SCHEDULE 14A INFORMATION

PROXY STATEMENT PURSUANT TO SECTION 14(a) OF THE
SECURITIES EXCHANGE ACT OF 1934

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LIONS GATE ENTERTAINMENT CORP.

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LIONS GATE ENTERTAINMENT CORP.

 

 

 

 

 

NOTICE OF ANNUAL GENERAL MEETING

OF SHAREHOLDERS

To Be Held September 15, 2009

 

 

 

 

 

To Our Shareholders:

 

The 2009 Annual General Meeting of Shareholders of Lions Gate Entertainment Corp. will be held at the Soho Metropolitan Hotel, 318 Wellington Street West, Toronto, Ontario, Canada M5V 3T4, on Tuesday, September 15, 2009, beginning at 10:00 a.m., local time. At the meeting, shareholders will act on the following matters:

 

1. Elect 12 directors, each for a term of one year or until their successors are duly elected and qualified;

 

2. Re-appoint Ernst & Young LLP as the Company’s independent registered public accounting firm for the fiscal year ending March 31, 2010 and authorize the Company’s Audit Committee to determine the remuneration to be paid to Ernst & Young LLP;

 

3. Receive the audited consolidated financial statements of the Company for the fiscal year ended March 31, 2009, together with the auditor’s report thereon; and

 

4. Transact such further and other business as may properly come before the meeting and any continuations, adjournments or postponements thereof.

 

Shareholders of record at the close of business on July 20, 2009 are entitled to vote at the meeting or any continuations, adjournments or postponements thereof. It is expected that these materials first will be mailed to shareholders on or about August 17, 2009.

 

By Order of Our Board of Directors,

Jon Feltheimer

Chief Executive Officer and Co-Chairman of the Board

 

Vancouver, British Columbia

August 17, 2009

 

 

 

 

 

TABLE OF CONTENTS

 

2009 ANNUAL GENERAL MEETING OF SHAREHOLDERS

OF

LIONS GATE ENTERTAINMENT CORP.

 

 

PROXY STATEMENT

 

 

This proxy statement is part of a solicitation of proxies by the Board of Directors and management of Lions Gate Entertainment Corp. and contains information relating to our annual general meeting of shareholders (the “Annual Meeting”) to be held on Tuesday, September 15, 2009, beginning at 10:00 a.m., local time, at the Soho Metropolitan Hotel, 318 Wellington Street West, Toronto, Ontario, Canada M5V 3T4, and to any continuations, adjournments or postponements thereof. All dollar figures contained in this proxy statement are United States dollars, unless otherwise indicated. The notice of the Annual Meeting, this proxy statement and the enclosed proxy card first will be mailed to shareholders on or about August 17, 2009.

 

What is the purpose of the Annual Meeting?

 

At the Annual Meeting, shareholders will act upon the matters outlined in the accompanying notice of meeting, including the election of directors. In addition, after the formal portion of the meeting, our management will report on our performance during fiscal 2009 and respond to appropriate questions from shareholders.

 

Who is entitled to vote at the Annual Meeting?

 

Only shareholders of record of the Company’s common shares (NYSE: LGF) at the close of business on July 20, 2009 (the “Record Date”) are entitled to receive notice of the Annual Meeting and to vote the common shares that they held on that date at the meeting, or any continuations, adjournments or postponements of the meeting. Each outstanding common share entitles its holder to cast one vote on each matter to be voted upon. As of the Record Date, 117,166,526 common shares were outstanding and entitled to vote and held by approximately 790 shareholders of record.

 

Who can attend and vote at the Annual Meeting?

 

Only registered shareholders of the Company or the persons they appoint as their proxies are permitted to attend and vote at the Annual Meeting. Most shareholders of the Company are “non-registered” shareholders (“Non-Registered Shareholders”) because the shares they own are not registered in their names but are, instead, registered in the name of the brokerage firm, bank or trust company through which they purchased the shares. Shares beneficially owned by a Non-Registered Shareholder are registered either: (i) in the name of an intermediary (an “Intermediary”) that the Non-Registered Shareholder deals with in respect of the shares of the Company (Intermediaries include, among others, banks, trust companies, securities dealers or brokers and trustees or administrators of self-administered Registered Retirement Savings Plans, Registered Retirement Income Funds, Registered Education Savings Plans and similar plans); or (ii) in the name of a clearing agency (such as The Canadian Depository for Securities Limited or The Depository Trust & Clearing Corporation) of which the Intermediary is a participant. In accordance with applicable securities law requirements, the Company will have distributed copies of the notice of Annual Meeting, this proxy statement and the proxy card (collectively, the “Meeting Materials”) to the clearing agencies and Intermediaries for distribution to Non-Registered Shareholders.

Intermediaries are required to forward the Meeting Materials to Non-Registered Shareholders unless a Non-Registered Shareholder has waived the right to receive them. Intermediaries often use service companies to forward the Meeting Materials to Non-Registered Shareholders. Generally, Non-Registered Shareholders who have not waived the right to receive Meeting Materials will either:

 

(i) be given a voting instruction form which is not signed by the Intermediary and which, when properly completed and signed by the Non-Registered Shareholder and returned to the Intermediary or its service company, will constitute voting instructions (often called a “voting instruction form”) which the Intermediary must follow. Typically, the voting instruction form will consist of a one-page printed form. Sometimes, instead of the one-page pre-printed form, the voting instruction form will consist of a regular printed proxy form accompanied by a page of instructions which contains a removable label with a bar code and other information. In order for the form of proxy to validly constitute a voting instruction form, the Non-Registered Shareholder must remove the label from the instructions and affix it to the form of proxy, properly complete and sign the form of proxy and submit it to the Intermediary or its service company in accordance with the instructions of the Intermediary or its service company; or

 

(ii) be given a form of proxy which has already been signed by the Intermediary (typically by a facsimile, stamped signature), which is restricted to the number of shares beneficially owned by the Non-Registered Shareholder but which is otherwise not completed by the Intermediary. Because the Intermediary has already signed the form of proxy, this form of proxy is not required to be signed by the Non-Registered Shareholder when submitting the proxy. In this case, the Non-Registered Shareholder who wishes to submit a proxy should properly complete the form of proxy and deposit it with the Company, c/o IVS Associates, Inc., 1925 Lovering Avenue, Wilmington, DE 19806.

 

In either case, the purpose of these procedures is to permit Non-Registered Shareholders to direct the voting of the shares of the Company they beneficially own. Should a Non-Registered Shareholder who receives one of the above forms wish to vote at the Annual Meeting in person (or have another person attend and vote on behalf of the Non-Registered Shareholder), the Non-Registered Shareholder should request a legal proxy from their Intermediary. Instructions for obtaining legal proxies may be found on the voting instruction form.

 

A Non-Registered Shareholder may revoke a voting instruction form or a waiver of the right to receive Meeting Materials and to vote which has been given to an Intermediary at any time by written notice to the Intermediary, provided that an Intermediary is not required to act on a revocation of a voting instruction form or of a waiver of the right to receive Meeting Materials and to vote which is not received by the Intermediary at least seven days prior to the Annual Meeting.

 

What constitutes a quorum?

 

A quorum is necessary to hold a valid meeting of shareholders. The presence at the Annual Meeting, in person or by proxy, of two holders of the Company’s common shares outstanding on the Record Date who, in the aggregate, hold at least 10% of the issued common shares of the Company, will constitute a quorum.

 

How do I vote at the Annual Meeting?

 

If you complete and properly sign the accompanying proxy card and return it to us, it will be voted as you direct. If you are a registered shareholder and you attend the Annual Meeting, you may deliver your completed proxy card in person or may vote in person. “Street name” shareholders who wish to vote at the Annual Meeting will need to obtain a proxy from the institution that holds their shares, see Who can attend and vote at the Annual Meeting? above. At the Annual Meeting, one or more representatives from IVS Associates, Inc., an independent, third-party company, shall be appointed to act as scrutineers. These scrutineers will determine the number of common shares represented at the Annual Meeting, the existence of a quorum and the validity of proxies, will count the votes and ballots, if required, and will determine and report the results to us.

Can I change my vote after I return my proxy card?

 

Yes. Even after you have submitted your proxy, you may change your vote at any time before the proxy is exercised by filing with our Corporate Secretary at one of our principal executive offices either a notice of revocation or a duly executed proxy bearing a later date. The powers of the proxy holders will be suspended if you attend the Annual Meeting in person and so request, although attendance at the Annual Meeting will not by itself revoke a previously granted proxy.

 

What are the board’s recommendations?

 

The enclosed proxy is solicited on behalf of our Board of Directors and management. Unless you give other instructions on your proxy card, the persons named as proxy holders on the proxy card will vote in accordance with the recommendations of our Board of Directors set forth with the description of each item in this proxy statement. In summary, our Board of Directors recommends a vote:

 

 

Our Board of Directors does not know of any other matters that may be brought before the Annual Meeting, nor does it foresee or have reason to believe that the proxy holders will have to vote for substitute or alternate board nominees. If any other matter should properly come before the Annual Meeting or any nominee is not available for election, the proxy holders will vote as recommended by our Board of Directors or, if no recommendation is given, in accordance with their best judgment.

 

What vote is required to approve each item?

 

In order to be approved, the proposals included in this proxy statement — for the election of each of the nominated directors (Proposal 1) and the re-appointment of Ernst & Young LLP as our independent registered public accounting firm (Proposal 2) — each requires the affirmative vote of a majority of the Company’s common shares present or represented by proxy. Abstentions and broker non-votes will not be counted in determining the number of shares necessary for approval of any item.

 

Who pays for the preparation of this proxy statement?

 

We will pay the cost of preparing, assembling and mailing this proxy statement, notice of meeting and enclosed proxy card. In addition to the use of mail, our employees may solicit proxies personally and by telephone. Our employees will receive no compensation for soliciting proxies other than their regular salaries. We may request banks, brokers and other custodians, nominees and fiduciaries to forward copies of the proxy materials to their principals and to request authority for the execution of proxies and we may reimburse those persons for their expenses incurred in connection with these activities. We will compensate only independent third-party agents that are not affiliated with us but who solicit proxies. At this time, we do not anticipate that we will be retaining a third-party solicitation firm, but should we determine, in the future, that it is in our best interests to do so, we will retain a solicitation firm and pay all costs and expenses associated with retaining this solicitation firm.

 

May I propose actions for consideration at next year’s annual general meeting of shareholders?

 

Yes. Under U.S. laws, for your proposal to be considered for inclusion in our proxy statement for next year’s annual meeting, we must receive your written proposal no later than April 19, 2010. You should also be aware that your proposal must comply with U.S. Securities and Exchange Commission (the “SEC”) regulations regarding inclusion of shareholder proposals in company-sponsored proxy materials. Shareholder proposals submitted as per the Business Corporations Act (British Columbia) (the “BC Act”) to be presented at the next annual general meeting of shareholders must be received by our Corporate Secretary at our registered office no later than June 12, 2010, and must comply with the requirements of the BC Act.

If the date of the 2010 annual meeting is advanced or delayed by more than 30 days from the date of the 2009 annual meeting, under U.S. laws, shareholder proposals intended to be included in the proxy statement for the 2010 annual meeting must be received by us within a reasonable time before we begin to print and mail the proxy statement for the 2010 annual meeting. Upon any determination that the date of the 2010 annual meeting will be advanced or delayed by more than 30 days from the date of the 2009 annual meeting, we will disclose the change in the earliest practicable Quarterly Report on Form 10-Q.

 

SEC rules also govern a company’s ability to use discretionary proxy authority with respect to shareholder proposals that were not submitted by the shareholders in time to be included in the proxy statement. In the event a shareholder proposal is not submitted to us prior to July 28, 2010, the proxies solicited by our Board of Directors for the 2010 annual meeting of shareholders will confer authority on the proxyholders to vote the shares in accordance with the recommendations of our Board of Directors if the proposal is presented at the 2010 annual meeting of shareholders without any discussion of the proposal in the proxy statement for such meeting. If the date of the 2010 annual meeting is advanced or delayed more than 30 days from the date of the 2009 annual meeting, then the shareholder proposal must have been submitted to us within a reasonable time before we mail the proxy statement for the 2010 annual meeting.

 

Important Notice Regarding the Availability of Proxy Materials for the Shareholder Meeting to Be Held on September 15, 2009

 

The notice of Annual Meeting, this proxy statement and the enclosed proxy card will be mailed to shareholders on or about August 17, 2009. Our proxy statement and fiscal 2009 Annual Report to Shareholders will also available in the Investors/Governance Documents section on our website at www.lionsgate.com.

