Item 5.02 Departure of Directors or Certain Officers; Election of Directors;
Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.
Appointment of Chief Executive Officer and Entry into Employment Agreement
On August 4, 2022, the Board of Directors (the "Board") of AMC Networks Inc.
(the "Company") appointed Christina Spade, age 53, the Company's current Chief
Operating Officer and Chief Financial Officer, as Chief Executive Officer of the
Company commencing September 9, 2022 (the "CEO Commencement Date").
In connection with Ms. Spade's appointment as Chief Executive Officer of the
Company, Ms. Spade and the Company entered into a new employment agreement dated
August 4, 2022 (the "CEO Employment Agreement"), which becomes effective as of
the date thereof (the "CEO Effective Date") and expires on December 31, 2025
(the "CEO Expiration Date"). As of the CEO Effective Date, Ms. Spade will
continue to serve as the Company's Chief Operating Officer and Chief Financial
Officer. On August 8, 2022, Ms. Spade will cease to serve as the Company's Chief
Financial Officer, and on the CEO Commencement Date, Ms. Spade will cease to
serve as the Company's Chief Operating Officer and begin serving as the
Company's Chief Executive Officer. Beginning on the CEO Commencement Date, Ms.
Spade will receive a minimum annual base salary of $1,750,000 (subject to annual
review and potential increase in the discretion of the Compensation Committee of
the Board of Directors of the Company (the "Compensation Committee")) and an
annual target bonus opportunity equal to 200% of actual salary dollars paid
during the applicable year, in the discretion of the Compensation Committee;
provided that for 2022, Ms. Spade's current target bonus opportunity of one
hundred seventy-five percent (175%) of actual salary dollars paid will apply
from January 1, 2022 through the CEO Commencement Date. Ms. Spade will continue
to 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. The CEO Employment Agreement provides that, beginning in
2023, it is expected that Ms. Spade will continue to participate in the
Company's long-term equity and other incentive programs with annual grants of
cash and/or equity awards with a target value of not less than $3,750,000, as
determined by the Compensation Committee. Effective as of the CEO Commencement
Date, the Company will reimburse Ms. Spade for reasonable car service fees
incurred to commute between her home and the Company's offices.
In addition, on or as soon as reasonably practicable (but in no event later than
thirty (30) days) following the CEO Effective Date, Ms. Spade will be granted a
one-time special award of restricted stock units with an aggregate value of
$6,000,000 (the "CEO Special Equity Award"), which will vest ratably on each of
the first, second and third anniversary of the date of the grant, subject to Ms.
Spade's continued employment with the Company. Notwithstanding the foregoing,
the CEO Special Equity Award will vest (i) on a Change in Control (as defined in
the award agreement for the CEO Special Equity Award) of the Company and (ii)
subject to Ms. Spade's execution of a severance agreement, on termination of Ms.
Spade's employment without Cause or for Good Reason (as those terms are defined
in the CEO Employment Agreement) or due to Ms. Spade's death or disability.
In addition, following the CEO Effective Date, Ms. Spade will be granted a
one-time signing bonus in the amount of $30,000, which will become payable no
later than 60 days following the CEO Effective Date.
If, prior to the CEO Expiration Date, Ms. Spade's employment with the Company is
terminated (i) by the Company other than for Cause (as defined in the CEO
Employment Agreement) or (ii) by Ms. Spade for Good Reason (as defined in the
CEO Employment Agreement) other than if Cause exists, then, subject to Ms.
Spade'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 Ms. Spade), the Company will
provide Ms. Spade with the following benefits and rights:
a) a cash severance payment in an amount equal to not less than two times the
sum of Ms. Spade's annual base salary and annual target bonus as in effect at
the time of termination of employment, provided that, if Ms. Spade is terminated
between the CEO Effective Date and the CEO Commencement Date, such amounts will
be determined based on Ms. Spade's annual base salary and target annual bonus
that would be in effect as of the CEO Commencement Date;
b) 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;
c) each of Ms. Spade's outstanding long term cash incentive awards and
performance-based restricted stock unit awards will immediately vest in full and
be payable at the same time as such awards are paid to active employees of the
Company and the payment amount of such awards will be to the same extent that
other similarly situated executives receive payment for such awards as
determined by the Compensation Committee (subject to the satisfaction of any
applicable performance criteria);
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d) each of Ms. Spade's outstanding restricted stock and restricted stock unit
awards (other than the CEO Special Equity Award and COO Special Equity Award, as
defined below) will continue to vest in accordance with their original vesting
schedule;
e) each of Ms. Spade's outstanding stock options and stock appreciation awards
under plans of the Company, if any, will continue to vest in accordance with
their original vesting schedule and Ms. Spade will have the right to exercise
each of those options and stock appreciation awards for the remainder of the
term of such option or award; and
f) Ms. Spade's RSU award granted November 19, 2021 (the "COO Special Equity
Award") will immediately vest and be paid within 75 days following such
termination.
If Ms. Spade ceases to be an employee of the Company prior to the CEO Expiration
Date as a result of her death or physical or mental disability, and at such time
Cause does not exist, subject to Ms. Spade's execution of a severance agreement
(other than in the case of death), the Company will pay Ms. Spade (or her estate
or beneficiary) the benefits and rights set forth in clause (b) above and each
of Ms. Spade's outstanding equity and cash incentive awards vest and pay in
full, whether or not subject to performance criteria. Any such award that is
subject to performance criteria will vest and pay at the target level unless the
performance measurement period for such award has been completed prior to the
date of termination, in which case the award will vest and pay when and to the
same extent as the awards held by other employees, subject to the satisfaction
of the performance criteria.
