UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported): October 11, 2016
Lions Gate Entertainment Corp.
(Exact name of registrant as specified in charter)
British Columbia, Canada
(State or Other Jurisdiction of Incorporation)
 
 
 
(Commission File Number) 1-14880
 
(IRS Employer Identification No.) N/A
(Address of principal executive offices)
250 Howe Street, 20th Floor
Vancouver, British Columbia V6C 3R8
and
2700 Colorado Avenue
Santa Monica, California 90404
Registrant’s telephone number, including area code: (877) 848-3866
No Change
(Former name or former address, if changed since last report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
    
o
Written Communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
o
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
o
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
o
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
 




Item 5.02
Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.
(e)      Compensatory Arrangements of Certain Officers.

On October 11, 2016, the Compensation Committee (the “Committee”) of the Board of Directors of Lions Gate Entertainment Corp. (the “Company”) approved a five-year extension of the term of the Company’s employment agreement with Jon Feltheimer, the Company’s Chief Executive Officer (the “Agreement’), through May 22, 2023. The Committee also approved certain amendments to the Agreement as set forth in the Amendment to Employment Agreement, attached hereto as Exhibit 10.1 (the “Amendment”).

Pursuant to the Agreement, Mr. Feltheimer receives an annual base salary of $1,500,000 and is eligible to receive an annual performance bonus based on such performance criteria as established by the Committee, with the target bonus being 100% of his base salary. Any portion of Mr. Feltheimer’s annual bonus that exceeds $1,500,000 for a particular year may be paid to him in the form of fully vested Company common shares. The Agreement also provides for Mr. Feltheimer to participate in the Company's usual benefit programs for executives at his level, as well as Company-provided life and disability insurance coverage, reasonable club membership dues and limited use of the Company’s private aircraft. In connection with his entering into the Amendment, Mr. Feltheimer was granted an option to purchase 1,150,000 of the Company’s common shares at an exercise price of $19.68 per share (the closing price of the Company’s common shares on October 11, 2016) and an option to purchase 1,150,000 of the Company’s common shares at an exercise price of $24.60 per share. Each of these options is scheduled to vest in annual installments over the five-year period beginning May 22, 2018. In addition, Mr. Feltheimer was granted a bonus opportunity in the amount of $5,000,000 that will be payable only if Lions Gate achieves a performance goal established by the Committee during a specified period following Lions Gate’s pending acquisition of Starz.

In the event Mr. Feltheimer’s employment is terminated by the Company without cause or by him for good reason (as such terms are defined in the Agreement), he would be entitled to a cash severance payment equal to the present value of his base salary through May 22, 2023, as well as Company payment of his premiums for continued health coverage for up to six months following his termination and his premiums for continued life and disability insurance through May 22, 2023. In addition, Mr. Feltheimer would be entitled to a prorated annual bonus for the fiscal year in which his termination occurs, and Mr. Feltheimer’s equity awards granted by the Company pursuant to the Agreement (including the Amendment), to the extent then outstanding and unvested, would become fully vested upon his termination. If Mr. Feltheimer’s employment is terminated by the Company without cause or by him for good reason and such termination occurs on or within 12 months following a change in control of the Company (as defined in the Agreement), he would be entitled to the severance benefits described above, except that his cash severance would be the greater of the present value of his base salary through May 22, 2023 or $6.0 million. In each case, Mr. Feltheimer’s right to receive the severance payments described above would be subject to his execution of a release of claims in favor of the Company. In the event Mr. Feltheimer’s employment with the Company terminates due to his death or disability, his equity awards granted by the Company pursuant to the Agreement (including the Amendment), to the extent then outstanding and unvested, would become fully vested as of the date of such termination.

The foregoing summary of the Agreement is qualified in its entirety by the provisions of the Agreement, which was filed as Exhibit 10.1 to the Company’s Current Report on Form 8-K, filed with the SEC on May 31, 2013, and by the Amendment filed herewith, each of which is incorporated herein by this reference.




1


Item 7.01 Regulation FD Disclosure.