 

 

 

 

NO PERSON IS AUTHORIZED ON BEHALF OF THE COMPANY TO GIVE ANY INFORMATION OR TO MAKE ANY REPRESENTATIONS WITH RESPECT TO THE PROPOSALS TO BE VOTED ON AT THE ANNUAL MEETING, OTHER THAN THE INFORMATION AND REPRESENTATIONS CONTAINED IN THIS PROXY STATEMENT, AND, IF GIVEN OR MADE, SUCH INFORMATION AND/OR REPRESENTATIONS MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED, AND THE DELIVERY OF THIS PROXY STATEMENT SHALL, UNDER NO CIRCUMSTANCES, CREATE ANY IMPLICATION THAT THERE HAS BEEN NO CHANGE IN THE AFFAIRS OF THE COMPANY SINCE THE DATE HEREOF.

 

 

 

 

Our registered and head office is located at 1055 West Hastings Street, Suite 2200, Vancouver, British Columbia V6E 2E9, and our telephone number there is (877) 848-3866. Our principal executive offices are located at our head office and at 2700 Colorado Avenue, Suite 200, Santa Monica, California 90404, and our telephone number there is (310) 449-9200. Our website is located at www.lionsgate.com. Website addresses referred to in this proxy statement are not intended to function as hyperlinks, and the information contained on our website is not a part of this proxy statement. As used in this proxy statement, unless the context requires otherwise, the terms “we,” “us,” “our” and the “Company” refer to Lions Gate Entertainment Corp. and its subsidiaries.

 

 

 

 

The date of this proxy statement is August 17, 2009

 

The following table presents certain information about beneficial ownership of our common shares as of July 20, 2009 by each person (or group of affiliated persons) who is known by us to own beneficially more than 5% of our common shares. Except as indicated in the footnotes to this table, the persons named in the table have sole voting and dispositive power with respect to all common shares shown as beneficially owned by them, subject to community property laws, where applicable.

 

 

 

 

The following table presents certain information about beneficial ownership of our common shares as of July 20, 2009 by (i) each director, nominee for director and executive officer, and (ii) all current directors and executive officers as a group. Except as indicated in the footnotes to this table, the persons named in the table have sole voting and dispositive power with respect to all common shares shown as beneficially owned by them, subject to community property laws, where applicable. Except for common shares in brokerage accounts, which may, from time to time (and up to a maximum of 10,000 common shares), together with other securities in the account, serve as collateral for margin loans made in such accounts, no shares reported as beneficially owned have been pledged as security for any loan or indebtedness.

 

 

 

 

ELECTION OF DIRECTORS; CONTINUING DIRECTOR NOMINEES

 

On July 27, 2009, as permitted by Canadian law and our Articles, our Board of Directors set the number of directors at 12 for the ensuing fiscal year. Our Board of Directors is limited by our Articles to set a minimum of five directors and a maximum of 18 directors.

 

Nominees for Directors

 

On February 6, 2009, we redeemed all of our outstanding Preferred Shares, Restricted Voting, Non-Transferable Series B (the “Series B Preferred Shares”) for a redemption price of $100.00. The Series B Preferred Shares ceased to have the exclusive and separate right to elect Mark Amin, a current director, to be a member of our Board of Directors. Mr. Amin will not stand for re-election at the Annual Meeting but will continue to serve as a member of our Board of Directors until the date of the Annual Meeting.

 

On July 9, 2009, we entered into a letter agreement with Dr. Rachesky in which we agreed, among other things, to nominate Dr. Rachesky for election to our Board of Directors at the Annual Meeting and to recommend the election and solicit proxies for the election of Dr. Rachesky. Dr. Rachesky will replace Mr. Amin on our Board of Directors if elected at the Meeting.

 

Laurie May, a current director of the Company, will also not stand for re-election at the Annual Meeting. Ms. May will, however, continue to serve as a member of our Board of Directors until the date of the Annual Meeting. Phyllis Yaffe, a director nominee, has been nominated by our Board of Directors to replace Ms. May if elected at the Meeting.

 

Upon the recommendation of the Nominating & Corporate Governance Committee, the 12 persons named below have been nominated for election as directors. Each nominee, if elected at the Annual Meeting, will serve until our 2010 Annual General Meeting of Shareholders, or until his or her successor is duly elected or appointed, unless his or her office is earlier vacated in accordance with our Articles.

 

The nominees have consented to serve on our Board of Directors and our Board of Directors has no reason to believe that they will not serve if elected. However, if any of them should become unavailable to serve as a director, and if our Board of Directors has designated a substitute nominee, the persons named as proxies will vote for this substitute nominee. There are no family relationships among the nominees for directors or executive officers of the Company. Ages are as of July 1, 2009. With the exception of Dr. Rachesky and Ms. Yaffe, the nominees listed below are current directors of the Company.

 

Biographical Information on Nominees

 

Norman Bacal.  Mr. Bacal became a director in December 2004. Mr. Bacal has been a partner with the law firm of Heenan Blaikie LLP since 1987, and has been co-managing partner of the firm since 1997. Mr. Bacal is 53 years old and his place of residence is Toronto, Ontario.

 

Michael Burns.  Mr. Burns became a director in August 1999 and has been our Vice Chairman since March 2000. During his tenure at Prudential Securities Inc.’s Los Angeles Investment Banking Office from 1991 to March 2000, Mr. Burns served as Managing Director and Head of the Office. Mr. Burns is Chairman and a director of Novica.com, a privately held company, and a director of Next Point, Inc., a privately held company of which the Company owns a 43% interest (“Break.com”). Mr. Burns is 50 years old and his place of residence is Los Angeles, California.

 

Arthur Evrensel.  Mr. Evrensel became a director in September 2001 and is Chairman of the Compensation Committee. Mr. Evrensel has been a partner with the law firm of Heenan Blaikie LLP since 1992. Mr. Evrensel is 50 years old and his place of residence is North Vancouver, British Columbia.

 

Jon Feltheimer.  Mr. Feltheimer became a director in January 2000 and Co-Chairman of our Board of Directors in June 2005, and has been our Chief Executive Officer since March 2000. Mr. Feltheimer worked for Sony Pictures Entertainment from 1991 to 1999, serving as Founder and President of TriStar Television from 1991 to 1993, as President of Columbia TriStar Television from 1993 to 1995, and from 1995 to 1999, as President of Columbia TriStar Television Group and Executive Vice President of Sony Pictures Entertainment. Mr. Feltheimer is a director of Horror Entertainment, LLC, a privately held company of which the Company owns a 33% interest (“FEARnet”). Mr. Feltheimer is 57 years old and his place of residence is Los Angeles, California.

 

Morley Koffman, Q.C.  Mr. Koffman has been a director since November 1997 and is a member of the Audit Committee and Chairman of the Nominating & Corporate Governance Committee. Mr. Koffman is a lawyer with the firm of Koffman Kalef LLP, where he has practiced since 1993. Mr. Koffman is 79 years old and his place of residence is Vancouver, British Columbia.

 

Harald Ludwig.  Mr. Ludwig previously served as a director from November 1997 to December 2004, and was re-appointed to our Board of Directors in June 2005. Mr. Ludwig is currently Co-Chairman of our Board of Directors, the Chairman of the Strategic Advisory Committee and a member of the Compensation Committee. Since 1985, Mr. Ludwig has served as President of Macluan Capital Corporation, a leveraged buy-out company. Mr. Ludwig is a director, a member of the Governance Committee and Chairman of the Compensation Committee of West Fraser Timber Co. Limited, a public company listed on the Toronto Stock Exchange. Mr. Ludwig is 54 years old and his place of residence is West Vancouver, British Columbia.

 

G. Scott Paterson.  Mr. Paterson has been a director since November 1997 and is Chairman of the Audit Committee and a member of the Strategic Advisory Committee. Mr. Paterson is Vice Chairman of NeuLion Inc., a public company listed on the Toronto Stock Exchange and a leading provider of IPTV services to the NFL, NHL, and NCAA, amongst others. In October 2008, NeuLion merged with JumpTV Inc., a company where Mr. Paterson had been Chairman since January 2002. Mr. Paterson is also Chairman of Automated Benefits Corp., a public company listed on the Toronto Venture Stock Exchange, a director of Run of River Power, Inc., a public company listed on the Toronto Venture Stock Exchange, and Chairman of the Merry Go Round Children’s Foundation, a position he has held since he founded the charity in 1997. From October 1998 to December 2001, Mr. Paterson served as Chairman and Chief Executive Officer of Yorkton Securities, Inc., which was then the leading underwriter of technology and film and entertainment companies in Canada. Mr. Paterson is also the former Chairman of the Canadian Venture Stock Exchange and a former Vice Chairman of the Toronto Stock Exchange. Mr. Paterson is a graduate of the Institute of Corporate Directors (2009) at the Rotman Business School, University of Toronto. In December 2001, Mr. Paterson entered into a settlement agreement with the Ontario Securities Commission in connection with conduct that was, in the view of the Commission, contrary to the public interest in connection with certain corporate finance and trading activities engaged in by Mr. Paterson and the investment dealer with which he was associated. Mr. Paterson has fulfilled the terms of the settlement agreement which provided that he could not be registered under the Securities Act (Ontario) until December 19, 2003, that he make a voluntary payment to the Commission of $1 million Canadian dollars and that he temporarily cease trading for a six-month period. There were no allegations of securities rule or law breaches. Mr. Paterson is 45 years old and his place of residence is Toronto, Ontario.

Mark H. Rachesky, M.D.  Dr. Rachesky, a director nominee, is a co-founder and the President of MHR Fund Management LLC (founded in 1996) and affiliates, investment managers of various private investment funds that invest in inefficient market sectors, including distressed investments and special situation equities. Dr. Rachesky currently serves as Non-Executive Chairman of the board of directors of Leap Wireless International, Inc., a wireless communications company listed on the NASDAQ Stock Market, Loral Space & Communications Inc., a satellite communications company listed on the NASDAQ Stock Market, and Telesat Canada, a satellite communications company. Dr. Rachesky also serves on the board of directors of Emisphere Technologies, Inc., a biopharmaceutical company listed on the OTC Bulletin Board. Dr. Rachesky holds an M.B.A. from the Stanford University School of Business, an M.D. from the Stanford University School of Medicine, and a B.A. from the University of Pennsylvania. Dr. Rachesky is 50 years old and his place of residence is New York, New York.

 

Daryl Simm.  Mr. Simm became a director in September 2004 and is a member of the Compensation Committee and the Nominating & Corporate Governance Committee. Since 1998, Mr. Simm has been Chairman and Chief Executive Officer of Omnicom Media Group, a division of Omnicom Group, Inc., of which he is an officer. Omnicom Media Group companies provide media planning and buying and related services to advertisers. Mr. Simm is 48 years old and his place of residence is Scarsdale, New York.

 

Hardwick Simmons.  Mr. Simmons became a director in June 2005 and is a member of the Strategic Advisory Committee and the Nominating & Corporate Governance Committee. During his tenure at The NASDAQ Stock Market Inc. from February 2001 to June 2003, Mr. Simmons served first as Chief Executive Officer and then as Chairman and Chief Executive Officer. From May 1991 to December 2000, Mr. Simmons served as President and Chief Executive Officer of Prudential Securities Incorporated. Mr. Simmons is currently the lead director, the Chairman of the Audit Committee and a member of the Corporate Governance, Nominating and Compensation Committee for Raymond James Financial, a public company listed on the New York Stock Exchange. Mr. Simmons is 69 years old and his place of residence is Marion, Massachusetts.

 

Brian V. Tobin.  Mr. Tobin became a director in January 2004 and is a member of the Audit Committee and the Strategic Advisory Committee. Mr. Tobin is currently the President of BVT Associates Inc., a consulting company, a Senior Business Advisor with Fraser Milner Casgrain LLP in Toronto, Canada, and is Special Advisor for the Canadian Youth Business Foundation. Mr. Tobin has been a consultant since 2002 and, prior to that, held numerous political positions in Canada, both federal and provincial, including as Federal Minister of Industry from October 2000 to January 2002, and Premier of Newfoundland and Labrador from 1996 to 2000. Mr. Tobin is a director and member of the Human Resources & Compensation Committee of Aecon Group Inc., a public company listed on the Toronto Stock Exchange, Vice Chairman of the board of directors and a member of the Audit Committee of Consolidated Thompson — Lundmark Gold Mines Ltd., a public company listed on the Toronto Stock Exchange, and Chairman of the board of directors and a member of the Compensation, Nominating and Corporate Governance Committee of New Flyer Industries Inc., a public company listed on the Toronto Stock Exchange. Mr. Tobin is also a director of Canpages Inc. and Marport Canada, Inc., both privately held companies. Mr. Tobin is 54 years old and his place of residence is Manotick, Ontario.

