Sphere Entertainment Co. filed SEC Form 8-K: Leadership Update
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM
CURRENT REPORT
Pursuant to Section 13 or 15(d)
of The Securities Exchange Act of 1934
Date of report (Date of earliest event reported):
(Exact Name of Registrant as Specified in Charter)
| (State or other jurisdiction of incorporation) |
(Commission File Number) |
(IRS Employer Identification No.) |
| |
||
| (Address of principal executive offices) | (Zip Code) |
Registrant’s telephone number, including area code:
Not Applicable
(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 (see General Instruction A.2. below):
| Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425). |
| Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12). |
| Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240-14d-2(b)). |
| Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240-13e-4(c)). |
Securities registered pursuant to Section 12(b) of the Act:
| Title of each class |
Trading Symbol(s) |
Name of Each Exchange on Which Registered | ||
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
| Item 5.02 | Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers. |
On June 30, 2024, Sphere Entertainment Co. (the “Company”) entered into a renewal employment agreement with James L. Dolan (the “Renewal Agreement”), effective July 1, 2024, the date immediately following the expiration date of the prior employment agreement between the Company and Mr. Dolan. The Renewal Agreement provides for Mr. Dolan’s continued employment as Executive Chairman and Chief Executive Officer of the Company.
Pursuant to the Renewal Agreement, effective July 1, 2024, Mr. Dolan will receive an annual base salary not less than $230,000 and, consistent with the prior employment agreement, an annual target bonus opportunity equal to not less than 200% of his annual base salary. In lieu of participating in any long-term incentive programs that are made available in the future to similarly situated executives of the Company, subject to his continued employment by the Company and approval by the Company’s stockholders at the Company’s 2024 annual meeting of stockholders of an amendment to the Company’s 2020 Employee Stock Plan, as amended (the “Stock Plan”), that is necessary to implement the following, Mr. Dolan will receive (i) non-qualified performance vesting options (“Performance Vesting Options”) to purchase 1,800,000 shares of the Company’s Class A common stock, which shall be granted on July 1, 2024 (and which were granted on such date), and (ii) Performance Vesting Options to purchase 984,700 shares of the Company’s Class A common stock, which shall be granted on the first business day of the 2025 calendar year, provided that if material non-public information exists at such time, the Compensation Committee of the Board of Directors of the Company may delay such grant for up to five business days after the date on which no such material non-public information exists. In the event that the Company’s stockholders fail to approve such amendment to the Stock Plan, the Performance Vesting Options shall be cancelled or not granted, as applicable, and commencing with the fiscal year starting July 1, 2024, Mr. Dolan will be eligible, subject to his continued employment by the Company, to participate in such long-term incentive programs that are made available in the future to similarly situated executives of the Company. In such event, commencing with the fiscal year starting July 1, 2024, it is expected that Mr. Dolan will receive one or more annual long-term awards with an annual target value of not less than $11,770,000.
The Renewal Agreement provides for a term expiring on June 30, 2027 (the “Scheduled Expiration Date”). The Renewal Agreement includes provisions substantially similar to those in the prior employment agreement relating to benefit plan participation, general role and responsibilities (with reference to his service with affiliated entities), severance payments and entitlements payable upon the Company’s involuntary termination of Mr. Dolan’s employment for any reason other than “cause” (as defined in the Renewal Agreement), or Mr. Dolan’s termination for “good reason” (as defined in the Renewal Agreement) and when cause does not then exist (in each case, occurring on or prior to the Scheduled Expiration Date), and payments and entitlements payable upon Mr. Dolan’s death or disability before the Scheduled Expiration Date; provided that the Performance Vesting Options and the performance stock option award granted to Mr. Dolan on October 20, 2023 shall be governed solely by the terms and conditions of the applicable award agreements and not the severance treatment otherwise applicable to Mr. Dolan’s other equity-based awards. The Renewal Agreement permits Mr. Dolan to serve on outside boards under certain circumstances, and includes a sixty days’ prior written notice requirement if Mr. Dolan voluntarily resigns without good reason.
Consistent with the prior employment agreement, the Renewal Agreement contains certain covenants by Mr. Dolan, including a noncompetition agreement that restricts Mr. Dolan’s ability to engage in competitive activities until the first anniversary of a termination of his employment with the Company.
The description above is qualified in its entirety by reference to the Renewal Agreement, which is attached as Exhibit 10.1 hereto and incorporated into this Item 5.02 by reference.
| Item 9.01 | Financial Statements and Exhibits. |
| (d) | Exhibits. |
| Exhibit |
Description of Exhibit | |
| 10.1 | Employment Agreement, dated as of June 30, 2024, between Sphere Entertainment Co. and James L. Dolan (including the Form of the Performance Vesting Option Agreement). † | |
| 104 | Cover Page Interactive Data File (embedded within the Inline XBRL document). | |
| † | This exhibit is a management contract or a compensatory plan or arrangement. |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| SPHERE ENTERTAINMENT CO. | ||
| (Registrant) | ||
| By: | /s/ Mark Cresitello | |
| Name: | Mark Cresitello | |
| Title: | Secretary | |
Dated: July 3, 2024