Warner Bros. Discovery, Inc SC 14D9, filed Dec 17, 2025
Warner Bros. Discovery, Inc. (WBD)
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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 14D-9
(Rule 14d-101)
SOLICITATION/RECOMMENDATION STATEMENT
UNDER SECTION 14(d)(4) OF THE SECURITIES EXCHANGE ACT OF 1934
WARNER BROS. DISCOVERY, INC.
(Name of Subject Company)
WARNER BROS. DISCOVERY, INC.
(Name of Persons Filing Statement)
Series A Common Stock, $0.01 par value per share
(Title of Class of Securities)
934423104
(CUSIP Number of Class of Securities)
Priya Aiyar
Chief Legal Officer
Warner Bros. Discovery, Inc.
230 Park Avenue South
New York, New York 10003
(212) 548-5555
(Name, address, and telephone number of persons authorized to receive notices and communications
on behalf of the person filing statement)
Copies to:
| Jonathan E. Levitsky Gordon S. Moodie Katherine D. Taylor Erik J. Andren Debevoise & Plimpton LLP 66 Hudson Boulevard New York, New York 10001 (212) 909-6000 |
Andrew J. Nussbaum Karessa L. Cain Hannah Clark Wachtell, Lipton, Rosen & Katz 51 West 52nd Street New York, New York 10019 (212) 403-1000 |
| ☐ | Check the box if the filing relates solely to preliminary communications made before the commencement of a tender offer. |
Table of Contents
| Page | ||||||
| Item 1. |
Subject Company Information | 1 | ||||
| Item 2. |
Identity and Background of Filing Person | 1 | ||||
| Item 3. |
Past Contacts, Transactions, Negotiations and Agreements | 5 | ||||
| Item 4. |
The Solicitation or Recommendation | 17 | ||||
| Item 5. |
Person/Assets Retained, Employed, Compensated or Used | 64 | ||||
| Item 6. |
Interest in Securities of the Subject Company | 65 | ||||
| Item 7. |
Purposes of the Transaction and Plans or Proposals | 66 | ||||
| Item 8. |
Additional Information | 67 | ||||
| Item 9. |
Exhibits | 78 | ||||
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Item 1. Subject Company Information
Name and Address
The name of the subject company to which this Solicitation/Recommendation Statement on Schedule 14D-9 (together with any exhibits attached hereto, this “Statement”) relates is Warner Bros. Discovery, Inc., a Delaware corporation (“WBD” or the “Company”). WBD’s principal executive offices are located at 230 Park Avenue South, New York, New York 10003. WBD’s telephone number at this address is (212) 548-5555.
Securities
The title of the class of equity securities to which this Statement relates is WBD’s Series A common stock, par value $0.01 per share (“WBD Common Stock”). As of December 16, 2025, there were 2,479,486,688 shares of WBD Common Stock outstanding.
Item 2. Identity and Background of Filing Person
Name and Address
The name, business address, and business telephone number of WBD, which is the subject company and the person filing this Statement, are set forth in Item 1 above. WBD’s website address is www.wbd.com. The information contained on or connected to WBD’s website is not incorporated by reference in this Statement and should not be considered a part of this Statement.
Tender Offer
This Statement relates to the unsolicited offer by Prince Sub Inc., a Delaware corporation (the “Purchaser”) and a direct wholly-owned subsidiary of Paramount Skydance Corporation, a Delaware corporation (“PSKY”), to purchase all of the outstanding shares of WBD Common Stock, other than shares held in treasury by WBD or owned by PSKY or any of its wholly-owned subsidiaries, at $30.00 per share, net to the seller in cash, without interest and less any required withholding taxes (the “Offer Price”), as disclosed in the Tender Offer Statement on Schedule TO (together with the exhibits thereto, as amended or supplemented from time to time, the “Schedule TO”) filed by PSKY with the Securities and Exchange Commission (the “SEC”) on December 8, 2025. The tender offer is being made on the terms and subject to the conditions set forth in the Offer to Purchase, dated December 8, 2025 (as amended or supplemented from time to time, the “Offer to Purchase”), and the related letter of transmittal that accompanies the Offer to Purchase.
The tender offer and the value of the consideration offered thereby, together with all of the terms and conditions applicable to the tender offer, is referred to in this Statement as the “Offer.” According to the Schedule TO, the Offer will expire at 5:00 p.m., New York City time, on January 8, 2026, unless PSKY extends or earlier terminates the Offer (as extended, the “Expiration Date”).
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PSKY has stated that the purpose of the Offer is to acquire control of, and ultimately the entire equity interest in, WBD. PSKY has stated it intends, substantially concurrent with and following the completion of the Offer, to consummate a second-step merger between WBD and the Purchaser pursuant to Section 251(h) of the General Corporation Law of the State of Delaware (the “DGCL”) (the “Second-Step Merger”). PSKY has stated the purpose of the Second-Step Merger is to acquire all of the outstanding shares of WBD Common Stock not acquired pursuant to the Offer. In the Second-Step Merger, each remaining outstanding share of WBD Common Stock (other than shares held in treasury by WBD, shares owned by PSKY or any of its wholly-owned subsidiaries or shares as to which appraisal rights have been properly exercised by the holders or beneficial owners of such shares in accordance with the DGCL) would be converted into the right to receive the same amount of cash as is received by WBD stockholders pursuant to the Offer. After the Second-Step Merger, PSKY would own all of the outstanding shares of WBD Common Stock and WBD would be a wholly-owned direct subsidiary of PSKY.
According to the Schedule TO, both the board of directors of WBD (the “WBD Board”) and WBD stockholders would be required to approve the Second-Step Merger, unless PSKY receives at least 90% of the outstanding shares of WBD Common Stock in the Offer, in which case PSKY would not be required to, and would not seek the approval of, WBD stockholders before effecting the Second-Step Merger of the Purchaser with and into WBD as a “short-form merger” pursuant to Section 253 of the DGCL. Section 253 of the DGCL provides that a parent corporation owning at least 90% of the outstanding shares of each class of the stock of a subsidiary entitled to vote on a merger (without applying Section 253 of the DGCL) can merge with that subsidiary without advance notice or consent of the board of directors or minority stockholders of such subsidiary upon approval by the parent corporation’s board of directors. Accordingly, if the Offer is completed and PSKY receives, through the Purchaser, at least 90% of the outstanding shares of WBD Common Stock, PSKY intends to effect the Second-Step Merger to acquire all outstanding shares of WBD Common Stock without a vote of WBD stockholders in accordance with Section 253 of the DGCL.
The Offer is also subject to numerous conditions. Notwithstanding any other provision of the Offer and in addition to (and not in limitation of) PSKY’s and the Purchaser’s rights to extend and amend the Offer at any time, in their discretion, PSKY and the Purchaser are not required to accept for purchase any shares of WBD Common Stock tendered pursuant to the Offer and may terminate, extend or amend the Offer, if immediately prior to the expiration of the Offer, in the reasonable judgment of PSKY and the Purchaser, any one or more of the following conditions shall not have been satisfied:
| • | The “PSKY Merger Agreement Condition” – WBD shall have entered into a definitive merger agreement with PSKY and the Purchaser substantially in the form of the merger agreement submitted by PSKY to WBD on December 4, 2025 and attached to the Offer to Purchase as part of Annex A (the “PSKY Merger Agreement”), other than changes required to reflect completion of the Offer followed by a second-step merger under Section 251(h) of the DGCL and any other changes mutually agreed between WBD and PSKY; |
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| • | The “Abandonment of Separation Condition” – WBD’s plans to separate its Streaming & Studios and Global Networks businesses into two separate publicly traded companies shall not have been consummated; |
| • | The “Minimum Tender Condition” – WBD stockholders shall have validly tendered and not withdrawn prior to the expiration of the Offer at least that number of shares of WBD Common Stock that constitutes a majority of the then-outstanding shares of WBD Common Stock on a fully diluted basis; |
| • | The “Section 203 Condition” – The restrictions on business combinations under Section 203 of the DGCL shall be inapplicable to the Second-Step Merger following the Offer; |
| • | The “Competition Laws Condition” – The waiting period applicable to the Offer and the Second-Step Merger under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended (“HSR Act”), shall have expired or been terminated, and any commitments not to close the Offer or the Second-Step Merger before a certain date under a timing agreement entered into by PSKY or the Purchaser with any governmental entity shall have expired or been terminated and any applicable mandatory waiting period, clearance or affirmative approval of any governmental body, agency or authority shall have expired or been obtained; |
| • | The “Injunction Condition” – No governmental entity shall after the date of the Offer to Purchase have enacted, issued or promulgated any law or order that is in effect and that restrains, enjoins or otherwise prohibits consummation of the Offer or the Second-Step Merger; |
| • | The “Material Adverse Effect Condition” – There shall not have occurred any effect, event, development, change, state of facts, condition, circumstance or occurrence, that, individually or in the aggregate, has had, or would reasonably be expected to have, a Material Adverse Effect (as defined below); |
| • | The “Regulatory Material Adverse Effect Condition” – No approval, clearance, consent, registration, permit, authorization or other confirmation required under applicable law or by any governmental body, agency or authority in connection with the consummation of the Offer or the Second-Step Merger shall have imposed any remedy that, individually or in the aggregate with all other remedies imposed, to be taken or agreed to, would reasonably be expected to have a material adverse effect on the combined company following consummation of the Offer and the Second-Step Merger; |
| • | The “Termination of Netflix Merger Agreement/Stockholder Vote Condition” – the Netflix Merger Agreement (as defined below) shall have been validly terminated in accordance with its terms and WBD stockholders shall not have adopted the Netflix Merger Agreement and shall not have approved the transactions contemplated thereby; and |
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| • | The “Compliance Condition” – WBD shall not have taken any action or actions that would have constituted a breach in any material respect of Section 6.1 of the PSKY Merger Agreement as if such agreement had been entered into as of the date of the Offer. |
According to the Schedule TO, the Offer is not subject to any financing conditions, Committee on Foreign Investment in the United States (“CFIUS”) clearance or (so long as WBD complies with its covenants as contemplated by the PSKY Merger Agreement) Federal Communications Commission (“FCC”) approval.
According to the Schedule TO, the foregoing conditions are for the sole benefit of PSKY and the Purchaser and may be asserted by PSKY or the Purchaser regardless of the circumstances giving rise to any such condition or, other than the “Competition Laws Condition” and “Injunction Condition,” may be waived by PSKY or the Purchaser, in whole or in part, at any time and from time to time prior to the expiration of the Offer in its discretion. The Schedule TO further provides that, to the extent PSKY or the Purchaser waives a condition set forth in the Offer to Purchase with respect to one tender, PSKY and the Purchaser would waive that condition with respect to all other tenders. According to the Schedule TO, the failure by PSKY or the Purchaser at any time to exercise any of the foregoing rights shall not be deemed a waiver of any such right; the waiver of any such right with respect to particular facts and other circumstances shall not be deemed a waiver with respect to any other facts and circumstances; and each such right shall be deemed an ongoing right that may be asserted at any time and from time to time until the expiration of the Offer. Any determination by PSKY or the Purchaser concerning any condition or event described in the Offer to Purchase shall be final and binding on all parties to the fullest extent permitted by law.
According to the Schedule TO, subject to applicable law, PSKY and the Purchaser reserve the right to amend the Offer in any respect (including amending the Offer Price). In addition, in the event that PSKY or the Purchaser enters into a merger agreement with WBD and such merger agreement does not provide for a tender offer, PSKY and the Purchaser reserve the right to terminate the Offer, in which case the shares of WBD Common Stock would, upon consummation of such merger, be converted into the right to receive the consideration negotiated by PSKY and WBD and specified in such merger agreement.
The Schedule TO states that the principal executive offices of the Purchaser are located at 1515 Broadway, New York, New York 10036 and that its telephone number is (212) 258-6000.
Definition of Material Adverse Effect
“Material Adverse Effect” means any effect, event, development, change, state of facts, condition, circumstance or occurrence that, individually or in the aggregate with any other effect, event, development, change, state of facts, condition, circumstance or occurrence that is, or would reasonably be expected to be, materially adverse to the financial condition, properties, assets, operations, liabilities, business or results of operations of WBD and its subsidiaries taken as a whole; provided, however, that none of the following, alone or in combination, shall be deemed to constitute a “Material Adverse Effect,” or be taken into account in determining whether a Material Adverse Effect has occurred or would be reasonably likely to occur:
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(a) effects generally affecting the economy, credit, capital, securities or financial markets or political, regulatory, economic or business conditions (including tariffs, trade policies and sanctions) in any jurisdiction in which WBD or its subsidiaries has material operations or in which products or services of WBD or its subsidiaries are sold; (b) effects that are the result of factors generally affecting the industries, markets or geographical areas in which WBD or its subsidiaries has material operations; (c) changes in the relationship of WBD or its subsidiaries, contractual or otherwise, with customers, employees, unions, suppliers, distributors, financing sources, partners or similar relationship or any resulting effect that was caused by the announcement, pendency or performance of the Offer by, or resulting or arising from the identity of or any facts or circumstances relating to, PSKY or its affiliates; (d) changes or modifications in accounting standards applicable to WBD or its subsidiaries, including U.S. generally accepted accounting principles, or in any law of general applicability, including the repeal thereof, or in the interpretation or enforcement thereof, after the date of the Offer to Purchase; (e) any failure by WBD or its subsidiaries to meet any internal or public projections or forecasts or estimates of revenues or earnings for any period; provided that the exception in this clause (e) shall not prevent or otherwise affect a determination that any effect underlying such failure has resulted in, or contributed to, or would reasonably be expected to result in, or contribute to, a Material Adverse Effect; (f) effects resulting from acts of war (whether or not declared), civil disobedience, hostilities, sabotage, terrorism, cyberterrorism, ransomware or malware, military actions or the escalation of any of the foregoing, any hurricane, flood, tornado, earthquake or other weather or natural disaster, or any epidemic, pandemic, outbreak of illness or other public health event (including pandemics and epidemics) or any other force majeure event, or any national or international calamity or crisis; (g) any actions taken or failed to be taken by WBD or its subsidiaries that are expressly required to be taken by the Offer to Purchase or any actions taken with PSKY’s written consent or failed to be taken at PSKY’s written request; (h) any effect or announcement of an effect affecting the credit rating or other rating of financial strength of WBD, its subsidiaries or any of their respective securities; provided that the exception in this clause (h) shall not prevent or otherwise affect a determination that any effect underlying such effect or announcement of an effect has resulted in, or contributed to, or would reasonably be expected to result in, or contribute to, a Material Adverse Effect; provided, further that, with respect to clauses (a), (b), (d) and (f), such effect, event, development, change, state of facts, condition, circumstance or occurrence shall be taken into account in determining whether a “Material Adverse Effect” has occurred or is occurring to the extent it materially and disproportionately adversely affects WBD and its subsidiaries (taken as a whole) compared to other companies operating in the industries and geographies in which WBD and its subsidiaries operate (in which case only the incremental disproportionate impact may be taken into account, and only to the extent otherwise permitted by this definition).
Item 3. Past Contacts, Transactions, Negotiations and Agreements
Except as described in this Statement or as otherwise incorporated herein by reference, including in Exhibit (e)(3)-(e)(69) to this Statement and in the excerpts from WBD’s Definitive Proxy Statement on Schedule 14A, dated and filed with the SEC on April 23, 2025 (the “2025 Proxy Statement”), relating to WBD’s Annual Meeting held on June 2, 2025, which excerpts are filed as Exhibit (e)(2) to this Statement and incorporated herein by reference, to the knowledge of WBD as of the date of this Statement, there are no material agreements, arrangements or understandings, nor any actual or potential conflicts of interest, between WBD
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or any of its affiliates, on the one hand, and (a) WBD or any of its executive officers, directors or affiliates, or (b) PSKY or Purchaser or any of their respective executive officers, directors or affiliates, on the other hand. Exhibit (e)(2) is incorporated herein by reference and includes the following sections from the 2025 Proxy Statement: “Corporate Governance—Transactions with Related Persons,” “Corporate Governance—Director Compensation,” “Executive Compensation—Compensation Discussion and Analysis,” “Executive Compensation—Compensation Philosophy and Practices,” “Executive Compensation—NEO Compensation in 2024,” “Executive Compensation—Executive Compensation Tables” and “Stock Ownership.”
Any information contained in the pages from the 2025 Proxy Statement incorporated herein by reference shall be deemed modified or superseded for purposes of this Statement to the extent that any information contained herein modifies or supersedes such information.
The Netflix Merger Agreement
On December 4, 2025, WBD, Netflix, Inc., a Delaware corporation (“Netflix”), Nightingale Sub, Inc., a Delaware corporation and wholly-owned subsidiary of Netflix (“Merger Sub”), and New Topco 25, Inc., a newly formed Delaware corporation and wholly-owned subsidiary of WBD (“New WBD”), entered into an Agreement and Plan of Merger (the “Netflix Merger Agreement”), pursuant to and subject to the terms of which, among other things, (i) a newly formed Delaware corporation and wholly-owned subsidiary of New WBD will merge with and into WBD (the “Holdco Merger”) in accordance with Section 251(g) of the DGCL, with WBD surviving as a wholly-owned subsidiary of New WBD and with the stockholders of WBD immediately prior to the effective time of the Holdco Merger becoming the stockholders of New WBD at and immediately following the effective time of the Holdco Merger, (ii) WBD will undertake an internal reorganization and the separation and distribution (the “Separation and Distribution”) of WBD’s Global Linear Networks business and certain other assets (the “SpinCo Business”) pursuant to a separation and distribution agreement (the “Separation and Distribution Agreement”), as a result of which WBD will hold the Streaming & Studios businesses of WBD (the “Retained Business” or “Warner Bros.”) and a newly formed entity (“Discovery Global”) will hold the SpinCo Business, and WBD will distribute all of the issued and outstanding stock of Discovery Global to the holders of the outstanding shares of WBD Common Stock, on a pro rata basis, and (iii) Merger Sub will merge with and into WBD, with WBD surviving as a wholly-owned subsidiary of Netflix (the “Netflix Merger”).
For the avoidance of doubt, all references to WBD with respect to a matter occurring after the completion of the Holdco Merger will be deemed to be references to New WBD.
The boards of directors of WBD and Netflix have unanimously approved the Netflix Merger Agreement and the consummation of the Netflix Merger, and the other transactions contemplated thereby, and the WBD Board has unanimously resolved to recommend that WBD’s stockholders approve the Netflix Merger and adopt the Netflix Merger Agreement.
Subject to the terms and conditions set forth in the Netflix Merger Agreement and the Separation and Distribution Agreement, at the effective time of the Netflix Merger, WBD stockholders will receive for each share of WBD Common Stock (a) an amount in cash equal to $23.25, without interest, and (b) a number of shares of common stock of Netflix, par value
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$0.001 per share (“Netflix Common Stock”), equal to an exchange ratio to be determined based on the 15-day volume-weighted average trading price of Netflix Common Stock (measured three trading days prior to the closing of the Netflix Merger), subject to a collar and a dollar-for-dollar adjustment based on the net indebtedness of Discovery Global at the time of the Separation and Distribution. In addition, in connection with the Separation and Distribution, WBD stockholders will receive for each share of WBD Common Stock a number of shares of common stock of Discovery Global equal to a distribution ratio to be determined closer in time to the Separation and Distribution.
The Netflix Merger Agreement contains customary representations and warranties and pre-closing covenants of both WBD and Netflix, along with customary closing conditions, including, among others, the consummation of the Separation and Distribution.
The Netflix Merger Agreement also provides for certain mutual termination rights. Upon termination of the Netflix Merger Agreement under certain circumstances, including, but not limited to, if WBD terminates the Netflix Merger Agreement to enter into a definitive agreement providing for a Company Superior Proposal (as defined in the Netflix Merger Agreement), WBD will be obligated to pay Netflix a fee equal to $2.8 billion. Additionally, if the Netflix Merger Agreement is terminated after March 4, 2027 (subject to two automatic three-month extensions under certain circumstances) due to failure to receive certain regulatory clearances or due to an antitrust or foreign regulatory injunction permanently enjoining the Netflix Merger, Netflix will be obligated to pay WBD a fee equal to $5.8 billion.
A summary of the Netflix Merger Agreement is contained in Annex A to this Statement, which contains certain disclosure from WBD’s Current Report on Form 8-K filed with the SEC on December 5, 2025 (Film # 251553760). This summary does not purport to be complete and is qualified in its entirety by reference to the Netflix Merger Agreement, which is filed as Exhibit (e)(1) to this Statement and is incorporated herein by reference.
Relationship with PSKY
According to the Schedule TO, as of December 8, 2025, PSKY was the beneficial owner of 1,000 shares of WBD Common Stock, representing less than 1% of the outstanding shares of WBD Common Stock. As of December 17, 2025, WBD was the beneficial owner of no shares of PSKY Class A common stock, par value $0.001 per share, or Class B common stock, par value $0.001 per share.
The information contained in “Item 4. The Solicitation or Recommendation” below is incorporated herein by reference.
Arrangements with Current Directors and Executive Officers of WBD
Shares of WBD Common Stock Held by Non-Employee Directors and Executive Officers
If WBD’s non-employee directors and executive officers were to tender any shares of WBD Common Stock that they own pursuant to the Offer, and such shares were accepted for exchange by Purchaser, then they would receive the Offer Price of $30.00 per share of WBD
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Common Stock on the same terms and conditions as other tendering WBD stockholders. As of December 15, 2025, WBD’s non-employee directors and executive officers (and any of their respective spouses) held an aggregate of 9,352,645 shares of WBD Common Stock. If the non-employee directors and executive officers of WBD were to tender all such shares of WBD Common Stock for exchange pursuant to the Offer, and those shares of WBD Common Stock were accepted by Purchaser in exchange for the Offer Price, then the non-employee directors and executive officers of WBD would collectively receive an aggregate of $280,579,350 in cash.
Equity-Based Awards Held by Non-Employee Directors and Executive Officers
Set forth below is a discussion of the treatment of the equity-based awards and WBD Notional Units (as defined below) held by WBD’s non-employee directors and executive officers in connection with the consummation of the Offer. Equity-based awards held by WBD’s executive officers were granted pursuant to WBD’s Amended & Restated Warner Bros. Discovery, Inc. Stock Incentive Plan or the Warner Bros. Discovery, Inc. 2013 Incentive Plan (together, including all award agreements thereunder, the “Stock Incentive Plan”) and equity-based awards held by WBD’s non-employee directors were granted pursuant to the Warner Bros. Discovery, Inc. 2005 Director Incentive Plan (as amended and restated, including all award agreements thereunder, the “Director Incentive Plan”).
The Offer provides as a condition to its completion that WBD and PSKY will have entered into the PSKY Merger Agreement, which among other things, provides for the treatment of outstanding equity-based awards in connection with the consummation of the Offer. Pursuant to the PSKY Merger Agreement, all outstanding equity-based awards held by non-employee directors and executive officers of WBD would be assumed by PSKY and converted into PSKY equity-based awards of equivalent value based on the Offer Price (“Assumed PSKY Equity Awards”), which Assumed PSKY Equity Awards would otherwise be subject to the same vesting terms and other conditions (including any double trigger protection) as in effect for such WBD equity-based awards immediately prior to the consummation of the Offer.
It is assumed for all purposes of this discussion that the consummation of the Offer would constitute a “change in control” under each of the Stock Incentive Plan and the Director Incentive Plan, following which, if the holder of an Assumed PSKY Equity Award is terminated other than for “cause” or for certain executive officers only, such holder resigns with “good reason” (either, a “qualifying termination”), such qualifying termination would result in the full acceleration of vesting of the Assumed PSKY Equity Award. The definitions of “cause” and “good reason” applicable to each WBD director or executive officer are contained in his or her respective award or employment-related agreements. It is further assumed for all purposes of this discussion that, in connection with the consummation of the Offer, equity-based awards and WBD Notional Units are treated pursuant to the terms of the PSKY Merger Agreement, and, therefore, references to the “consummation of the Offer” in such context shall be understood to include the closing of the Second-Step Merger pursuant to the terms of the PSKY Merger Agreement.
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Awards Held by Non-Employee Directors of WBD
As of December 15, 2025, WBD non-employee directors held an aggregate of 288,000 unvested restricted stock units of WBD (“WBD RSUs”) and 280,316 deferred stock units of WBD (“WBD DSUs”) under the Director Incentive Plan. WBD DSUs are vested WBD RSUs, the settlement of which has been deferred pursuant to deferral elections made by non-employee directors. Pursuant to the PSKY Merger Agreement, all WBD RSUs and WBD DSUs held by non-employee directors would be assumed by PSKY and converted into restricted stock units or deferred stock units of PSKY, respectively, of equivalent value based on the Offer Price.
The following table summarizes the number of WBD RSUs and WBD DSUs held by each non-employee director as of December 15, 2025 and the estimated cash value, based on the Offer Price of $30.00 per share of WBD Common Stock that each non-employee director would be expected to receive in respect of such award assuming that such awards are converted into Assumed PSKY Equity Awards in connection with the consummation of the Offer and, for purposes of illustration only, that each non-employee director is terminated in a qualifying termination immediately following the consummation of the Offer. For any Assumed PSKY Equity Award that is a deferred stock unit, the settlement timing for such award shall follow the applicable settlement election made by the holder thereof. All unit numbers and dollar values have been rounded to the nearest whole number.
| Name |
WBD RSUs (#) |
WBD DSUs(1) (#) |
Total Value ($) |
|||||||||
| Samuel A. Di Piazza, Jr. |
24,000 | 59,151 | $ | 2,494,530 | ||||||||
| Richard W. Fisher |
24,000 | 16,106 | $ | 1,203,180 | ||||||||
| Paul A. Gould |
24,000 | 103,159 | $ | 3,814,770 | ||||||||
| Debra L. Lee |
24,000 | 16,106 | $ | 1,203,180 | ||||||||
| Joseph M. Levin |
24,000 | 10,537 | $ | 1,036,110 | ||||||||
| Anton J. Levy |
24,000 | 0 | $ | 720,000 | ||||||||
| Kenneth W. Lowe |
24,000 | 0 | $ | 720,000 | ||||||||
| Fazal F. Merchant |
24,000 | 0 | $ | 720,000 | ||||||||
| Anthony J. Noto |
24,000 | 0 | $ | 720,000 | ||||||||
| Paula A. Price |
24,000 | 59,151 | $ | 2,494,530 | ||||||||
| Daniel E. Sanchez |
24,000 | 0 | $ | 720,000 | ||||||||
| Geoffrey Y. Yang |
24,000 | 16,106 | $ | 1,203,180 | ||||||||
| (1) | Non-employee directors may elect for WBD DSUs to be settled upon a separation from service, one year following a separation from service or five years following a separation from service, or on a specified date. The consummation of the Offer would not be expected to impact the settlement timing of such WBD DSUs, unless the holder experiences a separation from service in connection with either such event. |
WBD Notional Units Held by Non-Employee Directors of WBD
Certain non-employee directors of WBD hold notional investment units with respect to shares of WBD Common Stock (“WBD Notional Units”) acquired in connection with an election to defer such director’s cash retainer under the Warner Bros. Discovery, Inc. Non-Employee Directors Deferral Plan. Pursuant to the PSKY Merger Agreement, all WBD Notional Units would be assumed by PSKY and converted into notional investment units of PSKY of
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equivalent value based on the Offer Price and that would otherwise be subject to the same settlement timing that applied to such WBD Notional Units prior to the consummation of the Offer, unless the holder were to experience a separation from service in connection with the consummation of the Offer.
As of December 15, 2025, Samuel A. Di Piazza, Jr. and Paula A. Price held 79,714 and 8,400 WBD Notional Units, respectively, which would have a value of $2,391,420 and $252,000, respectively, at the Offer Price of $30.00 per share of WBD Common Stock.
Awards Held by Executive Officers of WBD
Pursuant to the PSKY Merger Agreement, equity-based awards held by executive officers would, subject to certain exceptions, be assumed by PSKY and converted into PSKY awards of equivalent value and the same form, except that any WBD performance restricted stock units (“WBD PRSUs”) would be converted into time-based restricted stock units of PSKY with the applicable performance-vesting criteria determined (1) with respect to any WBD PRSU for which the performance period has been completed prior to the consummation of the Offer, based on actual performance and (2) with respect to any WBD PRSU for which the applicable performance period has not been completed prior to the consummation of the Offer, based on the greater of (I) target performance and (II) actual performance extrapolated through the end of the applicable performance period as determined in good faith based on actual performance through the date of the consummation of the Offer and consistent with past practice. Any options to purchase WBD Common Stock (“WBD Options”) for which the exercise price is equal to or greater than the Offer Price (“Underwater Options”) would be canceled at the consummation of the Offer for no consideration. As of December 15, 2025, WBD’s executive officers held an aggregate of 3,503,516 WBD RSUs, 21,948,631 WBD PRSUs and 25,364,768 WBD Options (including, in each case, unvested awards and awards that have vested but not yet settled into, or been exercised for, shares of WBD Common Stock, but excluding any Underwater Options). The aggregate number of WBD PRSUs outstanding is calculated after adjusting for achievement of performance-vesting criteria, which for 2023 annual WBD PRSU awards is calculated based on actual achievement as of the date hereof (which level is 208%), and for all other WBD PRSUs for which the performance period is ongoing (including those held by Mr. Zaslav), is calculated assuming maximum performance (but the number of WBD PRSUs outstanding at the time of the consummation of the Offer may be less depending on actual performance at such time).
All Assumed PSKY Equity Awards resulting from conversion of the equity-based awards held by WBD’s executive officers would be subject to the “double trigger” accelerated vesting if the holder thereof is terminated in a qualifying termination within 12 months following the consummation of the Offer. In addition, certain stock options held by WBD’s Chief Executive Officer, David Zaslav, that were granted on June 12, 2025 (the “CEO Options”) are subject to “single trigger” vesting on a “change in control,” including the consummation of the Offer. All of the CEO Options are subject to a service-based vesting condition requiring continued employment over a period of five years from the grant date, which service condition ceases to apply upon the consummation of a “change in control.” In addition, 60% of such CEO Options are subject to performance goals related to the price of WBD Common Stock relative to each CEO Option’s exercise price, which performance goals have already been achieved. Accordingly, 100% of such CEO Options are eligible to vest on a “single
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trigger” basis in connection with the consummation of the Offer. Pursuant to Mr. Zaslav’s employment agreement, WBD has agreed to grant Mr. Zaslav an additional 3,052,734 WBD Options on January 2, 2026 on terms consistent with the CEO Options and may also grant to Mr. Zaslav additional WBD Options or other awards to make up for the lost economic value if the exercise price of the WBD Options granted on January 2, 2026 is higher than that of the CEO Options granted in June of 2025 (together, the “Follow-On CEO Awards”). Because the terms of any such Follow-On CEO Awards are unknown as of the date of this Statement, no value is ascribed to them in the table below.
The following table summarizes the vested and unvested equity-based awards held by each executive officer as of December 15, 2025 and the estimated cash value, based on the Offer Price of $30.00 per share of WBD Common Stock, that each executive officer would be entitled to receive in respect of such awards, assuming that such awards were converted into Assumed PSKY Equity Awards (with the performance adjustments described below for any WBD PRSUs) and, for purposes of illustration only, that each executive officer was terminated in a qualifying termination immediately following the consummation of the Offer. All unit numbers and dollar values have been rounded to the nearest whole number.
| Name |
WBD RSUs (#) |
WBD PRSUs (#)(1) |
WBD Options (#) |
Total Value of Unvested Awards ($)(2) |
Total Value of Vested Awards ($)(3) |
|||||||||||||||
| David M. Zaslav |
— | 6,608,016 | 20,898,776 | (4) | $ | 537,668,436 | $ | 75,203,760 | ||||||||||||
| Gunnar Wiedenfels |
423,978 | 3,729,718 | 732,159 | $ | 138,767,232 | $ | — | |||||||||||||
| Priya Aiyar |
845,092 | 763,530 | 234,070 | $ | 52,701,300 | $ | — | |||||||||||||
| Bruce L. Campbell |
434,788 | 4,025,038 | 1,323,610 | $ | 120,751,138 | $ | 32,664,076 | |||||||||||||
| Lori Locke |
100,962 | — | — | $ | 3,028,860 | $ | — | |||||||||||||
| Jean-Briac Perrette |
454,689 | 4,025,038 | 1,395,596 | $ | 150,282,582 | $ | 6,528,101 | |||||||||||||
| Amy Girdwood |
966,130 | — | — | $ | — | $ | 28,983,900 | |||||||||||||
| Gerhard Zeiler |
277,877 | 2,797,291 | 780,557 | $ | 83,918,720 | $ | 23,044,998 | |||||||||||||
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| (1) | WBD PRSUs. Amounts reported in this column include (a) 19,121,731 unvested WBD PRSUs for which the performance period has not ended (“Unvested In-Progress PRSUs”), (b) 320,108 unvested WBD PRSUs for which the performance period has ended but that remain subject to time-based vesting conditions and (c) 2,506,792 fully vested PRSUs held by Mr. Zaslav that are no longer subject to performance or time-based vesting conditions but for which settlement into shares of WBD Common Stock is scheduled to occur at a later date (“Deferred PRSUs”). The number of Unvested In-Progress PRSUs held by Mr. Zaslav assumes achievement of the applicable performance-vesting criteria at the maximum level (200% of target) pursuant to the terms of Mr. Zaslav’s employment agreement. For the other executive officers, the number of Unvested In-Progress PRSUs is based on the forecasted level of actual achievement of the applicable performance-vesting criteria for 2023 annual WBD PRSU awards (which level is 208% of target), and, for illustrative purposes, maximum level of achievement of applicable performance-vesting criteria for all other Unvested In-Progress PRSUs (but the number of WBD PRSUs outstanding at the time of the consummation of the Offer may be less depending on actual achievement of applicable performance-vesting criteria at such time). |
| (2) | Total Value of Unvested Awards. Amounts reported in this column reflect the aggregate value of each executive officer’s outstanding unvested equity-based awards, which (i) for the unvested WBD RSUs and unvested WBD PRSUs, is equal to the product obtained by multiplying the Offer Price of $30.00 per share by the number of shares of WBD Common Stock underlying each such award (after adjusting WBD PRSUs for assumed performance as described above), and (ii) for the unvested WBD Options, is equal to the product obtained by multiplying the number of shares of WBD Common Stock underlying each such award by the difference between $30.00 and the exercise price per option. Amounts reported in this column for Mr. Zaslav reflect the value of his outstanding CEO Options ($414,631,716), which are “single trigger” awards that vest solely as a result of the consummation of the Offer, and the value of his outstanding Unvested In-Progress PRSUs ($123,036,720), which are “double trigger” awards that do not become vested unless he experiences a qualifying termination within 12 months following the consummation of the Offer. All unvested equity-based awards held by all other executive officers are “double trigger” awards that do not become vested unless the executive officer experiences a qualifying termination within the 12 months following the consummation of the Offer. |
| (3) | Total Value of Vested Awards. Amounts reported in this column reflect the aggregate value of (a) the Deferred PRSUs held by Mr. Zaslav, (b) 1,301,179 WBD Options held by Messrs. Campbell, Perrette and Zeiler that are vested and currently exercisable with an aggregate cash value (based on the Offer Price) equal to $3,729,662, $6,528,101 and $4,091,417, respectively, (c) 1,373,852 WBD Options held by Messrs. Campbell and Zeiler that are not currently exercisable but without regard to a change in control would be retained and exercisable following a voluntary or involuntary employment termination (other than for “cause” or due to death or disability) because the executive has satisfied retirement eligibility criteria under the applicable award agreement (“Retirement-Vested Options”) with an aggregate cash value (based on the Offer Price) equal to $15,890,774 and $10,617,271, respectively and (d) 1,678,795 WBD RSUs held by Messrs. Campbell and Zeiler and Ms. Girdwood that without regard to a change in control would be retained following a voluntary or involuntary employment termination (other than for “cause” or due to death or disability) because the executive has satisfied retirement eligibility criteria under the applicable award agreement (“Retirement-Vested RSUs”) with an aggregate cash value (based on the Offer Price) equal to $13,043,640, $8,336,310 and $28,983,900, respectively. |
| (4) | Does not include the potential value of any Follow-On CEO Awards, the terms of which are unknown as of the date of this Statement. |
Transaction Bonus Program
On December 3, 2025, the compensation committee of the WBD Board (the “Compensation Committee”) adopted a transaction bonus program (the “Transaction Bonus Program”), the purpose of which is both to recognize and incentivize the contributions of selected key employees, which may include WBD’s executive officers other than its Chief Executive Officer, to the success of a spin-off, including the Separation and Distribution, and
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change in control of the Retained Business contemplated as part of the Netflix Merger Agreement, as well as to secure and encourage the continued employment of such employees through the consummation of the Separation and Distribution and/or change in control. Under the Transaction Bonus Program, designated employees may receive a cash bonus from a pool of $38.7 million. As of the date hereof, no amounts from the pool have been allocated to WBD’s eligible executive officers.
Existing WBD Executive Employment Agreements
Benefits upon Termination of Employment
WBD’s executive officers are generally eligible for severance benefits under their respective employment agreements in the event of a qualifying termination, regardless of whether a “change in control” (including the consummation of the Offer) has occurred.
In the event of a qualifying termination, and subject to the execution and non-revocation of a release of claims and continued compliance with any applicable restrictive covenants (as discussed below in the section entitled “Restrictive Covenants”) executive officers (other than Mr. Zaslav) would generally be entitled to receive:
| • | Cash Severance: Continued payment of base salary for a period not to exceed 24 months, which is the longest of (i) the remainder of the executive officer’s employment term, (ii) 12 months, or (iii) the number of weeks of severance to which the executive officer would have been entitled under WBD’s severance plan then in effect (the “Base Salary Continuation Period”). |
| • | Target Annual Bonus(es): An annual bonus for the year of termination, based on target performance, and an additional target annual bonus for each subsequent year (or partial year) within the Base Salary Continuation Period, with the target annual bonus for any partial year within the Base Salary Continuation Period prorated based on the portion of the year that occurs within the Base Salary Continuation Period, payable at the time bonuses for the applicable year are paid to other executives. |
| • | Health and Welfare Benefits: Reimbursement of COBRA premiums for up to 18 months for Messrs. Wiedenfels, Campbell and Perrett; continued eligibility to participate in WBD’s applicable group health plans during the Base Salary Continuation Period for Mmes. Aiyar, Locke and Girdwood. Mr. Zeiler’s |
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| employment agreement does not provide for post-termination health and welfare benefits. |
| • | Repatriation: Mr. Wiedenfels is also eligible for repatriation benefits covering himself and his family members. |
In the event of a qualifying termination, and subject to the execution and non-revocation of a release of claims, Mr. Zaslav would be entitled to receive:
| • | Cash Severance: An amount equal to one-twelfth (1/12) of the average annual base salary Mr. Zaslav was earning in the calendar year of the termination and the immediately preceding calendar year, multiplied by 24 months, plus an amount equal to one-twelfth (1/12) of the average annual bonus paid to Mr. Zaslav for the immediately preceding two years (excluding the amount of any annual bonus in excess of $12,000,000), multiplied by 24, payable over the course of 24 months following his termination in accordance with our normal payroll practices. |
| • | Annual Bonus: A prorated bonus for the year of termination (subject to the applicable performance metrics). |
| • | Health and Welfare Benefits: Reimbursement of COBRA premiums for up to the maximum applicable COBRA period. |
| • | Equity-Based Awards: Accelerated vesting of the CEO Options, Follow-On CEO Awards and any outstanding WBD RSUs and WBD PRSUs at maximum levels of performance. |
For an estimate of the value of the payments and benefits described above that would be payable to WBD’s named executive officers in connection with a qualifying termination of employment, see “Item 8. Additional Information—Information Regarding Golden Parachute Compensation.”
Restrictive Covenants
Mr. Zaslav is subject to a non-competition covenant and a non-solicitation of customers and employees covenant that are each applicable during the period of his employment and for a period of 24 months thereafter, unless Mr. Zaslav’s employment is terminated without “cause” or by Mr. Zaslav for “good reason,” in which case the restricted period would be reduced to 12 months following such qualifying termination.
Each of WBD’s other executive officers (other than Mr. Perrette) is subject to a non-competition covenant and a non-solicitation of customers and employees covenant that are each applicable during the period of employment and for 12 months and 18 months, respectively, following the termination of the executive’s services with WBD (except for Ms. Girdwood whose post-employment non-solicitation period is 12 months instead of 18 months).
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Mr. Perrette, who is based in California, is subject to non-solicitation covenants with respect to customers and employees that are applicable during the period of employment and for 12 months following the termination of his services with WBD.
All executive officers are required to perpetually maintain the confidentiality of WBD’s confidential information.
Changes in Compensation for Executive Officers upon a Separation and Distribution
Certain executive officers of WBD are party to employment agreements with WBD or one of its subsidiaries that provide for changes in compensation or other special awards that only become effective upon the consummation of a spin-off transaction (including the Separation and Distribution) and would not take effect in the event that the Offer is successful and WBD abandons the Netflix Merger. A summary of such changes or special awards for each executive officer party to such an agreement is provided in both the table and the descriptions below. All dollar values in the table below are rounded to the nearest whole number and expressed in thousands. Mr. Zaslav’s employment agreement also provides for changes in his compensation that become effective on the earlier of a Separation and Distribution or January 1, 2028, which changes include reducing his annual target cash bonus opportunity from $22 million to $6 million and shifting a greater portion of his overall annual compensation opportunity to long-term incentives.
| Name |
Base Salary(1) ($) |
Target Bonus(1) ($) |
Target Grant Date Value of Annual Equity-Based Awards ($) |
Expiration Date | ||||||||||||
| Gunnar Wiedenfels |
||||||||||||||||
| Current Terms |
$ | 2,142 | 175% of Base Salary | $8,000 | July 10, 2026 | |||||||||||
| Post-Spin Terms |
$ | 2,500 | 350% of Base Salary | $16,000(2) | December 31, 2031 | |||||||||||
| Bruce Campbell |
||||||||||||||||
| Current Terms |
$ | 2,946 | 200% of Base Salary | $8,500(3) | July 9, 2028 | |||||||||||
| Post-Spin Terms |
$ | 2,300 | 200% of Base Salary | $10,600-$11,600(4) | December 31, 2030 | |||||||||||
| Jean-Briac Perrette |
||||||||||||||||
| Current Terms |
$ | 2,850 | 200% of Base Salary | $8,500(3) | August 3, 2028 | |||||||||||
| Post-Spin Terms |
$ | 2,300 | 200% of Base Salary | $10,600 | December 31, 2029 | |||||||||||
| (1) | Base salary and target bonus amounts for the year in which the Separation occurs to be prorated based on compensation terms in effect for the pre-spin and post spin periods. |
| (2) | Value of annual equity-based award for the first year in which Mr. Wiedenfels is CEO of Discovery Global will be adjusted with a top-up grant that reflects the higher target value of his annual equity-based award for the prorated portion of the year that he serves as CEO of Discovery Global. |
| (3) | Target value increased to $9,500,000 for 2025 only; reverts to $8,500,000 thereafter. |
| (4) | $11,600,000 target for first calendar year post-spin; $10,600,000 target thereafter. |
Gunnar Wiedenfels
In addition to the compensation changes described above, upon the consummation of a Separation and Distribution (including prior to a Netflix Merger), in connection with his assumption of the role of CEO of Discovery Global, Mr. Wiedenfels would receive a one-time
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equity-based award under Discovery Global’s then-effective equity incentive plan with a target grant date value of $15,000,000.
Amy Girdwood
Upon the later of the consummation of a spin-off transaction, including the Separation and Distribution, or July 2, 2026, Ms. Girdwood would be eligible to receive a one-time bonus equal to the sum of her then-current (i) base salary and (ii) target bonus (approximately $2,281,115 based on the exchange rate of 1.34 United States Dollar to 1 Pound sterling recorded as of December 15, 2025).
This summary does not purport to be complete and is qualified in its entirety by reference to (i) the employment agreements of Messrs. Zaslav and Wiedenfels and Mmes. Aiyar, Locke and Girdwood, attached as Exhibits (e)(54), (e)(56), (e)(63), (e)(64) and (e)(65) hereto, (ii) the employment agreements and letter amendments of Messrs. Campbell and Perrette, attached as Exhibits (e)(58), (e)(59), (e)(60) and (e)(61) hereto and (iii) the amendment to Mr. Zaslav’s employment agreement, attached as Exhibit (e)(62) hereto, which each are incorporated herein by reference.
Warner Bros. Discovery Supplemental Retirement Plan
The consummation of the Offer would constitute a “change in control” for purposes of the Warner Bros. Discovery Supplemental Retirement Plan (“WBD SRP”), upon which any unvested discretionary employer contributions to the WBD SRP would become vested. As of December 15, 2025, Ms. Locke has an unvested discretionary employer contribution balance in the WBD SRP of $189,038, and no other executive officers have unvested discretionary employer contribution balances under the WBD SRP.
Indemnification of Directors and Officers
WBD is organized under the laws of the State of Delaware. The Third Restated Certificate of Incorporation of WBD contains provisions permitted under the DGCL relating to the limitation of liability of directors. These provisions eliminate a director’s personal liability to WBD and its stockholders for monetary damages resulting from a breach of his or her fiduciary duty as a director, except in circumstances involving:
| • | any breach of the director’s duty of loyalty to WBD or its stockholders; |
| • | acts or omissions not in good faith or which involve intentional misconduct or a knowing violation of the law; |
| • | Section 174 of the DGCL (unlawful dividends, repurchases or redemptions); or |
| • | any transaction from which the director derived an improper personal benefit. |
The principal effect of these limitation of liability provisions is that a WBD stockholder is unable to prosecute an action for monetary damages against a director, unless the stockholder can demonstrate a basis for liability as set forth in the exceptions above. These provisions, however, do not limit or eliminate WBD’s rights or any WBD stockholder’s rights to seek non-monetary relief, such as an injunction or rescission, in the event of breach of a director’s
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fiduciary duty. These provisions do not alter a director’s liability under U.S. federal securities laws.
In addition, provisions in the Second Amended and Restated Bylaws of WBD provide that WBD will indemnify any director or officer who was or is a party or is threatened to be made a party to any threatened, pending or completed action, suit or proceeding, whether civil, criminal, administrative or investigative, including any action or suit by WBD or in its right, by reason of the fact that such person is or was a director or officer of WBD, or while such person is or was a director or officer of WBD, is or was serving at WBD’s request as a director, officer, employee or agent of another corporation or other enterprise, against all liabilities and losses, judgments, fines, penalties, excise taxes, amounts paid in settlement and costs, charges and expenses (including attorneys’ fees and disbursements), in each case only if and to the extent permitted under applicable state or federal law.
Section 145 of the DGCL permits a corporation to purchase and maintain insurance on behalf of any person who is or was a director, officer, employee or agent of the corporation or is or was serving at the request of the corporation as a director, officer, employee or agent of another entity, against any liability asserted against him or her and incurred by him or her in any such capacity or arising out of his or her status as such.
Item 4. The Solicitation or Recommendation
Solicitation/Recommendation
After careful consideration, including review of the terms and conditions of the Offer in consultation with WBD’s independent legal and financial advisors, the WBD Board, at a meeting on December 15, 2025, unanimously concluded that (i) the Offer is not in the best interests of WBD and its stockholders; (ii) the Offer is not a Company Superior Proposal (as defined in the Netflix Merger Agreement); and (iii) the Offer did not meet the standard of being more favorable to WBD stockholders than the transactions contemplated by the Netflix Merger Agreement, after taking into account all relevant factors, including likelihood of consummation on the terms proposed and all legal, financial and regulatory aspects of the Offer.
Accordingly, the WBD Board unanimously recommends that WBD stockholders reject the Offer and not tender any of their shares of WBD Common Stock pursuant to the Offer, and has unanimously resolved to recommend the Netflix Merger Agreement as in the best interests of WBD stockholders. Please see “—Background of the Offer and Reasons for Recommendation—Reasons for Recommendation” below for further detail.
If you have tendered any of your shares of WBD Common Stock, you can withdraw them. For assistance in withdrawing your shares of WBD Common Stock, you can contact your broker or Innisfree M&A Incorporated (“Innisfree”), located at 501 Madison Avenue, 20th Floor, New York, NY 10022, at the telephone number (877) 825-8777 (toll-free) or (212) 750-5833 (banks and brokerage firms).
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A copy of the press release relating to the recommendation of the WBD Board that WBD stockholders reject the Offer and not tender any of their shares of WBD Common Stock to PSKY pursuant to the Offer is filed as Exhibit (a)(2)(B) hereto and is incorporated herein by reference.
Background of the Offer and Reasons for Recommendation
Background of the Offer and the Netflix Merger
The following chronology summarizes the material meetings and events that led to the execution of the Netflix Merger Agreement. This chronology does not purport to catalogue every conversation of, or among, the WBD Board, members of WBD senior management or WBD’s advisors and other parties.
The WBD Board, together with WBD’s senior management, regularly reviews WBD’s performance, growth prospects and overall strategic direction and evaluates potential opportunities to strengthen WBD’s business and enhance value for its stockholders. From time to time, these reviews and evaluations have included WBD’s strategy as a standalone company and potential opportunities for business combinations, acquisitions, divestitures, partnerships, licensing arrangements, collaborations and other strategic transactions.
During the first quarter of 2024, WBD senior management conducted a due diligence review of Paramount Global, the predecessor to PSKY, during its strategic alternatives review process. The WBD Board, after consultation with WBD senior management, decided not to submit a proposal to acquire Paramount Global.
On December 12, 2024, WBD announced plans to implement a new corporate structure consisting of two operating divisions – global linear networks (the “WBD Global Linear Networks Business”) and streaming and studios (the “WBD Streaming & Studios Business”) – with the goal of enhancing strategic flexibility and creating potential opportunities to unlock stockholder value.
On January 1, 2025, WBD implemented certain transactions to facilitate the movement of entities and assets to align with the two new operating divisions.
On April 28, 2025, the WBD Board held a meeting via means of remote communication, which included senior management of WBD and representatives of Wachtell, Lipton, Rosen & Katz (“Wachtell Lipton”) and Kirkland & Ellis, LLP (“Kirkland & Ellis”). During the meeting, the WBD Board discussed potential strategic alternatives to create stockholder value, including (i) a potential sale or divestiture of WBD in its entirety and (ii) a potential tax-free separation via a spin-off of the WBD Streaming & Studios Business from the WBD Global Linear Networks Business. Following advice from its tax and legal advisors, the WBD Board understood that it would be restricted from engaging in substantive merger and acquisition (“M&A”) discussions regarding the spun-off entity or the remaining company for a significant period in order to preserve the tax-free nature of a spin-off of the WBD Streaming & Studios Business. The WBD Board acknowledged that this tax constraint would effectively preclude such M&A discussions during the pendency of the separation. Following discussion, the WBD
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Board authorized management to begin the process of evaluating a spin-off of the WBD Streaming & Studios Business.
On May 7, 2025, the WBD Board held a meeting via means of remote communication, which included senior management of WBD and representatives of J.P. Morgan Securities, LLC (“J.P. Morgan”), Evercore Group L.L.C. (“Evercore”) and Kirkland & Ellis. During the meeting, the WBD Board reviewed the proposed structure for a potential spin-off transaction, whereby WBD would spin off the WBD Streaming & Studios Business to be a separate, standalone public company with the WBD Global Linear Networks Business as the remaining company. The WBD Board also discussed an alternative structure involving a joint venture for the WBD streaming business, and engaged in a review of the legal, tax and governance implications of such structures.
On June 3, 2025, the WBD Board held a meeting via means of remote communication, which included senior management of WBD and representatives of J.P. Morgan, Evercore, Kirkland & Ellis and KPMG LLP (“KPMG”). During the meeting, the WBD Board discussed WBD’s updated financial forecast, WBD’s long-range plan for each of WBD’s reporting segments and the strategic rationale for pursuing a spin-off of the WBD Streaming & Studios Business from the WBD Global Linear Networks Business.
On June 5, 2025, the WBD Board held a meeting via means of remote communication, which included senior management of WBD and representatives of Kirkland & Ellis, Evercore, J.P. Morgan and KPMG. During the meeting, the WBD Board discussed the proposed separation transaction, certain legal considerations relating to the proposed separation and the proposed costs for the financing aspects of the proposed separation. The WBD Board focused on strategies to minimize one-time costs and dis-synergies associated with a separation.
On June 9, 2025, WBD announced plans to separate the company, in a tax-free transaction, into two publicly traded companies, consisting of the WBD Streaming & Studios Business and the WBD Global Linear Networks Business, with Mr. Zaslav to serve as President and Chief Executive Officer of the WBD Streaming & Studios Business and Mr. Wiedenfels to serve as President and Chief Executive Officer of the WBD Global Linear Networks Business. WBD indicated that the separation was expected to be completed by mid-2026, subject to closing and other conditions, including final approval by the WBD Board.
Throughout the summer of 2025, WBD’s management and advisors continued to progress the workstreams necessary to effectuate the separation, including tax structuring, capital structure, and regulatory preparations.
On August 12, 2025, the WBD Board held an in-person meeting, which included senior management of WBD and representatives of J.P. Morgan and Wachtell Lipton. During the meeting, the WBD Board discussed (i) the timeline of key separation actions and WBD’s target date for actual separation and (ii) potential M&A activity that might occur either prior to completion of the separation for WBD as a whole or after the separation for either the spun-off entity or the remaining company. The WBD Board reaffirmed its commitment to the spin-off of the WBD Streaming & Studios Business as the clearest path to value creation, noting that
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WBD’s ability to solicit acquisition proposals was constrained by the tax requirements of the pending separation.
On September 11, 2025, media sources reported that PSKY was preparing a bid for WBD. Following these reports, WBD’s stock price exhibited significant volatility. The WBD Board recognized that PSKY’s approach appeared timed to exploit the period during which WBD was constrained by the tax requirements of the pending separation from marketing the separated businesses to potential bidders.
On September 14, 2025, Mr. Zaslav and David Ellison, Chief Executive Officer of PSKY, met in person at Mr. D. Ellison’s request. At the meeting, Mr. D. Ellison, on behalf of PSKY, proposed to combine WBD and PSKY in a transaction in which WBD stockholders would receive a 60% to 40% cash-stock mix, comprised of $11.40 in cash and 0.404 of a share of PSKY Class B common stock for each outstanding share of WBD Common Stock (the “PSKY September 14 Proposal”). The PSKY September 14 Proposal, which was subsequently delivered in writing, implied a value of approximately $19.00 per share of WBD Common Stock based on PSKY’s trading price at the time of $18.79 per share. The proposal indicated that the acquisition would be funded by a new equity investment in the combined company of approximately $14 billion, which would be “backstopped by [PSKY’s] principal equity holders” (but did not include further details or any proposed equity commitment letters or guarantees), and included executed debt commitment letters from Bank of America Corporation (“BofA”) and Citigroup Inc. (“Citi”) for an aggregate principal amount of $32 billion. With respect to governance rights, the proposal offered non-voting Class B common stock of PSKY as the stock portion of the consideration and suggested that Mr. Zaslav could be the Chairman of the combined company’s board and that PSKY “would also want other WBD directors to join the combined company’s Board.” Mr. D. Ellison outlined his vision for the combined company but provided limited details regarding the regulatory roadmap.
On September 15, 2025, the WBD Board held a meeting via means of remote communication, which included senior management of WBD and representatives of Allen & Company LLC (“Allen & Company”), J.P. Morgan, Evercore, Debevoise & Plimpton LLP (“Debevoise”), Wachtell Lipton and Covington & Burling LLP (“Covington”). During the meeting, Mr. Zaslav summarized his meeting with Mr. D. Ellison on September 14, 2025, and the WBD Board discussed the potential risks and benefits of the PSKY September 14 Proposal, including in relation to WBD’s previously announced separation plan. The WBD Board noted that the PSKY September 14 Proposal significantly undervalued WBD (taking into account, in particular, that PSKY’s share price was inflated in value relative to its recent unaffected price prior to rumors of a potential transaction), that the proposal lacked details or commitments regarding equity financing, and that the stock consideration offered by PSKY consisted of non-voting Class B common stock of PSKY, ensuring that the Ellison family would retain voting control of the combined entity despite owning a minority of the economic interests in the combined company. The WBD Board agreed to meet again to discuss the PSKY September 14 Proposal after further review by WBD’s financial advisors.
On September 22, 2025, the WBD Board held a meeting via means of remote communication, which included senior management of WBD and representatives of Allen & Company, J.P. Morgan, Evercore, Debevoise, Wachtell Lipton and Covington. During the
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meeting, the WBD Board discussed the potential risks and benefits of the PSKY September 14 Proposal, and reviewed its fiduciary duties with legal counsel. The WBD Board concluded that the PSKY September 14 Proposal was inadequate in numerous respects – including its insufficient valuation of WBD, PSKY’s overvaluation of the stock component of the PSKY September 14 Proposal, lack of any details or commitments regarding equity financing, governance concerns relating to the dual-class stock structure, and the absence of meaningful protections for WBD stockholders – and would not be in the best interests of WBD and its stockholders. The WBD Board unanimously rejected the PSKY September 14 Proposal.
Also on September 22, 2025, on behalf of the WBD Board, Mr. Zaslav and Samuel A. DiPiazza, Jr., Chair of the WBD Board, sent a letter to Mr. D. Ellison rejecting the PSKY September 14 Proposal. The letter mentioned the substantial progress WBD had made toward executing its publicly announced plan to separate the WBD Global Linear Networks Business from the WBD Streaming & Studios Business, noting that WBD believed this separation would unlock significant value for both businesses and WBD’s stockholders, and that the separation transactions were expected to have no execution risk and to be completed by mid-2026, and would permit WBD stockholders to retain full voting control of both companies in a one-share/one-vote structure. The letter also noted that both of the separated WBD companies may have substantial M&A opportunities, post-separation, to deliver further value for WBD’s stockholders. The letter stated that the WBD Board had unanimously concluded that PSKY’s proposed transaction was inadequate in numerous respects and would not be in the best interests of WBD and its stockholders.
Also on September 22, 2025, Mr. Zaslav had a telephone conversation with Mr. D. Ellison to verbally communicate the WBD Board’s decision to reject the PSKY September 14 Proposal.
Later on September 22, 2025, Mr. D. Ellison called Mr. Zaslav to request that Mr. Zaslav meet with his father, Larry Ellison, to discuss the PSKY September 14 Proposal and PSKY’s interest in acquiring WBD. Mr. Zaslav agreed.
On September 24, 2025, Mr. Zaslav, John Malone, the Chair Emeritus of the WBD Board, and Mr. L. Ellison had a videoconference meeting to discuss the PSKY September 14 Proposal and PSKY’s interest in acquiring WBD. Mr. Zaslav reiterated the reasons for the WBD Board’s decision that were conveyed in WBD’s September 22, 2025 letter to Mr. D. Ellison and the WBD Board’s commitment to the separation plan as a superior path to value creation. Mr. Zaslav also confirmed that the WBD Board would continue to focus on opportunities in the best interests of WBD’s stockholders.
On September 25, 2025, the WBD Board held a meeting via means of remote communication, which included senior management of WBD and representatives of Allen & Company, J.P. Morgan, Evercore, Debevoise, Wachtell Lipton and Covington. During the meeting, Mr. Zaslav discussed his communications with Mr. D. Ellison and Mr. L. Ellison since the September 22, 2025 WBD Board meeting. Mr. Zaslav noted for the WBD Board that the Ellisons had indicated to him that, if a transaction between PSKY and WBD were to occur, Mr. Zaslav would receive a compensation package worth several hundred million dollars. Mr. Zaslav
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advised the WBD Board that he informed the Ellisons that it would be inappropriate to discuss any such arrangements at that time.
On September 30, 2025, Mr. D. Ellison called Mr. Zaslav to indicate that PSKY would be making a second proposal to acquire WBD.
Later on September 30, 2025, Mr. D. Ellison, on behalf of PSKY, submitted a written proposal to the WBD Board to acquire WBD, in which WBD stockholders would receive a 66.7% to 33.3% cash-stock mix, comprised of $14.67 in cash and 0.376 of a share of PSKY Class B non-voting common stock for each outstanding share of WBD Common Stock (the “PSKY September 30 Proposal”). The PSKY September 30 Proposal implied a value of approximately $22.00 per share of WBD Common Stock based on PSKY’s Class B common stock trading price at that time of $19.50 per share, representing a modest increase from the prior proposal, but retained the same dual-class share structure with no voting rights in the combined company for WBD stockholders, and still lacked details or commitments regarding the required equity financing (stating that the equity financing would be “backstopped by our well-capitalized principal equity holders”). In addition, the proposal offered a reverse termination fee of $2 billion to be paid by PSKY in the event regulatory approvals were not received, and offered Mr. Zaslav the roles of co-Chief Executive Officer and co-Chairman of the board of the combined company.
On October 1, 2025, the WBD Board held a meeting via means of remote communication, which included senior management of WBD and representatives of Allen & Company, J.P. Morgan, Evercore, Debevoise, Wachtell Lipton, Covington and Joele Frank, Wilkinson Brimmer Katcher (“Joele Frank”). During the meeting, the WBD Board had an initial discussion of the potential risks and benefits of the PSKY September 30 Proposal and WBD’s standalone prospects, and agreed to meet again to discuss the PSKY September 30 Proposal in detail after further review of WBD’s financial advisors.
On October 7, 2025, the WBD Board held a meeting via means of remote communication, which included senior management of WBD and representatives of Allen & Company, J.P. Morgan, Evercore, Debevoise, Wachtell Lipton, Covington and Joele Frank. During the meeting, the WBD Board reviewed WBD’s updated forecasts and considered whether to approve WBD’s updated long-range plans. The WBD Board also further considered and discussed the PSKY September 30 Proposal with WBD’s financial advisors. WBD’s management team discussed WBD’s ongoing, publicly announced separation plan, including the high degree of certainty of execution and the substantial benefits and value that the separation was expected to create for WBD and its stockholders. The WBD Board considered and weighed other relative risks and potential benefits of the PSKY September 30 Proposal as compared to WBD’s separation plan, including (i) the uncertain and speculative value of the PSKY share consideration component of the PSKY September 30 Proposal, (ii) certain significant downside risks in the PSKY business, including the significantly leveraged capital structure of the combined business and high degree of dependency on revenues from its linear networks business, and (iii) the possibility of M&A activity involving a broader universe of potential counterparties following completion of WBD’s separation plan when tax impediments to an M&A transaction would be lower. The WBD Board also discussed the regulatory risks associated with the PSKY September 30 Proposal. The WBD Board concluded that the PSKY
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September 30 Proposal was inadequate in numerous respects and would not be in the best interests of WBD and its stockholders, and unanimously rejected the PSKY September 30 Proposal.
On October 8, 2025, on behalf of the WBD Board, Mr. Zaslav and Mr. DiPiazza sent a letter to Mr. D. Ellison rejecting the PSKY September 30 Proposal. The letter identified with specificity the areas in which PSKY’s proposal fell short, including concerns discussed during the October 7, 2025 WBD Board meeting. In particular, the letter noted (i) that the PSKY September 30 Proposal failed to realize the strategic value of WBD’s businesses and that, in the WBD Board’s view, WBD’s strategic separation transaction would create significantly greater near-term and long-term value (and with greater execution certainty) for WBD and its stockholders, (ii) the uncertain and speculative value of the PSKY share consideration component of the PSKY September 30 Proposal, (iii) certain significant downside risks in the PSKY business, including the highly leveraged capital structure of the combined company and the significant synergies realization that would be required to delever and achieve investment grade credit ratings, (iv) that PSKY Class B shares are non-voting and lack numerous other protections to ensure that WBD stockholders would be treated fairly and have a voice in a combined company’s future and (v) that the PSKY September 30 Proposal did not outline PSKY’s plan to manage the risks inherent in the regulatory review process, which could be substantial and time-consuming, and during which WBD stockholders would not be protected. On the same day, Mr. D. Ellison contacted Mr. Zaslav via text message to arrange a call to discuss the rejection, which Mr. Zaslav agreed to take immediately.
On October 9, 2025, Mr. Zaslav and Mr. L. Ellison had a videoconference meeting to discuss the PSKY September 30 Proposal and WBD’s response thereto.
On October 13, 2025, Mr. D. Ellison, on behalf of PSKY, submitted a written proposal to the WBD Board to acquire all of WBD for an implied value of $23.50 per share, comprised of an 80% to 20% cash-stock mix (the “PSKY October 13 Proposal”). While the headline price in the PSKY October 13 Proposal had increased by $1.50 per share of WBD Common Stock, as compared to PSKY’s prior proposal, the proposal did not provide an exchange ratio for the stock consideration (and therefore the implied value of the stock consideration following the decline in PSKY’s stock price was unclear), continued to consist of a mix of cash and non-voting stock, lacked definitive equity financing commitments for the cash consideration (beyond reiterating that the equity contribution would be “fully backstopped by [PSKY]’s existing equity holders, including the Ellison family and RedBird Capital Partners”), and did not address the WBD Board’s concerns regarding deal certainty, the regulatory review process and governance of the combined company.
Also on October 13, 2025, media sources reported that WBD had received interest from PSKY with respect to a potential transaction.
On October 14, 2025, Mr. D. Ellison sent an email to Mr. Zaslav and Mr. Malone reiterating a desire for PSKY to acquire WBD.
Following the media reports, WBD received unsolicited inbound communications from other strategic parties, including Netflix and Company A, another large media conglomerate. On
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October 16, 2025, Ted Sarandos, Co-Chief Executive Officer of Netflix, called Mr. Zaslav to discuss Netflix’s interest in acquiring the WBD Streaming & Studios Business. Also on October 16, 2025, the Chief Executive Officer of Company A called Mr. Zaslav to discuss Company A’s interest in a potential transaction combining part of its existing business with the WBD Streaming & Studios Business, and on or about October 16, 2025, the Chief Executive Officer of Company A separately called Mr. Malone to discuss Company A’s interest in acquiring the WBD Streaming & Studios Business. Both Netflix and Company A indicated to WBD management that they had significant strategic interest in the WBD business. However, both parties expressed that they were reluctant to engage in formal substantive discussions at that time given the pending separation and the concern that pre-separation negotiations with WBD regarding a potential acquisition of the WBD Streaming & Studios Business could (i) trigger tax liabilities in connection with the separation that would degrade transaction value or (ii) restrict them from engaging in post-separation M&A discussions with the WBD Streaming & Studios Business for the duration of a tax-related “cooling off” period. Both parties encouraged WBD to contact them if these concerns could be addressed.
On October 20, 2025, the WBD Board held a meeting via means of remote communication, which included senior management of WBD and representatives of Allen & Company, J.P. Morgan, Evercore, Debevoise, Wachtell Lipton, Covington and Joele Frank. The WBD Board considered and discussed the PSKY October 13 Proposal with WBD’s advisors. After discussion, the WBD Board determined that the PSKY October 13 Proposal was inadequate, noting that the proposed value was still insufficient and that PSKY again had failed to address the other concerns that the WBD Board repeatedly identified. In light of interest received from Netflix and Company A, however, WBD’s management and advisors discussed with the WBD Board a potential alternative transaction structure involving the spin-off of the WBD Global Linear Networks Business rather than the WBD Streaming & Studios Business. This structure would allow WBD to negotiate a post spin-off strategic transaction involving the WBD Streaming & Studios Business, which would be held by the remaining company following the separation, in a substantially more tax-efficient transaction when compared with a post spin-off strategic transaction involving a spun-off entity holding the WBD Streaming & Studios Business. WBD’s legal and financial advisors discussed the profile of potential bidders, including Netflix, Company A, and PSKY, as well as other large media and technology companies, from a financial and regulatory perspective. Based on the opportunity provided by this structural adjustment, the WBD Board determined it was in the best interests of stockholders to conduct a strategic review enabled by the revised structure. The WBD Board rejected the PSKY October 13 Proposal and authorized the launch of a strategic alternatives review process, in which the WBD Board would consider a range of potential transactions including, but not limited to, continuing with the planned separation of the WBD Streaming & Studios Business from the WBD Global Linear Networks Business, a sale of the entire company, or a sale of one or more of the businesses with a spin-off of the other business to WBD stockholders.
