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): November 3, 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 November 3, 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 Michael Burns, the Company’s Vice Chairman (the “Agreement’), through October 30, 2022. 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. Burns receives an annual base salary of $1,000,000 and is eligible to receive an annual performance bonus based on such performance criteria as established by the Committee, with the target bonus being 75% of his base salary. Any portion of Mr. Burns’ annual bonus that exceeds $1.5 million for a particular year (and, at Mr. Burns’ election, 50% of any annual bonus he is awarded up $1.5 million) will be paid to him in the form of either an award of the Company's common shares or an option to purchase the Company's common shares, as determined by the Committee (any such award to be fully vested on grant and the number of shares subject to such award to be determined based on the Company’s then-current stock price and, in the case of an option, the assumptions then used to value stock options for purposes of the Company's financial reporting). The Agreement also provides for Mr. Burns to participate in the Company’s usual benefit programs for executives at his level, as well as Company-provided life and disability insurance coverage, a car allowance and limited use of the Company’s private aircraft. In connection with his entering into the Amendment, Mr. Burns was granted an option to purchase 950,000 of the Company’s common shares at an exercise price of $19.01 per share (the closing price of the Company’s common shares on November 3, 2016) and an option to purchase 950,000 of the Company’s common shares at an exercise price of $23.76 per share. Each of these options is scheduled to vest in annual installments over the five-year period beginning October 30, 2017. In addition, Mr. Burns was granted a bonus opportunity in the amount of $4,000,000 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. The Agreement also currently provides for grants to Mr. Burns each quarter of a number of the Company's common shares with a value of $187,500, calculated using the closing price of the shares on the last trading day immediately prior to the respective quarterly issuance date. Pursuant to the Amendment, these quarterly grants will terminate November 3, 2017.

In the event Mr. Burns’ 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 October 30, 2022, as well as Company payment of his premiums for continued health coverage for up to six months following his termination and continued payment of his quarterly share grants through November 2, 2017. In addition, Mr. Burns’ 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. Burns’ 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 October 30, 2022 or $3.5 million. In each case, Mr. Burns’ 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. Burns’ 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 November 5, 2012, and by the Amendment filed herewith, each of which is incorporated herein by this reference.





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Item 9.01     Financial Statements and Exhibits.
(d)     Exhibits

 
Exhibit No.
Description
 
10.1
Amendment to Employment Agreement, dated November 3, 2016, between the Company and Michael Burns


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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: November 4, 2016
LIONS GATE ENTERTAINMENT CORP.
 
(Registrant)
 
 
 
 
 
By: /s/ Wayne Levin                          
 
Name: Wayne Levin
 
Title: General Counsel and Chief Strategic Officer


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Exhibit 10.1
AMENDMENT
to
EMPLOYMENT AGREEMENT
THIS AMENDMENT TO EMPLOYMENT AGREEMENT (this “ Amendment ”) is dated as of November 3, 2016, by and between Lions Gate Entertainment Corp. (“ Lions Gate ”), and Michael Burns (“ Burns ”).
WHEREAS , Burns is currently employed by Lions Gate as its Vice Chairman pursuant to that certain Employment Agreement, dated October 30, 2012 (the “ Employment Agreemen t”); and
WHEREAS , Lions Gate and Burns 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 . Burns’ employment term under this Agreement shall commence on October 30, 2012 (the “ Effective Date ”) and continue through and including October 30, 2022 (the “ Expiration Date ”), subject to early termination as provided in this Agreement (the “ Term ”).”
2.      Section 4(a) of the Employment Agreement is hereby amended and restated to read in its entirety as follows:
“(a)      Bonus Opportunity . During the Term, Burns shall be eligible to receive a discretionary annual bonus (the “ Discretionary Bonus ”) based on Lions Gate’s fiscal year. For fiscal years prior to Lions Gate’s 2016 fiscal year, the Discretionary Bonus shall have a target of fifty percent (50%) of Burns’ Base Salary, and for Lions Gate’s 2016 fiscal year and each fiscal year during the Term thereafter, the Discretionary Bonus shall have a target of seventy-five percent (75%) of Burns’ Base Salary. Lions Gate’s Compensation Committee (“ Compensation Committee ”) shall establish performance criteria upon which the determination of the Discretionary Bonus amount, if any, shall be made, such criteria to be established at the beginning of the applicable fiscal year. For any fiscal year in which Burns is employed for only a portion of that fiscal year, Burns shall be eligible for consideration by the Compensation Committee for a pro-rata Discretionary Bonus following the end of and with respect to that fiscal year. The Discretionary Bonus (or portion thereof if either Section 4(b) or 4(c) below applies), if any, that is payable in cash shall be payable in a timely manner, but in any event when bonuses, if any, are generally given to Lions Gate’s other senior-level employees and in all events within the “short-term deferral” period provided under Treasury Regulation Section 1.409A-1(a)(4).”