The CEO Employment Agreement contains certain covenants by Ms. Spade, including
a non-competition agreement that restricts Ms. Spade's ability to engage in
competitive activities until the first anniversary of the termination of her
employment with the Company, if she is terminated prior to the CEO Expiration
Date.
If any payment due under the CEO Employment Agreement would result in the
imposition of an excise tax under Section 4999 of the Internal Revenue Code, the
Company will instead pay Ms. Spade either (a) the amount of that payment or (b)
the maximum amount that could be paid to Ms. Spade without the imposition of the
excise tax, depending on whichever amount results in Ms. Spade receiving the
greater amount of after-tax proceeds.
Appointment of and Employment Agreement with new Chief Financial Officer
On August 4, 2022, the Board appointed Patrick O'Connell, age 47, Executive Vice
President and Chief Financial Officer of the Company effective as of August 8,
2022 (the "CFO Commencement Date").
Mr. O'Connell was Chief Strategy Officer of BRANDED SA from March 2021 through
July 2022. Prior to BRANDED, he served as Executive Vice President, Head of
Corporate Development of CBS Corporation from March 2017 through January 2020.
Prior to that, Mr. O'Connell served as a Managing Director of Goldman, Sachs &
Co. in the Investment Banking, Telecom, Media & Technology (TMT) department from
August 2003 through January 2017. Mr. O'Connell is a CPA as well as a Chartered
Financial Analyst. He also received an MBA from the University of Pennsylvania,
Wharton School of Business.
In connection with Mr. O'Connell's appointment as Chief Financial Officer of the
Company, Mr. O'Connell and the Company entered into an employment agreement
dated August 4, 2022 (the "CFO Employment Agreement"), which becomes effective
as of the date thereof (the "CFO Effective Date") and expires on March 31, 2026
(the "CFO Expiration Date"). Beginning on the CFO Commencement Date, Mr.
O'Connell will receive a minimum annual base salary of $800,000 (subject to
annual review and potential increase in the discretion of the Compensation
Committee) and an annual target bonus opportunity equal to 100% of actual salary
dollars paid during the applicable year, in the discretion of the Compensation
Committee. Mr. O'Connell 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. The CFO Employment Agreement
provides that, beginning in 2022, it is expected that Mr. O'Connell will
participate in the Company's long-term equity and other incentive programs with
annual grants of cash and/or equity awards with a target value of not less than
$1,200,000, as determined by the Compensation Committee.
In addition, following the CFO Effective Date, Mr. O'Connell will be entitled to
a one-time signing bonus in the amount of $1,050,000 (the "CFO Sign On Bonus"),
which will become payable no later than 60 days following the CFO Commencement
Date. If at any time prior to the first anniversary of the CFO Commencement
Date, Mr. O'Connell's employment with the Company terminates as a result of (i)
his voluntary resignation (other than for Good Reason as defined in the CFO
Employment Agreement), or (ii) an involuntary termination by the Company for
Cause (as defined in the CFO Employment Agreement), Mr. O'Connell will
immediately refund the Company the gross amount of the CFO Sign On Bonus.
If, prior to the CFO Expiration Date, Mr. O'Connell's employment with the
Company is terminated (i) by the Company other than for Cause (as defined in the
CFO Employment Agreement) or (ii) by Mr. O'Connell for Good Reason (as defined
in the CFO Employment Agreement) other than if Cause exists, then, subject to
Mr. O'Connell's execution and effectiveness of a
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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. O'Connell), the Company will provide Mr. O'Connell with the
following benefits and rights:
a) a cash severance payment in an amount equal to not less than two times the
sum of Mr. O'Connell's annual base salary and annual target bonus as in effect
at the time of termination of employment;
b) 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;
c) each of Mr. O'Connell's outstanding long term cash incentive awards and
performance-based restricted stock unit awards will immediately vest in full and
be payable at the same time as such awards are paid to active employees of the
Company and the payment amount of such awards will be to the same extent that
other similarly situated executives receive payment for such awards as
determined by the Compensation Committee (subject to the satisfaction of any
applicable performance objectives);
d) each of Mr. O'Connell's outstanding restricted stock and restricted stock
unit awards will continue to vest in accordance with their original vesting
schedule; and
e) each of Mr. O'Connell's outstanding stock options and stock appreciation
awards under plans of the Company, if any, will continue to vest in accordance
with their original vesting schedule and Mr. O'Connell will have the right to
exercise each of those options and stock appreciation awards for the remainder
of the term of such option or award.
If Mr. O'Connell ceases to be an employee of the Company prior to the CFO
Expiration Date as a result of his death or physical or mental disability, and
at such time Cause does not exist, subject to Mr. O'Connell's execution of a
severance agreement (other than in the case of death), the Company will pay Mr.
O'Connell (or his estate or beneficiary) the benefits and rights set forth in
clause (b) above and each of Mr. O'Connell's outstanding equity and cash
incentive awards vest and pay in full, whether or not subject to performance
criteria. Any such award that is subject to performance criteria will vest and
pay at the target level unless the performance measurement period for such award
has been completed prior to the date of termination, in which case the award
will vest and pay when and to the same extent as the awards held by other
employees, subject to the satisfaction of the performance criteria.
The CFO Employment Agreement contains certain covenants by Mr. O'Connell,
. . .
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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