Item 5.02 Departure of Directors or Certain Officers; Election of Directors;
Appointment of Certain Officers; Compensatory Arrangements of Certain
Officers.
Appointment of President and Chief Operating Officer
Andrew Lustgarten, President and Chief Executive Officer of Madison Square
Garden Sports Corp. (the "Company"), will step down from his role as Chief
Executive Officer as of January 1, 2023. On September 9, 2022, the Board of
Directors (the "Board"), effective as of January 1, 2023, expanded the number of
directors on the Board by one director, and the directors who are designated as
elected by holders of the Company's Class B common stock, par value $0.01 per
share (the "Class B Common Stock"), appointed Mr. Lustgarten to serve as a
director of the Company elected by such holders of the Class B Common Stock.
On September 9, 2022, the Board appointed David Hopkinson as President and Chief
Operating Officer of the Company, effective immediately. In this role,
Mr. Hopkinson will be responsible for setting the Company's business strategy
and overseeing all aspects of business operations for its collection of
professional sports franchises. Mr. Hopkinson, 51, previously served as
Executive Vice President, MSG Sports and President, Team Business Operations
since October 2020. In this role, Mr. Hopkinson led the commercial strategy for
the Company's portfolio of assets. He was responsible for managing the business
operations for the teams, directly overseeing core functions that include
strategic planning, marketing, ticketing, and the in-game experience, as well as
community and fan development. Prior to his role with the Company, Mr. Hopkinson
served as Global Head of Partnerships for Real Madrid Club de Futbol, and prior
to that spent over 20 years in roles of increasing responsibility with Maple
Leaf Sports and Entertainment, which has a portfolio of teams including the
Toronto Maple Leafs, Toronto Raptors, Toronto FC and Toronto Argonauts.
The Company issued a press release announcing Mr. Lustgarten's transition and
the appointment of Mr. Hopkinson, a copy of which is furnished as Exhibit 99.1
to this Current Report on Form 8-K.
Employment Agreement with David Hopkinson
In connection with Mr. Hopkinson's appointment, Mr. Hopkinson and the Company
entered into an employment agreement (the "Hopkinson Employment Agreement"),
effective as of September 9, 2022. The Hopkinson Employment Agreement replaces
Mr. Hopkinson's existing employment agreement with the Company.
The Hopkinson Employment Agreement provides for an annual base salary of not
less than $1,250,000. Mr. Hopkinson will be eligible to participate in the
Company's discretionary annual cash incentive program with an annual target
bonus equal to not less than 150% of his annual base salary. Mr. Hopkinson will
also continue to participate in future long-term incentive programs that are
made available to similarly situated executives of the Company, subject to
Mr. Hopkinson's continued employment by the Company. It is expected that
Mr. Hopkinson will receive annual grants of cash and/or equity long-term
incentive awards with an aggregate target value of not less than $2,375,000 as
determined by the Compensation Committee of the Board in its discretion. For the
Company's fiscal year ending June 30, 2023, Mr. Hopkinson will be entitled to a
mid-year grant with a target value of $700,000 to reflect the increased target
value for such fiscal year. Mr. Hopkinson 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 September 9, 2025 (the "Hopkinson Scheduled Expiration
Date"), Mr. Hopkinson's employment with the Company is terminated (i) by the
Company other than for "cause" or (ii) by Mr. Hopkinson for "good reason" as
defined in the agreement (so long as "cause" does not then exist), then, subject
to Mr. Hopkinson's execution of a separation agreement with the Company, 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. Hopkinson's annual base salary and
annual target bonus; (b) any unpaid annual bonus
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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. Hopkinson's outstanding long-term cash awards will
immediately vest in full and will be payable to Mr. Hopkinson to the same extent
that other similarly situated active executives receive payment; (d) all of the
time-based restrictions on each of Mr. Hopkinson's outstanding restricted stock
or restricted stock units granted to him under the plans of the Company will
immediately be eliminated and will be payable or deliverable to Mr. Hopkinson
subject to satisfaction of any applicable performance criteria; and (e) each of
Mr. Hopkinson's outstanding stock options and stock appreciation awards under
the plans of the Company will immediately vest.
If Mr. Hopkinson ceases to be an employee of the Company prior to the Hopkinson
Scheduled Expiration Date due to death or disability, Mr. Hopkinson (or his
estate or beneficiary) will be provided with the benefits and rights set forth
in (b), (d) and (e) above. Additionally, each of Mr. Hopkinson's outstanding
long-term cash awards will immediately vest in full and will be payable;
provided that if any such 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 of such award will be at the same
time and to the extent that other similarly situated executives receive payment
as determined by the Compensation Committee of the Board (subject to the
satisfaction of the applicable performance criteria).
The Hopkinson Employment Agreement contains certain covenants by Mr. Hopkinson
including a non-competition covenant that restricts Mr. Hopkinson's ability to
engage in competitive activities until the first anniversary of a termination of
his employment with the Company.
The foregoing description of the Hopkinson Employment Agreement does not purport
to be complete and is subject to, and qualified in its entirety by, the full
text of the Hopkinson Employment Agreement, a copy of which is filed as Exhibit
10.1 and incorporated herein by reference.
Item 9.01. Financial Statements and Exhibits.
(d) Exhibits.
Exhibit
No. Description of Exhibit
10.1 Employment Agreement, dated as of September 9, 2022, between Madison
Square Garden Sports Corp. and David Hopkinson. †
99.1 Press Release dated September 9, 2022
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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