on accounting matters that arose during
the
fiscal year.
Compatibility
of Fees with Independent Accountant’s Independence
Our
Audit
Committee has determined that the provision of services covered under the
subheading “All Other Fees” above is compatible with maintaining Deloitte &
Touche, LLP’s independence. We adopted policies and procedures for the
pre-approval of audit services and permitted non-audit services during fiscal
2003.
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STOCKHOLDER
COMMUNICATION
Annual
Report
A
copy of
our Annual Report on Form 10-K for its fiscal year ended December 31, 2006
is
being provided with this Proxy Statement.
Stockholder
Communications with Directors
It
is the
policy of our Board of Directors that any communications sent to the attention
of any one or more of our directors care of our executive offices, or deposited
in any of the “Suggestion Boxes” maintained at our principal administrative
offices in Los Angeles, Manhattan and Melbourne, Australia, will be promptly
forwarded to such directors. Such communications will not be opened or reviewed
by any of our officers or employees, or by any other director, unless they
are
requested to do so by the addressee of any such communication. Likewise, the
content of any telephone messages left for any one or more of our directors
(including, any call-back number, if any) will be promptly forwarded to that
director.
Stockholder
Proposals and Director Nominations
Any
stockholder who, in accordance with and subject to the provisions of the proxy
rules of the SEC, wishes to submit a proposal for inclusion in our Proxy
Statement for our 2008 Annual Meeting of Stockholders, must deliver such
proposal in writing to the Secretary of the Company at the address of our
company's principal executive offices at 500 Citadel Drive, Suite 300, Commerce,
California 90040. Unless we change the date of our annual meeting by more than
30 days, then such written proposal must be delivered to us no later than
January 10, 2008. If we are not notified of a stockholder proposal by that
date,
the proxies that we hold may confer discretionary authority to vote against
such
stockholder proposal, even though such proposal is not discussed in our Proxy
Statement for that meeting.
Our
Board
of Directors will consider written nominations for directors from stockholders.
Nominations for the election of directors made by our stockholders must be
made
by written notice delivered to our Secretary at our principal executive offices
not less than 120 days prior to the first anniversary of the immediately
preceding annual meeting of our stockholders at which directors are elected.
Such written notice must set forth the name, age, address and principal
occupation or employment of such nominee, the number of shares of our company’s
Common Stock beneficially owned by such nominee and such other information
as is
required by the proxy rules of the SEC with respect to a nominee of the Board
of
Directors.
Under
our
governing documents and applicable Nevada law, our stockholders may also
directly nominate candidate from the floor at any meeting of our stockholders
held at which directors are to be elected.
Other
Matters
We
do not
know of any other matters to be presented for consideration other than the
matters described in the Notice of Annual Meeting, but if any matters are
properly presented, it is the intention of the persons named in the accompany
proxy to vote on such matters in accordance with their judgment.
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DELIVERY
OF PROXY MATERIALS TO HOUSEHOLDS
As
permitted by the Securities Exchange Act of 1934, only one copy of the proxy
materials are being delivered to our stockholders residing at the same address,
unless such stockholders have notified us of their desire to receive multiple
copies of the proxy materials.
We
will
promptly deliver without charge, upon oral or written request, a separate
copy
of the proxy materials to any stockholder residing at an address to which
only
one copy was mailed. Requests for additional copies should be directed to
our
Corporate Secretary or Assistant Corporate Secretary by telephone at (213)
235-2236 or by mail to Secretary, Reading
International, Inc.,
500
Citadel Drive, Suite 300, Commerce, California 90040.
Stockholders
residing at the same address and currently receiving only one copy of the
proxy
materials may contact the Corporate Secretary or Assistant Corporate Secretary
as described above to request multiple copies of the proxy materials in the
future.
By
Order
of the Board of Directors,
James
J.
Cotter, Chairman
Dated:
April 24, 2007
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