UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): November 4, 2005
Warner Music Group Corp.
(Exact name of Co-Registrant as specified in its charter)
| Delaware | 001-32502 | 13-4271875 | ||
| (State or other jurisdiction of incorporation) |
(Commission File Number) | (IRS Employer Identification No.) |
| 75 Rockefeller Plaza, New York, New York | 10019 | |
| (Address of principal executive offices) | (Zip Code) |
Co-Registrant’s telephone number, including area code: (212) 275-2000
WMG Acquisition Corp.
(Exact name of Co-Registrant as specified in its charter)
| Delaware | 333-121322 | 68-0576630 | ||
| (State or other jurisdiction of incorporation) |
(Commission File Number) | (IRS Employer Identification No.) |
| 75 Rockefeller Plaza, New York, New York | 10019 | |
| (Address of principal executive offices) | (Zip Code) |
Co-Registrant’s telephone number, including area code: (212) 275-2000
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
| ¨ | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
| ¨ | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
| ¨ | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
| ¨ | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
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| ITEM 1.01. | ENTRY INTO A MATERIAL DEFINITIVE AGREEMENT. |
Director Restricted Stock Award Agreement
Warner Music Group Corp. (the “Company”) and Shelby W. Bonnie entered into a Director Restricted Stock Award Agreement on November 4, 2005, under which Mr. Bonnie will be granted 1,555 shares of the Company’s common stock, which as of November 4, 2005, represents less than 1% of the common stock of the Company. The restricted stock agreement provides that the restricted shares vest on the first anniversary of the agreement. Such shares shall be forfeited without consideration by Mr. Bonnie at any time prior to vesting upon his cessation of Board membership, with certain exceptions. Mr. Bonnie’s restricted stock agreement is attached to this current report on Form 8-K as Exhibit 10.1.
| ITEM 5.02. | DEPARTURE OF DIRECTORS OR PRINCIPAL OFFICERS; ELECTION OF DIRECTORS; APPOINTMENT OF PRINCIPAL OFFICERS. |
At a meeting of the Board of Directors of the Company on November 4, 2005, and as announced in a press release dated November 7, 2005, attached hereto as Exhibit 99.1, the Board elected, based upon, among other considerations, the recommendation of the Executive, Governance and Nominating Committee, Mr. Bonnie to fill one of two remaining independent directorships in accordance with the Company’s bylaws. As previously announced, the Company expects to add a third independent director within twelve months of the completion of its initial public offering, completed on May 10, 2005. Mr. Bonnie was also appointed by the Board of Directors to the Audit Committee of the Company. The Audit Committee of the Company now consists of Richard Bressler, the Chair, Mr. Bonnie and Scott Jaeckel. Mr. Bonnie was also elected to the Board of Directors of each of WMG Holdings Corp., a wholly-owned subsidiary of the Company, and WMG Acquisition Corp., a wholly-owned subsidiary of WMG Holdings Corp.
Mr. Bonnie is a co-founder of CNET Networks and has been with CNET Networks as both an executive and a member of the Board of Directors since 1993. He has also served as Chief Executive Officer since March 2000 and as Chairman of the Board of Directors of CNET Networks since November of 2000. Mr. Bonnie has also held the positions of Chief Operating Officer and Chief Financial Officer of CNET Networks. Prior to joining CNET Networks, Mr. Bonnie held positions at Tiger Management Corporation, a New York based investment managing firm; Lynx Capital, a private equity fund; and in the mergers and acquisitions department at Morgan Stanley & Co. Inc. Mr. Bonnie is 40 years old.
In connection with his election, and in accordance with the Company’s currently established compensation policies with respect to independent directors, Mr. Bonnie will be paid the pro rata portion of an annual retainer of $160,000 for his service as a director and a member of the Audit Committee. One-half of this retainer (pro rated as applicable) was paid in the form of an initial grant of 1,555 shares of the Company’s common stock. Such shares are subject to the terms of a Director Restricted Stock Award Agreement, which is described in Item 1.01 above. The remainder of the annual retainer (pro rated as applicable) will be paid in cash to Mr. Bonnie in equal installments once a month in arrears as an independent contractor on the Company’s payroll system as long as Mr. Bonnie continues to serve as a director.
