EXHIBIT 4.2
LIONS GATE ENTERTAINMENT CORP.
RESTRICTED SHARE UNIT AWARD AGREEMENT
THIS RESTRICTED SHARE UNIT AWARD
AGREEMENT (this “ Agreement ”) is dated as
of [
] by and between Lions Gate Entertainment Corp., a company
recognized under the laws of the Province of British Columbia (the
“ Corporation ”), and [
] (the “ Grantee ”).
W
I T N E S S E T H
WHEREAS , pursuant to that
certain Employment Agreement (the “ Employment
Agreement ”) dated as of [
] between the Corporation and the Grantee, the Corporation
has granted to the Grantee effective as of [
] (the “ Award Date ”), an award of
restricted units (the “ Share Unit Award ” or
“ Award ”), upon the terms and conditions set
forth herein.
NOW THEREFORE , in
consideration of services rendered and to be rendered by the
Grantee, and the mutual promises made herein and the mutual
benefits to be derived therefrom, the parties agree as
follows:
1. Grant
. Subject to the terms of this Agreement, the Corporation hereby
grants to the Grantee a Share Unit Award with respect to an
aggregate of [
] restricted share units (subject to adjustment as provided
in Section 8(a) below) (the “ Share Units ”). As
used herein, the term “Share Unit” shall mean a
non-voting unit of measurement which is deemed for bookkeeping
purposes to be equivalent to one outstanding share of the
Corporation’s Common Shares (subject to adjustment, as
provided in Section 8(a) below) solely for purposes of this
Agreement. The Share Units shall be used solely as a device for the
determination of the payment to eventually be made to the Grantee
if such Share Units vest pursuant to Section 3 below. The
Share Units shall not be treated as property or as a trust fund of
any kind.
The Award is the award referenced in
and required to be granted pursuant to Section [
] of the Employment Agreement.
2.
Vesting .
(a)
Time-Based Vesting . Subject to Sections 7 and 8
below, [
(
) ] Share Units subject to the Award shall vest on the
second anniversary of the Award Date, and [
(
) ] Share Units shall vest on each of the third, fourth and
fifth anniversaries of the Award Date (each such vesting date, a
“ Vesting Date ”).
(b)
Possible Accelerated Vesting on Certain Terminations
. Notwithstanding any other provision herein, the Share Units are
subject to accelerated vesting as follows:
(i) In the
event of a termination of the Grantee’s employment due to the
Grantee’s death, the Award, to the extent outstanding and
unvested, shall automatically become fully vested; and
1
(ii) In
the event of a termination of the Grantee’s employment either
by the Corporation “without cause” or by the Grantee
for “good reason” (as each such term is defined in the
Employment Agreement), (A) at any time before the first
anniversary of the Award Date, the installment of the Award
scheduled to vest on the next Vesting Date after the date of such
termination of employment shall become vested with respect to
seventy-five percent (75%) of the Share Units subject to such
installment; and (B) at any time on or after the first
anniversary of the Award Date and before the fifth anniversary of
the Award Date, the installment of the Award scheduled to vest on
the next Vesting Date after the date of such termination of
employment (the “ Next Installment ”) shall
become vested with respect to one hundred percent (100%) of the
Share Units subject to such installment, and the installment of the
Award scheduled to vest next following the Next Installment (if
any) shall become vested with respect to fifty percent (50%) of the
Share Units subject to such installment. Any portion of the Award
that is not vested after giving effect to the foregoing provisions
shall terminate as of the date of termination of the
Grantee’s employment.
The Award is also subject to
accelerated vesting in connection with a Change of Control, as
provided in Section 8(b) below.
3. Continuance of
Employment . Except as set forth herein, the vesting
schedule requires continued employment or service through each
applicable vesting date as a condition to the vesting of the
applicable installment of the Award and the rights and benefits
under this Agreement. Except as set forth herein, employment or
service for only a portion of the vesting period, even if a
substantial portion, will not entitle the Grantee to any
proportionate vesting or avoid or mitigate a termination of rights
and benefits upon or following a termination of employment or
services as provided in Section 7 below.
Nothing contained in this Agreement
constitutes an employment or service commitment by the Corporation,
confers upon the Grantee any right to remain employed by or in
service to the Corporation or any Subsidiary, interferes in any way
with the right of the Corporation or any Subsidiary at any time to
terminate such employment or services, or affects the right of the
Corporation or any Subsidiary to increase or decrease the
Grantee’s other compensation or benefits, subject in each
case to the Employment Agreement. Nothing in this paragraph,
however, is intended to adversely affect any independent
contractual right of the Grantee without his consent thereto. As
used herein, “ Subsidiary ” means any
corporation or other entity a majority of whose outstanding voting
stock or voting power is beneficially owned directly or indirectly
by the Corporation.
4. Dividend and
Voting Rights .
(a)
Limitations on Rights Associated with Units . The
Grantee shall have no rights as a shareholder of the Corporation,
no dividend rights (except as expressly provided in
Section 4(b)) and no voting rights, with respect to the Share
Units and any Common Shares underlying or issuable in respect of
such Share Units until such Common Shares are actually issued to
and held of record by the Grantee. No adjustments will be made for
dividends or other rights of a holder for which the record date is
prior to the date of issuance of the share certificate.
(b)
Dividend Equivalent Rights Distributions . As of any
date that the Corporation pays a cash dividend on its Common
Shares, the Corporation shall pay the Grantee an amount equal to
the per share cash dividend paid by the Corporation on its Common
Shares on such date multiplied by the number of Share Units
remaining subject to this Award as of the
2
related
dividend payment record date. No such payment shall be made with
respect to any Share Units which, as of such record date, have
either been paid pursuant to Section 6 below or terminated
pursuant to Section 7 below.
5. Restrictions
on Transfer .
The Award and any other rights of the
Grantee under this Agreement (but not with respect to the Common
Shares issued with respect to the Award) are nontransferable,
except that such transfer restrictions shall not apply to:
(i) transfers to the Corporation;
(ii) the
designation of a beneficiary to receive benefits in the event of
the Grantee’s death or, if the Grantee has died, transfers to
the Grantee’s beneficiary, or, in the absence of a validly
designated beneficiary, transfers by will or the laws of descent
and distribution;
(iii) transfers to a family member (or former family member)
of the Grantee pursuant to a domestic relations order if approved
or ratified by the Administrator;
(iv) transfers to a trust or other entity formed primarily for
estate or family planning purposes (such as a family limited
partnership) that is for the benefit of the Grantee, the
Grantee’s spouse, one or more descendants of the Grantee, or
any combination of the foregoing, to the extent the transfer will
not adversely affect the Corporation’s ability to rely on a
Form S-8 Registration Statement with respect to the offer, sale and
issuance of securities in respect of the Award and is otherwise in
compliance with all applicable laws; or
(v) if the
Grantee has suffered a disability, permitted transfers on behalf of
the Grantee by his legal representative.
The Administrator may permit the
Award to be paid to, or otherwise transferred to, other persons or
entities pursuant to such conditions and procedures, including
limitations on subsequent transfers, as the Administrator may, in
its sole discretion, establish in writing. Any permitted transfer
shall be subject to compliance with applicable federal and state
securities laws.
For purposes of this Agreement,
“ Administrator ” means the Board of Directors
of the Corporation (the “ Board ”) or any
committee appointed by the Board or another committee (within its
delegated authority) to administer all or certain aspects of the
Award on behalf of the Corporation.
6. Timing and
Manner of Payment of Share Units . As soon as
administratively practicable following each vesting of the
applicable portion of the total Award (and in all events within two
and one-half (2 1/2) months after the date of such vesting ev
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