SEC Form 4 · accession 0001209191-15-080367
STARZ ENTERTAINMENT CORP /CN/ · STRZ
Statement of changes in beneficial ownership, as filed. Original on EDGAR ↗
Table I — non-derivative securities
Table II — derivative securities
| Security | Conv. / exercise price | Date | Code | Shares | A/D | Exercisable | Expires | Underlying | Underlying shares | Owned after | D/I |
|---|---|---|---|---|---|---|---|---|---|---|---|
| Call option (obligation to sell)F1,F2,F3,F4,F5 | $52.677 | Nov 12, 2015 | S | 2,500,000 | D | — | — | Common Shares | 2,500,000 | 2,500,000 | I |
| Put option (right to sell)F1,F2,F3,F4,F5 | $33.167 | Nov 12, 2015 | P | 2,500,000 | A | — | — | Common Shares | 2,500,000 | 2,500,000 | I |
Explanation of responses
- F1On November 12, 2015, Discovery Lightning Investments Limited ("Discovery"), a wholly-owned subsidiary of Discovery Communications Inc., entered into a Collar Transaction (the "Transaction") with an unaffiliated bank (the "Bank"), pursuant to which Discovery wrote covered call options and purchased put options over an aggregate of 2,500,000 Common Shares of the Issuer ("Common Shares)".
- F2The Transaction is divided into three individual tranches (each a "Tranche") with each Tranche divided into 25 individual components (each a "Component"); the expiration dates of the options included in the Components constituting Tranche 1 are the 25 trading days from July 25, 2019 through August 28, 2019, inclusive; the expiration dates of the options included in the Components constituting Tranche 2 are the 25 trading days from October 23, 2020 through November 30, 2020, inclusive; and the expiration dates of the Components constituting Tranche 3 are the 25 trading days from January 25, 2022 through March 1, 2022, inclusive. Each Component relates to 33,334 Common Shares (or, in the case of the options included in the Components having the final expiration date for each Tranche, 33,317 Common Shares in the case of Tranche 1 and Tranche 2 and 33,318 Common Shares in the case of Tranche 3).
- F3On the relevant expiration date for each Component: the call option will automatically be exercised if the Reference Price (as defined below) is greater than $52.677 (the "Call Strike Price"); the put option will automatically be exercised if the Reference price is less than $33.167 (the "Put Strike Price"); and the call right and the put right will expire unexercised if the Reference Price is equal to or greater than the Put Strike Price but less than or equal to the Call Strike Price.
- F4The "Reference Price" means the volume weighted average trading price of the Common Shares on the expiration date for the relevant Component. At Discovery's election, any of the options may be settled in cash. In exchange for the Bank's entering into the Transaction, Discovery paid the Bank a premium of $3,599,595 and pledged 2,500,000 Common Shares of the Issuer (the "Pledged Shares") to the Bank to secure its obligations under the Transaction. In most circumstances, Discovery retained voting rights in the Pledged Shares during the term of the pledge, but Discovery is obligated to share with the Bank the economic benefit of any dividends paid during the term of the pledge based on a formula that takes into account a theoretical hedging position by the Bank.
- F5The shares are held directly by Discovery Lightning Investments Limited, an indirect wholly-owned subsidiary of Discovery Communications, Inc.
Remarks
As a result of certain agreements among the Reporting Persons, the Issuer and certain other shareholders of the Issuer, the Reporting Persons may be deemed members of a "group", within the meaning of Rule 13d-5(b)(1) under the Securities Exchange Act of 1934, as amended (the" Act"), with such other shareholders, that beneficially owns more than 10% of the Common Shares of the Issuer. These agreements are described in, and filed as exhibits to, the Issuer's Current Report on Form 8-K filed with the Securities Exchange Commission on November 10, 2015. This filing is being made as a precautionary matter and shall not be deemed an admission that any of the Reporting Persons is a member of a group or subject to the reporting requirements of Section 16 of the Act.