Item 5.02 Departure of Directors or Certain Officers; Election of Directors;
Appointment of Certain Officers; Compensatory Arrangements of Certain
Officers.
On December 27, 2021, Madison Square Garden Sports Corp. (the "Company") entered
into an employment agreement with James L. Dolan. The employment agreement
provides for Mr. Dolan's continued employment as the Executive Chairman of the
Company and recognizes that Mr. Dolan is employed by Madison Square Garden
Entertainment Corp. ("MSGE") during his employment with the Company.
Pursuant to the employment agreement, which is effective as of the expiration of
the prior employment agreement with Mr. Dolan, April 17, 2021 (the "Effective
Date"), Mr. Dolan will receive an annual base salary of not less than
$1,250,000. On or before December 31, 2021, the Company will pay Mr. Dolan, for
the period from the Effective Date through June 30, 2021, the difference between
the base salary under the employment agreement and the base salary paid to him
previously for such period. Mr. Dolan is eligible to participate in the
Company's annual bonus program with an annual target bonus opportunity equal to
not less than 200% of his base salary. On or before December 31, 2021, the
Company will pay Mr. Dolan, for the period from the Effective Date through
June 30, 2021, the difference between the pro rata portion of his annual bonus
calculated based on the base salary under the employment agreement and the pro
rata portion of the annual bonus paid to him previously for such period. He is
also 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. Commencing with the
fiscal year starting July 1, 2021 ("fiscal year 2022"), it is expected that
Mr. Dolan will receive one or more annual long-term awards with an aggregate
target value of not less than $6,150,000. For fiscal year 2022, Mr. Dolan will
be entitled to a mid-year grant with an aggregate target value of $2,550,000, as
determined by the Compensation Committee of the Company's Board of Directors in
its sole discretion, to reflect the increase in his target annual long-term
award over the award for such fiscal year previously granted to him.
For the period in which Mr. Dolan is employed by MSGE, Mr. Dolan will not be
eligible to participate in the Company's benefits program, except that Mr. Dolan
will continue to be eligible to participate in the Company's Excess Savings Plan
and Executive Deferred Compensation Plan (and Mr. Dolan's full base salary will
be used to determine his benefits under the Excess Savings Plan). If Mr. Dolan's
employment with MSGE terminates while Mr. Dolan remains employed by the Company,
then he will be eligible to participate in the Company's standard benefits
program, subject to meeting the relevant eligibility requirements, payment of
required premiums, and the terms of the plans.
If, on or prior to June 30, 2024, Mr. Dolan's employment is either involuntarily
terminated by the Company for any reason other than "cause" (as defined in the
agreement), or is terminated by Mr. Dolan for "good reason" (as defined in the
agreement) and cause does not then exist (a "Qualifying Termination"), then,
subject to Mr. Dolan's execution of a separation agreement, the Company will
provide him with the following benefits and rights: (a) a severance payment in
an amount determined at the discretion of the Company, but in no event less than
two times the sum of Mr. Dolan's annual base salary and annual target bonus,
(b) any unpaid annual bonus for the fiscal year prior to the fiscal year in
which such termination occurred and a prorated annual bonus for the fiscal year
in which such termination occurred, (c) each of Mr. Dolan's outstanding unvested
long-term cash awards will immediately vest in full and will be payable to
Mr. Dolan to the same extent that other similarly situated active executives
receive payment, (d) all of the time-based restrictions on each of Mr. Dolan's
outstanding unvested shares of restricted stock or restricted stock units
(including restricted stock units subject to performance criteria) will
immediately be eliminated and such restricted stock and restricted stock units
will be payable or deliverable to Mr. Dolan subject to satisfaction of any
applicable performance criteria, and (e) each of Mr. Dolan's outstanding
unvested stock options and stock appreciation awards will immediately vest.
If Mr. Dolan's employment is terminated due to his death or disability before
June 30, 2024, and at such time cause does not exist, then, subject to execution
of a separation agreement (other than in the case of death), he or his estate or
beneficiary will be provided with the benefits and rights set forth in clauses
(b), (d) and (e) above and any long-term cash awards shall immediately vest in
full, whether or not subject to performance criteria and will be payable on the
90th day after the termination of his employment; provided, that if any such
long-term cash award is subject to any performance criteria, then (i) if the
measurement period for such performance criteria has not yet been fully
completed, then the payment amount will be at the target amount for such award,
and (ii) if the measurement period for such performance criteria has already
been fully completed, then the payment amount of such award will be at the same
time and to the same extent that other similarly situated executives receive
payment as determined by the Compensation Committee (subject to the satisfaction
of the applicable performance criteria). If Mr. Dolan's employment is terminated
after June 30, 2024 due to a Qualifying Termination, death or disability, then,
subject to execution of a separation agreement (other than in the case of
death), he or his estate or beneficiary will be provided with the benefits and
rights set forth in clauses (c), (d) and (e) above.
Following June 30, 2024, certain provisions of the employment agreement
regarding annual cash and equity compensation will no longer continue in effect
with respect to services following such date.
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The employment 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 employment agreement supersedes Mr. Dolan's
previous agreement with the Company.
The description above is qualified in its entirety by reference to Mr. Dolan's
Employment 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
No. Description of Exhibit
10.1 Employment Agreement, dated as of December 27, 2021, between Madison
Square Garden Sports Corp. and James L. Dolan. †
104 Cover Page Interactive Data File (embedded within the Inline XBRL
document).
† This exhibit is a management contract or a compensatory plan or arrangement.
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