UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 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. |
As previously disclosed, on April 17, 2020 all of the outstanding common stock of Madison Square Garden Entertainment Corp. (the “Company”) was distributed to the stockholders of Madison Square Garden Sports Corp. (“MSG Sports”) (such distribution, the “Spin-off”). In connection with the Spin-off, each holder of an MSG Sports employee restricted stock unit received one Company restricted stock unit in respect of every MSG Sports restricted stock unit owned on the record date and each holder of an MSG Sports employee performance stock unit received one Company performance stock unit in respect of every MSG Sports performance stock unit owned on the record date.
On September 10, 2020, the Compensation Committee (the “Committee”) of the Board of Directors of the Company amended the performance stock units granted on April 17, 2020 in connection with the Spin-off that correspond to performance stock units granted by MSG Sports in Fiscal Year 2019 (the “2019-2021 PSUs”) and Fiscal Year 2020 (the “2020-2022 PSUs” and, together with the 2019-2021 PSUs, the “PSUs”) under the Company’s 2020 Employee Stock Plan to establish new performance targets that will apply in the final year of the vesting period of the applicable award. As previously disclosed in MSG Sports’ proxy statement for its 2018 and 2019 annual meetings of shareholders, the PSUs generally were structured to be settled upon the later of September 15th following a three-year vesting period, and the date of certification of achievement against pre-determined performance goals measured in the final year of such three-year period.
The original performance goals of Total Company Net Revenue and Business Unit AOI were established at the time at which the PSUs were granted based on MSG Sports’ then-existing five-year strategic plan. The five-year strategic plan represented the combined businesses, including the sports businesses that are not part of the Company following the Spin-off. The original goals were not reflective of the Company as a standalone entertainment company, including the impact of the intra-company agreements entered into with MSG Sports in connection with the Spin-off. The amended performance goals of Company Total Company Net Revenue and Company Business Unit AOI reflect the Company’s current five-year plan adopted following the Spin-off including the impact of the COVID-19 pandemic. The Company’s strategic plan is confidential and disclosure of the amended performance targets could provide information that could lead to competitive harm, and for this reason the performance stock unit financial performance targets are not disclosed; however, the Committee seeks to make target goals ambitious, requiring meaningful growth over the performance period, while threshold goals are expected to be achievable. The Company intends to disclose the payout results as a percentage of target as well as the resulting payout for the 2019-2021 PSUs and the 2020-2022 PSUs as a percentage of target after the end of the performance period. With the exception of the amendments described above, the PSUs remain subject to their existing terms.
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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 H. FitzPatrick | |
| Name: | Mark H. FitzPatrick | |
| Title: | Executive Vice President and Chief Financial Officer | |
Dated: September 11, 2020
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