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| ITEM 9.01. | FINANCIAL STATEMENTS AND EXHIBITS. |
(c) Exhibits. The following Exhibits are furnished as part of this Current Report on Form 8-K.
| Exhibit No. |
Description | |
| 10.1 | Director Restricted Stock Award Agreement, dated as of November 4, 2005, between Warner Music Group Corp. and Shelby W. Bonnie. | |
| 99.1 | Press Release dated November 7, 2005. | |
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the Co-Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
| Warner Music Group Corp. | ||||||||
| Date: November 7, 2005 | By: | /s/ MICHAEL D. FLEISHER | ||||||
| Michael D. Fleisher | ||||||||
| Chief Financial Officer | ||||||||
| WMG Acquisition Corp. | ||||||||
| Date: November 7, 2005 | By: | /s/ MICHAEL D. FLEISHER | ||||||
| Michael D. Fleisher | ||||||||
| Chief Financial Officer | ||||||||
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EXHIBIT INDEX
| Exhibit No. |
Description | |
| 10.1 | Director Restricted Stock Award Agreement, dated as of November 4, 2005, between Warner Music Group Corp. and Shelby W. Bonnie. | |
| 99.1 | Press Release dated November 7, 2005. | |
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Exhibit 10.1
WARNER MUSIC GROUP CORP.
DIRECTOR RESTRICTED STOCK AWARD AGREEMENT
THIS DIRECTOR RESTRICTED STOCK AWARD AGREEMENT (the “Agreement”), is made, effective as of the 4th day of November, 2005 (hereinafter the “Date of Grant”), between Warner Music Group Corp., a Delaware corporation, (the “Company”), and Shelby W. Bonnie (the “Director”).
R E C I T A L S:
WHEREAS, the Company has adopted the Warner Music Group Corp. 2005 Omnibus Award Plan (the “Plan”), pursuant to which awards of restricted shares of the Company’s Common Stock may be granted to persons including members of the Board of Directors of the Company (the “Board”); and
WHEREAS, the Board has determined that it is in the best interests of the Company and its stockholders to grant the restricted stock award provided for herein (the “Restricted Stock Award”) to the Director in connection with the Director’s services to the Company, such grant to be subject to the terms set forth herein.
NOW THEREFORE, in consideration of the mutual covenants hereinafter set forth, the parties hereto agree as follows:
1. Incorporation by Reference, Etc. The provisions of the Plan are hereby incorporated herein by reference. Except as otherwise expressly set forth herein, this Agreement shall be construed in accordance with the provisions of the Plan and any capitalized terms not otherwise defined in this Agreement shall have the definitions set forth in the Plan. The Board shall have final authority to interpret and construe the Plan and this Agreement and to make any and all determinations under them, and its decision shall be binding and conclusive upon the Director and his legal representative in respect of any questions arising under the Plan or this Agreement.
2. Grant of Restricted Stock Award. The Company hereby grants on the Date of Grant to the Director a Restricted Stock Award consisting of 1,555 shares of Common Stock (hereinafter called the “Restricted Shares”), on the terms and conditions set forth in this Agreement and as otherwise provided in the Plan. The Restricted Shares shall vest in accordance with Section 3(a) hereof.
3. Terms and Conditions.
(a) Vesting. Except as otherwise provided in the Plan and this Agreement, and contingent upon the Director’s continued membership on the Board, one hundred percent (100%) of the Restricted Shares shall vest and become non-forfeitable on the first anniversary of the Award Date (such anniversary, the “Vesting Date”).
(b) Taxes. The Director shall pay to the Company promptly upon request, and in any event at the time the Director recognizes taxable income in respect of the Restricted Stock Award, an amount equal to the taxes, if any, the Company determines it is required to withhold under applicable tax laws with respect to the Restricted Shares. Such payment shall be made in the form of cash.
(c) Certificates. Certificates evidencing the Restricted Shares shall be issued by the Company and shall be registered in the Director’s name on the stock transfer books of the Company promptly after the date hereof, but shall remain in the physical custody of the Company or its designee at all times prior to, in the case of any particular Restricted Shares, the applicable Vesting Date. As a condition to the receipt of this Restricted Stock Award, the Director shall deliver to the Company a stock power, duly endorsed in blank, relating to the Restricted Shares.
(d) Effect of Termination of Services.
(i) Except as provided in subsection (ii) of this Section 3(d), unvested Restricted Shares shall be forfeited without consideration by the Director at any time prior to the Vesting Date upon the Director’s cessation of Board membership.
(ii) Upon the Director’s cessation of Board membership due to death or Disability, any remaining unvested Restricted Shares shall vest on the date of such termination.