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3.      A new Section 5A is hereby added to the Employment Agreement to read in its entirety as follows:
“5A.      Special Bonus Opportunity .  Burns shall be granted the opportunity to receive a cash bonus in the amount of $4,000,000 (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 in approving the Special Bonus for the three-month performance period commencing on the date of the closing of the acquisition of Starz (the “ Performance Period ”), and (c) Burns’ 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, Burns’ employment is terminated by Lions Gate without Cause pursuant to Section 11(f), by Burns for Good Reason pursuant to Section 11(e)(iv), or due to Burns’ death or Disability pursuant to Section 11(b) or 11(c), respectively, the Special Bonus opportunity will be held open until the end of the Performance Period and will be payable to Burns if the performance goal set forth in clause (b) of this Section 5A 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 5A is not achieved, or if Burns’ 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.”
4.      Section 6 of the Employment Agreement is hereby amended and restated to read in its entirety as follows:
“6.      Quarterly Grant . Subject to Burns’ continued employment hereunder through the relevant grant date (and in each case subject to shareholder or regulatory approval, if required), on November 3, 2012 and on each three (3) month anniversary of November 3, 2012 that occurs during the period through and including November 3, 2017 (each such anniversary date, a “ Quarterly Grant Date ,” and the last day of such period, the “ Final Quarterly Grant Date ”), Burns shall be issued a number of Lions Gate common shares equivalent to US$187,500, calculated using the closing price (in regular trading) of Lions Gate’s common shares on the last trading day immediately prior to the respective grant date (each a “ Quarterly Grant ”) and subject in each case to applicable tax withholding. Each Quarterly Grant shall be fully vested upon grant, and the shares subject to such Quarterly Grant shall be issued not more than five (5) business days after the applicable Quarterly Grant Date. Notwithstanding the foregoing, in the event that, prior to the Final Quarterly Date, Lions Gate terminates Burns’ employment without Cause pursuant to Section 11(f) or Burns terminates his employment for Good Reason pursuant to Section 11(e)(iv), then, subject to Sections 12(d) and 13(b), the Quarterly Grants shall continue to be granted to Burns on each quarterly grant date through the Final Quarterly Grant Date (including the final Quarterly Grant to be made on the Final Quarterly Grant Date), and no further Quarterly Grants shall be made after that date. For the sake of clarity, any future Quarterly Grants shall be forfeited in the event that Burns’ employment hereunder and the Term is terminated for any reason other than as contemplated by the preceding sentence prior to the Final Quarterly Grant Date. If

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shareholder or regulatory approval of any Quarterly Grant is necessary and Lions Gate is unable to obtain such approval for all or any portion of a Quarterly Grant, then Burns shall be entitled to alternative commensurate compensation, the details of which shall be negotiated in good faith.”
5.      A new Section 7A is hereby added to the Employment Agreement to read in its entirety as follows:
“7A.      Equity Awards .
Grants of Options . Subject to regulatory approval if required, Burns shall be granted the following options to purchase common shares of Lions Gate (the “ 2016 Options ”): (i) a 2016 Option to purchase 950,000 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 950,000 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 Burns’ 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 October 30, 2018, October 30, 2019, October 30, 2020, October 30, 2021 and October 30, 2022; provided, however, if the vesting of such awards is accelerated pursuant to Section 8(b), 12(b) or 12(c) below, then the foregoing requirement that Burns 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 Burns 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.”
6.      Section 8(b)(i) of the Employment Agreement is hereby amended to change the dollar amount in clause (2) of such section from “US$2,500,000” to “US$3,500,000.”
7.      Section 12(b) of the Employment Agreement 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 11(b) or (c) above, Lions Gate shall have the obligation to pay Burns’ estate or Burns, as applicable, any Accrued Obligations. In addition, in the event of the termination of this Agreement due to Burns’ death or Disability, the 2016 Options, the Option, the RSU Grant 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

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the date of death in the case of death or upon the date of termination for Disability in the case of Disability.”
8.      The third sentence of Section 12(c) of the Employment Agreement is hereby amended and restated to read in its entirety as follows:
“In addition, the 2016 Options, the Option, the RSU Grant 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 Burns’ Separation from Service.”
9.      Except as expressly modified herein, the Employment Agreement shall remain in full force and effect in accordance with its original terms.
10.      Capitalized terms that are not defined herein shall have the meanings ascribed to them in the Agreement.
11.      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]

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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



MICHAEL BURNS


/s/ Michael Burns
Michael Burns








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