At the same meeting, the WBD Board also noted that the process should proceed as expeditiously and efficiently as practical, in view of the disruption to WBD’s business and the distraction for management and other employees given extensive media leaks and rumors regarding PSKY’s prior proposals.
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On October 21, 2025, the WBD Board sent a letter to Mr. D. Ellison rejecting the PSKY October 13 Proposal and called Mr. D. Ellison to discuss the WBD Board’s rejection of the PSKY October 13 Proposal. The letter stated that (i) the “headline price” of $23.50 per share of WBD Common Stock in the PSKY October 13 Proposal failed to provide adequate value to WBD’s stockholders in the context of a sale of control, and given WBD’s available alternatives, (ii) the PSKY October 13 Proposal did not specify any exchange ratio or valuation for the PSKY Class B stock, which comprised 20% of the proposed merger consideration, (iii) the value of the PSKY Class B stock was uncertain and speculative, given its comparatively small public float, limited trading history, price volatility since the closing of the PSKY merger in August 2025, and lack of earnings history, (iv) the PSKY October 13 Proposal would create a company with an unusually high debt level, which WBD estimated to be approximately $66 billion (which would represent close to 5.4x 2026E EBITDA before synergies, a leverage level significantly above industry peers), (v) PSKY did not address WBD’s concerns regarding the regulatory risks inherent in the PSKY October 13 Proposal or the risks to WBD during the likely extended period to closing and (vi) the PSKY Class B common stock has no voting rights and no customary protections for public stockholders, such as from disparate, unfavorable treatment as compared to PSKY’s controlling stockholders in a future sale transaction (a risk noted in PSKY’s own public filings). The letter invited PSKY to participate in the strategic alternatives review process on an equal basis with other interested parties.
Also on October 21, 2025, WBD issued a press release announcing that the WBD Board had “initiated a review of strategic alternatives to maximize stockholder value, in light of unsolicited interest [WBD] has received from multiple parties for both the entire company and [the WBD Streaming & Studios Business].”
Also on October 21, 2025, at WBD’s direction, Allen & Company and J.P. Morgan sent draft non-disclosure agreements on behalf of WBD to potential counterparties, including Netflix, PSKY, Company A and Company B, a private holding company and global investment firm.
Also on October 21, 2025, Mr. Zaslav had telephone conversations with the chief executive officers and other senior leaders of approximately eight companies, including PSKY, Netflix and Company A, supplemented by discussions between certain of the potential bidders’ financial advisors and, in accordance with WBD’s directives, representatives of Allen & Company and J.P. Morgan, to discuss WBD’s press release and the WBD Board’s review of strategic alternatives. Over the course of the following days, as directed by the WBD Board, WBD’s senior management and financial advisors contacted approximately five additional potentially interested counterparties.
Also on October 21, 2025, in accordance with the WBD Board’s directives, members of WBD’s management, together with representatives of WBD’s financial advisors, Allen & Company and J.P. Morgan, held separate videoconference meetings with representatives of Netflix, Company A and PSKY and their respective financial advisors to discuss WBD’s strategic alternatives review process.
On October 22, 2025, the WBD Board held a meeting via means of remote communication, which included senior management of WBD and representatives of Allen & Company, J.P. Morgan, Evercore, Debevoise, Wachtell Lipton and Joele Frank. During the
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meeting, the WBD Board discussed WBD’s recent conversations with potential bidders and was provided with an overview of the process and timeline for the WBD Board’s review of strategic alternatives. The WBD Board reiterated its concern regarding disruption to WBD’s business and the distraction for management and other employees, and its desire that the process proceed as promptly as practical, with an expectation that it might reach a conclusion prior to the December 2025 holiday period, and preferably by WBD’s regularly scheduled board meeting on December 8, 2025.
On October 23, 2025, Company B and WBD executed a non-disclosure agreement.
Also on October 23, 2025, the founder of Company C, an American media company, called Mr. Wiedenfels to signal Company C’s interest in a potential transaction with the WBD Global Networks Business.
On October 26, 2025, Netflix and WBD executed a non-disclosure agreement after brief negotiations between Debevoise and Skadden, Arps, Slate, Meagher & Flom LLP (“Skadden”), counsel to Netflix, addressing limited comments.
On October 28, 2025, Netflix was provided with access to WBD’s virtual data room containing documents and information with respect to WBD.
On November 3, 2025, a senior member of the Allen & Company team representing WBD had an in-person meeting with a senior member of the Centerview Partners LLC (“Centerview”) team representing PSKY to discuss PSKY’s interest in acquiring WBD. During the meeting, the senior member of the Centerview team stated that PSKY would need “days, rather than weeks” to complete its due diligence of WBD and that PSKY was committed to following any processes for the proposed transaction established by the WBD Board.
Also on November 3, 2025, Company A and WBD executed a non-disclosure agreement after brief negotiations between Debevoise and counsel to Company A addressing limited comments.
Also on November 3, 2025, Company A was provided with access to WBD’s virtual data room containing documents and information with respect to WBD.
On November 5, 2025, WBD held a management presentation with Netflix, which included senior executives of both companies and representatives of Allen & Company and Evercore and Netflix’s financial advisor, Moelis & Company, LLC.
Also on November 5, 2025, WBD held a management presentation with Company A, which included senior executives of both companies and representatives of Allen & Company, J.P. Morgan and Evercore and Company A’s financial advisors.
Also on November 5, 2025, representatives of Allen & Company, Debevoise and Wachtell Lipton held a videoconference meeting with representatives of Centerview, Cravath, Swaine & Moore LLP (“Cravath”) and Latham & Watkins LLP (“Latham”), counsel to PSKY, to negotiate the draft non-disclosure agreement between WBD and PSKY. PSKY had requested various provisions in the non-disclosure agreement that WBD had not offered any other party,
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and, in the view of WBD’s legal and financial advisors, included significant changes that might jeopardize the sale process, such as the right to require financial institutions to act exclusively for PSKY and thus not provide financing to any other bidding party.
On November 7, 2025, the WBD Board held a meeting via means of remote communication, which included representatives of Allen & Company, J.P. Morgan, Evercore, Debevoise, Wachtell Lipton, Covington and Joele Frank. During the meeting, WBD’s senior management and financial advisors updated the WBD Board on the status of the strategic alternatives review process. The WBD Board was advised that WBD and its financial advisors had contacted 13 potential counterparties. Netflix and Company A had quickly negotiated and signed non-disclosure agreements and entered the process. PSKY had been slow to engage and finalize the non-disclosure agreement, indicating through its financial advisor, Centerview, that it would not sign such agreement until after PSKY’s earnings call on November 10, 2025. PSKY had been informed by WBD’s advisors that (i) failure to enter into a non-disclosure agreement would limit the WBD information it would receive, (ii) other interested parties had entered into such agreements and begun their due diligence processes in earnest and (iii) WBD’s transaction process was expected to proceed quickly. Company B also had signed a non-disclosure agreement and expressed an interest in a potential transaction involving the WBD Global Linear Networks Business that was not immediately actionable. Other potential bidders that had been contacted either had declined to participate or did not engage. The WBD Board was advised that interested parties that entered into non-disclosure agreements had been or would be provided with a first-round process letter requesting initial bids during the week of November 17, 2025. In addition, and on the recommendation of the Compensation Committee of the WBD Board, the WBD Board approved (i) an amendment to the amended and restated employment agreement and the stock option agreement previously entered into with David Zaslav in June 2025 to ensure his incentives remain aligned with stockholder interests across various possible transactions under the strategic alternatives review process and (ii) a letter to executive officers with employment agreements contingent on the spin-off of the WBD Streaming & Studios Business to clarify that their employment agreements would likewise take effect if the WBD Global Linear Networks Business were spun off instead.
On November 9, 2025, at WBD’s direction, Allen & Company and J.P. Morgan sent process letters on behalf of WBD to Netflix and Company A, which requested that the bidders submit their proposals, including markups of term sheets containing key expected transaction terms, by 12:00 p.m. Eastern time on November 20, 2025.
On November 10, 2025, 19 days after WBD provided an initial draft non-disclosure agreement to PSKY, PSKY and WBD executed a non-disclosure agreement, after negotiations between Debevoise and Wachtell Lipton, on the one hand, and Cravath, on the other hand, in which PSKY sought and was ultimately granted material concessions not provided to other bidders, including with respect to standstill provisions and PSKY’s ability to engage on an exclusive basis with certain identified financing sources and to engage in non-exclusive discussions with other potential financing sources that were not identified in advance to WBD.
Also on November 10, 2025, PSKY was provided with access to WBD’s virtual data room containing documents and information with respect to WBD. In total, approximately 143 individuals associated with PSKY and its representative received data room access. The 143
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total individuals who received access included representatives of PSKY and RedBird Capital Partners (“RedBird”), representatives of two investment banks (Centerview and LionTree LLC), representatives of two law firms (Cravath and Latham), three PSKY lending sources (BofA, Citi and Apollo Global Management, Inc. (“Apollo”)), one consulting firm (Bain & Company (“Bain”)) and one finance and tax advisor (Ernst & Young, LLP).
Also on November 10, 2025, at WBD’s direction, Allen & Company and J.P. Morgan sent a process letter on behalf of WBD to PSKY. The process letter, consistent with the process letters sent to Netflix and Company A, requested proposals no later than 12:00 p.m. Eastern time on November 20, 2025.
On November 11, 2025, PSKY provided virtual data room access to WBD’s representatives to permit them to conduct due diligence on PSKY’s business.
On November 12, 2025, Andy Gordon, Chief Strategy Officer and Chief Operating Officer of PSKY, had a video conference meeting with a senior member of the Allen & Company team representing WBD to discuss PSKY’s interest in acquiring WBD. During the meeting, Mr. Gordon indicated that (i) WBD should expect that a portion of PSKY’s consideration in its forthcoming proposal would include consideration in the form of PSKY non-voting Class B common stock and (ii) the Ellison family would fully backstop PSKY’s equity commitment in a proposed transaction with WBD.
Also on November 12, 2025, a senior member of the Centerview team representing PSKY and a senior member of the Allen & Company team representing WBD had a telephone call to discuss PSKY’s interest in acquiring WBD. During the call, the senior member of the Centerview team reiterated portions of Mr. Gordon’s conversation earlier that day with Allen & Company, including that WBD should expect that a portion of PSKY’s consideration in its forthcoming proposal would include consideration in the form of PSKY non-voting common stock.
Also on November 12, 2025, term sheets for the documents relevant to the spin-off of the WBD Global Linear Networks Business and the acquisition of the WBD Streaming & Studios Business (the merger agreement, separation and distribution agreement, tax matters agreement, employee matters agreement and intellectual property matters agreement) were made available to Netflix and Company A via email.
Also on November 12, 2025, a term sheet for a merger agreement to acquire WBD was made available to PSKY via email.
On November 13, 2025, senior executives of WBD, together with representatives of Allen & Company, J.P. Morgan and Evercore, held a management presentation with senior executives of PSKY and representatives of Centerview and RedBird. Senior executives of WBD, together with representatives of Allen & Company and J.P. Morgan, traveled to Los Angeles from New York City for this management presentation, and a representative of Evercore attended via means of remote communication. Based on attendance lists provided for the meeting, approximately 74 members of PSKY management, as well as representatives from
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multiple investment banks, law firms, financing sources, a consulting firm and a finance and accounting firm, attended either in person or remotely.
Also on November 13, 2025, Mr. D. Ellison proposed to meet with Mr. Zaslav the following week, and their meeting was scheduled for November 17.
On November 14, 2025, Mr. Gordon sent a text message to Bruce Campbell, Chief Revenue and Strategy Officer of WBD, stating that the November 13, 2025 WBD management presentation with PSKY was “truly a great presentation.”
On November 16, 2025, Mr. Zaslav had an in-person meeting with Mr. Sarandos to discuss Netflix’s interest in a potential transaction with WBD.
Also on November 16, 2025, drafts of the separation and distribution agreement, tax matters agreement, employee matters agreement and intellectual property matters agreement were made available to Netflix and Company A. A draft transition services agreement previously had been made available to them.
On November 17, 2025, Mr. Zaslav had an in-person meeting with Mr. D. Ellison to discuss PSKY’s interest in a potential transaction with WBD.
Also on November 17, 2025, WBD and its representatives participated in a reverse due diligence meeting with PSKY and its representatives.
Also on November 17, 2025, PSKY and its advisors, Centerview and Bain, participated in a product and technology due diligence meeting with members of WBD management and representatives of Allen & Company.
On November 18, 2025, media sources reported that PSKY had formed an investment consortium with the sovereign wealth funds of Saudi Arabia, Qatar and Abu Dhabi to submit a bid for WBD. Later that day, PSKY issued a statement categorizing these reports as “inaccurate.”
Also on November 18, 2025, a senior member of the Centerview team representing PSKY called a senior member of the Allen & Company team representing WBD. During the call, the senior member of the Centerview team representing PSKY denied the publicly reported rumor that PSKY’s forthcoming proposal to acquire WBD would include a consortium of co-investors and stated that PSKY would make a “clean bid for the whole thing.”
On November 20, 2025, a senior member of the Centerview team representing PSKY called a senior member of the Allen & Company team representing WBD. During the call, the senior member of the Centerview team representing PSKY noted that PSKY would not be submitting its bid to WBD by the 12:00 p.m. Eastern time deadline set forth in WBD’s process letter and instead PSKY would be submitting its bid “by the end of the day.”
Also on November 20, 2025, WBD received preliminary bids from PSKY, Netflix, Company A and Company C (collectively, the “November 20 Bids”):
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| • | PSKY proposed acquiring all of WBD for $25.50 per share (comprised of $21.68 cash and $3.82 of PSKY non-voting Class B common stock) with no pre-transaction spin-off of a portion of WBD’s business (the “PSKY November 20 Bid”). The PSKY November 20 Bid proposed that WBD stockholders would be able to elect to receive cash or stock subject to an overall split of 85% cash and 15% stock. The PSKY November 20 Bid also provided that Mr. Zaslav would serve as co-CEO and co-Chairman of the combined company and that one additional independent WBD director would join the board of the combined company. The PSKY November 20 Bid included a regulatory termination fee of $5 billion. The PSKY November 20 Bid did not include any equity commitment documentation, but stated that (i) “[t]he Ellison family and Redbird will commit to fund the full $34.5 billion in cash” (emphasis in original), this being the total required equity commitment to fund PSKY’s proposal, and (ii) PSKY “may, at signing, have additional highly capitalized partners.” With respect to debt financing, the proposal included signed commitment letters from BofA, Citi and Apollo for an aggregate principal amount of up to $40 billion contingent on the availability of full equity commitments to fund at closing. The PSKY November 20 Bid also included a markup of the term sheet for the merger agreement. |
| • | Netflix proposed acquiring the WBD Streaming & Studios Business, following the spin-off of the WBD Global Linear Networks Business, for $27 per share (comprised of $22 cash and $5 of Netflix voting stock), which would be in addition to the value WBD stockholders would receive in the spin-off (the “Netflix November 20 Bid”). The Netflix November 20 Bid proposed that WBD stockholders would have an option to elect to receive cash or stock, subject to an overall split of 81% cash and 19% stock. The Netflix November 20 Bid included a regulatory termination fee of $2.8 billion. The Netflix November 20 Bid also included markups of the term sheets for the merger agreement, separation and distribution agreement, tax matters agreement, employee matters agreement and intellectual property matters agreement. The Netflix November 20 Bid did not, nor did Netflix at any other time, extend any offer of future employment to members of WBD management or any Netflix board seats for WBD’s board members. |
| • | Company A proposed combining the WBD Streaming & Studios Business and certain of Company A’s related businesses, following the spin-off of the WBD Global Linear Networks Business, for per share consideration of $3.75 in cash and an amount of stock per share such that WBD stockholders would own 48% of the equity and voting power of the combined company, which would be in addition to the value WBD stockholders would receive in the spin-off (the “Company A November 20 Bid”). The Company A November 20 Bid also proposed to provide WBD stockholders with contingent value rights maturing one year after the closing of the proposed transaction, to provide downside protection value of up to $3.85 per share, if the volume weighted average of the combined company’s stock price for a 20-day period prior to the maturity date was less than $29.50. Based on a variety of valuation assumptions Company A made and set forth in its bid letter, Company A ascribed a “headline price” of $33.25 per WBD |
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| share in the Company A November 20 Bid. The Company A November 20 Bid included a regulatory termination fee of $5 billion. Company A’s proposal contemplated an initial combined company board of 11 members, with six designated by Company A and five designated by WBD. The Company A November 20 Bid did not, nor did Company A at any other time, extend any offer of future employment to members of WBD management. The Company A November 20 Bid also included markups of the term sheets for the merger agreement, separation and distribution agreement, tax matters agreement, employee matters agreement and intellectual property matters agreement. |
| • | Company C proposed acquiring Discovery Global and 20% of the WBD Streaming & Studios Business, including WBD’s HBO Max streaming service, for $25 billion in cash (the “Company C November 20 Bid”). The Company C November 20 Bid proposed a 90-day exclusivity period. |
On November 21, 2025, Mr. DiPiazza held a meeting with WBD’s senior management and advisors in person and via means of remote communication. During the meeting, the attendees discussed the November 20 Bids. The attendees further noted that the Netflix bid offered superior value and a higher degree of certainty compared to the PSKY bid, and that based on Netflix’s comments on initial term sheets they were expected to cooperate with the planned spin-off of the WBD Global Linear Networks Business in a straightforward manner without requiring material changes in planning. The attendees also noted that the Company A November 20 Bid was less attractive than the Netflix November 20 Bid, given the additional complexity of the proposed transaction, the need to diligence and document a carve-out of the Company A business, additional time needed to enter into the transaction, difficulty in assessing the value of the stock consideration and the low percentage of cash in the proposed consideration mix. The attendees discussed appropriate feedback for each bidder, with the intention of keeping PSKY, Netflix and Company A engaged in the process and improving their proposals. WBD determined that Company C’s proposal was not actionable at that time.
On November 22, 2025, draft merger agreements were made available to PSKY, Netflix and Company A via WBD’s virtual data room.
Also on November 22, 2025, a working group consisting of Mr. DiPiazza, Mr. Zaslav, three other WBD Board members and the Chair Emeritus of the WBD Board met to discuss the initial bids. The working group reviewed and discussed with WBD’s management and legal and financial advisors the guidance to be given to bidders later that day, as well as plans to update the full WBD Board regarding the bid process.
Also on November 22, 2025, members of WBD senior management and representatives of Allen & Company and J.P. Morgan had a meeting with members of PSKY’s senior management and PSKY’s financial advisors to discuss PSKY’s proposal. During the meeting, WBD senior management and WBD’s financial advisors provided feedback to PSKY on its proposal, including that (i) PSKY was behind other bidders on value, (ii) the WBD Board generally viewed cash as more attractive consideration than PSKY’s non-voting stock and (iii) the WBD Board needed further details on the terms of the equity commitment from the Ellison family that would backstop the transaction. Also during this meeting, Mr. Gordon stated that
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“there would be no CFIUS or Team Telecom review” when he was asked about the language in the PSKY November 20 Bid stating that PSKY may have “additional highly capitalized partners” at signing.
Also on November 22, 2025, members of WBD senior management and representatives of Allen & Company and J.P. Morgan had a meeting with members of Company A’s senior management and Company A’s financial advisors to discuss Company A’s proposal. During the meeting, WBD senior management and WBD’s financial advisors provided feedback to Company A on its proposal, including that (i) Company A should focus on improving the cash portion of its proposal and (ii) Company A’s proposed value had not differentiated it from other bidders.
Also on November 22, 2025, members of WBD senior management and representatives of Allen & Company and J.P. Morgan had a meeting with members of Netflix’s senior management and Netflix’s financial advisors to discuss Netflix’s proposal. During the meeting, WBD senior management and WBD’s financial advisors provided feedback to Netflix on its proposal, including that Netflix should meaningfully raise the amount of its regulatory termination fee and consider a higher valuation for the WBD Streaming & Studios Business.
During the November 22, 2025 meetings among WBD and its financial advisors, on the one hand, and each of PSKY, Netflix and Company A and their respective representatives, on the other hand, representatives of Allen & Company and J.P. Morgan provided an overview to each bidder of the process timeline, including that all bidders would be required to submit a markup of the draft merger agreement by November 26, 2025, Debevoise and Wachtell Lipton would provide feedback on each bidder’s merger agreement markup prior to December 1, 2025, and all bidders would be asked to submit a binding proposal on December 1, 2025. WBD’s financial advisors also informed all parties that they would be asked to complete their confirmatory due diligence prior to submission of their next proposal.
Also on November 22, 2025, representatives of Debevoise and Wachtell Lipton had a meeting by teleconference with representatives of Cravath and Latham to discuss PSKY’s proposal and next steps, including requesting that PSKY provide a markup of the draft merger agreement by November 26, 2025, and a markup of the draft disclosure schedules by November 28, 2025. WBD’s advisors provided guidance to PSKY regarding the WBD Board’s expectations as to the legal components of the transaction, including with respect to certainty and regulatory risks, and noted specifically that PSKY would need to provide committed equity financing.
Also on November 22, 2025, Debevoise and Wachtell Lipton had a meeting by teleconference with Skadden to discuss Netflix’s proposal and next steps, including requesting that Netflix provide a markup of the separation and distribution agreement and other ancillary agreements by November 24, 2025, a markup of the draft merger agreement by November 26, 2025, and a markup of the draft disclosure schedules by November 28, 2025.
Also on November 22, 2025, Debevoise and Wachtell Lipton had a meeting by teleconference with counsel to Company A to discuss Company A’s proposal and next steps, including requesting that Company A provide a markup of the separation and distribution
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agreement and other ancillary agreements by November 24, 2025, a markup of the draft merger agreement by November 26, 2025, and a markup of the draft disclosure schedules by November 28, 2025.
On November 23, 2025, a senior member of the Centerview team representing PSKY had a call with a senior member of the Allen & Company team representing WBD. During the call, the senior member of the Centerview team representing PSKY asked whether the PSKY November 20 Bid had been shared with the WBD Board and suggested that he would call WBD Board members to confirm with them directly (which would constitute a violation of PSKY’s non-disclosure agreement with WBD).
Also on November 23, 2025, senior attorneys from Debevoise and Wachtell Lipton spoke by telephone with a senior attorney from Cravath to provide notice that WBD had become aware that PSKY representatives were seeking to engage in direct conversations with members of the WBD Board in violation of PSKY’s obligations under the non-disclosure agreement between PSKY and WBD. WBD’s counsel requested that PSKY and its advisors cease such activities immediately in order to preserve an orderly process fair to all bidders. Such contacts nonetheless continued to occur during the ensuing period.
Also on November 23, 2025, a draft of the separation and distribution agreement schedules was made available to Netflix and Company A via WBD’s virtual data room.
On November 24, 2025, Skadden, on behalf of Netflix, shared markups of the separation and distribution agreement, tax matters agreement, employee matters agreement and intellectual property matters agreement with Debevoise and Wachtell Lipton. Netflix’s markups substantially accepted WBD’s proposed terms, facilitating a rapid path to definitive agreements.
Also on November 24, 2025, WBD and Netflix executed a “clean team” confidentiality agreement to facilitate Netflix’s review of competitively sensitive information.
Also on November 24, 2025, representatives of WBD, J.P. Morgan and Debevoise had a meeting via videoconference with representatives of Citi, BofA and Latham to discuss financing considerations with respect to PSKY’s bid and attempt to assist PSKY in developing solutions that would allow PSKY to present a stronger debt financing proposal. During this meeting, WBD management and WBD’s advisors provided a detailed overview of WBD’s debt capital structure, highlighting the critical need for WBD to refinance its existing bridge loan facilities with permanent capital, in the form of term loans and secured notes, prior to the closing of any transaction to avoid “going concern” risks and ensure capital stability. WBD’s advisors also detailed the mechanics of the pending exchange of approximately $15 billion of existing notes for new junior lien notes, explained that failure to execute this exchange would trigger a penalty of approximately $1.5 billion, and described how they believed WBD’s proposed refinancing and junior lien notes could be integrated with PSKY’s proposed pro forma capital structure.
Also on November 24, 2025, Mr. Zaslav had an in-person meeting with Mr. D. Ellison and Mr. L. Ellison regarding PSKY’s interest in a potential transaction with WBD.
Over the course of November 23 and 24, 2025, Mr. DiPiazza had individual conversations with each member of the WBD Board to update them on the transaction process.
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On November 25, 2025, WBD and PSKY executed a “clean team” confidentiality agreement to facilitate PSKY’s review of competitively sensitive information. The execution of this agreement required extensive negotiation regarding the scope of access, as PSKY had initially requested admission for an unusually large number of individuals, including certain personnel that WBD believed were inappropriate for access to highly sensitive competitive data given their roles at PSKY. Once PSKY agreed to a customary and appropriate list of access parties, WBD promptly executed the agreement and provided access to the “clean room.”
Also on November 25, 2025, at WBD’s direction, Allen & Company and J.P. Morgan sent process letters on behalf of WBD to PSKY, Netflix and Company A setting a bid date of December 1, 2025. The parties were advised that they should not expect an additional opportunity to improve their bid after that date and that the WBD Board “intends to select a prospective purchaser who will be invited to execute definitive agreements and effect the Transaction.”
Also on November 25, 2025, representatives of Covington and Debevoise spoke with representatives of Latham with respect to the need for CFIUS and FCC filings in connection with the PSKY bid. Covington and Debevoise emphasized WBD’s strong preference that the terms of any participation by non-U.S. investors should not result in CFIUS or the FCC having jurisdiction over the potential transaction.
Also on November 25, 2025, a senior member of the Centerview team representing PSKY had a call with a senior member of the Allen & Company team representing WBD. During the call, the senior member of the Centerview team representing PSKY (i) offered an apology for suggesting on their previous call on November 23, 2025 that he would contact WBD Board members directly and (ii) mentioned that Mr. Zaslav, Mr. D. Ellison and Mr. L. Ellison had a good meeting on the prior day.
On November 26, 2025, Cravath, on behalf of PSKY, sent a markup of the draft merger agreement, a draft form equity commitment letter, a draft form subscription agreement and a draft form limited guarantee to Debevoise and Wachtell Lipton. PSKY proposed that it would provide on the December 1, 2025 bid date debt commitment letters from BofA, Citi and Apollo and subscription agreements, equity commitment letters and limited guarantees with respect to equity investments by the Ellison family and other equity investors sufficient to cover the purchase price. PSKY did not specify the identities of other equity investors or their proposed investment amounts. PSKY’s draft merger agreement markup proposed, among other things: (i) no collar or other value-protection mechanics on PSKY’s stock consideration, (ii) an end date 12 months after the execution of the merger agreement with two automatic three-month extensions if all closing conditions had been satisfied other than the closing condition relating to obtaining required regulatory approvals, (iii) a $5 billion regulatory termination fee (limited to terminations as a result of antitrust laws or foreign regulatory laws), (iv) a WBD termination fee equal to 4% of the equity value of the proposed transaction, (v) a regulatory efforts covenant including a “reasonable best efforts” standard with a regulatory material adverse effect exception (measured with respect to the combined company), (vi) a “clear skies” provision limited to no acquisitions by PSKY that would reasonably be expected to delay the closing and (vii) interim operating covenants imposing significant restrictions on the operations of WBD during the period between signing and closing that would constrain WBD’s ability to manage its business in
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the ordinary course. The draft merger agreement also provided that (subject to further discussions) PSKY would have an absolute consent right over the terms of WBD’s refinancing of its bridge loan facility, which was required to occur prior to the filing of WBD’s 2025 annual financial statements, and the right to require that WBD pay approximately $1.5 billion to the holders of certain exchangeable notes in order to facilitate PSKY’s transaction financing (an amount payable under the terms of these notes by December 30, 2026) rather than completing the cost-free exchange of such notes that WBD envisioned. In general, both the volume and substance of PSKY’s comments on the draft merger agreement were significantly more onerous and restrictive in comparison to those received from Netflix.
Also on November 26, 2025, counsel to Company A sent markups of the draft merger agreement, separation and distribution agreement, tax matters agreement, employee matters agreement, intellectual property matters agreement and transition services agreement, as well as a draft stockholders agreement, to Debevoise and Wachtell Lipton.
Also on November 26, 2025, Skadden, on behalf of Netflix, sent a markup of the draft merger agreement, proposing, among other things: (i) an end date 15 months after the signing date with two three-month extension options that either party could exercise unilaterally to obtain approvals required under antitrust laws or foreign regulatory laws; (ii) a $5.6 billion regulatory termination fee; (iii) a $2.8 billion WBD termination fee; (iv) a regulatory efforts covenant including a “reasonable best efforts” standard with a burdensome condition exception that included any action that (a) would reasonably be expected to have a material impact on the business or financial condition of WBD and its subsidiaries, taken as a whole, (b) would have a material impact on the benefits reasonably expected to be derived from the transaction by Netflix or (c) involved, applied to, restricted, or affected the operation, contracts, business or assets of Netflix and its affiliates; and (v) a carveout to the “clear skies” provision to permit ordinary course actions. Netflix’s markup of the draft merger agreement would allow WBD to freely manage its debt capital structure, including refinancing its bridge loan facility and engaging in the junior lien notes exchange subject only to consultation with Netflix and considering its input in good faith.
On November 28, 2025, a working group of the WBD Board held a meeting via means of remote communication, which included representatives of Allen & Company, J.P. Morgan, Evercore, Debevoise, Wachtell Lipton and Covington, along with members of WBD’s senior management. During the meeting, such group discussed the merger agreement and other transaction document markups received from all parties on November 24, 2025 and November 26, 2025, and the disclosure schedule markups received on November 28, 2025.
On November 29, 2025, representatives of Debevoise and Wachtell Lipton met via videoconference with representatives of Cravath and Latham to provide feedback on PSKY’s initial markup of the merger agreement and the draft equity financing documents. WBD’s legal advisors emphasized the need for a full equity backstop from the Ellison family for the entire purchase price, and noted the risk inherent in PSKY’s proposal in which the funding obligation of the lead investor was conditioned on the funding of other consortium members. WBD’s legal advisors also noted that PSKY had on numerous occasions conveyed both orally and in writing that the Ellison family would fully backstop the equity commitment, but thus far PSKY had failed to provide any evidence of this commitment. During this meeting, WBD’s legal advisors
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provided additional feedback on the transaction documents, including specific objections to the complexity and conditionality of PSKY’s proposed equity financing structure, which relied on nested subscription agreements, equity commitment letters and limited guarantees rather than direct commitments. WBD’s legal advisors requested a simplified and clear structure with direct subscription agreements to ensure funding certainty and the ability of WBD to fully enforce the commitments of any investor. They also raised concerns regarding the composition of the equity consortium, noting potential risks associated with non-U.S. investors and the implications for CFIUS and FCC jurisdiction and potentially other regulatory approval requirements. The representatives of Cravath and Latham acknowledged these comments without responding and, when asked how many investors were in the equity consortium, indicated that the number was “single digits” but not yet final. WBD’s legal advisors provided specific feedback on the interim operating covenants, noting that the restrictions proposed by PSKY were extensive and potentially unworkable given the anticipated long period between signing and closing, and expressly requested flexibility for WBD to refinance its existing indebtedness during the pendency of the transaction and to complete the junior lien notes exchange that WBD was required to complete by December 30, 2026 in order to avoid a payment to the applicable note holders of approximately $1.5 billion. Finally, WBD’s legal advisors requested that the “clear skies” provision apply to Mr. L. Ellison and Mr. D. Ellison, each of whom is an “ultimate parent entity” of PSKY for purposes of HSR Act filing requirements, to prevent them from acquiring competing assets or engaging in other transactions that could delay or impede the receipt of regulatory approvals.
Also on November 29, 2025, representatives of Debevoise and Wachtell Lipton held a separate meeting via videoconference with representatives of PSKY’s legal and financial advisors to specifically discuss the debt financing and capital structure aspects of PSKY’s proposal. During this meeting, WBD’s legal advisors objected to PSKY’s proposal to impose a consent right over WBD’s financing activities and the terms of any ultimate financing, explaining that WBD required the flexibility to access the bond markets and to offer prevailing market terms to refinance its bridge facilities without PSKY’s prior approval. WBD’s legal advisors suggested that WBD would be amenable to a consultation right, so that PSKY could provide input on WBD’s refinancing, but not a blocking right. WBD’s legal advisors also noted that the covenants in PSKY’s proposed financing package would force WBD to forego the junior lien notes exchange and incur the $1.5 billion penalty without any compensation from PSKY.
Also on November 29, 2025, representatives of Debevoise and Wachtell Lipton met via videoconference with Skadden to discuss Netflix’s markups. WBD’s legal advisors advocated for a regulatory efforts standard tied to a material adverse effect standard with appropriate carve-outs, broader reverse termination fee triggers to capture non-antitrust regulatory impediments, and a narrower exception to the “clear skies” antitrust covenant. The parties also addressed fiduciary protections, with WBD seeking a more flexible “Superior Proposal” definition and shorter match rights, and Netflix indicating openness to accommodating WBD’s interim operating needs. In contrast to the position taken by PSKY, Netflix indicated that it understood WBD’s need to manage its capital structure during the pendency of the transaction and was amenable to permitting WBD to execute its refinancing plan and the junior lien notes exchange, subject only to an obligation to consult with Netflix.
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Also on November 29, 2025, representatives of Debevoise and Wachtell Lipton met via videoconference with counsel to Company A to review Company A’s markups.
On December 1, 2025, a senior member of the Centerview team representing PSKY had a call with a senior member of the Allen & Company team representing WBD. During the call, the senior member of the Centerview team representing PSKY stated that (i) certain Middle Eastern investors would be included as part of PSKY’s equity financing consortium in PSKY’s forthcoming bid and (ii) PSKY’s forthcoming bid would not include a CFIUS approval closing condition.
Also on December 1, 2025, WBD received revised bids from PSKY, Netflix and Company A (collectively, the “December 1 Bids”):
| • | PSKY proposed acquiring all of WBD for $26.50 in cash per outstanding share of WBD Common Stock (the “PSKY December 1 Bid”). The PSKY December 1 Bid included a regulatory termination fee equal to $5 billion and a WBD termination fee equal to 3.75% of the equity value of the proposed transaction. The PSKY December 1 Bid disclosed, for the first time, a consortium of seven investors that would commit an aggregate amount of $37.2 billion, consisting of the Lawrence J. Ellison Revocable Trust u/a/d 01/22/88 (the “Revocable Trust”) ($11.8 billion), the Public Investment Fund (Kingdom of Saudi Arabia) ($10 billion), L’imad Holding Company PJSC (Abu Dhabi) ($7 billion), Qatar Investment Authority (Qatar) ($7 billion), Tencent ($1 billion), RedBird ($300 million) and Affinity Partners ($200 million). The PSKY December 1 Bid did not include any commitment or backstop by any member of the Ellison family, and expressly and fully conditioned each investor’s commitment, including that of the Revocable Trust, on every other investor fully funding their respective commitments. As to each equity investor, the cross-conditioned nature of the equity financing structure created significant funding risk, as the failure of any single investor to fund would automatically relieve the Revocable Trust and every other equity investor of its respective funding obligations. The contemplated equity participation by Tencent, a Chinese technology company, which recently in connection with the acquisition of Paramount Global by Skydance Media, LLC (the “Paramount/Skydance Merger”) had been the subject of significant scrutiny by the U.S. government, and the participation of the Middle Eastern sovereign wealth funds in the equity financing structure, whose investment size and governance rights likely established jurisdiction by CFIUS and potentially other non-U.S. regulators over the PSKY proposal, created additional regulatory risks and related uncertainties. The PSKY December 1 Bid also included certain burdensome restrictions that would apply to WBD during the interim period between signing and closing that were substantially similar to the interim operating period restrictions included in PSKY’s November 26, 2025 markup of the draft merger agreement. Despite WBD’s feedback on November 29, 2025 regarding the need for flexibility in these provisions, PSKY did not meaningfully address the WBD Board’s concerns. PSKY’s proposed definition of “Company Material Adverse Effect” in its markup of the draft merger agreement included in the PSKY December 1 Bid took into account any impacts resulting from these |
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| interim operating period restrictions, which created closing risk for WBD. The PSKY December 1 Bid also did not address WBD’s concerns with respect to financing matters, requiring PSKY consent in its “sole discretion” over the terms of WBD’s essential bridge loan refinancing and a blocking right over the junior lien notes exchange necessary to avoid a payment of approximately $1.5 billion. |
| • | Netflix proposed acquiring the WBD Streaming & Studios Business for $27.75 per outstanding share of WBD Common Stock (comprised of $22.50 in cash and $5.25 of Netflix stock per outstanding share of WBD Common Stock) (the “Netflix December 1 Bid”). The stock component of the Netflix December 1 Bid was subject to a symmetrical 10% collar designed to ensure that WBD stockholders received Netflix stock consideration valued at $5.25 per share, provided that the 15-day volume-weighted average trading price of Netflix shares (measured three days prior to the closing) (the “Netflix Average Stock Price”) fell between $98.81 and $120.77. If the Netflix Average Stock Price was less than or equal to $98.81, WBD stockholders would receive 0.0531 of a Netflix share for each outstanding WBD share. If the Netflix Average Stock Price was greater than or equal to $120.77, WBD stockholders would receive 0.0435 of a Netflix share for each outstanding WBD share. As a result, the Netflix December 1 Bid provided that between 112.9 and 137.9 million Netflix shares would be issued to WBD stockholders. The Netflix December 1 Bid included a regulatory termination fee of $5.8 billion and a WBD termination fee of $2.8 billion. Netflix’s revised draft of the merger agreement included with the Netflix December 1 Bid proposed, among other things, (i) that the regulatory termination fee would be payable to WBD solely if the closing did not occur as a result of antitrust laws (and not other regulatory laws) and (ii) the same “reasonable efforts standard” and burdensome condition exception that Netflix proposed in its November 26, 2025 markup of the draft merger agreement. Netflix’s merger agreement markup also included meaningful concessions on the interim operating covenants applicable to WBD during the interim period between signing and closing, and included a statement that Netflix was open to further discussing (i) any flexibility that WBD needed to operate its business in the ordinary course during the interim period between signing and closing and (ii) any interim operating period restrictions in Netflix’s merger agreement markup that WBD viewed as overly burdensome. In contrast to PSKY’s approach, Netflix had a relatively small number of comments of relatively modest significance on the draft transaction agreements, demonstrated a willingness to work collaboratively with WBD to address the WBD Board’s concerns and provided responsive markup language addressing key points raised by WBD’s advisors, including tightening conditions, providing financing flexibility, and modifying interim operating covenants. |
| • | Company A proposed combining the WBD Streaming & Studios Business and certain of Company A’s related businesses for per share consideration of $5.25 in cash and an amount of stock per outstanding share of WBD Common Stock such that WBD stockholders would own 49% of the combined company (the “Company A December 1 Bid”). The Company A December 1 Bid also |
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| proposed to provide WBD stockholders with contingent value rights maturing one year after the closing of the proposed transaction, to provide downside protection value of up to $4.81 per share, if the volume weighted average of the combined company’s stock price for a 20-day period prior to the maturity date was less than $30.18 per share. Based on a variety of valuation assumptions Company A made and set forth in its bid letter, Company A ascribed a “headline price” of $35.43 per WBD share in the Company A December 1 Bid. The Company A December 1 Bid included a regulatory termination fee of $5 billion and a WBD termination fee of $2.275 billion. |
On December 2, 2025, journalist Charles Gasparino released a report on the X service with details of PSKY’s bid, which was directly attributed to “$PSKY’s reps.” This public disclosure of transaction information violated PSKY’s obligations under its confidentiality agreement with WBD.
Also on December 2, 2025, a working group of the WBD Board held a meeting via means of remote communication, which included representatives of Allen & Company, J.P. Morgan, Evercore, Debevoise, Wachtell Lipton and Covington, along with members of WBD’s senior management. During the meeting, the group reviewed and discussed the December 1 Bids and prepared to update the full WBD Board later that day.
Also on December 2, 2025, the WBD Board held a meeting in person and via means of remote communication, which included representatives of Allen & Company, J.P. Morgan, Evercore, Debevoise, Wachtell Lipton, Covington and Fried, Frank, Harris, Shriver & Jacobson LLP (“Fried Frank”), along with members of WBD’s senior management. During the meeting, the WBD Board reviewed the bids and discussed the relative merits of, and certain considerations with respect to, the December 1 Bids, including (i) the significant funding certainty concerns with PSKY’s cross-conditioned equity financing structure, (ii) the superior value-protection features in the Netflix December 1 Bid (including the collar on the stock component), (iii) Netflix’s demonstrated willingness to address WBD’s concerns regarding interim operating covenants, (iv) the regulatory implications of including Tencent and Middle Eastern sovereign wealth funds in PSKY’s equity financing structure, (v) the significant concerns presented by PSKY’s inflexibility regarding WBD’s financing needs during the period between signing and closing, including an anticipated cash expense of approximately $1.5 billion that would be payable to the holders of certain exchangeable notes even if PSKY was unable to complete its acquisition of WBD, (vi) the risks associated with delaying WBD’s near-term pending strategic separation transaction to pursue a transaction with PSKY and (vii) the additional time required to properly structure and execute a transaction with Company A. The WBD Board determined that, while there could be strategic merit in the transaction proposed by Company A, the value of the equity portion of Company A’s bid was uncertain, the percentage of cash in Company A’s proposed consideration mix was lower than that of Netflix and PSKY, and the complex transaction structure would require an extended timeline to complete due diligence and documentation. Given that, among other things, Netflix submitted the meaningfully highest bid of the December 1 Bids accompanied by the most readily actionable legal documentation, with few issues remaining to be resolved, the WBD Board unanimously decided to accelerate discussions with Netflix in order to resolve remaining issues in Netflix’s merger agreement markup and other transaction agreements. At the same time, the WBD Board instructed WBD’s
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management and advisors to remain engaged with Company A and PSKY, and provide them feedback consistent with the WBD Board’s discussions regarding the deficiencies in their proposals. The WBD Board determined to meet periodically during the week, as frequently as daily, as matters developed, with the goal of potentially finalizing and agreeing to a transaction prior to the weekend, depending on the bidders’ responses.
Also on December 2, 2025, WBD management and representatives from Allen & Company had a meeting by teleconference with Netflix representatives to provide feedback on the Netflix December 1 Bid.
On December 3, 2025, Debevoise, on behalf of WBD, sent revised drafts of the merger agreement, separation and distribution agreement, tax matters agreement and intellectual property matters agreement to Skadden, proposing, among other things, (i) that Netflix would be required to take all actions necessary to obtain regulatory approvals, except those that would have a material adverse effect on WBD and its subsidiaries after giving effect to the separation and distribution or would apply to the operation, contracts, business or assets of Netflix, and (ii) that the regulatory termination fee would be payable to WBD if the closing did not occur as a result of any antitrust law or foreign regulatory law.
Also on December 3, 2025, Mr. Zaslav had a telephone conversation with Mr. D. Ellison to provide feedback on the PSKY December 1 Bid. During this call, Mr. Zaslav stated that (i) the PSKY December 1 Bid was not the highest value proposal received by WBD and (ii) PSKY’s proposed equity financing terms raised legal and regulatory complexities that would be challenging for the WBD Board to accept and that PSKY’s proposal should be fully backstopped by the Ellison family and RedBird.
Also on December 3, 2025, Debevoise and Wachtell Lipton had a meeting by teleconference with Cravath to provide feedback on legal aspects of the PSKY December 1 Bid. During this call, Debevoise and Wachtell Lipton reiterated the WBD Board’s specific concerns regarding, among other matters, (i) the cross-conditioned nature of PSKY’s equity financing structure and the need for a full backstop from the Ellison family and RedBird, as had been promised repeatedly in PSKY’s earlier proposals to the WBD Board and in conversations among advisors, (ii) the failure of the Ellison family to make any commitments to provide regulatory cooperation that would be required to consummate the transaction, (iii) the presence of Tencent and other non-U.S. investors in the equity financing and resulting regulatory implications, including exposure of the transaction to CFIUS jurisdiction and the potential requirement to make filings in several jurisdictions that would not otherwise be required, (iv) the need for WBD to have flexibility in the interim operating covenants and (v) the need for WBD to have flexibility to manage its debt capital structure during the interim period and to complete the junior lien notes exchange. WBD’s legal advisors specifically identified each of these issues and recommended that PSKY address them in a revised proposal. WBD’s legal advisors informed the representatives of Cravath that the WBD Board would be meeting periodically throughout the week, urged them to provide any revised proposal as soon as feasible and stated they would be available for any follow-up questions.
Also on December 3, 2025, WBD management and representatives from Allen & Company had a meeting by teleconference with PSKY representatives to provide feedback on
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the PSKY December 1 Bid. PSKY was informed that it had not submitted the highest value proposal, and WBD had significant concerns regarding PSKY’s proposed equity financing structure and bridge refinancing consent right. PSKY was urged to respond in an expeditious manner and informed that the WBD Board was meeting periodically throughout the week.
Also on December 3, 2025, two senior members of the Centerview team representing PSKY had a call with a senior member of the Allen & Company team representing WBD. During the call, a senior member of the Centerview team representing PSKY stated that “not every dollar will come from [Mr. L.] Ellison” when discussing PSKY’s proposal to acquire WBD.
Also on December 3, 2025, members of WBD and PSKY management, together with representatives of Debevoise and Latham, and representatives of Citibank and BofA, met by virtual means to discuss WBD’s serious concerns about the limitations on WBD’s financing activities on which PSKY continued to insist. During this discussion, WBD’s management and legal advisors explained that PSKY’s proposal to permit refinancing only if such debt was “callable at par” was unworkable, as the depth of the term loan market alone was most likely insufficient to refinance WBD’s bridge facility and the bond market would require customary call protection premiums. WBD’s legal advisors emphasized that restricting WBD’s ability to agree to customary call protection in the context of a financing structure that could be assumed by PSKY would effectively preclude WBD from accessing the bond markets, leaving WBD with a precarious capital structure if the transaction failed to close. WBD and its legal advisors also emphasized the significant financial expense that would be borne by WBD if the junior lien notes exchange could not be completed by December 30, 2026 as contemplated.
Also on December 3, 2025, Debevoise and Wachtell Lipton had a meeting by teleconference with Skadden to provide feedback on the legal aspects of the Netflix December 1 Bid. During this call, Debevoise and Wachtell Lipton conveyed the WBD Board’s specific requests and concerns regarding (i) the need for Netflix to improve its regulatory efforts covenant by (A) removing from the definition of “Burdensome Condition” the clause that refers to actions that would have a material adverse impact on the benefits that Netflix reasonably expects to derive from the transaction and (B) removing the ordinary course carveout from the “clear skies” covenant, and (ii) modifying the trigger for payment of the regulatory termination fee to WBD to include failure of the regulatory approvals closing condition or legal restraint closing condition as a result of a governmental order pursuant to any regulatory law (rather than only pursuant to antitrust laws).
Also on December 3, 2025, Mr. Zaslav had a telephone conversation with the Chief Executive Officer of Company A to provide feedback on the Company A December 1 Bid.
Also on December 3, 2025, WBD management and representatives from Allen & Company had a meeting by teleconference with Company A representatives to provide feedback on the Company A December 1 Bid.
Also on December 3, 2025, Netflix agreed in a conversation between Mr. Sarandos and Mr. Zaslav, followed by a discussion among counsel, to strengthen its regulatory efforts
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obligations and modify its proposal to shift $0.75 of the per share consideration to be paid to holders of WBD Common Stock from Netflix Common Stock to cash.
Also on December 3, 2025, the WBD Board held a meeting via means of remote communication, which included representatives of Allen & Company, J.P. Morgan, Evercore, Debevoise, Wachtell Lipton, Covington and Fried Frank, along with members of WBD’s senior management. During the meeting, the WBD Board discussed the PSKY December 1 Bid and the Netflix December 1 Bid, recapped discussions with the bidders since the previous meeting of the WBD Board and discussed the status of the transaction process generally. After discussion, the WBD Board unanimously resolved that WBD’s management and advisors should finalize documentation with Netflix as soon as possible, in order to be in a position to enter into definitive agreements by the evening of December 4, 2025 should the WBD Board decide to proceed with a transaction with Netflix. The WBD Board also instructed WBD’s management and advisors to remain engaged with the other bidders.
Also on December 3, 2025, Centerview, on behalf of PSKY, conveyed to Allen & Company that PSKY would submit a revised proposal prior to 10:00 a.m. Eastern time on December 4, 2025.
During the evening of December 3, 2025, the litigation boutique Quinn Emanuel Urquhart & Sullivan, LLP (“Quinn Emanuel”), on behalf of PSKY, sent a letter to WBD (the “December 3 Quinn Emanuel Letter”) “express[ing] serious concerns about the fairness and adequacy” of the WBD sale process based on its interpretation of public media reports. The December 3 Quinn Emanuel Letter was sent by Mr. D. Ellison directly to Mr. Zaslav via email, and separately sent by email, by in-person delivery by a litigation delivery services firm, and by overnight courier to four law firms advising WBD and to Allen & Company. The December 3 Quinn Emanuel Letter contained no specific proposals for changes to the transaction documents or valuation that would have improved the PSKY December 1 Bid. The December 3 Quinn Emanuel Letter largely relied for its assertions on partial summaries of inaccurate and incomplete newspaper reports that were not relevant to the evaluation of a potential transaction, while other assertions had no factual basis whatsoever. The December 3 Quinn Emanuel Letter further sought confirmation as to whether WBD had appointed “an independent special committee of disinterested members of its board to consider the potential transaction opportunities” and “strongly urge[d]” WBD to empower such a committee if one did not already exist.
WBD’s legal advisors provided the December 3 Quinn Emanuel Letter to the WBD Board, as requested in the letter. PSKY did not submit any revisions to the PSKY December 1 Bid on December 3, 2025.
Also on December 3, 2025 and on the morning of December 4, 2025, after learning of the December 3 Quinn Emanuel Letter, representatives of PSKY’s legal and financial advisors contacted their respective counterparts to advise that they had been unaware of the December 3 Quinn Emanuel Letter prior to its delivery to WBD and that, in their view, the letter should not have been sent, was “not helpful” and was a “mistake.”
Also on December 3, 2025, Skadden, on behalf of Netflix, sent revised drafts of the merger agreement and other transaction agreements to Debevoise and Wachtell Lipton.
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On December 4, 2025, Wachtell Lipton and Debevoise, on behalf of WBD, responded to Quinn Emanuel stating that it had shared the December 3 Quinn Emanuel Letter with the WBD Board and confirming that “the WBD Board attends to its fiduciary obligations with the utmost care, and that they have fully and robustly complied with them, and will continue to do so.”
Also on December 4, 2025, Debevoise, on behalf of WBD, sent revised drafts of the merger agreement, other transaction agreements and disclosure schedules to Skadden. Over the course of the day, Debevoise and Skadden exchanged drafts of these agreements and disclosure schedules in order to finalize their terms.
Also on December 4, 2025, a few hours before the WBD Board’s scheduled meeting, PSKY sent a revised offer for $30 per share in cash (the “PSKY December 4 Proposal”), along with markups of the merger agreement and the disclosure schedules and draft subscription agreements, equity commitment letter and limited guarantee to Debevoise and Wachtell Lipton. The PSKY December 4 Proposal modified the equity financing structure to provide a $40.4 billion backstop from the Revocable Trust, but continued to include significant deficiencies that had been identified by the WBD Board throughout the process, including (i) the lack of any actual commitments or backstop from any member of the Ellison family, a dependency on an opaque Revocable Trust, the creditworthiness of which was not certain and subject to change, deficiencies in the Revocable Trust’s obligations under the proposed equity financing documents, including a monetary damages cap of $2.8 billion on the Revocable Trust’s liability, including in the event of a willful breach, and failure of any member of the Ellison family to make any commitments to provide regulatory cooperation that would be required to consummate the transaction, (ii) continued regulatory uncertainty related to PSKY’s expected equity syndication, (iii) the continued absence of necessary flexibility for WBD to manage its debt capital structure and execute essential refinancing activities during the potentially lengthy period between signing and closing, which, among other adverse consequences, would require WBD to pay a financing cost of approximately $1.5 billion to certain note holders if the contemplated debt exchange offer was not completed by December 30, 2026, and the restriction on WBD’s ability to refinance its $15.4 billion bridge loan, and (iii) other interim operating covenants that remained substantially identical to the burdensome restrictions rejected by WBD in the PSKY December 1 Proposal, ignoring the specific feedback provided by WBD’s advisors on November 29, 2025 and December 3, 2025 regarding WBD’s need for reasonable operating flexibility during a potentially lengthy interim period. While PSKY stated in its cover letter that it was prepared to sign “immediately”, the transaction documents included with the PSKY December 4 Proposal would require substantial additional negotiation on key issues that PSKY had declined to address despite multiple rounds of specific feedback from the WBD Board and WBD’s advisors, and were also incomplete in other respects, with footnotes and bracketed provisions.
Also on December 4, 2025, Skadden, on behalf of Netflix, sent a revised draft of the merger agreement to Debevoise and Wachtell Lipton in advance of the WBD Board meeting scheduled for later that day. In its email to Debevoise and Wachtell Lipton, Skadden stated, at the instruction of Netflix:
“We have our client’s signature page in escrow and are prepared to exchange signature pages after your client’s board has met and approved this afternoon. Our client’s
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expectation is that we will be signed as soon as practicable this evening, and the deal announced before open of market tomorrow morning. We have been instructed by our client to convey that this is our best and final proposal and that if we are not done before open of market tomorrow morning, our proposal shall be deemed withdrawn, null and void. We will withdraw from your process, abandon pursuit of the transaction and terminate discussions.”
Late in the afternoon on December 4, 2025, Mr. Sarandos called Mr. Zaslav to inform him that Netflix was prepared to enter into definitive transaction agreements with WBD that evening, or it would withdraw its proposal and withdraw from the process.
At 4:00 p.m. on December 4, 2025, the WBD Board held a meeting via means of remote communication, which included representatives of Allen & Company, J.P. Morgan, Evercore, Debevoise, Wachtell Lipton and Covington, along with members of WBD’s senior management. During the meeting, the WBD Board reviewed the PSKY December 4 Proposal and the status of negotiations with Netflix, and discussed the relative merits of each proposal, including the significant concerns regarding PSKY’s transaction documents that remained unresolved despite the WBD Board’s detailed feedback throughout the process. The WBD Board observed that the PSKY proposal carried significantly higher execution risk than the Netflix proposal for reasons including the absence of a direct and unconditional equity funding backstop from the Ellison family, the uncertain current and future creditworthiness of the Revocable Trust, the lack of any obligations by the Ellisons to provide any regulatory cooperation in connection with the proposed transaction or avoid taking actions to frustrate closing and the financial condition and creditworthiness of PSKY, which is a significantly smaller and more highly leveraged company. In contrast, the WBD Board noted that Netflix is an investment grade public company with a market capitalization in excess of $400 billion.
The WBD Board also noted that, in contrast to Netflix’s responsiveness, PSKY had repeatedly failed to incorporate critical feedback regarding its equity financing, WBD’s need for financing flexibility, and interim operating covenants provided by WBD’s advisors. PSKY’s revised draft continued to restrict WBD from refinancing its bridge loan with standard high-yield notes containing customary call protection, thereby forcing WBD to rely on a potentially insufficient term loan market or seek PSKY’s consent for necessary financing. The WBD Board also observed that PSKY’s expectation that WBD would pay $1.5 billion to certain noteholders by December 30, 2026, in lieu of the planned junior lien notes exchange, would result in a material uncompensated expense in the event of a failed transaction. The WBD Board viewed this lack of flexibility as a significant risk to WBD’s financial stability during the interim period. The WBD Board also considered that, because PSKY’s proposal would require WBD to abandon the Separation and Distribution, any delay or failure to close could deprive WBD stockholders of strategic flexibility and value-creation possibilities of the Separation and Distribution. The WBD Board also viewed the continued refusal of PSKY to provide necessary operating flexibility to create a material risk that the transaction would fail to close or that the business would be materially damaged during a prolonged regulatory review. The WBD Board further took into account advice of WBD’s regulatory advisors that regulatory risk was not a material differentiating factor between the PSKY and Netflix proposals.
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The WBD Board considered that the Netflix transaction offered high risk-adjusted value, a strong regulatory package, and financing certainty from a counterparty with an investment-grade balance sheet. By comparison, the WBD Board determined that the risk adjusted, per-share value of the PSKY December 4 Proposal was not superior to the value offered by Netflix, which consisted of $23.25 in cash, plus a number of shares of Netflix Common Stock representing a target value of $4.50, with the exchange ratio to be determined (within a specified collar) based on the 15-day volume-weighted average trading price of Netflix Common Stock (measured three trading days prior to closing), plus the additional value of the shares of Discovery Global that WBD stockholders will receive pursuant to the Separation and Distribution (as further described below). In reaching its determination, the WBD Board considered that (i) Netflix had demonstrated throughout the process a willingness to work collaboratively with WBD and respond constructively to the WBD Board’s feedback, while PSKY had failed to meaningfully address key concerns that the WBD Board and WBD’s advisors specifically had identified in multiple conversations, (ii) Netflix’s proposal provided significant value protection through the collar mechanism, (iii) Netflix’s proposal provided greater closing certainty given Netflix’s strong balance sheet and investment-grade credit rating, (iv) the Netflix transaction included a strong regulatory commitment with a $5.8 billion regulatory termination fee, one of the largest cash termination fees ever agreed, (v) Netflix’s proposal provided WBD with the flexibility to manage its debt capital structure and (vi) the proposed transaction with Netflix would not require WBD to abandon the Separation and Distribution. The WBD Board also considered a number of other relevant factors set forth below (see – “Reasons for Recommendation”).
The WBD Board also considered the respective opinions of Allen & Company and J.P. Morgan rendered to the WBD Board on December 4, 2025, confirmed by delivery of written opinions dated December 4, 2025, as to the fairness, from a financial point of view, as of such date and based upon and subject to the assumptions made, procedures followed, matters considered, and qualifications and limitations upon the review undertaken, of the merger consideration to be received by holders of WBD Common Stock (other than, as applicable Netflix, Merger Sub and their respective affiliates) pursuant to the Netflix Merger Agreement.
In light of the above and Netflix’s representations that it would abandon its offer if it were not accepted that evening and would disengage from the process, the WBD Board (i) determined that the terms of the Netflix Merger Agreement and the other transaction documents, including terms related to the Netflix Merger and the Distribution (but in the case of the Distribution, subject to the WBD Board’s final approval thereof prior to the Distribution), were fair to, and in the best interests of, WBD and its stockholders, (ii) determined that it was in the best interests of WBD and its stockholders and declared it advisable to enter into the Netflix Merger Agreement and the other transaction documents, (iii) approved the execution and delivery by WBD of the Netflix Merger Agreement and the other transaction documents, the performance by WBD of its covenants and agreements contained therein and the consummation of the transactions contemplated by the Netflix Merger Agreement and the other transaction documents, including the Netflix Merger (but in the case of the Distribution, subject to the WBD Board’s final approval thereof prior to the Distribution), on the terms and subject to the conditions set forth therein and (iv) resolved to recommend that the stockholders of WBD approve the Netflix Merger and adopt the Netflix Merger Agreement and directed that the Netflix Merger Agreement be submitted to the stockholders of WBD for their adoption.
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At approximately 5:00 p.m. on December 4, 2025, while the meeting of the WBD Board to consider the various proposals was ongoing, Mr. Zaslav received a text message from Mr. D. Ellison. Notwithstanding that PSKY had been repeatedly advised that it should not expect an additional opportunity to improve its bid after the December 1, 2025 bid date, and that PSKY had nonetheless been given an opportunity to do so, the message stated that PSKY’s offer of a few hours earlier was not “best and final.” A representative of Evercore previously had received a similar text message from a representative of Centerview at approximately 4:30 p.m. Neither Evercore nor Mr. Zaslav responded to these messages as they did not present any actionable improved proposal for consideration and it would not have been appropriate to do so in the midst of the WBD Board’s deliberations.
Later in the evening on December 4, 2025, WBD entered into the Netflix Merger Agreement. Consistent with the express terms of the Netflix Merger Agreement, WBD and its advisors did not engage further in discussions with Company A or PSKY.
On the morning of December 5, 2025, WBD and Netflix issued a joint press release announcing the execution of the Netflix Merger Agreement. Later that day, counsel for WBD sent notices to counsel for Company A and PSKY requiring them to comply with the “return or destroy” provisions of their respective non-disclosure agreements with WBD, and to certify such compliance within five business days, as required by those agreements.
On December 8, 2025, PSKY launched the Offer, in which it proposes to acquire WBD on substantially the same terms as the PSKY December 4 Proposal. Despite having had the opportunity to review the publicly filed Netflix Merger Agreement and accept its more favorable terms, including enhanced regulatory efforts commitments, a higher regulatory break fee, the ability to refinance the WBD bridge facility and to complete the junior lien notes exchange, as well as more flexible interim operating covenants and representations and warranties, PSKY launched the Offer on the same terms (with additional conditions related to the Offer) that the WBD Board had found deficient throughout the sale process. The Offer did not address any of the deficiencies in PSKY’s equity funding proposal that were specifically and consistently noted to PSKY by WBD and its advisors in their responses to PSKY’s prior proposals. The Offer also failed to provide, as is common in such circumstances, that PSKY would bear the expense of the termination fee owed to Netflix under the terms of the Netflix Merger Agreement, if the WBD Board were to decide to terminate the Netflix Merger Agreement in order to enter into an alternative transaction with PSKY.
Later in the day on December 8, 2025, WBD issued a press release stating that (i) PSKY had commenced an unsolicited tender offer to acquire all of the outstanding shares of WBD Common Stock, (ii) consistent with its fiduciary duties and in consultation with WBD’s independent financial and legal advisors, the WBD Board will carefully review and consider PSKY’s offer in accordance with the terms of the Netflix Merger Agreement, (iii) the WBD Board is not modifying its recommendation with respect to the Netflix Merger Agreement, (iv) WBD intends to advise its stockholders of the WBD Board’s recommendation regarding the Offer within 10 business days and (v) WBD stockholders are advised not to take any action at this time with respect to the Offer.
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Also on December 8, 2025, the WBD Board held a meeting via means of remote communication, which included representatives of Allen & Company, J.P. Morgan, Evercore, Debevoise, Wachtell Lipton and Covington, along with members of WBD’s senior management. During the meeting, the WBD Board discussed the Offer and proposed next steps.
On December 10, 2025, PSKY released a letter addressed to WBD’s stockholders. The letter stated that the Revocable Trust would “happily address [concerns about the terms of the equity financing] in the transaction documentation,” but failed to mention that PSKY had declined to address specific concerns raised by WBD on several occasions. Counsel for PSKY also sent a similar “return or destroy” notice with respect to PSKY confidential information to counsel for WBD, and to certify such compliance within five business days.
On December 15, 2025, the WBD Board held a meeting via means of remote communication, which included representatives of Allen & Company, J.P. Morgan, Evercore, Joele Frank, Debevoise, Wachtell Lipton and Covington, along with members of WBD’s senior management. During the meeting, the WBD Board discussed the status of the Offer, including the timeline for WBD’s response and the legal requirements relating to the Schedule 14D-9. Representatives of Debevoise and Wachtell Lipton reviewed fiduciary duty considerations applicable to the WBD Board in evaluating the Offer, as well as the provisions of the Netflix Merger Agreement relating to a potential change of recommendation and the termination fee that would be payable to Netflix in certain circumstances pursuant to the Netflix Merger Agreement. The WBD Board discussed various considerations with respect to the Offer, including the value of the Offer, taking into account numerous risks and uncertainties relating to the Offer, as well as the benefits of the Netflix Merger and the Separation and Distribution (see “—Reasons for Recommendation”). Following discussion, the WBD Board directed management and its advisors to prepare a substantially final version of this Statement prior to finalizing its decision on whether to recommend in favor of or against the Offer.
On December 16, 2025, the members of the WBD Board executed a unanimous written consent to recommend that WBD stockholders reject the Offer and not tender their shares of WBD Common Stock pursuant to the Offer and to recommend the Netflix Merger Agreement.
On December 17, 2025, WBD filed this Statement.
Reasons for Recommendation
The WBD Board has unanimously concluded that (i) the Offer is not in the best interests of WBD and its stockholders; (ii) the Offer is not a Company Superior Proposal (as defined in the Netflix Merger Agreement); and (iii) the Offer did not meet the standard of being more favorable to WBD stockholders than the transactions contemplated by the Netflix Merger Agreement, after taking into account all relevant factors, including likelihood of consummation on the terms proposed and all legal, financial and regulatory aspects of the Offer.
Accordingly, the WBD Board unanimously recommends that WBD stockholders reject the Offer and not tender any of their shares of WBD Common Stock pursuant to the Offer, and has unanimously resolved to recommend the Netflix Merger Agreement as in the best interests of WBD stockholders.
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In evaluating the Offer, the WBD Board consulted with WBD’s legal and financial advisors and WBD’s management and, in reaching its conclusion and making its recommendation to the stockholders, took into account numerous factors.
In sum, the WBD Board unanimously determined that the Offer is not more favorable to WBD stockholders than the Netflix Merger and is wholly inadequate given, among other things: the Offer’s insufficient value (taking into account price, and numerous risks and uncertainties); significant costs that WBD would be required to incur if it accepted the PSKY Merger Agreement; the non-binding nature of the Offer and its many conditions; the material flaws and limitations in PSKY’s $40.65 billion equity financing required to complete the Offer (including lack of an Ellison family backstop and weak contractual protections for WBD relating to the conditional commitment of the Revocable Trust); regulatory risks; risks associated with failure to consummate the Offer; and other proposed merger agreement terms that are highly unfavorable to WBD and other considerations further described below.
The factors the WBD Board considered in reaching this conclusion included, but were not limited to, the following:
| I. | Insufficient value represented by the Offer, taking into account the value of the Offer as well as the numerous risks and uncertainties associated with the Offer. |
| • | The risk-adjusted value of the Offer is not superior to the Netflix Merger. The WBD Board determined that the per-share value of the Offer is not superior to the value offered by the Netflix Merger, which consists of $23.25 in cash, plus a number of shares of Netflix Common Stock, representing a target value of $4.50, with the exchange ratio to be determined (within a specified collar) based on the 15-day volume-weighted average trading price of Netflix Common Stock (measured three trading days prior to closing), plus the additional value of the shares of Discovery Global that WBD stockholders will receive pursuant to the Separation and Distribution. |
| • | The Offer is not binding on PSKY, cannot be completed by the current expiration of the Offer and can be terminated or amended at any time by PSKY (including to reduce the Offer Price and add material conditions). The Offer is entirely at PSKY’s discretion and may be terminated or amended in any way by PSKY at any time prior to its acceptance of tendered shares. The first paragraph of the Offer states it is “subject to the conditions set forth in this offer to purchase (as it may be amended or supplemented from time to time)” and continues, on the next page, “we reserve the right to amend the Offer in any respect (including amending the Offer Price)” (Emphasis added). |
The Offer also includes additional material conditions (as described in Section X below), many of which are not present in the Netflix Merger Agreement. The regulatory conditions to the Offer are expected, even by PSKY’s own statements, to take 12 to 18 months to satisfy, compared to the expiration of the Offer in approximately three weeks. There is therefore no reason for WBD stockholders to tender their shares prior to
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the current expiration of the Offer, because the Offer is not capable of completion on that timeline.
