Item 2.01 Completion of Acquisition or Disposition of Assets.
On July 9, 2021, Madison Square Garden Entertainment Corp., a Delaware
corporation ("MSG Entertainment"), completed its previously announced
acquisition of MSG Networks Inc., a Delaware corporation ("MSG Networks pursuant
to that certain Agreement and Plan of Merger, dated as of March 25, 2021 (the
"Merger Agreement"), among MSG Entertainment, Broadway Sub Inc., a Delaware
corporation and a wholly-owned subsidiary of MSG Entertainment ("Merger Sub")
and MSG Networks. On July 9, 2021, Merger Sub merged with and into MSG Networks
(the "Merger"), with MSG Networks surviving and continuing as the surviving
corporation in the Merger as a wholly-owned subsidiary of MSG Entertainment.
At 7:51 a.m. on July 9, 2021, the effective time of the Merger (the "Effective
Time"), (i) each share of Class A common stock, par value $0.01 per share, of
MSG Networks ("MSGN Class A Common Stock") issued and outstanding immediately
prior to the Effective Time was automatically converted into the right to
receive a number of shares of Class A common stock, par value $0.01 per share,
of MSG Entertainment ("MSGE Class A Common Stock") such that each holder of
record of shares of MSGN Class A Common Stock has the right to receive, in the
aggregate, a number of shares of MSGE Class A Common Stock equal to the total
number of shares of MSGN Class A Common Stock held of record immediately prior
to the Effective Time multiplied by 0.172, with such product rounded up to the
next whole share and (ii) each share of Class B common stock, par value $0.01
per share, of MSG Networks ("MSGN Class B Common Stock" and, together with MSGN
Class A Common Stock, "MSGN Common Stock") issued and outstanding immediately
prior to the Effective Time was automatically converted into the right to
receive a number of shares of Class B common stock, par value $0.01 per share,
of MSG Entertainment ("MSGE Class B Common Stock" and, together with MSGE
Class A Common Stock, "MSGE Common Stock") such that each holder of record of
shares of MSGN Class B Common Stock has the right to receive, in the aggregate,
a number of shares of MSGE Class B Common Stock equal to the total number of
shares of MSGN Class B Common Stock held of record immediately prior to the
Effective Time multiplied by 0.172, with such product rounded up to the next
whole share, in each case except for Excluded Shares (as defined in the Merger
Agreement).
The issuance of shares of MSGE Common Stock in connection with the Merger was
registered under the Securities Act of 1933, as amended (the "Securities Act"),
pursuant to MSG Entertainment's registration statement on Form S-4 (File
No. 333-255859) (the "Registration Statement"), declared effective by the
Securities and Exchange Commission (the "SEC") on June 4, 2021. The joint proxy
statement/prospectus (the "Joint Proxy Statement/Prospectus") included in the
Registration Statement contains additional information about the Merger.
The foregoing description of the Merger Agreement and the transactions
contemplated thereby, including the Merger, is not complete and is subject to
and qualified in its entirety by reference to the Merger Agreement, a copy of
which was included as Annex A to the Joint Proxy Statement/Prospectus, and which
was filed as Exhibit 2.1 to MSG Networks' Current Report on Form 8-K filed on
March 26, 2021. The Merger Agreement is incorporated herein by reference.
Item 3.01 Notice of Delisting or Failure to Satisfy a Continued Listing Rule or
Standard; Transfer of Listing.
In connection with the consummation of the Merger, MSG Networks notified the New
York Stock Exchange (the "NYSE") that each outstanding share of MSGN Class A
Common Stock was converted into the right to receive MSGE Class A Common Stock
and requested that the NYSE withdraw the listing of MSGN Class A Common Stock.
Upon MSG Networks' request, the NYSE filed a notification of removal from
listing on Form 25 with the SEC with respect to the delisting of MSGN Class A
Common Stock. MSGN Class A Common Stock ceased being traded on the NYSE prior to
the opening of the market on July 9, 2021, and will no longer be listed on the
NYSE. In addition, MSG Networks intends to file with the SEC a Form 15
requesting that the reporting obligations of MSG Networks under Sections 13(a)
and 15(d) of the Securities Exchange Act of 1934 be suspended.