On October 13, 2016, the Company issued a press release announcing the extension of Mr. Feltheimer’s Agreement. The press release issued by the Company in connection with the announcement is attached hereto as Exhibit 99.1. Exhibit 99.1 shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities under that Section and shall not be deemed to be incorporated by reference into any filing of the Company under the Securities Act of 1933, as amended, or the Exchange Act.

Item 9.01     Financial Statements and Exhibits.
(d)     Exhibits

 
Exhibit No.
Description
 
10.1
Amendment to Employment Agreement, dated October 11, 2016, between the Company and Jon Feltheimer
 
 
 
 
99.1
Press Release dated October 13, 2016


2


SIGNATURE
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: October 13, 2016
LIONS GATE ENTERTAINMENT CORP.
 
(Registrant)
 
 
 
 
 
By: /s/ Wayne Levin                          
 
Name: Wayne Levin
 
Title: General Counsel and Chief Strategic Officer


3

Exhibit 10.1
AMENDMENT
to
EMPLOYMENT AGREEMENT
THIS AMENDMENT TO EMPLOYMENT AGREEMENT (this “ Amendment ”) is dated as of October 11, 2016, by and between Lions Gate Entertainment Corp. (“ Lions Gate ”), and Jon Feltheimer (“ Feltheimer ”).
WHEREAS , Feltheimer is currently employed by Lions Gate as its Chief Executive Officer pursuant to that certain Employment Agreement, dated May 30, 2013 (the “ Agreemen t”); and
WHEREAS , Lions Gate and Feltheimer desire to amend the Employment Agreement, as provided herein.
NOW, THEREFORE , the parties agree as follows:

1.      Section 2 of the Employment Agreement is hereby amended and restated to read in its entirety as follows:
“2.      Term . Feltheimer’s employment term under this Agreement shall commence on May 22, 2013 (the “ Effective Date ”) and continue through and including May 22, 2023 (the “ Expiration Date ”), subject to early termination as provided in this Agreement (the “ Term ”).”
2.      A new Section 4A is hereby added to the Employment Agreement to read in its entirety as follows:
“4A.      Special Bonus Opportunity .  Feltheimer shall be granted the opportunity to receive a cash bonus in the amount of $5,000,000 (the “ Special Bonus ”) subject to the following terms.  The Special Bonus will be payable only if (a) Lions Gate’s acquisition of Starz (“ Starz ”) closes, (b) Lions Gate achieves the performance goal for the Special Bonus established by the Compensation Committee at its meeting on October 11, 2016 for the three-month performance period commencing on the date of the closing of the acquisition of Starz (the “ Performance Period ”), and (c) Feltheimer’s employment with Lions Gate continues through the last day of the Performance Period; provided, however, that if, at any time after the closing of the Starz acquisition and prior to the end of the Performance Period, Feltheimer’s employment is terminated by Lions Gate without Cause pursuant to Section 9(f), by Feltheimer for Good Reason pursuant to Section 9(e)(iv), or due to Feltheimer’s death or Disability pursuant to Section 9(b) or 9(c), respectively, the Special Bonus opportunity will be held open until the end of the Performance Period and will be payable to Feltheimer if the performance goal set forth in clause (b) of this Section 4A is achieved.  For purposes of clarity, no Special Bonus will be payable hereunder if the acquisition of Starz is not consummated, if the performance goal set forth in clause (b) of this Section 4A is not achieved, or if Feltheimer’s employment terminates prior to the end of the Performance Period for any reason other than as set forth in the proviso to the preceding sentence.”