 

Phyllis Yaffe.  Ms. Yaffe is a director nominee. From June 2005 to December 2007, Ms. Yaffe was Chief Executive Officer and a member of the board of directors of Alliance Atlantis Communications, a media company for whom she has worked in several capacities since 1998. The Company was acquired by CanWest Global Communications and an affiliate of Goldman Sachs in 2007. Currently, Ms. Yaffe is Chair of the Nominating and Governance Committee and a member of the Salary and Organization Committee of Torstar Corporation, a public company listed on the Toronto Stock Exchange, and a member of the Audit Committee of Cineplex Entertainment LP. The units of Cineplex Galaxy Income Fund, which owns approximately 99.6% of Cineplex Entertainment LP, are traded on the Toronto Stock Exchange. Ms. Yaffe is also Vice-Chair of the Board of Governors of Ryerson University, is on the Executive Board of Governor’s of the World Wildlife Fund Canada, and the Chair of Women Against Multiple Sclerosis (Canada). In 1999, Ms. Yaffe was selected as the Canadian Women in Communications Woman of the Year, and received the Lifetime Achievement Award from Women in Film and Television in April 2000. In 2006, Ms. Yaffe was included in the Women’s Executive Network’s list of Canada’s 100 Most Powerful Women and in November 2007, she was inducted into the Canadian Association of Broadcasters’ Broadcast Hall of Fame. Ms. Yaffe is 60 years old and her place of residence is Toronto, Canada.

Vote Required and Board of Directors Recommendation

 

The affirmative vote of a majority of common shares present at the Annual Meeting or represented by proxy is required for the election of each of the nominated directors. For purposes of this proposal, abstentions and broker non-votes will not be counted in determining the number of votes necessary for the election of each of the nominated directors.

 

Unless such authority is withheld, the proxies given pursuant to this solicitation will be voted FOR the election of directors. Our board of directors recommends a vote for each of the nominees.

RE-APPOINTMENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

 

At the request of the Audit Committee, Ernst & Young LLP will be nominated at the Annual Meeting for re-appointment as the Company’s independent registered public accounting firm at a remuneration to be fixed by the Audit Committee. Ernst & Young LLP has been our independent registered public accounting firm since August 2001.

 

Representatives of Ernst & Young LLP are expected to be present at the Annual Meeting, and will have the opportunity to make a statement if they desire to do so, and to respond to appropriate questions from shareholders.

 

Vote Required and Board of Directors Recommendation

 

The affirmative vote of a majority of the common shares present at the Annual Meeting or represented by proxy is required for the re-appointment of Ernst & Young LLP as our independent registered public accounting firm. For purposes of this proposal, abstentions and broker non-votes will not be counted in determining the number of votes necessary for the re-appointment of Ernst & Young LLP as our independent registered public accounting firm.

 

Unless such authority is withheld, the proxies given pursuant to this solicitation will be voted FOR the re-appointment of Ernst & Young LLP as the independent registered public accounting firm of the Company to hold office until the close of the 2010 annual general meeting of shareholders, or until a successor is appointed, at a remuneration to be determined by the Audit Committee. Our board of directors recommends their re-appointment.

 

Our Board of Directors held a total of fifteen meetings in fiscal 2009 (including regularly scheduled and special meetings, which were held in person or via teleconference). Each director attended at least 75% of the aggregate number of meetings of our Board of Directors and meetings of committees on which he or she served in fiscal 2009. All directors are invited, but not required, to attend the Annual General Meeting of Shareholders. All of our then current directors attended our 2008 Annual General Meeting of Shareholders in person. Harald Ludwig, our Co-Chairman, presides at the regularly scheduled executive sessions of the non-management directors.

 

Our Board of Directors has a standing Audit Committee, Compensation Committee, Nominating & Corporate Governance Committee and Strategic Advisory Committee. The table below provides current membership information for our standing committees, as well as meeting information for such committees.

 

 

Audit Committee

 

Messrs. Paterson (Chair), Koffman and Tobin are the current members of the Audit Committee. The Audit Committee held seven meetings during fiscal 2009 (in person or via teleconference), two of which were joint meetings with the Nominating & Corporate Governance Committee. The Audit Committee is governed by a written charter adopted by our Board of Directors, as amended on June 22, 2009. The full text of the charter is available in the Investors/Governance Documents section on our website at www.lionsgate.com, or may be obtained in print, without charge, by any shareholder upon request to our Corporate Secretary.

 

Pursuant to its charter, the duties and responsibilities of the Audit Committee include, among other things, the following:

 

 

 

Our Board of Directors has determined that each member of the Audit Committee qualifies as an “independent” director under the New York Stock Exchange (the “NYSE”) listing standards and the enhanced independence standards applicable to audit committees pursuant to Rule 10A-3(b)(1) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”). Additionally, our Board of Directors has determined that Mr. Paterson is a “financial expert” under NYSE listing standards, applicable SEC rules and Canadian securities laws, regulations, policies and instruments.

 

Compensation Committee

 

Messrs. Evrensel (Chair), Ludwig and Simm are the current members of the Compensation Committee. The Compensation Committee held seven meetings during fiscal 2009 (in person or via teleconference). Mr. Ludwig replaced Mr. Simmons as a member of the committee in September 2008. The Compensation Committee is governed by a written charter adopted by our Board of Directors, as amended on May 30, 2007. The full text of the charter is available in the Investors/Governance Documents section on our website at www.lionsgate.com, or may be obtained in print, without charge, by any shareholder upon request to our Corporate Secretary.

 

Pursuant to its charter, the duties and responsibilities of the Compensation Committee include, among other things, the following:

 

 

The Compensation Committee may form subcommittees and delegate to its subcommittees such power and authority as it deems appropriate, but no subcommittee will have final decision-making authority on behalf of the Board of Directors unless so authorized. The Compensation Committee has no current intention to delegate any of its authority to any subcommittee. Our executive officers, including the Named Executive Officers (as defined below), do not have any role in determining the form or amount of compensation paid to the Named Executive Officers and our other senior executive officers. However, our Chief Executive Officer does make recommendations to the Compensation Committee with respect to compensation paid to the other executive officers.

 

Pursuant to its charter, the Compensation Committee is also authorized to retain independent compensation consultants and other outside experts or advisors as it believes to be necessary or appropriate to carry out its duties. For fiscal 2009, the Compensation Committee utilized a detailed report created by third-party compensation firm Towers Perrin to assist it in determining compensation levels for our senior executive officers.

 

In the section entitled Compensation Discussion and Analysis, we provide additional discussion of the Compensation Committee’s role and responsibilities.

 

Our Board of Directors has determined that each member of the Compensation Committee qualifies as an “independent” director under the NYSE listing standards.

 

Nominating & Corporate Governance Committee

 

Messrs. Koffman (Chair), Simm and Simmons are the current members of the Nominating & Corporate Governance Committee. The Nominating & Corporate Governance Committee held five meetings during fiscal

2009 (in person or via teleconference), two of which were joint meetings with the Audit Committee. The Nominating & Corporate Governance Committee is governed by a written charter adopted by our Board of Directors, as amended on May 29, 2008. The full text of the charter is available in the Investors/Governance Documents section on our website at www.lionsgate.com, or may be obtained in print, without charge, by any shareholder upon request to our Corporate Secretary.

 

Pursuant to its charter, the duties and responsibilities of the Nominating & Corporate Governance Committee include, among other things, the following:

 

 

Our Board of Directors nominates directors for election at each annual meeting of stockholders and elects new directors to fill vacancies when they arise. The Nominating & Corporate Governance Committee has the responsibility to identify, evaluate, recruit and recommend qualified candidates to our Board of Directors for nomination or election. In considering candidates for our Board of Directors, the Nominating & Corporate Governance Committee reviews the entirety of each candidate’s credentials. In particular, the committee’s assessment of potential candidates for election includes, but is not limited to, consideration of: (i) relevant knowledge and diversity of background and experience; (ii) understanding of the Company’s business; (iii) roles and contributions valuable to the business community; (iv) personal qualities of leadership, character, judgment and whether the candidate possesses and maintains throughout service on our Board of Directors a reputation in the community at large of integrity, trust, respect, competence and adherence to the highest ethical standards; (v) whether the candidate is free of conflicts and has the time required for preparation, participation and attendance at all meetings; (vi) compatibility with our Chief Executive Officer, senior management and the culture of our Board of Directors; and (vii) other factors deemed relevant.

 

The Nominating and Corporate Governance Committee assesses our Board of Directors’ current and anticipated strengths and needs based upon our Board of Directors’ then-current profile and the Company’s current and future needs, and screens the slate of candidates to identify the individuals who best fit the criteria listed above. During the selection process, the Nominating & Corporate Governance Committee seeks inclusion and diversity within our Board of Directors. Prior to the nomination of a new director, the Nominating and Governance Committee follows prudent practices, such as interviews of the potential nominee conducted by members of our Board of Directors and senior management.

 

For instructions on how shareholders may submit recommendations for director nominees to the Nominating & Corporate Governance Committee, see Shareholder Communications below.

 

Our Board of Directors has determined that each member of the Nominating & Corporate Governance Committee qualifies as an “independent” director under the NYSE listing standards.

 

Strategic Advisory Committee

 

Messrs. Ludwig (Chair), Amin, Paterson, Simmons and Tobin are the current members of the Strategic Advisory Committee. Mr. Mr. Simmons joined as a member of the committee in September 2008. The Strategic Advisory Committee held nine meetings during fiscal 2009 (in person or via teleconference). The Strategic Advisory Committee is responsible for reviewing the Company’s strategic plan annually, meeting with management on a periodic basis to review operations against the plan, as well as overseeing preliminary negotiations regarding strategic transactions and, when applicable, acting as a pricing and approval committee on certain transactions.

 

As noted above, Mr. Amin will not stand for re-election at the Meeting. We currently expect that one of our other directors will be selected to join as a member of the Strategic Advisory Committee on the date of the Meeting.

Special Committee

 

In March 2009, our Board of Directors created a special committee consisting of Messrs. Koffman, Ludwig, Simmons and Tobin (“independent” directors of the Company) to review and evaluate strategic alternatives and consider the best interests of all of our shareholders in light of discussions with certain Company shareholders. The Special Committee met several times during fiscal 2009. For their services on the special committee, each member earns a fee of $4,000 per month. Messrs. Ludwig and Tobin will also receive a one-time fee of $10,000 for their participation on the special committee.

 

Shareholders and interested parties who would like to communicate with our Board of Directors may do so by writing to any or all non-employee directors, care of our Corporate Secretary, at either of our principal executive offices. The complete text of our Policy on Shareholder Communications is available in the Investors/Governance Documents section on our website at www.lionsgate.com. Our Corporate Secretary will log in all shareholder and interested party correspondence and forward to the director addressee(s) all communications that, in his judgment, are appropriate for consideration by the directors. Any director may review the correspondence log and request copies of any correspondence. Examples of communications that would be considered inappropriate for consideration by the directors include, but are not limited to, commercial solicitations, trivial, obscene, or profane items, administrative matters, ordinary business matters, or personal grievances. Correspondence that is not appropriate for board of director review will be handled by our Corporate Secretary. All appropriate matters pertaining to accounting or internal controls will be brought promptly to the attention of the Chairman of the Audit Committee.

 

Shareholder recommendations for director nominees are welcome and should be sent to our General Counsel at 2700 Colorado Avenue, Suite 200, Santa Monica, California 90404, who will forward such recommendations to the Nominating & Corporate Governance Committee. The Nominating & Corporate Governance Committee will evaluate candidates recommended by shareholders in the same manner as candidates recommended by other sources, using criteria, if any, developed by the committee and approved by our Board of Directors, from time to time.

 

Our policy on shareholder and interested party communications may be amended at any time with the consent of the Nominating & Corporate Governance Committee.

 

We have a Code of Business Conduct and Ethics that applies to all our directors, officers and employees, and a Code of Ethics for Senior Financial Officers that applies to our principal executive officer, principal financial officer, principal accounting officer or controller, and persons performing similar functions. Each of these codes is available in the Investors/Governance Documents section on our website at www.lionsgate.com, or may be obtained in print, without charge, by any shareholder upon request to our Corporate Secretary. We will disclose on our website when there have been waivers of, or amendments to, either code that applies to our Chief Executive Officer, Chief Financial Officer, Chief Accounting Officer or persons performing similar functions.

 

None of our directors or executive officers, and none of the associates or affiliates of any of the foregoing, is currently indebted to the Company or was indebted to the Company at any time since the beginning of the Company’s most recently completed fiscal year.