Item 3.03 Material Modification to Rights of Security Holders.
The information set forth in Item 2.01, Item 3.01 and Item 5.03 of this Current
Report on Form 8-K is incorporated herein by reference.
At the Effective Time, each share of MSGN Common Stock outstanding immediately
prior to the Effective Time (excluding certain Excluded Shares (as defined in
the Merger Agreement)) was converted into the right to receive MSGE Common Stock
in accordance with the Merger Agreement and as described in Item 2.01 hereto.
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Each outstanding and unexercised stock option to purchase MSGN Class A Common
Stock (a "MSGN Stock Option"), whether vested or unvested, that was outstanding
and unexercised immediately prior to the Effective Time was assumed by MSG
Entertainment and converted into a stock option to purchase MSGE Common Stock (a
"MSGE Stock Option"), evidencing the right to purchase (i) such number of shares
of MSGE Common Stock (rounded down to the nearest whole share) equal to the
product obtained by multiplying (A) the total number of shares of MSGN Class A
Common Stock subject to such MSGN Stock Option immediately prior to the
Effective Time by (B) 0.172, (ii) at a per-share exercise price (rounded up to
the nearest whole cent) equal to the quotient obtained by dividing (A) the
exercise price per share of MSGN Class A Common Stock at which such MSGN Stock
Option was exercisable immediately prior to the Effective Time by
(B) 0.172; provided that for each such MSGN Stock Option subject to performance
vesting conditions that was outstanding on the date of the Merger Agreement and
that remained outstanding at the Effective Time, (x) the number of shares of
MSGN Class A Common Stock used in clause (i) (A) of this sentence is equal to
the number of shares of MSGN Class A Common Stock that would be subject to such
MSGN Stock Option assuming the performance conditions applicable thereto were
achieved at 100% of target and (y) each such MSGN Stock Option converted to an
MSGE Stock Option with time-based vesting conditions for the remainder of the
applicable performance period. Except as set forth in this paragraph, each MSGE
Stock Option is otherwise subject to the same terms, conditions and vesting
requirements as were applicable to the MSGN Stock Option immediately prior to
the Effective Time.
Each restricted stock unit award corresponding to shares of MSGN Class A Common
Stock, which award is subject to restrictions on vesting or settlement based on
performance and/or continuing service (a "MSGN RSU"), whether vested or
unvested, that was outstanding immediately prior to the Effective Time was
assumed by MSG Entertainment and converted into a restricted stock unit award
corresponding to shares of MSGE Common Stock, which award is subject to
restrictions on vesting or settlement based on performance and/or continuing
service (a "MSGE RSU"). The number of MSGE RSUs received in exchange for each
MSGN RSU was determined by multiplying (i) the total number of shares of MSGN
Class A Common Stock subject to such MSGN RSU immediately prior to the Effective
Time by (ii) 0.172; provided that for each MSGN RSU subject to performance
vesting conditions that was outstanding on the date of the Merger Agreement and
that remained outstanding at the Effective Time, (x) the number of shares of
MSGN Class A Common Stock used in clause (i) of this sentence is equal to the
number of shares of MSGN Class A Common Stock that would be subject to such MSGN
RSU assuming the performance conditions applicable thereto were achieved at 100%
of target and (y) each such MSGN RSU converted to an MSGE RSU with time-based
vesting conditions for the remainder of the applicable performance period.
Except as set forth in this paragraph, each MSGE RSU is otherwise subject to the
same terms, conditions and vesting requirements as were applicable to the MSGN
RSU immediately prior to the Effective Time.
Item 5.01 Changes in Control of Registrant.
As a result of the consummation of the Merger, at the Effective Time, MSG
Networks became a wholly-owned subsidiary of MSG Entertainment. Prior to the
Merger, MSG Entertainment and MSG Networks operated as independent public
companies both under common control by the Dolan family group. Because the Dolan
family group controls both MSG Entertainment and MSG Networks, the Merger does
not involve a change of control.
The information set forth in Item 2.01 of this Current Report on Form 8-K is
incorporated herein by reference.
