UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
CURRENT REPORT
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| Item 5.02 | Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers. |
Appointment of Chief Financial Officer
On December 16, 2021, the Board of Directors (the “Board”) of Madison Square Garden Entertainment Corp. (the “Company”) appointed David Byrnes, 51, as Executive Vice President and Chief Financial Officer of the Company effective January 24, 2022, who will replace Mark FitzPatrick, the Company’s current Executive Vice President and Chief Financial Officer.
Mr. Byrnes joins the Company from ViacomCBS where he most recently served as Executive Vice President, Corporate Finance. Mr. Byrnes assumed this role in December 2019 following the merger of CBS and Viacom and was primarily responsible for the company’s budgeting, forecasting and long-range strategic planning processes. He was also responsible for the corporate, technology and finance integration and transformation finance teams.
Previously, at CBS, Mr. Byrnes assumed the role of Senior Vice President, Controller and Chief Accounting Officer in 2019; Senior Vice President, Internal Audit in 2015; Senior Vice President, Finance, CBS Technology in 2014; Vice President, Finance at Simon & Schuster in 2009; and Vice President, Corporate Development in 2008. Before joining CBS, Byrnes held various financial leadership positions at Automatic Data Processing, including Divisional CFO and Vice President of Financial Reporting and Policy. He began his career in the audit practice at KPMG, where he spent 11 years.
Mr. Byrnes, a certified public accountant, received his undergraduate degree in public accounting from Pace University in 1992 and MBA in finance from the Columbia Business School in 1998.
Employment Agreement with David Byrnes
In connection with David Byrnes’ appointment, Mr. Byrnes and the Company entered into an employment agreement (the “Byrnes Employment Agreement”) dated December 20, 2021, which contemplates Mr. Byrnes’ employment commencing effective as of January 24, 2022 (the “Effective Date”) and expiring on December 31, 2024 (the “Scheduled Expiration Date”). The Byrnes Employment Agreement provides for an annual base salary of not less than $800,000 and, commencing with the Company’s fiscal year starting July 1, 2021, an annual target bonus opportunity equal to 100% of annual base salary. Mr. Byrnes will be eligible, subject to his continued employment by the Company, to participate in future long-term incentive programs that are made available to similarly situated executives of the Company. It is expected that Mr. Byrnes will receive one or more annual long-term awards with an aggregate target value of not less than $1,200,000. In addition, Mr. Byrnes will be entitled to a one-time special cash payment of up to $1,331,000, paid on the Company’s first regular payroll date on or after April 1, 2022 (the “Special Cash Award”); provided that, if Mr. Byrnes’ employment with the Company terminates prior to the first anniversary of the Effective Date as a result of (a) his resignation (other than for good reason (as defined in the Byrnes Employment Agreement)) or (b) an involuntary termination by the Company for “cause” (as defined in the Byrnes Employment Agreement), then Mr. Byrnes will be required to refund to the Company the gross amount of the Special Cash Award. Mr. Byrnes 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 the Scheduled Expiration Date, Mr. Byrnes’ employment with the Company is either terminated by the Company other than for “cause” (as defined in the Byrnes Employment Agreement), or by Mr. Byrnes for good reason (as defined in the Byrnes Employment Agreement) and “cause” does not exist, then, subject to Mr. Byrnes’ execution of a separation agreement with the Company, the Company will provide him with the following benefits and rights: (a) severance in an amount determined at the discretion of the Company, but in no event less than two times the sum of Mr. Byrnes’ 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) any unpaid portion of the Special Cash Award; (d) each of Mr. Byrnes’ outstanding long-term cash awards will immediately vest in full and will be payable to Mr. Byrnes to the same extent that other similarly situated active executives receive payment; (e) all of the time-based restrictions on each of Mr. Byrnes’ 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. Byrnes subject to satisfaction of any applicable performance criteria; and (f) each of Mr. Byrnes’ outstanding stock options and stock appreciation awards under the plans of the Company will immediately vest.
If Mr. Byrnes ceases to be an employee of the Company on or prior to the Scheduled Expiration Date due to death or disability, and at such time cause does not exist, then, subject to execution of a separation agreement (other than in the
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case of death), Mr. Byrnes (or his estate or beneficiary) will be provided with the benefits and rights set forth in (b), (c), (e) and (f) above. Additionally, each of Mr. Byrnes’ 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).
