|
|
|
|
|
Proposal 1 Election of Directors
|
Under the Investor Rights Agreement, Liberty and Discovery Lightning (together with certain of their affiliates) have agreed that if they sell or transfer any of their
Company common shares to a shareholder or group of shareholders that beneficially own 5% or more of the Companys then outstanding common shares, or that would result in a person or group of persons beneficially owning 5% or more of the
Companys then outstanding common shares, any such transferee would have to agree to the standstill, transfer and voting provisions set forth in the Investor Rights Agreement and the Voting and Standstill Agreement (described below), subject to
certain exceptions set forth in the Investor Rights Agreement.
In addition, the Company has also agreed to provide Liberty, Discovery Lightning and MHR
Fund Management with certain pre-emptive rights on shares that the Company may issue in the future for cash consideration. Furthermore, the Company has agreed that, until November 10, 2020, the
Company will not adopt a poison pill or shareholder rights plan that would prevent Liberty, Discovery Lightning and Dr. John C. Malone, a former director of the Company (together with certain of their affiliates) from
beneficially owning at least 18.5% of the outstanding voting power of the Company in the aggregate.
Amendment to Investor Rights
Agreement
On June 30, 2016, the Company entered into an Agreement and Plan of Merger (the Merger Agreement) with Starz, a Delaware
corporation (Starz) and Orion Arm Acquisition Inc., a Delaware corporation and an indirect wholly-owned subsidiary of the Company (Orion Arm) pursuant to which, on December 8, 2016, Orion Arm merged with and into Starz,
with Starz continuing as the surviving corporation and becoming an indirect wholly-owned subsidiary of the Company (the Merger). In connection with the Merger Agreement, the parties entered into Amendment No. 1 to the Investor
Rights Agreement (Amendment No. 1 to the Investor Rights Agreement), which, among other things, requires the Company to call a shareholder meeting in order to seek the approval of its shareholders for any issuance of New Issue
Securities (as defined therein) to the Investors (as defined therein) pursuant to the pre-emptive rights granted in the Investor Rights Agreement, that occurs between the date of such shareholder meeting and
the date that is five years following such meeting. Pursuant to Amendment No. 1 to the Investor Rights Agreement, MHR Fund Management, Liberty, Discovery Lightning, Liberty Global, Discovery, and the affiliated funds of MHR Fund Management
party thereto agreed to vote in favor of such approval, as has Dr. Malone pursuant to the Voting and Standstill Agreement (discussed below). The Company agreed that it will not issue any New Issue Securities until it obtains shareholder
approval for such issuance if shareholder approval would be required in order to give effect to the pre-emptive rights granted in the Investor Rights Agreement.
Voting and Standstill Agreement
On
November 10, 2015, the Company entered into a voting and standstill agreement with Liberty Global, Discovery, Liberty, Discovery Lightning, Dr. Malone and certain affiliates of MHR Fund Management (the Voting and Standstill
Agreement). Under the Voting and Standstill Agreement, Liberty, Discovery Lightning and Dr. Malone have agreed that, until November 10, 2020 (the Standstill Period), they (together with certain of their affiliates) will
not beneficially own more than 18.5% of the Companys outstanding voting power in the aggregate.
During the Standstill Period, Liberty, Discovery Lightning and
Dr. Malone have each agreed to vote, in any vote of the Companys shareholders, all of the Companys common shares beneficially owned by them (together with certain of their affiliates) in the aggregate in excess of 13.5% of the
Companys outstanding voting power in the aggregate in the same proportion as the votes cast by shareholders other than Liberty, Discovery Lightning and Dr. Malone (together with certain of their affiliates). After the expiration of the
Standstill Period, Liberty, Discovery Lightning and Dr. Malone have agreed to vote, in any vote of the Companys shareholders on a merger, amalgamation, plan of arrangement, consolidation, business combination, third party tender offer,
asset sale or other similar transaction involving the Company or any of the Companys subsidiaries (and any proposal relating to the issuance of capital, increase in the authorized capital or amendment to any constitutional documents in
connection with any of the foregoing), all of the Companys common shares beneficially owned by them (together with certain of their affiliates) in excess of 18.5% of the Companys outstanding voting power in the aggregate in the same
proportion as the votes cast by shareholders other than Liberty, Discovery Lightning and Dr. Malone (together with certain of their affiliates).
In addition,
each of Liberty, Discovery Lightning, Dr. Malone and MHR Fund Management (together with certain of their affiliates) has agreed that as long as any of them have the right to nominate at least one representative to the Board, each of them will
vote all of the Companys common shares owned by them (together with certain of their affiliates) in favor of each of the others respective director nominees, subject to certain exceptions set forth in the Voting and Standstill Agreement.
Under the Voting and Standstill Agreement, Liberty, Discovery Lightning and Dr. Malone (together with certain of their affiliates) have also agreed that if
they sell or transfer any of their Company common shares to a shareholder or group of shareholders that beneficially own 5% or more of the Companys common shares, or that would result in a person or group of persons beneficially owning 5% or
more of the Companys common shares, any such transferee would have to agree to the standstill, transfer and voting provisions set forth in the Investor Rights Agreement and the Voting and Standstill Agreement.
The Voting and Standstill Agreement also includes certain other standstill restrictions on Liberty, Discovery Lightning and Dr. Malone that will be in effect during
the Standstill Period.
Lions Gate 2020 Proxy Statement 17