 

It is the policy of our Board of Directors that a majority of directors be “independent” of the Company and of the Company’s management. For a director to be deemed “independent,” our Board of Directors shall affirmatively determine that the director has no material relationship with the Company or its affiliates or any member of the senior management of the Company or his or her affiliates. In making this determination, our Board of Directors

shall apply, at a minimum and in addition to any other standards for independence established under applicable statutes and regulations, the following standards, which are available in the Investors/Governance Documents section on our website at www.lionsgate.com and which may be amended or supplemented, from time to time:

 

 

Pursuant to our Corporate Governance Guidelines, our Board of Directors undertook its annual review of director independence in May 2009. During this review, our Board of Directors considered transactions and relationships between each director or any member of his immediate family and the Company and its subsidiaries and affiliates, including those reported under the heading Certain Relationships and Related Transactions below. Our Board of Directors also examined transactions and relationships between directors or their affiliates and members of the Company’s senior management or their affiliates. As provided in our Corporate Governance Guidelines, the purpose of this review was to determine whether any such relationships or transactions were inconsistent with a determination that the director is “independent.” The Nominating & Corporate Governance Committee, with assistance from counsel, regularly reviews our Corporate Governance Guidelines to ensure their compliance with Canadian law and SEC and NYSE regulations. The full text of our Corporate Governance Guidelines is available on our website at www.lionsgate.com, or may be obtained in print, without charge, by any shareholder upon request to our Corporate Secretary.

 

As a result of this review, our Board of Directors affirmatively determined that each of Messrs. Bacal, Evrensel, Koffman, Ludwig, Paterson, Simm, Simmons and Tobin are “independent” of the Company and its management under our Standards for Director Independence, Canadian standards, SEC rules and regulations and the NYSE listing standards. Our Board of Directors has also affirmatively determined that Dr. Rachesky and Ms. Yaffe, who will replace Mr. Amin and Ms. May on our Board of Directors if elected at the Meeting, are “independent” of the Company and its management under our Standards for Director Independence, Canadian standards, SEC rules and regulations and the NYSE listing standards.

 

The members of our Board of Directors who are not also our employees (“Non-Employee Directors”) are entitled to receive an annual retainer of $40,000 and an additional retainer of $15,000 if such director acts as Chairman of the Audit Committee, or $10,000 if such director acts as Chairman of the Compensation Committee, Chairman of the Nominating & Corporate Governance Committee or Chairman of the Strategic Advisory Committee. The non-employee Co-Chairman of our Board of Directors is entitled to receive an additional annual retainer. Effective April 6, 2009, the amount of the Co-Chairman annual retainer was increased from $30,000 to $52,000. In addition, each Non-Employee Director is entitled to receive a fee of $1,400 for each meeting of our Board of Directors or any committee thereof that the director attends in person or via teleconference. Moreover, each director that serves on the special committee (see Board Committees and Responsibilities — Special Committee above) earns a fee of $4,000 per month. Messrs. Ludwig and Tobin will also receive a one-time fee of $10,000 for their participation on the special committee.

 

The retainers and fees for the Non-Employee Directors are paid, at the director’s election, either 50% in cash and 50% in the form of our common shares or 100% in the form of our common shares, except that the additional annual retainer for our non-employee Co-Chairman is paid 50% in cash and 50% in the form of our common shares. Retainers are generally paid in two installments each year, with the number of shares to be delivered in payment of any retainer to be determined by dividing the dollar amount of the retainer to be paid in the form of common shares by the average closing price of our common shares for the last five business days prior to payment.

 

Our Non-Employee Directors are also granted 12,500 restricted share units upon first being elected or appointed to our Board of Directors and, effective as of September 9, 2008, an additional 12,500 restricted share units after five years of service on our Board of Directors. The restricted share units vest in annual installments over three years following the date of grant and are paid upon vesting in an equivalent number of our common shares. We require that our Non-Employee Directors hold a minimum of 10,000 common shares.

 

Pursuant to our policies, we also reimburse our directors for reasonable expenses incurred in the performance of their duties, including reimbursement for air travel and hotel expenses.

 

The following table presents information regarding the compensation paid to each of our Non-Employee Directors for services rendered during fiscal 2009. The compensation paid to Messrs. Feltheimer and Burns, each of whom is also employed by us, is presented below in the Summary Compensation table and the related explanatory tables.

 

DIRECTOR COMPENSATION — FISCAL 2009

 

 

 

 

 

The following is a list of our executive officers followed by their biographical information (other than Messrs. Feltheimer and Burns, whose biographical information appears on page 11). Ages are as of July 1, 2009.

 

 

Steven Beeks.  Mr. Beeks has been our Chief Operating Officer since April 2007, Co-Chief Operating Officer since September 2007, President since July 2006 and President of Lions Gate Entertainment Inc., our wholly owned subsidiary, since December 2003. From January 1998 until December 2003, Mr. Beeks served as President of Artisan Home Entertainment Inc.

 

Joseph Drake.  Mr. Drake has been our Co-Chief Operating Officer and President, Motion Picture Group, since September 2007. From March 2001 to September 2007, Mr. Drake was the President of Mandate Pictures, LLC (“Mandate Pictures”), a worldwide independent film producer, financier and distributor. We acquired Mandate Pictures in September 2007.

 

James Keegan.  Mr. Keegan has been our Chief Financial Officer since September 2002 and our Chief Administrative Officer since April 2002. From September 1998 to April 2002, Mr. Keegan was the Chief Financial Officer of Artisan Entertainment Inc. From April 1989 to March 1990, Mr. Keegan was Controller of Trimark Holdings, Inc. and from March 1990 to August 1998, he was the Chief Financial Officer of Trimark Holdings, Inc.

 

Wayne Levin.  Mr. Levin has been our Executive Vice President, Corporate Operations since February 2004. Previously, Mr. Levin had been our Executive Vice President, Legal and Business Affairs since November 2000. Mr. Levin has been our General Counsel since November 2000. Mr. Levin worked for Trimark Holdings, Inc. from September 1996 to November 2000, first as Director of Legal and Business Affairs from 1996 to 1998 and then as General Counsel and Vice President from 1998 to 2000.

 

Our officers are appointed and serve at the discretion of our Board of Directors. The employment agreements for the Named Executive Officers, including the salary and bonus terms of each agreement, are described in Executive Compensation Information — Description of Employment Agreements — Salary and Bonus Amounts below.

 

This section describes the material elements of compensation awarded to, earned by or paid to the individuals who served as our principal executive officer or our principal financial officer during fiscal 2009, and our three other most highly compensated executive officers. These individuals are listed in the Summary Compensation table below and are referred to as the “Named Executive Officers” in this proxy statement.

 

Our executive compensation programs are determined and approved by the Compensation Committee. Our management, however, provides recommendations to the Compensation Committee regarding our compensation programs. The recommendations include executive compensation plans, designs and strategies, performance goals and criteria for both annual and long-term incentive plans and individual compensation actions for management. Our management provides its recommendations in conjunction with, and based on information gathered from, compensation consultants and general market information as well as from internal resources, with the objective of aligning the design and operation of our compensation programs with our business strategies and objectives. None of the Named Executive Officers are members of the Compensation Committee or otherwise had any role in determining the compensation of other Named Executive Officers, except that the Compensation Committee considers the recommendations of Mr. Feltheimer in making compensation decisions for the Named Executive Officers other than himself.

 

Our executive compensation program is designed to attract, retain and motivate the senior executive talent required to ensure our success. The program also aims to support the creation of shareholder value and ensure that pay is consistent with performance.

 

The Compensation Committee’s general philosophy is that bonus and equity compensation should fluctuate with the Company’s success in achieving financial and other goals, and that the Company should continue to use long-term compensation such as restricted share units, share appreciation rights (“SARs”) and stock options to align shareholders’ and executives’ interests.

 

The Compensation Committee also reviews compensation levels to ensure they are reasonable after consideration of the executive compensation programs of similar companies. Specifically, as described below, the Company utilizes a detailed report prepared by outside consultants that maintains information on compensation levels and practices of 16 companies in the entertainment industry as a tool for compensation planning purposes.

 

Our current executive compensation program is based on three components, which are designed to be consistent with our compensation philosophy: (1) base salary; (2) annual incentive bonuses; and (3) long-term stock awards, including awards of restricted share units, SARs and stock options, that are subject to time-based and/or performance-based vesting. We also provide certain perquisites and personal benefits to the Named Executive Officers pursuant to their employment agreements, and severance benefits if the Named Executive Officer’s employment terminates under certain circumstances.

 

In structuring executive compensation packages, the Compensation Committee considers how each component of compensation promotes retention and/or motivates performance by the executive. Base salaries, perquisites and personal benefits, and severance and other termination benefits are primarily intended to attract and retain highly qualified executives. These are the elements of our executive compensation program where the value of the benefit in any given year is not dependent on performance (although base salary amounts and benefits determined by reference to base salary may increase from year to year depending on performance, among other things). We believe that in order to attract and retain top executives, we need to provide them with certain predictable compensation levels that reward their continued service. Annual incentive bonuses are primarily intended to motivate the Named Executive Officers to achieve specific strategies and operating objectives, although we believe they also help us to attract and retain top executives. Our long-term equity incentives are primarily intended to align the Named Executive Officers’ long-term interests with shareholders’ long-term interests, although we believe they also play a role in helping us to attract and retain top executives. Annual bonuses and long-term equity awards are the elements of our executive compensation program that are designed to reward performance and thus, the creation of shareholder value.

The Compensation Committee believes that performance-based compensation such as annual bonuses and long-term equity incentives play a significant role in aligning management’s interests with those of our shareholders. For this reason, these forms of compensation constitute a substantial portion of each of the Named Executive Officers’ compensation. The Compensation Committee’s philosophy has been to set the base salary levels of the Named Executive Officers at or slightly below the median salary level paid to similarly situated executives at our peer companies, with the majority of the executive’s compensation being delivered in the form of incentive compensation tied directly to shareholder value creation. In general, the Named Executive Officers’ compensation arrangements are intended to result in a majority of each executive’s total direct compensation being incentive compensation, with base salary constituting the balance of their total direct compensation. As used in this discussion, the term “total direct compensation” means the aggregate amount of the executive’s base salary, target incentive bonus, and long-term equity incentive awards based on the grant-date fair value of such awards, as determined under the accounting principles used in the Company’s financial reporting. Our compensation packages are designed to promote teamwork, initiative and resourcefulness by key employees whose performance and responsibilities directly affect our results of operations.

 

From time to time and as necessary, the Compensation Committee retains independent compensation consultants to help identify appropriate peer group companies and to obtain and evaluate current executive compensation data for these companies. For fiscal 2009, the Compensation Committee utilized a detailed report created by third-party compensation firm Towers Perrin to assist it in determining compensation levels for our senior executive officers. The survey included a competitive review and analysis of base salary, total cash compensation and total direct compensation for the highest 20 executive officers of the Company, matched by total compensation and level relative to the Company’s identified peer group. This peer group is periodically reviewed and updated by the Compensation Committee, to ensure that it consists of companies against which the Compensation Committee believes the Company competes for talent. For fiscal 2009, the peer group was comprised of the following 16 U.S.-based entertainment companies:

 

 

This peer group was chosen because the Company believes that it represents the public entertainment and media-related companies with which the Company generally competes for both business and executive talent. The report provided the Compensation Committee historical and prospective total compensation components for each executive officer as compared to the peer group. The data from the report was considered by the Compensation Committee and compared with the compensation of the Company’s executive officers in evaluating the amount and proportions of base pay, annual incentive pay and long-term compensation, as well as the targeted total compensation value.

 

We view our current executive compensation program as one in which the individual components combine together to create a total compensation package for each Named Executive Officer that we believe achieves our compensation objectives and has a targeted value at approximately the 30^th percentile of total direct compensation of the peer group companies identified above. The Compensation Committee believes that this level is appropriate as the Company is smaller than most of the peer group companies, in terms of market capitalization and market value. Because the Compensation Committee generally determines the target value of our current executive compensation program based on an assessment of the compensation paid by our peer group companies, we do not generally factor in amounts realized from prior compensation paid to the Named Executive Officers.

The Compensation Committee made its compensation decisions during fiscal 2009, including decisions with respect to the Named Executive Officers’ compensation, after review of the Towers Perrin report. As in fiscal 2008, in fiscal 2009, we remained below the median total direct executive compensation relative to the peer group.

