Item 5.02 Departure of Directors or Certain Officers; Election of Directors;
Appointment of Certain Officers; Compensatory Arrangements of Certain Officers
Election of Executive Vice Chairman, Interim Chief Executive Officer, and Chief
Accounting Officer
On August 23, 2021, the Board of Directors (the "Board") of AMC Networks Inc.
(the "Company") took the following actions:
•elected Joshua W. Sapan, age 70, the Company's current President and Chief
Executive Officer, as Executive Vice Chairman of the Company effective September
8, 2021;
•elected Matthew Blank, age 71, as Interim Chief Executive Officer of the
Company effective September 8, 2021; and
•elected Michael J. Sherin III, age 51, Executive Vice President and Chief
Accounting Officer of the Company effective August 24, 2021.
Mr. Blank was an advisor to Showtime Networks, Inc. ("Showtime") from January
2018 to December 2018, after serving as Chairman of Showtime from January 2016
to December 2017. Prior to that, Mr. Blank served as Chief Executive Officer of
Showtime from 1995 through 2015 and President and Chief Operating Officer of
Showtime from 1993 through 1995, after serving as Executive Vice President of
Marketing, Creative Services and Public Affairs from 1988 to 1992. Prior to
joining Showtime, Mr. Blank served over 12 years in various roles at Home Box
Office, Inc. ("HBO"), leaving HBO as its Senior Vice President of Consumer
Marketing. Mr. Blank currently serves as a director of Cumulus Media, Inc. and
CuriosityStream Inc. and as a senior advisor to The Raine Group, LLC. Mr. Blank
previously served on the board of directors of Madison Square Garden
Entertainment Corp. from April 2020 to August 2021 and Madison Square Garden
Sports Corp. from December 2019 to April 2020.
Mr. Sherin most recently served as Senior Vice President - Financial Reporting &
Technical Accounting since March 2021 and previously served as Vice President -
Financial Reporting from September 2011, when he joined the Company. Previously,
Mr. Sherin served as Senior Director - Financial Reporting and Compliance at The
Nature's Bounty Co. from January 2007 through September 2011. Prior to The
Nature's Bounty Co., Mr. Sherin worked at PricewaterhouseCoopers LLP for ten
years. Mr. Sherin received his degree in accounting from Providence College.
Employment Agreement with Matthew Blank
In connection with Mr. Blank's election, Mr. Blank and the Company entered into
an employment agreement dated August 23, 2021 (the "Employment Agreement"),
which becomes effective as of September 8, 2021 (the "Effective Date") and
expires on the first anniversary of the Effective Date (the "Expiration Date").
Mr. Blank will receive a minimum annual base salary of $2,000,000 and an annual
target bonus opportunity equal to 200% of annual base salary. Bonus payments are
based on actual salary dollars earned during the year and depend on a number of
factors including Company, unit and individual performance and will be subject
to the positive discretion of the Compensation Committee of the Board (the
"Compensation Committee"). Mr. Blank will be eligible for the Company's standard
benefits program, subject to meeting the relevant eligibility requirements,
payment of required premiums and the terms of the plans, and Mr. Blank will also
receive certain perquisites in connection with his service as Interim Chief
Executive Officer of the Company. In addition, on the Effective Date, Mr. Blank
was granted a one-time special award of restricted stock units with an aggregate
value of $5,000,000 (the "Special Equity Award"), which will vest on the
Expiration Date. Mr. Blank will not be eligible to participate in the Company's
long-term bonus or incentive programs.
If, prior to the Expiration Date, Mr. Blank's employment with the Company is
terminated (i) by the Company other than for Cause (as defined in the Employment
Agreement) or (ii) by Mr. Blank for Good Reason (as defined in the Employment
Agreement) other than if Cause exists, then, subject to Mr. Blank's execution
and effectiveness of an early termination agreement satisfactory to the Company
(including, without limitation, a full and complete general release in favor of
the Company and its affiliates (subject to customary carve outs) and
non-competition, non-solicitation, non-disparagement, confidentiality and
further cooperation obligations and restrictions on Mr. Blank), the Company will
provide Mr. Blank with the following benefits and rights:
a) a cash payment in an amount equal to Mr. Blank's base salary for the period
from the date of the termination of employment (the "Termination Date") through
the Expiration Date, payable in a lump sum on the 90th day after the Termination
Date;
b) a full bonus for the year of termination (based on the amount of base salary
earned during such year, including the base salary payable pursuant to section
(a) above) and, to the extent termination occurs prior to the payment of an
annual bonus for the preceding year, an annual bonus for the preceding year, in
each case, if and when other similarly situated employees receive payment of
bonuses for such years as determined by the Compensation Committee in its sole
discretion and subject to the satisfaction of any applicable Company and
business-unit performance objectives without adjustment for individual
performance; and
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c) each of Mr. Blank's restricted stock units granted pursuant to the Special
Equity Award shall immediately vest in full and be payable on the 90th day after
the Termination Date.
If Mr. Blank ceases to be an employee of the Company prior to the Expiration
Date as a result of his death or physical or mental disability, and at such time
Cause does not exist, subject to Mr. Blank's execution of an early termination
agreement (other than in the case of death), the Company will pay Mr. Blank (or
his estate or beneficiary) the benefits and rights set forth in clause (c)
above, and a prorated bonus for the year of termination and, to the extent
termination occurs prior to the payment of an annual bonus for the preceding
year, an annual bonus for the preceding year, in each case, if and when other
similarly situated employees receive payment of bonuses for such years as
determined by the Compensation Committee in its sole discretion and subject to
the satisfaction of any applicable Company and business-unit performance
objectives without adjustment for individual performance.
