Item 5.02 Departure of Directors or Certain Officers; Election of Directors;
Appointment of Certain Officers; Compensatory Arrangements of Certain
Officers.
On March 28, 2023, in connection with Nick Khan's transition to being the sole
Chief Executive Officer of the Company following the departure of Stephanie
McMahon, and the appointment of Vincent McMahon as the Company's Executive
Chairman, the Compensation & Human Capital Committee (the "Committee") of World
Wrestling Entertainment, Inc. (the "Company") approved an amendment to Mr.
Khan's employment agreement with the Company and a new employment agreement with
Mr. McMahon following a review of market data with the input of its independent
compensation consultant and legal counsel.
Mr. Khan entered into an employment agreement amendment with the Company,
effective as of March 29, 2023 (the "Khan Amendment"), pursuant to which,
retroactive to January 10, 2023 (the date Mr. Khan was appointed the sole Chief
Executive Officer of the Company), Mr. Khan's (i) annual base salary increased
from $1.35 million to $1.5 million; (ii) annual target bonus opportunity (as a
percentage of annual base salary) increased from 160% to 175%; and (iii) annual
equity grant date target value increased from $3.575 million to $5.375 million,
subject to performance metrics and vesting periods (as determined by the
Committee). These changes are being made in connection with certain changes to
narrow the definition of "change of control" and "good reason" in Mr. Khan's
employment agreement.
Mr. McMahon entered into an employment agreement with the Company, effective as
of March 29, 2023 (the "McMahon Employment Agreement"), pursuant to which,
retroactive to January 9, 2023 (the date Mr. McMahon was appointed Executive
Chairman of the Company), he will continue to serve as Executive Chairman for a
term of two years from his start date of January 9, 2023, subject to automatic
extension for additional one-year terms thereafter unless either the Company or
Mr. McMahon provides at least 180 days' notice of non-renewal. The McMahon
Employment Agreement provides that Mr. McMahon will receive (i) an annual base
salary of $1.2 million, (ii) an annual target bonus opportunity (as a percentage
of annual base salary) of 175% and (iii) an annual equity grant date target
value set at $4.3 million, subject to performance metrics and vesting periods
(as determined by the Committee). In the event the Company terminates his
employment without "cause" (as defined in McMahon Employment Agreement) or he
terminates his employment for "good reason" (as defined in the McMahon
Employment Agreement), Mr. McMahon will be eligible to receive as severance (a)
base salary continuation through the end of the term (or, if longer, for one
year), (b) a prorated portion of the annual bonus based on target performance
for the year in which the termination occurs and (c) health and welfare
continuation through the end of the term in accordance with the Company's
severance policy. In the event such a termination occurs within the two-year
period following a "change in control" (as defined in the McMahon Employment
Agreement), Mr. McMahon will instead be eligible to receive (1) a lump sum cash
payment equal to two times Mr. McMahon's then-current base salary, (2) a lump
sum cash payment equal to two times Mr. McMahon's annual bonus based on target
performance, (3) a prorated portion of the annual bonus based on target
performance for the year in which the termination occurs, (4) full accelerated
vesting of Mr. McMahon's unvested equity awards (with the payout of
performance-based awards determined based on target-level achievement) and
(5) health and welfare continuation for the twenty-four month period following
the termination.
As disclosed in our annual proxy statements, the annual target bonus opportunity
is a target opportunity only and the actual bonus paid may be above or below
such amount based on, among other factors, the Company's performance taking into
account performance metrics established by the Committee. For annual equity
grants, the Company's current practice is to value grants at an average of the
closing price of the Company's Class A Common Stock on the New York Stock
Exchange over the thirty trading days immediately preceding the grant date;
however, the 2023 grants for Messrs. Khan and McMahon are instead valued over
the thirty trading days immediately preceding February 7, 2023 (the date on
which 2023 annual equity awards were granted to our other named executive
officers).
The foregoing descriptions of the Khan Amendment and the McMahon Employment
Agreement are qualified in its entirety by reference to the complete text of the
Khan Amendment and the McMahon Employment Agreement, as applicable, copies of
which are attached as Exhibits 10.1 and 10.2 to this Current Report on Form 8-K
and incorporated herein by reference. Further information about the Company's
executive compensation plans and programs, including the incentive plan, is
included in the Company's proxy statements.
Item 9.01 Financial Statements and Exhibits
(d) Exhibits
Exhibit No. Description
10.1 First Amendment to the Second Amended and Restated Employment
Agreement with Nick Khan, dated March 29, 2023
10.2 Employment Agreement with Vincent K. McMahon, dated March 29, 2023
104 Cover Page Interactive Data File (embedded within the Inline XBRL
document)
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