 

We have entered into multi-year employment agreements with each of the Named Executive Officers. Each employment agreement specifies the annual base salary that the executive will be entitled to receive during the term of the agreement, as well as the Company benefit plans in which the executive will participate and any other perquisites that the executive will receive. In addition, each agreement sets forth the annual and long-term incentive compensation target or ranges that the executive officer will be eligible to receive, subject in all instances to the discretion of the Compensation Committee. Each agreement also specifies the post-termination benefits that will be received by each executive (including the treatment of any unvested equity awards) upon certain terminations of employment, a change in control or upon expiration of the employment agreement.

 

Each of these agreements was approved by the Compensation Committee and is described below under Description of Employment Agreements — Salary and Bonus Amounts. We believe that it is in the best interests of the Company to enter into multi-year employment agreements with the Named Executive Officers because the agreements foster long-term retention, while still allowing the Compensation Committee to exercise considerable discretion in designing incentive compensation programs and rewarding individual performance. In addition, we believe that use of multi-year employment agreements assists in recruiting efforts because generally, other entertainment companies with which we compete for executive talent enter into long-term employment agreements with their executives as well.

 

During fiscal 2009, the Compensation Committee approved amendments to the employment agreements for Messrs. Feltheimer, Burns and Beeks, extending the terms of their agreements, and a new employment agreement for Mr. Keegan. In each case, the new arrangements provided for new equity award grants for each executive and increases in base compensation for Messrs. Feltheimer, Burns and Keegan. These changes are discussed in detail under the applicable sections of this Compensation Discussion and Analysis below. The terms of Mr. Drake’s compensation were established under an employment agreement entered into in September 2007 in connection with our acquisition of Mandate Pictures LLC.

 

EXECUTIVE COMPENSATION INFORMATION

 

Base Salaries

 

The base salaries of the Named Executive Officers, including periodic increases, are set forth in their respective employment agreements. As noted above, the Compensation Committee believes that a significant portion of executive officers’ compensation should be in the form of incentive compensation that helps to align the interests of our executives with those of our shareholders. Accordingly, our executive officers’ salary levels are generally set below the median level of the peer group companies so that a greater percentage of our executives’ compensation may be delivered in the form of incentive compensation opportunities.

 

In establishing the salary levels of the Named Executive Officers and our other executive officers, the Compensation Committee assesses the executive’s past performance and expected future contributions to the Company, the executive’s salary and responsibilities relative to the other executive officers, and the salaries of similarly situated executives within our peer group companies. The Compensation Committee believes that the base salary levels of the Named Executive Officers and the other executive officers generally are reasonable in view of competitive practices, the Company’s performance and the contribution of those officers relative to that performance.

 

In October 2008, the Compensation Committee approved a three-year extension of the term of Mr. Feltheimer’s agreement to March 2014. His base salary level was not changed. However, commencing in October 2011, his base salary will be subject to an annual increase based on increases in a consumer price index specified in the agreement.

In approving these amendments, the Compensation Committee considered, among other things, compensation of other Named Executive Officers, the Towers Perrin report comparing compensation of chief executive officers at peer group companies, the importance of securing senior management under long term employment contracts, the Company’s performance over the past few years, the contribution of Mr. Feltheimer to such past and expected contribution to the future performance of the Company, and the desire to retain Mr. Feltheimer as our Chief Executive Officer for an additional three years.

 

In September 2008, the Compensation Committee approved a one-year extension of the term of Mr. Burns’ agreement to September 2011 and an increase in his base salary level to $925,000 through September 2010 and $950,000 for the twelve-month period thereafter. In approving these amendments, the Compensation Committee considered, among other things, compensation of other Named Executive Officers, the Towers Perrin report comparing compensation of similar positions at peer group companies (which reflected a base salary of less than the 10^th percentile of the base salary of similar positions in the peer group companies identified), the importance of securing senior management under long term employment contracts, Mr. Burns’ contribution towards the closing of an amended and restated credit facility in July 2008, and the desire to retain Mr. Burns as our Vice Chairman for an additional year.

 

Finally, in January 2009, the Compensation Committee approved an employment agreement with Mr. Keegan that extended the term of his employment through April 2012 and increased his base salary level to $475,000. In approving this agreement, the Compensation Committee considered, among other things, compensation of other Named Executive Officers, the Towers Perrin report comparing compensation of chief financial officers at peer group companies (which reflected a base salary of less than the 10th percentile of base salary of similar positions in the peer group companies identified), the importance of securing senior management under long term employment contracts, Mr. Keegan’s contribution towards the closing of an amended and restated credit facility in July 2008, and the desire to retain Mr. Keegan as our Chief Financial Officer for an additional three years.

 

Annual Incentive Bonuses

 

Historically, annual incentive bonuses have been awarded to our executive officers based upon multiple performance criteria, including evaluations of personal job performance and performance measured against objective business criteria. As noted above, the Company has entered into employment agreements with each of the Named Executive Officers that generally provide for bonuses to be determined in the discretion of the Compensation Committee based on the performance measures set forth in the employment agreement.

 

Although annual incentive bonuses are primarily based on individual and corporate performance, in some circumstances, the Compensation Committee may provide additional discretionary bonus awards. The committee believes that discretionary bonuses, where warranted, can be effective in motivating, rewarding and retaining our executive officers.

 

For fiscal 2009, the Compensation Committee approved discretionary bonuses to be awarded to each of the Named Executive Officers. Generally, the bonus amounts awarded to the Named Executive Officers were 25% of the executive’s fiscal 2008 bonuses. Even though the Company reported record revenues of $1.47 billion for fiscal 2009, which included fourth quarter 2009 revenue of $463.2 million, the Company’s second best quarterly revenue performance to date, the reduction in the annual incentive bonuses reflected, in part, reported earnings before interest, income tax provision, depreciation and amortization, equity interests and gains on extinguishment of debt and the sale of equity securities (“EBITDA”) of negative $133.6 million for fiscal 2009 compared to EBITDA of negative $54.6 million for fiscal 2008, as well as the Company’s net loss of $163.0 million for the 2009 fiscal year. In light of these EBITDA results and notwithstanding the individual achievements of the Named Executive Officers identified below, the Compensation Committee determined that it would be appropriate to reduce the level of annual bonuses awarded to the Named Executive Officers for fiscal 2009 from the fiscal 2008 bonus levels. EBITDA is a non-GAAP financial measure, as defined in Regulation G promulgated by the SEC. A reconciliation of EBITDA to net income (loss) for the fiscal 2009 and fiscal 2008 was previously included in our Current Report on Form 8-K furnished with the SEC on June 1, 2009.

 

The bonus amounts for Messrs. Feltheimer and Burns were determined based on, among other factors, the Compensation Committee’s assessment of the Company’s performance during the fiscal year as measured by

EBITDA, total revenues, earnings, free cash flow, debt reduction, share price and other performance measures. Specifically, the Compensation Committee noted, among other things, that EBITDA was negative $133.6 million for fiscal 2009 compared to EBITDA of negative $54.6 million for fiscal 2008, the Company had a net loss of $163.0 million for fiscal 2009 compared to net loss of $73.9 for fiscal 2008, free cash flow was negative $142.8 million for fiscal 2009 compared to $136.6 million for fiscal 2008 and the Company’s stock price was $5.05 as of March 31, 2009 compared to $9.75 as of March 31, 2008. Free cash flow is a non-GAAP financial measure, as defined in Regulation G promulgated by the SEC. A reconciliation of free cash flow to net cash flows provided by (used in) operating activities for the fiscal 2009 and fiscal 2008 was previously included in our Current Report on Form 8-K furnished with the SEC on June 1, 2009. The Compensation Committee also considered, however. the contributions of Messrs. Feltheimer and Burns to the following: the closing of an amended and restated credit facility in July 2008; the acquisition of certain assets related to the TV Guide Network and the TV Guide Online (tvguide.com) business in February 2009 and the subsequent sale of 49% of such interest to One Equity Partners in May 2009; the closing of a new multi-picture, multi-year deal in April 2009 under which the Company acquired U.S. distribution rights for up to five Relativity Media productions per year; growth of the Company’s home entertainment business in fiscal 2009; growth of all segments (production, syndication, reality programming and channel) of the Company’s television business in fiscal 2009; the Company’s fourth quarter 2009 revenue of $463.2 million, its second best quarterly revenue performance to date; and the Company’s continued commitment to disciplined growth by implementation of cost cutting initiatives in order to maintain an approximate 8% to 9% overhead to revenue ratio, instead of cutting back on investments in new businesses that drive the Company’s growth, even in the current challenging economic environment. Accordingly, based on its review, the Compensation Committee approved a cash bonus of $437,500 for Mr. Feltheimer (which was 25% of his bonus for fiscal 2008, minus a $400,000 discretionary bonus granted to him in fiscal 2008) and a cash bonus of $312,500 for Mr. Burns (which was 25% of his bonus for fiscal 2008, minus a $350,000 discretionary bonus granted to him in fiscal 2008).

 

Mr. Beeks’ bonus was determined, in part, based on the Company’s EBITDA and the performance of the Company’s home entertainment division during the fiscal year and, in part, based on assessment by the Compensation Committee and Mr. Feltheimer of Mr. Beeks’ individual performance during the fiscal year. The Compensation Committee also considered the contribution of Mr. Beeks to the following: the Company’s home entertainment revenue grew to a record $675.6 million in the fiscal 2009, a 5% increase from $645.1 million in fiscal 2008; the Company’s digital revenue grew approximately 144% in fiscal 2009 compared to fiscal 2008; the strengthening of the Company’s library and home entertainment businesses by extension of a library agreement with Studio Canal; the closing of an agreement with Disney-ABC Domestic Television in August 2008 for the home entertainment distribution rights to select primetime series and library titles from ABC Studios; extension of a relationship with American Greetings Properties in January 2009 acquiring the exclusive North American home entertainment distribution rights to numerous titles based on the Care Bears; and completion of a first-look partnership with Comcast Entertainment Group in July 2008 under which the Company obtained the home entertainment distribution rights to popular series airing on E! Entertainment Television, The Style Network and G4. Accordingly, based on its review, the Compensation Committee approved a cash bonus of $175,000 for Mr. Beeks (which was 25% of Mr. Beeks’ bonus for fiscal 2008).

 

Mr. Drake’s bonus was determined, in part, based on the Company’s EBITDA and the performance of the Company’s theatrical division during the fiscal year and, in part, based on assessment by the Compensation Committee and Mr. Feltheimer of Mr. Drake’s individual performance during the fiscal year. The Compensation Committee also considered the contribution of Mr. Drake to the following: the Company’s motion picture revenue for fiscal 2009 grew to a record $1.23 billion, an increase of 7% from $1.15 billion in fiscal 2008; within the motion picture segment, the Company’s theatrical revenue was $223.3 million in fiscal 2009, an increase of 17% from $191.7 million in fiscal 2008, propelled by record fourth quarter fiscal 2009 box office revenues from titles such as Tyler Perry’s Madea Goes To Jail, My Bloody Valentine 3-D and The Haunting In Connecticut, as well as successes earlier in fiscal 2009 that included Saw V, Tyler Perry’s The Family That Preys and The Forbidden Kingdom; and the closing of a new multi-picture, multi-year deal in April 2009 under which the Company acquired U.S. distribution

rights for up to five Relativity Media productions per year. Accordingly, based on its review, the Compensation Committee approved a bonus for Mr. Drake of 20,000 restricted share units subject to a three-year vesting schedule.

 

Mr. Keegan’s bonus was based on an assessment by the Compensation Committee and Mr. Feltheimer of Mr. Keegan’s individual performance during the fiscal year, which included review of the Company’s financial performance during the fiscal year and Mr. Keegan’s contribution towards the acquisition of certain assets related to the TV Guide Network and the TV Guide Online (tvguide.com) business in February 2009 and the subsequent sale of 49% of such interest to One Equity Partners in May 2009. Accordingly, based on its review, the Compensation Committee approved a cash bonus of $62,500 for Mr. Keegan (which was 25% of his fiscal 2008 bonus, minus a $75,000 discretionary bonus granted to him in fiscal 2008). In addition, Mr. Keegan was granted a $50,000 bonus in recognition of the closing of an amended and restated credit facility in July 2008.

 

In addition to their annual incentive bonus awards, Messrs. Feltheimer and Burns would be entitled to “stock price bonuses” pursuant to their employment agreements if the volume-weighted average of the median price of our common shares exceeds certain thresholds over a six-month period. We believe that the stock price bonus provides an effective incentive to these executives to enhance Company performance in a way that is directly tied to the creation of value for our shareholders. No such bonuses were granted in fiscal 2009. For more information on these bonuses, see the descriptions of the employment agreements for Messrs. Feltheimer and Burns under Description of Employment Agreements — Salary and Bonus Amounts below.

