SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
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|Item 5.02|| |
Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.
Compensatory Arrangements of Certain Officers.
On December 18, 2020, the Compensation Committee (the “Committee”) of the Board of Directors of Lions Gate Entertainment Corp. (the “Company”) approved a new employment agreement for Michael Burns the Company’s Vice Chair (the “New Employment Agreement’). The New Employment Agreement replaces the Company’s current employment agreement with Mr. Burns, which was originally entered into as of October 30, 2012 and subsequently amended as of November 3, 2016 (the “Prior Employment Agreement”). The New Employment Agreement has the same compensation and other terms of employment as the Prior Employment Agreement, except as described below.
The term of the New Employment Agreement is scheduled to expire on October 30, 2023 (as opposed to the expiration date of October 30, 2022 provided in the Prior Employment Agreement), and the New Employment Agreement gives the Company the right, in its sole discretion, to extend the term of the New Employment Agreement by one additional year (so that the term would expire on October 30, 2024).
The New Employment Agreement also provides for the grant to Mr. Burns of an award of performance-based share appreciation rights (“SARs”) with respect to 1,500,000 of the Company’s Class B non-voting shares (“Class B Shares”). The SARs were granted to Mr. Burns on December 18, 2020, have a per-share exercise price of $8.51 (the closing price of a Class B Share on the date of grant of the award), and vest and become exercisable in three equal annual installments on each of the first three anniversaries of the date of grant (subject to Mr. Burns’ continued employment through the applicable vesting date); provided, however, that no portion of the SARs shall be vested or exercisable prior to the date on which the volume-weighted average of the closing prices of the Class B Shares over a period of thirty consecutive trading days ending on or before December 18, 2023 is greater than or equal to $17.02 (the “VWAP Performance Goal”), in each case in regular trading on the New York Stock Exchange. If the VWAP Performance Goal is not achieved on or before December 18, 2023, the SARs, to the extent then outstanding and whether or not the employment-based vesting requirement described above has been met, will terminate and be cancelled on that date. Notwithstanding the foregoing, if the Company does not extend the term by the additional year noted above and Mr. Burns’ employment terminates on October 30, 2023, and if the VWAP Performance Goal has been achieved prior to that date, then the third tranche of the SAR award shall automatically vest on October 29, 2023. In addition, if prior to December 18, 2023, Mr. Burns’ employment is terminated by the Company without cause, by him for good reason, or due to his death or disability (as such terms are defined in the New Employment Agreement), the SARs that are then outstanding and unvested will remain outstanding (subject to Mr. Burns providing a release pursuant to the New Employment Agreement) and will vest only if the VWAP Performance Goal is achieved on or before December 18, 2023. Upon exercise, the SARs may be settled in cash, the Class B Shares, the Company’s Class A voting shares, or a combination thereof, as determined by the Committee, with the amount of the payment in each case determined based on the value of the Class B Shares at the time of payment (less the applicable exercise price in the case of SARs).
The foregoing summary is qualified in its entirety by reference to the text of the New Employment Agreement, filed herewith as Exhibit 10.1 and incorporated herein by this reference.
|Item 9.01|| |
Financial Statements and Exhibits.
|10.1||Employment Agreement among Michael Burns and Lions Gate Entertainment Corp. dated as of December 18, 2020|
|104||The cover page from this Current Report on Form 8-K, formatted in Inline XBRL (included as Exhibit 101).|
Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
Date: December 21, 2020
|LIONS GATE ENTERTAINMENT CORP.|
|Name:||Corii D. Berg|