The WBD Board believes the Offer is essentially an option for PSKY, which has reserved the right to reduce the Offer Price, amend other terms of the Offer or terminate the Offer. The Netflix Merger Agreement is binding on Netflix, provides WBD stockholders the opportunity to vote on a specific and binding transaction, and cannot be amended without WBD’s consent. In comparison, the Offer is illusory and poses material risks to WBD stockholders.
| • | The Separation and Distribution will create additional value for WBD stockholders. Accepting the Offer would deprive WBD stockholders of this value. The Separation and Distribution will afford Discovery Global enhanced strategic, operating and financial flexibility, including to pursue accretive investments and M&A opportunities or realize a future control premium for stockholders. Unlike Comcast’s Versant, which PSKY has pointed to as a comparison, Discovery Global’s business has greater scale and profitability, with a geographically diversified footprint and strong international presence, including international free-to-air broadcasters, and a streaming product (Discovery+) that generates hundreds of millions of dollars of revenue. Discovery Global’s assets reach viewers across 200 countries and territories and include significant sports assets both in the U.S. and internationally (i.e., TNT Sports U.S., Bleacher Report, Eurosport.com), and include the rights to high-profile sporting events, such as MLB, NHL (including the Stanley Cup Finals), NCAA Men’s March Madness, College Football Playoffs, the French Open and the Olympics on Eurosport. WBD will be most able to achieve this additional value, with the highest degree of certainty, by completing the Separation and Distribution on the currently contemplated timeline, which is in the next 7 to 10 months. |
| • | Significant loss of value if the PSKY Merger Agreement is entered into but not consummated. The WBD Board also considered the $2.8 billion termination fee that WBD would be required to pay to Netflix in order to accept the PSKY Merger Agreement or that Netflix could require WBD to pay if the WBD Board changes its recommendation with respect to the Netflix Merger – which PSKY has not offered to fund or reimburse. In addition, pursuant to the terms of the PSKY Merger Agreement, WBD would incur approximately $1.5 billion in financing costs if WBD cannot execute its debt exchange offer as described herein. This total amount of $4.3 billion in immediate and near-term costs represents a loss of value of approximately $1.66 per share of WBD Common Stock, on a pre-tax basis, if the PSKY Merger Agreement is entered into but not consummated. |
| II. | PSKY’s ability to consummate the Offer requires it to obtain $40.65 billion of equity financing, which is subject to significant risks and uncertainties. The Ellison family has provided no commitment of any kind to fund such financing. |
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| • | Despite PSKY’s headline claims, there is no equity commitment or backstop from the Ellison family for the Offer (and there never has been). Neither Mr. L. Ellison nor Mr. D. Ellison has agreed to personally guarantee or is in any way obligated with respect to the Offer – despite the fact that access to an extraordinary amount of their personal wealth is essential to close the Offer. For months, PSKY assured the WBD Board that the Ellison family would fully backstop the equity financing required for a transaction with WBD. |
This commitment has never materialized. Less than two weeks ago, when the bidders in the strategic alternatives review process were instructed to deliver binding bids, PSKY proposed a seven-party, cross-conditional consortium of equity commitments, from multiple U.S. and foreign sources, including Tencent, an investor that previously has been identified on lists maintained by the U.S. government reflecting national security concerns. The commitments and rights of several Middle Eastern sovereign wealth funds would have made the entire proposal subject to the authorities of, and reviewable by, CFIUS. The President of the United States and CFIUS have broad authorities to review foreign investments subject to CFIUS jurisdiction, and the President’s national security findings in such a context are not subject to judicial review. Of the $37.2 billion equity check required in that binding bid, only 32% ($12 billion) of the total commitment came from the Revocable Trust.
As further described below and reflected in the transaction agreements submitted by PSKY with the Offer, the limited and conditional commitment of the Revocable Trust is not secure.
| • | The creditworthiness of the Revocable Trust is not certain and is subject to change. PSKY’s proposed “Ellison family backstop” is actually a commitment from the Revocable Trust, an opaque entity whose assets, liabilities, beneficiaries, terms, conditions and limitations are not publicly disclosed, and are subject to change. Contrary to PSKY’s assertions, the financial condition of the Revocable Trust is not publicly reported or disclosed; nor is it fixed. Although the Offer states that the Revocable Trust is the record and beneficial owner of a substantial amount of Oracle common stock, PSKY has not provided any evidence of this. The WBD Board also notes there is at least one other similarly named L. Ellison revocable trust, and there may be additional Ellison family estate planning vehicles, whose relationship to and assets compared with the Revocable Trust are unknown. The WBD Board has been advised that neither Oracle’s annual proxy statement, nor Mr. L. Ellison’s SEC filings on Schedule 13G with respect to Oracle common stock, disclose the Revocable Trust’s record or beneficial ownership of any Oracle common stock. Additionally, public disclosures by Oracle indicate that Mr. L. Ellison has already pledged a substantial portion of his Oracle common stock to secure other personal indebtedness. |
Regardless of the assets the Revocable Trust may or may not hold, PSKY has provided
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no information with respect to the terms or governance of the Revocable Trust, nor other liabilities it may have. A revocable trust generally has terms that would pose substantial risks to WBD stockholders. It is typical, for example, that a grantor of a revocable trust can remove assets from the trust; the terms of the trust can be amended to permit, or prohibit, certain transactions; the trust can be dissolved and its assets fully distributed, leaving a shell entity; the trust may incur significant liabilities; and other beneficiaries of the trust may have claims against the trust if it takes certain actions not in their best interests. Any of the foregoing changes with respect to the Revocable Trust may render the Revocable Trust unable to fund its equity commitment or pay damages (which PSKY and the Revocable Trust have agreed to cap at 7% of the Revocable Trust’s equity commitment, even for a willful breach) in the event of a failure to fund the Offer.
The Netflix Merger is backed by an investment-grade, well-capitalized public company with a market capitalization in excess of $400 billion and no equity funding needed.
| • | PSKY’s proposed equity financing agreements contain several loopholes that could be exploited to jeopardize closing certainty. The Revocable Trust’s commitment will automatically terminate if any WBD stockholder files a legal action on behalf of WBD against the Revocable Trust or its affiliates in connection with the transaction. In addition, the limited guarantee provided by the Revocable Trust is only enforceable by PSKY (and not by WBD), thereby further limiting WBD’s ability to recover even in the event of a willful breach. These loopholes create material enforcement risk for WBD and its stockholders in the event that PSKY or the Revocable Trust were to lose their enthusiasm for the transaction over the year or more likely required to complete the transaction. |
| • | PSKY is not obligated to obtain alternate equity financing. Pursuant to the PSKY Merger Agreement, PSKY has no obligation to seek replacement equity financing in the event that the Revocable Trust fails or is unable to fund, effectively asking WBD stockholders to bet the entirety of the transaction on the bona fides of an unconstrained and unknown Revocable Trust. |
| • | If the equity financing fails to be funded at closing, the debt financing providers would not be required to fund. The $54 billion in debt financing required for PSKY to complete the transaction is contingent on the receipt of at least $35 billion of equity financing, meaning that the debt financing providers would not be required to fund in the event that the Revocable Trust does not fulfill its equity commitment, regardless of the reason. As a result, PSKY would be unable to complete the transaction. |
| • | The Revocable Trust’s liability for monetary damages is capped at $2.8 billion, a mere 7% of its total equity commitment. In the event that a remedy of specific performance is unavailable, PSKY’s ability to obtain funding from the Revocable Trust would be limited to a $2.8 billion “Cap” (as defined in the Offer) – even in the event of a willful breach. The significant difference between the “Cap” and the overall equity commitment, |
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| particularly given the relatively small market capitalization of PSKY and its current debt levels, highlights the risk to WBD stockholders. |
| • | PSKY has a track record of seeking loopholes and limitations that jeopardize closing certainty. WBD’s advisors repeatedly provided direct feedback to PSKY that its proposed equity financing terms put PSKY at a significant disadvantage to other bidders, none of which had an equity financing requirement, and expressed concern that the oft-promised full backstop by the Ellison family had yet to emerge. Instead of addressing this concern, the PSKY December 1 Bid produced proposed equity financing drafts that, among other things, stated that each equity investor would be fully relieved of its funding obligation in the event that any other equity investor failed to fund at closing, and that the Revocable Trust would only be required to fund approximately 32% of the total required equity funding. Thereafter, in the PSKY December 4 Proposal, PSKY proposed for the first time that the Revocable Trust – an entity with no public transparency or accountability – would be the sole limited and conditional guarantor of essentially all of the equity financing PSKY requires to obtain its debt financing and complete the transaction. |
| • | PSKY’s comparison of its equity financing arrangements with the equity commitments in the Paramount/Skydance and Musk/Twitter transactions is irrelevant and actually highlights the inadequacy of PSKY’s proposal. PSKY has stated that the terms of the equity commitment are “identical” in all material respects to the commitment provided by Elon Musk in connection with his acquisition of Twitter. This is incorrect, and also irrelevant. As was publicly disclosed in numerous filings relating to the Twitter transaction, Mr. Musk signed his equity commitment personally, as an individual, not by use of an estate planning vehicle with no transparency. Mr. Musk also personally signed the Twitter merger agreement with respect to financing and regulatory obligations, protections the Ellison family has not agreed to provide. |
PSKY also touts the involvement of the Revocable Trust in the Paramount/Skydance Merger and the Twitter sale. The Offer differs meaningfully. Based on publicly available information, the equity investment in Paramount Global for the Paramount/Skydance acquisition was only for $6 billion, of which the Revocable Trust committed only a portion, and the Revocable Trust committed only $1 billion in Mr. Musk’s acquisition of Twitter. The Offer contemplates more than 6 times the Revocable Trust’s equity investment in connection with the Paramount/Skydance acquisition, and 40 times the amount of its investment in Twitter. In contrast to the Twitter and Paramount situations, WBD was well-positioned to select among proposals from a number of bidders as a result of a highly competitive and successful strategic alternatives review process, in which the other competing bidders were large-cap, investment-grade companies, with no equity funding needed. The Netflix Merger entails no equity financing risk, and the WBD Board is not persuaded that it should recommend that WBD stockholders accept a substantially riskier offer on the basis of entirely unrelated transactions.
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| • | A personal guarantee is not unprecedented, and is particularly appropriate given the extraordinary amount ($40.65 billion) of equity funding that PSKY requires. PSKY’s ability to complete this transaction is entirely dependent on the personal wealth of a controlling stockholder. The WBD Board believes it is appropriate that the stockholder personally, directly and securely be obligated to support and fund the transaction. Without such funding, PSKY’s transaction becomes incapable of closing, a risk that should not fall on WBD stockholders in any circumstance. Mr. Musk personally signed an equity commitment letter for $33.5 billion in the Twitter transaction, and also personally signed the Twitter merger agreement to support his acquisition – commitments that provided essential protection for Twitter when Mr. Musk challenged his obligation to close. |
| • | These risks contrast sharply with the funding certainty for the Netflix Merger. In contrast to PSKY, Netflix is an investment-grade, well-capitalized public company rated A by S&P Global Ratings and A3 by Moody’s Ratings with a market capitalization in excess of $400 billion, and there is no equity financing contemplated by the Netflix Merger. |
| III. | The Ellison family has no obligation to make required regulatory filings, provide any cooperation in connection with the Offer, including to obtain regulatory approvals, or avoid taking actions that could delay or frustrate closing. |
| • | The Ellison family’s cooperation is essential for obtaining required regulatory approvals. Messrs. L. and D. Ellison are the ultimate controlling persons of PSKY under certain antitrust laws. In order for PSKY to consummate its Offer, the Ellisons would be required to make certain regulatory filings and provide information to regulators. This concern was raised with counsel to PSKY prior to its submission of the PSKY December 1 Bid. It remains unaddressed in the Offer. |
| • | The Ellison family has no obligation to provide regulatory cooperation. The Offer also lacks any commitment by either of the Ellisons to provide required information or otherwise cooperate to obtain the many global regulatory approvals required for consummation of the Offer. The Ellison family has also not agreed to refrain from taking actions that may delay or frustrate the Offer, such as acquisitions of other media assets (a “clear skies” commitment). Although this concern was noted by WBD’s counsel to PSKY’s counsel, PSKY has merely proposed that it will cause the Ellison family to cooperate and not take frustrating actions. The WBD Board does not believe that a controlled company such as PSKY can cause its controlling stockholders to take any action whatsoever. |
The WBD Board is also aware that Mr. Musk agreed to be a direct party to the Twitter merger agreement for purposes of regulatory efforts and financing, and that Ellison affiliates agreed to similar obligations in their financing papers in the Paramount/Skydance Merger.
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| IV. | Financial condition and creditworthiness of PSKY, which is a significantly smaller and more highly leveraged company than Netflix, raise substantial risks for its acquisition of WBD. |
| • | The creditworthiness of PSKY is relevant in evaluating certainty of closing. PSKY states in the Offer that its financial condition is not relevant to WBD stockholders in deciding whether to tender their shares for cash consideration. The WBD Board disagrees. The financial viability of PSKY, and the extraordinary debt leverage it proposes to incur, are central to its ability to (1) complete the Offer, including as a result of potential changes in the PSKY or WBD businesses between signing and closing, and (2) pay damages in the event it is unable, or refuses, to do so. |
| • | PSKY’s credit rating is on the edge of “junk” status, and the combined company would be even more highly leveraged. PSKY is rated BB+ by S&P Global Ratings, which is “junk” grade, and it has a similarly low Baa3 / Negative rating from Moody’s Ratings. The combined PSKY-WBD company would have an estimated gross leverage at an illustrative December 31, 2026 closing date of approximately 6.8x 2026E EBITDA before synergies – a level that would be substantially in excess of peer companies. According to a Moody’s release on December 9, 2025, total pro forma debt of the combined PSKY-WBD company would be near $92 billion at closing, which could present significant execution and integration risks. |
| • | Headwinds facing PSKY’s business and unrealistic synergy targets may exacerbate this credit risk. A disproportionate share of PSKY and the combined company’s revenues and EBITDA are expected to be generated from declining linear television businesses. PSKY’s aggressive target of realizing $9 billion of synergies, from its acquisition of WBD and from the Paramount/Skydance Merger, is highly speculative. The WBD Board notes that PSKY’s synergies figure for the acquisition of WBD increased by $1 billion between the PSKY November 20 Bid and the PSKY December 4 Proposal, and will inevitably entail significant headcount reductions in addition to those required by the additional $3 billion of targeted cost synergies from the Paramount/Skydance Merger. These synergies would take time to realize, and will require significant upfront one-time costs to achieve, which will present additional challenges given the combined company’s leverage. |
| • | PSKY has recently entered into multiple programming commitments that may further stress its financial performance. In the short period since the completion of the Paramount/Skydance transaction, PSKY has signed above-market, multi-year programming and sports licensing deals, both domestic and international. Despite limited visibility into their long-term performance, PSKY will begin to bear significant fixed financial costs related to these agreements going forward. This, together with potentially higher costs associated with NFL rights given the league’s right to renegotiate early, could create further headwinds to PSKY’s financial profile. |
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| • | Netflix has a significantly stronger financial condition. Wall Street equity research analysts expect PSKY to generate standalone 2026E free cash flow losses of approximately $400 million for 2026E. In contrast, Netflix, which is a substantially larger investment-grade public company, also has a materially healthier credit profile, with Wall Street equity research analysts expecting its standalone 2026E free cash flow to be more than $12 billion. |
| V. | No material difference in the level of regulatory risk associated with the Offer as compared to the Netflix Merger. The Netflix regulatory termination cash fee is historically high. |
| • | Regulatory risk is not a material differentiating factor between the Offer and the Netflix Merger. The WBD Board carefully considered the federal, state, and international regulatory risks for both the Netflix Merger and the Offer with its regulatory advisors. The WBD Board is of the view that each transaction is capable of obtaining the necessary U.S. and foreign regulatory approvals and that any difference between the respective regulatory risk levels is not material. |
| • | Netflix has offered a meaningfully larger regulatory termination fee. The WBD Board also noted the historically unprecedented $5.8 billion regulatory break fee by Netflix, or 8% of the equity value in the Netflix Merger, as compared to the $5.0 billion regulatory break fee, or 6.4% of the equity value in the Offer, and which would be further reduced by $4.3 billion given the costs noted above (to about 1% of the equity value at the Offer Price). |
| • | PSKY’s equity financing arrangements could create regulatory risks and delays that are not raised by the Netflix Merger. The regulatory risks associated with the Offer may be exacerbated by PSKY’s undisclosed equity syndication, which PSKY is not required to disclose to WBD and over which WBD has no consent right. The Offer proposes that the Revocable Trust and RedBird have full flexibility and discretion to syndicate any or all of their respective equity commitments between signing and closing, despite the risk that such transactions could require additional regulatory approvals that could delay or frustrate the closing. In addition, the amounts and other terms of equity participation by other investors – including with respect to governance rights – have not been disclosed by PSKY, and WBD has neither a consent right nor information rights with respect to such arrangements. |
| • | Although PSKY has proposed that the Revocable Trust would backstop any equity syndication, PSKY would not be required to close if such syndication results in a legal restraint that prohibits or restrains the closing of the Offer. The Offer references equity investments by three sovereign wealth funds, but neither the amounts nor terms of these investments are disclosed. In the PSKY December 1 Bid, PSKY proposed that the $37.2 billion of required equity funding would be provided by a consortium of seven investors, consisting of the Revocable Trust ($11.8 billion), RedBird ($300 million), Affinity |
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| Partners ($200 million), the Public Investment Fund (Kingdom of Saudi Arabia) ($10 billion), L’imad Holding Company PJSC (Abu Dhabi) ($7 billion), Qatar Investment Authority (Qatar) ($7 billion) and Tencent ($1 billion). Although PSKY has suggested that any syndication would not trigger review by CFIUS, it is unclear whether regulatory filings and clearances under foreign investment or media merger laws of non-U.S. jurisdictions would be required. As noted, the President of the United States and CFIUS have broad authorities to review foreign investments subject to CFIUS jurisdiction, and the President’s national security findings in such a context are not subject to judicial review. |
Media reports, including in the Financial Times, indicate that the Revocable Trust has already syndicated the majority of its equity commitment to multiple Middle Eastern sovereign wealth funds. Confirmation or details of any such syndication have not been provided in the Offer nor to WBD.
| VI. | There are greater risks and losses for WBD and its stockholders if the Offer is accepted but then fails to close, than if the Netflix Merger fails to close. These risks could impact WBD’s financial condition, strategic flexibility and business operations and could be material to WBD’s future as an independent company. |
| • | Upfront requirement to pay the $2.8 billion termination fee. In order to accept the Offer, WBD would need to pay Netflix a $2.8 billion termination fee, which PSKY has not proposed to fund or reimburse. In addition, if WBD fails to recommend against the Offer within 10 business days after its commencement, that would constitute a “Change in Company Recommendation” under the Netflix Merger Agreement, which would give Netflix the right to terminate the Netflix Merger Agreement and require WBD to pay Netflix the $2.8 billion termination fee. |
| • | Limitations on WBD’s business during the interim period. As compared to the Netflix Merger, the Offer includes more onerous operating restrictions on WBD’s ability to conduct its business during the potentially lengthy period between signing and closing, which could impair its organic growth and ability to maintain its competitive position in the markets in which it operates. For example, WBD’s ability to enter into new content license agreements, to modify or enter into new affiliation agreements, or to refinance its $15.4 billion bridge loan are severely limited by the Offer. These restrictions, and many others, handcuff WBD’s businesses in numerous ways, for a long period. |
PSKY suggests that WBD and its legal and financial advisors did not provide sufficient guidance on these issues. This is false. All bidders were provided with detailed term sheets for a potential transaction in mid-November, and thereafter with full drafts of all transaction agreements, well in advance of the December 1 binding bid date. Along the way, all bidders, including PSKY, had ample opportunity to engage with WBD’s legal and financial advisors regarding transaction terms, and were encouraged to do so. Multiple conversations occurred with PSKY’s legal and financial advisors during this
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period, as described above in “Background of the Offer and the Netflix Merger.” PSKY has now also had an opportunity to review the publicly filed Netflix Merger Agreement, but has not made a single change in the terms of the Offer to reflect the more favorable terms of the Netflix Merger Agreement.
If the Offer does not close for any reason, WBD’s business could be significantly impacted, and its value severely diminished by the terms of the Offer.
| • | WBD financing cost of $1.5 billion. The restrictions on WBD during the interim period proposed by the Offer would prevent WBD, without PSKY’s consent, from complying with its contractual obligation to make a debt exchange offer that, if not undertaken by December 30, 2026, would require WBD to incur an approximately $1.5 billion financing cost. The Offer does not address this cost. |
| • | Effective prohibition on WBD’s ability to refinance its $15.4 billion bridge loan. The Offer would also prohibit WBD from refinancing its expiring bridge loan without PSKY’s consent, unless such refinanced indebtedness is mandatorily repayable at par, a term unlikely to be available in the open market. WBD’s bridge loan will mature in December 2026, and WBD will, absent the ability to refinance, be left with a large funded and expiring bridge loan in an uncertain market environment, hampered by refinancing requirements that would significantly limit its ability to effectively manage its balance sheet. The Offer does not address this risk. |
| • | Opportunity costs from abandoning the Separation and Distribution. The Offer would also require WBD to abandon its planned Separation and Distribution and, if the Offer ultimately fails to be consummated, WBD and its stockholders will incur opportunity costs and forfeit the substantial benefits of the Separation and Distribution over a prolonged period, including the certainty associated with completing the Separation and Distribution on the contemplated timeframe. PSKY has estimated that the Offer would take 12 to 18 months to be consummated, whereas the Separation and Distribution is expected to be completed in the next 7 to 10 months. In contrast, the Netflix Merger Agreement requires WBD to complete the Separation and Distribution potentially well in advance of closing the Netflix Merger, thereby providing WBD stockholders with near-term benefits of the Separation and Distribution in addition to those of the Netflix Merger. |
| • | Risks of employee retention. The WBD Board also considered the risk that WBD may experience more substantial losses of employees and talent during the pre-closing period if the Offer is accepted in lieu of the Netflix Merger, in light of PSKY’s announced target of realizing $6 billion in synergies, and given the overlapping nature of the studio, streaming and linear networks businesses of PSKY and WBD, as compared to Netflix. |
| • | Immaterial compensation received from regulatory termination fee after adjustment for costs to be borne by WBD. In the event of a regulatory failure, WBD would receive a |
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| smaller regulatory termination fee from PSKY ($5.0 billion) than from Netflix ($5.8 billion). Furthermore, in the event of a terminated PSKY transaction, WBD would have incurred $4.3 billion of additional immediate and near-term costs, as discussed above – namely, the $2.8 billion termination fee that WBD would have paid to Netflix to accept the Offer, plus the approximately $1.5 billion in financing costs. On a net basis, the regulatory termination fee that WBD would receive from PSKY would be reduced to $700 million, or less than 1% of the equity value of the Offer – an unacceptably low amount that is wholly inadequate to compensate WBD for the likely damage to WBD’s business, and to its stockholders. |
| • | More limited ability to recover damages. If the Offer fails to close due to a breach by PSKY, the WBD Board considered that it may be more difficult to recover damages from PSKY, particularly given PSKY’s comparatively small $15 billion market capitalization and substantial debt leverage. The Revocable Trust expressly limits its obligation to fund damages to a mere 7% of its equity commitment, even in the case of a willful breach. The Netflix Merger has no damages cap, and damages would be highly collectible, given Netflix’s significantly greater financial capacity. |
| VII. | The PSKY Merger Agreement contains onerous terms and conditions that are unfavorable to WBD in multiple respects when compared to the Netflix Merger Agreement. Among the many conditions to the Offer (in addition to PSKY’s ability to terminate or amend it, including the Offer Price in any way), the Offer requires that WBD enter into the PSKY Merger Agreement, which is essentially identical to the agreement previously submitted by PSKY on December 4, 2025, and was rejected by the WBD Board, and the entry into the Offer requires acceptance by WBD of this unfavorable merger agreement: |
| • | PSKY failed to address key concerns raised by WBD and its advisors. Despite extensive engagement over nearly three months among WBD, PSKY and their respective advisors, PSKY failed to address key concerns, and it consistently proposed more aggressive transaction terms that were significantly less favorable to WBD than those proposed, and agreed to, by Netflix. Furthermore, although PSKY has now had ample opportunity to review and compare the terms of the publicly filed Netflix Merger Agreement that are more favorable to WBD, PSKY has not proposed any revisions to PSKY Merger Agreement compared to the merger agreement it submitted to the WBD Board on December 4, 2025. |
| • | Less favorable terms of the PSKY Merger Agreement as compared to the Netflix Merger Agreement include the following: |
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| Netflix |
PSKY | |
| Superior financing certainty through standard debt commitments, including the obligation to obtain alternate financing in the event the debt financing falls through, and no risk to WBD with respect to any equity financing in respect of the Netflix Merger.
Clear funding structure with certainty and clarity regarding the funding entities and all relevant parties bound by the regulatory efforts covenants and the “clear skies” provision. |
Inadequate and unclear equity financing arrangements, as noted above. | |
| Less restrictive interim operating covenants for WBD, including the ability for WBD to complete its debt exchange and refinancing transactions.
These covenants permit WBD to operate its business largely in the ordinary course and to preserve operations, retain employees, and retain and attract talent. |
Extensive operational limitations on WBD during the interim period, including, for example, aggressive limitations on WBD’s material affiliation agreements, restrictions on WBD’s content-related budgets (for development, production and acquisition), an affirmative covenant requiring WBD to maintain all material franchise agreements, restrictions on content licenses above $10 million (a very low threshold for a business of WBD’s scale) and a flat prohibition on increasing compensation for senior executives (even in immaterial amounts). | |
| Permits WBD to complete its contemplated debt exchange. | Prohibits WBD from executing its contemplated debt exchange offer without PSKY’s consent, which would require WBD to pay a financing cost of approximately $1.5 billion if not completed by December 30, 2026. | |
| Permits WBD to refinance its bridge loan. | Prohibits WBD from refinancing its $15.4 billion bridge loan without PSKY’s consent. Without the ability to refinance its bridge loan, which will mature in December 2026, WBD could be left with a large funded and expiring bridge in an uncertain market environment. | |
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| Netflix |
PSKY | |
| Permits the Separation and Distribution to occur as promptly as practicable, and reduces opportunity costs for WBD in the event the Netflix Merger fails to close. | Prohibits the Separation and Distribution, which creates risk of a significant opportunity cost in the event the Offer fails to close. | |
| Higher regulatory termination fee ($5.8 billion), which is the largest cash regulatory termination fee in a public M&A transaction. | Lower regulatory termination fee ($5.0 billion), which would be offset by the $2.8 billion upfront termination fee that WBD would need to pay to Netflix in order to accept the Offer and the approximately $1.5 billion financing cost that WBD would incur if it cannot execute its debt exchange offer as described above. | |
| Less extensive representations and warranties, which reduces the risk that the closing condition for accuracy of representations and warranties could fail to be satisfied. | More extensive representations and warranties, which creates potential closing risk. | |
| No damages cap in the event of a breach by Netflix. | $2.8 billion damages cap on equity funding available to PSKY in the event of a breach, the recoverability of which is limited for WBD given its lack of a direct enforcement right. | |
| VIII. | WBD conducted a robust and highly competitive sale process that afforded PSKY ample opportunities to succeed, but PSKY repeatedly failed to submit the best proposal for WBD stockholders. |
| • | WBD held numerous meetings with PSKY over nearly three months. After the PSKY September 14 Proposal, Mr. Zaslav and Mr. Malone met with Messrs. L. and D. Ellison to discuss the terms of PSKY’s first proposal and suggested areas for improvement. Following WBD’s launch of the strategic alternatives review process, members of WBD senior management and WBD’s advisors engaged repeatedly and constructively with PSKY, including hosting management sessions with PSKY and its advisors, providing extensive confidential due diligence information, responding to numerous requests for additional information and holding a large number of calls and meetings between advisors. In addition, Mr. Zaslav met with Mr. L. Ellison and/or Mr. D. Ellison for multiple dinners and in-person meetings, in addition to video conferences and other communications, on numerous occasions. |
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| • | PSKY submitted six proposals and received specific feedback on all but the last-minute PSKY December 4 Proposal, yet it was unable or unwilling to address WBD’s concerns. Contrary to PSKY’s complaints that it did not receive adequate feedback, WBD’s management team and advisors carefully reviewed each of PSKY’s proposals and provided specific feedback on value and terms. Ahead of the December 1, 2025 binding bid date, all bidders were informed that they should limit their comments on WBD’s draft agreements in order to provide the most actionable offer, and that the WBD Board would take into account the extent of revisions in evaluating the proposals. Despite that guidance, PSKY repeatedly submitted more onerous and extensive markups than any other bidder, and this was called to its attention by WBD’s legal advisors on more than one occasion. |
PSKY also received direct feedback from WBD’s financial advisors regarding the financial terms of its offer, and was repeatedly told that its merger consideration was not competitive with other bidders. Issues regarding the PSKY equity commitments were raised by both financial and legal advisors to WBD with their respective PSKY counterparts. Mr. Zaslav delivered information consistent with this feedback directly to Mr. D. Ellison at various stages in the strategic alternatives review process. PSKY’s failure to produce a superior proposal on or prior to the December 1 binding bid date, or thereafter, reflects its own refusal to address known concerns and its unwillingness to propose terms that would be competitive to those agreed to by Netflix.
Given the highly competitive nature of the bid process, ahead of the December 1, 2025 binding bid date, all bidders were instructed that they should be in a position to immediately enter into definitive agreements should their proposal be selected by the WBD Board. PSKY submitted a last-minute proposal on December 4, 2025, a few hours before a scheduled WBD Board meeting. That proposal would have required significant further negotiations, which may not have been successful, and was not capable of being executed immediately. The proposed merger agreement delivered by Netflix on December 4, in comparison, was capable of immediate execution and would have been withdrawn if not accepted by the next morning.
PSKY has essentially remained entirely unresponsive to WBD’s feedback, and to the superior terms of the Netflix Merger Agreement. The Offer represents a coercive attempt by PSKY to force these unacceptable terms on WBD and its stockholders.
| IX. | PSKY’s credibility is undermined by breaches of its contractual obligations and spurious threats of litigation. |
| • | PSKY has a track record of breaching its obligations to WBD. The WBD Board is aware that PSKY and its advisors on multiple occasions breached specific provisions of its non-disclosure agreement with WBD in order to, among other things, seek to receive |
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| confidential board information, concerns that were raised directly in a phone conversation between PSKY’s legal advisors and WBD’s legal advisors on November 23, 2025. |
| • | PSKY threatened WBD with unfounded allegations as a pressure tactic. The December 3 Quinn Emanuel Letter, which also promptly appeared in numerous media outlets in addition to being served on WBD and its advisors, accused WBD directors of “bias and beholdenness to others” and alleged management conflicts from personal interests in post-transaction roles. In fact, the only post-transaction roles discussed with WBD management by any bidder were the repeated offers that PSKY made to Mr. Zaslav for several hundred million dollars (to be co-CEO and co-chairman of PSKY). Mr. Zaslav refused to discuss those proposals with PSKY and disclosed them to the WBD Board. PSKY’s engagement of Quinn Emanuel, the same firm that Mr. Musk retained to seek to avoid closing the Twitter transaction, suggests a highly litigious posture rather than a constructive attempt to achieve a negotiated agreement in the best interests of WBD stockholders. Indeed, representatives of PSKY’s legal and financial advisors reached out separately to WBD’s legal and financial advisors on December 3 and 4, 2025 to indicate that, in their respective views, the December 3 Quinn Emanuel Letter should not have been sent, and was “not helpful” and a “mistake.” |
| X. | The quantity and nature of the Offer’s conditions create significant uncertainty and risk for WBD and its stockholders. |
| • | The numerous conditions set forth in the Offer create uncertainty and risk as to whether the Offer can be completed and the timing for completion. As described in “Item 2. Identity and Background of Filing Person —Tender Offer” above and in Annex A to this Statement, such conditions include: |
| • | the PSKY Merger Agreement Condition; |
| • | the Abandonment of Separation Condition; |
| • | the Minimum Tender Condition; |
| • | the Section 203 Condition; |
| • | the Competition Laws Condition; |
| • | the Injunction Condition; |
| • | the Material Adverse Effect Condition; |
| • | the Regulatory Material Adverse Effect Condition; |
| • | the Termination of Netflix Merger Agreement/Stockholder Vote Condition; and |
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| • | the Compliance Condition. |
PSKY has stated that it expects to require 12 to 18 months to obtain regulatory approvals, which are among the conditions to the Offer. Therefore, there is no reason for WBD stockholders to tender their shares prior to the Expiration Date. As noted above in Section I, the Offer is also subject to material change or amendment, including reduction in the Offer Price and other changes that may be highly adverse to WBD stockholders.
| XI. | The Offer would deprive WBD stockholders of the long-term benefits expected to result from the Netflix Merger. |
| • | The potential value creation that may be realized by WBD stockholders by virtue of their holdings in Netflix following its acquisition of Warner Bros. includes: |
| • | Benefits of complementary scale that the combined company may enjoy as a stronger company than either WBD or Netflix individually, with the scale, breadth and capabilities to compete more effectively by bringing together Warner Bros.’ franchises, shows and movies and Netflix’s global reach and streaming service. |
| • | Run-rate synergies of at least $2.5 billion targeted to be achieved by the third year following the Netflix Merger, resulting in significant part from savings relating to SG&A and technology, and the majority of which is not driven by workforce/headcount reductions. |
| • | Future value of stock consideration based on the anticipated market capitalization of the combined company and the expectation that the value of the stock consideration received by stockholders as a result of the Netflix Merger would be buttressed by the significant public float and liquidity of Netflix Common Stock and the value-protective collar reflected in the Netflix Merger Agreement. |
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* * * * *
The foregoing discussion of the information and factors considered by the WBD Board is not meant to be exhaustive, but includes the material information and factors considered by the WBD Board in reaching its conclusions and recommendations. The members of the WBD Board evaluated the various factors listed above in light of their knowledge of the business, financial condition and prospects of WBD and considered the advice of WBD’s independent legal and financial advisors and WBD management. In light of the number and variety of factors that the WBD Board considered, the members of the WBD Board did not find it practicable to assign relative weights to the foregoing factors. However, the recommendation of the WBD Board was made after considering the totality of the information and factors involved. In addition, individual members of the WBD Board may have assigned different weight to different factors.
In light of the factors described above, the WBD Board, on behalf of WBD, has unanimously determined that the Offer is not in the best interests of WBD and WBD stockholders. Accordingly, the WBD Board unanimously recommends that WBD stockholders reject the Offer and not tender any of their shares of WBD Common Stock pursuant to the Offer, and has unanimously resolved to recommend the Netflix Merger Agreement as in the best interests of WBD stockholders.
Intent to Tender
To the knowledge of WBD after making reasonable inquiry, none of WBD’s directors, executive officers, affiliates or subsidiaries intends to tender any shares of WBD Common Stock held of record or beneficially owned by such person pursuant to the Offer.
Item 5. Person/Assets Retained, Employed, Compensated or Used
WBD has retained Allen & Company, J.P. Morgan and Evercore as WBD’s financial advisors in connection with WBD’s consideration of a possible transaction, including the Netflix Merger, the Offer and other matters. WBD has agreed to pay (i) Allen & Company an aggregate fee of $85 million for its services, of which $10 million is payable in connection with the rendering of an opinion, $30 million is payable no later than December 1, 2026 and $45 million is contingent upon consummation of the Netflix Merger, the Offer or certain other transactions; (ii) J.P. Morgan an aggregate fee of $85 million for its services, of which $5 million is payable in connection with the rendering of an opinion, $30 million is payable no later than December 1, 2026 and $50 million is contingent upon consummation of the Netflix Merger, the Offer or certain other transactions; and (iii) Evercore an aggregate fee of $55 million for its services, contingent upon consummation of the Netflix Merger, the Offer or certain other transactions. WBD also has agreed to reimburse Allen & Company, J.P. Morgan and Evercore for their respective expenses and to indemnify Allen & Company, J.P. Morgan, Evercore and certain
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related parties against certain liabilities, including under federal securities laws, arising out of their engagement.
Allen & Company, J.P. Morgan and Evercore have not been retained to make any solicitation or recommendation in connection with the Netflix Merger, the Offer, any other transactions or otherwise.
WBD has engaged Innisfree to assist it in connection with WBD’s communications with its stockholders in connection with the Offer. WBD has agreed to pay customary compensation to Innisfree for such services. In addition, WBD has agreed to reimburse Innisfree for certain expenses and indemnify it and certain related persons against certain liabilities relating to or arising out of the engagement.
WBD has also retained Joele Frank as its public relations advisor in connection with the Offer. WBD has agreed to pay customary compensation to Joele Frank for such services. In addition, WBD has agreed to reimburse Joele Frank for certain expenses and indemnify it and certain related persons against certain liabilities relating to or arising out of the engagement.
Except for Innisfree, neither WBD nor any person acting on its behalf has or currently intends to employ, retain, or compensate any person to make solicitations or recommendations to WBD stockholders on its behalf with respect to the Offer.
Item 6. Interest in Securities of the Subject Company
Securities Transactions
Other than as set forth below, no transactions with respect to WBD Common Stock have been effected by WBD or, to WBD’s knowledge after making reasonable inquiry, by any of its executive officers, directors, affiliates, or subsidiaries, during the 60 days prior to the date of this Statement.
Transactions by Executive Officers and Directors
| Name |
Date | Number of Shares of WBD Common Stock |
Price Per Share ($) |
Nature of Transaction | ||||||||||
| Priya Aiyar |
12/15/2025 | 267,165 | $ | 29.71 | Shares withheld to satisfy tax withholding obligations related to the vesting of previously granted restricted stock units | |||||||||
| Bruce Campbell |
12/15/2025 | 9,495 | $ | 26.08 | Shares withheld to satisfy tax withholding obligations related to the vesting of previously granted restricted stock units | |||||||||
| Gunnar Wiedenfels |
12/10/2025 | 150,402 | $ | 29.50 | Sale pursuant to Rule 10b5-1 plan(1) | |||||||||
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| Gunnar Wiedenfels |
12/10/2025 | 150,402 | $ | 25.70 | Exercise of stock options granted in 2020(1) | |||||||||
| Gunnar Wiedenfels |
12/10/2025 | 92,592 | $ | 29.50 | Sale pursuant to Rule 10b5-1 plan(1) | |||||||||
| Gunnar Wiedenfels |
12/10/2025 | 92,592 | $ | 29.08 | Exercise of stock options granted in 2019(1) | |||||||||
| Lori C. Locke |
12/10/2025 | 4,122 | $ | 28.92 | Sale pursuant to Rule 10b5-1 plan(2) | |||||||||
| Lori C. Locke |
12/09/2025 | 5,000 | $ | 27.45 | Sale pursuant to Rule 10b5-1 plan(2) | |||||||||
| Lori C. Locke |
12/08/2025 | 5,000 | $ | 27.62 | Sale pursuant to Rule 10b5-1 plan(2) | |||||||||
| Lori C. Locke |
12/05/2025 | 5,000 | $ | 25.42 | Sale pursuant to Rule 10b5-1 plan(2) | |||||||||
| Lori C. Locke |
12/04/2025 | 5,000 | $ | 24.14 | Sale pursuant to Rule 10b5-1 plan(2) | |||||||||
| Lori C. Locke |
12/03/2025 | 5,000 | $ | 24.18 | Sale pursuant to Rule 10b5-1 plan(2) | |||||||||
| Lori C. Locke |
12/02/2025 | 5,000 | $ | 24.25 | Sale pursuant to Rule 10b5-1 plan(2) | |||||||||
| Lori C. Locke |
12/01/2025 | 5,000 | $ | 23.74 | Sale pursuant to Rule 10b5-1 plan(2) | |||||||||
| Lori C. Locke |
11/28/2025 | 5,000 | $ | 23.83 | Sale pursuant to Rule 10b5-1 plan(2) | |||||||||
| Lori C. Locke |
11/26/2025 | 5,000 | $ | 23.25 | Sale pursuant to Rule 10b5-1 plan(2) | |||||||||
| Gunnar Wiedenfels |
10/31/2025 | 222,210 | $ | 22.50 | Sale pursuant to Rule 10b5-1 plan(1) |
| (1) | These transactions were made pursuant to a Rule 10b5-1 plan entered into on March 4, 2025. |
| (2) | These transactions were made pursuant to a Rule 10b5-1 plan entered into on August 28, 2025. |
Item 7. Purposes of the Transaction and Plans or Proposals
As described above in “Item 3. Past Contacts, Transactions, Negotiations and Agreements” and “Item 4. The Solicitation or Recommendation—Background of the Offer and Reasons for Recommendation—Reasons for Recommendation,” WBD continues to pursue the Netflix Merger.
Except as described above or otherwise set forth in this Statement (including in the exhibits and annex attached to this Statement) or as incorporated in this Statement by reference, WBD is not now undertaking or engaged in any negotiations in response to the Offer that relate to: (i) a tender offer or other acquisition of WBD Common Stock by WBD, any of its subsidiaries or any other person; (ii) any extraordinary transaction, such as a merger, reorganization or liquidation, involving WBD or any of its subsidiaries; (iii) any purchase, sale or transfer of a material amount of assets of WBD or any of its subsidiaries; or (iv) any material change in the present dividend rate or policy, or indebtedness or capitalization of WBD.
Except as described above or otherwise set forth in this Statement (including in the exhibits and annex attached to this Statement) or as incorporated in this Statement by reference,
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there are no transactions, resolutions of the WBD Board, agreements in principle or signed contracts that have been entered into in response to the Offer that relate to one or more of the following: (i) a tender offer or other acquisition of WBD Common Stock by WBD, any of its subsidiaries or any other person; (ii) any extraordinary transaction, such as a merger, reorganization or liquidation, involving WBD or any of its subsidiaries; (iii) any purchase, sale or transfer of a material amount of assets of WBD or any of its subsidiaries; or (iv) any material change in the present dividend rate or policy, or indebtedness or capitalization of WBD.
Item 8. Additional Information
Information Regarding Golden Parachute Compensation
This section sets forth the information required by Item 402(t) of Regulation S-K regarding the estimated amounts of compensation for each of WBD’s named executive officers that is based on, or that otherwise relates to, the Offer. The potential payments in the table below are based on the Offer Price of $30.00 per share of WBD Common Stock and the following assumptions, which are made solely for purposes of this disclosure:
| • | the consummation of the Offer occurs on December 31, 2025; |
| • | in connection with the consummation of the Offer, equity-based awards held by each named executive officer are treated as set forth in the PSKY Merger Agreement; |
| • | each named executive officer’s salary and target short-term cash incentive opportunities are those in effect as of the date of this Statement; |
| • | no named executive officer receives any equity grants or other awards (or forfeits any outstanding awards) on or prior to December 31, 2025; and |
| • | the employment of each named executive officer is terminated without “cause” or by the named executive officer for “good reason” (as such terms are defined in the relevant agreement), in either case, on December 31, 2025, immediately following the consummation of the Offer. |
The amounts shown in the tables below are estimates based on multiple assumptions that may or may not actually occur or be accurate as of the actual consummation of the Offer, and do not reflect certain compensation actions that may occur after the date of this Statement but before the actual consummation of the Offer. As a result, the actual amounts received by a WBD named executive officer may materially differ from the amounts set forth below. All dollar amounts set forth below have been rounded to the nearest whole number.
| Name |
Cash ($)(1) | Equity ($)(2) | Perquisites/ Benefits ($)(3) |
Total ($) | ||||||||||||
| David Zaslav |
$ | 30,000,000 | $ | 537,668,436 | $ | 44,195 | $ | 567,712,631 | ||||||||
| Gunnar Wiedenfels |
$ | 5,891,600 | $ | 138,767,232 | $ | 266,283 | $ | 144,925,115 | ||||||||
| Bruce L. Campbell |
$ | 17,676,000 | $ | 120,751,138 | $ | 43,347 | $ | 138,470,485 | ||||||||
| Jean-Briac Perrette |
$ | 17,100,000 | $ | 150,282,582 | $ | 41,551 | $ | 167,424,133 | ||||||||
| Gerhard Zeiler |
$ | 11,302,695 | $ | 83,918,720 | $ | — | $ | 95,221,414 | ||||||||
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| (1) | Cash. The amounts reported in this column reflect the aggregate value of the cash severance payments to which the named executive officers are entitled under their respective employment agreements (as discussed above in “Item 3. Arrangements with Current Directors and Executive Officers of WBD – Benefits upon Termination of Employment”) in connection with a qualifying termination of employment (which, for Mr. Zeiler, is based on the exchange rate of 1.17 United States Dollars to 1 Euro recorded as of December 15, 2025). All cash severance payments are “double trigger” payments contingent on a qualifying termination of employment within 12 months following a change in control. The cash severance payments that WBD named executive officers are entitled to as a result of a qualifying termination are not enhanced if the qualifying termination follows a change in control. Such payments are subject to the named executive officer’s execution and delivery of a release of claims and, for each named executive officer other than Mr. Zaslav, continued compliance with applicable non-competition and non-solicitation covenants. The following table quantifies and further describes each component of each named executive officer’s cash severance entitlement assuming a qualifying termination occurred on December 31, 2025: |
| Name |
Salary Severance ($)(a) |
Bonus Severance ($)(b) |
Total ($) | |||||||||
| David Zaslav |
$ | 6,000,000 | $ | 24,000,000 | $ | 30,000,000 | ||||||
| Gunnar Wiedenfels |
$ | 2,142,400 | $ | 3,749,200 | $ | 5,891,600 | ||||||
| Bruce L. Campbell |
$ | 5,892,000 | $ | 11,784,000 | $ | 17,676,000 | ||||||
| Jean-Briac Perrette |
$ | 5,700,000 | $ | 11,400,000 | $ | 17,100,000 | ||||||
| Gerhard Zeiler |
$ | 4,065,718 | $ | 7,236,977 | $ | 11,302,695 | ||||||
| (a) | The amounts reported in this column reflect the amount of each named executive officer’s cash severance entitlement determined by reference to base salary, as summarized above in “Item 3. Arrangements with Current Directors and Executive Officers of WBD – Benefits upon Termination of Employment.” As of the date of this Statement, the Base Salary Continuation Period for Messrs. Campbell, Perrette and Zeiler is 24 months and the Base Salary Continuation Period for Mr. Wiedenfels is 12 months. If WBD were to extend the term of Mr. Wiedenfels’ employment agreement prior to its expiration in July 2026, such extension could increase his Base Salary Continuation Period up to a maximum of 24 months. |
| (b) | The amounts reported in this column reflect the portion of each named executive officer’s severance entitlement determined by reference to an annual bonus entitlement (“Bonus Severance”), as summarized above in “Item 3. Arrangements with Current Directors and Executive Officers of WBD – Benefits upon Termination of Employment.” In addition, each named executive officer is eligible for payment of a pro-rata bonus for the year of termination, which for Mr. Zaslav, is based on actual performance and for the other named executive officers is based on target performance. Such amounts are not reflected in the above calculations because, on December 31, 2025, each named executive officer would have otherwise been eligible to receive a full annual bonus for calendar year 2025. |
| (2) | Equity. The amounts reported in this column reflect the aggregate cash value of the unvested WBD Options, unvested WBD RSUs and unvested WBD PRSUs held by each named executive officer as of December 31, 2025, in each case, based on the Offer Price of $30.00 per share of WBD Common Stock (which, in the case of WBD Options, is calculated as the difference between $30.00 and the applicable exercise price per option). As described in greater detail in “Item 3. Arrangements with Current Directors and Executive Officers of WBD – Equity-Based Awards Held by Executive Officers,” in connection with the Offer, it is assumed that each outstanding equity-based award will be converted into an Assumed PSKY Equity Award in accordance with the PSKY Merger Agreement with the performance conditions applicable to any WBD PRSUs deemed to be settled as described above and in the footnotes to the table below. Mr. Zaslav’s CEO Options are “single trigger” awards that vest solely as a result of the consummation of the Offer. All other equity-based awards held by named executive officers are “double trigger” awards and the values reported below assume that the employment of each holder thereof was terminated in a qualifying termination on December 31, 2025. The following table quantifies the value (without regard to applicable tax withholding) of unvested WBD Options, unvested WBD RSUs, and unvested WBD PRSUs included in the aggregate values reported in this column: |
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| Name |
WBD Options ($)(a) | WBD RSUs ($)(b) | WBD PRSUs ($) | Total ($) | ||||||||||||
| David Zaslav |
$ | 414,631,716 | $ | — | $ | 123,036,720 | (c) | $ | 537,668,436 | (e) | ||||||
| Gunnar Wiedenfels |
$ | 14,156,344 | $ | 12,719,340 | $ | 111,891,548 | (d) | $ | 138,767,232 | |||||||
| Bruce L. Campbell |
$ | — | $ | — | $ | 120,751,138 | (d) | $ | 120,751,138 | |||||||
| Jean-Briac Perrette |
$ | 15,890,774 | $ | 13,640,670 | $ | 120,751,138 | (d) | $ | 150,282,582 | |||||||
| Gerhard Zeiler |
$ | — | $ | — | $ | 83,918,720 | (d) | $ | 83,918,720 | |||||||
| (a) | The amounts reported in this column exclude the value of vested and currently exercisable WBD Options, as well as Retirement-Vested Options, which, because of the applicable named executive officer’s retirement eligibility, would be retained by such executive following a voluntary or involuntary termination (other than for cause) and therefore the vesting of such options is not impacted because the assumed qualifying termination follows a change in control. The values of vested and currently exercisable WBD Options and Retirement-Vested Options held by named executive officers are detailed above in “Item 3. Arrangements with Current Directors and Executive Officers of WBD – Awards Held by Executive Officers of WBD.” All vested WBD Options held by Mr. Zaslav, and certain vested WBD Options held by Messrs. Wiedenfels, Campbell and Perrette, have an exercise price that is greater than the Offer Price and therefore are assumed to have been canceled for no consideration. |
| (b) | The amounts reported in this column exclude the value of Retirement-Vested RSUs, which, because of the applicable named executive officer’s retirement eligibility, would be retained by such executive following a voluntary or involuntary termination (other than for cause) and therefore the vesting of such RSUs is not impacted because the assumed qualifying termination follows a change in control. The values of Retirement-Vested RSUs held by named executive officers are detailed above in “Item 3. Arrangements with Current Directors and Executive Officers of WBD – Awards Held by Executive Officers of WBD.” |
| (c) | The amount reported in this column for Mr. Zaslav is determined assuming maximum-level achievement of the performance criteria applicable to his Unvested In-Progress PRSUs, as discussed above in “Item 3. Arrangements with Current Directors and Executive Officers of WBD – Awards Held by Executive Officers of WBD.” The amount reported in this column for Mr. Zaslav excludes his Deferred PRSUs, which are already vested and have an aggregate cash value of $75,203,760. |
| (d) | The amounts reported in this column represent the aggregate value of the Unvested In-Progress PRSUs held by each such named executive officer calculated using the assumptions regarding attainment of the applicable performance-vesting criteria discussed above under “Item 3. Arrangements with Current Directors and Executive Officers of WBD – Awards Held by Executive Officers of WBD.” |
| (e) | Does not include the potential value of any Follow-On CEO Awards, the terms of which are unknown as of the date of this Statement. |
| (3) | Perquisites/Benefits. The amounts reported in this column for named executive officers other than Mr. Zeiler represent the aggregate value of continued coverage under WBD’s group health plans or continued health coverage reimbursement benefits to which the named executive officers are entitled under their respective employment agreements (as discussed above in “Item 3. Arrangements with Current Directors and Executive Officers of WBD – Benefits upon Termination of Employment”). For Mr. Wiedenfels only, such amount also reflects the estimated cost of providing repatriation benefits to him and his family pursuant to his employment agreement ($231,594). |
Regulatory Approvals in Connection with the Offer
The United States
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With respect to the United States, the Offer is subject to review by the U.S. Federal Trade Commission (the “FTC”) and the Antitrust Division of the U.S. Department of Justice (the “Antitrust Division”). Under the HSR Act, the Offer may not be consummated until PSKY files a Notification and Report Form with the Antitrust Division and the FTC, and the statutorily mandated waiting period expires or is otherwise terminated. On December 11, 2025, WBD received letters from the FTC stating that PSKY filed its Notification and Report Forms with respect to the Offer with the Antitrust Division and the FTC on December 8, 2025, and that WBD’s Notification and Report Form with respect to the Offer is due on or before December 18, 2025. As a result, the initial waiting period applicable to the Offer expires at 11:59 p.m., New York City time, on December 23, 2025, unless terminated early or otherwise extended. However, before that time, the Antitrust Division or the FTC may extend the waiting period by requesting additional information or documentary material relevant to the Offer. If such a request is made, the waiting period would be extended until 11:59 p.m., New York City time, 10 calendar days after PSKY certifies substantial compliance with such request.
At any time before or after consummation of the Offer, notwithstanding the expiration or termination of the applicable waiting period under the HSR Act, the Antitrust Division or the FTC, or any state, could take such action under the antitrust laws as it deems necessary or desirable in the public interest, including seeking to enjoin the completion of the Offer, seeking divestiture of substantial assets of the parties, or requiring the parties to license or hold separate assets or terminate existing relationships and contractual rights.
Other Jurisdictions
In jurisdictions outside the United States, the Offer would entail pre-closing filings to around 20 or more merger control authorities, to around 10 or more foreign investment control authorities, and to multiple broadcast, communications, and media authorities. In particular, the Offer would result in filings to authorities across South America, Asia, and Europe—including the European Union under both the Merger Regulation and the Foreign Subsidies Regulation. Merger control authorities may consider, for example, effects on competition if the Offer is consummated, foreign investment control authorities (including the European Union under the Foreign Subsidies Regulation) may consider, for example, economic security and the identity of equity investors, and broadcast, communications and media authorities may consider questions regarding, for example, media plurality and technical capabilities.
Under jurisdiction-specific laws, the Offer would require PSKY and WBD to submit notifications prior to closing, and authorities would have jurisdiction to conduct staged reviews, request information, pause their review, and issue governmental orders that could prohibit the Offer. The transaction contemplated by the Offer cannot be completed until PSKY and WBD obtain all necessary clearances or the applicable waiting periods have expired or been terminated in each applicable jurisdiction.
Timing Considerations
According to the Schedule TO, the Offer contemplates a range of 12 to 18 months to achieve all regulatory approvals that are closing conditions, with an initial period of 12 months
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and the possibility of two automatically triggered three-month extensions to obtain any outstanding authority approvals. The Offer provides that a transaction between PSKY and WBD would not be consummated in the event that an authority imposes a remedy that would reasonably be expected to have a material adverse effect on the combined company following the consummation of the Offer and the Second-Step Merger. Further, the Offer contemplates that PSKY would have sole discretion as to whether or not WBD would be required to offer or agree to a remedy, the effectiveness of which would be conditioned on the consummation of the transaction between PSKY and WBD.
If any action is taken before consummation of the Offer by any government or governmental authority, or if any required approvals, waivers or consents are not obtained, or obtained subject to condition, as a result of which any of the conditions described in “Item 2. Identity and Background of Filing Person—Tender Offer” would not be satisfied, PSKY and the Purchaser would not be obligated to accept for payment or pay for any tendered shares of WBD Common Stock pursuant to the Offer.
Regulatory Approvals in Connection with the Netflix Merger
The Netflix Merger is also subject to review by the Antitrust Division and the FTC, as well as certain other antitrust authorities in jurisdictions outside of the United States.
In the United States, the Netflix Merger Agreement states the parties will file Notification and Report Forms pursuant to the HSR Act with the Antitrust Division and the FTC within 25 business days of signing. The waiting period applicable to the Netflix Merger would expire at 11:59 p.m., New York City time, 30 calendar days after both parties file their Notification and Report Forms, unless the waiting period is terminated early or otherwise extended. However, before that time, the Antitrust Division or the FTC may extend the waiting period by requesting additional information or documentary material relevant to the Netflix Merger. If such a request is made, the waiting period will be extended until 11:59 p.m., New York City time, 30 calendar days after both of the parties have certified substantial compliance with such request.
At any time before or after consummation of the Netflix Merger, notwithstanding the expiration or termination of the applicable waiting period under the HSR Act, the Antitrust Division or the FTC, or any state, could take such action under the antitrust laws as it deems necessary or desirable in the public interest, including seeking to enjoin the completion of the Netflix Merger, seeking divestiture of substantial assets of the parties, or requiring the parties to license or hold separate assets or terminate existing relationships and contractual rights.
In jurisdictions outside the United States, the Netflix Merger will entail pre-closing filings to around 20 or more merger control authorities and to around 10 or more foreign investment control authorities. Filings are anticipated to authorities across South America, Asia and Europe—including the European Union under both the Merger Regulation and the Foreign Subsidies Regulation. Merger control authorities may consider, for example, effects on competition if the Netflix Merger is consummated, and foreign investment control authorities (including the European Union under the Foreign Subsidies Regulation) may consider, for example, economic security and the identity of equity investors.
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The Netflix Merger will result in WBD and Netflix submitting notifications in the same way as described above as related to the Offer. Further, authorities will have similar jurisdiction to investigate, review, and seek to prohibit the Netflix Merger. The Netflix Merger cannot be completed until Netflix and WBD obtain all necessary clearances or the applicable waiting periods have expired or been terminated in each applicable jurisdiction.
The Netflix Merger Agreement provides for up to 21 months to achieve the necessary regulatory clearances, effected by an initial period of 15 months and the possibility of two automatically triggered three-month extensions to obtain any outstanding authority approvals. The Netflix Merger Agreement provides that Netflix is not required to take any action that would (i) individually or in the aggregate, reasonably be expected to have a material adverse effect on WBD, or (ii) affect Netflix’s business and operations. Under the Netflix Merger Agreement, WBD is not obligated to agree to any divestiture or other remedy not conditioned on consummation of the transaction or that affects the SpinCo Business.
Delaware Business Combinations Statute
Section 203 of the DGCL applies to the Second-Step Merger or any other “business combination” (as defined in the DGCL) involving PSKY or the Purchaser (and/or any of PSKY’s subsidiaries) and WBD. The DGCL could significantly delay PSKY’s or the Purchaser’s (and/or any of PSKY’s subsidiaries’) ability to acquire the entire equity interest in WBD. The following description is not complete and is qualified in its entirety by reference to the provisions of Section 203 of the DGCL.
In general, Section 203 of the DGCL prohibits a Delaware corporation such as WBD from engaging, under certain circumstances, in a “business combination” (which is defined to include a variety of transactions, including the Second-Step Merger) with an “interested stockholder” for a period of three years following the time that the stockholder became an interested stockholder, unless:
| • | prior to such time the board of directors of the corporation approved either the business combination or the transaction that resulted in the stockholder becoming an interested stockholder; |
| • | upon consummation of the transaction that resulted in the stockholder becoming an interested stockholder, the interested stockholder owned at least 85% of the voting stock of the corporation outstanding at the time the transaction commenced, excluding for purposes of determining the voting stock outstanding (but not for purposes of determining the outstanding voting stock owned by the interested stockholder) those shares owned (i) by persons who are directors and also officers and (ii) by employee stock plans in which employee participants do not have the right to determine confidentially whether shares held subject to the plan will be tendered in a tender or exchange offer; or |
| • | at or subsequent to such time the business combination is approved by the board of directors and authorized at an annual or special meeting of stockholders, and not by |
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| written consent, by the affirmative vote of at least 66-2/3% of the outstanding voting stock which is not owned by the interested stockholder. |
For purposes of Section 203 of the DGCL, the term “interested stockholder” generally means any person (other than the corporation and any direct or indirect majority-owned subsidiary of the corporation) that (i) is the owner of 15% or more of the outstanding voting stock of the corporation or (ii) is an affiliate or associate of the corporation and was the owner of 15% or more of the outstanding voting stock of the corporation at any time within the three-year period immediately prior to the date on which it is sought to be determined whether such person is an interested stockholder, and the affiliates and associates of such person.
Other State Takeover Laws
A number of other states have adopted laws and regulations applicable to attempts to acquire securities of corporations which are incorporated, or have substantial assets, stockholders, principal executive offices or principal places of business, or whose business operations otherwise have substantial economic effects, in such states. In the event it is asserted that one or more state takeover laws is applicable to the Offer or the Second-Step Merger, and an appropriate court does not determine that it is inapplicable or invalid as applied to the Offer, PSKY might be required to file certain information with, or receive approvals from, the relevant state authorities. In addition, if enjoined, PSKY might be unable to accept for exchange any WBD Common Stock tendered pursuant to the Offer, or be delayed in continuing or consummating the Offer and the Second-Step Merger. In such case, PSKY may not be obligated to accept for exchange any WBD Common Stock tendered. See “Item 2. Identity and Background of Filing Person—Tender Offer.”
Appraisal/Dissenters’ Rights
Solely for purposes of this “Appraisal/Dissenters’ Rights” section, the word “stockholder” means a holder of record of shares of WBD Common Stock, and “beneficial owner” means a person who is the beneficial owner of shares of WBD Common Stock held either in voting trust or by a nominee on behalf of such person.
No appraisal or dissenters’ rights are available in connection with the Offer. However, if the Second-Step Merger is consummated, the holders of record and beneficial owners of shares of WBD Common Stock immediately prior to the completion of the Second-Step Merger (other than WBD, with respect to shares held in treasury, or PSKY or any of its wholly-owned subsidiaries) who (i) did not tender their shares of WBD Common Stock in the Offer and continue to hold (or in the case of a beneficial owner, continue to beneficially own) their shares of WBD Common Stock through the effective date of the Second-Step Merger, (ii) demand an appraisal of such shares of WBD Common Stock and otherwise follow the procedures set forth in Section 262 of the DGCL and (iii) do not thereafter validly withdraw their demand for appraisal of such shares of WBD Common Stock or otherwise waive, lose or forfeit their appraisal rights, in each case, in accordance with the DGCL, would be entitled to seek appraisal of their shares of WBD Common Stock by the Delaware Court of Chancery and receive payment of the “fair value” of such shares of WBD Common Stock as determined by the Delaware Court of Chancery, exclusive of any element of value arising from the accomplishment or expectation
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of the Second-Step Merger, together with interest (if any), to be paid upon the amount determined to be the “fair value.” The “fair value” could be higher or lower than, or the same as, the consideration payable in the Offer or the consideration payable in the Second-Step Merger (which is the same as the consideration payable in the Offer).
The “fair value” of any shares of WBD Common Stock could be based upon considerations other than, or in addition to, the price paid in the Offer or in the Second-Step Merger and the market value of such shares of WBD Common Stock. Stockholders and beneficial owners of shares of WBD Common Stock should recognize that the value so determined could be higher or lower than, or the same as, the amount of consideration payable in the Offer or in the Second-Step Merger. Moreover, the surviving corporation may argue in an appraisal proceeding that, for purposes of such proceeding, the fair value of such shares of WBD Common Stock is less than such amount.
The preservation and exercise of appraisal rights require strict and timely adherence to Section 262 of the DGCL. If the Second-Step Merger is submitted to stockholders for approval at a meeting of stockholders, the notice of and procedures for exercising appraisal rights would be set forth in the proxy statement for the Second-Step Merger. Such notice would be given at least 20 days before the meeting and would notify stockholders as of the record date for notice of the meeting of the availability of appraisal rights. If the Second-Step Merger is effected as a short-form merger pursuant to Section 253 of the DGCL, the formal notice of appraisal rights under Section 262 of the DGCL would be set forth in an information statement. Under Section 262 of the DGCL, where a merger is approved under Section 253, either a constituent corporation before the effective date of the merger, or the surviving corporation within 10 days thereafter, must notify each of the record holders of any class or series of stock of such constituent corporation who is entitled to appraisal rights of the approval of the merger and that appraisal rights are available for any or all shares of such class or series of stock of such constituent corporation. The notice of appraisal rights, whether in a proxy statement or in an information statement, must include either a copy of Section 262 of the DGCL or information directing such stockholders to a publicly available electronic resource at which Section 262 may be accessed without subscription or cost. (Section 262 of the DGCL may be accessed without subscription or cost at the following publicly available website: https://delcode.delaware.gov/title8/c001/sc09/index.html#262.)
The foregoing summary of the appraisal rights of WBD stockholders and beneficial owners under the DGCL if the Second-Step Merger is consummated does not purport to be a complete statement of the procedures to be followed by WBD stockholders and beneficial owners desiring to exercise any appraisal rights available thereunder and is qualified in its entirety by reference to Section 262 of the DGCL. The proper exercise of appraisal rights requires strict and timely adherence to the applicable provisions of the DGCL.
Going Private Transactions
Any business combination with PSKY, including the Second-Step Merger, would also need to comply with any applicable U.S. federal law. The SEC has adopted Rule 13e-3 under the Securities Exchange Act of 1934, as amended, which is applicable to certain “going private” transactions and which may under certain circumstances be applicable to the Second-Step
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Merger or another business combination following PSKY’s purchase of the shares of WBD Common Stock pursuant to the Offer. According to the Schedule TO, PSKY believes that Rule 13e-3 should not be applicable to the Second-Step Merger; however, the SEC may take a different view in the event that nominees of PSKY constitute a majority of the WBD Board at the time of the Second-Step Merger. Rule 13e-3 requires, among other things, that certain financial information concerning WBD and certain information relating to the fairness of the proposed transaction and the consideration offered to minority stockholders in such transaction be filed with the SEC and disclosed to stockholders prior to consummation of the transaction.
Legal Proceedings
Other than as set forth below, as of the date of this Statement, there are currently no legal proceedings pending against WBD relating to the Netflix Merger.
On December 8, 2025, following the announcement of the Netflix Merger, a proposed class action against Netflix was filed in the Northern District of California (Fendelander v. Netflix, Inc., No. 5:25-cv-10521). The proposed plaintiff class includes existing HBO Max subscribers who allege that the Netflix Merger will reduce competition in the U.S. subscription video-on-demand market. The lawsuit seeks, among other things, injunctive relief to enjoin the Netflix Merger under Section 7 of the Clayton Act. WBD is not a named defendant in the suit.
Important Information About the Netflix Merger and Where to Find It
This Statement does not constitute an offer to sell or the solicitation of an offer to buy any securities or a solicitation of any vote or approval. This Statement may be deemed to be solicitation material in respect of the Netflix Merger. In connection with the Netflix Merger, Netflix intends to file a registration statement on Form S-4, containing a proxy statement/prospectus, with the SEC and WBD intends to file a proxy statement with the SEC. WBD also intends to file a registration statement for Discovery Global. INVESTORS AND SECURITY HOLDERS ARE ADVISED TO READ ALL RELEVANT DOCUMENTS FILED WITH THE SEC, INCLUDING THE REGISTRATION STATEMENTS, PROXY STATEMENT/PROSPECTUS AND ANY OTHER RELEVANT DOCUMENTS WHEN THEY BECOME AVAILABLE BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION ABOUT THE NETFLIX MERGER AND RELATED MATTERS. Investors and security holders may obtain free copies of the registration statements and proxy statement/prospectus (when available) as well as other filings containing information about WBD and Netflix, without charge, at the SEC’s website, https://www.sec.gov. Free copies of the registration statements and proxy statement/prospectus, once available, and each company’s other filings with the SEC may also be obtained from the respective companies. Free copies of documents filed with the SEC by WBD will be made available on WBD’s investor relations website at https://ir.wbd.com. Free copies of documents filed with the SEC by Netflix will be made available on Netflix’s investor relations website at https://ir.netflix.net.
Participants in the Solicitation
WBD and Netflix and certain of their respective directors and executive officers may be deemed to be participants in the solicitation of proxies in respect of the Netflix Merger.
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Information about the directors and executive officers of WBD is set forth in its Annual Report on Form 10-K for the year ended December 31, 2024, under the heading “Executive Officers of Warner Bros. Discovery, Inc.,” and its definitive proxy statement filed with the SEC on April 23, 2025, under the heading “Proposal 1: Election of Directors.” Information about the directors and executive officers of Netflix is set forth in its definitive proxy statement filed with the SEC on April 17, 2025, under the headings “Our Board of Directors” and “Our Company Executive Officers.” Investors may obtain additional information regarding the interests of such participants by reading the registration statements, proxy statement/prospectus and other relevant materials regarding the Netflix Merger when they become available.
Cautionary Statement on Forward-Looking Statements
Certain statements in this Statement, including statements concerning WBD, Netflix, PSKY, the Netflix Merger, the Offer, a possible business combination transaction with PSKY and other matters, constitute forward-looking statements. These statements are subject to risks and uncertainties, and actual results might differ materially. Such estimates and statements include, but are not limited to, statements about the benefits of the Netflix Merger, including future financial and operating results, the combined company’s plans, objectives, expectations and intentions, and other statements that are not historical facts. Such statements are based upon the current beliefs and expectations of the management of WBD and Netflix and are subject to significant risks and uncertainties outside of our control. All written and oral forward-looking statements concerning the Netflix Merger, the Offer, a possible business combination transaction with PSKY or other matters addressed in this Statement and attributable to WBD, Netflix or any person acting on their behalf are expressly qualified in their entirety by the cautionary statements contained or referred to in this Statement.
