The new terms, contained in an 8K SEC filing issued Friday, as a legal requirement will only apply in the unlikely event that Walt Disney does not complete its pending $71.3 billion deal for Fox and their current contracts, which expire this year, need to be extended.
The amended agreements, dated March 5, also stipulate that Fox CEO James Murdoch’s non-compete agreement has been altered to indicate he will not be able to work as a CEO at a rival company for one year should his employment be terminated.
As things stand, 21st Century Fox is near to completion of its deal to sell off most of its assets to the Walt Disney Company. Post-merger, Lachlan Murdoch is set to serve as the chairman and CEO of properties left behind in the merger, to be known as “Fox.”
That portfolio of assets will include Fox Sports, Fox Broadcasting Network, Fox News and the Fox Business Network. At the same time, the amended contract terms between 21st Century Fox America, a subsidiary of 21st Century Fox, and executive chairman Lachlan Murdoch and James Murdoch state that should either executive be terminated, they will be able to collect $22 million in severance.
If the deal with Disney is abandoned, the Murdochs will then be able to collect $11 million in cash if their employment is terminated. Besides the potential severance terms and James Murdoch’s non-compete, all other terms of their employment agreements, including base salary, annual bonus and long-term incentive awards, remain unchanged.
Disney has agreed to purchase Fox’s entertainment assets, including the TV studio, the movie operation and cable properties FX Networks and National Geographic Channels. Disney chairman and CEO Bob Iger on Thursday told his annual shareholders meeting that he expected the deal for Fox to close “soon.”