1



3.      A new Section 5A is hereby added to the Employment Agreement to read in its entirety as follows:
“5A.      Equity Awards .
Grants of Options . Subject to regulatory approval if required, Feltheimer shall be granted the following options to purchase common shares of Lions Gate (the “ 2016 Options ”): (i) a 2016 Option to purchase 1,150,000 common shares of Lions Gate at a per-share exercise price equal to the closing price of a Lions Gate common share on the grant date of the 2016 Option (the “ Grant Date ”), and (ii) a 2016 Option to purchase 1,150,000 common shares of Lions Gate at a per-share exercise price equal to (x) 125% multiplied by (y) the closing price of a Lions Gate common share on the Grant Date. Each 2016 Option shall be evidenced by and subject to the terms of an option agreement in the form generally then used by Lions Gate to evidence grants of stock options under Lions Gate’s stock incentive plan.
Date of Vesting; Date Exercisable . Subject to Feltheimer’s continued employment hereunder, each of the foregoing 2016 Options shall vest and become exercisable as to twenty percent (20%) of the shares subject to the award on each of May 22, 2019, May 22, 2020, May 22, 2021, May 22, 2022 and May 22, 2023; provided, however, if the vesting of such awards is accelerated pursuant to Section 6(b), 10(b) or 10(c) below, then the foregoing requirement that Feltheimer be an employee shall not apply with respect to any of the foregoing vesting dates. If shareholder or regulatory approval of any 2016 Option grant is necessary and Lions Gate is unable to obtain such approval for all or any portion of either such award, then Feltheimer shall be entitled to alternative commensurate compensation, the details of which shall be negotiated in good faith. The number of common shares subject to, and the exercise prices of, the 2016 Options are each subject to customary adjustments upon the occurrence of stock splits and similar events.”
4.      Section 6(b)(i) of the Employment Agreement is hereby amended to change the dollar amount in clause (2) of such section from “US$4,500,000” to “US$6,000,000.”
5.      Section 10(b) is hereby amended and restated to read in its entirety as follows:
“(b)      Death or Disability . In the event of the termination of this Agreement pursuant to Section 9(b) or (c) above, Lions Gate shall have the obligation to pay Feltheimer’s estate or Feltheimer, as applicable, any Accrued Obligations. In addition, in the event of the termination of this Agreement due to Feltheimer’s death or Disability, the 2016 Options, the Options, the RSU Grants and any Pre-Existing Equity, to the extent then outstanding and unvested, will be fully vested and, in the case of stock options, become exercisable upon the date of death in the case of death or upon the date of termination for Disability in the case of Disability. In the event of a termination due to Feltheimer’s Disability, Lions Gate shall continue to pay the premiums for life and disability premiums for Feltheimer as contemplated by Section 7(c) above through the Expiration Date.”



2



6.      Section 10(c)(iii) is hereby amended and restated to read in its entirety as follows:
“(iii)
the 2016 Options, the Options, the RSU Grants and any Pre-Existing Equity, to the extent then outstanding and unvested, will be fully vested and, in the case of stock options, become exercisable upon the date of Feltheimer’s Separation from Service;”
7.      Section 10(c)(iv) is hereby amended and restated to read in its entirety as follows:
“(iv)
Feltheimer shall be entitled to payment of (a) any Discretionary Bonus that would otherwise have been paid to Feltheimer had his employment with Lions Gate not terminated with respect to any fiscal year that ended before the date of his termination (to the extent such bonus has not previously been paid) and (b) (x) any Discretionary Bonus that would otherwise have been paid to Feltheimer had his employment with Lions Gate not terminated with respect to the fiscal year in which the date of his termination occurs (or, in the case of a termination of Feltheimer’s employment described in Section 6(b)(i), the greater of the target amount of Feltheimer’s Discretionary Bonus in effect for such fiscal year and any Discretionary Bonus that would otherwise have been paid to Feltheimer had his employment with Lions Gate not terminated with respect to such fiscal year), multiplied by (y) a fraction, the numerator of which is the total number of days in such fiscal year on which Feltheimer was employed by Lions Gate and the denominator of which is the total number of days in such fiscal year;”
8.      Except as expressly modified herein, the Agreement shall remain in full force and effect in accordance with its original terms.
9.      Capitalized terms that are not defined herein shall have the meanings ascribed to them in the Agreement.
10.      This Amendment may be executed in one or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument.
[Remainder of page intentionally left blank]

    

3



IN WITNESS WHEREOF, the parties have caused this Amendment to be duly executed and delivered on the day and year first above written.


LIONS GATE ENTERTAINMENT CORP.