 

Long-Term Incentive Equity Awards

 

The Company believes that the long-term compensation of the Named Executive Officers and other executive officers should be directly linked to the value provided to shareholders. Therefore, we have historically made annual grants of stock options, restricted share unit awards and SARs to provide further incentives to our executives to increase shareholder value. The Compensation Committee bases its award grants to executives each year on a number of factors, including:

 

 

In addition, the size, frequency and type of long-term incentive grants may be determined on the basis of tax consequences of the grants to the individual and the Company, accounting impact and potential dilution effects.

 

Award grants to the Named Executive Officers are generally made by the Compensation Committee in connection with the executive’s entering into a new employment agreement with the Company. The Company typically does not grant equity-based awards to its executive officers at any other time. The award grants to each of Messrs. Beeks, Burns, Feltheimer and Keegan during fiscal 2009 were made in connection with the entering into of new or amended employment agreements with the Company, as described under Description of Employment Agreements — Salary and Bonus Amounts below.

 

Stock Options.  The Company makes a portion of its long-term incentive grants to the Named Executive Officers in the form of stock options, with an exercise price that is equal to the closing price of our common shares on the date of grant. Thus, the Named Executive Officers will only realize value on their stock options if our shareholders realize value on their shares. The stock options also function as a retention incentive for our executives as they vest ratably over a certain period, generally four years, after the date of grant. The Company did not grant any stock options to the Named Executive Officers in fiscal 2009.

 

Share Appreciation Rights.  The Company also makes a portion of its long-term incentive grants to the Named Executive Officers in the form of SARs. Upon exercise of a SAR, the holder receives a cash payment equal to the excess, if any, of the fair market value of our common shares on the date of exercise of the SAR over the base price of the SAR. Because the base price of the SAR is equal to the closing price of our common shares on the grant date, SARs provide the same incentives as stock options because the holder will only realize value on their SARs if

our share price increases after the date of grant. The SARs also function as a retention incentive for our executives as they vest ratably over a certain period after the date of grant.

 

In February 2009, the Company granted Mr. Beeks 850,000 SARs that vest in three equal installments beginning on February 5, 2010. The number of SARs granted to Mr. Beeks was negotiated as part of the amendment of his employment agreement, with the vesting schedule of the SARs being based on the term of his employment agreement. In determining the number of SARs to be subject to the grant, the Compensation Committee considered among other things, compensation of other Named Executive Officers, the Towers Perrin report comparing compensation of similar positions at peer group companies, and the decrease in value and the number of SARs previously granted to Mr. Beeks upon their expiration in 2009.

 

Time-Based Restricted Share Units.  The Company also grants long-term incentive awards to the Named Executive Officers in the form of restricted share units that are subject to time-based vesting requirements. Awards of time-based restricted share units vest over a period of several years following the date of grant and, upon vesting, are paid in our common shares. Thus, the units are designed both to link executives’ interests with those of our shareholders as the units’ value is based on the value of our common shares and to provide a long-term retention incentive for the vesting period, as they generally have value regardless of stock price volatility.

 

In October 2008, the Company granted Mr. Feltheimer 458,036 time-vesting restricted share units that vest in three equal annual installments beginning March 31, 2012. The vesting schedule of the time-based restricted share units was based on the term of his employment agreement (which units will be fully vested at the end of such term). In addition, on the first day following each three month anniversary of October 8, 2008 that occurs during the term of Mr. Feltheimer’s employment agreement, he will receive a number of fully vested common shares equivalent to $250,000, calculated using the closing price of our common shares on the last trading day immediately prior to the respective grant date. In determining the levels of these grants to Mr. Feltheimer, the Compensation Committee considered, among other things, compensation of other Named Executive Officers, the Towers Perrin report comparing compensation of Chief Executive Officers at peer group companies, the importance of securing senior management under long term employment contracts, the Company’s performance over the past few years, the contribution of Mr. Feltheimer to such past and expected contribution to the future success of the Company, and the desire to retain Mr. Feltheimer as our Chief Executive Officer for an additional three years. Additionally, the time-based restricted share units (and the performance-based restricted share units described below) represent three fourths (3/4) of the value of options and restricted share units granted to Mr. Feltheimer for his previous four- year employment term.

 

In September 2008, the Company granted Mr. Burns 137,143 time-vesting restricted share units that vest in three equal annual installments beginning September 1, 2009. The vesting schedule of the time-based restricted share units was based on the term of his employment agreement (which units will be fully vested at the end of such term). In determining the levels of these grants to Mr. Burns, the Compensation Committee considered, among other things, compensation of other Named Executive Officers, the Towers Perrin report comparing compensation of similar positions at peer group companies, the importance of securing senior management under long term employment contracts, Mr. Burns’ contribution towards the closing of an amended and restated credit facility in July 2008, and the desire to retain Mr. Burns as our Vice Chairman for an additional year. Additionally, the time-based restricted share units (and the performance-based restricted share units described below) represent one fourth (1/4) of the value of options and restricted share units granted to Mr. Burns for his previous four-year employment term.

 

In January 2009, the Company granted Mr. Keegan 60,000 time-vesting restricted share units that vest in three equal annual installments beginning on February 5, 2010. The vesting schedule of the time-based restricted share units was based on the term of the executive’s employment agreement (which units will be fully vested at the end of such term). In determining the number of share units to be subject to the grant, the Compensation Committee considered, among other things, compensation of other Named Executive Officers, the Towers Perrin report comparing compensation of Chief Financial Officers at peer group companies, the importance of securing senior management under long term employment contracts, Mr. Keegan’s contribution towards the closing of an amended and restated credit facility in July 2008, and the desire to retain Mr. Keegan as our Chief Financial Officer for the next three years.

Performance-Based Restricted Share Units.  The Company also grants long-term incentive awards to the Named Executive Officers in the form of performance-based restricted share units. The performance unit awards cover multiple years, with a percentage of the units subject to the award becoming eligible to vest each year based on the Company’s and the individual’s actual performance during that year relative to performance goals established by the Compensation Committee. Thus, the performance units are designed both to motivate executives to maximize the Company’s performance each year and to provide a long-term retention incentive for the entire period covered by the award.

 

In October 2008, the Company granted Mr. Feltheimer 458,035 performance-vesting restricted share units that vest in three equal annual installments beginning March 31, 2012 (subject to satisfaction of annual performance targets approved by the Compensation Committee for the relevant period or on a sliding scale basis if the performance targets have not been fully met for a particular year). The factors relied on by the Compensation Committee in determining the levels for this grant are described above under Time-Based Restricted Share Units.

 

In September 2008, the Company granted Mr. Burns 137,142 performance-vesting restricted share units that vest in three equal annual installments beginning September 1, 2009 (subject to satisfaction of annual performance targets approved by the Compensation Committee for the relevant period or on a sliding scale basis if the performance targets have not been fully met for a particular year). The factors relied on by the Compensation Committee in determining the levels for this grant are described above under Time-Based Restricted Share Units.

 

For outstanding performance-based restricted unit awards held by Messrs. Beeks and Drake that were eligible to vest during fiscal 2009, the Compensation Committee determined that the vesting of these units would be triggered upon achievement of 80% of our annual budget for the applicable twelve-month performance period, which is measured by EBITDA, revenue and free cash flow for that performance period. The Committee believes that a target of 80% reflects an appropriately difficult yet achievable level of performance for payouts of performance-based restricted unit awards, based on, among other things, the difficulty in projecting film and television revenues due to the volatility of various market segments and the nature of the feature film business. Thereafter, performance-based restricted share units vest on a sliding scale basis based on the actual achievement of the annual budget for that particular performance period.

 

For outstanding performance-based restricted share unit held by Messrs. Feltheimer and Burns that were eligible to vest during fiscal 2009, the Compensation Committee selected the following performance criteria to determine the number of these units that would vest for the applicable twelve-month performance period: assessing whether deals or acquisitions are accretive by examining post-transaction multiples or results, as the case may be, stock price in comparison to the market and other media companies, annual revenue growth, performance of acquisitions over time and their value-added nature, free cash flow, cash management and management of cost of capital, achievement of pre-tax net income targets (adjusting for growth opportunities) and return on equity and gross margin (whenever comparables are appropriate, in order to assess the Company’s marketplace performance versus those measures at year end).

 

Even though the Company reported record revenues of $1.47 billion for fiscal 2009, which included fourth quarter 2009 revenue of $463.2 million, the Company’s second best quarterly revenue performance to date, the Compensation Committee determined that none of the performance-based restricted share units held by the Named Executive Officers that were eligible to vest during fiscal 2009 would vest due, in part, to the Company reporting EBITDA of negative $133.6 for fiscal 2009 million compared to EBITDA of negative $54.6 million for fiscal 2008, as well as the Company’s net loss of $163.0 million for the 2009 fiscal year (which was primarily attributable to the underperformance of theatrical releases in the second and third fiscal quarters of 2009 and a charge of $36.1 million taken on the Company’s North American DVD distribution of HIT Entertainment Inc.’s family entertainment titles).

 

For more information on the equity-based awards granted to the Named Executive Officers during fiscal 2009, see the Grants of Plan-Based Awards table and accompanying narrative below.

 

Severance and Other Benefits Upon Termination of Employment

 

The Company believes that severance protections, particularly in the context of a change in control transaction, can play a valuable role in attracting and retaining key executive officers. Accordingly, we provide such protections

for the Named Executive Officers under their respective employment agreements. The Compensation Committee evaluates the level of severance benefits to provide a Named Executive Officer on a case-by-case basis, and, in general, we consider these severance protections an important part of an executive’s compensation and consistent with competitive practices.

 

As described in more detail under Potential Payments Upon Termination or Change in Control below, the Named Executive Officers would be entitled under their employment agreements to severance benefits in the event of a termination of employment by the Company without cause (and, in the case of Messrs. Feltheimer and Drake, for good reason). The Company has determined that it is appropriate to provide these executives with severance benefits under these circumstances in light of their positions with the Company and as part of their overall compensation package. The severance benefits for these executives are generally determined as if they continued to remain employed by the Company through the remainder of the term covered by their employment agreement.

 

The Company also believes that the occurrence, or potential occurrence, of a change in control transaction will create uncertainty regarding the continued employment of our executive officers. This uncertainty results from the fact that many change in control transactions result in significant organizational changes, particularly at the senior executive level. In order to encourage certain of our executive officers to remain employed with the Company during an important time when their prospects for continued employment following the transaction are often uncertain, we provide certain Named Executive Officers with enhanced severance benefits if their employment is terminated by the Company without cause or, in certain cases, by the executive in connection with a change in control. Because we believe that a termination by the executive for good reason may be conceptually the same as a termination by the Company without cause, and because we believe that in the context of a change in control, potential acquirors would otherwise have an incentive to constructively terminate the executive’s employment to avoid paying severance, we believe it is appropriate to provide severance benefits in these circumstances.

 

We do not believe that the Named Executive Officers should be entitled to receive their cash severance benefits merely because a change in control transaction occurs. The payment of cash severance benefits is only triggered by an actual or constructive termination of employment. Under their respective employment agreements, certain of the Named Executive Officers would be entitled to accelerated vesting of their outstanding equity awards automatically on a change in control of the Company.

 

Perquisites and Other Benefits

 

We provide certain Named Executive Officers with limited perquisites and other personal benefits, such as a car allowance, life insurance policy contributions and club membership dues that the Compensation Committee believes are reasonable and consistent with our overall compensation program, to better enable us to attract and retain superior employees for key positions. Additionally, we own an interest in an aircraft through a fractional ownership program for use related to film promotion and other corporate purposes. This enables our executive officers and other service providers to fly more efficiently and to conduct business in privacy while traveling. As we own an interest in and maintain this aircraft for business purposes, we believe it is reasonable to afford limited personal use of the aircraft consistent with regulations of the Internal Revenue Service, the SEC and the Federal Aviation Administration. Mr. Feltheimer reimburses the Company for a substantial amount of the costs incurred for his limited personal use of the aircraft. All of these perquisites are reflected in the All Other Compensation column of the Summary Compensation table and the accompanying footnotes below.

 

Section 409A Amendments to Employment Agreements in Fiscal 2009

 

In December 2008, the Company amended the employment agreements with each of the Named Executive Officers to comply with the IRS’s deferred compensation rules under Section 409A of the Internal Revenue Code. These amendments did not increase the intended benefits to the executives under these agreements.