Item 5.02 Departure of Directors or Certain Officers; Election of Directors;
Appointment of Certain Officers; Compensatory Arrangements of Certain
Officers.
In accordance with the terms of the Merger Agreement, all of the directors of
MSG Networks prior to the Effective Time ceased to be directors of MSG Networks
effective as of the Effective Time. MSG Networks' executive officers remained
with MSG Networks following the Effective Time. As discussed in the Joint Proxy
Statement/Prospectus, the consummation of the Merger was not a change in control
under any plans or agreements of MSG Networks to which its named executive
officers are party, and any severance benefits under those individuals'
agreements are payable only upon a qualifying termination of employment.
Item 5.03 Amendments to Certificate of Incorporation or Bylaws; Change in Fiscal
Year.
At the Effective Time, the Amended and Restated Certificate of Incorporation and
Amended By-laws of MSG Networks were amended and restated in accordance with the
Merger Agreement.
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A copy of the Amended and Restated Certificate of Incorporation of MSG Networks
Inc. effective as of the Effective Time is filed as Exhibit 3.1 to this Current
Report on Form 8-K and is incorporated herein by reference, and a copy of the
Amended and Restated By-Laws of MSG Networks Inc. effective as of the Effective
Time is filed as Exhibit 3.2 to this Current Report on Form 8-K and is
incorporated herein by reference.
Item 5.07 Submission of Matters to a Vote of Security Holders.
On July 8, 2021, MSG Networks held a special meeting of stockholders (the
"Special Meeting") to vote upon the proposals set forth in the joint proxy
statement/prospectus of MSG Entertainment and MSG Networks, filed with the SEC
on June 4, 2021, to (1) adopt the Merger Agreement (the "Merger Proposal"), (2)
approve, on a non-binding advisory basis, the compensation that may be paid or
become payable to MSG Networks' named executive officers that is based on or
otherwise relates to the Merger Agreement (the "Non-Binding Compensation
Proposal") and (3) adjourn the Special Meeting, if necessary or appropriate, to
solicit additional proxies if there are not sufficient votes to approve the
Merger Proposal (the "Adjournment Proposal").
As of the close of business on June 14, 2021, the record date for the Special
Meeting, there were 43,459,880 shares of MSGN Class A Common Stock and
13,588,555 shares of MSGN Class B Common Stock issued and outstanding and
entitled to vote at the Special Meeting. 37,429,350 shares of MSGN Class A
Common Stock and 13,588,555 shares of MSGN Class B Common Stock were represented
in person or by proxy at the Special Meeting, which constituted a quorum to
conduct business at the meeting. In accordance with the Amended and Restated
Certificate of Incorporation of MSG Networks then in effect, the holders of MSGN
Class A Common Stock have one vote per share and the holders of MSGN Class B
Common Stock have ten votes per share. The Merger Proposal, Non-Binding
Compensation Proposal and Adjournment Proposal were approved, although no
adjournment was needed in light of the Merger Proposal approval.
The voting results for the Merger Proposal and the Non-Binding Compensation
Proposal, including the votes for, the percentage of votes for, the votes
against, and any abstentions or broker non-votes, are described below.
Proposal 1 - Approval of the Merger Proposal:
Votes For Percentage For Votes Against Abstentions Broker Non-Votes
160,846,030 89.7% 12,411,740 57,130 0
Proposal 2 - Approval of the Non-Binding Compensation Proposal:
Votes For Percentage For Votes Against Abstentions Broker Non-Votes
163,686,821 91.3% 9,562,931 65,148
0
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits.
Exhibit
No. Description of Exhibit
2.1 Agreement and Plan of Merger, dated as of March 25, 2021, by and
among MSG Entertainment, Merger Sub and MSG Networks (incorporated by
reference to Exhibit 2.1 to MSG Networks' Current Report on Form 8-K
filed on March 26, 2021).
3.1 Amended and Restated Certificate of Incorporation of MSG Networks.
3.2 Amended By-Laws of MSG Networks.
104 Cover Page Interactive Data File (embedded within the Inline XBRL
document).
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