By: /s/ Wayne Levin                     
Name: Wayne Levin
Title: General Counsel and Chief Strategic Officer


JON FELTHEIMER


/s/ Jon Feltheimer                  
Jon Feltheimer









4


Exhibit 99.1

LGCORP.JPG
LIONSGATE CHIEF EXECUTIVE OFFICER JON FELTHEIMER SIGNS NEW LONG-TERM AGREEMENT WITH COMPANY
SANTA MONICA, CA and VANCOUVER, BC, October 13, 2016-- Lionsgate (NYSE: LGF) Chief Executive Officer Jon Feltheimer has signed a new long-term agreement extending his tenure until May 2023, effective immediately, the Company announced today.
During Mr. Feltheimer's 16 years as CEO, Lionsgate has grown into a global content leader with a feature film slate averaging nearly $2 billion annually at the worldwide box office, a television business encompassing nearly 80 series on 40 networks and a library that handles more than 16,000 motion picture and television titles. The Company is also building a suite of streaming channels and is an innovator in creating and delivering content to online platforms around the world.
Lionsgate has complemented its organic growth during the past year with a majority investment in leading reality producer Pilgrim Media Group, a strategic partnership with Discovery Communications and Liberty Global and a majority investment in Primal Media in the UK. In June 2016, Lionsgate announced the $4.4 billion acquisition of Starz as part of the continued growth and evolution of its content platform, effectively doubling the scale of the Company under Mr. Feltheimer’s recent leadership.
"We are pleased to extend Jon's tenure as CEO until 2023, providing Lionsgate with great continuity as he and Michael Burns continue to lead the Company’s evolution into a vertically integrated global content platform that unlocks strategic opportunities for our business and creates long-term value for shareholders," said Lionsgate Chairman of the Board Dr. Mark Rachesky.
"We were early believers in the value of premium content in today’s ecosystem, and we believe that the Company continues to take the right steps to move closer to consumers, adapt to market developments and capitalize on opportunities in a fast-changing environment, “ Dr. Rachesky continued.
ABOUT LIONSGATE
Lionsgate is a premier next generation global content leader with a diversified presence in motion picture production and distribution, television programming and syndication, home entertainment, international distribution and sales, branded channel platforms, interactive ventures and games, and location-based entertainment.  The Company has nearly 80 television


shows on 40 different networks spanning its primetime production, distribution and syndication businesses.  These include the ground-breaking hit series Orange is the New Black , the fan favorite drama series Nashville , the syndication success The Wendy Williams Show , the hit drama The Royals, the Golden Globe-nominated dramedy Casual and the breakout success Greenleaf .
The Company's feature film business spans eight labels and includes the blockbuster  Hunger Games  franchise, the Now You See Me and John Wick series,  Nerve , CBS Films/Lionsgate's Hell or High Water , Sicario , Roadside Attractions'  Love & Mercy  and  Mr. Holmes,  Codeblack Films' Addicted  and breakout concert film Kevin Hart: Let Me Explain and Pantelion Films' Instructions Not Included , the highest-grossing Spanish-language film ever released in the U.S.
Lionsgate's home entertainment business is an industry leader in box office-to-DVD and box office-to-VOD revenue conversion rates.  Lionsgate handles a prestigious and prolific library of approximately 16,000 motion picture and television titles that is an important source of recurring revenue and serves as a foundation for the growth of the Company's core businesses. The Lionsgate and Summit brands remain synonymous with original, daring, quality entertainment in markets around the world.  www.lionsgate.com
For further information, please contact:
Peter D. Wilkes 
310.255.3726 
pwilkes@lionsgate.com
The matters discussed in this press release include forward-looking statements.  Such statements are subject to a number of risks and uncertainties. Actual results in the future could differ materially and adversely from those described in the forward-looking statements as a result of various important factors, including the risk factors as set forth in Lionsgate's Quarterly Report on Form 10-Q, filed with the Securities and Exchange Commission (the "SEC") on August 4, 2016, which risk factors are incorporated herein by reference.  The Company undertakes no obligation to publicly release the result of any revisions to these forward-looking statements that may be made to reflect any future events or circumstances.