01—Abstract
Summary
Summary of the 10-K/A filed April 30, 2009. Cited figures are marked; the original filing is the authoritative source.
This Amendment No. 1 to the Form 10-K of Live Nation, Inc. (now Live Nation Entertainment, Inc.) for the fiscal year ended December 31, 2008 supplies Part III information: directors and executive officers, executive compensation, security ownership, related-person transactions, director independence, and auditor fees.
The filing states that the financial statements are incorporated by reference to the original Form 10-K, and the cover page reports a non-affiliate market value of approximately $454.7 milliona as of June 30, 2008 and 78,299,209 outstanding common shares as of February 23, 2009. The filing describes a pending merger with Ticketmaster Entertainment, Inc. and says the April 2009 amendment to CEO Michael Rapino's employment agreement provides a cash payment upon closing of that merger. Rapino's 2008 total compensation is reported as $8,504,881, and the compensation committee states that 2008 Adjusted Operating Income reached 103% of the $189 million company target.
Bonuses were paid partly in restricted stock vesting tied to 2008 targets, which the committee determined were achieved in February 2009. Governance disclosures show a ten-member board, seven of whom are independent, and an audit committee chaired by Jeffrey T. Hinson.
Ernst & Young LLP fees totaled $7,785 thousandb for 2008 compared with $7,394 thousand for 2007, with audit fees of $6,759 thousand. Related-party items include $4.5 million paid in a lump sum to KSC for Michael Cohl's consulting services, about $13.2 million paid to Clear Channel for advertising, and about $0.8 million under lease and licensing agreements with Clear Channel.
02—Key points
Key Highlights
- Pending merger with Ticketmaster Entertainment, Inc.: the filing references the pending Merger and an April 2009 amendment to Rapino's employment agreement providing a cash payment upon its closing.
- CEO Michael Rapino's 2008 total compensation was $8,504,881, including a $1,950,000 non-equity incentive payment after a $2,000,000 performance bonus was offset by a retention bonus.
- 2008 Adjusted Operating Income target of $189 million was reported as achieved at 103% on a pro forma basis, triggering vesting of Rapino's 2008 restricted stock awards (50% vested March 31, 2009).
- Board of ten directors, seven independent; the board met nine times in 2008, and the audit committee met six times.
- Ernst & Young LLP total fees were $7,785 thousand for 2008 versus $7,394 thousand for 2007.
- Related-party exposure includes a $4.5 million lump-sum payment to KSC for Michael Cohl's consulting services, about $13.2 million paid to Clear Channel for advertising, and about $0.8 million under Clear Channel leases and licenses.
- Largest disclosed beneficial owners include Shapiro Capital Management LLC at 14.1% and Capital Research Global Investors at 7.6%; directors and executive officers as a group held 6.5%.
03—Questions
Frequently Asked Questions
What is the pending Merger mentioned in the filing?
The filing states that Live Nation has a pending merger with Ticketmaster Entertainment, Inc., referred to as the Merger. The April 2009 amendment to Michael Rapino's employment agreement provides a cash payment upon the Merger's closing and accelerated vesting of his unvested equity awards, and the filing says a new conditional employment agreement will take effect only if the Merger is consummated.
How was executive compensation tied to performance in 2008?
The Compensation Committee based 2008 cash performance bonuses on Adjusted Operating Income on a pro forma basis. The company was reported at 103% of its $189 million target, and divisional targets for North American Music (131%) and International Music (94%) were also cited. Rapino's 2008 restricted stock awards vested 50% on March 31, 2009 after the targets were determined to be met.
How many shares were outstanding and who were the largest holders?
The cover page reports 78,299,209 outstanding common shares as of February 23, 2009. The beneficial ownership table uses 84,565,415 shares as of April 23, 2009. Shapiro Capital Management LLC reported 11,926,867 shares (14.1%), Capital Research Global Investors reported 6,425,000 shares (7.6%), and Harris Associates L.P. reported 5,006,490 shares (5.9%), based on Schedule 13G filings.
What related-party transactions are disclosed?
The filing discloses that KSC received $0.8 million, $1.2 million and $0.6 million under Michael Cohl's services agreement for 2008, 2007 and 2006, and that a $4.5 million lump-sum payment was made in connection with the June 2008 amendment. Two directors, L. Lowry Mays and Randall T. Mays, also serve as directors of Clear Channel, with which the company paid about $13.2 million for advertising and about $0.8 million under leases and licenses in 2008.
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