Among the risks and uncertainties that could cause actual results to differ from those described in the forward-looking statements are the following: (1) the completion of the Netflix Merger may not occur on the anticipated terms and timing or at all; (2) the occurrence of any event, change or other circumstances that could give rise to the termination of the Netflix Merger; (3) the risk that WBD stockholders may not approve the Netflix Merger; (4) the risk that the necessary regulatory approvals for the Netflix Merger may not be obtained or may be obtained subject to conditions that are not anticipated; (5) the risk that any of the closing conditions to the Netflix Merger may not be satisfied in a timely manner; (6) the final allocation of indebtedness between WBD and Discovery Global in connection with the Separation and Distribution could cause a reduction to the consideration for the Netflix Merger; (7) risks related to potential litigation brought in connection with the Netflix Merger; (8) the risk that the integration of the businesses will be more difficult, time consuming or costly than expected; (9) risks related to financial community and rating agency perceptions of each of WBD and Netflix and their businesses, operations, financial conditions and the industries in which they operate; (10) risks related to disruption of management time from ongoing business operations due to the Netflix Merger; (11) failure to realize the benefits expected from the Netflix Merger; (12) effects of the announcement, pendency or completion of the Netflix Merger on the ability of WBD and Netflix to retain customers and retain and hire key personnel and maintain relationships with their suppliers, and on their operating results and businesses generally; (13) risks associated with third-party contracts containing consent and/or other provisions that may be triggered by the Netflix Merger; (14) negative effects of the announcement or the consummation of the Netflix
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Merger on the market price of WBD and/or Netflix Common Stock; (15) risks relating to the value of the shares of Netflix Common Stock to be issued in the Netflix Merger and uncertainty as to the long-term value of Netflix Common Stock; (16) the potential impact of unforeseen liabilities, future capital expenditures, revenues, expenses, earnings, synergies, economic performance, indebtedness, financial condition and losses on the future prospects, business and management strategies for the management, expansion and growth of Netflix’s operations after the consummation of the Netflix Merger, and on the other conditions to the completion of the Netflix Merger; (17) risks related to the potential impact of general economic, political and market factors on the companies or the Netflix Merger; (18) the risk that Discovery Global, as a new company that currently has no credit rating, will not have access to the capital markets on acceptable terms; (19) the risk that Discovery Global may be unable to achieve some or all of the benefits that WBD expects Discovery Global to achieve as an independent, publicly-traded company; (20) the risk that Discovery Global may be more susceptible to market fluctuations and other adverse events than it would have otherwise been while still a part of WBD; (21) the risk that Discovery Global will incur significant indebtedness in connection with the Separation and Distribution, and the degree to which it will be leveraged following completion of the Separation and Distribution may materially and adversely affect its business, financial condition and results of operations; (22) the ability to obtain or consummate financing or refinancing related to the Netflix Merger or the Separation and Distribution upon acceptable terms or at all; (23) uncertainties as to how many WBD stockholders will tender their shares of WBD Common Stock in the Offer; (24) the conditions to the completion of the Offer, including the receipt of any required stockholder and regulatory approvals; (25) PSKY’s ability to finance the Offer and the indebtedness PSKY expects to incur in connection with the Offer; (26) the possibility that PSKY may be unable to achieve expected synergies and operating efficiencies within the expected timeframes or at all and to successfully integrate WBD’s operations with those of PSKY, and the possibility that such integration may be more difficult, time-consuming or costly than expected or that operating costs and business disruption (including, without limitation, disruptions in relationships with employees, customers or suppliers) may be greater than expected in connection with the Offer; and (27) the response of WBD, Netflix or PSKY management to any of the aforementioned factors. Discussions of additional risks and uncertainties are contained in WBD’s and Netflix’s filings with the SEC, including their Annual Reports on Form 10-K and Quarterly Reports on Form 10-Q, and will be contained in the Form S-4, containing a proxy statement/prospectus, to be filed by Netflix in connection with the Netflix Merger and the registration statement to be filed by Discovery Global in connection with the Separation and Distribution. WBD is not under any obligation, and expressly disclaims any obligation, to update, alter, or otherwise revise any forward-looking statements, whether written or oral, that may be made from time to time, whether as a result of new information, future events, or otherwise. Persons reading this Statement are cautioned not to place undue reliance on these forward-looking statements which speak only as of the date hereof.
Non-GAAP Financial Measures
This Statement includes financial measures that are not prepared in accordance with U.S. generally accepted accounting principles (“GAAP”), such as gross leverage and free cash flow, which WBD’s management believes is useful information for investors and WBD stockholders to evaluate the financial condition of a combined PSKY-WBD company and the Netflix Merger,
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as applicable. Gross leverage is calculated as gross debt of WBD and PSKY divided by total EBITDA of WBD and PSKY, based on (i) Wall Street consensus estimates of PSKY and WBD EBITDA and free cash flow metrics, (ii) PSKY’s proposed transaction terms in the PSKY October 13 Proposal and the Offer, as applicable, (iii) WBD management’s forecasts and (iv) certain other adjustments.
WBD is not able to provide a reconciliation of the non-GAAP forward-looking measures to comparable GAAP measures as, at this time, WBD cannot determine the occurrence or impact of the adjustments, such as the effects of any future synergies from a potential transaction that would be excluded from such GAAP measures. In addition, the non-GAAP forward-looking measures are based on information obtained from Wall Street equity research analysts. Accordingly, WBD is relying on the exception provided by Item 10(e)(1)(i)(B) of Regulation S-K to exclude these reconciliations.
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After due inquiry and to the best of my knowledge and belief, I certify that the information set forth in this statement is true, complete and correct.
Dated: December 17, 2025
| Warner Bros. Discovery, Inc. | ||||
| By: | /s/ Priya Aiyar | |||
| Name: | Priya Aiyar | |||
| Title: | Chief Legal Officer | |||
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ANNEX A
On December 4, 2025, Warner Bros. Discovery, Inc., a Delaware corporation (“WBD”), Netflix, Inc., a Delaware corporation (“Netflix”), Nightingale Sub, Inc., a Delaware corporation and wholly owned subsidiary of Netflix (“Merger Sub”), and New Topco 25, Inc., a newly formed Delaware corporation and wholly owned subsidiary of WBD (“NewCo”), entered into an Agreement and Plan of Merger (the “Merger Agreement”), pursuant to which, subject to the terms of which, among other things, (i) a newly formed Delaware corporation and wholly owned subsidiary of NewCo will merge with and into WBD (the “Holdco Merger”) in accordance with Section 251(g) of the General Corporation Law of the State of Delaware, with WBD surviving as a wholly owned subsidiary of NewCo and with the stockholders of WBD immediately prior to the effective time of the Holdco Merger becoming the stockholders of NewCo at and immediately following the effective time of the Holdco Merger, and (ii) following an internal reorganization and the separation and distribution of WBD’s Global Linear Networks business and certain other assets as further described below, as a result of which WBD will hold the Streaming & Studios businesses of WBD (the “Retained Business”), Merger Sub will merge with and into WBD, with WBD surviving as a wholly owned subsidiary of Netflix (the “Merger”). For the avoidance of doubt, all references to WBD with respect to a matter occurring after the completion of the Holdco Merger will be deemed to be references to NewCo.
The boards of directors of WBD and Netflix have unanimously approved the Merger Agreement, including the Merger and the other transactions contemplated thereby, and the board of directors of WBD has resolved to recommend that WBD’s stockholders approve the Merger and adopt the Merger Agreement.
Separation and Distribution
Prior to the consummation of the Merger, WBD and a newly formed subsidiary of WBD (“SpinCo”) will enter into a Separation and Distribution Agreement substantially in the form attached to the Merger Agreement (the “Separation and Distribution Agreement”), pursuant to which WBD will, among other things, engage in an internal reorganization, including the Holdco Merger, whereby it will transfer to SpinCo its Global Linear Networks business (subject to certain deviations set forth on a schedule to the Separation and Distribution Agreement) and certain other assets, and SpinCo will assume from WBD certain liabilities associated with such business (the “Separation”). WBD will retain the Retained Business, and all other assets and liabilities not transferred to SpinCo, including WBD’s Streaming & Studios businesses (subject to certain deviations set forth on a schedule to the Separation and Distribution Agreement). Following the Separation and prior to the Merger, WBD will distribute all of the issued and outstanding common stock of SpinCo to the holders of outstanding shares of WBD common stock, par value $0.01 per share (the “WBD Common Stock”), on a pro rata basis (the “Distribution”) in accordance with the terms and subject to the conditions of the Separation and Distribution Agreement, which may be effected pursuant to a merger in which a wholly owned subsidiary of WBD is merged with and into WBD.
In connection with the Holdco Merger, NewCo will assume sponsorship of WBD stock plans and all WBD equity awards thereunder will be converted to NewCo equity awards, which will be further adjusted or converted in connection with the Separation and the Distribution (as
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described under Form of Employee Matters Agreement below). All references below to WBD equity awards herein will be deemed to be references to NewCo equity awards.
In connection with the transactions contemplated by the Separation and Distribution Agreement, WBD and SpinCo will enter into certain additional agreements, including an Employee Matters Agreement, an Intellectual Property Matters Agreement, a Tax Matters Agreement and a Transition Services Agreement (each as defined in the Merger Agreement and substantially in the form attached to the form of the Separation and Distribution Agreement), which will govern certain rights, responsibilities and obligations of WBD and SpinCo, respectively, with respect to the subject matter applicable therein in connection with the Separation and the Distribution. WBD and/or Netflix will also enter into certain commercial arrangements with SpinCo prior to the consummation of the Merger.
At the effective time of the Distribution, WBD will use commercially reasonable efforts to cause the net debt of SpinCo to equal a specified amount of indebtedness, which may be reduced by WBD in its sole discretion, resulting in a dollar-for-dollar reduction to the price per share of WBD Common Stock payable by Netflix at the effective time of the Merger (the “Effective Time”) (such reduction, the “Net Debt Adjustment”).
Merger Agreement
Effect on Capital Stock
Following the consummation of the Separation and the Distribution, at the Effective Time, subject to the terms and conditions of the Merger Agreement, each share of WBD Common Stock issued and outstanding immediately prior to the Effective Time (other than shares of WBD Common Stock to be canceled in accordance with the Merger Agreement or as to which appraisal rights have been properly exercised) shall be converted into the right to receive (i) an amount in cash equal to $23.25, without interest (the “Cash Consideration”), and (ii) such number of validly issued, fully paid and nonassessable shares of common stock of Netflix, par value $0.001 per share (the “Buyer Common Stock”) equal to the Exchange Ratio (“Stock Consideration” and together with the Cash Consideration, the “Merger Consideration”), plus cash in lieu of any fractional shares to which such share would otherwise be entitled. The “Exchange Ratio” will be determined based on the per share volume-weighted average trading price of Buyer Common Stock for the fifteen (15) consecutive trading days ending on (and including) the trading day that is three (3) trading days prior to the closing date of the Merger (the “Average Buyer Stock Price”), and which will be (x) 0.0376, if the Average Buyer Stock Price is equal to or greater than $119.67, (y) the quotient obtained by dividing $4.50 by the Average Buyer Stock Price if the Average Buyer Stock Price is greater than $97.91 but less than $119.67 and (z) 0.0460, if the Average Buyer Stock Price is less than or equal to $97.91, in each case, subject to any Net Debt Adjustment.
Treatment of Equity Awards
Pursuant to the Merger Agreement, at the Effective Time, each outstanding option to purchase shares of WBD Common Stock granted under any WBD stock plan (a “WBD Option”) that is (x) by its terms vested as of the Effective Time or (y) held by a former employee or
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service provider of WBD (each, a “Vested WBD Option”), in each case, with an exercise price per share of WBD Common Stock that is less than the sum (rounded to the nearest four decimals) of (1) the Cash Consideration plus (2) an amount in cash equal to the product obtained by multiplying (x) the Exchange Ratio by (y) the Average Buyer Stock Price (the “Merger Consideration Value”), will be canceled in consideration for the right to receive the Merger Consideration (or, for any individual who holds any WBD equity award assumed and adjusted by SpinCo in accordance with the Employee Matters Agreement (each, a “SpinCo Award Holder”), the cash value thereof) in respect of the number of whole and partial shares of WBD Common Stock equal to (i) the product obtained by multiplying (A) the number of shares of WBD Common Stock subject to such Vested WBD Option immediately prior to the Effective Time, and (B) the excess of the Merger Consideration Value over the exercise price per share of WBD Common Stock subject to such Vested WBD Option, divided by (ii) the Merger Consideration Value (the “Net WBD Shares”) as if each Net WBD Share were one share of WBD Common Stock issued and outstanding immediately prior to the Effective Time.
At the Effective Time, each WBD Option that is outstanding and unexercised immediately prior to the Effective Time and that is not a Vested WBD Option (an “Unvested WBD Option”) with an exercise price per share of WBD Common Stock that is less than the Merger Consideration Value will be assumed by Netflix and automatically converted into the contingent right to receive an amount in cash, without interest, equal to the product obtained by multiplying (i) the excess of the Merger Consideration Value over the per-share exercise price for such Unvested WBD Option, by (ii) the total number of shares of WBD Common Stock subject to such Unvested WBD Option immediately prior to the Effective Time (the “Unvested WBD Option Consideration”), with such Unvested WBD Option Consideration remaining subject to the same terms and conditions (including any applicable terms relating to accelerated vesting upon qualifying terminations of employment and timing and form of payment) that applied to the corresponding Unvested WBD Option immediately prior to the Effective Time (except for terms rendered inoperative by reason of the transactions contemplated by the Merger Agreement or for other administrative or ministerial changes as in the reasonable and the good faith determination of Netflix are appropriate to conform the administration of the Unvested WBD Option Consideration amounts and are not adverse to the holders) with respect to receipt of the Unvested WBD Option Consideration.
At the Effective Time, each WBD Option with an exercise price per share of WBD Common Stock that is equal to or greater than the Merger Consideration Value will be canceled without any cash payment or other consideration being made in respect thereof.
At the Effective Time, each award of restricted stock units corresponding to shares of WBD Common Stock granted pursuant to any WBD stock plan, including performance restricted stock units (a “WBD RSU”) that is vested in accordance with its terms as of the Effective Time or that is held by a non-employee member of the board of directors of WBD (each, a “Vested WBD RSU”), will be canceled and converted into the right to receive the Merger Consideration (or, for SpinCo Award Holders, the cash value thereof) with respect to each share of WBD Common Stock underlying such Vested WBD RSU.
At the Effective Time, each WBD RSU that is outstanding immediately prior to the Effective Time and that is not a Vested WBD RSU (each, an “Unvested WBD RSU”) will be
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assumed by Netflix and automatically converted into the contingent right to receive an amount in cash, without interest, equal to the product of (i) the Merger Consideration Value, multiplied by (ii) the total number of shares of WBD Common Stock subject to such Unvested WBD RSU immediately prior to the Effective Time (the “Unvested WBD RSU Consideration”), with such Unvested WBD RSU Consideration remaining subject to the same terms and conditions (including any applicable terms relating to accelerated vesting upon qualifying terminations of employment and timing and form of payment) that applied to the corresponding Unvested WBD RSU immediately prior to the Effective Time (except for terms rendered inoperative by reason of the transactions contemplated by the Merger Agreement or for other administrative or ministerial changes as in the reasonable and the good faith determination of Netflix are appropriate to conform the administration of the Unvested WBD RSU Consideration amounts and are not adverse to the holders) with respect to receipt of the Unvested WBD RSU Consideration.
At the Effective Time, the total number of shares of WBD Common Stock that are subject to each Unvested WBD RSU that remains subject to performance-based vesting conditions as of the Effective Time will be determined by assuming, in respect of such WBD RSU, achievement at the greater of (x) target performance and (y) actual performance extrapolated through the end of the applicable performance period based on actual performance through the closing date of the Merger, determined by the board of directors of WBD or a committee thereof in good faith and consistent with past practice.
At the Effective Time, each deferred stock unit of WBD (a “WBD DSU”) that is outstanding immediately prior to the Effective Time will be assumed by Netflix and automatically converted into a right to receive an amount in cash, without interest, equal to the product obtained by multiplying (A) the Merger Consideration Value by (B) the number of shares of WBD Common Stock subject to such WBD DSU immediately prior to the Effective Time (the “WBD DSU Consideration”), with such WBD DSU Consideration remaining subject to the same terms and conditions that applied to the corresponding WBD DSU immediately prior to the Effective Time (including with respect to timing of payment).
At the Effective Time, each notional investment unit with respect to shares of WBD Common Stock (a “WBD Notional Unit”) subject to WBD’s Non-Employee Directors Deferral Plan and WBD’s Supplemental Retirement Plan (each, a “WBD DC Plan”) that is outstanding immediately prior to the Effective Time will be assumed by Netflix and automatically converted into a notional unit with respect to a number of shares of Buyer Common Stock (a “Buyer Notional Unit”) equal to the product obtained by multiplying (A) the Equity Award Exchange Ratio by (B) the number of shares of WBD Common Stock subject to such WBD Notional Unit immediately prior to the Effective Time, with each such Buyer Notional Unit remaining subject to the same terms and conditions that applied to the corresponding WBD Notional Unit immediately prior to the Effective Time (including with respect to timing and form of payment), as set forth in the applicable WBD DC Plan, provided that WBD Notional Units held by SpinCo Award Holders will settle in cash. The “Equity Award Exchange Ratio” is determined by summing (i) the Exchange Ratio plus (ii) the fraction obtained by dividing the Cash Consideration by the Average Buyer Stock Price.
Representation and Warranties; Certain Covenants
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The Merger Agreement contains customary representations and warranties of both WBD (relating to the Retained Business) on the one hand, and Netflix and Merger Sub, on the other hand, in each case generally subject to materiality qualifiers. Additionally, the Merger Agreement provides for customary pre-closing covenants of WBD, including covenants relating to conducting the Retained Business in the ordinary course consistent with past practice and to refrain from taking certain actions without Netflix’s consent, covenants not to solicit proposals relating to alternative transactions or, subject to certain exceptions, enter into discussions concerning or provide information in connection with such alternative transactions and, subject to certain exceptions, covenants to recommend that WBD’s stockholders approve the Merger and adopt the Merger Agreement (such recommendation, the “WBD Recommendation”). The Merger Agreement also provides for customary pre-closing covenants of Netflix, including certain actions that Netflix must refrain from taking without WBD’s consent.
Prior to the adoption of the Merger Agreement by WBD’s stockholders, the board of directors of WBD may, in response to an unsolicited third-party acquisition proposal received after the date of the Merger Agreement, withdraw, qualify, modify or propose publicly to do the foregoing with respect to the WBD Recommendation, or approve, recommend or otherwise declare advisable a Company Superior Proposal (as defined in the Merger Agreement), or cause WBD to terminate the Merger Agreement, subject to complying with notice requirements and other specified processes in the Merger Agreement, including giving Netflix the opportunity to propose revisions to the terms of the transactions contemplated by the Merger Agreement during a match right period, and paying Netflix the Company Termination Fee (as defined below) prior to or substantially concurrently with such termination.
WBD and Netflix have agreed to use their respective reasonable best efforts to take all actions necessary, proper or advisable under applicable laws to consummate the Merger as promptly as practicable after the date of the Merger Agreement, including to obtain the required regulatory approvals for the Merger, and Netflix has agreed, if required to resolve or eliminate any impediments or objections that may be asserted with respect to the Merger, to certain commitments relating thereto.
Closing Conditions
Consummation of the Merger is subject to the satisfaction or waiver of certain customary conditions, including, among others, (i) the consummation of the Separation and Distribution in all material respects in accordance with the principal terms of the Separation and Distribution Agreement, (ii) the adoption of the Merger Agreement by the affirmative vote of the holders of a majority of the voting power of the outstanding shares of WBD Common Stock entitled to vote (the “WBD Stockholder Approval”) at a meeting of WBD’s stockholders duly called and held for such purpose (the “WBD Stockholder Meeting”), (iii) the authorization for listing on NASDAQ upon official notice of issuance of the shares of Buyer Common Stock issuable to the holders of shares of WBD Common Stock pursuant to the Merger Agreement and the effectiveness of a registration statement on Form S-4 with respect thereto, (iv) the expiration or termination of the applicable waiting period (or any extension thereof) under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended, and the expiration of certain other mandatory waiting periods or receipt of certain other clearances or affirmative approvals of certain other governmental bodies, agencies or authorities and (v) the absence of any law or
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order, issued by a court or governmental entity of competent jurisdiction, restraining, enjoining, prohibiting or preventing the consummation of the Merger. Each of WBD’s and Netflix’s obligations to consummate the Merger is also subject to certain other conditions, including, among others, the compliance with pre-closing covenants by and accuracy of the representations and warranties of WBD (on the part of Netflix), on the one hand, and Netflix and Merger Sub (on the part of WBD), on the other hand (in each case, subject to certain qualifications) and the absence of certain changes that have had, or would reasonably be expected to have, a material adverse effect with respect to Netflix and the Retained Business of WBD, respectively. The consummation of the Merger is not subject to a financing condition.
Termination Rights and Fees
The Merger Agreement also provides for certain mutual termination rights. Subject to certain limitations, the Merger Agreement may be terminated by either Netflix or WBD (i) by mutual written consent, (ii) if the WBD Stockholder Meeting concludes without obtaining the WBD Stockholder Approval, (iii) if any governmental entity of competent jurisdiction issues, enacts, enforces or enters any order permanently enjoining or prohibiting the consummation of the Merger, and such order becomes final and non-appealable or (iv) subject to certain limitations, if the Effective Time has not occurred on or before 11:59 p.m., Eastern time, on March 4, 2027 (the “End Date”), subject to two automatic three (3)-month extensions if on both such dates all of the closing conditions, except those related to regulatory approvals and governmental orders, have been satisfied or waived. In addition, (x) the Merger Agreement may be terminated by Netflix (1) due to certain breaches by WBD of its representations, warranties and covenants contained in the Merger Agreement, subject to certain cure rights, or (2) if prior to the WBD Stockholder Meeting, the board of directors of WBD effects a change in the WBD Recommendation, and (y) the Merger Agreement may be terminated by WBD (A) due to certain breaches by Netflix of its representations, warranties and covenants contained in the Merger Agreement, subject to certain cure rights or (B) if prior to the WBD Stockholder Meeting, WBD determines to enter into a definitive agreement providing for a Superior Proposal.
If, prior to receipt of WBD Stockholder Approval, (i) the Merger Agreement is terminated by WBD in order to enter into a definitive agreement providing for a Superior Proposal, (ii) the Merger Agreement is terminated by Netflix because the board of directors of WBD has changed its recommendation that WBD stockholders adopt the Merger Agreement, (iii) the Merger Agreement is terminated by Netflix or WBD as a result of the WBD Stockholder Approval having not been obtained and, immediately prior to the WBD Stockholder Meeting, Netflix would have been entitled to terminate the Merger Agreement because the board of directors of WBD has changed its recommendation that WBD stockholders adopt the Merger Agreement or (iv) (x) after the date of the Merger Agreement, an acquisition proposal is publicly proposed or publicly disclosed prior to the WBD Stockholder Meeting (a “WBD Qualifying Transaction”), (y) the Merger Agreement is terminated (1) by Netflix or WBD as a result of the WBD Stockholder Approval having not been obtained or (2) by Netflix as a result of a willful breach by WBD of its covenants in the Merger Agreement and (z) concurrently with or within twelve (12) months after such termination, WBD (1) consummates a WBD Qualifying Transaction or (2) enters into a definitive agreement providing for a WBD Qualifying Transaction, then WBD will be obligated to pay Netflix a fee equal to $2,800,000,000 (the “Company Termination Fee”).
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If the Merger Agreement is terminated by WBD or Netflix (i) if the Effective Time has not occurred prior to the End Date due to the closing conditions related to regulatory approvals and governmental orders not being satisfied, but all other closing conditions have been satisfied or waived (or have not been satisfied due to a breach by Netflix or Merger Sub of their obligations under the Merger Agreement) or (ii) due to an antitrust or foreign regulatory injunction permanently prohibiting the closing of the Merger, then Netflix will be obligated to pay WBD a termination fee equal to $5,800,000,000 in cash.
The Merger Agreement also provides that each party may seek to compel the other parties to specifically perform their obligations under the Merger Agreement.
Form of Separation and Distribution Agreement
In addition to the matters described above, the Separation and Distribution Agreement will provide that the Distribution is subject to satisfaction (or waiver by WBD in its sole and absolute discretion) of certain conditions. WBD will have the discretion to determine (and change, subject to prior written notice to, and under certain circumstances consent of, Netflix) the terms of the Separation and the Distribution and to determine whether to proceed with the Separation and the Distribution, subject to the obligation in the Merger Agreement for WBD to use reasonable best efforts to cause the Separation and the Distribution to be consummated in all material respects in accordance with the terms of the Separation and Distribution Agreement. Termination of the Separation and Distribution Agreement will require the consent of WBD and, unless the Merger Agreement has been terminated in accordance with the terms thereof, Netflix.
The Separation and Distribution Agreement will also set forth certain other covenants and agreements between WBD and SpinCo related to the Separation and the Distribution, including provisions concerning the termination and settlement of intercompany accounts and financing or refinancing certain indebtedness. The Separation and Distribution Agreement will also set forth certain covenants and agreements that govern certain aspects of the relationship between WBD and SpinCo following the Distribution, including provisions with respect to release of claims and indemnification.
Form of Employee Matters Agreement
In connection with the Separation and the Distribution, WBD and SpinCo will enter into the Employee Matters Agreement to allocate liabilities and responsibilities relating to employment matters, employee compensation and benefit plans and programs and other related matters. The Employee Matters Agreement will also govern the treatment of WBD equity awards that are outstanding as of the Separation and the Distribution.
Pursuant to the Employee Matters Agreement, at the time of the Distribution, subject to certain exceptions, (i) each outstanding WBD equity award held by a current or former employee of WBD will be adjusted to reflect the impact of the Distribution such that the intrinsic value of such award is maintained, and (ii) each outstanding WBD equity award held by (a) a current or former SpinCo employee and granted prior to calendar year 2026 or (b) a member of the WBD board, will be converted into a SpinCo equity award and an adjusted WBD equity award that together have the same aggregate intrinsic value as the original WBD equity award from which
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they were converted. All adjusted WBD equity awards and SpinCo equity awards resulting from such conversion shall otherwise be subject to the same terms and conditions after the Distribution as were applicable to such WBD equity awards prior to the Distribution, except that any performance criteria that applied to a WBD equity award granted prior to 2026 shall be deemed to be satisfied as provided in the Employee Matters Agreement.
Form of Intellectual Property Matters Agreement
In connection with the Separation and the Distribution, WBD and SpinCo will enter into the Intellectual Property Matters Agreement, pursuant to which WBD and SpinCo and their respective affiliates will license the use of certain intellectual property, including certain cross-licenses for patents, software and other shared intellectual property (excluding content) to facilitate the continued use of shared intangible assets by each party and a 180-day trademark wind-up license to permit each party to wind up usage of the other party’s trademarks.
Form of Tax Matters Agreement
In connection with the Separation and Distribution, WBD and SpinCo will enter into the Tax Matters Agreement, which will govern the parties’ respective rights, responsibilities and obligations with respect to taxes, including taxes incurred in connection with the Separation and Distribution and the transactions contemplated by the Merger Agreement.
Form of Transition Services Agreement
In connection with the Separation and the Distribution, WBD and SpinCo will enter into the Transition Services Agreement, pursuant to which WBD and SpinCo and their respective affiliates will provide to each other, on an interim, transitional basis, various services intended to support business continuity, facilitate operational integration, and ensure an efficient and orderly transition of responsibilities, systems and processes following the consummation of the Separation and the Distribution. Such services will include, among others, technology and operations (including IT, infrastructure, enterprise systems and media technology & operations), benefits, payroll, finance, legal, procurement, marketing, content operations, streaming technology, and other corporate services, and will be provided for in detail in schedules to the Transition Services Agreement.
Description of Merger Agreement Not Complete
The foregoing description of the Merger Agreement, including the forms of agreements attached as exhibits thereto, and the transactions contemplated thereby does not purport to be complete and is subject to, and qualified in its entirety by reference to, the full text of the Merger Agreement, including the forms of agreements attached as exhibits thereto, which is attached as Exhibit (e)(1) hereto and is incorporated herein by reference.
The Merger Agreement, including the forms of agreements attached as exhibits thereto, has been included to provide investors with information regarding its terms. It is not intended to provide any other factual information about Netflix, WBD, NewCo or SpinCo. The representations, warranties, covenants and agreements contained in the Merger Agreement were made only for purposes of the Merger Agreement, as of the specific dates therein, were solely for
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the benefit of the parties to the Merger Agreement and the parties expressly identified as third-party beneficiaries thereto, as applicable (except as expressly provided therein), are subject to limitations agreed upon by the contracting parties, including being qualified by confidential disclosures made for the purposes of allocating contractual risk between the parties to the Merger Agreement instead of establishing these matters as facts, and are subject to standards of materiality applicable to the contracting parties that differ from those applicable to investors. Except as expressly provided in the Merger Agreement, stockholders are not third-party beneficiaries under the Merger Agreement and should not rely on the representations, warranties, covenants and agreements therein or any descriptions thereof as characterizations of the actual state of facts or condition of the parties thereto or any of their respective subsidiaries or affiliates. Moreover, information concerning the subject matter of representations and warranties may change after the date of the Merger Agreement, which subsequent information may or may not be fully reflected in Netflix’s and WBD’s respective public disclosures.
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Exhibit (a)(2)(B)
FOR IMMEDIATE RELEASE
December 17, 2025
Warner Bros. Discovery Board of Directors
Unanimously Recommends Shareholders Reject Paramount Tender Offer
Reiterates Recommendation in Support of Netflix Combination, Which Represents Superior, More Certain Value for Shareholders
Paramount Offer Reflects Inadequate Value and Imposes Numerous, Significant Risks and Costs on WBD
Ellison Family Has Still Not Provided an Equity Backstop, Despite Headline Claims
WBD Board’s Full, Fair and Transparent Review Established a Level Playing Field in a Competitive Process
No Material Difference in Regulatory Risk Between PSKY Offer and Netflix Merger
Illusory, Non-Binding Offer Can Be Terminated or Amended by Paramount At Any Time, Creating
Untenable Degree of Potential Downside to WBD Shareholders
New York, NY- December 17, 2025- Warner Bros. Discovery, Inc. (“Warner Bros. Discovery” or “WBD”) (NASDAQ: WBD) today announced that its Board of Directors (the “Board”) has unanimously determined that the tender offer launched by Paramount Skydance (“PSKY”) (NASDAQ: PSKY) on December 8, 2025 is not in the best interests of WBD and its shareholders and does not meet the criteria of a “Superior Proposal” under the terms of WBD’s merger agreement with Netflix announced on December 5, 2025.
The Warner Bros. Discovery Board unanimously reiterates its recommendation in support of the Netflix combination and recommends that WBD shareholders reject PSKY’s offer.
“Following a careful evaluation of Paramount’s recently launched tender offer, the Board concluded that the offer’s value is inadequate, with significant risks and costs imposed on our shareholders,” said Samuel A. Di Piazza, Jr., Chair of the Warner Bros. Discovery Board of Directors. “This offer once again fails to address key concerns that we have consistently communicated to Paramount throughout our extensive engagement and review of their six previous proposals. We are confident that our merger with Netflix represents superior, more certain value for our shareholders and we look forward to delivering on the compelling benefits of our combination.”
In connection with its determination, today the Board sent a letter to shareholders providing detail on its recommendation to shareholders.
Full text of the letter follows below.
Dear Fellow Shareholders,
As your Board of Directors, we are committed to acting in your best interest. In this spirit, in October, we launched a public review of strategic alternatives to maximize shareholder value. This followed three separate proposals from Paramount Skydance (“PSKY”), as well as interest from multiple other parties.
That thorough process, overseen by the Board with the assistance of independent financial and legal advisors, as well as our management team, led to the company entering into a merger agreement with Netflix on December 4, with the substantial benefits to WBD shareholders described below. Having failed to submit the best proposal for you, our shareholders, PSKY launched an offer nearly identical to its most recently rejected proposal.
As a Board, we have now conducted another review and determined that PSKY’s tender offer remains inferior to the Netflix merger. The Board continues to unanimously recommend the Netflix merger, and that you reject the PSKY offer and not tender your shares.
Below, and in more detail in our 14D-9 filing, we highlight the many reasons for the Board’s determination. None of these reasons will be a surprise to PSKY given our clear, and oft-repeated, feedback on their six prior proposals.
The terms of the Netflix merger are superior. The PSKY offer provides inadequate value and imposes numerous, significant risks and costs on WBD.
The value we have secured for shareholders through the Netflix merger is extraordinary by any measure.
Our agreement with Netflix gives WBD shareholders $23.25 in cash, plus $4.50 in shares of Netflix common stock (based on a collar range of $97.91- $119.67 in the Netflix stock price at the time of closing), plus the additional value of the shares of Discovery Global and the opportunity to participate in future potential upside following Discovery Global’s separation from WBD. The entire Board is confident in our recommendation that Netflix represents the best value-creating path for shareholders.
PSKY has consistently misled WBD shareholders that its proposed transaction has a “full backstop” from the Ellison family. It does not, and never has.
PSKY’s most recent proposal includes a $40.65 billion equity commitment, for which there is no Ellison family commitment of any kind. Instead, they propose that you rely on an unknown and opaque revocable trust for the certainty of this crucial deal funding. Despite having been told repeatedly by WBD how important a full and unconditional financing commitment from the Ellison family was- and despite their own ample resources, as well as multiple assurances by PSKY during our strategic review process that such a commitment was forthcoming- the Ellison family has chosen not to backstop the PSKY offer.
And a revocable trust is no replacement for a secured commitment by a controlling stockholder. The assets and liabilities of the trust are not publicly disclosed and are subject to change. As the name indicates, revocable trusts typically have provisions allowing for assets to be moved at any
time. And the documents provided by PSKY for this conditional commitment contain gaps, loopholes and limitations that put you, our shareholders, and our company at risk.
Amplifying the concerns about the credibility of the equity commitment being offered by PSKY, the revocable trust and PSKY have agreed that the trust’s liability for damages, even in the case of a willful breach, would be capped at 7% of its commitment ($2.8 billion on a $108.4 billion transaction). Of course, the damage to WBD and its stockholders were the trust or PSKY to breach their obligations to close a transaction would likely be many multiples of this amount.
WBD’s merger agreement with Netflix is a binding agreement with enforceable commitments, with no need for any equity financing and robust debt commitments. The Netflix merger is fully backed by a public company with a market cap in excess of $400 billion with an investment grade balance sheet. The debt financing for the PSKY bid relies on an unsecure revocable trust commitment as well as the credit worthiness of a $15 billion market cap company with a credit rating at or only a notch above “junk” status from the two leading rating agencies. The financial condition and creditworthiness of PSKY, which, if its proposed transaction were to close, would have a high gross leverage ratio of 6.8x 2026E debt to EBITDA with virtually no current free cash flow generation before synergies, raise substantial risks for its acquisition of WBD. Such debt levels reflect a risky capital structure that is vulnerable to even potentially small changes in the PSKY or WBD business between signing and closing.
Additionally, PSKY contemplates $9 billion in synergies from the mergers of Paramount/Skydance and their offer for WBD. These targets are both ambitious from an operational perspective and would make Hollywood weaker, not stronger.
The Board’s review was full, transparent and competitive- establishing a level playing field that fostered a rigorous and fair process.
The Board repeatedly engaged with all parties, including extensive engagement with PSKY and its advisors over the course of nearly three months. We held dozens of calls and meetings with its principals and advisors including four in-person meetings and meals between David Zaslav and David and/or Larry Ellison and provided multiple opportunities for PSKY to offer a proposal that was superior to those of the other bidders, which PSKY never did.
After each bid, we informed PSKY of the material deficiencies and offered potential solutions. Despite this feedback, PSKY has never submitted a proposal that is superior to the Netflix merger agreement.
Despite PSKY’s media statements to the contrary, the Board does not believe there is a material difference in regulatory risk between the PSKY offer and the Netflix merger.
The Board carefully considered the federal, state, and international regulatory risks for both the Netflix merger and the PSKY offer with its regulatory advisors. The Board believes that each transaction is capable of obtaining the necessary U.S. and foreign regulatory approvals and that any difference between the respective regulatory risk levels is not material. The Board also notes that Netflix has agreed to a record-setting regulatory termination cash fee of $5.8 billion, significantly higher than PSKY’s $5 billion break fee.
The PSKY offer is illusory.
The offer can be terminated or amended by PSKY at any time prior to its completion; it is not the same thing as a binding merger agreement. The first paragraph of the offer states it is “subject to the conditions set forth in this offer to purchase (as it may be amended or supplemented from time to time)” and continues on the next page, “we reserve the right to amend the Offer in any respect (including amending the Offer Price)’’. In addition, the offer is not capable of being completed by its current expiration date, due to the need for, among other things, global regulatory approvals, which PSKY indicates may take 12-18 months. Nothing in this structure offers WBD shareholders any deal certainty.
The PSKY offer provides an untenable degree of risk and potential downside for WBD shareholders.
There will be additional costs associated with PSKY’s offer that could impact shareholders.
When considering the PSKY offer at this juncture, it is important to note that its acceptance could incur significant additional costs to shareholders- all of which PSKY has ignored in their communications. WBD would have to pay Netflix a $2.8 billion termination fee, which PSKY has not offered to reimburse. In addition, WBD would incur approximately $1.5 billion in financing costs if we do not complete our planned debt exchange as agreed to with certain of our debtholders, which would not be permitted by the PSKY offer. This additional $4.3 billion in potential costs represents approximately $1.66 per share to be borne by WBD shareholders if the offer does not close.
We look forward to moving ahead with our combination with Netflix and delivering the compelling and certain value it will create for shareholders. We urge you to carefully read the 14D-9 filed with the SEC this morning and available on our website, which more fully details the strategic review process and the Board’s reasons for its recommendation to you.
Sincerely,
The Warner Bros. Discovery Board of Directors
The basis for the Board’s decision is set forth in the Solicitation/Recommendation Statement on Schedule 14D-9 (the “Schedule 14D-9”) filed today with the U.S. Securities and Exchange Commission.
Allen & Company, J.P. Morgan and Evercore are serving as financial advisors to Warner Bros. Discovery and Wachtell Lipton, Rosen & Katz and Debevoise & Plimpton LLP are serving as legal counsel.
Contacts:
Investors:
Andrew Slabin
(212) 548-5544
andrew.slabin@wbd.com
Peter Lee
(212) 548-5907
peter.lee@wbd.com
Press:
Robert Gibbs
(347) 268-3017
Robert.Gibbs@wbd.com
About Warner Bros. Discovery:
Warner Bros. Discovery is a leading global media and entertainment company that creates and distributes the world’s most differentiated and complete portfolio of branded content across television, film, streaming and gaming. Warner Bros. Discovery inspires, informs and entertains audiences worldwide through its iconic brands and products including: Discovery Channel, HBO Max, discovery+, CNN, DC, TNT Sports, Eurosport, HBO, HGTV, Food Network, OWN, Investigation Discovery, TLC, Magnolia Network, TNT, TBS, truTV, Travel Channel, Animal Planet, Science Channel, Warner Bros. Motion Picture Group, Warner Bros. Television Group, Warner Bros. Pictures Animation, Warner Bros. Games, New Line Cinema, Cartoon Network, Adult Swim, Turner Classic Movies, Discovery en Español, Hogar de HGTV and others. For more information, please visit www.wbd.com.
Important Information about the Tender Offer and Where to Find It
WBD has filed a solicitation/recommendation statement on Schedule 14D-9 with respect to the tender offer (the “tender offer”) by a subsidiary of PSKY with the Securities and Exchange Commission (the “SEC”). INVESTORS AND SECURITY HOLDERS ARE ADVISED TO READ ALL RELEVANT DOCUMENTS FILED WITH THE SEC, INCLUDING THE SOLICITATION /RECOMMENDATION STATEMENT AND ANY OTHER RELEVANT DOCUMENTS, WHEN THEY BECOME AVAILABLE BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION ABOUT THE TENDER OFFER. Investors and security holders may obtain free copies of the solicitation/recommendation statement as well as other filings by WBD, without charge, at the SEC’s website, https://www.sec.gov. In addition, free copies of documents filed with the SEC by WBD will be made available free of charge on WBD’s investor relations website at https://www. ir.wbd.com.
Important Information about the Transaction and Where to Find It
This communication does not constitute an offer to sell or the solicitation of an offer to buy any securities or a solicitation of any vote or approval. This communication may be deemed to be solicitation material in respect of the proposed transaction between WBD and Netflix Inc. (“Netflix”) (the “proposed transaction”). In connection with the proposed transaction, Netflix intends to file a registration statement on Form S-4, containing a proxy statement/prospectus, with the SEC and WBD intends to file a proxy statement with the SEC. WBD also intends to file a registration statement for a newly formed subsidiary (“Discovery Global”), which is contemplated to own certain assets and businesses of WBD not being acquired by Netflix in connection with the proposed transaction. INVESTORS AND SECURITY HOLDERS ARE ADVISED TO READ ALL RELEVANT DOCUMENTS FILED WITH THE SEC, INCLUDING THE REGISTRATION STATEMENTS, PROXY STATEMENT/PROSPECTUS AND ANY OTHER RELEVANT DOCUMENTS WHEN THEY BECOME AVAILABLE BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION ABOUT THE PROPOSED TRANSACTION AND RELATED MATTERS. Investors and security holders may obtain free
copies of the registration statements and proxy statement/prospectus (when available) as well as other filings containing information about WBD and Netflix, without charge, at the SEC’s website, https://www.sec.gov. Free copies of the registration statements and proxy statement/prospectus, once available, and each company’s other filings with the SEC may also be obtained from the respective companies. Free copies of documents filed with the SEC by WBD will be made available on WBD’s investor relations website at https://ir.wbd.com. Free copies of documents filed with the SEC by Netflix will be made available on Netflix’s investor relations website at https://ir.netflix.net.
Participants in the Solicitation
WBD and Netflix and certain of their respective directors and executive officers may be deemed to be participants in the solicitation of proxies in respect of the proposed transaction. Information about the directors and executive officers of WBD is set forth in its Annual Report on Form 10-K for the year ended December 31, 2024, under the heading “Executive Officers of Warner Bros. Discovery, Inc.,” and its definitive proxy statement filed with the SEC on April 23, 2025, under the heading “Proposal 1: Election of Directors.” Information about the directors and executive officers of Netflix is set forth in its definitive proxy statement filed with the SEC on April 17, 2025, under the headings “Our Board of Directors” and “Our Company Executive Officers.” Investors may obtain additional information regarding the interests of such participants by reading the registration statements, proxy statement/prospectus and other relevant materials regarding the proposed transaction when they become available.
Forward-Looking Statements
Information set forth in this communication, including financial estimates and statements as to the expected timing, completion and effects of the proposed transaction between WBD and Netflix, constitute forward-looking statements within the meaning of the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. These estimates and statements are subject to risks and uncertainties, and actual results might differ materially. Such estimates and statements include, but are not limited to, statements about the benefits of the proposed transaction, including future financial and operating results, the combined company’s plans, objectives, expectations and intentions, statements about the tender offer and other statements that are not historical facts. Such statements are based upon the current beliefs and expectations of the management of WBD and Netflix and are subject to significant risks and uncertainties outside of our control.
Among the risks and uncertainties that could cause actual results to differ from those described in the forward-looking statements are the following: (1) the completion of the proposed transaction may not occur on the anticipated terms and timing or at all; (2) the occurrence of any event, change or other circumstances that could give rise to the termination of the proposed transaction; (3) the risk that WBD stockholders may not approve the proposed transaction; (4) the risk that the necessary regulatory approvals for the proposed transaction may not be obtained or may be obtained subject to conditions that are not anticipated; (5) risks that any of the closing conditions to the proposed transaction may not be satisfied in a timely manner; (6) the final allocation of indebtedness between WBD and Discovery Global in connection with the separation could cause a reduction to the consideration for the proposed transaction; (7) risks related to potential litigation brought in connection with the proposed transaction; (8) the risk that the integration of the businesses will be more difficult, time consuming or costly than expected; (9) risks related to financial community and rating agency perceptions of each of WBD and Netflix and their businesses, operations, financial conditions and the industries in which they operate; (10) risks related to disruption of management time from ongoing business operations due to the
proposed transaction; (11) failure to realize the benefits expected from the proposed transaction; (12) effects of the announcement, pendency or completion of the proposed transaction on the ability of WBD and Netflix to retain customers and retain and hire key personnel and maintain relationships with their suppliers, and on their operating results and businesses generally; (13) risks associated with third party contracts containing consent and/or other provisions that may be triggered by the proposed transaction; (14) negative effects of the announcement or the consummation of the proposed transaction on the market price of WBD and/or Netflix common stock; (15) risks relating to the value of the shares of Netflix common stock to be issued in the proposed transaction and uncertainty as to the long-term value of Netflix common stock; (16) the potential impact of unforeseen liabilities, future capital expenditures, revenues, expenses, earnings, synergies, economic performance, indebtedness, financial condition and losses on the future prospects, business and management strategies for the management, expansion and growth of Netflix’s operations after the consummation of the proposed transaction, and on the other conditions to the completion of the proposed transaction; (17) risks related to the potential impact of general economic, political and market factors on the companies or the proposed transaction; (18) the risk that Discovery Global, as a new company that currently has no credit rating, will not have access to the capital markets on acceptable terms; (19) the risk that Discovery Global may be unable to achieve some or all of the benefits that WBD expects Discovery Global to achieve as an independent, publicly-traded company; (20) the risk that Discovery Global may be more susceptible to market fluctuations and other adverse events than it would have otherwise been while still a part of WBD; (21) the risk that Discovery Global will incur significant indebtedness in connection with the separation, and the degree to which it will be leveraged following completion of the separation may materially and adversely affect its business, financial condition and results of operations; (22) the ability to obtain or consummate financing or refinancing related to the proposed transaction or the separation upon acceptable terms or at all; (23) uncertainties as to how many WBD stockholders will tender their shares in the tender offer; (24) the conditions to the completion of the tender offer, including the receipt of any required stockholder and regulatory approvals; (25) PSKY’s ability to finance the tender offer and the indebtedness PSKY expects to incur in connection with the tender offer; (26) the possibility that PSKY may be unable to achieve expected synergies and operating efficiencies within the expected timeframes or at all and to successfully integrate PSKY’s operations with those of PSKY, and the possibility that such integration may be more difficult, time-consuming or costly than expected or that operating costs and business disruption (including, without limitation, disruptions in relationships with employees, customers or suppliers) may be greater than expected in connection with the tender offer; and (27) the response of WBD, Netflix or PSKY management to any of the aforementioned factors. Discussions of additional risks and uncertainties are contained in WBD’s and Netflix’s filings with the SEC, including their Annual Reports on Form 10-K and Quarterly Reports on Form 10-Q, and will be contained in the Form S-4, containing a proxy statement/prospectus, to be filed by Netflix in connection with the proposed transaction and the registration statement to be filed by Discovery Global in connection with the separation. Neither WBD nor Netflix is under any obligation, and each expressly disclaims any obligation, to update, alter, or otherwise revise any forward-looking statements, whether written or oral, that may be made from time to time, whether as a result of new information, future events, or otherwise. Persons reading this announcement are cautioned not to place undue reliance on these forward-looking statements which speak only as of the date hereof.
Exhibit (a)(2)(C)
This communication was sent to everyone at WBD.
Team,
I want to share a brief update following developments today.
You will have seen that the Warner Bros. Discovery Board of Directors has filed a formal response to Paramount Skydance’s unsolicited tender offer. In that filing, the Board has recommended that shareholders not tender their shares.
This action reflects the Board’s ongoing oversight and its responsibility to act in the best interests of shareholders. As part of its work, the Board reviewed Paramount Skydance’s most recent unsolicited tender offer with the same care and discipline it has applied throughout this process, including its review of multiple prior proposals. The Board’s evaluation followed a thorough and consistent process and is grounded in its fiduciary duties.
You may be asking: where does that leave us?
We continue to have a signed transaction agreement with Netflix and we are working together to close the transaction, subject to regulatory approvals and other closing conditions.
That regulatory review process has already begun.
When there is additional information we can provide, we will communicate it clearly and promptly.
For those who would like to read more:
| • | You can view the Board’s filing here: [Link to Schedule 14D-9] |
| • | You can read today’s press release here: [Link to release] |
Until any transaction closes, Warner Bros. Discovery and Netflix remain separate companies and our operating plans remain unchanged. WBD remains focused on the work ahead, serving audiences, partners, and one another—and finishing the year strong.
Thank you, as always, for your professionalism and focus during a period that naturally draws attention. We will continue to keep you informed as this process moves forward.
David
**********
Important Information about the Tender Offer and Where to Find It
Warner Bros. Discovery, Inc. (“WBD”) has filed a solicitation/recommendation statement on Schedule 14D-9 with respect to the tender offer (the “tender offer”) by a subsidiary of Paramount Skydance Corporation (“PSKY”) with the Securities and Exchange Commission (the “SEC”). INVESTORS AND SECURITY HOLDERS ARE ADVISED TO READ ALL RELEVANT DOCUMENTS FILED WITH THE SEC, INCLUDING THE SOLICITATION /RECOMMENDATION STATEMENT AND ANY OTHER RELEVANT DOCUMENTS, WHEN THEY BECOME AVAILABLE BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION ABOUT THE TENDER OFFER. Investors and security holders may obtain free copies of the solicitation/recommendation statement as well as other filings by WBD, without charge, at the SEC’s website, https://www.sec.gov. In addition, free copies of documents filed with the SEC by WBD will be made available free of charge on WBD’s investor relations website at https://www.ir.wbd.com.
Important Information about the Transaction and Where to Find It
This communication does not constitute an offer to sell or the solicitation of an offer to buy any securities or a solicitation of any vote or approval. This communication may be deemed to be solicitation material in respect of the proposed transaction between WBD and Netflix Inc. (“Netflix”) (the “proposed transaction”). In connection with the proposed transaction, Netflix intends to file a registration statement on Form S-4, containing a proxy statement/prospectus, with the SEC and WBD intends to file a proxy statement with the SEC. WBD also intends to file a registration statement for a newly formed subsidiary (“Discovery Global”), which is contemplated to own certain assets and businesses of WBD
not being acquired by Netflix in connection with the proposed transaction. INVESTORS AND SECURITY HOLDERS ARE ADVISED TO READ ALL RELEVANT DOCUMENTS FILED WITH THE SEC, INCLUDING THE REGISTRATION STATEMENTS, PROXY STATEMENT/PROSPECTUS AND ANY OTHER RELEVANT DOCUMENTS WHEN THEY BECOME AVAILABLE BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION ABOUT THE PROPOSED TRANSACTION AND RELATED MATTERS. Investors and security holders may obtain free copies of the registration statements and proxy statement/prospectus (when available) as well as other filings containing information about WBD and Netflix, without charge, at the SEC’s website, https://www.sec.gov. Free copies of the registration statements and proxy statement/prospectus, once available, and each company’s other filings with the SEC may also be obtained from the respective companies. Free copies of documents filed with the SEC by WBD will be made available on WBD’s investor relations website at https://ir.wbd.com. Free copies of documents filed with the SEC by Netflix will be made available on Netflix’s investor relations website at https://ir.netflix.net.
Participants in the Solicitation
WBD and Netflix and certain of their respective directors and executive officers may be deemed to be participants in the solicitation of proxies in respect of the proposed transaction. Information about the directors and executive officers of WBD is set forth in its Annual Report on Form 10-K for the year ended December 31, 2024, under the heading “Executive Officers of Warner Bros. Discovery, Inc.,” and its definitive proxy statement filed with the SEC on April 23, 2025, under the heading “Proposal 1: Election of Directors.” Information about the directors and executive officers of Netflix is set forth in its definitive proxy statement filed with the SEC on April 17, 2025, under the headings “Our Board of Directors” and “Our Company Executive Officers.” Investors may obtain additional information regarding the interests of such participants by reading the registration statements, proxy statement/prospectus and other relevant materials regarding the proposed transaction when they become available.
Forward-Looking Statements
Information set forth in this communication, including financial estimates and statements as to the expected timing, completion and effects of the proposed transaction between WBD and Netflix, constitute forward-looking statements within the meaning of the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. These estimates and statements are subject to risks and uncertainties, and actual results might differ materially. Such estimates and statements include, but are not limited to, statements about the benefits of the proposed transaction, including future financial and operating results, the combined company’s plans, objectives, expectations and intentions,
statements about the tender offer and other statements that are not historical facts. Such statements are based upon the current beliefs and expectations of the management of WBD and Netflix and are subject to significant risks and uncertainties outside of our control.
Among the risks and uncertainties that could cause actual results to differ from those described in the forward-looking statements are the following: (1) the completion of the proposed transaction may not occur on the anticipated terms and timing or at all; (2) the occurrence of any event, change or other circumstances that could give rise to the termination of the proposed transaction; (3) the risk that WBD stockholders may not approve the proposed transaction; (4) the risk that the necessary regulatory approvals for the proposed transaction may not be obtained or may be obtained subject to conditions that are not anticipated; (5) risks that any of the closing conditions to the proposed transaction may not be satisfied in a timely manner; (6) the final allocation of indebtedness between WBD and Discovery Global in connection with the separation could cause a reduction to the consideration for the proposed transaction; (7) risks related to potential litigation brought in connection with the proposed transaction; (8) the risk that the integration of the businesses will be more difficult, time consuming or costly than expected; (9) risks related to financial community and rating agency perceptions of each of WBD and Netflix and their businesses, operations, financial conditions and the industries in which they operate; (10) risks related to disruption of management time from ongoing business operations due to the proposed transaction; (11) failure to realize the benefits expected from the proposed transaction; (12) effects of the announcement, pendency or completion of the proposed transaction on the ability of WBD and Netflix to retain customers and retain and hire key personnel and maintain relationships with their suppliers, and on their operating results and businesses generally; (13) risks associated with third party contracts containing consent and/or other provisions that may be triggered by the proposed transaction; (14) negative effects of the announcement or the consummation of the proposed transaction on the market price of WBD and/or Netflix common stock; (15) risks relating to the value of the shares of Netflix common stock to be issued in the proposed transaction and uncertainty as to the long-term value of Netflix common stock; (16) the potential impact of unforeseen liabilities, future capital expenditures, revenues, expenses, earnings, synergies, economic performance, indebtedness, financial condition and losses on the future prospects, business and management strategies for the management, expansion and growth of Netflix’s operations after the consummation of the proposed transaction, and on the other conditions to the completion of the proposed transaction; (17) risks related to the potential impact of general economic, political and market factors on the companies or the proposed
transaction; (18) the risk that Discovery Global, as a new company that currently has no credit rating, will not have access to the capital markets on acceptable terms; (19) the risk that Discovery Global may be unable to achieve some or all of the benefits that WBD expects Discovery Global to achieve as an independent, publicly-traded company; (20) the risk that Discovery Global may be more susceptible to market fluctuations and other adverse events than it would have otherwise been while still a part of WBD; (21) the risk that Discovery Global will incur significant indebtedness in connection with the separation, and the degree to which it will be leveraged following completion of the separation may materially and adversely affect its business, financial condition and results of operations; (22) the ability to obtain or consummate financing or refinancing related to the proposed transaction or the separation upon acceptable terms or at all; (23) uncertainties as to how many WBD stockholders will tender their shares in the tender offer; (24) the conditions to the completion of the tender offer, including the receipt of any required stockholder and regulatory approvals; (25) PSKY’s ability to finance the tender offer and the indebtedness PSKY expects to incur in connection with the tender offer; (26) the possibility that PSKY may be unable to achieve expected synergies and operating efficiencies within the expected timeframes or at all and to successfully integrate PSKY’s operations with those of PSKY, and the possibility that such integration may be more difficult, time-consuming or costly than expected or that operating costs and business disruption (including, without limitation, disruptions in relationships with employees, customers or suppliers) may be greater than expected in connection with the tender offer; and (27) the response of WBD, Netflix or PSKY management to any of the aforementioned factors. Discussions of additional risks and uncertainties are contained in WBD’s and Netflix’s filings with the SEC, including their Annual Reports on Form 10-K and Quarterly Reports on Form 10-Q, and will be contained in the Form S-4, containing a proxy statement/prospectus, to be filed by Netflix in connection with the proposed transaction and the registration statement to be filed by Discovery Global in connection with the separation. Neither WBD nor Netflix is under any obligation, and each expressly disclaims any obligation, to update, alter, or otherwise revise any forward-looking statements, whether written or oral, that may be made from time to time, whether as a result of new information, future events, or otherwise. Persons reading this announcement are cautioned not to place undue reliance on these forward-looking statements which speak only as of the date hereof.
Exhibit (e)(2)
| Proxy Statement Summary | Election of Directors | Corporate Governance | Audit Matters |
Executive Compensation | Other Matters |
Additional Information | Appendices |
Transactions with Related Persons
Our current written policies and procedures for the review, approval or ratification of related person transactions and other conflict of interest matters are based on our Guidelines and our Code of Ethics, which apply to all directors, officers and employees of WBD. Among other things, our Guidelines provide that when a director has an actual or potential conflict of interest, the director should promptly inform the Chief Executive Officer, the Chief Legal Officer and the chair of the Nominating and Corporate Governance Committee. The Nominating and Corporate Governance Committee, or another independent committee of the Board designated by the Board, will resolve any conflict of interest involving a director, the Chief Executive Officer or any other executive officer. No related person transaction may be effected by WBD without the approval of the Nominating and Corporate Governance Committee or another independent committee designated by the Board. For purposes of our Guidelines, a “related person transaction” refers to any transaction which WBD would be required to disclose pursuant to Item 404 of Regulation S-K.
In evaluating potential related person transactions, the Nominating and Corporate Governance Committee considers:
| • | the nature of the related person’s interest in the transaction; |
| • | the approximate total dollar value of, and extent of the related person’s interest in, the transaction; |
| • | whether the transaction would be undertaken in our ordinary course of business; |
| • | whether the transaction is proposed to be entered into on terms no less favorable to us than terms that could have been reached with an unrelated third party; and |
| • | the purpose of, and potential benefits to the Company of, the transaction. |
In the ordinary course of business during 2024, we were a party to certain business transactions with institutions affiliated with members of our Board. Management believes, and the Nominating and Corporate Governance Committee concurred, that the terms and conditions of the transactions were no more and no less favorable to us than the terms of similar transactions with unaffiliated institutions to which we are, or expect to be, a party. Those transactions that are required to be disclosed under rules promulgated by the SEC are described below.
We have a commercial business relationship with SoFi Technologies, Inc. (or its predecessor, Social Finance, Inc.) (“SoFi”), where Anthony J. Noto, a member of our Board, serves as chief executive officer. From time to time, SoFi purchases advertising on our platforms, on customary rates and terms. During 2024, we received approximately $20 million in revenue from SoFi.
We have a commercial business relationship with Angi, Inc. (“Angi”), where Joseph M. Levin, a member of our Board, served as chief executive officer for an interim period ending on April 30, 2024. From time to time, Angi purchases advertising on our platforms, on customary rates and terms. During the period in 2024 when Mr. Levin served as CEO of Angi, we received approximately $1.8 million in revenue from Angi.
We have a commercial business relationship with Wiz, Inc. (“Wiz”), where Fazal F. Merchant, a member of our Board, serves as president and chief financial officer effective as of January of 2025. From time to time, we purchase cybersecurity software as a service from Wiz, on customary rates and terms. During 2025, we anticipate paying approximately $2.3 million to Wiz.
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| Proxy Statement Summary | Election of Directors | Corporate Governance | Audit Matters |
Executive Compensation | Other Matters |
Additional Information | Appendices |
The daughter of David M. Zaslav, our CEO, was employed by us during 2024 as a producer for CNN. She has served in this position since 2019, prior to the closing of the WarnerMedia Transaction in 2022. Her total compensation in fiscal year 2024 exceeded the $120,000 reporting threshold. The compensation she received was consistent with the level and type of compensation provided to other employees in similar positions.
The daughter of Debra L. Lee, a member of our Board, was engaged by us during 2024 as a writer and producer for a television program produced by Warner Bros. Television. Her total compensation in fiscal year 2024 exceeded the $120,000 reporting threshold. The compensation she received was based on the Writers Guild of America fee scale and was consistent with the amount of compensation provided to other writers and producers in similar positions.
In 2024, we made payments to Steven Miron (who served on our Board through March 2024), and Robert Miron (an immediate family member of Steven Miron), in connection with litigation relating to the WarnerMedia Transaction. The lawsuit named certain of our former directors (including the Mirons) and Advance/Newhouse as defendants and generally alleged that the former directors and Advance/Newhouse breached their fiduciary duties in connection with the WarnerMedia Transaction (the “Stockholders Litigation”). The parties agreed to settle the Stockholders Litigation in July 2024. We paid the Mirons the combined sum of $25.0 million in satisfaction of potential claims for advancement and indemnification relating to the Stockholders Litigation.
| 2025 PROXY STATEMENT | 37 |
| Proxy Statement Summary | Election of Directors | Corporate Governance | Audit Matters |
Executive Compensation | Other Matters |
Additional Information | Appendices |
Director Compensation
The Compensation Committee reviews compensation for our non-employee directors and recommends any changes to such compensation to the full Board for approval. The components of our non-employee director compensation are cash fees and equity awards. The Board believes that appropriate compensation levels help attract and retain superior candidates for Board service and that director compensation should be weighted toward equity-based compensation to enhance alignment with the interests of our stockholders. Employee directors do not receive any compensation for their Board service. Currently, Mr. Zaslav is the only director who is also a Company employee.
2024 Director Compensation Program
The following tables show the cash and equity compensation that was in effect in 2024.
| Board Service Compensation |
||||
| Annual Cash Retainer |
||||
| Board Chair |
$ | 300,000 | ||
| Board Member |
$ | 125,000 | ||
| Annual Equity Grant (Restricted Stock Units) |
||||
| Board Chair |
$ | 220,000 | ||
| Board Member |
$ | 220,000 | ||
| Committee Service Compensation |
||||
| Annual Cash Retainer |
||||
| Audit Committee Chair |
$ | 40,000 | ||
| Audit Committee Member |
$ | 20,000 | ||
| Compensation Committee Chair |
$ | 35,000 | ||
| Compensation Committee Member |
$ | 20,000 | ||
| Nominating and Corporate Governance Committee Chair |
$ | 25,000 | ||
| Nominating and Corporate Governance Committee Member |
$ | 10,000 | ||
Changes to Director Compensation Program for 2025
In December 2024, after reviewing non-employee director compensation at our peer group companies and in consultation with its independent compensation consultant, the Compensation Committee recommended, and the Board subsequently approved, changes to the director compensation program for 2025 to reduce the annual cash retainers for Board service by $20,000 and to increase the amount of the annual equity grant by $20,000. This change was made to further align our director compensation program with stockholder interests. No changes were made to the retainers for Committee service. The new Board service retainers are set forth below.
| 2025 Board Service Compensation (adopted December 2024) |
||||
| Annual Cash Retainer |
||||
| Board Chair |
$ | 280,000 | ||
| Board Member |
$ | 105,000 | ||
| Annual Equity Grant (Restricted Stock Units) |
||||
| Board Chair |
$ | 240,000 | ||
| Board Member |
$ | 240,000 | ||
| 2025 PROXY STATEMENT | 43 |
| Proxy Statement Summary | Election of Directors | Corporate Governance | Audit Matters |
Executive Compensation | Other Matters |
Additional Information | Appendices |
Cash Compensation
Cash compensation for non-employee directors consists solely of the annual cash retainers described above. Annual cash retainers are paid in quarterly installments. The cash retainer paid to non-employee directors who are elected or appointed mid-year is prorated based on the quarter in which they join the Board or applicable committee.
Non-employee directors may elect to receive shares of our common stock in lieu of their cash retainer (or any portion thereof). If a director so elects, such shares of common stock are issued each quarter at the same time such cash retainer would have been paid. The number of shares of common stock received in lieu of cash is calculated by dividing the dollar amount of the applicable cash retainer by the closing price of our common stock on the date of issuance. In 2024, no director made this election.
Equity Compensation
Non-employee directors receive stock-based compensation under our 2005 Non-Employee Director Incentive Plan (the “Director Incentive Plan”) as it may be amended from time to time. Our Board determined for 2024 that the equity grants to directors should consist solely of restricted stock units (“RSUs”) of common stock. Annual equity grants for 2024 were made on June 5, 2024. Equity awards for directors who are elected or appointed after the most recent annual stockholders’ meeting are prorated based on when they join the Board. The number of RSUs is calculated by dividing the dollar amount of the grant by the closing price of our common stock on the last business day prior to the grant date. Our Board has implemented a cap of $750,000 on individual director annual equity award grant date value. RSUs granted in 2024 will vest 100% on the earlier of the one-year anniversary of the grant date and the date of the 2025 Annual Meeting, assuming continued service to such date of vesting. The RSUs granted to our directors do not include the right to receive cash dividends.
Deferred Compensation
The Company maintains the Warner Bros. Discovery, Inc. Non-Employee Directors Deferral Plan (the “Deferral Plan”), a non-qualified deferred compensation plan, which allows each non-employee director to elect to defer up to 100% of his or her cash compensation with respect to a specific calendar year in which the non-employee director will receive such compensation (the “Plan Year”). In addition, under the Director Incentive Plan, each non-employee director may elect to defer up to 100% of his or her equity compensation with respect to the Plan Year. Any such election must be made by the non-employee director prior to the beginning of the Plan Year by executing a deferral agreement specifying the time and form of payment for amounts deferred for such Plan Year. The deferral agreement becomes irrevocable at the end of the period preceding the Plan Year. Non-employee directors who elect to defer any portion of their cash compensation have the ability to invest such deferred amounts by selecting from a range of investment crediting options available under the Deferral Plan, including an option to invest in notional shares of WBD stock which settle in shares of stock at distribution. Messrs. Di Piazza, Gould and Newhouse elected to defer receipt of their respective cash retainers payable to them during 2024. Messrs. Di Piazza and Newhouse elected to invest their respective deferred cash retainers in notional shares of WBD stock. Messrs. Di Piazza, Gould and Malone and Ms. Price elected to defer the settlement of their respective annual RSU grants made in 2024.
Other Director Compensation Matters
We do not have any pension or retirement plans for our non-employee directors. Non-employee directors are reimbursed for out-of-pocket costs for attending each meeting of the Board or any Board committee of which they are a member, including airfare, whether by commercial or private aircraft. Under the Guidelines, the Company encourages the participation of all directors in continuing education programs, at the Company’s expense, that are relevant to the business and affairs of the Company and the fulfillment of the directors’ responsibilities as members of the Board and its committees.
| 44 |
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| Proxy Statement Summary | Election of Directors | Corporate Governance | Audit Matters |
Executive Compensation | Other Matters |
Additional Information | Appendices |
The Company provides a charitable contribution matching program through which we match contributions made by our non-employee directors to eligible charitable organizations up to a maximum of $20,000 for each director per fiscal year. In order to be matched, the contribution must be tax-deductible by the Company. The program is designed to match contributions to educational, arts and cultural institutions that have been approved by the Internal Revenue Service as tax-exempt institutions to which contributions are deductible for federal income tax purposes. Certain types of contributions and institutions would not be eligible for matching, such as tuition payments, contributions made to family foundations or other charitable foundations or organizations that are affiliated with a non-employee director, or membership or alumni association dues. Matching contributions under this program are included below in the 2024 Director Compensation Tables under the “All Other Compensation” column.