(e) Rights as a Stockholder; Dividends. The Director shall be the record owner of the Restricted Shares unless and until such shares are forfeited pursuant to Section 3(d) hereof or sold or otherwise disposed of, and as record owner shall be entitled to all rights of a common stockholder of the Company, including, without limitation, voting rights, if any, with respect to the Restricted Shares; provided that any cash or in-kind dividends paid with respect to unvested Restricted Shares shall be withheld by the Company and shall be paid to the Director, without interest, only when, and if, such Restricted Shares shall become vested. As soon as practicable following the vesting of any Restricted Shares, certificates for such vested Restricted Shares and any cash dividends or in-kind dividends credited to the Director’s account with respect to such Restricted Shares shall be delivered to the Director or the Director’s beneficiary along with the stock power relating thereto.
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(f) Restrictive Legend. All certificates representing Restricted Shares shall have affixed thereto a legend in substantially the following form, in addition to any other legends that may be required under federal or state securities laws:
TRANSFER OF THIS CERTIFICATE AND THE SHARES REPRESENTED HEREBY IS RESTRICTED PURSUANT TO THE TERMS OF THE WARNER MUSIC GROUP CORP. 2005 OMNIBUS AWARD PLAN AND A RESTRICTED STOCK AWARD AGREEMENT, DATED AS OF NOVEMBER 4, 2005, BETWEEN WARNER MUSIC GROUP CORP. AND SHELBY W. BONNIE. A COPY OF SUCH PLAN AND AGREEMENT IS ON FILE AT THE OFFICES OF WARNER MUSIC GROUP CORP.
(g) Transferability. The Restricted Shares may not at any time prior to the Vesting Date (as to any particular Restricted Share) be assigned, alienated, pledged, attached, sold or otherwise transferred or encumbered by the Director and any such purported assignment, alienation, pledge, attachment, sale, transfer or encumbrance shall be void and unenforceable against the Company; provided, that the designation of a beneficiary shall not constitute an assignment, alienation, pledge, attachment, sale, transfer or encumbrance.
4. Miscellaneous.
(a) Notices. Any notice, consent, request or other communication made or given in accordance with this Agreement shall be in writing and shall be deemed to have been duly given when actually received or, if mailed, three days after mailing by registered or certified mail, return receipt requested, or one business day after mailing by a nationally recognized express mail delivery service with instructions for next-day delivery, to those persons listed below at their following respective addresses or at such other address or person’s attention as each may specify by notice to the others:
To the Company:
Warner Music Group Corp.
75 Rockefeller Plaza
New York, New York 10019
Attention: General Counsel
To the Director:
The most recent address for the Director in the records of the Company. The Director hereby agrees to promptly provide the Company with written notice of any change in the Director’s address for so long as this Agreement remains in effect.
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(b) Bound by Plan. By signing this Agreement, the Director acknowledges that he has received a copy of the Plan and has had an opportunity to review the Plan and agrees to be bound by all the terms and provisions of the Plan.
(c) Beneficiary. The Director may file with the Board a written designation of a beneficiary on such form as may be prescribed by the Board and may, from time to time, amend or revoke such designation. If no designated beneficiary survives the Director, the executor or administrator of the Director’s estate shall be deemed to be the Director’s beneficiary.
(d) Successors. The terms of this Agreement shall be binding upon and inure to the benefit of the Company, its successors and assigns, and of the Director and the beneficiaries, executors, administrators, heirs and successors of the Director.
(e) Entire Agreement. This Agreement contains the entire agreement and understanding of the parties hereto with respect to the subject matter contained herein and supersedes all prior communications, representations and negotiations in respect thereto. No change, modification or waiver of any provision of this Agreement shall be valid unless the same be in writing and signed by the parties hereto.
(f) GOVERNING LAW; CONSENT TO JURISDICTION. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF DELAWARE APPLICABLE TO AGREEMENTS MADE AND TO BE WHOLLY PERFORMED WITHIN THAT STATE. ANY ACTION TO ENFORCE THIS AGREEMENT MUST BE BROUGHT IN A COURT SITUATED IN, AND THE PARTIES HEREBY CONSENT TO THE JURISDICTION OF, COURTS SITUATED IN NEW YORK COUNTY, NEW YORK. EACH PARTY HEREBY WAIVES THE RIGHTS TO CLAIM THAT ANY SUCH COURT IS AN INCONVENIENT FORUM FOR THE RESOLUTION OF ANY SUCH ACTION.