 

Policy with Respect to Section 162(m)

 

Section 162(m) of the Internal Revenue Code of 1986, as amended, generally disallows public companies a tax deduction for compensation in excess of $1,000,000 paid to their chief executive officers and certain other executive officers unless certain performance and other requirements are met. Our intent generally is to design and administer

executive compensation programs in a manner that will preserve the deductibility of compensation paid to our executive officers, and we believe that a substantial portion of our current executive compensation program (including the stock options granted to the Named Executive Officers, as described above) satisfies the requirements for exemption from the $1,000,000 deduction limitation. However, we reserve the right to design programs that recognize a full range of performance criteria important to our success, even where the compensation paid under such programs may not be deductible. The Compensation Committee will continue to monitor the tax and other consequences of our executive compensation program as part of its primary objective of ensuring that compensation paid to our executive officers is reasonable, performance-based and consistent with the goals of the Company and its shareholders.

 

The following Report of the Compensation Committee does not constitute soliciting material and should not be deemed filed or incorporated by reference into any of our other filings under the Securities Act of 1933, as amended, or the Exchange Act, except to the extent we specifically incorporate the report by reference in that filing.

 

The Compensation Committee has certain duties and powers as described in its charter. The Compensation Committee is currently composed of the three non-employee directors named at the end of this report, each of whom is independent as defined by the NYSE listing standards.

 

The Compensation Committee has reviewed and discussed with management the disclosures contained in the Compensation Discussion and Analysis section of this proxy statement. Based upon this review and discussion, the Compensation Committee recommended to our Board of Directors that the Compensation Discussion and Analysis section be included in this proxy statement to be filed with the SEC.

 

Compensation Committee of the Board of Directors

 

Arthur Evrensel (Chair)
Harald Ludwig
Daryl Simm

 

Messrs. Evrensel and Simm were members of the Compensation Committee during all of fiscal 2009. Mr. Ludwig replaced Mr. Simmons as a member of the Compensation Committee in September 2008. No member who served on the Compensation Committee at any time during fiscal 2009 is or has been a former or current executive officer of the Company or had any relationships requiring disclosure by the Company under the SEC’s rules requiring disclosure of certain relationships and related-party transactions. None of the Company’s executive officers served as a director or a member of a compensation committee (or other committee serving an equivalent function) of any other entity, the executive officers of which served as a director or member of the Compensation Committee during the fiscal year ended March 31, 2009.

 

The Summary Compensation table below quantifies the value of the different forms of compensation earned by or awarded to our Chief Executive Officer and Chief Financial Officer and the three most highly compensated executive officers other than our Chief Executive Officer and Chief Financial Officer for the 2009 fiscal year (the “Named Executive Officers”). The primary elements of each Named Executive Officer’s total compensation reported in the table are base salary, an annual bonus, and long-term equity incentives consisting of stock options, restricted share units and SARs, as applicable. The Named Executive Officers also received the other benefits listed in column (i) of the Summary Compensation table, as further described in footnote 3 to the table.

 

The Summary Compensation table should be read in conjunction with the tables and narrative descriptions that follow. The Grants of Plan-Based Awards table, and the accompanying description of the material terms of the stock options, restricted share unit awards and SARs granted in fiscal 2009, provide information regarding the long-term equity incentives awarded to the Named Executive Officers in fiscal 2009. The Outstanding Equity Awards at Fiscal Year End and Option Exercises and Stock Vested tables provide further information on the Named Executive Officers’ potential realizable value and actual value realized with respect to their equity awards.

 

SUMMARY COMPENSATION — FISCAL 2007, 2008 AND 2009

 

 

 

 

 

 

 

 

 

We have entered into employment agreements with each of the Named Executive Officers. These employment agreements, including the salary and bonus terms of each agreement, are briefly described below. Provisions of these agreements relating to outstanding equity incentive awards and post-termination of employment benefits are discussed below under the applicable sections of this proxy statement.

 

Jon Feltheimer.  We entered into an employment agreement with Mr. Feltheimer effective September 20, 2006, as amended on September 18, 2008 and October 8, 2008. The agreement provides that Mr. Feltheimer will serve as our Chief Executive Officer for a term that ends March 31, 2014. Mr. Feltheimer’s annual base salary under the agreement is $1,200,000 but, commencing October 8, 2011, his salary will increase in the same proportion as the proportional difference between the “Consumer Price Index for Urban Wage Earners All Items (Los Angeles-Riverside-Orange County, CA),” published by the United States Department of Labor, Bureau of Labor Statistics (the “CPI”) in effect on March 1 of the preceding year and the CPI in effect as of October 8, 2011 and as of each successive anniversary of such date during the term of the agreement. Mr. Feltheimer is entitled to an annual discretionary bonus determined by the Compensation Committee, based on certain criteria set forth in the agreement, with an informal target bonus of 100% of his base salary. In addition, Mr. Feltheimer will be entitled to receive a stock price bonus of $750,000 if the volume-weighted average of our median stock price exceeds $13.00, $16.00 or $19.00 for a period of six consecutive months (for a maximum total bonus of $2,250,000 if all three stock price values are met). The agreement also provides for Mr. Feltheimer to participate in the Company’s usual benefit programs for senior executives.

Michael Burns.  We entered into an employment agreement with Mr. Burns effective September 1, 2006, as amended on September 22, 2008. The agreement provides that Mr. Burns will serve as our Vice Chairman for a term that ends September 1, 2011. Mr. Burns’ annual base salary under the agreement increased from $750,000 to $925,000 from September 10, 2008 through September 1, 2010, and will increase to $950,000 from September 2, 2010 through September 1, 2011. Mr. Burns is entitled to an annual discretionary bonus, recommended by our Chief Executive Officer and determined by the Compensation Committee, based on certain criteria set forth in the agreement, with an informal target bonus of 100% of his base salary. In addition, Mr. Burns will be entitled to receive a stock price bonus of $600,000 if the volume-weighted average of our median stock price exceeds $13.00, $16.00 or $19.00 for a period of six consecutive months (for a maximum total bonus of $1,800,000 if all three stock price values are met). The agreement also provides for Mr. Burns to participate in the Company’s usual benefit programs for senior executives.

 

Steven Beeks.  We entered into an employment agreement with Mr. Beeks effective April 1, 2007, as amended on December 15, 2008 and February 6, 2009. The agreement provides that Mr. Beeks will serve as our President and Chief Operating Officer for a term that ends April 1, 2012. Mr. Beeks’ annual base salary under the agreement was $600,000 through March 31, 2008, and increased thereafter to $750,000 for the remainder of the term. Mr. Beeks is entitled to an annual performance bonus at the full discretion of our Chief Executive Officer, in consultation with the Compensation Committee. In addition, Mr. Beeks is entitled to receive an annual “EBITDA bonus” of either 12.5% or 25% of his annual base salary if the Company attains 105% or 115%, respectively, of an EBITDA target established by the Company for the applicable fiscal year. The agreement also provides for Mr. Beeks to participate in the Company’s usual benefit programs for its employees.

 

Joseph Drake.  We entered into an employment agreement with Mr. Drake effective September 10, 2007. The agreement provides that Mr. Drake will serve as our Co-Chief Operating Officer and President, Motion Picture Group, for a term that ends September 10, 2012. Mr. Drake’s annual base salary under the agreement is $850,000. Mr. Drake is entitled to an annual performance bonus at the full discretion of our Chief Executive Officer (in consultation with the Compensation Committee) which, for the first three years of his employment term only, can be up to $200,000. In addition, Mr. Drake is entitled to receive an annual bonus of either 12% or 23.5% of his annual base salary if the Company attains 105% or 115%, respectively, of an EBITDA target established by the Company for the applicable fiscal year. The agreement also provides for Mr. Drake to participate in the Company’s usual benefit programs for its employees.

 

James Keegan.  On January 14, 2009, we entered into an employment agreement with Mr. Keegan to continue to serve as our Chief Financial Officer for a term commencing April 16, 2009 and ending April 15, 2012. Pursuant to the agreement, Mr. Keegan will receive an annual base salary of $475,000. Mr. Keegan is also entitled to annual performance bonuses at the full discretion of our Chief Executive Officer, in consultation with the Compensation Committee, and to participate in the Company’s usual benefit programs for its employees.

 

The following table presents information regarding the equity incentive awards granted to the Named Executive Officers during fiscal 2009. Each of these awards was granted under the Lions Gate Entertainment Corp. 2004 Performance Incentive Plan (the “2004 Plan”).

 

GRANTS OF PLAN-BASED AWARDS — FISCAL 2009

 

 

 

 

Description of Plan-Based Awards

 

Each of the equity-based awards reported in the Grants of Plan-Based Awards table was granted under, and is subject to, the terms of the 2004 Plan. The 2004 Plan is administered by the Compensation Committee. The Compensation Committee has authority to interpret the plan provisions and make all required determinations under the plan. This authority includes making required proportionate adjustments to outstanding awards upon the occurrence of certain corporate events such as reorganizations, mergers and stock splits, and making provisions to ensure that any tax withholding obligations incurred in respect of awards are satisfied. Awards granted under the plan are generally only transferable to a beneficiary of a Named Executive Officer upon his death. However, the Compensation Committee may establish procedures for the transfer of awards to other persons or entities, provided that such transfers comply with applicable securities laws and, with limited exceptions set forth in the plan document, are not made for value.

 

Under the terms of the 2004 Plan, if there is a change in control of the Company, each Named Executive Officer’s outstanding awards granted under the plan will generally become fully vested and, in the case of options and SARs, exercisable, unless the Compensation Committee provides for the substitution, assumption, exchange or other continuation of the outstanding awards. Any options and SARs that become vested in connection with a change in control generally must be exercised prior to the change in control, or they will be canceled in exchange for the right to receive a cash payment in connection with the change in control transaction.

As described below under Potential Payments Upon Termination or Change in Control, certain options, restricted share unit awards and SARs granted to the Named Executive Officers during fiscal 2009 are subject to accelerated vesting under the terms of their respective employment agreements in the event of a change in control of the Company and/or the termination of their employment under certain circumstances.

 

Restricted Share Units

 

Columns (g) and (i) in the table above report awards of restricted share units granted to the Named Executive Officers in fiscal 2009. Each restricted share unit represents a contractual right to receive one of our common shares. The Named Executive Officer does not have the right to vote or dispose of the restricted share units, but does have the right to receive cash payments as dividend equivalents based on the amount of dividends (if any) paid by the Company during the term of the award on a number of shares equal to the number of outstanding and unpaid restricted share units then subject to the award. Such payments are made at the same time the related dividends are paid to the Company’s shareholders generally.

 

Time-Based Units.  Column (i) in the table above reports awards of restricted share units granted to the Named Executive Officers in fiscal 2009 that are subject to time-based vesting requirements. Other than the “Quarterly Grants” to Mr. Feltheimer described below, the restricted share units granted to each of Messrs. Feltheimer, Burns and Keegan reported in this column are subject to a three-year vesting schedule provided that, in each case, the officer continues to be employed with the Company through the vesting date. See the footnotes to the Outstanding Equity Awards at Fiscal 2009 Year-End table below for more information on the specific vesting dates of these awards.

 

Performance-Based Units.  Column (g) of the table above reports awards of restricted share units granted to each of Messrs. Feltheimer and Burns in fiscal 2009 that are eligible to vest based on the Company’s performance over a specified period of time relative to certain preestablished goals. Up to one-third of the total number of restricted share units subject to the award are eligible to vest during each of the three performance years covered by the award. The performance period for Mr. Feltheimer’s award runs from April 1, 2011 through March 31, 2014, while the performance period for Mr. Burns’ award runs from September 2, 2008 through September 1, 2011. In general, the number of restricted share units that vest each year is determined based on the Company’s performance during the applicable year, but the Compensation Committee has discretion to provide that the units may vest even if the performance goals are not met or that any units that do not vest based on the Company’s performance for a particular year will be eligible to vest based on the Company’s performance in a subsequent year. For more information on these awards, please see the Compensation Discussion and Analysis above.

 

Quarterly Grants.  In October 2008, Mr. Feltheimer was granted the right to receive, on the first day following each three month anniversary of October 8, 2008 that occurs during the term of his employment agreement and subject to regulatory approval, if required, a number of our common shares equivalent to $250,000, calculated using the closing price of our common shares on the last trading day immediately prior to the respective quarterly issuance date. If shareholder or regulatory approval of any such quarterly issuance is necessary and is not obtained, Mr. Feltheimer will receive alternative commensurate compensation to be negotiated in good faith. As noted above, the term of Mr. Feltheimer’s employment agreement is scheduled to end on March 31, 2014.