Board of Directors Stock Ownership Policy
Our Board maintains a stock ownership policy that requires each director to hold a specified amount of our stock, calculated as a multiple of five times the then-current annual cash retainer for Board service, exclusive of any additional retainer with respect to committee or other service. Each director is required to reach the stock holding target within five years after joining the Board. Our Board determined that any shares of our stock beneficially owned by the director, as well as unvested awards of RSUs and deferred stock awards, but not shares underlying stock options, would be counted for purposes of meeting the stock holding target. Once a director meets the target, the director is expected to maintain holdings at the target for as long as he or she remains a Board member. Our Board may take any appropriate action to support the intent of the policy, including requiring a director to retain a percentage of shares pursuant to stock option exercises or vesting events in future years. All directors serving on the Board at December 31, 2024 had reached and maintained the stock holding target or were on track to do so.
| 2025 PROXY STATEMENT | 45 |
| Proxy Statement Summary | Election of Directors | Corporate Governance | Audit Matters |
Executive Compensation | Other Matters |
Additional Information | Appendices |
2024 Director Compensation Tables
The following tables summarize the compensation provided to all persons who served as non-employee directors during 2024.
| Name |
Fees Earned or Paid in Cash ($) |
Stock Awards ($)(1) |
All Other Compensation ($) |
Total ($) |
||||||||||||
| L. Chen |
135,000 | 221,610 | 51,616 | (5) | 408,226 | |||||||||||
| S. Di Piazza |
320,000 | (3) | 221,618 | (4) | — | 541,618 | ||||||||||
| R. Fisher |
155,000 | 221,610 | 36,030 | (6) | 412,640 | |||||||||||
| P. Gould |
170,000 | 221,610 | — | 391,610 | ||||||||||||
| D. Lee |
145,000 | 221,610 | 55,848 | (7) | 422,458 | |||||||||||
| K. Lowe |
165,000 | 221,610 | 27,551 | (8) | 414,161 | |||||||||||
| J. Malone |
150,000 | 221,610 | — | 371,610 | ||||||||||||
| F. Merchant |
155,000 | 221,610 | 80,514 | (9) | 457,124 | |||||||||||
| S. Miron |
36,250 | (2) | — | — | 36,250 | |||||||||||
| $. Newhouse |
33,750 | (2) (3) | — | — | 33,750 | |||||||||||
| P. Price |
165,000 | 221,610 | 63,988 | (10) | 450,598 | |||||||||||
| D. Sanchez |
31,250 | (2) | 163,200 | — | 194,450 | |||||||||||
| G. Yang |
145,000 | 221,610 | 27,586 | (11) | 394,196 | |||||||||||
| (1) | The aggregate grant date fair value of the RSU awards made to non-employee directors in 2024 was $2,379,300, as calculated in accordance with FASS ASC Topic 718. At December 31, 2024, the non-employee directors held unvested RSUs as follows: |
| Name |
Unvested RSUs | |||
| L. Chen |
26,700 | |||
| S. Di Piazza |
26,700 | |||
| R. Fisher |
26,700 | |||
| P. Gould |
26,700 | |||
| D. Lee |
26,700 | |||
| K. Lowe |
26,700 | |||
| J. Malone |
26,700 | |||
| F. Merchant |
26,700 | |||
| P. Price |
26,700 | |||
| D. Sanchez |
20,000 | |||
| G. Yang |
26,700 | |||
| (2) | Partial year. Messrs. Miron and Newhouse retired from the Board effective March 29, 2024. Mr. Sanchez joined the Board effective October 1, 2024. |
| (3) | Elected to defer 100% of cash retainer payments for 2024 and invest such amounts in notional shares of WBD stock under the Deferral Plan, which will result in distribution to each such director at the time of settlement of the following number of WBD shares: 37,098 for Mr. Di Piazza and 3,866 for Mr. Newhouse. |
| (4) | Includes $8.25 which reflects the amount by which the aggregate value of notional shares received in lieu of cash retainer was higher than the aggregate amount of the cash retainer foregone by Mr. Di Piazza. |
| (5) | In 2024, the Company was a media partner to the 2024 Paris Olympic Games (the “Games”) and invited the members of the WBD board to attend the Games to help host key WBD business partners and clients and enhance those business relationships. Non-employee directors who attended the Games had the option to bring a guest whose flights and other expenses were paid for by the Company (the “Olympics Hospitality Program”). Includes $24,130 for the Olympics Hospitality Program and $27,486 for reimbursement of tax liabilities associated with the Olympics Hospitality Program. |
| (6) | Includes $19,456 for the Olympics Hospitality Program, $11,574 for reimbursement of tax liabilities associated with the Olympics Hospitality Program and $5,000 for a matching charitable contribution made by the Company on behalf of Mr. Fisher. |
| (7) | Includes $30,716 for the Olympics Hospitality Program and $25,132 for reimbursement of tax liabilities associated with the Olympics Hospitality Program. |
| (8) | Includes $19,206 for the Olympics Hospitality Program and $8,345 for reimbursement of tax liabilities associated with the Olympics Hospitality Program. |
| (9) | Includes $46,819 for the Olympics Hospitality Program for two guests and $33,695 for reimbursement of tax liabilities associated with the Olympics Hospitality Program. |
| (10) | Includes $20,511 for the Olympics Hospitality Program, $23,362 for reimbursement tax of liabilities associated with the Olympics Hospitality Program and $20,000 for a matching charitable contribution made by the Company on behalf of Ms. Price. |
| (11) | Includes $15,172 for the Olympics Hospitality Program and $12,414 for reimbursement of tax liabilities associated with the Olympics Hospitality Program. |
| 46 |
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| Proxy Statement Summary | Election of Directors | Corporate Governance | Audit Matters |
Executive Compensation | Other Matters |
Additional Information | Appendices |
Compensation Discussion and Analysis
This Compensation Discussion and Analysis (“CD&A”) analyzes and discusses our executive compensation programs and provides information about the compensation we paid to our CEO, Chief Financial Officer (“CFO”), and the three other most highly compensated executive officers who were serving as executive officers at fiscal year-end (December 31, 2024) (collectively with the CEO and CFO, the “Named Executive Officers” or “NEOs”). The Compensation Committee (referred to in this CD&A as the “Committee”) of the Board oversees all aspects of NEO compensation.
Our NEOs for 2024 are:
Compensation Philosophy and Practices
Compensation Philosophy
Our compensation philosophy is to pay for performance, encourage excellence, retain our high-performing executive talent across the blended organization and reward executives who deliver.
Our executive compensation programs are designed to implement our pay-for-performance compensation philosophy, as follows:
| • | Align Interests: ensure a strong alignment of the interests of our stockholders and employees; |
| • | Pay for Performance: design incentives that are earned in line with short-term and long-term performance; |
| • | Reward Competitively: pay competitively, across salary grades and geographies; and |
| • | Attract and Retain World-Class Talent: retain high-performing individuals whose actions create long-term stockholder value. |
| 2025 PROXY STATEMENT | 51 |
| Proxy Statement Summary | Election of Directors | Corporate Governance | Audit Matters |
Executive Compensation | Other Matters |
Additional Information | Appendices |
NEO Target Compensation Mix
Our Compensation Committee has designed the executive compensation program based on our compensation philosophy with a significant majority of target total direct compensation for each NEO delivered in performance-based pay. The charts below for fiscal year 2024 demonstrate the balance between cash and equity compensation, and annual and long-term incentive awards, underscored by all pay elements other than base salary being at risk.
Stockholder Engagement and Board Responsiveness
Our Board values stockholder feedback and is committed to robust stockholder outreach. Stockholder feedback is conveyed to the full Board and respective committees of the Board and informs the Board and Board committees discussions and decisions.
Following our 2024 Annual Meeting, we:
| Offered engagement to stockholders representing |
Engaged in substantive discussions with stockholders representing |
Our independent directors participated in | ||||||
| 46% | 36% | 100% | ||||||
| of outstanding shares | of outstanding shares | of engagement meetings |
Our independent Board Chair, Mr. Di Piazza, and our Compensation Committee Chair, Mr. Gould, led the engagement meetings along with representatives from our Investor Relations and Legal teams.
| 52 |
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| Proxy Statement Summary | Election of Directors | Corporate Governance | Audit Matters |
Executive Compensation | Other Matters |
Additional Information | Appendices |
We received feedback on, and took action related to, several aspects of our executive compensation program:
| What We Heard |
What We Did |
Why Its’s Impactful | ||
• WBD should enhance pay-for-performance linkage of executive compensation
• Investors want incentives to be earned based on performance against preset goals |
• CEO Annual Bonus: Transitioned away from guaranteed bonus to ensure outcomes are solely driven by Company performance against preset financial and strategic goals
• Other NEO Annual Bonus: Modified 2025 Incentive Compensation Program (“ICP”) to emphasize objective and measurable performance with initial awards determined entirely by financial performance that may be modified up or down by individual or strategic performance achievements
• Adjusted ICP payout scale to better align with prevailing market practice
• Replaced Performance Pool utilized in prior years to recognize high-performing executives with a rigorous Individual Performance Multiplier that is only applied after assessment of performance versus financial goals |
• Enhances alignment of annual incentive payouts with preset Company performance goals
• Ensures that payouts for other NEOs are based on individual performance and are contingent upon the achievement of rigorous, pre- determined corporate financial goals and assessment of performance versus rigorous preset individual goals | ||
• WBD should enhance utilization of performance-based long- term incentives
• Investors want metrics to align with TSR/stock price |
• Maintained CEO annual equity to consist 100% of PRSUs
• Ensured a significant portion of annual equity awards were in the form of PRSUs for other NEOs
• Strengthened TSR modifier to have a greater impact on payouts and better align with prevailing market practice |
• Ensures executives focus on Company performance against preset goals, with ultimate payouts based on stock price performance | ||
• WBD should eliminate Supplemental Equity grants to NEOs |
• Eliminated all NEO Supplemental Equity grants effective 2026 |
• Responds directly to feedback
• Aligns executive compensation program with peers | ||
Executive Compensation Program Updates
Since the closing of the WarnerMedia Transaction in 2022, the Committee has been focused on ensuring that the evolution of our compensation program is aligned with the Company’s strategic goals, and has worked to reengineer compensation arrangements and programs that were put in place at or prior to the time of the closing of the WarnerMedia Transaction in 2022.
Since the 2024 “Say on Pay” vote, WBD and the Committee have:
| • | engaged in extensive stockholder outreach to elicit feedback (as outlined above), |
| • | appointed new leadership within our People & Culture function, including a new leader for our total rewards team which develops and oversees executive compensation strategy from the management perspective, |
| 2025 PROXY STATEMENT | 53 |
| Proxy Statement Summary | Election of Directors | Corporate Governance | Audit Matters |
Executive Compensation | Other Matters |
Additional Information | Appendices |
| • | conducted a comprehensive review of practices at peer companies led by the Committee’s independent compensation consultant, and |
| • | continued the transformation of our compensation program with changes being implemented in 2024, 2025, and 2026. |
2024: WBD’s Incentive Compensation Program (“ICP”) was amended to introduce a strategic performance element for all employees to better align with the cash bonus program already in place for the CEO and CFO. Cash bonuses for NEOs who participated in the ICP in 2024 were calculated as follows:
In addition, the Committee increased the performance period for PRSUs awarded in 2024 to incorporate a two-year (vs. one-year) free cash flow (“FCF”) performance goal for the NEOs (other than the CEO). The Committee believes a two-year performance period is appropriate in light of challenging macroeconomic conditions and the evolving media landscape, both of which are beyond the control of management and make a two-year performance period a more sustainable metric for our plan. These PRSUs are also subject to an additional three-year relative TSR modifier.
2025: The Committee designed a new executive compensation program, beginning in 2025, that it believes will more effectively align pay and performance (both Company performance and individual performance), is consistent with prevailing pay practices in our industry, incents our executives and employees to achieve the over-arching corporate financial objectives that are important to the success of the enterprise as well as the individual strategic objectives established for their own success and development, and rewards above-target performance and exceptional accomplishments. Annual cash bonuses for NEOs who participate in the ICP in 2025 will be calculated as follows:
For the 2025 ICP, the Committee modified the payout scale to increase the level of performance required for a minimum payout and also increase the potential payout for “above target” performance to better align with market practice.
The Committee also modified the scale for the Relative TSR modifier that will be applied to the PRSU awards made in 2025 to the NEOs (other than the CEO). In response to investor feedback, the Committee took action to strengthen the Relative TSR payout curve and adjusted the modifier between the 25th percentile and the 75th percentile to better align with market practice and to maintain the strong performance orientation of the Relative TSR Modifier.
2026: The Committee, with effect from 2026, also approved the elimination of the annual Supplemental PRSUs which were originally adopted in 2023.
The table below outlines the transformation of our executive compensation structures since the closing of WarnerMedia Transaction in 2022.
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| Proxy Statement Summary | Election of Directors | Corporate Governance | Audit Matters |
Executive Compensation | Other Matters |
Additional Information | Appendices |
WBD Executive Compensation Transformation
| Pay Element |
2023 |
2024 |
2025 |
Impact of Action | ||||
| Short-term incentives revamped to align payouts with Company and Individual Performance against preset goals while balancing the need to attract and retain high performing executives. | ||||||||
| Annual Bonus for CEO | Guaranteed Target Payout | 2024 Bonus: 70% Financial 30% Strategic ELIMINATED Guaranteed Payout |
2025 Bonus: 70% Financial 30% Strategic |
Payouts aligned with performance against ambitious preset goals | ||||
| 2023 Bonus 100% Financial |
2024 Bonus 70% Financial 30% Strategic |
2025 Bonus Annual bonus determined by multiplying NEO target bonus by a Company performance factor (based 100% on preset financial metrics) and then by an additional individual performance factor (based on pre-determined individual goals) |
||||||
| Annual Bonus for Other NEOs | Discretionary Performance Pool to reward high- performers | Adjusted payout scale to better align with market practice | Payouts aligned with performance against ambitious preset goals and rigorous individual performance assessment | |||||
| ELIMINATED Below-target funding for Performance Pool | ELIMINATED Performance Pool; ADOPTED Individual Performance Multiplier based on Pre- Determined Goals | |||||||
| Long-term incentives enhanced to focus on multi-year performance goals while balancing the need to reward executives competitively and aligning executives’ interests with long-term stockholders. | ||||||||
| CEO Annual Equity | 100% PRSUs | 100% PRSUs | 100% PRSUs | Maintain strong pay-for- performance focus | ||||
| Other NEO Annual Equity | 50% PRSUs 25% RSUs 25% Stock options |
50% PRSUs 25% RSUs 25% Stock options |
50% PRSUs 25% RSUs 25% Stock options |
Maintain strong alignment of payouts with Company performance and stockholder value creation with updates to PRSU performance incentives described below | ||||
| NEO Supplemental Equity | 100% PRSUs | 100% PRSUs | 100% PRSUs | ELIMINATING in 2026 to align with peers | ||||
| Two-year FCF with 3 -year TSR modifier | Two-year FCF with 3-year TSR modifier | |||||||
| PRSUs to NEOs (other than the CEO) | One-year FCF with 3-yearTSR modifier | LENGTHENED Performance Period | MODIFIED TSR payout curve to strengthen performance orientation and better align with market practice | Enhance long-term focus on Company performance | ||||
| 2025 PROXY STATEMENT | 55 |
| Proxy Statement Summary | Election of Directors | Corporate Governance | Audit Matters |
Executive Compensation | Other Matters |
Additional Information | Appendices |
NEO Employment Agreements
The table below summarizes the compensatory terms of the current employment agreements for our NEOs. Mr. Zaslav’s agreement was originally entered into in May 2021 in connection with signing the definitive merger agreement and other documents relating to the WarnerMedia Transaction. The agreements with the other NEOs were entered into at or near the time of closing the WarnerMedia Transaction in 2022; we extended the term of Mr. Zeiler’s agreement in February 2025 with no changes to the compensatory terms or other material provisions.
| David Zaslav | Gunnar Wiedenfels | Bruce L. Campbell | Jean-Briac Perrette | Gerhard Zeiler(2) | ||||||
| Expiration |
December 31, 2027 | July 10, 2026 | July 8, 2025 | August 1, 2025 | April 7, 2028 | |||||
| Base Salary(1) |
$3,000,000 | $2,000,000 | $2,500,000 | $2,500,000 | $1,800,000 | |||||
| Target Cash Bonus |
$22,000,000 | 175% of Base Salary | 200% of Base Salary | 200% of Base Salary | 178% of Base Salary | |||||
| Equity Target Value |
$23,500,000 | $8,000,000 | $8,500,000 | $8,500,000 | $6,000,000 | |||||
| Equity Form |
PRSUs | Annual equity awards to be provided in the same form and type as other similarly situated executives | ||||||||
| (1) | Base Salary is as set forth in the applicable employment agreement. NEO base salaries (other than for the CEO) are subject to review and adjustment by the Committee, at its discretion, as part of the Annual Base Salary Review. Adjusted 2024 base salary amounts for our NEOs (other than our CEO) are set forth in the section titled “Base Salary” below; there were no merit increases to NEO base salaries for 2025. |
| (2) | In 2024, Mr. Zeiler resided in Austria and his salary was delivered in Euros; the amounts provided above reflect the conversion to United States dollars. |
In each of these agreements, our NEOs are subject to customary restrictive covenants, including those relating to non-solicitation, non-interference, non-competition and confidentiality, during the term of the agreement and, depending on the circumstances of termination, for a period thereafter. The summaries of the NEO employment agreements provided below are qualified in their entirety by reference to the full text of the applicable NEO employment agreement, each of which is filed as an exhibit to the 2024 Form 10-K.
NEO Compensation in 2024
2024 Performance Highlights
2024 was a year of significant transformation and evolution for WBD, highlighted by our December announcement to restructure the Company to improve strategic flexibility and unlock future stockholder value. Under the new corporate structure, WBD will operate two distinct divisions:
| • | Global Linear Networks: A premier linear television business that operates some of the most renowned networks with compelling news, sports, scripted and unscripted programming. |
| • | Streaming & Studios: A globally scaled streaming platform and storied film and entertainment studios with a portfolio of some of the world’s most beloved intellectual property. |
The new structure will enhance clarity and focus and create optionality to pursue further value creation opportunities for both divisions. This strategic shift followed significant stockholder engagement and a comprehensive review of our portfolio by the Board.
Despite ongoing industry-wide challenges, we made significant progress throughout the year, including:
| • | Reduced outstanding debt by approximately $4.4 billion during 2024, bringing us to a total of approximately $16.7 billion of outstanding debt repaid since the WarnerMedia Transaction in 2022; |
| • | Recorded strong full-year Adjusted EBITDA of $677 million in our DTC segment, adding 19 million global subscribers primarily driven by our highly-successful international rollout of Max; |
| • | Delivered numerous Studios hits, including: |
| • | Dune: Part Two, WBD’s top grossing movie of 2024, with over $700 million in the global box office, and |
| • | The Penguin, which ranks as one of the top three most viewed original debut seasons on Max and represents the powerful potential for collaboration among DC Studios, Max and Warner Bros. Television. |
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Executive Compensation | Other Matters |
Additional Information | Appendices |
| • | Continued to produce award-winning content at Warner Bros. Television, HBO and Warner Bros. Motion Picture Group, resulting in 16 primetime Emmy®Awards, as well as four Golden Globe®Awards and two Academy Awards®. |
We also made significant announcements related to our Linear business in 2024, including:
| • | Multi-year renewal agreements with major pay-TV providers domestically, which will continue to generate overall affiliate rate increases while providing access to DTC apps and/or accommodate greater packaging flexibility in line with industry trends to support the longer-term health and sustainability of the linear ecosystem. |
| • | Resolution of our negotiations with the NBA and entry into a far more efficient long-term relationship with the league for rights to NBA games in certain international markets as well as rights to NBA digital highlights globally for Bleacher Report. At the same time, through adjacent negotiations with ESPN, we will continue to produce the iconic Inside the NBA franchise and gain rights to certain Big XII football and basketball games. |
Elements of 2024 Compensation
Total direct compensation for the NEOs in 2024 consisted of:
| Pay Elements |
Key Features |
Rationale |
Committee Actions | |||
| Base Salary | • Fixed annual cash amount, reviewed annually in the first 90 days of the calendar year |
• Attract and retain high-performing executives with competitive base salaries that provide financial stability |
• Increased 2024 NEO base salaries (other than the CEO) by 4.0% in line with adjustments for broader organization
• No merit increases to NEO base salaries for 2025 | |||
| Annual Cash Bonus | • Company-wide annual performance-based cash compensation
• For NEOs, 100% of bonus is performance-based: 70% is contingent on Company financial performance and 30% on individual performance against preset goals |
• lncentivize and competitively reward executives for actions that deliver sustainable stockholder value |
• Paid annual cash bonuses for 2024 based on Committee’s assessment of 2024 performance versus preset financial goals
• For NEOs, each executive’s individual performance was also assessed against preset strategic goals | |||
| Long-Term Incentive Awards |
• PRSUs for CEO that vest based on 1-year FCF performance, with modifier based on over-delivery of FCF
• PRSUs for NEOs (other than the CEO) that vest based on 2-year FCF performance, with 3-year Relative TSR performance modifier |
• Reward executives for multi-year financial performance
• Align payout with long-term stockholder value creation
• Align interests of executives with those of long-term stockholders |
• 100% of Mr. Zaslav’s 2024 annual equity grant was in PRSUs
• 50% of each other NEO’s 2024 annual equity grant was in PRSUs | |||
• RSUs and stock options that vest ratably over the first three anniversaries of the grant date for NEOs other than the CEO |
• Strengthen the alignment of interests of executives with those of long-term stockholders
• Ensure value realized by NEOs is aligned with incremental stockholder value creation |
• 25% of each other NEO’s 2024 annual equity grant was in RSUs
• 25% of each other NEO’s 2024 annual equity grant was in stock options | ||||
| 2025 PROXY STATEMENT | 57 |
| Proxy Statement Summary | Election of Directors | Corporate Governance | Audit Matters |
Executive Compensation | Other Matters |
Additional Information | Appendices |
Base Salary
In February 2024, as part of the 2024 Annual Base Salary Review, the Committee decided to provide each NEO (other than the CEO) with a 4% merit increase to his base salary. The CEO’s base salary is set, per the terms of his employment agreement, at $3 million through December 31, 2027.
The Committee decided to award merit increases to the other NEOs based on the CEO’s recommendation, with reference to the WBD Peer Group market data. This increase was also in line with merit increases for the broader employee population. The NEOs base salaries, following the 2024 Annual Base Salary Review are set forth below. There were no merit increases to 2025 base salaries for NEOs following the 2025 Annual Base Salary Review.
| • | Mr. Zaslav: $3,000,000 (as set forth in his employment agreement) |
| • | Mr. Wiedenfels: $2,142,400 |
| • | Mr. Campbell: $2,678,000 |
| • | Mr. Perrette: $2,678,000 |
| • | Mr. Zeiler: $1,876,485 (In 2024, Mr. Zeiler resided in Austria and his salary was delivered in Euros; this amount reflects conversion to U.S. dollars) |
Annual Cash Bonus Awards
The Compensation Committee has designed an annual bonus program that incentivizes all employees, including the NEOs, for actions that are aligned with our strategy, and rewards them in line with Company and individual performance against preset goals. Annual targets, metrics and respective performance goals are established at the beginning of each annual performance cycle. Following the completion of the performance period, the Committee then evaluates performance against the preset goals to certify and approve a cash bonus payout for each participant.
NEOs other than our CEO and CFO participate in the ICP, while the CEO and CFO participate in a separate bonus program, which in the case of the CEO is governed by his employment agreement. As part of its commitment to ensuring all NEOs are aligned, for performance year 2024, the Committee aligned the structure of the ICP with that of the bonus program applicable to the CEO and CFO, as outlined in the table below.
Alignment of ICP for NEOs with Annual Bonus for CEO and CFO
| Executives |
Financial Metrics (70%) |
Strategic Goals (30%) | ||||
| Annual Cash Bonus Plan |
CEO and CFO | • Adjusted EBITDA
• Net Revenue
• Year-End Paid DTC Subscribers |
Specific to each of the CEO and CFO | |||
| ICP | Other NEOs | • Adjusted EBITDA |
Specific to each other NEO | |||
• Net Revenue |
||||||
• Year-End Paid DTC Subscribers |
||||||
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| Proxy Statement Summary | Election of Directors | Corporate Governance | Audit Matters |
Executive Compensation | Other Matters |
Additional Information | Appendices |
2024 Financial Metrics
For 2024, the Committee selected the following financial metrics to underpin the annual cash bonus, with the respective weighting for our CEO and CFO outlined in the table below:
| Financial Metric |
Weighting |
Definition & Committee Rationale | ||
| Adjusted EBITDA(1) | 60% | Alignment with WBD Strategy: Adjusted EBITDA is the core financial measure that investors consider to be an important measure of our financial health and overall performance. Adjusted EBITDA, along with net debt, reflects our leverage ratio the reduction of which has been a key priority for WBD since 2022. The Committee believes that having the largest portion of our executives’ cash bonuses tied to an Adjusted EBITDA target aligns compensation with stockholder interests, incents management to maintain focus on reducing leverage and motivates our executives to achieve outcomes that will drive stockholder value. | ||
| Net Revenue | 30% | Alignment with WBD Strategy: Revenue is another key financial metric that WBD uses to communicate our business performance to our investors.
The Committee believes that weighing this metric at 30% appropriately focuses management on top-line performance given that achieving revenue targets is important to overall financial health and ability to execute our strategy to maintain. | ||
| Year-End Paid DTC Subscribers(2) | 10% | Alignment with WBD Strategy: A key component of our strategy is to grow our DTC businesses and paid subscribers is one of the key metrics that we and investors use to measure viability and success in streaming. Paid subscribers is also one of the metrics that we regularly use when we describe our streaming business to investors and other stakeholders.
The Committee weighted this metric at 10% because our strategy is focused on growing our streaming business profitably and generating revenue from our streaming business, not merely acquiring and growing subscribers. | ||
| (1) | Adjusted EBITDA is defined as operating income excluding (i) employee share-based compensation; (ii) depreciation and amortization; (iii) restructuring and facility consolidation;(iv) certain impairment charges; (v) gains and losses on business and asset dispositions; (vi) third-party transaction and integration costs; (vii) amortization of purchase accounting fair value step-up for content; (viii) amortization of capitalized interest for content; and (ix) other items impacting comparability. |
| (2) | A DTC Subscription is defined as: (i) a retail subscription to discovery+, HBO, HBO Max, Max, or a Premium Sports Product (defined below) for which we have recognized subscription revenue, whether directly or through a third party, from a direct-to-consumer platform; (ii) a wholesale subscription to discovery+, HBO, HBO Max, Max, or a Premium Sports Product for which we have recognized subscription revenue from a fixed-fee arrangement with a third party and where the individual user has activated their subscription; (iii) a wholesale subscription to discovery+, HBO, HBO Max, Max, or a Premium Sports Product for which we have recognized subscription revenue on a per subscriber basis; (iv) a retail or wholesale subscription to an independently-branded, regional product sold on a stand-alone basis that includes discovery+, HBO, HBO Max, Max, and/or a Premium Sports Product, for which we have recognized subscription revenue (as per (i)-(iii) above); and (v) users on free trials who convert to a subscription for which we have recognized subscription revenue within the first seven days of the calendar month immediately following the month in which their free trial expires. We define a “Premium Sports Product” as a strategically prioritized, sports-focused product sold on a stand-alone basis and made available directly to consumers. The current “independently-branded, regional products” referred to in (iv) above consist of TVN/Player and BluTV. Subscribers to multiple WBD DTC products (listed above) are counted as a paid subscriber for each individual WBD DTC product subscription. The aggregate number of DTC Subscriptions are “Paid DTC Subscribers.” |
2024 Adjustments to Financial Performance
The Committee annually reviews potential adjustments to performance against the financial metrics. The principle applied in deciding whether to apply an adjustment is to ensure that the bonus calculation reflects the impact of actual operational decisions made by management but excludes the impact of events over which management has little or no influence and excludes the impact of items that were not considered at the time the targets were set. Adjustments for currency fluctuations are made to ensure that the results are currency neutral.
In 2024, based on the two unique and non-recurring events described below, the Committee determined it was appropriate to make an adjustment to performance:
| • | Venu Joint Venture: The Venu joint venture was originally slated to formally launch and begin airing programming in August 2024. The launch was delayed due to litigation filed by a distributor, who also ceased its carriage of several of our networks during 2024. The launch delay, loss of carriage, and costs of defending the litigation, all of which were unanticipated by management and unexpected, negatively impacted our 2024 Revenue and EBITDA results. |
In January 2025, the litigation was settled but the Venu joint venture was abandoned by the Company and its partners.
| 2025 PROXY STATEMENT | 59 |
| Proxy Statement Summary | Election of Directors | Corporate Governance | Audit Matters |
Executive Compensation | Other Matters |
Additional Information | Appendices |
| • | Major Sports Strategy Change: During the spring and summer of 2024, WBD invested in new sports rights packages and programming which did not exist in the market previously and could not be foreseen or planned for at the time the financial targets were set in February 2024. This strategic change was implemented when these rights became available in order to maintain our value proposition with distributors if we were ultimately unsuccessful in our bid to retain the rights to air NBA games on our linear networks. These investments resulted in higher near-term costs as we transitioned our sports strategy, including costs relating to the sublicense fee for the College Football Playoffs and costs to acquire additional sports rights for TNT, which negatively impacted our 2024 EBITDA and FCF results. |
The adjustments made by the Committee had the effect of increasing our 2024 Revenue, Adjusted EBITDA and FCF performance, including with respect to certain individual lines of business performance, for purposes of calculating cash bonuses and ICP awards (see discussion on page 59), as compared to our reported results, which ultimately increased the payout amount for 2024 cash bonus awards made to NEOs. The adjustments to FCF performance had no impact on the payout of LTl Awards, as our non-adjusted FCF performance exceeded the level required for these awards to vest (see page 68 for additional details). The adjustments also had no impact on Year-End Paid DTC Subscriber performance.
Determination of 2024 Annual Cash Bonus Awards
2024 Cash Bonuses to CEO and CFO
For each of Mr. Zaslav and Mr. Wiedenfels, 70% of his annual cash bonus opportunity shall be based on performance against financial metrics, and 30% based on performance against strategic measures.
The Committee determined that including all three WBD Corporate financial metrics described above was appropriate for the CEO and CFO given the scope of their responsibilities and direct impact on resource allocation decisions. The Committee established threshold (0% payout), target (100% payout) and above target (125% payout) amounts for each of the financial metrics and a payout scale that would determine the amount payable for achievement of results between the “threshold” and the “above target” amounts. The payout scale was designed to provide an “above target” payout only upon over-delivery of the relevant financial metric, with payout prorated for performance between the “threshold” and “above target” levels.
The table below outlines the financial metrics, targets, weighting and results for the cash bonuses to the CEO and CFO for 2024.
| Threshold | Target | Above Target | Actual | |||||||||||||||||
| Financial Metrics for CEO/CFO |
Weighting | (20% payout)* | (100% payout) | (125% payout)* | Achievement** | |||||||||||||||
| Net Revenue($ in millions) |
30 | % | $ | 28,279 | $ | 40,399 | $ | 44,439 | $ | 39,589 | ||||||||||
| Adjusted EB/TOA($ in millions) |
60 | % | $ | 6,300 | $ | 9,000 | $ | 9,900 | $ | 9,324 | ||||||||||
| Year-End Paid DTC Subscribers(# in millions) |
10 | % | 71.8 | 102.6 | 112.9 | 116.9 | ||||||||||||||
| * | The Committee established threshold (0% payout), target (100% payout) and above target (125% payout) amounts for each of the financial metrics and a payout scale that would determine the amount payable for achievement of results between the “threshold” and the “above target” amounts. The payout scale was designed to provide an “above target” payout only upon over-delivery of the relevant financial metric, with payout prorated for performance between the “threshold” and “above target” levels. Performance below “threshold” would result in no payout. The Committee established the payout scale and targets for the cash bonuses to the CEO and CFO in February of 2024, and believes that the payout scale was appropriate considering pay practices at other peer companies and that the targets were rigorous and consistent with our internal 2024 budget. Payments beyond the “above target” amount may be made at the Committee’s discretion; the Committee did not use its discretion to make any payments beyond the “above target” amount for 2024 performance. |
| ** | “Actual Achievement” shown below is after the adjustments described above starting on page 59. |
The determination as to whether 2024 financial metrics for the CEO and CFO cash bonuses were met was made in the 2024 Annual Bonus Review during the first quarter of 2025, following review of the full-year 2024 financial results. Based on the performance against the three WBD Corporate financial metrics and the payout scale applicable to the CEO and CFO, the payout for the portion of the CEO’s and CFO’s 2024 cash bonus that is based on financial metrics was 105.9% of target.
2024 Strategic Goals for CEO and CFO and Assessment of Performance
The Committee develops preset annual individual strategic goals for Mr. Zaslav related to our enterprise-wide priorities, and for Mr. Wiedenfels based on the priorities in his role as CFO. The Committee sets updated goals each year based on changing priorities, and there is variation from year to year in both the substance of the annual goals and how they are weighted. The weighting reflects the Committee’s determination of the relative priority of each of these goals. These strategic goals are designed to incent the CEO and CFO to take actions that create long-term value for stockholders and provide a competitive advantage for WBD, and complement the financial goals and the separate strategic goals for the CEO’s PRSU awards.
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| Proxy Statement Summary | Election of Directors | Corporate Governance | Audit Matters |
Executive Compensation | Other Matters |
Additional Information | Appendices |
In February 2025, the Committee also reviewed the CEO’s and CFO’s achievement of their respective strategic goals, considering the CEO’s and CFO’s self-assessments and, with respect to Mr. Wiedenfels, the input of the CEO and with respect to Mr. Zaslav, the input of the Board. With respect to the strategic goals, the Committee determined that each of Mr. Zaslav and Mr. Wiedenfels had exceeded expectations and over-delivered with respect to their respective strategic goals and approved a payout for the portion of the CEO’s 2024 cash bonus that is based on strategic metrics at 115% of target and a payout of 114% of target for the portion of the CFO’s 2024 cash bonus that is based on strategic metrics. In approving these payouts, the Committee specifically noted the following accomplishments for each of Mr. Zaslav and Mr. Wiedenfels:
David Zaslav
| Category |
Strategic Goals |
Weighting |
2024 Accomplishments | |||
| Corporate | • Complete integration pipeline; Implement cost controls to adjust cost to serve in declining linear revenue environment
• Successfully onboard new executives
• Enhance employee engagement scores |
25% | • Achieved incremental cost savings of $1.88 in 2024, significantly over delivering against internal goal
• Delivered $4.4 billion of FCF(*) and retired $4.4 billion of debt in 2024, thereby reducing net leverage(*) below 4.0x Adjusted EBITDA(*) at end of 2024 $4.4 billion of debt in 2024, thereby reducing net leverage(*) below 4.0x Adjusted EBITDA(*) at end of 2024
• Enhanced global content greenlight governance process and implemented “OneWBD” content performance dashboards ensuring WBD takes cross- company view of content when making capital allocation trade-offs
• Successfully onboarded new executives and senior leaders in various functions and rolled out a revamped “People Pact,” an integrated people program that engages employees globally and year-round | |||
| Direct-to- Consumer |
• Launch Max globally while increasing engagement in the US
• Further optimize the news and sports experience |
25% | • Max successfully launched in 70 markets in 2024- including 39 in Latin America, 24 in EMEA, and 7 in APAC
• Engagement as measured by median hours per active sub was up versus 2023
• Leveraged learnings from initial news and sports launches on Max to successfully deliver Paris Olympics and CNN Election coverage; made strategic shifts with respect to availability of Sports & News content in various Max service tiers | |||
| 2025 PROXY STATEMENT | 61 |
| Proxy Statement Summary | Election of Directors | Corporate Governance | Audit Matters |
Executive Compensation | Other Matters |
Additional Information | Appendices |
| Category |
Strategic Goals |
Weighting |
2024 Accomplishments | |||
| Studio | • Execute Theatrical, TV, and Games program development
• Secure three big talents to WBD
• Enhance motion picture slate |
25% | • WB Motion Pictures: Successes with Dune, GodzillaxKong and Beetlejuice, Beetlejuice
• WBTV: Reclaimed its position as the industry’s #l supplier of live action TV to third parties
• Games: Poor performance of certain titles was partially offset by strong catalog business and continued success of Hogwarts Legacy; took action to restructure gaming business and adopt new strategic focus areas
• Talent: WB Motion Pictures and WBTV secured new deals or projects with several A-list actors, filmmakers and showrunners
• Revamped greenlight process and managing slate to be more focused on proven IP | |||
| Networks | • Develop a plan to respond to linear ad sales pressure
• Manage transition of affiliate value between linear and DTC model |
25% | • Built out advanced sales capabilities by launching proof of concept of data driven video product and our proprietary first- party data solution for marketers as a part of 24/25 upfront cycle
• Share of digital/advance advertising revenues as a percent of total advertising increased (up over 50% year over year in US DTC)
• Renewed distribution deals with the largest distributors with increases in carriage rates
• Began to drive a shift in CNN revenues towards digital through new digital product launches | |||
| (*) | A non-GAAP financial measure; see Appendix D for additional details. |
In addition to the accomplishments noted above, the Committee also noted that Mr. Zaslav:
| • | Resolved WBD’s negotiations with the NBA, resulting in a more efficient long-term relationship with the league in which WBD retained valuable rights to NBA games in several international markets, as well as NBA digital highlights globally for Bleacher Report. He also led adjacent negotiations with ESPN whereby WBD will continue to produce its Inside the NBA franchise and gain rights to certain Big XII football and basketball games; and |
| • | Provided strategic leadership and guidance that led to the December 2024 announcement of WBD’s new corporate structure. |
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Executive Compensation | Other Matters |
Additional Information | Appendices |
Gunnar Wiedenfels
| Category |
Strategic Goals |
Weighting |
2024 Accomplishments | |||
| Capital Structure and Equity |
• Manage capital structure and continued WBD de-levering |
40% | • Exceptional leadership with respect to FCF generation and debt reduction, with $4.4 billion in FCF(*) generated in 2024 leading to $4.4 billion of debt retired during the year | |||
| Develop Strategic Options | • Generate and begin executing new (IMO) growth initiatives and strategic structural opportunities
• Develop next wave of efficiency measures to protect financial results in budget |
40% | • Delivered $1.8 billion in costs savings and integration synergies in 2024 while developing a pipeline for additional synergy capture in future years | |||
| Execute Finance Transformation | • Execute in-flight Capability Center initiatives
• Deliver systems integrations |
20% | • Transitioned approximately 2,500 positions to Capability Centers during 2024, driving cost savings and advancing finance function transformation initiatives
• Continued progress with respect to financial system integration: retired a legacy HR management tool in the US in 2024 and laid the foundation for its retirement globally by the end of 2025 | |||
| (*) | A non-GAAP financial measure; see Appendix D for additional details. |
In addition to the accomplishments noted above, the Committee also noted that Mr. Wiedenfels:
| • | Provided thought leadership and led financial analysis to support December 2024 announcement of new corporate structure; and |
| • | Continued to establish disciplined culture of financial management and decision-making which enabled investments in global Max expansion and expanding WBD’s portfolio of sports rights. |
When combining the funding levels based on achievement of WBD strategic metrics with those based on achievement of financial metrics, the resulting payouts, as a percentage of target, were 108.6% for Mr. Zaslav and 108.3% for Mr. Wiedenfels. The Committee also determined that Mr. Wiedenfels’ exemplary 2024 performance was worthy of a Performance Pool award. For a summary of the final bonus payout amounts and percentages for each of Mr. Zaslav and Mr. Wiedenfels, inclusive of the Performance Pool award to Mr. Wiedenfels, see page 68.
2024 Incentive Compensation Program– Other NEOs
The 2024 annual cash bonuses for Messrs. Campbell, Perrette, and Zeiler were based on the terms of the ICP. The ICP specifies various financial metrics depending on an employee’s role and business alignment. The aggregate amount payable to an individual under the ICP is calculated by:
| • | first, determining the target bonus of each employee (the pre-established percentage of the employee’s base salary); |
| • | second, establishing the amount payable based on (a) our performance versus the ICP financial metrics and any applicable line of business performance measures, and (b) individual performance versus the strategic goals established for each NEO, as applied to the target bonus amount (such amount, the “ICP Payout Percentage”); and |
| • | third, adding to the total payout amount a specific dollar amount that is an allocation of the “performance pool” if applicable. The performance pool is available to allocate to high performers, with the amount available to allocate varying based on our overall financial performance and the Committee’s discretion. |
| 2025 PROXY STATEMENT | 63 |
| Proxy Statement Summary | Election of Directors | Corporate Governance | Audit Matters |
Executive Compensation | Other Matters |
Additional Information | Appendices |
The 2024 annual cash bonus awards to Messrs. Campbell, Perrette and Zeiler were calculated as follows:
For the 2024 ICP, the Committee established threshold (0% payout), target (100% payout) and above target (110% payout) amounts for each of the ICP financial metrics and a payout scale that would determine the amount payable for achievement of results between the “threshold” and the “above target” amounts. The payout scale was designed to provide an “above target” payout only upon over-delivery of the relevant financial metric, with payout prorated for performance between the “threshold” and “above target” levels. Payments beyond the “above target” amount may be made at the Committee’s discretion; the Committee did not use its discretion to make any payments beyond the “above target” amount in 2024. Performance at or below “threshold” would result in no payout based on the payout scale. The Committee established the payout scale and targets for the ICP in February of 2024, following consultation with its independent compensation consultant, and believed that the payout scale was appropriate considering pay practices at other peer companies and that the targets were rigorous and consistent with our internal 2024 budget.
In 2024, the Committee continued its practice of tying a portion of ICP awards for NEOs who lead a line of business to the performance of their line of business and a portion to overall WBD performance. For Messrs. Campbell, Perrette and Zeiler, who lead lines of business, 30% of their 2024 ICP award was based on the performance of their line(s) of business and 40% of their 2024 ICP was based on the 2024 WBD Corporate financial metrics described above and set forth in the table below; the remaining 30% was based on the individual strategic goals. The Committee believed this was an appropriate and effective means to incent these NEOs to drive individual line of business performance while also focusing on those actions and initiatives that would lead to overall Corporate financial performance. The metrics chosen for each NEO’s line of business were the metrics the Committee believed were most important for the relevant lines of business to focus on in 2024.
WBD Corporate. The 2024 WBD Corporate ICP performance targets and weightings are set forth in the following table. The metric weightings are the same relative weightings used for the CEO and CFO cash bonuses and described above, but reduced to represent in the aggregate 40% of the weighting of the other NEOs ICP awards. The numbers in the tables below under “Actual Achievement” reflect the adjustments discussed above and are the same as those determined for the CEO and CFO.
| WBD Corporate |
Weighting | Threshold | Target | Above Target | Actual Achievement |
|||||||||||||||
| Net Revenue($ in millions) |
12 | % | $ | 28,279 | $ | 40,399 | $ | 44,439 | $ | 39,589 | ||||||||||
| Adjusted EBITDA ($ in millions) |
24 | % | $ | 6,300 | $ | 9,000 | $ | 9,900 | $ | 9,324 | ||||||||||
| Year-End Paid DTC Subscribers(# in millions) |
4 | % | 71.8 | 102.6 | 112.9 | 116.9 | ||||||||||||||
Lines of Business (“LOBs”)
Mr. Campbell: Mr. Campbell’s 2024 ICP performance target was total revenue for the LOBs he oversees (US Ad Sales, US Affiliate Sales, US Third-Party Content Sales, Consumer Products, Themed Entertainment, DC Publishing, and e-commerce) and is set forth in the following table. The numbers in the tables below under “Actual Achievement” reflect the adjustments discussed above.
| LOBs-Campbell |
Weighting | Threshold | Target | Above Target | Actual Achievement |
|||||||||||||||
| Total Combined Revenue(1) J($ in millions) |
30 | % | $ | 16,476 | $ | 23,537 | $ | 25,891 | $ | 23,899 | ||||||||||
| (1) | Total Combined Revenue for Mr. Campbell’s LOBs means combined revenue of US Ad Sales, US Affiliate Sales, US Licensing & Home Entertainment, and Global Brands and Experiences. |
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Executive Compensation | Other Matters |
Additional Information | Appendices |
Mr. Perrette: Mr. Perrette’s 2024 ICP performance targets and weightings for the LOBs he oversees (DTC and Games) are set forth in the following table. The numbers in the tables below under “Actual Achievement” for DTC Adjusted EBITDA and Games Revenue reflect the adjustments discussed above; the results for “Year-End Paid DTC Subscribers” were not adjusted.
| LOBs - Perrette |
Weighting | Threshold | Target | Above Target | Actual Achievement |
|||||||||||||||
| DTC Adjusted EBITDA(1) ($ in millions) |
12 | % | $ | 114 | $ | 163 | $ | 179 | $ | 979 | ||||||||||
| Games Revenue (2) ($ in millions) |
6 | % | $ | 957 | $ | 1,367 | $ | 1,504 | $ | 844 | ||||||||||
| Year-End Paid DTC Subscribers(# in millions) |
12 | % | 71.8 | 102.6 | 112.9 | 116.9 | ||||||||||||||
| (1) | DTC Adjusted EBITDA means Adjusted EBITDA for our DTC segment (excluding corporate allocations). |
| (2) | Games Revenue means revenue for our Games business unit. |
Mr. Zeiler: The 2024 ICP performance targets and weightings for the LOBs overseen by Mr. Zeiler (International) are set forth in the following table. The numbers in the tables below under “Actual Achievement” reflect the adjustments discussed above.
| LOBs - Zeiler |
Weighting | Threshold | Target | Above Target | Actual Achievement |
|||||||||||||||
| Select International Revenue(1) ($ in millions) |
10 | % | $ | 1,548 | $ | 2,211 | $ | 2,432 | $ | 2,082 | ||||||||||
| Select International Adjusted EBITDA(2) ($ in millions) |
20 | % | $ | 966 | $ | 1,381 | $ | 1,519 | $ | 1,826 | ||||||||||
| (1) | Select International Revenue means total revenue from international third-party content licensing, and international home entertainment. |
| (2) | Select International Adjusted EBITDA means total Adjusted EBITDA from international networks, international DTC, and WB International Television Production. |
Assessment of Performance — Other NEOs
The determination as to whether the 2024 ICP financial metrics were met was made in the 2024 Annual Bonus Review during the first quarter of 2025, following review of the full-year 2024 financial results. Based on our financial performance in 2024 versus the ICP performance targets, the Committee funded the WBD Corporate ICP for eligible NEOs at 103.6% of target and the ICP for the LOBs overseen by Messrs. Campbell, Perrette and Zeiler at 101.5%, 92.0% and 104.7%, respectively. When combining the WBD Corporate ICP payout with the LOB ICP payouts, the resulting payouts for the 70% of the other NEOs’ 2024 cash bonuses that are based on financial metrics was 102.7% of target for Mr. Campbell, 98.6% of target for Mr. Perrette and 104.1% of target for Mr. Zeiler.
For 2024, the Committee determined that 30% of the ICP for the other NEOs would also be based on strategic goals. This aligned the ICP for the NEOs with the cash bonus program for the CEO and CFO. The Committee established two enterprise-level strategic goals that would apply to each of the NEOs, as well as individual goals unique to each NEO’s individual business unit and personal objectives. The enterprise-level strategic goals were:
| • | Make decisions that are in the best interest of the entire enterprise, to further our “OneWBD” strategy, and |
| • | Foster a culture of inclusivity for all employees at WBD. |
In February 2025, the Committee reviewed performance versus the two enterprise strategic goals and each NEO’s achievement of their respective strategic goals, considering each NEO’s self-assessments and the input of the CEO. The Committee determined that the enterprise strategic goals set forth above had been met. The specific actions the Committee noted as evidence that the enterprise goals were met were:
| • | Cross-functional collaboration to successfully launch Max internationally and produce the Paris Olympics |
| • | Promotion of tentpole content across divisions, platforms and geographies |
| • | Successful establishment of third-party licensing opportunities that span functions, platforms and geographies |
| • | Enterprise-wide partnership to drive cost savings |
| • | Inclusive leadership training program for senior leaders |
| • | Expansion of employee resource groups internationally |
With respect to the individual strategic goals, the Committee determined that each of Messrs. Campbell, Perrette and Zeiler had exceeded expectations and over-delivered with respect to their respective strategic goals. The Committee specifically noted the following accomplishments for each executive:
| 2025 PROXY STATEMENT | 65 |
| Proxy Statement Summary | Election of Directors | Corporate Governance | Audit Matters |
Executive Compensation | Other Matters |
Additional Information | Appendices |
Bruce Campbell
| Strategic Goals |
Accomplishments | |
• Develop strategic opportunities aligned with Board expectations, CEO and market dynamics |
• Streamlined portfolio of non-core assets and equity investments through sale/disposition and wind down (e.g., All3Media, Formula E, Rooster Teeth) | |
• Grow subscribers delivered through bundles with distribution partners and third-party services |
• Oversaw renewal of affiliate distribution agreements with major US distributors, which led to additional Max ad-lite subscribers
• Successfully launched innovative bundles with Disney and Verizon that grew Max subscribers
• Added Max ad-lite partnerships with third-party retail partners | |
• Build out the digital/advanced ad sales capabilities and expand the new ad sales tech platform. |
• Launched new streaming and digital ad sales capabilities and platforms that led to significant increase in streaming and digital ad sales revenues | |
Jean-Briac Perrette
| Strategic Goals |
Accomplishments | |
• Expand the distribution partnerships for Max, accelerating growth.
• Improve consumer experience and personalization in Max product driving stronger engagement |
• Exceeded DTC subscriber target by 14% and led the successful launch of Max in 70 international markets
• Maintained levels of viewing rate, habituality, diversity of viewing, and average hours per subscriber year over year
• Reduced Max churn rate
• Drove leading app store rating for Max across platforms and regions | |
• Implement a revamped Games monetization strategy to deliver a greater share of recurring revenue. |
• Laid foundation for release of free to play titles in 2025 to help alleviate reliance on console transactional revenues | |
• Extended monetization lifecycle of launched games resulted in revenues generated for Hogwarts Legacy (released in 2023) and Game of Thrones (released in 2017) | ||
Gerhard Zeiler
| Strategic Goals |
Accomplishments | |
• Maintain or grow audience share on average in our top 10 international markets |
• Grew audience share across our top 10 international markets by approximately 4% | |
• Deliver international wholesale streaming subscribers by year-end 2024 |
• Grew International DTC Subscribers 31% driven primarily by increasing wholesale subscribers
• Implemented strategies to shift from linear to streaming during affiliate distribution renewals to support Max expansion, leading to greater revenues for WBD | |
• Drive franchise growth |
• Implemented an international structure and operating model aligned to the global franchise model
• Provided critical international marketing support, through the use of promo spots, owned and operated inventory, and creative executions, to Theatrical, Streaming, and Games | |
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Executive Compensation | Other Matters |
Additional Information | Appendices |
Based on the achievements noted above, the Committee determined the NEOs had met and over-delivered their strategic objectives, resulting in the strategic portion of the ICP being scored at 111% for Mr. Campbell, 106% for Mr. Perrette and 116% for Mr. Zeiler. While there were no specific weighting assigned to each qualitative goal, performance relative to the business unit strategic goals weighed more heavily in the Committee’s decision to award bonuses above target.
When combining the funding levels based on achievement of WBD strategic metrics with those based on achievement of financial metrics, the resulting payouts, as a percentage of target, were 105.2% for Mr. Campbell, 100.8% for Mr. Perrette and 107.7% for Mr. Zeiler. For a summary of the final bonus payout amounts and percentages for each NEO, see page 68.
Performance Pool
For 2024, and for executives other than the CEO, the annual cash bonus design also rewards exceptional individual performance through the allocation of a “performance pool.” The performance pool is designed such that if we achieve or over-deliver specified EBITDA targets for the Company or individual LOBs, amounts are allocated to fund the performance pool. The performance pool is funded as a total amount, and the Committee may use its discretion to award some, all or none of the amounts allocated for the performance pool. All bonus-eligible employees (including the CFO, but excluding the CEO) are eligible for a performance pool award. The CEO is not eligible for the performance pool because the CEO’s employment agreement provides an opportunity for the CEO to earn an above-target bonus (up to 125% of target) for exceptional performance.
The performance pool is allocated to high performing employees, which may include the eligible NEOs, based on the recommendations of their manager and department or division leader. In the case of the eligible NEOs, performance pool recommendations are made by the CEO and individual awards are approved by the Committee. Each eligible NEO received a performance pool award for 2024.
As part of our Executive Compensation Transformation, as discussed above, the performance pool has been eliminated, beginning in 2025. Instead, the Committee has adopted an Individual Performance Multiplier to more objectively evaluate and reward outperforming employees.
For 2025, the Committee is eliminating the performance pool and implementing a new executive annual compensation program, including the Individual Performance Multiplier, that it believes will more effectively align pay and performance—both Company performance and individual performance - and is consistent with prevailing pay practices in our industry, incents our executives and employees to achieve the over-arching corporate financial objectives that are important to the success of the enterprise as well as the individual strategic objectives established for their own success and development, and rewards above-target performance and exceptional accomplishments. Cash bonuses for NEOs who participate in the ICP in 2025 will be calculated as follows:
| * | Replacing Performance Pool |
| 2025 PROXY STATEMENT | 67 |
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Additional Information | Appendices |
Target Bonus Amounts
The annual bonus target amount for Mr. Zaslav is set at a fixed dollar amount, and for each other NEO is set as a percentage of base salary, as disclosed in the section above titled “NEO Employment Agreements”. These were agreed upon as part of the negotiation of each executive’s employment agreement and were determined by the Committee based on external market data and internal equity. As discussed below, the determination of the actual cash bonuses paid to each NEO is based on achievement of annual financial targets and accomplishment of annual strategic goals, as applied to the target value.
For all employees who have a bonus target that is expressed as a percentage of base salary, including the NEOs, our policy is to apply the bonus target that is in effect on December 31 of the calendar year to the total base salary paid in that year in order to calculate the bonus payment for that year.
If an executive works only part of the year, the bonus amount generally is subject to proration based on the period of employment. The annual bonus target may be changed during an executive’s employment or in the negotiation of a new or extended employment agreement when the scope of a new role and responsibilities would warrant such a change.
2024 Cash Bonus Awards
Actual cash bonus payouts for 2024 performance to each NEO are as follows:
| NEO |
Bonus Target Amount |
Bonus Payout Percentage |
Cash Bonus Award (Bonus + Performance Pool (if applicable)) |
|||||||||
| David Zaslav |
$ | 22,000,000 | 108.6 | % | $ | 23,897,060 | ||||||
| Gunnar Wiedenfels |
$ | 3,749,200 | 108.3 | % | $ | 4,811,246 | ||||||
| Bruce L. Campbell |
$ | 5,356,000 | 105.2 | % | $ | 6,633,976 | ||||||
| Jean-Briac Perrette |
$ | 5,356,000 | 100.8 | % | $ | 6,400,990 | ||||||
| Gerhard Zeiler |
$ | 3,340,143 | 107.7 | % | $ | 4,695,664 | ||||||
Long-Term Incentive Compensation
The Committee makes equity awards as part of our LTl compensation program under our Warner Bros. Discovery, Inc. Stock Incentive Plan (the “WBD Stock Incentive Plan”). We believe that delivering a substantial portion of an executive’s total direct compensation in equity awards helps to align our executives’ interests with those of our stockholders. In 2024, we made long-term equity awards to each of the NEOs, which we believe serves to focus their attention on increasing the Company’s value overtime.
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Executive Compensation | Other Matters |
Additional Information | Appendices |
2024 Long-Term Incentive Awards to NEOs
For 2024, NEOs received equity in the form of PRSUs, RSUs, and stock options.
| Type of Equity |
Description; Vesting Schedule | |
| Annual PRSUs | • Each NEO received an Annual PRSU award in 2024 | |
| All NEOs |
CEO PRSUs | |
• 100% of his target LTl award in Annual PRSUs | ||
• Based 75% on individual strategic goals and 25% on a financial metric, per amended employment agreement | ||
• One-year performance period (2024) based on performance versus a financial metric (FCF) and individual strategic goals, as set forth in the CEO’s employment agreement | ||
• Payout also subject to a modifier based on a financial metric (FCF) which could cause the awards to vest at 200% of target based on performance versus the metric | ||
• Upon certification by the Committee, the CEO’s 2024 PRSUs were earned at 200% of target; 70% of the vested shares distributed on vesting and the remaining 30% will distribute in 2028 | ||
| Other NEO PRSUs | ||
• 50% of their 2024 target LTl award in Annual PRSUs | ||
• For 2024, the other NEOs’ Annual PRSU awards are based on performance versus a financial metric (FCF) over a two-year performance period (2024-2025) | ||
• Payout also subject to a relative TSR performance modifier based on the percentile ranking of WBD’s relative total stockholder return as compared to our peers in the S&P 500 Media and Entertainment Index over a three- year performance period (2024-2026) (the “Relative TSR Modifier”), as set forth below: | ||
| 2024-2026 Relative TSR Modifier | ||||
| Percentile |
Modifier | |||
| 100% |
150 | % | ||
| 75% |
110 | % | ||
| 50% |
100 | % | ||
| 25% |
90 | % | ||
| 0% |
50 | % | ||
• Relative TSR Modifier capped at 100% if TSR is negative over performance period | ||
• Annual PRSUs granted to the other NEOs in 2024 will cliff vest in March 2027, following the application of the Relative TSR Modifier and the Committee’s certification of WBD’s three-year relative TSR performance | ||
| Supplemental PRSUs All NEOs |
• In 2024, the CEO received a Supplemental PRSU award, which would be earned based solely on WBD’s 2024 FCF performance relative to the target established by the Committee | |
|
• In 2024, each other NEO received a Supplemental PRSU award, which could be earned based solely on WBD’s two-year 2024-2025 FCF performance relative to the target established by the Committee | ||
• The Supplemental PRSUs granted in 2024 could be earned at up to 200% for over- delivery versus the established FCF target | ||
• Upon certification by the Committee in 2024, the CEO’s 2024 Supplemental PRSUs were earned at 200% of target; 70% of the vested shares distributed on vesting and the remaining 30% will distribute in 2028 | ||
• For the other NEOs, the 2024 Supplemental PRSUs vest 50 % on the second and third anniversaries of the grant date if WBD achieves the two-year FCF target. The Compensation Committee will certify the Company’s performance versus the two-year performance period in February 2026. | ||
| Stock Options Non-CEO NEOs |
• NEOs (other than the CEO) received 25% of their 2024 target LTl award in stock options. The stock options vest ratably over the first three anniversaries of the grant date, and expire on the seventh anniversary of the grant date | |
| RSUs Non-CEO NEOs |
• NEOs (other than the CEO) received 25% of their 2024 target LTl award in RSUs. The RSUs vest ratably over the first three anniversaries of the grant date. | |
| 2025 PROXY STATEMENT | 69 |
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Executive Compensation | Other Matters |
Additional Information | Appendices |
The following chart summarizes the specific equity awards made in 2024 to each NEO.
| 2024 Target Amount or FMV | ||||||||||||||||||||
| Supplemental | ||||||||||||||||||||
| NEO |
Annual PRSUs | PRSUs | Stock Options | RSUs | Total | |||||||||||||||
| David Zaslav |
$ | 12,000,000 | $ | 11,500,000 | $ | 23,500,000 | ||||||||||||||
| CEO |
(1,365,188 PRSUs | ) | (1,308,305 PRSUs | ) | ||||||||||||||||
| Gunnar Wiedenfels |
$ | 4,000,000 | $ | 2,000,000 | $ | 2,000,000 | $ | 2,000,000 | $ | 10,000,000 | ||||||||||
| CFO |
(455,063 PRSUs | ) | (227,532 PRSUs | ) | (397,356 Options | ) | (227,532 RSUs | ) | ||||||||||||
| Bruce L. Campbell |
$ | 4,250,000 | $ | 2,000,000 | $ | 2,125,000 | $ | 2,125,000 | $ | 10,500,000 | ||||||||||
| Chief Revenue & Strategy Officer | (483,504 PRSUs | ) | (227,532 PRSUs | ) | (422,190 Options | ) | (241,752 RSUs | ) | ||||||||||||
| Jean-Briac Perrette |
$ | 4,250,000 | $ | 2,000,000 | $ | 2,125,000 | $ | 2,125,000 | $ | 10,500,000 | ||||||||||
| President and CEO, Global Steaming and Games | (483,504 PRSUs | ) | (227,532 PRSUs | ) | (422,190 Options | ) | (241,752 RSUs | ) | ||||||||||||
| Gerhard Zeiler |
$ | 3,000,000 | $ | 1,500,000 | $ | 1,500,000 | $ | 1,500,000 | $ | 7,500,000 | ||||||||||
| President, International |
(341,297 PRSUs | ) | (170,649 PRSUs | ) | (298,017 Options | ) | (170,649 RSUs | ) | ||||||||||||
Financial Metric for PRSUs awarded in 2024
The financial metric for all PRSUs awarded in 2024 was FCF, which is defined below. For our CEO, his Annual PRSU award was based 25% on financial performance.
| Financial Metric |
Weighting |
Definition | ||
| Free Cash Flow |
100% | Cash provided by operations less acquisitions of property and equipment. |
During our stockholder engagement efforts, stockholders have consistently indicated they place significant value on FCF, leverage reduction and balance sheet management. The Committee was very cognizant of this feedback and determined that FCF continued to be the appropriate financial metric to use for the 2024 PRSUs awarded to the NEOs.
Strategic Goals for 2024 Annual PRSUs Awarded to CEO
In March 2024, the Committee established the following strategic goals comprising 75% of the weighting for the 2024 Annual PRSU awards granted to the CEO. These strategic goals were intended to incentivize the CEO to take actions that would create long-term value for stockholders and provide a competitive advantage for WBD, and were also designed to complement the separate strategic goals for the CEO’s 2024 cash bonus.
The strategic goals for the CEO’s 2024 PRSU awards were:
CEO Annual PRSU Strategic Goals
| Category |
Strategic Goals |
Weight | ||
| Corporate |
• Develop a plan and begin implementation of growth initiatives to offset and mitigate significant declines across our business with defined key priorities related to streaming and franchise management and experiences |
30% | ||
|
Direct-to-Consumer |
• Achieve profitability consistent with budget, meet topline consistent with budget, and reduce churn for Max; develop a plan to grow digital ad sales |
40% | ||
| Studio |
• Manage studios return to production after strike and develop clear operational milestones to lay the foundation for long-term growth across studios |
30% |
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Assessment of Performance for PRSUs Awarded to CEO in 2024
The Committee set a target of $3.75 billion in 2024 FCF for the 2024 PRSU awards to vest at target. Over-delivery of the target would make the awards eligible to vest above target, up to a maximum of 200% of target as set forth in the tables below. The Committee set the 2024 FCF target in early March of 2024. At the time the target was set, the Committee believed it to be rigorous and aligned with both our internal budget and forecasts.
As described above, the Committee annually reviews potential adjustments to performance against the financial metrics and determined it was appropriate to take an adjustment to performance in 2024. The adjustments made by the Committee had the effect of increasing our FCF performance as compared to our reported results and are reflected below under “Actual Achievement.” However, our FCF performance prior to adjustment was $4.4 billion(*), which exceeded the amount required for “Above Target” performance.
| (*) | A non-GAAP financial measure; see Appendix D for additional details. |
The determination as to whether the 2024 FCF metric was met was made during the first quarter of 2025, following review of the full-year 2024 financial results. In February 2025, the Committee also reviewed the CEO’s 2024 performance in relation to the strategic goals for his 2024 Annual PRSU awards. Our 2024 FCF performance exceeded the pre-established target for the 2024 PRSUs, as set forth in the tables below.
| Above | Actual | |||||||||||||||||||
| CEO’s 2024 Annual PRSUs |
Threshold | Target | Target | Achievement | Payout | |||||||||||||||
| Free Cash Flow ($ in millions) |
$ | 2,625 | $ | 3,750 | $ | 4,031 | $ | 4,626 | 200 | %(1 ) | ||||||||||
| (1) | For the CEO’s 2024 Annual PRSUs to vest at target, WBD must achieve 100% of the financial metric and Mr. Zaslav must achieve 100% of his individual strategic goals. Over-delivery of the 2024 financial metric (FCF) as compared to the “Above Target” amount above caused these 2024 Annual PRSUs to vest and payout at 200% of target. |
Based on WBD’s 2024 FCF performance versus the pre-established target, as noted above, and Mr. Zaslav’s individual performance, in February 2025, the Committee certified the vesting of the 2024 Annual PRSUs granted to Mr. Zaslav at 200%, with 70% of the shares distributed at the time of vesting, and the remaining 30% to be distributed in January 2028 subject to Mr. Zaslav’s continued employment and the other terms and conditions of the award. The Committee assessed Mr. Zaslav’s 2024 performance against his strategic goals and determined that he met or exceeded the objectives set forth in the strategic goals established for his 2024 PRSU awards. In making this determination, the Committee acknowledged the accomplishments noted in the table below:
| 2025 PROXY STATEMENT | 71 |
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| Category |
Strategic Goals |
Weight | 2024 Accomplishments | |||
| Corporate | • Develop a plan and begin implementation of growth initiatives to offset and mitigate significant declines across our business with defined key priorities related to streaming and franchise management and experiences |
30% | • Moved 9 priority initiatives from integration management office growth program into the implementation stage, which are expected to deliver significant run rate savings in 2025
• Gross debt less than $40 billion at year end after retiring $4.4 billion in 2024 and total debt retired since deal closing of $16.7 billion
• Led the establishment of key priorities for DTC and Global Franchises and growth pillars for Global Experiences | |||
| Direct-to- Consumer | • Achieve profitability consistent with budget, meet topline consistent with budget, and reduce churn for Max; develop a plan to grow digital ad sales |
40% | • DTC segment generated nearly $680 million of EBITDA on $10.3 billion in revenues
• Added more than 19 million global paid subscribers in 2024, representing 20% year-over- year growth, ahead of internal schedule and investor consensus
• U.S. churn saw improvement from Jan ‘24 to Jan ‘25; churn was notably lower for subscribers in the US who came in through the Max/ Disney+/ Hulu bundle
• Executing two-fold attack plan for growing digital ad sales: (1) increasing inventory by growing ad- lite subs and our digital ad product offerings and (2) increasing CPM by leveraging our premium entertainment and sports IP | |||
| Studio | • Manage studios return to production after strike and develop clear operational milestones to lay the foundation for long term growth across studios |
30% | • Led successful rebound of WBTV from strike, delivering increased episodes in 2024 (as compared to 2023).
• Sustained momentum in greenlights and development deals positioned WBTV for near- and longer-term success.
• WBTV has also realized improved unit economics across scripted slate due to increased episode orders, above market premiums, converting deficit buyers to cost-plus buyers, and new downstream revenues (e.g., licensing)
• Established WB Motion pictures strategy to regain market share at improved profitability leveraging known/proven IP
• Established new Global Experiences group to combine two disparate legacy groups with a clear growth ambition and strategies to pursue, including new Harry Potter tour in Shanghai with a targeted opening of 2027
• Global franchise management plan developed and rolled out; new leader for Global Franchises recruited and onboarded | |||
Based on WBD’s 2024 FCF performance versus the pre-established target, as noted above, in February 2025, the Committee also certified the vesting of the Supplemental PRSUs granted to the CEO in 2024 at 200%. For the CEO’s Supplemental PRSUs that vested in February 2025, 70% of the shares were distributed at the time of vesting, and 30% will be distributed in January 2028 subject to Mr. Zaslav’s continued employment and the other terms and conditions of the award.
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Assessment of Performance for PRSUs Awarded to Other NEOs in 2024
With respect to the 2024 Annual PRSUs and Supplemental PRSUs awarded to NEOs other than the CEO, these awards have a two-year performance period (2024-2025). The Committee will assess performance following the end of 2025 and certify performance versus the two-year FCF target established for these PRSUs. The Annual PRSUs are also subject to a modifier based our relative TSR performance over the three-year period from 2024-2026, as compared to our peers in the S&P 500 Media and Entertainment Index (the “Relative TSR Modifier”). The Relative TSR Modifier is interpolated for performance between the bottom and top quartiles and the Relative TSR Modifier is capped at 100% if TSR is negative over performance period. The Committee will assess WBD’s TSR performance over the 2024-2026 performance period in February of 2027 and make a final certification with respect to the 2024 Annual PRSUs awarded to the other NEOs, at which point such awards will vest and be distributed if the applicable performance goals are met.