In connection with any termination of Mr. Blank's employment, other than as
specifically provided above, all equity grants or awards he may then have
outstanding will be treated in accordance with their terms and nothing in the
Employment Agreement is intended to limit any more favorable rights to which Mr.
Blank is entitled under the terms of his equity grants or awards, including in
the event of a termination of employment, a "going private transaction" or a
"change of control" (as such terms are defined in the award agreements).
The Employment Agreement contains certain covenants by Mr. Blank, including a
non-competition agreement that restricts Mr. Blank's ability to engage in
competitive activities until the first anniversary of the termination of his
employment with the Company.
If any payment due under the Employment Agreement would result in the imposition
of an excise tax under Section 4999 of the Internal Revenue Code, the Company
will instead pay Mr. Blank either (a) the amount of that payment or (b) the
maximum amount that could be paid to Mr. Blank without the imposition of the
excise tax, depending on whichever amount results in Mr. Blank receiving the
greater amount of after-tax proceeds.
Amendment to Amended and Restated Employment Agreement with Joshua W. Sapan
On August 23, 2021, the Company entered into an amendment (the "Amendment") to
the amended and restated employment agreement dated December 11, 2020 (the "A&R
Employment Agreement") with Joshua W. Sapan. The Amendment provides that either
Mr. Sapan or the Company may, upon written notice to the other at any time,
change Mr. Sapan's title to Executive Vice Chairman effective no earlier than
September 8, 2021. Additionally, the Amendment provides written notice to the
Company of Mr. Sapan's election to change his title to Executive Vice Chairman
effective September 8, 2021 (the "Transition Effective Date") and that the
provisions of the A&R Employment Agreement applicable to Mr. Sapan's service as
Executive Vice Chairman shall apply as of the Transition Effective Date.
The Amendment provides that in each of the 2023 and 2024 calendar years, the
Company shall acquire at least three films from those submitted by Mr. Sapan,
subject to submission requirements as set forth in the Amendment, with the
Company receiving exclusive North American rights for all manner of exclusive
exploitation, including without limitation, theatrical, linear and all currently
and then existing forms of streaming. The price for each of such acquired films
shall be $900,000, which amount will assist Mr. Sapan in financing and producing
such films. Mr. Sapan may submit films for a higher price, but the Company shall
be under no obligation to acquire a film with a price in excess of $900,000.
In his new role as Executive Vice Chairman, Mr. Sapan will continue to assist in
setting the Company's corporate and creative direction and work closely with the
Company's leadership to support the overall advancement of the Company,
particularly as it continues to grow its targeted streaming business, led by its
streaming offerings, which include AMC+, Acorn TV, Shudder, Sundance Now and
ALLBLK.
Employment Agreement with Michael J. Sherin III
In connection with Mr. Sherin's election, Mr. Sherin and the Company entered
into an employment agreement dated August 24, 2021 (the "CAO Employment
Agreement"), which becomes effective as of August 24, 2021 (the "CAO Effective
Date") and expires on the third anniversary of the CAO Effective Date (the "CAO
Expiration Date"). The CAO Employment Agreement provides for Mr. Sherin's
employment as Executive Vice President and Chief Accounting Officer of the
Company, with a minimum annual base salary of $400,000 (subject to annual review
and potential increase in the discretion of the Compensation Committee) and an
annual target bonus opportunity equal to 40% of annual base salary at the
discretion of the Compensation Committee. Mr. Sherin will be eligible for the
Company's standard benefits program, subject to meeting the relevant eligibility
requirements, payment of required premiums and the terms of the plans, and the
opportunity to participate in the Company's long-term equity and other incentive
programs, in each case on the same basis as similarly situated executives at the
Company. It is expected that Mr. Sherin's participation in the Company's
long-term equity and other incentive programs will consist of annual grants of
cash and/or equity awards with a target value of not less than $340,000, as
determined by the Compensation Committee.
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If, prior to the Expiration Date, Mr. Sherin's employment with the Company is
terminated by the Company other than for Cause (as defined in the CAO Employment
Agreement), then, subject to Mr. Sherin's execution and effectiveness of a
severance agreement satisfactory to the Company (including, without limitation,
a full and complete general release in favor of the Company and its affiliates
(subject to customary carve outs) and non-competition, non-solicitation,
non-disparagement, confidentiality and further cooperation obligations and
restrictions on Mr. Sherin), the Company will provide Mr. Sherin a cash payment
in an amount equal to (less applicable withholding taxes) one and one-half times
his aggregate base salary and annual target bonus (as in effect at the time of
termination of employment), payable in a lump sum on the 90th day after such
termination of employment.
The CAO Employment Agreement contains certain covenants by Mr. Sherin, including
a non-competition agreement that restricts Mr. Sherin's ability to engage in
competitive activities until the first anniversary of the termination of his
employment with the Company. If any payment due under the CAO Employment
Agreement would result in the imposition of an excise tax under Section 4999 of
the Internal Revenue Code, the Company will instead pay Mr. Sherin either (a)
the amount of that payment or (b) the maximum amount that could be paid to Mr.
Sherin without the imposition of the excise tax, depending on whichever amount
results in Mr. Sherin receiving the greater amount of after-tax proceeds.
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits
104 Cover Page Interactive Data File (embedded within the Inline XBRL document)
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