8-KLeadership Changes

Liberty Media Corp 8-K Report, Executive Changes (May 31, 2016)

Filed May 31, 2016For Securities:FWONKFWONAFWONB

Summary

Liberty Media Corporation (FWONK) announced on May 31, 2016, an updated compensation arrangement for its Chief Legal Officer, Richard N. Baer, effective January 1, 2017, through December 31, 2020. This new agreement maintains Mr. Baer's current annual base salary of $901,000 and target bonus of 100% of base salary, but introduces performance-based equity incentives and extends his employment term by four years. The arrangement also includes specific severance provisions, the details of which will be outlined in a definitive employment agreement. A significant component of this new arrangement involves a one-time grant of stock options for Series C Liberty SiriusXM (LSXMK), Series C Liberty Braves (BATRK), and Series C Liberty Media (LMCK) common stock. These options vest over two years, commencing in January 2017, and are subject to continued employment and potential termination event accelerations. Additionally, Mr. Baer will be eligible for annual performance-based restricted stock units (Performance RSUs) starting in 2017, with a combined target annual value of $1.875 million across Liberty Media and Liberty Interactive, contingent upon achievement of specific performance metrics.

Key Highlights

  • 1New four-year employment term for Chief Legal Officer Richard N. Baer, effective January 1, 2017, to December 31, 2020.
  • 2Base salary ($901,000) and target bonus (100% of base salary) remain unchanged.
  • 3Introduction of annual performance-based equity incentive awards (Performance RSUs) starting in 2017, with a combined target annual value of $1.875 million.
  • 4One-time grant of stock options for LSXMK, BATRK, and LMCK Series C common stock to Mr. Baer.
  • 5Options vest in two tranches on December 31, 2019, and December 31, 2020, subject to employment.
  • 6Vesting of options commences January 1, 2017, and they expire on December 31, 2023.
  • 7Liberty Interactive will reimburse Liberty Media for its allocable portion of certain payments made to Mr. Baer, excluding performance bonuses and equity awards.

Frequently Asked Questions

The primary change is the extension of his employment term by four years (January 1, 2017 - December 31, 2020) and the introduction of annual performance-based equity incentive awards (Performance RSUs) and a one-time grant of stock options. His base salary and target bonus percentage remain the same.

The stock options will vest in two equal installments: one-half on December 31, 2019, and the remaining half on December 31, 2020, provided Mr. Baer is employed on those dates. The exercise price will be the closing price of the respective stock on June 1, 2016. The potential value depends on the stock prices at the time of vesting and exercise.

Starting in 2017, Mr. Baer will receive annual grants of performance-based restricted stock units. The combined annual target value of these RSUs, along with those from Liberty Interactive, is $1.875 million. The vesting of these RSUs will be contingent on the achievement of specific performance metrics determined by the Compensation Committee.

Liberty Interactive is obligated to reimburse Liberty Media for its allocable share of certain payments made to Mr. Baer under the services agreement, excluding payments directly related to performance bonuses and equity awards, which will be settled directly by the applicable issuer.