The Committee believes a two-year performance period is appropriate in light of challenging macroeconomic conditions and the evolving media landscape, both of which are beyond the control of management and make a two-year performance period a more sustainable metric for our plan. We then combine this two-year performance period with an additional three-year Relative TSR modifier.
The Committee implemented the Relative TSR Modifier for the 2024 Annual PRSUs awarded to NEOs (other than the CEO) in order to reward stock price appreciation relative to peers, in addition to incentivizing short-term FCF goals through the FCF performance metric. The Committee also believed this modifier more directly links of our equity compensation program to stockholder returns by rewarding our NEOs for sustained market out-performance, as well as regulating payouts for market underperformance, even if financial metrics are achieved at or above target.
The Relative TSR Modifier was not added to the CEO’s 2024 Annual PRSUs because the terms of the CEO’s employment agreement provide that the CEO’s 2024 Annual PRSUs shall be subject to a modifier based on our 2024 FCF performance. Because Mr. Zaslav received a sizeable grant of premium priced stock options upon execution of his employment agreement in 2021 that will require significant stock price appreciation in order for Mr. Zaslav to recognize value, the Committee believes that Mr. Zaslav’s compensation was already appropriately aligned with our stock price performance and he is adequately incentivized to take actions that will lead to stock price appreciation.
| 2025 PROXY STATEMENT | 73 |
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Retirement Plans and Other Benefits
Retirement Benefits
Our U.S.-based NEOs generally participate in the same benefit plans on the same terms as are offered to other U.S.-based full-time employees. We offer a 401(k) defined contribution plan as well as a nonqualified deferred compensation plan, the Supplemental Retirement Plan (the “SRP”), that is available to certain U.S.-based senior employees, including all of the NEOs other than Mr. Zeiler. The eligible NEOs participate in these plans on the same terms and conditions as other eligible employees.
To encourage participation in the 401(k) plan, we make a matching contribution of 100% of the employee’s first 6% of eligible compensation that is contributed each pay period as before-tax and/or Roth after-tax contributions, subject to certain limits under applicable tax regulations. We do not make matching contributions into the SRP. In addition to base salary deferrals, participants in the SRP are also permitted to defer a portion of their annual bonus award into the SRP. The 401(k) and SRP offer similar investment options, with the amounts actually invested for the 401(k) plan and with earnings (or losses) measured hypothetically for the SRP.
We believe the SRP is necessary to allow employees who would otherwise be limited by IRS restrictions on the amount of compensation that may be considered in participation in our 401(k) plan to save a proportionate amount for retirement and support the goals of providing competitive compensation packages to our employees.
In 2024, Mr. Zeiler participated in the Company’s retirement benefit plans and programs as offered to Austria-based Company employees.
For more information about the SRP, please refer to the 2024 Nonqualified Deferred Compensation Table under “Executive Compensation Tables” below.
Health, Welfare and Other Personal Benefits
The U.S.-based NEOs are eligible to participate in the health, welfare and fringe benefits we generally make available to our U.S.-based regular full-time employees, such as basic and supplemental life insurance, short and long-term disability, commuter reimbursement, fitness reimbursement and access to legal resources. Due to his frequent travel and work from the U.S. and other locations outside of Austria, Mr. Zeiler receives life insurance, disability insurance and medical insurance benefits through our international plan, which is generally made available to employees on international assignment.
In addition, we provide the following perquisites and other personal benefits to our NEOs:
| Relocation Expenses and International Assignment Benefits | We provide relocation and international assignment benefits consistent with our international long-term assignment policies, including reimbursing relocation costs, offering education and other allowances, providing tax equalization benefits, which are intended to maintain the executive’s out of pocket tax liabilities at the same level they would have been had the executive not been assigned to a foreign jurisdiction and, for some benefits, paying the executive an amount equal to the tax resulting from the reimbursement or allowance (a “gross-up”). |
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Executive Compensation | Other Matters |
Additional Information | Appendices |
| Aircraft Usage | Per the terms of his employment agreement, Mr. Zaslav is permitted to utilize our corporate aircraft for up to 250 hours of personal flight time each year. The first 125 hours are provided to him at the Company’s expense, and, with respect to the second 125 hours, Mr. Zaslav is required to reimburse the Company at a rate of two times the cost of fuel, as provided in the aircraft time- sharing agreement between the Company and Mr. Zaslav. The Committee believes that providing Mr. Zaslav with access to our corporate aircraft for personal travel facilitates Mr. Zaslav’s provision of services to the Company and also ensures Mr. Zaslav’s safety, as further discussed below under “CEO Security Program.”
Family members may accompany Mr. Zaslav on authorized business flights on our corporate aircraft at no aggregate incremental cost to the Company. We typically provide a gross-up to Mr. Zaslav to cover taxes for imputed income arising when a family member accompanies him on business travel at the request of the Company (e.g., when Mr. Zaslav’s spouse accompanies him to a business event in which attendance by a spouse is customary and serves our business interests). | |
| Car Allowance | We provide Mr. Zaslav with a monthly car allowance as set forth in his employment agreement. | |
| CEO Security Program |
We have provided certain personal security services to ensure Mr. Zaslav’s safety for several years. In 2023, the Committee implemented a comprehensive security program for Mr. Zaslav, following a review by internal and external security professionals. The Committee authorized a security program for Mr. Zaslav to address safety concerns due to specific threats to his safety arising directly as a result of Mr. Zaslav’s high profile position as our CEO. We believe these security measures are for the benefit of the Company and our stockholders because of the importance of Mr. Zaslav and his leadership to WBD and we believe that the scope and costs of these security programs are appropriate and necessary.
Under Mr. Zaslav’s overall security program, we pay for costs related to personal security for him at his residences and during personal travel, including the annual costs of security personnel for his protection and the procurement, installation, and maintenance of certain security measures for his residences. As noted above, the Committee considers Mr. Zaslav’s use of the WBD Aircraft for personal travel to be consistent with the Company’s approach to CEO security.
Although we do not consider Mr. Zaslav’s overall security program to be a perquisite for his benefit for the reasons described above, the costs related to personal security for Mr. Zaslav at his residences and during personal travel pursuant to his overall security program are reported as other compensation to Mr. Zaslav in the “All Other Compensation” column of the 2024 Summary Compensation Table.
The costs of Mr. Zaslav’s security program vary from year to year depending on requisite security measures, his travel schedule, and other factors. For example, in 2024, we incurred approximately $285,553 in one-time costs relating to the procurement and installation of certain security equipment at Mr. Zaslav’s residences.
The Committee believes that these costs are appropriate and necessary in light of the threat landscape. The Committee will evaluate this program at least annually, including a review of security professional assessments of safety threats and recommendations for the security programs. In February 2025, the Committee conducted its annual review, which was informed by analysis provided by internal and external security professionals, and approved enhancements to the CEO security program in response to changes to the threat landscape.
For more information regarding the perquisites provided in 2024 to each NEO, please refer to the “All Other Compensation” column of the 2024 Summary Compensation Table. | |
| 2025 PROXY STATEMENT | 75 |
| Proxy Statement Summary | Election of Directors | Corporate Governance | Audit Matters |
Executive Compensation | Other Matters |
Additional Information | Appendices |
Executive Compensation Tables
The following tables set forth compensation information for our NEOs.
2024 Summary Compensation Table
The following Summary Compensation Table provides information concerning the 2024 compensation of our Chief Executive Officer, Chief Financial Officer, and the three other most highly compensated executive officers who were serving as executive officers at fiscal year end (December 31, 2024) (“named executive officers” or “NEOs”). For a complete understanding of the table, please read the footnotes and narrative disclosures that follow the table.
| Name and Principal Position |
Year | Salary ($)(1) |
Bonus ($) |
Stock Awards ($)(2) |
Option Awards ($)(3) |
Non-Equity Incentive Plan Compensation ($)(4) |
All Other Compensation ($)(5) |
Total ($) |
||||||||||||||||||||||||
| David M. Zaslav |
2024 | 3,000,000 | 23,098,980 | 23,897,060 | 1,922,523 | (6) | 51,918,563 | |||||||||||||||||||||||||
| President and Chief |
2023 | 3,000,000 | 23,078,769 | 22,000,000 | 1,623,777 | 49,702,546 | ||||||||||||||||||||||||||
| Executive Officer |
2022 | 3,057,692 | 12,025,683 | 1,448,138 | 21,831,456 | 925,489 | 39,288,458 | |||||||||||||||||||||||||
| Gunnar Wiedenfels |
2024 | 2,126,554 | 8,304,908 | 1,753,532 | 4,811,246 | 61,344 | (7) | 17,057,584 | ||||||||||||||||||||||||
| Chief Financial |
2023 | 2,049,154 | 8,357,236 | 2,073,019 | 4,551,770 | 25,791 | 17,056,970 | |||||||||||||||||||||||||
| Officer |
2022 | 1,952,996 | 8,061,276 | 3,472,000 | 18,342 | 13,504,614 | ||||||||||||||||||||||||||
| Bruce L. Campbell |
2024 | 2,658,193 | 8,700,661 | 1,725,068 | 6,633,976 | 61,992 | 19,779,890 | |||||||||||||||||||||||||
| Chief Revenue and |
2023 | 2,561,443 | 8,758,506 | 2,028,321 | 4,865,650 | 54,356 | 18,268,276 | |||||||||||||||||||||||||
| Strategy Officer |
2022 | 2,386,815 | 6,558,066 | 4,780,000 | 19,164 | 13,744,045 | ||||||||||||||||||||||||||
| Jean-Briac Perrette |
2024 | 2,658,193 | 8,700,661 | 1,863,124 | 6,400,990 | 101,595 | (9) | 19,724,563 | ||||||||||||||||||||||||
| CEO and President, |
2023 | 2,561,443 | 8,758,506 | 2,202,585 | 5,959,650 | 660,517 | 20,142,701 | |||||||||||||||||||||||||
| Global Streaming and Games |
2022 | 2,337,916 | 6,861,378 | 4,780,000 | 95,904 | 14,075,198 | ||||||||||||||||||||||||||
| Gerhard Zeiler(10) |
2024 | 1,866,175 | 6,228,679 | 1,217,697 | 4,695,664 | 787,343 | (11) | 14,795,558 | ||||||||||||||||||||||||
| President, |
2023 | 1,812,180 | 6,267,944 | 1,431,758 | 3,706,618 | 89,659 | 13,308,159 | |||||||||||||||||||||||||
| International |
2022 | * | 1,330,813 | 2,946,504 | 3,178,270 | 2,734,429 | 77,573 | 10,267,589 | ||||||||||||||||||||||||
| * | Partial year. Mr. Zeiler joined the Company on April 8, 2022 upon completion of the WarnerMedia Transaction. |
| (1) | The dollar amounts in this column represent the actual salary amount that each NEO earned in 2024. Amounts may vary from salary amounts stated in their respective employment agreements due to increases from the Annual Base Salary Review (as discussed in the CD&A) as well as the timing of payments made under our normal payroll practices. |
| 82 |
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| Proxy Statement Summary | Election of Directors | Corporate Governance | Audit Matters |
Executive Compensation | Other Matters |
Additional Information | Appendices |
| (2) | The amounts in this column represent the grant date fair value, computed in accordance with FASB ASC Topic 718, of PRSUs and RSUs for each of the applicable fiscal years. For each of the RSU awards and PRSU awards without a market condition, the grant date fair value is calculated using the closing price of our common stock on the grant date as if these awards were fully vested and issued on the grant date. See Note 15 to our 2024 Form 10-K for information regarding the value determination of the PRSU awards without a market condition. For the PRSU awards with a market condition, the grant date fair values were calculated using a Monte Carlo simulation model, determined based on the probable outcome of the performance condition as of the grant date. There can be no assurance that these grant date fair values will ever be realized by any NEO. See the 2024 Grants of Plan-Based Awards table for additional information on PRSU and RSU awards made in 2024. |
| (3) | The amounts in this column reflect the grant date fair value computed in accordance with FASB ASC Topic 718 with respect to option awards granted to our NEOs for each of the applicable fiscal years. We calculate the grant date fair value using the Black-Scholes model, using the assumptions described in Note 15 to our 2024 Form 10-K. These amounts do not reflect actual payments made to our NEOs. There can be no assurance that the full grant date fair value will ever be realized by any NEO. |
| (4) | These amounts reflect the cash performance awards earned by the applicable NEO for 2024. These amounts were calculated as described in the CD&A beginning on page 51. |
| (5) | The table below outlines payments made on behalf of the NEOs under our U.S. benefit plans in 2024. For more information regarding these benefits, please see “NEO Compensation in 2024-Retirement Plans and Other Benefits” beginning on page 74 in the CD&A. |
| Matching | ||||||||||||
| Disability/Long | Contributions | |||||||||||
| Basic Life | Term Care | 401(k) | ||||||||||
| ($) | ($) | ($) | ||||||||||
| Mr. Zaslav |
1,805 | 6,912 | 20,700 | |||||||||
| Mr. Wiedenfels |
1,805 | 4,361 | 20,700 | |||||||||
| Mr. Campbell |
1,805 | 5,485 | 20,213 | |||||||||
| Mr. Perrette |
1,805 | 1,316 | 11,885 | |||||||||
| Mr. Zeiler |
2,457 | 1,309 | 0 | |||||||||
In addition to the U.S. benefits described above, we made payments on behalf of Mr. Zeiler as follows: $114,607 for an Austrian pension plan.
| (6) | Includes $17,446 for a car allowance and $991,179 for costs related to personal security for Mr. Zaslav at his residences and during personal travel. See “Compensation Discussion and Analysis- NEO Compensation in 2024- Retirement Plans and Other Benefits—CEO Security” on page 76 in the CD&A for more information regarding our policies for Mr. Zaslav’s security. The amount reported also includes $813,990 for personal use of corporate aircraft (including family travel for which Mr. Zaslav is not provided a tax gross-up) and $16,249 for tax gross-ups associated with business associate and spousal travel on corporate aircraft at the request of the Company that is considered business use. See “Compensation Discussion and Analysis- NEO Compensation in 2024 -Retirement Plans and Other Benefits-Aircraft Usage” on page 75 in the CD&A for more information regarding our policies for Mr. Zaslav’s use of corporate aircraft. In addition, in connection with the Company’s role as media partner to the 2024 Olympic Games, our NEOs attended the Games to help host key WBD business partners and clients and enhance those business relationships. Our NEOs, including Mr. Zaslav, had the option to bring a guest whose flights and other expenses were paid for by the Company (the “Olympics Hospitality Program”). The amount reported also includes $22,876 for the Olympics Hospitality Program and $28,300 for reimbursement of tax liabilities associated with the Olympics Hospitality Program. See footnote 5 of the 2024 Director Compensation Table for more information on the Olympics Hospitality Program. |
| (7) | Includes $16,877 for the Olympics Hospitality Program and $17,601 for reimbursement of tax liabilities associated with the Olympics Hospitality Program. |
| (8) | Includes $15,900 for the Olympics Hospitality Program and $16,582 for reimbursement of tax liabilities associated with the Olympics Hospitality Program. |
| (9) | Includes $42,481 for personal tax services provided to Mr. Perrette pursuant to our relocation policy due to his relocation from the U.K. to the U.S. in 2022. The amount reported also includes $27,784 for spousal attendance at Company events, including the Olympics Hospitality Program, and $16,324 for reimbursement of tax liabilities associated with the Olympics Hospitality Program. |
| (10) | Mr. Zeiler resides in Austria and his salary is denominated in Euros. To the extent Mr. Zeiler’s compensation is denominated in Euros, we converted such amounts to United States dollars using a conversion rate of 1.08, which is the average of the monthly Bloomberg spot rates as of the second business day prior to each month end during 2024. This may not have been the conversion rate in effect at the time the payments were made. |
| (11) | Mr. Zeiler’s primary work location is New York and his permanent residence is Austria. The amount reported includes $147,754 for a furnished apartment in New York, $153,282 for the costs of travel between New York and Austria and $367,933 for tax gross-ups associated with the furnished apartment and cost of travel. |
| 2025 PROXY STATEMENT | 83 |
| Proxy Statement Summary | Election of Directors | Corporate Governance | Audit Matters |
Executive Compensation | Other Matters |
Additional Information | Appendices |
2024 Grants of Plan-Based Awards
| All | All | |||||||||||||||||||||||||||||||||||||||||||||||
| Other | Other | |||||||||||||||||||||||||||||||||||||||||||||||
| Stock | Option | |||||||||||||||||||||||||||||||||||||||||||||||
| Awards: | Awards: | Exercise | Grant Date | |||||||||||||||||||||||||||||||||||||||||||||
| Estimated Future Payouts | Estimated Future Payouts | Number | Number of | or Base | Fair Value | |||||||||||||||||||||||||||||||||||||||||||
| Under Non-Equity Incentive | Under Equity Incentive | of Shares | Securities | Price of | of Stock | |||||||||||||||||||||||||||||||||||||||||||
| Plan Awards | Plan Awards | of Stock | Underlying | Option | and Option | |||||||||||||||||||||||||||||||||||||||||||
| Grant | Approval | Threshold | Target(1) | Maximum(2) | Threshold | Target | Maximum | or Units | Options | Awards | Awards | |||||||||||||||||||||||||||||||||||||
| Name |
Date | Date | ($) | ($) | (#) | (#) | (#) | (#) | (#) | (#) | ($/Sh) | ($) | ||||||||||||||||||||||||||||||||||||
| D. Zaslav |
0 | 22,000,000 | 27,500,000 | |||||||||||||||||||||||||||||||||||||||||||||
| WBD |
||||||||||||||||||||||||||||||||||||||||||||||||
| Common |
3/27/2024 | 3/27/2024 | 0 | 341,297 | (3) | 682,594 | (3) | 2,948,806 | ||||||||||||||||||||||||||||||||||||||||
| Stock |
3/27/2024 | 3/27/2024 | 0 | 1,023,891 | (4) | 2,047,782 | (4) | 8,846,418 | ||||||||||||||||||||||||||||||||||||||||
| 3/27/2024 | 3/27/2024 | 0 | 1,308,305 | (5) | 2,616,610 | (5) | 11,303,756 | |||||||||||||||||||||||||||||||||||||||||
| G. Wiedenfels |
0 | 3,749,200 | 6,561,100 | |||||||||||||||||||||||||||||||||||||||||||||
| WBD |
||||||||||||||||||||||||||||||||||||||||||||||||
| Common |
3/1/2024 | 3/1/2024 | 397,356 | (6) | 1,753,532 | |||||||||||||||||||||||||||||||||||||||||||
| Stock |
3/1/2024 | 3/1/2024 | 227,532 | (7) | 1,972,702 | |||||||||||||||||||||||||||||||||||||||||||
| 3/1/2024 | 3/1/2024 | 0 | 455,063 | (8) | 1,365,189 | (8) | 4,359,504 | |||||||||||||||||||||||||||||||||||||||||
| 3/1/2024 | 3/1/2024 | 0 | 227,532 | (9) | 455,064 | (8) | 1,972,702 | |||||||||||||||||||||||||||||||||||||||||
| B. Campbell |
0 | 5,356,000 | 9,373,000 | |||||||||||||||||||||||||||||||||||||||||||||
| WBD |
||||||||||||||||||||||||||||||||||||||||||||||||
| Common |
3/1/2024 | 3/1/2024 | 422,190 | (6) | 1,725,068 | |||||||||||||||||||||||||||||||||||||||||||
| Stock |
3/1/2024 | 3/1/2024 | 241,752 | (7) | 2,095,990 | |||||||||||||||||||||||||||||||||||||||||||
| 3/1/2024 | 3/1/2024 | 0 | 483,504 | (8) | 1,450,512 | (8) | 4,631,968 | |||||||||||||||||||||||||||||||||||||||||
| 3/1/2024 | 3/1/2024 | 0 | 227,532 | (9) | 455,064 | (9) | 1,972,702 | |||||||||||||||||||||||||||||||||||||||||
| J. Perrette |
0 | 5,356,000 | 9,373,000 | |||||||||||||||||||||||||||||||||||||||||||||
| WBD |
||||||||||||||||||||||||||||||||||||||||||||||||
| Common |
3/1/2024 | 3/1/2024 | 422,190 | (6) | 1,863,124 | |||||||||||||||||||||||||||||||||||||||||||
| Stock |
||||||||||||||||||||||||||||||||||||||||||||||||
| 3/1/2024 | 3/1/2024 | 241,752 | (7) | 2,095,990 | ||||||||||||||||||||||||||||||||||||||||||||
| 3/1/2024 | 3/1/2024 | 0 | 483,504 | (8) | 1,450,512 | (8) | 4,631,968 | |||||||||||||||||||||||||||||||||||||||||
| 3/1/2024 | 3/1/2024 | 0 | 227,532 | (9) | 455,064 | (9) | 1,972,702 | |||||||||||||||||||||||||||||||||||||||||
| G. Zeiler |
0 | 3,340,143 | 10 | 5,845,250 | 10 | |||||||||||||||||||||||||||||||||||||||||||
| WBD |
||||||||||||||||||||||||||||||||||||||||||||||||
| Common |
3/1/2024 | 3/1/2024 | 298,017 | (6) | 1,217,697 | |||||||||||||||||||||||||||||||||||||||||||
| Stock |
3/1/2024 | 3/1/2024 | 170,649 | (7) | 1,479,527 | |||||||||||||||||||||||||||||||||||||||||||
| 3/1/2024 | 3/1/2024 | 0 | 341,297 | (8) | 1,023,891 | (8) | 3,269,625 | |||||||||||||||||||||||||||||||||||||||||
| 3/1/2024 | 3/1/2024 | 0 | 170,649 | (9) | 341,298 | (9) | 1,479,527 | |||||||||||||||||||||||||||||||||||||||||
| (1) | These amounts reflect the possible payouts with respect to awards of annual cash bonus for performance in 2024. Each of the foregoing bonuses are subject to the Compensation Committee’s authority to exercise “downward discretion.” These amounts of annual cash bonus awards actually paid for performance in 2024 are disclosed in the Non-Equity Incentive Plan Compensation column of the 2024 Summary Compensation Table. For more information regarding the terms of these annual cash bonus awards, please see “Compensation Discussion and Analysis- NEO Compensation in 2024- Annual Cash Bonus Awards” beginning on page 58. |
| (2) | Amounts in excess of this maximum may be paid by the Committee on a discretionary basis. |
| (3) | These amounts represent Annual PRSU awards. The Annual PRSUs vest if WBD achieves certain one-year financial performance targets. In February 2025, the Compensation Committee certified that the financial target had been over-achieved and certified the PRSUs to vest at 200% of target. Of the amount that vested, 70% was distributed on February 24, 2025 and 30% will be distributed on January 6, 2028, assuming Mr. Zaslav continues to be employed by WBD. For more information regarding these awards, please see “Compensation Discussion and Analysis—NEO Compensation in 2024—Long-Term Incentive Compensation.” |
| (4) | These amounts represent Annual PRSU awards. The Annual PRSUs vest if Mr. Zaslav achieves certain one-year strategic performance goals, which the Compensation Committee certified were achieved in February 2025. In addition, because of over-achievement of the related financial metric, these Annual PRSUs vested at 200% of target. Of the grant, 70% was distributed on February 24, 2025 and 30% will be distributed on January 6, 2028, assuming Mr. Zaslav continues to be employed by WBD. For more information regarding these awards, please see “Compensation Discussion and Analysis- NEO Compensation in 2024-Long-Term Incentive Compensation.” |
| (5) | These amounts represent Supplemental PRSU awards granted to our CEO in 2024. The Supplemental PRSUs vest if WBD achieves certain one-year financial performance targets. In February 2025, the Compensation Committee certified that the financial target had been over-achieved and certified the PRSUs to vest at 200% of target. Of the amount that vested, 70% was distributed on February 24, 2025 and 30% will be distributed on January 6, 2028, assuming Mr. Zaslav continues to be employed by WBD. For more information regarding these awards, please see “Compensation Discussion and Analysis-NEG Compensation in 2024-Long-Term Incentive Compensation.” |
| (6) | These amounts represent stock options that will vest in three substantially equal installments on the first, second, and third anniversaries of the grant date and expire on March 1, 2031. |
| (7) | These amounts represent restricted stock units that will vest in three substantially equal installments on the first, second, and third anniversaries of the grant date. |
| 84 |
|
| Proxy Statement Summary | Election of Directors | Corporate Governance | Audit Matters |
Executive Compensation | Other Matters |
Additional Information | Appendices |
| (8) | These amounts represent Annual PRSU awards, with two separate performance vesting criteria:(a) a two-year performance period from January 1, 2024 to December 31, 2025 based on a financial target, and (b) a three-year relative TSR modifier based on our relative TSR performance versus the S&P 500 Media and Entertainment Index for calendar years 2024-2026. The Annual PRSUs will vest on the third anniversary of the grant date. The Committee will certify our financial performance in February 2026 and determine the relative TSR performance following the end of 2026 and modify the payout of the Annual PRSUs accordingly. For more information regarding these awards, please see “Compensation Discussion and Analysis-Long-Term Incentive Compensation.” |
| (9) | These amounts represent Supplemental PRSU awards granted in 2024. The Supplemental PRSUs vest 50% on the second and third anniversaries of the grant date if WBD achieves certain two-year financial performance targets. The Compensation Committee will certify the Company’s performance versus the two-year performance period in February 2026. For more information regarding these awards, please see “Compensation Discussion and Analysis-NEG Compensation in 2024-Long-Term Incentive Compensation.” |
| (10) | Mr. Zeiler’s compensation is paid in Euros; therefore, the financial performance of Mr. Zeiler’s bonus payout was determined in Euros. Those amounts were then converted into United States dollars at the rate of 1.08 United States dollars per Euro. See “Compensation Discussion and Analysis- NEO Compensation in 2024” on page 56 for more information on the determination of Mr. Zeiler’s bonus payout. |
Outstanding Equity Awards at 2024 Fiscal Year-End
| Number of | Number of | Number of | Market value | |||||||||||||||||||||||||||||
| securities | securities | shares | of shares | Market value | ||||||||||||||||||||||||||||
| underlying | underlying | Option | or units of | or units of | Number of | of unearned | ||||||||||||||||||||||||||
| unexercised | unexercised | exercise | Option | stock | stock that | unearned units | units that | |||||||||||||||||||||||||
| options(#) | options(#) | price | expiration | that have not | have not | that have not | have not | |||||||||||||||||||||||||
| exercisable | unexercisable | ($) | date | vested (#)(1) | vested ($)(1) | vested(1) | vested(1) | |||||||||||||||||||||||||
| Name |
Option Awards | Stock Awards | ||||||||||||||||||||||||||||||
| D. Zaslav |
2,435,655 | 0 | $ | 27.35 | 7/16/2025 | 115,238 | (12)(13) | $ | 1,218,066 | |||||||||||||||||||||||
| WBD Common Stock |
2,211,344 | 0 | $ | 28.72 | 7/16/2025 | 345,712 | (12)(14) | $ | 3,654,176 | |||||||||||||||||||||||
| 2,155,404 | 0 | $ | 30.15 | 7/16/2025 | 441,742 | (12)(15) | $ | 4,669,213 | ||||||||||||||||||||||||
| 2,393,454 | 0 | $ | 31.66 | 7/16/2025 | 682,594 | (12)(16) | $ | 7,215,019 | ||||||||||||||||||||||||
| 1,571,489 | 0 | $ | 33.24 | 7/16/2025 | 2,047,782 | (12)(17) | $ | 21,645,056 | ||||||||||||||||||||||||
| 989,299 | 0 | $ | 33.24 | 7/16/2025 | 2,616,610 | (12)(18) | $ | 27,657,568 | ||||||||||||||||||||||||
| 1,226,463 | 408,821 | (2) | $ | 35.65 | 5/16/2028 | |||||||||||||||||||||||||||
| 759,706 | 759,708 | (3) | $ | 37.43 | 5/16/2028 | |||||||||||||||||||||||||||
| 514,036 | 1,043,649 | (4) | $ | 39.30 | 5/16/2028 | |||||||||||||||||||||||||||
| 0 | 1,603,292 | (5) | $ | 41.27 | 5/16/2028 | |||||||||||||||||||||||||||
| 0 | 1,682,083 | (6) | $ | 43.33 | 5/16/2028 | |||||||||||||||||||||||||||
| 340,031 | 1,020,096 | (7) | $ | 35.65 | 5/16/2028 | |||||||||||||||||||||||||||
| 0 | 1,421,234 | (8) | $ | 37.43 | 5/16/2028 | |||||||||||||||||||||||||||
| 0 | 1,401,917 | (9) | $ | 39.30 | 5/16/2028 | |||||||||||||||||||||||||||
| 0 | 1,270,188 | (l0) | $ | 41.27 | 5/16/2028 | |||||||||||||||||||||||||||
| 0 | 1,322,488 | (11) | $ | 43.33 | 5/16/2028 | |||||||||||||||||||||||||||
| 99,066 | 99,066 | (3) | $ | 37.43 | 1/3/2029 | |||||||||||||||||||||||||||
| G. Wiedenfels |
50,741 | $ | 24.06 | 3/1/2025 | 9,429 | (22) | $ | 99,665 | $ | 512,164 | (28) | $ | 5,413,573 | |||||||||||||||||||
| WBD Common Stock |
92,592 | $ | 29.08 | 3/1/2026 | 106,952 | (23) | $ | 1,130,483 | $ | 455,063 | (29) | $ | 4,810,016 | |||||||||||||||||||
| 150,402 | $ | 25.70 | 2/28/2027 | 49,891 | (24) | $ | 527,348 | $ | 227,532 | (30) | $ | 2,405,013 | ||||||||||||||||||||
| 97,909 | 32,637 | (19) | $ | 58.18 | 3/1/2028 | 85,788 | (25) | $ | 906,779 | |||||||||||||||||||||||
| 88,728 | 180,146 | (20) | $ | 15.02 | 3/1/2030 | 170,722 | (26) | $ | 1,804,532 | |||||||||||||||||||||||
| 397,356 | (21) | $ | 8.67 | 3/1/2031 | 227,532 | (27) | $ | 2,405,013 | ||||||||||||||||||||||||
| B. Campbell |
202,962 | $ | 24.06 | 3/1/2025 | 9,429 | (22) | $ | 99,665 | $ | 544,176 | (28) | $ | 5,751,940 | |||||||||||||||||||
| WBD Common Stock |
126,984 | $ | 29.08 | 3/1/2026 | 76,540 | (36) | $ | 809,028 | $ | 483,504 | (29) | $ | 5,110,637 | |||||||||||||||||||
| 183,346 | $ | 25.70 | 2/28/2027 | 47,651 | (31) | $ | 503,671 | $ | 227,532 | (30) | $ | 2,405,013 | ||||||||||||||||||||
| 97,909 | 32,637 | (19) | $ | 58.18 | 3/1/2028 | 86,995 | (32) | $ | 919,537 | |||||||||||||||||||||||
| 94,274 | 191,405 | (20) | $ | 15.02 | 3/1/2030 | 170,722 | (26) | $ | 1,804,532 | |||||||||||||||||||||||
| 422,190 | (21) | $ | 8.67 | 3/1/2031 | 230,677 | (33) | $ | 2,438,256 | ||||||||||||||||||||||||
| 2025 PROXY STATEMENT | 85 |
| Proxy Statement Summary | Election of Directors | Corporate Governance | Audit Matters |
Executive Compensation | Other Matters |
Additional Information | Appendices |
| Number of securities underlying unexercised options(#) exercisable |
Number of securities underlying unexercised options(#) unexercisable |
Option exercise price ($) |
Option expiration date |
Number of shares or units of stock that have not vested (#)(1) |
Market value of shares or units of stock that have not vested($)(1) |
Number of unearned units that have not vested(1) |
Market value of uneuned units that have not vested(1) |
|||||||||||||||||||||||||
| Name |
Option Awards | Stack Awards | ||||||||||||||||||||||||||||||
| J. Perretta |
54,969 | $ | 24.06 | 3/1/2025 | 9,429 | (22) | $ | 99,665 | 544,176 | (28) | $ | 5,751,940 | ||||||||||||||||||||
| WBD Common Stock |
92,592 | $ | 29.08 | 3/1/2026 | 78,432 | (23) | $ | 829,026 | 483,504 | (29) | $ | 5,110,637 | ||||||||||||||||||||
| 150,402 | $ | 25.70 | 28/2027 | 49,891 | (34) | $ | 527,348 | 227,532 | (30) | $ | 2,405,013 | |||||||||||||||||||||
| 97,909 | 32,637 | (19) | $ | 58.18 | 3/1/2028 | 91,150 | (25) | $ | 963,456 | |||||||||||||||||||||||
| 94,274 | 191,405 | (20) | $ | 15.02 | 3/1/2030 | 170,722 | (26) | $ | 1,804,532 | |||||||||||||||||||||||
| 422,190 | (21) | $ | 8.67 | 3/1/2031 | 241,752 | (27) | $ | 2,555,319 | ||||||||||||||||||||||||
| G. Zeller |
66,546 | 135,110 | (20) | $ | 15.02 | 3/1/2030 | 23,666 | (35) | $ | 250,150 | 384,124 | (28) | $ | 4,060,191 | ||||||||||||||||||
| WBD Common Stock |
298.017 | (21) | $ | 8.67 | 3/1/2031 | 64,341 | (25) | $ | 680,084 | 341,297 | (29) | $ | 3,607,509 | |||||||||||||||||||
| 128,042 | (26) | $ | 1,353,404 | 170,649 | (30) | $ | 1,803,760 | |||||||||||||||||||||||||
| 170,649 | (27) | $ | 1,803,760 | |||||||||||||||||||||||||||||
| (1) | For RSUs and PRSUs that have not vested and or been distributed and were granted before 2023, the value is calculated based on the grant amount and assumes target performance for PRSUs. |
For PRSUs that have not vested and were granted in 2023, the value is calculated based on 200% performance which was achieved in 2023 and certified by the Committee in February 2024.
For PRSUs that have not vested and were granted in 2024, the value is calculated based on 200% performance which was achieved in 2024 and certified by the Committee in February 2025.
For PRSUs that are unearned and were granted in 2023, the value is calculated based on exceeding the threshold at the next higher performance measure, 200%.
For PRSUs that are unearned and were granted in 2024, the value is calculated based on target as the initial performance period is through December 31, 2025.
| (2) | This award vested 25% on each of May 16, 2022, May 16, 2023, and May 16, 2024 and will vest 25% on May 16, 2025. |
| (3) | This award vested 25% on each of May 16, 2023 and May 16, 2024 and will vest 25% on each of May 16, 2025, and May 16, 2026. |
| (4) | This award vested 33% on May 16, 2024 and will vest 33% on May 16, 2025 and 34% on May 16, 2026. |
| (5) | This award will vest 50% on each of May 16, 2025 and May 16, 2026. |
| (6) | This award will vest 100% on May 16, 2026. |
| (7) | This award vested 25% on each of January 1, 2024 and January 1, 2025, and will vest 25% on each of January 1, 2026 and January 1, 2027. |
| (8) | This award vested 25% on January 1, 2025 and will vest 25% on each of January 1, 2026, January 1, 2027, and December 31, 2027. |
| (9) | This award will vest 33% on January 1, 2026 and January 1, 2027 and 34% on December 31, 2027. |
| (10) | This award will vest 50% on January 1, 2027 and 50% on December 31, 2027. |
| (11) | This award will vest 100% on December 31, 2027. |
| (12) | These amounts represent PRSUs granted pursuant to the terms of Mr. Zaslav’s employment agreement. The vesting of the PRSUs is subject to the and Analysis-NEG Compensation in 2024-Long-Term Incentive Compensation.” |
| (13) | These amounts represent PRSUs granted to Mr. Zaslav on March 8, 2023 with a one-year performance period from January 1, 2023- December 31, 2023. In February 2024, the Compensation Committee certified that the Company’s performance versus the performance metric associated with the one-year performance was “above target” and certified the PRSUs to vest at 200% of target. The units were distributed 70% in February 2024, and the remaining 30% to be distributed in January 2027. |
| (14) | These amounts represent PRSUs granted to Mr. Zaslav on March 8, 2023 with a one-year performance period from January 1, 2023- December 31, 2023. In February 2024, the Compensation Committee certified that the Company’s performance versus the performance metric associated with the one-year performance was “above target” and certified the PRSUs to vest at 200% of target. The units were distributed 70% in February 2024, and the remaining 30% to be distributed in January 2027. |
| (15) | These amounts represent PRSUs granted to Mr. Zaslav on March 8, 2023 with a one-year performance period from January 1, 2023- December 31, 2023. In February 2024, the Compensation Committee certified that the Company’s performance versus the performance metric associated with the one-year performance was “above target” and certified the PRSUs to vest at 200% of target. The units were distributed 70% in February 2024, and the remaining 30% to be distributed in January 2027. |
| (16) | These amounts represent PRSUs granted to Mr. Zaslav on March 27, 2024 with a one-year performance period from January 1, 2024- December 31, 2024. In February 2025, the Compensation Committee certified that the Company’s performance versus the performance metric associated with the one-year performance was “above target” and certified the PRSUs to vest at 200% of target. The units were distributed 70% in February 2025, and the remaining 30% to be distributed in January 2028. |
| 86 |
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| Proxy Statement Summary | Election of Directors | Corporate Governance | Audit Matters |
Executive Compensation | Other Matters |
Additional Information | Appendices |
| (17) | These amounts represent PRSUs granted to Mr. Zaslav on March 27, 2024 with a one-year performance period from January 1, 2024- December 31, 2024. In February 2025, the Compensation Committee certified that the Company’s performance versus the performance metric associated with the one-year performance was “above target” and certified the PRSUs to vest at 200% of target. The units were distributed 70% in February 2025, and the remaining 30% to be distributed in January 2028. |
| (18) | These amounts represent PRSUs granted to Mr. Zaslav on March 27, 2024 with a one-year performance period from January 1, 2024- December 31, 2024. In February 2025, the Compensation Committee certified that the Company’s performance versus the performance metric associated with the one-year performance was “above target” and certified the PRSUs to vest at 200% of target. The units were distributed 70% in February 2025, and the remaining 30% to be distributed in January 2028. |
| (19) | These stock options vest in four equal annual installments beginning March 1, 2022, the first anniversary of the grant date. |
| (20) | These stock options vest in three substantially equal annual installments beginning March 1, 2024, the first anniversary of the grant date. |
| (21) | These stock options vest in three substantially equal annual installments beginning March 1, 2025, the first anniversary of the grant date. |
| (22) | These RSU awards vested 25% on each of March 1, 2022, March 1, 2023, March 1, 2024, and March 1, 2025. |
| (23) | These RSU awards vested 25% on each of March 1, 2023, March 1, 2024, and March 1, 2025, and will vest 25% on March 1, 2026. |
| (24) | These RSU awards vested 33% on each of July 11, 2023 and July 11, 2024 and will vest 34% on July 11, 2025. |
| (25) | These RSU awards vested 33% on March 1, 2024 and March 1, 2025 and will vest 34% on March 1, 2026. |
| (26) | These amounts represent PRSUs granted to the NEO on March 6, 2023, with a one-year performance period from January 1, 2023 to December 31, 2023. In February 2024, the Compensation Committee certified that the Company’s performance versus the performance metric associated with the one-year performance period was “above target” and certified the PRSUs to vest at 200% of target. The PRSUs vested 1/3rd on each of March 6, 2024 and March 6, 2025 and will vest 1/3rd on March 6, 2026. |
| (27) | These RSU awards vest in three substantially equal installments beginning March 1, 2025, the first anniversary of the grant date. |
| (28) | These amounts represent PRSUs granted to the NEO on March 1, 2023, with two separate performance vesting criteria: (a) a one-year performance period from January 1, 2023 to December 31, 2023, and (b) a three-year relative TSR modifier based on our relative TSR performance versus the S&P 500 Media and Entertainment Index for calendar years 2023-2025. In February 2024, the Compensation Committee certified that the Company’s performance versus the performance metric associated with the one-year performance period was “above target” and certified the PRSUs to vest at 200% of target. The Committee will determine our relative TSR performance following the end of 2025 and modify the payout of the PRSUs accordingly. |
| (29) | These amounts represent PRSUs granted to the NEO on March 1, 2024, with two separate performance vesting criteria: (a) a two-year performance period from January 1, 2024 to December 31, 2025, and (b) a three-year relative TSR modifier based on our relative TSR performance versus the S&P 500 Media and Entertainment Index for calendar years 2024-2026. The Compensation Committee will determine the Company’s performance versus the performance metric associated with the two-year performance period following the end of 2025. The Committee will determine our relative TSR performance following the end of 2026 and modify the payout of the PRSUs accordingly. For more information regarding these awards, please see “Compensation Discussion and Analysis- Long-Term Incentive Compensation.” |
| (30) | These amounts represent PRSUs granted to the NEO on March 1, 2024, with a two-year performance period from January 1, 2024 to December 31, 2025. The Compensation Committee will determine the Company’s performance versus the performance metric associated with the two-year performance period following the end of 2025. For more information regarding these awards, please see “Compensation Discussion and Analysis-Long-Term Incentive Compensation.” |
| (31) | On December 28, 2022, 6,722 RSUs from the overall award of 146,736 RSUs were withheld to pay for FICA taxes. The remaining 140,014 RSUs vests in three substantially equal installments on each of July 9, 2023, July 9, 2024 and July 9, 2025. |
| (32) | On December 8, 2023, 6,233 RSUs from the overall award of 136,044 RSUs were withheld to pay for FICA taxes. The remaining 129,811 RSUs vests in three substantially equal installments on each of March 1, 2024, March 1, 2025 and March 1, 2026. |
| (33) | On December 6, 2024, 11,075 RSUs from the overall award of 241,752 RSUs were withheld to pay for FICA taxes. The remaining 230,677 RSUs vests in three substantially equal installments on each of March 1, 2025, March 1, 2026 and March 1, 2027. |
| (34) | This RSU award vests in three substantially equal installments on each of August 2, 2023, August 2, 2024 and August 2, 2025. |
| (35) | This RSU award vested approximately 50% on February 15, 2023, 32% on February 15, 2024 and 18% on February 15, 2025. |
| (36) | On December 28, 2022, 7,350 RSUs from the overall award of 160,428 RSUs were withheld to pay for FICA taxes. The remaining RSUs vested on March 1, 2023, March 1, 2024, and March 1, 2025 and will vest on March 1, 2026. |
| 2025 PROXY STATEMENT | 87 |
| Proxy Statement Summary | Election of Directors | Corporate Governance | Audit Matters |
Executive Compensation | Other Matters |
Additional Information | Appendices |
Option Exercises and Stock Vested in 2024
| Stock Awards | ||||||||
| Name |
Number of shares acquired on vesting (#) |
Value realized on vesting ($)(1) |
||||||
| D. Zaslav |
||||||||
| WBD Common Stock |
2,289,168 | (2) | 20,093,634 | |||||
| G. Wiedenfels |
||||||||
| WBD Common Stock |
263,060 | (3) | 2,197,036 | |||||
| B. Campbell |
||||||||
| WBD Common Stock |
255,183 | (4) | 2,151,742 | |||||
| J. Perrette |
||||||||
| WBD Common Stock |
251,441 | (5) | 2,139,395 | |||||
| G. Zeiler |
||||||||
| WBD Common Stock |
137,588 | (6) | 1,237,803 | |||||
| (1) | Represents the value realized upon RSU and PRSU vesting and distributions listed in the corresponding column of the table, using the closing market price of the Series A common stock on the vesting or distribution date (as applicable). |
| (2) | Represents the distribution of Mr. Zaslav’s 56,572 shares of WBD common stock from his March 1, 2021 PRSU grant; 126,322 shares of WBD common stock from his March 1, 2022 PRSU grant; and 2,106,274 shares of WBD common stock from his March 8, 2023 PRSU grant. |
| (3) | Represents the vesting of (A) RSUs granted to Mr. Wiedenfels on February 28, 2020, March 1, 2021, March 1, 2022, July 15, 2022, and March 1, 2023 and (B) PRSUs granted on March 6, 2023. |
| (4) | Represents the vesting of (A) RSUs granted to Mr. Campbell on February 28, 2020, March 1, 2021, March 1, 2022, July 15, 2022, and March 1, 2023 and (B) PRSUs granted on March 6, 2023. Additionally, this represents the vesting of RSUs granted on March 1, 2024 that were distributed for taxes due to retirement eligibility. |
| (5) | Represents vesting of (A) RSUs granted to Mr. Perrette on February 28, 2020, March 1, 2021, March 1, 2022, August 3, 2022, and March 1, 2023 and (B) PRSUs granted on March 6, 2023. |
| (6) | Represents vesting of (A) RSUs granted to Mr. Zeiler on April 8, 2022 and March 1, 2023 and (B) PRSUs granted on March 6, 2023. |
| 88 |
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| Proxy Statement Summary | Election of Directors | Corporate Governance | Audit Matters |
Executive Compensation | Other Matters |
Additional Information | Appendices |
2024 Nonqualified Deferred Compensation(1)
| Name |
Executive contributions in last FY ($) |
Registrant contributions in last FY ($) |
Aggregate earnings in last FY ($) |
Aggregate withdrawals/ distributions ($) |
Aggregate balance at last FYE ($) |
|||||||||||||||
| D. Zaslav |
— | — | 2,272,095 | — | 78,112,130 | (2) | ||||||||||||||
| G. Wiedenfels |
— | — | 485,605 | — | 3,772,234 | (3) | ||||||||||||||
| B. Campbell |
— | — | 998,758 | — | 9,658,085 | (4) | ||||||||||||||
| J. Perrette |
— | — | — | — | — | |||||||||||||||
| G. Zeiler |
— | — | — | — | — | |||||||||||||||
| (1) | This table provides information with respect to the SRP for senior employees in the U.S. For more information regarding the SRP, please see “Compensation Discussion and Analysis—2024 NEO Compensation—Retirement Benefits” above. |
| (2) | $41,895,169 of this amount was reported as compensation to Mr. Zaslav in our Summary Compensation Tables for previous years. |
| (3) | $2,034,602 of this amount was reported as compensation to Mr. Wiedenfels in our Summary Compensation Tables for previous years. |
| (4) | $4,845,167 of this amount was reported as compensation to Mr. Campbell in our Summary Compensation Tables for previous years. |
Potential Payments upon Termination or Change in Control
The following table and accompanying narrative disclosures summarize the potential payments and other benefits required to be made available to the NEOs in connection with a termination of their employment or a change in control. Payments or other benefits under benefit plans and policies that apply equally to all salaried employees participating in such plans, including our life insurance plan, are not included below. Similarly, amounts that could be recognized under equity awards that were vested as of December 31, 2024 are not included below, as the treatment of the vested awards for our NEOs is identical to the treatment afforded all employees under the termination scenarios described in this section.
In the event of a change of control, there is a double trigger on potential payments to the NEOs (other than the CEO}, requiring both a change of control and an involuntary termination without cause or voluntary termination for good reason occurring within 12 months of the change of control. Upon an NEO’s death or disability, RSUs would immediately vest at 100%, and PRSUs would vest based on actual performance. Upon retirement, if an NEO is retirement eligible, RSUs would immediately vest at 100% (provided the awards were granted at least six months prior to the retirement date) and PRSUs would vest pro-rata based on actual performance and the time worked during the relevant performance period. Under no circumstances would any of the NEOs be eligible for a post-termination payment if they were terminated for “cause.” Defined terms such as “cause,” “good reason,” and “change of control” used in this section are described under “Defined Terms Used in this Section” below.
The quantitative examples provided in the table below assume:
| • | the applicable NEO ceased to be employed by WBD as of the close of business on December 31, 2024; |
| • | the applicable NEO (other than the CEO) was eligible to receive their standard 2024 cash bonus (cash bonus target times Company performance, no performance pool allocation or other discretionary amounts) in all scenarios because the terms of our ICP and other cash bonus programs provide that cash bonus awards are deemed to be earned if the individual is employed on December 31, 2024; |
| • | for stock option awards, the value shown in the table is calculated on a grant-by-grant basis by multiplying the number of unvested options granted by the difference between the exercise price for such option and the closing price of our respective series of common stock on December 31, 2024, $10.57. |
| • | for PRSU/RSU awards, the value shown in the table was calculated on a grant-by-grant basis by multiplying the number of unvested PRSUs/RSUs granted by $10.57, the closing price of our common stock on December 31, 2024, the last trading day of the year, multiplied by 200%. The Committee certified in February 2024 that, based on WBD’s 2023 free cash flow performance versus the pre-established target, these PRSUs were eligible to vest at 200% of target. Whether and to what extent the awards will ultimately vest at 200% or are modified upwards to a maximum of 200% of target or downwards to a minimum payout of 100% of target, will depend on our relative TSR over the three-year period from 2023-2025, as compared to our peers in the S&P 500 Media and Entertainment Index. |
| • | only Messrs. Campbell and Zeiler met the definition of “retirement” as set forth in their applicable agreements and plans as of December 31, 2024; and |
| • | all accrued salary at that assumed termination date was previously paid. |
| 2025 PROXY STATEMENT | 89 |
| Proxy Statement Summary | Election of Directors | Corporate Governance | Audit Matters |
Executive Compensation | Other Matters |
Additional Information | Appendices |
Quantification of Payments Upon Termination or Change in Control
The table below summarizes the potential benefits that would have been paid to each of the NEOs had his employment been terminated under any of the circumstances noted as of December 31, 2024. Please see “Defined Terms Used in this Section” for additional information. The summary provided below is qualified in its entirety by reference to the full text of the applicable NEO employment agreement, each of which is filed as an exhibit to the 2024 Form 10-K.
| Voluntary Termination ($) |
Death ($) | Disability ($) | Involuntary Termination Without Cause ($) |
Voluntary Termination for Good Reason ($) |
Involuntary Termination Without Cause or Voluntary Termination for Good Reason Following a Change in Control ($) |
Voluntary Termination Within 30 Days after 31st Day Following Change in Control ($) |
||||||||||||||||||||||
| D. Zaslav |
||||||||||||||||||||||||||||
| Base Salary |
0 | 0 | 0 | 6,000,000 | 6,000,000 | 6,000,000 | 6,000,000 | |||||||||||||||||||||
| Bonus |
23,897,060 | 23,897,060 | 23,897,060 | 47,897,060 | 47,897,060 | 47,897,060 | 47,897,060 | |||||||||||||||||||||
| Stock Options |
0 | 0 | 0 | 0 | 0 | 0 | 0 | |||||||||||||||||||||
| PRSUs |
0 | 66,059,096 | 66,059,096 | 66,059,096 | 66,059,096 | 113,059,096 | 113,059,096 | |||||||||||||||||||||
| Cobra Premiums |
0 | 44,195 | 71,203 | 44,195 | 44,195 | 44,195 | 0 | |||||||||||||||||||||
| Total |
23,897,060 | 90,000,351 | 90,027,359 | 120,000,351 | 120,000,351 | 167,000,351 | 166,956,156 | (l) | ||||||||||||||||||||
| G. Wiedenfels |
||||||||||||||||||||||||||||
| Base Salary |
0 | 0 | 0 | 3,213,600 | 3,213,600 | 3,213,600 | 0 | |||||||||||||||||||||
| Bonus |
4,061,246 | 4,061,246 | 4,061,246 | 9,685,046 | 9,685,046 | 9,685,046 | 0 | |||||||||||||||||||||
| Stock Options |
0 | 754,976 | 754,976 | 503,318 | 0 | 754,976 | 0 | |||||||||||||||||||||
| RSUs |
0 | 19,502,422 | 19,502,422 | 18,684,717 | 0 | 16,795,635 | 0 | |||||||||||||||||||||
| Cobra Premiums |
0 | 0 | 55,887 | 34,689 | 34,689 | 34,689 | 0 | |||||||||||||||||||||
| Repatriation |
0 | 231,594 | 231,594 | 231,594 | 231,594 | 231,594 | 0 | |||||||||||||||||||||
| Total |
4,061,246 | 24,550,238 | 24,606,125 | 32,352,964 | 13,164,929 | 30,715,540 | 0 | |||||||||||||||||||||
| B. Campbell |
||||||||||||||||||||||||||||
| Base Salary |
0 | 0 | 0 | 2,678,000 | 2,678,000 | 2,678,000 | 0 | |||||||||||||||||||||
| Bonus |
5,633,976 | 5,633,976 | 5,633,976 | 10,989,976 | 10,989,976 | 10,989,976 | 0 | |||||||||||||||||||||
| Stock Options |
802,161 | 802,161 | 802,161 | 802,161 | 802,161 | 802,161 | 0 | |||||||||||||||||||||
| RSUs |
16,084,454 | 19,842,279 | 19,842,279 | 19,842,279 | 16,084,454 | 16,966,309 | 0 | |||||||||||||||||||||
| Cobra Premiums |
0 | 0 | 69,837 | 43,347 | 43,347 | 43,347 | 0 | |||||||||||||||||||||
| Total |
22,520,591 | 26,278,416 | 26,348,253 | 34,355,763 | 30,597,938 | 31,479,793 | 0 | |||||||||||||||||||||
| J. Perrette |
||||||||||||||||||||||||||||
| Base Salary |
0 | 0 | 0 | 2,678,000 | 2,678,000 | 2,678,000 | 0 | |||||||||||||||||||||
| Bonus |
5,400,990 | 5,400,990 | 5,400,990 | 10,756,990 | 10,756,990 | 10,756,990 | 0 | |||||||||||||||||||||
| Stock Options |
0 | 802,161 | 802,161 | 267,387 | 0 | 802,161 | 0 | |||||||||||||||||||||
| RSUs |
0 | 20,046,935 | 20,046,935 | 17,431,405 | 0 | 17,170,965 | 0 | |||||||||||||||||||||
| Cobra Premiums |
0 | 0 | 66,943 | 41,551 | 41,551 | 41,551 | 0 | |||||||||||||||||||||
| Total |
5,400,990 | 26,250,086 | 26,317,029 | 31,175,333 | 13,476,541 | 31,449,667 | 0 | |||||||||||||||||||||
| G. Zeiler |
||||||||||||||||||||||||||||
| Base Salary |
0 | 0 | 0 | 1,876,485 | 1,876,485 | 1,876,485 | 0 | |||||||||||||||||||||
| Bonus |
3,595,665 | 3,595,665 | 3,595,665 | 6,935,808 | 6,935,808 | 6,935,808 | 0 | |||||||||||||||||||||
| Stock Options |
566,232 | 566,232 | 566,232 | 566,232 | 566,232 | 566,232 | 0 | |||||||||||||||||||||
| RSUs |
10,853,223 | 13,558,858 | 13,558,858 | 13,558,858 | 10,853,223 | 11,528,762 | 0 | |||||||||||||||||||||
| Cobra Premiums |
0 | 0 | 0 | 0 | 0 | 0 | 0 | |||||||||||||||||||||
| Total |
15,015,120 | 17,720,755 | 17,720,755 | 22,937,383 | 20,231,748 | 20,907,287 | 0 | |||||||||||||||||||||
| (1) | In the event the Change in Control is solely due to the occurrence of a majority change in Incumbent Directors, and the Executive’s employment is not terminated by the Company and without cause or by the Executive for Good Reason within 60 days following the Majority Board Change, the Executive’s PRSU’s would vest at 150% (instead of 200%) and the total payment would be $155,206,156. |
| 90 |
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| Proxy Statement Summary | Election of Directors | Corporate Governance | Audit Matters |
Executive Compensation | Other Matters |
Additional Information | Appendices |
Defined Terms Used in this Section
The descriptions of potential payments upon termination or change of control set forth above utilize certain terms that are defined in our 2013 Incentive Plan, our WBD Stock Incentive Plan, our Incentive Compensation Program, and in each of the individual employment agreements with our NEOs. Set forth below is a summary of the defined terms referred to in this section.
Defined Terms from 2013 Incentive Plan and WBD Stock Incentive Plan
Under each NEO’s respective award agreement and our standard form of award agreement, a “Change in Control” means an “Approved Transaction,” “Control Purchase,” or “Board Change,” each as defined in the 2013 Incentive Plan or WBD Stock Incentive Plan, as applicable, provided that the transaction actually closes and the qualifying separation from employment occurs within 12 months after the closing date. The meanings of those terms, under the 2013 Incentive Plan and WBD Stock Incentive Plane are as follows:
| • | “Approved Transaction” means any transaction in which the Board (or, if approval of the Board is not required as a matter of law, the stockholders of the Company) shall approve (i) any consolidation or merger of the Company, or binding share exchange, pursuant to which shares of Common Stock of the Company would be changed or converted into or exchanged for cash, securities, or other property, other than any such transaction in which the common stockholders of the Company immediately prior to such transaction have the same proportionate ownership of the Common Stock of, and voting power with respect to, the surviving corporation immediately after such transaction, (ii) any merger, consolidation or binding share exchange to which the Company is a party as a result of which the Persons who are common stockholders of the Company immediately prior thereto have less than a majority of the combined voting power of the outstanding capital stock of the Company ordinarily (and apart from the rights accruing under special circumstances) having the right to vote in the election of directors immediately following such merger, consolidation or binding share exchange, (iii) the adoption of any plan or proposal for the liquidation or dissolution of the Company, or (iv) any sale, lease, exchange or other transfer (in one transaction or a series of related transactions) of all, or substantially all, of the assets of the Company, provided that, with respect to clauses (i) through (iv), the Approved Transaction will not occur until the closing of the event described in such clause. |
| • | “Board Change” means, during any period of two consecutive years, individuals who at the beginning of such period constituted the entire Board cease for any reason to constitute a majority thereof unless the election, or the nomination for election, of each new director was approved by a vote of at least two-thirds of the directors then still in office who were directors at the beginning of the period. |
| • | “Control Purchase” under the 2013 Incentive Plan means any transaction (or series of related transactions) in which (i) any person (as such term is defined in Sections 13(d)(3) and 14(d)(2) of the Exchange Act), corporation or other entity (other than the Company, any Subsidiary of the Company or any employee benefit plan sponsored by the Company or any Subsidiary of the Company or any Exempt Person (as defined below)) shall become the “beneficial owner” (as such term is defined in Rule 13d-3 under the Exchange Act), directly or indirectly, of securities of the Company representing 30% or more of the combined voting power of the then outstanding securities of the Company ordinarily (and apart from the rights accruing under special circumstances) having the right to vote in the election of directors (calculated as provided in Rule 13d-3(d) under the Exchange Act in the case of rights to acquire the Company’s securities), other than in a transaction (or series of related transactions) approved by the Board. For purposes of this definition, “Exempt Person” means each of (a) the Chair of the Board, the President and each of the directors of Discovery Holding Company as of the Distribution Date, and (b) the respective family members, estates and heirs of each of the persons referred to in clause (a) above and any trust or other investment vehicle for the primary benefit of any of such persons or their respective family members or heirs. As used with respect to any person, the term “family member” means the spouse, siblings and lineal descendants of such person. |
| • | “Control Purchase” under the WBD Stock Incentive Plan means any transaction (or series of related transactions) in which (i) any person (as such term is defined in Sections 13(d)(3) and 14(d)(2) of the Exchange Act), corporation or other entity (other than the Company, any Subsidiary of the Company or any employee benefit plan sponsored by the Company or any Subsidiary of the Company) shall become the “beneficial owner” (as such term is defined in Rule 13d-3 under the Exchange Act), directly or indirectly, of securities of the Company representing 30% or more of the combined voting power of the then outstanding securities of the Company ordinarily (and apart from the rights accruing under special circumstances) having the right to vote in the election of directors (calculated as provided in Rule 13d-3(d) under the Exchange Act in the case of rights to acquire the Company’s securities), other than in a transaction (or series of related transactions) approved by the Board. |
| 2025 PROXY STATEMENT | 91 |
| Proxy Statement Summary | Election of Directors | Corporate Governance | Audit Matters |
Executive Compensation | Other Matters |
Additional Information | Appendices |
Defined Terms from Incentive Compensation Program (“ICP”)
| • | “Cause” means (i) the conviction of, or nolo contendere to guilty plea, to a felony (whether any right to appeal has been or may be exercised); (ii) conduct constituting embezzlement, material misappropriation or fraud, whether or not related to the executive’s employment with the Company; (iii) conduct constituting a financial crime, material act of dishonesty or conduct in violation of the Company’s Code of Business Conduct and Ethics; (iv) improper conduct substantially prejudicial to the Company’s business; (v) willful unauthorized disclosure or use of Company confidential information; (vi) material improper destruction of Company property; (vii) willful misconduct in connection with the performance of Executive’s duties; and (vii) any other conduct that constitutes Cause under the Company’s policies and procedures. |
Defined Terms from Mr. Zaslav’s Employment Agreement
| • | “Cause” means (i) gross neglect, willful malfeasance or willful gross misconduct in connection with Mr. Zaslav’s employment which has had a material adverse effect on the business, unless he reasonably believed in good faith that such act or non-act was in or not opposed to the best interests of the Company; (ii) conviction or plea of guilty or nolo contendere to, or failure to defend against, a felony; (iii) substantial and continuous refusal by Mr. Zaslav to perform his duties or to follow the lawful directions of the Board (provided such directions do not include meeting any specific financial performance metrics); (iv) material breach of the restrictive covenants in Mr. Zaslav’s employment agreement; (v) violation of any policy of the Company that is generally applicable to all employees or all officers or the Company’s code of conduct, that Mr. Zaslav knows or reasonably should know could reasonably be expected to result in a material adverse effect on the Company; or (vi) Ms. Zaslav’s failure to cooperate, if requested by the Board, with any investigation or inquiry into his or the Company’s business practices. The “Cause” definition includes a requirement of notice and certain opportunities to cure. |
| • | “Good Reason” means (1) reduction of Mr. Zaslav’s base salary; (2) material reduction in the amount of the annual bonus which he is eligible to earn; (3) relocation of his primary office at the Company to a facility or location that is more than 40 miles away from his primary office location immediately prior to such relocation and is further away from his residence; (4) material reduction of his duties; or (5) material breach of his employment agreement. The “Good Reason” definition includes a requirement of notice and an opportunity to cure. |
| • | “Change in Control” means (A) the merger, consolidation or reorganization of the Company with any other company (or our issuance of voting securities as consideration in a merger, consolidation or reorganization of a subsidiary with any other company) other than such a merger, consolidation or reorganization which would result in the voting securities of the Company outstanding immediately prior thereto continuing to represent (either by remaining outstanding or by being converted into voting securities of the other entity) at least 50% of the combined voting power of the voting securities of the Company or such other entity outstanding immediately after such merger, consolidation or reorganization, (B) within any 12 month period, incumbent directors (those persons serving as members of the Board at the beginning of the applicable 12-month period and any other person nominated for election or elected to the Board by a majority of the persons then serving on the Board who are treated as Incumbent Directors, unless such person’s election, or nomination for election, to the Board was as a result of, or in connection with, a proxy contest) shall cease to constitute a majority of the members of the Board; (C) any person, including a group as defined for purposes of Section 13(d) of the Securities Exchange Act of 1934, as amended, other (i) than Advance/Newhouse Programming Partnership (individually and with its affiliates) or (ii) John C. Malone (individually and with his respective affiliates) or his heirs shall acquire stock representing 33% or more of the combined voting power of the voting securities of the Company; or (D) the consummation by the Company of a plan of complete liquidation of the Company or an agreement for the sale or disposition by the Company of all or substantially all of the Company’s assets. Notwithstanding the foregoing, a Change in Control will not accelerate the payment of any “deferred compensation” (as defined under Section 409A) unless the Change in Control also qualifies as a change in control under Treasury Regulation Section 1.409A-3(i)(5). Mr. Zaslav’s employment agreement specifically excluded the WarnerMedia Transaction, but not subsequent events, from the definition of Change in Control. |
| • | “Majority Board Change” means the consummation by the Company of a plan of complete liquidation of the Company or an agreement for the sale or disposition by the Company of all or substantially all of the Company’s assets, other than any such sale or disposition to an entity for which either (i) Advance/Newhouse Programming Partnership (individually and with its affiliates) continues to be entitled to exercise its Preferred A Blocking Rights and Robert Miron or Steven Miron is a member of the surviving company’s board (or Steven Newhouse has board observation rights), or (ii) Dr. Malone (individually and with his affiliates) or his heirs continues to be entitled to exercise his Common B Blocking rights. |
| 92 |
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| Proxy Statement Summary | Election of Directors | Corporate Governance | Audit Matters |
Executive Compensation | Other Matters |
Additional Information | Appendices |
Defined Terms from Mr. Wiedenfels’ Employment Agreement
| • | “Cause” means: (i) the conviction of, or nolo contendere or guilty plea, to a felony (whether any right to appeal has been or may be exercised); (ii) conduct constituting embezzlement, material misappropriation or fraud, whether or not related to Mr. Wiedenfels’ employment with the Company; (iii) conduct constituting a financial crime, material act of dishonesty or conduct in violation of Company’s Code of Ethics or the Company’s other written policies; (iv) improper conduct substantially prejudicial to the Company’s business (whether financial or otherwise); (v) willful unauthorized disclosure or use of Company confidential information; (vi) material improper destruction of Company property; or (vii) willful misconduct in connection with the performance of Mr. Wiedenfels’ duties. “Cause” also includes him materially neglecting his duties or engaging in other conduct that breaches his employment agreement, subject to a one-time notice and cure opportunity. |
| • | “Good Reason” means the occurrence of any of the following events without Mr. Wiedenfels’ consent: (a) a material reduction in Mr. Wiedenfels’ duties or responsibilities; (b) a material change in his work location from the New York, NY metropolitan area; (c) a material breach by us of the agreement; or (d) a change of his reporting relationship to a level below the Company’s Chief Executive Officer. The “Good Reason” definition includes a requirement of notice and an opportunity to cure. |
Defined Terms from Mr. Campbell’s Employment Agreement
| • | “Cause” generally has the same meaning as in Mr. Wiedenfels’ employment agreement. |
| • | “Good Reason” generally has the same meaning as in Mr. Wiedenfels’ employment agreement, but does not include the removal of legal and/or consumer products and experiences divisions from Mr. Campbell’s duties or responsibilities. |
Defined Terms from the Mr. Perrette’s Employment Agreement
| • | “Cause” generally has the same meaning as in Mr. Wiedenfels’ employment agreement. |
| • | “Good Reason” means the occurrence of any of the following events without Mr. Perrette’s consent:(a) a material reduction in Mr. Perrette’s duties or responsibilities; (b) a material change in his work location from the Los Angeles, CA metropolitan area; or (c) a change of his reporting relationship to a level lower than the CEO of the Company. The “Good Reason” definition includes a requirement of notice and an opportunity to cure. |
Defined Terms from the Mr. Zeiler’s Employment Agreement
| • | “Cause” generally has the same meaning as in Mr. Wiedenfels’ employment agreement. |
| • | “Good Reason” means the occurrence of any of the following events without Mr. Zeiler’s consent: (a) a material reduction in Mr. Zeiler’s duties or responsibilities; (b) a material change in his work location from the New York metropolitan area; or (c) a material breach by us of the agreement. The “Good Reason” definition includes a requirement of notice and an opportunity to cure. |
| 2025 PROXY STATEMENT | 93 |
| Proxy Statement Summary | Election of Directors | Corporate Governance | Audit Matters |
Executive Compensation | Other Matters |
Additional Information | Appendices |
Stock Ownership
Security Ownership of Certain Beneficial Owners
The following table sets forth information, to the extent known by us or ascertainable from public filings, concerning the beneficial ownership of each person or entity, other than certain of our directors and executive officers whose ownership information follows, who owns more than five percent of the outstanding shares of our common stock as of April 4, 2025.