If, after the Scheduled Expiration Date, Mr. Byrnes’ employment is terminated (i) by the Company, (ii) by Mr. Byrnes for good reason or (iii) due to his death or disability and at the time of any such termination, “cause” does not exist, then, subject to Mr. Byrnes’ execution of a separation agreement (other than in the case of death), each of his outstanding long-term cash awards and equity awards that were awarded prior to the Scheduled Expiration Date will vest or be payable as set forth in clauses (b), (d), (e) and (f) of the second preceding paragraph.
The Byrnes Employment Agreement contains certain covenants by Mr. Byrnes including a non-competition covenant that restricts Mr. Byrnes’ ability to engage in competitive activities until the first anniversary of a termination of his employment with the Company.
Employment Agreement with Andrew Lustgarten
On December 16, 2021, Mr. Lustgarten and the Company entered into an employment agreement (the “Lustgarten Employment Agreement”). The Lustgarten Employment Agreement, which replaces Mr. Lustgarten’s existing employment agreement with the Company, recognizes that Mr. Lustgarten will continue to be employed by The Madison Square Garden Sports Corp. (“MSGS”) and states that certain matters arising from or relating to such employment will not be deemed a breach of his obligations under the Lustgarten Employment Agreement or to constitute “cause” (as defined in the Lustgarten Employment Agreement).
The Lustgarten Employment Agreement provides for an annual base salary of not less than $800,000. Mr. Lustgarten will be eligible to participate in the Company’s discretionary annual cash incentive program with an annual target bonus equal to not less than 200% of his annual base salary. Mr. Lustgarten 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. Lustgarten’s continued employment by the Company. It is expected that Mr. Lustgarten will receive annual grants of cash and/or equity long-term incentive awards with an aggregate target value of not less than $1,600,000 as determined by the Compensation Committee of the Board in its discretion. Under the Lustgarten Employment Agreement, if Mr. Lustgarten’s employment with MSGS terminates while he remains employed by the Company, Mr. Lustgarten 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. Notwithstanding the foregoing, Mr. Lustgarten will continue to be eligible to participate in the Company’s Excess Savings Plan and to be eligible for paid time off to be accrued and used in accordance with Company policy.
If, on or prior to December 31, 2024 (the “Lustgarten Scheduled Expiration Date”), Mr. Lustgarten’s employment with the Company is terminated (i) by the Company other than for “cause” or (ii) by Mr. Lustgarten for “good reason” as defined in the agreement (so long as “cause” does not then exist), then, subject to Mr. Lustgarten’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. Lustgarten’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. Lustgarten’s outstanding long-term cash awards will immediately vest in full and will be payable to Mr. Lustgarten to the same extent that other similarly situated active executives receive payment; (d) all of the time-based restrictions on each of Mr. Lustgarten’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. Lustgarten subject to satisfaction of any applicable performance criteria; and (e) each of Mr. Lustgarten’s outstanding stock options and stock appreciation awards under the plans of the Company will immediately vest.
If Mr. Lustgarten ceases to be an employee of the Company prior to the Lustgarten Scheduled Expiration Date due to death or disability, Mr. Lustgarten (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. Lustgarten’s outstanding long-term cash awards will immediately vest in
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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).
If after the Lustgarten Scheduled Expiration Date, Mr. Lustgarten’s employment with the Company is terminated (i) by the Company, (ii) by Mr. Lustgarten for good reason or (iii) due to his death or disability and at the time of any such termination, “cause” does not exist, then, subject to Mr. Lustgarten’s execution of a separation agreement (other than in the case of death), Mr. Lustgarten (or his estate or beneficiary) will be provided with the benefits and rights set forth in (b), (d) and (e) of the second preceding paragraph.
The Lustgarten Employment Agreement contains certain covenants by Mr. Lustgarten including a non-competition covenant that restricts Mr. Lustgarten’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 Lustgarten Employment Agreement does not purport to be complete and is subject to, and qualified in its entirety by, the full text of the Lustgarten 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 December 16, 2021, between Madison Square Garden Entertainment Corp. and Andrew Lustgarten.† | |
| 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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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| MADISON SQUARE GARDEN ENTERTAINMENT CORP. | ||
| (Registrant) | ||
| By: |
/s/ Mark C. Cresitello | |
| Name: Mark C. Cresitello | ||
| Title: Secretary | ||
Dated: December 21, 2021
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