Business Context and Reporting Period
This Form 8-K Current Report was filed by Lions Gate Entertainment Corp. on February 13, 2013, covering events occurring on February 7, 2013. The filing details the appointment of Wayne Levin to a new executive role and the terms of his employment agreement.
Key Financial Metrics
The filing does not provide revenue, profit, cash flow, margin, debt, or liquidity metrics. It focuses exclusively on executive compensation arrangements.
- Base Salary: $750,000 annually (Feb 7, 2013 – Mar 31, 2013); $825,000 annually (Apr 1, 2013 – end of term).
- Equity Grants: 100,000 time-vesting RSUs, 100,000 performance-vesting RSUs, 175,000 time-vesting options, and 175,000 performance-vesting options.
- Contract Term: Approximately three years, ending March 31, 2016.
Material Changes
On February 7, 2013, Wayne Levin was appointed as General Counsel and Chief Strategic Officer, expanding his previous role as General Counsel and Executive Vice President, Corporate Operations. This appointment is accompanied by a new three-year employment agreement with increased compensation and significant equity incentives.
Outlook, Risks, and Unusual Items
Severance Provisions:
- Termination Without Cause: Entitles Mr. Levin to 50% of base salary for the remainder of the term (minimum of 12 months' salary) and 12 months of accelerated vesting for time-vested awards.
- Change in Control/Management: If terminated without cause or for good reason within six months of a change in control, Mr. Levin receives 100% of base salary for the remainder of the term and full vesting of all outstanding awards. If terminated within six months of a change in management, the next vesting installment and 50% of the following installment vest.
- Death: All restricted share units and options become fully vested.
Performance Bonus: Mr. Levin is eligible for an annual performance bonus at the discretion of the Compensation Committee.
Investor Verification Checklist
- Verify the specific performance criteria for the 100,000 performance-vesting RSUs and 175,000 performance-vesting options, as these are determined by the Compensation Committee.
- Review the full employment agreement (expected in the 2013 Form 10-K) for detailed definitions of "cause," "good reason," and "change in control."
- Confirm the impact of the new equity grants on total shareholder dilution.
- Check the Company's existing severance policy for non-contract employees to understand the baseline for the "greater of" severance calculation.