Item 5.02 Departure of Directors or Certain Officers; Election of Directors;
Appointment of Certain Officers; Compensatory Arrangements of Certain
Officers
On July 9, 2022 and July 11, 2022, respectively, Discovery Communications, LLC
("DCL"), a wholly owned subsidiary of Warner Bros. Discovery, Inc. ("we," "us,"
"our" or the "Company"), entered into employment agreements with Bruce Campbell,
our Chief Revenue and Strategy Officer, and Gunnar Wiedenfels, our Chief
Financial Officer (individually, the "Campbell Agreement" and the "Wiedenfels
Agreement," and collectively, the "Agreements").
The following summary descriptions of certain provisions of the Agreements do
not purport to be complete, and are qualified in their entirety by the actual
text of the respective Agreements, which have been filed with this Current
Report as Exhibits 10.1 and 10.2, respectively, and are incorporated herein by
reference.
Campbell Agreement
Pursuant to the Campbell Agreement, Mr. Campbell will continue to serve as our
Chief Revenue and Strategy Officer. In this role, Mr. Campbell will continue to
have responsibility for advertising sales, distribution revenue and content
licensing in the United States, while globally leading our corporate development
and strategy, streaming platform agreements, legal affairs and consumer products
and experiences. The term of the Campbell Agreement is effective as of July 9,
2022 and runs through July 8, 2025. The parties may agree to renew the Campbell
Agreement at the end of the term. If we desire to renew the Campbell Agreement,
Mr. Campbell must be notified to that effect, in writing, no later than 120 days
prior to the end of the term of the Campbell Agreement. If a "qualifying renewal
offer" (as described below) is not made to Mr. Campbell, Mr. Campbell will be
eligible for severance payments in connection with his termination. If a
qualifying renewal offer is made to Mr. Campbell, but Mr. Campbell declines such
offer, Mr. Campbell would be eligible for a payment of (i) 50% of his base
salary for the twelve (12) months following his termination and (ii) a prorated
portion of his annual bonus at target for the year of termination (the "Campbell
Noncompetition Payment"). The Campbell Noncompetition Payment would be
contingent upon Mr. Campbell's continued compliance with the noncompetition and
nonsolicitation covenants in the Campbell Agreement and executing a release of
claims.
For purposes of the Campbell Agreement, a "qualifying renewal offer" is an offer
to renew the Campbell Agreement with a meaningful increase in base salary and a
bonus target that is at least the same level as in effect under the Campbell
Agreement at the end of his term of employment, and with other material terms
that are as favorable in the aggregate as the material terms of the Campbell
Agreement.
Under the Campbell Agreement, Mr. Campbell's base salary was increased from
$1.8 million per annum to $2.5 million per annum, effective as of April 8, 2022
(the same day as the closing of the transaction whereby the Company acquired the
business, operations and activities that constituted a portion of the
WarnerMedia segment of AT&T Inc. (the "Closing")). Future salary increases will
be reviewed and decided in accordance with the Company's standard practices and
procedures for similarly situated executives. Mr. Campbell's target annual bonus
was increased from 150% of his base salary to 200% of his base salary, effective
as of the Closing. There is no guaranteed annual bonus amount. Mr. Campbell will
also be considered for annual equity grants under the Warner Bros. Discovery,
Inc. Stock Incentive Plan (the "Plan") in accordance with our normal executive
compensation processes and practices. Beginning in 2023, and subject to approval
from our Compensation Committee, such annual equity grants will have a target
grant date value of $8.5 million per annum. Mr. Campbell will also be
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granted a one-time award of restricted stock units ("RSUs") under the Plan with
a grant date value of $2 million. This one-time award of RSUs will be granted on
July 15, 2022, based on the closing price of our Series A common stock as of the
end of trading on July 14, 2022, with the number of RSUs received rounded up to
the nearest whole share. The vesting commencement date for this grant shall be
July 9, 2023. The award documents that evidence equity awards made to
Mr. Campbell pursuant to the Campbell Agreement shall provide for double-trigger
vesting upon an Approved Transaction, Board Change or Control Purchase (each as
defined in the Plan). The terms of the equity awards granted to Mr. Campbell
under the Campbell Agreement will otherwise be consistent with our normal
executive compensation processes and practices, with vesting subject to
continued employment, and other terms and conditions, as well as approval of our
Compensation Committee in each case.