(g) JURY TRIAL WAIVER. THE PARTIES EXPRESSLY AND KNOWINGLY WAIVE ANY RIGHT TO A JURY TRIAL IN THE EVENT ANY ACTION ARISING UNDER OR IN CONNECTION WITH THIS AGREEMENT IS LITIGATED OR HEARD IN ANY COURT.
(h) Headings. The headings of the Sections hereof are provided for convenience only and are not to serve as a basis for interpretation or construction, and shall not constitute a part, of this Agreement.
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(i) Signature in Counterparts. This Agreement may be signed in counterparts, each of which shall be an original, with the same effect as if the signatures thereto and hereto were upon the same instrument. The parties hereto confirm that any facsimile copy of another party’s executed counterpart of this Agreement (or its signature page thereof) will be deemed to be an executed original thereof.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement.
| Warner Music Group Corp. | ||
| /s/ DAVID H. JOHNSON | ||
| By: |
David H. Johnson | |
| Title: |
EVP and General Counsel | |
| /s/ SHELBY W. BONNIE | ||
| Shelby W. Bonnie | ||
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STOCK POWER
FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfers unto , 1,555 shares of Common Stock of Warner Music Group Corp., a Delaware corporation, issued pursuant to a Director Restricted Stock Award Agreement between Warner Music Group Corp. and the undersigned, dated November 4, 2005 and standing in the name of the undersigned on the books of said corporation, represented by Certificate No. , and does hereby irrevocably constitute and appoint Warner Music Group Corp. as the undersigned’s true and lawful attorney, for it and in its name and stead, to sell, assign and transfer the said stock on the books of said corporation with full power of substitution in the premises.
| Dated: |
||||
| Shelby W. Bonnie | ||||
Exhibit 99.1
WARNER MUSIC GROUP CORP. ELECTS SHELBY W. BONNIE
TO BOARD OF DIRECTORS
NEW YORK, November 7, 2005—Warner Music Group Corp. (NYSE: WMG) today announced the election of Shelby W. Bonnie to the company’s board of directors. Bonnie, 40, will serve as an independent director on WMG’s board and will sit on the audit committee.
Bonnie is Chairman and Chief Executive Officer of CNET Networks, Inc. (NASDAQ: CNET), a worldwide media company and creator of content environments for the interactive age, in categories including personal technology, games and entertainment, and business technology. Based in San Francisco with a strong international presence in the U.S., Asia and Europe, CNET Networks operates a portfolio of well-known brands.
“On behalf of Warner Music Group, we welcome Shelby Bonnie as an independent director on our board,” said Edgar Bronfman, Jr., Chairman and Chief Executive Officer of WMG. “As Warner Music Group continues to transform in order to seize the opportunities presented by new and rapidly expanding digital distribution platforms, Shelby’s experience founding and now leading a worldwide media company like CNET Networks makes him ideally suited to join our board.”
“Warner Music Group has been aggressive and early in integrating digital platforms across its organization,” said Bonnie. “I’m excited to apply the synergies from my background toward further fueling their success and thought leadership in the digital music space, and helping them deliver on their goals.”
Bonnie co-founded CNET Networks in 1993. Under his leadership, the company has pioneered multiple technological and creative developments that continue to shape the online content industry. In 2004, CNET Networks had revenue of nearly $300 million.
An early proponent of interactive marketing, including online advertising, Bonnie was Chairman of the Interactive Advertising Bureau from 2001 to 2004 and remains the bureau’s chairman emeritus and a member of the executive committee.
Prior to joining CNET Networks, Bonnie held positions at Tiger Management Corporation, a New York-based investment managing firm; Lynx Capital, a private equity fund; and Morgan Stanley’s mergers and acquisitions department. Bonnie earned a B.S. in Commerce from the University of Virginia and an M.B.A. from Harvard University. He resides in the San Francisco Bay Area with his wife and children.
About Warner Music Group
Warner Music Group (WMG) became the only stand-alone music company to be publicly traded in the United States in May 2005. With its broad roster of new stars and legendary artists, Warner Music Group is home to a collection of the best-known record labels in the music industry including Asylum, Atlantic, Bad Boy, East West, Elektra, Lava, Maverick, Nonesuch, Reprise, Rhino, Sire, Warner Bros. and Word. Warner Music International, a leading company in national and international repertoire, operates through numerous international affiliates and licensees in more than 50 countries. Warner Music Group also includes Warner/Chappell Music, one of the world’s leading music publishers, with a catalog of more than one million copyrights worldwide.
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Contact:
Will Tanous
Warner Music Group
(212) 275-2244
will.tanous@wmg.com