The Percent of Class shown below is based upon 2,473,835,609 shares of our common stock outstanding as of April 4, 2025.
| Name and Address of Beneficial Owner |
Amount and Nature of Beneficial Ownership |
Percent of Class (%) |
||||||
| Advance/Newhouse Programming Partnership One World Trade Center New York, New York 10007 |
198,181,749 | (1) | 8.0 | |||||
| BlackRock, Inc. 50 Hudson Yards New York, NY 10001 |
154,407,752 | (2) | 6.2 | |||||
| State Street Corporation 1 Congress Street Boston, MA 02114 |
136,648,651 | (3) | 5.5 | |||||
| The Vanguard Group 100 Vanguard Boulevard Malvern, PA 19355 |
246,253,532 | (4) | 10.0 | |||||
| (1) | The number of shares is based on Amendment No. 1 to Schedule 130 jointly filed on April 2, 2024 on behalf of Advance/Newhouse Programming Partnership (“ANPP”), Advance/ Newhouse Partnership (“ANP”), Newhouse Broadcasting Corporation (“NBCo”), and Advance Publications, Inc.(“API”) and a Form 4 filed on December 15, 2023 by Steven 0. Newhouse. ANPP owns directly 184,023,290 shares and ANP owns directly 14,158,459 shares. NBCo beneficially owns such shares indirectly through its 65% interest in ANPP and 61.24% interest in ANP, and API beneficially owns such shares indirectly through its 35% interest in ANPP and 38.76% interest in ANP. API and NBCo may be deemed to beneficially own the shares due to their ownership and control of ANPP and ANP. Each reporting person disclaims beneficial ownership of the shares except to the extent of its pecuniary interest. The board of directors of API makes all voting and investment decisions with respect to the shares. The members of the board of directors of API are Samuel I. Newhouse, Ill, Steven 0. Newhouse, Michael A. Newhouse, Victor F. Ganzi, and Thomas S. Summer. Each of Samuel I. Newhouse, Ill, Steven 0. Newhouse, Michael A. Newhouse, Victor F. Ganzi, and Thomas S. Summer disclaims beneficial ownership of the shares. |
| (2) | The number of shares is based on an Amendment No.1 to Schedule 13G filed January 29, 2024 by BlackRock Inc., a parent holding company, on behalf of the subsidiaries listed in Exhibit A of its filing, none of which beneficially owns five percent or greater of our common stock. BlackRock, Inc. is deemed to be the beneficial owner of shares of our common stock as a result of acting as a parent holding company. |
| (3) | The number of shares is based on an Amendment to Schedule 13G filed January 25, 2024 by State Street Corporation, a parent holding company on behalf of the subsidiaries listed in Exhibit 1 of its filing. State Street Corporation is deemed to be the beneficial owner of shares of our common stock as a result of acting as a parent holding company. |
| (4) | The number of shares is based on Amendment No.15 to Schedule 13G filed February 13, 2024 by The Vanguard Group (“Vanguard”). Vanguard is deemed to be the beneficial owner of shares of our common stock as a result of acting as investment adviser. |
| 106 |
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| Proxy Statement Summary | Election of Directors | Corporate Governance | Audit Matters |
Executive Compensation | Other Matters |
Additional Information | Appendices |
Director and Executive Officer Stock Ownership Requirements
We require that all directors and executive officers maintain the significant stock ownership levels shown below, in order to align their interests with those of our stockholders.
Executive officers, including the CEO, are required to attain these stock ownership levels within five years of assuming their leadership roles, and directors are required to do so within five years of joining the Board. The CEO is also required to hold 1,500,000 shares of common stock during the term of his employment agreement.
To determine whether a director or executive officer meets the required ownership level, shares of our stock beneficially owned by the covered executive, as well as unvested awards of PRSUs and RSUs, but not shares underlying unvested or unexercised stock options, are counted for purposes of meeting the stock holding target. Once a director or executive meets the target, they are expected to maintain holdings at the target for as long as he or she remains a Board member or in a role that is identified as a covered executive under the policy.
The Compensation Committee and the Board may consider failure to meet the requirements of the policy in making compensation decisions for a covered executive and may take any other action appropriate to support the intent of the policy, including requiring an executive or director to retain a percentage of shares pursuant to stock option exercises or vesting events in future years.
Each of the directors and named executive officers is in compliance with the applicable stock ownership guidelines, or on track to meet them within the required period.
Security Ownership of Management
The following table sets forth information, as of April 4, 2025, with respect to the beneficial ownership of our shares of common stock by each of our named executive officers, directors and director nominees and all of our current directors and executive officers as a group.
The percentage ownership is based upon 2,473,835,609 shares of common stock outstanding as of April 4, 2025.
Shares of common stock that may be acquired on or within 60 days of April 4, 2025 are deemed to be outstanding and to be beneficially owned by the person holding the securities for the purpose of computing the percentage ownership of the person, but are not treated as outstanding for the purpose of computing the percentage ownership of any other person.
| 2025 PROXY STATEMENT | 107 |
| Proxy Statement Summary | Election of Directors | Corporate Governance | Audit Matters |
Executive Compensation | Other Matters |
Additional Information | Appendices |
The persons indicated below have sole voting power with respect to the shares owned by them, except as otherwise stated in the notes to the table. The address of each person listed below is 230 Park Avenue South, New York, New York 10003.
| Name of Beneficial Owner |
Number of Shares |
Number of Shares Acquirable Within 60 Days |
Total Number of Shares Beneficially Owned |
Percent of Class (%) |
Number of Deferred RSUs and Notional Shares in Deferred Compensation Accounts |
|||||||||||||||
| David M. Zaslav |
4,210,913 | 15,391,287 | 19,602,200 | (1) | * | |||||||||||||||
| Chief Executive Officer, President and Director |
||||||||||||||||||||
| Gunnar Wiedenfels |
600,702 | 682,123 | 1,282,825 | (2) | * | |||||||||||||||
| Chief Financial Officer |
||||||||||||||||||||
| Bruce L. Campbell |
658,848 | 768,747 | 1,427,595 | (3) | * | |||||||||||||||
| Chief Revenue and Strategy Officer |
||||||||||||||||||||
| Jean-Briac Perrette |
659,120 | 701,411 | 1,360,531 | * | ||||||||||||||||
| CEO and President, Global Streaming and Games |
||||||||||||||||||||
| Gerhard Zeiler |
466,429 | 231,438 | 697,867 | * | ||||||||||||||||
| President, International |
||||||||||||||||||||
| Samuel A. Di Piazza, Jr. |
41,886 | 41,886 | (4) | * | 128,479 | |||||||||||||||
| Director, Board Chair |
||||||||||||||||||||
| Richard W. Fisher |
18,764 | 26,700 | 45,464 | * | 16,106 | |||||||||||||||
| Director |
||||||||||||||||||||
| Paul A. Gould |
717,198 | 717,198 | * | 103,159 | ||||||||||||||||
| Director |
||||||||||||||||||||
| Debra A. Lee |
16,345 | 26,700 | 43,045 | * | 16,106 | |||||||||||||||
| Director |
||||||||||||||||||||
| Joseph M. Levin |
* | 10,537 | ||||||||||||||||||
| Director |
||||||||||||||||||||
| Kenneth W. Lowe |
1,050,341 | 27,493 | 1,077,834 | (5) | * | |||||||||||||||
| Director |
||||||||||||||||||||
| John C. Malone |
18,517,175 | 547,189 | 19,064,364 | (6)(7) | * | 63,151 | ||||||||||||||
| Director |
||||||||||||||||||||
| Fazal F. Merchant |
79,839 | 26,700 | 106,539 | * | ||||||||||||||||
| Director |
||||||||||||||||||||
| Anthony J. Noto |
2,680 | 10,537 | 13,217 | * | ||||||||||||||||
| Director |
||||||||||||||||||||
| Paula A. Price |
* | 62,530 | ||||||||||||||||||
| Director |
||||||||||||||||||||
| Daniel E. Sanchez |
54 | 20,000 | 20,054 | * | ||||||||||||||||
| Director |
||||||||||||||||||||
| Geoffrey Y. Yang |
149,361 | 26,700 | 176,061 | (8) | * | 16,106 | ||||||||||||||
| Director |
||||||||||||||||||||
| Anton J. Levy |
* | |||||||||||||||||||
| Director Nominee |
||||||||||||||||||||
| All current directors and executive officers as a group (20 persons) |
27,272,642 | 18,487,025 | 45,759,667 | 1.9 | % | 416,174 | ||||||||||||||
| , | Less than one percent. |
| 108 |
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| Proxy Statement Summary | Election of Directors | Corporate Governance | Audit Matters |
Executive Compensation | Other Matters |
Additional Information | Appendices |
| (1) | Includes 153 shares held by Mr. Zaslav’s spouse. |
| (2) | Includes 14,140 shares held in UTMA accounts for Mr. Wiedenfels’ children, of which Mr. Wiedenfels is the custodian and 13,045 shares held by Mr. Wiedenfels’ spouse. |
| (3) | Includes 145,418 shares held in an LLC through a grantor retained annuity trust, of which Mr. Campbell is the settlor and trustee, and 209,700 shares held by a trust, of which Mr. Campbell’s spouse is the trustee for the benefit of Mr. Campbell’s children. |
| (4) | Includes 3,443 shares held by Mr. Di Piazza’s spouse. |
| (5) | Includes 793 shares held by a trust, of which Mr. Lowe has investment power. |
| (6) | Includes (i) 1,934,719 shares held by Dr. Malone’s spouse, as to which shares Dr. Malone disclaims beneficial ownership, (ii) 91,789 shares held by trusts for the benefit of Dr. Malone’s children with respect to which Dr. Malone is not the trustee, has no voting or investment power, and has a power of substitution with respect to the shares held in the trusts, as to which shares Dr. Malone disclaims beneficial ownership, (iii) 6,934,606 shares held by trusts, with respect to which Dr. Malone is the sole trustee and (iv) 455,400 shares held by the Malone Family Land Preservation Foundation with respect to which Dr. Malone has no pecuniary interest, disclaims beneficial ownership and has voting and investment power. |
| (7) | Includes 3,650,000 shares which have been pledged in support of one or more lines of credit or margin accounts as of February 28, 2025. |
| (8) | Includes (i) 10,706 shares held in a limited partnership, (ii) 11,937 shares held in an investment company and (iii) 35,653 shares held in a family trust of which Mr. Yang is trustee. |
| 2025 PROXY STATEMENT | 109 |
Exhibit (e)(63)
EXECUTION VERSION
EMPLOYMENT AGREEMENT
This Employment Agreement (“Agreement”) is made this January 9, 2025 by and between Discovery Communications, LLC (“Company”), a subsidiary of Warner Bros. Discovery, Inc. (“WBD”), collectively with respect to affiliates (“WBD Group”) and Priya Aiyar (“you/your”).
You have completed a successful background check as of the date hereof. As a condition to and in consideration of the mutual promises and covenants set forth in this Agreement, Company hereby offers you and you hereby accept employment upon the terms and conditions set forth herein.
| I. | DUTIES, ACCEPTANCE, LOCATION |
| A. | Company hereby employs you to render exclusive and full-time services as Chief Legal Officer on the terms and conditions set forth herein. Your duties shall be consistent with your title and as otherwise reasonably directed by Company. |
| B. | Your primary work location shall be Company’s offices in the New York, New York metropolitan area, but you shall make yourself available for travel to other locations as business needs reasonably require. Subject to Section IV (D)(1) hereof, if Company deems it necessary, Company reserves the right to change the location where you work, and the individual and/or position to whom/which you report, provided that you shall not report to a position at a level lower than Chief Executive Officer of Warner Bros. Discovery, Inc. |
| C. | You hereby accept such employment and agree to render the services described above. Throughout your employment with Company, you agree to serve Company faithfully and to the best of your ability, and to devote your full business time and energy to perform the duties arising under this Agreement in a professional manner that does not discredit but furthers the interests of Company and WBD. At all times during your employ hereunder, you agree to be subject to and will comply with Company’s policies and procedures, including the WBD Code of Ethics, currently in effect and as may be modified from time to time (of which you are advised in writing or should reasonably be aware), except to the extent any such policy or procedure specifically conflicts with the express terms of this Agreement. In addition, you will be required to complete the Conflict of Interest Questionnaires and attend management training and compliance meetings within the time periods prescribed by Company; your failure to do so in a timely fashion may be considered a disciplinary event, including impacting your eligibility for and/or amount of any merit pay increase, and/or discretionary bonus and/or equity grants under this Agreement. |
| II. | TERM OF EMPLOYMENT |
| A. | Subject to Section IV, your term of employment under this Agreement shall be three (3) years beginning on February 24, 2025 (“Start Date”), subject to your compliance with any notice period required by you with your current employer (“Term of Employment”). |
| B. | Company shall have the option to enter negotiations with you to renew this Agreement for an additional term. If Company wishes to exercise its option to enter negotiations with you to renew this Agreement, it shall give you written notice of its intent to enter such negotiations to renew no later than one hundred twenty (120) days prior to the end of the Term of Employment. You and Company agree then to negotiate with each other exclusively and in good faith until the end of the Term of Employment. The Term of Employment may not, however, be extended unless by mutual written agreement of Company and you as to all of the material terms and conditions of the extension. In the event the parties do not enter into an agreement to extend the Term of Employment for an additional term, this Agreement shall expire and the Term of Employment shall end; provided, however, that if Company does not make a Qualifying Renewal Offer (as defined below) you shall be eligible for a Severance Payment pursuant to Section IV(D)(2) herein in connection with your Separation from Service (as defined below) at the end of the Term of Employment (and assuming that you were willing and able at the end of the Term of Employment to perform future services, whether for Company or any other party). If Company has made a Qualifying Renewal Offer, but you decline the offer and terminate employment at the end of the Term of Employment, you shall not be eligible for any Severance Payment from Company but shall be eligible for a Noncompetition Payment (as defined by, and in accordance with, Section VI(F), below). For these purposes, a “Qualifying Renewal Offer” is an offer to renew this Agreement with a meaningful increase in Base Salary and a bonus target that is at least the same level as in effect at the end of the Term of Employment, and with other material terms that are as favorable in the aggregate as the material terms of this Agreement. |
| III. | COMPENSATION |
| A. | Base Salary. Company shall pay you an annual base salary of $1,600,000. Beginning on the Start Date, the Base Salary shall, with respect to each year during the Term of Employment, be paid over the course of twelve (12) months in increments paid on regular Company paydays, less such sums as law requires Company to deduct or withhold. The annual base salary payable to you under this Section III(A), as it may be increased from time to time, shall hereinafter be referred to as the “Base Salary.” Commencing in 2026, your future Base Salary increases shall be reviewed and decided in accordance with Company’s standard practices and procedures as generally |
2
| applied to similarly-situated senior executives of Company (“Senior Executives”). |
| B. | Bonus/Incentive Payment. In addition to the Base Salary paid to you pursuant to Section III(A), you shall be eligible to participate in Company’s then-effective annual incentive compensation plan with an annual incentive payment target of 150% of the Base Salary (“Target”). For 2025, your bonus/incentive payment shall be calculated based on a full year. The portion of the incentive payment payable to you shall be determined and paid in accordance with Company’s then effective annual incentive compensation plan (e.g., subject to reduction for Company/division under performance and increase for Company/division over performance). |
| C. | Benefits/Vacation. During the Term of Employment, you shall be entitled to participate in and receive benefits under Company’s employee benefit plans, programs and arrangements which you are eligible for participation in (and, for those plans which require a voluntary election, you elect to participate in). In addition, you shall be entitled to paid time off pursuant to Company’s time off policy. |
| D. | Equity Program. |
| 1. | New Hire Grant. You have informed Company that you may forfeit your 2024 annual bonus payable in 2025 by your former employer (“Former Employer Bonus”) due to your resignation to accept employment with Company. If you fail to receive the Former Employer Bonus, you shall represent in writing to the Company (and directed to Jennifer Remling, Chief People and Culture Officer) no later than thirty (30) days after such annual bonuses are paid to similarly situated executives at your former employer, that you have not received any Former Employer Bonus (such date, “Former Bonus Notification Date”). Subject to and conditioned on you commencing employment with Company on the Start Date and executing this Agreement, you shall receive a one-time award of Restricted Stock Units (“RSUs”) with a target value of up to $12,500,000, less any Former Employer Bonus (or portion thereof) paid to you, under the Warner Bros. Discovery Stock Incentive Plan or a successor plan (the “Stock Plan”). The award (“New Hire Grant”) shall be subject to the normal process and practices for approving and granting of equity to Senior Executives (including final approval by the Compensation Committee of the WBD Board of the Directors (the “Compensation Committee”) of the grant date within the time frame set forth in this paragraph) and awarded the later of (i) 14 days following the Former Bonus Notification Date and |
3
| (ii) 90 days following the Start Date. The RSUs for this grant shall vest over a period of three (3) years as follows: 40% of RSUs shall vest on December 15 2025, 35% of RSUs shall vest on December 15, 2026 and 25% of RSUs shall vest on December 15, 2027 and shall otherwise be subject to the terms and conditions of the Stock Plan and implementing award agreement. |
| 2. | Annual Grant. So long as the Term of Employment has not terminated and provided neither you nor the Company has given notice of intent to terminate employment commencing in 2025, when WBD grants its regular annual long-term incentive awards each year (or within thirty (30) days following your Start Date, if your Start Date occurs after the date on which WBD made such grants for 2025), you will be eligible to receive annual long-term incentive compensation (the “Annual LTI Award”) with a target value of no less than $5,000,000 per year during the Term of Employment in accordance with the Company’s then standard practices and procedures for awards to Senior Executives. The equity instruments, terms and conditions, and calculation of number of awards shall be based on Company’s then standard practices and procedures for awards to Senior Executives. |
| 3. | Change in Control. In the award agreements granting the New Hire Grant as well as any Annual Equity Grant, Company hereby agrees to provide that if an Approved Transaction, Control Purchase, or Board Change, as such terms are defined in the Stock Plan (each a “Change in Control”), occurs before such equity award has vested and provided that there is an equitable substitution or replacement for the equity award in connection with a Change in Control, the vesting of the equity award shall fully accelerate as a result of such Change in Control only if and when (i) within 12 months after the Change in Control, (A) the Company or a Subsidiary (as defined in the Stock Plan) terminates your employment other than for Cause, or (B) if you resign for Good Reason, or (ii) during such 12- month period after the Change in Control, you are given notice by Company that, in connection with a termination of your employment by Company other than for Cause, you shall no longer be required to provide services for Company or its affiliates or subsidiaries as an employee and you cease to provide such services, but due to the length of any statutorily or contractually required notice period, your employment actually terminates following the expiration of such 12-month period. Any accelerated vesting as described in the preceding sentence |
4
| shall occur only if and to the extent permitted under Section 409A of the Code and the regulations thereunder. |
| E. | Clawback Policy. You agree to acknowledge and comply fully with the WBD Compensation Clawback Policy (the “Clawback Policy”), currently in effect and as may be modified from time to time. In the event of any inconsistency between the Clawback Policy and the terms of this Agreement, or the terms of any WBD compensation plan, program or agreement under which any compensation has been granted, awarded, earned or paid to you, the terms of the Clawback Policy shall govern. In the event it is determined by the Compensation Committee that any amounts granted, awarded, earned, or paid to you must be forfeited or reimbursed to the Company, you will promptly take any action necessary to effectuate such forfeiture and/or reimbursement. |
| F. | Expenses. Company shall reimburse you for business, travel and entertainment expenses reasonably and actually incurred during the performance of your duties pursuant to this Agreement to the extent such reimbursement is sought in accordance with Company’s business, travel, and entertainment policies and procedures. |
| G. | Travel. You will be entitled to business travel benefits and opportunities under Company’s travel policies. |
| H. | Director and Officer Liability Insurance. You shall be eligible for and entitled to insurance coverage under Company’s director and officer liability insurance and employment practices liability insurance policies in accordance with those policies and in amounts similar to coverage afforded other Senior Executives for activities on behalf of Company, WBD or any entity that directly or indirectly, through one or more intermediaries, controls, is controlled by, or is under common control with Company (“control” of Company or any other entity meaning the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of such entity, whether through the ownership of voting securities or other interests, by contract or otherwise) (each an “Affiliate”; provided, however, that no stockholder of WBD shall be an Affiliate of Company for purposes of this Agreement) and otherwise shall be eligible for and entitled to indemnification in accordance with Company’s corporate governance requirements, but, in any event, not including any amendments or additions after the Start Date that limit or narrow, but including any that add to or broaden, the protection afforded to you by those requirements. |
| IV. | TERMINATION OF EMPLOYMENT |
| A. | Death. If you should die during the Term of Employment, this Agreement shall automatically terminate. No further amounts or benefits shall be |
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| payable except earned but unpaid Base Salary, unreimbursed business expenses, and those benefits that may vest in accordance with the controlling documents for other relevant Company benefit programs, which shall be paid in accordance with the terms of this Agreement and such other Company benefit programs, including the terms governing the time and manner of payment (the “Accrued Benefits”). Company also shall pay a prorated portion of your annual bonus Target for the calendar year of your death based on the amount of time you were employed during that calendar year (and subject to achievement of any applicable performance metrics), payable at the time annual bonuses are ordinarily paid to Senior Executives. Your then-outstanding equity awards under the Stock Plan shall be treated in accordance with the applicable plan documents and implementing award agreements. |
| B. | Inability To Perform Duties. If, during the Term of Employment, you should become physically or mentally disabled, such that you are unable to perform your duties under Sections I (A) and (C) hereof for (i) a period of six (6) consecutive months or (ii) for shorter periods that add up to six (6) months in any eight (8)-month period, by written notice to you, Company may terminate the Term of Employment. Notwithstanding the foregoing, the Term of Employment shall terminate upon you incurring a “Separation from Service” under the medical leave rules of Code Section 409A (as defined in Section VIII(I)). In such case, no further amounts or benefits shall be payable to you, except that you shall (i) receive the Accrued Benefits, (ii) receive a prorated portion of your annual bonus at Target for the calendar year of your Separation from Service based on the amount of time you were employed during that calendar year (and subject to achievement of any applicable performance metrics), payable at the time annual bonuses are ordinarily paid to Senior Executives, and (iii) be eligible to elect to (x) receive continued coverage under Company’s relevant medical or disability plans to the extent permitted by, and under the terms of, such plans and to the extent such benefits continue to be provided to other former Senior Executives generally or (y) receive COBRA continuation of the group health benefits previously provided to you and your dependents (provided you timely elect such COBRA coverage) in which case Company shall pay the premiums for such COBRA coverage up to the maximum applicable COBRA period, provided that if Company determines that the provision of continued group health coverage at Company’s expense may result in Federal taxation of the benefit provided thereunder to you (e.g., because such benefits are provided by a self-insured basis by Company), then you shall be obligated to pay the full monthly premium for such coverage and, in such event, Company shall pay you, in monthly installments, an amount equivalent to the monthly premium for COBRA coverage for the remaining balance of the maximum applicable COBRA period (provided, that Company shall cease to pay such COBRA premiums at such time that you |
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| obtain new employment and are eligible for health insurance benefits from a new employer). Your then-outstanding equity awards under the Stock Plan shall be treated in accordance with the applicable plan documents and implementing award agreements. |
| C. | Termination For Cause. |
| 1. | Company may, subject to Section IV (C)(2), terminate the Term of Employment for Cause by written notice. “Cause” shall mean: (i) the conviction of, or nolo contendere or guilty plea, to a felony (whether any right to appeal has been or may be exercised); (ii) conduct constituting embezzlement, misappropriation or fraud, whether or not related to your employment with Company; (iii) conduct constituting a financial crime, material act of dishonesty or conduct in material violation of WBD’s Code of Ethics or other Company written policies; (iv) improper conduct substantially prejudicial to Company’s or WBD’s business (whether financial or otherwise); (v) willful unauthorized disclosure or use of Company or WBD Confidential Information (as such term is defined in Exhibit B); (vi) material improper destruction of Company or WBD property; or (vii) willful misconduct in connection with the performance of your duties. |
| 2. | In the event that you materially neglect your duties under Section I (A) or Section I (C) hereof or engage in other conduct that constitutes a breach by you of this Agreement, including any conduct constituting Cause (collectively, “Breach”), Company shall so notify you in writing. Other than a Breach that is not susceptible to cure, you shall be afforded a one time only opportunity to cure the noted Breach within ten (10) calendar days from receipt of such notice. If, in the Company’s sole discretion, no cure is achieved within this time, or if you engage in the same Breach a second time after once having been given the opportunity to cure, Company has the right to terminate the Term of Employment by written notice to you. |
| 3. | Any termination of the Term of Employment pursuant to Sections IV(C)(1) or Section IV(C)(2) hereof shall be considered a termination of your employment for “Cause” and upon such termination, you shall only be entitled to receive any amounts or benefits hereunder that have been earned or vested at the time of such termination in accordance with the terms of the applicable governing Company or WBD plan(s) (including the provisions of such plan(s) governing the time and manner of payment), and/or as may be required by law. “Cause” as used |
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| in any such Company or WBD plan shall be deemed to mean solely the commission of acts described in Section IV(C)(1) or Section IV(C)(2) hereof (after giving effect to the cure opportunity described in Section IV(C)(2)). |
| D. | Termination Of Employment By You for Good Reason/Termination of Employment by Company Not For Cause. |
| 1. | Company may terminate the Term of Employment not For Cause (as defined above), and you may terminate the Term of Employment for “Good Reason” as defined herein. “Good Reason” for purposes of this Agreement shall only mean the occurrence of any of the following events without your consent: (a) a material reduction in your duties or responsibilities ; (b) Company’s material change in the location of Company office where your work (i.e., relocation to a location outside the New York City metropolitan area); or (c) a material breach of this Agreement by Company, including a change in the position to which you report as set forth in Section I(B); provided however, that you must provide Company with written notice of the existence of the reduction, change or breach constituting Good Reason within sixty (60) calendar days of any such event having occurred, and allow Company thirty (30) calendar days to cure the same in writing to you. If Company so cures the reduction, change or breach, you shall have no basis for terminating the Term of Employment for Good Reason with respect to such cured reduction, change or breach. You must terminate your employment in writing within five (5) calendar days following the expiration of Company’s cure period for the termination to be on account of Good Reason or such right shall be deemed waived. |
| 2. | (i) If Company terminates the Term of Employment not for Cause, (ii) if Company elects not to renew the Term of Employment in circumstances that trigger your entitlement to severance under Section II (B), or (iii) if you terminate the Term of Employment for Good Reason, then Company shall pay you the Accrued Benefits. In addition, Company shall make the following payments (collectively, the “Severance Payment”): |
(a) Commencing as soon as administratively possible after the Release Effective Date (as defined below), Company shall pay you your Base Salary for the period beginning on your termination date through the period which is the longest of (i) the balance of the Term of Employment but not to exceed twenty-four (24) months, (ii)
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twelve (12) months, and (iii) the number of weeks of severance to which you would have been entitled had Company’s then-current redundancy severance plan applied to your termination, except that the first installment payment shall include any installments that would have been payable between the date of termination and the Release Effective Date had the release requirement under Section IV(D)(3) hereof been satisfied on the date of termination (the “Base Salary Continuation”). For the avoidance of doubt, in no event shall the Base Salary Continuation period be longer than twenty- four (24) months. In the event the Base Salary Continuation period is calculated under Section 2(a)(ii) or 2(a)(iii) of this paragraph and Company places you in an inactive employment status for some period of time prior to the effective date of your termination of employment, this period of “garden leave” shall be offset against the number of weeks of Base Salary Continuation. Notwithstanding the foregoing, the Base Salary Continuation may in no event be less than twenty-six (26) weeks. While employed in an inactive status, your obligation to provide exclusive and full-time services to Company pursuant to Sections I(A) and I(C) shall remain in full force and effect unless you are directed by Company in writing to mitigate. For purposes of Section 409A of the Internal Revenue Code (“Code Section 409A”), your “Services Cessation Date” is the date you stop rendering active services, and “Service Cessation Date” means a “Separation from Service” under Code Section 409A.
Except as provided in this Section IV (D)(2) with respect to the first installment payment, the Base Salary Continuation shall be paid weekly in substantially equal increments, less required deductions and withholdings, until the balance is paid in full.
(b) Notwithstanding anything in Company’s then-effective annual incentive compensation plan to the contrary, you shall be paid a bonus at Target under Section III (B) for each full calendar year within the Base Salary Continuation period (which, for clarity, will include a full bonus for the year in which termination occurs) (“Severance Bonus”). For any partial calendar year within which the Base Salary Continuation period ends, you shall only be entitled to a prorated Target bonus based on the elapsed time from January 1 of such partial year through the last day of the Base Salary Continuation period. The foregoing bonus/incentive payments portions of the Severance Payment shall be paid to you in a single lump sum on the date that Company pays bonuses/incentive payments to its other Senior Executives for the applicable then- effective annual incentive compensation plan year.
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(c) During the Base Salary Continuation period, you will continue to be eligible to participate in the WBD Group Health Plan, the WBD Health Care Flexible and Limited Purpose Spending Account programs, and the Health Savings Account, to the extent such health and welfare benefits are maintained in effect by the Company for its executives. Notwithstanding the foregoing, your medical coverage under the WBD Health Plan will be affected when you or your covered dependent are eligible (or become eligible) for Medicare and immediate steps should be taken to enroll in Medicare Part A & B. The WBD Group Health Plan assumes you are enrolled in Medicare Part A & B and Medicare is your primary payor. For the avoidance of any doubt, during the Base Salary Continuation period, you will not be eligible to participate in the Company’s disability programs. Your ability to contribute to the Warner Bros. Discovery 401(k) Savings Plan and to participate in the other qualified and non- qualified retirement plans of the Company will end on your termination date or such earlier date on which you cease to provide active services to the Company, in each case, as required under the terms of the applicable plan document or applicable law. You shall not be entitled to any additional awards or grants under any stock option, restricted stock, RSUs or other stock-based incentive plan. Notwithstanding the foregoing, if you become eligible by reason of your employment by or provision of services to a third party to participate in such third party’s comparable medical or dental insurance, or life insurance program, you agree to give timely notice of such eligibility to the Company and to provide such limited information concerning your eligibility as may be reasonably needed to coordinate benefits between the two programs in accordance with the coordination of benefits provisions in those programs. You agree that upon your eligibility for comparable medical, dental, or life insurance programs, you will seek any such coverages offered by such third party and that the benefits and coverages provided by the Company hereunder will terminate upon the effective date of the coverage provided by such third party.
| 3. | No Severance Payment shall be made if you fail to sign a general release of claims substantially in the form attached hereto as Exhibit A (which may include any additional updates as Company may determine to be necessary or advisable to comply with applicable law). Such release must be executed and become effective after your termination date and within the review period (including any applicable revocation period) designated in the general release (the “Release Effective Date”). Notwithstanding the foregoing, if payment of the Severance Payment could commence in more than one taxable |
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| year based on when the Release Effective Date occurs, then any such payments that would have been made during the calendar year in which your employment terminates shall instead be withheld and paid on the first payroll date in the calendar year immediately after the calendar year in which your employment terminates, with all remaining payments to be made as if no such delay had occurred. No Severance Payment shall be made if you violate Section VI hereof, in which case all Severance Payments shall cease, and Company may seek forfeiture of Severance Payments already made. |
| 4. | Company agrees that if, at the time the Term of Employment is terminated not for Cause, or you terminate the Term of Employment for Good Reason, and Company has a standard severance policy in effect that would be applicable in the absence of this Agreement (i.e., applicable to the circumstances surrounding the termination) and that would result in you receiving a sum greater than the Severance Payment, you shall receive whichever is the greater of the two payments; provided, that if (i) the standard severance policy would provide for a sum greater than the Severance Payment, and (ii) the payment schedule under the severance policy is different from the payment schedules for the Severance Payment and would result in an impermissible acceleration or delay in payment in violation of the time and manner of payment requirements of Code Section 409A, then the payment schedule provided in Company’s standard severance policy shall apply only to the portion of the amount payable under the standard severance policy that exceeds the Severance Payment. |
| 5. | If you terminate the Term of Employment before it has expired for a reason other than one or more of those stated in Section IV(D)(1) hereof, it shall be deemed a material breach of this Agreement. You agree that, in that event, in addition to any other rights and remedies which Company or WBD may have as a result of such breach, you shall forfeit all rights to be compensated for any remaining portion of your Base Salary, Severance Payment and/or bonus/incentive payment that may otherwise be due under this Agreement, pursuant to other Company or WBD plans or policies, or otherwise, except for Accrued Benefits or as may be required by law. Notwithstanding the foregoing, if you give at least six (6) months advance written notice of your intention to terminate the Term of Employment before it has expired for a reason other than one or more of those stated in Section IV(D)(1) |
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| hereof, then the sole consequence thereof will be that you will forfeit the aforesaid financial entitlements. |
| E. | Right To Offset. In the event that you secure employment or any consulting or contractor or business arrangement for services you perform during the period that any payment from Company is continuing or due under Section IV (D) hereof, you shall have the obligation to timely notify Company of the source and amount of payment (“Offset Income”). Company shall have the right to reduce the Severance Payment by the Offset Income. You acknowledge and agree that any non-contingent deferred compensation for your services from another source that are performed while receiving Severance Payments from Company will be treated as Offset Income (regardless of when you choose to receive such compensation). In addition, to the extent that your compensation arrangement for the services include elements that are required to be paid later in the term of the arrangement (e.g., bonus or other payments that are earned in full or part based on performance or service requirements for the period during which the Severance Payment is made), Company may calculate the Offset Income by annualizing or by using any other reasonable methodology to attribute the later payments to the applicable period of the Severance Payment. You agree to provide Company with information sufficient to determine the calculation of the Offset Income, including compensation excerpts of any employment agreement or other contract for services, Form W-2s, and any other documentation that Company reasonably may require, and that failure to provide timely notice to Company of Offset Income or to respond to inquiries from Company regarding any such Offset Income shall be deemed a material breach of this Agreement. You also agree that Company shall have the right to inquire of third-party individuals and entities regarding potential Offset Income and to inform such parties of Company’s right of offset under this Agreement with you. Accordingly, you agree that no further Severance Payment from Company will be made until or unless this breach is cured and that all payments from Company already made to you, during the time you failed to disclose your Offset Income, shall be forfeited, and must be returned to Company upon its demand, up to the amount of Offset Income attributable to such period. Any offsets made by Company pursuant to this Section IV(E) shall be made at the same time and in the same amount as a Severance Payment amount is otherwise payable (applying the Offset Income to Company’s payments in the order each are paid) so as not to accelerate or delay the payment of any Severance Payment installment. In the event you become reemployed by or engaged to perform services for Company or any Affiliates, during the Base Salary Continuation period, your severance pay and related benefits will end on the effective date of that employment or engagement. You agree to repay the Company any sums due it and/or authorize the Company to deduct such amounts from the payments to be |
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| made to you by the Company pursuant to this Agreement, to the extent allowed by law. |
| F. | Mitigation. In the event of your termination of employment pursuant to Section IV (D) herein, and during the period that any payment from Company is continuing or due under Section IV (D), you shall be under a continuing obligation to seek other employment, including taking all reasonable steps to identify and apply for any comparable, available jobs for which you are qualified in either the New York or Washington, DC metropolitan areas. At Company’s request, you may be required to furnish to Company proof that you have engaged in efforts consistent with this paragraph, and you agree to comply with any such request. You further agree that Company may follow-up with reasonable inquiries to third parties to confirm your mitigation efforts. Should Company determine in good faith that you failed to take reasonable steps to secure alternative employment consistent with this paragraph, Company shall be entitled to cease any payments due to you pursuant to Section IV(D)(2) following notice to you with a ten (10) day opportunity to cure. |
| V. | CONFIDENTIAL INFORMATION |
| A. | You acknowledge your fiduciary duty to Company. As a condition of employment, you agree to protect and hold in a fiduciary capacity for the benefit of Company all confidential information, knowledge or data, including the terms of this Agreement and, without limitation, all trade secrets relating to Company and its Affiliates, and their respective businesses, (i) obtained by you during your employment by Company or otherwise and (ii) that is not otherwise publicly known (other than by reason of an unauthorized act by you). After termination of your employment with Company, you shall not communicate or divulge any such information, knowledge or data to anyone other than Company and those designated by it, without the prior written consent of Company. For the avoidance of doubt, and notwithstanding the foregoing, nothing herein or in this Agreement shall (x) prohibit you from communicating with a government agency, regulator or legal authority concerning any possible violations of federal or state law or regulation, or (y) prevent or limit you from discussing your terms and conditions of employment. Nothing herein or in this Agreement, however, authorizes the disclosure of information you obtained through a communication that was subject to the attorney-client privilege, unless disclosure of the information would otherwise be permitted by an applicable law or rule. As a condition of employment, you are required to sign a Confidential Information and Assignment of Inventions Agreement, which is attached hereto as Exhibit B and incorporated herein by reference. |
| B. | In the event that you are compelled, pursuant to a subpoena or other order of a court or other body having jurisdiction over such matter, to produce |
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| any information relevant to Company, whether confidential or not, you agree to provide Company with such written notice of this subpoena or order within three (3) business days of receiving it so that Company may timely move to quash if appropriate unless such notice to Company is prohibited by law or procedure. You also agree to cooperate with Company in any legal action for which your participation is needed; the Company shall reimburse you for any reasonable out-of-pocket travel and accommodation-related expenses incurred by you as a result of such cooperation, and such cooperation shall be subject to your reasonable professional availability. Company agrees to try to schedule all such meetings so that they do not unduly interfere with your pursuits after you are no longer in Company’s employ. |
| VI. | RESTRICTIVE COVENANTS |
| A. | You covenant that during the Term of Employment and, for a period of twelve (12) months after the conclusion thereof (the “Restricted Period”), you shall not, directly or indirectly, on your own behalf (i.e. self- employment) or on behalf of any entity or individual, engage in any business activities involving the production, provision and/or delivery of, nonfiction, scripted, sports, lifestyle, news, interactive games, or general entertainment television programming or content (whether in cable, broadcast, free to air, digital, streaming, film, or any other distribution method) within the Restricted Territory (“Competitive Services”). The Restricted Territory is the United States and any other country for which you had management responsibilities (e.g., supervised employees located in that country or was involved in business or programming operations in that country) at any time during the three (3) years prior to your separation from employment. This provision shall not prevent you from owning stock in any publicly-traded company; provided, that, your ownership is equal to or less than three (3) percent of such entity’s outstanding stock. You agree that this Section VI (A) is a material part of this Agreement, breach of which will cause Company irreparable harm and damages, the loss of which cannot be adequately compensated at law. In the event that the provisions of this paragraph should ever be deemed to exceed the limitations permitted by applicable laws, you and Company agree that such provisions shall be reformed to the maximum limitations permitted by the applicable laws. In the event that Executive is placed on “garden leave” pursuant to Section IV (D) prior to separation and the period of Base Salary Continuation is less than six months, the Restricted Period shall be six (6) months or the period of Base Salary Continuation, whichever is shorter. Nothing in this Section VI will restrict you from the right to practice law (including an in-house legal role) following the termination of employment with Company. |
| B. | During your employment and for a period of eighteen (18) months following the conclusion of your employment with Company, you covenant |
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| that you will not directly or indirectly solicit, recruit, interfere with or otherwise attempt to entice, any employees of Company or any of its Affiliates to leave their employment with Company or such Affiliate. |
| C. | You acknowledge that during your employment, you will learn confidential, nonpublic information about the Company’s vendors, producers, independent contractors, and other business partners. In order to protect this confidential information, during your employment and for an eighteen (18) month period following the conclusion of your employment with Company, you covenant that you will not directly or indirectly solicit, recruit, interfere with or otherwise attempt to entice, solicit, induce or encourage any vendor, producer, independent contractor, or business partner to terminate its business relationship with Company or its Affiliates. |
| D. | During the period you are employed by Company, you covenant and agree not to engage in any other business activities whatsoever, or to directly or indirectly render services of a business, commercial or professional in nature to any other business entity or organization, regardless of whether you are compensated for these services, unless you obtain the prior written consent of the Chief Executive Officer of WBD and complies with the standard Conflict of Interest internal process for review of outside activities. Notwithstanding the foregoing, you may remain on any boards of directors (including on boards of organizations from which you receive compensation) of which you are currently a member as set forth in Schedule 1; provided, that such activities do not conflict or interfere with the performance of your duties or responsibilities hereunder. You may retain any compensation or benefits received as a result of any such outside activities, and Company shall not reduce your compensation by the amount of any such compensation or benefits. |
| E. | Throughout the period that you are an employee of Company, you agree to disclose to Company any direct investments (i.e., any investment in which you have made the decision to invest in a particular company) you have in a company that is a competitor of Company or its Affiliates (“Competitor”) or that Company or its Affiliates is doing business with during the Term of Employment (“Partner”), if such direct investments result in you or your immediate family members, and/or a trust established by you or your immediate family members, owning three (3) percent or more of such a Competitor or Partner. This Section VI(E) shall not prohibit you, however, from making passive investments on behalf of you and your family (i.e., where you do not make the decision to invest in a particular mutual fund or similar entity, even if such entity, in turn, invests in such a Competitor or Partner). Regardless of the nature of your investments, you herein agree that your investments may not materially interfere with your obligations and ability to provide services under this Agreement. |
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| F. | If Company makes a Qualifying Renewal Offer, you decline such offer, and you terminate employment at the end of the Term of Employment, you shall be eligible for a Noncompetition Payment (as defined below). Provided that you sign a release in the form attached hereto as Exhibit A, and such release is executed and becomes effective on or before the Release Deadline, then, on the Release Deadline, Company will commence to pay you an amount equal to 50% of your Base Salary for the Restricted Period and you also shall receive a prorated portion of your annual bonus Target for the calendar year in which the Term of Employment ends based on the amount of time you were employed during that calendar year (and subject to achievement of any applicable performance metrics), payable at the time annual bonuses are ordinarily paid to Senior Executives, but in no event shall it be paid later than March 15th of the year following the calendar year in which the Term of Employment ends (the “Noncompetition Payment”). The Base Salary component of the Noncompetition Payment shall be paid in substantially equal increments on regular Company paydays (less required deductions and withholdings), except that the first installment payment shall also provide any installments that would have been payable between the date of termination and the Release Deadline had the release requirement under Section (IV)(D)(3) been satisfied on the date of termination (less required deductions and withholdings), until the balance is paid in full, provided that you comply with the provisions of this Section VI; provided, however, the last sentence of Section IV(A) shall not be applicable or have any effect in determining such compliance (it being understood that you will not be eligible to receive a Noncompetition Payment if you practice law at a Competitor). For the avoidance of doubt, the Noncompetition Payment is intended to be paid in circumstances in which you are not eligible for the Severance Payment |
| G. | Prior to the conclusion of your employment with Company, you shall return all Company property and materials, including equipment, such as laptop computers and mobile telephones, and documentation, such as files (including originals and copies), notes, e-mail accounts and computer disks. |
| H. | In the event that you violate any provision of this Section VI, in addition to any injunctive relief and damages to which you acknowledge Company would be entitled, all Severance Payments or Noncompetition Payment to you, if any, shall cease, and Company may seek forfeiture of any Severance Payments or Noncompetition Payment already made. |
| VII. | ARBITRATION |
| A. | Submission To Arbitration. Company and you agree to submit to arbitration all claims, disputes, issues or controversies between Company and you or between you and other employees of Company or its Affiliates (collectively “Claims”) directly or indirectly relating to or arising out of |
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| your employment with Company or the termination of such employment including Claims under Title VII of the Civil Rights Act of 1964, as amended, the Civil Rights Act of 1991, the Age Discrimination in Employment Act of 1967, the Americans With Disabilities Act of 1990, Section 1981 of the Civil Rights Act of 1966, as amended, the Family Medical Leave Act, the Employee Retirement Income Security Act, and any Claim arising under any similar federal, state or local law, statute, regulation or common law doctrine or out of this Agreement. |
| B. | Use Of AAA; Choice of Law. All Claims for arbitration shall be presented to the American Arbitration Association (“AAA”) in accordance with its applicable rules (“Rules”). The seat or place of arbitration shall be New York metropolitan area. The arbitrator(s) shall be directed to apply the substantive law of federal and state courts sitting in New York without regard to conflict of law principles. Any arbitration pursuant to this Agreement shall be deemed an arbitration proceeding subject to the Federal Arbitration Act. |
| C. | Binding Effect. Arbitration shall be binding and shall afford parties the same options for damage awards as would be available in court. You and Company agree that discovery shall be allowed, and all discovery disputes shall be decided, exclusively by arbitration in accordance with the Rules. |
| D. | Damages and Costs. Any damages shall be awarded only in accord with applicable law. The arbitrator may only order your reinstatement if money damages are insufficient. The parties shall bear in equal shares all fees and expenses of arbitration. However, each party shall bear the expense of its own counsel, experts, witnesses and preparation and presentation of proof. |
| VIII. | CONTROLLING LAW AND ADDITIONAL COVENANTS |
| A. | The validity and construction of this Agreement or any of its provisions shall be determined under the laws of the State of New York. The invalidity or unenforceability of any provision of this Agreement shall not affect or limit the validity and enforceability of the other provisions. |
| B. | If any provision of this Agreement is held by a court of competent jurisdiction to be invalid, void or unenforceable, the remaining provisions shall nevertheless continue in full force and effect without being impaired or invalidated. The section headings of this Agreement are for convenience only and shall not in any way affect the interpretation of any section hereof or of the Agreement itself. Any provision of this Agreement which refers to the words “include,” “includes,” or “including” shall be deemed to be followed by the words “without limitation.” |
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| C. | You warrant that (1) your employment under this Agreement will not violate or conflict in any way with any other contract or agreement to which you are bound; (2) you will do nothing on behalf of Company that violates or conflicts with any such contract or agreement; and (3) you will indemnify Company for any liability, damages, costs, or attorneys’ fees that Company suffers as a result of any such violation or conflict. |
| D. | You expressly acknowledge that Company has advised you to consult with independent legal counsel of your choosing prior to you signing this Agreement to review and explain to you the legal effect of the terms and conditions of this Agreement. |
| E. | Without limiting anything to the contrary in this Agreement, unless and until publicly disclosed by the Company, you agree not to disclose the terms hereof to any person or entity, other than your attorneys, accountants, financial advisors, or members of your immediate family who need to know this information and agree to keep it confidential. |
| F. | This Agreement supersedes any and all other agreements, either oral or in writing, between the parties with respect to your employment by Company and contains all of the covenants and agreements between the parties with respect to such employment in any manner whatsoever. Each party to this Agreement acknowledges that no representations, inducements, promises or agreements have been made, orally or otherwise, by any party, or anyone acting on behalf of any party, that are not stated in this Agreement, and that no other agreement, statement or promise not contained in this Agreement shall be valid or binding. Notwithstanding either of the foregoing sentences, or any other provision of this Agreement, this Agreement shall not supersede, replace, invalidate or otherwise modify or affect any restrictive covenants in any previous, subsequent or other agreements or documents between you and Company, including, without limitation, any covenants regarding confidentiality, intellectual property, confidential and proprietary information, non-competition, non-solicitation of customers, non- solicitation or no hire of employees, and the like (collectively, “Other Restrictive Covenants”), and any such Other Restrictive Covenants will remain in effect and you shall remain bound by such Other Restrictive Covenants. To the extent any of the restrictions or covenants contained in this Agreement conflict in any way with any such Other Restrictive Covenants, such conflict shall be resolved by giving effect to the provision that provides the greatest protection to Company that is enforceable under applicable law. |
| G. | This Agreement may be amended, modified, superseded, cancelled, renewed or extended and the terms or covenants hereof may be waived only by written instrument signed either by hand or electronic means (i.e., e- |
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| signature) by both of the parties hereto, or in the case of a waiver, by the party waiving compliance. |
| H. | Any payments to be made by Company hereunder shall be made subject to applicable law, including required deductions and withholdings. |
| I. | Section 409A of the Code. |
| 1. | It is intended that the provisions of this Agreement comply with Section 409A of the Internal Revenue Code of 1986, as amended, (the “Code”) and the regulations and guidance promulgated thereunder (collectively, “Code Section 409A”), and all provisions of this Agreement shall be construed in a manner consistent with the requirements for avoiding taxes or penalties under Code Section 409A. Notwithstanding the foregoing, Company shall have no liability to you with regard to any failure to comply with Code Section 409A so long as Company has acted in good faith with regard to compliance therewith. |
| 2. | If under this Agreement, an amount is to be paid in two or more installments, for purposes of Code Section 409A, each installment shall be treated as a separate payment. |
| 3. | A termination of employment shall not be deemed to have occurred for purposes of any provision of this Agreement providing for the payment of amounts or benefits upon or following a termination of employment unless such termination is also a “Separation from Service” within the meaning of Code Section 409A and, for purposes of any such provision of this Agreement, references to a “resignation,” “termination,” “termination of employment,” “separation” or like terms shall mean Separation from Service. |
| 4. | If you are deemed on the date of termination of your employment to be a “specified employee”, within the meaning of that term under Section 409A(a)(2)(B) of the Code and using the identification methodology selected by Company from time to time, or if none, the default methodology, then: |
| a. | With regard to any payment, the providing of any benefit or any distribution of equity upon Separation from Service that constitutes “deferred compensation” subject to Code Section 409A, such payment, benefit or distribution shall not be made or provided prior to the earlier of (i) the expiration of the six-month period measured from the date |
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| of your Separation from Service or (ii) the date of your death; and |
| b. | On the first day of the seventh month following the date of your Separation from Service or, if earlier, on the date of your death, (x) all payments delayed pursuant to this Section VIII(I)(4) (whether they would otherwise have been payable in a single sum or in installments in the absence of such delay) shall be paid or reimbursed to you in a lump sum, and any remaining payments and benefits due under this Agreement shall be paid or provided in accordance with the normal dates specified from them herein and (y) all distributions of equity delayed pursuant to this Section VIII(I)(4) shall be made to you. |
| 5. | With regard to any provision herein that provides for reimbursement of costs and expenses or in-kind benefits, except as permitted by Code Section 409A, (i) the right to reimbursement or in-kind benefits shall not be subject to liquidation or exchange for another benefit, (ii) the amount of expenses eligible for reimbursement, of in-kind benefits, provided during any taxable year shall not affect the expenses eligible for reimbursement, or in-kind benefits to be provided, in any other taxable year, provided that the foregoing clause (ii) shall not be violated without regard to expenses reimbursed under any arrangement covered by Section 105(b) of the Code solely because such expenses are subject to a limit related to the period the arrangement is in effect and (iii) such payments shall be made on or before the last day of your taxable year following the taxable year in which the expense occurred. |
| 6. | Whenever a payment under this Agreement specifies a payment period with reference to a number of days (e.g., “payment shall be made within thirty (30) days following the date of termination”), the actual date of payment within the specified period shall be within the sole discretion of Company. |
| J. | This Agreement shall be binding upon and inure to the benefit of the parties and their respective successors, your heirs, and assigns. The rights or obligations under this Agreement may not be assigned or transferred by either party, except that such rights or obligations may be assigned or transferred pursuant to a merger or consolidation in which Company is not the continuing entity, or the sale or liquidation of all or substantially all of the assets of Company; provided, however, that the assignee or transferee is the successor to all or substantially all of the assets of Company and such assignee or transferee assumes the liabilities, obligations and duties of |
20
| Company, as contained in this Agreement, either contractually or as a matter of law. Notwithstanding the foregoing, this Agreement may be assigned to any Affiliate of Company which employs you. |
| K. | This Agreement may be executed with electronic signatures, in any number of counterparts. The electronically signed Agreement shall constitute one original agreement. Duplicates and electronically signed copies of this Agreement shall be effective and fully enforceable as of the date signed and sent. |
| L. | All notices and other communications to be made or otherwise given hereunder shall be in writing and shall be deemed to have been given when the same are (i) addressed to the other party at the mailing address or email address indicated below, and (ii) either: (a) personally delivered or mailed, registered or certified mail, first class postage prepaid return receipt requested, (b) delivered by a reputable private overnight courier service utilizing a written receipt or other written proof of delivery, to the applicable party, or (c) sent by electronic email. Any such notice sent in the manner set forth above by United States Mail shall be deemed to have been given and received three (3) days after it has been so deposited in the United States Mail, and any notice sent in any other manner provided above shall be deemed to be given when received. The substance of any such notice shall be deemed to have been fully acknowledged in the event of refusal of acceptance by the party to whom the notice is addressed. Until further notice given in according with the foregoing, the respective addresses and email addresses for the parties are as follows: |
If to Company:
Warner Bros. Discovery,
Inc. 230 Park Avenue
South
New York, New York 10003
Attention: Chief People and Culture Officer
Or if by electronic mail, to the Chief People and Culture Officer as such officer’s work email address is listed in the Company’s records at the time of the giving of such notice.
If to you, at the home address then on file with Company.
With a copy (not constituting notice) to:
Williams & Connolly LLP
680 Maine Avenue, S.W.
Washington, DC 20024
Attn: ***
21
In witness whereof, the parties have caused this Agreement to be duly executed as set forth below.
| YOU: | DATE: | |||
| /s/ Priya Aiyar |
01/09/2025 | |||
| Priya Aiyar | ||||
| COMPANY: | ||||
| DATE: | ||||
| /s/ Jennifer Remling |
01/09/2025 | |||
| Jennifer Remling | ||||
| Chief People & Culture Officer | ||||
Exhibit (e)(64)
EMPLOYMENT AGREEMENT
This Employment Agreement (“Agreement”) is made this 15th day of November 2023 by and between Discovery Communications, LLC (“Company”), a subsidiary of Warner Bros. Discovery, Inc. (“WBD”), collectively with respect to affiliates (“WBD Group”) and Lori Locke (“you/your”).
You previously entered into an Employment Agreement with Company, made April 26, 2019 and effective June 1, 2019, as amended on August 25, 2020, May 16, 2022, and November 8, 2022 (collectively, the “Prior Agreement”). You and Company desire for this Agreement to supersede and replace in all respects the Prior Agreement. As a condition to and in consideration of the mutual promises and covenants set forth in this Agreement, Company hereby offers you and you hereby accept employment upon the terms and conditions set forth herein.
| I. | DUTIES, ACCEPTANCE, LOCATION |
| A. | Company hereby employs you to render exclusive and full-time services as Executive Vice President and Chief Accounting Officer, on the terms and conditions set forth herein. Your duties shall be consistent with your title and as otherwise reasonably directed by Company. |
| B. | You shall report to the Chief Financial Officer (CFO) of WBD. Your primary work location shall be Company’s offices in the Silver Spring, Maryland metropolitan area, but you shall make yourself available for travel to other locations as business needs reasonably require. Subject to Section IV(D)(l) hereof, if Company deems it necessary, Company reserves the right to change the location where you work. |
| C. | You hereby accept such employment and agree to render the services described above. Throughout your employment with Company, you agree to serve Company faithfully and to the best of your ability, and to devote your full business time and energy to perform the duties arising under this Agreement in a professional manner that does not discredit but furthers the interests of Company and WBD. At all times during your employ hereunder, you agree to be subject to and will comply with Company’s policies and procedures, including the WBD Code of Ethics, currently in effect and as may be modified from time to time (of which you are advised in writing or should reasonably be aware), except to the extent any such policy or procedure specifically conflicts with the express terms of this Agreement. In addition, you will be required to complete the Conflict of Interest Questionnaires and attend management training and compliance meetings within the time periods prescribed by Company; your failure to do so in a timely fashion may be considered a disciplinary event, including impacting your eligibility for and/or amount of any merit pay increase, and/or discretionary bonus and/or equity grants under this Agreement. |
| II. | TERM OF EMPLOYMENT |
| A. | Subject to Section IV, your term of employment under this Agreement shall be the date you sign the Agreement (“Start Date”) and shall end on May 31, 2026 (“Term of Employment”). |
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| B. | Company shall have the option to enter negotiations with you to renew this Agreement for an additional term. If Company wishes to exercise its option to enter negotiations with you to renew this Agreement, it shall give you written notice of its intent to enter such negotiations to renew no later than ninety (90) days prior to the end of the Term of Employment. You and Company agree then to negotiate with each other exclusively and in good faith until the end of the Term of Employment. The Term of Employment may not, however, be extended unless by mutual written agreement of Company and you as to all of the material terms and conditions of the extension. In the event the parties do not enter into an agreement to extend the Term of Employment for an additional term, this Agreement shall expire and the Term of Employment shall end; provided, however, that if Company does not make a Qualifying Renewal Offer (as defined below) you shall be eligible for a severance payment pursuant to Section IV(D)(2) herein in connection with your Separation from Service (as defined below) at the end of the Term of Employment (and assuming that you were willing and able at the end of the Term of Employment to perform future services, whether for Company or any other party). For these purposes, a Qualifying Renewal Offer is an offer of continued employment, with a minimum term of one (1) year, entitling you to compensation and benefits that are substantially comparable in the aggregate to those provided herein. |
| III. | COMPENSATION |
| A. | Base Salary. Company shall pay you an annual base salary of $825,000.00 which is inclusive of any merit increase given in 2024 for the 2023 performance review cycle. Beginning on the Start Date, the Base Salary shall, with respect to each year during the Term of Employment, be paid over the course of twelve (12) months in increments paid on regular Company paydays, less such sums as law requires Company to deduct or withhold. The annual base salary payable to you under this Section III(A), shall hereinafter be referred to as the “Base Salary.” For the avoidance of doubt, you shall not be eligible for a merit increase in 2024 for the 2023 performance year. Commencing in 2025, your future Base Salary increases shall be reviewed and decided in accordance with Company’s standard practices and procedures as generally applied to similarly-situated senior executives of Company (“Senior Executives”). |
| B. | Bonus/Incentive Payment. In addition to the Base Salary paid to you pursuant to Section III(A), you shall continue to be eligible to participate in Company’s then-effective annual incentive compensation plan with your current annual incentive payment target of 75% of Base Salary (“Target”). The portion of the incentive payment payable to you shall be determined and paid in accordance with Company’s then-effective annual incentive compensation plan (e.g., subject to reduction for Company/division under-performance and increase for Company/division over-performance). |
| C. | Benefits/Vacation. During the Term of Employment, you shall be entitled to participate in and receive benefits under Company’s employee benefit plans, programs and arrangements which you are eligible for participation in (and, for those plans which require a voluntary election, you elect to participate in). In addition, you shall be entitled to paid time off pursuant to Company’s time off policy. |
| D. | Equity Program. So long as the Tenn of Employment has not terminated and provided neither you nor the Company has given notice of intent to terminate employment, when WBD grants its regular annual long-term incentive awards each year, you will be eligible to receive annual long-term incentive compensation (the “Annual LTI Award”) in accordance with the Company’s then-standard practices and procedures for awards to executives. The equity form, instruments, terms and conditions, and calculation of number of awards for the Annual LTI Award shall be based on Company’s then-standard practices and procedures for awards to Senior Executives. |
| E. | Supplemental Retirement Plan Credit. WBD maintains a Supplemental Retirement Plan (the “SRP”). Within thirty (30) days of your execution of this Agreement, Company shall credit the sum of THREE HUNDRED THOUSAND DOLLARS ($300,000.00) (the “Discretionary SRP Credit”) into your SRP account and, in accordance with Section 5.2 of the SRP, such credit shall vest in two (2) tranches as follows: (1) 50% shall vest on the first anniversary of the Start Date and (2) 50% shall vest on the second anniversary of the Start Date. Each vesting is subject to you being employed by Company as of the relevant date. In the event that the Agreement is not renewed for any reason and your employment ends or your employment with Company is terminated for any reason other than (a) termination by the Company for Cause (as defined below), or (b) termination by you in violation of this Agreement, upon your departure from Company, you shall receive the vested portion of the Discretionary SRP Credit, calculated to include any investment losses or gains on such vested portion, subject to and administered as provided in the SRP. Other than these vesting provisions applicable to the Discretionary SRP Credit, your SRP account shall be subject to all terms and conditions of the SRP, as it may change from time to time. You acknowledge that under the provisions of the SRP, the Discretionary SRP Credit and any gains thereon remain an asset of Company until such time as they are payable to you under the terms of this Agreement and the SRP plan document. You acknowledge that each of the tranches set forth above shall be subject to required payroll tax withholdings (e.g., FICA, if applicable, and Medicare) at the time each tranche vests and that, pursuant to the SRP, these payroll taxes will be withheld from regular compensation paid to you. |
| F. | Expenses. Company shall reimburse you for business, travel and entertainment expenses reasonably and actually incurred during the performance of your duties pursuant to this Agreement to the extent such reimbursement is sought in accordance with Company’s business, travel, and entertainment policies and procedures. |
| G. | Travel. You will be entitled to business travel benefits and opportunities under Company’s travel policies. |
| H. | Director and Officer Liability Insurance. You shall be eligible for and entitled to insurance coverage under Company’s director and officer liability insurance and employment practices liability insurance policies in accordance with those policies and in amounts similar to coverage afforded other Senior Executives for activities on behalf of Company, WBD or any entity that directly or indirectly, |
| through one or more intermediaries, controls, is controlled by, or is under common control with Company (“control” of Company or any other entity meaning the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of such entity, whether through the ownership of voting securities or other interests, by contract or otherwise) (an “Affiliate”; provided, however, that no stockholder of WBD. shall be an Affiliate of Company for purposes of this Agreement) and otherwise shall be eligible for and entitled to indemnification in accordance with Company’s corporate governance requirements. |
| IV. | TERMINATION OF EMPLOYMENT |
| A. | Death. If you should die during the Term of Employment, this Agreement shall automatically terminate. No further amounts or benefits shall be payable except earned but unpaid Base Salary, unreimbursed business expenses, and those benefits that may vest in accordance with the controlling documents for other relevant Company benefit programs, which shall be paid in accordance with the terms of this Agreement and such other Company benefit programs, including the terms governing the time and manner of payment (the “Accrued Benefits”). Company also shall pay a prorated portion of your annual bonus Target for the calendar year of your death based on the amount of time you were employed during that calendar year (and subject to achievement of any applicable performance metrics), payable at the time annual bonuses are ordinarily paid to Senior Executives. Your then-outstanding equity awards under the Stock Plan shall be treated in accordance with the applicable plan documents and implementing award agreements. |
| B. | Inability To Perform Duties. If, during the Term of Employment, you should become physically or mentally disabled, such that you are unable to perform your duties under Sections I (A) and (C) hereof for (i) a period of six (6) consecutive months or (ii) for shorter periods that add up to six (6) months in any eight (8)-month period, by written notice to you, Company may terminate the Term of Employment. Notwithstanding the foregoing, the Term of Employment shall terminate upon you incurring a “separation from service” under the medical leave rules of Code Section 409A (as defined in Section VIII(I)). In such case, no further amounts or benefits shall be payable to you, except that you shall (i) receive the Accrued Benefits, (ii) receive a prorated portion of your annual bonus at Target for the calendar year of your separation of service based on the amount of time you were employed during that calendar year (and subject to achievement of any applicable performance metrics), payable at the time annual bonuses are ordinarily paid to Senior Executives, and (iii) be eligible to elect to (x) receive continued coverage under Company’s relevant medical or disability plans to the extent permitted by, and under the terms of, such plans and to the extent such benefits continue to be provided to other former Senior Executives generally or (y) receive COBRA continuation of the group health benefits previously provided to you and your dependents (provided you timely elect such COBRA coverage) in which case Company shall pay the premiums for such COBRA coverage up to the maximum applicable COBRA period, provided that if Company determines that the provision of continued group health coverage at Company’s expense may result in Federal taxation of the benefit provided thereunder to you (e.g., because such benefits are provided by a self-insured basis |
| by Company), then you shall be obligated to pay the full monthly premium for such coverage and, in such event, Company shall pay you, in monthly installments, an amount equivalent to the monthly premium for COBRA coverage for the remaining balance of the maximum applicable COBRA period (provided, that Company shall cease to pay such COBRA premiums at such time that you obtain new employment and are eligible for health insurance benefits from a new employer). Your then-outstanding equity awards under the Stock Plan shall be treated in accordance with the applicable plan documents and implementing award agreements. |
| C. | Termination For Cause. |
| 1. | Company may, subject to Section IV(C)(2), terminate the Term of Employment for Cause by written notice. “Cause” shall mean: (i) the conviction of, or nolo contendere or guilty plea, to a felony (whether any right to appeal has been or may be exercised); (ii) conduct constituting embezzlement, misappropriation or fraud, whether or not related to your employment with Company; (iii) conduct constituting a financial crime, material act of dishonesty or conduct in material violation of WBD’s Code of Ethics or other Company written policies; (iv) improper conduct substantially prejudicial to Company’s or WBD’s business (whether financial or otherwise); (v) willful unauthorized disclosure or use of Company or WBD Confidential Information (as such term is defined in Exhibit B) ; (vi) material improper destruction of Company or WBD property; or (vii) willful misconduct in connection with the performance of your duties. |
| 2. | In the event that you materially neglect your duties under Section l(A) or Section I(C) hereof or engage in other conduct that constitutes a breach by you of this Agreement, including any conduct constituting Cause (collectively, “Breach”), Company shall so notify you in writing. Other than a Breach that is not susceptible to cure, you shall be afforded a one-time-only opportunity to cure the noted Breach within ten (10) calendar days from receipt of such notice. If, in the Company’s sole discretion, no cure is achieved within this time, or if you engage in the same Breach a second time after once having been given the opportunity to cure, Company has the right to terminate the Term of Employment by written notice to you. |
| 3. | Any termination of the Term of Employment pursuant to Sections IV(C)(l) or Section IV(C)(2) hereof shall be considered a termination of your employment for “Cause” and upon such termination, you shall only be entitled to receive any amounts or benefits hereunder that have been earned or vested at the time of such termination in accordance with the terms of the applicable governing Company or WBD plan(s) (including the provisions of such plan(s) governing the time and manner of payment), and/or as may be required by law. “Cause” as used in any such Company or WBD plan shall be deemed to mean solely the commission of acts described in Section IV(C)(l) or Section IV(C)(2) hereof (after giving effect to the cure opportunity described in Section IV(C)(2)). |
| D. | Termination Of Employment By You for Good Reason/Termination of Employment by Company Not For Cause. |
| 1. | Company may terminate the Term of Employment not For Cause (as defined above), and you may terminate the Term of Employment for “Good Reason” as defined herein. “Good Reason” for purposes of this Agreement shall only mean the occurrence of any of the following events without your consent: (a) a material reduction in your duties or responsibilities; (b) Company’s material change in the location of Company office where your work (i.e., relocation to a location outside the Silver Spring, Maryland metropolitan area); or (c) a material breach of this Agreement by Company, including a change in the position to which you report from CFO to some lower level position; provided however, that you must provide Company with written notice of the existence of the reduction, change or breach constituting Good Reason within sixty (60) calendar days of any such event having occurred, and allow Company thirty (30) calendar days to cure the same in writing to you. If Company so cures the reduction, change or breach, you shall have no basis for terminating the Term of Employment for Good Reason with respect to such cured reduction, change or breach. You must terminate your employment in writing within five (5) calendar days following the expiration of Company’s cure period for the termination to be on account of Good Reason or such right shall be deemed waived. |
| 2. | (i) If Company terminates the Term of Employment not for Cause, (ii) if Company elects not to renew the Term of Employment in circumstances that trigger your entitlement to severance under Section II(B), or (iii) if you terminate the Term of Employment for Good Reason, then Company shall pay you the Accrued Benefits. In addition, Company shall make the following payments (collectively, the “Severance Payment”): |
(a) Commencing as soon as administratively possible after the Release Effective Date (as defined below), Company shall pay you your Base Salary for the period beginning on your termination date through the period which is the longest of (i) the balance of the Term of Employment but not to exceed twenty-four (24) months, (ii) twelve (12) months, and (iii) the number of weeks of severance to which you would have been entitled had Company’s then-current redundancy severance plan applied to your termination, except that the first installment payment shall include any installments that would have been payable between the date of termination and the Release Effective Date had the release requirement under Section IV(D)(3) hereof been satisfied on the date of termination (the “Base Salary Continuation”). For the avoidance of doubt, in no event shall the Base Salary Continuation period be longer than twenty-four (24) months. In the event the Base Salary Continuation period is calculated under Section 2(a)(ii) or 2(a)(iii) of this paragraph and Company places you in an inactive employment status for some period of time prior to the effective date of your termination of employment, this period of “garden leave” shall be offset against the number of weeks of Base Salary Continuation. Notwithstanding the foregoing, the Base Salary Continuation may in no event be less than twenty-six (26) weeks. While employed in an inactive status, your obligation to provide exclusive and full-
time services to Company pursuant to Sections l(A) and l(C) shall remain in full force and effect unless you are directed by Company in writing to mitigate. For purposes of Section 409A of the Internal Revenue Code (“Code Section 409A”), your “Services Cessation Date” is the date you stop rendering active services, and “Service Cessation Date” means a “separation of service” under Code Section 409A.