Mr. Campbell's employment may be terminated for "cause." "Cause" for purposes of
the Campbell Agreement means: (i) the conviction of, or nolo contendere or
guilty plea, to a felony (whether any right to appeal has been or may be
exercised); (ii) conduct constituting embezzlement, misappropriation or fraud,
whether or not related to Mr. Campbell's employment with us; (iii) conduct
constituting a financial crime, material act of dishonesty or conduct in
material violation of our Code of Ethics or other of our written policies;
(iv) improper conduct substantially prejudicial to our business (whether
financial or otherwise); (v) willful unauthorized disclosure or use of our
confidential information; (vi) material improper destruction of our property; or
(vii) willful misconduct in connection with the performance of Mr. Campbell's
duties. If Mr. Campbell's employment is terminated for "cause," he will be
entitled to receive only amounts or benefits that have been earned or vested at
the time of his termination, or as may be required by applicable law.
If Mr. Campbell's employment is terminated without "cause" (as defined above) or
by Mr. Campbell for "good reason" (or, as described above, results from a
failure to make Mr. Campbell a "qualifying renewal offer"), Mr. Campbell will be
eligible to receive the following severance payments: (a) base salary for the
longest of (i) the balance of the term of employment under the Campbell
Agreement, (ii) twelve (12) months, or (iii) the number of weeks of severance
Mr. Campbell would otherwise have been entitled to under our severance plan, in
each case subject to a maximum of twenty-four (24) months; (b) annual bonus
payments at target under our annual incentive plan for each year in which
Mr. Campbell is entitled to base salary continuation under clause (a) above
(subject to proration for partial years); and (c) reimbursement of up to
eighteen (18) months of COBRA premiums. In certain circumstances in which
Mr. Campbell is relieved of all work responsibilities for some period of time
prior to the effective date of his termination of employment, salary paid during
this period of "garden leave" will be offset against the severance amounts
otherwise payable to Mr. Campbell. "Good reason" under the Campbell Agreement
means: (a) a material reduction in Mr. Campbell's duties or responsibilities
(excluding responsibilities related to our legal and/or consumer products and
experience divisions); (b) a material change in the location of the office where
Mr. Campbell works (i.e., relocation outside the New York, NY metropolitan
area); or (c) a material breach of the Campbell Agreement by us, including a
change in the position to which Mr. Campbell reports. These severance amounts
are contingent on Mr. Campbell executing a release of claims. Additionally, if
Mr. Campbell secures employment or any consulting, contractor or other business
arrangement for services during the period during which he is receiving
severance payments, the severance payments he is receiving may be reduced by the
amounts otherwise payable under the Campbell Agreement by the amount
Mr. Campbell receives for those services.
The Campbell Agreement also contains certain noncompetition and nonsolicitation
covenants effective during Mr. Campbell's employment and for a period of twelve
(12) months and eighteen (18) months, respectively, after the conclusion of
Mr. Campbell's employment. If Mr. Campbell ceases to comply with the
noncompetition or nonsolicitation clauses in the Campbell Agreement, the
Campbell Noncompetition Payment described above, as well as any unpaid severance
payments, would be terminated, as applicable.
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Wiedenfels Agreement
Pursuant to the Wiedenfels Agreement, Mr. Wiedenfels will continue to serve as
our Chief Financial Officer. In this role, Mr. Wiedenfels will continue to
oversee our finances and has also assumed responsibility for global enterprise
tech and broadcast operations, facilities, security, and studio operations. The
Wiedenfels Agreement replaced Mr. Wiedenfels' prior employment agreement with
DCL. The term of the Wiedenfels Agreement is effective as of July 11, 2022 and
runs through July 10, 2026. The parties may agree to renew the Wiedenfels
Agreement at the end of the term. If we desire to renew the Wiedenfels
Agreement, Mr. Wiedenfels must be notified to that effect, in writing, no later
than one hundred twenty (120) days prior to the end of the term of the
Wiedenfels Agreement. If a "qualifying renewal offer" (as described below) is
not made to Mr. Wiedenfels, Mr. Wiedenfels will be eligible for severance
payments in connection with his termination. If a "qualifying renewal offer" is
made to Mr. Wiedenfels, but Mr. Wiedenfels declines such offer, Mr. Wiedenfels
would be eligible for the payment of 50% of his base salary for the twelve
(12) months following his termination (the "Wiedenfels Noncompetition Payment").
The Wiedenfels Noncompetition Payment would be contingent upon Mr. Wiedenfels'
continued compliance with the noncompetition and nonsolicitation covenants in
the Wiedenfels Agreement and executing a release of claims.