 

Share Appreciation Rights

 

Column (j) of the table reports SARs granted to Mr. Beeks in fiscal 2009 that vest in three equal installments. The SARs entitle Mr. Beeks to receive, upon exercise of the SAR, a cash payment equal to the amount by which the trading price of our common shares on the exercise notice date exceeds the SARs’ base price of $5.45, multiplied by the number of SARs exercised. The SARs vest in three equal annual installments beginning on February 5, 2010 and have a maximum term of five years. However, vested SARs may terminate earlier in connection with a change in control transaction or a termination of Mr. Beeks’ employment. Subject to any accelerated vesting that may apply in the circumstances, the unvested portion of the SARs will immediately terminate upon a termination of Mr. Beeks’ employment, and he will generally have six months to exercise the vested SARs following a termination of employment. The SARs (whether or not vested) will immediately terminate if Mr. Beeks is terminated by us for cause. See Current Executive Compensation Program Elements Long-Term Incentive Equity Awards — Share Appreciation Rights above for more information on this award.

 

The following table presents information regarding the outstanding equity awards held by each of the Named Executive Officers as of March 31, 2009, including the vesting dates for the portions of these awards that had not vested as of that date.

 

OUTSTANDING EQUITY AWARDS AT FISCAL 2009 YEAR-END

 

 

 

 

 

 

The following table presents information regarding the exercise of stock options by the Named Executive Officers during fiscal 2009 and on the vesting during fiscal 2009 of other stock awards previously granted to the Named Executive Officers.

 

OPTION EXERCISES AND STOCK VESTED — FISCAL 2009

 

 

 

 

The following section describes the benefits that may become payable to certain Named Executive Officers in connection with a termination of their employment with us and/or a change in control of the Company pursuant to the terms of their respective employment agreements with the Company. In addition to the benefits described below, outstanding equity-based awards held by the Named Executive Officers may also be subject to accelerated vesting in connection with a change in control of the Company under the terms of our 2004 Plan, as noted under Grants of Plan-Based Awards above.

 

Jon Feltheimer

 

Severance Benefits — Termination of Employment.  In the event Mr. Feltheimer’s employment is terminated during the employment term either by us without cause or by Mr. Feltheimer for good reason (as those terms are defined in the employment agreement), Mr. Feltheimer will be entitled to severance pay equal to the present value (using the then prevailing rate of interest charged to us by our principal lender as the discount rate) of his base salary for the remainder of the term of the employment. In addition, the stock options and time-based restricted share units granted to Mr. Feltheimer pursuant to his employment agreement, along with the next installment of his performance-based share units scheduled to vest following the date of termination, will generally become fully vested, to the extent then outstanding and not otherwise vested. For the remainder of the term of his employment agreement, we will continue to provide Mr. Feltheimer with the benefits he was receiving at the time of his termination, and Mr. Feltheimer will continue to be eligible for the stock-price bonuses described above under Description of Employment Agreements — Salary and Bonus Amounts. Mr. Feltheimer will also continue to receive the quarterly grants of fully vested shares for the remainder of the term of the employment agreement described above under Description of Plan-Based Awards — Quarterly Grants.

 

Change in Control Benefits.  Upon a change in control of the Company (as defined in the employment agreement), the stock options and time-based restricted share units granted to Mr. Feltheimer pursuant to his employment agreement, along with the next installment of his performance-based stock units scheduled to vest following the date of the change in control, will generally become fully vested, to the extent then outstanding and not otherwise vested. In addition, if the price of our common shares as of the change in control date exceeds the thresholds for the stock-price bonuses described above, Mr. Feltheimer would be entitled to payment of the applicable amount of his stock-price bonus. In the event that the benefits payable to Mr. Feltheimer in connection with a change in control would be subject to the excise tax imposed under Section 280G of the U.S. Internal Revenue Code of 1986 (“Section 280G”), Mr. Feltheimer’s benefits would either be reduced to a level such that the excise tax would not apply or he would be paid the full amount of his benefits and would receive a gross-up payment from us up to a maximum of $150,000, whichever would result in his receiving the greater benefit on an after-tax basis.

 

Severance Benefits — Termination of Employment in Connection with Change in Control.  In the event Mr. Feltheimer’s employment is terminated by us in connection with a change in control (as defined in the employment agreement), for any reason other than cause, or due to Mr. Feltheimer’s death or disability, Mr. Feltheimer would be entitled to a cash payment of $2,500,000 and to severance pay of continued payments of his base salary for the remainder of the term of the employment agreement. If a change in control occurs and Mr. Feltheimer voluntarily terminates his employment within the 30-day period following the change in control, he would be entitled to a cash payment of $2,500,000, but would not be entitled to any continued payment of his base salary.

 

Severance Benefits — Death or Disability.  In the event Mr. Feltheimer’s employment is terminated during the employment term due to his death or disability (as defined in the employment agreement), he (or his estate) would be entitled to payment of the applicable amount of his stock-price bonus if the price of our common shares exceeded the stock-price bonus thresholds for the four-month period preceding the date of termination. Mr. Feltheimer (or his estate) may also be entitled to a prorated payment of his stock-price bonus based on the price of our common shares during the six-month period following such a termination. In addition, if Mr. Feltheimer’s employment is terminated due to his death, all restricted share units and options granted to Mr. Feltheimer pursuant to the employment agreement (but not including the quarterly grants of fully vested shares described above), to the extent outstanding and unvested, will immediately accelerate and become fully vested as of the date of death.

Michael Burns

 

Severance Benefits — Termination of Employment.  In the event Mr. Burns’ employment is terminated during the employment term by us without cause (as defined in the employment agreement), Mr. Burns will be entitled to a lump sum severance payment equal to 50% of his base salary for the remainder of the term of the employment agreement. In addition, the stock options and time-based restricted share units granted to Mr. Burns pursuant to his employment agreement, along with the next installment of his performance-based stock units scheduled to vest following the date of termination, will generally become fully vested, to the extent then outstanding and not otherwise vested.

 

Change in Control Benefits.  Upon a change in control of the Company (as defined in the employment agreement), the stock options and time-based restricted share units granted to Mr. Burns pursuant to his employment agreement, along with the next installment of his performance-based stock units scheduled to vest following the date of the change in control, will generally become fully vested, to the extent then outstanding and not otherwise vested. In addition, if the price of our common shares as of the change in control date exceeds the thresholds for the stock-price bonuses described above, Mr. Burns would be entitled to payment of the applicable amount of his stock-price bonus.

 

Severance Benefits — Termination of Employment in Connection with Change in Control.  In the event Mr. Burns’ employment is terminated by the Company in connection with a change in control (as defined in the employment agreement), for any reason other than cause, due to Mr. Burns’ death or disability, or if Mr. Burns voluntarily elects to terminate his employment within the 15-day period following a change in control, Mr. Burns would be entitled to severance pay equal to the greater of continued payments of his base salary for the remainder of the term of the employment agreement or $1,800,000.

 

Severance Benefits — Death or Disability.  In the event Mr. Burns’ employment is terminated during the employment term due to his death or disability (as defined in the employment agreement), he (or his estate) would be entitled to payment of the applicable amount of his stock-price bonus if the price of our common shares exceeded the stock-price bonus thresholds for the four-month period preceding the date of termination. Mr. Burns (or his estate) may also be entitled to a prorated payment of his stock-price bonus based on the price of our common shares during the six-month period following such a termination. In addition, if Mr. Burns’ employment is terminated due to his death, all restricted share units and options granted to Mr. Burns pursuant to the employment agreement, to the extent outstanding and unvested, will immediately accelerate and become fully vested as of the date of death.

 

Steven Beeks

 

Severance Benefits — Termination of Employment.  In the event Mr. Beeks’ employment is terminated during the employment term by us without cause (as defined in the employment agreement), Mr. Beeks will be entitled to receive a lump sum severance payment equal to 50% of his base salary for the remainder of the term of the employment agreement, but in no event less than the greater of either six months’ base salary or the amount Mr. Beeks would receive under our severance policy for non-contract employees that is in effect at the time of termination. In addition, the SARs granted to Mr. Beeks pursuant to his employment agreement will generally become fully vested, to the extent then outstanding and not otherwise vested, although the SARs may not be exercised by Mr. Beeks until the date they were originally scheduled to vest.

 

Change in Control Benefits.  Upon a change in control of the Company (as defined in the employment agreement), the stock options, restricted share units and SARs granted to Mr. Beeks pursuant to his employment agreement will generally become fully vested, to the extent then outstanding and not otherwise vested.

 

Severance Benefits — Termination of Employment in Connection with Change in Control.  In the event Mr. Beeks’ employment is terminated by the Company within six months of the date of a change in control (as defined in the employment agreement), Mr. Beeks would be entitled to severance pay equal to the greater of 50% of his base salary under the employment agreement for the remainder of the term or $1,500,000.

 

Severance Benefits — Death.  In the event Mr. Beeks’ employment is terminated during the employment term due to his death, the stock options, restricted share units and SARs granted to Mr. Beeks pursuant to his employment agreement will generally become fully vested, to the extent then outstanding and not otherwise vested.

Joseph Drake

 

Severance Benefits — Termination of Employment.  In the event Mr. Drake’s employment is terminated during the employment term by us without cause or by Mr. Drake for good reason (as those terms are defined in the employment agreement), Mr. Drake will be entitled to receive (i) a lump sum payment of 50% of each EBITDA bonus (as described under Description of Employment Agreements — Salary and Bonus Amounts above) that would have been earned through the conclusion of the term as if the employment agreement had not been terminated and (ii) a lump sum payment of 50% of his base salary for the remainder of the term of the employment agreement (provided that such payment is not less than the greater of six months’ of Mr. Drake’s base salary or the amount he would be entitled to receive under our severance policy for non-contract employees). In addition, Mr. Drake would be entitled to accelerated vesting of the equity-based awards granted pursuant to his employment agreement as follows: (a) with respect to his stock options, 100% of the next installment scheduled to vest following the date of termination and 50% of the following installment will generally become fully vested; (b) with respect to his time-based restricted share units, 100% of the next installment scheduled to vest following the date of termination and 50% of the following installment will generally become fully vested; and (c) 100% of the next installment of his performance-based stock units scheduled to vest following the date of termination will generally become fully vested, in each case to the extent then outstanding and not otherwise vested.

 

Change in Control Benefits.  Upon a change in control of the Company (as defined in the employment agreement), the stock options and restricted share units granted to Mr. Drake pursuant to his employment agreement will generally become fully vested, to the extent then outstanding and not otherwise vested.

 

Severance Benefits — Termination of Employment in Connection with Change in Control.  In the event Mr. Drake’s employment is terminated by us within six months of the date of a change in control (as defined in the employment agreement), Mr. Drake would be entitled to (i) payment of each EBITDA bonus that would have been earned through the conclusion of the term as if the employment agreement had not been terminated and (ii) severance pay equal to the greater of 50% of his base salary under the employment agreement for the remainder of the term or $1,700,000.

 

Severance Benefits — Death.  In the event Mr. Drake’s employment is terminated during the employment term due to his death, the stock options and restricted share units granted to Mr. Drake pursuant to his employment agreement will generally become fully vested, to the extent then outstanding and not otherwise vested.

 

James Keegan

 

Severance Benefits — Termination of Employment.  In the event Mr. Keegan’s employment is terminated during the employment term by us without cause (as defined in the employment agreement), Mr. Keegan will be entitled to receive a lump sum severance payment equal to 50% of his base salary for the remainder of the term of the employment agreement.

 

The following present the approximate amount of the benefits that each of the Named Executive Officers would have been entitled to have, had his employment terminated under the circumstances described in the preceding paragraphs on March 31, 2009.

Severance Benefits.  The following chart presents our estimate of the amount of the dollar value of the benefits to which each of the Named Executive Officers would have been entitled to have, had his employment terminated under the circumstances described above (other than in connection with a change in control of the Company) on March 31, 2009:

 

 

 

 

Change in Control Benefits.  The following chart presents our estimate of the dollar value of the amount of the benefits to which each of the Named Executive Officers would have been entitled to have, had a change in control of the Company occurred on March 31, 2009 (and, as applicable, the executive’s employment with us had terminated under the circumstances described above on such date):

 

 

 

 

We currently maintain two equity compensation plans: the 2004 Plan and the Lionsgate Employees’ and Directors’ Equity Incentive Plan (the “Equity Incentive Plan”), each of which has been approved by our shareholders. No new awards may be granted under the Equity Incentive Plan. In addition, as described below, we granted certain equity-based awards that were not under shareholder-approved plans in connection with our acquisition of Mandate Pictures in 2007.

 

The following table sets forth, for each of our equity compensation plans, the number of common shares subject to outstanding options and rights, the weighted-average exercise price of outstanding options, and the number of shares remaining available for future award grants as of March 31, 2009.