Except as provided in this Section IV(D)(2) with respect to the first installment payment, the Base Salary Continuation shall be paid weekly in substantially equal increments, less required deductions and withholdings, until the balance is paid in full.
(b) Notwithstanding anything in Company’s then-effective annual incentive compensation plan, you shall be paid a bonus for each calendar year within the Base Salary Continuation period (“Severance Bonus”). For clarity, the Severance Bonus shall include a full bonus for the year in which termination occurs (“First Year Termination Bonus”). For any partial calendar year within which the Base Salary Continuation period ends, you shall only be entitled to a prorated bonus based on the elapsed time from January 1 of such partial year through the last day of the Base Salary Continuation period. The First Year Termination Bonus shall be calculated at Target as set forth in Section III(B), and will be adjusted for Company and/or line of business performance, as applicable, but not more than one hundred percent (100%) for Company and/or line of business target performance. The remaining Severance Bonus shall be calculated at Target and will be adjusted for overall WBD performance but not more than one hundred percent (100%) for overall WBD target performance. The foregoing bonus/incentive payments shall be paid to you in a lump sum on the date that Company pays bonuses/incentive payments to its other Senior Executives for the applicable then-effective annual incentive compensation plan year.
(c) During the Base Salary Continuation period, you will continue to be eligible to participate in the WBD Group Health Plan, the WBD Health Care Flexible and Limited Purpose Spending Account programs, and the Health Savings Account, to the extent such health and welfare benefits are maintained in effect by the Company for its executives. Notwithstanding the foregoing, your medical coverage under the WBD Health Plan will be affected when you or your covered dependent are eligible (or become eligible) for Medicare and immediate steps should be taken to enroll in Medicare Part A & B. The WBD Group Health Plan assumes you are enrolled in Medicare Part A & B and Medicare is your primary payor. For the avoidance of any doubt, during the Base Salary Continuation period, you will not be eligible to participate in the Company’s disability programs. Your ability to contribute to the Warner Bros. Discovery 40l(k) Savings Plan and to participate in the other qualified and non-qualified retirement plans of the Company will end on your termination date or such earlier date on which you cease to provide active services to the Company, in each case, as required under the terms of the applicable plan document or applicable law. You shall not be entitled to any additional awards or grants under any stock option, restricted stock, RSUs or other stock-based incentive plan. Notwithstanding the foregoing, if you become eligible by
reason of your employment by or provision of services to a third party to participate in such third party’s comparable medical or dental insurance, or life insurance program, you agree to give timely notice of such eligibility to the Company and to provide such limited information concerning your eligibility as may be reasonably needed to coordinate benefits between the two programs in accordance with the coordination of benefits provisions in those programs. You agree that upon your eligibility for comparable medical, dental, or life insurance programs, you will seek any such coverages offered by such third party and that the benefits and coverages provided by the Company hereunder will terminate upon the effective date of the coverage provided by such third party.
| 3. | No Severance Payment shall be made if you fail to sign a general release of claims substantially in the form attached hereto as Exhibit A (which may include any additional updates as Company may determine to be necessary or advisable to comply with applicable law or Company policy). Such release must be executed and become effective after your termination date and within the review period (including any applicable revocation period) designated in the general release (the “Release Effective Date”). Notwithstanding the foregoing, if payment of the Severance Payment could commence in more than one taxable year based on when the Release Effective Date occurs, then any such payments that would have been made during the calendar year in which your employment terminates shall instead be withheld and paid on the first payroll date in the calendar year immediately after the calendar year in which your employment terminates, with all remaining payments to be made as if no such delay had occurred. No Severance Payment shall be made if you violate Section VI hereof, in which case all Severance Payment shall cease, and those already made shall be forfeited. |
| 4. | Company agrees that if, at the time the Term of Employment is terminated not for Cause, or you terminate the Term of Employment for Good Reason, and Company has a standard severance policy in effect that would be applicable in the absence of this Agreement (i.e., applicable to the circumstances surrounding the termination) and that would result in you receiving a sum greater than the Severance Payment, you shall receive whichever is the greater of the two payments; provided, that if (i) the standard severance policy would provide for a sum greater than the Severance Payment, and (ii) the payment schedule under the severance policy is different from the payment schedules for the Severance Payment and would result in an impermissible acceleration or delay in payment in violation of the time and manner of payment requirements of Code Section 409A, then the payment schedule provided in Company’s standard severance policy shall apply only to the portion of the amount payable under the standard severance policy that exceeds the Severance Payment. |
| 5. | If you terminate the Term of Employment before it has expired for a reason other than one or more of those stated in Section IV(D)(l) hereof, it shall be deemed a material breach of this Agreement. You agree that, in that event, in addition to any other rights and remedies which Company or WBD may have as a result of such breach, you shall forfeit all rights to be compensated for any remaining portion of your Base Salary, Severance Payment and/or |
bonus/incentive payment that may otherwise be due under this Agreement, pursuant to other Company or WBD plans or policies, or otherwise, except for Accrued Benefits or as may be required by law.
| E. | Right To Offset. In the event that you secure employment or any consulting or contractor or business arrangement for services you perform during the period that any payment from Company is continuing or due under Section IV(D) hereof, you shall have the obligation to timely notify Company of the source and amount of payment (“Offset Income”). Company shall have the right to reduce the Severance Payment by the Offset Income; except that Company waives its right to such reduction for payments received from serving on a Board of Directors. You acknowledge and agree that any deferred compensation for your services from another source that are performed while receiving Severance Payments from Company will be treated as Offset Income (regardless of when you choose to receive such compensation). In addition, to the extent that your compensation arrangement for the services include elements that are required to be paid later in the term of the arrangement (e.g., bonus or other payments that are earned in full or part based on performance or service requirements for the period during which the Severance Payment is made), Company may calculate the Offset Income by annualizing or by using any other reasonable methodology to attribute the later payments to the applicable period of the Severance Payment. You agree to provide Company with information sufficient to determine the calculation of the Offset Income, including compensation excerpts of any employment agreement or other contract for services, Form W-2s, and any other documentation that Company reasonably may require, and that failure to provide timely notice to Company of Offset Income or to respond to inquiries from Company regarding any such Offset Income shall be deemed a material breach of this Agreement. You also agree that Company shall have the right to inquire of third-party individuals and entities with prior notice to you regarding potential Offset Income and to inform such parties of Company’s right of offset under this Agreement with you. Accordingly, you agree that no further Severance Payment from Company will be made until or unless this breach is cured and that all payments from Company already made to you, during the time you failed to disclose your Offset Income, shall be forfeited, and must be returned to Company upon its demand, up to the amount of Offset Income attributable to such period. Any offsets made by Company pursuant to this Section IV(E) shall be made at the same time and in the same amount as a Severance Payment amount is otherwise payable (applying the Offset Income to Company’s payments in the order each are paid) so as not to accelerate or delay the payment of any Severance Payment installment. In the event you become reemployed by or engaged to perform services for Company or any Affiliates, during the Base Salary Continuation period, your severance pay and related benefits will end on the effective date of that employment or engagement. |
| F. | Mitigation. In the event of your termination of employment pursuant to Section IV(D) herein, and during the period that any payment from Company is continuing or due under Section IV(D), you shall be under a continuing obligation to seek other employment, including taking all reasonable steps to identify and apply for any comparable, available jobs for which you are qualified. At Company’s request, you may be required to furnish to Company proof that you have engaged in efforts consistent with this paragraph, and you agree to comply with any such request. You further agree that Company may follow-up with reasonable inquiries to third parties to confirm your mitigation efforts. Should Company determine in good faith that you failed to take reasonable steps to secure alternative employment consistent with this |
| paragraph, Company shall be entitled to cease any payments due to you pursuant to Section IV(D)(2). |
| V. | CONFIDENTIAL INFORMATION |
| A. | You acknowledge your fiduciary duty to Company. As a condition of employment, you agree to protect and hold in a fiduciary capacity for the benefit of Company all confidential information, knowledge or data, including the terms of this Agreement and, without limitation, all trade secrets relating to Company and its Affiliates, and their respective businesses, (i) obtained by you during your employment by Company or otherwise and (ii) that is not otherwise publicly known (other than by reason of an unauthorized act by you). After termination of your employment with Company, you shall not communicate or divulge any such information, knowledge or data to anyone other than Company and those designated by it, without the prior written consent of Company. For the avoidance of doubt, and notwithstanding the foregoing, nothing herein or in this Agreement shall (x) prohibit you from communicating with a government agency, regulator or legal authority concerning any possible violations of federal or state law or regulation, or (y) prevent or limit you from discussing your terms and conditions of employment. Nothing herein or in this Agreement, however, authorizes the disclosure of information you obtained through a communication that was subject to the attorney-client privilege, unless disclosure of the information would otherwise be permitted by an applicable law or rule. As a condition of employment, you are required to sign a Confidential Information and Assignment of Inventions Agreement, which is attached hereto as Exhibit Band incorporated herein by reference. |
| B. | In the event that you are compelled, pursuant to a subpoena or other order of a court or other body having jurisdiction over such matter, to produce any information relevant to Company, whether confidential or not, you agree to provide Company with such written notice of this subpoena or order within three (3) business days of receiving it so that Company may timely move to quash if appropriate unless such notice to Company is prohibited by law or procedure. You also agree to cooperate with Company in any legal action for which your participation is needed. Company agrees to try to schedule all such meetings so that they do not unduly interfere with your pursuits after you are no longer in Company’s employ. |
| VI. | RESTRICTIVE COVENANTS |
| A. | You covenant that during the Term of Employment and, for a period of twelve (12) months after the conclusion thereof (the “Restricted Period”), you shall not, directly or indirectly, on your own behalf (i.e. self-employment) or on behalf of any entity or individual, engage in any business activities involving the production, provision and/or delivery of, nonfiction, scripted, sports, lifestyle, news, interactive games, or general entertainment television programming or content (whether in cable, broadcast, free to air, digital, streaming, film, or any other distribution method) within the Restricted Territory (“Competitive Services”). The Restricted Territory is the United States and any other country for which you had management responsibilities (e.g., supervised employees located in that country or was involved in business or programming operations in that country) at any time during the three (3) years prior to your separation from employment. This provision shall not prevent you from owning stock in any publicly-traded company; provided, that, your ownership is equal to or less than three (3) percent of such entity’s outstanding stock. You agree that this Section VI (A) is a |
| material part of this Agreement, breach of which will cause Company irreparable harm and damages, the loss of which cannot be adequately compensated at law. In the event that the provisions of this paragraph should ever be deemed to exceed the limitations permitted by applicable laws, you and Company agree that such provisions shall be reformed to the maximum limitations permitted by the applicable laws. In the event that Executive is placed on “garden leave” pursuant to Section IV (D) prior to separation and the period of Base Salary Continuation is less than six months, the Restricted Period shall be six (6) months or the period of Base Salary Continuation, whichever is shorter. |
| B. | During your employment and for a period of eighteen (18) months following the conclusion of your employment with Company, you covenant that you will not directly or indirectly solicit, recruit, interfere with or otherwise attempt to entice, any employees of Company or any of its Affiliates to leave their employment with Company or such Affiliate. |
| C. | You acknowledge that during your employment, you will learn confidential, non-public information about the Company’s vendors, producers, independent contractors, and other business partners. In order to protect this confidential information, during your employment and for an eighteen (18) month period following the conclusion of your employment with Company, you covenant that you will not directly or indirectly solicit, recruit, interfere with or otherwise attempt to entice, solicit, induce or encourage any vendor, producer, independent contractor, or business partner to terminate its business relationship with Company or its Affiliates. |
| D. | During the period you are employed by Company, you covenant and agree not to engage in any other business activities whatsoever, or to directly or indirectly render services of a business, commercial or professional in nature to any other business entity or organization, regardless of whether you are compensated for these services, unless you obtain the prior written consent of the Chief Executive Officer of WBD or his designee and complies with the standard Conflict oflnterest internal process for review of outside activities. Notwithstanding the foregoing, Company agrees that it has approved your continuing involvement as a member of the Board of Directors of the Media Financial Management Association and such service is not a violation of this covenant. |
| E. | Throughout the period that you are an employee of Company, you agree to disclose to Company any direct investments (i.e., any investment in which you have made the decision to invest in a particular company) you have in a company that is a competitor of Company or its Affiliates (“Competitor”) or that Company or its Affiliates is doing business with during the Term of Employment (“Partner”), if such direct investments result in you or your immediate family members, and/or a trust established by you or your immediate family members, owning three (3) percent or more of such a Competitor or Partner. This Section VI(D) shall not prohibit you, however, from making passive investments (i.e., where you do not make the decision to invest in a particular mutual fund or similar entity, even if such entity, in turn, invests in such a Competitor or Partner). Regardless of the nature of your investments, you herein agree that your investments may not materially interfere with your obligations and ability to provide services under this Agreement. |
| F. | Prior to the conclusion of your employment with Company, you shall return all Company property and materials, including equipment, such as laptop computers and mobile telephones, and documentation, such as files (including originals and copies), notes, e-mail accounts and computer disks. |
| G. | For the term of employment and after any employment with the Company, regardless of how, when, or why such employment ends, you shall not make, either directly or by or through another person, any oral or written negative, disparaging or adverse statements or representations of or concerning the Company or any Affiliate of the Company, or any of their respective current or former officers, directors, employees or joint venture partners. |
| H. | In the event that you violate any provision of this Section VI, in addition to seeking any injunctive relief and damages to which you acknowledge Company would be entitled, all Severance Payments to you, if any, shall cease, and those already made may be forfeited. |
| VII. | ARBITRATION |
| A. | Submission To Arbitration. Company and you agree to submit to arbitration all claims, disputes, issues or controversies between Company and you or between you and other employees of Company or its Affiliates (collectively “Claims”) directly or indirectly relating to or arising out of your employment with Company or the termination of such employment including Claims under Title VII of the Civil Rights Act of 1964, as amended, the Civil Rights Act of 1991, the Age Discrimination in Employment Act of 1967, the Americans With Disabilities Act of 1990, Section 1981 of the Civil Rights Act of 1966, as amended, the Family Medical Leave Act, the Employee Retirement Income Security Act, and any Claim arising under any similar federal, state or local law, statute, regulation or common law doctrine or out of this Agreement. |
| B. | Use Of AAA; Choice of Law. All Claims for arbitration shall be presented to the American Arbitration Association (“AAA”) in accordance with its applicable rules (“Rules”). The seat or place of arbitration shall be New York, New York metropolitan area. The arbitrator(s) shall be directed to apply the substantive law offederal and state courts sitting in New York without regard to conflict of law principles. Any arbitration pursuant to this Agreement shall be deemed an arbitration proceeding subject to the Federal Arbitration Act. |
| C. | Binding Effect. Arbitration shall be binding and shall afford parties the same options for damage awards as would be available in court. You and Company agree that discovery shall be allowed, and all discovery disputes shall be decided, exclusively by arbitration in accordance with the Rules. |
| D. | Damages and Costs. Any damages shall be awarded only in accord with applicable law. The arbitrator may only order your reinstatement if money damages are insufficient. The parties shall bear in equal shares all fees and expenses of arbitration. However, each party shall bear the expense of its own counsel, experts, witnesses and preparation and presentation of proof. |
| VIII. | CONTROLLING LAW AND ADDITIONAL COVENANTS |
| A. | The validity and construction of this Agreement or any of its provisions shall be determined under the laws of the State of New York. The invalidity or unenforceability of any provision of this Agreement shall not affect or limit the validity and enforceability of the other provisions. |
| B. | If any provision of this Agreement is held by a court of competent jurisdiction to be invalid, void or unenforceable, the remaining provisions shall nevertheless continue in full force and effect without being impaired or invalidated. The section headings of this Agreement are for convenience only and shall not in any way affect the interpretation of any section hereof or of the Agreement itself. Any provision of this Agreement which refers to the words “include,” “includes,” or “including” shall be deemed to be followed by the words “without limitation.” |
| C. | You warrant that (1) your employment under this Agreement will not violate or conflict in any way with any other contract or agreement to which you are bound; (2) you will do nothing on behalf of Company that violates or conflicts with any such contract or agreement; and (3) you will indemnify Company for any liability, damages, costs, or attorneys’ fees that Company suffers as a result of any such violation or conflict. |
| D. | You expressly acknowledge that Company has advised you to consult with independent legal counsel of your choosing prior to you signing this Agreement to review and explain to you the legal effect of the terms and conditions of this Agreement. |
| E. | Without limiting anything to the contrary in this Agreement, you agree not to disclose the terms hereof to any person or entity, other than your attorneys, accountants, financial advisors, or members of your immediate family who need to know this information and agree to keep it confidential. |
| F. | This Agreement supersedes any and all other agreements, including the Prior Agreement, either oral or in writing, between the parties with respect to your employment by Company and contains all of the covenants and agreements between the parties with respect to such employment in any manner whatsoever. Each party to this Agreement acknowledges that no representations, inducements, promises or agreements have been made, orally or otherwise, by any party, or anyone acting on behalf of any party, that are not stated in this Agreement, and that no other agreement, statement or promise not contained in this Agreement shall be valid or binding. Notwithstanding either of the foregoing sentences, or any other provision of this Agreement, this Agreement shall not supersede, replace, invalidate or otherwise modify or affect any restrictive covenants in any previous, subsequent or other agreements or documents between you and Company, including, without limitation, any covenants regarding confidentiality, intellectual property, confidential and proprietary information, non-competition, non-solicitation of customers, non-solicitation or no hire of employees, and the like (collectively, “Other Restrictive Covenants”), and any such Other Restrictive Covenants will remain in effect and you shall remain bound by such Other Restrictive Covenants. To the extent any of the restrictions or covenants contained in this Agreement conflict in any way with any such Other Restrictive Covenants, such conflict shall be resolved by giving effect to the |
| provision that provides the greatest protection to Company that is enforceable under applicable law. |
| G. | This Agreement may be amended, modified, superseded, cancelled, renewed or extended and the terms or covenants hereof may be waived only by written instrument signed either by hand or electronic means (i.e., e-signature) by both of the parties hereto, or in the case of a waiver, by the party waiving compliance. |
| H. | Any payments to be made by Company hereunder shall be made subject to applicable law, including required deductions and withholdings. |
| I. | Section 409A of the Code. |
| 1. | It is intended that the provisions of this Agreement comply with Section 409A of the Internal Revenue Code of 1986, as amended, (the “Code”) and the regulations and guidance promulgated thereunder (collectively, “Code Section 409A”), and all provisions of this Agreement shall be construed in a manner consistent with the requirements for avoiding taxes or penalties under Code Section 409A. Notwithstanding the foregoing, Company shall have no liability to you with regard to any failure to comply with Code Section 409A so long as Company has acted in good faith with regard to compliance therewith. |
| 2. | If under this Agreement, an amount is to be paid in two or more installments, for purposes of Code Section 409A, each installment shall be treated as a separate payment. |
| 3. | A termination of employment shall not be deemed to have occurred for purposes of any provision of this Agreement providing for the payment of amounts or benefits upon or following a termination of employment unless such termination is also a “Separation from Service” within the meaning of Code Section 409A and, for purposes of any such provision of th is Agreement, references to a “resignation,” “termination,” “termination of employment,” “separation” or like terms shall mean Separation from Service. |
| 4. | If you are deemed on the date of termination of your employment to be a “specified employee”, within the meaning of that term under Section 409A(a)(2)(B) of the Code and using the identification methodology selected by Company from time to time, or if none, the default methodology, then: |
| (a) | With regard to any payment, the providing of any benefit or any distribution of equity upon separation from service that constitutes “deferred compensation” subject to Code Section 409A, such payment, benefit or distribution shall not be made or provided prior to the earlier of (i) the expiration of the six-month period measured from the date of your Separation from Service or (ii) the date of your death; and |
| (b) | On the first day of the seventh month following the date of your Separation from Service or, if earlier, on the date of your death, (x) all payments delayed pursuant to this Section VIII(I)(4) (whether they |
| would otherwise have been payable in a single sum or in installments in the absence of such delay) shall be paid or reimbursed to you in a lump sum, and any remaining payments and benefits due under this Agreement shall be paid or provided in accordance with the normal dates specified from them herein and (y) all distributions of equity delayed pursuant to this Section VIIl(I)(4) shall be made to you. |
| 5. | With regard to any provision herein that provides for reimbursement of costs and expenses or in-kind benefits, except as permitted by Code Section 409A, (i) the right to reimbursement or in-kind benefits shall not be subject to liquidation or exchange for another benefit, (ii) the amount of expenses eligible for reimbursement, of in-kind benefits, provided during any taxable year shall not affect the expenses eligible for reimbursement, or in-kind benefits to be provided, in any other taxable year, provided that the foregoing clause (ii) shall not be violated without regard to expenses reimbursed under any arrangement covered by Section 105(b) of the Code solely because such expenses are subject to a limit related to the period the arrangement is in effect and (iii) such payments shall be made on or before the last day of your taxable year following the taxable year in which the expense occurred. |
| 6. | Whenever a payment under this Agreement specifies a payment period with reference to a number of days (e.g., “payment shall be made within thirty (30) days following the date of termination), the actual date of payment within the specified period shall be within the sole discretion of Company. |
| J. | This Agreement shall be binding upon and inure to the benefit of the parties and their respective successors, your heirs, and assigns. The rights or obligations under this Agreement may not be assigned or transferred by either party, except that such rights or obligations may be assigned or transferred pursuant to a merger or consolidation in which Company is not the continuing entity, or the sale or liquidation of all or substantially all of the assets of Company; provided, however, that the assignee or transferee is the successor to all or substantially all of the assets of Company and such assignee or transferee assumes the liabilities, obligations and duties of Company, as contained in this Agreement, either contractually or as a matter of law. Notwithstanding the foregoing, this Agreement may be assigned to any Affiliate of Company which employs you. |
| K. | This Agreement may be executed with electronic signatures, in any number of counterparts. The electronically signed Agreement shall constitute one original agreement. Duplicates and electronically signed copies of this Agreement shall be effective and fully enforceable as of the date signed and sent. |
| L. | All notices and other communications to be made or otherwise given hereunder shall be in writing and shall be deemed to have been given when the same are (i) addressed to the other party at the mailing address or email address indicated below, and (ii) either: (a) personally delivered or mailed, registered or certified mail, first class postage prepaid return receipt requested, (b) delivered by a reputable private overnight courier service utilizing a written receipt or other written proof of delivery, to the applicable party, or (c) sent by electronic email. Any such notice sent in the manner set forth above by United States Mail shall be deemed to have been given and received three (3) days after it has been so deposited in the United States Mail, and any notice sent in any |
| other manner provided above shall be deemed to be given when received. The substance of any such notice shall be deemed to have been fully acknowledged in the event of refusal of acceptance by the party to whom the notice is addressed. Until further notice given in according with the foregoing, the respective addresses and email addresses for the parties are as follows: |
If to Company:
Warner Bros. Discovery, Inc.
230 Park Avenue South
New York, New York 10003
Attention: General Counsel
Or if by electronic mail, to the Chief People and Culture Officer, and to the Company’s General Counsel, as each such officer (and such officer’s work email address) is listed in the Company’s records at the time of the giving of such notice.
If to you, at the home address then on file with Company.
In witness whereof, the parties have caused this Agreement to be duly executed as set forth below.
| YOU: | DATE: | |||
| /s/ Lori Locke |
2/13/2024 | |||
| Lori Locke | ||||
| COMPANY: | DATE: | |||
| /s/ Adria Alpert-Romm |
2/13/2024 | |||
| Adria Alpert Romm | ||||
| Chief People & Culture Officer | ||||
Exhibit (e)(65)
EMPLOYMENT AGREEMENT
This Employment Agreement (“Agreement”) is made this 2 n d day of July, 2025 (“Effective Date”) by and between Discovery Corporate Service Limited (“Company”), a subsidiary of Warner Bros. Discovery, Inc. (“WBD”), collectively with respect to WBD and its subsidiaries, affiliates, successors, or assigns from time to time (“Company Group”) and Amy Girdwood (“you/your”). For the purposes of this Agreement, “Affiliate” means any entity that directly or indirectly, through one or more intermediaries, controls, is controlled by, or is under common control with Company (for the foregoing purposes, “control” means the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of an entity, whether through the ownership of voting securities or other interests, by contract or otherwise).
You previously entered into an Employment Agreement with Discovery Communications Europe Limited, made/effective 1 December 2009 (the “Prior Agreement”). Your period of continuous employment commenced on July 1, 1993. You and Company desire for this Agreement to supersede and replace in all respects the Prior Agreement and any subsequent variations and amendments thereof. As a condition to and in consideration of the mutual promises and covenants set forth in this Agreement, including Exhibit 1 and Exhibit 2 attached hereto, Company hereby offers you and you hereby accept employment upon the terms and conditions set forth herein.
| I. | DUTIES, ACCEPTANCE, LOCATION |
| A. | Company hereby employs you to render exclusive and full-time services as Chief People & Culture Officer, on the terms and conditions set forth herein. Your duties shall be consistent with your title and as otherwise reasonably directed by Company. |
| B. | Your primary work location shall be Company’s offices in Chiswick, London, but you shall make yourself available for travel to other locations as business needs reasonably require. Subject to Section IV(D)(1) hereof, if Company deems it necessary, Company reserves the right to change the location where you work, and the individual and/or position to whom/which you report. You may also be required to travel within the UK and other locations, including the US, for the performance of your duties. |
| C. | You hereby accept such employment and agree to render the services described above. Throughout your employment with Company, you agree to serve Company faithfully and to the best of your ability, and to devote your full business time and energy to perform the duties arising under this Agreement in a professional manner that does not discredit but furthers the interests of Company and WBD. At all times during your employment hereunder, you agree to be subject to and will comply with Company’s policies and procedures, including the WBD Code of Ethics, currently in effect and as may be modified from time to time (of which you are advised in writing or should reasonably be aware), except to the extent any such policy or procedure specifically conflicts with the express terms of this Agreement. In addition, you will be required to complete the Conflict of Interest Questionnaires and attend management training and compliance meetings within the time periods prescribed by Company; your failure to do so in a timely fashion may be considered a disciplinary event, including impacting your eligibility for and/or amount of any merit pay increase, and/or discretionary bonus and/or equity grants under this Agreement. |
| II. | TERM OF EMPLOYMENT |
| A. | Subject to earlier termination by: (i) you; or (ii) the Company for Cause, in each case in accordance and consistent with the terms of this Agreement, your term of employment under this Agreement shall end on the latest of: (a) October 1, 2026; (b) a date that is not earlier than six months plus one day after the date your 2026 Annual LTI Award is granted to you, in accordance with Section III(C) below; or (c) the day following the Sign on Bonus Payment Date (as defined in Section III(D) below) (the “End Date”) (the “Term of Employment”). |
| B. | The Term of Employment may not be extended unless by mutual written agreement of you and the Company as to all the material terms and conditions of the extension. In the event the parties do not agree to extend the term for an additional (1) year (or such other term as mutually agreed by the parties), this Agreement shall expire and the Term of Employment shall end on the End Date. Your separation at the end of the Term of Employment or at any later date (save in circumstances where you have lawfully been terminated for Cause or you and the Company have mutually agreed otherwise in writing) shall be considered an involuntary termination without “Cause” and you shall be eligible for a Severance Payment pursuant to Section IV(D)(4), below. |
| C. | You and Company each agree that the nature of your position is such that your working time cannot be measured and, accordingly, that your employment falls within the scope of regulation 20 of the Working Time Regulations 1998. For the avoidance of any doubt, you will not receive additional remuneration in the event that you work outside of Company’s normal working hours which are from 9am to 6pm, Monday to Friday. |
| III. | COMPENSATION |
| A. | Base Salary. Effective March 10, 2025, Company shall pay you an annual base salary of £775,500. The Base Salary shall, with respect to each year during the Term of Employment, be paid over the course of twelve (12) months in equal increments paid on regular Company paydays, less tax and employee National Insurance Contributions. The annual base salary payable to you under this Section III(A) shall hereinafter be referred to as the “Base Salary.” Commencing in 2026, your future Base Salary increases shall be reviewed and decided in accordance with Company’s standard practices and procedures as generally applied to similarly-situated senior executives of Company (“Senior Executives”). |
| B. | Bonus/Incentive Payment. In addition to the Base Salary paid to you pursuant to Section III(A), you shall be eligible to participate in Company’s then-effective annual incentive compensation plan with an annual incentive payment target of 120% of Base Salary (“Target”). The portion of the incentive payment payable to you shall be determined and paid in accordance with Company’s then- effective annual incentive compensation plan (e.g., subject to reduction for Company/division under-performance and increase for Company/division over- performance). |
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| C. | Equity. So long as the Term of Employment has not terminated and provided neither you nor Company has given notice to terminate employment, beginning in 2026, when WBD grants its regular annual long-term incentive awards each year, you will be eligible to receive annual long-term incentive compensation (the “Annual LTI Award”) under the Warner Bros. Discovery, Inc. Stock Incentive Plan or any successor plan (the “Stock Plan”) with a value of $4,800,000.00 per annum in accordance with Company’s then-standard practices and procedures for awards to Senior Executives. The equity form, instruments, terms and conditions, and calculation of number of awards for the Annual LTI Award shall be based on Company’s then-standard practices and procedures for awards to Senior Executives. In the award agreements granting the Annual LTI Award, Company hereby agrees to provide that if an Approved Transaction, Control Purchase, or Board Change, as such terms are defined in the Stock Plan (each a “Change in Control”), occurs before such equity award has vested and provided that there is an equitable substitution or replacement for the equity award in connection with a Change in Control the vesting of the equity award shall fully accelerate as a result of such Change in Control only if and when (i) within 12 months after the Change in Control, (A) the Company or a Subsidiary (as defined in the Stock Plan) terminates your employment other than for Cause, or (B) if you resign for Good Reason, or (ii) during such 12-month period after the Change in Control, you are given notice by Company that, in connection with a termination of your employment by Company other than for Cause, you shall no longer be required to provide services for Company or its affiliates or subsidiaries as an employee and you cease to provide such services, but due to the length of any statutorily or contractually required notice period, your employment actually terminates following the expiration of such 12-month period. Any accelerated vesting as described in the preceding sentence shall occur only if and to the extent permitted under Section 409A of the Code and the regulations thereunder. |
| D. | Sign on Bonus: In expectation of your leadership during the transition period of the separation of WBD’s Global Networks division from its Streaming & Studios Division through a spin-off (the “Spinoff”) of the Streaming & Studios division as a standalone public company (“ContentCo”), in the event that you remain continuously employed by the Company or by any Company Group (which may include, but is not limited to, any new or existing entities that are involved in the Spinoff) through the closing date of the Spinoff of ContentCo or one (1) year after execution of this Agreement by you (the “Sign on Bonus Payment Date”), whichever is later, the Company shall pay you within thirty (30) calendar days of the Sign on Bonus Payment Date an amount equal to the sum of (i) your then current Base Salary and (ii) your annual bonus Target under Section III(B) (the “Sign on Bonus”). This payment shall not preclude you from being eligible for receipt of any potential project/transaction bonus tied to the successful completion of the Spinoff of ContentCo, subject to Compensation Committee approval of your receipt of any such project/transaction bonus. |
| E. | Tax Preparation. The Company will provide tax preparation assistance to you at its cost and you agree to use and cooperate with the Company’s designated tax return preparer. All information gathered in association with this process shall be distributed only to those with a legitimate need to know in order to effectuate tax preparation. |
| F. | Benefits/Vacation. During the Term of Employment, you shall be entitled to |
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| participate in and receive benefits under Company’s employee benefit plans programs and arrangements applicable to the UK, including the life assurance scheme and the private healthcare scheme. You remain automatically enrolled into the healthcare scheme on the level of cover you currently enjoy. Membership of the healthcare scheme increases your taxable salary and you agree that the resulting increase in the tax you pay will be deducted from your Base Salary. Your participation in any of the discretionary plans, programs and arrangements referred to above is subject to the rules of the relevant scheme from time to time in force. Company reserves the right to not pay any benefits under any of these schemes, unless Company is paid by the insurer. Company may terminate your employment even if such termination results in the loss of any existing or prospective insurance benefit. |
In addition, you shall be entitled to paid time off as follows: You are entitled to 25 working days’ holiday plus the normal bank and public holidays in England and Wales (“Holiday Entitlement”). Company’s holiday year runs from 1 January to 31 December. Holiday Entitlement must be taken in the holiday year that it accrues. However, you may carry over up to five (5) days of annual leave into the next calendar year. If those days are not used by 30th April, they will be forfeited. If you end employment part way through a holiday year, your Holiday Entitlement will be calculated on a pro rata basis. If you have Holiday Entitlement still owing, Company may, at its sole discretion, require you to take all or part of your outstanding holiday during your notice period or to pay you in lieu of accrued but untaken holiday at the rate of 1/260 of your salary for each days accrued holiday. If you have taken more than your entitlement, Company will deduct the excess from any payments due to you using the same calculation already set out in this clause.
| G. | Sickness. If you are absent due to incapacity at any time you must follow the Company’s sickness absence policy from time to time in force (which is on the portal or available from People & Culture). On the first day of absence and before your usual work start time, you must notify Company’s absence management service of the reason for and anticipated length of your absence. You must then continue to follow the procedures under the Company’s sickness absence policy. If you qualify, you will receive Statutory Sick Pay (“SSP”) during absence. The Company in its absolute discretion may choose to make additional payments to you (inclusive of SSP) during a period of sickness. Company will not exercise this discretion where Company has good reason not to. In particular, Company will stop payment if: |
| a. | you do not comply with the Company’s sickness absence policy (including notification) or if you do not consent to a medical examination at the Company’s request (see below); or |
| b. | you are absent from work due to illness or injury during an investigation or process which relates to any aspect of your conduct or performance and which could result in a formal sanction. |
Any previous payment of discretionary Company sick pay to you or to any other employee does not imply any right to any future payments and you should have no such expectation.
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You agree to consent to a medical examination (at Company’s expense) by a doctor nominated by Company should Company ask you to. You agree that any report produced in connection with any examination may be disclosed to Company or any Group Company and Company may discuss the contents of the report with the relevant doctor. You agree that in the event of your incapacity,
Company may make a referral to its insurers as appropriate including to consider rehabilitation and support that may be available to you.
| H. | Pension. Company will comply with its employer pension duties in respect of you in accordance with Part 1 of the Pensions Act 2008. You have opted-out of Company’s pension scheme (the “Scheme”). However, the Company may be required by law to re-enroll you into the Scheme, or another appropriate pension scheme, at a later date. You can choose to re-join the Scheme at any time. If you re-join the Scheme, the employer and employee contribution rates and benefits provided will be in accordance with the rules of the Scheme. Further details on the Scheme are available on Company’s portal. Company reserves the right to withdraw and/or replace the Scheme at any time or to alter the benefits available under the Scheme including the right to amend employer and employee contribution rates under the Scheme. Company may agree with you to provide you with a non-contractual pensions allowance in lieu of pension contributions. However, if you choose to re-join the Scheme or are auto-enrolled into the Scheme, the non-contractual pensions allowance will stop unless otherwise agreed with Company. |
| I. | Expenses. Company shall reimburse you for business, travel and entertainment expenses reasonably and actually incurred during the performance of your duties pursuant to this Agreement to the extent such reimbursement is sought in accordance with Company’s business, travel, and entertainment policies and procedures. |
| J. | Travel. You will be entitled to business travel benefits and opportunities under Company’s travel policies. |
| K. | Director and Officer Liability Insurance. You shall be eligible for and entitled to insurance coverage under Company’s director and officer liability insurance and employment practices liability insurance policies in accordance with those policies and in amounts similar to coverage afforded other Senior Executives for activities on behalf of Company, WBD or any Affiliate, and otherwise shall be eligible for and entitled to indemnification in accordance with Company’s corporate governance requirements. |
| L. | Disciplinary and Grievance. The following non-contractual arrangements apply to disciplinary and grievance issues. If you have a grievance relating to the Term of Employment or are dissatisfied with any disciplinary decision relating to you or any decision to dismiss you, you should raise it with the Chief Executive. If the matter is not resolved it should be escalated to the Board which may delegate consideration of the matter to one or more of its members or another person. |
Company’s disciplinary procedure which applies to you can be obtained on Company’s Benefits Portal or from the People & Culture team. The policy is for guidance only and is not contractual.
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| IV. | TERMINATION OF EMPLOYMENT |
| A. | Death. If you should die during the Term of Employment, this Agreement shall automatically terminate. No further amounts or benefits shall be payable except earned but unpaid Base Salary, any accrued but unused vacation, unreimbursed business expenses, and those benefits that may vest in accordance with the controlling documents for other relevant Company benefit programs, which shall be paid in accordance with the terms of this Agreement and such other Company benefit programs, including the terms governing the time and manner of payment (the “Accrued Benefits”). Company also shall pay: (i) a prorated portion of your annual bonus Target for the calendar year of your death based on the amount of time you were employed during that calendar year (and subject to achievement of any applicable performance metrics), payable at the time annual bonuses are ordinarily paid to Senior Executives; and (ii) a prorated proportion of the Sign- On Bonus, based on a fraction, (x) the numerator of which is the number days elapsed between June 9, 2025 (i.e. the date of the announcement of the Spinoff) and the date of your death and (y) the denominator of which is the number of days between June 9, 2025 and the Sign on Bonus Payment Date determined in accordance with Section III(D) above as if you remained employed through such date, to be paid in the next reasonably practicable payroll run following: (a) the date of your death or; (b) if later, the closing date of the Spinoff of ContentCo. Your then-outstanding equity awards under the Stock Plan shall be treated in accordance with the applicable plan documents and implementing award agreements. |
| B. | Inability To Perform Duties. If, during the Term of Employment, you should become physically or mentally disabled, such that you are unable to perform your duties for a period of 6 months or more, you may become eligible to receive payment under Company’s income protection plan, subject to the rules of the plan from time to time in force. If you are not eligible, or a claim is rejected by the insurer, or if payments end, without prejudice to any other rights that Company may have, your employment may be terminated on six (6) months’ notice, subject to Company’s compliance with applicable laws and payment to you of salary for your period of notice. In such case, save as set out in this Agreement, no further amounts or benefits shall be payable to you, except that you shall receive: (i) a prorated portion of your annual bonus at Target for the calendar year in which you were terminated, based on the amount of time you were employed during that calendar year (and subject to achievement of any applicable performance metrics), payable at the time annual bonuses are ordinarily paid to Senior Executives; and (ii) a prorated portion of the Sign-On Bonus, based on a fraction, (x) the numerator of which is the number of days elapsed between June 9, 2025 and your termination date under this paragraph and (y) denominator of which is the number of days between June 9, 2025 and the Sign on Bonus Payment Date determined in accordance with Section III(D) above as if you remain employed through such date, to be paid in the next reasonably practicable payroll run following: (a) the date your employment is terminated or; (b) if later, the closing date of the Spinoff of ContentCo. Your then-outstanding equity awards under the Stock Plan shall be treated in accordance with the applicable plan documents and implementing award agreements, save that the Company will classify you, in circumstances where this Section IV(B) applies, as suffering from a Disability (as defined in the Stock Plan) for the purposes of the Annual LTI Award(s). |
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| For the avoidance of doubt, Company may terminate your employment on any grounds notwithstanding your actual or potential eligibility for benefits under the income protection plan. |
| C. | Termination For Cause. |
| 1. | Company may terminate the Term of Employment for Cause by written notice. “Cause” shall mean: (i) the conviction of or guilty plea, to a criminal office (whether any right to appeal has been or may be exercised); (ii) conduct constituting embezzlement, misappropriation or fraud, whether or not related to your employment with Company; (iii) conduct constituting a financial crime, material act of dishonesty or conduct in material violation of WBD’s Code of Ethics or other Company written policies; (iv) improper conduct substantially prejudicial to Company’s or WBD’s business (whether financial or otherwise) or reputation; (v) willful unauthorized disclosure or use of Company or WBD Confidential Information (as such term is defined in Exhibit 1) ; (vi) material improper destruction of Company or WBD property; or (vii) gross misconduct or gross negligence. |
| 2. | Any lawful termination of the Term of Employment pursuant to Section IV(C)(1) hereof shall be considered a termination of your employment for “Cause” and upon such termination, you shall only be entitled to receive any amounts or benefits hereunder that have been earned or vested at the time of such termination in accordance with the terms of the applicable governing Company or WBD plan(s) (including, without limitation, the Stock Plan) (including the provisions of such plan(s) governing the time and manner of payment), and/or as may be required by law. “Cause” as used in any such Company or WBD plan (including, without limitation, the Stock Plan) shall be deemed to mean solely the commission of acts described in Section IV(C)(1) hereof. |
| D. | Termination Of Employment By You for Good Reason/Termination of Employment by Company Not For Cause. |
| 1. | This Agreement may be terminated by: (i) Company, in the event that it is extended beyond the End Date, not for Cause (as defined above) by giving you six (6) months’ notice in writing; and (ii) you at any time for any reason, by giving the Company six (6) months’ notice in writing. The termination of your employment by you shall only constitute “Good Reason” for purposes of this Agreement upon the occurrence of any of the following events without your consent: (a) a material reduction in your, duties or responsibilities; (b) Company’s material change in the location of Company office where you work (i.e., relocation to a location outside of Greater London); (c) a material breach of this Agreement by Company; or (d) any other circumstances amounting to constructive dismissal, pursuant to Section 95(1)(c) of the Employment Rights Act 1996; provided however, that you must provide Company with written notice of the existence of the reduction, change or breach constituting Good Reason within sixty (60) calendar days of any such event having occurred, and allow Company thirty (30) calendar days to cure the same in writing to you. If Company so cures the reduction, change or breach, you shall have no basis for terminating the Term of Employment for Good Reason with respect to such cured reduction, change or breach. You must serve notice to terminate your employment in writing within five (5) calendar days following the expiration |
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| of Company’s cure period for the termination to be on account of Good Reason or such right shall be deemed waived. |
| 2. | After giving or receiving notice to terminate your employment, Company may choose to make a payment of base salary (only) in lieu of all or the remaining part of your notice period. Your employment will terminate on the date that such notice is given or such later date as Company may state in that notice. Company may make the payment in lieu in a lump sum or in monthly installments in which case the first instalment will be paid within one month of the termination date, subject to such deductions as are required by law. If Company elects to make a payment in lieu of notice, it may offset the amount paid against any sum which becomes payable in accordance with the provisions of Section IV (D)(4) below. |
| 3. | During any period of notice (whether given by you or Company), Company may (provided always that Company shall continue to pay your salary and provide contractual benefits whilst you remain employed by Company): |
| a. | require you not to attend work; |
| b. | require you not to perform any duties of employment; |
| c. | require you not perform some duties of employment; |
| d. | require you to perform different duties or carry out special projects; |
| e. | require you not to communicate with any customers, suppliers, employees or officers of Company or its Affiliates (save for on a purely social basis); |
| f. | terminate or restrict your access to any of Company’s IT systems; |
| g. | impose a combination of the above requirements; or |
| h. | impose such other requirements as it may reasonably decide, collectively “Garden Leave”. |
| 4. | If the Term of Employment is terminated by Company in accordance with Section IV(D)(1) above (Termination not for Cause) or by you in accordance with Section IV(D)(1) above and for Good Reason, or if the parties do not agree to extend the Term of Employment that trigger your entitlement to severance under Section II(B), then Company shall pay you the following payments (collectively, the “Severance Payment”) which will be conditional on you signing a release agreement satisfactory to Company which discharges and waives all and any claims which you have or may have against Company or its Affiliates, including but not limited to any claims for unfair dismissal, discrimination and whistleblowing in, as applicable, the United Kingdom and United States at the date of termination (the “Release”): |
(a) Commencing as soon as administratively possible after the Release Effective Date (as defined below), Company shall pay you your Base Salary for the period beginning on your termination date through the period which is
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the longest of (i) the balance of the Term of Employment but not to exceed twenty-four (24) months, or (ii) twelve (12) months. However, the first installment payment shall include any installments that would have been payable between the date of termination and the Release Effective Date, had the release requirement under Section IV(D)(4) hereof been satisfied on the date of termination, and the total payment under (a)(i) above shall be reduced by any payment made in accordance with Section IV(D)(2) above, provided that the minimum period of payment is twelve (12) months (“Base Salary Continuation”). In the event Company places you on Garden Leave in line with Section IV(D)(3), this period shall be offset against the number of months of Base Salary Continuation, provided that the minimum period of payment is twelve (12) months. While on Garden Leave, your obligation to provide exclusive and full-time services to Company pursuant to Sections 1(A) and 1(C) shall remain in full force.
Except as provided in this Section IV(D)(4) with respect to the first installment payment, Base Salary Continuation shall be paid monthly in substantially equal increments, less required deductions and withholdings, until the balance is paid in full. Base Salary Continuation is inclusive of any entitlement to statutory or enhanced redundancy or other termination payments, howsoever arising.
(b) Notwithstanding anything in Company’s then-effective annual incentive compensation plan, you shall be paid a bonus at Target under Section III (B) for each full calendar year within the Base Salary Continuation period (“Severance Bonus”). For clarity, the Severance Bonus shall include a full bonus for the year in which termination occurs (“First Year Termination Bonus”). For any partial calendar year within which the Base Salary Continuation period ends, you shall only be entitled to a prorated Target bonus based on the elapsed time from January 1 of such partial year through the last day of the Base Salary Continuation period, provided that the Severance Bonus will include a Target bonus for a period of no less than twelve (12) months, after discounting any part of the First Year Termination Bonus that relates to the period prior to: (i) notice of termination being issued; or (ii) if notice of termination is not given (or if the Company elects to make a payment in lieu of such notice in accordance with clause Section IV(D)(2)), your termination date. The foregoing bonus/incentive payments shall be paid to you in a lump sum on the date that Company pays bonuses/incentive payments to its other Senior Executives for the applicable then-effective annual incentive compensation plan year.
(c) During Base Salary Continuation, you shall not be entitled to any additional awards or grants under any stock option, restricted stock, RSUs or other stock- based incentive plan. You will also continue, during the Base Salary Continuation period, remain eligible to participate in the Company’ insurance benefits, on the same basis as such benefits were provided to you immediately prior to your termination date, to the extent that such continued participation is permitted by the Company’s insurance providers. Notwithstanding the foregoing, if you become eligible by reason of your employment by or provision of services to a third party to participate in such third party’s comparable insurance benefits, you agree to give timely notice of such eligibility to the Company and to provide such limited information concerning
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your eligibility as may be reasonably needed to coordinate benefits between the two programs in accordance with the coordination of benefits provisions in those programs. You agree that upon your eligibility for comparable insurance benefits, you will seek any such coverages offered by such third party and that the benefits and coverages provided by the Company hereunder will terminate upon the effective date of the coverage provided by such third party.
| 5. | No Severance Payment shall be made if you fail to sign the Release (which will require you to obtain independent legal advice). Such Release must be executed and become effective after your termination date and within a reasonable review period (including any applicable revocation period) designated in the Release (the “Release Effective Date”). Notwithstanding the foregoing, if payment of the Severance Payment could commence in more than one taxable year based on when the Release Effective Date occurs, then any such payments that would have been made during the calendar year in which your employment terminates shall instead be withheld and paid on the first payroll date in the calendar year immediately after the calendar year in which your employment terminates, with all remaining payments to be made as if no such delay had occurred. No Severance Payment shall be made if you violate Section VI hereof, in which case all Severance Payment shall cease, and those already made shall be forfeited. |
| 6. | If you terminate the Term of Employment before it has expired for a reason other than one or more of those stated in Section IV(D)(1) hereof, it shall be deemed a material breach of this Agreement. You agree that, in that event, in addition to any other rights and remedies which Company or WBD may have as a result of such breach, you shall forfeit all rights to be compensated for any remaining portion of your Base Salary, Severance Payment and/or bonus/incentive payment that may otherwise be due under this Agreement, pursuant to other Company or WBD plans or policies, or otherwise, except for Accrued Benefits or as may be required by law. |
| E. | Right To Offset. In the event that you secure employment or any consulting or contractor or business arrangement for services you perform during the period that any payment from Company is continuing or due under Section IV(D) hereof, you shall have the obligation to timely notify Company of the source and amount of payment (“Offset Income”). Company shall have the right to reduce the Severance Payment by the Offset Income. You acknowledge and agree that any deferred compensation for your services from another source that are performed while receiving Severance Payments from Company will be treated as Offset Income (regardless of when you choose to receive such compensation). In addition, to the extent that your compensation arrangement for the services include elements that are required to be paid later in the term of the arrangement (e.g., bonus or other payments that are earned in full or part based on performance or service requirements for the period during which the Severance Payment is made), Company may calculate the Offset Income by annualizing or by using any other reasonable methodology to attribute the later payments to the applicable period of the Severance Payment. You agree to provide Company with information sufficient to determine the calculation of the Offset Income, including compensation excerpts of any employment agreement or other contract for services, Form W-2s (if and solely to the extent applicable) or local equivalents, and any other |
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| documentation that Company reasonably may require, and that failure to provide timely notice to Company of Offset Income or to respond to inquiries from Company regarding any such Offset Income shall be deemed a material breach of this Agreement. You also agree that Company shall have the right to inquire of third-party individuals and entities regarding potential Offset Income and to inform such parties of Company’s right of offset under this Agreement with you. Accordingly, you agree that no further Severance Payment from Company will be made until or unless this breach is cured and that all payments from Company already made to you, during the time you failed to disclose your Offset Income, shall be forfeited, and must be returned to Company upon its demand, up to the amount of Offset Income attributable to such period. Any offsets made by Company pursuant to this Section IV(E) shall be made at the same time and in the same amount as a Severance Payment amount is otherwise payable (applying the Offset Income to Company’s payments in the order each are paid) so as not to accelerate or delay the payment of any Severance Payment installment. In the event you become reemployed by or engaged to perform services for Company or any Affiliates, during Base Salary Continuation, your severance pay and related benefits will end on the effective date of that employment or engagement. You agree to repay the Company any sums due it and/or authorize the Company to deduct such amounts from the payments to be made to you by the Company pursuant to this Agreement, to the extent allowed by law. |
| F. | Mitigation. You will take all reasonable steps to find alternative paid work, whether on an employed or self-employed basis, as soon as possible during the period that any payment is continuing or due under Section IV(D) and will promptly provide Company with details of any steps taken, any work obtained and the pay or other benefits which you will receive in respect of any such work. At Company’s request, you may be required to furnish to Company proof that you have engaged in efforts consistent with this paragraph, and you agree to comply with any such request. You further agree that Company may follow- up with reasonable inquiries to third parties to confirm your mitigation efforts. Should Company determine in good faith that you failed to take reasonable steps to secure alternative employment consistent with this paragraph, Company shall be entitled to cease any payments due to you pursuant to Section IV(D)(4). |
| V. | CONFIDENTIAL INFORMATION |
| A. | As a condition of employment, you are required to sign and comply with the Confidential Information and Assignment of Inventions Agreement, attached hereto as Exhibit 1 (“Confidentiality and IP Agreement”) and incorporated herein by reference. |
| B. | In the event that you are compelled, pursuant to an order of a court or other body having jurisdiction over such matter, to you agree to provide Company with such written notice of this subpoena or order within three (3) business days of receiving it so that Company may timely move to quash if appropriate unless such notice to Company is prohibited by law or procedure. To the extent this Section V(B) conflicts with the Confidentiality and IP Agreement, this Section shall control. You also agree to reasonably cooperate with Company in any legal action for which your participation is reasonably needed. Company agrees to try to schedule all such meetings so that they do not unduly interfere with your pursuits after you are no longer in Company’s employ |
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| and will reimburse you for any out-of pocket travel expenses you may incur in complying with this clause. |
| VI. | RESTRICTIVE COVENANTS |
| A. | You agree to comply with the post-termination obligations set out in Exhibit 2. |
| B. | You agree that you will comply with the provisions of the Confidentiality and IP Agreement relating to Company property including that prior to the conclusion of your employment with Company, you agree not to delete any Company information from hard copy or electronic files, including any company information stored on a personal mobile device that you may use for work purposes, and you shall return all Company property and materials, including equipment, such as laptop computers and mobile devices, and documentation, such as files (including originals and copies), notes, e- mail accounts and computer hardware with all Company information intact. |
| C. | For the term of employment and after any employment with the Company, regardless of how, when, or why such employment ends, you shall not make, either directly or by or through another person, any oral or written negative, disparaging or adverse public statements or representations of or concerning the Company or any Affiliate of the Company, or any of their respective current or former officers, directors, employees or joint venture partners, except as otherwise permitted by applicable law. |
| D. | In the event that you violate any provision of this Section VI, Exhibit 1 or Exhibit 2, in addition to any injunctive relief and damages to which you acknowledge Company would be entitled, all Severance Payments to you, if any, shall cease, and those already made will be forfeited. |
| VII. | CHOICE OF LAW AND DISPUTES |
| A. | The construction, validity and performance of this Agreement and all non-contractual obligations (if any) arising from or connected with this Agreement shall be governed by the laws of England. |
| B. | Both you and Company irrevocably agree to submit to the exclusive jurisdiction of the courts of England over any claim or matter (including any non-contractual claim) arising under or in connection with this Agreement. |
Notwithstanding the foregoing, to the extent that you bring a claim in the US, the following provisions shall apply:
| C. | Submission To Arbitration (US). Company and you agree to submit to arbitration all claims, disputes, issues or controversies between Company and you or between you and other employees of Company or its Affiliates (collectively “Claims”) directly or indirectly relating to or arising out of your employment with Company or the termination of such employment including Claims under Title VII of the Civil Rights Act of 1964, as amended, the Civil Rights Act of 1991, the Age Discrimination in Employment Act of 1967, the Americans With Disabilities Act of 1990, Section 1981 of the Civil Rights Act of 1966, as amended, the Family Medical Leave Act, the Employee Retirement Income Security Act, any Claim arising under any similar federal, state or local law, statute, regulation or common law doctrine or out of this Agreement, and any claim or dispute arising out of or relating to Exhibit 3. |
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| D. | Use Of AAA; Choice of Law (US). All Claims for arbitration shall be presented to the American Arbitration Association (“AAA”) in accordance with its applicable rules (“Rules”). The seat or place of arbitration shall be New York metropolitan area. The arbitrator(s) shall be directed to apply the substantive law of federal and state courts sitting in New York without regard to conflict of law principles. Any arbitration pursuant to this Agreement shall be deemed an arbitration proceeding subject to the Federal Arbitration Act. Such arbitration shall allow for discovery under the Federal Rules of Civil Procedure as reasonably agreed upon by the parties. |
| E. | Binding Effect (US). Arbitration shall be binding and shall afford parties the same options for damage awards as would be available in court. You and Company agree that discovery shall be allowed, and all discovery disputes shall be decided, exclusively by arbitration in accordance with the Rules. |
| F. | Damages and Costs (US). Any damages shall be awarded only in accord with applicable law. The arbitrator may only order your reinstatement if money damages are insufficient. The parties shall bear in equal shares all fees and expenses of arbitration. However, each party shall bear the expense of its own counsel, experts, witnesses and preparation and presentation of proof. |
| VIII. | ADDITIONAL COVENANTS |
| A. | If any provision of this Agreement is held by a court of competent jurisdiction to be invalid, void or unenforceable, the remaining provisions shall nevertheless continue in full force and effect without being impaired or invalidated. The section headings of this Agreement are for convenience only and shall not in any way affect the interpretation of any section hereof or of the Agreement itself. Any provision of this Agreement which refers to the words “include,” “includes,” or “including” shall be deemed to be followed by the words “without limitation.” |
| B. | You warrant that (1) your employment under this Agreement will not violate or conflict in any way with any contract or agreement to which you are bound; (2) you will do nothing that violates or conflicts with any such contract or agreement; and (3) you will indemnify Company for any liability, damages, costs, or attorneys’ fees that Company Group suffers as a result of any such violation or conflict, except as prohibited by law. |
| C. | You expressly acknowledge that Company has advised you to consult with independent legal counsel of your choosing prior to you signing this Agreement to review and explain to you the legal effect of the terms and conditions of this Agreement. |
| D. | Without limiting anything to the contrary in this Agreement, you agree not to disclose the terms hereof to any person or entity, other than your attorneys, accountants, financial advisors, or members of your immediate family who need to know this information and agree to keep it confidential or to any governmental body to the extent required or as otherwise required by law or a court of competent jurisdiction. |
| E. | This Agreement, together with its exhibits, constitutes the entire agreement between you and Company regarding the subject matters hereof and supersedes any and all other agreements, including the Prior Agreement, either oral or in writing, between the parties with respect to your employment by Company and contains all of the covenants and agreements between the parties with respect to such employment in any manner whatsoever, save that, for the avoidance of doubt, nothing in this Agreement shall affect |
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| your current and existing entitlements awarded to you prior to the date of this Agreement under the Stock Plan. Each party to this Agreement acknowledges that no representations, inducements, promises or agreements have been made, orally or otherwise, by any party, or anyone acting on behalf of any party, that are not stated in this Agreement, and that no other agreement, statement or promise not contained in this Agreement shall be valid or binding. Notwithstanding either of the foregoing sentences, or any other provision of this Agreement, this Agreement shall not supersede, replace, invalidate or otherwise modify or affect any restrictive covenants in any previous, subsequent or other agreements or documents between you and Company, including, without limitation, any covenants regarding confidentiality, intellectual property, confidential and proprietary information, non-competition, non- solicitation of customers, non-solicitation or no hire of employees, and the like (collectively, “Other Restrictive Covenants”), and any such Other Restrictive Covenants will remain in effect and you shall remain bound by such Other Restrictive Covenants. To the extent any of the restrictions or covenants contained in this Agreement conflict in any way with any such Other Restrictive Covenants, such conflict shall be resolved by giving effect to the provision that provides the greatest protection to Company that is enforceable under applicable law. |
| F. | This Agreement may be amended, modified, superseded, cancelled, renewed or extended and the terms or covenants hereof may be waived only by written instrument signed either by hand or electronic means (i.e., e-signature) by both of the parties hereto, or in the case of a waiver, by the party waiving compliance. |
| G. | Any payments to be made by Company hereunder shall be made subject to applicable law, including required deductions and withholdings. It is intended that the provisions of this Agreement comply with Section 409A of the US Internal Revenue Code of 1986, as amended, (the “Code”) and the regulations and guidance promulgated thereunder (collectively, “Code Section 409A”), and all provisions of this Agreement shall be construed in a manner consistent with the requirements for avoiding taxes or penalties under Code Section 409A, as applicable to you. Notwithstanding the foregoing, Company shall have no liability to you with regard to any failure to comply with Code Section 409A so long as Company has acted in good faith with regard to compliance therewith. |
| H. | If you are deemed on the date of termination of your employment to be a “specified employee”, within the meaning of that term under Section 409A(a)(2)(B) of the Code and using the identification methodology selected by Company from time to time, or if none, the default methodology, then: |
| 1. | With regard to any payment, the providing of any benefit or any distribution of equity upon “Separation from Service” (within the meaning of Code Section 409A) that constitutes “deferred compensation” subject to Code Section 409A, such payment, benefit or distribution shall not be made or provided prior to the earlier of (i) the expiration of the six-month period measured from the date of your Separation from Service or (ii) the date of your death; and |
| 2. | On the first day of the seventh month following the date of your Separation from Service or, if earlier, on the date of your death, (x) all payments delayed pursuant to this Section VIII(I)(4) (whether they would otherwise have been payable in a single sum or in installments in the absence of such delay) shall be paid or reimbursed to you in a lump sum, and any remaining payments and benefits due under this Agreement shall be paid or provided in accordance with the normal dates specified from them |
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| herein and (y) all distributions of equity delayed pursuant to this Section VIII(I)(4) shall be made to you. |
| I. | There are no collective agreements which directly affect the terms and conditions of your employment. |
| J. | This Agreement shall be binding upon and inure to the benefit of the parties and their respective successors, your heirs, and assigns. The rights or obligations under this Agreement may not be assigned or transferred by either party, except that such rights or obligations may be assigned or transferred pursuant to a merger or consolidation in which Company is not the continuing entity, or the sale or liquidation of all or substantially all of the assets of Company; provided, however, that the assignee or transferee is the successor to all or substantially all of the assets of Company and such assignee or transferee assumes the liabilities, obligations and duties of Company, as contained in this Agreement, either contractually or as a matter of law. Notwithstanding the foregoing, this Agreement may be assigned to any Affiliate of Company which employs you. To the extent this Section conflicts with the Confidentiality and IP Agreement, this Section shall control. |
| K. | This Agreement may be executed with electronic signatures, in any number of counterparts. The electronically signed Agreement shall constitute one original agreement. Duplicates and electronically signed copies of this Agreement shall be effective and fully enforceable as of the date signed and sent. |
| L. | All notices and other communications to be made or otherwise given hereunder shall be in writing and shall be deemed to have been given when the same are (i) addressed to the other party at the mailing address or email address indicated below, and (ii) either: (a) personally delivered or mailed, registered or certified mail, first class postage prepaid return receipt requested, (b) delivered by a reputable private overnight courier service utilizing a written receipt or other written proof of delivery, to the applicable party, or (c) sent by electronic email. Any such notice sent in the manner set forth above by United States Mail or, as applicable, United Kingdom Mail shall be deemed to have been given and received three (3) days after it has been so deposited in the United States Mail or, as applicable, the United Kingdom Mail, and any notice sent in any other manner provided above shall be deemed to be given when received. The substance of any such notice shall be deemed to have been fully acknowledged in the event of refusal of acceptance by the party to whom the notice is addressed. Until further notice given in according with the foregoing, the respective addresses and email addresses for the parties are as follows: |
If to Company:
Warner Bros. Discovery, Inc.
230 Park Avenue South, 7th Floor
New York, New York 10003
Attention: Chief Legal Officer
Or if by electronic mail, to the Company’s Chief Legal Officer, as such officer’s work email address is listed in the Company’s records at the time of the giving of such notice.
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If to you, at the home address then on file with Company, with a copy to:
Mishcon de Reya LLP
70 Kingsway
London
WC2B 6AH
Attention: ***
In witness whereof, the parties have caused this Agreement to be duly executed as set forth below.
| YOU: | DATE: | |||
| /s/ Amy Girdwood |
07/02/2025 | |||
| Amy Girdwood | ||||
| COMPANY: | DATE: | |||
| /s/ Joanna Adams |
07/03/2025 | |||
| Joanna Adams, Group Vice President, Employment Legal-EMEA on behalf of Discovery Corporate Service Limited | ||||
Exhibit (e)(66)
CONFIDENTIAL
DISCOVERY CORPORATE SERVICE LIMITED
CHISWICK PARK BUILDING 2
566 CHISWICK HIGH ROAD
LONDON ENGLAND W4 5YB
December 1, 2025
Amy Girdwood
Dear Amy:
As you know, while Warner Bros. Discovery, Inc. (“WBD”) continues to advance its efforts to separate its Streaming and Studios division (“Warner Bros.”) from its Global Linear Networks division (“Discovery Global”), WBD recently announced a review of other strategic alternatives to maximize shareholder value (the “Strategic Review”).
Your employment agreement with us, dated July 2, 2025 (the “Employment Agreement”), provides for a one-time cash bonus opportunity (referred to in the Employment Agreement as the “Sign on Bonus”), which is payable to you if you remain continuously employed by us (or any affiliate of Discovery Global or Warner Bros.) through the closing of a separation of Warner Bros. from Discovery Global (referred to in the Employment Agreement as the “Spinoff”) or through July 2, 2026, whichever is later.
In light of the Strategic Review, we wanted to assure you that any transaction that results in the separation of Discovery Global and Warner Bros. as two independent public companies, including if this separation occurs pursuant to a transaction where Warner Bros. remains with WBD and Discovery Global is spun off (a “DG Spinoff”), shall be treated as a Spinoff for purposes of the Sign on Bonus.
Accordingly, you will be entitled to receive the Sign on Bonus if you remain continuously employed by us (or any affiliate of Discovery Global or Warner Bros.) through the date that either a Spinoff or DG Spinoff is completed, or through July 2, 2026, whichever is later (and such date shall be considered the “Sign on Bonus Payment Date” under your Employment Agreement). For clarity, all references in your Employment Agreement to ContentCo shall be understood to refer to Warner Bros. following the completion of a Spinoff or DG Spinoff, as applicable.
Except as described above, your Employment Agreement remains unchanged. If you have any questions, please do not hesitate to contact me.
CONFIDENTIAL
| Sincerely, | ||
| Discovery Corporate Service Limited | ||
| By: | /s/ Joanna Adams | |
| Name: Joanna Adams | ||
| Title: Group Vice President | ||
Exhibit (e)(67)
CONFIDENTIAL
[COMPANY]
230 PARK AVENUE
NEW YORK, NY 10003
November [•], 2025
[Full Name]
Dear [First Name]:
As you know, while Warner Bros. Discovery, Inc. (“WBD”) continues to advance its efforts to separate its Streaming and Studios division (“Warner Bros.”) from its Global Linear Networks division (“Discovery Global”), WBD recently announced a review of other strategic alternatives to maximize shareholder value (the “Strategic Review”).
Your employment agreement with us, dated [•] (the “Employment Agreement”), becomes effective upon a separation of Warner Bros. from Discovery Global (referred to in the Employment Agreement as the “Spinoff”). In light of the Strategic Review, we wanted to assure you that your Employment Agreement will become effective upon completion of any transaction that results in the separation of Warner Bros. and Discovery Global as two independent public companies, including if this separation occurs pursuant to a transaction where Warner Bros. remains with WBD and Discovery Global is spun off (a “DG Spinoff”).
Accordingly, your Employment Agreement will take effect on the date that either a Spinoff or DG Spinoff is completed (and such date shall be considered the “Spinoff Effective Date” under your Employment Agreement). All references in your Employment Agreement to “Streaming & Studios” shall be understood to refer to Warner Bros. following the completion of a Spinoff or DG Spinoff, as applicable.
Except as described above, your Employment Agreement remains unchanged. If you have any questions, please do not hesitate to contact me.
| Sincerely, | ||
| [Company] | ||
| By: |
| |
| Name: | Ellen Exum | |
| Title: Executive Vice President, Total Rewards | ||
(e)(68)
CONFIDENTIAL
[COMPANY]
230 PARK AVENUE
NEW YORK, NY 10003
November [•], 2025
[Full Name]
Dear [First Name]:
As you know, while Warner Bros. Discovery, Inc. (“WBD”) continues to advance its efforts to separate its Streaming and Studios division (“Warner Bros.”) from its Global Linear Networks division (“Discovery Global”), WBD recently announced a review of other strategic alternatives to maximize shareholder value (the “Strategic Review”).
Your employment agreement with us, dated [•] (the “Employment Agreement”), becomes effective upon a separation of Warner Bros. from Discovery Global (referred to in the Employment Agreement as the “Spinoff”). In light of the Strategic Review, we wanted to assure you that your Employment Agreement will become effective upon completion of any transaction that results in the separation of Warner Bros. and Discovery Global as two independent public companies, including if this separation occurs pursuant to a transaction where Warner Bros. remains with WBD and Discovery Global is spun off (a “DG Spinoff”).
Accordingly, your Employment Agreement will take effect on the date that either a Spinoff or DG Spinoff is completed (and such date shall be considered the “Spinoff Effective Date” under your Employment Agreement). All references in your Employment Agreement to “NetworkCo” shall be understood to refer to Discovery Global following the completion of a Spinoff or DG Spinoff, as applicable.
Except as described above, your Employment Agreement remains unchanged. If you have any questions, please do not hesitate to contact me.
| Sincerely, | ||
| [Company] | ||
| By: |
| |
| Name: | Ellen Exum | |
| Title: Executive Vice President, Total Rewards | ||