For purposes of the Wiedenfels Agreement, a "qualifying renewal offer" is an
offer to renew the Wiedenfels Agreement with a meaningful increase in base
salary and an annual bonus target that is at least the same level as in effect
at the end of the term of the Wiedenfels Agreement, and with other material
terms that are at least as favorable in the aggregate as the material terms of
the Wiedenfels Agreement.
Under the Wiedenfels Agreement, Mr. Wiedenfels' base salary was increased from
$1.7 million per annum to $2.0 million per annum, effective as of the Closing.
Future salary increases will be reviewed and decided in accordance with our
standard practices and procedures for similarly situated senior executives.
Mr. Wiedenfels' target annual bonus under the Wiedenfels Agreement was increased
from 150% of his base salary to 175% of his base salary, effective as of the
Closing. There is no guaranteed annual bonus amount. Mr. Wiedenfels will also be
considered for annual equity grants under the Plan in accordance with our normal
executive compensation processes and practices. Beginning in 2023, and subject
to approval from our Compensation Committee, such annual equity grants will have
a target grant date value of $8 million. Mr. Wiedenfels will also be granted a
one-time award of RSUs under the Plan with a target grant date value of
$2 million. This one-time award of RSUs will be granted on July 15, 2022, based
on the closing price of our Series A common stock as of the end of trading on
July 14, 2022, with the number of RSUs received rounded up to the nearest whole
share. The vesting commencement date for this grant shall be July 11, 2023. The
award documents that evidence the equity awards made to Mr. Wiedenfels pursuant
to the Wiedenfels Agreement shall provide for double-trigger vesting upon an
Approved Transaction, Board Change or Control Purchase (each as defined in the
Plan). The terms of the equity awards granted to Mr. Wiedenfels under the
Wiedenfels Agreement will otherwise be consistent with our normal executive
compensation processes and practices, with vesting subject to continued
employment and other terms and conditions, as well as approval of our
Compensation Committee in each case.
Mr. Wiedenfels' employment may be terminated for "cause." "Cause" for purposes
of the Wiedenfels Agreement means: (i) the conviction of, or nolo contendere or
guilty plea, to a felony (whether any right to appeal has been or may be
exercised); (ii) conduct constituting embezzlement, misappropriation or fraud,
whether or not related to
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Mr. Wiedenfels' employment with us; (iii) conduct constituting a financial
crime, material act of dishonesty or conduct in material violation of our Code
of Ethics or other of our written policies; (iv) improper conduct substantially
prejudicial to our business (whether financial or otherwise); (v) willful
unauthorized disclosure or use of our confidential information; (vi) material
improper destruction of our property; or (vii) willful misconduct in connection
with the performance of Mr. Wiedenfels' duties. If Mr. Wiedenfels' employment is
terminated for Cause, he will be entitled to receive only amounts or benefits
that have been earned, accrued or vested at the time of his termination, or as
may be required by applicable law.
If Mr. Wiedenfels' employment is terminated without "cause" (as described above)
or by Mr. Wiedenfels for "good reason" (as described below, or, as described
above, results from a failure to make Mr. Wiedenfels a "qualifying "renewal
offer"), Mr. Wiedenfels will receive the following severance payments: (a) base
salary continuation for the longer of (i) the balance of the term of employment
under the Wiedenfels Agreement, (ii) twelve (12) months, or (iii) the number of
weeks of severance Mr. Wiedenfels would otherwise have been entitled to under
our severance plan, in each case subject to a maximum of twenty-four
(24) months; (b) annual bonus payments at target under our annual incentive plan
for each year in which Mr. Wiedenfels is entitled to base salary continuation
under clause (a) above (subject to proration for partial years); (c)
reimbursement of up to eighteen (18) months of COBRA premiums; and
(d) repatriation benefits to return Mr. Wiedenfels and his family to Germany. In
certain circumstances in which Mr. Wiedenfels is relieved of all work
. . .
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits
Exhibit
No. Description
10.1 Employment Agreement between Bruce Campbell and Discovery
Communications, LLC, dated July 9, 2022.*
10.2 Employment Agreement between Gunnar Wiedenfels and Discovery
Communications, LLC, dated July 11, 2022.*
104 Cover Page Interactive Data File (embedded within the Inline XBRL
document)
* Certain exhibits have been omitted pursuant to Item 601(a)(5) of Regulation S-K
and will be supplementally provided to the SEC upon request.
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